EX-7.1 4 ex7_1.htm EXHIBIT 7.1 ex7_1.htm

Exhibit 7.1
 
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth the ratio of earnings to fixed charges for Thomson Reuters Corporation for the period presented.  For purposes of reporting with the US Securities and Exchange Commission, Thomson Reuters PLC is a successor issuer to Reuters Group PLC (Reuters).

Thomson Reuters has two parent companies — Thomson Reuters Corporation and Thomson Reuters PLC — and their respective subsidiaries operate as a unified group under a dual listed company structure. Accordingly, standalone Thomson Reuters PLC information, which excludes the results of Thomson Reuters Corporation, is not indicative of the financial position, results of operations or cash flows of Thomson Reuters as a whole and does not provide meaningful information for investors.  Thomson Reuters primary financial statements are the consolidated financial statements of Thomson Reuters Corporation, which account for Thomson Reuters PLC as a subsidiary.

Accordingly, the computation below is based on Thomson Reuters Corporation consolidated financial statements as at and for the year ended December 31, 2008, which include the results of Reuters from April 17, 2008, the date Reuters was acquired by The Thomson Corporation (renamed Thomson Reuters Corporation as of that date).

We have not made any pro forma adjustments to reflect Reuters results from the beginning of the period presented as Thomson Reuters Corporation was not required to prepare consolidated pro forma financial statements as at and for the year ended December 31, 2008.  We computed the ratio of earnings to fixed charges by dividing the amount of total earnings by the amount of total fixed charges.

(U.S. dollars in millions, except ratio)
 
Year ended
December 31, 2008
 
Earnings:
     
Earnings from continuing operations (1)
    1,405  
Add back:
       
Income taxes
    351  
Tradeweb ownership interests, net of tax
    17  
Earnings from continuing operations before income taxes and minority interests
    1,773  
Add:
       
Fixed charges
    488  
Dividends from equity affiliates
    2  
Less:
       
Preference shares dividend requirement
    (6 )
Tradeweb ownership interests before income taxes included above
    (28 )
Earnings, as adjusted
    2,229  
         
Fixed Charges:
       
Interest expense
    388  
Estimated interest component of rental expense
    94  
Preference shares dividend requirement
    6  
Fixed charges, total
    488  
         
Ratio of earnings to fixed charges
    4.57  

(1)
Amount as reported in Thomson Reuters Corporation audited consolidated statement of earnings for the year ended December 31, 2008.
 
 

 

The following table sets forth the ratio of earnings to fixed charges for Reuters for the periods presented. The information below was derived from audited financial statements previously filed by Reuters with the SEC. We computed the ratios of earnings to fixed charges by dividing the amount of total earnings by the amount of total fixed charges.
 
   
Year Ended December 31,
(in millions of British pounds sterling, except for ratios)
 
2007
IFRS
   
2006
IFRS
   
2005
IFRS
   
2004
IFRS
 
Earnings
                       
Earnings from continuing operations before income taxes
 
£
281
   
£
320
   
£
237
   
£
389
 
Fixed charges
   
70
     
57
     
59
     
68
 
Total
 
£
351
   
£
377
   
£
296
   
£
457
 
Fixed Charges
                               
Interest expense
 
£
46
   
£
32
   
£
28
   
£
27
 
Estimated interest component of rental expense
   
24
     
25
     
31
     
41
 
Total
 
£
70
   
£
57
   
£
59
   
£
68
 
Ratio of Earnings to Fixed Charges
   
5.01
x
   
6.61
x
   
5.02
x
   
6.72
x

The ratios above for 2005, 2006 and 2007 reflect Reuters adoption of IAS 39 in 2005.

The following table sets forth the ratio of earnings to fixed charges for Reuters Group PLC for the applicable periods under US GAAP.

   
Year Ended December 31,
(in millions of British pounds sterling, except for ratios)
 
2006
US GAAP
   
2005
US GAAP
   
2004
US GAAP
 
Earnings
                 
Earnings (loss) from continuing operations before income taxes
 
£
350
   
£
162
   
£
519
 
Fixed charges
   
57
     
59
     
68
 
Total
 
£
407
   
£
221
   
£
587
 
Fixed Charges
                       
Interest expense
 
£
32
   
£
28
   
£
27
 
Estimated interest component of rental expense
   
25
     
31
     
41
 
Total
 
£
57
   
£
59
   
£
68
 
Ratio of Earnings to Fixed Charges
   
7.14
x
   
3.75
x
   
8.63
x