Thomson Reuters
Reports Third-Quarter 2017 Results
TORONTO, Nov. 1, 2017 /PRNewswire/ -- Thomson Reuters
(TSX/NYSE: TRI) today reported results for the third quarter ended
September 30, 2017. Based on its
results for the first nine months of the year, the company
reaffirmed its full year guidance (as updated in August) and
expects to achieve the high end of its full-year 2017 adjusted
earnings per share (EPS) guidance, which was increased last quarter
to between $2.40 to $2.45.
"It is gratifying to see that the progress we have made over the
last several years is continuing to pay off," said Jim Smith, president and chief executive officer
of Thomson Reuters. "And, despite lower than expected revenue
growth for the quarter, margins continue to improve and our most
promising growth initiatives are performing well. We will continue
to manage the things within our control with the same rigor and
discipline that has turned around our organization, in order to
build maximum sustainable long-term profit growth. Our
transformation efforts should continue to generate bottom-line
growth and provide the added fuel we need to accelerate top-line
growth in the future."
Consolidated Financial Highlights -
Three Months Ended September 30
(Millions of U.S.
dollars, except for adjusted EBITDA margin and EPS)
(unaudited) |
IFRS Financial Measures(1) |
2017 |
2016 |
Change |
Change at Constant
Currency |
Revenues |
$2,792 |
$2,744 |
2% |
|
Operating profit |
$467 |
$385 |
21% |
|
Diluted EPS (includes discontinued
operations) |
$0.46 |
$0.36 |
28% |
|
Cash flow from operations (includes discontinued
operations) |
$808 |
$758 |
7% |
|
Non-IFRS Financial
Measures(1) |
|
|
|
|
Revenues |
$2,792 |
$2,744 |
2% |
1% |
Adjusted EBITDA |
$849 |
$814 |
4% |
4% |
Adjusted EBITDA margin |
30.4% |
29.7% |
70bp |
70bp |
Adjusted EPS |
$0.68 |
$0.54 |
26% |
24% |
Free cash flow (includes discontinued
operations) |
$531 |
$519 |
2% |
|
Revenues increased 2% due to higher recurring revenues
and a positive impact from foreign currency.
- At constant currency, revenues increased 1%.
Operating profit increased 21% due to higher revenues and
a gain on the sale of an investment.
- Adjusted EBITDA increased 4% to $849 million and the margin increased 70 basis
points to 30.4% from 29.7%.
Diluted EPS, which includes discontinued operations,
increased 28% to $0.46 primarily due
to higher operating profit, despite the loss of earnings from IP
& Science following its sale in the fourth quarter of 2016.
Lower interest and tax expense were offset by higher expenses from
non-cash foreign currency fluctuations on intercompany loans.
- Adjusted EPS was $0.68, an
increase of 26%, or $0.14 per share
primarily due to higher adjusted EBITDA, and lower interest and tax
expense.
Cash flow from operations increased 7% due to
higher operating profit.
- Free cash flow increased 2% to $531 million as higher adjusted EBITDA was partly
offset by higher capital expenditures.
(1) |
In addition to results reported in accordance with
International Financial Reporting Standards (IFRS), the company
uses certain non-IFRS financial measures as supplemental indicators
of its operating performance and financial position. 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. |
The company repurchased 5.0 million shares during the third
quarter at a cost of $230 million and
repurchased 18.5 million shares during the first nine months of the
year at a cost of $808 million under
its $1.0 billion share buyback
program.
Highlights by Business Unit – Three
Months Ended September 30
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited) |
|
|
Three Months
Ended |
|
|
|
|
|
September
30, |
|
Change |
|
|
2017 |
2016 |
|
Total |
Foreign Currency |
Constant Currency |
Revenues |
|
|
|
|
|
|
|
Financial & Risk |
|
$1,542 |
$1,516 |
|
2% |
1% |
1% |
Legal |
|
843 |
835 |
|
1% |
0% |
1% |
Tax & Accounting |
|
341 |
323 |
|
6% |
1% |
5% |
Corporate & Other (Reuters News) |
|
73 |
73 |
|
0% |
1% |
-1% |
Eliminations |
|
(7) |
(3) |
|
|
|
|
Revenues |
|
$2,792 |
$2,744 |
|
2% |
1% |
1% |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
Financial & Risk |
|
$495 |
$460 |
|
8% |
2% |
6% |
Legal |
|
338 |
328 |
|
3% |
1% |
2% |
Tax & Accounting |
|
95 |
87 |
|
9% |
1% |
8% |
Corporate & Other (includes Reuters News) |
|
(79) |
(61) |
|
n/a |
n/a |
n/a |
Adjusted EBITDA |
|
$849 |
$814 |
|
4% |
0% |
4% |
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
Financial & Risk |
|
32.1% |
30.3% |
|
180bp |
30bp |
150bp |
Legal |
|
40.1% |
39.3% |
|
80bp |
10bp |
70bp |
Tax & Accounting |
|
27.9% |
26.9% |
|
100bp |
30bp |
70bp |
Corporate & Other (includes Reuters News) |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
Adjusted EBITDA margin |
|
30.4% |
29.7% |
|
70bp |
0bp |
70bp |
|
|
|
|
|
|
|
|
n/a – not applicable |
|
|
|
|
|
|
|
Unless otherwise noted, all revenue growth comparisons by
business unit in this news release are at constant currency (or
exclude the impact of foreign currency) as Thomson Reuters believes
this provides the best basis to measure their
performance.
Financial & Risk
Revenues increased 1% to $1.5
billion. Organic revenues were unchanged and
acquisitions contributed 1%.
- Revenues by type:
- Recurring revenues grew 1% (77% of total)
- Transactions revenues grew 7% (15% of total) due to
increased revenue from Tradeweb and contributions from
acquisitions.
- Recoveries revenues decreased 4% (8% of
total).
- Revenues by geography:
- Revenues were up 3% in the Americas, up 2% in Asia, and decreased 1% in Europe, Middle
East and Africa
(EMEA).
Adjusted EBITDA increased 8% to $495 million.
- The margin increased to 32.1% from 30.3%. In constant currency,
the margin increased 150 basis points primarily due to savings from
the company's simplification initiatives, including 2016 severance
charges, and higher revenues.
Net sales were positive in the quarter.
Legal
Revenues increased 1% to $843
million.
- Recurring revenues grew 3% (76% of total)
- US Print revenues declined 7% (13% of total)
- Transactions revenues declined 8% (11% of total)
Adjusted EBITDA increased 3% to $338 million.
- The margin increased to 40.1% from 39.3%. In constant currency,
the margin increased 70 basis points due to higher revenues and
savings related to fourth-quarter 2016 severance charges and
ongoing simplification initiatives.
Tax & Accounting
Revenues increased 5% to $341
million.
- Recurring revenues grew 2% (87% of total)
- Transactions revenues grew 33% (13% of total)
Adjusted EBITDA increased 9% to $95 million.
- The margin increased to 27.9% from 26.9%. In constant currency,
the margin increased 70 basis points due to higher revenues.
Corporate & Other (Including
Reuters News)
Reuters News revenues were $73
million, down 1%.
Corporate & Other costs at the adjusted EBITDA level
were $79 million compared to
$61 million in the prior-year period.
The increase was primarily due to investments relating to improving
customer experience and costs related to real estate consolidation
initiatives.
- Including depreciation and amortization of software, Corporate
& Other costs were $85 million
compared to $77 million in the
prior-year period. On this basis, the company expects full-year
Corporate & Other costs will be approximately $290 million.
Consolidated Financial Highlights –
Nine Months Ended September 30
(Millions of U.S.
dollars, except for adjusted EBITDA margin and EPS)
(unaudited) |
IFRS Financial Measures |
2017 |
2016 |
Change |
Change At
Constant Currency |
Revenues |
$8,389 |
$8,306 |
1% |
|
Operating profit |
$1,310 |
$1,096 |
20% |
|
Diluted EPS (includes discontinued
operations) |
$1.13 |
$1.15 |
-2% |
|
Cash flow from operations (includes discontinued
operations) |
$1,274 |
$1,986 |
-36% |
|
|
|
|
|
|
Non-IFRS Financial Measures |
|
|
|
|
Revenues |
$8,389 |
$8,306 |
1% |
2% |
Adjusted EBITDA |
$2,563 |
$2,319 |
11% |
10% |
Adjusted EBITDA margin |
30.6% |
27.9% |
270bp |
240bp |
Adjusted EPS |
$1.91 |
$1.47 |
30% |
29% |
Free cash flow (includes discontinued
operations) |
$526 |
$1,267 |
-58% |
|
|
|
|
|
|
|
Revenues increased 1% as higher recurring revenues and
contributions from acquisitions were partly offset by the impact of
foreign currency.
- At constant currency, revenues increased 2%.
Operating profit increased 20% primarily due to higher
revenues and lower expenses, which reflected continued
simplification initiatives.
- Adjusted EBITDA increased 11% to $2.6 billion and the margin increased to 30.6%
from 27.9%, reflecting the same factors.
Diluted EPS, which includes discontinued operations,
decreased 2% to $1.13 as higher
operating profit and lower interest expense were more than offset
by non-cash foreign currency fluctuations on intercompany loans and
the loss of earnings from IP & Science following its sale.
- Adjusted EPS was $1.91, an
increase of 30%, or $0.44 per share,
primarily due to higher adjusted EBITDA, as well as lower interest
expense.
Cash flow from operations declined 36% primarily due to a
$500 million pension plan
contribution in the first quarter of 2017, $137 million of payments related to 2016
severance charges, and the loss of cash flow from IP & Science
following its sale ($237 million
year-on-year variance).
- Free cash flow decreased 58% to $526 million reflecting similar factors as noted
above.
Highlights by Business Unit – Nine
Months Ended September 30
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited) |
|
|
Nine Months Ended |
|
|
|
|
|
September
30, |
|
Change |
|
|
2017 |
2016 |
|
Total |
Foreign Currency |
Constant Currency |
Revenues |
|
|
|
|
|
|
|
Financial & Risk |
|
$4,561 |
$4,549 |
|
0% |
-1% |
1% |
Legal |
|
2,509 |
2,503 |
|
0% |
-1% |
1% |
Tax & Accounting |
|
1,108 |
1,036 |
|
7% |
1% |
6% |
Corporate & Other (Reuters News) |
|
221 |
227 |
|
-3% |
-1% |
-2% |
Eliminations |
|
(10) |
(9) |
|
|
|
|
Revenues |
|
$8,389 |
$8,306 |
|
1% |
-1% |
2% |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
Financial & Risk |
|
$1,435 |
$1,340 |
|
7% |
0% |
7% |
Legal |
|
965 |
936 |
|
3% |
0% |
3% |
Tax & Accounting |
|
339 |
283 |
|
20% |
1% |
19% |
Corporate & Other (includes Reuters News) |
|
(176) |
(240) |
|
n/a |
n/a |
n/a |
Adjusted EBITDA |
|
$2,563 |
$2,319 |
|
11% |
1% |
10% |
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
Financial & Risk |
|
31.5% |
29.5% |
|
200bp |
40bp |
160bp |
Legal |
|
38.5% |
37.4% |
|
110bp |
20bp |
90bp |
Tax & Accounting |
|
30.6% |
27.3% |
|
330bp |
0bp |
330bp |
Corporate & Other (includes Reuters News) |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
Adjusted EBITDA margin |
|
30.6% |
27.9% |
|
270bp |
30bp |
240bp |
|
|
|
|
|
|
|
|
n/a – not applicable |
|
|
|
|
|
|
|
Dividend
In February 2017, the Thomson
Reuters board of directors approved a $0.02 per share annualized increase in the
dividend to $1.38 per common share. A
quarterly dividend of $0.345 per
share is payable on December 15, 2017
to common shareholders of record as of November 16, 2017.
Business Outlook 2017 (At Constant
Currency)
Based on the results of the first nine months of the year, the
company reaffirmed its full-year outlook, as communicated in
August 2017:
- Low single-digit revenue growth
- Adjusted EBITDA margin to range between 29.3% - 30.3%
- Free cash flow to range between $0.9
billion and $1.2 billion, which reflects cash payments in
2017 relating to fourth-quarter 2016 severance charges, the
$500 million pension plan
contribution made in the first quarter of 2017 and the loss of free
cash flow from the sale of the IP & Science business
- Adjusted EPS target of $2.40 -
$2.45, which is now forecast to be at the top of this
range.
The company's 2017 outlook does not factor in the impact of
acquisitions or divestitures that may occur during the year.
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."
Thomson Reuters
Thomson Reuters is the world's leading source of news and
information for professional markets. Our customers rely on us to
deliver the intelligence, technology and expertise they need to
find trusted answers. The business has operated in more than 100
countries for more than 100 years. Thomson Reuters shares are
listed on the Toronto and New York
Stock Exchanges (symbol: TRI). For more information, visit
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 adjusted EBITDA and the
related margin (other than at the business unit or segment level),
free cash flow, adjusted EPS, and selected measures excluding 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. The
term "organic" refers to Thomson Reuters' existing businesses
before the impact of acquisitions.
The company's business outlook
contains various non-IFRS financial measures. For outlook purposes
only, the company is unable to reconcile these non-IFRS measures to
the most comparable IFRS measures because it cannot predict, with
reasonable certainty, the 2017 impact of changes in foreign
exchange rates which impact (i) the translation of its results
reported at average foreign currency rates for the year, (ii) fair
value adjustments associated with foreign currency derivatives
embedded in certain customer contracts, and (iii) other finance
income or expense related to foreign exchange contracts and
intercompany financing arrangements. Additionally, the company
cannot reasonably predict the occurrence or amount of other
operating gains and losses, which generally arise from business
transactions that it does not anticipate.
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 2017 (At Constant Currency)" section, Mr. Smith's comments
and statements regarding corporate costs, 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 2017. 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 2017 business outlook
is based on various external and internal assumptions. Economic and
market assumptions include, but are not limited to, GDP growth in
most of the countries where Thomson Reuters operates, a continued
increase in demand for high quality information and workflow
solutions and a continued need for trusted products and services
that help customers navigate changing geopolitical, economic and
regulatory environments. Internal financial and operational
assumptions include, but are not limited to, the successful
execution of sales initiatives, ongoing product release programs,
our 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 and retain existing ones, or expand into new
geographic markets and identify areas of higher growth; fraudulent
or unpermitted data access or other cyber-security or privacy
breaches; failures or disruptions of telecommunications, data
centers, network systems or the Internet; increased accessibility
to free or relatively inexpensive information sources; failure to
meet the challenges involved in operating globally; failure to
maintain a high renewal rate for recurring, subscription-based
services; dependency on third parties for data, information and
other services; changes to law and regulations; tax matters,
including changes to tax laws, regulations and treaties;
fluctuations in foreign currency exchange and interest rates;
failure to adapt to organizational changes and effectively
implement strategic initiatives; failure to attract, motivate and
retain high quality management and key employees; failure to
protect the brands and reputation of Thomson Reuters; inadequate
protection of intellectual property rights; threat of legal actions
and claims; failure to derive fully the anticipated benefits from
existing or future acquisitions, joint ventures, investments or
dispositions; risk of antitrust/competition-related claims or
investigations; impairment of goodwill and other identifiable
intangible assets; 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
David Crundwell
Senior Vice President, Corporate Affairs
+1 416 649 9904
david.crundwell@tr.com |
INVESTORS
Frank J. Golden
Senior Vice President, Investor Relations
+1 646 223 5288
frank.golden@tr.com |
Thomson Reuters will webcast a discussion of its
third-quarter 2017 results today beginning at 8:30 a.m. Eastern Daylight Time (EDT). 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 |
Consolidated Income
Statement |
(millions of U.S.
dollars, except per share data) |
(unaudited) |
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September
30, |
|
September
30, |
|
2017 |
2016 |
|
2017 |
2016 |
CONTINUING OPERATIONS |
|
|
|
|
|
Revenues |
$2,792 |
$2,744 |
|
$8,389 |
$8,306 |
Operating expenses |
(1,996) |
(1,964) |
|
(5,997) |
(6,064) |
Depreciation |
(73) |
(78) |
|
(222) |
(239) |
Amortization of computer software |
(171) |
(177) |
|
(519) |
(518) |
Amortization of other identifiable intangible
assets |
(115) |
(128) |
|
(354) |
(388) |
Other operating gains (losses), net |
30 |
(12) |
|
13 |
(1) |
Operating profit |
467 |
385 |
|
1,310 |
1,096 |
Finance costs, net: |
|
|
|
|
|
Net interest expense |
(84) |
(108) |
|
(272) |
(304) |
Other finance costs |
(58) |
(3) |
|
(176) |
(28) |
Income before tax and equity method
investments |
325 |
274 |
|
862 |
764 |
Share of post-tax earnings (losses)
in equity method
investments |
2 |
2 |
|
(3) |
2 |
Tax benefit (expense) |
22 |
(8) |
|
8 |
16 |
Earnings from continuing operations |
349 |
268 |
|
867 |
782 |
(Loss) earnings from discontinued operations, net
of tax |
(1) |
18 |
|
1 |
126 |
Net earnings |
$348 |
$286 |
|
$868 |
$908 |
|
|
|
|
|
|
Earnings attributable to: |
|
|
|
|
|
Common shareholders |
330 |
273 |
|
819 |
872 |
Non-controlling interests |
18 |
13 |
|
49 |
36 |
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
Basic earnings per share: |
|
|
|
|
|
From continuing operations |
$0.46 |
$0.34 |
|
$1.13 |
$0.99 |
From discontinued operations |
- |
0.03 |
|
- |
0.17 |
Basic earnings per share |
$0.46 |
$0.37 |
|
$1.13 |
$1.16 |
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
From continuing operations |
$0.46 |
$0.34 |
|
$1.13 |
$0.99 |
From discontinued operations |
- |
0.02 |
|
- |
0.16 |
Diluted earnings per share |
$0.46 |
$0.36 |
|
$1.13 |
$1.15 |
|
|
|
|
|
|
Basic weighted-average common shares |
715,532,769 |
743,939,102 |
|
721,205,041 |
752,226,485 |
Diluted weighted-average common shares |
716,900,125 |
745,772,211 |
|
722,527,597 |
753,916,599 |
Thomson Reuters
Corporation |
Consolidated
Statement of Financial Position |
(millions of U.S.
dollars) |
(unaudited) |
|
|
September 30, |
|
December 31, |
2017 |
|
2016 |
Assets |
|
|
|
Cash and cash equivalents |
$898 |
|
$2,368 |
Trade and other receivables |
1,530 |
|
1,392 |
Other financial assets |
106 |
|
188 |
Prepaid expenses and other current assets |
724 |
|
686 |
Current assets |
3,258 |
|
4,634 |
|
|
|
|
Computer hardware and other property, net |
903 |
|
961 |
Computer software, net |
1,411 |
|
1,394 |
Other identifiable intangible assets, net |
5,429 |
|
5,655 |
Goodwill |
15,019 |
|
14,485 |
Other financial assets |
93 |
|
135 |
Other non-current assets |
596 |
|
537 |
Deferred tax |
56 |
|
51 |
Total assets |
$26,765 |
|
$27,852 |
|
|
|
|
Liabilities and equity |
|
|
|
Liabilities |
|
|
|
Current indebtedness |
$1,723 |
|
$1,111 |
Payables, accruals and provisions |
2,219 |
|
2,448 |
Deferred revenue |
935 |
|
901 |
Other financial liabilities |
315 |
|
102 |
Current liabilities |
5,192 |
|
4,562 |
|
|
|
|
Long-term indebtedness |
5,383 |
|
6,278 |
Provisions and other non-current liabilities |
1,680 |
|
2,258 |
Other financial liabilities |
285 |
|
340 |
Deferred tax |
987 |
|
1,158 |
Total liabilities |
13,527 |
|
14,596 |
|
|
|
|
Equity |
|
|
|
Capital |
9,536 |
|
9,589 |
Retained earnings |
6,920 |
|
7,477 |
Accumulated other comprehensive loss |
(3,712) |
|
(4,293) |
Total shareholders' equity |
12,744 |
|
12,773 |
Non-controlling interests |
494 |
|
483 |
Total equity |
13,238 |
|
13,256 |
Total liabilities and equity |
$26,765 |
|
$27,852 |
Thomson Reuters
Corporation |
Consolidated
Statement of Cash Flow |
(millions of U.S.
dollars) |
(unaudited) |
|
|
|
|
|
|
Three Months
Ended
September 30, |
|
Nine Months
Ended
September 30, |
|
2017 |
2016 |
|
2017 |
2016 |
Cash provided by (used in): |
|
|
|
|
|
Operating activities |
|
|
|
|
|
Earnings from continuing operations |
$349 |
$268 |
|
$867 |
$782 |
Adjustments for: |
|
|
|
|
|
Depreciation |
73 |
78 |
|
222 |
239 |
Amortization of computer software |
171 |
177 |
|
519 |
518 |
Amortization of other identifiable intangible
assets |
115 |
128 |
|
354 |
388 |
Net gains on disposals of businesses and
investments |
(35) |
(2) |
|
(35) |
(4) |
Deferred tax |
(121) |
(46) |
|
(194) |
(130) |
Other |
164 |
129 |
|
601 |
354 |
Pension contribution |
- |
- |
|
(500) |
- |
Changes in working capital and other
items |
97 |
37 |
|
(506) |
(344) |
Operating cash flows from continuing
operations |
813 |
769 |
|
1,328 |
1,803 |
Operating cash flows from discontinued
operations |
(5) |
(11) |
|
(54) |
183 |
Net cash provided by operating activities |
808 |
758 |
|
1,274 |
1,986 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Acquisitions, net of cash acquired |
(1) |
- |
|
(184) |
(111) |
Proceeds from disposals of businesses and
investments |
40 |
3 |
|
50 |
4 |
Capital expenditures, less proceeds from
disposals |
(256) |
(213) |
|
(710) |
(658) |
Other investing activities |
(1) |
3 |
|
14 |
23 |
Investing cash flows from continuing
operations |
(218) |
(207) |
|
(830) |
(742) |
Investing cash flows from discontinued
operations |
- |
(13) |
|
17 |
(38) |
Net cash used in investing activities |
(218) |
(220) |
|
(813) |
(780) |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Proceeds from debt |
- |
- |
|
- |
498 |
Repayments of debt |
(550) |
- |
|
(1,100) |
(503) |
Net borrowings under short-term loan
facilities |
555 |
398 |
|
705 |
702 |
Repurchases of common shares |
(230) |
(542) |
|
(808) |
(1,232) |
Dividends paid on preference shares |
(1) |
(1) |
|
(2) |
(2) |
Dividends paid on common shares |
(237) |
(243) |
|
(720) |
(740) |
Dividends paid to non-controlling interests |
(19) |
(15) |
|
(50) |
(44) |
Other financing activities |
14 |
9 |
|
30 |
22 |
Net cash used in financing activities |
(468) |
(394) |
|
(1,945) |
(1,299) |
Increase (decrease) in cash and bank
overdrafts |
122 |
144 |
|
(1,484) |
(93) |
Translation adjustments |
4 |
(2) |
|
9 |
(3) |
Cash and bank overdrafts at beginning of
period |
766 |
684 |
|
2,367 |
922 |
Cash and bank overdrafts at end of period |
$892 |
$826 |
|
$892 |
$826 |
|
|
|
|
|
|
Cash and bank overdrafts at end of period
comprised of: |
|
|
|
|
|
Cash and cash equivalents |
$898 |
$831 |
|
$898 |
$831 |
Bank overdrafts |
(6) |
(5) |
|
(6) |
(5) |
|
$892 |
$826 |
|
$892 |
$826 |
Thomson Reuters
Corporation |
Reconciliation of
Earnings from Continuing Operations to Adjusted
EBITDA(1) |
(millions of U.S.
dollars, except for margins) |
(unaudited) |
|
|
Three Months
Ended |
|
Nine Months
Ended |
September
30, |
September
30, |
|
2017 |
2016 |
Change |
|
2017 |
2016 |
Change |
|
|
|
|
|
|
|
|
Earnings from continuing operations |
$349 |
$268 |
30% |
|
$867 |
$782 |
11% |
Adjustments to remove: |
|
|
|
|
|
|
|
Tax (benefit) expense |
(22) |
8 |
|
|
(8) |
(16) |
|
Other finance costs |
58 |
3 |
|
|
176 |
28 |
|
Net interest expense |
84 |
108 |
|
|
272 |
304 |
|
Amortization of other identifiable intangible
assets |
115 |
128 |
|
|
354 |
388 |
|
Amortization of computer software |
171 |
177 |
|
|
519 |
518 |
|
Depreciation |
73 |
78 |
|
|
222 |
239 |
|
EBITDA |
$828 |
$770 |
|
|
$2,402 |
$2,243 |
|
Adjustments to remove: |
|
|
|
|
|
|
|
Share of post-tax (earnings) losses in equity
method investments |
(2) |
(2) |
|
|
3 |
(2) |
|
Other operating (gains) losses, net |
(30) |
12 |
|
|
(13) |
1 |
|
Fair value adjustments |
53 |
34 |
|
|
171 |
77 |
|
Adjusted EBITDA |
$849 |
$814 |
4% |
|
$2,563 |
$2,319 |
11% |
Adjusted EBITDA margin(1) |
30.4% |
29.7% |
70bp |
|
30.6% |
27.9% |
270bp |
Thomson Reuters
Corporation |
Reconciliation of
Earnings Attributable to Common Shareholders to Adjusted
Earnings(2) |
(millions of U.S.
dollars, except for share and per share data) |
(unaudited) |
|
|
Three
Months Ended
September 30, |
|
Nine
Months Ended
September 30, |
|
|
|
2017 |
2016 |
Change |
|
2017 |
2016 |
Change |
Earnings attributable to common
shareholders |
$330 |
$273 |
21% |
|
$819 |
$872 |
-6% |
Adjustments to remove: |
|
|
|
|
|
|
|
Fair value adjustments |
53 |
34 |
|
|
171 |
77 |
|
Amortization of other identifiable intangible
assets |
115 |
128 |
|
|
354 |
388 |
|
Other operating (gains) losses, net |
(30) |
12 |
|
|
(13) |
1 |
|
Other finance costs |
58 |
3 |
|
|
176 |
28 |
|
Share of post-tax (earnings) losses in equity
method
investments |
(2) |
(2) |
|
|
3 |
(2) |
|
Tax on above items |
(19) |
(46) |
|
|
(108) |
(138) |
|
Tax items impacting comparability |
(5) |
7 |
|
|
(3) |
13 |
|
Loss (earnings) from discontinued operations, net
of tax |
1 |
(18) |
|
|
(1) |
(126) |
|
Interim period effective tax rate
normalization(3) |
(13) |
13 |
|
|
(15) |
- |
|
Dividends declared on preference shares |
(1) |
(1) |
|
|
(2) |
(2) |
|
Adjusted earnings |
$487 |
$403 |
21% |
|
$1,381 |
$1,111 |
24% |
Adjusted EPS |
$0.68 |
$0.54 |
26% |
|
$1.91 |
$1.47 |
30% |
Foreign currency(4) |
|
|
2% |
|
|
|
1% |
Constant currency(4) |
|
|
24% |
|
|
|
29% |
|
|
|
|
|
|
|
|
Diluted weighted-average common shares
(millions) |
716.9 |
745.8 |
|
|
722.5 |
753.9 |
|
Refer to page 11 for footnotes.
Thomson Reuters
Corporation
Reconciliation of Net Cash Provided by Operating Activities to
Free Cash Flow(5)
(millions of U.S. dollars)
(unaudited) |
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September
30, |
|
September
30, |
|
2017 |
2016 |
|
2017 |
2016 |
Net cash provided by operating activities |
$808 |
$758 |
|
$1,274 |
$1,986 |
Capital expenditures, less proceeds from
disposals |
(256) |
(213) |
|
(710) |
(658) |
Capital expenditures from discontinued
operations |
- |
(13) |
|
- |
(38) |
Other investing activities |
(1) |
3 |
|
14 |
23 |
Dividends paid on preference shares |
(1) |
(1) |
|
(2) |
(2) |
Dividends paid to non-controlling interests |
(19) |
(15) |
|
(50) |
(44) |
Free cash flow |
$531 |
$519 |
|
$526 |
$1,267 |
Footnotes |
(1) |
Thomson Reuters defines adjusted EBITDA as
earnings from continuing operations before tax expense or benefit,
net interest expense, other finance costs or income, depreciation,
amortization of software and other identifiable intangible assets,
Thomson Reuters share of post-tax (earnings) losses in equity
method investments, other operating gains and losses, certain asset
impairment charges, fair value adjustments and corporate related
items. Adjusted EBITDA margin is adjusted EBITDA expressed as a
percentage of revenues. Thomson Reuters uses adjusted EBITDA
because it provides a consistent basis to evaluate operating
profitability and performance trends by excluding items that the
Company does not consider to be controllable activities for this
purpose. Adjusted EBITDA also represents a measure commonly
reported and widely used by investors as a valuation metric.
Additionally, this measure is used by Thomson Reuters and investors
to assess a company's ability to incur and service debt. |
(2) |
Adjusted earnings and adjusted EPS include
dividends declared on preference shares but exclude the post-tax
impacts of fair value adjustments, amortization of other
identifiable intangible assets, other operating gains and losses,
certain asset impairment charges, other finance costs or income,
Thomson Reuters share of post-tax (earnings) losses in equity
method investments, discontinued operations and other items
affecting comparability. Thomson Reuters calculates the post-tax
amount of each item excluded from adjusted earnings based on the
specific tax rules and tax rates associated with the nature and
jurisdiction of each item. Adjusted EPS is calculated using diluted
weighted-average shares and does not represent actual earnings or
loss per share attributable to shareholders. Thomson Reuters uses
adjusted earnings and adjusted EPS as they provide a more
comparable basis to analyze earnings and they are also measures
commonly used by shareholders to measure the company's
performance. |
(3) |
Adjustment to reflect income taxes based on
estimated full-year effective tax rate. Earnings or losses for
interim periods under IFRS reflect income taxes based on the
estimated effective tax rates of each of the jurisdictions in which
Thomson Reuters operates. The non-IFRS adjustment reallocates
estimated full-year income taxes between interim periods, but has
no effect on full-year income taxes. |
(4) |
The changes in revenues, adjusted EBITDA 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-year period's local
currency equivalent using the same exchange rates. |
(5) |
Free cash flow (includes free cash flow from
continuing and discontinued operations) is net cash provided by
(used in) operating activities, and other investing activities less
capital expenditures, dividends paid on the company's preference
shares, and dividends paid to non-controlling interests. Thomson
Reuters uses free cash flow as it helps assess the company's
ability, over the long term, to create value for its shareholders
as it represents cash available to repay debt, pay common dividends
and fund share repurchases and new acquisitions. |
Supplemental |
Thomson Reuters
Corporation
Depreciation and Amortization of Computer Software by Business
Segment
(millions of U.S. dollars)
(unaudited) |
|
|
Three Months
Ended
September 30, |
|
Nine Months
Ended
September 30, |
|
2017 |
2016 |
|
2017 |
2016 |
Financial & Risk |
$147 |
$147 |
|
$434 |
$435 |
Legal |
60 |
64 |
|
183 |
187 |
Tax & Accounting |
31 |
28 |
|
95 |
86 |
Corporate & Other (includes Reuters News) |
6 |
16 |
|
29 |
49 |
Total depreciation and amortization of computer
software |
$244 |
$255 |
|
$741 |
$757 |