THOMSON REUTERS CORP TORONTO, April 28, 2017 /PRNewswire/ -- Thomson Reuters (TSX /NYSE: TRI) today reported results for the first quarter ended March 31, 2017.
-- Reported revenues were up 1%, compared to down 1% in the prior-year
period
-- Before currency, revenues were up 2%, compared to up 1% in the
prior-year period
-- Operating profit increased 43%, from $310 million to $444 million
-- Adjusted EBITDA increased 17%, with the margin increasing 430 basis
points to 31.1%
-- Diluted earnings per share (EPS) was $0.41, an increase of 21%, or $0.07
per share
-- Adjusted EPS was $0.63, an increase of 37%, or $0.17 per share
-- The company repurchased 6.8 million shares at a cost of $284 million
-- The company re-affirmed its 2017 full-year outlook
"Today's results demonstrate the progress we continue to make strengthening our business," said Jim Smith, president and chief executive officer of Thomson Reuters. "It is particularly encouraging to see the investments we have made behind our most promising growth opportunities beginning to shine through on the revenue line. That growth, coupled with savings from our transformation programs, led to a significant improvement in profitability and earnings per share this quarter. We expect those trends to continue as we move through the year."
Consolidated Financial Highlights - First-Quarter 2017
Unless otherwise indicated, all amounts are from continuing operations and exclude the results of the company's former IP & Science business, which was sold in October 2016. IP & Science was classified as a discontinued operation for 2016 reporting purposes.
IFRS Financial Measures (1) Three Months Ended March 31,
(Millions of U.S. dollars, except
earnings per share (EPS))
---------------------------------
2017 2016 Change
---- ---- ------
Revenues $2,815 $2,793 1%
Operating profit $444 $310 43%
Diluted EPS (includes discontinued operations) $0.41 $0.34 21%
Cash flow from operations (includes discontinued operations) $(368) $458 n/m(2)
(1) Financial results reported in accordance with International Financial Reporting Standards
(2) n/m - not meaningful
-- Revenues increased 1% as higher subscription revenues and contributions
from Financial & Risk's acquisitions were partly offset by the impact of
foreign currency and a decline in Financial & Risk's recoveries
revenues.
-- Operating profit increased 43% due to higher revenues, lower expenses
(which reflected the impact of transformation initiatives to simplify
the business) and the favorable timing of certain corporate costs.
-- Diluted EPS, which includes discontinued operations, increased 21% to
$0.41 as higher operating profit more than offset the loss of earnings
from IP & Science following its sale.
-- Cash flow from operations, which includes discontinued operations, was
negative $368 million in the quarter due to a $500 million pension plan
contribution, $86 million of payments related to the fourth-quarter 2016
severance charges, and the loss of cash flow from IP & Science following
its sale ($152 million year-on-year variance). In the fourth quarter of
2016, the company incurred $212 million of severance charges. Cash
payments associated with the charges did not have a meaningful impact on
the company's cash flow from operations in 2016, as most of the payments
are expected to be made in 2017.
Non-IFRS Financial Measures (1) Three Months Ended March 31,
(Millions of U.S. dollars, except EPS and
margins)
-----------------------------------------
2017 2016 Change Change Before
Currency
--------
Revenues $2,815 $2,793 1% 2%
Adjusted EBITDA $876 $748 17% 17%
Adjusted EBITDA margin 31.1% 26.8% 430bp 400bp
Adjusted EPS $0.63 $0.46 37% 37%
Free cash flow (includes discontinued operations) $(585) $223 n/m(2)
(1) In addition
to results
reported in
accordance
with IFRS,
the company
uses certain
non-IFRS
financial
measures as
supplemental
indicators
of its
operating
performance
and
financial
position.
These and
other non-
IFRS
financial
measures are
defined and
reconciled
to the most
directly
comparable
IFRS
measures in
the tables
appended to
this news
release.
Additional
information
is provided
in the
explanatory
footnotes to
the appended
tables.
(2) n/m -not
meaningful
-- Revenues increased 1% to $2.8 billion.
-- Before currency, revenues increased 2% as higher subscription
revenues and contributions from Financial & Risk's acquisitions were
partly offset by a decline in Financial & Risk's recoveries
revenues.
-- Adjusted EBITDA increased 17% to $876 million and the margin increased
to 31.1% from 26.8%, primarily due to higher revenues and lower
expenses, which reflected savings from transformation initiatives to
simplify the business and favorable timing for certain corporate costs.
Currency had a 30 basis points positive impact on the margin.
-- Adjusted EPS was $0.63, an increase of 37%, or $0.17 per share. Currency
had no impact.
-- Free cash flow for the first quarter of 2017 was negative $585 million,
primarily due to (1) a $500 million pension plan contribution; (2) $86
million of payments related to fourth-quarter 2016 severance charges;
and (3) the loss of the free cash flow from the company's former IP &
Science business ($152 million year-on-year variance).
-- Free cash flow for the full year is expected to be between $0.9
billion and $1.2 billion, as reflected in the company's Outlook. The
first quarter is historically the company's weakest of the year for
free cash flow generation.
Recent Developments
$500 Million Pension Plan Contribution
As previously disclosed, the company made a voluntary cash contribution of $500 million to its US defined benefit pension plan in January 2017, which impacted first-quarter cash flow from operations and free cash flow.
Dividend and Share Repurchases
In February 2017, the Thomson Reuters board of directors approved a $0.02 per share annualized increase in the dividend to $1.38 per common share. A quarterly dividend of $0.345 per share is payable on June 15, 2017 to common shareholders of record as of May 18, 2017.
In February 2017, the company announced that it planned to repurchase up to an additional $1.0 billion of its shares after completing its previous buyback program. In the first quarter of 2017, the company repurchased 6.8 million shares at a cost of $284 million.
Business Outlook 2017 (Before Currency)
Thomson Reuters today reaffirmed its Outlook for 2017. The company's 2017 Outlook assumes constant currency rates compared to 2016 and does not factor in the impact of acquisitions or divestitures that may occur during the year.
For the full year 2017, the company expects:
-- Low single-digit revenue growth
-- Adjusted EBITDA margin to range between 28.8% to 29.8%
-- Free cash flow to range between $0.9 billion and $1.2 billion (which
reflects cash payments in 2017 relating to the fourth-quarter 2016
charge, the $500 million contribution to the US defined benefit pension
plan made earlier in the first quarter and the loss of free cash flow
from the divestiture of the IP & Science business)
-- Adjusted EPS target of $2.35
The information in this section is forward-looking and should be read in conjunction with the section below entitled "Special Note Regarding Forward-Looking Statements, Material Assumptions and Material Risks."
Highlights by Business Unit
Unless otherwise noted, all revenue growth comparisons in this news release are before the impact of foreign currency (constant currency) as Thomson Reuters believes this provides the best basis to measure the performance of its business.
The impact of currency on profitability metrics in the first quarter was not material to either the consolidated results or to the business units and therefore only reported profitability is discussed below.
Financial & Risk
-- Revenues increased 1% to $1.5 billion. Acquisitions contributed
approximately 1% to the first-quarter revenue growth. Organic revenues
grew approximately 2% excluding the impact of lower recoveries revenues
and commercial pricing adjustments related to the migration of certain
customers to new platforms. The company expects these two factors to
have a lesser impact on reported revenue growth in the second quarter
and to have no material impact in the second half of the year.
-- Recurring revenues (77% of the segment's revenues in the quarter)
were up 2%, primarily due to an annual price increase and positive
net sales. Growth was partly offset by the commercial pricing
adjustments described above.
-- Transactions revenues (15% of the segment's revenues in the quarter)
were up 4% due to increased revenue from Tradeweb and the BETA
brokerage processing business, as well as contributions from
acquisitions. This increase was offset by the impact of lower
foreign exchange trading and outright revenues.
-- Low-margin recoveries revenues (8% of the segment's revenues in the
quarter) decreased 9%, partially due to third parties continuing to
move to direct billing with their customers. Recoveries revenues are
expected to be only marginally lower for the full-year 2017 compared
to 2016.
-- Recoveries represent revenues for content or services provided
by third parties and distributed through or in conjunction with
Financial & Risk's platform. Reductions in recoveries revenue
have no material impact on the unit's adjusted EBITDA.
-- By geography, revenues in the Americas were up 3%, Europe, Middle East
and Africa (EMEA) and Asia were unchanged. Excluding the impact of lower
recoveries and commercial pricing adjustments, all regions reported
revenue growth.
-- Adjusted EBITDA increased 6% to $463 million and the margin increased to
30.8% from 29.0% due to savings related to the fourth-quarter 2016
charges and higher revenues.
-- Net sales were positive, driven by sales in EMEA and Asia. This was
partially offset by the Americas, where negative net sales were impacted
by the migration of legacy asset management products to Eikon, which is
expected to be largely complete by the end of the second quarter.
Legal
-- Revenues increased 1% to $824 million. Excluding US print, revenues grew
2%.
-- Solutions businesses (44% of the segment's revenues in the quarter)
grew 2% resulting from subscription revenue growth of 5%, partially
offset by a 9% reduction in transactional revenues.
-- US Online Legal Information (43% of the segment's revenues in the
quarter) grew 2%.
-- US Print (13% of the segment's revenues in the quarter) declined 4%.
-- Subscription revenues (76% of the segment's revenues in the quarter)
grew 4%. However, transactional revenues (11% of the segment's revenues
in the quarter) declined 8%. US Print (13% of the segment's revenues in
the quarter) declined 4%.
-- Adjusted EBITDA increased 3% to $307 million and the margin increased to
37.3% from 36.3% primarily due to the impact of higher revenues.
Expenses were slightly lower than the prior-year period, reflecting
transformation and cost-management initiatives.
Tax & Accounting
-- Revenues increased 6% to $417 million, driven by the Corporate and
Professional businesses. Growth was partially offset by declines in the
Knowledge Solutions and Government businesses.
-- Adjusted EBITDA increased 24% to $141 million and the margin increased
to 33.8% from 29.3% due to higher revenues, savings related to the
fourth-quarter 2016 charges and the absence of severance costs incurred
in the first quarter of 2016 that did not repeat in the first quarter of
2017.
Corporate & Other (Including Reuters News)
-- Reuters News revenues were $74 million, up 1%.
-- Corporate & Other costs at the adjusted EBITDA level were $35 million
compared to $101 million in the prior-year period. Including
depreciation and amortization of software, Corporate & Other costs were
$46 million compared to $118 million in the prior-year period. The
reduction on both bases was driven by savings generated by the company's
Enterprise, Technology & Operations group, the elimination of certain
retained costs relating to the sale of IP & Science, increased
allocation of costs to the business units and the timing of spend within
2017.
-- For the full year, the company expects Corporate costs, inclusive of
depreciation and amortization of software, to be approximately $300
million.
Thomson Reuters
Thomson Reuters is the world's leading source of news and information for professional markets. Our customers rely on us to deliver the intelligence, technology and expertise they need to find trusted answers. The business has operated in more than 100 countries for more than 100 years. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, visit www.thomsonreuters.com.
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).
This news release includes certain non-IFRS financial measures, such as adjusted EBITDA and the related margin, free cash flow, adjusted EPS, and selected measures before the impact of foreign currency. Thomson Reuters uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position. These measures do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS. Non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the appended tables.
The company no longer reports underlying operating profit, reflecting a simplification of its reporting, in line with how the businesses are currently managed internally, and consistent with how the company provided its 2017 business outlook.
The company's business outlook contains various non-IFRS financial measures. For outlook purposes only, the company is unable to reconcile these non-IFRS measures to the most comparable IFRS measures because it cannot predict, with reasonable certainty, the 2017 impact of changes in foreign exchange rates which impact (i) the translation of its results reported at average foreign currency rates for the year, (ii) fair value adjustments associated with foreign currency derivatives embedded in certain customer contracts, and (iii) other finance income or expense related to foreign exchange contracts and intercompany financing arrangements. Additionally, the company cannot reasonably predict the occurrence or amount of other operating gains and losses, which generally arise from business transactions that it does not anticipate.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL ASSUMPTIONS AND MATERIAL RISKS
Certain statements in this news release, including, but not limited to, statements in the "Business Outlook 2017 (Before Currency)" section, Mr. Smith's comments and statements regarding recoveries revenues , the timing of product migrations within the Financial & Risk business, and corporate costs, are forward-looking. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. There is no assurance that the events described in any forward-looking statement will materialize. A business outlook is provided for the purpose of presenting information about current expectations for 2017. This information may not be appropriate for other purposes. You are cautioned not to place undue reliance on forward-looking statements which reflect expectations only as of the date of this news release. Except as may be required by applicable law, Thomson Reuters disclaims any obligation to update or revise any forward-looking statements.
The company's 2017 business outlook is based on various external and internal assumptions. Economic and market assumptions include, but are not limited to, GDP growth in most of the countries where Thomson Reuters operates, a continued increase in demand for high quality information and workflow solutions and a continued need for trusted products and services that help customers navigate changing geopolitical, economic and regulatory environments. Internal financial and operational assumptions include, but are not limited to, the successful execution of sales initiatives, ongoing product release programs, our globalization strategy and other growth and efficiency initiatives.
Some of the material risk factors that could cause actual results or events to differ materially from those expressed in or implied by forward-looking statements in this news release include, but are not limited to, changes in the general economy; actions of competitors; failure to develop new products, services, applications and functionalities to meet customers' needs, attract new customers and retain existing ones, or expand into new geographic markets and identify areas of higher growth; fraudulent or unpermitted data access or other cyber-security or privacy breaches; failures or disruptions of telecommunications, data centers, network systems or the Internet; increased accessibility to free or relatively inexpensive information sources; failure to meet the challenges involved in operating globally; failure to maintain a high renewal rate for recurring, subscription-based services; dependency on third parties for data, information and other services; changes to law and regulations; tax matters, including changes to tax laws, regulations and treaties; fluctuations in foreign currency exchange and interest rates; failure to adapt to organizational changes and effectively implement strategic initiatives; failure to attract, motivate and retain high quality management and key employees; failure to protect the brands and reputation of Thomson Reuters; inadequate protection of intellectual property rights; threat of legal actions and claims; failure to derive fully the anticipated benefits from existing or future acquisitions, joint ventures, investments or dispositions; risk of antitrust/competition-related claims or investigations; impairment of goodwill and other identifiable intangible assets; downgrading of credit ratings and adverse conditions in the credit markets; the effect of factors outside of the control of Thomson Reuters on funding obligations in respect of pension and post-retirement benefit arrangements; and actions or potential actions that could be taken by the company's principal shareholder, The Woodbridge Company Limited. These and other factors are discussed in materials that Thomson Reuters from time to time files with, or furnishes to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. Thomson Reuters annual and quarterly reports are also available in the "Investor Relations" section of www.thomsonreuters.com.
CONTACTS
MEDIA INVESTORS
David Crundwell Frank J. Golden
Senior Vice President, Corporate
Affairs Senior Vice President, Investor Relations
+1 646 223 5285 +1 646 223 5288
david.crundwell@tr.com frank.golden@tr.com
Thomson Reuters will webcast a discussion of its first-quarter 2017 results today beginning at 8:30 a.m. Eastern Daylight Time (EDT). You can access the webcast by visiting the "Investor Relations" section of www.thomsonreuters.com. An archive of the webcast will be available following the presentation.
Thomson Reuters Corporation
Consolidated Income Statement
(millions of U.S. dollars, except per share data)
(unaudited)
Three Months Ended
March 31,
---------
2017 2016
---- ----
CONTINUING OPERATIONS
Revenues $2,815 $2,793
Operating expenses (2,004) (2,109)
Depreciation (72) (81)
Amortization of computer software (180) (169)
Amortization of other identifiable
intangible assets (119) (128)
Other operating gains, net 4 4
Operating profit 444 310
Finance costs, net:
Net interest expense (93) (93)
Other finance costs (27) (34)
Income before tax and equity method
investments 324 183
Share of post-tax earnings in
equity method investments 2 1
Tax (expense) benefit (9) 26
--- ---
Earnings from continuing operations 317 210
(Loss) earnings from discontinued
operations, net of tax (3) 62
--- ---
Net earnings $314 $272
==== ====
Earnings attributable to:
Common shareholders 297 262
Non-controlling interests 17 10
Earnings per share:
Basic and diluted earnings per share:
From continuing operations $0.41 $0.26
From discontinued operations - 0.08
--- ----
Basic and diluted earnings per share $0.41 $0.34
===== =====
Basic weighted-average common shares 727,200,617 760,727,773
=========== ===========
Diluted weighted-average common
shares 729,194,404 762,216,127
=========== ===========
Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
March 31, December 31,
2017 2016
---- ----
Assets
Cash and
cash
equivalents $812 $2,368
Trade and
other
receivables 1,573 1,392
Other
financial
assets 131 188
Prepaid
expenses
and
other
current
assets 740 686
--- ---
Current
assets 3,256 4,634
Computer
hardware
and
other
property,
net 937 961
Computer
software,
net 1,396 1,394
Other
identifiable
intangible
assets,
net 5,622 5,655
Goodwill 14,673 14,485
Other
financial
assets 102 135
Other
non-
current
assets 565 537
Deferred
tax 55 51
--- ---
Total
assets $26,606 $27,852
======= =======
Liabilities and equity
Liabilities
Current
indebtedness $828 $1,111
Payables,
accruals
and
provisions 2,033 2,448
Deferred
revenue 970 901
Other
financial
liabilities 130 102
--- ---
Current
liabilities 3,961 4,562
Long-
term
indebtedness 6,288 6,278
Provisions
and
other
non-
current
liabilities 1,662 2,258
Other
financial
liabilities 330 340
Deferred
tax 1,130 1,158
----- -----
Total
liabilities 13,371 14,596
------ ------
Equity
Capital 9,617 9,589
Retained
earnings 7,284 7,477
Accumulated
other
comprehensive
loss (4,158) (4,293)
------ ------
Total
shareholders'
equity 12,743 12,773
Non-
controlling
interests 492 483
--- ---
Total
equity 13,235 13,256
------ ------
Total
liabilities
and
equity $26,606 $27,852
======= =======
Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
Three Months
Ended
March 31,
---------
2017 2016(1)
---- ------
Cash provided by (used in):
Operating activities
Earnings from continuing operations $317 $210
Adjustments for:
Depreciation 72 81
Amortization of computer software 180 169
Amortization of other identifiable
intangible assets 119 128
Net gains on disposals of
businesses and investments - (1)
Deferred tax (21) (58)
Other 163 178
Pension contributions (500) -
Changes in working capital and
other items (657) (371)
---- ----
Operating cash flows from
continuing operations (327) 336
Operating cash flows from
discontinued operations (41) 122
--- ---
Net cash (used in) provided by
operating activities (368) 458
---- ---
Investing activities
Acquisitions, net of cash acquired (178) (46)
Proceeds from disposals of
businesses and investments 10 2
Capital expenditures, less proceeds
from disposals (213) (233)
Other investing activities 6 19
--- ---
Investing cash flows from
continuing operations (375) (258)
Investing cash flows from
discontinued operations - (11)
--- ---
Net cash used in investing
activities (375) (269)
---- ----
Financing activities
Repayments of debt (550) (3)
Net borrowings under short-term
loan facilities 255 442
Repurchases of common shares (284) (432)
Dividends paid on preference shares (1) (1)
Dividends paid on common shares (242) (249)
Dividends paid to non-controlling
interests (9) (9)
Other financing activities 5 4
--- ---
Net cash used in financing
activities (826) (248)
---- ----
Decrease in cash and bank
overdrafts (1,569) (59)
Translation adjustments 2 4
Cash and bank overdrafts at
beginning of period 2,367 922
----- ---
Cash and bank overdrafts at end of
period $800 $867
==== ====
Cash and bank overdrafts at end of period comprised of:
Cash and cash equivalents $812 $898
Bank overdrafts (12) (31)
--- ---
$800 $867
==== ====
Refer to page 12 for footnotes.
Thomson Reuters Corporation
Reconciliation of Changes in Revenues, Adjusted EBITDA and the Related Margin
Excluding the Effects of Foreign Currency by Business Segment
(millions of U.S. dollars, except for margins)
(unaudited)
Three Months Ended
March 31, Change
---------
2017 2016 Total Foreign Before
Currency (3) Currency (3)
----------- -----------
Revenues
--------
Financial & Risk $1,502 $1,509 0% -1% 1%
Legal 824 822 0% -1% 1%
Tax & Accounting 417 389 7% 1% 6%
Corporate & Other (includes Reuters News) 74 75 -1% -2% 1%
Eliminations (2) (2)
--- ---
Revenues $2,815 $2,793 1% -1% 2%
====== ======
Change
Total Foreign Before
Currency (3) Currency (3)
----------- -----------
Adjusted EBITDA (2)
------------------
Financial & Risk $463 $437 6% -1% 7%
Legal 307 298 3% -1% 4%
Tax & Accounting 141 114 24% 0% 24%
Corporate & Other (includes Reuters News) (35) (101) n/a n/a n/a
--- ----
Adjusted EBITDA $876 $748 17% 0% 17%
==== ====
Adjusted EBITDA Margin (2)
-------------------------
Financial & Risk 30.8% 29.0% 180bp 20bp 160bp
Legal 37.3% 36.3% 100bp -10bp 110bp
Tax & Accounting 33.8% 29.3% 450bp -30bp 480bp
Corporate & Other (includes Reuters News) n/a n/a n/a n/a n/a
Adjusted EBITDA margin 31.1% 26.8% 430bp 30bp 400bp
n/a - not applicable
Refer to page 12 for footnotes.
Thomson Reuters Corporation
Reconciliation of Earnings from Continuing Operations to Adjusted EBITDA (2)
(millions of U.S. dollars, except for margins)
(unaudited)
Three Months
Ended
March 31,
---------
2017 2016 Change
---- ---- ------
Earnings from
continuing
operations $317 $210 51%
Adjustments to remove:
Tax expense (benefit) 9 (26)
Other finance costs 27 34
Net interest expense 93 93
Amortization of other
identifiable
intangible assets 119 128
Amortization of
computer software 180 169
Depreciation 72 81
--- ---
EBITDA $817 $689
Adjustments to remove:
Share of post-tax
earnings in equity
method investments (2) (1)
Other operating
gains, net (4) (4)
Fair value
adjustments 65 64
Adjusted EBITDA $876 $748 17%
---- ----
Adjusted EBITDA
margin (2) 31.1% 26.8% 430bp
==== ====
Thomson Reuters Corporation
Reconciliation of Earnings Attributable to Common Shareholders to Adjusted Earnings (4)
(millions of U.S. dollars, except for share and per share data)
(unaudited)
Three Months
Ended
March 31,
---------
2017 2016(1) Change
---- ------ ------
Earnings attributable to common shareholders $297 $262 13%
Adjustments to remove:
Fair value adjustments 65 64
Amortization of other identifiable assets 119 128
Other operating gains, net (4) (4)
Other finance costs 27 34
Share of post-tax earnings in equity method investments (2) (1)
Tax on above items (47) (57)
Tax items impacting comparability - (7)
Loss (earnings) from discontinued operations, net of tax 3 (62)
Interim period effective tax rate normalization (5) 1 (5)
Dividends declared on preference shares (1) (1)
--- ---
Adjusted earnings $458 $351 30%
==== ==== ===
Adjusted EPS $0.63 $0.46 37%
===== ===== ===
Foreign currency (3) 0%
Before currency (3) 37%
Diluted weighted-average common shares (millions) 729.2 762.2
===== =====
Refer to page 12 for footnotes.
Thomson Reuters Corporation
Reconciliation of Net Cash Provided by Operating Activities to Free
Cash Flow (6)
(millions of U.S. dollars)
(unaudited)
Three Months
Ended
March 31,
---------
2017 2016
---- ----
Net cash (used in) provided by
operating activities $(368) $458
Capital expenditures, less
proceeds from disposals (213) (233)
Capital expenditures from
discontinued operations - (11)
Other investing activities 6 19
Dividends paid on preference
shares (1) (1)
Dividends paid to non-
controlling interests (9) (9)
Free cash flow $(585) $223
===== ====
Footnotes
---------
(1) Prior-year period amounts have
been revised to reflect the
current presentation.
(2) Thomson Reuters defines adjusted
EBITDA as earnings from
continuing operations before tax
expense or benefit, net interest
expense, other finance costs or
income, depreciation,
amortization of software and
other identifiable intangible
assets, Thomson Reuters share of
post-tax (earnings) losses in
equity method investments, other
operating gains and losses,
certain asset impairment charges,
fair value adjustments and
corporate related items. Adjusted
EBITDA margin is adjusted EBITDA
expressed as a percentage of
revenues. Thomson Reuters uses
adjusted EBITDA because it
provides a consistent basis to
evaluate operating profitability
and performance trends by
excluding items that the Company
does not consider to be
controllable activities for this
purpose. Adjusted EBITDA also
represents a measure commonly
reported and widely used by
investors as a valuation metric.
Additionally, this measure is
used by Thomson Reuters and
investors to assess a company's
ability to incur and service
debt.
(3) The changes in revenues, adjusted
EBITDA and the related margins,
and adjusted earnings per share
before currency (at constant
currency or excluding the effects
of currency) are determined by
converting the current and prior-
year period's local currency
equivalent using the same
exchange rates.
(4) Adjusted earnings and adjusted
earnings per share (EPS) include
dividends declared on preference
shares but exclude the post-tax
impacts of fair value
adjustments, amortization of
other identifiable intangible
assets, other operating gains and
losses, certain asset impairment
charges, other finance costs or
income, Thomson Reuters share of
post-tax (earnings) losses in
equity method investments,
discontinued operations and other
items affecting comparability.
Thomson Reuters calculates the
post-tax amount of each item
excluded from adjusted earnings
based on the specific tax rules
and tax rates associated with the
nature and jurisdiction of each
item. Adjusted earnings per share
is calculated using diluted
weighted-average shares and does
not represent actual earnings or
loss per share attributable to
shareholders. Thomson Reuters
uses adjusted earnings and
adjusted EPS as they provide a
more comparable basis to analyze
earnings and they are also
measures commonly used by
shareholders to measure the
company's performance.
(5) Adjustment to reflect income taxes
based on estimated full-year
effective tax rate. Earnings or
losses for interim periods under
IFRS reflect income taxes based
on the estimated effective tax
rates of each of the
jurisdictions in which Thomson
Reuters operates. The non-IFRS
adjustment reallocates estimated
full-year income taxes between
interim periods, but has no
effect on full-year income
taxes.
(6) Free cash flow (includes free cash
flow from continuing and
discontinued operations) is net
cash provided by (used in)
operating activities, and other
investing activities less capital
expenditures, dividends paid on
the company's preference shares,
and dividends paid to non-
controlling interests. Thomson
Reuters uses free cash flow as it
helps assess the company's
ability, over the long term, to
create value for its shareholders
as it represents cash available
to repay debt, pay common
dividends and fund share
repurchases and new acquisitions.
Supplemental
Thomson Reuters Corporation
Depreciation and Amortization of Computer Software by Business
Segment
(millions of U.S. dollars)
(unaudited)
Three Months
Ended
March 31,
---------
2017 2016
---- ----
Financial & Risk $147 $142
Legal 62 60
Tax & Accounting 32 31
Corporate & Other (includes Reuters
News) 11 17
Total depreciation and amortization
of computer software $252 $250
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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/thomson-reuters-reports-first-quarter-2017-results-300447920.html
SOURCE Thomson Reuters
