For the month of May 2012
|
Commission File Number: 1-31349
|
THOMSON REUTERS CORPORATION
(Registrant)
|
|||
By:
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/s/ Marc E. Gold
|
||
Name: Marc E. Gold
|
|||
Title: Assistant Secretary
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Exhibit Number
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Description
|
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Management's Discussion and Analysis
|
||
Unaudited Consolidated Financial Statements
|
||
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
·
|
Overview – a brief discussion of our business;
|
|
·
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Results of Operations – a comparison of our current and prior period results;
|
|
·
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Liquidity and Capital Resources – a discussion of our cash flow and debt;
|
|
·
|
Outlook – our current financial outlook for 2012;
|
|
·
|
Related Party Transactions – a discussion of transactions with our principal and controlling shareholder, The Woodbridge Company Limited (Woodbridge), and others;
|
|
·
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Subsequent Events – a discussion of material events occurring after March 31, 2012 and through the date of this management’s discussion and analysis;
|
|
·
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Changes in Accounting Policies – a discussion of changes in our accounting policies and recent accounting pronouncements;
|
|
·
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Critical Accounting Estimates and Judgments – a discussion of critical estimates and judgments made by our management in applying accounting policies;
|
|
·
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Additional Information – other required disclosures; and
|
|
·
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Appendices – supplemental information and discussion.
|
|
·
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General economic conditions and market trends and their anticipated effects on our business;
|
|
·
|
Our 2012 financial outlook;
|
|
·
|
Investments that we have made and plan to make and the timing for businesses that we expect to sell; and
|
|
·
|
Our liquidity and capital resources available to us to fund our ongoing operations, investments and returns to shareholders.
|
|
·
|
4% growth in revenues from ongoing businesses (before currency)(1) was led by our Legal, Tax & Accounting and Intellectual Property & Science segments. Growth from these segments reflected the benefit of our investments in products, adjacent markets and new geographic areas in recent years and favorable market dynamics, particularly in Tax & Accounting. Our Financial & Risk segment made progress on product and customer initiatives to address challenges in the business.
|
|
·
|
Adjusted EBITDA margin(1) increased 260 basis points due to the elimination of Reuters integration expenses, as we completed the program last year, and from higher revenues. Underlying operating profit margin(1) decreased 30 basis points due to higher depreciation and amortization associated with investments in products. Adjusted earnings per share(1) of $0.44 increased 19% due to the elimination of integration expenses and higher underlying operating profit.
|
|
·
|
DataStream Pro, a new product for investment managers, which consolidates 12 legacy desktop products;
|
|
·
|
Accelus Compliance Manager in our Governance, Risk & Compliance business unit; and
|
|
·
|
Specific versions of Thomson Reuters Eikon for Commodities & Energy and for Wealth Management in Asia and EMEA (Europe, Middle East and Africa).
|
(1)
|
Refer to Appendix A for additional information on non-IFRS financial measures.
|
|
·
|
Revenues from ongoing businesses;
|
|
·
|
Revenues at constant currency (before currency or revenues excluding the effects of foreign currency);
|
|
·
|
Underlying operating profit and underlying operating profit margin;
|
|
·
|
Adjusted EBITDA and adjusted EBITDA margin;
|
|
·
|
Adjusted earnings and adjusted earnings per share from continuing operations;
|
|
·
|
Net debt;
|
|
·
|
Free cash flow; and
|
|
·
|
Free cash flow from ongoing operations.
|
(1)
|
Prior period amounts have been reclassified to reflect the current presentation. See Appendix C for restated 2011 and 2010 annual information.
|
Three months ended
March 31,
|
||||||||||||
(millions of U.S. dollars, except per share amounts)
|
2012
|
2011
|
Change
|
|||||||||
IFRS Financial Measures
|
||||||||||||
Revenues
|
3,354 | 3,330 | 1 | % | ||||||||
Operating profit
|
386 | 396 | (3 | %) | ||||||||
Diluted earnings per share
|
$ | 0.38 | $ | 0.30 | 27 | % | ||||||
Non-IFRS Financial Measures
|
||||||||||||
Revenues from ongoing businesses
|
3,187 | 3,077 | 4 | % | ||||||||
Adjusted EBITDA
|
825 | 717 | 15 | % | ||||||||
Adjusted EBITDA margin
|
25.9 | % | 23.3 | % | 260 | bp | ||||||
Underlying operating profit
|
545 | 536 | 2 | % | ||||||||
Underlying operating profit margin
|
17.1 | % | 17.4 | % | (30 | )bp | ||||||
Adjusted earnings per share from continuing operations
|
$ | 0.44 | $ | 0.37 | 19 | % |
Three months ended
March 31,
|
Percentage change:
|
|||||||||||||||||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
Existing
businesses
|
Acquired
businesses
|
Constant
currency
|
Foreign
currency
|
Total
|
|||||||||||||||||||||
Revenues from ongoing businesses
|
3,187 | 3,077 | 1 | % | 3 | % | 4 | % | - | 4 | % | |||||||||||||||||
Other businesses
|
167 | 253 | n/m | n/m | n/m | n/m | n/m | |||||||||||||||||||||
Revenues
|
3,354 | 3,330 | n/m | n/m | n/m | n/m | 1 | % |
Three months ended
March 31,
|
||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
Change
|
|||||||||
Operating profit
|
386 | 396 | (3 | %) | ||||||||
Adjustments:
|
||||||||||||
Amortization of other identifiable intangible assets
|
152 | 144 | ||||||||||
Integration programs expenses
|
- | 70 | ||||||||||
Fair value adjustments
|
30 | (2 | ) | |||||||||
Other operating gains, net
|
(22 | ) | (33 | ) | ||||||||
Operating profit from Other businesses
|
(1 | ) | (39 | ) | ||||||||
Underlying operating profit
|
545 | 536 | 2 | % | ||||||||
Adjustments:
|
||||||||||||
Integration programs expenses
|
- | (70 | ) | |||||||||
Depreciation and amortization of computer software (excluding Other businesses)
|
280 | 251 | ||||||||||
Adjusted EBITDA (1)
|
825 | 717 | 15 | % | ||||||||
Underlying operating profit margin
|
17.1 | % | 17.4 | % | (30 | )bp | ||||||
Adjusted EBITDA margin
|
25.9 | % | 23.3 | % | 260 | bp |
(1)
|
See Appendix B for a reconciliation of earnings from continuing operations to adjusted EBITDA.
|
Three months ended
March 31,
|
||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
Change
|
|||||||||
Operating expenses
|
2,553 | 2,552 | - | % | ||||||||
Remove:
|
||||||||||||
Fair value adjustments (1)
|
(30 | ) | 2 | |||||||||
Other businesses
|
(161 | ) | (194 | ) | ||||||||
Operating expenses, excluding fair value adjustments and Other businesses
|
2,362 | 2,360 | - | % |
(1)
|
Fair value adjustments primarily represent non-cash accounting adjustments from the revaluation of embedded foreign exchange derivatives within certain customer contracts due to fluctuations in foreign exchange rates and mark-to-market adjustments from certain share-based awards.
|
Three months ended
March 31,
|
||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
Change
|
|||||||||
Depreciation
|
110 | 107 | 3 | % | ||||||||
Amortization of computer software
|
175 | 164 | 7 | % | ||||||||
Amortization of other identifiable intangible assets
|
152 | 144 | 6 | % |
|
·
|
Depreciation and amortization of computer software increased reflecting investments in products such as Thomson Reuters Eikon, new capital expenditures and amortization of assets from recently acquired businesses, particularly in our Tax & Accounting segment.
|
|
·
|
Amortization of other identifiable intangible assets increased due to amortization from newly-acquired assets, which more than offset decreases from the completion of amortization for certain identifiable intangible assets acquired in previous years.
|
Three months ended
March 31,
|
||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
||||||
Other operating gains, net
|
22 | 33 |
Three months ended
March 31,
|
||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
Change
|
|||||||||
Net interest expense
|
114 | 101 | 13 | % |
Three months ended
March 31,
|
||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
||||||
Other finance income
|
30 | 7 |
Three months ended
March 31,
|
||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
||||||
Share of post tax (losses) earnings in equity method investees
|
(7 | ) | 5 |
Three months ended
March 31,
|
||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
||||||
Tax benefit (expense)
|
33 | (52 | ) |
|
·
|
$87 million of tax benefit from the recognition of a deferred tax asset that we expect to realize in connection with the planned sale of our Healthcare business;
|
|
·
|
$26 million of discrete tax benefits, of which $14 million related to lower corporate tax rates that were substantively enacted in certain jurisdictions outside the U.S. The remainder related to the recognition of deferred tax assets and the reversal of provisions for uncertain tax positions; and
|
|
·
|
$ 33 million of tax expense related to a gain on the sale of the Trade and Risk Management business.
|
Three months ended
March 31,
|
||||||||
(millions of U.S. dollars, except per share amounts)
|
2012
|
2011
|
||||||
Net earnings
|
326 | 257 | ||||||
Diluted earnings per share
|
$ | 0.38 | $ | 0.30 |
Three months ended
March 31,
|
||||||||||||
(millions of U.S. dollars, except per share amounts and share data)
|
2012
|
2011
|
Change
|
|||||||||
Earnings attributable to common shareholders
|
314 | 250 | 26 | % | ||||||||
Adjustments:
|
||||||||||||
Operating profit from Other businesses
|
(1 | ) | (39 | ) | ||||||||
Fair value adjustments
|
30 | (2 | ) | |||||||||
Other operating gains, net
|
(22 | ) | (33 | ) | ||||||||
Other finance income
|
(30 | ) | (7 | ) | ||||||||
Share of post-tax losses (earnings) in equity method investees
|
7 | (5 | ) | |||||||||
Tax on above
|
21 | 12 | ||||||||||
Interim period effective tax rate normalization
|
6 | (10 | ) | |||||||||
Discrete tax items
|
(113 | ) | - | |||||||||
Amortization of other identifiable intangible assets
|
152 | 144 | ||||||||||
Discontinued operations
|
2 | (2 | ) | |||||||||
Dividends declared on preference shares
|
(1 | ) | (1 | ) | ||||||||
Adjusted earnings from continuing operations
|
365 | 307 | 19 | % | ||||||||
Adjusted earnings per share from continuing operations (adjusted EPS)
|
$ | 0.44 | $ | 0.37 | 19 | % | ||||||
Diluted weighted average common shares (millions)
|
830.3 | 839.7 |
Three months ended
March 31,
|
Percentage change:
|
|||||||||||||||||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
Existing
businesses
|
Acquired
businesses
|
Constant
currency
|
Foreign
currency
|
Total
|
|||||||||||||||||||||
Trading
|
859 | 885 | (2 | %) | - | (2 | %) | (1 | %) | (3 | %) | |||||||||||||||||
Investors
|
603 | 623 | (3 | %) | - | (3 | %) | - | (3 | %) | ||||||||||||||||||
Marketplaces
|
298 | 273 | 4 | % | 6 | % | 10 | % | (1 | %) | 9 | % | ||||||||||||||||
Governance, Risk & Compliance (GRC)
|
51 | 23 | 16 | % | 106 | % | 122 | % | - | 122 | % | |||||||||||||||||
Revenues
|
1,811 | 1,804 | (1 | %) | 2 | % | 1 | % | (1 | %) | - | |||||||||||||||||
EBITDA
|
459 | 465 | (1 | %) | ||||||||||||||||||||||||
EBITDA margin
|
25.3 | % | 25.8 | % | (50 | )bp | ||||||||||||||||||||||
Segment operating profit
|
302 | 327 | (8 | %) | ||||||||||||||||||||||||
Segment operating profit margin
|
16.7 | % | 18.1 | % | (140 | )bp |
By revenue type:
|
First Quarter 2012 Revenues
|
|
· Subscription revenues increased 1% due to acquisitions and the benefit of a price increase. Excluding acquisitions, revenues decreased 1% due to desktop losses. We continued to make progress with the rollout of Thomson Reuters Eikon and Thomson Reuters Elektron. Thomson Reuters Eikon had more than 16,000 active desktops at the end of the first quarter of 2012, an increase of 30% from year-end 2011, and Thomson Reuters Elektron has 15 hosting centers around the world, including a new center opened in Brazil in April 2012.
· Recoveries revenues (low-margin revenues that we collect and largely pass-through to a third party provider, such as stock exchange fees) increased 2% as a result of a price increase from exchanges.
· Transaction revenues increased 4%, led by higher fixed income volume at Tradeweb. Lower foreign exchange volumes impacted revenues.
· Outright revenues, which are primarily discrete sales of software and services, represented a small portion of Financial & Risk’s revenues and increased 9%.
|
_______________________________
|
|
·
|
Trading revenues decreased as growth from Commodities & Energy and Foreign Exchange was offset by desktop cancellations in Exchange Traded Instruments and Fixed Income. Recoveries revenues increased 2%.
|
|
·
|
Investors revenues declined as a 16% increase in Enterprise Content, driven by demand for pricing and reference data, was more than offset by a 10% decrease from Investment Management (IM). Prior year cancellations and challenging operating conditions in Europe impacted IM’s performance. While IM’s revenues declined sequentially from the fourth quarter of 2011, net sales, though still negative, improved over the same period. Revenues from Corporate customers increased 1%, Investment Banking was unchanged and Wealth Management decreased 3%.
|
|
·
|
Marketplaces revenues increased led by Tradeweb, which benefited from the recent acquisition of Rafferty Capital Markets and also reflected 11% growth from Tradeweb’s existing business. Foreign exchange revenues rose slightly, but were impacted by lower transaction volumes.
|
|
·
|
GRC revenues increased significantly as this unit is primarily comprised of recently acquired business. Strong demand for risk and compliance solutions also contributed to revenue growth. Thomson Reuters Accelus Compliance Manager was launched in March 2012.
|
Three months ended
March 31,
|
Percentage change:
|
|||||||||||||||||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
Existing
businesses
|
Acquired
businesses
|
Constant
currency
|
Foreign
currency
|
Total
|
|||||||||||||||||||||
Revenues
|
777 | 754 | 2 | % | 1 | % | 3 | % | - | 3 | % | |||||||||||||||||
EBITDA
|
270 | 257 | 5 | % | ||||||||||||||||||||||||
EBITDA margin
|
34.7 | % | 34.1 | % | 60 | bp | ||||||||||||||||||||||
Segment operating profit
|
200 | 190 | 5 | % | ||||||||||||||||||||||||
Segment operating profit margin
|
25.7 | % | 25.2 | % | 50 | bp |
|
·
|
Subscription revenues increased 4%, led by client development solutions and global businesses;
|
|
·
|
Transaction revenues increased 7%, led by our back office and legal process outsourcing solutions; and
|
|
·
|
U.S. print revenues declined 3%.
|
|
·
|
U.S. Law Firm Solutions revenues increased 2%, led by a 12% increase in Business of Law revenues (FindLaw and Elite). Core legal research revenues were unchanged;
|
|
·
|
Corporate, Government & Academic revenues increased 4%, led by growth in legal process outsourcing;
|
|
·
|
Global businesses revenues increased 7% (4% from existing businesses) led by growth in Latin America. Global businesses include our operations outside the U.S. in both developed markets such as the U.K., Canada, Australia and New Zealand and higher growth regions such as Latin America and Asia; and
|
|
·
|
U.S. Law Firm Solutions, Corporate, Government & Academic and Global businesses represented approximately 55%, 25% and 20% of the Legal segment’s revenues, respectively, in the first quarter of 2012.
|
Three months ended
March 31,
|
Percentage change:
|
|||||||||||||||||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
Existing
businesses
|
Acquired
businesses
|
Constant
currency
|
Foreign
currency
|
Total
|
|||||||||||||||||||||
Revenues
|
310 | 238 | 9 | % | 22 | % | 31 | % | (1 | %) | 30 | % | ||||||||||||||||
EBITDA
|
96 | 64 | 50 | % | ||||||||||||||||||||||||
EBITDA margin
|
31.0 | % | 26.9 | % | 410 | bp | ||||||||||||||||||||||
Segment operating profit
|
68 | 43 | 58 | % | ||||||||||||||||||||||||
Segment operating profit margin
|
21.9 | % | 18.1 | % | 380 | bp |
Three months ended
March 31,
|
Percentage change:
|
|||||||||||||||||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
Existing
businesses
|
Acquired
businesses
|
Constant
currency
|
Foreign
currency
|
Total
|
|||||||||||||||||||||
Revenues
|
209 | 201 | 3 | % | 1 | % | 4 | % | - | 4 | % | |||||||||||||||||
EBITDA
|
72 | 66 | 9 | % | ||||||||||||||||||||||||
EBITDA margin
|
34.4 | % | 32.8 | % | 160 | bp | ||||||||||||||||||||||
Segment operating profit
|
55 | 52 | 6 | % | ||||||||||||||||||||||||
Segment operating profit margin
|
26.3 | % | 25.9 | % | 40 | bp |
Three months ended
March 31,
|
||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
||||||
Revenues – Media
|
82 | 82 | ||||||
Media
|
(1 | ) | (1 | ) | ||||
Core corporate expenses
|
(79 | ) | (75 | ) | ||||
Total
|
(80 | ) | (76 | ) |
Three months ended
March 31,
|
||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
||||||
Revenues
|
167 | 253 | ||||||
Operating profit
|
1 | 39 |
Business
|
Status
|
Former Segment
|
Description
|
|||
BARBRI
|
Sold - Q2 2011
|
Legal
|
A provider of bar exam preparatory workshops, courses, software, lectures and other tools in the U.S.
|
|||
Healthcare
|
Signed agreement for sale – Q2 2012
|
Healthcare & Science
|
A provider of data, analytics and performance benchmarking solutions and services to companies, government agencies and healthcare professionals
|
|||
Property Tax Consulting
|
Held for sale
|
Tax & Accounting
|
A provider of property tax outsourcing and compliance services in the U.S.
|
|||
Trade and Risk Management
|
Sold - Q1 2012
|
Financial & Risk
|
A provider of risk management solutions to financial institutions, including banks, broker-dealers and hedge funds
|
|
·
|
Approximately $0.5 billion of cash on hand;
|
|
·
|
Access through August 2016 to an undrawn $2.0 billion syndicated credit facility;
|
|
·
|
The ability to access capital markets as evidenced by our active commercial paper program; and
|
|
·
|
No scheduled maturities of long-term debt until 2013.
|
As at
|
||||||||
(millions of U.S. dollars)
|
March 31,
2012
|
December 31,
2011
|
||||||
Current indebtedness
|
296 | 434 | ||||||
Long-term indebtedness
|
7,210 | 7,160 | ||||||
Total debt
|
7,506 | 7,594 | ||||||
Swaps
|
(246 | ) | (224 | ) | ||||
Total debt after swaps
|
7,260 | 7,370 | ||||||
Other derivatives (2)
|
- | (2 | ) | |||||
Remove fair value adjustments for hedges
|
(44 | ) | (19 | ) | ||||
Total debt after hedging arrangements
|
7,216 | 7,349 | ||||||
Remove transaction costs and discounts included in the carrying value of debt
|
58 | 60 | ||||||
Less: cash and cash equivalents (3)
|
(467 | ) | (422 | ) | ||||
Net debt
|
6,807 | 6,987 |
(1)
|
Net debt is a non-IFRS financial measure, which we define in Appendix A.
|
(2)
|
Fair value of derivatives associated with commercial paper borrowings that were not designated as hedges for accounting purposes.
|
(3)
|
Includes restricted cash of $131 million and $147 million at March 31, 2012 and December 31, 2011, respectively.
|
|
·
|
We monitor the financial strength of financial institutions with which we have banking and other commercial relationships, including those that hold our cash and cash equivalents as well as those which are counterparties to derivative financial instruments and other arrangements;
|
|
·
|
We expect to continue to have access to funds held by our subsidiaries outside the U.S. in a tax efficient manner to meet our liquidity requirements; and
|
|
·
|
We have issued $350 million principal amount of debt securities under our $3.0 billion debt shelf prospectus that expires in May 2013.
|
(millions of U.S. dollars)
|
||||
Balance at December 31, 2011
|
16,750 | |||
Net earnings
|
326 | |||
Share issuances
|
50 | |||
Share repurchases
|
(24 | ) | ||
Effect of share-based compensation plans on contributed surplus
|
(8 | ) | ||
Dividends declared on common shares
|
(265 | ) | ||
Dividends declared on preference shares
|
(1 | ) | ||
Change in unrecognized net loss on cash flow hedges
|
(29 | ) | ||
Change in foreign currency translation adjustment
|
81 | |||
Net actuarial losses on defined benefit pension plans, net of tax
|
(44 | ) | ||
Distributions to non-controlling interests
|
(8 | ) | ||
Balance at March 31, 2012,
|
16,828 |
Three months ended
March 31,
|
||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
$ Change
|
|||||||||
Net cash provided by operating activities
|
273 | 200 | 73 | |||||||||
Net cash provided by (used in) investing activities
|
177 | (277 | ) | 454 | ||||||||
Net cash used in financing activities
|
(409 | ) | (180 | ) | (229 | ) | ||||||
Translation adjustments on cash and cash equivalents
|
4 | 4 | - | |||||||||
Increase (decrease) in cash and cash equivalents
|
45 | (253 | ) | 298 | ||||||||
Cash and cash equivalents at beginning of period
|
422 | 864 | (442 | ) | ||||||||
Cash and cash equivalents at end of period
|
467 | 611 | (144 | ) |
|
·
|
Net cash provided by operating activities increased reflecting higher adjusted EBITDA which included a benefit from lower Reuters integration-related costs;
|
|
·
|
We realized $614 million in proceeds (within investing activities) principally from the sale of our Trade and Risk Management business; and
|
|
·
|
We reduced our short-term borrowings by $136 million and continued to return cash to our shareholders in the current period.
|
|
·
|
Commercial paper program. Our $2.0 billion commercial paper program provides efficient and flexible short-term funding to balance the timing of completed acquisitions, expected disposal proceeds and debt repayments. We had commercial paper of $0.3 billion outstanding at March 31, 2012. Issuances of commercial paper reached a peak of $0.6 billion during the three-month period.
|
|
·
|
Credit facility. We have a $2.0 billion unsecured syndicated credit facility agreement which we may utilize from time to time to provide liquidity in connection with our commercial paper program and for general corporate purposes. As of March 31, 2012, we had no amounts drawn under the credit facility.
|
|
·
|
Credit ratings. Our access to financing depends on, among other things, suitable market conditions and the maintenance of suitable long-term credit ratings. Our credit ratings may be adversely affected by various factors, including increased debt levels, decreased earnings, declines in customer demand, increased competition, a further deterioration in general economic and business conditions and adverse publicity. Any downgrades in our credit ratings may impede our access to the debt markets or raise our borrowing rates.
|
Moody’s
|
Standard & Poor’s
|
DBRS Limited
|
Fitch
|
|
Long-term debt
|
Baa1
|
A-
|
A (low)
|
A-
|
Commercial paper
|
-
|
A-1 (low)
|
R-1 (low)
|
F2
|
Trend/Outlook
|
Stable
|
Stable
|
Stable
|
Stable
|
·
|
Dividends. Dividends paid on our common shares were as follows for the periods presented:
|
Three months ended
March 31,
|
||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
||||||
Dividends declared
|
265 | 259 | ||||||
Dividends reinvested in shares
|
(9 | ) | (42 | ) | ||||
Dividends paid
|
256 | 217 |
|
·
|
Share repurchases. We may buy back shares (and subsequently cancel them) from time to time as part of our capital management strategy. In May 2011, we renewed our normal course issuer bid (NCIB) for an additional 12-month period. Under the NCIB, we may repurchase up to 15 million common shares (representing less than 2% of the total outstanding shares) in open market transactions on the Toronto Stock Exchange (TSX) or the New York Stock Exchange (NYSE) between May 13, 2011 and May 12, 2012.
|
Three months ended
March 31,
|
||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
||||||
Net cash provided by operating activities
|
273 | 200 | ||||||
Capital expenditures, less proceeds from disposals
|
(283 | ) | (294 | ) | ||||
Other investing activities
|
5 | 35 | ||||||
Dividends paid on preference shares
|
(1 | ) | (1 | ) | ||||
Free cash flow
|
(6 | ) | (60 | ) | ||||
Remove: Other businesses
|
(35 | ) | (85 | ) | ||||
Free cash flow from ongoing operations
|
(41 | ) | (145 | ) |
2012 Outlook
|
Material assumptions
|
Material risks
|
||
Revenues expected to grow low single digits
|
— Improvement in net sales as the year progresses
— Positive gross domestic product (GDP) growth in the countries where we operate, led by rapidly developing economies
— Continued increase in the number of professionals around the world and their demand for high quality information and services
— Successful execution of ongoing product release and customer support programs, globalization strategy and other growth initiatives
|
— Uneven economic growth or recession across the markets we serve may result in reduced spending levels by our customers
— Demand for our products and services could be reduced by changes in customer buying patterns, competitive pressures or our inability to execute on key product or customer support initiatives
— Implementation of regulatory reform, including Dodd-Frank legislation and similar financial services laws around the world, may limit business opportunities for our customers, lowering their demand for our products and services
— Uncertainty regarding the European sovereign debt crisis and the Euro currency could impact demand from our customers as well as their ability to pay us
— Pressure on our customers, in developed markets in particular, to constrain the number of professionals employed due to regulatory and economic uncertainty
|
||
Adjusted EBITDA margin expected to be between 27% and 28%
|
— Revenues expected to grow low single digits in 2012
— Business mix continues to shift to higher-growth lower margin offerings
— Realization of expected benefits from efficiency initiatives and 2011 organizational realignments
|
— See the risks above related to the revenue outlook
— Revenues from higher margin businesses may be lower than expected
— The costs of required investments exceed expectations or actual returns are below expectations
|
2012 Outlook
|
Material assumptions
|
Material risks
|
||
Underlying operating profit margin expected to be between 18% and 19%
|
— Adjusted EBITDA margin expected to be between 27% and 28% in 2012
— Depreciation and amortization expense expected to represent 9% of revenues reflecting prior investments
— Capital expenditures expected to be between 7.5% and 8.0% of revenues
|
— See the risks above related to adjusted EBITDA margin outlook
— 2012 capital expenditures may be higher than currently expected, resulting in higher in-period depreciation and amortization
|
Free cash flow expected to increase 5% to 10% and free cash flow from ongoing operations expected to grow 15% to 20%
|
— Revenues expected to grow low single digits in 2012
— Adjusted EBITDA margin expected to be between 27% and 28%
— Capital expenditures expected to be between 7.5% to 8.0% of revenues
|
— See the risks above related to the revenue outlook and adjusted EBITDA margin outlook
— A weaker macroeconomic environment and unanticipated disruptions from new order-to-cash applications could negatively impact working capital performance
— 2012 capital expenditures may be higher than currently expected resulting in higher cash outflows
— The timing of completing divestitures may vary from our expectations resulting in actual free cash flow performance below our expectations
|
Non-IFRS Financial Measure
|
How We Define It
|
Why We Use It and Why It Is Useful to Investors
|
Most Directly Comparable IFRS Measure/Reconciliation
|
|||
Revenues from ongoing businesses
|
Revenues from reportable segments and Corporate & Other (which includes the Media business), less eliminations.
|
Provides a measure of our ability to grow our ongoing businesses over the long term.
|
Revenues
|
|||
Revenues at constant currency (before currency or revenues excluding the effects of foreign currency)
|
Revenues applying the same foreign currency exchange rates for the current and equivalent prior period. To calculate the foreign currency impact between periods, we convert the current and equivalent prior period’s local currency revenues using the same foreign currency exchange rate.
|
Provides a measure of underlying business trends, without distortion from the effect of foreign currency movements during the period.
Our reporting currency is the U.S. dollar. However, we conduct a significant amount of our activities in currencies other than the U.S. dollar. We manage our operating segments on a constant currency basis, and we manage currency exchange risk at the corporate level.
|
Revenues
|
|||
Underlying operating profit and underlying operating profit margin
|
Operating profit from reportable segments and Corporate & Other. The related margin is expressed as a percentage of revenues from ongoing businesses.
|
Provides a basis to evaluate operating profitability and performance trends, excluding the impact of items which distort the performance of our operations.
|
Operating profit
|
|||
Adjusted EBITDA and adjusted EBITDA margin
|
Underlying operating profit excluding the related depreciation and amortization of computer software. In 2011, this measure also included expenses associated with the final year of the Reuters integration program. The related margin is expressed as a percentage of revenues from ongoing businesses.
|
Provides a measure commonly reported and widely used by investors as an indicator of a company’s operating performance and ability to incur and service debt, and as a valuation metric.
|
Earnings from continuing operations
|
Non-IFRS Financial Measure
|
How We Define It
|
Why We Use It and Why It Is Useful to Investors
|
Most Directly Comparable IFRS Measure/Reconciliation
|
|||
Adjusted earnings and adjusted earnings per share from continuing operations
|
Earnings attributable to common shareholders and per share excluding the pre-tax impacts of amortization of other identifiable intangible assets and the post-tax impacts of fair value adjustments, other operating gains and losses, certain impairment charges, the results of Other businesses, other net finance costs or income, our share of post-tax earnings or losses in equity method investees, discontinued operations and other items affecting comparability. We also deduct dividends declared on preference shares. This measure is calculated using diluted weighted average shares.
In interim periods, we also adjust our reported earnings and earnings per share to reflect a normalized effective tax rate. Specifically, the normalized effective rate is computed as the estimated full-year effective tax rate applied to adjusted pre-tax earnings of the interim period. The reported effective tax rate is based on separate annual effective income tax rates for each taxing jurisdiction that are applied to each interim period’s pre-tax income.
|
Provides a more comparable basis to analyze earnings and is also a measure commonly used by shareholders to measure our performance.
Because the geographical mix of pre-tax profits and losses in interim periods distorts the reported effective tax rate within an interim period, we believe that using the expected full-year effective tax rate provides more comparability among interim periods. The adjustment to normalize the effective tax rate reallocates estimated full-year income taxes between interim periods, but has no effect on full year tax expense or on cash taxes paid.
|
Earnings attributable to common shareholders and earnings per share attributable to common shareholders
|
Non-IFRS Financial Measure
|
How We Define It
|
Why We Use It and Why It Is Useful to Investors
|
Most Directly Comparable IFRS Measure/Reconciliation
|
|||
Net debt
|
Total indebtedness, including the associated fair value of hedging instruments on our debt, but excluding unamortized transaction costs and premiums or discounts associated with our debt, less cash and cash equivalents.
|
Provides a commonly used measure of a company’s leverage.
Given that we hedge some of our debt to reduce risk, we include hedging instruments as we believe it provides a better measure of the total obligation associated with our outstanding debt. However, because we intend to hold our debt and related hedges to maturity, we do not consider certain components of the associated fair value of hedges in our measurements. We reduce gross indebtedness by cash and cash equivalents.
|
Total debt (current indebtedness plus long-term indebtedness)
|
|||
Free cash flow
|
Net cash provided by operating activities less capital expenditures, other investing activities and dividends paid on our preference shares.
|
Helps assess our ability, over the long term, to create value for our shareholders as it represents cash available to repay debt, pay common dividends and fund share repurchases and new acquisitions.
|
Net cash provided by operating activities
|
|||
Free cash flow from ongoing operations
|
Free cash flow excluding businesses that have been or are expected to be exited through sale or closure, which we refer to as “Other businesses”.
|
Provides a supplemental measure of our ability, over the long term, to create value for our shareholders because it represents free cash flow generated by our operations excluding businesses that have been or are expected to be exited through sale or closure.
|
Net cash provided by operating activities
|
Three months ended
March 31,
|
||||||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
Change
|
|||||||||
Earnings from continuing operations
|
328 | 255 | 29 | % | ||||||||
Adjustments:
|
||||||||||||
Tax (benefit) expense
|
(33 | ) | 52 | |||||||||
Other finance income
|
(30 | ) | (7 | ) | ||||||||
Net interest expense
|
114 | 101 | ||||||||||
Amortization of other identifiable intangible assets
|
152 | 144 | ||||||||||
Amortization of computer software
|
175 | 164 | ||||||||||
Depreciation
|
110 | 107 | ||||||||||
EBITDA
|
816 | 816 | ||||||||||
Adjustments:
|
||||||||||||
Share of post tax losses (earnings) in equity method investees
|
7 | (5 | ) | |||||||||
Other operating gains, net
|
(22 | ) | (33 | ) | ||||||||
Fair value adjustments
|
30 | (2 | ) | |||||||||
EBITDA from Other businesses (1)
|
(6 | ) | (59 | ) | ||||||||
Adjusted EBITDA
|
825 | 717 | 15 | % | ||||||||
Adjusted EBITDA margin
|
25.9 | % | 23.3 | % | 260 | bp |
Three months ended March 31, 2012
|
Three months ended March 31, 2011
|
|||||||||||||||||||||||
(millions of U.S. dollars)
|
Underlying
Operating
profit
|
Add:
Depreciation
and
amortization of
computer
software **
|
Adjusted
EBITDA
|
Underlying
Operating
profit
|
Add:
Depreciation
and
amortization of
computer
software **
|
Adjusted
EBITDA
|
||||||||||||||||||
Financial & Risk
|
302 | 157 | 459 | 327 | 138 | 465 | ||||||||||||||||||
Legal
|
200 | 70 | 270 | 190 | 67 | 257 | ||||||||||||||||||
Tax & Accounting
|
68 | 28 | 96 | 43 | 21 | 64 | ||||||||||||||||||
Intellectual Property & Science
|
55 | 17 | 72 | 52 | 14 | 66 | ||||||||||||||||||
Corporate & Other (includes Media) (2)
|
(80 | ) | 8 | (72 | ) | (76 | ) | 11 | (65 | ) | ||||||||||||||
Integration programs expenses
|
na
|
na
|
- |
na
|
na
|
(70 | ) | |||||||||||||||||
Total
|
545 | 280 | 825 | 536 | 251 | 717 |
(1)
|
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. Significant businesses in this category include: BARBRI (legal education provider, sold in the second quarter of 2011); Trade and Risk Management (trade and risk management solutions provider to financial institutions sold in the first quarter of 2012); Healthcare (data, analytics and performance benchmarking solutions provider); and Property Tax Consulting (property tax outsourcing and compliance services provider in the U.S.).
|
Three months ended
March 31,
|
||||||||
(millions of U.S. dollars)
|
2012
|
2011
|
||||||
Revenues
|
167 | 253 | ||||||
Operating profit
|
1 | 39 | ||||||
Depreciation and amortization of computer software
|
5 | 20 | ||||||
EBITDA
|
6 | 59 |
(2)
|
Corporate & Other includes the Media business and expenses for corporate functions and certain share-based compensation costs.
|
Year ended
December 31,
|
Percentage change:
|
|||||||||||||||||||||||||||
(millions of U.S. dollars)
|
2011
|
2010
|
Existing
businesses
|
Acquired
businesses
|
Constant
currency
|
Foreign
currency
|
Total
|
|||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||
Trading
|
3,537 | 3,400 | - | - | - | 4 | % | 4 | % | |||||||||||||||||||
Investors
|
2,472 | 2,432 | (1 | %) | - | (1 | %) | 3 | % | 2 | % | |||||||||||||||||
Marketplaces
|
1,134 | 997 | 4 | % | 7 | % | 11 | % | 3 | % | 14 | % | ||||||||||||||||
Governance Risk & Compliance
|
154 | 73 | 14 | % | 94 | % | 108 | % | 3 | % | 111 | % | ||||||||||||||||
Financial & Risk
|
7,297 | 6,902 | 1 | % | 2 | % | 3 | % | 3 | % | 6 | % | ||||||||||||||||
Legal
|
3,221 | 3,027 | 2 | % | 3 | % | 5 | % | 1 | % | 6 | % | ||||||||||||||||
Tax & Accounting
|
1,050 | 907 | 6 | % | 9 | % | 15 | % | 1 | % | 16 | % | ||||||||||||||||
Intellectual Property & Science
|
852 | 789 | 5 | % | 2 | % | 7 | % | 1 | % | 8 | % | ||||||||||||||||
Reportable segments
|
12,420 | 11,625 | 2 | % | 3 | % | 5 | % | 2 | % | 7 | % | ||||||||||||||||
Corporate & Other (includes Media) (2)
|
336 | 324 | - | - | - | 4 | % | 4 | % | |||||||||||||||||||
Eliminations
|
(13 | ) | (12 | ) | - | - | - | - | - | |||||||||||||||||||
Revenues from ongoing businesses
|
12,743 | 11,937 | 2 | % | 3 | % | 5 | % | 2 | % | 7 | % | ||||||||||||||||
Other businesses (1)
|
1,064 | 1,133 | n/m | n/m | n/m | n/m | n/m | |||||||||||||||||||||
Consolidated revenues
|
13,807 | 13,070 | n/m | n/m | n/m | n/m | 6 | % | ||||||||||||||||||||
Operating (loss) profit
|
Margin
|
|||||||||||||||||||||||||||
Segment operating profit
|
2011 | 2010 | ||||||||||||||||||||||||||
Financial & Risk
|
1,396 | 1,270 | 19.1 | % | 18.4 | % | ||||||||||||||||||||||
Legal
|
941 | 892 | 29.2 | % | 29.5 | % | ||||||||||||||||||||||
Tax & Accounting
|
237 | 203 | 22.6 | % | 22.4 | % | ||||||||||||||||||||||
Intellectual Property & Science
|
237 | 209 | 27.8 | % | 26.5 | % | ||||||||||||||||||||||
Reportable segments
|
2,811 | 2,574 | 22.6 | % | 22.1 | % | ||||||||||||||||||||||
Corporate & Other (includes Media) (2)
|
(270 | ) | (257 | ) | - | - | ||||||||||||||||||||||
Underlying operating profit
|
2,541 | 2,317 | 19.9 | % | 19.4 | % | ||||||||||||||||||||||
Other businesses (1)
|
238 | 243 | ||||||||||||||||||||||||||
Integration programs expenses
|
(215 | ) | (463 | ) | ||||||||||||||||||||||||
Fair value adjustments
|
149 | (117 | ) | |||||||||||||||||||||||||
Amortization of other identifiable intangible assets
|
(612 | ) | (545 | ) | ||||||||||||||||||||||||
Goodwill impairment
|
(3,010 | ) | - | |||||||||||||||||||||||||
Other operating gains (losses), net
|
204 | (16 | ) | |||||||||||||||||||||||||
Consolidated operating (loss) profit
|
(705 | ) | 1,419 |
Year ended
December 31,
|
||||||||||||
(millions of U.S. dollars)
|
2011
|
2010
|
Change
|
|||||||||
Operating (loss) profit
|
(705 | ) | 1,419 | n/m | ||||||||
Adjustments:
|
||||||||||||
Goodwill impairment
|
3,010 | - | ||||||||||
Amortization of other identifiable intangible assets
|
612 | 545 | ||||||||||
Integration programs expenses
|
215 | 463 | ||||||||||
Fair value adjustments
|
(149 | ) | 117 | |||||||||
Other operating (gains) losses, net
|
(204 | ) | 16 | |||||||||
Operating profit from Other businesses (1)
|
(238 | ) | (243 | ) | ||||||||
Underlying operating profit
|
2,541 | 2,317 | 10 | % | ||||||||
Adjustments:
|
||||||||||||
Integration programs expenses
|
(215 | ) | (463 | ) | ||||||||
Depreciation and amortization of computer software (excluding Other businesses (1))
|
1,042 | 955 | ||||||||||
Adjusted EBITDA
|
3,368 | 2,809 | 20 | % | ||||||||
Underlying operating profit margin
|
19.9 | % | 19.4 | % | 50 | bp | ||||||
Adjusted EBITDA margin
|
26.4 | % | 23.5 | % | 290 | bp |
Year ended
December 31,
|
||||||||||||
(millions of U.S. dollars, except per share amounts)
|
2011
|
2010
|
Change
|
|||||||||
(Loss) earnings attributable to common shareholders
|
(1,390 | ) | 909 | n/m | ||||||||
Adjustments:
|
||||||||||||
Goodwill impairment
|
3,010 | - | ||||||||||
Goodwill impairment attributable to non-controlling interests
|
(40 | ) | - | |||||||||
Operating profit from Other businesses (1)
|
(238 | ) | (243 | ) | ||||||||
Fair value adjustments
|
(149 | ) | 117 | |||||||||
Other operating (gains) losses, net
|
(204 | ) | 16 | |||||||||
Other finance costs (income)
|
15 | (28 | ) | |||||||||
Share of post-tax earnings in equity method investees
|
(13 | ) | (8 | ) | ||||||||
Tax on above
|
143 | 21 | ||||||||||
Discrete tax items
|
(105 | ) | (47 | ) | ||||||||
Amortization of other identifiable intangible assets
|
612 | 545 | ||||||||||
Discontinued operations
|
(4 | ) | - | |||||||||
Dividends declared on preference shares
|
(3 | ) | (3 | ) | ||||||||
Adjusted earnings from continuing operations
|
1,634 | 1,279 | 28 | % | ||||||||
Adjusted earnings per share from continuing operations
|
$ | 1.96 | $ | 1.53 | 28 | % | ||||||
Diluted weighted average common shares (millions)
|
835.8 | 836.4 |
Year ended
December 31,
|
||||||||||||
(millions of U.S. dollars)
|
2011
|
2010
|
Change
|
|||||||||
(Loss) earnings from continuing operations
|
(1,396 | ) | 933 | n/m | ||||||||
Adjustments:
|
||||||||||||
Tax expense
|
293 | 139 | ||||||||||
Other finance costs (income)
|
15 | (28 | ) | |||||||||
Net interest expense
|
396 | 383 | ||||||||||
Amortization of other identifiable intangible assets
|
612 | 545 | ||||||||||
Amortization of computer software
|
659 | 572 | ||||||||||
Depreciation
|
438 | 457 | ||||||||||
EBITDA
|
1,017 | 3,001 | ||||||||||
Adjustments:
|
||||||||||||
Share of post-tax earnings in equity method investees
|
(13 | ) | (8 | ) | ||||||||
Other operating (gains) losses, net
|
(204 | ) | 16 | |||||||||
Goodwill impairment
|
3,010 | - | ||||||||||
Fair value adjustments
|
(149 | ) | 117 | |||||||||
EBITDA from Other businesses (1)
|
(293 | ) | (317 | ) | ||||||||
Adjusted EBITDA
|
3,368 | 2,809 | 20 | % | ||||||||
Adjusted EBITDA margin
|
26.4 | % | 23.5 | % | 290 | bp |
Year ended December 31, 2011
|
Year ended December 31, 2010
|
|||||||||||||||||||||||
(millions of U.S. dollars)
|
Underlying
Operating
profit
|
Add:
Depreciation
and
amortization of
computer
software **
|
Adjusted
EBITDA
|
Underlying
Operating
profit
|
Add:
Depreciation
and
amortization of
computer
software **
|
Adjusted
EBITDA
|
||||||||||||||||||
Financial & Risk
|
1,396 | 576 | 1,972 | 1,270 | 520 | 1,790 | ||||||||||||||||||
Legal
|
941 | 269 | 1,210 | 892 | 254 | 1,146 | ||||||||||||||||||
Tax & Accounting
|
237 | 95 | 332 | 203 | 81 | 284 | ||||||||||||||||||
Intellectual Property & Science
|
237 | 59 | 296 | 209 | 54 | 263 | ||||||||||||||||||
Corporate & Other (includes Media) (2)
|
(270 | ) | 43 | (227 | ) | (257 | ) | 46 | (211 | ) | ||||||||||||||
Integration programs expenses
|
na
|
na
|
(215 | ) |
na
|
na
|
(463 | ) | ||||||||||||||||
Total
|
2,541 | 1,042 | 3,368 | 2,317 | 955 | 2,809 |
(1)
|
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. Significant businesses in this category include: BARBRI (legal education provider, sold in the second quarter of 2011); Trade and Risk Management (trade and risk management solutions provider to financial institutions sold in the first quarter of 2012); Healthcare (data, analytics and performance benchmarking solutions provider); and Property Tax Consulting (property tax outsourcing and compliance services provider in the U.S.).
|
Year ended December 31,
|
||||||||
(millions of U.S. dollars)
|
2011
|
2010
|
||||||
Revenues
|
1,064 | 1,133 | ||||||
Operating profit
|
238 | 243 | ||||||
Depreciation and amortization of computer software
|
55 | 74 | ||||||
EBITDA
|
293 | 317 |
(2)
|
Corporate & Other includes the Media business and expenses for corporate functions and certain share-based compensation costs.
|
Quarter ended
March 31,
|
Quarter ended
June 30,
|
Quarter ended
September 30,
|
Quarter ended
December 31,
|
|||||||||||||||||||||||||||||
(millions of U.S. dollars, except per share amounts)
|
2012
|
2011
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||||||||||
Revenues
|
3,354 | 3,330 | 3,447 | 3,216 | 3,453 | 3,256 | 3,577 | 3,458 | ||||||||||||||||||||||||
Operating profit (loss)
|
386 | 396 | 833 | 435 | 659 | 356 | (2,593 | ) | 307 | |||||||||||||||||||||||
Earnings (loss) from continuing operations
|
328 | 255 | 572 | 303 | 381 | 271 | (2,604 | ) | 225 | |||||||||||||||||||||||
(Loss) earnings from discontinued operations, net of tax
|
(2 | ) | 2 | - | (6 | ) | - | 6 | 2 | - | ||||||||||||||||||||||
Net earnings (loss)
|
326 | 257 | 572 | 297 | 381 | 277 | (2,602 | ) | 225 | |||||||||||||||||||||||
Earnings (loss) attributable to common shares
|
314 | 250 | 563 | 290 | 369 | 268 | (2,572 | ) | 224 | |||||||||||||||||||||||
Dividends declared on preference shares
|
(1 | ) | (1 | ) | (1 | ) | - | - | (1 | ) | (1 | ) | (1 | ) | ||||||||||||||||||
Basic earnings per share
|
||||||||||||||||||||||||||||||||
From continuing operations
|
$ | 0.38 | $ | 0.30 | $ | 0.67 | $ | 0.36 | $ | 0.44 | $ | 0.31 | $ | (3.11 | ) | $ | 0.27 | |||||||||||||||
From discontinued operations
|
- | - | - | (0.01 | ) | - | 0.01 | - | - | |||||||||||||||||||||||
$ | 0.38 | $ | 0.30 | $ | 0.67 | $ | 0.35 | $ | 0.44 | $ | 0.32 | $ | (3.11 | ) | $ | 0.27 | ||||||||||||||||
Diluted earnings per share
|
||||||||||||||||||||||||||||||||
From continuing operations
|
$ | 0.38 | $ | 0.30 | $ | 0.67 | $ | 0.36 | $ | 0.44 | $ | 0.31 | $ | (3.11 | ) | $ | 0.27 | |||||||||||||||
From discontinued operations
|
- | - | - | (0.01 | ) | - | 0.01 | - | - | |||||||||||||||||||||||
$ | 0.38 | $ | 0.30 | $ | 0.67 | $ | 0.35 | $ | 0.44 | $ | 0.32 | $ | (3.11 | ) | $ | 0.27 |
Three months ended March 31,
|
|||||||||||
(millions of U.S. dollars, except per share amounts)
|
Notes
|
2012
|
2011
|
||||||||
Revenues
|
3,354 | 3,330 | |||||||||
Operating expenses
|
5 | (2,553 | ) | (2,552 | ) | ||||||
Depreciation
|
(110 | ) | (107 | ) | |||||||
Amortization of computer software
|
(175 | ) | (164 | ) | |||||||
Amortization of other identifiable intangible assets
|
(152 | ) | (144 | ) | |||||||
Other operating gains, net
|
6 | 22 | 33 | ||||||||
Operating profit
|
386 | 396 | |||||||||
Finance costs, net:
|
|||||||||||
Net interest expense
|
7 | (114 | ) | (101 | ) | ||||||
Other finance income
|
7 | 30 | 7 | ||||||||
Income before tax and equity method investees
|
302 | 302 | |||||||||
Share of post tax (losses) earnings in equity method investees
|
(7 | ) | 5 | ||||||||
Tax benefit (expense)
|
8 | 33 | (52 | ) | |||||||
Earnings from continuing operations
|
328 | 255 | |||||||||
(Loss) earnings from discontinued operations, net of tax
|
(2 | ) | 2 | ||||||||
Net earnings
|
326 | 257 | |||||||||
Earnings attributable to:
|
|||||||||||
Common shareholders
|
314 | 250 | |||||||||
Non-controlling interests
|
12 | 7 | |||||||||
Earnings per share:
|
9 | ||||||||||
Basic and diluted earnings per share:
|
|||||||||||
From continuing operations
|
$ | 0.38 | $ | 0.30 | |||||||
From discontinued operations
|
- | - | |||||||||
Basic and diluted earnings per share
|
$ | 0.38 | $ | 0.30 |
Three months ended March 31,
|
|||||||||||
(millions of U.S. dollars)
|
Notes
|
2012
|
2011
|
||||||||
Net earnings
|
326 | 257 | |||||||||
Other comprehensive income:
|
|||||||||||
Cash flow hedges adjustments to equity
|
18 | 50 | |||||||||
Cash flow hedges adjustments to earnings
|
7 | (47 | ) | (55 | ) | ||||||
Foreign currency translation adjustments to equity
|
81 | 216 | |||||||||
Foreign currency translation adjustments to earnings
|
- | 1 | |||||||||
Net actuarial (losses) gains on defined benefit pension plans, net of tax(1)
|
(44 | ) | 19 | ||||||||
Other comprehensive income
|
8 | 231 | |||||||||
Total comprehensive income
|
334 | 488 | |||||||||
Comprehensive income for the period attributable to:
|
|||||||||||
Common shareholders
|
322 | 481 | |||||||||
Non-controlling interests
|
12 | 7 |
(1)
|
The related tax benefit (expense) was $10 million and ($18) million for the three months ended March 31, 2012 and 2011, respectively.
|
(millions of U.S. dollars)
|
Notes
|
March 31,
2012
|
December 31,
2011
|
||||||||
ASSETS
|
|||||||||||
Cash and cash equivalents
|
467 | 422 | |||||||||
Trade and other receivables
|
1,796 | 1,984 | |||||||||
Other financial assets
|
10 | 64 | 100 | ||||||||
Prepaid expenses and other current assets
|
619 | 641 | |||||||||
Current assets excluding assets held for sale
|
2,946 | 3,147 | |||||||||
Assets held for sale
|
11 | 900 | 767 | ||||||||
Current assets
|
3,846 | 3,914 | |||||||||
Computer hardware and other property, net
|
1,428 | 1,509 | |||||||||
Computer software, net
|
1,569 | 1,640 | |||||||||
Other identifiable intangible assets, net
|
8,256 | 8,471 | |||||||||
Goodwill
|
15,752 | 15,932 | |||||||||
Other financial assets
|
10 | 451 | 425 | ||||||||
Other non-current assets
|
12 | 530 | 535 | ||||||||
Deferred tax
|
46 | 50 | |||||||||
Total assets
|
31,878 | 32,476 | |||||||||
LIABILITIES AND EQUITY
|
|||||||||||
Liabilities
|
|||||||||||
Current indebtedness
|
10 | 296 | 434 | ||||||||
Payables, accruals and provisions
|
13 | 2,155 | 2,675 | ||||||||
Deferred revenue
|
1,230 | 1,379 | |||||||||
Other financial liabilities
|
10 | 99 | 81 | ||||||||
Current liabilities excluding liabilities associated with assets held for sale
|
3,780 | 4,569 | |||||||||
Liabilities associated with assets held for sale
|
11 | 216 | 35 | ||||||||
Current liabilities
|
3,996 | 4,604 | |||||||||
Long-term indebtedness
|
10 | 7,210 | 7,160 | ||||||||
Provisions and other non-current liabilities
|
14 | 2,560 | 2,513 | ||||||||
Other financial liabilities
|
10 | 21 | 27 | ||||||||
Deferred tax
|
1,263 | 1,422 | |||||||||
Total liabilities
|
15,050 | 15,726 | |||||||||
Equity
|
|||||||||||
Capital
|
15 | 10,320 | 10,288 | ||||||||
Retained earnings
|
7,623 | 7,633 | |||||||||
Accumulated other comprehensive loss
|
(1,464 | ) | (1,516 | ) | |||||||
Total shareholders’ equity
|
16,479 | 16,405 | |||||||||
Non-controlling interests
|
349 | 345 | |||||||||
Total equity
|
16,828 | 16,750 | |||||||||
Total liabilities and equity
|
31,878 | 32,476 |
Three months ended March 31,
|
|||||||||||
(millions of U.S. dollars)
|
Notes
|
2012
|
2011
|
||||||||
Cash provided by (used in):
|
|||||||||||
OPERATING ACTIVITIES
|
|||||||||||
Net earnings
|
326 | 257 | |||||||||
Adjustments for:
|
|||||||||||
Depreciation
|
110 | 107 | |||||||||
Amortization of computer software
|
175 | 164 | |||||||||
Amortization of other identifiable intangible assets
|
152 | 144 | |||||||||
Net gains on disposals of businesses
|
(37 | ) | (4 | ) | |||||||
Deferred tax
|
(172 | ) | (32 | ) | |||||||
Other
|
16 | 92 | 35 | ||||||||
Changes in working capital and other items
|
16 | (373 | ) | (471 | ) | ||||||
Net cash provided by operating activities
|
273 | 200 | |||||||||
INVESTING ACTIVITIES
|
|||||||||||
Acquisitions, net of cash acquired
|
17 | (159 | ) | (54 | ) | ||||||
Proceeds from disposals
|
614 | 15 | |||||||||
Capital expenditures, less proceeds from disposals
|
(283 | ) | (294 | ) | |||||||
Other investing activities
|
5 | 35 | |||||||||
Investing cash flows from continuing operations
|
177 | (298 | ) | ||||||||
Investing cash flows from discontinued operations
|
- | 21 | |||||||||
Net cash provided by (used in) investing activities
|
177 | (277 | ) | ||||||||
FINANCING ACTIVITIES
|
|||||||||||
Repayments of debt
|
- | (5 | ) | ||||||||
Net (repayments) borrowings under short-term loan facilities
|
(136 | ) | 43 | ||||||||
Repurchases of common shares
|
15 | (24 | ) | - | |||||||
Dividends paid on preference shares
|
(1 | ) | (1 | ) | |||||||
Dividends paid on common shares
|
15 | (256 | ) | (217 | ) | ||||||
Other financing activities
|
8 | - | |||||||||
Net cash used in financing activities
|
(409 | ) | (180 | ) | |||||||
Translation adjustments on cash and cash equivalents
|
4 | 4 | |||||||||
Increase (decrease) in cash and cash equivalents
|
45 | (253 | ) | ||||||||
Cash and cash equivalents at beginning of period
|
422 | 864 | |||||||||
Cash and cash equivalents at end of period
|
467 | 611 | |||||||||
Supplemental cash flow information is provided in note 16.
|
|||||||||||
Interest paid
|
(116 | ) | (133 | ) | |||||||
Interest received
|
1 | 1 | |||||||||
Income taxes paid
|
(61 | ) | (2 | ) |
(millions of U.S. dollars)
|
Stated
share
capital
|
Contributed
surplus
|
Total
capital
|
Retained
earnings
|
Unrecognized
loss on cash
flow hedges
|
Foreign
currency
translation
adjustments
|
Total accumulated
other
comprehensive
(loss) income
(“AOCL”)
|
Non-
controlling
interests
|
Total
|
|||||||||||||||||||||||||||
Balance, December 31, 2011
|
10,134 | 154 | 10,288 | 7,633 | (22 | ) | (1,494 | ) | (1,516 | ) | 345 | 16,750 | ||||||||||||||||||||||||
Comprehensive income (loss) (1)
|
- | - | - | 270 | (29 | ) | 81 | 52 | 12 | 334 | ||||||||||||||||||||||||||
Distributions to non-controlling interest
|
- | - | - | - | - | - | - | (8 | ) | (8 | ) | |||||||||||||||||||||||||
Dividends declared on preference shares
|
- | - | - | (1 | ) | - | - | - | - | (1 | ) | |||||||||||||||||||||||||
Dividends declared on common shares
|
- | - | - | (265 | ) | - | - | - | - | (265 | ) | |||||||||||||||||||||||||
Shares issued under Dividend Reinvestment Plan (“DRIP”)
|
9 | - | 9 | - | - | - | - | - | 9 | |||||||||||||||||||||||||||
Repurchases of common shares
|
(10 | ) | - | (10 | ) | (14 | ) | - | - | - | - | (24 | ) | |||||||||||||||||||||||
Stock compensation plans
|
41 | (8 | ) | 33 | - | - | - | - | - | 33 | ||||||||||||||||||||||||||
Balance, March 31, 2012
|
10,174 | 146 | 10,320 | 7,623 | (51 | ) | (1,413 | ) | (1,464 | ) | 349 | 16,828 | ||||||||||||||||||||||||
(millions of U.S. dollars)
|
Stated
share
capital
|
Contributed
surplus
|
Total
capital
|
Retained
earnings
|
Unrecognized
loss on cash
flow hedges
|
Foreign
currency
translation
adjustments
|
AOCL
|
Non-
controlling
interests
|
Total
|
|||||||||||||||||||||||||||
Balance, December 31, 2010
|
10,077 | 207 | 10,284 | 10,518 | (43 | ) | (1,437 | ) | (1,480 | ) | 353 | 19,675 | ||||||||||||||||||||||||
Comprehensive income (loss) (1)
|
- | - | - | 269 | (5 | ) | 217 | 212 | 7 | 488 | ||||||||||||||||||||||||||
Distributions to non- controlling interest
|
- | - | - | - | - | - | - | (5 | ) | (5 | ) | |||||||||||||||||||||||||
Dividends declared on preference shares
|
- | - | - | (1 | ) | - | - | - | - | (1 | ) | |||||||||||||||||||||||||
Dividends declared on common shares
|
- | - | - | (259 | ) | - | - | - | - | (259 | ) | |||||||||||||||||||||||||
Shares issued under DRIP
|
42 | - | 42 | - | - | - | - | - | 42 | |||||||||||||||||||||||||||
Stock compensation plans
|
47 | (7 | ) | 40 | - | - | - | - | - | 40 | ||||||||||||||||||||||||||
Balance, March 31, 2011
|
10,166 | 200 | 10,366 | 10,527 | (48 | ) | (1,220 | ) | (1,268 | ) | 355 | 19,980 |
(1)
|
Retained earnings for the three months ended March 31, 2012 includes net actuarial losses of $44 million, net of tax (2011 - gains of $19 million, net of tax).
|
Effective – January 1, 2013
|
|||
IFRS 10
|
Consolidated Financial Statements
|
IFRS 10 replaces the guidance on ‘consolidation’ in IAS 27 - Consolidated and Separate Financial Statements and Standing Interpretations Committee (“SIC”) 12 - Consolidation - Special Purpose Entities. The new standard contains a single consolidation model that identifies control as the basis for consolidation for all types of entities, including special purpose entities. The new standard also sets out requirements for situations when control is difficult to assess, including circumstances in which voting rights are not the dominant factor in determining control.
|
|
IFRS 11
|
Joint Arrangements
|
IFRS 11 replaces the guidance on ‘joint ventures’ in IAS 31 - Interests in Joint Ventures and SIC 13 - Jointly Controlled Entities - Non-Monetary Contributions by Venturers. The new standard introduces a principles-based approach to accounting for joint arrangements that requires a party to a joint arrangement to recognize its rights and obligations arising from the arrangement. The new standard requires that joint ventures be accounted for under the equity method thus eliminating the option to proportionally consolidate such ventures.
|
|
IFRS 13
|
Fair Value Measurement
|
IFRS 13 defines 'fair value' and sets out in a single standard a framework for measuring fair value and requires disclosures about fair value measurements. The new standard reduces complexity and improves consistency by clarifying the definition of fair value and requiring its application to all fair value measurements.
|
|
IAS 27
|
Separate Financial Statements
|
IAS 27 has been amended for the issuance of IFRS 10, but retains the current guidance for separate financial statements.
|
|
IAS 28
|
Investments in Associates and Joint Ventures
|
IAS 28 has been amended for conforming changes based on issuance of IFRS 10 and IFRS 11. The amendment requires that where a joint arrangement is determined to be a joint venture under IFRS 11, it should be accounted for using the equity method guidance provided in this standard.
|
Effective – January 1, 2015
|
|||
IFRS 9
|
Financial Instruments (Classification and Measurement)
|
IFRS 9 replaces the guidance on ‘classification and measurement’ of financial instruments in IAS 39 - Financial Instruments - Recognition and Measurement. The new standard requires a consistent approach to the classification of financial assets and replaces the numerous categories of financial assets in IAS 39 with two categories, measured at either amortized cost or at fair value. For financial liabilities, the standard retains most of the IAS 39 requirements, but where the fair value option is taken, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch.
|
|
·
|
IFRS 7 - Financial Instruments: Disclosures (amendments effective January 1, 2013 and 2015);
|
|
·
|
IFRS 12 - Disclosure of Interests in Other Entities;
|
|
·
|
IAS 1 - Presentation of Financial Statements; and
|
|
·
|
IAS 32 - Financial Instruments: Presentation (amendment effective January 1, 2014).
|
|
·
|
Corporate & Other includes expenses for corporate functions, certain share-based compensation costs and the Media business, which is comprised of the Reuters News Agency and consumer publishing; and
|
|
·
|
Other businesses is an aggregation of businesses that have been or are expected to be exited through sale or closure that did not qualify for discontinued operations classification. See notes 6 and 11.
|
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Revenues
|
||||||||
Financial & Risk
|
1,811 | 1,804 | ||||||
Legal
|
777 | 754 | ||||||
Tax & Accounting
|
310 | 238 | ||||||
Intellectual Property & Science
|
209 | 201 | ||||||
Reportable segments
|
3,107 | 2,997 | ||||||
Corporate & Other (includes Media)
|
82 | 82 | ||||||
Eliminations
|
(2 | ) | (2 | ) | ||||
Revenues from ongoing businesses
|
3,187 | 3,077 | ||||||
Other businesses (1)
|
167 | 253 | ||||||
Consolidated revenues
|
3,354 | 3,330 | ||||||
Operating profit
|
||||||||
Segment operating profit
|
||||||||
Financial & Risk
|
302 | 327 | ||||||
Legal
|
200 | 190 | ||||||
Tax & Accounting
|
68 | 43 | ||||||
Intellectual Property & Science
|
55 | 52 | ||||||
Reportable segments
|
625 | 612 | ||||||
Corporate & Other (includes Media)
|
(80 | ) | (76 | ) | ||||
Underlying operating profit
|
545 | 536 | ||||||
Other businesses (1)
|
1 | 39 | ||||||
Integration programs expenses (see note 5)
|
- | (70 | ) | |||||
Fair value adjustments (see note 5)
|
(30 | ) | 2 | |||||
Amortization of other identifiable intangible assets
|
(152 | ) | (144 | ) | ||||
Other operating gains, net
|
22 | 33 | ||||||
Consolidated operating profit
|
386 | 396 |
(1)
|
Significant businesses in this category include: BARBRI (legal education provider, sold in the second quarter of 2011); Trade and Risk Management (trade and risk management solutions provider to financial institutions sold in the first quarter of 2012); Healthcare (data, analytics and performance benchmarking solutions provider); and Property Tax Consulting (property tax outsourcing and compliance services provider in the U.S).
|
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Salaries, commissions and allowances
|
1,298 | 1,310 | ||||||
Share-based payments
|
34 | 34 | ||||||
Post-employment benefits
|
65 | 63 | ||||||
Total staff costs
|
1,397 | 1,407 | ||||||
Goods and services (1)
|
605 | 611 | ||||||
Data
|
257 | 249 | ||||||
Telecommunications
|
144 | 160 | ||||||
Real estate
|
120 | 127 | ||||||
Fair value adjustments (2)
|
30 | (2 | ) | |||||
Total operating expenses
|
2,553 | 2,552 |
(1)
|
Goods and services include professional fees, consulting services, contractors, technology-related expenses, selling and marketing, and other general and administrative costs.
|
(2)
|
Fair value adjustments primarily represent mark-to-market impacts on embedded derivatives and certain share-based awards.
|
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Interest expense:
|
||||||||
Debt
|
(103 | ) | (107 | ) | ||||
Derivative financial instruments - hedging activities
|
4 | 10 | ||||||
Other
|
(18 | ) | (10 | ) | ||||
Fair value gains (losses) on financial instruments:
|
||||||||
Debt
|
2 | 5 | ||||||
Cash flow hedges, transfer from equity
|
47 | 55 | ||||||
Fair value hedges
|
1 | 11 | ||||||
Net foreign exchange losses on debt
|
(50 | ) | (71 | ) | ||||
(117 | ) | (107 | ) | |||||
Interest income
|
3 | 6 | ||||||
Net interest expense
|
(114 | ) | (101 | ) |
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Net gains due to changes in foreign currency exchange rates
|
23 | 22 | ||||||
Net gains (losses) on derivative instruments
|
7 | (15 | ) | |||||
Other finance income
|
30 | 7 |
|
·
|
$87 million of tax benefit from the recognition of a deferred tax asset that the Company expects to realize in connection with the planned sale of its Healthcare business;
|
|
·
|
$26 million of discrete tax benefits, of which $14 million related to lower corporate tax rates that were substantively enacted in certain jurisdictions outside the U.S. The remainder related to the recognition of deferred tax assets and the reversal of provisions for uncertain tax positions; and
|
|
·
|
$ 33 million of tax expense related to a gain on the sale of the Trade and Risk Management business.
|
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Net earnings
|
326 | 257 | ||||||
Less: Earnings attributable to non-controlling interests
|
(12 | ) | (7 | ) | ||||
Dividends declared on preference shares
|
(1 | ) | (1 | ) | ||||
Earnings used in consolidated earnings per share
|
313 | 249 | ||||||
Less: Loss (earnings) from discontinued operations, net of tax
|
2 | (2 | ) | |||||
Earnings used in earnings per share from continuing operations
|
315 | 247 |
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Weighted average number of shares outstanding
|
828,274,235 | 834,072,064 | ||||||
Vested DSUs and PRSUs
|
566,623 | 1,099,469 | ||||||
Basic
|
828,840,858 | 835,171,533 | ||||||
Effect of stock options and TRSUs
|
1,449,002 | 4,534,776 | ||||||
Diluted
|
830,289,860 | 839,706,309 |
March 31, 2012
|
Cash, loans
and
receivables
|
Assets/
(liabilities) at
fair value
through
earnings
|
Derivatives
used for
hedging
|
Available
for sale
|
Other
financial
liabilities
|
Total
|
||||||||||||||||||
Cash and cash equivalents
|
467 | - | - | - | - | 467 | ||||||||||||||||||
Trade and other receivables
|
1,796 | - | - | - | - | 1,796 | ||||||||||||||||||
Other financial assets - current
|
28 | 36 | - | - | - | 64 | ||||||||||||||||||
Other financial assets - non-current
|
159 | - | 267 | 25 | - | 451 | ||||||||||||||||||
Current indebtedness
|
- | - | - | - | (296 | ) | (296 | ) | ||||||||||||||||
Trade payables (see note 13)
|
- | - | - | - | (313 | ) | (313 | ) | ||||||||||||||||
Accruals (see note 13)
|
- | - | - | - | (1,467 | ) | (1,467 | ) | ||||||||||||||||
Other financial liabilities - current
|
- | (23 | ) | - | - | (76 | ) | (99 | ) | |||||||||||||||
Long term indebtedness
|
- | - | - | - | (7,210 | ) | (7,210 | ) | ||||||||||||||||
Other financial liabilities - non current
|
- | - | (21 | ) | - | - | (21 | ) | ||||||||||||||||
Total
|
2,450 | 13 | 246 | 25 | (9,362 | ) | (6,628 | ) |
December 31, 2011
|
Cash, loans
and
receivables
|
Assets/
(liabilities) at
fair value
through
earnings
|
Derivatives
used for
hedging
|
Available
for sale
|
Other
financial
liabilities
|
Total
|
||||||||||||||||||
Cash and cash equivalents
|
422 | - | - | - | - | 422 | ||||||||||||||||||
Trade and other receivables
|
1,984 | - | - | - | - | 1,984 | ||||||||||||||||||
Other financial assets - current
|
27 | 73 | - | - | - | 100 | ||||||||||||||||||
Other financial assets - non-current
|
154 | - | 251 | 20 | - | 425 | ||||||||||||||||||
Current indebtedness
|
- | - | - | - | (434 | ) | (434 | ) | ||||||||||||||||
Trade payables (see note 13)
|
- | - | - | - | (508 | ) | (508 | ) | ||||||||||||||||
Accruals (see note 13)
|
- | - | - | - | (1,756 | ) | (1,756 | ) | ||||||||||||||||
Other financial liabilities - current
|
- | (32 | ) | - | - | (49 | ) | (81 | ) | |||||||||||||||
Long term indebtedness
|
- | - | - | - | (7,160 | ) | (7,160 | ) | ||||||||||||||||
Other financial liabilities - non current
|
- | - | (27 | ) | - | - | (27 | ) | ||||||||||||||||
Total
|
2,587 | 41 | 224 | 20 | (9,907 | ) | (7,035 | ) |
Business
|
Former Segment (1)
|
Description
|
||
Healthcare
|
Healthcare & Science (2)
|
A provider of data, analytics and performance benchmarking solutions and services to companies, government agencies and healthcare professionals
|
||
Property Tax Consulting
|
Tax & Accounting
|
A provider of property tax outsourcing and compliance services in the U.S.
|
(1)
|
The results of operations from these businesses are reported within the “Other businesses” category. See note 3.
|
(2)
|
The Company disbanded the Healthcare & Science segment in June 2011 in connection with the announcement to divest the Healthcare business.
|
March 31,
2012
|
December 31,
2011
|
|||||||
Trade and other receivables
|
108 | 12 | ||||||
Computer software, net
|
67 | 76 | ||||||
Other identifiable intangible assets, net
|
126 | - | ||||||
Goodwill
|
538 | 659 | ||||||
Other assets
|
61 | 20 | ||||||
Total assets held for sale
|
900 | 767 | ||||||
Payables, accruals and provisions
|
61 | 14 | ||||||
Deferred revenue
|
150 | 13 | ||||||
Other liabilities
|
5 | 8 | ||||||
Total liabilities associated with assets held for sale
|
216 | 35 |
March 31,
2012
|
December 31,
2011
|
|||||||
Net defined benefit plan surpluses
|
4 | 13 | ||||||
Cash surrender value of life insurance policies
|
249 | 241 | ||||||
Investments in equity method investees
|
243 | 253 | ||||||
Other non-current assets
|
34 | 28 | ||||||
Total other non-current assets
|
530 | 535 |
March 31,
2012
|
December 31,
2011
|
|||||||
Trade payables
|
313 | 508 | ||||||
Accruals
|
1,467 | 1,756 | ||||||
Provisions
|
203 | 232 | ||||||
Other current liabilities
|
172 | 179 | ||||||
Total payables, accruals and provisions
|
2,155 | 2,675 |
March 31,
2012
|
December 31,
2011
|
|||||||
Net defined benefit plan obligations
|
1,473 | 1,438 | ||||||
Deferred compensation and employee incentives
|
218 | 218 | ||||||
Provisions
|
173 | 176 | ||||||
Unfavorable contract liability
|
136 | 147 | ||||||
Uncertain tax positions
|
467 | 446 | ||||||
Other non-current liabilities
|
93 | 88 | ||||||
Total provisions and other non-current liabilities
|
2,560 | 2,513 |
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Dividends declared per common share
|
$ | 0.32 | $ | 0.31 |
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Dividend reinvestment
|
9 | 42 |
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Non-cash employee benefit charges
|
74 | 73 | ||||||
Other
|
18 | (38 | ) | |||||
92 | 35 |
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Trade and other receivables
|
117 | (3 | ) | |||||
Prepaid expenses and other current assets
|
(49 | ) | (81 | ) | ||||
Other financial assets
|
9 | 4 | ||||||
Payables, accruals and provisions
|
(468 | ) | (537 | ) | ||||
Deferred revenue
|
(7 | ) | 112 | |||||
Other financial liabilities
|
21 | (6 | ) | |||||
Income taxes
|
62 | 65 | ||||||
Other
|
(58 | ) | (25 | ) | ||||
(373 | ) | (471 | ) |
Three months ended March 31,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
Number of
transactions
|
Cash
consideration(1)
|
Number of
transactions
|
Cash
consideration(1)
|
|||||||||||||
Businesses and identifiable intangible assets acquired
|
8 | 143 | 9 | 53 | ||||||||||||
Contingent consideration payments
|
- | 14 | - | - | ||||||||||||
Investments in businesses
|
- | 2 | - | 1 | ||||||||||||
8 | 159 | 9 | 54 |
(1)
|
Cash consideration is net of cash acquired of $2 million in each of the three months ended March 31, 2012 and 2011.
|
Three months ended March 31,
|
||||||||
2012
|
2011
|
|||||||
Cash and cash equivalents
|
2 | 2 | ||||||
Trade and other receivables
|
3 | 6 | ||||||
Prepaid expenses and other current assets
|
1 | 3 | ||||||
Current assets
|
6 | 11 | ||||||
Computer hardware and other property, net
|
1 | - | ||||||
Computer software, net
|
17 | 3 | ||||||
Other identifiable intangible assets
|
51 | 36 | ||||||
Other non-current assets
|
- | 1 | ||||||
Total assets
|
75 | 51 | ||||||
Payables, accruals and provisions
|
(1 | ) | (15 | ) | ||||
Deferred revenue
|
(5 | ) | (4 | ) | ||||
Current liabilities
|
(6 | ) | (19 | ) | ||||
Provisions and other non-current liabilities
|
(3 | ) | (1 | ) | ||||
Deferred tax
|
(12 | ) | (2 | ) | ||||
Total liabilities
|
(21 | ) | (22 | ) | ||||
Net assets acquired
|
54 | 29 | ||||||
Goodwill
|
91 | 26 | ||||||
Total
|
145 | 55 |
1.
|
I have reviewed this report on Form 6-K of Thomson Reuters Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 3, 2012
|
|
|
|
/s/ James C. Smith
|
|
|
James C. Smith
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 6-K of Thomson Reuters Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Stephane Bello
|
|
|
Stephane Bello
|
|
|
Executive Vice President and Chief Financial Officer
|
|
/s/ James C. Smith
|
|
|
James C. Smith
President and Chief Executive Officer
|
|
/s/ Stephane Bello
|
|
|
Stephane Bello
Executive Vice President and Chief Financial Officer
|