TORONTO, Aug. 1, 2017 /PRNewswire/ -- Thomson Reuters
(TSX/NYSE: TRI) today reported results for the second quarter ended
June 30, 2017. Based on its
first-half results, the company raised its full-year 2017 outlook
for several metrics, as reflected on page 5.
"It is encouraging to see the continued improvement in
underlying operating performance," said Jim
Smith, president and chief executive officer of Thomson
Reuters. "Based on the solid start to the year, we are increasing
full-year EPS guidance. Our execution focus is paying off, and we
believe efforts to improve customer experience will keep the trend
lines moving in the right direction."
Consolidated Financial Highlights Three Months Ended
June 30
(Millions of U.S.
dollars, except for adjusted EBITDA margin and earnings per share
(EPS)
(unaudited)
|
IFRS Financial
Measures(1)
|
2017
|
2016
|
Change
|
Change at
Constant
Currency
|
Revenues
|
$2,782
|
$2,769
|
0%
|
|
Operating
profit
|
$399
|
$401
|
0%
|
|
Diluted EPS (includes
discontinued operations)
|
$0.27
|
$0.45
|
-40%
|
|
Cash flow from
operations (includes discontinued operations)
|
$834
|
$770
|
8%
|
|
Non-IFRS Financial
Measures(1)
|
|
|
|
|
Revenues
|
$2,782
|
$2,769
|
0%
|
2%
|
Adjusted
EBITDA
|
$838
|
$757
|
11%
|
11%
|
Adjusted EBITDA
margin
|
30.1%
|
27.3%
|
280bp
|
230bp
|
Adjusted
EPS
|
$0.60
|
$0.47
|
28%
|
28%
|
Free cash flow
(includes discontinued operations)
|
$580
|
$525
|
10%
|
|
|
|
|
|
|
Revenues were slightly higher compared to the prior-year
period as higher recurring revenues and contributions from
acquisitions were mostly offset by the impact of foreign currency.
- At constant currency, revenues increased 2%.
Operating profit was essentially unchanged as slightly
higher revenues and lower expenses, which reflected savings from
the company's simplification initiatives, were offset by the
unfavorable impact of fair value adjustments associated with
foreign currency derivatives embedded in certain customer
contracts.
- Adjusted EBITDA increased 11% to $838 million and the margin increased 280 basis
points to 30.1% from 27.3% primarily due to higher revenues and
simplification initiatives which resulted in lower
expenses.
Diluted EPS, which includes discontinued operations,
decreased 40% to $0.27 due to the
same factors that impacted operating profit, as well as non-cash
foreign currency fluctuations on intercompany loans and the loss of
earnings from IP & Science following its sale in the fourth
quarter of 2016.
- Adjusted EPS was $0.60, an
increase of 28%, or $0.13 per share,
primarily due to higher adjusted EBITDA.
Cash flow from operations increased 8%, despite the
loss of cash flow from IP & Science following its sale, due to
higher operating profit before the impact of non-cash items, such
as fair value adjustments.
- Free cash flow increased 10% to $580 million, primarily reflecting stronger
adjusted EBITDA performance, partly offset by the loss of cash flow
from IP & Science following its sale.
The company repurchased 6.7 million shares during the second
quarter at a cost of $294 million and
repurchased 13.5 million shares during the first six months of the
year at a cost of $578 million under
its $1.0 billion share buyback
program.
(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.
|
Highlights by Business Unit – Three Months Ended June 30
|
|
|
|
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
|
June
30,
|
|
Change
|
|
|
2017
|
2016
|
|
Total
|
Foreign
Currency
|
Constant
Currency
|
Revenues
|
|
|
|
|
|
|
|
Financial &
Risk
|
|
$1,517
|
$1,524
|
|
0%
|
-2%
|
2%
|
Legal
|
|
842
|
846
|
|
0%
|
-1%
|
1%
|
Tax &
Accounting
|
|
350
|
324
|
|
8%
|
0%
|
8%
|
Corporate & Other
(Reuters News)
|
|
74
|
79
|
|
-6%
|
-1%
|
-5%
|
Eliminations
|
|
(1)
|
(4)
|
|
|
|
|
Revenues
|
|
$2,782
|
$2,769
|
|
0%
|
-2%
|
2%
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Financial &
Risk
|
|
$477
|
$443
|
|
8%
|
0%
|
8%
|
Legal
|
|
320
|
310
|
|
3%
|
-1%
|
4%
|
Tax &
Accounting
|
|
103
|
82
|
|
26%
|
2%
|
24%
|
Corporate & Other
(includes Reuters News)
|
|
(62)
|
(78)
|
|
n/a
|
n/a
|
n/a
|
Adjusted
EBITDA
|
|
$838
|
$757
|
|
11%
|
0%
|
11%
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
|
|
|
|
|
Financial &
Risk
|
|
31.4%
|
29.1%
|
|
230bp
|
50bp
|
180bp
|
Legal
|
|
38.0%
|
36.6%
|
|
140bp
|
30bp
|
110bp
|
Tax &
Accounting
|
|
29.4%
|
25.3%
|
|
410bp
|
20bp
|
390bp
|
Corporate & Other
(includes Reuters News)
|
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
Adjusted EBITDA
margin
|
|
30.1%
|
27.3%
|
|
280bp
|
50bp
|
230bp
|
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 2% to $1.5
billion. Organic revenues grew 1% and acquisitions
contributed 1%.
- Revenues by type:
-
- Recurring revenues grew 1% (77% of total)
-
- The increase was primarily due to an annual price increase and
positive net sales.
- Transactions revenues grew 8% (15% of total)
-
- Growth was due to increased revenue from Tradeweb and the BETA
brokerage processing business, as well as contributions from
acquisitions. These increases were partially offset by the impact
of lower foreign exchange trading revenues.
- Recoveries revenues decreased 5% (8% of total).
The company does not expect recoveries to have a significant impact
on Financial & Risk's revenue growth in the second half of the
year.
- Revenues by geography:
-
- Revenues were up 3% in the Americas, up 1% in Europe, Middle
East and Africa (EMEA) and
were up slightly in Asia Pacific,
despite the impact of lower recoveries revenues in each
region.
Adjusted EBITDA increased 8% to $477 million.
- The margin increased to 31.4% from 29.1%. In constant currency,
the margin increased 180 basis points primarily due to savings from
the company's simplification initiatives, including the 2016
severance charges, and higher revenues.
Net sales were positive in the quarter.
Legal
Revenues increased 1% to $842
million.
- Recurring revenues grew 4% (76% of total)
- US Print revenues declined 8% (14% of total)
- Transactions revenues declined 8% (10% of total)
Adjusted EBITDA increased 3% to $320 million.
- The margin increased to 38.0% from 36.6%. In constant currency,
the margin increased 110 basis points due to higher revenues,
savings related to the fourth-quarter 2016 severance charges and
ongoing simplification initiatives.
Tax & Accounting
Revenues increased 8% to $350
million primarily due to higher recurring revenues and
improved transactions revenues. Revenue growth also benefited
from a favorable year-over-year comparison, as the Government
business reported lower revenues in the prior-year period due to
delays on certain contracts.
- Recurring revenues grew 4% (84% of total)
- Transactions revenues grew 36% (16% of total)
Adjusted EBITDA increased 26% to $103 million.
- The margin increased to 29.4% from 25.3%. In constant currency,
the margin increased 390 basis points due to higher revenues and
savings related to the fourth-quarter 2016 severance charges.
Corporate & Other (Including Reuters News)
Reuters News revenues were $74
million, down 5%.
Corporate & Other costs at the adjusted EBITDA level
were $62 million compared to
$78 million in the prior-year
period.
- The reduction was driven by savings generated by the company's
simplification initiatives and the elimination of certain costs
following the sale of IP & Science.
- Including depreciation and amortization of software, Corporate
& Other costs were $74 million
compared to $94 million in the
prior-year period. On this basis, the company expects full-year
Corporate & Other costs to be approximately $280 million.
Consolidated Financial Highlights - Six Months Ended
June 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
|
$5,597
|
$5,562
|
1%
|
|
Operating
profit
|
$843
|
$711
|
19%
|
|
Diluted EPS (includes
discontinued operations)
|
$0.67
|
$0.79
|
-15%
|
|
Cash flow from
operations (includes discontinued operations)
|
$466
|
$1,228
|
-62%
|
|
|
|
|
|
|
Non-IFRS Financial
Measures
|
|
|
|
|
Revenues
|
$5,597
|
$5,562
|
1%
|
2%
|
Adjusted
EBITDA
|
$1,714
|
$1,505
|
14%
|
14%
|
Adjusted EBITDA
margin
|
30.6%
|
27.1%
|
350bp
|
310bp
|
Adjusted
EPS
|
$1.23
|
$0.93
|
32%
|
32%
|
Free cash flow
(includes discontinued operations)
|
($5)
|
$748
|
n/m
|
|
n/m – not
meaningful
|
|
|
|
|
Revenues increased 1% as higher recurring revenues and
contributions from acquisitions were partly offset by the impact of
foreign currency and a decline in Financial & Risk's recoveries
revenues.
- At constant currency, revenues increased 2%.
Operating profit increased 19% as higher revenues and
lower expenses were partly offset by unfavorable fair value
adjustments associated with foreign currency derivatives embedded
in certain customer contracts. Lower expenses reflected continued
simplification initiatives.
- Adjusted EBITDA increased 14% to $1.7 billion and the margin increased to 30.6%
from 27.1%, primarily reflecting higher revenues and the positive
impact of the company's simplification initiatives.
Diluted EPS, which includes discontinued operations,
decreased 15% to $0.67 as higher
operating profit was 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 $1.23, an
increase of 32%, or $0.30 per share,
primarily due to higher adjusted EBITDA.
Cash flow from operations declined 62% primarily due to a
$500 million pension plan
contribution, $116 million of
payments related to 2016 severance charges, and the loss of cash
flow from IP & Science following its sale ($243 million year-on-year variance).
- Free cash flow was negative $5
million reflecting similar factors as noted above.
- Free cash flow for the full year is expected to be between
$0.9 billion and $1.2 billion, as
reflected in the company's outlook.
Highlights by Business Unit – Six Months Ended June 30
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited)
|
|
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
Change
|
|
|
2017
|
2016
|
|
Total
|
Foreign
Currency
|
Constant
Currency
|
Revenues
|
|
|
|
|
|
|
|
Financial &
Risk
|
|
$3,019
|
$3,033
|
|
0%
|
-1%
|
1%
|
Legal
|
|
1,666
|
1,668
|
|
0%
|
-1%
|
1%
|
Tax &
Accounting
|
|
767
|
713
|
|
8%
|
1%
|
7%
|
Corporate & Other
(Reuters News)
|
|
148
|
154
|
|
-4%
|
-2%
|
-2%
|
Eliminations
|
|
(3)
|
(6)
|
|
|
|
|
Revenues
|
|
$5,597
|
$5,562
|
|
1%
|
-1%
|
2%
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Financial &
Risk
|
|
$940
|
$880
|
|
7%
|
0%
|
7%
|
Legal
|
|
627
|
608
|
|
3%
|
-1%
|
4%
|
Tax &
Accounting
|
|
244
|
196
|
|
24%
|
0%
|
24%
|
Corporate & Other
(includes Reuters News)
|
|
(97)
|
(179)
|
|
n/a
|
n/a
|
n/a
|
Adjusted
EBITDA
|
|
$1,714
|
$1,505
|
|
14%
|
0%
|
14%
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
|
|
|
|
|
Financial &
Risk
|
|
31.1%
|
29.0%
|
|
210bp
|
40bp
|
170bp
|
Legal
|
|
37.6%
|
36.5%
|
|
110bp
|
0bp
|
110bp
|
Tax &
Accounting
|
|
31.8%
|
27.5%
|
|
430bp
|
-10bp
|
440bp
|
Corporate & Other
(includes Reuters News)
|
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
Adjusted EBITDA
margin
|
|
30.6%
|
27.1%
|
|
350bp
|
40bp
|
310bp
|
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 September 15,
2017 to common shareholders of record as of August 17, 2017.
Business Outlook 2017 (At Constant Currency)
Based on the results of the first half of the year, the company
raised its full-year outlook for adjusted EBITDA margin and
adjusted EPS. The company reaffirmed its full-year outlook for
revenue growth and free cash flow. For the full-year 2017, the
company currently expects:
- Low single-digit revenue growth
- Adjusted EBITDA margin to range between 29.3% - 30.3% - up from
previous guidance of 28.8% - 29.8%
- Free cash flow to range between $0.9
billion and $1.2 billion, which reflects cash payments in
2017 relating to the fourth-quarter 2016 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 – up from previous guidance of $2.35
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
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
recoveries revenues and 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
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
second-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
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2017
|
2016
|
|
2017
|
2016
|
CONTINUING
OPERATIONS
|
|
|
|
|
|
Revenues
|
$2,782
|
$2,769
|
|
$5,597
|
$5,562
|
Operating
expenses
|
(1,997)
|
(1,991)
|
|
(4,001)
|
(4,100)
|
Depreciation
|
(77)
|
(80)
|
|
(149)
|
(161)
|
Amortization of
computer software
|
(168)
|
(172)
|
|
(348)
|
(341)
|
Amortization of other
identifiable intangible assets
|
(120)
|
(132)
|
|
(239)
|
(260)
|
Other operating
(losses) gains, net
|
(21)
|
7
|
|
(17)
|
11
|
Operating
profit
|
399
|
401
|
|
843
|
711
|
Finance costs,
net:
|
|
|
|
|
|
Net interest
expense
|
(95)
|
(103)
|
|
(188)
|
(196)
|
Other finance (costs)
income
|
(91)
|
9
|
|
(118)
|
(25)
|
Income before tax and
equity method investments
|
213
|
307
|
|
537
|
490
|
Share of post-tax
losses in equity method investments
|
(7)
|
(1)
|
|
(5)
|
-
|
Tax (expense)
benefit
|
(5)
|
(2)
|
|
(14)
|
24
|
Earnings from
continuing operations
|
201
|
304
|
|
518
|
514
|
Earnings from
discontinued operations, net of tax
|
5
|
46
|
|
2
|
108
|
Net
earnings
|
$206
|
$350
|
|
$520
|
$622
|
|
|
|
|
|
|
Earnings attributable
to:
|
|
|
|
|
|
Common
shareholders
|
192
|
337
|
|
489
|
599
|
Non-controlling
interests
|
14
|
13
|
|
31
|
23
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
Basic and diluted
earnings per share:
|
|
|
|
|
|
From
continuing operations
|
$0.26
|
$0.39
|
|
$0.67
|
$0.65
|
From
discontinued operations
|
0.01
|
0.06
|
|
-
|
0.14
|
Basic and diluted
earnings per share
|
$0.27
|
$0.45
|
|
$0.67
|
$0.79
|
|
|
|
|
|
|
Basic
weighted-average common shares
|
721,009,957
|
751,598,761
|
|
724,088,186
|
756,163,267
|
Diluted
weighted-average common shares
|
722,504,109
|
753,350,217
|
|
725,409,478
|
757,795,444
|
Thomson Reuters
Corporation
Consolidated
Statement of Financial Position
(millions of U.S.
dollars)
(unaudited)
|
|
|
June
30,
|
|
December
31,
|
|
2017
|
|
2016
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$771
|
|
$2,368
|
Trade and other
receivables
|
1,545
|
|
1,392
|
Other financial
assets
|
86
|
|
188
|
Prepaid expenses and
other current assets
|
735
|
|
686
|
Current
assets
|
3,137
|
|
4,634
|
|
|
|
|
Computer hardware and
other property, net
|
877
|
|
961
|
Computer software,
net
|
1,404
|
|
1,394
|
Other identifiable
intangible assets, net
|
5,539
|
|
5,655
|
Goodwill
|
14,856
|
|
14,485
|
Other financial
assets
|
84
|
|
135
|
Other non-current
assets
|
565
|
|
537
|
Deferred
tax
|
55
|
|
51
|
Total
assets
|
$26,517
|
|
$27,852
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Liabilities
|
|
|
|
Current
indebtedness
|
$718
|
|
$1,111
|
Payables, accruals
and provisions
|
2,027
|
|
2,448
|
Deferred
revenue
|
1,023
|
|
901
|
Other financial
liabilities
|
195
|
|
102
|
Current
liabilities
|
3,963
|
|
4,562
|
|
|
|
|
Long-term
indebtedness
|
6,326
|
|
6,278
|
Provisions and other
non-current liabilities
|
1,687
|
|
2,258
|
Other financial
liabilities
|
315
|
|
340
|
Deferred
tax
|
1,093
|
|
1,158
|
Total
liabilities
|
13,384
|
|
14,596
|
|
|
|
|
Equity
|
|
|
|
Capital
|
9,571
|
|
9,589
|
Retained
earnings
|
6,990
|
|
7,477
|
Accumulated other
comprehensive loss
|
(3,922)
|
|
(4,293)
|
Total shareholders'
equity
|
12,639
|
|
12,773
|
Non-controlling
interests
|
494
|
|
483
|
Total
equity
|
13,133
|
|
13,256
|
Total liabilities
and equity
|
$26,517
|
|
$27,852
|
Thomson Reuters
Corporation
Consolidated
Statement of Cash Flow
(millions of U.S.
dollars)
(unaudited)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2017
|
2016
|
|
2017
|
2016
|
Cash provided by
(used in):
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
Earnings from
continuing operations
|
$201
|
$304
|
|
$518
|
$514
|
Adjustments
for:
|
|
|
|
|
|
Depreciation
|
77
|
80
|
|
149
|
161
|
Amortization of
computer software
|
168
|
172
|
|
348
|
341
|
Amortization of other
identifiable intangible assets
|
120
|
132
|
|
239
|
260
|
Net gains on disposals
of businesses and investments
|
-
|
(1)
|
|
-
|
(2)
|
Deferred
tax
|
(52)
|
(26)
|
|
(73)
|
(84)
|
Other
|
274
|
47
|
|
437
|
225
|
Pension
contributions
|
-
|
-
|
|
(500)
|
-
|
Changes in working
capital and other items
|
54
|
(10)
|
|
(603)
|
(381)
|
Operating cash flows
from continuing operations
|
842
|
698
|
|
515
|
1,034
|
Operating cash flows
from discontinued operations
|
(8)
|
72
|
|
(49)
|
194
|
Net cash provided by
operating activities
|
834
|
770
|
|
466
|
1,228
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
Acquisitions, net of
cash acquired
|
(5)
|
(65)
|
|
(183)
|
(111)
|
(Payments for)
proceeds from disposals of businesses and
investments
|
-
|
(1)
|
|
10
|
1
|
Capital expenditures,
less proceeds from disposals
|
(241)
|
(212)
|
|
(454)
|
(445)
|
Other investing
activities
|
9
|
1
|
|
15
|
20
|
Investing cash flows
from continuing operations
|
(237)
|
(277)
|
|
(612)
|
(535)
|
Investing cash flows
from discontinued operations
|
17
|
(14)
|
|
17
|
(25)
|
Net cash used in
investing activities
|
(220)
|
(291)
|
|
(595)
|
(560)
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
Proceeds from
debt
|
-
|
498
|
|
-
|
498
|
Repayments of
debt
|
-
|
(500)
|
|
(550)
|
(503)
|
Net (repayments)
borrowings under short-term loan facilities
|
(105)
|
(138)
|
|
150
|
304
|
Repurchases of common
shares
|
(294)
|
(258)
|
|
(578)
|
(690)
|
Dividends paid on
preference shares
|
-
|
-
|
|
(1)
|
(1)
|
Dividends paid on
common shares
|
(241)
|
(248)
|
|
(483)
|
(497)
|
Dividends paid to
non-controlling interests
|
(22)
|
(20)
|
|
(31)
|
(29)
|
Other financing
activities
|
11
|
9
|
|
16
|
13
|
Net cash used in
financing activities
|
(651)
|
(657)
|
|
(1,477)
|
(905)
|
Decrease in cash and
bank overdrafts
|
(37)
|
(178)
|
|
(1,606)
|
(237)
|
Translation
adjustments
|
3
|
(5)
|
|
5
|
(1)
|
Cash and bank
overdrafts at beginning of period
|
800
|
867
|
|
2,367
|
922
|
Cash and bank
overdrafts at end of period
|
$766
|
$684
|
|
$766
|
$684
|
|
|
|
|
|
|
Cash and bank
overdrafts at end of period comprised of:
|
|
|
|
|
|
Cash and cash
equivalents
|
$771
|
$686
|
|
$771
|
$686
|
Bank
overdrafts
|
(5)
|
(2)
|
|
(5)
|
(2)
|
|
$766
|
$684
|
|
$766
|
$684
|
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
|
|
|
Six Months
Ended
|
|
|
June
30,
|
|
|
June
30,
|
|
|
2017
|
2016
|
Change
|
|
2017
|
2016
|
Change
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$201
|
$304
|
-34%
|
|
$518
|
$514
|
1%
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
Tax expense
(benefit)
|
5
|
2
|
|
|
14
|
(24)
|
|
Other finance costs
(income)
|
91
|
(9)
|
|
|
118
|
25
|
|
Net interest
expense
|
95
|
103
|
|
|
188
|
196
|
|
Amortization of other
identifiable intangible assets
|
120
|
132
|
|
|
239
|
260
|
|
Amortization of
computer software
|
168
|
172
|
|
|
348
|
341
|
|
Depreciation
|
77
|
80
|
|
|
149
|
161
|
|
EBITDA
|
$757
|
$784
|
|
|
$1,574
|
$1,473
|
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
Share of post-tax
losses in equity method
investments
|
7
|
1
|
|
|
5
|
-
|
|
Other operating losses
(gains), net
|
21
|
(7)
|
|
|
17
|
(11)
|
|
Fair value
adjustments
|
53
|
(21)
|
|
|
118
|
43
|
|
Adjusted
EBITDA
|
$838
|
$757
|
11%
|
|
$1,714
|
$1,505
|
14%
|
Adjusted EBITDA
margin(1)
|
30.1%
|
27.3%
|
280bp
|
|
30.6%
|
27.1%
|
350bp
|
|
|
|
|
|
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
June
30,
|
|
Six Months
Ended
June
30,
|
|
2017
|
2016
|
Change
|
|
2017
|
2016
|
Change
|
Earnings
attributable to common shareholders
|
$192
|
$337
|
-43%
|
|
$489
|
$599
|
-18%
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
Fair value
adjustments
|
53
|
(21)
|
|
|
118
|
43
|
|
Amortization of other
identifiable intangible assets
|
120
|
132
|
|
|
239
|
260
|
|
Other operating losses
(gains), net
|
21
|
(7)
|
|
|
17
|
(11)
|
|
Other finance costs
(income)
|
91
|
(9)
|
|
|
118
|
25
|
|
Share of post-tax
losses in equity method investments
|
7
|
1
|
|
|
5
|
-
|
|
Tax on above
items
|
(42)
|
(35)
|
|
|
(89)
|
(92)
|
|
Tax items impacting
comparability
|
2
|
13
|
|
|
2
|
6
|
|
Earnings from
discontinued operations, net of tax
|
(5)
|
(46)
|
|
|
(2)
|
(108)
|
|
Interim period
effective tax rate normalization(3)
|
(3)
|
(8)
|
|
|
(2)
|
(13)
|
|
Dividends declared on
preference shares
|
-
|
-
|
|
|
(1)
|
(1)
|
|
Adjusted
earnings
|
$436
|
$357
|
22%
|
|
$894
|
$708
|
26%
|
Adjusted
EPS
|
$0.60
|
$0.47
|
28%
|
|
$1.23
|
$0.93
|
32%
|
Foreign
currency(4)
|
|
|
0%
|
|
|
|
0%
|
Constant
currency(4)
|
|
|
28%
|
|
|
|
32%
|
|
|
|
|
|
|
|
|
Diluted
weighted-average common shares (millions)
|
722.5
|
753.4
|
|
|
725.4
|
757.8
|
|
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
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2017
|
2016
|
|
2017
|
2016
|
Net cash provided by
operating activities
|
$834
|
$770
|
|
$466
|
$1,228
|
Capital expenditures,
less proceeds from disposals
|
(241)
|
(212)
|
|
(454)
|
(445)
|
Capital expenditures
from discontinued operations
|
-
|
(14)
|
|
-
|
(25)
|
Other investing
activities
|
9
|
1
|
|
15
|
20
|
Dividends paid on
preference shares
|
-
|
-
|
|
(1)
|
(1)
|
Dividends paid to
non-controlling interests
|
(22)
|
(20)
|
|
(31)
|
(29)
|
Free cash
flow
|
$580
|
$525
|
|
$(5)
|
$748
|
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
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2017
|
2016
|
|
2017
|
2016
|
Financial &
Risk
|
$140
|
$146
|
|
$287
|
$288
|
Legal
|
61
|
63
|
|
123
|
123
|
Tax &
Accounting
|
32
|
27
|
|
64
|
58
|
Corporate & Other
(includes Reuters News)
|
12
|
16
|
|
23
|
33
|
Total depreciation
and amortization of computer software
|
$245
|
$252
|
|
$497
|
$502
|
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