TORONTO, April 28, 2017 /PRNewswire/ -- Thomson Reuters
(TSX /NYSE: TRI) today reported results for the first quarter ended
March 31, 2017.
- Reported revenues were up 1%, compared to down 1% in the
prior-year period
-
- Before currency, revenues were up 2%, compared to up 1% in the
prior-year period
- Operating profit increased 43%, from $310 million to $444
million
-
- Adjusted EBITDA increased 17%, with the margin increasing 430
basis points to 31.1%
- Diluted earnings per share (EPS) was $0.41, an increase of 21%, or $0.07 per share
-
- Adjusted EPS was $0.63, an
increase of 37%, or $0.17 per
share
- The company repurchased 6.8 million shares at a cost of
$284 million
- The company re-affirmed its 2017 full-year outlook
"Today's results demonstrate the progress we continue to make
strengthening our business," said Jim
Smith, president and chief executive officer of Thomson
Reuters. "It is particularly encouraging to see the investments we
have made behind our most promising growth opportunities beginning
to shine through on the revenue line. That growth, coupled
with savings from our transformation programs, led to a significant
improvement in profitability and earnings per share this quarter.
We expect those trends to continue as we move through the
year."
Consolidated Financial Highlights – First-Quarter
2017
Unless otherwise indicated, all amounts are from
continuing operations and exclude the results of the
company's former IP & Science business, which was sold in
October 2016. IP & Science was
classified as a discontinued operation for 2016 reporting
purposes.
IFRS Financial
Measures (1)
|
Three Months Ended
March 31,
(Millions of U.S.
dollars, except earnings per share (EPS))
|
|
2017
|
2016
|
Change
|
|
Revenues
|
$2,815
|
$2,793
|
1%
|
|
Operating
profit
|
$444
|
$310
|
43%
|
|
Diluted EPS (includes
discontinued operations)
|
$0.41
|
$0.34
|
21%
|
|
Cash flow from
operations (includes discontinued operations)
|
$(368)
|
$458
|
n/m(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Financial
results reported in accordance with International Financial
Reporting Standards
|
(2) n/m - not
meaningful
|
- Revenues increased 1% as higher subscription revenues and
contributions from Financial & Risk's acquisitions were partly
offset by the impact of foreign currency and a decline in Financial
& Risk's recoveries revenues.
- Operating profit increased 43% due to higher revenues, lower
expenses (which reflected the impact of transformation initiatives
to simplify the business) and the favorable timing of certain
corporate costs.
- Diluted EPS, which includes discontinued operations, increased
21% to $0.41 as higher operating
profit more than offset the loss of earnings from IP & Science
following its sale.
- Cash flow from operations, which includes discontinued
operations, was negative $368 million
in the quarter due to a $500 million
pension plan contribution, $86
million of payments related to the fourth-quarter 2016
severance charges, and the loss of cash flow from IP & Science
following its sale ($152 million
year-on-year variance). In the fourth quarter of 2016, the company
incurred $212 million of severance
charges. Cash payments associated with the charges did not have a
meaningful impact on the company's cash flow from operations in
2016, as most of the payments are expected to be made in 2017.
Non-IFRS Financial
Measures (1)
|
Three Months Ended
March 31, (Millions of U.S. dollars, except EPS and
margins)
|
|
2017
|
2016
|
Change
|
Change Before
Currency
|
Revenues
|
$2,815
|
$2,793
|
1%
|
2%
|
Adjusted
EBITDA
|
$876
|
$748
|
17%
|
17%
|
Adjusted EBITDA
margin
|
31.1%
|
26.8%
|
430bp
|
400bp
|
Adjusted
EPS
|
$0.63
|
$0.46
|
37%
|
37%
|
Free cash flow
(includes discontinued
operations)
|
$(585)
|
$223
|
n/m(2)
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In addition to
results reported in accordance with IFRS, the company uses certain
non-IFRS financial measures as supplemental indicators of its
operating performance and financial position. These and other
non-IFRS financial measures are defined and reconciled to the most
directly comparable IFRS measures in the tables appended to this
news release. Additional information is provided in the explanatory
footnotes to the appended tables.
|
(2)
|
n/m - not
meaningful
|
- Revenues increased 1% to $2.8
billion.
-
- Before currency, revenues increased 2% as higher subscription
revenues and contributions from Financial & Risk's acquisitions
were partly offset by a decline in Financial & Risk's
recoveries revenues.
- Adjusted EBITDA increased 17% to $876
million and the margin increased to 31.1% from 26.8%,
primarily due to higher revenues and lower expenses, which
reflected savings from transformation initiatives to simplify the
business and favorable timing for certain corporate costs. Currency
had a 30 basis points positive impact on the margin.
- Adjusted EPS was $0.63, an
increase of 37%, or $0.17 per share.
Currency had no impact.
- Free cash flow for the first quarter of 2017 was negative
$585 million, primarily due to (1) a
$500 million pension plan
contribution; (2) $86 million of
payments related to fourth-quarter 2016 severance charges; and (3)
the loss of the free cash flow from the company's former IP &
Science business ($152 million
year-on-year variance).
-
- Free cash flow for the full year is expected to be between
$0.9 billion and $1.2 billion, as
reflected in the company's Outlook. The first quarter is
historically the company's weakest of the year for free cash flow
generation.
Recent Developments
$500 Million Pension Plan
Contribution
As previously disclosed, the company made a voluntary cash
contribution of $500 million to its
US defined benefit pension plan in January
2017, which impacted first-quarter cash flow from operations
and free cash flow.
Dividend and Share Repurchases
In February 2017, the Thomson
Reuters board of directors approved a $0.02 per share annualized increase in the
dividend to $1.38 per common share. A
quarterly dividend of $0.345 per
share is payable on June 15, 2017 to
common shareholders of record as of May 18,
2017.
In February 2017, the company
announced that it planned to repurchase up to an additional
$1.0 billion of its shares after
completing its previous buyback program. In the first quarter of
2017, the company repurchased 6.8 million shares at a cost of
$284 million.
Business Outlook 2017 (Before Currency)
Thomson Reuters today reaffirmed its Outlook for 2017. The
company's 2017 Outlook assumes constant currency rates compared to
2016 and does not factor in the impact of acquisitions or
divestitures that may occur during the year.
For the full year 2017, the company expects:
- Low single-digit revenue growth
- Adjusted EBITDA margin to range between 28.8% to 29.8%
- Free cash flow to range between $0.9
billion and $1.2 billion (which reflects cash payments in
2017 relating to the fourth-quarter 2016 charge, the $500 million contribution to the US defined
benefit pension plan made earlier in the first quarter and the loss
of free cash flow from the divestiture of the IP & Science
business)
- Adjusted EPS target of $2.35
The information in this section is forward-looking and should
be read in conjunction with the section below entitled "Special
Note Regarding Forward-Looking Statements, Material Assumptions and
Material Risks."
Highlights by Business Unit
Unless otherwise noted, all revenue growth comparisons in
this news release are before the impact of foreign currency
(constant currency) as Thomson Reuters believes this provides the
best basis to measure the performance of its
business.
The impact of currency on profitability metrics in the first
quarter was not material to either the consolidated results or to
the business units and therefore only reported profitability is
discussed below.
Financial & Risk
- Revenues increased 1% to $1.5
billion. Acquisitions contributed approximately 1% to the
first-quarter revenue growth. Organic revenues grew
approximately 2% excluding the impact of lower recoveries revenues
and commercial pricing adjustments related to the migration of
certain customers to new platforms. The company expects these two
factors to have a lesser impact on reported revenue growth in the
second quarter and to have no material impact in the second half of
the year.
-
- Recurring revenues (77% of the segment's revenues in the
quarter) were up 2%, primarily due to an annual price increase and
positive net sales. Growth was partly offset by the commercial
pricing adjustments described above.
- Transactions revenues (15% of the segment's revenues in the
quarter) were up 4% due to increased revenue from Tradeweb and the
BETA brokerage processing business, as well as contributions from
acquisitions. This increase was offset by the impact of lower
foreign exchange trading and outright revenues.
- Low-margin recoveries revenues (8% of the segment's revenues in
the quarter) decreased 9%, partially due to third parties
continuing to move to direct billing with their customers.
Recoveries revenues are expected to be only marginally lower for
the full-year 2017 compared to 2016.
-
- Recoveries represent revenues for content or services provided
by third parties and distributed through or in conjunction with
Financial & Risk's platform. Reductions in recoveries revenue
have no material impact on the unit's adjusted EBITDA.
- By geography, revenues in the Americas were up 3%, Europe, Middle
East and Africa (EMEA) and
Asia were unchanged. Excluding the
impact of lower recoveries and commercial pricing adjustments, all
regions reported revenue growth.
- Adjusted EBITDA increased 6% to $463
million and the margin increased to 30.8% from 29.0% due to
savings related to the fourth-quarter 2016 charges and higher
revenues.
- Net sales were positive, driven by sales in EMEA and
Asia. This was partially offset by
the Americas, where negative net sales were impacted by the
migration of legacy asset management products to Eikon, which is
expected to be largely complete by the end of the second
quarter.
Legal
- Revenues increased 1% to $824
million. Excluding US print, revenues grew 2%.
-
- Solutions businesses (44% of the segment's revenues in the
quarter) grew 2% resulting from subscription revenue growth of 5%,
partially offset by a 9% reduction in transactional
revenues.
- US Online Legal Information (43% of the segment's revenues in
the quarter) grew 2%.
- US Print (13% of the segment's revenues in the quarter)
declined 4%.
- Subscription revenues (76% of the segment's revenues in the
quarter) grew 4%. However, transactional revenues (11% of the
segment's revenues in the quarter) declined 8%. US Print (13%
of the segment's revenues in the quarter) declined 4%.
- Adjusted EBITDA increased 3% to $307
million and the margin increased to 37.3% from 36.3%
primarily due to the impact of higher revenues. Expenses were
slightly lower than the prior-year period, reflecting
transformation and cost-management initiatives.
Tax & Accounting
- Revenues increased 6% to $417
million, driven by the Corporate and Professional
businesses. Growth was partially offset by declines in the
Knowledge Solutions and Government businesses.
- Adjusted EBITDA increased 24% to $141
million and the margin increased to 33.8% from 29.3% due to
higher revenues, savings related to the fourth-quarter 2016 charges
and the absence of severance costs incurred in the first quarter of
2016 that did not repeat in the first quarter of 2017.
Corporate & Other (Including Reuters News)
- Reuters News revenues were $74
million, up 1%.
- Corporate & Other costs at the adjusted EBITDA level were
$35 million compared to $101 million in the prior-year period. Including
depreciation and amortization of software, Corporate & Other
costs were $46 million compared to
$118 million in the prior-year
period. The reduction on both bases was driven by savings generated
by the company's Enterprise, Technology & Operations group, the
elimination of certain retained costs relating to the sale of IP
& Science, increased allocation of costs to the business units
and the timing of spend within 2017.
-
- For the full year, the company expects Corporate costs,
inclusive of depreciation and amortization of software, to be
approximately $300 million.
Thomson Reuters
Thomson Reuters is the world's leading source of news and
information for professional markets. Our customers rely on us to
deliver the intelligence, technology and expertise they need to
find trusted answers. The business has operated in more than 100
countries for more than 100 years. Thomson Reuters shares are
listed on the Toronto and New York
Stock Exchanges (symbol: TRI). For more information, visit
www.thomsonreuters.com.
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its financial statements in
accordance with International Financial Reporting Standards (IFRS),
as issued by the International Accounting Standards Board
(IASB).
This news release includes certain non-IFRS financial
measures, such as adjusted EBITDA and the related margin, free cash
flow, adjusted EPS, and selected measures before the impact of
foreign currency. Thomson Reuters uses these non-IFRS financial
measures as supplemental indicators of its operating performance
and financial position. These measures do not have any standardized
meanings prescribed by IFRS and therefore are unlikely to be
comparable to the calculation of similar measures used by other
companies, and should not be viewed as alternatives to measures of
financial performance calculated in accordance with IFRS. Non-IFRS
financial measures are defined and reconciled to the most directly
comparable IFRS measures in the appended tables.
The company no longer reports underlying operating profit,
reflecting a simplification of its reporting, in line with how the
businesses are currently managed internally, and consistent with
how the company provided its 2017 business outlook.
The company's business outlook contains various non-IFRS
financial measures. For outlook purposes only, the company is
unable to reconcile these non-IFRS measures to the most comparable
IFRS measures because it cannot predict, with reasonable certainty,
the 2017 impact of changes in foreign exchange rates which impact
(i) the translation of its results reported at average foreign
currency rates for the year, (ii) fair value adjustments associated
with foreign currency derivatives embedded in certain customer
contracts, and (iii) other finance income or expense related to
foreign exchange contracts and intercompany financing arrangements.
Additionally, the company cannot reasonably predict the occurrence
or amount of other operating gains and losses, which generally
arise from business transactions that it does not
anticipate.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL
ASSUMPTIONS AND MATERIAL RISKS
Certain statements in this news release, including, but not
limited to, statements in the "Business Outlook 2017 (Before
Currency)" section, Mr. Smith's comments and statements regarding
recoveries revenues , the timing of product migrations within the
Financial & Risk business, and corporate costs, are
forward-looking. As a result, forward-looking statements are
subject to a number of risks and uncertainties that could cause
actual results or events to differ materially from current
expectations. There is no assurance that the events
described in any forward-looking statement will materialize. A
business outlook is provided for the purpose of presenting
information about current expectations for 2017. This information
may not be appropriate for other purposes. You are cautioned not to
place undue reliance on forward-looking statements which reflect
expectations only as of the date of this news release. Except as
may be required by applicable law, Thomson Reuters disclaims any
obligation to update or revise any forward-looking
statements.
The company's 2017 business outlook is based on various
external and internal assumptions. Economic and market assumptions
include, but are not limited to, GDP growth in most of the
countries where Thomson Reuters operates, a continued increase in
demand for high quality information and workflow solutions and a
continued need for trusted products and services that help
customers navigate changing geopolitical, economic and regulatory
environments. Internal financial and operational assumptions
include, but are not limited to, the successful execution of sales
initiatives, ongoing product release programs, our globalization
strategy and other growth and efficiency initiatives.
Some of the material risk factors that could cause
actual results or events to differ materially from those expressed
in or implied by forward-looking statements in this news
release include, but are not limited to, changes in the
general economy; actions of competitors; failure to develop new
products, services, applications and functionalities to meet
customers' needs, attract new customers and retain existing ones,
or expand into new geographic markets and identify areas of higher
growth; fraudulent or unpermitted data access or other
cyber-security or privacy breaches; failures or disruptions of
telecommunications, data centers, network systems or the Internet;
increased accessibility to free or relatively inexpensive
information sources; failure to meet the challenges involved in
operating globally; failure to maintain a high renewal rate for
recurring, subscription-based services; dependency on third parties
for data, information and other services; changes to law and
regulations; tax matters, including changes to tax laws,
regulations and treaties; fluctuations in foreign currency exchange
and interest rates; failure to adapt to organizational changes and
effectively implement strategic initiatives; failure to attract,
motivate and retain high quality management and key employees;
failure to protect the brands and reputation of Thomson Reuters;
inadequate protection of intellectual property rights; threat of
legal actions and claims; failure to derive fully the anticipated
benefits from existing or future acquisitions, joint ventures,
investments or dispositions; risk of antitrust/competition-related
claims or investigations; impairment of goodwill and other
identifiable intangible assets; downgrading of credit ratings and
adverse conditions in the credit markets; the effect of factors
outside of the control of Thomson Reuters on funding obligations in
respect of pension and post-retirement benefit arrangements; and
actions or potential actions that could be taken by the company's
principal shareholder, The Woodbridge Company Limited. These and
other factors are discussed in materials that Thomson Reuters from
time to time files with, or furnishes to, the Canadian securities
regulatory authorities and the U.S. Securities and Exchange
Commission. Thomson Reuters annual and quarterly reports are also
available in the "Investor Relations" section of
www.thomsonreuters.com.
CONTACTS
MEDIA
David Crundwell
Senior Vice President, Corporate Affairs
+1 646 223 5285
david.crundwell@tr.com
|
INVESTORS
Frank J. Golden
Senior Vice President, Investor Relations
+1 646 223 5288
frank.golden@tr.com
|
Thomson Reuters will webcast a discussion of its
first-quarter 2017 results today beginning at 8:30 a.m. Eastern Daylight Time (EDT).
You can access the webcast by visiting the "Investor Relations"
section of www.thomsonreuters.com. An archive
of the webcast will be available following the
presentation.
Thomson Reuters
Corporation
Consolidated
Income Statement
(millions of U.S.
dollars, except per share data)
(unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
2016
|
CONTINUING
OPERATIONS
|
|
|
Revenues
|
$2,815
|
$2,793
|
Operating
expenses
|
(2,004)
|
(2,109)
|
Depreciation
|
(72)
|
(81)
|
Amortization of
computer software
|
(180)
|
(169)
|
Amortization of other
identifiable intangible assets
|
(119)
|
(128)
|
Other operating
gains, net
|
4
|
4
|
Operating
profit
|
444
|
310
|
Finance costs,
net:
|
|
|
Net interest
expense
|
(93)
|
(93)
|
Other finance
costs
|
(27)
|
(34)
|
Income before tax and
equity method investments
|
324
|
183
|
Share of post-tax
earnings in equity method investments
|
2
|
1
|
Tax (expense)
benefit
|
(9)
|
26
|
Earnings from
continuing operations
|
317
|
210
|
(Loss) earnings from
discontinued operations, net of tax
|
(3)
|
62
|
Net
earnings
|
$314
|
$272
|
|
|
|
Earnings attributable
to:
|
|
|
Common
shareholders
|
297
|
262
|
Non-controlling
interests
|
17
|
10
|
|
|
|
Earnings per
share:
|
|
|
Basic and diluted
earnings per share:
|
|
|
From
continuing operations
|
$0.41
|
$0.26
|
From
discontinued operations
|
-
|
0.08
|
Basic and diluted
earnings per share
|
$0.41
|
$0.34
|
|
|
|
Basic
weighted-average common shares
|
727,200,617
|
760,727,773
|
Diluted
weighted-average common shares
|
729,194,404
|
762,216,127
|
Thomson Reuters
Corporation
Consolidated
Statement of Financial Position
(millions of U.S.
dollars)
(unaudited)
|
|
|
March 31,
|
|
December
31,
|
2017
|
|
2016
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$812
|
|
$2,368
|
Trade and other
receivables
|
1,573
|
|
1,392
|
Other financial
assets
|
131
|
|
188
|
Prepaid expenses and
other current assets
|
740
|
|
686
|
Current
assets
|
3,256
|
|
4,634
|
|
|
|
|
Computer hardware and
other property, net
|
937
|
|
961
|
Computer software,
net
|
1,396
|
|
1,394
|
Other identifiable
intangible assets, net
|
5,622
|
|
5,655
|
Goodwill
|
14,673
|
|
14,485
|
Other financial
assets
|
102
|
|
135
|
Other non-current
assets
|
565
|
|
537
|
Deferred
tax
|
55
|
|
51
|
Total
assets
|
$26,606
|
|
$27,852
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Liabilities
|
|
|
|
Current
indebtedness
|
$828
|
|
$1,111
|
Payables, accruals
and provisions
|
2,033
|
|
2,448
|
Deferred
revenue
|
970
|
|
901
|
Other financial
liabilities
|
130
|
|
102
|
Current
liabilities
|
3,961
|
|
4,562
|
|
|
|
|
Long-term
indebtedness
|
6,288
|
|
6,278
|
Provisions and other
non-current liabilities
|
1,662
|
|
2,258
|
Other financial
liabilities
|
330
|
|
340
|
Deferred
tax
|
1,130
|
|
1,158
|
Total
liabilities
|
13,371
|
|
14,596
|
|
|
|
|
Equity
|
|
|
|
Capital
|
9,617
|
|
9,589
|
Retained
earnings
|
7,284
|
|
7,477
|
Accumulated other
comprehensive loss
|
(4,158)
|
|
(4,293)
|
Total shareholders'
equity
|
12,743
|
|
12,773
|
Non-controlling
interests
|
492
|
|
483
|
Total
equity
|
13,235
|
|
13,256
|
Total liabilities
and equity
|
$26,606
|
|
$27,852
|
Thomson Reuters
Corporation
Consolidated
Statement of Cash Flow
(millions of U.S.
dollars)
(unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
2016(1)
|
Cash provided by
(used in):
|
|
|
Operating
activities
|
|
|
Earnings from
continuing operations
|
$317
|
$210
|
Adjustments
for:
|
|
|
Depreciation
|
72
|
81
|
Amortization of
computer software
|
180
|
169
|
Amortization of other
identifiable intangible assets
|
119
|
128
|
Net gains on disposals
of businesses and investments
|
-
|
(1)
|
Deferred
tax
|
(21)
|
(58)
|
Other
|
163
|
178
|
Pension
contributions
|
(500)
|
-
|
Changes in working
capital and other items
|
(657)
|
(371)
|
Operating cash flows
from continuing operations
|
(327)
|
336
|
Operating cash flows
from discontinued operations
|
(41)
|
122
|
Net cash (used in)
provided by operating activities
|
(368)
|
458
|
|
|
|
Investing
activities
|
|
|
Acquisitions, net of
cash acquired
|
(178)
|
(46)
|
Proceeds from
disposals of businesses and investments
|
10
|
2
|
Capital expenditures,
less proceeds from disposals
|
(213)
|
(233)
|
Other investing
activities
|
6
|
19
|
Investing cash flows
from continuing operations
|
(375)
|
(258)
|
Investing cash flows
from discontinued operations
|
-
|
(11)
|
Net cash used in
investing activities
|
(375)
|
(269)
|
|
|
|
Financing
activities
|
|
|
Repayments of
debt
|
(550)
|
(3)
|
Net borrowings under
short-term loan facilities
|
255
|
442
|
Repurchases of common
shares
|
(284)
|
(432)
|
Dividends paid on
preference shares
|
(1)
|
(1)
|
Dividends paid on
common shares
|
(242)
|
(249)
|
Dividends paid to
non-controlling interests
|
(9)
|
(9)
|
Other financing
activities
|
5
|
4
|
Net cash used in
financing activities
|
(826)
|
(248)
|
Decrease in cash and
bank overdrafts
|
(1,569)
|
(59)
|
Translation
adjustments
|
2
|
4
|
Cash and bank
overdrafts at beginning of period
|
2,367
|
922
|
Cash and bank
overdrafts at end of period
|
$800
|
$867
|
|
|
|
Cash and bank
overdrafts at end of period comprised of:
|
|
|
Cash and cash
equivalents
|
$812
|
$898
|
Bank
overdrafts
|
(12)
|
(31)
|
|
$800
|
$867
|
|
Refer to page 12 for
footnotes.
|
Thomson Reuters
Corporation
Reconciliation of
Changes in Revenues, Adjusted EBITDA and the Related
Margin
Excluding the
Effects of Foreign Currency by Business Segment
(millions of U.S.
dollars, except for margins)
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
Change
|
|
|
2017
|
2016
|
|
Total
|
Foreign
Currency (3)
|
Before
Currency (3)
|
Revenues
|
|
|
|
|
|
|
|
Financial &
Risk
|
|
$1,502
|
$1,509
|
|
0%
|
-1%
|
1%
|
Legal
|
|
824
|
822
|
|
0%
|
-1%
|
1%
|
Tax &
Accounting
|
|
417
|
389
|
|
7%
|
1%
|
6%
|
Corporate & Other
(includes Reuters News)
|
|
74
|
75
|
|
-1%
|
-2%
|
1%
|
Eliminations
|
|
(2)
|
(2)
|
|
|
|
|
Revenues
|
|
$2,815
|
$2,793
|
|
1%
|
-1%
|
2%
|
|
|
|
|
|
|
Change
|
|
|
|
|
Total
|
Foreign
Currency (3)
|
Before
Currency (3)
|
Adjusted
EBITDA (2)
|
|
|
|
|
|
|
|
Financial &
Risk
|
|
$463
|
$437
|
|
6%
|
-1%
|
7%
|
Legal
|
|
307
|
298
|
|
3%
|
-1%
|
4%
|
Tax &
Accounting
|
|
141
|
114
|
|
24%
|
0%
|
24%
|
Corporate & Other
(includes Reuters News)
|
|
(35)
|
(101)
|
|
n/a
|
n/a
|
n/a
|
Adjusted
EBITDA
|
|
$876
|
$748
|
|
17%
|
0%
|
17%
|
|
Adjusted EBITDA
Margin (2)
|
|
|
|
|
|
|
|
Financial &
Risk
|
|
30.8%
|
29.0%
|
|
180bp
|
20bp
|
160bp
|
Legal
|
|
37.3%
|
36.3%
|
|
100bp
|
-10bp
|
110bp
|
Tax &
Accounting
|
|
33.8%
|
29.3%
|
|
450bp
|
-30bp
|
480bp
|
Corporate & Other
(includes Reuters News)
|
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
Adjusted EBITDA
margin
|
|
31.1%
|
26.8%
|
|
430bp
|
30bp
|
400bp
|
|
n/a - not
applicable
Refer to page 12 for footnotes.
|
Thomson Reuters
Corporation
Reconciliation of
Earnings from Continuing Operations to Adjusted EBITDA
(2)
(millions of U.S.
dollars, except for margins)
(unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
|
2017
|
2016
|
Change
|
Earnings from
continuing operations
|
$317
|
$210
|
51%
|
Adjustments to
remove:
|
|
|
|
Tax expense
(benefit)
|
9
|
(26)
|
|
Other finance
costs
|
27
|
34
|
|
Net interest
expense
|
93
|
93
|
|
Amortization of other
identifiable intangible assets
|
119
|
128
|
|
Amortization of
computer software
|
180
|
169
|
|
Depreciation
|
72
|
81
|
|
EBITDA
|
$817
|
$689
|
|
Adjustments to
remove:
|
|
|
|
Share of post-tax
earnings in equity method investments
|
(2)
|
(1)
|
|
Other operating gains,
net
|
(4)
|
(4)
|
|
Fair value
adjustments
|
65
|
64
|
|
Adjusted
EBITDA
|
$876
|
$748
|
17%
|
Adjusted EBITDA
margin (2)
|
31.1%
|
26.8%
|
430bp
|
Thomson Reuters
Corporation
Reconciliation of
Earnings Attributable to Common Shareholders to Adjusted Earnings
(4)
(millions of U.S.
dollars, except for share and per share data)
(unaudited)
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2017
|
2016(1)
|
Change
|
|
Earnings
attributable to common shareholders
|
$297
|
$262
|
13%
|
|
Adjustments to
remove:
|
|
|
|
|
Fair value
adjustments
|
65
|
64
|
|
|
Amortization of other
identifiable assets
|
119
|
128
|
|
|
Other operating gains,
net
|
(4)
|
(4)
|
|
|
Other finance
costs
|
27
|
34
|
|
|
Share of post-tax
earnings in equity method investments
|
(2)
|
(1)
|
|
|
Tax on above
items
|
(47)
|
(57)
|
|
|
Tax items impacting
comparability
|
-
|
(7)
|
|
|
Loss (earnings) from
discontinued operations, net of tax
|
3
|
(62)
|
|
|
Interim period
effective tax rate normalization (5)
|
1
|
(5)
|
|
|
Dividends declared on
preference shares
|
(1)
|
(1)
|
|
|
Adjusted
earnings
|
$458
|
$351
|
30%
|
|
Adjusted
EPS
|
$0.63
|
$0.46
|
37%
|
|
Foreign currency
(3)
|
|
|
0%
|
|
Before currency
(3)
|
|
|
37%
|
|
|
|
|
|
|
Diluted
weighted-average common shares (millions)
|
729.2
|
762.2
|
|
|
|
Refer to page 12 for
footnotes.
|
Thomson Reuters
Corporation
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash Flow
(6)
(millions of U.S.
dollars)
(unaudited)
|
|
|
Three Months
Ended
|
March
31,
|
|
2017
|
2016
|
Net cash (used in)
provided by operating activities
|
$(368)
|
$458
|
Capital expenditures,
less proceeds from disposals
|
(213)
|
(233)
|
Capital expenditures
from discontinued operations
|
-
|
(11)
|
Other investing
activities
|
6
|
19
|
Dividends paid on
preference shares
|
(1)
|
(1)
|
Dividends paid to
non-controlling interests
|
(9)
|
(9)
|
Free cash
flow
|
$(585)
|
$223
|
Footnotes
|
(1)
|
Prior-year period
amounts have been revised to reflect the current presentation.
|
(2)
|
Thomson Reuters
defines adjusted EBITDA as earnings from continuing operations
before tax expense or benefit, net interest expense, other finance
costs or income, depreciation, amortization of software and other
identifiable intangible assets, Thomson Reuters share of post-tax
(earnings) losses in equity method investments, other operating
gains and losses, certain asset impairment charges, fair value
adjustments and corporate related items. Adjusted EBITDA margin is
adjusted EBITDA expressed as a percentage of revenues. Thomson
Reuters uses adjusted EBITDA because it provides a consistent basis
to evaluate operating profitability and performance trends by
excluding items that the Company does not consider to be
controllable activities for this purpose. Adjusted EBITDA also
represents a measure commonly reported and widely used by investors
as a valuation metric. Additionally, this measure is used by
Thomson Reuters and investors to assess a company's ability to
incur and service debt.
|
(3)
|
The changes in
revenues, adjusted EBITDA and the related margins, and adjusted
earnings per share before currency (at constant currency or
excluding the effects of currency) are determined by converting the
current and prior-year period's local currency equivalent using the
same exchange rates.
|
(4)
|
Adjusted earnings and
adjusted earnings per share (EPS) include dividends declared on
preference shares but exclude the post-tax impacts of fair value
adjustments, amortization of other identifiable intangible assets,
other operating gains and losses, certain asset impairment charges,
other finance costs or income, Thomson Reuters share of post-tax
(earnings) losses in equity method investments, discontinued
operations and other items affecting comparability. Thomson Reuters
calculates the post-tax amount of each item excluded from adjusted
earnings based on the specific tax rules and tax rates associated
with the nature and jurisdiction of each item. Adjusted earnings
per share is calculated using diluted weighted-average shares and
does not represent actual earnings or loss per share attributable
to shareholders. Thomson Reuters uses adjusted earnings and
adjusted EPS as they provide a more comparable basis to analyze
earnings and they are also measures commonly used by shareholders
to measure the company's performance.
|
(5)
|
Adjustment to reflect
income taxes based on estimated full-year effective tax rate.
Earnings or losses for interim periods under IFRS reflect income
taxes based on the estimated effective tax rates of each of the
jurisdictions in which Thomson Reuters operates. The non-IFRS
adjustment reallocates estimated full-year income taxes between
interim periods, but has no effect on full-year income
taxes.
|
(6)
|
Free cash flow
(includes free cash flow from continuing and discontinued
operations) is net cash provided by (used in) operating activities,
and other investing activities less capital expenditures, dividends
paid on the company's preference shares, and dividends paid to
non-controlling interests. Thomson Reuters uses free cash flow as
it helps assess the company's ability, over the long term, to
create value for its shareholders as it represents cash available
to repay debt, pay common dividends and fund share repurchases and
new acquisitions.
|
Supplemental
|
|
Thomson Reuters
Corporation
Depreciation and
Amortization of Computer Software by Business
Segment
(millions of U.S.
dollars)
(unaudited)
|
|
|
Three Months
Ended
|
March
31,
|
|
2017
|
2016
|
Financial &
Risk
|
$147
|
$142
|
Legal
|
62
|
60
|
Tax &
Accounting
|
32
|
31
|
Corporate & Other
(includes Reuters News)
|
11
|
17
|
Total depreciation
and amortization of computer software
|
$252
|
$250
|
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