THOMSON REUTERS CORP NEW YORK, July 30, 2014 /PRNewswire/ -- Thomson Reuters (TSX / NYSE: TRI) today reported results for the second quarter ended June 30, 2014.
-- Revenues from ongoing businesses grew 1% before currency to $3.2 billion
-- Adjusted EBITDA grew 2% to $877 million with a margin of 27.8%, up 20
basis points from the prior-year period
-- Excluding charges from both periods, adjusted EBITDA margin was
28.7%, up 80 basis points from the prior-year period
-- Underlying operating profit grew 2% to $581 million with a margin of
18.4%, up 10 basis points from the prior-year period
-- Excluding charges from both periods, underlying operating profit
margin was 19.3%, up 70 basis points from the prior-year period
-- Adjusted earnings per share were $0.51 versus $0.48 in the prior-year
period
-- Financial & Risk Q2 net sales positive
-- Company completed $1.0 billion share buyback program announced last
October and plans to repurchase up to an additional $1.0 billion of its
shares by the end of 2015
-- 2014 Outlook affirmed
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"Our second-quarter results build upon the good start to the year and are consistent with our full-year expectations," said James C. Smith, chief executive officer of Thomson Reuters. "The actions we are taking are building a platform for sustainable growth, and we will continue to simplify our organization and position resources behind the most promising growth opportunities."
Consolidated Financial Highlights - Second Quarter
Three Months Ended June 30,
---------------------------
(Millions of U.S. dollars,
except EPS and margins)
IFRS Financial Measures 2014 2013 Change
---- ---- ------
Revenues $3,159 $3,163 0%
Operating profit $381 $597 -36%
Diluted earnings per share (EPS) $0.31 $0.30 3%
Cash flow from operations $876 $904 -3%
Second-quarter 2013 results were impacted by two offsetting items: operating profit benefited from a $140 million gain realized
on the sale of the company's Corporate Services business; and the company also recorded a $161 million tax charge associated
with the consolidation of its technology and content assets. No similar items impacted second-quarter 2014 results.
Non-IFRS Financial Measures(1) 2014 2013 Change
---- ---- ------
Revenues from ongoing businesses $3,158 $3,108 2%
Adjusted EBITDA $877 $858 2%
Adjusted EBITDA margin 27.8% 27.6% 20bp
Underlying operating profit $581 $569 2%
Underlying operating profit margin 18.4% 18.3% 10bp
Adjusted earnings per share (EPS) $0.51 $0.48 6%
Free cash flow $652 $732 -11%
-- Revenues from ongoing businesses were $3.2 billion, a 1% increase before
currency, reflecting 5% combined growth from the company's Legal, Tax &
Accounting and Intellectual Property & Science businesses, which was
offset by a 2% decline in Financial & Risk.
-- Adjusted EBITDA increased 2%, and the corresponding margin was 27.8%
versus 27.6% in the prior-year period. The increase was primarily due to
cost savings generated in the Financial & Risk business from the
company's simplification program announced in October 2013, which were
partially offset by $30 million of charges incurred in the quarter.
Excluding charges from both periods, adjusted EBITDA margin was 28.7%,
up 80 basis points from the prior-year period.
-- Underlying operating profit increased 2%, and the corresponding margin
was 18.4% versus 18.3% in the prior-year period. The increase was
primarily due to the same factors that impacted adjusted EBITDA.
Excluding charges from both periods, underlying operating profit margin
was 19.3%, up 70 basis points from the prior-year period.
-- Adjusted EPS was $0.51 compared to $0.48 in the prior-year period, up
6%.
Second-Quarter Business Segment Highlights
Unless otherwise noted, all revenue growth comparisons in this news release are before the impact of foreign currency as Thomson Reuters believes this provides the best basis to measure the performance of its business.
Financial & Risk
-- Revenues were down 2% (down 3% organic) due to the impact of negative
net sales over the prior 12 months and a decline in transactions-related
revenues.
-- Recurring subscription-related revenues decreased 2% (down 3% organic)
due to the impact of negative net sales over the prior 12 months.
-- Transactions-related revenues decreased 4% (down 11% organic) due to
lower trading volumes related to lower volatility in the equity, foreign
exchange and fixed income markets. Recoveries revenues were flat.
-- By geography, revenues in Europe, Middle East and Africa (EMEA) were
down 4%, revenues in the Americas were down 1% and revenues in Asia were
up 1%.
-- Net sales were positive for the quarter and were better than both the
prior-year period and the first quarter of 2014. Net sales were positive
for the Americas and Asia and remained negative in Europe. However, all
three regions showed year-on-year improvements in their respective net
sales performance.
-- EBITDA increased 1%, primarily due to simplification program savings,
despite $30 million of charges incurred in the quarter compared to $3
million in the prior-year period. The margin was 25.7% compared to 25.3%
in the prior-year period.
-- Excluding charges from both periods, EBITDA increased 8% with a
margin of 27.6% compared to a margin of 25.5% in the prior-year
period.
-- Operating profit increased 2%. The margin was 16.1% compared to 15.7% in
the prior-year period.
-- Excluding charges from both periods, operating profit increased 13%
with a margin of 17.9% compared to a margin of 15.8% in the
prior-year period.
Legal
-- Revenues increased 1% (flat organic). Excluding US print, revenues grew
3% (2% organic).
-- Solutions businesses (45% of Legal revenues) grew 6% (5% organic),
driven by strong growth from Elite, Practical Law and FindLaw. Solutions
businesses represent all of Legal's revenue excluding US print and US
online legal information.
-- US online legal information (39% of Legal revenues) declined 1%.
-- US print (16% of Legal revenues) declined 9%.
-- EBITDA increased 2% primarily from savings programs. The margin was
38.9% compared to 38.5% in the prior-year period.
-- Operating profit increased 2% with a margin of 30.7% versus 30.1% in the
prior-year period.
Tax & Accounting
-- Revenues increased 14% (10% organic) driven by growth across the
business.
-- EBITDA increased 13% with a margin of 30.2%, flat compared to the
prior-year period due to acquisition dilution and reinvestment in the
business.
-- Operating profit increased 14% and the margin was 20.1% compared to
19.8% in the prior-year period.
-- Small movements in the timing of revenues and expenses can impact
margins in any given quarter for the Tax & Accounting business.
Full-year margins are more reflective of the segment's underlying
performance.
Intellectual Property & Science
-- Revenues increased 7% (5% organic), driven by recurring revenue growth
of 10% (8% organic) partially offset by a 1% decline (down 3% organic)
in transactions-related revenues.
-- EBITDA increased 8% due to revenue flow-through. The margin was 33.9%,
up 10 basis points compared to the prior-year period.
-- Operating profit increased 5%. The margin was 24.7% compared to 25.2% in
the prior-year period, down 50 basis points due to the dilutive impact
of acquisitions in 2013.
-- Small movements in the timing of revenues and expenses can impact
margins in any given quarter for the Intellectual Property & Science
business. Full-year margins are more reflective of the segment's
underlying performance.
Corporate & Other (Including Reuters News)
Reuters News revenues for the second quarter of 2014 were $82 million, down 1% from the prior-year period. Corporate & Other costs for the second quarter of 2014 were $73 million, compared to $62 million in the prior-year period. The increase was primarily related to costs associated with the company's transformation program.
Consolidated Financial Highlights - Six Months
Six Months Ended June 30,
-------------------------
(Millions of U.S. dollars,
except EPS and margins)
IFRS Financial Measures 2014 2013 Change
---- ---- ------
Revenues $6,289 $6,338 -1%
Operating profit $740 $987 -25%
Diluted earnings per share (EPS) $0.65 $0.26 150%
Cash flow from operations $989 $1,020 -3%
Results for the first six months of 2013 were impacted by the following significant items: operating profit benefited from a
$140 million gain realized on the sale of the company's Corporate Services business; and the company also recorded a $396
million tax charge associated with the consolidation of its technology and content assets. No similar items impacted results
in the first six months of 2014.
Non-IFRS Financial Measures(2) 2014 2013 Change
---- ---- ------
Revenues from ongoing businesses $6,287 $6,205 1%
Adjusted EBITDA $1,697 $1,615 5%
Adjusted EBITDA margin 27.0% 26.0% 100bp
Underlying operating profit $1,109 $1,031 8%
Underlying operating profit margin 17.6% 16.6% 100bp
Adjusted earnings per share (EPS) $0.97 $0.86 13%
Free cash flow $517 $501 3%
-- Revenues from ongoing businesses were $6.3 billion, a 1% increase before
currency.
-- Adjusted EBITDA increased 5% and the corresponding margin was 27.0%
versus 26.0% in the prior-year period. The increase was primarily due to
simplification program savings in the Financial & Risk business and
lower charges compared to the prior-year period. Charges for the
six-month period were $40 million versus $87 million in the prior-year
period.
-- Excluding charges from both periods, adjusted EBITDA increased 2%
and the related margin was 27.6% versus 27.4% in the prior-year
period.
-- Underlying operating profit increased 8% and the corresponding margin
was 17.6% versus 16.6% in the prior-year period. The increase was
primarily due to the same factors that impacted adjusted EBITDA.
-- Excluding charges from both periods, underlying operating profit
increased 3% and the related margin was 18.3% versus 18.0% in the
prior-year period.
-- Adjusted EPS was $0.97 compared to $0.86 in the prior-year period.
-- Free cash flow was $517 million versus $501 million in the prior-year
period. The increase was primarily due to the timing of capital
expenditures partially offset by payments related to simplification
program charges and a loss of free cash flow from disposals. For the
full year, the company continues to expect to achieve free cash flow
between $1.3 billion and $1.5 billion.
Business Outlook (Before Currency)
Thomson Reuters today reaffirmed its full-year business outlook for 2014 which was previously communicated in February 2014. The company continues to expect:
-- revenues to be comparable to 2013;
-- adjusted EBITDA margin to range between 26% and 27%;
-- underlying operating profit margin to range between 17.0% and 18.0%; and
-- free cash flow to range between $1.3 billion and $1.5 billion in 2014.
The company's 2014 outlook includes the impact of $120 million of previously announced charges expected to be incurred this year. The estimated aggregate amount of these charges is $395 million, $275 million of which was incurred in 2013. The free cash flow outlook for 2014 reflects the estimated cash impact of the charges incurred in 2013 and 2014 as well as the impact of the loss of free cash flow from disposals (approximately $375 million in aggregate).
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."
Dividend and Share Repurchases
As previously announced in February 2014, Thomson Reuters board of directors approved a $0.02 per share annualized increase in the dividend to $1.32 per share. A quarterly dividend of $0.33 per share is payable on September 15, 2014, to common shareholders of record as of August 21, 2014.
Through July 29, 2014, the company had repurchased approximately 26.6 million shares at an aggregate cost of approximately $960 million under its $1.0 billion share buyback program announced in October 2013. In the second quarter of 2014, the company returned approximately $353 million to shareholders through the repurchase of approximately 10 million shares.
Today, the company announced that its board of directors approved plans to repurchase up to an additional $1.0 billion of its shares through the end of 2015.
Thomson Reuters
Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world's most trusted news organization. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, go to 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. 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.
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 (Before Currency)" section and Mr. Smith's comments, are forward-looking. Forward-looking statements also include expectations regarding the 2014 charges. 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 2014. 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 2014 business outlook is based on various external and internal assumptions. Economic and market assumptions include, but are not limited to, GDP growth in the countries where Thomson Reuters operates. Internal financial and operational assumptions include, but are not limited to, continuing operational improvement in the Financial & Risk business and the successful execution of new sales initiatives, ongoing product release programs, 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 or expand into new geographic markets and identify areas of higher growth; increased accessibility to free or relatively inexpensive information sources; failures or disruptions of network systems or the Internet; failure to maintain a high renewal rate for subscription-based services; dependency on third parties for data, information and other services; changes to law and regulations, including the impact of the Dodd-Frank legislation and similar financial services laws around the world; failure to adapt to recent organizational changes and effectively implement strategic initiatives; failure to recruit, motivate and retain high quality management and key employees; failure to meet the challenges involved in operating globally; failure to derive fully the anticipated benefits from existing or future acquisitions, joint ventures, investments or dispositions; failure to protect the brands and reputation of Thomson Reuters; impairment of goodwill and identifiable intangible assets; inadequate protection of intellectual property rights; threat of legal actions and claims; risk of antitrust/competition-related claims or investigations; downgrading of credit ratings and adverse conditions in the credit markets; fluctuations in foreign currency exchange and interest rates; 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
Corporate Affairs Senior Vice President, Investor Relations
+1 646 223 5285 +1 646 223 5288
david.crundwell@thomsonreuters.com frank.golden@thomsonreuters.com
Thomson Reuters will webcast a discussion of its second-quarter 2014 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.
(1) 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.
Thomson Reuters Corporation
Business Segment Information
(millions of U.S. dollars)
(unaudited)
Three Months Ended
June 30, Change
-------- ------
2014 2013 Total Before Organic
Currency
--------
Revenues
--------
Financial & Risk $1,655 $1,660 0% -2% -3%
Legal 850 846 1% 1% 0%
Tax & Accounting 324 288 13% 14% 10%
Intellectual Property & Science 251 234 7% 7% 5%
Corporate & Other (includes Reuters News) 82 82 0% -1% -1%
Eliminations (4) (2)
--- ---
Revenues from ongoing businesses (1) 3,158 3,108 2% 1% 0%
Other Businesses (2) 1 55
--- ---
Revenues $3,159 $3,163 0%
====== ======
Margin
------
Adjusted EBITDA (3) Change 2014 2013 Change
------------------ ------ ---- ---- ------
Financial & Risk $426 $420 1% 25.7% 25.3% 40bp
Legal 331 326 2% 38.9% 38.5% 40bp
Tax & Accounting 98 87 13% 30.2% 30.2% 0bp
Intellectual Property & Science 85 79 8% 33.9% 33.8% 10bp
Corporate & Other (includes Reuters News) (63) (54)
Adjusted EBITDA $877 $858 2% 27.8% 27.6% 20bp
==== ====
Underlying Operating Profit (4)
------------------------------
Financial & Risk $266 $260 2% 16.1% 15.7% 40bp
Legal 261 255 2% 30.7% 30.1% 60bp
Tax & Accounting 65 57 14% 20.1% 19.8% 30bp
Intellectual Property & Science 62 59 5% 24.7% 25.2% -50bp
Corporate & Other (includes Reuters News) (73) (62)
--- ---
Underlying operating profit $581 $569 2% 18.4% 18.3% 10bp
==== ====
Refer to page 12 for footnotes.
Thomson Reuters Corporation
Business Segment Information
(millions of U.S. dollars)
(unaudited)
Six Months Ended
June 30, Change
-------- ------
2014 2013 Total Before Organic
Currency
--------
Revenues
--------
Financial & Risk $3,313 $3,335 -1% -2% -3%
Legal 1,653 1,640 1% 1% 0%
Tax & Accounting 672 605 11% 13% 10%
Intellectual Property & Science 494 467 6% 6% 4%
Corporate & Other (includes Reuters News) 161 163 -1% -1% -1%
Eliminations (6) (5)
--- ---
Revenues from ongoing businesses (1) 6,287 6,205 1% 1% 0%
Other Businesses (2) 2 133
--- ---
Revenues $6,289 $6,338 -1%
====== ======
Margin
------
Adjusted EBITDA (3) Change 2014 2013 Change
------------------ ------ ---- ---- ------
Financial & Risk $825 $780 6% 24.9% 23.4% 150bp
Legal 615 602 2% 37.2% 36.7% 50bp
Tax & Accounting 213 185 15% 31.7% 30.6% 110bp
Intellectual Property & Science 157 149 5% 31.8% 31.9% -10bp
Corporate & Other (includes Reuters News) (113) (101)
Adjusted EBITDA $1,697 $1,615 5% 27.0% 26.0% 100bp
====== ======
Underlying Operating Profit (4)
------------------------------
Financial & Risk $506 $460 10% 15.3% 13.8% 150bp
Legal 476 456 4% 28.8% 27.8% 100bp
Tax & Accounting 149 126 18% 22.2% 20.8% 140bp
Intellectual Property & Science 113 110 3% 22.9% 23.6% -70bp
Corporate & Other (includes Reuters News) (135) (121)
---- ----
Underlying operating profit $1,109 $1,031 8% 17.6% 16.6% 100bp
====== ======
Refer to page 12 for footnotes.
Thomson Reuters Corporation
Reconciliation of Operating Profit to Adjusted EBITDA (3)
(millions of U.S. dollars)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 Change 2014 2013 Change
---- ---- ------ ---- ---- ------
Operating profit $381 $597 -36% $740 $987 -25%
Adjustments to remove:
Amortization of other identifiable intangible assets 165 157 328 317
Fair value adjustments 33 (29) 35 (91)
Other operating losses (gains), net 2 (136) 5 (130)
Operating (profit) loss from Other Businesses (2) - (20) 1 (52)
--- --- --- ---
Underlying operating profit $581 $569 2% $1,109 $1,031 8%
Remove: depreciation and amortization of computer 296 289 588 584
software (excluding Other Businesses (2))
Adjusted EBITDA $877 $858 2% $1,697 $1,615 5%
==== ==== ====== ======
Underlying operating profit margin (4) 18.4% 18.3% 10bp 17.6% 16.6% 100bp
==== ==== ==== ====
Adjusted EBITDA margin (3) 27.8% 27.6% 20bp 27.0% 26.0% 100bp
==== ==== ==== ====
Thomson Reuters Corporation
Reconciliation of Earnings from Continuing Operations to Adjusted EBITDA (3)
(millions of U.S. dollars)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 Change 2014 2013 Change
---- ---- ------ ---- ---- ------
Earnings from continuing operations $260 $256 2% $552 $239 131%
Adjustments to remove:
Tax expense 40 209 27 456
Other finance (income) costs (29) 17 (57) 72
Net interest expense 111 124 219 239
Amortization of other identifiable intangible assets 165 157 328 317
Amortization of computer software 197 188 391 376
Depreciation 99 101 197 208
--- --- --- ---
EBITDA $843 $1,052 $1,657 $1,907
Adjustments to remove:
Share of post-tax earnings in equity method (1) (9) (1) (19)
investments
Other operating losses (gains), net 2 (136) 5 (130)
Fair value adjustments 33 (29) 35 (91)
EBITDA from Other Businesses (2) - (20) 1 (52)
--- --- --- ---
Adjusted EBITDA $877 $858 2% $1,697 $1,615 5%
==== ==== ====== ======
Refer to page 12 for footnotes.
Thomson Reuters Corporation
Reconciliation of Underlying Operating Profit (4) to Adjusted EBITDA (3) by Business Segment
(millions of U.S. dollars)
(unaudited)
Three Months Ended Three Months Ended
June 30, 2014 June 30, 2013
------------- --------------
Underlying Add: Adjusted Underlying Add: Adjusted
Operating Depreciation EBITDA Operating Depreciation EBITDA
Profit and Profit and
Amortization Amortization of
of Computer Computer
Software ** Software **
--- ---
Financial & Risk $266 $160 $426 $260 $160 $420
Legal 261 70 331 255 71 326
Tax & Accounting 65 33 98 57 30 87
Intellectual Property & Science 62 23 85 59 20 79
Corporate & Other (includes Reuters News) (73) 10 (63) (62) 8 (54)
$581 $296 $877 $569 $289 $858
==== ==== ==== ==== ==== ====
Six Months Ended Six Months Ended
June 30, 2014 June 30, 2013
------------- -------------
Underlying Add: Adjusted Underlying Add: Adjusted
Operating Depreciation EBITDA Operating Depreciation EBITDA
Profit and Profit and
Amortization Amortization of
of Computer Computer
Software ** Software **
--- ---
Financial & Risk $506 $319 $825 $460 $320 $780
Legal 476 139 615 456 146 602
Tax & Accounting 149 64 213 126 59 185
Intellectual Property & Science 113 44 157 110 39 149
Corporate & Other (includes Reuters News) (135) 22 (113) (121) 20 (101)
$1,109 $588 $1,697 $1,031 $584 $1,615
====== ==== ====== ====== ==== ======
** Excludes Other Businesses (2)
Refer to page 12 for footnotes.
Thomson Reuters Corporation
Reconciliation of Earnings Attributable to Common Shareholders
to Adjusted Earnings (5)
(millions of U.S. dollars, except as otherwise indicated and except for per share data)
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Earnings attributable to common shareholders $249 $248 $531 $217
Adjustments to remove:
Operating (profit) loss from Other Businesses (2) - (20) 1 (52)
Fair value adjustments 33 (29) 35 (91)
Other operating losses (gains), net 2 (136) 5 (130)
Other finance (income) costs (29) 17 (57) 72
Share of post-tax earnings in equity method investments (1) (9) (1) (19)
Tax on above items (4) 36 (4) 58
Discrete tax items 14 151 - 372
Amortization of other identifiable intangible assets 165 157 328 317
Discontinued operations - (6) - (6)
Interim period effective tax rate normalization (6) 7 19 (5) 12
Tax charge amortization (7) (21) (24) (43) (32)
Dividends declared on preference shares - (1) (1) (2)
Adjusted earnings $415 $403 $789 $716
==== ==== ==== ====
Adjusted earnings per share $0.51 $0.48 $0.97 $0.86
===== ===== ===== =====
Diluted weighted-average common shares (millions) 813.4 832.5 817.3 831.5
===== ===== ===== =====
Thomson Reuters Corporation
Reconciliation of Net Cash Provided by Operating Activities
to Free Cash Flow from Ongoing Businesses (8)
(millions of U.S. dollars)
(unaudited)
Three Months
Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Net cash provided by
operating activities $876 $904 $989 $1,020
Capital expenditures,
less proceeds from
disposals (225) (188) (473) (538)
Other investing
activities 1 17 2 21
Dividends paid on
preference shares - (1) (1) (2)
Free cash flow 652 732 517 501
Remove: Other Businesses
(2) 1 (59) 1 (52)
--- --- --- ---
Free cash flow from
ongoing businesses $653 $673 $518 $449
==== ==== ==== ====
Refer to page 12 for footnotes.
Footnotes
---------
(1) Revenues from ongoing businesses
are revenues from reportable
segments and Corporate & Other
(which includes Reuters News)
less eliminations. Other
Businesses (see note (2) below)
are excluded.
(2) Other Businesses are businesses
that have been or are expected to
be exited through sale or closure
that did not qualify for
discontinued operations
classification.
(millions of U.S. dollars) Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
Other Businesses 2014 2013 2014 2013
---------------- ---- ---- ---- ----
Revenues $1 $55 $2 $133
=== === === ====
Operating profit (loss) - $20 ($1) $52
Depreciation and amortization of computer software - - - -
--- --- --- ---
EBITDA - $20 ($1) $52
=== === === ===
(3) Thomson Reuters defines adjusted
EBITDA as underlying operating
profit excluding the related
depreciation and amortization of
computer software. Adjusted
EBITDA margin is adjusted EBITDA
expressed as a percentage of
revenues from ongoing businesses.
(4) Underlying operating profit is
operating profit from reportable
segments and Corporate & Other
(includes Reuters News).
Underlying operating profit
margin is the underlying
operating profit expressed as a
percentage of revenues from
ongoing businesses.
(5) Adjusted earnings and adjusted
earnings per share include
dividends declared on preference
shares and amortization of the
2013 tax charges associated with
the consolidation of technology
and content assets but exclude
the pre-tax impacts of
amortization of other
identifiable intangible assets as
well as the post-tax impacts of
fair value adjustments, other
operating (gains) and losses,
certain impairment charges, the
results of Other Businesses (see
note (2) above), other finance
(income) costs, Thomson Reuters
share of post-tax (earnings)
losses in equity method
investments, discontinued
operations and other items
affecting comparability. Adjusted
earnings per share is calculated
using diluted weighted-average
shares and does not represent
actual earnings or loss per share
attributable to shareholders.
(6) Adjustment to reflect income taxes
based on estimated full-year
effective tax rate. Reported
earnings or loss for interim
periods reflect income taxes
based on the estimated effective
tax rates of each of the
jurisdictions in which Thomson
Reuters operates. The adjustment
reallocates estimated full-year
income taxes between interim
periods, but has no effect on
full-year income taxes.
(7) Reflects amortization of the 2013
tax charges associated with the
consolidation of the ownership
and management of technology and
content assets. For the non-IFRS
measure, the majority of the
charges are amortized over seven
years, the period over which the
tax is expected to be paid.
(8) Free cash flow is net cash
provided by operating activities
less capital expenditures, other
investing activities and
dividends paid on the company's
preference shares. Other
Businesses (see note (2) above)
are also removed to arrive at
free cash flow from ongoing
businesses.
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,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Revenues $3,159 $3,163 $6,289 $6,338
Operating expenses (2,315) (2,256) (4,628) (4,580)
Depreciation (99) (101) (197) (208)
Amortization of computer software (197) (188) (391) (376)
Amortization of other identifiable intangible assets (165) (157) (328) (317)
Other operating (losses) gains, net (2) 136 (5) 130
Operating profit 381 597 740 987
Finance costs, net:
Net interest expense (111) (124) (219) (239)
Other finance income (costs) 29 (17) 57 (72)
Income before tax and equity method investments 299 456 578 676
Share of post-tax earnings in equity method investments 1 9 1 19
Tax expense (40) (209) (27) (456)
--- ---- --- ----
Earnings from continuing operations 260 256 552 239
Earnings from discontinued operations, net of tax - 6 - 6
--- --- --- ---
Net earnings $260 $262 $552 $245
==== ==== ==== ====
Earnings attributable to:
Common shareholders 249 248 531 217
Non-controlling interests 11 14 21 28
Basic and diluted earnings per share $0.31 $0.30 $0.65 $0.26
===== ===== ===== =====
Basic weighted-average common shares 809,941,274 829,921,311 813,910,056 829,136,505
=========== =========== =========== ===========
Diluted weighted-average common shares 813,363,597 832,509,774 817,255,753 831,453,225
=========== =========== =========== ===========
Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
June 30, December 31,
2014 2013
---- ----
Assets
Cash and
cash
equivalents $704 $1,316
Trade
and
other
receivables 1,798 1,751
Other
financial
assets 143 183
Prepaid
expenses
and
other
current
assets 590 650
--- ---
Current
assets 3,235 3,900
Computer
hardware
and
other
property,
net 1,224 1,291
Computer
software,
net 1,566 1,622
Other
identifiable
intangible
assets,
net 7,639 7,890
Goodwill 17,060 16,871
Other
financial
assets 181 192
Other
non-
current
assets 603 583
Deferred
tax 70 90
--- ---
Total
assets $31,578 $32,439
======= =======
Liabilities and equity
Liabilities
Current
indebtedness $591 $596
Payables,
accruals
and
provisions 2,074 2,624
Deferred
revenue 1,429 1,348
Other
financial
liabilities 143 193
--- ---
Current
liabilities 4,237 4,761
Long-
term
indebtedness 7,467 7,470
Provisions
and
other
non-
current
liabilities 1,814 1,759
Other
financial
liabilities 142 102
Deferred
tax 1,801 1,917
----- -----
Total
liabilities 15,461 16,009
Equity
Capital 10,208 10,347
Retained
earnings 6,914 7,303
Accumulated
other
comprehensive
loss (1,477) (1,614)
------ ------
Total
shareholders'
equity 15,645 16,036
Non-
controlling
interests 472 394
--- ---
Total
equity 16,117 16,430
------ ------
Total
liabilities
and
equity $31,578 $32,439
======= =======
Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Cash provided by (used in):
Operating activities
Net earnings $260 $262 $552 $245
Adjustments for:
Depreciation 99 101 197 208
Amortization of
computer software 197 188 391 376
Amortization of
other identifiable
intangible assets 165 157 328 317
Net (gains) losses
on disposals of
businesses and
investments - (142) 1 (156)
Deferred tax (35) 70 (75) 242
Other 77 60 111 125
Changes in working
capital and other
items 113 208 (516) (337)
--- --- ---- ----
Net cash provided by
operating
activities 876 904 989 1,020
--- --- --- -----
Investing activities
Acquisitions, net of
cash acquired (137) (118) (137) (848)
Proceeds from
disposals of
businesses and
investments, 12 322 12 352
net of taxes paid
Capital
expenditures, less
proceeds from
disposals (225) (188) (473) (538)
Other investing
activities 1 17 2 21
Net cash (used in)
provided by
investing
activities (349) 33 (596) (1,013)
---- --- ---- ------
Financing activities
Proceeds from debt - 854 - 1,294
Repayments of debt - - - (440)
Net repayments under
short-term loan
facilities - (327) - -
Repurchases of
common shares (353) - (617) -
Dividends paid on
preference shares - (1) (1) (2)
Dividends paid on
common shares (258) (260) (520) (519)
Other financing
activities 125 (2) 129 7
--- --- --- ---
Net cash (used in)
provided by
financing
activities (486) 264 (1,009) 340
---- --- ------ ---
Increase (decrease)
in cash and bank
overdrafts 41 1,201 (616) 347
Translation
adjustments 3 (6) 3 (17)
Cash and bank
overdrafts at
beginning of period 655 411 1,312 1,276
--- --- ----- -----
Cash and bank
overdrafts at end
of period $699 $1,606 $699 $1,606
==== ====== ==== ======
Cash and bank overdrafts at end of period
comprised of:
Cash and cash
equivalents $704 $1,613 $704 $1,613
Bank overdrafts (5) (7) (5) (7)
--- --- --- ---
$699 $1,606 $699 $1,606
==== ====== ==== ======
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SOURCE Thomson Reuters
