TORONTO, May 4, 2021 /PRNewswire/ -- Thomson Reuters
(TSX/NYSE: TRI) today reported results for the first quarter ended
March 31, 2021, updated its revenue
outlook for the full year and provided an outlook for the second
quarter 2021.
"Our first-quarter performance reflects a strong start to the
year, and we are encouraged by the momentum we see building. Our
customers are more confident in an improving economic environment
and those positive prevailing tailwinds were reflected in strong
sales across our businesses. Despite the improving outlook, risks
remain as the pandemic is still significantly impacting many parts
of the world. However, we are encouraged by the first quarter's
results and our increasing confidence is reflected in our new
outlook for the second quarter and the increase to the low end of
our revenue outlook for the full year," said Steve Hasker, president and CEO of Thomson
Reuters.
Consolidated Financial Highlights - Three Months Ended
March 31
Three Months Ended
March 31,
(Millions of U.S.
dollars, except for adjusted EBITDA margin and EPS)
(unaudited)
|
IFRS Financial
Measures(1)
|
2021
|
2020
|
Change
|
Change at
Constant
Currency
|
Revenues
|
$1,580
|
$1,520
|
4%
|
|
Operating
profit
|
$387
|
$290
|
34%
|
|
Diluted earnings per
share (EPS)
|
$10.13
|
$0.39
|
n/m
|
|
Cash flow from
operations
|
$380
|
$176
|
115%
|
|
Non-IFRS Financial
Measures(1)
|
|
|
|
|
Revenues
|
$1,580
|
$1,520
|
4%
|
3%
|
Adjusted
EBITDA
|
$558
|
$480
|
16%
|
15%
|
Adjusted EBITDA
margin
|
35.3%
|
31.6%
|
370bp
|
360bp
|
Adjusted
EPS
|
$0.58
|
$0.48
|
21%
|
19%
|
Free cash
flow
|
$239
|
$35
|
570%
|
|
(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.
n/m: not
meaningful
|
Revenues increased 4% due to growth in recurring revenues
and a 1% favorable impact from foreign currency.
- Organic revenues increased 3%, driven by 3% growth in recurring
revenues, which comprised 77% of total revenues.
- The company's "Big 3" segments (Legal Professionals, Corporates
and Tax & Accounting Professionals), which collectively
comprised 81% of total revenues, reported organic revenue growth of
5%.
Operating profit increased 34% due to higher revenues and
a favorable impact from the revaluation of warrants that the
company held in Refinitiv until they were exercised in connection
with the closing of the sale to London Stock Exchange Group (LSEG)
on January 29, 2021.
- Adjusted EBITDA, which excludes the impact of the
warrant revaluation, among other items, increased 16% due to higher
revenues and lower costs, which reflected the impact from
cost-reduction initiatives in 2020. The related margin increased to
35.3% from 31.6% in the prior-year period.
Diluted EPS increased to $10.13 per share from $0.39 per share in the prior-year period due to
the gain on the sale of the company's investment in Refinitiv to
LSEG.
- Adjusted EPS, which excludes the gain from the sale of
the company's investment in Refinitiv, as well as other
adjustments, increased to $0.58 per
share from $0.48 per share in the
prior-year period, primarily due to higher adjusted EBITDA.
Cash flow from operations increased due to favorable
movements in working capital (including lower bonus payments which
were due to the impact of COVID-19 in 2020), higher revenues and
cash savings from 2020 cost-reduction initiatives.
- Free cash flow increased due to the same factors as cash
flow from operations.
Highlights by Customer Segment - Three Months Ended
March 31
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited)
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
March
31,
|
|
Change
|
|
|
2021
|
2020
|
|
Total
|
Constant
Currency
|
Organic(1)
|
Revenues
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$668
|
$626
|
|
7%
|
5%
|
5%
|
Corporates
|
|
384
|
367
|
|
5%
|
4%
|
4%
|
Tax &
Accounting Professionals
|
|
225
|
218
|
|
3%
|
5%
|
5%
|
"Big 3" Segments
Combined
|
|
1,277
|
1,211
|
|
5%
|
5%
|
5%
|
Reuters
News
|
|
160
|
155
|
|
3%
|
2%
|
2%
|
Global
Print
|
|
143
|
155
|
|
-7%
|
-9%
|
-9%
|
Eliminations/Rounding
|
|
-
|
(1)
|
|
|
|
|
Revenues
|
|
$1,580
|
$1,520
|
|
4%
|
3%
|
3%
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$279
|
$230
|
|
21%
|
18%
|
|
Corporates
|
|
146
|
117
|
|
25%
|
25%
|
|
Tax &
Accounting Professionals
|
|
98
|
84
|
|
17%
|
17%
|
|
"Big 3" Segments
Combined
|
|
523
|
431
|
|
21%
|
20%
|
|
Reuters
News
|
|
28
|
19
|
|
45%
|
65%
|
|
Global
Print
|
|
57
|
63
|
|
-9%
|
-11%
|
|
Corporate
costs
|
|
(50)
|
(33)
|
|
n/a
|
n/a
|
|
Adjusted
EBITDA
|
|
$558
|
$480
|
|
16%
|
15%
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
41.8%
|
36.7%
|
|
510bp
|
460bp
|
|
Corporates
|
|
38.1%
|
31.9%
|
|
620bp
|
630bp
|
|
Tax &
Accounting Professionals
|
|
43.7%
|
38.7%
|
|
500bp
|
470bp
|
|
"Big 3" Segments
Combined
|
|
41.0%
|
35.6%
|
|
540bp
|
510bp
|
|
Reuters
News
|
|
17.6%
|
12.6%
|
|
500bp
|
750bp
|
|
Global
Print
|
|
39.9%
|
40.5%
|
|
-60bp
|
-80bp
|
|
Corporate
costs
|
|
n/a
|
n/a
|
|
n/a
|
n/a
|
|
Adjusted EBITDA
margin
|
|
35.3%
|
31.6%
|
|
370bp
|
360bp
|
|
|
n/a: not
applicable
(1) 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 5% (all organic) to $668 million.
- Recurring revenues grew 4% (93% of total, all organic),
primarily due to strong performances from Practical Law, Westlaw
Edge and the Government business.
- Transactions revenues grew 17% (7% of total, all organic),
primarily due to the Elite and Government businesses.
Adjusted EBITDA increased 21% to $279 million.
- The margin increased to 41.8% from 36.7%, primarily due to
higher revenues and benefits from 2020 cost-savings
initiatives.
Corporates
Revenues increased 4% (all organic) to $384 million, despite a 2% reduction in revenue
growth due to a loss of revenues related to the impact of the U.S.
federal Affordable Care Act that was recorded in the prior-year
period.
- Recurring revenues grew 4% (77% of total, all organic).
- Transactions revenues grew 4% (23% of total, all organic),
primarily related to increasing demand for solutions provided by
the Confirmation business, which provides audit confirmation
services.
Adjusted EBITDA increased 25% to $146 million.
- The margin increased to 38.1% from 31.9%, primarily due to
higher revenues and benefits from 2020 cost-savings
initiatives.
Tax & Accounting Professionals
Revenues increased 5% (all organic) to $225 million, reflecting strong transactions
revenue growth of 7%, despite the extension of the U.S. tax filing
deadline to May from April that resulted in lower transactional tax
filing revenues in the first quarter. Additionally, revenue growth
was negatively impacted due to the acceleration of the release of
some UltraTax U.S. state tax software from January 2021 to December
2020 to align with the traditional December release of the
segment's U.S. Federal tax software. If the UltraTax software had
been released in January 2021,
organic revenue growth for the segment would have been 8%.
- Recurring revenues grew 4% (71% of total, all organic).
- Transactions revenues grew 7% (29% of total, all organic),
primarily due to audit products.
Adjusted EBITDA increased 17% to $98 million.
- The margin increased to 43.7% from 38.7%, primarily due to
higher revenues and benefits from 2020 cost-savings
initiatives.
- The Tax & Accounting Professionals segment is the company's
most seasonal business with approximately 60% of full-year revenues
typically generated in the first and fourth quarters. As a result,
the margin performance of this segment 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 $160
million increased 2%, all organic, primarily due
to the segment's professional business.
- Reuters Events is currently holding all events virtually.
Reuters Events continue to assess when in-person events can resume
based on local health guidelines and feedback from customers.
Adjusted EBITDA increased 45% to $28 million, primarily due to revenue growth and
benefits from 2020 cost-savings initiatives.
Global Print
Revenues decreased 9% to $143
million, a better than expected performance, driven by
higher third-party revenues for printing services.
- Global Print's full-year 2021 revenues are forecast to decline
between 4% and 7%.
- Global Print's second-quarter revenues are forecast to increase
between 1% and 3%, as the prior-year period was negatively impacted
by delayed shipments at the beginning of the COVID-19
pandemic.
Adjusted EBITDA decreased 9% to $57
million.
- The margin decreased from 40.5% to 39.9% due to the decline in
revenues.
Corporate Costs
Corporate costs at the adjusted EBITDA level were
$50 million, including $11 million of Change Program costs, compared to
$33 million of Corporate costs in the
prior-year period. Additional information on the Change Program is
provided below.
Thomson Reuters Change Program and Outlook
In February 2021, the company
announced a two-year Change Program to transition from a holding
company to an operating company, and from a content provider to a
content-driven technology company. The program is expected to take
24 months (2021-2022) to largely complete and is projected to
require an investment of between $500
million and $600 million
during the course of that time. In 2023, the company is forecast
to:
- Achieve organic revenue growth of 5% - 6%, including additional
annual revenues of $100 million;
- Achieve an Adjusted EBITDA margin of 38% - 40%;
- Achieve free cash flow of $1.8
billion - $2.0 billion;
- Achieve annual operating expense savings of $600 million, of which $200 million is expected to be reinvested in
growth initiatives; and
- Reduce capital expenditures as a percentage of revenue to
between 6.0% and 6.5%.
The company's outlook for 2021, 2022 and 2023 incorporates the
forecasted impacts associated with the Change Program, assumes
constant currency rates, and excludes the impact of any future
acquisitions or dispositions that may occur during those periods.
Thomson Reuters believes that this type of guidance provides useful
insight into the performance of its businesses.
While the company's first-quarter 2021 performance provides it
with increasing confidence about its outlook, the global economy
continues to experience substantial disruption due to concerns
regarding the spread of COVID-19, as well as from the measures
intended to mitigate its impact. Any worsening of the global
economic or business environment could impact the company's ability
to achieve its outlook.
Today, the company updated its revenue outlook for 2021 and
reaffirmed its outlook for 2022 and 2023. The full updated outlook
is appended to this news release.
Second-Quarter 2021 Outlook
The company provided a new outlook today for the second quarter
of 2021:
- Total company revenues and total organic revenues are expected
to increase between 5.5% and 6.5%. Second-quarter revenue growth is
forecast to be the high point for the year given the impact of
COVID-19 in the second quarter of 2020.
- "Big 3" total revenue growth and organic revenue growth is
forecast to range between 6.0% and 7.0%.
- Tax & Accounting Professionals revenues are expected to
increase between 10% and 15%.
- Reuters News revenues are expected to increase between 2.0% and
3.0%.
- Global Print revenues are expected to increase between 1.0% and
3.0%.
Second-Quarter and Update to Full-Year 2021 Revenue
Outlook
Total Thomson
Reuters
|
Q2
2021
Outlook
|
Original
FY
2021
Outlook
(February 23,
2021)
|
FY
2021
Outlook
Update
|
Total Revenue
Growth
|
5.5% -
6.5%
|
3.0% -
4.0%
|
3.5% -
4.0%
|
Organic Revenue
Growth
|
5.5% -
6.5%
|
3.0% -
4.0%
|
3.5% -
4.0%
|
Adjusted EBITDA
Margin
|
-
|
30% - 31%
|
Unchanged
|
Corporate
Costs
Core Corporate
Costs
Change Program Operating
Expenses
|
-
|
$305 - $340
million
$130 - $140
million
$175 - $200
million
|
Unchanged
|
Free Cash
Flow
|
-
|
$1.0 - $1.1
billion
|
Unchanged
|
Capital Expenditures
- % of Revenue
Change Program Capital
Expenditures
|
-
|
9.0% -
9.5%
$125 - $150
million
|
Unchanged
|
Depreciation &
Amortization of
Computer
Software
|
-
|
$650 - $675
million
|
Unchanged
|
Interest Expense
(P&L)
|
-
|
$190 - $210
million
|
Unchanged
|
Effective Tax Rate on
Adjusted Earnings
|
-
|
16% - 18%
|
Unchanged
|
|
|
|
|
Big
3
|
Q2
2021
Outlook
|
Original
FY
2021
Outlook
(February 23,
2021)
|
FY
2021
Outlook
Update
|
Total Revenue
Growth
|
6.0% -
7.0%
|
4.5% -
5.5%
|
5.0% -
5.5%
|
Organic Revenue
Growth
|
6.0% -
7.0%
|
4.5% -
5.5%
|
5.0% -
5.5%
|
Adjusted EBITDA
Margin
|
|
38% - 39%
|
Unchanged
|
The information in this section is
forward-looking. Actual results, which include the
impact of currency and future acquisitions and dispositions
completed during 2021, 2022 and 2023, 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."
Dividends and Share Repurchases
In February 2021, the company
announced its Board of Directors approved a $0.10 per share annualized increase in the
dividend to $1.62 per common share,
representing the 28th consecutive year of dividend
increases. A quarterly dividend of $0.405 per share is payable on June 15, 2021 to common shareholders of record as
of May 20, 2021.
The company also announced in February
2021 that it completed the repurchase of $200 million of its common shares under its
normal course issuer bid (NCIB), which began in January 2021. Thomson Reuters does not currently
intend to repurchase additional shares in 2021. Thomson Reuters has
set a target to maintain approximately 500 million common shares
outstanding by using share repurchases to offset dilution
associated with its dividend reinvestment and equity incentive
plans. As of May 3, 2021, Thomson
Reuters had approximately 496 million common shares
outstanding.
Sale of Refinitiv to London Stock Exchange Group (LSEG)
On January 29, 2021, Thomson
Reuters and private equity funds affiliated with
Blackstone closed the sale of Refinitiv to LSEG in
an all-share transaction. Thomson Reuters now indirectly
owns LSEG shares through an entity that it jointly owns with
Blackstone's consortium and a group of current and former Refinitiv
senior management. On March 19,
2021, as permitted under a lock-up exception, Thomson
Reuters sold approximately 10.1 million LSEG shares for pre-tax net
proceeds of $994 million. Over the
course of 2021, Thomson Reuters will pay approximately $225 million of tax on the sale of these shares
and will use the after-tax proceeds to pay the approximately
$640 million of taxes that became
payable when the Refinitiv sale closed. As of May 3, 2021, Thomson Reuters indirectly
owned approximately 72.4 million LSEG shares which had a
market value of approximately $7.4 billion based on LSEG's closing
share price on that day.
Subject to certain exceptions, Thomson Reuters and
Blackstone's consortium have otherwise agreed to be
subject to a lock-up for their LSEG shares until
January 29, 2023. In each of the
three and four years following the closing (starting on
January 30, 2023 and January 30, 2024, respectively), Thomson Reuters
and Blackstone's consortium will become entitled to sell in
aggregate one-third of the LSEG shares issued to them. The lock-up
arrangement will terminate on January
29, 2025. The ability of current and former members of
Refinitiv senior management to sell shares held by them is also
subject to certain restrictions.
Reuters News' 30-year agreement to supply news and
editorial content to Refinitiv/LSEG continues under the same terms
and conditions and is scheduled to run to 2048.
Thomson Reuters financial results for the first quarter included
a gain on the sale of Refinitiv to LSEG of $8.1 billion within "Share of post-tax earnings
(losses) of equity investments". The proceeds from Thomson Reuters
March 2021 sale of LSEG shares were
distributed to Thomson Reuters as a dividend that reduced the value
of the investment. The proceeds from the sale of the LSEG shares
were presented in "Net cash provided by investing activities"
within the consolidated statement of cash flow. Thomson Reuters
removed these amounts from its non-IFRS calculation of adjusted EPS
and free cash flow. The company accounts for its indirect
investment in LSEG at fair value, based on the share price of LSEG,
within "Share of post-tax earnings (losses) in equity method
investments" within the consolidated income statement.
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
2021, 2022 and 2023 impacts 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
(i) our share of post-tax earnings (losses) in equity
method investments, which is subject to changes in the stock price
of LSEG or (ii) the occurrence or amount of other operating gains
and 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.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL
RISKS AND MATERIAL ASSUMPTIONS
Certain statements in this news release, including, but not
limited to, statements in Mr. Hasker's comments, the "Thomson
Reuters Change Program and Outlook" section, and the company's
expectations regarding Reuters Events, Global Print and share
repurchases, 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 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, uncertainty, downturns and changes
in the markets that the company serves, 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; 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 keep pace with
technological developments to provide 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; inadequate
protection of intellectual property rights; actions of competitors;
failure to adapt to organizational changes and effectively
implement strategic initiatives; failure to attract, motivate and
retain high quality, talented and diverse 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; failure to protect the brands and
reputation of Thomson Reuters; impairment of goodwill and other
identifiable intangible assets; changes to law and regulations
related to privacy, data security, data protection and other areas;
tax matters, including changes to tax laws, regulations and
treaties; threat of legal actions and claims; risk of
antitrust/competition-related claims or investigations;
fluctuations in foreign currency exchange and interest rates;
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; actions or potential actions
that could be taken by the company's principal shareholder, The
Woodbridge Company Limited; 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 tr.com.
The company's 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 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 improved
global economic conditions throughout 2021 to
2023, despite periods of
volatility due to disruption caused by COVID-19
and the measures intended to mitigate its
impact; there will be a continued need for
trusted products and services that help
customers navigate evolving and complex legal, tax, accounting,
regulatory, geopolitical and commercial changes, developments and
environments, and for cloud-based digital tools that drive
productivity; Thomson Reuters will have a continued ability to
deliver innovative products that meet evolving customer
demands; the company will acquire new customers
through expanded and improved digital platforms, simplification of
the product portfolio and through other sales initiatives;
and the company will improve customer retention through
commercial simplification efforts and customer service
improvements. 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; Change Program expenses are
$500 million to $600 million during the course of 2021 and 2022;
and Change Program investments will drive higher adjusted EBITDA
margin through higher revenues and efficiencies by 2023.
Material assumptions related to the company's free cash flow
outlook are its ability to achieve its revenue and adjusted EBITDA
margin targets; and capital expenditures are between the
percentages of revenues in 2021, 2022 and 2023 as set forth in the
company's outlook. 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 2020 does not significantly change; no unexpected changes
in tax laws or treaties within the jurisdictions where the company
operates; depreciation and amortization of
computer software for 2021 as set forth in the company's outlook;
and interest expense for 2021 as set forth in the company's
outlook.
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 future outbreaks and resurgences
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; demand for the company's products and services could be
reduced by changes in customer buying patterns or in its inability
to execute on key product design or customer support initiatives;
competitive pricing actions and product innovation could impact the
company's revenues; and the company's sales, commercial
simplification and product design initiatives may be insufficient
to retain customers or generate new sales.
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 to execute the Change Program may be higher than
current expectations or the expected benefits by 2023 may be lower
than current expectations; and acquisition and disposal activity
may dilute the company's adjusted EBITDA margin. 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; a weaker macroeconomic environment could negatively impact
working capital performance, including the ability of customers to
pay the company; capital expenditures may be higher than currently
expected; and the timing and amount of tax payments to governments
may differ from the company's
expectations. 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; 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
the periods presented. 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
Melissa
Cassar
Head of Commercial
Communications & Corporate Affairs
+1 437 388
3619
melissa.cassar@tr.com
|
|
INVESTORS
Frank J.
Golden
Head of Investor
Relations
+1 332 219
1111
frank.golden@tr.com
|
Thomson Reuters will webcast a discussion of its
first-quarter 2021 results and its business outlook today beginning
at 8:30 a.m. Eastern Daylight Time
(EDT). You can access the webcast by visiting ir.tr.com. An
archive of the webcast will be available following the
presentation.
Thomson Reuters
Corporation
|
2021 - 2023
Outlook
|
|
Total Thomson
Reuters
|
2021
Outlook
(Updated)
|
2022
Outlook
|
2023
Outlook
|
Total Revenue
Growth
|
3.5% -
4.0%
|
4.0% -
5.0%
|
5.0% -
6.0%
|
Organic Revenue
Growth
|
3.5% -
4.0%
|
4.0% -
5.0%
|
5.0% -
6.0%
|
Adjusted EBITDA
Margin
|
30% - 31%
|
34% - 35%
|
38% – 40%
|
Corporate
Costs
Core Corporate
Costs
Change Program Operating
Expenses
|
$305 - $340
million
$130 - $140
million
$175 - $200
million
|
$245 - $280
million
$120 - $130
million
$125 - $150
million
|
$110 - $120
million
$110 - $120
million
$0
|
Free Cash
Flow
|
$1.0 - $1.1
billion
|
$1.2 - $1.3
billion
|
$1.8 - $2.0
billion
|
Capital Expenditures
- % of Revenue
Change Program Capital
Expenditures
|
9.0% -
9.5%
$125 - $150
million
|
7.5% -
8.0%
$75 - $100
million
|
6.0% -
6.5%
$0
|
Depreciation &
Amortization of
Computer
Software
|
$650 - $675
million
|
$620 - $645
million
|
$580 - $605
million
|
Interest Expense
(P&L)
|
$190 - $210
million
|
$190 - $210
million
|
$190 - $210
million
|
Effective Tax Rate on
Adjusted Earnings
|
16% - 18%
|
n/a
|
n/a
|
Big
3
|
2021
Outlook
(Updated)
|
2022
Outlook
|
2023
Outlook
|
Total Revenue
Growth
|
5.0% -
5.5%
|
5.5% -
6.5%
|
6.0% -
7.0%
|
Organic Revenue
Growth
|
5.0% -
5.5%
|
5.5% -
6.5%
|
6.0% -
7.0%
|
Adjusted EBITDA
Margin
|
38% - 39%
|
41% - 42%
|
43% - 45%
|
The information in this section is
forward-looking. Actual results, which include the
impact of currency and future acquisitions and dispositions
completed during 2021, 2022 and 2023, 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
above entitled "Non-IFRS Financial Measures" for more information.
The information in this section should also be read in conjunction
with the section above entitled "Special Note Regarding
Forward-Looking Statements, Material Risks and Material
Assumptions."
Thomson Reuters
Corporation
|
Consolidated
Income Statement
|
(millions of U.S.
dollars, except per share data)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2021
|
2020
|
CONTINUING
OPERATIONS
|
|
|
Revenues
|
$1,580
|
$1,520
|
Operating
expenses
|
(1,018)
|
(1,017)
|
Depreciation
|
(46)
|
(40)
|
Amortization of
computer software
|
(115)
|
(111)
|
Amortization of other
identifiable intangible assets
|
(31)
|
(30)
|
Other operating gains
(losses), net
|
17
|
(32)
|
Operating
profit
|
387
|
290
|
Finance costs,
net:
|
|
|
Net interest
expense
|
(51)
|
(45)
|
Other finance (costs)
income
|
(6)
|
47
|
Income before tax and
equity method investments
|
330
|
292
|
Share of post-tax
earnings (losses) in equity method investments
|
6,297
|
(54)
|
Tax
expense
|
(1,594)
|
(47)
|
Earnings from
continuing operations
|
5,033
|
191
|
Earnings from
discontinued operations, net of tax
|
3
|
2
|
Net
earnings
|
$5,036
|
$193
|
Earnings attributable
to common shareholders
|
$5,036
|
$193
|
|
|
|
Earnings per
share:
|
|
|
Basic earnings per
share:
|
|
|
From
continuing operations
|
$10.15
|
$0.38
|
From
discontinued operations
|
-
|
0.01
|
Basic earnings per
share
|
$10.15
|
$0.39
|
|
|
|
Diluted earnings per
share:
|
|
|
From
continuing operations
|
$10.13
|
$0.38
|
From
discontinued operations
|
-
|
0.01
|
Diluted earnings per
share
|
$10.13
|
$0.39
|
|
|
|
Basic
weighted-average common shares
|
495,939,970
|
496,205,027
|
Diluted
weighted-average common shares
|
496,938,318
|
498,145,078
|
Thomson Reuters
Corporation
|
Consolidated
Statement of Financial Position
|
(millions of U.S.
dollars)
|
(unaudited)
|
|
|
March
31,
|
|
December
31,
|
2021
|
|
2020
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$2,584
|
|
$1,787
|
Trade and other
receivables
|
1,049
|
|
1,151
|
Other financial
assets
|
77
|
|
612
|
Prepaid expenses and
other current assets
|
448
|
|
425
|
Current
assets
|
4,158
|
|
3,975
|
|
|
|
|
Property and
equipment, net
|
500
|
|
545
|
Computer software,
net
|
815
|
|
830
|
Other identifiable
intangible assets, net
|
3,397
|
|
3,427
|
Goodwill
|
5,977
|
|
5,976
|
Equity method
investments
|
6,870
|
|
1,136
|
Other non-current
assets
|
884
|
|
788
|
Deferred
tax
|
1,179
|
|
1,204
|
Total
assets
|
$23,780
|
|
$17,881
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Liabilities
|
|
|
|
Payables, accruals
and provisions
|
$1,059
|
|
$1,159
|
Current tax
liabilities
|
1,130
|
|
251
|
Deferred
revenue
|
832
|
|
866
|
Other financial
liabilities
|
157
|
|
376
|
Current
liabilities
|
3,178
|
|
2,652
|
|
|
|
|
Long-term
indebtedness
|
3,788
|
|
3,772
|
Provisions and other
non-current liabilities
|
954
|
|
1,083
|
Deferred
tax
|
1,043
|
|
394
|
Total
liabilities
|
8,963
|
|
7,901
|
|
|
|
|
Equity
|
|
|
|
Capital
|
5,465
|
|
5,458
|
Retained
earnings
|
10,119
|
|
5,211
|
Accumulated other
comprehensive loss
|
(767)
|
|
(689)
|
Total
equity
|
14,817
|
|
9,980
|
Total liabilities
and equity
|
$23,780
|
|
$17,881
|
Thomson Reuters
Corporation
|
Consolidated
Statement of Cash Flow
|
(millions of U.S.
dollars)
|
(unaudited)
|
|
|
Three Months
Ended
March 31,
|
|
2021
|
2020
|
Cash provided by
(used in):
|
|
|
Operating
activities
|
|
|
Earnings from
continuing operations
|
$5,033
|
$191
|
Adjustments
for:
|
|
|
Depreciation
|
46
|
40
|
Amortization of
computer software
|
115
|
111
|
Amortization of other
identifiable intangible assets
|
31
|
30
|
Share of post-tax
(earnings) losses in equity method investments
|
(6,297)
|
54
|
Deferred
tax
|
674
|
(3)
|
Other
|
30
|
11
|
Changes in working
capital and other items
|
785
|
(243)
|
Operating cash flows
from continuing operations
|
417
|
191
|
Operating cash flows
from discontinued operations
|
(37)
|
(15)
|
Net cash provided by
operating activities
|
380
|
176
|
Investing
activities
|
|
|
Acquisitions, net of
cash acquired
|
(3)
|
(124)
|
Proceeds (payments)
from disposals of businesses and investments
|
5
|
(3)
|
Dividend from sale of
LSEG shares
|
994
|
-
|
Capital
expenditures
|
(120)
|
(142)
|
Proceeds from
disposals of property and equipment
|
-
|
19
|
Other investing
activities
|
1
|
1
|
Taxes paid on sale of
Refinitiv and LSEG shares
|
(6)
|
-
|
Investing cash flows
from continuing operations
|
871
|
(249)
|
Investing cash flows
from discontinued operations
|
(42)
|
-
|
Net cash provided by
(used in) investing activities
|
829
|
(249)
|
Financing
activities
|
|
|
Proceeds from
debt
|
-
|
1,020
|
Repayments of
debt
|
-
|
(645)
|
Net borrowings under
short-term loan facilities
|
-
|
118
|
Payments of lease
principal
|
(21)
|
(18)
|
Repurchases of common
shares
|
(200)
|
(200)
|
Dividends paid on
preference shares
|
(1)
|
(1)
|
Dividends paid on
common shares
|
(194)
|
(182)
|
Other financing
activities
|
5
|
(12)
|
Net cash (used in)
provided by financing activities
|
(411)
|
80
|
Increase in cash and
bank overdrafts
|
798
|
7
|
Translation
adjustments
|
(1)
|
(10)
|
Cash and bank
overdrafts at beginning of period
|
1,787
|
825
|
Cash and bank
overdrafts at end of period
|
$2,584
|
$822
|
Cash and bank
overdrafts at end of period comprised of:
|
|
|
Cash and cash
equivalents
|
$2,584
|
$823
|
Bank
overdrafts
|
-
|
(1)
|
|
$2,584
|
$822
|
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
|
|
March
31,
|
|
|
2021
|
2020
|
|
Earnings from
continuing operations
|
$5,033
|
$191
|
|
Adjustments to
remove:
|
|
|
|
Tax expense
|
1,594
|
47
|
|
Other finance costs
(income)
|
6
|
(47)
|
|
Net interest
expense
|
51
|
45
|
|
Amortization of other
identifiable intangible assets
|
31
|
30
|
|
Amortization of
computer software
|
115
|
111
|
|
Depreciation
|
46
|
40
|
|
EBITDA
|
$6,876
|
$417
|
|
Adjustments to
remove:
|
|
|
|
Share of post-tax
(earnings) losses in equity method investments
|
(6,297)
|
54
|
|
Other operating
(gains) losses, net
|
(17)
|
32
|
|
Fair value
adjustments
|
(4)
|
(23)
|
|
Adjusted EBITDA
(1)
|
$558
|
$480
|
|
Adjusted EBITDA
margin(1)
|
35.3%
|
31.6%
|
|
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
|
|
|
March
31,
|
|
|
2021
|
2020
|
Change
|
Net
earnings
|
$5,036
|
$193
|
|
Adjustments to
remove:
|
|
|
|
Fair value
adjustments
|
(4)
|
(23)
|
|
Amortization of other
identifiable intangible assets
|
31
|
30
|
|
Other operating
(gains) losses, net
|
(17)
|
32
|
|
Other finance costs
(income)
|
6
|
(47)
|
|
Share of post-tax
(earnings) losses in equity method investments
|
(6,297)
|
54
|
|
Tax on above
items
|
1,535
|
(31)
|
|
Tax items impacting
comparability
|
1
|
30
|
|
Earnings from
discontinued operations, net of tax
|
(3)
|
(2)
|
|
Interim period
effective tax rate normalization(3)
|
1
|
4
|
|
Dividends declared on
preference shares
|
(1)
|
(1)
|
|
Adjusted
earnings(2)
|
$288
|
$239
|
|
Adjusted
EPS(2)
|
$0.58
|
$0.48
|
21%
|
Foreign
currency(4)
|
|
|
2%
|
Constant
currency(4)
|
|
|
19%
|
|
|
|
|
Diluted
weighted-average common shares (millions)
|
496.9
|
498.1
|
|
|
Refer to page 19 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
|
March
31,
|
|
2021
|
2020
|
Net cash provided
by operating activities
|
$380
|
$176
|
Capital
expenditures
|
(120)
|
(142)
|
Proceeds from
disposals of property and equipment
|
-
|
19
|
Other investing
activities
|
1
|
1
|
Payments of lease
principal
|
(21)
|
(18)
|
Dividends paid on
preference shares
|
(1)
|
(1)
|
Free cash
flow
|
$239
|
$35
|
Thomson Reuters
Corporation
|
Reconciliation of
Net Debt and Leverage Ratio of Net Debt to Adjusted
EBITDA(7)
|
(millions of U.S.
dollars)
|
(unaudited)
|
|
|
|
March 31,
2021
|
Long-term
indebtedness
|
|
$3,788
|
Total
debt
|
|
3,788
|
Swaps
|
|
(110)
|
Total debt after
swaps
|
|
3,678
|
Remove fair value
adjustments for hedges
|
|
(5)
|
Total debt after
currency arrangements
|
|
3,673
|
Remove transaction
costs, premiums or discounts included in the carrying value of
debt
|
|
37
|
Add: lease
liabilities (current and non-current)
|
|
280
|
Less: cash and cash
equivalents
|
|
(2,584)
|
Net debt
(7)
|
|
$1,406
|
|
|
|
Adjusted
EBITDA(1)*
|
|
$2,053
|
Net Debt /
Adjusted EBITDA(7)*
|
|
0.7
|
|
* Our 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 $558 million, $525 million,
$491 million and $479 million for the three months ended March 31,
2021, December 31, 2020, September 30, 2020 and June 30, 2020,
respectively. Refer to the tables appended to this news release,
the company's 2020 annual report and the company's interim reports
for the three months ended September 30, 2020 and June 30, 2020,
for additional information regarding the calculation of adjusted
EBITDA in each of these periods.
|
|
Refer to page 19 for
footnotes.
|
Thomson Reuters
Corporation
|
Reconciliation of
Changes in Revenues to Changes in Revenues on a Constant
Currency (4) and Organic Basis
(6)
|
(millions of U.S.
dollars)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
Change
|
|
|
2021
|
2020
|
|
Total
|
Foreign
Currency
|
SUBTOTAL Constant
Currency (4)
|
Acquisitions/
(Divestitures)
|
Organic
(6)
|
Total
Revenues
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$668
|
$626
|
|
7%
|
1%
|
5%
|
1%
|
5%
|
Corporates
|
|
384
|
367
|
|
5%
|
0%
|
4%
|
0%
|
4%
|
Tax &
Accounting Professionals
|
|
225
|
218
|
|
3%
|
-1%
|
5%
|
0%
|
5%
|
"Big 3" Segments
Combined
|
|
1,277
|
1,211
|
|
5%
|
1%
|
5%
|
0%
|
5%
|
Reuters
News
|
|
160
|
155
|
|
3%
|
2%
|
2%
|
0%
|
2%
|
Global
Print
|
|
143
|
155
|
|
-7%
|
1%
|
-9%
|
0%
|
-9%
|
Eliminations/Rounding
|
|
-
|
(1)
|
|
|
|
|
|
|
Revenues
|
|
$1,580
|
$1,520
|
|
4%
|
1%
|
3%
|
0%
|
3%
|
|
|
|
|
|
|
|
|
|
|
Recurring
Revenues
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$621
|
$587
|
|
6%
|
1%
|
4%
|
1%
|
4%
|
Corporates
|
|
295
|
281
|
|
5%
|
0%
|
4%
|
0%
|
4%
|
Tax &
Accounting Professionals
|
|
160
|
158
|
|
2%
|
-2%
|
4%
|
0%
|
4%
|
"Big 3" Segments
Combined
|
|
1,076
|
1,026
|
|
5%
|
1%
|
4%
|
0%
|
4%
|
Reuters
News
|
|
144
|
142
|
|
2%
|
2%
|
0%
|
0%
|
0%
|
Total Recurring
Revenues
|
|
$1,220
|
$1,168
|
|
5%
|
1%
|
4%
|
0%
|
3%
|
|
|
|
|
|
|
|
|
|
|
Transactions
Revenues
|
|
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$47
|
$39
|
|
20%
|
3%
|
17%
|
0%
|
17%
|
Corporates
|
|
89
|
86
|
|
4%
|
0%
|
4%
|
0%
|
4%
|
Tax &
Accounting Professionals
|
|
65
|
60
|
|
7%
|
1%
|
7%
|
0%
|
7%
|
"Big 3" Segments
Combined
|
|
201
|
185
|
|
8%
|
1%
|
8%
|
0%
|
8%
|
Reuters
News
|
|
16
|
13
|
|
23%
|
1%
|
22%
|
0%
|
22%
|
Total Transactions
Revenues
|
|
$217
|
$198
|
|
9%
|
1%
|
9%
|
0%
|
9%
|
|
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 19 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
|
|
|
|
|
March
31,
|
|
Change
|
|
|
2021
|
2020
|
|
Total
|
Foreign
Currency
|
Constant
Currency
(4)
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
$279
|
$230
|
|
21%
|
3%
|
18%
|
Corporates
|
|
146
|
117
|
|
25%
|
0%
|
25%
|
Tax &
Accounting Professionals
|
|
98
|
84
|
|
17%
|
-1%
|
17%
|
"Big 3" Segments
Combined
|
|
523
|
431
|
|
21%
|
2%
|
20%
|
Reuters
News
|
|
28
|
19
|
|
45%
|
-20%
|
65%
|
Global
Print
|
|
57
|
63
|
|
-9%
|
2%
|
-11%
|
Corporate
costs
|
|
(50)
|
(33)
|
|
n/a
|
n/a
|
n/a
|
Adjusted
EBITDA
|
|
$558
|
$480
|
|
16%
|
1%
|
15%
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
|
|
|
|
|
Legal
Professionals
|
|
41.8%
|
36.7%
|
|
510bp
|
50bp
|
460bp
|
Corporates
|
|
38.1%
|
31.9%
|
|
620bp
|
-10bp
|
630bp
|
Tax &
Accounting Professionals
|
|
43.7%
|
38.7%
|
|
500bp
|
30bp
|
470bp
|
"Big 3" Segments
Combined
|
|
41.0%
|
35.6%
|
|
540bp
|
30bp
|
510bp
|
Reuters
News
|
|
17.6%
|
12.6%
|
|
500bp
|
-250bp
|
750bp
|
Global
Print
|
|
39.9%
|
40.5%
|
|
-60bp
|
20bp
|
-80bp
|
Corporate
costs
|
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
Adjusted EBITDA
margin
|
|
35.3%
|
31.6%
|
|
370bp
|
10bp
|
360bp
|
|
n/a: not
applicable
|
|
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 19 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 and dividends paid on the
company's preference shares. 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 (excluding the associated unamortized transaction
costs and premiums or discounts) plus the currency related fair
value of associated 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.
|
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SOURCE Thomson Reuters