For the month of November 2012
|
Commission File Number: 1-31349
|
THOMSON REUTERS CORPORATION
(Registrant)
|
|||
By:
|
/s/ Marc E. Gold
|
||
Name: Marc E. Gold
|
|||
Title: Assistant Secretary
|
|||
Date: November 2, 2012
|
Exhibit Number
|
Description
|
|
News release dated November 2, 2012 – Thomson Reuters Reports Third-Quarter 2012 Results
|
·
|
Revenues grew 1% before currency
|
·
|
Adjusted EBITDA of $864 million with a margin of 27.3%
|
·
|
Underlying operating profit of $585 million with a margin of 18.5%
|
·
|
Adjusted earnings per share were $0.54, unchanged from the third quarter of 2011
|
·
|
2012 Outlook affirmed
|
Three Months Ended September 30,
(Millions of U.S. dollars, except EPS and margins)
|
||||||||||||||||
IFRS Financial Measures
|
2012
|
2011
|
Change
|
|||||||||||||
Revenues
|
$ | 3,216 | $ | 3,453 | -7 | % | ||||||||||
Operating profit
|
$ | 390 | $ | 659 | -41 | % | ||||||||||
Diluted earnings per share (EPS)
|
$ | 0.56 | $ | 0.44 | 27 | % | ||||||||||
Cash flow from operations
|
$ | 607 | $ | 576 | 5 | % | ||||||||||
Non-IFRS Financial Measures1
|
2012 | 2011 |
Change
|
Change Before
Currency
|
||||||||||||
Revenues from ongoing businesses
|
$ | 3,165 | $ | 3,197 | -1 | % | 1 | % | ||||||||
Adjusted EBITDA
|
$ | 864 | $ | 911 | -5 | % | -4 | % | ||||||||
Adjusted EBITDA margin
|
27.3 | % | 28.5 | % | -120 | bp | -150 | bp | ||||||||
Underlying operating profit
|
$ | 585 | $ | 690 | -15 | % | -14 | % | ||||||||
Underlying operating profit margin
|
18.5 | % | 21.6 | % | -310 | bp | -320 | bp | ||||||||
Adjusted earnings per share (EPS)
|
$ | 0.54 | $ | 0.54 | 0 | % | ||||||||||
Free cash flow
|
$ | 376 | $ | 360 | 4 | % | ||||||||||
Free cash flow from ongoing operations
|
$ | 369 | $ | 319 | 16 | % |
·
|
Revenues from ongoing businesses were $3.2 billion, a 1% increase before currency.
|
·
|
Adjusted EBITDA decreased 5% and the corresponding margin was 27.3% versus 28.5% in the prior-year period. The margin declined as the benefit from no integration expenses in the quarter (versus $39 million in the prior-year period) was offset by lower organic revenue growth; a decrease in high-margin revenues compared to the prior-year period; and anticipated increases in expenses in Financial & Risk related to investments in customer service and customer administration.
|
·
|
Underlying operating profit decreased 15% and the corresponding margin was 18.5% versus 21.6% in the prior-year period due to higher depreciation and amortization from investments made in prior periods, planned increases in expenses and nominal revenue growth.
|
·
|
Adjusted EPS was $0.54, unchanged from the prior-year period. Anticipated lower underlying operating profit was offset by the elimination of integration expenses and a lower tax rate. Foreign exchange had a $0.01 negative impact on adjusted EPS.
|
·
|
Revenues were flat compared to the prior-year period as the benefit from acquisitions was offset by a decline in organic growth. Growth in Marketplaces and Governance, Risk & Compliance was offset by a decline in the Trading business. Investors revenues were unchanged from the prior-year period.
|
·
|
Recurring subscription-related revenues decreased 1%. Transactions-related revenues increased 4% solely due to acquisitions. Recoveries revenues decreased 1% and Outright revenues increased 2%.
|
·
|
By geography, revenues in Europe, Middle East and Africa (EMEA) were flat, revenues in the Americas were up 1% while revenues in Asia declined 1%, primarily related to Japan.
|
·
|
EBITDA was $440 million, down 16%, with a related margin of 24.7%. EBITDA margin decreased 370 basis points from the prior-year period due to lower organic revenues, planned investments in customer service and customer administration.
|
·
|
Operating profit was $283 million, down 26%, with a related margin of 15.9%. Operating profit margin decreased 480 basis points due to the same items that impacted the EBITDA margin and higher depreciation and amortization from product investments made in prior periods.
|
·
|
Eikon desktops totaled 25,600 at the end of the third quarter of 2012, up approximately 35% from the end of the second quarter of 2012.
|
·
|
Revenues decreased 4% with growth in Commodities & Energy, Data Feeds & Platform and Elektron hosting offset by desktop cancellations in Exchange Traded Instruments and Fixed Income. Omgeo declined by 17% due to low equity transaction volumes.
|
·
|
Recoveries revenues decreased 2%.
|
·
|
Revenues were flat compared to the prior-year period. Investment Management declined 4%, but continued to improve compared to the second quarter (down 5%) and first quarter (down 10%). Investment Management continues to be impacted by weakness in Europe and Asia. Enterprise Content revenues grew 12% (12% of Investors total revenues).
|
·
|
Corporates revenues were down 1%. Wealth Management and Banking & Advisory were up 1% and down 1%, respectively, versus the prior-year period.
|
·
|
Revenues increased 7% due to acquisitions with organic revenues down 2%. Tradeweb was up 13% related to the acquisition of Rafferty in 2011.
|
·
|
Foreign exchange-related revenues increased 5% due to the acquisition of FXall. Foreign exchange-related organic revenues however declined 2% as overall market volumes declined compared to the prior-year period.
|
·
|
Revenues grew 17%, all organic, to $55 million driven by new sales and continued strong demand for risk and compliance solutions.
|
·
|
Thomson Reuters GRC business was recently named by Gartner, Inc. to the prestigious “Leaders Quadrant of the Enterprise Governance, Risk and Compliance Platforms Magic Quadrant.” The announcement was made following Gartner’s evaluation of Thomson Reuters Enterprise GRC solution on completeness of vision and ability to execute.
|
·
|
Revenues increased 2% (1% organic). US Law Firm Solutions grew slightly driven by a 13% increase in Business of Law revenues (FindLaw and Elite) while research-related revenues declined 3%. Corporate, Government and Academic revenues rose 1%. Global businesses grew 9% with a strong performance by Latin American operations.
|
·
|
US print revenues declined 9%, partly timing-related. Excluding US print, revenues grew 5% (3% organic).
|
·
|
EBITDA was up slightly from the prior-year period and the associated margin increased 10 basis points to 39.4%. Excluding the benefit of currency, the margin declined 40 basis points.
|
·
|
Operating profit was flat and the associated margin was 30.8% compared to 31.3% in the prior-year period. Excluding the benefit of currency, the margin declined 100 basis points due to the decline in print revenues and higher depreciation and amortization expense.
|
·
|
73% of Westlaw revenue is now converted to WestlawNext.
|
·
|
Revenues increased 10% (3% organic) driven by acquisitions and strong growth in revenues from the ONESOURCE suite and software sales to accounting firms. Organic revenue growth was partly impacted by difficult comparisons to the prior-year period.
|
·
|
EBITDA increased 3% and the corresponding margin decreased 120 basis points to 24.8% due mainly to acquisition dilution and a change in business mix.
|
·
|
Operating profit decreased 8% and the corresponding margin decreased 230 basis points to 13.0% due to softer revenue growth and software amortization from acquisitions.
|
·
|
Tax & Accounting is a seasonal business with a significant percentage of its operating profit traditionally generated in the fourth quarter. Small movements in the timing of revenues and expenses can impact margins in any given quarter for the Tax & Accounting business. Full-year margins are more reflective of the segment’s underlying performance.
|
·
|
Revenues were up 3% (flat organic) impacted by strong prior-year comparables. IP Solutions grew 3%, Life Sciences increased 8% and Scientific & Scholarly Research revenues decreased 6% due to strong back-file sales recorded in the prior-year period that did not repeat this year.
|
·
|
EBITDA decreased 9% with the corresponding margin declining 380 basis points to 32.9% primarily due to acquisition dilution associated with MarkMonitor and a difficult comparison to the prior-year period when the business benefited from significant back-file sales.
|
·
|
Operating profit decreased 14% with the corresponding margin declining 470 basis points to 25.1%. The decline in the margin reflected the same items that impacted the EBITDA margin as well as an increase in depreciation and amortization due to products released in the second half of 2011.
|
·
|
Small movements in the timing of revenues and expenses can impact margins in any given quarter for the Intellectual Property & Science business. Full-year margins are more reflective of the segment’s underlying performance.
|
Nine Months Ended September 30,
(Millions of U.S. dollars, except EPS and margins)
|
||||||||||||||||
IFRS Financial Measures
|
2012
|
2011
|
Change
|
|||||||||||||
Revenues
|
$ | 9,879 | $ | 10,230 | -3 | % | ||||||||||
Operating profit
|
$ | 2,094 | $ | 1,888 | 11 | % | ||||||||||
Diluted earnings per share (EPS)
|
$ | 2.04 | $ | 1.41 | 45 | % | ||||||||||
Cash flow from operations
|
$ | 1,750 | $ | 1,655 | 6 | % | ||||||||||
Non-IFRS Financial Measures1
|
2012 | 2011 |
Change
|
Change Before
Currency
|
||||||||||||
Revenues from ongoing businesses
|
$ | 9,541 | $ | 9,435 | 1 | % | 3 | % | ||||||||
Adjusted EBITDA
|
$ | 2,581 | $ | 2,516 | 3 | % | 4 | % | ||||||||
Adjusted EBITDA margin
|
27.1 | % | 26.7 | % | 40 | bp | 30 | bp | ||||||||
Underlying operating profit
|
$ | 1,747 | $ | 1,895 | -8 | % | -6 | % | ||||||||
Underlying operating profit margin
|
18.3 | % | 20.1 | % | -180 | bp | -180 | bp | ||||||||
Adjusted earnings per share (EPS)
|
$ | 1.52 | $ | 1.42 | 7 | % | ||||||||||
Free cash flow
|
$ | 1,030 | $ | 933 | 10 | % | ||||||||||
Free cash flow from ongoing operations
|
$ | 969 | $ | 785 | 23 | % |
·
|
Revenues from ongoing businesses were $9.5 billion, a 3% increase before currency.
|
·
|
Adjusted EBITDA increased 3% and the corresponding margin was 27.1% versus 26.7% in the prior-year period as higher revenues and the elimination of integration expenses in 2012 offset the planned investments in customer service and customer administration.
|
·
|
Underlying operating profit decreased 8% and the corresponding margin was 18.3% versus 20.1% in the prior-year period due to higher depreciation and amortization expense related to new product launches and planned increases in expenses.
|
·
|
Adjusted EPS was $1.52 compared to $1.42 in the prior-year period. The increase was primarily attributable to the elimination of integration expenses and a lower tax rate, partly offset by lower underlying operating profit.
|
·
|
Free cash flow was $1.03 billion, up 10% compared to the prior-year period. Free cash flow from ongoing operations was $969 million, up 23% from the same period in 2011.
|
·
|
revenues to grow low single-digits in 2012;
|
·
|
adjusted EBITDA margin to range between 27% and 28% in 2012;
|
·
|
underlying operating profit margin to range between 18% and 19% in 2012 due to higher depreciation and amortization expense; and
|
·
|
reported free cash flow to grow 5% to 10% and free cash flow from ongoing operations to grow 15% to 20% in 2012.
|
MEDIA
Carla Jones
Senior Vice President
+1 646 223 5285
carla.jones@thomsonreuters.com
|
INVESTORS
Frank J. Golden
Senior Vice President, Investor Relations
+1 646 223 5288
frank.golden@thomsonreuters.com
|
Three Months Ended
|
||||||||||||||||||||
September 30,
|
Change
|
|||||||||||||||||||
2012
|
2011(1)
|
Total
|
Before
Currency
|
Organic
|
||||||||||||||||
Revenues
|
||||||||||||||||||||
Trading
|
$ | 816 | $ | 887 | -8 | % | -4 | % | -4 | % | ||||||||||
Investors
|
604 | 616 | -2 | % | 0 | % | -1 | % | ||||||||||||
Marketplaces
|
303 | 289 | 5 | % | 7 | % | -2 | % | ||||||||||||
Governance, Risk & Compliance
|
55 | 47 | 17 | % | 17 | % | 17 | % | ||||||||||||
Financial & Risk
|
1,778 | 1,839 | -3 | % | 0 | % | -2 | % | ||||||||||||
Legal
|
830 | 821 | 1 | % | 2 | % | 1 | % | ||||||||||||
Tax & Accounting
|
262 | 242 | 8 | % | 10 | % | 3 | % | ||||||||||||
Intellectual Property & Science
|
219 | 215 | 2 | % | 3 | % | 0 | % | ||||||||||||
Corporate & Other (includes Media)
|
79 | 83 | -5 | % | 1 | % | 1 | % | ||||||||||||
Eliminations
|
(3 | ) | (3 | ) | ||||||||||||||||
Revenues from ongoing businesses (2)
|
3,165 | 3,197 | -1 | % | 1 | % | -1 | % | ||||||||||||
Other businesses (3)
|
51 | 256 | ||||||||||||||||||
Revenues
|
$ | 3,216 | $ | 3,453 | -7 | % |
Change
|
Margin
|
|||||||||||||||||||||||
Adjusted EBITDA (4)
|
Total
|
Before
Currency
|
2012
|
2011
|
||||||||||||||||||||
Financial & Risk
|
$ | 440 | $ | 523 | -16 | % | -13 | % | 24.7 | % | 28.4 | % | ||||||||||||
Legal
|
327 | 323 | 1 | % | 1 | % | 39.4 | % | 39.3 | % | ||||||||||||||
Tax & Accounting
|
65 | 63 | 3 | % | 3 | % | 24.8 | % | 26.0 | % | ||||||||||||||
Intellectual Property & Science
|
72 | 79 | -9 | % | -8 | % | 32.9 | % | 36.7 | % | ||||||||||||||
Corporate & Other (includes Media)
|
(40 | ) | (38 | ) | ||||||||||||||||||||
Integration programs expenses
|
- | (39 | ) | |||||||||||||||||||||
Adjusted EBITDA
|
$ | 864 | $ | 911 | -5 | % | -4 | % | 27.3 | % | 28.5 | % | ||||||||||||
Underlying Operating Profit (5)
|
||||||||||||||||||||||||
Financial & Risk
|
$ | 283 | $ | 380 | -26 | % | -22 | % | 15.9 | % | 20.7 | % | ||||||||||||
Legal
|
256 | 257 | 0 | % | -1 | % | 30.8 | % | 31.3 | % | ||||||||||||||
Tax & Accounting
|
34 | 37 | -8 | % | -8 | % | 13.0 | % | 15.3 | % | ||||||||||||||
Intellectual Property & Science
|
55 | 64 | -14 | % | -14 | % | 25.1 | % | 29.8 | % | ||||||||||||||
Corporate & Other (includes Media)
|
(43 | ) | (48 | ) | ||||||||||||||||||||
Underlying operating profit
|
$ | 585 | $ | 690 | -15 | % | -14 | % | 18.5 | % | 21.6 | % |
Nine Months Ended
|
||||||||||||||||||||
September 30,
|
Change
|
|||||||||||||||||||
2012
|
2011(1)
|
Total
|
Before
Currency
|
Organic
|
||||||||||||||||
Revenues
|
||||||||||||||||||||
Trading
|
$ | 2,515 | $ | 2,668 | -6 | % | -3 | % | -3 | % | ||||||||||
Investors
|
1,815 | 1,866 | -3 | % | -1 | % | -2 | % | ||||||||||||
Marketplaces
|
893 | 844 | 6 | % | 8 | % | 1 | % | ||||||||||||
Governance, Risk & Compliance
|
158 | 104 | 52 | % | 53 | % | 17 | % | ||||||||||||
Financial & Risk
|
5,381 | 5,482 | -2 | % | 1 | % | -1 | % | ||||||||||||
Legal
|
2,425 | 2,378 | 2 | % | 3 | % | 1 | % | ||||||||||||
Tax & Accounting
|
855 | 709 | 21 | % | 22 | % | 6 | % | ||||||||||||
Intellectual Property & Science
|
644 | 627 | 3 | % | 4 | % | 2 | % | ||||||||||||
Corporate & Other (includes Media)
|
244 | 249 | -2 | % | 1 | % | 1 | % | ||||||||||||
Eliminations
|
(8 | ) | (10 | ) | ||||||||||||||||
Revenues from ongoing businesses (2)
|
9,541 | 9,435 | 1 | % | 3 | % | 0 | % | ||||||||||||
Other businesses (3)
|
338 | 795 | ||||||||||||||||||
Revenues
|
$ | 9,879 | $ | 10,230 | -3 | % |
Change
|
Margin
|
|||||||||||||||||||||||
Adjusted EBITDA (4)
|
Total
|
Before
Currency
|
2012
|
2011
|
||||||||||||||||||||
Financial & Risk
|
$ | 1,359 | $ | 1,514 | -10 | % | -7 | % | 25.3 | % | 27.6 | % | ||||||||||||
Legal
|
916 | 898 | 2 | % | 2 | % | 37.8 | % | 37.8 | % | ||||||||||||||
Tax & Accounting
|
245 | 196 | 25 | % | 26 | % | 28.7 | % | 27.6 | % | ||||||||||||||
Intellectual Property & Science
|
219 | 216 | 1 | % | 2 | % | 34.0 | % | 34.4 | % | ||||||||||||||
Corporate & Other (includes Media)
|
(158 | ) | (157 | ) | ||||||||||||||||||||
Integration programs expenses
|
- | (151 | ) | |||||||||||||||||||||
Adjusted EBITDA
|
$ | 2,581 | $ | 2,516 | 3 | % | 4 | % | 27.1 | % | 26.7 | % | ||||||||||||
Underlying Operating Profit (5)
|
||||||||||||||||||||||||
Financial & Risk
|
$ | 891 | $ | 1,084 | -18 | % | -14 | % | 16.6 | % | 19.8 | % | ||||||||||||
Legal
|
707 | 697 | 1 | % | 1 | % | 29.2 | % | 29.3 | % | ||||||||||||||
Tax & Accounting
|
158 | 127 | 24 | % | 25 | % | 18.5 | % | 17.9 | % | ||||||||||||||
Intellectual Property & Science
|
169 | 173 | -2 | % | -2 | % | 26.2 | % | 27.6 | % | ||||||||||||||
Corporate & Other (includes Media)
|
(178 | ) | (186 | ) | ||||||||||||||||||||
Underlying operating profit
|
$ | 1,747 | $ | 1,895 | -8 | % | -6 | % | 18.3 | % | 20.1 | % |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
Operating profit
|
$ | 390 | $ | 659 | -41 | % | $ | 2,094 | $ | 1,888 | 11 | % | ||||||||||||
Adjustments:
|
||||||||||||||||||||||||
Amortization of other identifiable intangible assets
|
158 | 152 | 459 | 446 | ||||||||||||||||||||
Integration programs expenses
|
- | 39 | - | 151 | ||||||||||||||||||||
Fair value adjustments
|
34 | (102 | ) | 21 | (112 | ) | ||||||||||||||||||
Other operating losses (gains), net
|
18 | 17 | (802 | ) | (302 | ) | ||||||||||||||||||
Operating profit from Other businesses (1), (3)
|
(15 | ) | (75 | ) | (25 | ) | (176 | ) | ||||||||||||||||
Underlying operating profit (1)
|
$ | 585 | $ | 690 | -15 | % | $ | 1,747 | $ | 1,895 | -8 | % | ||||||||||||
Adjustments:
|
||||||||||||||||||||||||
Integration programs expenses
|
- | (39 | ) | - | (151 | ) | ||||||||||||||||||
Depreciation and amortization of computer software (excluding Other businesses (1), (3))
|
279 | 260 | 834 | 772 | ||||||||||||||||||||
Adjusted EBITDA (1)
|
$ | 864 | $ | 911 | -5 | % | $ | 2,581 | $ | 2,516 | 3 | % | ||||||||||||
Underlying operating profit margin
|
18.5 | % | 21.6 | % | -310 | bp | 18.3 | % | 20.1 | % | -180 | bp | ||||||||||||
Adjusted EBITDA margin
|
27.3 | % | 28.5 | % | -120 | bp | 27.1 | % | 26.7 | % | 40 | bp |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
Earnings from continuing operations
|
$ | 472 | $ | 381 | 24 | % | $ | 1,736 | $ | 1,208 | 44 | % | ||||||||||||
Adjustments:
|
||||||||||||||||||||||||
Tax (benefit) expense
|
(140 | ) | 145 | 106 | 371 | |||||||||||||||||||
Other finance (income) costs
|
(30 | ) | 35 | (44 | ) | 19 | ||||||||||||||||||
Net interest expense
|
90 | 102 | 295 | 301 | ||||||||||||||||||||
Amortization of other identifiable intangible assets
|
158 | 152 | 459 | 446 | ||||||||||||||||||||
Amortization of computer software
|
175 | 155 | 516 | 481 | ||||||||||||||||||||
Depreciation
|
104 | 107 | 323 | 324 | ||||||||||||||||||||
EBITDA
|
$ | 829 | $ | 1,077 | -23 | % | $ | 3,391 | $ | 3,150 | 8 | % | ||||||||||||
Adjustments:
|
||||||||||||||||||||||||
Share of post tax (earnings) losses in equity method investees
|
(2 | ) | (4 | ) | 1 | (11 | ) | |||||||||||||||||
Other operating losses (gains), net
|
18 | 17 | (802 | ) | (302 | ) | ||||||||||||||||||
Fair value adjustments
|
34 | (102 | ) | 21 | (112 | ) | ||||||||||||||||||
EBITDA from Other businesses (1), (3)
|
(15 | ) | (77 | ) | (30 | ) | (209 | ) | ||||||||||||||||
Adjusted EBITDA (1)
|
$ | 864 | $ | 911 | -5 | % | $ | 2,581 | $ | 2,516 | 3 | % |
Three Months Ended
September 30, 2012
|
Three Months Ended
September 30, 2011 (1)
|
|||||||||||||||||||||||
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
|
$ | 283 | $ | 157 | $ | 440 | $ | 380 | $ | 143 | $ | 523 | ||||||||||||
Legal
|
256 | 71 | 327 | 257 | 66 | 323 | ||||||||||||||||||
Tax & Accounting
|
34 | 31 | 65 | 37 | 26 | 63 | ||||||||||||||||||
Intellectual Property & Science
|
55 | 17 | 72 | 64 | 15 | 79 | ||||||||||||||||||
Corporate & Other (includes Media)
|
(43 | ) | 3 | (40 | ) | (48 | ) | 10 | (38 | ) | ||||||||||||||
Integration programs expenses
|
na
|
na
|
- |
na
|
na
|
(39 | ) | |||||||||||||||||
$ | 585 | $ | 279 | $ | 864 | $ | 690 | $ | 260 | $ | 911 |
Nine Months Ended
September 30, 2012
|
Nine Months Ended
September 30, 2011 (1)
|
|||||||||||||||||||||||
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
|
$ | 891 | $ | 468 | $ | 1,359 | $ | 1,084 | $ | 430 | $ | 1,514 | ||||||||||||
Legal
|
707 | 209 | 916 | 697 | 201 | 898 | ||||||||||||||||||
Tax & Accounting
|
158 | 87 | 245 | 127 | 69 | 196 | ||||||||||||||||||
Intellectual Property & Science
|
169 | 50 | 219 | 173 | 43 | 216 | ||||||||||||||||||
Corporate & Other (includes Media)
|
(178 | ) | 20 | (158 | ) | (186 | ) | 29 | (157 | ) | ||||||||||||||
Integration programs expenses
|
na
|
na
|
- |
na
|
na
|
(151 | ) | |||||||||||||||||
$ | 1,747 | $ | 834 | $ | 2,581 | $ | 1,895 | $ | 772 | $ | 2,516 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Earnings attributable to common shareholders
|
$ | 462 | $ | 369 | $ | 1,698 | $ | 1,182 | ||||||||
Adjustments:
|
||||||||||||||||
Operating profit from Other businesses (1), (3)
|
(15 | ) | (75 | ) | (25 | ) | (176 | ) | ||||||||
Fair value adjustments
|
34 | (102 | ) | 21 | (112 | ) | ||||||||||
Other operating losses (gains), net
|
18 | 17 | (802 | ) | (302 | ) | ||||||||||
Other finance (income) costs
|
(30 | ) | 35 | (44 | ) | 19 | ||||||||||
Share of post tax (earnings) losses in equity method investees
|
(2 | ) | (4 | ) | 1 | (11 | ) | |||||||||
Tax on above items
|
(3 | ) | 63 | 184 | 190 | |||||||||||
Interim period effective tax rate normalization (7)
|
(60 | ) | (15 | ) | (8 | ) | (10 | ) | ||||||||
Discrete tax items
|
(115 | ) | 13 | (224 | ) | (33 | ) | |||||||||
Amortization of other identifiable intangible assets
|
158 | 152 | 459 | 446 | ||||||||||||
Discontinued operations
|
(2 | ) | - | 1 | (2 | ) | ||||||||||
Dividends declared on preference shares
|
- | - | (2 | ) | (2 | ) | ||||||||||
Adjusted earnings from continuing operations (1)
|
$ | 445 | $ | 453 | $ | 1,259 | $ | 1,189 | ||||||||
Adjusted earnings per share from continuing operations (1)
|
$ | 0.54 | $ | 0.54 | $ | 1.52 | $ | 1.42 | ||||||||
Diluted weighted average common shares (in millions)
|
828.4 | 836.7 | 829.7 | 838.2 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net cash provided by operating activities
|
$ | 607 | $ | 576 | $ | 1,750 | $ | 1,655 | ||||||||
Capital expenditures, less proceeds from disposals
|
(232 | ) | (218 | ) | (726 | ) | (759 | ) | ||||||||
Other investing activities
|
1 | 2 | 8 | 39 | ||||||||||||
Dividends paid on preference shares
|
- | - | (2 | ) | (2 | ) | ||||||||||
Free cash flow
|
376 | 360 | 1,030 | 933 | ||||||||||||
Remove: Other businesses
|
(7 | ) | (41 | ) | (61 | ) | (148 | ) | ||||||||
Free cash flow from ongoing operations
|
$ | 369 | $ | 319 | $ | 969 | $ | 785 |
(1)
|
Prior-period amounts have been reclassified to reflect the current presentation.
|
(2)
|
Revenues from ongoing businesses are revenues from reportable segments and Corporate & Other (which includes the Media business) less eliminations. Other businesses (see note (3) below) are excluded.
|
(3)
|
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.
|
(millions of U.S. dollars)
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
Other businesses
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Revenues
|
$ | 51 | $ | 256 | $ | 338 | $ | 795 | ||||||||
Operating profit
|
$ | 15 | $ | 75 | $ | 25 | $ | 176 | ||||||||
Depreciation and amortization of computer software
|
- | 2 | 5 | 33 | ||||||||||||
EBITDA
|
$ | 15 | $ | 77 | $ | 30 | $ | 209 |
(4)
|
Thomson Reuters defines adjusted EBITDA as underlying operating profit excluding the related depreciation and amortization of computer software but including integration programs expense. Adjusted EBITDA margin is adjusted EBITDA expressed as a percentage of revenues from ongoing businesses.
|
(5)
|
Underlying operating profit is operating profit from reportable segments and Corporate & Other (includes Media). Underlying operating profit margin is the underlying operating profit expressed as a percentage of revenues from ongoing businesses.
|
(6)
|
Adjusted earnings from continuing operations and adjusted earnings per share from continuing operations include dividends declared on preference shares and integration programs expense, but exclude the pre-tax impacts of amortization of other identifiable intangible assets as well as the post-tax impacts of fair value adjustments, other operating (gains) and losses, certain impairment charges, the results of Other businesses (see note (3) above), other finance (income) costs, Thomson Reuters share of post-tax (earnings) losses in equity method investees, discontinued operations and other items affecting comparability. Adjusted earnings per share from continuing operations is calculated using diluted weighted average shares and does not represent actual earnings or loss per share attributable to shareholders.
|
(7)
|
Adjustment to reflect income taxes based on estimated full-year effective tax rate. Reported earnings or loss for interim periods reflect income taxes based on the estimated effective tax rates of each of the jurisdictions in which Thomson Reuters operates. The adjustment reallocates estimated full-year income taxes between interim periods, but has no effect on full year income taxes.
|
(8)
|
Free cash flow is net cash provided by operating activities less capital expenditures, other investing activities and dividends paid on the company’s preference shares. Other businesses (see note (3) above) are also removed to arrive at free cash flow from ongoing operations.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Revenues
|
$ | 3,216 | $ | 3,453 | $ | 9,879 | $ | 10,230 | ||||||||
Operating expenses
|
(2,371 | ) | (2,363 | ) | (7,289 | ) | (7,393 | ) | ||||||||
Depreciation
|
(104 | ) | (107 | ) | (323 | ) | (324 | ) | ||||||||
Amortization of computer software
|
(175 | ) | (155 | ) | (516 | ) | (481 | ) | ||||||||
Amortization of other identifiable intangible assets
|
(158 | ) | (152 | ) | (459 | ) | (446 | ) | ||||||||
Other operating (losses) gains, net
|
(18 | ) | (17 | ) | 802 | 302 | ||||||||||
Operating profit
|
390 | 659 | 2,094 | 1,888 | ||||||||||||
Finance costs, net:
|
||||||||||||||||
Net interest expense
|
(90 | ) | (102 | ) | (295 | ) | (301 | ) | ||||||||
Other finance income (costs)
|
30 | (35 | ) | 44 | (19 | ) | ||||||||||
Income before tax and equity method investees
|
330 | 522 | 1,843 | 1,568 | ||||||||||||
Share of post tax earnings (losses) in equity method investees
|
2 | 4 | (1 | ) | 11 | |||||||||||
Tax benefit (expense)
|
140 | (145 | ) | (106 | ) | (371 | ) | |||||||||
Earnings from continuing operations
|
472 | 381 | 1,736 | 1,208 | ||||||||||||
Earnings (loss) from discontinued operations, net of tax
|
2 | - | (1 | ) | 2 | |||||||||||
Net earnings
|
$ | 474 | $ | 381 | $ | 1,735 | $ | 1,210 | ||||||||
Earnings attributable to:
|
||||||||||||||||
Common shareholders
|
462 | 369 | 1,698 | 1,182 | ||||||||||||
Non-controlling interests
|
12 | 12 | 37 | 28 | ||||||||||||
Basic earnings per share
|
$ | 0.56 | $ | 0.44 | $ | 2.05 | $ | 1.41 | ||||||||
Diluted earnings per share
|
$ | 0.56 | $ | 0.44 | $ | 2.04 | $ | 1.41 | ||||||||
Basic weighted average common shares
|
826,257,191 | 834,645,519 | 827,804,739 | 835,624,471 | ||||||||||||
Diluted weighted average common shares
|
828,405,144 | 836,712,254 | 829,747,967 | 838,203,018 |
September 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$ | 769 | $ | 422 | ||||
Trade and other receivables
|
1,772 | 1,984 | ||||||
Other financial assets
|
81 | 100 | ||||||
Prepaid expenses and other current assets
|
604 | 641 | ||||||
Current assets excluding assets held for sale
|
3,226 | 3,147 | ||||||
Assets held for sale
|
141 | 767 | ||||||
Current assets
|
3,367 | 3,914 | ||||||
Computer hardware and other property, net
|
1,364 | 1,509 | ||||||
Computer software, net
|
1,679 | 1,640 | ||||||
Other identifiable intangible assets, net
|
8,215 | 8,471 | ||||||
Goodwill
|
16,583 | 15,932 | ||||||
Other financial assets
|
390 | 425 | ||||||
Other non-current assets
|
552 | 535 | ||||||
Deferred tax
|
42 | 50 | ||||||
Total assets
|
$ | 32,192 | $ | 32,476 | ||||
Liabilities and equity
|
||||||||
Liabilities
|
||||||||
Current indebtedness
|
$ | 1,007 | $ | 434 | ||||
Payables, accruals and provisions
|
2,442 | 2,675 | ||||||
Deferred revenue
|
1,138 | 1,379 | ||||||
Other financial liabilities
|
97 | 81 | ||||||
Current liabilities excluding liabilities associated with assets held for sale
|
4,684 | 4,569 | ||||||
Liabilities associated with assets held for sale
|
18 | 35 | ||||||
Current liabilities
|
4,702 | 4,604 | ||||||
Long-term indebtedness
|
6,255 | 7,160 | ||||||
Provisions and other non-current liabilities
|
2,689 | 2,513 | ||||||
Other financial liabilities
|
8 | 27 | ||||||
Deferred tax
|
1,176 | 1,422 | ||||||
Total liabilities
|
14,830 | 15,726 | ||||||
Equity
|
||||||||
Capital
|
10,331 | 10,288 | ||||||
Retained earnings
|
8,197 | 7,633 | ||||||
Accumulated other comprehensive loss
|
(1,508 | ) | (1,516 | ) | ||||
Total shareholders’ equity
|
17,020 | 16,405 | ||||||
Non-controlling interests
|
342 | 345 | ||||||
Total equity
|
17,362 | 16,750 | ||||||
Total liabilities and equity
|
$ | 32,192 | $ | 32,476 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Cash provided by (used in):
|
||||||||||||||||
Operating activities
|
||||||||||||||||
Net earnings
|
$ | 474 | $ | 381 | $ | 1,735 | $ | 1,210 | ||||||||
Adjustments for:
|
||||||||||||||||
Depreciation
|
104 | 107 | 323 | 324 | ||||||||||||
Amortization of computer software
|
175 | 155 | 516 | 481 | ||||||||||||
Amortization of other identifiable intangible assets
|
158 | 152 | 459 | 446 | ||||||||||||
Net losses (gains) on disposals of businesses and investments
|
11 | (3 | ) | (815 | ) | (389 | ) | |||||||||
Deferred tax
|
(97 | ) | (55 | ) | (216 | ) | (229 | ) | ||||||||
Other
|
(65 | ) | (3 | ) | (41 | ) | 161 | |||||||||
Changes in working capital and other items
|
(153 | ) | (158 | ) | (211 | ) | (349 | ) | ||||||||
Net cash provided by operating activities
|
607 | 576 | 1,750 | 1,655 | ||||||||||||
Investing activities
|
||||||||||||||||
Acquisitions, net of cash acquired
|
(1,015 | ) | (388 | ) | (1,275 | ) | (1,114 | ) | ||||||||
(Payments for) proceeds from disposals, net of taxes paid
|
(176 | ) | (5 | ) | 1,807 | 505 | ||||||||||
Capital expenditures, less proceeds from disposals
|
(232 | ) | (218 | ) | (726 | ) | (759 | ) | ||||||||
Other investing activities
|
1 | 2 | 8 | 39 | ||||||||||||
Investing cash flows from continuing operations
|
(1,422 | ) | (609 | ) | (186 | ) | (1,329 | ) | ||||||||
Investing cash flows from discontinued operations
|
- | 12 | 90 | 51 | ||||||||||||
Net cash used in investing activities
|
(1,422 | ) | (597 | ) | (96 | ) | (1,278 | ) | ||||||||
Financing activities
|
||||||||||||||||
Repayments of debt
|
- | (593 | ) | (2 | ) | (646 | ) | |||||||||
Net borrowings (repayments) under short-term loan facilities
|
- | 1,083 | (423 | ) | 1,063 | |||||||||||
Repurchases of common shares
|
- | (319 | ) | (168 | ) | (319 | ) | |||||||||
Dividends paid on preference shares
|
- | - | (2 | ) | (2 | ) | ||||||||||
Dividends paid on common shares
|
(254 | ) | (247 | ) | (766 | ) | (712 | ) | ||||||||
Other financing activities
|
32 | (17 | ) | 52 | (31 | ) | ||||||||||
Net cash used in financing activities
|
(222 | ) | (93 | ) | (1,309 | ) | (647 | ) | ||||||||
Translation adjustments on cash and cash equivalents
|
5 | (10 | ) | 2 | (5 | ) | ||||||||||
(Decrease) increase in cash and cash equivalents
|
(1,032 | ) | (124 | ) | 347 | (275 | ) | |||||||||
Cash and cash equivalents at beginning of period
|
1,801 | 713 | 422 | 864 | ||||||||||||
Cash and cash equivalents at end of period
|
$ | 769 | $ | 589 | $ | 769 | $ | 589 |
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