Full-year outlook reaffirmed; free cash flow outlook
raised
Second-quarter outlook achieved and new third-quarter outlook
provided
TORONTO, Aug. 5, 2020 /PRNewswire/ -- Thomson Reuters
(TSX/NYSE: TRI) today reported results for the second quarter ended
June 30, 2020.
"I am pleased to report that the company met or exceeded each of
the financial guidance metrics provided in May for the second
quarter. And, given our performance for the second quarter and
first half, we have increasing confidence in how our businesses
will perform over the remainder of the year. Therefore, we are
raising our free cash flow outlook and reaffirming the rest of our
full-year 2020 guidance," said Steve
Hasker, President and CEO of Thomson Reuters.
"I again want to express my appreciation to our employees for
their flexibility, fortitude and ongoing support of our customers
as they shifted from the office to working from home. Importantly,
we have seen an improvement in both productivity and customer
satisfaction during this period."
"As we look ahead, we see tangible opportunities to better serve
our customers with solutions that are digital, virtual, real-time
and automated. Today's environment has reinforced that view, and
our customers are demanding it. We have an opportunity to reimagine
the end-to-end customer experience through simplification,
innovation and enhanced product integration, which I believe will
present substantive opportunities to further fuel our growth and
realize substantial efficiencies."
Consolidated Financial Highlights - Three Months Ended
June 30
Three Months Ended
June 30,
(Millions of U.S.
dollars, except for adjusted EBITDA margin and EPS)
(unaudited)
|
IFRS Financial
Measures(1)
|
2020
|
2019(2)
|
Change
|
Change at
Constant
Currency
|
Revenues
|
$1,405
|
$1,423
|
-1%
|
|
Operating
profit
|
$365
|
$447
|
-18%
|
|
Diluted earnings per
share (EPS)
|
$0.25
|
$0.36
|
-31%
|
|
Cash flow from
operations
|
$422
|
$113
|
288%
|
|
Non-IFRS Financial
Measures(1)
|
|
|
|
|
Revenues
|
$1,405
|
$1,423
|
-1%
|
0%
|
Adjusted
EBITDA
|
$479
|
$355
|
35%
|
34%
|
Adjusted EBITDA
margin
|
34.1%
|
25.0%
|
910bp
|
840bp
|
Adjusted
EPS
|
$0.44
|
$0.29
|
52%
|
48%
|
Free cash
flow
|
$305
|
$1
|
n/m
|
|
n/m: not
meaningful
(1) In
addition to results reported in accordance with International
Financial Reporting Standards (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.
(2) 2019
results have been revised to correct for certain immaterial
misstatements. For additional information, see the "Revision of
Prior-Period Financial Statements" section of this news
release.
|
Revenues decreased 1% as growth in recurring revenues was
more than offset by expected declines in Global Print and
transactions revenues, as well as a negative impact from foreign
currency that reduced revenues by $21
million (approximately 1%).
- As expected, organic revenues decreased 2% reflecting the
declines in Global Print (down 17%) and transactions revenues (down
19%).
- Recurring revenues, which comprised 81% of total revenues, grew
4% before currency and 3% organically.
- The company's "Big 3" segments (Legal Professionals, Corporates
and Tax & Accounting Professionals), which collectively
comprised approximately 80% of second-quarter revenues, reported
organic revenue growth of 2%, driven by 4% growth in recurring
revenues.
Operating profit decreased as the prior-year period
included a significantly higher benefit from the revaluation of
warrants that the company holds in Refinitiv relating to the
proposed sale of Refinitiv to London Stock Exchange Group plc
(LSEG), which is discussed later in this news release.
- Adjusted EBITDA, which excludes the impact of the
warrant revaluation among other items, increased 35% due to the
completion of the program in 2019 to reposition the company
following the separation from Financial & Risk (F&R) and
lower expenses from the company's COVID-19-related efforts to
mitigate 2020 annual costs by $100
million. The related margin increased to 34.1% from 25.0% in
the prior-year period.
Diluted EPS decreased to $0.25 per share from $0.36 per share in the prior-year period
primarily due to lower operating profit, which reflects the impact
of the warrant revaluation.
- Adjusted EPS, which excludes the warrant revaluation as
well as other adjustments, increased to $0.44 from $0.29 in
the prior-year period, primarily due to higher adjusted
EBITDA.
Cash flow from operations increased to $422 million from $113
million due to significantly higher costs and investments in
the prior-year period to reposition Thomson Reuters following the
separation of F&R from the company, favorable working capital
movements and savings from the company's COVID-19-related cost
mitigation efforts.
- Free cash flow was $305
million and increased for the same reasons.
Highlights by Customer Segment - Three Months Ended
June 30
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
June
30,
|
|
Change
|
|
|
2020
|
2019(1)
|
|
Total
|
Constant
Currency
|
Organic(2)
|
Revenues
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$620
|
$605
|
|
2%
|
3%
|
1%
|
Corporates
|
|
329
|
315
|
|
4%
|
6%
|
5%
|
Tax &
Accounting Professionals
|
|
168
|
182
|
|
-8%
|
-4%
|
0%
|
"Big 3" Segments
Combined
|
|
1,117
|
1,102
|
|
1%
|
3%
|
2%
|
Reuters
News
|
|
155
|
156
|
|
-1%
|
0%
|
-11%
|
Global
Print
|
|
134
|
164
|
|
-19%
|
-17%
|
-17%
|
Eliminations/Rounding
|
|
(1)
|
1
|
|
|
|
|
Revenues
|
|
$1,405
|
$1,423
|
|
-1%
|
0%
|
-2%
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$254
|
$229
|
|
11%
|
11%
|
|
Corporates
|
|
118
|
98
|
|
21%
|
21%
|
|
Tax &
Accounting Professionals
|
|
54
|
59
|
|
-9%
|
-6%
|
|
"Big 3" Segments
Combined
|
|
426
|
386
|
|
10%
|
11%
|
|
Reuters
News
|
|
25
|
19
|
|
24%
|
6%
|
|
Global
Print
|
|
54
|
72
|
|
-25%
|
-24%
|
|
Corporate
costs
|
|
(26)
|
(122)
|
|
n/a
|
n/a
|
|
Adjusted
EBITDA
|
|
$479
|
$355
|
|
35%
|
34%
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
40.9%
|
37.8%
|
|
310bp
|
280bp
|
|
Corporates
|
|
35.9%
|
30.9%
|
|
500bp
|
450bp
|
|
Tax &
Accounting Professionals
|
|
31.9%
|
32.3%
|
|
-40bp
|
-80bp
|
|
"Big 3" Segments
Combined
|
|
38.1%
|
34.9%
|
|
320bp
|
270bp
|
|
Reuters
News
|
|
15.6%
|
12.5%
|
|
310bp
|
70bp
|
|
Global
Print
|
|
40.5%
|
44.1%
|
|
-360bp
|
-390bp
|
|
Corporate
costs
|
|
n/a
|
n/a
|
|
n/a
|
n/a
|
|
Adjusted EBITDA
margin
|
|
34.1%
|
25.0%
|
|
910bp
|
840bp
|
|
n/a: not
applicable
(1) For
comparative purposes, 2019 segment results have been adjusted to
reflect the current period presentation. For additional
information, see the "Adjustments to Prior-Period Segment Results"
section of this news release.
(2) Computed for
revenue growth only.
|
Unless otherwise noted, all revenue growth comparisons by
customer segment in this news release are at constant
currency (or exclude the impact of foreign currency) as
Thomson Reuters believes this provides the best basis to measure
their performance.
Legal Professionals
Revenues increased 3% (1% organic) to $620 million.
- Recurring revenues grew 5% (94% of total), driven by organic
revenue growth of 3% and contributions from HighQ and Pondera,
which were acquired in July 2019 and
March 2020, respectively.
- Transactions revenues declined 17% (6% of total) due to a delay
in Elite installations, a slowing of transactional sales and the
cancellation of some in-person events. Transactions revenues
declined 19% organically.
Adjusted EBITDA increased 11% to $254 million.
- The margin increased to 40.9% from 37.8%, primarily due to
higher revenues and lower expenses from the company's
COVID-19-related cost mitigation efforts.
Corporates
Revenues increased 6% (5% organic) to $329 million, primarily due to strong recurring
revenue growth. Growth of 6% also reflected contributions from the
July 2019 acquisitions of
Confirmation and HighQ, which more than offset a loss of revenues
following the sale of the Pangea3/Legal Managed Services business
in May 2019.
- Recurring revenues grew 7% (86% of total), all organic.
- Transactions revenues declined 2% (14% of total).
Adjusted EBITDA increased 21% to $118 million.
- The margin increased to 35.9% from 30.9%, primarily due to
higher revenues and lower expenses from the company's
COVID-19-related cost mitigation efforts.
Tax & Accounting Professionals
Revenues of $168
million decreased 4%, as expected (organic revenues were
unchanged). The decrease was due to a 3% negative impact related to
the delay in transactional Pay-Per-Return tax filings resulting
from the extended U.S. federal tax filing deadline to July 15, 2020 and a loss of revenues following
the sale of the Aumentum government business in November 2019. If $6
million of Pay-Per-Return tax filings had not been delayed
to the third quarter, Tax & Accounting Professionals' organic
revenues would have increased 3%. The $6
million in delayed revenues was recorded in July and will be
reflected in the segment's third-quarter results.
- Recurring revenues declined 3% (81% of total), driven by the
loss of revenues from the sale of the Aumentum government business.
Organic recurring revenues grew 4%.
- Transactions revenues declined 6% (19% of total), driven by an
organic revenue decline of 14%, primarily due to the delayed
Pay-Per-Return tax filings.
Adjusted EBITDA declined 9% to $54 million.
- The margin decreased from 32.3% to 31.9%, primarily due to the
decline in revenues.
- The Tax & Accounting Professionals segment is the company's
most seasonal business with nearly 60% of full-year revenues
typically generated in the first and fourth quarters. Because of
this, the margin performance in this segment historically has been
generally higher in the first and fourth quarters as costs are
typically incurred in a more linear fashion throughout the
year.
Reuters News
Revenues of $155
million were relatively flat and organic
revenues decreased 11% primarily due to the COVID-19-related
cancellation of in-person events in the Reuters Events business
(formerly FC Business Intelligence), which was acquired in
October 2019.
- All of Reuters Events in-person conferences have been postponed
through the third quarter.
- In the third quarter of 2020, the company expects Reuters News
total revenues to decline between 2% and 4%. Full-year 2020
revenues are expected to decline between 4% and 6%.
Adjusted EBITDA was $25
million, up $6 million from
the prior-year period mainly due to a benefit from one-time items
and currency.
Global Print
Revenues decreased 17% to $134
million, as expected, due to the continuing delay in
shipments of content.
In the third quarter of 2020, the company expects Global Print's
revenues to decline between 7% and 15%, primarily due to the
continuing delay in shipping some print materials as many customers
continue to work from home and are not at their offices to accept
shipments throughout the phased re-openings of the U.S. and various
other countries. As these print materials have historically been
viewed as critical content by law firms and government agencies,
the company currently expects most of these shipments will
eventually take place by the end of 2020. Full-year revenues for
Global Print are expected to decline between 7%-11%.
Adjusted EBITDA decreased 25% to $54
million.
- The margin decreased from 44.1% to 40.5% due to the decline in
revenues.
Corporate Costs
Corporate costs at the adjusted EBITDA level were
$26 million compared to $122 million in the prior-year period. The
decline primarily reflected the completion of the company's program
in 2019 to reposition Thomson Reuters following the separation of
F&R, which required significant costs and investments. In
addition, the first half of 2020 benefited from some favorable
timing items that are not expected to continue.
Consolidated Financial Highlights – Six Months Ended
June 30
Six Months Ended
June 30,
(Millions of U.S.
dollars, except for adjusted EBITDA margin and EPS)
(unaudited)
|
IFRS Financial
Measures(1)
|
2020
|
2019(2)
|
Change
|
Change at
Constant
Currency
|
Revenues
|
$2,925
|
$2,910
|
1%
|
|
Operating
profit
|
$655
|
$721
|
-9%
|
|
Diluted
EPS
|
$0.64
|
$0.56
|
14%
|
|
Cash flow from
operations
|
$598
|
$83
|
635%
|
|
Non-IFRS Financial
Measures(1)
|
|
|
|
|
Revenues
|
$2,925
|
$2,910
|
1%
|
2%
|
Adjusted
EBITDA
|
$959
|
$752
|
27%
|
27%
|
Adjusted EBITDA
margin
|
32.8%
|
25.8%
|
700bp
|
650bp
|
Adjusted
EPS
|
$0.92
|
$0.65
|
42%
|
40%
|
Free cash
flow
|
$340
|
$(176)
|
n/m
|
|
n/m: not
meaningful
(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.
(2) 2019
results have been revised to correct for certain immaterial
misstatements. For additional information, see the "Revision of
Prior-Period Financial Statements" section of this news
release.
|
Revenues increased 1% as growth in recurring revenues
more than offset a decline in Global Print revenues, as well as a
negative impact from foreign currency that reduced revenues by
$35 million (approximately 1%).
- Organic revenue growth was flat as 4% growth in recurring
revenues, which comprised 79% of total revenues, was offset by
declines in transactions and Global Print revenues.
- The company's "Big 3" segments reported organic revenue growth
of 3%, driven by 4% growth in recurring revenues, and collectively
comprised approximately 80% of revenues in the first half of the
year.
Operating profit declined as the prior-year period
included a significantly higher benefit from the revaluation of
warrants that the company holds in Refinitiv.
- Adjusted EBITDA, which excludes the impact of the
warrant revaluation among other items, increased 27%, primarily due
to lower costs reflecting the completion of the F&R separation
program, which required significant costs and investments in the
prior-year period and lower expenses from the company's
COVID-19-related cost mitigation efforts. The related margin
increased to 32.8% from 25.8% in the prior-year period.
Diluted EPS increased to $0.64 per share compared to $0.56 per share in the prior-year period as lower
losses from the company's 45% equity interest in Refinitiv and
currency benefits from the revaluation of certain intercompany
financing arrangements more than offset higher income taxes and
lower operating profit due to the impact of the warrant
revaluation.
- Adjusted EPS, which excludes the company's equity
interest in Refinitiv, the currency revaluation benefits, the
warrant revaluation and other adjustments, increased to
$0.92 from $0.65 in the prior-year period, primarily due to
higher adjusted EBITDA.
Cash flow from operations increased primarily because the
prior-year period included a $167
million pension contribution as well as significantly higher
costs and investments to reposition Thomson Reuters following the
separation from F&R. Cash flow also benefited from savings
related to the company's COVID-19-related cost mitigation efforts
in the current period.
- Free cash flow increased for the same reasons.
Highlights by Customer Segment – Six Months Ended
June 30
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited)
|
|
|
Six Months
Ended
June 30,
|
|
Change
|
|
|
2020
|
2019(1)
|
|
Total
|
Constant
Currency
|
Organic(2)
|
Revenues
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$1,246
|
$1,205
|
|
3%
|
4%
|
3%
|
Corporates
|
|
696
|
661
|
|
5%
|
6%
|
5%
|
Tax &
Accounting Professionals
|
|
386
|
404
|
|
-4%
|
-1%
|
0%
|
"Big 3" Segments
Combined
|
|
2,328
|
2,270
|
|
3%
|
4%
|
3%
|
Reuters
News
|
|
310
|
311
|
|
0%
|
0%
|
-8%
|
Global
Print
|
|
289
|
329
|
|
-12%
|
-11%
|
-11%
|
Eliminations/Rounding
|
|
(2)
|
-
|
|
|
|
|
Revenues
|
|
$2,925
|
$2,910
|
|
1%
|
2%
|
0%
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$484
|
$458
|
|
6%
|
6%
|
|
Corporates
|
|
235
|
209
|
|
13%
|
13%
|
|
Tax &
Accounting Professionals
|
|
138
|
151
|
|
-8%
|
-6%
|
|
"Big 3" Segments
Combined
|
|
857
|
818
|
|
5%
|
5%
|
|
Reuters
News
|
|
44
|
42
|
|
3%
|
-12%
|
|
Global
Print
|
|
117
|
146
|
|
-20%
|
-19%
|
|
Corporate
costs
|
|
(59)
|
(254)
|
|
n/a
|
n/a
|
|
Adjusted
EBITDA
|
|
$959
|
$752
|
|
27%
|
27%
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
38.8%
|
38.0%
|
|
80bp
|
70bp
|
|
Corporates
|
|
33.8%
|
31.5%
|
|
230bp
|
180bp
|
|
Tax &
Accounting Professionals
|
|
35.7%
|
37.3%
|
|
-160bp
|
-190bp
|
|
"Big 3" Segments
Combined
|
|
36.8%
|
36.0%
|
|
80bp
|
60bp
|
|
Reuters
News
|
|
14.1%
|
13.6%
|
|
50bp
|
-170bp
|
|
Global
Print
|
|
40.5%
|
44.4%
|
|
-390bp
|
-420bp
|
|
Corporate
costs
|
|
n/a
|
n/a
|
|
n/a
|
n/a
|
|
Adjusted EBITDA
margin
|
|
32.8%
|
25.8%
|
|
700bp
|
650bp
|
|
|
n/a: not
applicable
(1) For
comparative purposes, 2019 segment results have been adjusted to
reflect the current period presentation. For additional
information, see the "Adjustments to Prior-Period Segment Results"
section of this news release.
(2) Computed for
revenue growth only.
|
Business Outlook for 2020
Thomson Reuters today increased its full-year 2020 outlook for
free cash flow and reaffirmed all other metrics for full-year 2020
that it previously communicated on May
5, 2020. While the company's second-quarter
performance provides it with increasing confidence about its
full-year outlook, it is still too early to predict with certainty
how and when world markets may recover. The company has also
provided an outlook for the third quarter of 2020.
The company's outlook for 2020 continues to assume constant
currency rates and excludes the impact of any future acquisitions
or dispositions that may occur in 2020. Thomson Reuters believes
that this type of guidance provides useful insight into the
performance of its businesses.
Third-Quarter 2020 Outlook (New)
Total company revenues and total organic revenues for the third
quarter of 2020 are expected to grow between 1.0% and 2.0%. The
company's revenues continue to be negatively affected by Reuters
News and delays in shipping of certain Global Print materials.
The company's "Big 3" segments (Legal Professionals, Corporates
and Tax & Accounting Professionals) collectively are expected
to achieve revenue growth and organic growth between 3.0% and 4.0%
in the third quarter of 2020.
Full-Year 2020 Outlook – Reaffirms Outlook previously
provided on May 5, 2020
(1)
|
Total Thomson
Reuters
2020
Outlook
|
Big
3
2020
Outlook
|
|
Before currency
and excluding the impact of future
acquisitions/dispositions
|
Total Revenue
Growth
|
1.0% -
2.0%
|
3.0% -
4.0%
|
Organic Revenue
Growth
|
0% - 1.0%
|
3.0% -
4.0%
|
Adjusted EBITDA
Margin
|
31.0% –
32.0%
|
36.0% –
37.0%
|
Corporate
Costs
|
$140 - $150
million
|
|
Free Cash
Flow
|
$1.0 - $1.1
billion
|
|
Capital Expenditures
- % of Revenue
|
7.5% -
8.0%
|
|
Depreciation &
Amortization of Computer Software
|
$625 - $650
million
|
|
Interest Expense
(P&L)
|
$190 - $215
million
|
|
Effective Tax Rate on
Adjusted Earnings
|
Approx. 17% -
19%
|
|
(1)
|
The company increased
its free cash flow outlook from ~$1.0 billion to $1.0-$1.1 billion
as part of this news release.
|
The information in this section is
forward-looking. Actual results, which include the
impact of currency and acquisitions and dispositions completed
during 2020, may differ materially from the company's
outlook. Some of
the forward-looking financial measures in the
outlook above are provided on a non-IFRS basis. See the section
below entitled "Non-IFRS Financial Measures" for more information.
The information in this section should also be read in conjunction
with the section below entitled "Special Note Regarding
Forward-Looking Statements, Material Risks and Material
Assumptions."
COVID-19 Update
Thomson Reuters has not experienced any significant disruptions
to its business and continues to be fully operational. Most
employees continue to work remotely from their homes, enabled by
technology that allows them to collaborate with customers and each
other. Essential employees who cannot work from home, such as
Reuters News journalists and those working in the company's Global
Print facilities, follow various health and safety standards. While
the company cancelled or postponed nearly all in-person
conferences, primarily in its Reuters Events business, some of
these events were replaced with virtual meetings. The company
continues to act based on guidance from global health
organizations, relevant governments and evolving best
practices.
The company has approximately 500,000 customers that are largely
comprised of legal and tax professionals in corporations and
professional service firms, many of whom are also working remotely.
The company's products enable its customers to remain productive
while they work remotely because they can access most Thomson
Reuters products and services through the Internet.
The company continues to believe it is well positioned to
weather the economic crisis because its business is supported by a
solid financial foundation with access to liquidity resources that
it believes are adequate to support it through a gradual
recovery. Thomson Reuters principal sources of liquidity
continue to be cash on hand, cash provided by its operations, its
$1.8 billion syndicated credit
facility and its $1.8 billion
commercial paper program. From time to time, the company also
issues debt securities under a prospectus. As set forth in its
full-year 2020 outlook, the company expects to generate between
$1.0 billion and $1.1 billion of free cash flow this year. As of
June 30, 2020, Thomson Reuters had
$946 million of cash on hand and
$120 million of current
indebtedness. None of the company's outstanding debt
securities are scheduled to mature until 2023.
Dividends and Share Repurchases
The company does not anticipate any changes to its plans to pay
the annualized dividend. In February
2020, the company announced that its Board of Directors
approved a $0.08 per share annualized
increase in the dividend to $1.52 per
common share (representing the 27th consecutive year of
dividend increases). A quarterly dividend of $0.38 per share is payable on September 15, 2020 to common shareholders of
record as of August 20, 2020.
In the first quarter of 2020, the company completed the
repurchase of $200 million of its
shares. The company did not repurchase any of its shares in the
second quarter of 2020 and does not anticipate repurchasing more of
its shares for the remainder of the year.
Refinitiv Ownership Interest and Proposed Sale to
LSEG
On October 1, 2018, the company
sold a 55% interest in its F&R business to private equity funds
affiliated with Blackstone. Thomson Reuters retained a 45% interest
in the business, which is now known as Refinitiv. Thomson Reuters
includes its share of post-tax losses from its 45% interest in
Refinitiv, an equity method investment, in its net earnings,
however, it removes these amounts from its non-IFRS
calculation of adjusted EPS. Refinitiv achieved run-rate savings of
$567 million as of June 30, 2020. Refinitiv believes it is on track
to achieve its full annual cost savings run-rate target of
$650 million by the end of 2020.
Additional information regarding Refinitiv's financial results is
provided in the appendix to this news release.
On August 1, 2019, Thomson Reuters
and private equity funds affiliated with Blackstone agreed to sell
Refinitiv to LSEG in an all share transaction for a total
enterprise value of approximately $27
billion (as of the announcement date). The proposed
transaction is subject to regulatory clearances and other customary
closing conditions and is expected to close by the end of 2020 or
early in 2021. Upon the closing of this transaction, Thomson
Reuters is projected to indirectly own approximately 82.5 million
LSEG shares, which would have a market value of approximately
$9.1 billion based on LSEG's closing
share price on August 4, 2020.
Thomson Reuters
Thomson Reuters is a leading provider of business information
services. Our products include highly specialized
information-enabled software and tools for legal, tax, accounting
and compliance professionals combined with the world's most global
news service – Reuters. For more information on Thomson Reuters,
visit tr.com and for the latest world news,
reuters.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 (other
than at the customer segment level), net debt to adjusted EBITDA
leverage ratio, free cash flow, adjusted EPS, selected measures
excluding the impact of foreign currency, and changes in revenues
computed on an organic basis. 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's outlook contains various non-IFRS financial
measures. The company believes that providing reconciliations of
forward-looking non-IFRS financial measures in its outlook would be
potentially misleading and not practical due to the difficulty of
projecting items that are not reflective of ongoing operations in
any future period. The magnitude of these items may be significant.
Consequently, 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
2020 impact of changes in foreign exchange rates which impact (i)
the translation of its results reported at average foreign currency
rates for the year, and (ii) other finance income or expense
related to intercompany financing arrangements. Additionally, the
company cannot reasonably predict the occurrence or amount of other
operating gains and losses, which include fair value adjustments
relating to the warrants the company holds in Refinitiv as well as
gains or losses that generally arise from business transactions
that the company does not currently anticipate.
ROUNDING
Other than EPS, the company reports its results in millions
of U.S. dollars, but computes percentage changes and margins using
whole dollars to be more precise. As a result, percentages and
margins calculated from reported amounts may differ from those
presented, and growth components may not total due to
rounding.
ADJUSTMENTS TO PRIOR-PERIOD SEGMENT RESULTS
The company adjusted its prior-period segment amounts to
reflect the current presentation. In the first quarter of 2020, in
connection with the completion of its program to reposition its
businesses after the separation from Refinitiv, the company
re-assessed its methodology for allocating costs to its business
segments and adjusted its allocations. The 2019 segment amounts
were also adjusted to reflect the transfer of certain revenues
primarily from the Corporates segment to the Legal Professionals
segment, where they are better aligned. These changes impacted the
2019 financial results of the segments, but did not change the
consolidated 2019 financial results. The table below summarizes the
segment amounts that changed:
|
Three Months
Ended June 30, 2019
|
|
Six Months
Ended June 30, 2019
|
(millions of U.S.
dollars)
|
As
Reported
|
Adjustments
|
As
Revised
|
|
As
Reported
|
Adjustments
|
As
Revised
|
|
Revenues
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
$603
|
$2
|
$605
|
|
$1,197
|
$8
|
$1,205
|
|
Corporates
|
318
|
(3)
|
315
|
|
670
|
(9)
|
661
|
|
Eliminations/Rounding
|
-
|
1
|
1
|
|
(1)
|
1
|
-
|
|
Total
revenues
|
$1,423
|
-
|
$1,423
|
|
$2,910
|
-
|
$2,910
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
$232
|
$(3)
|
$229
|
|
$459
|
$(1)
|
$458
|
|
Corporates
|
102
|
(4)
|
98
|
|
220
|
(11)
|
209
|
|
Tax & Accounting
Professionals
|
60
|
(1)
|
59
|
|
153
|
(2)
|
151
|
|
Reuters
News
|
10
|
9
|
19
|
|
26
|
16
|
42
|
|
Global
Print
|
73
|
(1)
|
72
|
|
147
|
(1)
|
146
|
|
Corporate
costs/Rounding
|
(122)
|
-
|
(122)
|
|
(253)
|
(1)
|
(254)
|
|
Total adjusted
EBITDA
|
$355
|
-
|
$355
|
|
$752
|
-
|
$752
|
|
REVISION OF PRIOR-PERIOD FINANCIAL STATEMENTS
Since October 1, 2018, the
company has included its share of post-tax losses from its 45%
interest in Refinitiv, an equity method investment, in its net
earnings. As initially disclosed by the company on October 31, 2019, a misstatement was identified
in the third quarter of 2019 that understated the company's share
of Refinitiv's post-tax losses since the fourth quarter of
2018. The misstatement related to an accounting principle
difference for preferred stock issued by Refinitiv to the
Blackstone consortium between U.S. GAAP, the basis on which
Refinitiv prepares its financial statements, and IFRS, the basis on
which Thomson Reuters prepares its financial statements. The
misstatement, which does not impact revenue, operating
profit, segment measures, adjusted EBITDA, adjusted EPS, cash
flow from operations or free cash flow, was immaterial to the
company's previously issued financial statements. As the
correction of the cumulative misstatement in the third quarter of
2019 would have been material to net earnings in the quarter, the
company revised its previously issued financial statements. In
conjunction with correcting this misstatement, the company
corrected other unrelated misstatements in the applicable prior
periods which were also not material to the company's previously
issued financial statements.
The company revised its previously issued financial
statements for the nine months ended September 30, 2018, the year ended December 31, 2018, the three months ended
March 31, 2019 and the six months
ended June 30, 2019.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL
RISKS AND MATERIAL ASSUMPTIONS
Certain statements in this news release, including, but not
limited to, statements in the "Business Outlook for 2020" section,
statements regarding the potential or expected impact of the
COVID-19 pandemic on Thomson Reuters, its customers and the general
economy, Mr. Hasker's comments, the company's expectations
regarding Reuters News, Global Print, dividends, share repurchases
and its liquidity and capital resources, the number of LSEG shares
that Thomson Reuters is projected to indirectly own upon closing of
the proposed sale of Refinitiv, the company's current expectations
regarding the timing for closing of the proposed LSEG/Refinitiv
transaction, and Refinitiv's belief regarding achieving its full
annual cost savings run-rate target by the end of 2020, are
forward-looking. The words "will", "expect", "believe", "target",
"estimate", "could", "should", "intend", "predict", "project" and
similar expressions identify forward-looking statements. While the
company believes that it has a reasonable basis for making
forward-looking statements in this news release, they are not a
guarantee of future performance or outcomes and there is no
assurance that the proposed LSEG/Refinitiv transaction will be
completed or that any of the other events described in any
forward-looking statement will materialize. Forward-looking
statements, including those related to the COVID-19 pandemic, are
subject to a number of risks, uncertainties and assumptions that
could cause actual results or events to differ materially from
current expectations. Many of these risks, uncertainties and
assumptions are beyond the company's control and the effects of
them can be difficult to predict. In particular, the full
extent of the impact of the COVID-19 pandemic on the company's
business, operations and financial results will depend on numerous
evolving factors that it may not be able to accurately
predict.
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, the ongoing impact of the COVID-19 pandemic
on the company's business and risks that the pandemic could have a
longer duration or a more significant impact on Thomson Reuters
than the company currently expects; changes in the general economy
(including the impact of the pandemic on the U.S. and global
economies); actions of competitors; fraudulent or unpermitted data
access or other cyber-security or privacy breaches; failures or
disruptions of data centers, network systems, telecommunications,
or the Internet; 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; changes to
law and regulations; 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 derive fully the anticipated benefits from existing or
future acquisitions, joint ventures, investments or dispositions;
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; inadequate protection of
intellectual property rights; tax matters, including changes to tax
laws, regulations and treaties; fluctuations in foreign currency
exchange and interest rates; failure to protect the brands and
reputation of Thomson Reuters; threat of legal actions and claims;
downgrading of credit ratings and adverse conditions in the credit
markets; failure to efficiently complete the separation of
Refinitiv from Thomson Reuters; failure to complete the proposed
LSEG/Refinitiv transaction; the effect of factors outside of the
control of Thomson Reuters on funding obligations in respect of
pension and post-retirement benefit arrangements; risk of
antitrust/competition-related claims or investigations; actions or
potential actions that could be taken by the company's principal
shareholder, The Woodbridge Company Limited; impairment of goodwill
and other identifiable intangible assets; and the ability of
Thomson Reuters Founders Share Company to affect the company's
governance and management. Many of the foregoing
risks are, and could be, exacerbated by
the COVID-19 pandemic and any worsening of the global
business and economic environment as a result. These
and other risk 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.
The company's 2020 business outlook is based on information
currently available to the company and is based on various external
and internal assumptions made by the company in light of its
experience and perception of historical trends, current conditions
and expected future developments (including those related to the
COVID-19 pandemic), as well as other factors that the company
believes are appropriate under the circumstances. Material
assumptions and material risks may cause actual performance to
differ from the company's expectations underlying its 2020 business
outlook, which reflects the global economic crisis caused by the
COVID-19 pandemic. Material assumptions related to the
company's revenue outlook are that there will be
diminished economic activity through the second quarter followed
by a gradual recovery through the second half of 2020; the
financial and operational health of the company's customer base
in both the U.S. and global economies will gradually
improve, which the company believes will coincide with the easing
of lockdowns and other restrictions; the company will incur
limited cancellations of subscription contracts during the economic
crisis, as its products and services will remain critical for legal
and tax professionals; during the extended work from home period,
Thomson Reuters' customers will continue to access the company's
products remotely and will value high quality information and tools
that drive productivity and efficiency; the company will maintain
its ability to acquire some new customers during the economic
crisis, as it enhances its digital platforms and propositions or
through other sales initiatives; Reuters News will experience a
significant reduction in demand in its Reuters Events business due
to the cancellation of in-person events, as well as lower demand in
its consumer and news agency business; Thomson Reuters' workforce
will continue to be effective in a remote working environment for
an extended period, including the ability to implement new products
and service and support existing products for the company's
customers; the company's Global Print facility will continue to
remain open and its Reuters News journalists will continue to be
able to report on global events; customer requested shipment delays
of print materials will be temporary and that shipments delayed in
the second quarter will resume in the third and fourth quarters
of 2020; a limited number of Thomson Reuters' smaller
customers will be unable to pay the company or will seek financial
accommodations or alternative payment terms due to their financial
condition; and customers will continue to seek
software-as-a-service or other cloud-based offerings. Material
assumptions related to the company's adjusted EBITDA margin outlook
are its ability to achieve revenue growth targets; the company's
business mix continues to shift to higher-growth product offerings;
continued investment in growth markets, customer service, product
development and digital capabilities; and the company will be able
to mitigate a significant portion of the impact of lost revenues on
adjusted EBITDA margin through its cost savings programs, including
reduced spending on consulting and advisory services, travel and
entertainment, certain development initiatives and other
discretionary spend. Material assumptions related to the company's
free cash flow outlook are its ability to achieve its revenue and
adjusted EBITDA margin targets; capital expenditures are expected
to be approximately between 7.5% to 8.0% of revenues in 2020; a
limited number of Thomson Reuters' smaller customers will be unable
to pay the company or will seek financial accommodations or
alternative payment terms due to their financial condition; and
deferrals of payments from customers will be limited, and the
company's access to credit facilities will be sufficient to bridge
any gap. Material assumptions related to the company's
effective tax rate on adjusted earnings outlook are its ability to
achieve its adjusted EBITDA target; the mix of taxing jurisdictions
where the company recognized pre-tax profit or losses in 2019 does
not significantly change; no unexpected changes in tax laws or
treaties within the jurisdictions where the company operates; the
completion of the proposed sale of Refinitiv to LSEG or the sale of
another significant, but non-strategic, equity investment at a
significant gain by the end of 2020; depreciation and amortization
of computer software between $625
million and $650 million; and
interest expense between $190 million
and $215 million.
Material risks related to the company's revenue outlook are
that business disruptions associated with the COVID-19
pandemic, including government enforced quarantines and
stay-at-home orders, may continue longer than the company expects
or may be interrupted by secondary outbreaks of the virus, delaying
the anticipated recovery of the global economy; global economic
uncertainty due to the COVID-19 pandemic as well as related
regulatory reform and changes in the political environment may lead
to limited business opportunities for the company's customers,
creating significant cost pressures for them and potentially
constraining the number of professionals employed, which could lead
to lower demand for Thomson Reuters' products and services;
competitive pricing actions and product innovation could impact the
company's revenues; the company's sales, commercial simplification
and product initiatives may be insufficient to retain customers or
generate new sales; factors that the company cannot anticipate may
reduce the effectiveness of its employees working remotely,
including the inability to execute on key product or customer
support initiatives or to perform implementation services remotely;
factors that the company cannot anticipate may require it to
suspend or cease operations at its Global Print facility or may
limit the ability of Reuters News journalists to report on certain
global events; and a decline in Global Print revenues may be larger
than the company anticipates if customers do not resume shipments
because they are not able to return to their business locations or
for other reasons. Material risks related to the
company's adjusted EBITDA margin outlook are the same as the risks
above related to the revenue outlook; the costs of required
investments exceed expectations or actual returns are below
expectations; acquisition and disposal activity may dilute the
company's adjusted EBITDA margin; and the company's cost savings
programs may be insufficient to offset lost revenues. Material
risks related to the company's free cash flow outlook are the same
as the risks above related to the revenue and adjusted EBITDA
margin outlook; 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 the company's
expectations; a significant deterioration in the macroeconomic
environment could negatively impact the ability of Thomson Reuters'
customers to pay the company leading to reduced free cash flow and
the tightening of credit markets could limit the company's ability
to bridge gaps in payments leading to unexpected operational
impacts on its business. Material risks related
to the company's effective tax rate on adjusted earnings outlook
are the same as the risks above related to adjusted EBITDA; a
material change in the geographical mix of the company's pre-tax
profits and losses; a material change in current tax laws or
treaties to which the company is subject, and
did not expect; the tax rates and calculations that apply to the
company's taxable income could be impacted if the transactions
described in the material assumptions for the effective tax rate on
adjusted earnings outlook do not occur; and depreciation and
amortization of computer software as well as interest expense may
be significantly higher or lower than expected.
The company has provided an updated Outlook for the purpose
of presenting information about current expectations for 2020. 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, including those related to the COVID-19
pandemic.
CONTACTS
|
|
|
|
MEDIA
David
Crundwell
Head of Corporate
Affairs
+44 7909 898
605
david.crundwell@tr.com
|
INVESTORS
Frank J.
Golden
Head of Investor
Relations
+1 646 223
5288
frank.golden@tr.com
|
Thomson Reuters will webcast a discussion of its
second-quarter 2020 results and business outlook for 2020 today
beginning at 8:30 a.m. Eastern Daylight
Time (EDT). You can access the webcast by visiting
ir.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
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2020
|
2019
|
|
2020
|
2019
|
CONTINUING
OPERATIONS
|
|
|
|
|
|
Revenues
|
$1,405
|
$1,423
|
|
$2,925
|
$2,910
|
Operating
expenses
|
(929)
|
(1,070)
|
|
(1,946)
|
(2,161)
|
Depreciation
|
(43)
|
(38)
|
|
(83)
|
(72)
|
Amortization of
computer software
|
(118)
|
(104)
|
|
(229)
|
(209)
|
Amortization of other
identifiable intangible assets
|
(30)
|
(25)
|
|
(60)
|
(52)
|
Other operating
gains, net
|
80
|
261
|
|
48
|
305
|
Operating
profit
|
365
|
447
|
|
655
|
721
|
Finance costs,
net:
|
|
|
|
|
|
Net interest
expense
|
(52)
|
(37)
|
|
(97)
|
(72)
|
Other finance (costs)
income
|
(13)
|
(18)
|
|
34
|
(29)
|
Income before tax and
equity method investments
|
300
|
392
|
|
592
|
620
|
Share of post-tax
losses in equity method investments
|
(153)
|
(138)
|
|
(207)
|
(251)
|
Tax
expense
|
(16)
|
(47)
|
|
(63)
|
(48)
|
Earnings from
continuing operations
|
131
|
207
|
|
322
|
321
|
Loss from
discontinued operations, net of tax
|
(5)
|
(27)
|
|
(3)
|
(37)
|
Net
earnings
|
$126
|
$180
|
|
$319
|
$284
|
Earnings attributable
to common shareholders
|
$126
|
$180
|
|
$319
|
$284
|
|
|
|
|
|
|
Earnings (loss)
per share:
|
|
|
|
|
|
Basic and diluted
earnings per share:
|
|
|
|
|
|
From
continuing operations
|
$0.26
|
$0.41
|
|
$0.65
|
$0.64
|
From
discontinued operations
|
(0.01)
|
(0.05)
|
|
(0.01)
|
(0.08)
|
Basic and diluted
earnings per share
|
$0.25
|
$0.36
|
|
$0.64
|
$0.56
|
|
|
|
|
|
|
Basic
weighted-average common shares
|
496,317,115
|
501,231,212
|
|
496,261,070
|
501,558,134
|
Diluted
weighted-average common shares
|
497,580,339
|
503,040,736
|
|
497,579,131
|
503,152,488
|
Thomson Reuters
Corporation
Consolidated
Statement of Financial Position
(millions of U.S.
dollars)
(unaudited)
|
|
|
June 30,
|
|
December
31,
|
2020
|
|
2019
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$946
|
|
$825
|
Trade and other
receivables
|
1,093
|
|
1,167
|
Other financial
assets
|
492
|
|
533
|
Prepaid expenses and
other current assets
|
509
|
|
546
|
Current
assets
|
3,040
|
|
3,071
|
|
|
|
|
Property and
equipment, net
|
584
|
|
615
|
Computer software,
net
|
893
|
|
900
|
Other identifiable
intangible assets, net
|
3,445
|
|
3,518
|
Goodwill
|
5,821
|
|
5,853
|
Equity method
investments
|
1,291
|
|
1,551
|
Other non-current
assets
|
686
|
|
611
|
Deferred
tax
|
1,143
|
|
1,176
|
Total
assets
|
$16,903
|
|
$17,295
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Liabilities
|
|
|
|
Current
indebtedness
|
$120
|
|
$579
|
Payables, accruals
and provisions
|
1,145
|
|
1,373
|
Deferred
revenue
|
762
|
|
833
|
Other financial
liabilities
|
132
|
|
434
|
Current
liabilities
|
2,159
|
|
3,219
|
|
|
|
|
Long-term
indebtedness
|
3,699
|
|
2,676
|
Provisions and other
non-current liabilities
|
1,245
|
|
1,264
|
Deferred
tax
|
491
|
|
576
|
Total
liabilities
|
7,594
|
|
7,735
|
|
|
|
|
Equity
|
|
|
|
Capital
|
5,413
|
|
5,377
|
Retained
earnings
|
4,924
|
|
4,965
|
Accumulated other
comprehensive loss
|
(1,028)
|
|
(782)
|
Total
equity
|
9,309
|
|
9,560
|
Total liabilities
and equity
|
$16,903
|
|
$17,295
|
Thomson Reuters
Corporation
Consolidated
Statement of Cash Flow
(millions of U.S.
dollars)
(unaudited)
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2020
|
2019
|
|
2020
|
2019
|
Cash provided by
(used in):
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
Earnings from
continuing operations
|
$131
|
$207
|
|
$322
|
$321
|
Adjustments
for:
|
|
|
|
|
|
Depreciation
|
43
|
38
|
|
83
|
72
|
Amortization of
computer software
|
118
|
104
|
|
229
|
209
|
Amortization of other
identifiable intangible assets
|
30
|
25
|
|
60
|
52
|
Net (gains) losses on
disposals of businesses and investments
|
(2)
|
3
|
|
1
|
(21)
|
Deferred
tax
|
(34)
|
(12)
|
|
(37)
|
(80)
|
Other
|
138
|
(67)
|
|
200
|
77
|
Pension
contribution
|
-
|
-
|
|
-
|
(167)
|
Changes in working
capital and other items
|
(7)
|
(120)
|
|
(250)
|
(258)
|
Operating cash flows
from continuing operations
|
417
|
178
|
|
608
|
205
|
Operating cash flows
from discontinued operations
|
5
|
(65)
|
|
(10)
|
(122)
|
Net cash provided by
operating activities
|
422
|
113
|
|
598
|
83
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
Acquisitions, net of
cash acquired
|
2
|
(1)
|
|
(122)
|
(5)
|
Proceeds from
disposals of businesses and investments
|
4
|
23
|
|
1
|
57
|
Capital
expenditures
|
(145)
|
(102)
|
|
(287)
|
(240)
|
Proceeds from
disposals of property and equipment
|
45
|
2
|
|
64
|
2
|
Other investing
activities
|
1
|
1
|
|
2
|
4
|
Investing cash flows
from continuing operations
|
(93)
|
(77)
|
|
(342)
|
(182)
|
Investing cash flows
from discontinued operations
|
-
|
-
|
|
-
|
29
|
Net cash used in
investing activities
|
(93)
|
(77)
|
|
(342)
|
(153)
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
Proceeds from
debt
|
999
|
-
|
|
2,019
|
-
|
Repayments of
debt
|
(1,000)
|
-
|
|
(1,645)
|
-
|
Net borrowings under
short-term loan facilities
|
-
|
-
|
|
118
|
-
|
Payments of lease
principal
|
(18)
|
(12)
|
|
(36)
|
(23)
|
Repurchases of common
shares
|
-
|
-
|
|
(200)
|
(190)
|
Dividends paid on
preference shares
|
-
|
(1)
|
|
(1)
|
(2)
|
Dividends paid on
common shares
|
(182)
|
(175)
|
|
(364)
|
(349)
|
Other financing
activities
|
(4)
|
2
|
|
(16)
|
37
|
Net cash used in
financing activities
|
(205)
|
(186)
|
|
(125)
|
(527)
|
Increase (decrease)
in cash and bank overdrafts
|
124
|
(150)
|
|
131
|
(597)
|
Translation
adjustments
|
-
|
-
|
|
(10)
|
2
|
Cash and bank
overdrafts at beginning of period
|
822
|
2,258
|
|
825
|
2,703
|
Cash and bank
overdrafts at end of period
|
$946
|
$2,108
|
|
$946
|
$2,108
|
Cash and bank
overdrafts at end of period comprised of:
|
|
|
|
|
|
Cash and cash
equivalents
|
$946
|
$2,108
|
|
$946
|
$2,108
|
Thomson Reuters
Corporation
|
|
Reconciliation of
Earnings from Continuing Operations to Adjusted
EBITDA(1)
|
|
(millions of U.S.
dollars, except for margins)
|
|
(unaudited)
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
June
30,
|
|
|
June
30,
|
|
|
2020
|
2019
|
|
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$131
|
$207
|
|
|
$322
|
$321
|
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
Tax expense
|
16
|
47
|
|
|
63
|
48
|
|
Other finance costs
(income)
|
13
|
18
|
|
|
(34)
|
29
|
|
Net interest
expense
|
52
|
37
|
|
|
97
|
72
|
|
Amortization of other
identifiable intangible assets
|
30
|
25
|
|
|
60
|
52
|
|
Amortization of
computer software
|
118
|
104
|
|
|
229
|
209
|
|
Depreciation
|
43
|
38
|
|
|
83
|
72
|
|
EBITDA
|
$403
|
$476
|
|
|
$820
|
$803
|
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
Share of post-tax
losses in equity method
investments
|
153
|
138
|
|
|
207
|
251
|
|
Other operating gains,
net
|
(80)
|
(261)
|
|
|
(48)
|
(305)
|
|
Fair value
adjustments
|
3
|
2
|
|
|
(20)
|
3
|
|
Adjusted
EBITDA
|
$479
|
$355
|
|
|
$959
|
$752
|
|
Adjusted EBITDA
margin(1)
|
34.1%
|
25.0%
|
|
|
32.8%
|
25.8%
|
|
Thomson Reuters
Corporation
|
Reconciliation of
Net Earnings to Adjusted
Earnings(2)
|
Reconciliation of
Total Change in Adjusted EPS to Change in Constant
Currency(4)
|
(millions of U.S.
dollars, except for share and per share data)
|
(unaudited)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
|
2020
|
2019
|
Change
|
|
2020
|
2019
|
Change
|
Net
earnings
|
$126
|
$180
|
|
|
$319
|
$284
|
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
Fair value
adjustments
|
3
|
2
|
|
|
(20)
|
3
|
|
Amortization of other
identifiable intangible assets
|
30
|
25
|
|
|
60
|
52
|
|
Other operating gains,
net
|
(80)
|
(261)
|
|
|
(48)
|
(305)
|
|
Other finance costs
(income)
|
13
|
18
|
|
|
(34)
|
29
|
|
Share of post-tax
losses in equity method investments
|
153
|
138
|
|
|
207
|
251
|
|
Tax on above
items
|
(28)
|
30
|
|
|
(59)
|
1
|
|
Tax items impacting
comparability
|
9
|
(4)
|
|
|
39
|
(15)
|
|
Loss from discontinued
operations, net of tax
|
5
|
27
|
|
|
3
|
37
|
|
Interim period
effective tax rate normalization(3)
|
(10)
|
(8)
|
|
|
(6)
|
(8)
|
|
Dividends declared on
preference shares
|
-
|
(1)
|
|
|
(1)
|
(2)
|
|
Adjusted earnings
(2)
|
$221
|
$146
|
|
|
$460
|
$327
|
|
Adjusted EPS
(2)
|
$0.44
|
$0.29
|
52%
|
|
$0.92
|
$0.65
|
42%
|
Foreign
currency(4)
|
|
|
3%
|
|
|
|
2%
|
Constant
currency(4)
|
|
|
48%
|
|
|
|
40%
|
|
|
|
|
|
|
|
|
Diluted
weighted-average common shares (millions)
|
497.6
|
503.0
|
|
|
497.6
|
503.2
|
|
Refer to page 23 for footnotes.
Thomson Reuters
Corporation
|
Reconciliation of
Net Cash Provided by Operating Activities to Free Cash
Flow(5)
|
(millions of U.S.
dollars)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
June
30,
|
|
June
30,
|
|
2020
|
2019
|
|
2020
|
2019
|
Net cash provided
by operating activities
|
$422
|
$113
|
|
$598
|
$83
|
Capital
expenditures
|
(145)
|
(102)
|
|
(287)
|
(240)
|
Proceeds from
disposals of property and equipment
|
45
|
2
|
|
64
|
2
|
Other investing
activities
|
1
|
1
|
|
2
|
4
|
Payments of lease
principal
|
(18)
|
(12)
|
|
(36)
|
(23)
|
Dividends paid on
preference shares
|
-
|
(1)
|
|
(1)
|
(2)
|
Free cash
flow
|
$305
|
$1
|
|
$340
|
$(176)
|
Thomson Reuters
Corporation
|
Reconciliation of
Net Debt and Leverage Ratio of Net Debt to Adjusted
EBITDA(7)
|
(millions of U.S.
dollars)
|
(unaudited)
|
|
|
|
June 30,
2020
|
Current
indebtedness
|
|
$120
|
Long-term
indebtedness
|
|
3,699
|
Total
debt
|
|
3,819
|
Swaps
|
|
(17)
|
Total debt after
swaps
|
|
3,802
|
Remove fair value
adjustments for hedges
|
|
(12)
|
Total debt after
currency arrangements
|
|
3,790
|
Remove transaction
costs and discounts included in the carrying value of
debt
|
|
40
|
Add: lease
liabilities (current and non-current)
|
|
324
|
Less: cash and cash
equivalents
|
|
(946)
|
Net
debt
|
|
$3,208
|
|
|
|
Adjusted
EBITDA*
|
|
$1,700
|
|
|
|
Net Debt /
Adjusted EBITDA*
|
|
1.9x
|
* The company's target leverage ratio of 2.5:1 is a non-IFRS
measure. For purposes of this calculation, adjusted EBITDA is
computed on a rolling twelve-month basis and includes adjusted
EBITDA of $479 million, $480 million, $396
million and $345 million for
the three months ended June 30, 2020,
March 31, 2020, December 31, 2019 and September 30, 2019, respectively. Refer to the
tables appended to this news release and Appendix C of the
company's 2019 annual management's discussions and analysis, which
is contained in the company's 2019 annual report, for additional
information regarding the calculation of adjusted EBITDA in each of
these periods.
Refer to page 23 for footnotes.
Thomson Reuters
Corporation
|
|
Reconciliation of
Changes in Revenues (Total, Recurring and Transactions) to Changes
in Revenues on a Constant Currency (4) and Organic
Basis(6)
|
|
(millions of U.S.
dollars)
|
|
(unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
Change
|
|
|
|
2020
|
2019*
|
|
Total
|
Foreign
Currency
|
SUBTOTAL Constant
Currency
|
Acquisitions/
(Divestitures)
|
Organic
|
Total
Revenues
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$620
|
$605
|
|
2%
|
-1%
|
3%
|
2%
|
1%
|
Corporates
|
|
329
|
315
|
|
4%
|
-2%
|
6%
|
1%
|
5%
|
Tax &
Accounting Professionals
|
|
168
|
182
|
|
-8%
|
-4%
|
-4%
|
-3%
|
0%
|
"Big 3" Segments
Combined
|
|
1,117
|
1,102
|
|
1%
|
-2%
|
3%
|
1%
|
2%
|
Reuters
News
|
|
155
|
156
|
|
-1%
|
-1%
|
0%
|
11%
|
-11%
|
Global
Print
|
|
134
|
164
|
|
-19%
|
-1%
|
-17%
|
0%
|
-17%
|
Eliminations/Rounding
|
|
(1)
|
1
|
|
|
|
|
|
|
Revenues
|
|
$1,405
|
$1,423
|
|
-1%
|
-2%
|
0%
|
2%
|
-2%
|
|
|
|
|
|
|
|
|
|
|
Recurring
Revenues
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$580
|
$557
|
|
4%
|
-1%
|
5%
|
2%
|
3%
|
Corporates
|
|
282
|
267
|
|
6%
|
-2%
|
7%
|
1%
|
7%
|
Tax &
Accounting Professionals
|
|
136
|
147
|
|
-7%
|
-4%
|
-3%
|
-7%
|
4%
|
"Big 3" Segments
Combined
|
|
998
|
971
|
|
3%
|
-2%
|
4%
|
0%
|
4%
|
Reuters
News
|
|
141
|
144
|
|
-2%
|
0%
|
-2%
|
0%
|
-2%
|
Total Recurring
Revenues
|
|
$1,139
|
$1,115
|
|
2%
|
-1%
|
4%
|
0%
|
3%
|
|
|
|
|
|
|
|
|
|
|
Transactions
Revenues
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$40
|
$48
|
|
-18%
|
-1%
|
-17%
|
2%
|
-19%
|
Corporates
|
|
47
|
48
|
|
-4%
|
-1%
|
-2%
|
0%
|
-2%
|
Tax &
Accounting Professionals
|
|
32
|
35
|
|
-8%
|
-2%
|
-6%
|
8%
|
-14%
|
"Big 3" Segments
Combined
|
|
119
|
131
|
|
-10%
|
-1%
|
-9%
|
3%
|
-12%
|
Reuters
News
|
|
14
|
12
|
|
19%
|
-8%
|
26%
|
80%
|
-54%
|
Total Transactions
Revenues
|
|
$133
|
$143
|
|
-8%
|
-2%
|
-6%
|
14%
|
-19%
|
|
|
|
|
|
|
|
|
|
|
* For comparative purposes, 2019 segment results have been
adjusted to reflect the current period presentation. For additional
information, see the "Adjustments to Prior-Period Segment Results"
section of this news release.
Growth percentages are computed using whole dollars. As a
result, percentages calculated from reported amounts may differ
from those presented, and growth components may not total due to
rounding.
Refer to page 23 for footnotes.
Thomson Reuters
Corporation
|
|
Reconciliation of
Changes in Revenues (Total, Recurring and Transactions) to Changes
in Revenues on a Constant Currency (4) and Organic
Basis(6)
|
|
(millions of U.S.
dollars)
|
|
(unaudited)
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
Change
|
|
|
|
2020
|
2019*
|
|
Total
|
Foreign
Currency
|
SUBTOTAL
Constant
Currency
|
Acquisitions/
(Divestitures)
|
Organic
|
Total
Revenues
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$1,246
|
$1,205
|
|
3%
|
-1%
|
4%
|
1%
|
3%
|
Corporates
|
|
696
|
661
|
|
5%
|
-1%
|
6%
|
1%
|
5%
|
Tax &
Accounting Professionals
|
|
386
|
404
|
|
-4%
|
-3%
|
-1%
|
-1%
|
0%
|
"Big 3" Segments
Combined
|
|
2,328
|
2,270
|
|
3%
|
-1%
|
4%
|
1%
|
3%
|
Reuters
News
|
|
310
|
311
|
|
0%
|
-1%
|
0%
|
8%
|
-8%
|
Global
Print
|
|
289
|
329
|
|
-12%
|
-1%
|
-11%
|
0%
|
-11%
|
Eliminations/Rounding
|
|
(2)
|
-
|
|
|
|
|
|
|
Revenues
|
|
$2,925
|
$2,910
|
|
1%
|
-1%
|
2%
|
2%
|
0%
|
|
|
|
|
|
|
|
|
|
|
Recurring
Revenues
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$1,167
|
$1,113
|
|
5%
|
-1%
|
6%
|
2%
|
4%
|
Corporates
|
|
563
|
530
|
|
6%
|
-1%
|
8%
|
1%
|
7%
|
Tax &
Accounting Professionals
|
|
294
|
320
|
|
-8%
|
-3%
|
-5%
|
-6%
|
1%
|
"Big 3" Segments
Combined
|
|
2,024
|
1,963
|
|
3%
|
-1%
|
4%
|
0%
|
4%
|
Reuters
News
|
|
283
|
287
|
|
-2%
|
0%
|
-1%
|
0%
|
-1%
|
Total Recurring
Revenues
|
|
$2,307
|
$2,250
|
|
3%
|
-1%
|
4%
|
0%
|
4%
|
|
|
|
|
|
|
|
|
|
|
Transactions
Revenues
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$79
|
$92
|
|
-15%
|
-1%
|
-14%
|
-1%
|
-13%
|
Corporates
|
|
133
|
131
|
|
1%
|
-1%
|
2%
|
4%
|
-2%
|
Tax &
Accounting Professionals
|
|
92
|
84
|
|
11%
|
-2%
|
12%
|
16%
|
-4%
|
"Big 3" Segments
Combined
|
|
304
|
307
|
|
-1%
|
-1%
|
0%
|
5%
|
-5%
|
Reuters
News
|
|
27
|
24
|
|
14%
|
-1%
|
15%
|
60%
|
-45%
|
Total Transactions
Revenues
|
|
$331
|
$331
|
|
0%
|
-1%
|
1%
|
12%
|
-11%
|
|
|
|
|
|
|
|
|
|
|
* For comparative purposes, 2019 segment results have been
adjusted to reflect the current period presentation. For additional
information, see the "Adjustments to Prior-Period Segment Results"
section of this news release.
Growth percentages are computed using whole dollars. As a
result, percentages calculated from reported amounts may differ
from those presented, and growth components may not total due to
rounding.
Refer to page 23 for footnotes.
Thomson Reuters
Corporation
|
|
Reconciliation of
Changes in Adjusted EBITDA to Changes on a Constant
Currency Basis(4)
|
|
(millions of U.S.
dollars)
|
|
(unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
June
30,
|
|
Change
|
|
|
|
2020
|
2019*
|
|
Total
|
Foreign
Currency
|
Constant
Currency
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$254
|
$229
|
|
11%
|
0%
|
11%
|
Corporates
|
|
118
|
98
|
|
21%
|
0%
|
21%
|
Tax &
Accounting Professionals
|
|
54
|
59
|
|
-9%
|
-3%
|
-6%
|
"Big 3" Segments
Combined
|
|
426
|
386
|
|
10%
|
-1%
|
11%
|
Reuters
News
|
|
25
|
19
|
|
24%
|
18%
|
6%
|
Global
Print
|
|
54
|
72
|
|
-25%
|
-1%
|
-24%
|
Corporate
costs
|
|
(26)
|
(122)
|
|
n/a
|
n/a
|
n/a
|
Adjusted
EBITDA
|
|
$479
|
$355
|
|
35%
|
1%
|
34%
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
40.9%
|
37.8%
|
|
310bp
|
30bp
|
280bp
|
Corporates
|
|
35.9%
|
30.9%
|
|
500bp
|
50bp
|
450bp
|
Tax &
Accounting Professionals
|
|
31.9%
|
32.3%
|
|
-40bp
|
40bp
|
-80bp
|
"Big 3" Segments
Combined
|
|
38.1%
|
34.9%
|
|
320bp
|
50bp
|
270bp
|
Reuters
News
|
|
15.6%
|
12.5%
|
|
310bp
|
240bp
|
70bp
|
Global
Print
|
|
40.5%
|
44.1%
|
|
-360bp
|
30bp
|
-390bp
|
Corporate
costs
|
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
Adjusted EBITDA
margin
|
|
34.1%
|
25.0%
|
|
910bp
|
70bp
|
840bp
|
|
|
|
|
|
|
|
|
n/a: not applicable
* For comparative purposes, 2019 segment results have been
adjusted to reflect the current period presentation. For additional
information, see the "Adjustments to Prior-Period Segment Results"
section of this news release.
Growth percentages and margins are computed using whole
dollars. As a result, percentages and margins calculated from
reported amounts may differ from those presented, and growth
components may not total due to rounding.
Refer to page 23 for footnotes.
Thomson Reuters
Corporation
|
|
Reconciliation of
Changes in Adjusted EBITDA to Changes on a Constant
Currency Basis(4)
|
|
(millions of U.S.
dollars)
|
|
(unaudited)
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June
30,
|
|
Change
|
|
|
|
2020
|
2019*
|
|
Total
|
Foreign
Currency
|
Constant
Currency
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$484
|
$458
|
|
6%
|
-1%
|
6%
|
Corporates
|
|
235
|
209
|
|
13%
|
0%
|
13%
|
Tax &
Accounting Professionals
|
|
138
|
151
|
|
-8%
|
-2%
|
-6%
|
"Big 3" Segments
Combined
|
|
857
|
818
|
|
5%
|
-1%
|
5%
|
Reuters
News
|
|
44
|
42
|
|
3%
|
15%
|
-12%
|
Global
Print
|
|
117
|
146
|
|
-20%
|
0%
|
-19%
|
Corporate
costs
|
|
(59)
|
(254)
|
|
n/a
|
n/a
|
n/a
|
Adjusted
EBITDA
|
|
$959
|
$752
|
|
27%
|
0%
|
27%
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
38.8%
|
38.0%
|
|
80bp
|
10bp
|
70bp
|
Corporates
|
|
33.8%
|
31.5%
|
|
230bp
|
50bp
|
180bp
|
Tax &
Accounting Professionals
|
|
35.7%
|
37.3%
|
|
-160bp
|
30bp
|
-190bp
|
"Big 3" Segments
Combined
|
|
36.8%
|
36.0%
|
|
80bp
|
20bp
|
60bp
|
Reuters
News
|
|
14.1%
|
13.6%
|
|
50bp
|
220bp
|
-170bp
|
Global
Print
|
|
40.5%
|
44.4%
|
|
-390bp
|
30bp
|
-420bp
|
Corporate
costs
|
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
Adjusted EBITDA
margin
|
|
32.8%
|
25.8%
|
|
700bp
|
50bp
|
650bp
|
|
|
|
|
|
|
|
|
n/a: not applicable
* For comparative purposes, 2019 segment results have been
adjusted to reflect the current period presentation. For additional
information, see the "Adjustments to Prior-Period Segment Results"
section of this news release.
Growth percentages and margins are computed using whole
dollars. As a result, percentages and margins calculated from
reported amounts may differ from those presented, and growth
components may not total due to rounding.
Refer to page 23 for footnotes.
Footnotes
|
|
|
(1)
|
Thomson Reuters
defines adjusted EBITDA for its business segments as earnings or
losses 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 or losses in equity
method investments, other operating gains and losses, certain asset
impairment charges, fair value adjustments and corporate related
items. Consolidated adjusted EBITDA is comprised of adjusted EBITDA
for its business segments and corporate costs. 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.
|
(2)
|
Thomson Reuters
defines adjusted earnings as net earnings or loss including
dividends declared on preference shares but excluding 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 or 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 EPS is calculated from adjusted
earnings 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.
|
(3)
|
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.
|
(4)
|
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.
|
(5)
|
Free cash flow is net
cash provided by operating activities, proceeds from disposals of
property and equipment, and other investing activities less capital
expenditures, payments of lease principal, 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.
|
(6)
|
Represents changes in
revenues of our existing businesses at constant currency. The
metric excludes the distortive impacts of acquisitions and
dispositions from not owning the business in both comparable
periods. Thomson Reuters uses organic growth because it
provides further insight into the performance of its existing
businesses by excluding distortive impacts and serves as a better
measure of the company's ability to grow its business over the long
term.
|
(7)
|
Net debt is total
indebtedness (including the associated fair value of hedging
instruments, but excluding the associated unamortized transaction
costs and premiums or discounts and the interest-related fair value
component of hedging instruments), and lease liabilities less cash
and cash equivalents. For purposes of calculating the leverage
ratio, net debt is divided by adjusted EBITDA for the previous
twelve-month period ending with the current fiscal
quarter.
|
APPENDIX – INFORMATION ABOUT REFINITIV
Thomson Reuters owns a 45% interest in Refinitiv, which was
formerly its wholly owned F&R business. 55% of Refinitiv is
owned by private equity funds affiliated with Blackstone. Thomson
Reuters IFRS results include the company's 45% share of Refinitiv's
results reported in a single line item on the company's
consolidated income statement titled
"Share of post-tax losses in equity method
investments."
Thomson Reuters non-IFRS measures, including
adjusted earnings, exclude its
share of post-tax results in Refinitiv and
other equity method investments.
The table below sets forth selected financial information for
100% of Refinitiv for the three and six months ended June 30, 2020 and 2019 on both an IFRS and
non-IFRS basis. Refinitiv reports on a US GAAP basis and provides a
reconciliation to IFRS in accordance with Thomson Reuters
accounting policies. A reconciliation from these IFRS measures to
the related non-IFRS measures is also included in this
appendix.
|
Refinitiv
|
|
Financial
Data
|
|
(millions of U.S.
dollars, except for margins)
|
|
(unaudited)
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June 30,
|
|
|
|
Change
|
|
|
Change
|
|
2020
|
2019
|
Total
|
Before Currency
&
Excluding
Businesses
Disposed
|
|
2020
|
2019
|
Total
|
Before Currency
&
Excluding
Businesses
Disposed
|
IFRS
Measures
|
|
|
|
|
|
|
|
|
|
Revenues
|
$1,588
|
$1,550
|
2%
|
3%
|
|
$3,221
|
$3,117
|
3%
|
4%
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$(326)
|
$(302)
|
|
|
|
$(419)
|
$(545)
|
|
|
Cash flow from
operations
|
$403
|
$273
|
|
|
|
$349
|
$73
|
|
|
Capital expenditures,
less
proceeds
from disposals
|
$157
|
$106
|
|
|
|
$343
|
$237
|
|
|
Debt at June 30, 2020
and
June 30,
2019
|
|
|
|
|
|
$14,128
|
$13,983
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-IFRS
Measures
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$611
|
$555
|
|
|
|
$1,231
|
$1,112
|
|
|
Adjusted EBITDA
margin
|
38.5%
|
35.8%
|
|
|
|
38.2%
|
35.7%
|
|
|
Free cash
flow
|
$238
|
$89
|
|
|
|
$(7)
|
$(252)
|
|
|
The following reconciliations of IFRS measures to non-IFRS
measures are based on Refinitiv's definition of non-GAAP measures,
which is not the same as the definitions used by Thomson
Reuters.
Refinitiv
|
|
Reconciliation of
Net Loss to Adjusted EBITDA
|
|
(millions of U.S.
dollars, except for margins)
|
|
(unaudited)
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
2019
|
|
|
2020
|
2019
|
|
Net
loss
|
$(326)
|
$(302)
|
|
|
$(419)
|
$(545)
|
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
Tax expense
(benefit)
|
8
|
(38)
|
|
|
8
|
(60)
|
|
Finance
costs
|
277
|
269
|
|
|
443
|
504
|
|
Depreciation and
amortization
|
486
|
482
|
|
|
957
|
945
|
|
EBITDA
|
$445
|
$411
|
|
|
$989
|
$844
|
|
Adjustments to
remove:
|
|
|
|
|
|
|
|
Share of post-tax
earnings in equity method investments
|
(1)
|
(1)
|
|
|
(2)
|
(1)
|
|
Other operating losses
(gains)
|
45
|
-
|
|
|
(9)
|
1
|
|
Fair value
adjustments
|
15
|
16
|
|
|
21
|
38
|
|
Share-based
compensation
|
8
|
3
|
|
|
21
|
7
|
|
Transformation-related
costs
|
99
|
126
|
|
|
211
|
223
|
|
Adjusted
EBITDA
|
$611
|
$555
|
|
|
$1,231
|
$1,112
|
|
Adjusted EBITDA
margin
|
38.5%
|
35.8%
|
|
|
38.2%
|
35.7%
|
|
Refinitiv
|
|
Reconciliation of
Net Cash Provided By Operating Activities to Free Cash
Flow
|
|
(millions of U.S.
dollars)
|
|
(unaudited)
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
|
2020
|
2019
|
|
|
2020
|
2019
|
|
Net cash provided
by operating activities
|
$403
|
$273
|
|
|
$349
|
$73
|
|
Capital expenditures,
less proceeds from disposals
|
(157)
|
(106)
|
|
|
(343)
|
(237)
|
|
Other investing
activities
|
-
|
1
|
|
|
1
|
-
|
|
Dividends paid to
non-controlling interests
|
(8)
|
(79)
|
|
|
(14)
|
(88)
|
|
Free cash
flow
|
$238
|
$89
|
|
|
$(7)
|
$(252)
|
|
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