6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2014 Commission File Number:  1-31349

THOMSON REUTERS CORPORATION

(Translation of registrant's name into English)

3 Times Square

New York, New York 10036, United States

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  o     Form 40-F   x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

The information contained in Exhibits 99.1 and 99.2 of this Form 6-K is incorporated by reference into, or as additional exhibits to, as applicable, the registrant’s outstanding registration statements.

Thomson Reuters Corporation is voluntarily furnishing certifications by its Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 as Exhibits 99.3-99.6 of this Form 6-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	THOMSON REUTERS CORPORATION (Registrant)
	By:	/s/ Marc E. Gold
		Name:  Marc E. Gold
		Title:    Assistant Secretary
Date: August 1, 2014

EXHIBIT INDEX

Exhibit Number	Description
99.1	Management's Discussion and Analysis
99.2	Unaudited Consolidated Financial Statements
99.3	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
99.4	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
99.5	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.6	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EX-99.1

EXHIBIT 99.1

THOMSON REUTERS CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

This management’s discussion and analysis is designed to provide you with a narrative explanation through the eyes of our management of our financial condition and results of operations. We recommend that you read this in conjunction with our consolidated interim financial statements for the three and six months ended June 30, 2014, our 2013 annual consolidated financial statements and our 2013 annual management’s discussion and analysis. This management’s discussion and analysis is dated as of July 30, 2014. This management's discussion and analysis contains forward-looking statements, which are subject to risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements. Forward-looking statements include, but are not limited to, our 2014 outlook and our expectations related to general economic conditions and market trends and their anticipated effects on our business segments. For additional information related to forward-looking statements and material risks associated with them, please see the “Cautionary Note Concerning Factors That May Affect Future Results” section of this management’s discussion and analysis.

Contents - We have organized our management’s discussion and analysis in the following key sections:

		Page
·	Overview – a brief discussion of our business	1
·	Results of Operations – a comparison of our current and prior-year period results	3
·	Liquidity and Capital Resources – a discussion of our cash flow and debt	15
·	Outlook – our current financial outlook for 2014	20
·	Related Party Transactions– a discussion of transactions with our principal and controlling shareholder, The Woodbridge Company Limited (Woodbridge), and others	21
·	Subsequent Events – a discussion of material events occurring after June 30, 2014 and through the date of this management’s discussion and analysis	22
·	Changes in Accounting Policies – a discussion of changes in our accounting policies and recent accounting pronouncements	22
·	Critical Accounting Estimates and Judgments – a discussion of critical estimates and judgments made by our management in applying accounting policies	22
·	Additional Information – other required disclosures	22
·	Appendices – supplemental information and discussion	24

We prepare our consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). This management’s discussion and analysis also includes certain non-IFRS financial measures which we use as supplemental indicators of our operating performance and financial position and for internal planning purposes.

References in this discussion to “$” and “US$” are to U.S. dollars and references to “C$” are to Canadian dollars. In addition, “bp” means “basis points” and “na” and “n/m” refer to “not applicable” and “not meaningful”, respectively. Unless otherwise indicated or the context otherwise requires, references in this discussion to “we,” “our,” “us” and “Thomson Reuters” are to Thomson Reuters Corporation and our subsidiaries.

OVERVIEW

Our company -We are the leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision-makers. We deliver this must-have insight to the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world’s most trusted news organization.

We derive the majority of our revenues from selling electronic content and services to professionals, primarily on a subscription basis. Over the years, this has proven to be capital efficient and cash flow generative, and it has enabled us to maintain leading and scalable positions in our chosen markets. Within each of the market segments that we serve, we bring in-depth understanding of our customers’ needs, flexible technology platforms, proprietary content and scale. We believe our ability to embed our solutions into customers’ workflows is a significant competitive advantage as it leads to strong customer retention.

Our company is organized as a group of strategic business units: Financial & Risk, Legal, Tax & Accounting and Intellectual Property & Science, supported by a corporate center. We believe this structure allows us to best meet the complex demands of our customers, capture growth opportunities and achieve efficiencies. We also operate a Global Growth & Operations (GGO) organization which works across our business units to identify opportunities in faster growing geographic areas. We do not report GGO as a separate business unit, but rather include its results within our strategic business units. Our Reuters News business is managed and reported within our corporate center.

1

KEY HIGHLIGHTS Second quarter performance:  Our second quarter results built upon the good start we achieved in the first quarter of the year. Our performance in the second quarter and the first six months of 2014 was consistent with our full-year expectations. In the second quarter, revenues from ongoing businesses increased 1% before currency(1), reflecting 5% combined growth from our Legal, Tax & Accounting and Intellectual Property & Science businesses, which was partially offset by a 2% decline in our Financial & Risk business. The overall increase in revenues from ongoing businesses before currency was due to contributions from acquisitions as revenues from existing businesses were essentially unchanged.
	●	Despite a 2% revenue decrease, we believe that Financial & Risk is continuing to make progress. Financial & Risk’s revenue decline reflected the lag effect of negative net sales over the past 12 months on its revenue, and lower market-driven transaction revenues. A 1% contribution from acquisitions was more than offset by a 3% decline in existing businesses. Led by Eikon and Elektron, Financial & Risk’s net sales continued to improve and were positive in the second quarter. This net sales performance was better than both the prior-year period and the first quarter of 2014. We expect Financial & Risk’s net sales performance to continue to improve in the second half of the year compared to the prior-year period. The business continued to drive cost savings and expanded margins by executing on its operational priorities and simplification program initiatives.
	●	Legal’s revenues rose 1% due to contributions from acquisitions. Revenues from existing businesses were essentially unchanged.  A 6% increase in Legal’s Solutions businesses was offset by a 9% decline in U.S. print and a 1% decline in U.S. online legal information.
	●	Tax & Accounting had a strong second quarter, with revenues increasing 14%, of which 10% was from existing businesses. This growth was driven by the continued strength of our offerings and healthy conditions prevailing in the global tax and accounting markets.
	●	Intellectual Property & Science also reported good growth, with revenues increasing 7% driven by 5% growth from existing businesses. Revenue growth reflected strong growth in recurring revenues.
	●	Our Global Growth & Operations (GGO) unit, which works across our businesses to combine our global capabilities, increased revenues 9%, of which 5% was from existing businesses. On an annualized basis, GGO comprises about $1.2 billion of our company’s total revenues. GGO’s results are included in each of our four segments.
Adjusted EBITDA(1) increased 2% and the related margin increased 20bp to 27.8% despite higher charges associated with our simplification program initiatives in the current-year period. Excluding charges from both periods, our consolidated adjusted EBITDA margin was 28.7% in the second quarter of 2014 compared to 27.9% in the prior-year period, an increase of 80bp. The increase in adjusted EBITDA margin reflected the cost savings from our earlier simplification program initiatives, which more than offset the margin impact of a 3% decline in revenues from existing businesses within our Financial & Risk segment in the quarter.Underlying operating profit(1) increased 2%, and the related margin increased 10bp largely reflecting the same factors that impacted adjusted EBITDA.Excluding charges from both periods, our consolidated underlying operating profit margin was 19.3% in the second quarter of 2014 compared to 18.6% in the prior-year period, an increase of 70bp. Adjusted EPS(1) was $0.51 per share, which represented a $0.03 increase compared to the prior-year period. In the first six months of 2014, we returned over $600 million to shareholders through our buyback program. During 2014, we remain focused on:
	●	Transforming from a portfolio company to an enterprise model to realize more benefits from simplification and greater scale;
	●	Shifting our growth focus towards organic initiatives (rather than acquisitions), with greater emphasis on innovation and investing organically in high growth opportunities; and
	●	Delivering strong and consistent cash flow growth to reinvest in our growth businesses while returning capital to our shareholders both through dividends and increased share repurchases.
2014 Outlook:  We recently reaffirmed our 2014 full-year business outlook that we originally communicated in February. For 2014, we continue to expect revenues to be comparable to 2013(1), adjusted EBITDA margin(1) between 26.0% and 27.0%, underlying operating profit margin(1) between 17.0% and 18.0%, and free cash flow(1) between $1.3 billion and $1.5 billion. Our 2014 outlook includes the impact of an estimated $120 million of previously announced charges expected to be incurred this year. The free cash flow outlook for 2014 reflects the estimated cash impact of the charges incurred in 2013 and expected to be incurred in 2014, as well as the impact of the loss of free cash flow from Other Businesses (approximately $375 million in the aggregate). Additional information is provided in the “Outlook” section of this management’s discussion and analysis.
(1)	Refer to Appendix A for additional information on non-IFRS financial measures.

2

SEASONALITY

Our revenues and operating profit on a consolidated basis do not tend to be significantly impacted by seasonality as we record a large portion of our revenues ratably over a contract term and our costs are generally incurred evenly throughout the year. However, our non-recurring revenues can cause changes in our performance from quarter to consecutive quarter. Additionally, the release of certain print-based offerings can be seasonal as can certain product releases for the regulatory markets, which tend to be concentrated at the end of the year. As a consequence, the results of certain of our segments can be impacted by seasonality to a greater extent than our consolidated revenues and operating profit.

USE OF NON-IFRS FINANCIAL MEASURES

In addition to our results reported in accordance with IFRS, we use certain non-IFRS financial measures as supplemental indicators of our operating performance and financial position and for internal planning purposes. These non-IFRS financial measures include:

· Revenues from ongoing businesses;

· Revenues at constant currency (before currency or revenues excluding the effects of foreign currency);

· Underlying operating profit and the related margin;

· Adjusted EBITDA and the related margin;

· Adjusted EBITDA less capital expenditures and the related margin;

· Adjusted earnings and adjusted earnings per share;

· Net debt;

· Free cash flow; and

· Free cash flow from ongoing businesses.

We report non-IFRS financial measures as we believe their use provides more insight into and understanding of our performance. See Appendix A of this management’s discussion and analysis for a description of our non-IFRS financial measures, including an explanation of why we believe they are useful measures of our performance, including our ability to generate cash flow. Refer to the sections of this management’s discussion and analysis entitled “Results of Operations”, “Liquidity and Capital Resources” and Appendix B for reconciliations of these non-IFRS financial measures to the most directly comparable IFRS financial measures.

RESULTS OF OPERATIONS

BASIS OF PRESENTATION

In this management’s discussion and analysis, we discuss our results of operations on both an IFRS and non-IFRS basis. Both bases exclude discontinued operations and include the performance of acquired businesses from the date of purchase.

Consolidated results

We discuss our consolidated results from continuing operations on an IFRS basis, as reported in our consolidated income statement. Additionally, we discuss our consolidated results on a non-IFRS basis using the measures described in the “Use of Non-IFRS Financial Measures” section. Among other adjustments, our non-IFRS revenue and profitability measures as well as free cash flow from ongoing businesses exclude Other Businesses, which 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.

Segment results

We discuss the results of our four reportable segments as presented in our consolidated interim financial statements for the three and six months ended June 30, 2014: Financial & Risk, Legal, Tax & Accounting and Intellectual Property & Science.

We also provide information on “Corporate & Other” and “Other Businesses”. These categories neither qualify as a component of another reportable segment nor as a separate reportable segment.

· Corporate & Other includes expenses for corporate functions, certain share-based compensation costs and the Reuters News business, which is comprised of the Reuters News Agency and consumer publishing.

· 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. The results of Other Businesses are not comparable from period to period as the composition of businesses changes due to the timing of completed divestitures.

3

See note 3 of our consolidated interim financial statements for the three and six months ended June 30, 2014 which includes a reconciliation of results from our reportable segments to consolidated results as reported in our consolidated income statement.

In analyzing our revenues from ongoing businesses, at both the consolidated and segment levels, we separately measure the effect of foreign currency changes. We separately measure both the revenue growth of existing businesses and the impact of acquired businesses on our revenue growth, on a constant currency basis.

CONSOLIDATED RESULTS

	Three months ended June 30,									Six months ended June 30,
(millions of U.S. dollars, except per share amounts)	2014			2013			Change			2014			2013			Change
IFRS Financial Measures
Revenues		3,159			3,163			-			6,289			6,338			(1	%)
Operating profit		381			597			(36	%)		740			987			(25	%)
Diluted earnings per share	$	0.31		$	0.30			3	%	$	0.65		$	0.26			150	%
Non-IFRS Financial Measures
Revenues from ongoing businesses		3,158			3,108			2	%		6,287			6,205			1	%
Adjusted EBITDA		877			858			2	%		1,697			1,615			5	%
Adjusted EBITDA margin		27.8	%		27.6	%		20	bp		27.0	%		26.0	%		100	bp
Adjusted EBITDA less capital expenditures		652			670			(3	%)		1,224			1,077			14	%
Adjusted EBITDA less capital expenditures margin		20.6	%		21.6	%		(100	)bp		19.5	%		17.4	%		210	bp
Underlying operating profit		581			569			2	%		1,109			1,031			8	%
Underlying operating profit margin		18.4	%		18.3	%		10	bp		17.6	%		16.6	%		100	bp
Adjusted earnings per share	$	0.51		$	0.48			6	%	$	0.97		$	0.86			13	%

Foreign currency effects. With respect to the average foreign exchange rates that we use to report our results, the U.S. dollar strengthened against the Japanese yen, but weakened against the Euro and the British pound sterling in the second quarter of 2014 compared to the same period in 2013. Given our currency mix of revenues and expenses around the world, these fluctuations had a positive impact on our revenue growth, and on our adjusted EBITDA and underlying operating profit margins in the second quarter. 

Revenues.

	Three months ended June 30,				Percentage change:
(millions of U.S. dollars)	2014		2013		Existing businesses		Acquired businesses		Constant currency		Foreign currency		Total
Revenues from ongoing businesses		3,158		3,108		-		1%		1%		1%		2%
Other Businesses		1		55		n/m		n/m		n/m		n/m		n/m
Revenues		3,159		3,163		n/m		n/m		n/m		n/m		-

	Six months ended June 30,				Percentage change:
(millions of U.S. dollars)	2014		2013		Existing businesses		Acquired businesses		Constant currency		Foreign currency		Total
Revenues from ongoing businesses		6,287		6,205		-		1%		1%		-		1%
Other Businesses		2		133		n/m		n/m		n/m		n/m		n/m
Revenues		6,289		6,338		n/m		n/m		n/m		n/m		(1%)

Revenues from ongoing businesses increased on a constant currency basis in both the second quarter  and the six-month period as our Legal, Tax & Accounting and Intellectual Property & Science segments, which increased 5% on a combined basis, were partially offset by a 2% decline in our Financial & Risk segment. Acquisitions contributed to revenue growth across all segments in both periods. Revenues from existing businesses were essentially unchanged as growth in our Tax & Accounting and Intellectual Property & Science segments offset a 3% decline in Financial & Risk. The decline in Financial & Risk was primarily due to the lag effect of negative net sales over the prior 12 months on our current period revenue, reflecting our largely subscription-based model.

4

Our GGO organization is focused on supporting our businesses in the following geographic areas: Latin America, China, India, the Middle East, Africa, the Association of Southeast Asian Nations/North Asia, Russia and countries comprising the Commonwealth of Independent States and Turkey. Revenues from these geographic areas represented 10% and 9% of our revenues in the second quarter and six-month period, respectively.  On a constant currency basis, revenues from our GGO regions grew 9% and 8% (5% and 4% from existing businesses) in the second quarter and six-month period, respectively.

Operating profit, underlying operating profit, adjusted EBITDA and adjusted EBITDA less capital expenditures.

	Three months ended June 30,									Six months ended June 30,
(millions of U.S. dollars)	2014			2013			Change			2014			2013			Change
Operating profit		381			597			(36	%)		740			987			(25	%)
Adjustments to remove:
Amortization of other identifiable intangible assets		165			157						328			317
Fair value adjustments		33			(29	)					35			(91	)
Other operating losses (gains), net		2			(136	)					5			(130	)
Operating profit from Other Businesses		-			(20	)					1			(52	)
Underlying operating profit		581			569			2	%		1,109			1,031			8	%
Remove: depreciation and amortization of computer software (excluding Other Businesses)		296			289						588			584
Adjusted EBITDA(1)		877			858			2	%		1,697			1,615			5	%
Remove: capital expenditures, less proceeds from disposals (excluding Other Businesses)		225			188						473			538
Adjusted EBITDA less capital expenditures(1)		652			670			(3	%)		1,224			1,077			14	%
Underlying operating profit margin		18.4	%		18.3	%		10	bp		17.6	%		16.6	%		100	bp
Adjusted EBITDA margin		27.8	%		27.6	%		20	bp		27.0	%		26.0	%		100	bp
Adjusted EBITDA less capital expenditures margin		20.6	%		21.6	%		(100	)bp		19.5	%		17.4	%		210	bp

(1) See Appendix B for a reconciliation of earnings from continuing operations to adjusted EBITDA and adjusted EBITDA less capital expenditures.

Operating profit decreased in both periods primarily due to a gain in 2013 on the sale of our Investor Relations, Public Relations and Multimedia Solutions businesses (Corporate Services) and unfavorable fair value adjustments. Operating profit was further impacted by charges, primarily severance, associated with our simplification program initiatives. In the second quarter of 2014, we incurred $30 million of charges compared to $9 million in the prior-year period. In the six-month period of 2014, we incurred $40 million of charges compared to $87 million in the prior-year period. As previously announced, we expect to incur approximately $120 million of charges in 2014.

In both periods, the increase in adjusted EBITDA and the related margins reflected lower expenses, which resulted from the reduction of our cost structure and favorable foreign exchange. The increase in adjusted EBITDA and the related margin for the six-month period also reflected lower charges compared to the prior-year period. Underlying operating profit and the related margins increased in both periods primarily due to the same factors that impacted adjusted EBITDA. Foreign currency increased adjusted EBITDA and underlying operating profit margins by 30bp and 20bp, respectively, in the second quarter, and adjusted EBITDA and underlying operating profit margins by 50bp and 30bp, respectively, in the six-month period. Depreciation and amortization increased slightly in both periods.

Adjusted EBITDA less capital expenditures decreased in the second quarter as higher adjusted EBITDA was offset by higher capital expenditures.  Adjusted EBITDA less capital expenditures increased in the six-month period due to higher adjusted EBITDA and lower capital expenditures. The fluctuations in capital expenditures in both periods reflected timing of spending.

As discussed above, in the second quarter of 2014, we continued to incur charges for simplification program initiatives and we continued to reduce our costs as a result of earlier simplification program initiatives. We believe that our adjusted EBITDA and underlying operating profit margins excluding these charges from each period provide a better measurement of our performance. Excluding charges from both periods, our consolidated adjusted EBITDA margin increased 80bp to 28.7% in the second quarter, as benefits of our earlier simplification program initiatives more than offset the impact of the 3% decline in revenues from existing businesses in our Financial & Risk segment. On the same basis, our consolidated adjusted EBITDA margin increased 20bp to 27.6% in the six-month period of 2014 (which is less than the increase including the charges), because benefits from simplification program initiatives in the first quarter were not enough to mitigate the decline in first quarter revenues from existing businesses in our Financial & Risk segment. Excluding charges from both periods, our consolidated underlying operating profit margin increased 70bp to 19.3% in the second quarter, and increased 30bp to 18.3% in the six-month period due to the same factors that impacted adjusted EBITDA margin. Our simplification program initiatives are expected to generate additional benefits in 2014, and by 2015, we expect to generate approximately $300 million of annual cost savings from these initiatives due to lower ongoing staff costs.

5

Operating expenses.

	Three months ended June 30,									Six months ended June 30,
(millions of U.S. dollars)	2014			2013			Change			2014			2013			Change
Operating expenses		2,315			2,256			3	%		4,628			4,580			1	%
Adjustments to remove:
Fair value adjustments(1)		(33	)		29						(35	)		91
Other Businesses		(1	)		(35	)					(3	)		(81	)
Operating expenses, excluding fair value adjustments and Other Businesses		2,281			2,250			1	%		4,590			4,590			-

(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.

Operating expenses, excluding fair value adjustments and Other Businesses, increased slightly in the second quarter, and were unchanged in the first six months compared to the prior-year periods, respectively. All periods included charges associated with our simplification program initiatives, which were $30 million in the second quarter ($9 million – 2013) and $40 million in the six-month period ($87 million – 2013). Both periods benefited from lower expenses due to the reduction of our cost structure which resulted from these initiatives. Additionally, both periods included higher expenses associated with newly acquired businesses.

Depreciation and amortization.

	Three months ended June 30,							Six months ended June 30,
(millions of U.S. dollars)	2014		2013		Change			2014		2013		Change
Depreciation		99		101		(2	%)		197		208		(5	%)
Amortization of computer software		197		188		5	%		391		376		4	%
Subtotal		296		289		2	%		588		584		1	%
Amortization of other identifiable intangible assets		165		157		5	%		328		317		3	%

· Depreciation and amortization of computer software on a combined basis increased in both periods due to higher amortization reflecting our investments in products, such as Thomson Reuters Eikon, and the amortization of assets from recently acquired businesses, partly offset by the completion of depreciation of fixed assets acquired in previous years.

· Amortization of other identifiable intangible assets increased in both periods due to amortization from newly-acquired assets which more than offset decreases from the completion of amortization for certain identifiable assets acquired in previous years. 

Other operating (losses) gains, net.

	Three months ended June 30,					Six months ended June 30,
(millions of U.S. dollars)	2014			2013		2014			2013
Other operating (losses) gains, net		(2	)		136		(5	)		130

In the second quarter and six months ended June 30, 2013, other operating gains, net, were primarily comprised of a gain from the sale of our Corporate Services business, which was partially offset by acquisition-related costs.    

Net interest expense.

	Three months ended June 30,							Six months ended June 30,
(millions of U.S. dollars)	2014		2013		Change			2014		2013		Change
Net interest expense		111		124		(10	%)		219		239		(8	%)

The decrease in net interest expense in both periods was primarily due to lower interest costs on our net pension and debt obligations. In the second half of 2013, we contributed $500 million to our pension plans which reduced our net obligations, as well as our ongoing interest cost associated with the net obligations. The decrease in interest from debt obligations reflected timing of 2013 debt issuances and repayments (see the “Liquidity and Capital Resources - Cash Flow” section of this management’s discussion and analysis for additional information). As of June 30, 2014, over 95% of our long-term debt obligations paid interest at fixed rates (after swaps), so the balance of net interest expense was relatively unchanged.

6

Other finance income (costs).

	Three months ended June 30,					Six months ended June 30,
(millions of U.S. dollars)	2014		2013			2014		2013
Other finance income (costs)		29		(17	)		57		(72	)

Other finance income (costs) primarily included gains or losses realized from changes in foreign currency exchange rates on certain intercompany funding arrangements and gains or losses related to freestanding derivative instruments.

Share of post-tax earnings in equity method investments.

	Three months ended June 30,				Six months ended June 30,
(millions of U.S. dollars)	2014		2013		2014		2013
Share of post-tax earnings in equity method investments		1		9		1		19

The second quarter and six months ended June 30, 2013 included our share of post-tax earnings from our former joint venture in Omgeo, a provider of trade management services, which was sold in the fourth quarter of 2013.

Tax expense.

	Three months ended June 30,				Six months ended June 30,
(millions of U.S. dollars)	2014		2013		2014		2013
Tax expense		40		209		27		456

The comparability of our tax expense was impacted by various transactions and accounting adjustments during each period. Additionally, the tax expense in each period reflected the mix of taxing jurisdictions in which pre-tax profits and losses were recognized. Because the geographical mix of pre-tax profits and losses in interim periods distorts the reported effective tax rate, tax expense or benefit in interim periods is not necessarily indicative of tax expense for the full year.

In the three and six months ended June 30, 2013, we recorded tax charges of $161 million and $396 million, respectively, in connection with intercompany sales of certain technology and content assets between our wholly owned subsidiaries. These transactions were part of the consolidation of the ownership and management of our technology and content assets and are part of our simplification program. The intercompany gains that arose from these transactions were eliminated in consolidation. 

7

The following table sets forth significant components within income tax expense that impact comparability from period to period, including tax expense associated with items that are removed from adjusted earnings:

(Expense) benefit	Three months ended June 30,						Six months ended June 30,
(millions of U.S. dollars)	2014			2013			2014			2013
Discrete tax items:
Deferred tax adjustment(1)		(21	)		-			(21	)		-
Consolidation of technology and content assets(2)		-			(161	)		-			(396	)
Uncertain tax positions(3)		-			-			3			2
Corporate tax rates(4)		-			-			2			1
Other(5)		7			10			16			21
Subtotal		(14	)		(151	)		-			(372	)
Tax related to:
Sale of businesses(6)		-			(15	)		-			(23	)
Operating profit of Other Businesses		-			(5	)		-			(13	)
Fair value adjustments		8			(14	)		7			(23	)
Other items		(4	)		(2	)		(3	)		1
Subtotal		4			(36	)		4			(58	)
Total		(10	)		(187	)		4			(430	)

(1) Relates to the write-off of deferred tax assets established in prior years.

(2) Relates to the consolidation of the ownership and management of our technology and content assets.

(3) Relates to the reversal of tax reserves in connection with favorable developments regarding tax disputes.

(4) Relates to the net reduction of deferred tax liabilities due to changes in corporate tax rates that were substantively enacted in certain jurisdictions.

(5) Primarily relates to the recognition of deferred tax benefits in connection with acquisitions.

(6) Primarily relates to the sale of the Corporate Services business.

Because the items described above impact the comparability of our tax expense for each period, we remove them from our calculation of adjusted earnings, along with the pre-tax items to which they relate. Accordingly, in our calculation of adjusted earnings for the three and six months ended June 30, 2013, we removed the impact of the tax charges associated with the consolidation of technology and content assets. Within our tax provision on adjusted earnings, we amortize a portion of the taxes associated with the intercompany sales on a straight-line basis over seven years (see note 2 below). 

The computation of our adjusted tax expense is set forth below:

(Expense) benefit	Three months ended June 30,						Six months ended June 30,
(millions of U.S. dollars)	2014			2013			2014			2013
Tax expense		(40	)		(209	)		(27	)		(456	)
Remove: Items from above impacting comparability		10			187			(4	)		430
Other adjustments:
Interim period effective tax rate normalization(1)		7			19			(5	)		12
Tax charge amortization(2)		(21	)		(24	)		(43	)		(32	)
Total tax expense on adjusted earnings		(44	)		(27	)		(79	)		(46	)

(1) 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 we operate. The adjustment reallocates estimated full-year income taxes between interim periods, but has no effect on full-year income taxes.

(2) For the year ended December 31, 2013, we recorded $604 million of deferred tax charges associated with the consolidation of the ownership and management of our technology and content assets. Within our tax expense on adjusted earnings, we amortize these charges on a straight-line basis over seven years. We believe this treatment more appropriately reflects our tax position because these charges are expected to be paid over seven years, in varying annual amounts, in conjunction with the repayments of interest-bearing notes that were issued as consideration in the original transactions.

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Net earnings and earnings per share.

(millions of U.S. dollars, except per share amounts)	Three months ended June 30,							Six months ended June 30,
	2014		2013		Change			2014		2013		Change
Net earnings		260		262		(1	%)		552		245		125	%
Diluted earnings per share	$	0.31	$	0.30		3	%	$	0.65	$	0.26		150	%

Net earnings decreased slightly in the second quarter as lower operating profit was offset by lower income tax expense. The related per share amount increased due to the impact of lower diluted weighted-average common shares outstanding as a result of share repurchases (see the “Liquidity and Capital Resources - Share repurchases” section of this management’s discussion and analysis for additional information). Net earnings and the related per share amounts increased in the six-month period primarily from lower tax expense. Both periods in 2013 included tax charges associated with the consolidation of the ownership and management of our technology and content assets.

Adjusted earnings and adjusted earnings per share.

(millions of U.S. dollars, except per share amounts and share data)	Three months ended June 30,									Six months ended June 30,
	2014			2013			Change			2014			2013			Change
Earnings attributable to common shareholders		249			248			-			531			217			145	%
Adjustments to remove:
Operating (profit) loss from Other Businesses		-			(20	)					1			(52	)
Fair value adjustments		33			(29	)					35			(91	)
Other operating losses (gains), net		2			(136	)					5			(130	)
Other finance (income) costs		(29	)		17						(57	)		72
Share of post-tax earnings in equity method investments		(1	)		(9	)					(1	)		(19	)
Tax on above items(1)		(4	)		36						(4	)		58
Discrete tax items(1)		14			151						-			372
Amortization of other identifiable intangible assets		165			157						328			317
Discontinued operations		-			(6	)					-			(6	)
Interim period effective tax rate normalization(1)		7			19						(5	)		12
Tax charge amortization(1)		(21	)		(24	)					(43	)		(32	)
Dividends declared on preference shares		-			(1	)					(1	)		(2	)
Adjusted earnings		415			403			3	%		789			716			10	%
Adjusted earnings per share (adjusted EPS)	$	0.51		$	0.48			6	%	$	0.97		$	0.86			13	%
Diluted weighted-average common shares (millions)		813.4			832.5						817.3			831.5

(1) See the “Tax expense” section above for additional information.

In the second quarter and the six-month period, adjusted earnings and the related per share amounts increased as higher underlying operating profit and lower interest expense were partly offset by higher income taxes. Additionally, the increase in adjusted earnings per share was partially attributable to lower diluted weighted-average common shares primarily due to share repurchases (see Liquidity and Capital Resources - Share repurchases). Foreign currency positively impacted adjusted earnings per share in the second quarter and the six-month period by $0.01 and $0.03, respectively, compared to the prior-year periods.

SEGMENT RESULTS

A discussion of the operating results of our Financial & Risk, Legal, Tax & Accounting and Intellectual Property & Science segments follows.

· Results from the Reuters News business are included in “Corporate & Other”. These results as well as Other Businesses are both excluded from our reportable segments as neither of them qualify as a component of our four reportable segments, nor as a separate reportable segment.

· We use segment operating profit to measure the operating performance of our reportable segments.

o The costs of centralized support services such as technology, news, real estate, accounting, procurement, legal and human resources are allocated to each segment based on usage or other applicable measures.

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o We define segment operating profit as operating profit before (i) amortization of other identifiable intangible assets; (ii) other operating gains and losses; (iii) certain asset impairment charges; (iv) corporate-related items; and (v) fair value adjustments. We use this measure because we do not consider these excluded items to be controllable operating activities for purposes of assessing the current performance of our reportable segments.

o We also use segment operating profit margin, which we define as segment operating profit as a percentage of revenues.

o Our definition of segment operating profit may not be comparable to that of other companies.

· As a supplemental measure of segment operating performance, we add back depreciation and amortization of computer software to segment operating profit to arrive at each segment’s EBITDA and the related margin as a percentage of revenues. See Appendix B of this management’s discussion and analysis for additional information.

Financial & Risk

(millions of U.S. dollars)	Three months ended June 30,						Percentage change:
	2014			2013			Existing businesses		Acquired businesses		Constant currency		Foreign currency		Total
Revenues		1,655			1,660			(3%)		1%		(2%)		2%		-
EBITDA		426			420											1%
EBITDA margin		25.7	%		25.3	%										40bp
Segment operating profit		266			260											2%
Segment operating profit margin		16.1	%		15.7	%										40bp

(millions of U.S. dollars)	Six months ended June 30,						Percentage change:
	2014			2013			Existing businesses		Acquired businesses		Constant currency		Foreign currency		Total
Revenues		3,313			3,335			(3%)		1%		(2%)		1%		(1%)
EBITDA		825			780											6%
EBITDA margin		24.9	%		23.4	%										150bp
Segment operating profit		506			460											10%
Segment operating profit margin		15.3	%		13.8	%										150bp

Revenues decreased on a constant currency basis as growth from acquired businesses was more than offset by a decline in revenues from existing businesses in the second quarter and six-month period. In both periods, the 3% decline in revenues from existing businesses was due to the lag effect of negative net sales over the past 12 monthson our current period revenues, reflecting our largely subscription-based model, as well as from a decline in market-driven transaction revenues. The decline in transaction revenues reflected significantly lower market volatility, which resulted in lower trading volumes across global markets including equity, credit and foreign exchange. Net sales were positive in the second quarter, an improvement from the negative net sales performances reported in the prior-year period and the first quarter of 2014. By region, net sales were positive in the Americas and Asia Pacific, and slightly negative, but much improved over the prior-year period, in Europe. We expect Financial & Risk’s net sales performance to continue to improve in the second half of the year compared to the prior-year period as a result of the migration of our customers to new products and packages. While in some instances pricing will be reduced as a result of this migration, the improving trend in net sales in 2014 is expected to lead to improving recurring revenue performance in 2015.

By geographic area, second quarter revenues in the Americas decreased 1% (4% from existing businesses), Europe, Middle East and Africa (EMEA) second quarter revenues decreased 4%, all from existing businesses, and Asia Pacific second quarter revenues increased 1% (essentially unchanged from existing businesses). For the six-month period, revenues decreased in the Americas and EMEA, but increased in Asia Pacific largely due to growth from acquired businesses.

Since the beginning of 2014, Financial & Risk continued to make progress on its operational execution which included the launch of Eikon 4.0 as well as a new “Know Your Customer” proposition in our Risk business. We also discontinued our legacy Reuters 3000Xtra product with over 120,000 customers upgraded to Eikon. In the second quarter and six months ended June 30, 2014, our simplification program led to higher operating profit and margin expansion in the business as we reduced our cost structure.  

In 2014, we are no longer reporting revenue information for four lines of businesses in our Financial & Risk segment, as the business is no longer managed under that structure. Financial & Risk is building a unified technology platform, which is enabling us to leverage the scale of a single Financial & Risk business, and also provides a vehicle for innovation and the creation of industry solutions. The unified technology platform strategy has enabled us to simplify our structure, remove costs and focus investment spending on areas that we believe provide the greatest growth and scale opportunities.

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Results by revenue type were:		Second Quarter 2014 Revenues
·	Subscription revenues decreased 2% (3% from existing businesses) in both the second quarter and six-month period reflecting the impact of negative, but improved, net sales over the past 12 months;
·	Transactions revenues decreased 4% (11% from existing businesses) in the second quarter and decreased 1% (7% from existing businesses) in the six-month period, driven by significantly lower market volatility which depressed trading volumes; and
·	Recoveries revenues (low-margin revenues that we collect and largely pass-through to a third party provider, such as stock exchange fees) were essentially unchanged in the second quarter and six-month period.

EBITDA and segment operating profit increased in the second quarter as cost savings resulting from earlier simplification initiatives were partially offset by higher charges for our continuing simplification program. We believe that Financial & Risk’s EBITDA margins excluding these charges from each period provide a better measurement of Financial & Risk’s performance. Excluding charges from both periods, Financial & Risk’s EBITDA margin increased 210bp to 27.6% in the second quarter, as benefits of our earlier simplification initiatives more than offset the impact of the 3% decline in revenues from existing businesses. On the same basis, Financial & Risk’s EBITDA margin increased 80bp to 26.2% in the six-month period of 2014 (which is less than the increase including the charges), because benefits from simplification initiatives in the first quarter were not enough to mitigate the decline in first quarter revenues from existing businesses. Foreign currency increased EBITDA margins by approximately 60bp in the second quarter and six-month period compared to the respective prior-year periods. Excluding charges from both periods, Financial & Risk’s segment operating profit margin increased 210bp to 17.9% in the second quarter, and increased 70bp to 16.5% in the six-month period due to the same factors that impacted adjusted EBITDA margin.

Legal

(millions of U.S. dollars)	Three months ended June 30,						Percentage change:
	2014			2013			Existing businesses		Acquired businesses		Constant currency		Foreign currency		Total
Revenues		850			846			-		1%		1%		-		1%
EBITDA		331			326											2%
EBITDA margin		38.9	%		38.5	%										40bp
Segment operating profit		261			255											2%
Segment operating profit margin		30.7	%		30.1	%										60bp

(millions of U.S. dollars)	Six months ended June 30,						Percentage change:
	2014			2013			Existing businesses		Acquired businesses		Constant currency		Foreign currency		Total
Revenues		1,653			1,640			-		1%		1%		-		1%
EBITDA		615			602											2%
EBITDA margin		37.2	%		36.7	%										50bp
Segment operating profit		476			456											4%
Segment operating profit margin		28.8	%		27.8	%										100bp

Revenues increased on a constant currency basis in the second quarter and six-month period due to contributions from acquired businesses. In the second quarter, revenues from existing businesses were unchanged as 4% growth in subscription revenues, which comprised approximately 75% of our Legal business, were offset by declines in transaction revenues and U.S. print revenues of 10% and 9%, respectively. In the six-month period, revenues from existing businesses reflected subscription revenue growth of 3% offset by a 7% decline in transaction revenues and a 6% decline in print revenues. Excluding U.S. print, Legal’s revenues increased 3% (2% from existing businesses) in the second quarter and six-month period.

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The following chart illustrates the growth dynamics and business mix in the Legal segment:

Results by line of business were:		Second  Quarter 2014 Revenues 1% constant currency revenue growth
·	Solutions Businesses revenues include non-U.S. legal information and global software and services businesses. Our Solutions businesses revenues increased 6% (5% from existing businesses) and 7% (5% from existing businesses) in the second quarter and six-month period, respectively,  driven by our U.K. Practical Law, Elite and FindLaw businesses;
·	U.S. Online Legal Information revenues are primarily comprised of Westlaw and decreased 1% in both periods. Revenues from existing businesses declined 1% and 2% in the second quarter and six-month period, respectively; and
·	U.S. Print revenues decreased 9% and 6%, all from existing businesses in the second quarter and six-month period, respectively. We expect U.S. print revenues to decline in the upper-single digit range in the third quarter of 2014 and to decline by mid-to-high single digits for the full year 2014 compared to prior-year periods.

In the second quarter and six-month period, EBITDA and the related margin increased as lower costs offset the impact of a challenging business mix. In the six-month period, segment operating profit growth and margin improvement also benefited from lower depreciation and amortization.

Tax & Accounting

(millions of U.S. dollars)	Three months ended June 30,						Percentage change:
	2014			2013			Existing businesses		Acquired businesses		Constant currency		Foreign currency		Total
Revenues		324			288			10%		4%		14%		(1%)		13%
EBITDA		98			87											13%
EBITDA margin		30.2	%		30.2	%										-
Segment operating profit		65			57											14%
Segment operating profit margin		20.1	%		19.8	%										30bp

(millions of U.S. dollars)	Six months ended June 30,						Percentage change:
	2014			2013			Existing businesses		Acquired businesses		Constant currency		Foreign currency		Total
Revenues		672			605			10%		3%		13%		(2%)		11%
EBITDA		213			185											15%
EBITDA margin		31.7	%		30.6	%										110bp
Segment operating profit		149			126											18%
Segment operating profit margin		22.2	%		20.8	%										140bp

In both periods, revenues increased on a constant currency basis reflecting contributions from existing and acquired businesses. Recurring revenues, which comprised approximately 80% of our Tax & Accounting business in each period, increased 12% (7% from existing businesses) in the second quarter and 11% (8% from existing businesses) in the six-month period. Transaction revenues increased 25% (24% from existing businesses) in the second quarter and 21% (19% from existing businesses) in the six-month period.

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Results by line of business were:		Second Quarter 2014 Revenues
·	Professional revenues from small, medium and large accounting firms increased 5% and 8%, all from existing businesses, in the second quarter and six-month period, respectively, primarily from our CS Professional Suite and Enterprise Suite accounting software solutions;
·	Knowledge Solutionsrevenues increased 2% (essentially unchanged from existing businesses) in the second quarter and 2% (1% from existing businesses) for the six-month period. Revenues from existing businesses in the second quarter reflected growth in our U.S. Checkpoint business offset by a decline in non-U.S. content sales;
·	Corporaterevenues increased 21% (11% from existing businesses) in the second quarter and 21% (13% from existing businesses) for the six-month period, primarily from ONESOURCE software and services and strong growth in solutions revenues in Latin America; and
·	Government revenues in the second quarter, which only represents about 5% of Tax & Accounting revenues, increased significantly over a relatively small revenue base in the prior-year period.

In both periods, EBITDA and segment operating profit increased due to the impact of higher revenues. In the second quarter, EBITDA margin was unchanged and segment operating profit margin was slightly higher, as reinvestments in the businesses offset the impact of higher revenues. In the six-month period, EBITDA and segment operating profit margins both increased reflecting the impact of higher revenues.

Tax & Accounting is a seasonal business with a significant percentage of its operating profit historically generated in the fourth quarter. Small movements in the timing of revenues and expenses can impact quarterly margins. Full-year margins are more reflective of the segment’s performance.

Intellectual Property & Science

(millions of U.S. dollars)	Three months ended June 30,						Percentage change:
	2014			2013			Existing businesses		Acquired businesses		Constant currency		Foreign currency		Total
Revenues		251			234			5%		2%		7%		-		7%
EBITDA		85			79											8%
EBITDA margin		33.9	%		33.8	%										10bp
Segment operating profit		62			59											5%
Segment operating profit margin		24.7	%		25.2	%										(50)bp

(millions of U.S. dollars)	Six months ended June 30,						Percentage change:
	2014			2013			Existing businesses		Acquired businesses		Constant currency		Foreign currency		Total
Revenues		494			467			4%		2%		6%		-		6%
EBITDA		157			149											5%
EBITDA margin		31.8	%		31.9	%										(10)bp
Segment operating profit		113			110											3%
Segment operating profit margin		22.9	%		23.6	%										(70)bp

In both periods, revenues increased on a constant currency basis reflecting contributions from existing and acquired businesses. Recurring revenues, which represented approximately 75% of Intellectual Property & Science’s business in each period, increased 10% (8% from existing businesses) in the second quarter and 7% (6% from existing businesses) in the six-month period. Revenue growth from recurring revenues was partly offset by transaction revenues, which declined 1% (3% from existing businesses) in the second quarter, and were essentially unchanged (1% decline from existing businesses) in the six-month period.

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Results by line of business were:		Second Quarter 2014 Revenues
·	IP Solutions revenues increased 6%, all from existing businesses, in the second quarter and 4% (3% from existing businesses) in the six-month period, respectively, primarily due to recurring revenue growth from MarkMonitor;
·	Scientific & Scholarly Research revenues increased 12% (10% from existing businesses) in the second quarter and 11% (9% from existing businesses) in the six-month period, led by higher subscriptions and discrete sales for Web of Science products; and
·	Life Sciences revenues increased 6% (essentially unchanged   from existing businesses) in the second quarter and the six-month period.

In both periods, EBITDA and segment operating profit increased primarily due to the impact of higher revenues. The declines in segment operating profit margins reflected the dilutive impact of businesses acquired in 2013.

Quarterly revenue growth for Intellectual Property & Science can be uneven due to the impact of large sales in the Scientific & Scholarly Research business. Small movements in the timing of revenues and expenses can impact quarterly margins. Full-year revenues and margins are more reflective of the segment’s performance.

Corporate & Other

(millions of U.S. dollars)	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Revenues - Reuters News		82			82			161			163
Reuters News		4			1			4			(3	)
Core corporate expenses		(77	)		(63	)		(139	)		(118	)
Total		(73	)		(62	)		(135	)		(121	)

Revenues from our Reuters News business were essentially unchanged in the second quarter and down slightly in the six-month period. Before currency, revenues from our Reuters News business decreased 1% in both periods.

Higher core corporate expenses in both periods reflected 2014 consulting costs associated with transforming our business. Full-year core corporate expenses are expected to be unchanged to slightly lower than the prior-year period.

Other Businesses

“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. The results of Other Businesses are not comparable from period to period, as the composition of businesses changes as businesses are identified for sale or closure. Further fluctuations are caused by the timing of the sales or closures. In 2013, the most significant business in Other Businesses was Corporate Services, a provider of tools and solutions that help companies communicate with investors and media formerly in the Financial & Risk segment. Corporate Services was sold in the second quarter of 2013.

The results of Other Businesses were as follows:

(millions of U.S. dollars)	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014			2013
Revenues		1		55		2			133
Operating profit (loss)		-		20		(1	)		52

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LIQUIDITY AND CAPITAL RESOURCES

Our disciplined capital management strategy remains focused on:

· Growing free cash flow and balancing the cash generated between reinvestment in the business and returns to shareholders; and

· Maintaining a strong balance sheet, solid credit ratings and ample financial flexibility to support the execution of our business strategy.

Our principal sources of liquidity are cash on hand, cash provided by our operations, our $2.0 billion commercial paper programs and our $2.5 billion credit facility. From time to time, we also issue debt securities. Our principal uses of cash are for debt repayments, debt servicing costs, dividend payments, capital expenditures, acquisitions and share repurchases. We believe that our existing sources of liquidity will be sufficient to fund our expected 2014 cash requirements in the normal course of business.

CASH FLOW

Summary of Consolidated Statement of Cash Flow

(millions of U.S. dollars)	Three months ended June 30,									Six months ended June 30,
	2014			2013			Change			2014			2013			Change
Net cash provided by operating activities		876			904			(28	)		989			1,020			(31	)
Net cash (used in) provided by investing activities		(349	)		33			(382	)		(596	)		(1,013	)		417
Net cash (used in) provided by financing activities		(486	)		264			(750	)		(1,009	)		340			(1,349	)
Increase (decrease) in cash and bank overdrafts		41			1,201			(1,160	)		(616	)		347			(963	)
Translation adjustments		3			(6	)		9			3			(17	)		20
Cash and bank overdrafts at beginning of period		655			411			244			1,312			1,276			36
Cash and bank overdrafts at end of period		699			1,606			(907	)		699			1,606			(907	)
Cash and bank overdrafts at end of period comprised of:
Cash and cash equivalents		704			1,613			(909	)		704			1,613			(909	)
Bank overdrafts		(5	)		(7	)		2			(5	)		(7	)		2

Operating activities. The decrease in net cash provided by operating activities in both periods was primarily due to the loss of operating cash flow from Other Businesses and higher severance payments associated with our simplification program initiatives, partly offset by higher adjusted EBITDA. While the second quarter included favorable timing of interest and tax payments, these inflows were largely offset by outflows of working capital due to timing.

Investing activities. The increase in net cash used in investing activities in the second quarter was principally attributable to higher capital expenditures and the 2013 proceeds from the sale of our Corporate Services business. The decrease in net cash used in investing activities for the six-month period reflected lower acquisition spending and lower capital expenditures in 2014, as well as the 2013 proceeds from the sale of our Corporate Services business. In 2014, we acquired Dominio Sistemas, a Brazilian provider of accounting and software solutions primarily to large and small accounting firms within our Tax & Accounting segment. In 2013, we acquired Practical Law, a provider of practical legal know-how, current awareness and workflow solutions within the Legal segment and T.Global, a Brazilian provider of global trade management software and solutions also within our Tax & Accounting segment. The fluctuations in capital expenditures in both periods reflected timing of spending.

Financing activities. The increase in net cash used in financing activities for the second quarter and six-month period was primarily attributable to 2014 share repurchases and proceeds from 2013 debt issuances. These increases were partly offset by a contribution from the non-controlling interests of Tradeweb of $115 million in exchange for additional shares. This contribution is reflected within “Other financing activities” in the consolidated statement of cash flow. Additionally, in the second quarter of 2013, we repaid $0.3 billion of commercial paper. In the second quarter and six-month period of 2014, we returned approximately $0.6 billion (2013 - $0.3 billion) and $1.1 billion (2013 - $0.5 billion) to our shareholders through dividends and share repurchases, respectively. Additional information about our debt, dividends and share repurchases is as follows:

· Commercial paper programs.Our $2.0 billion commercial paper programs provide cost-effective and flexible short-term funding to balance the timing of completed acquisitions, dividend payments and debt repayments. We had no short-term notes outstanding at June 30, 2014. Issuances of commercial paper reached a peak of $0.2 billion during the six-month period of 2014.

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· Credit facility. We have a $2.5 billion syndicated credit facility agreement which matures in May 2018. The facility may be utilized to provide liquidity for general corporate purposes (including support for our commercial paper programs). There were no borrowings during the first six months of 2014. In the six-month period of 2013, we borrowed and repaid $440 million under the credit facility.

We may request an extension of the maturity date under certain circumstances for up to two additional one-year periods, which the applicable lenders may accept or decline in their sole discretion. We may also request an increase, subject to approval by applicable lenders, in the lenders’ commitments up to a maximum amount of $3.0 billion.

Based on our current credit ratings, the cost of borrowing under the agreement is priced at LIBOR/EURIBOR plus 100 basis points. If our long-term debt rating were downgraded by Moody’s or Standard & Poor’s, our facility fee and borrowing costs may increase, although availability would be unaffected. Conversely, an upgrade in our ratings may reduce our facility fees and borrowing costs. We monitor the lenders that are party to our facility and believe they continue to be able to lend to us. 

We guarantee borrowings by our subsidiaries under the credit facility. We must also maintain a ratio of net debt as of the last day of each fiscal quarter to EBITDA as defined in the credit agreement (earnings before interest, income taxes, depreciation and amortization and other modifications described in the credit agreement) for the last four quarters ended of not more than 4.5:1. We were in compliance with this covenant at June 30, 2014. 

· Debt shelf prospectus. We have a debt shelf prospectus under which we may issue up to $3.0 billion principal amount of debt securities from time to time through April 2016. No debt securities have been issued under this prospectus as of the date of this management’s discussion and analysis.

· Long-term debt. We did not issue or repay long–term debt in the first six months of 2014. In the second quarter of 2013, we issued the following notes:  

Month/Year	Notes issued	Principal Amount (in millions)
May 2013	0.875% notes due 2016	US$500
May 2013	4.50% notes due 2043	US$350

We used the net proceeds of the May 2013 debt issuance for general corporate purposes, including pension contributions and debt repayments.

· 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 result in significantly higher borrowing rates.

The following table sets forth the credit ratings that we have received from rating agencies in respect of our outstanding securities as of the date of this management's discussion and analysis:

	Moody’s	Standard & Poor’s	DBRS Limited	Fitch
Long-term debt	Baa2	BBB+	BBB (high)	BBB+
Commercial paper	P-2	A-2 (1)	R-2 (high)	F2
Trend/Outlook	Stable	Stable	Stable	Stable

(1) The A-2 rating represents the global short-term/commercial paper rating from Standard & Poor’s. This A-2 global short-term/ commercial paper rating, taken together with our global long-term debt rating of BBB+, corresponds to a Canadian market commercial paper rating of A-1 (low) per Standard & Poor’s ratings criteria.

We are not aware of any changes to our credit ratings being contemplated by rating agencies.

These credit ratings are not recommendations to purchase, hold, or sell securities and do not address the market price or suitability of a specific security for a particular investor. Credit ratings may not reflect the potential impact of all risks on the value of securities. We cannot assure you that our credit ratings will not be lowered in the future or that rating agencies will not issue adverse commentaries regarding our securities.

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· Dividends.In February 2014, we announced a $0.02 per share increase in the annualized dividend rate to $1.32 per common share. Dividends paid on our common shares were as follows for the periods presented:

(millions of U.S. dollars)	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Dividends declared		266			270			536			539
Dividends reinvested		(8	)		(10	)		(16	)		(20	)
Dividends paid		258			260			520			519

· Share repurchases. We may buy back shares (and subsequently cancel them) from time to time as part of our capital strategy. In October 2013, we announced plans to repurchase up to $1 billion of our common shares by the end of 2014. We substantially completed these repurchases as of the date of this management’s discussion and analysis. We currently repurchase shares under a normal course issuer bid (NCIB), which we renewed in May 2014 for an additional 12 months. Under the current NCIB, we may repurchase up to 30 million common shares between May 28, 2014 and May 27, 2015 in open market transactions on the Toronto Stock Exchange (TSX), the New York Stock Exchange (NYSE) and/or other exchanges and alternative trading systems, if eligible, or by such other means as may be permitted by the TSX.

During the second quarter and six months ended June 30, 2014, we repurchased 9.8 million and 17.8 million of our common shares for a cost of $345 million and $624 million, respectively, of which $7 million was payable to the broker at June 30, 2014. The average price per share that we repurchased in the second quarter and six months ended June 30, 2014 was $35.25 and $35.17, respectively. We did not repurchase any shares during the six months ended June 30, 2013.

Decisions regarding any future repurchases will be based on market conditions, share price and other factors including opportunities to invest capital for growth. In July 2014, we announced that we plan to repurchase up to an additional $1.0 billion of our common shares by the end of 2015. We may elect to suspend or discontinue our share repurchases at any time, in accordance with applicable laws. From time to time when we do not possess material nonpublic information about ourselves or our securities, we may enter into a pre-defined plan with our broker to allow for the repurchase of shares at times when we ordinarily would not be active in the market due to our own internal trading blackout periods, insider trading rules or otherwise. Any such plans entered into with our broker will be adopted in accordance with applicable Canadian securities laws and the requirements of Rule 10b5-1 under the U.S. Securities Exchange Act of 1934, as amended. We entered into such plans with our broker on June 30, 2014 and on December 31, 2013. As a result, we recorded a liability of $40 million in “Other financial liabilities” within current liabilities at June 30, 2014 ($100 million at December 31, 2013) with a corresponding amount recorded in equity in the consolidated statement of financial position in both periods. The liability recorded on December 31, 2013 was settled in the first quarter of 2014.

Free cash flow and free cash flow from ongoing businesses.

(millions of U.S. dollars)	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Net cash provided by operating activities		876			904			989			1,020
Capital expenditures, less proceeds from disposals		(225	)		(188	)		(473	)		(538	)
Other investing activities		1			17			2			21
Dividends paid on preference shares		-			(1	)		(1	)		(2	)
Free cash flow		652			732			517			501
Remove: Other Businesses		1			(59	)		1			(52	)
Free cash flow from ongoing businesses		653			673			518			449

Free cash flow and free cash flow from ongoing businesses decreased in the second quarter and increased in the six-month period primarily due to capital expenditures, which reflected timing of spending. Both periods included the impacts of higher adjusted EBITDA, as well as severance payments associated with our simplification program initiatives. Other Businesses were primarily comprised of our Corporate Services business, which was sold in the second quarter of 2013.

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FINANCIAL POSITION

Our total assets were $31.6 billion at June 30, 2014, reflecting a decrease of $0.9 billion compared to December 31, 2013. The decrease was due to payments of dividends, repurchases of shares, depreciation and amortization, partly offset by assets of newly-acquired businesses, capital expenditures and changes in foreign currency. See the “Cash Flow” section of this management’s discussion and analysis for additional information.

As of June 30, 2014, the carrying amounts of our total current liabilities exceeded the carrying amounts of our total current assets principally because current liabilities include deferred revenue from the sale of information and services delivered electronically on a subscription basis, for which many customers pay in advance. The cash received from these advance payments is used to currently fund the operating, investing and financing activities of our business. However, for accounting purposes, these advance payments must be deferred and recognized over the term of the subscription. As such, we typically reflect a negative working capital position in our balance sheet. In the ordinary course of business, deferred revenue does not represent a cash obligation, but rather an obligation to perform services or deliver products. Therefore, we believe that our negative working capital position as at June 30, 2014, was not indicative of a liquidity issue, but rather an outcome of the required accounting for our business model.

Net Debt⁽¹⁾ 

	As at
(millions of U.S. dollars)	June 30, 2014			December 31, 2013
Current indebtedness		591			596
Long-term indebtedness		7,467			7,470
Total debt		8,058			8,066
Swaps		(97	)		(86	)
Total debt after swaps		7,961			7,980
Remove fair value adjustments for hedges		(8	)		(27	)
Total debt after hedging arrangements		7,953			7,953
Remove transaction costs and discounts included in the carrying value of debt		75			78
Less: cash and cash equivalents(2)		(704	)		(1,316	)
Net debt		7,324			6,715

(1) Net debt is a non-IFRS financial measure, which we define in Appendix A.

(2) Includes cash and cash equivalents of $93 million and $105 million at June 30, 2014 and December 31, 2013, respectively, which was held in subsidiaries which have regulatory restrictions, contractual restrictions or operate in countries where exchange controls and other legal restrictions apply and are therefore not available for general use by our company.

The increase in our net debt was primarily due to a decrease in cash and cash equivalents of $612 million, which reflected capital expenditures, and payments for dividends and repurchases of shares exceeding net cash provided by operating activities. See the “Cash Flow” section of this management’s discussion and analysis for additional information.

The maturity dates for our long-term debt are well balanced with no significant concentration in any one year. Our next scheduled long-term debt maturity occurs in the fourth quarter of 2014 and is recorded as “Current indebtedness” in our consolidated statement of financial position. At June 30, 2014, the average maturity of our long-term debt was nine years at an average interest rate (after swaps) of 5%.

Additional information.

· 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; and

· 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.

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OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTRACTUAL OBLIGATIONS

For a summary of our other off-balance sheet arrangements, commitments and contractual obligations please see our 2013 annual management’s discussion and analysis. There were no material changes to these arrangements, commitments and contractual obligations during the six months ended June 30, 2014.

CONTINGENCIES

Lawsuits and Legal Claims

We are engaged in various legal proceedings, claims, audits and investigations that have arisen in the ordinary course of business. These matters include, but are not limited to, intellectual property infringement claims, employment matters and commercial matters. The outcome of all of the matters against us is subject to future resolution, including the uncertainties of litigation. Based on information currently known to us and after consultation with outside legal counsel, management believes that the probable ultimate resolution of any such matters, individually or in the aggregate, will not have a material adverse impact on our financial condition taken as a whole.

Uncertain Tax Positions

We are subject to taxation in numerous jurisdictions. There are many transactions and calculations during the course of business for which the ultimate tax determination is uncertain. We maintain provisions for uncertain tax positions that we believe appropriately reflect our risk. These provisions are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. We review the adequacy of these provisions at the end of the reporting period. It is possible that at some future date, liabilities in excess of our provisions could result from audits by, or litigation with, relevant taxing authorities. Management believes that such additional liabilities would not have a material adverse impact on our financial condition taken as a whole.

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OUTLOOK

The information in this section is forward-looking and should be read in conjunction with the section below entitled “Cautionary Note Concerning Factors That May Affect Future Results”.

We recently reaffirmed our business outlook for 2014 that was first communicated in February.

Our 2014 outlook for adjusted EBITDA margin and underlying operating profit margin includes an estimated $120 million of previously announced charges associated with our simplification program initiatives. Our free cash flow outlook includes the estimated cash impact of charges incurred in 2013 and expected to be incurred in 2014, as well as the impact of the loss of free cash flow from Other Businesses (approximately $375 million in the aggregate). 

The following table sets forth our current 2014 financial outlook, the material assumptions related to our financial outlook and the material risks that may cause actual performance to differ materially from our current expectations.

Our 2014 outlook for revenues, adjusted EBITDA margin and underlying operating profit margin excludes the impact of foreign currency.

Revenues to be comparable to 2013
Material assumptions	Material risks
●     Gradual improvement in Financial & Risk’s net sales performance during the year ●     Gross domestic product (GDP) growth in the countries where we operate ●     Continued increase in the number of professionals around the world and their demand for high quality information and services ●     Continued operational improvement in the Financial & Risk business and the successful execution of new sales initiatives, ongoing product release programs, our globalization strategy and other growth and efficiency initiatives ●     A mid-to-high single digit decline in our U.S. print revenues within the Legal segment	●     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 further 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 ●     Pressure on our customers, in developed markets in particular, to constrain the number of professionals employed due to regulatory and economic uncertainty ●     Competitive pricing actions could impact our revenues
Adjusted EBITDA margin expected to be between 26.0% and 27.0%
Material assumptions	Material risks
●     Revenues expected to be comparable to 2013 ●     Business mix continues to shift to higher-growth, lower margin offerings ●     Realization of expected benefits from simplification program initiatives, primarily in our Financial & Risk segment, relative to reductions in workforce, platform consolidation and operational simplification	●     Refer to 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 ●     Acquisition and disposal activity may dilute margins ●     Simplification program initiatives may cost more than expected, be delayed or may not produce the expected level of savings

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Underlying operating profit margin expected to be between 17.0% and 18.0%
Material assumptions	Material risks
●     Adjusted EBITDA margin expected to be between 26.0% and 27.0% ●     Depreciation and software amortization expense expected to be approximately 9.5% of revenues ●     Capital expenditures expected to be approximately 8% of revenues	●     Refer to the risks above related to adjusted EBITDA margin outlook ●     Capital expenditures may be higher than currently expected, resulting in higher in-period depreciation and amortization
Free cash flow is expected to be between $1.3 billion and $1.5 billion
Material assumptions	Material risks
●     Revenues expected to be comparable to 2013 ●     Adjusted EBITDA margin expected to be between 26.0% and 27.0% ●     Capital expenditures expected to be approximately 8% of revenues	●     Refer to 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 ●     Capital expenditures may be higher than currently expected resulting in higher cash outflows ●     The timing and amount of tax payments to governments may differ from our expectations

Additionally, in 2014, we expect interest expense to be between $450 million and $475 million, assuming no significant change in our level of indebtedness. We expect our 2014 effective tax rate (as a percentage of post-amortization adjusted earnings) to be between 13% and 15%, assuming no material changes in current tax laws or treaties to which we are subject.

RELATED PARTY TRANSACTIONS

As of July 29, 2014, Woodbridge beneficially owned approximately 57% of our shares.

TRANSACTIONS WITH WOODBRIDGE

From time to time, in the normal course of business, we enter into transactions with Woodbridge and certain of its affiliates. These transactions involve providing and receiving product and service offerings, are negotiated at arm’s length on standard terms, including price, and are not significant to our results of operations or financial condition either individually or in the aggregate.

In May 2012, as part of our efforts to expand our mutual fund data and strategic research capabilities, we acquired a Canadian mutual fund database, fund fact sheet business and mutual fund and equity data feed business for approximately C$9 million from The Globe and Mail (The Globe), which is majority owned by Woodbridge. We paid approximately C$8 million in cash and issued a C$1 million promissory note to The Globe that will be due in May 2016. In connection with the acquisition, we licensed the acquired database to The Globe over a four year term, valued at approximately C$250,000 per year. The Globe issued four promissory notes to us, each for the value of the annual license. Amounts due each year under the notes issued by The Globe are offset against the note issued by us. Our board of directors’ Corporate Governance Committee approved the transaction.

In the normal course of business, certain of our subsidiaries charge a Woodbridge owned company fees for various administrative services. In 2013, the total amount charged to Woodbridge for these services was approximately $105,000.

We purchase property and casualty insurance from third party insurers and retain the first $500,000 of each and every claim under the programs via our captive insurance subsidiaries. Woodbridge is included in these programs and pays us a premium commensurate with its exposures. Premiums relating to 2013 were $44,000, which would approximate the premium charged by a third party insurer for such coverage.

We maintained an agreement with Woodbridge until April 17, 2008 (the closing date of the Reuters acquisition) under which Woodbridge agreed to indemnify up to $100 million of liabilities incurred either by our current and former directors and officers or by our company in providing indemnification to these individuals on substantially the same terms and conditions as would apply under an arm’s length, commercial arrangement. We were required to pay Woodbridge an annual fee of $750,000, which was less than the premium that would have been paid for commercial insurance. In 2008, we replaced this agreement with a conventional insurance agreement. We were entitled to seek indemnification from Woodbridge for any claims arising from events prior to April 17, 2008, so long as the claims were made before April 17, 2014. As there were no claims against the indemnity by current or former directors and officers, we did not seek indemnification from Woodbridge under this arrangement.

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TRANSACTIONS WITH ASSOCIATES AND JOINT VENTURES

From time to time, we enter into transactions with our investments in associates and joint ventures. These transactions typically involve providing or receiving services and are entered into in the normal course of business and on an arm’s length basis.

We and Shin Nippon Hoki Shuppan K.K. each own 50% of Westlaw Japan K.K., a provider of legal information and solutions to the Japanese legal market. We provide the joint venture with technology and other services, which were valued at approximately $300,000 for the six months ended June 30, 2014.

In connection with the 2008 acquisition of Reuters, we assumed a lease agreement with 3XSQ Associates, an entity owned by Thomson Reuters and Rudin Times Square Associates LLC that was formed to build and operate the 3 Times Square property and building in New York, New York that serves as our corporate headquarters. We follow the equity method of accounting for our investment in 3XSQ Associates. The lease provides us with over 690,000 square feet of office space until 2021 and includes provisions to terminate portions early and various renewal options. Our costs under this lease arrangement for rent, taxes and other expenses were approximately $19 million for the six months ended June 30, 2014.

SUBSEQUENT EVENTS

Share repurchases

In July 2014, we announced that we plan to repurchase up to an additional $1.0 billion of our common shares by the end of 2015.

CHANGES IN ACCOUNTING POLICIES

Please refer to the “Changes in Accounting Policies” section of our 2013 annual management’s discussion and analysis, which is contained in our 2013 annual report, as well as note 2 of our consolidated interim financial statements for the six months ended June 30, 2014, for information regarding changes in accounting policies.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of financial statements requires management to make estimates and judgments about the future. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Please refer to the “Critical Accounting Estimates and Judgments” section of our 2013 annual management’s discussion and analysis, which is contained in our 2013 annual report, for additional information. Since the date of our 2013 annual management’s discussion and analysis, there have not been any significant changes to our critical accounting estimates and judgments.

ADDITIONAL INFORMATION

DISCLOSURE CONTROLS AND PROCEDURES

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in applicable U.S. and Canadian securities law) as of the end of the period covered by this management’s discussion and analysis, have concluded that our disclosure controls and procedures were effective to ensure that all information that we are required to disclose in reports that we file or furnish under the U.S. Securities Exchange Act and applicable Canadian securities law is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and Canadian securities regulatory authorities and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. A multi-year phased implementation of order-to-cash (OTC) applications and related workflow processes is in progress. Key elements of the OTC solutions are order management, billing, cash management and collections functionality. We expect to reduce the number of applications and to streamline processes across our organization through this initiative. We are also in the process of automating manual processes and updating workflows associated with intercompany revenue and cost allocation. In 2014, we outsourced the support for selected financial applications and general accounting processes as part of our simplification program. Therefore, the internal control activities associated with the outsourced functions will now be performed by the third-party providers. However, our management remains responsible for the end-to-end control environment. We continue to modify the design and documentation of the related internal control processes and procedures as the implementations of these initiatives progress.

Except as described above, there was no change in our internal control over financial reporting during the last fiscal quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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SHARE CAPITAL

As of July 29, 2014, we had outstanding 803,688,587 common shares, 6,000,000 Series II preference shares, 10,690,287 stock options and a total of 7,691,223 time-based restricted share units and performance restricted share units. We have also issued a Thomson Reuters Founders Share which enables Thomson Reuters Founders Share Company to exercise extraordinary voting power to safeguard the Thomson Reuters Trust Principles.

PUBLIC SECURITIES FILINGS AND REGULATORY ANNOUNCEMENTS

You may access other information about our company, including our 2013 annual report (which contains information required in an annual information form) and our other disclosure documents, reports, statements or other information that we file with the Canadian securities regulatory authorities through SEDAR at www.sedar.com and in the United States with the SEC at www.sec.gov.

CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS

Certain statements in this management’s discussion and analysis are forward-looking, including, but not limited to, statements about 2014 expectations in the “Overview” and ”Outlook” sections, our expectations about additional charges associated with our simplification program initiatives and expected cost savings, net sales, revenue growth and EBITDA margin in the Financial & Risk segment, U.S. print revenues in our Legal segment, and future share repurchases. The words “expect”, “target” and “will” and similar expressions identify forward-looking statements. These forward-looking statements are based on certain assumptions and reflect our company’s current expectations. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Certain factors that could cause actual results or events to differ materially from current expectations are discussed in the “Outlook“ section above. Additional factors are discussed in the “Risk Factors” section of our 2013 annual report and in materials that we from time to time file with, or furnish to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. There is no assurance that any forward-looking statement will materialize. Our outlook is provided for the purpose of providing information about current expectations for 2014. This information may not be appropriate for other purposes. You are cautioned not to place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this management’s discussion and analysis. Except as may be required by applicable law, we disclaim any obligation to update or revise any forward-looking statements.

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APPENDIX A

NON-IFRS FINANCIAL MEASURES

We use non-IFRS financial measures as supplemental indicators of our operating performance and financial position. Additionally, we use non-IFRS measures as performance metrics as the basis for management incentive programs. These measures do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies. The following table sets forth our non-IFRS financial measures, including an explanation of why we believe they are useful measures of our performance. Reconciliations for the most directly comparable IFRS measure are reflected in our management’s discussion and analysis.

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 Reuters News 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. 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 (loss) from continuing operations

Adjusted EBITDA less capital expenditures and adjusted EBITDA less capital expenditures margin
Adjusted EBITDA less capital expenditures, less proceeds from disposals (excluding Other Businesses). The related margin is expressed as a percentage of revenues from ongoing businesses.	Provides a basis for evaluating the operating profitability and capital intensity of a business in a single measure. This measure captures investments regardless of whether they are expensed or capitalized.	Earnings (loss) from continuing operations

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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
Earnings (loss) attributable to common shareholders and per share excluding:	Provides a more comparable basis to analyze earnings and is also a measure commonly used by shareholders to measure our performance. We believe this treatment more accurately reflects our tax position because the tax liability is associated with ongoing tax implications from the consolidation of these assets.	Earnings (loss) attributable to common shareholders and earnings (loss) per share attributable to common shareholders
●      the pre-tax impacts of amortization of other identifiable intangible assets; ●      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 investments, discontinued operations and other items affecting comparability. We also deduct dividends declared on preference shares; and         amortization of the tax charges associated with the consolidation of ownership and management of technology and content assets. For the non-IFRS measure, the majority of the charges are amortized over seven years, the period over which the tax is expected to be paid.
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.	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.

25

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, and other investing activities, less capital expenditures 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 businesses
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

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APPENDIX B

This appendix provides reconciliations that are not presented elsewhere in this management’s discussion and analysis for certain non-IFRS measures to the most directly comparable IFRS measure, for the three and six months ended June 30, 2014 and 2013.

RECONCILIATION OF EARNINGS FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA AND ADJUSTED EBITDA LESS CAPITAL EXPENDITURES 

(millions of U.S. dollars)	Three months ended June 30,									Six months ended June 30,
	2014			2013			Change			2014			2013			Change
Earnings from continuing operations		260			256			2	%		552			239			131	%
Adjustments to remove:
Tax expense		40			209						27			456
Other finance (income) costs		(29	)		17						(57	)		72
Net interest expense		111			124						219			239
Amortization of other identifiable intangible assets		165			157						328			317
Amortization of computer software		197			188						391			376
Depreciation		99			101						197			208
EBITDA		843			1,052						1,657			1,907
Adjustments to remove:
Share of post-tax earnings in equity method investments		(1	)		(9	)					(1	)		(19	)
Other operating losses (gains), net		2			(136	)					5			(130	)
Fair value adjustments		33			(29	)					35			(91	)
EBITDA from Other Businesses(1)		-			(20	)					1			(52	)
Adjusted EBITDA		877			858			2	%		1,697			1,615			5	%
Remove: Capital expenditures, less proceeds from disposals (excluding Other Businesses(1))		225			188						473			538
Adjusted EBITDA less capital expenditures		652			670			(3	%)		1,224			1,077			14	%
Adjusted EBITDA margin		27.8	%		27.6	%		20	bp		27.0	%		26.0	%		100	bp
Adjusted EBITDA less capital expenditures margin		20.6	%		21.6	%		(100	)bp		19.5	%		17.4	%		210	bp

RECONCILIATION OF UNDERLYING OPERATING PROFIT TO ADJUSTED EBITDA BY SEGMENT

(millions of U.S. dollars)	Three months ended June 30, 2014								Three months ended June 30, 2013
	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		266			160		426			260			160		420
Legal		261			70		331			255			71		326
Tax & Accounting		65			33		98			57			30		87
Intellectual Property & Science		62			23		85			59			20		79
Corporate & Other (includes Reuters News)		(73	)		10		(63	)		(62	)		8		(54	)
Total		581			296		877			569			289		858

** Excludes Other Businesses⁽¹⁾

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RECONCILIATION OF UNDERLYING OPERATING PROFIT TO ADJUSTED EBITDA BY SEGMENT (CONTINUED)

(millions of U.S. dollars)	Six months ended June 30, 2014								Six months ended June 30, 2013
	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		506			319		825			460			320		780
Legal		476			139		615			456			146		602
Tax & Accounting		149			64		213			126			59		185
Intellectual Property & Science		113			44		157			110			39		149
Corporate & Other (includes Reuters News)		(135	)		22		(113	)		(121	)		20		(101	)
Total		1,109			588		1,697			1,031			584		1,615

** Excludes Other Businesses⁽¹⁾

(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. The results of Other Businesses were as follows:

(millions of U.S. dollars)	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014			2013
Revenues		1		55		2			133
Operating profit (loss)		-		20		(1	)		52
Depreciation and amortization of computer software		-		-		-			-
EBITDA		-		20		(1	)		52
Capital expenditures, less proceeds from disposals		-		-		-			-

28

APPENDIX C

QUARTERLY INFORMATION

The following table presents a summary of our consolidated operating results for the eight most recent quarters.

	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)	2014			2013			2014		2013			2013		2012		2013			2012
Revenues		3,130			3,175			3,159		3,163			3,086		3,181		3,278			3,364
Operating profit		359			390			381		597			316		372		213			537
Earnings (loss) from continuing operations		292			(17	)		260		256			283		451		(347	)		365
Earnings from discontinued operations, net of tax		-			-			-		6			-		2		4			3
Net earnings (loss)		292			(17	)		260		262			283		453		(343	)		368
Earnings (loss) attributable to common shareholders		282			(31	)		249		248			271		441		(351	)		352
Dividends declared on preference shares		(1	)		(1	)		-		(1	)		-		-		(1	)		(1	)
Basic earnings (loss) per share
From continuing operations	$	0.34		$	(0.04	)	$	0.31	$	0.29		$	0.33	$	0.53	$	(0.43	)	$	0.41
From discontinued operations		-			-			-		0.01			-		-		-			0.01
	$	0.34		$	(0.04	)	$	0.31	$	0.30		$	0.33	$	0.53	$	(0.43	)	$	0.42
Diluted earnings (loss) per share
From continuing operations	$	0.34		$	(0.04	)	$	0.31	$	0.29		$	0.33	$	0.53	$	(0.43	)	$	0.41
From discontinued operations		-			-			-		0.01			-		-		-			0.01
	$	0.34		$	(0.04	)	$	0.31	$	0.30		$	0.33	$	0.53	$	(0.43	)	$	0.42

Our revenues and operating profit on a consolidated basis do not tend to be significantly impacted by seasonality as we record a large portion of our revenues ratably over a contract term and our costs are generally incurred evenly throughout the year. However, our non-recurring revenues can cause changes in our performance from quarter to consecutive quarter. Additionally, the release of certain print-based offerings can be seasonal as can certain product releases for the regulatory markets, which tend to be concentrated at the end of the year. As a consequence, the results of certain of our segments can be impacted by seasonality to a greater extent than our consolidated revenues and operating profit.

Revenues - Revenues declined in each of the trailing four quarters compared to the respective prior-year periods, primarily reflecting the impact of divestitures. Revenue performance over these periods also reflected challenges in our Financial & Risk segment, including an overall difficult economic environment. This dynamic was partially offset by growth in our Legal, Tax & Accounting and Intellectual Property & Science segments. Acquisitions contributed to revenue changes. Foreign currency had a positive impact on revenues in the second quarter of 2014, no impact on revenues in the first quarter of 2014 and fourth quarter of 2013, and a negative impact on revenues in the third quarter of 2013.

Operating profit - Operating profit decreased in first and second quarters of 2014 from each respective prior-year period because 2013 included operating profit from Other Businesses which were sold later in the year and also as a result of unfavorable fair value adjustments. The second quarter of 2013 also included a gain on sale of our Corporate Services business, and the first quarter of 2013 included $78 million of charges associated with our simplification program initiatives. In the fourth quarter of 2013, operating profit included $275 million of charges associated with our simplification program initiatives.

Net earnings (loss) - Net earnings in the second quarter of 2014 were comparable to the second quarter of 2013 as lower operating profit was offset by lower income tax expense. The second quarter of 2013 included an income tax charge of $161 million associated with the consolidation of the ownership and management of our technology and content assets, which are part of our simplification program.The net losses in the first quarter and fourth quarter of 2013 were primarily due to $235 million and $425 million, respectively, of tax charges associated with the consolidation of the ownership and management of our technology and content assets.The decrease in net earnings in the third quarter of 2013 reflected lower income tax benefits, as the 2012 period included higher tax benefits from the reversal of uncertain tax provisions and changes in estimates identified during the preparation of prior-year income tax returns.

29

EX-99.2

EXHIBIT 99.2

THOMSON REUTERS CORPORATION

CONSOLIDATED INCOME STATEMENT

(unaudited)

(millions of U.S. dollars, except per share amounts)	Notes	Three months ended June 30,						Six months ended June 30,
		2014			2013			2014			2013
Revenues			3,159			3,163			6,289			6,338
Operating expenses	5		(2,315	)		(2,256	)		(4,628	)		(4,580	)
Depreciation			(99	)		(101	)		(197	)		(208	)
Amortization of computer software			(197	)		(188	)		(391	)		(376	)
Amortization of other identifiable intangible assets			(165	)		(157	)		(328	)		(317	)
Other operating (losses) gains, net	6		(2	)		136			(5	)		130
Operating profit			381			597			740			987
Finance costs, net:
Net interest expense	7		(111	)		(124	)		(219	)		(239	)
Other finance income (costs)	7		29			(17	)		57			(72	)
Income before tax and equity method investments			299			456			578			676
Share of post-tax earnings in equity method investments	8		1			9			1			19
Tax expense	9		(40	)		(209	)		(27	)		(456	)
Earnings from continuing operations			260			256			552			239
Earnings from discontinued operations, net of tax			-			6			-			6
Net earnings			260			262			552			245
Earnings attributable to:
Common shareholders			249			248			531			217
Non-controlling interests			11			14			21			28
Earnings per share:	10
Basic and diluted earnings per share:
From continuing operations		$	0.31		$	0.29		$	0.65		$	0.25
From discontinued operations			-			0.01			-			0.01
Basic and diluted earnings per share		$	0.31		$	0.30		$	0.65		$	0.26

The related notes form an integral part of these consolidated financial statements.

30

THOMSON REUTERS CORPORATION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(unaudited)

(millions of U.S. dollars)	Notes	Three months ended June 30,						Six months ended June 30,
		2014			2013			2014			2013
Net earnings			260			262			552			245
Other comprehensive income (loss):
Cash flow hedges adjustments to earnings	7		(100	)		93			7			136
Foreign currency translation adjustments to earnings			-			(1	)		-			(1	)
Items that may be subsequently reclassified to net earnings:
Cash flow hedges adjustments to equity			109			(87	)		12			(116	)
Foreign currency translation adjustments to equity			100			(115	)		118			(368	)
			209			(202	)		130			(484	)
Item that will not be reclassified to net earnings:
Net remeasurement (losses) gains on defined benefit pension plans, net of tax(1)			(6	)		75			(56	)		154
Other comprehensive income (loss)			103			(35	)		81			(195	)
Total comprehensive income			363			227			633			50
Comprehensive income for the period attributable to:
Common shareholders			352			213			612			22
Non-controlling interests			11			14			21			28

(1) The related tax benefit (expense) was $1 million and ($51) million for the three months ended June 30, 2014 and 2013, respectively, and $32 million and ($90) million for the six months ended June 30, 2014 and 2013, respectively.

The related notes form an integral part of these consolidated financial statements.

31

THOMSON REUTERS CORPORATION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(unaudited)

(millions of U.S. dollars)	Notes	June 30, 2014			December 31, 2013
ASSETS
Cash and cash equivalents	11		704			1,316
Trade and other receivables			1,798			1,751
Other financial assets	11		143			183
Prepaid expenses and other current assets			590			650
Current assets			3,235			3,900
Computer hardware and other property, net			1,224			1,291
Computer software, net			1,566			1,622
Other identifiable intangible assets, net			7,639			7,890
Goodwill			17,060			16,871
Other financial assets	11		181			192
Other non-current assets	12		603			583
Deferred tax			70			90
Total assets			31,578			32,439
LIABILITIES AND EQUITY
Liabilities
Current indebtedness	11		591			596
Payables, accruals and provisions	13		2,074			2,624
Deferred revenue			1,429			1,348
Other financial liabilities	11		143			193
Current liabilities			4,237			4,761
Long-term indebtedness	11		7,467			7,470
Provisions and other non-current liabilities	14		1,814			1,759
Other financial liabilities	11		142			102
Deferred tax			1,801			1,917
Total liabilities			15,461			16,009
Equity
Capital	15		10,208			10,347
Retained earnings			6,914			7,303
Accumulated other comprehensive loss			(1,477	)		(1,614	)
Total shareholders’ equity			15,645			16,036
Non-controlling interests			472			394
Total equity			16,117			16,430
Total liabilities and equity			31,578			32,439

Contingencies (note 19)

The related notes form an integral part of these consolidated financial statements.

32

THOMSON REUTERS CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOW

(unaudited)

(millions of U.S. dollars)	Notes	Three months ended June 30,						Six months ended June 30,
		2014			2013			2014			2013
Cash provided by (used in):
OPERATING ACTIVITIES
Net earnings			260			262			552			245
Adjustments for:
Depreciation			99			101			197			208
Amortization of computer software			197			188			391			376
Amortization of other identifiable intangible assets			165			157			328			317
Net (gains) losses on disposals of businesses and investments			-			(142	)		1			(156	)
Deferred tax			(35	)		70			(75	)		242
Other	17		77			60			111			125
Changes in working capital and other items	17		113			208			(516	)		(337	)
Net cash provided by operating activities			876			904			989			1,020
INVESTING ACTIVITIES
Acquisitions, net of cash acquired	18		(137	)		(118	)		(137	)		(848	)
Proceeds from disposals of businesses and investments, net of taxes paid			12			322			12			352
Capital expenditures, less proceeds from disposals			(225	)		(188	)		(473	)		(538	)
Other investing activities			1			17			2			21
Net cash (used in) provided by investing activities			(349	)		33			(596	)		(1,013	)
FINANCING ACTIVITIES
Proceeds from debt	11		-			854			-			1,294
Repayments of debt	11		-			-			-			(440	)
Net repayments under short-term loan facilities			-			(327	)		-			-
Repurchases of common shares	15		(353	)		-			(617	)		-
Dividends paid on preference shares			-			(1	)		(1	)		(2	)
Dividends paid on common shares	15		(258	)		(260	)		(520	)		(519	)
Other financing activities	16		125			(2	)		129			7
Net cash (used in) provided by financing activities			(486	)		264			(1,009	)		340
Increase (decrease) in cash and bank overdrafts			41			1,201			(616	)		347
Translation adjustments			3			(6	)		3			(17	)
Cash and bank overdrafts at beginning of period			655			411			1,312			1,276
Cash and bank overdrafts at end of period			699			1,606			699			1,606
Cash and bank overdrafts at end of period comprised of:
Cash and cash equivalents			704			1,613			704			1,613
Bank overdrafts			(5	)		(7	)		(5	)		(7	)
699						1,606			699			1,606

Supplemental cash flow information is provided in note 17.

Interest paid	(79	)	(102	)	(188	)	(199	)
Interest received	-		-		1		2
Income taxes received (paid)	20		(70	)	(45	)	(70	)

Interest paid is reflected as an operating cash flow and is net of debt-related hedges. Interest received is reflected as either an operating or investing cash flow depending on the nature of the underlying transaction.

Income taxes paid and received are reflected as either an operating or investing cash flow depending on the nature of the underlying transaction.

The related notes form an integral part of these consolidated financial statements.

33

THOMSON REUTERS CORPORATION

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(unaudited)

(millions of U.S. dollars)	Stated share capital			Contributed surplus			Total capital			Retained earnings			Unrecognized (loss) gain on cash flow hedges			Foreign currency translation adjustments			Total accumulated other comprehensive (loss) gain (“AOCL”)			Non-controlling interests			Total
Balance, December 31, 2013		10,170			177			10,347			7,303			(17	)		(1,597	)		(1,614	)		394			16,430
Comprehensive income (1)		-			-			-			475			19			118			137			21			633
Change in ownership interest of subsidiary(2)		-			-			-			38			-			-			-			77			115
Distributions to non-controlling interests		-			-			-			-			-			-			-			(20	)		(20	)
Dividends declared on preference shares		-			-			-			(1	)		-			-			-			-			(1	)
Dividends declared on common shares		-			-			-			(536	)		-			-			-			-			(536	)
Shares issued under Dividend Reinvestment Plan (“DRIP”)		16			-			16			-			-			-			-			-			16
Repurchases of common shares(3)		(199	)		-			(199	)		(365	)		-			-			-			-			(564	)
Stock compensation plans		51			(7	)		44			-			-			-			-			-			44
Balance, June 30, 2014		10,038			170			10,208			6,914			2			(1,479	)		(1,477	)		472			16,117
(millions of U.S. dollars)	Stated share capital			Contributed surplus			Total capital			Retained earnings			Unrecognized (loss) gain on cash flow hedges			Foreign currency translation adjustments			AOCL			Non-controlling interests			Total
Balance, December 31, 2012		10,201			170			10,371			8,311			(56	)		(1,481	)		(1,537	)		353			17,498
Comprehensive income (loss) (1)		-			-			-			371			20			(369	)		(349	)		28			50
Distributions to non-controlling  interests		-			-			-			-			-			-			-			(20	)		(20	)
Dividends declared on preference shares		-			-			-			(2	)		-			-			-			-			(2	)
Dividends declared on common shares		-			-			-			(539	)		-			-			-			-			(539	)
Shares issued under DRIP		20			-			20			-			-			-			-			-			20
Stock compensation plans		67			(27	)		40			-			-			-			-			-			40
Balance, June 30, 2013		10,288			143			10,431			8,141			(36	)		(1,850	)		(1,886	)		361			17,047

(1) Retained earnings for the six months ended June 30, 2014 includes net remeasurement losses on defined benefit pension plans of $56 million, net of tax (2013 - gains of $154 million, net of tax).

(2) Represents cash contribution of $115 million by the non-controlling interests. See note 16.

(3) Includes stated share capital of $14 million and retained earnings of $26 million related to the Company’s pre-defined share repurchase plan. See note 15.

The related notes form an integral part of these consolidated financial statements.

34

THOMSON REUTERS CORPORATION

Notes to Consolidated Financial Statements (unaudited)

(unless otherwise stated, all amounts are in millions of U.S. dollars)

Note 1: Business description and basis of preparation

General business description

Thomson Reuters Corporation (the “Company” or “Thomson Reuters”) is an Ontario, Canada corporation with common shares listed on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”) and Series II preference shares listed on the TSX.The Company provides intelligent information to businesses and professionals. Its offerings combine industry expertise with innovative technology to deliver critical information to decision makers.

Basis of preparation

The unaudited consolidated interim financial statements (“interim financial statements”) were prepared using the same accounting policies and methods as those used in the Company’s consolidated financial statements for the year ended December 31, 2013, except as described in note 2. The interim financial statements are in compliance with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”). Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board ("IASB"), have been omitted or condensed. The preparation of financial statements in accordance with IAS 34 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements have been set out in note 2 of the Company’s consolidated financial statements for the year ended December 31, 2013. These interim financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2013, which are included in the Company’s 2013 annual report.

The accompanying interim financial statements include all adjustments, composed of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position and cash flows. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year.

References to “$” are to U.S. dollars and references to “C$” are to Canadian dollars.

Note 2: Changes in accounting policies

Certain pronouncements were issued by the IASB or International Financial Reporting Interpretations Committee (“IFRIC”) that are effective for accounting periods beginning on or after January 1, 2014. Many of these updates are not applicable or consequential to the Company and have been excluded from the discussion below.

Pronouncements and related amendments adopted January 1, 2014

The following pronouncements and amendments were adopted on January 1, 2014 and did not have a material impact on the Company’s results for the three and six months ended June 30, 2014 and 2013, and financial position at June 30, 2014 and December 31, 2013.

IAS 32	Financial Instruments: Presentation	IAS 32 has been amended to clarify certain requirements for offsetting financial assets and liabilities. The amendment addresses the meaning and application of the concepts of legally enforceable right of set-off and simultaneous realization and settlement.
IAS 36	Impairment of Assets	IAS 36 has been amended to require disclosure of the recoverable amount of an asset (including goodwill) or a cash generating unit when an impairment loss has been recognized or reversed in the period. When the recoverable amount is based on fair value less costs of disposal, the valuation techniques and key assumptions must also be disclosed.
IAS 39	Financial Instruments: Recognition and Measurement	IAS 39 has been amended to allow hedge accounting to continue when, as a result of laws or regulations, the counterparty to a derivative designated as a hedging instrument is replaced by a central clearing counterparty.
IFRIC 21	Levies	IFRIC 21 addresses the recognition requirements for a liability to pay a levy imposed by a government, other than an income tax. The interpretation requires the recognition of a liability when the event, identified by the legislation, triggering the obligation to pay the levy occurs.

35

Pronouncements and related amendments effective for annual accounting periods beginning January 1, 2015 or later

IAS 19	Employee Benefits	IAS 19 amendment, Defined Benefit Plans: Employee Contributions, clarifies the accounting for contributions from employees. Employee contributions, which are often a fixed percentage of salary, may be recognized as a reduction in the service cost component of pension expense in the same period the employee provides services. However, if the employee contribution rate varies based on years of service, the reduction in expense must be allocated over future service periods, mirroring the service cost recognition pattern. The amendment is effective January 1, 2015 and is not anticipated to have a material impact on the Company’s results and financial position.
IFRS 15	Revenue from Contracts with Customers	IFRS 15 is the culmination of a joint project between the IASB and the Financial Accounting Standards Board, the accounting standard setter in the U.S., to create a single revenue standard. The core principle of IFRS 15 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard moves away from a revenue recognition model based on an earnings process to an approach that is based on transfer of control of a good or service to a customer. Additionally, the new standard requires disclosures as to the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. IFRS 15 is effective on January 1, 2017, and shall be applied retrospectively to each period presented or retrospectively as a cumulative-effect adjustment as of the date of adoption. The Company is assessing the impact of the new standard on its results and financial position.
IFRS 9	Financial Instruments	IFRS 9 replaces IAS 39 - Financial Instruments: Recognition and Measurement. The new standard addresses classification and measurement, impairment and hedge accounting. Classification and measurement The new standard requires the classification of financial assets based on business model and cash flow characteristics measured at either (a) amortized cost; (b) fair value through profit or loss; or (c) fair value through other comprehensive income.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. Impairment Under the forward looking impairment model, expected credit losses are recognized as soon as a financial asset is originated or purchased, rather than waiting for a trigger event to record a loss. Hedge accounting The new standard more closely aligns hedge accounting with an entity’s risk management activities. Specifically, the new standard (a) no longer requires the use of a specific quantitative threshold to determine if the hedging relationship is highly effective in order to qualify for hedge accounting; (b) removes restrictions that prevented some economically rational hedging strategies from qualifying for hedge accounting; and (c) allows purchased options, forwards and non-derivative financial instruments to be hedging instruments in applicable circumstances. IFRS 9 is effective on January 1, 2018 and shall be applied retrospectively to each period presented, subject to the various transition provisions within IFRS 9. The Company is assessing the impact of the new standard on its results and financial position.

36

Note 3: Segment information

The Company is organized as four reportable segments reflecting how the businesses are managed: Financial & Risk, Legal, Tax & Accounting and Intellectual Property & Science. The accounting policies applied by the segments are the same as those applied by the Company. The reportable segments offer products and services to target markets as described below.

Financial & Risk

The Financial & Risk segment is a provider of critical news, information and analytics, enabling transactions and bringing together financial communities. Financial & Risk also provides regulatory and operational risk management solutions.

Legal

The Legal segment is a provider of critical online and print information, decision support tools, software and services to support legal, investigation, business and government professionals around the world.

Tax & Accounting

The Tax & Accounting segment is a provider of integrated tax compliance and accounting information, software and services for professionals in accounting firms, corporations, law firms and government.

Intellectual Property & Science

The Intellectual Property & Science segment is a provider of comprehensive intellectual property and scientific information, decision support tools and services that enable governments, academia, publishers, corporations and law firms to discover, develop and deliver innovations.

The Company also reports “Corporate & Other” and “Other Businesses”. These categories neither qualify as a component of another reportable segment nor as a separate reportable segment.

· Corporate & Other includes expenses for corporate functions, certain share-based compensation costs and the Reuters News 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.

	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Revenues
Financial & Risk		1,655			1,660			3,313			3,335
Legal		850			846			1,653			1,640
Tax & Accounting		324			288			672			605
Intellectual Property & Science		251			234			494			467
Reportable segments		3,080			3,028			6,132			6,047
Corporate & Other (includes Reuters News)		82			82			161			163
Eliminations		(4	)		(2	)		(6	)		(5	)
Revenues from ongoing businesses		3,158			3,108			6,287			6,205
Other Businesses(1)		1			55			2			133
Consolidated revenues		3,159			3,163			6,289			6,338
Operating profit
Segment operating profit
Financial & Risk		266			260			506			460
Legal		261			255			476			456
Tax & Accounting		65			57			149			126
Intellectual Property & Science		62			59			113			110
Reportable segments		654			631			1,244			1,152
Corporate & Other (includes Reuters News)		(73	)		(62	)		(135	)		(121	)
Underlying operating profit		581			569			1,109			1,031
Other Businesses(1)		-			20			(1	)		52
Fair value adjustments (see note 5)		(33	)		29			(35	)		91
Amortization of other identifiable intangible assets		(165	)		(157	)		(328	)		(317	)
Other operating (losses) gains, net		(2	)		136			(5	)		130
Consolidated operating profit		381			597			740			987

(1) Includes Investor Relations, Public Relations and Multimedia Solutions business (“Corporate Services”), a provider of tools and solutions that help companies communicate with investors and media, which was sold in the second quarter of 2013.

37

In accordance with IFRS 8,Operating Segments, the Company discloses information about its reportable segments based upon the measures used by management in assessing the performance of those reportable segments.

· Results from the Reuters News business and Other Businesses are excluded from reportable segments as they do not qualify as a component of the Company’s four reportable segments, nor as a separate reportable segment.

· The Company uses segment operating profit to measure the operating performance of its reportable segments.

o The costs of centralized support services such as technology, news, real estate, accounting, procurement, legal, and human resources are allocated to each segment based on usage or other applicable measures. 

o Segment operating profit is defined as operating profit before (i) amortization of other identifiable intangible assets; (ii) other operating gains and losses; (iii) certain asset impairment charges; (iv) corporate-related items; and (v) fair value adjustments. Management uses this measure because the Company does not consider these excluded items to be controllable operating activities for purposes of assessing the current performance of the reportable segments.

o While in accordance with IFRS, the Company’s definition of segment operating profit may not be comparable to that of other companies.

· Management also uses revenues from ongoing businesses and underlying operating profit to measure its consolidated performance, which includes Reuters News. Revenues from ongoing businesses are revenues from reportable segments and Corporate & Other, less eliminations.

· Underlying operating profit is comprised of operating profit from reportable segments and Corporate & Other.

· Other Businesses are excluded from both measures as they are not fundamental to the Company’s strategy.

· Revenues from ongoing businesses and underlying operating profit do not have standardized meaning under IFRS, and therefore may not be comparable to similar measures of other companies.

Note 4: Seasonality

The Company’s revenues and operating profit on a consolidated basis do not tend to be significantly impacted by seasonality as it records a large portion of its revenues ratably over a contract term and its costs are generally incurred evenly throughout the year. However, non-recurring revenues can cause changes in the Company’s performance from quarter to consecutive quarter. Additionally, the release of certain print-based offerings can be seasonal as can certain product releases for the regulatory markets, which tend to be concentrated at the end of the year. As a consequence, the results of certain of the Company’s segments can be impacted by seasonality to a greater extent than its consolidated revenues and operating profit.

Note 5: Operating expenses

The components of operating expenses include the following:  

	Three months ended June 30,					Six months ended June 30,
	2014		2013			2014		2013
Salaries, commissions and allowances		1,147		1,182			2,327		2,462
Share-based payments		18		13			35		31
Post-employment benefits		60		74			130		149
Total staff costs		1,225		1,269			2,492		2,642
Goods and services(1)		546		508			1,081		1,010
Data		252		245			497		490
Telecommunications		137		143			286		290
Real estate		122		120			237		239
Fair value adjustments(2)		33		(29	)		35		(91	)
Total operating expenses		2,315		2,256			4,628		4,580

(1) Goods and services include professional fees, consulting and outsourcing 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.

Operating expenses include costs incurred in the ordinary course of business. Operating expenses included charges associated with the Company’s simplification program initiatives of $30 million and $9 million for the three months ended June 30, 2014 and 2013, respectively, and $40 million and $87 million for the six months ended June 30, 2014 and 2013, respectively. The charges were largely comprised of severance and recorded primarily within Financial & Risk. 

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Note 6: Other operating (losses) gains, net

Other operating gains, net, were $136 million and $130 million for the three and six months ended June 30, 2013, respectively, and were primarily comprised of a $140 million gain from the sale of the Corporate Services business, which was partially offset by acquisition-related costs.

Note 7: Finance costs, net

The components of finance costs, net, include interest (expense) income and other finance (costs) income are as follows:

	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Interest expense:
Debt		(97	)		(104	)		(194	)		(207	)
Derivative financial instruments - hedging activities		3			2			4			6
Other		(7	)		(6	)		(10	)		(8	)
Fair value gains (losses) on financial instruments:
Debt		1			1			2			3
Cash flow hedges, transfer from equity		100			(93	)		(7	)		(144	)
Fair value hedges		4			(6	)		(3	)		(11	)
Net foreign exchange (losses) gains on debt		(105	)		98			8			152
Net interest expense - debt		(101	)		(108	)		(200	)		(209	)
Net interest expense - pension and other post-employment benefit plans		(10	)		(16	)		(20	)		(32	)
Interest income		-			-			1			2
Net interest expense		(111	)		(124	)		(219	)		(239	)

	Three months ended June 30,					Six months ended June 30,
	2014		2013			2014		2013
Net gains (losses) due to changes in foreign currency exchange rates		20		(16	)		48		(87	)
Net gains (losses) on derivative instruments		8		(1	)		8		15
Other		1		-			1		-
Other finance income (costs)		29		(17	)		57		(72	)

Net gains (losses) due to changes in foreign currency exchange rates

Net gains (losses) due to changes in foreign currency exchange rates were principally comprised of amounts related to certain intercompany funding arrangements.

Net gains (losses) on derivative instruments

Net gains (losses) on derivative instruments were principally comprised of amounts relating to freestanding derivative instruments.

Note 8: Share of post-tax earnings in equity method investments

The components of share of post-tax earnings in equity method investments are as follows:

	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Share of post-tax earnings in equity method investees		1		1		1		5
Share of post-tax earnings in joint ventures		-		8		-		14
Share of post-tax earnings in equity method investments		1		9		1		19

In the three and six months ended June 30, 2013, the Company’s share of post-tax earnings in equity method investments included its former joint venture in Omgeo, a provider of trade management services, which was sold in the fourth quarter of 2013.

39

Note 9: Taxation

The tax expense in each period reflected the mix of taxing jurisdictions in which pre-tax profits and losses were recognized. Because the geographical mix of pre-tax profits and losses in interim periods distorts the reported effective tax rate, tax expense or benefit in interim periods is not necessarily indicative of tax expense for the full year.

The comparability of the Company’s tax expense was impacted by various transactions and accounting adjustments during each period. In the three and six months ended June 30, 2013, the Company recorded tax charges of $161 million and $396 million, respectively, in connection with intercompany sales of certain technology and content assets between wholly owned subsidiaries. These transactions were part of the Company’s consolidation of the ownership and management of its technology and content assets and are part of its simplification program. The intercompany gains that arose from these transactions were eliminated in consolidation.

The following table sets forth significant components within income tax expense that impact comparability from period to period:

(Expense) benefit	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Sale of businesses(1)		-			(15	)		-			(23	)
Discrete tax items:
Deferred tax adjustment(2)		(21	)		-			(21	)		-
Consolidation of technology and content assets(3)		-			(161	)		-			(396	)
Uncertain tax positions(4)		-			-			3			2
Corporate tax rates(5)		-			-			2			1
Other(6)		7			10			16			21

(1) Primarily relates to the sale of the Corporate Services business.

(2) Relates to the write-off of deferred tax assets established in prior years.

(3) Relates to the consolidation of the ownership and management of the Company’s technology and content assets.

(4) Relates to the reversal of tax reserves in connection with favorable developments regarding tax disputes.

(5) Relates to the net reduction of deferred tax liabilities due to changes in corporate tax rates that were substantively enacted in certain jurisdictions.

(6) Primarily relates to the recognition of deferred tax benefits in connection with acquisitions.

Note 10: Earnings per share

Basic earnings per share was calculated by dividing earnings attributable to common shareholders less dividends declared on preference shares by the sum of the weighted-average number of shares outstanding during the period plus vested deferred share units (“DSUs”). DSUs represent common shares that certain employees have elected to receive in the future in lieu of cash compensation.

Diluted earnings per share was calculated using the denominator of the basic calculation described above adjusted to include the potentially dilutive effect of outstanding stock options and time-based restricted share units (“TRSUs”). The denominator is: (1) increased by the total number of additional common shares that would have been issued by the Company assuming exercise of all stock options with exercise prices below the average market price for the period; and (2) decreased by the number of shares that the Company could have repurchased if it had used the assumed proceeds from the exercise of stock options to repurchase them on the open market at the average share price for the year.

Earnings used in determining consolidated earnings per share and earnings per share from continuing operations are as follows:

	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Net earnings		260			262			552			245
Less:Earnings attributable to non-controlling interests		(11	)		(14	)		(21	)		(28	)
Dividends declared on preference shares		-			(1	)		(1	)		(2	)
Earnings used in consolidated earnings per share		249			247			530			215
Less:Earnings from discontinued operations, net of tax		-			(6	)		-			(6	)
Earnings used in earnings per share from continuing operations		249			241			530			209

Earnings used in determining earnings per share from discontinued operations are the earnings from discontinued operations as reported within the consolidated income statement.

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The weighted-average number of shares outstanding, as well as a reconciliation of the weighted-average number of shares outstanding used in the basic earnings per share computation to the weighted-average number of shares outstanding used in the diluted earnings per share computation, is presented below:

	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Weighted-average number of shares outstanding		809,347,234		829,338,472		813,320,967		828,554,393
Vested DSUs		594,040		582,839		589,089		582,112
Basic		809,941,274		829,921,311		813,910,056		829,136,505
Effect of stock options and TRSUs		3,422,323		2,588,463		3,345,697		2,316,720
Diluted		813,363,597		832,509,774		817,255,753		831,453,225

Note 11: Financial instruments

Financial assets and liabilities

Financial assets and liabilities in the consolidated statement of financial position were as follows:

June 30, 2014	Cash, trade and other receivables		Assets/ (liabilities) at fair value through earnings			Derivatives used for hedging			Available for sale		Other financial liabilities			Total
Cash and cash equivalents		704		-			-			-		-			704
Trade and other receivables		1,798		-			-			-		-			1,798
Other financial assets - current		24		44			75			-		-			143
Other financial assets - non-current		59		5			84			33		-			181
Current indebtedness		-		-			-			-		(591	)		(591	)
Trade payables (see note 13)		-		-			-			-		(320	)		(320	)
Accruals (see note 13)		-		-			-			-		(1,336	)		(1,336	)
Other financial liabilities - current(1)		-		(48	)		-			-		(95	)		(143	)
Long-term indebtedness		-		-			-			-		(7,467	)		(7,467	)
Other financial liabilities - non-current		-		(28	)		(62	)		-		(52	)		(142	)
Total		2,585		(27	)		97			33		(9,861	)		(7,173	)

December 31, 2013	Cash, trade and other receivables		Assets/ (liabilities) at fair value through earnings			Derivatives used for hedging			Available for sale		Other financial liabilities			Total
Cash and cash equivalents		1,316		-			-			-		-			1,316
Trade and other receivables		1,751		-			-			-		-			1,751
Other financial assets - current		38		66			79			-		-			183
Other financial assets - non-current		59		27			80			26		-			192
Current indebtedness		-		-			-			-		(596	)		(596	)
Trade payables (see note 13)		-		-			-			-		(406	)		(406	)
Accruals (see note 13)		-		-			-			-		(1,626	)		(1,626	)
Other financial liabilities - current(2)		-		(48	)		-			-		(145	)		(193	)
Long-term indebtedness		-		-			-			-		(7,470	)		(7,470	)
Other financial liabilities - non-current		-		(29	)		(73	)		-		-			(102	)
Total		3,164		16			86			26		(10,243	)		(6,951	)

(1) Includes $40 million related to the Company’s pre-defined plan with its broker for the repurchase of up to $40 million of the Company’s shares during its internal trading blackout period. See note 15.

(2) Includes $100 million related to the Company’s pre-defined plan with its broker for the repurchase of up to $100 million of the Company’s shares during its internal trading blackout period. See note 15.

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Cash and cash equivalents

Of total cash and cash equivalents, $93 million and $105 million at June 30, 2014 and December 31, 2013, respectively, was held in subsidiaries which have regulatory restrictions, contractual restrictions or operate in countries where exchange controls and other legal restrictions apply and are therefore not available for general use by the Company.

Debt-related activity

The Company did not issue or repay long-term debt in the six months ended June 30, 2014. The Company issued the following notes in the six months ended June 30, 2013:

Month/Year	Notes issued	Principal Amount (in millions)
May 2013	0.875% notes due 2016	US$500
May 2013	4.50% notes due 2043	US$350

The net proceeds of the May 2013 debt issuance were for general corporate purposes, including pension contributions and debt repayments.

Credit facility

The Company has a $2.5 billion syndicated credit facility agreement which matures in May 2018. The facility may be utilized to provide liquidity for general corporate purposes (including to support its commercial paper programs). There were no borrowings during the six months ended June 30, 2014. In the six months ended June 30, 2013, the Company borrowed and repaid $440 million under the credit facility.

Fair Value

The fair values of cash, trade and other receivables, trade payables and accruals approximate their carrying amounts because of the short-term maturity of these instruments. The fair value of long-term debt and related derivative instruments is set forth below.

Debt and Related Derivative Instruments

Carrying Amounts

Amounts recorded in the consolidated statement of financial position are referred to as “carrying amounts”. The carrying amounts of primary debt are reflected in “Long-term indebtedness” and “Current indebtedness” and the carrying amounts of derivative instruments are included in “Other financial assets” and “Other financial liabilities”, both current and long-term in the consolidated statement of financial position, as appropriate.

Fair Value

The fair value of debt is estimated based on either quoted market prices for similar issues or current rates offered to the Company for debt of the same maturity. The fair values of interest rate swaps and forward contracts are estimated based upon discounted cash flows using applicable current market rates and taking into account non-performance risk.

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The following is a summary of debt and related derivative instruments that hedge the cash flows or fair value of the debt:

June 30, 2014	Carrying amount					Fair value
	Primary debt instruments		Derivative instruments (asset) liability			Primary debt instruments		Derivative instruments (asset) liability
Bank and other		24		-			26		-
C$600, 5.20% Notes, due 2014		567		(75	)		572		(75	)
C$600, 5.70% Notes, due 2015		563		42			587		42
C$750, 6.00% Notes, due 2016		703		(84	)		752		(84	)
C$500, 3.369% Notes, due 2019		467		3			483		3
C$750, 4.35% Notes, due 2020		700		17			761		17
$500, 0.875% Notes, due 2016		498		-			500		-
$550, 1.30% Notes, due 2017		546		-			551		-
$1,000, 6.50% Notes, due 2018		994		-			1,167		-
$500, 4.70% Notes, due 2019		496		-			552		-
$350, 3.95% Notes, due 2021		347		-			365		-
$600, 4.30% Notes, due 2023		592		-			625		-
$350, 4.50% Notes, due 2043		340		-			328		-
$350, 5.65% Notes, due 2043		340		-			385		-
$400, 5.50% Debentures, due 2035		393		-			425		-
$500, 5.85% Debentures, due 2040		488		-			556		-
Total		8,058		(97	)		8,635		(97	)
Current portion		591		(75	)
Long-term portion		7,467		(22	)

December 31, 2013	Carrying amount					Fair value
	Primary debt instruments		Derivative instruments (asset) liability			Primary debt instruments		Derivative instruments (asset) liability
Bank and other		24		-			28		-
C$600, 5.20% Notes, due 2014		569		(79	)		583		(79	)
C$600, 5.70% Notes, due 2015		564		45			597		45
C$750, 6.00% Notes, due 2016		704		(80	)		764		(80	)
C$500, 3.369% Notes, due 2019		469		6			470		6
C$750, 4.35% Notes, due 2020		701		22			731		22
$500, 0.875% Notes, due 2016		497		-			501		-
$550, 1.30% Notes, due 2017		546		-			530		-
$1,000, 6.50% Notes, due 2018		994		-			1,159		-
$500, 4.70% Notes, due 2019		497		-			540		-
$350, 3.95% Notes, due 2021		347		-			347		-
$600, 4.30% Notes, due 2023		593		-			595		-
$350, 4.50% Notes, due 2043		340		-			295		-
$350, 5.65% Notes, due 2043		340		-			352		-
$400, 5.50% Debentures, due 2035		393		-			387		-
$500, 5.85% Debentures, due 2040		488		-			503		-
Total		8,066		(86	)		8,382		(86	)
Current portion		596		(79	)
Long-term portion		7,470		(7	)

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Fair value estimation

The following fair value measurement hierarchy is used for financial instruments that are measured in the consolidated statement of financial position at fair value:

· Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

· Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and

· Level 3 - inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The levels used to determine fair value measurements for those instruments carried at fair value in the consolidated statement of financial position are as follows:

June 30, 2014								Total
Assets	Level 1		Level 2			Level 3		Balance
Embedded derivatives(1)		-		33			-		33
Forward exchange contracts(2)		-		16			-		16
Financial assets at fair value through earnings		-		49			-		49
Fair value hedges(3)		-		21			-		21
Cash flow hedges(4)		-		138			-		138
Derivatives used for hedging		-		159			-		159
Available for sale investments(5)		33		-			-		33
Total assets		33		208			-		241
Liabilities
Embedded derivatives(1)		-		(68	)		-		(68	)
Forward exchange contracts(2)		-		(8	)		-		(8	)
Financial liabilities at fair value through earnings		-		(76	)		-		(76	)
Cash flow hedges(4)		-		(62	)		-		(62	)
Derivatives used for hedging		-		(62	)		-		(62	)
Total liabilities		-		(138	)		-		(138	)

December 31, 2013								Total
Assets	Level 1		Level 2			Level 3		Balance
Embedded derivatives(1)		-		66			-		66
Forward exchange contracts(2)		-		27			-		27
Financial assets at fair value through earnings		-		93			-		93
Fair value hedges(3)		-		24			-		24
Cash flow hedges(4)		-		135			-		135
Derivatives used for hedging		-		159			-		159
Available for sale investments(5)		26		-			-		26
Total assets		26		252			-		278
Liabilities
Embedded derivatives(1)		-		(58	)		-		(58	)
Forward exchange contracts(2)		-		(19	)		-		(19	)
Financial liabilities at fair value through earnings		-		(77	)		-		(77	)
Cash flow hedges(4)		-		(73	)		-		(73	)
Derivatives used for hedging		-		(73	)		-		(73	)
Total liabilities		-		(150	)		-		(150	)

(1) Largely related to U.S. dollar pricing of vendor or customer agreements by foreign subsidiaries.

(2) Used to manage foreign exchange risk on cash flows excluding indebtedness.

(3) Comprised of fixed-to-floating cross-currency interest rate swaps on indebtedness.

(4) Comprised of fixed-to-fixed cross-currency swaps on indebtedness.

(5) Investments in entities over which the Company does not have control, joint control or significant influence.

44

Valuation Techniques

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Specific valuation techniques used to value financial instruments include:

· quoted market prices or dealer quotes for similar instruments; and

· the fair value of currency and interest rate swaps and forward foreign exchange contracts is calculated as the present value of the estimated future cash flows based on observable yield curves.

Note 12: Other non-current assets

	June 30, 2014		December 31, 2013
Net defined benefit plan surpluses		65		52
Cash surrender value of life insurance policies		278		273
Equity method investments:
Joint ventures		19		19
Other		176		178
Other non-current assets		65		61
Total other non-current assets		603		583

Note 13: Payables, accruals and provisions

	June 30, 2014		December 31, 2013
Trade payables		320		406
Accruals		1,336		1,626
Provisions		244		372
Other current liabilities		174		220
Total payables, accruals and provisions		2,074		2,624

Note 14: Provisions and other non-current liabilities

	June 30, 2014		December 31, 2013
Net defined benefit plan obligations		991		875
Deferred compensation and employee incentives		210		230
Provisions		179		183
Unfavorable contract liability		27		48
Uncertain tax positions		302		282
Other non-current liabilities		105		141
Total provisions and other non-current liabilities		1,814		1,759

Note 15: Capital

Share repurchases

The Company may buy back shares (and subsequently cancel them) from time to time as part of its capital strategy. In May 2014, the Company renewed its current normal course issuer bid (“NCIB”) for an additional 12 months. Under the NCIB, the Company may repurchase up to 30 million common shares between May 28, 2014 and May 27, 2015 in open market transactions on the TSX, the NYSE and/or other exchanges and alternative trading systems, if eligible, or by such other means as may be permitted by the TSX.

During the three and six months ended June 30, 2014, the Company repurchased 9.8 million and 17.8 million of its common shares for a cost of $345 million and $624 million, respectively, of which $7 million was payable to the broker at June 30, 2014. The average price per share that the Company repurchased in the three and six month periods ended June 30, 2014 was $35.25 and $35.17, respectively. The Company did not repurchase any shares during the six months ended June 30, 2013. Decisions regarding any future repurchases will be based on market conditions, share price and other factors including opportunities to invest capital for growth.

45

The Company may elect to suspend or discontinue its share repurchases at any time, in accordance with applicable laws. From time to time when the Company does not possess material nonpublic information about itself or its securities, it may enter into a pre-defined plan with its broker to allow for the repurchase of shares at times when the Company ordinarily would not be active in the market due to its own internal trading blackout periods, insider trading rules or otherwise. Any such plans entered into with the Company’s broker will be adopted in accordance with applicable Canadian securities laws and the requirements of Rule 10b5-1 under the U.S. Securities Exchange Act of 1934, as amended. The Company entered into such plans with its broker on June 30, 2014 and on December 31, 2013. As a result, the Company recorded a liability of $40 million in “Other financial liabilities” within current liabilities at June 30, 2014 ($100 million at December 31, 2013) with a corresponding amount recorded in equity in the consolidated statement of financial position in both periods. The liability recorded on December 31, 2013 was settled in the first quarter of 2014.

Dividends

Dividends on common shares are declared in U.S. dollars. Details of dividends declared per share are as follows:

	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Dividends declared per common share		$	0.33		$	0.32		$	0.66		$	0.65

In the consolidated statement of cash flow, dividends paid on common shares are shown net of amounts reinvested in the Company’s DRIP. Details of dividend reinvestment are as follows:

	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Dividend reinvestment		8		10		16		20

Note 16: Non-controlling interests

In June 2014, the non-controlling interests of Tradeweb contributed $115 million in exchange for additional shares. Post this transaction, the Company continues to own the majority of the equity interests and retains control of the entity. The carrying amount of the non-controlling interests was increased by $77 million to reflect the change in their relative ownership interest. The change in the Company’s ownership interest of $38 million did not result in a change in control, and was therefore accounted for as an equity transaction within retained earnings.

The contribution from the non-controlling interests is included in ‘Other financing activities” in the consolidated statement of cash flow.

Note 17: Supplemental cash flow information

Details of “Other” in the consolidated statement of cash flow are as follows:

	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Non-cash employee benefit charges		62			67			124			141
Fair value adjustments		33			(29	)		35			(91	)
Net (gains) losses on foreign exchange and derivative financial instruments		(32	)		18			(58	)		74
Other		14			4			10			1
		77			60			111			125

46

Details of “Changes in working capital and other items” are as follows:

	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Trade and other receivables		36			151			(33	)		24
Prepaid expenses and other current assets		6			19			(28	)		(46	)
Other financial assets		6			16			16			13
Payables, accruals and provisions		23			(32	)		(484	)		(452	)
Deferred revenue		3			37			83			115
Other financial liabilities		17			(20	)		5			(21	)
Income taxes		70			74			32			128
Other		(48	)		(37	)		(107	)		(98	)
		113			208			(516	)		(337	)

Note 18: Acquisitions

Acquisitions primarily comprise the purchase of businesses that are integrated into existing operations to broaden the Company’s range of offerings to customers as well as its presence in global markets.

Acquisition activity

The number of acquisitions completed, and the related cash consideration, during the three and six months ended June 30, 2014 and 2013 were as follows:

Number of transactions	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Businesses and identifiable intangible assets acquired		3		9		3		14
Investments in businesses		-		-		-		1
		3		9		3		15

Cash consideration	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Businesses and identifiable intangible assets acquired		126			119			126			871
Less: cash acquired		(2	)		(3	)		(2	)		(29	)
Businesses and identifiable intangible assets acquired, net of cash		124			116			124			842
Contingent consideration payments		12			2			12			3
Investments in businesses		1			-			1			3
		137			118			137			848

The following provides a brief description of certain acquisitions completed during the six months ended June 30, 2014 and 2013:

Date	Company	Acquiring segment	Description
April 2014	Dominio Sistemas	Tax & Accounting	A Brazilian provider of accounting and software solutions primarily to large and small accounting firms
April 2013	T.Global	Tax & Accounting	A Brazilian provider of global trade management software and solutions to professionals across Latin America
February 2013	Practical Law Company	Legal	A provider of practical legal know-how, current awareness and workflow solutions to law firms and corporate law departments

Purchase price allocation

Each business combination has been accounted for using the acquisition method and the results of acquired businesses are included in the consolidated financial statements from the dates of acquisition. Purchase price allocations related to certain acquisitions may be subject to adjustment pending completion of final valuations.

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The details of net assets acquired were as follows:

	Three months ended June 30,						Six months ended June 30,
	2014			2013(1)			2014			2013
Cash and cash equivalents		2			3			2			29
Trade and other receivables		4			(10	)		4			32
Prepaid expenses and other current assets		-			19			-			20
Current assets		6			12			6			81
Computer hardware and other property, net		2			(1	)		2			4
Computer software, net		25			(14	)		25			32
Other identifiable intangible assets		43			65			43			268
Other non-current assets		1			-			1			-
Deferred tax		-			1			-			7
Total assets		77			63			77			392
Current indebtedness		-			(1	)		-			(1	)
Payables, accruals and provisions		(5	)		9			(5	)		(39	)
Deferred revenue		(2	)		(4	)		(2	)		(63	)
Current liabilities		(7	)		4			(7	)		(103	)
Provisions and other non-current liabilities		(2	)		(5	)		(2	)		(5	)
Other financial liabilities		(3	)		(2	)		(3	)		(2	)
Deferred tax		-			(15	)		-			(70	)
Total liabilities		(12	)		(18	)		(12	)		(180	)
Net assets acquired		65			45			65			212
Goodwill		61			74			61			659
Total		126			119			126			871

(1) The three months ended June 30, 2013 includes valuation adjustments for acquisitions that closed in the first quarter of the year.

The excess of the purchase price over the net tangible and identifiable intangible assets acquired and assumed liabilities was recorded as goodwill and reflects synergies and the value of the acquired workforce. The majority of goodwill for acquisitions completed in 2014 is expected to be deductible for tax purposes (goodwill from 2013 acquisitions is not expected to be deductible for tax purposes).

Acquisition transactions were completed by acquiring all equity interests or the net assets of the acquired businesses. The revenues and operating profit of acquired businesses since the date of acquisition were not material to the Company’s results of operations.

Note 19: Contingencies

Lawsuits and legal claims

The Company is engaged in various legal proceedings, claims, audits and investigations that have arisen in the ordinary course of business. These matters include but are not limited to intellectual property infringement claims, employment matters and commercial matters. The outcome of all of the matters against the Company is subject to future resolution, including the uncertainties of litigation. Based on information currently known to the Company and after consultation with outside legal counsel, management believes that the probable ultimate resolution of any such matters, individually or in the aggregate, will not have a material adverse impact on the Company’s financial condition taken as a whole.

Uncertain tax positions

The Company is subject to taxation in numerous jurisdictions. There are many transactions and calculations during the course of business for which the ultimate tax determination is uncertain. The Company maintains provisions for uncertain tax positions that it believes appropriately reflect its risk. These provisions are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. It is possible that at some future date, liabilities in excess of the Company’s provisions could result from audits by, or litigation with, relevant taxing authorities. Management believes that such additional liabilities would not have a material adverse impact on the Company’s financial condition taken as a whole.

48

Note 20: Related party transactions

As of June 30, 2014, The Woodbridge Company Limited (“Woodbridge”) beneficially owned approximately 57% of the Company’s shares.

Transactions with Woodbridge

From time to time, in the normal course of business, the Company enters into transactions with Woodbridge and certain of its affiliates. These transactions involve providing and receiving product and service offerings, are negotiated at arm’s length on standard terms, including price, and are not significant to the Company’s results of operations or financial condition either individually or in the aggregate.

In May 2012, as part of its efforts to expand its mutual fund data and strategic research capabilities, the Company acquired a Canadian mutual fund database, fund fact sheet business and mutual fund and equity data feed business for approximately C$9 million from The Globe and Mail (“The Globe”), which is majority owned by Woodbridge. The Company paid approximately C$8 million in cash and issued a C$1 million promissory note to The Globe that will be due in May 2016. In connection with the acquisition, the Company licensed the acquired database to The Globe over a four year term, valued at approximately C$250,000 per year. The Globe issued four promissory notes to the Company, each for the value of the annual license. Amounts due each year under the notes issued by The Globe are offset against the note issued by the Company. The board of directors’ Corporate Governance Committee approved the transaction.

In the normal course of business, certain of the Company’s subsidiaries charge a Woodbridge-owned company fees for various administrative services. In 2013, the total amount charged to Woodbridge for these services was approximately $105,000 for the year ended December 31, 2013.

The Company purchases property and casualty insurance from third party insurers and retains the first $500,000 of each and every claim under the programs via the Company’s captive insurance subsidiaries. Woodbridge is included in these programs and pays the Company a premium commensurate with its exposures. Premiums relating to the year ended December 31, 2013 were $44,000, which would approximate the premium charged by a third party insurer for such coverage.

The Company maintained an agreement with Woodbridge until April 17, 2008 (the closing date of the Reuters acquisition) under which Woodbridge agreed to indemnify up to $100 million of liabilities incurred either by the Company’s current and former directors and officers or by the Company in providing indemnification to these individuals on substantially the same terms and conditions as would apply under an arm’s length, commercial arrangement. The Company was required to pay Woodbridge an annual fee of $750,000, which was less than the premium that would have been paid for commercial insurance. In 2008, the Company replaced this agreement with a conventional insurance agreement. The Company was entitled to seek indemnification from Woodbridge for any claims arising from events prior to April 17, 2008, so long as the claims were made before April 17, 2014. As there were no claims against the indemnity by current or former directors and officers, the Company did not seek indemnification from Woodbridge under this arrangement.

Transactions with associates and joint ventures

From time to time, the Company enters into transactions with its investments in associates and joint ventures. These transactions typically involve providing or receiving services and are entered into in the normal course of business and on an arm’s length basis.

The Company and Shin Nippon Hoki Shuppan K.K. each own 50% of Westlaw Japan K.K., a provider of legal information and solutions to the Japanese legal market. The Company provides the joint venture with technology and other services, which were valued at approximately $300,000 for the six months ended June 30, 2014.

In connection with the 2008 acquisition of Reuters, the Company assumed a lease agreement with 3XSQ Associates, an entity owned by the Company and Rudin Times Square Associates LLC that was formed to build and operate the 3 Times Square property and building in New York, New York that serves as the Company’s corporate headquarters. The Company follows the equity method of accounting for its investment in 3XSQ Associates. The lease provides the Company with over 690,000 square feet of office space until 2021 and includes provisions to terminate portions early and various renewal options. The Company’s costs under this lease arrangement for rent, taxes and other expenses were approximately $19 million for the six months ended June 30, 2014.

Note 21: Subsequent events

Share repurchases

In July 2014, the Company announced that it plans to repurchase up to an additional $1.0 billion of its common shares by the end of 2015.

49

EX-99.3

EXHIBIT 99.3

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James C. Smith, certify that:

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: August 1, 2014
	/s/ James C. Smith
	James C. Smith
	President and Chief Executive Officer

EX-99.4

EXHIBIT 99.4

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephane Bello, certify that:

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:  August 1, 2014

/s/ Stephane Bello

Stephane Bello

Executive Vice President and Chief Financial Officer

EX-99.5

EXHIBIT 99.5

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report of Thomson Reuters Corporation (the “Corporation”) on Form 6-K for the period ended June 30, 2014, as furnished to the Securities and Exchange Commission on the date hereof (the “Report”), I, James C. Smith, President and Chief Executive Officer of the Corporation, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Date: August 1, 2014

/s/ James C. Smith

James C. Smith

President and Chief Executive Officer

A signed original of this written statement has been provided to the Corporation and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.6

EXHIBIT 99.6

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report of Thomson Reuters Corporation (the “Corporation”) on Form 6-K for the period ended June 30, 2014, as furnished to the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephane Bello, Executive Vice President and Chief Financial Officer of the Corporation, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Date: August 1, 2014

/s/ Stephane Bello

Stephane Bello

Executive Vice President and Chief Financial Officer

A signed original of this written statement has been provided to the Corporation and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request.