TIDMTRIL
Thomson Reuters Reports Third-Quarter 2015 Results
Third-quarter performance consistent with full-year expectations
NEW YORK, Oct. 23, 2015 -- Thomson Reuters (TSX / NYSE: TRI) today reported
results for the third quarter ended September 30, 2015. The company also
reaffirmed its full-year 2015 outlook.
* Reported revenues were down 4% as the negative impact of foreign currency
reduced revenues by 5%
+ Revenues before currency grew 1%
o Financial & Risk's organic revenues were unchanged from the
prior-year period
o Legal, Tax & Accounting and Intellectual Property & Science's
revenues grew 3% in aggregate
* Financial & Risk net sales were positive for the sixth consecutive quarter
* Adjusted EBITDA grew 2% to $838 million
+ The margin increased to 28.1% vs. 26.5% in the prior-year period, up
160 basis points
+ Excluding the impact of currency, adjusted EBITDA grew 7% and the
margin was 160 basis points higher than the prior-year period
* Underlying operating profit increased 7% to $565 million
+ The margin increased to 19.0% vs. 17.1% in the prior-year period, up
190 basis points
+ Excluding the impact of currency, underlying operating profit grew 13%
and the margin was 200 basis points higher than the prior-year period
* Free cash flow increased 25% to $1.1 billion for the first nine months of
the year
* Adjusted EPS was up 16% to $0.52 vs. $0.45 in the prior-year period
+ Excluding the impact of currency, adjusted EPS was up 24% or $0.11
better than the prior-year period
* Returned $1.25 billion to shareholders through the repurchase of 31.7
million shares in the first nine months of the year
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"I am pleased to report another quarter of steady progress," said James C.
Smith, president and chief executive officer of Thomson Reuters. "I am
encouraged by the way we continue to execute against our key priorities, by the
progress towards our financial targets and especially by the underlying
performance of our subscription revenues."
Consolidated Financial Highlights - Third Quarter
Three Months Ended September 30,
(Millions of U.S. dollars, except EPS and
margins)
IFRS Financial Measures 2015 2014 Change
Revenues $2,979 $3,107 -4%
Operating profit $419 $466 -10%
Diluted earnings per share (EPS) $0.36 $0.28 29%
Cash flow from operations $665 $585 14%
The decrease in operating profit was primarily due to lower favorable fair
value adjustments largely associated with foreign currency embedded
derivatives in certain customer contracts. The increase in diluted EPS resulted
from lower finance costs associated with foreign currency
fluctuations, which more than offset the decrease in operating profit.
Non-IFRS Financial Measures (1) 2015 2014 Change Change Before
Currency
Revenues from ongoing businesses $2,979 $3,107 -4% 1%
Adjusted EBITDA $838 $822 2% 7%
Adjusted EBITDA margin 28.1% 26.5% 160bp 160bp
Underlying operating profit $565 $530 7% 13%
Underlying operating profit margin 19.0% 17.1% 190bp 200bp
Adjusted earnings per share (adjusted EPS) $0.52 $0.45 16% 24%
Free cash flow $449 $358 25%
(1) These and other non-IFRS financial measures are defined and reconciled to
the most directly comparable IFRS measures in the tables appended to this news
release. Additional information is provided in the explanatory footnotes to the
appended tables.
- Revenues from ongoing businesses increased 1% (before currency) from the
prior-year period driven by the Legal, Tax & Accounting and Intellectual
Property & Science businesses, which grew 3% in aggregate.
- Adjusted EBITDA increased 2% from the prior-year period and the margin
increased 160 basis points to 28.1%. Excluding the impact of currency in the
quarter, adjusted EBITDA increased 7% and the margin was 160 basis points
higher than the prior-year period.
- Underlying operating profit increased 7% from the prior-year period and the
margin increased 190 basis points to 19.0%. Excluding the impact of currency,
underlying operating profit increased 13% and the margin was 200 basis points
higher than the prior-year period.
- Adjusted EPS was $0.52, up $0.07 from the prior-year period despite foreign
currency having had a $0.04 negative impact.
Third-Quarter Business Segment Highlights
Unless otherwise noted, all revenue growth comparisons in this news release are
before the impact of foreign currency (constant currency) as Thomson Reuters
believes this provides the best basis to measure the performance of its
business.
Financial & Risk
* Revenues were unchanged compared to the prior-year period. Revenue growth
exceeded 2% before the impact of lower recoveries revenues and pricing
adjustments related to the migration of remaining legacy foreign exchange
and buy-side customers onto Financial & Risk's unified platform.
+ Recurring revenues (77% of the segment's revenues) increased 1% as an
annual price increase and the impact of positive net sales more than
offset the price adjustments related to the legacy product migration
described above.
+ Transactions-related revenues (13% of the segment's revenues) were
unchanged.
+ Recoveries revenues (10% of the segment's revenues) were down 7% and
are low-margin revenues. Recoveries revenues are expected to continue
to decline in the fourth quarter and throughout 2016 as more
third-party partners move to direct billing with our customers.
* By geography, revenues in the Americas and Asia were up 2%, while revenues
in Europe, Middle East and Africa (EMEA) were down 2%.
* Net sales were positive overall and were positive in all regions, except
for EMEA. This marked the sixth consecutive quarter of positive net sales.
However, net sales were lower than the third quarter of last year due to a
difficult quarterly comparison, as the third quarter of 2014 was the
strongest net sales quarter of the year.
* EBITDA increased 3% primarily due to savings related to efficiency
initiatives, which were partially offset by the impact of foreign currency.
+ The margin was 27.7%, up 260 basis points from the prior-year period
due to efficiency initiatives undertaken in 2014.
+ Excluding the impact of currency from both periods and the impact of
$18 million of charges taken by the company in the third quarter of
2014, the margin was up 260 basis points to 28.8% compared to the
prior-year period.
+ Foreign currency had a 110 basis point negative impact on the margin.
* Operating profit increased 8% compared to the prior-year period, primarily
due to the same factors that impacted EBITDA.
+ The margin was 17.9%, up 240 basis points from the prior-year period.
+ Before currency and one-time charges, the margin was up 280 basis
points from the prior-year period.
+ Foreign currency had a 150 basis point negative impact on the margin.
Legal
* Revenues increased 1%. Excluding US print, revenues grew 3%.
* Solutions businesses (46% of the segment's revenues) grew 4%, slightly
lower than the first half of the year due to timing factors. Revenue growth
was driven by Elite, Serengeti, Pangea3 legal managed services, and the
Investigations and Public Records business. Solutions businesses represent
all of Legal's revenues excluding US print and US online legal information.
* US online legal information (40% of the segment's revenues) grew 2%,
reflecting growth for the third consecutive quarter.
* US print (14% of the segment's revenues) declined 8%, as expected.
* EBITDA was unchanged and the margin increased 90 basis points to 38.8%
compared to 37.9% in the prior-year period. Excluding the benefit of
currency, the margin increased 30 basis points.
* Operating profit increased 4% and the margin increased 200 basis points to
31.7% compared to 29.7% in the prior-year period. Excluding the benefit of
currency, the margin increased 130 basis points due to lower depreciation
and amortization expense.
Tax & Accounting
* Revenues increased 8% driven by the Corporate, Professional and Knowledge
Solutions businesses, partially offset by a decline in the Government
business. Recurring revenues were up 9% organically.
* EBITDA increased 10% and the margin increased 180 basis points to 25.7%
compared to 23.9% in the prior-year period. Excluding the benefit of
currency, the margin was up 110 basis points.
* Operating profit increased 16% and the margin increased 200 basis points to
16.3% compared to 14.3% in the prior-year period. Excluding the benefit of
currency, the margin was up 120 basis points.
* Small movements in the timing of revenues and expenses can impact margins
in any given quarter for the Tax & Accounting business. Full-year margins
are more reflective of the segment's underlying performance.
Intellectual Property & Science
* Revenues were up 2% as subscription revenue (approximately 80% of the
segment's revenues) growth of 4% was partially offset by a 7% decline in
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October 23, 2015 06:31 ET (10:31 GMT)
transactions revenues as fewer one-time deals affected the growth rate in
the quarter.
* Both EBITDA and operating profit margins were affected by the 7% decline in
transactions revenues, which are highly profitable.
+ EBITDA was relatively unchanged with a margin of 30.9% compared to
30.6% in the prior-year period. Excluding the benefit of currency, the
margin declined 90 basis points compared to the prior-year period
+ Operating profit decreased 2% with a margin of 21.5% compared to 21.8%
in the prior-year period. Excluding the benefit of currency, the margin
declined 120 basis points compared to the prior-year period.
* Small movements in the timing of revenues and expenses can impact margins
in any given quarter for the Intellectual Property & Science business.
Full-year margins are more reflective of the segment's underlying
performance.
Corporate & Other (Including Reuters News)
* Reuters News revenues were $74 million, up 3% compared to the prior-year
period.
* Corporate & Other costs were $74 million compared to $73 million in the
prior-year period.
Consolidated Financial Highlights - Nine Months
Nine Months Ended September 30,
(Millions of U.S. dollars, except EPS and
margins)
IFRS Financial Measures 2015 2014 Change
Revenues $9,061 $9,396 -4%
Operating profit $1,231 $1,206 2%
Diluted earnings per share (EPS) $1.07 $0.93 15%
Cash flow from operations $1,833 $1,574 16%
Non-IFRS Financial Measures (1) 2015 2014 Change Change Before
Currency
Revenues from ongoing businesses $9,061 $9,394 -4% 1%
Adjusted EBITDA $2,497 $2,519 -1% 5%
Adjusted EBITDA margin 27.6% 26.8% 80bp 80bp
Underlying operating profit $1,656 $1,639 1% 8%
Underlying operating profit margin 18.3% 17.4% 90bp 120bp
Adjusted earnings per share (adjusted EPS) $1.48 $1.41 5% 16%
Free cash flow $1,093 $875 25%
(1) These and other non-IFRS financial measures are defined and reconciled
to the most directly comparable IFRS measures in the tables appended to this
news release. Additional information is provided in the explanatory footnotes
to the appended tables.
* Revenues from ongoing businesses increased 1% (before currency) from the
prior-year period driven by the Legal, Tax & Accounting and Intellectual
Property & Science businesses, which grew 3% in aggregate.
* Adjusted EBITDA decreased 1% from the prior-year period and the margin
increased 80 basis points to 27.6%. Excluding the impact of currency,
adjusted EBITDA increased 5% and the margin was 80 basis points higher than
the prior-year period.
* Underlying operating profit increased 1% from the prior-year period and the
margin increased 90 basis points to 18.3%. Excluding the impact of
currency, underlying operating profit increased 8% and the margin was 120
basis points higher than the prior-year period.
* Adjusted EPS was $1.48 compared to $1.41 in the prior-year period.
+ Excluding the impact of currency, adjusted EPS was up 16%, $0.22 better
than the prior-year period.
+ Currency had a negative impact of $0.15 on adjusted EPS.
* Free cash flow for the first nine months of the year was $1.1 billion
compared to $875 million in the prior-year period, primarily due to lower
severance payments than in the prior-year period.
Business Outlook (Before Currency)
Thomson Reuters today re-affirmed its full-year Business Outlook for 2015,
which was previously communicated in February 2015. The company's 2015 Outlook
assumes constant currency rates compared to 2014 and is based on the expected
performance of the company's existing businesses and does not factor in the
impact of any acquisitions or divestitures that may occur during the year. In
light of the increased volatility recently seen in the foreign currency
markets, the company continues to believe that currency is likely to have a
higher-than-usual impact on its results in 2015.
The company continues to expect:
* Positive organic revenue growth;
* Adjusted EBITDA margin to range between 27.5% and 28.5%;
* Underlying operating profit margin to range between 18.5% and 19.5%; and
* Free cash flow to range between $1.550 billion and $1.750 billion in 2015.
The information in this section is forward-looking and should be read in
conjunction with the section below entitled "Special Note Regarding
Forward-Looking Statements, Material Assumptions and Material Risks."
Dividend and Share Repurchases
In February 2015, Thomson Reuters board of directors approved a $0.02 per share
annualized increase in the dividend to $1.34 per share. A quarterly dividend of
$0.335 per share is payable on December 15, 2015 to common shareholders of
record as of November 19, 2015.
From January 1, 2015 through September 30, 2015, the company repurchased
approximately 31.7 million shares at a cost of approximately $1.25 billion. Of
this amount, 14.4 million shares were repurchased in the third quarter at a
cost of approximately $550 million.
Under the current $1.0 billion share repurchase program announced in May 2015,
the company has returned approximately $650 million to shareholders through the
repurchase of approximately 16.9 million shares.
Thomson Reuters
Thomson Reuters is the world's leading source of intelligent information for
businesses and professionals. We combine industry expertise with innovative
technology to deliver critical information to leading decision makers in the
financial and risk, legal, tax and accounting, intellectual property and
science and media markets, powered by the world's most trusted news
organization. Thomson Reuters shares are listed on the Toronto and New York
Stock Exchanges (symbol: TRI). For more information, go to http://
www.thomsonreuters.com/ .
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its financial statements in accordance with
International Financial Reporting Standards (IFRS), as issued by the
International Accounting Standards Board (IASB).
This news release includes certain non-IFRS financial measures, such as
revenues from ongoing businesses, adjusted EBITDA and the related margin,
underlying operating profit and the related margin, free cash flow, adjusted
EPS, and selected measures before the impact of foreign currency. Thomson
Reuters uses these non-IFRS financial measures as supplemental indicators of
its operating performance and financial position. These measures do not have
any standardized meanings prescribed by IFRS and therefore are unlikely to be
comparable to the calculation of similar measures used by other companies, and
should not be viewed as alternatives to measures of financial performance
calculated in accordance with IFRS. Non-IFRS financial measures are defined and
reconciled to the most directly comparable IFRS measures in the appended
tables.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL ASSUMPTIONS AND
MATERIAL RISKS
Certain statements in this news release, including, but not limited to,
statements in the "Business Outlook (Before Currency)" section and Mr. Smith's
comments, are forward-looking. As a result, forward-looking statements are
subject to a number of risks and uncertainties that could cause actual results
or events to differ materially from current expectations. There is no assurance
that the events described in any forward-looking statement will materialize. A
business outlook is provided for the purpose of presenting information about
current expectations for 2015. This information may not be appropriate for
other purposes. You are cautioned not to place undue reliance on
forward-looking statements which reflect expectations only as of the date of
this news release. Except as may be required by applicable law, Thomson Reuters
disclaims any obligation to update or revise any forward-looking statements.
The company's 2015 business outlook is based on various external and internal
assumptions. Economic and market assumptions include, but are not limited to,
GDP growth in the countries where Thomson Reuters operates. Internal financial
and operational assumptions include, but are not limited to, continuing
operational improvement in the Financial & Risk business and the successful
execution of new sales initiatives, ongoing product release programs,
globalization strategy and other growth and efficiency initiatives.
Some of the material risk factors that could cause actual results or events to
differ materially from those expressed in or implied by forward-looking
statements in this news release include, but are not limited to, changes in the
general economy; actions of competitors; failure to develop new products,
services, applications and functionalities to meet customers' needs, attract
new customers or expand into new geographic markets and identify areas of
higher growth; failures or disruptions of telecommunications, network systems
or the Internet; fraudulent or unpermitted data access or other cyber-security
or privacy breaches; increased accessibility to free or relatively inexpensive
information sources; failure to maintain a high renewal rate for
subscription-based services; dependency on third parties for data, information
and other services; changes to law and regulations, including the impact of the
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October 23, 2015 06:31 ET (10:31 GMT)
Dodd-Frank legislation and similar financial services laws around the world;
tax matters, including changes to tax laws, regulations and treaties;
fluctuations in foreign currency exchange and interest rates; failure to adapt
to recent organizational changes and effectively implement strategic
initiatives; failure to recruit, motivate and retain high quality management
and key employees; failure to meet the challenges involved in operating
globally; failure to derive fully the anticipated benefits from existing or
future acquisitions, joint ventures, investments or dispositions; failure to
protect the brands and reputation of Thomson Reuters; impairment of goodwill
and identifiable intangible assets; inadequate protection of intellectual
property rights; threat of legal actions and claims; risk of antitrust/
competition-related claims or investigations; downgrading of credit ratings and
adverse conditions in the credit markets; the effect of factors outside of the
control of Thomson Reuters on funding obligations in respect of pension and
post-retirement benefit arrangements; and actions or potential actions that
could be taken by the company's principal shareholder, The Woodbridge Company
Limited. These and other factors are discussed in materials that Thomson
Reuters from time to time files with, or furnishes to, the Canadian securities
regulatory authorities and the U.S. Securities and Exchange Commission. Thomson
Reuters annual and quarterly reports are also available in the "Investor
Relations" section of http://www.thomsonreuters.com/ .
CONTACTS
MEDIA INVESTORS
David Crundwell Frank J. Golden
Senior Vice President, Corporate Senior Vice President, Investor
Affairs Relations
+1 646 223 5285 +1 646 223 5288
david.crundwell@thomsonreuters.com frank.golden@thomsonreuters.com
Thomson Reuters will webcast a discussion of its third-quarter 2015 results
today beginning at 8:30 a.m. Eastern Time (ET). You can access the webcast by
visiting the "Investor Relations" section of www.thomsonreuters.com . An
archive of the webcast will be available following the presentation.
Thomson Reuters Corporation
Business Segment Information
(millions of U.S. dollars)
(unaudited)
Three Months
Ended
September 30, Change
2015 2014 Total Before Organic
Currency
(5)
Revenues
Financial & Risk $1,517 $1,628 -7% 0% 0%
Legal 837 854 -2% 1% 1%
Tax & Accounting 307 301 2% 8% 8%
Intellectual Property & Science 246 248 -1% 2% 2%
Corporate & Other (includes 74 79 -6% 3% 3%
Reuters News)
Eliminations (2) (3)
Revenues from ongoing 2,979 3,107 -4% 1% 1%
businesses (1)
Other Businesses (2) - -
Revenues $2,979 $3,107 -4%
Margin
Adjusted EBITDA (3) Change 2015 2014 Change
Financial & Risk $420 $408 3% 27.7% 25.1% 260bp
Legal 325 324 0% 38.8% 37.9% 90bp
Tax & Accounting 79 72 10% 25.7% 23.9% 180bp
Intellectual Property & Science 76 76 0% 30.9% 30.6% 30bp
Corporate & Other (includes (62) (58)
Reuters News)
Adjusted EBITDA $838 $822 2% 28.1% 26.5% 160bp
Underlying Operating Profit
(4)
Financial & Risk $271 $252 8% 17.9% 15.5% 240bp
Legal 265 254 4% 31.7% 29.7% 200bp
Tax & Accounting 50 43 16% 16.3% 14.3% 200bp
Intellectual Property & Science 53 54 -2% 21.5% 21.8% -30bp
Corporate & Other (includes (74) (73)
Reuters News)
Underlying operating profit $565 $530 7% 19.0% 17.1% 190bp
Refer to page 12 for explanation of footnotes.
Thomson Reuters Corporation
Business Segment Information
(millions of U.S. dollars)
(unaudited)
Nine Months
Ended
September 30, Change
2015 2014 Total Before Organic
Currency
(5)
Revenues
Financial & Risk $4,621 $4,941 -6% 0% 0%
Legal 2,487 2,507 -1% 2% 2%
Tax & Accounting 1,007 973 3% 8% 7%
Intellectual Property & Science 731 742 -1% 1% 1%
Corporate & Other (includes 222 240 -8% 2% 2%
Reuters News)
Eliminations (7) (9)
Revenues from ongoing 9,061 9,394 -4% 1% 1%
businesses (1)
Other Businesses (2) - 2
Revenues $9,061 $9,396 -4%
Margin
Adjusted EBITDA (3) Change 2015 2014 Change
Financial & Risk $1,251 $1,233 1% 27.1% 25.0% 210bp
Legal 918 939 -2% 36.9% 37.5% -60bp
Tax & Accounting 295 285 4% 29.3% 29.3% 0bp
Intellectual Property & Science 217 233 -7% 29.7% 31.4% -170bp
Corporate & Other (includes (184) (171)
Reuters News)
Adjusted EBITDA $2,497 $2,519 -1% 27.6% 26.8% 80bp
Underlying Operating Profit
(4)
Financial & Risk $786 $758 4% 17.0% 15.3% 170bp
Legal 729 730 0% 29.3% 29.1% 20bp
Tax & Accounting 211 192 10% 21.0% 19.7% 130bp
Intellectual Property & Science 149 167 -11% 20.4% 22.5% -210bp
Corporate & Other (includes (219) (208)
Reuters News)
Underlying operating profit $1,656 $1,639 1% 18.3% 17.4% 90bp
Refer to page 12 for explanation of footnotes.
Thomson Reuters Corporation
Reconciliation of Operating Profit to Adjusted EBITDA (3)
(millions of U.S. dollars)
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2015 2014 Change 2015 2014 Change
Operating profit $419 $466 -10% $1,231 $1,206 2%
Adjustments to remove:
Amortization of other 144 160 440 488
identifiable intangible assets
Fair value adjustments (8) (88) (2) (53)
Other operating losses (gains), 10 (9) (13) (4)
net
Operating loss from Other - 1 - 2
Businesses (2)
Underlying operating profit $565 $530 7% $1,656 $1,639 1%
Remove: depreciation and 273 292 841 880
amortization of computer
software (excluding Other
Businesses (2))
Adjusted EBITDA $838 $822 2% $2,497 $2,519 -1%
Underlying operating profit margin 19.0% 17.1% 190bp 18.3% 17.4% 90bp
(4)
Adjusted EBITDA margin (3) 28.1% 26.5% 160bp 27.6% 26.8% 80bp
Thomson Reuters Corporation
Reconciliation of Net Earnings to Adjusted EBITDA (3)
(millions of U.S. dollars)
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2015 2014 Change 2015 2014 Change
Net earnings $293 $250 17% $894 $802 11%
Adjustments to remove:
Tax expense 11 26 53 53
Other finance costs (income) 14 82 (23) 25
Net interest expense 102 110 314 329
Amortization of other identifiable 144 160 440 488
intangible assets
Amortization of computer software 186 195 572 586
Depreciation 87 97 269 294
EBITDA $837 $920 $2,519 $2,577
Adjustments to remove:
Share of post-tax earnings in (1) (2) (7) (3)
equity method
investments
Other operating losses (gains), net 10 (9) (13) (4)
Fair value adjustments (8) (88) (2) (53)
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EBITDA from Other Businesses (2) - 1 - 2
Adjusted EBITDA $838 $822 2% $2,497 $2,519 -1%
Refer to page 12 for explanation of footnotes.
Thomson Reuters Corporation
Reconciliation of Underlying Operating Profit (4) to Adjusted EBITDA (3) by
Business Segment
(millions of U.S. dollars)
(unaudited)
Three Months Ended Three Months Ended
September 30, 2015 September 30, 2014
Underlying Add: Adjusted Underlying Add: Adjusted
Operating Depreciation EBITDA Operating Depreciation EBITDA
Profit and Profit and
Amortization of Amortization
Computer of
Software Computer
Software **
Financial & $271 $149 $420 $252 $156 $408
Risk
Legal 265 60 325 254 70 324
Tax & 50 29 79 43 29 72
Accounting
Intellectual 53 23 76 54 22 76
Property &
Science
Corporate & (74) 12 (62) (73) 15 (58)
Other
(includes
Reuters
News)
$565 $273 $838 $530 $292 $822
Nine Months Ended Nine Months Ended
September 30, 2015 September 30, 2014
Underlying Add: Adjusted Underlying Add: Adjusted
Operating Depreciation EBITDA Operating Depreciation EBITDA
Profit and Profit and
Amortization of Amortization
Computer of Computer
Software Software **
Financial & $786 $465 $1,251 $758 $475 $1,233
Risk
Legal 729 189 918 730 209 939
Tax & 211 84 295 192 93 285
Accounting
Intellectual 149 68 217 167 66 233
Property &
Science
Corporate & (219) 35 (184) (208) 37 (171)
Other
(includes
Reuters
News)
$1,656 $841 $2,497 $1,639 $880 $2,519
_________________________
** Excludes Other Businesses (2)
Refer to page 12 for explanation of footnotes.
Thomson Reuters Corporation
Reconciliation of Changes in Adjusted EBITDA (5), Underlying Operating Profit
(5) and the Related Margins, and
Adjusted Earnings Per Share (EPS) (5) Excluding the Effects of Foreign Currency
(millions of U.S. dollars, except for per share amounts, and margins)
(unaudited)
Three Months Ended September 30,
% Change BP Change
2015 2014 Total Foreign Before 2015 2014 Total Foreign Before
Currency Currency Margin Margin Currency Currency
Adjusted EBITDA $838 $822 2% (5%) 7% 28.1% 26.5% 160bp 0bp 160bp
Underlying $565 $530 7% (6%) 13% 19.0% 17.1% 190bp (10)bp 200bp
operating
profit
Adjusted EPS $0.52 $0.45 16% (8%) 24% n/a n/a n/a n/a n/a
Nine Months Ended September 30,
% Change BP Change
2015 2014 Total Foreign Before 2015 2014 Total Foreign Before
Currency Currency Margin Margin Currency Currency
Adjusted EBITDA $2,497 $2,519 (1%) (6%) 5% 27.6% 26.8% 80bp 0bp 80bp
Underlying $1,656 $1,639 1% (7%) 8% 18.3% 17.4% 90bp (30)bp 120bp
operating
profit
Adjusted EPS $1.48 $1.41 5% (11%) 16% n/a n/a n/a n/a n/a
n/a - not applicable
Thomson Reuters Corporation
Reconciliation of Earnings Attributable to Common Shareholders
to Adjusted Earnings (6)
(millions of U.S. dollars, except for share and per share data)
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2015 2014 2015 2014
Earnings attributable to common shareholders $280 $231 $847 $762
Adjustments to remove:
Operating loss from Other Businesses (2) - 1 - 2
Fair value adjustments (8) (88) (2) (53)
Other operating losses (gains), net 10 (9) (13) (4)
Other finance costs (income) 14 82 (23) 25
Share of post-tax earnings in equity method (1) (2) (7) (3)
investments
Tax on above items (5) 14 (2) 10
Tax items impacting comparability 3 (10) 1 (10)
Amortization of other identifiable 144 160 440 488
intangible assets
Interim period effective tax rate (9) 5 (6) -
normalization (7)
Tax charge amortization (8) (22) (22) (65) (65)
Dividends declared on preference shares (1) (1) (2) (2)
Adjusted earnings $405 $361 $1,168 $1,150
Adjusted earnings per share $0.52 $0.45 $1.48 $1.41
Diluted weighted-average common shares 781.2 807.6 788.8 814.0
(millions)
Refer to page 12 for explanation of footnotes.
Thomson Reuters Corporation
Reconciliation of Net Cash Provided by Operating Activities
to Free Cash Flow from Ongoing Businesses (9)
(millions of U.S. dollars)
(unaudited)
Three Months Nine Months Ended
Ended
September 30, September 30,
2015 2014 2015 2014
Net cash provided by operating activities $665 $585 $1,833 $1,574
Capital expenditures, less proceeds from (217) (231) (743) (704)
disposals
Other investing activities 2 5 5 7
Dividends paid on preference shares (1) (1) (2) (2)
Free cash flow 449 358 1,093 875
Remove: Other Businesses (2) - (2) - (1)
Free cash flow from ongoing businesses $449 $356 $1,093 $874
Footnotes
(1) Revenues from ongoing businesses are revenues from reportable segments and
Corporate & Other (which includes Reuters News) less eliminations. Other
Businesses (see note (2) below) are excluded.
(2) Other Businesses are businesses that have been or are expected to be exited
through sale or closure that did not qualify for discontinued operations
classification.
(3) Thomson Reuters defines adjusted EBITDA as underlying operating profit
excluding the related depreciation and amortization of computer software.
Adjusted EBITDA margin is adjusted EBITDA expressed as a percentage of
revenues from ongoing businesses.
(4) Underlying operating profit is operating profit from reportable segments
and Corporate & Other (includes Reuters News). Underlying operating profit
margin is the underlying operating profit expressed as a percentage of
revenues from ongoing businesses.
(5) The changes in revenues from ongoing businesses, adjusted EBITDA and
underlying operating profit and the related margins, and adjusted earnings
per share before currency (at constant currency or excluding the effects of
currency) are determined by converting the current and prior period's local
currency equivalent using the same exchange rates.
(6) Adjusted earnings and adjusted earnings per share include dividends
declared on preference shares and amortization of the 2013 tax charges
associated with the consolidation of technology and content assets but
exclude the pre-tax impacts of amortization of other identifiable
intangible assets as well as the post-tax impacts of fair value
adjustments, other operating (gains) and losses, certain impairment
charges, the results of Other Businesses (see note (2) above), other
finance (income) costs, Thomson Reuters share of post-tax (earnings) losses
in equity method investments, discontinued operations and other items
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