* Revenue growth continues to accelerate; up 5% before currency
* Underlying operating profit up 1% (8% before one-time charges)
* Underlying operating profit margin was 17.2% (18.4% before one-time charges)
* Adjusted earnings per share were $0.39 ($0.42 before one-time charges) vs.
$0.36 in first quarter 2010
* 2011 Outlook affirmed
NEW YORK, April 28, 2011 Â - Thomson Reuters (TSX / NYSE: TRI), the world's
leading source of intelligent information for businesses and professionals,
today reported results for the first quarter ended March 31, 2011. The company
reported ongoing revenues of $3.2 billion, a 5% increase before currency,
underlying operating profit of $556 million and an underlying operating profit
margin of 17.2%.
Adjusted earnings per share (EPS) were $0.39, as compared to $0.36 in the first
quarter of 2010. The company incurred $39 million in one-time charges in the
first quarter, which it estimates will result in savings of $40 million in
2011. These charges, and related savings, are non-integration related and result
from ongoing efficiency opportunities to streamline the company's operations.
"I am pleased with our solid results for the first quarter," said Thomas H.
Glocer, chief executive officer of Thomson Reuters. "2011 is playing out much as
we anticipated, with accelerating revenue growth which will drive expanding
margins and higher cash flow as the year progresses."
"We are also focused on creating value by reallocating capital and talent to
drive growth and returns across the company. Today we announced the planned
divestiture of two businesses in the Markets division which, with the proceeds
of the previously announced sales of BARBRI and our Scandinavian Legal and Tax &
Accounting businesses, should provide approximately $1 billion for re-investment
in the attractive opportunities we find in our core businesses."
"Based on our good start to the year, we are confident that we will deliver on
our expectations for the full year."
Consolidated Financial Highlights
Today, the company announced its intention to sell its Enterprise Risk and
Portia businesses. Both of these transactions are expected to close in the
second half of 2011. The information presented in this news release excludes the
results from the businesses announced for disposal (BARBRI, the Scandinavian
Legal and Tax & Accounting businesses and the Enterprise Risk and Portia
businesses).
Three Months Ended March 31,
(Millions of U.S. dollars, except EPS and
 margin)
IFRS Financial Measures 2011 2010 Â Â Change
Revenues $3,330 $3,140 6%
Operating profit $396 $321 23%
Diluted earnings per share (EPS) $0.30 $0.15 100%
Cash flow from operations $124 $209 -41%
Change Before
Non-IFRS Financial Measures[1] 2011 2010 Change Currency
Revenues from ongoing businesses $3,240 $3,057 6% 5%
Adjusted EBITDA $751 $725 4% 3%
Adjusted EBITDA margin 23.2% 23.7% -50bp
Underlying operating profit $556 $550 1% 0%
Underlying operating profit margin 17.2% 18.0% -80bp
Adjusted earnings per share (EPS) $0.39 $0.36 8%
Underlying free cash flow $13 $107 -88%
[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. Â Additional information is provided in the explanatory note at the end
of this news release.
* Revenues from ongoing businesses were $3.2 billion, a 5% increase before
currency. Strong growth across the Professional division, up 8%, and a 2%
increase in the Markets division revenues contributed to the overall
increase.
* Adjusted EBITDA increased 4%, and the corresponding margin was 23.2% versus
23.7% in the prior-year period. Flow-through from higher revenues and
synergy savings in Markets were partly offset by $39 million of one-time
charges and the dilutive effects of 2010 acquisitions. Adjusted EBITDA
margin, excluding these one-time charges, was 24.4%.
* Underlying operating profit increased 1% and the corresponding margin was
17.2% (18.4% excluding one-time charges), versus 18.0% in the same period in
2010. Underlying operating profit growth across both divisions was partly
offset by the one-time charges.
* Adjusted EPS was $0.39 compared to $0.36 in the prior-year period. The
increase was largely attributable to lower integration costs and higher
underlying operating profit. Adjusted EPS prior to one-time charges was
$0.42.
First-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. Â All revenue growth
and operating profit comparisons are based upon results from ongoing businesses
and exclude the results of disposals.
Professional Division
  Three Months Ended March 31,
(Millions of U.S. dollars, except margin)
 Change Before
2011 2010 Â Â Change Currency
Revenues
Legal $885 $799 11% 10%
Tax & Accounting $272 $260 5% 4%
Healthcare & Science $220 $208 6% 6%
Professional Division
Total  $1,377   $1,267 9% 8%
      Margin
Adjusted EBITDA Â Â Â Â Â 2011 2010
Legal $291 $278 5% Â Â Â Â Â 32.9% Â Â Â 34.8%
Tax & Accounting $66 $57 16% Â Â 24.3% 21.9%
Healthcare & Science $62 $62 0% Â Â 28.2% 29.8%
Professional Division
Total $419 $397 6% 5% Â 30.4% 31.3%
Operating profit
Legal $216 $210 3% Â Â 24.4% 26.3%
Tax & Accounting $41 $35 17% Â Â 15.1% 13.5%
Healthcare & Science $44 $44 0% Â Â 20.0% 21.2%
Professional Division
Total $301 $289 4% 4% Â 21.9% 22.8%
* Revenues were up 8%, driven by solid growth across all businesses, in
particular Legal which grew 10% driven by growth in revenues across all
major units and acquisitions.
* EBITDA increased 6% compared to the prior-year period. Â The corresponding
margin was 30.4% compared to 31.3% for the prior year. The decline in margin
was due to $11 million in one-time charges and the dilutive effect from
2010 acquisitions.
* Operating profit was up 4% compared to the prior-year period. The
corresponding margin was 21.9% compared to 22.8% for the prior year. The
decline in margin was due to one-time charges and the dilutive effect from
2010 acquisitions.
* Excluding one-time charges, EBITDA margin was 31.2% versus 31.3% in the
prior-year period, and the operating profit margin was 22.7% versus 22.8%
for the same period a year ago.
Legal
* Revenues increased 10% from the prior-year period largely helped by
acquisitions. Subscription revenues grew 8%, led by 16% growth in FindLaw.
Corporate, Government and Academic revenues increased 12%. Non-subscription
revenues increased 26% primarily due to strong sales at our Elite law firm
automation unit (up 30%). Print revenues were up 5% primarily due to timing
and stabilizing print attrition.
* EBITDA increased 5% and the associated margin was 32.9% and included $10
million in one-time charges and the dilutive effect of acquisitions.
Excluding one-time charges, EBITDA rose 8% and the associated margin was
34.0%.
* Operating profit increased 3% and the associated margin was 24.4%. Excluding
one-time charges, operating profit rose 8% and the related margin was
25.5%.
* WestlawNext has been sold to over 18,500 customers since its launch in
February 2010 - representing 34% of Westlaw's revenue base. Customer
feedback continues to be extremely positive.
Tax & Accounting
* Revenues were up 4%. Workflow & Service Solutions (two-thirds of the
segment's revenues) grew 5%, led by growth in income tax software products,
global tax technology products and acquisitions. Business Compliance &
Knowledge Solutions revenues grew 3%, as online (including Checkpoint)
growth of 12% and acquisitions were partly offset by a decline in print,
which comprised 8% of Tax & Accounting's first-quarter revenues.
* EBITDA increased 16% and the related margin increased 240 basis points to
24.3%.
* Operating profit increased 17% and the related margin increased 160 basis
points to 15.1%.
* EBITDA and operating profit growth was driven by strong flow-through from
revenues and the results of efficiency initiatives. Tax & Accounting is a
seasonal business with nearly 50% of its operating profit traditionally
generated in the fourth quarter.
Healthcare & Science
* Revenues grew 6% from the prior-year period. Growth was driven by continued
demand for healthcare spending analytics in the Payer business, which was up
double-digit. Scientific & Scholarly Research was down 2%, primarily due to
timing related to a significant backfiles sale in the first quarter of
2010. Life Sciences revenues increased 14% due to strong demand for biology
and disease analytics products and the GeneGo acquisition.
* EBITDA was flat with the corresponding margin decreasing to 28.2%.
* Operating profit was flat with the corresponding margin decreasing to
20.0%. The decline in EBITDA and operating profit margins was due to timing
of revenues and a difficult prior-year comparison.
Markets Division
Three Months Ended March 31,
 (Millions of U.S. dollars, except margin)
Change Before
 2011 2010   Change Currency
Revenues
Sales & Trading $927 $890 4% 2%
Investment & Advisory $560 $559 0% -1%
Enterprise $296 $263 13% 10%
Media $82 $80 2% 1%
Markets Division Total $1,865 $1,792 4% 2%
Adjusted EBITDA $471 $475 -1% -3%
Adjusted EBITDA Margin % 25.3% 26.5%
Operating Profit $330 $318 4% 2%
Operating Profit Margin % 17.7% 17.7%
* Revenues increased 2%. By segment, strong revenue growth in Enterprise,
Commodities & Energy and Tradeweb was partly offset by weakness in
Investment Management and Exchange Traded Instruments.
* Recurring subscription-related revenues increased 2%. Revenue growth would
have been 3% absent a 5% decline in recoveries (pass-through revenues from
third party services such as exchange fees). Transactions-related revenues
increased 15%, primarily due to the change in the company's ownership in
Tradeweb. Outright revenues increased 3%.
* By geography, revenues in the first quarter grew across all major regions of
the world. Asia increased 3%, while Europe, Middle East and Africa (EMEA)
increased 2% and the Americas increased 2%.
* EBITDA was $471 million, down 1%, with the related margin of 25.3%.
* Operating profit was $330 million, up 4%, with a related margin of 17.7%.
* EBITDA and operating profit margin included a one-time charge of
approximately $28 million.
* Excluding the one-time charge, EBITDA margin was 26.8% (up 30 basis points
versus a year ago) and the operating margin was 19.2% (up 150 basis points
versus a year ago).
* Markets has sold or migrated more than 19,000 Thomson Reuters Eikon desktops
since the launch of its new flagship desktop offering in September 2010.
Sales & Trading
* Revenues were up 2% driven by Tradeweb growth of 35%, primarily due to the
change in the company's ownership in the business. Revenue growth was partly
offset by a 9% decline in recoveries.
* The Treasury business grew 1% with growth impacted by  2010 subscription
cancellations.
* Revenues from Commodities & Energy grew 9% primarily due to an acquisition,
while Exchange Traded Instruments declined 6%, due to planned shutdowns of
low-margin products and the continued reduction of recoveries revenues as
exchanges move to direct billing.
Investment & Advisory
* Revenues declined 1%. A 3% increase in Corporates and a 1% increase in
Wealth Management was not enough to offset weak performance in Investment
Management which declined 4% - an improvement over the 10% annual decline in
2010.
* An integrated plan has been established to improve the performance of the
Investment Management unit, including a change in management, changes in the
"go-to-market" strategy as well as longer-term product enhancements
culminating in the planned release of Thomson Reuters Eikon for Investment
Management later in the year.
Enterprise
* Revenues grew 10%, driven by continued strong customer demand. The
Enterprise Real Time Solutions business grew 10% as customers continued to
invest in low-latency data feeds and hosting solutions. The Enterprise
Content business grew 17%, driven by growth in pricing and reference data.
The Platform business grew 4%, driven by strong sales of recurring products.
Omgeo's revenues increased 7% due to strong equity volumes.
* Thomson Reuters Elektron continued to gain momentum as customers in
established and emerging markets adopted its combination of hosted and
deployed information and trading solutions. In total, 12 data hosting
centers are up and running with India having opened in the first quarter and
Brazil scheduled to open in the second quarter.
Media
* Revenues increased 1% driven by flow-through from good sales in the second
half of 2010.
* The Consumer business grew 6% in the first quarter, due to a pickup in
online advertising sales across all global properties, while the News Agency
business was flat.
Corporate & Other
Corporate costs were $143 million, compared to $163 million in the prior-year
period, and were comprised of core corporate costs of $75 million, favorable
fair-value adjustments (non-cash) of $2 million and integration program costs of
$70 million. Compared to the prior-year period, corporate costs decreased by $20
million primarily from lower integration program expenses.
Integration Programs
At the end of the first quarter of 2011, Thomson Reuters had achieved combined
run-rate savings of $1.5 billion from the Reuters integration, and legacy
savings programs. An incremental $80 million in run-rate savings achieved during
the first quarter of 2011 was largely attributable to retirement of legacy
products and execution of our sales and customer service transformation
programs.
Integration-related costs totaled $70 million in the quarter and are forecast to
be $200 million for the full-year 2011.
Business Outlook (Before Currency)
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."
Thomson Reuters today reaffirmed its business outlook for 2011 that was
previously communicated in February.
Based on new products gaining momentum and our markets recovering, Thomson
Reuters expects revenues to grow mid-single digits in 2011.
Thomson Reuters expects adjusted EBITDA margin to increase by at least 300 basis
points in 2011 reflecting revenue growth and the completion of integration
programs.
Thomson Reuters expects underlying operating profit margin to increase by at
least 100 basis points in 2011. This increase comes after absorbing a 70 basis
point impact from higher depreciation and amortization related to prior years'
investments in recently launched products.
The company expects that strong adjusted EBITDA growth in 2011 will contribute
to a 20% - 25% increase in reported free cash flow.
Dividend
As previously announced, Thomson Reuters increased its 2011 annual dividend by
$0.08 per share to $1.24 per share. A quarterly dividend of $0.31 per share is
payable on June 15, 2011 to shareholders of record as of May 19, 2011.
Recent Developments
Today, the company announced its intention to sell its Enterprise Risk and
Portia businesses. Â Both of these transactions are expected to close in the
second half of 2011.
The company closed the sale of its Scandinavian Legal and Tax & Accounting
businesses earlier this month and has signed an agreement to dispose of its
BARBRI legal education business, which is expected to close later this quarter.
The company expects net proceeds resulting from these dispositions of
approximately $1 billion.
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, legal, tax and accounting, healthcare and science and media markets,
powered by the world's most trusted news organization. With headquarters in New
York and major operations in London and Eagan, Minnesota, Thomson Reuters
employs more than 55,000 people and operates in over 100 countries. Â Thomson
Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol:
TRI). Â 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 "Integration Programs" and "Business Outlook (Before
Currency)" sections and Mr. Glocer's comments, are forward-looking. These
forward-looking statements are based on certain assumptions and reflect our
company's current expectations. 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 2011. 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 material assumptions underlying the company's 2011 business outlook are
based on various external and internal assumptions. Economic and market
assumptions include, but are not limited to, positive global GDP growth led by
rapidly developing economies and a continued increase in the number of
professionals around the world and their demand for high quality information and
services. Internal financial and operational assumptions include, but are not
limited to, the successful execution of the company's ongoing product release
programs, globalization strategy, other growth initiatives and efficiency
programs.
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; increased accessibility to free or
relatively inexpensive information sources; failure to develop new products,
services, applications and functionalities to meet customers' needs, attract new
customers or expand into new geographic markets; failure to maintain a high
renewal rate for subscription-based services; failures or disruptions of network
systems or the Internet; detrimental reliance on third parties for 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 meet the challenges involved in operating globally; failure to
protect the reputation of Thomson Reuters; impairment of goodwill and
identifiable intangible assets; inadequate protection of intellectual property
rights; threat of legal actions and claims; downgrading of credit ratings and
adverse conditions in the credit markets; fluctuations in foreign currency
exchange and interest rates; failure to recruit and retain high quality
management and key employees; 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; failure to
fully derive anticipated benefits from future or existing acquisitions, joint
ventures, investments or dispositions; and failure to achieve benefits from
integration programs to the extent, or within the time period, currently
expected. 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.
CONTACT
MEDIA INVESTORS
Calvin Mitchell Frank J. Golden
Senior Vice President, Corporate Senior Vice President, Investor
Affairs   Relations
+1 646 223 5285 +1 646 223 5288
calvin.mitchell@thomsonreuters.com frank.golden@thomsonreuters.com
Thomson Reuters will webcast a discussion of its first-quarter 2011 results
today beginning at 8:30 a.m. Eastern Daylight Time (EDT). Â You can access the
webcast by visiting www.thomsonreuters.com and clicking on "Investor Relations"
at the top of the page and then "Thomson Reuters Reports First-Quarter 2011
Results." Â An archive of the webcast will be available in the "Investor
Relations" section of the Thomson Reuters website.
Thomson Reuters Corporation
Division and Business Segment Information
 (millions of U.S. dollars)
(unaudited)
  Three Months Ended
  March 31,
  2011 2010   Change   Organic
Revenues
   Legal (1)  $885 $799 11% 4%
   Tax & Accounting (1)  272 260 5% 3%
   Healthcare & Science  220 208 6% 5%
Professional Division  1,377 1,267 9% 4%
   Sales & Trading  927 890 4% 0%
   Investment & Advisory  560 559 0% -1%
   Enterprise (1)  296 263 13% 10%
   Media  82 80 2% 1%
Markets Division  1,865 1,792 4% 1%
Eliminations  (2) (2)
Revenues from ongoing businesses (2)  3,240 3,057 6% 2%
Before currency    5%
Disposals (1), (2) Â 90 83
Revenues  $3,330 $3,140 6%
Adjusted EBITDA
Legal (1) Â $291 $278 5%
Tax & Accounting (1) Â 66 57 16%
Healthcare & Science  62 62 0%
Professional Division  419 397 6%
Markets Division (1) Â 471 475 -1%
Core corporate expenses  (69) (50)
Integration programs expenses  (70) (97)
Adjusted EBITDA Â $751 $725 4%
Underlying Operating Profit
Legal (1) Â $216 $210 3%
Tax & Accounting (1) Â 41 35 17%
Healthcare & Science  44 44 0%
Professional Division  301 289 4%
Markets Division (1) Â 330 318 4%
Core corporate expenses  (75) (57)
Underlying operating profit  $556 $550 1%
Thomson Reuters Corporation
Reconciliation of Operating Profit to Underlying Operating Profit (3) and
Adjusted EBITDA (4)
 (millions of U.S. dollars)
(unaudited)
 Three Months
Ended
March 31,
 2011     2010 Change
Operating profit $396 $321 23%
Adjustments:
   Amortization of other identifiable intangible
assets 144 129
   Integration programs expenses 70 97
   Fair value adjustments (2) 9
   Other operating gains, net (33) (1)
   Disposals (1) (19) (5)
Underlying operating profit $556 $550 1%
Adjustments:
Integration programs expenses (70) (97)
Depreciation and amortization of computer software
from ongoing businesses (1) 265 272
Adjusted EBITDA $751 $725 4%
Underlying operating profit margin 17.2% 18.0% -80bp
Adjusted EBITDA margin 23.2% 23.7% -50bp
Thomson Reuters Corporation
Reconciliation of Earnings from Continuing Operations to Adjusted EBITDA (4)
(millions of U.S. dollars)
(unaudited)
 Three Months
Ended
March 31,
 2011     2010 Change
Earnings from continuing operations $255 $134 90%
Adjustments:
   Tax expense  52 31
   Other finance (income) cost, net (7) 63
   Net interest expense 101 93
   Amortization of other identifiable intangible
assets 144 129
   Amortization of computer software 164 141
   Depreciation 107 138
EBITDA $816 $729 12%
Adjustments:
Share of post tax earnings in equity method investees (5) -
Other operating gains, net (33) (1)
Fair value adjustments (2) 9
EBITDA from disposals (25) (12)
Adjusted EBITDA $751 $725 4%
Adjusted EBITDA margin 23.2% 23.7% -50bp
Thomson Reuters Corporation
Reconciliation of Operating Profit to Adjusted EBITDA (4) by Division and
Business Segment
(millions of U.S. dollars)
(unaudited)
 Three months ended March 31, 2011  Three months ended March 31, 2010
  Adjustments    Adjustments
Depreciation Depreciation
and and
Amortization Amortization
Operating  of Computer Adjusted Operating of Computer Adjusted
 Profit Software  Other EBITDA  Profit Software  Other EBITDA
Division and
business
segment
  Legal (1) $216 $75 - $291  $210 $68 - $278
  Tax &
Accounting
(1) 41 25 - 66 Â 35 22 - 57
 Healthcare
& Science 44 18 - 62 Â 44 18 - 62
Professional
division 301 118 - 419 Â 289 108 - 397
Markets
division (1) 330 141 - 471 Â 318 157 - 475
  Core
corporate
expenses (75) 6 - (69) Â (57) 7 - (50)
 Integration
programs
  expenses (70) - - (70)  (97) - - (97)
  Fair
value
adjustments 2 - (2) - Â (9) - 9 -
Corporate &
Other (143) 6 (2) (139) Â (163) 7 9 (147)
Ongoing
businesses 488 265 (2) 751 Â 444 272 9 725
Disposals
(1), (2) 19 6 (25) - Â 5 7 (12) -
Segment
totals 507 $271 $(27) $751 Â 449 $279 $(3) $725
Amortization
of other
identifiable
intangible
assets (144) Â Â Â Â (129)
Other
operating
gains, net 33 Â Â Â Â 1
Total $396 Â Â Â Â $321
Thomson Reuters Corporation
Reconciliation of Earnings Attributable to Common Shareholders
 to Adjusted Earnings from Continuing Operations (5)
(millions of U.S. dollars, except as otherwise indicated and except for per
share data)
(unaudited)
Three Months
 Ended
 March 31,
 2011 2010
Earnings attributable to common shareholders $250 $127
Adjustments:
   Disposals (1) (19) (5)
   Fair value adjustments (2) 9
   Other operating gains, net (33) (1)
   Other finance (income) costs (7) 63
   Share of post tax earnings in equity method investees (5) -
   Tax on above items(1) 9 (4)
Interim period effective tax rate normalization (6) (10) (18)
Amortization of other identifiable intangible assets 144 129
Discontinued operations (2) -
Dividends declared on preference shares (1) (1)
Adjusted earnings from continuing operations $324 $299
Adjusted earnings per share from continuing operations $0.39 $0.36
Diluted weighted average common shares (in millions) 839.7 834.7
(1)Â Â Â Results for 2010 restated to reflect the 2011 presentation.
(2) Revenues, operating profit and EBITDA from ongoing businesses exclude the
results of disposals, which are defined as businesses sold or held for
sale that do not qualify as discontinued operations.
(3) Underlying operating profit excludes amortization of other identifiable
intangible assets, certain impairment charges, fair value adjustments,
integration programs expense, other operating gains and losses and the
results of disposals. Underlying operating profit margin is the
underlying operating profit expressed as a percentage of revenues from
ongoing businesses.
(4) Thomson Reuters defines adjusted EBITDA as underlying operating profit
excluding depreciation and amortization of computer software from ongoing
businesses but including integration programs expense. Adjusted EBITDA
margin is adjusted EBITDA expressed as a percentage of revenues from
ongoing businesses.
(5) Adjusted earnings from continuing operations and adjusted earnings per
share from continuing operations include dividends declared on preference
shares and integration programs expense, 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 disposals (see note
(2) above), other net finance (income) costs, Thomson Reuters share of
post-tax (earnings) losses in equity method investees, discontinued
operations and other items affecting comparability. Adjusted earnings per
share from continuing operations is calculated using diluted weighted
average shares and does not represent actual earnings per share
attributable to shareholders.
(6) Adjustment to reflect income taxes based on estimated full-year effective
tax rate. Reported earnings 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.
Thomson Reuters Corporation
Consolidated Income Statement
(millions of U.S. dollars, except per share data)
(unaudited)
  Three Months Ended
   March 31,
   2011 2010
Revenues   $3,330 $3,140
Operating expenses   (2,552) (2,412)
Depreciation   (107) (138)
Amortization of computer software   (164) (141)
Amortization of other identifiable intangible
assets  (144) (129)
Other operating gains, net   33 1
Operating profit   396 321
Finance costs, net:
   Net interest expense   (101) (93)
   Other finance income (costs)   7 (63)
Income before tax and equity method investees   302 165
Share of post tax earnings in equity method
investees  5 -
Tax expense   (52) (31)
Earnings from continuing operations   255 134
Earnings from discontinued operations, net of tax   2 -
Net earnings   $ 257 $134
Earnings attributable to:
Common shareholders   250 127
Non-controlling interests    7 7
Basic and diluted earnings per share  $0.30 $0.15
Basic weighted average common shares   835,171,533   830,890,182
Diluted weighted average common shares   839,706,309   834,740,243
Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
 March 31,  December 31,
2011 Â 2010
Assets
Cash and cash equivalents $611 Â $864
Trade and other receivables 1,895 Â 1,809
Other financial assets 66 Â 74
Prepaid expenses and other current assets 919 Â 912
Assets held for sale 202 Â -
Current assets 3,693 Â 3,659
Computer hardware and other property, net 1,524 Â 1,567
Computer software, net 1,617 Â 1,613
Other identifiable intangible assets, net 8,610 Â 8,714
Goodwill 18,967 Â 18,892
Other financial assets 505 Â 460
Other non-current assets 567 Â 558
Deferred tax 58 Â 68
Total assets $35,541 Â $35,531
Liabilities and equity
Liabilities
Current indebtedness $693 Â $645
Payables, accruals and provisions 2,436 Â 2,924
Deferred revenue 1,352 Â 1,300
Other financial liabilities 138 Â 142
Liabilities associated with assets held for sale 112 Â -
Current liabilities 4,731 Â 5,011
Long-term indebtedness 6,931 Â 6,873
Provisions and other non-current liabilities 2,176 Â 2,217
Other financial liabilities 58 Â 71
Deferred tax 1,665 Â 1,684
Total liabilities 15,561 Â 15,856
Equity
Capital 10,366 Â 10,284
Retained earnings 10,527 Â 10,518
Accumulated other comprehensive loss (1,268) Â (1,480)
Total shareholders' equity  19,625  19,322
Non-controlling interests 355 Â 353
Total equity 19,980 Â 19,675
Total liabilities and equity $35,541 Â $35,531
Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
 Three Months Ended  March
 31,
  2011 2010
Cash provided by (used in):
Operating activities
Net earnings  $ 257 $134
Adjustments for:
Depreciation  107 138
Amortization of computer software  164 141
Amortization of other identifiable intangible
assets  144 129
Deferred tax  (32) (38)
Other  31 142
Changes in working capital and other items  (547) (431)
Operating cash flows from continuing operations  124 215
Operating cash flows from discontinued operations  - (6)
Net cash provided by operating activities  124 209
Investing activities
Acquisitions, less cash acquired  (54) (63)
Proceeds from other disposals  15 14
Capital expenditures, less proceeds from disposals  (218) (214)
Other investing activities  35 (1)
Investing cash flows from continuing operations  (222) (264)
Investing cash flows from discontinued operations  21 -
Net cash used in investing activities  (201) (264)
Financing activities
Proceeds from debt  - 491
Repayments of debt  (5) (471)
Net borrowings under short-term loan facilities  43 -
Dividends paid on preference shares  (1) (1)
Dividends paid on common shares  (217) (231)
Other financing activities  - (6)
Net cash used in financing activities  (180) (218)
Translation adjustments on cash and cash
equivalents  4 (10)
Decrease in cash and cash equivalents  (253) (283)
Cash and cash equivalents at beginning of period  864 1,111
Cash and cash equivalents at end of period  $611 $828
Thomson Reuters Corporation
Reconciliation of Net Cash Provided by Operating Activities
to Underlying Free Cash Flow (1) (2)
(millions of U.S. dollars)
(unaudited)
  Three Months Ended
 March 31,
  2011 2010
Net cash provided by operating activities  $124 $209
Capital expenditures, less proceeds from disposals  (218) (214)
Other investing activities  35 (1)
Dividends paid on preference shares  (1) (1)
Free cash flow (1) Â (60) (7)
Integration programs costs  73 114
Underlying free cash flow (2) Â $13 $107
(1)Â Â Â Free cash flow is net cash provided by operating activities less capital
expenditures, other investing activities and dividends paid on our
preference shares. Thomson Reuters uses free cash flow as a performance
measure because it represents cash available to repay debt, pay dividends
and fund share repurchases and new acquisitions.
(2) Underlying free cash flow is free cash flow excluding one-time cash costs
associated with integration programs.
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(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Thomson Reuters Corporation via Thomson Reuters ONE
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