Consumer ServicesMediaMedia
Economy, Business And Finance
Company InformationQuarterly Or Semiannual Financial Statement
* Consolidated net sales were positive and accelerated through Q2, led by
strong performance in Legal and Markets
* Second-quarter ongoing revenues down 1% before currency
* Professional division revenues up 2% before currency; Markets division
revenues down 3% before currency
* Underlying operating profit of $655 million, down 17%
* Adjusted EPS of $0.47 vs. $0.58 in prior-year period
* Underlying free cash flow of $751 million, down 11%
* 2010 Outlook reaffirmed
NEW YORK, July 29, 2010 - Thomson Reuters (TSX / NYSE: TRI), the world's
leading source of intelligent information for businesses and professionals,
today reported results for the second quarter ended June 30, 2010. The company
reported ongoing revenues of $3.2 billion, underlying operating profit of $655
million, underlying operating profit margin of 20.4% and underlying free cash
flow of $751 million.
"I am pleased with the continuing progress the company has made in the first
half of the year. While our markets are only slowly improving, we have seen
accelerating results in terms of revenues, net sales and customer uptake of our
new products," said Thomas H. Glocer, chief executive officer of Thomson
Reuters. "Based on these encouraging trends, we expect that Thomson Reuters will
return to revenue growth in the third quarter."
"We attribute our expected return to growth to our decision not to cut
investment in innovation and new product platforms in 2010. While investments in
the launch of products like WestlawNext, Thomson Reuters Eikon and the ONESOURCE
global tax workstation are still expected to suppress margins by some 100 basis
points in 2010, they will enable us to drive growth, strengthen our competitive
position and improve margins for years to come."
Consolidated Financial Highlights
Three Months Ended June 30,
(Millions of U.S. dollars, except EPS and profit
margin)
IFRS Financial Measures 2010 2009 Change
Revenues $3,216 $3,293 -2%
Operating profit $435 $475 -8%
Diluted earnings per share $0.35 $0.38 -8%
(EPS)
Cash flow from operations $888 $1,006 -12%
Change Before
Non-IFRS Financial Measures[1] 2010 2009 Change Currency
Revenues from ongoing $3,216 $3,275 -2% -1%
businesses
Underlying operating profit $655 $792 -17% -12%
Underlying operating profit 20.4% 24.2% -380bp
margin
Adjusted earnings per share $0.47 $0.58 -19%
(EPS)
Underlying free cash flow $751 $846 -11%
[1] These and other non-IFRS financial measures are defined and reconciled to
the most directly comparable IFRS measure in the tables appended to this news
release. Additional information is provided in the explanatory note at the end
of this news release.
* Revenues from ongoing businesses were $3.2 billion, a decrease of 2% after
currency and a decrease of 1% before currency. Good growth in Enterprise,
Legal's subscription businesses and Tax & Accounting was offset by expected
softness in Legal print and non-subscription revenues and a decline in Sales
& Trading and Investment & Advisory revenues due to flow-through from
prior-year negative net sales.
* Underlying operating profit declined 17%, attributable to lower revenues,
product mix, previously announced investments and unfavorable currency
movements. Underlying operating profit declined 12% before currency.
* Adjusted EPS was $0.47 compared to $0.58 in the prior-year period. The
decline was largely attributable to lower underlying operating profit.
* Underlying free cash flow was $751 million, a decline of 11% versus the
prior-year period.
* Integration and legacy savings programs continue to progress well, achieving
run-rate savings of $1.3 billion towards a previously announced goal of $1.6
billion of run-rate savings by the end of 2011.
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. ( )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 June 30,
(Millions of U.S. dollars, except profit margin)
2010 2009 Change Change Before
Currency
Revenues
Legal $936 $934 0% 0%
Tax & Accounting $243 $225 8% 8%
Healthcare & Science $214 $210 2% 3%
Professional Division Total $1,393 $1,369 2% 2%
Operating Profit
Legal $306 $341 -10%
Tax & Accounting $32 $36 -11%
Healthcare & Science $48 $52 -8%
Professional Division Total $386 $429 -10% -10%
Operating Profit Margin %
Legal 32.7% 36.5%
Tax & Accounting 13.2% 16.0%
Healthcare & Science 22.4% 24.8%
Professional Division Total 27.7% 31.3%
* Second-quarter revenues rose 2% driven by good growth from Legal
subscriptions, Tax & Accounting and Healthcare & Science products, somewhat
offset by declines in Legal print and non-subscription products.
* Second-quarter operating profit declined 10%, as anticipated, primarily due
to revenue mix and continued investment in the business.
Legal
* Second-quarter revenues were unchanged from the prior-year period.
Subscription revenues grew 5%, led by 17% growth in FindLaw.
Non-subscription revenues declined 5% and print products declined 9% due to
tightened customer budgets and some timing benefits in the second quarter of
2009. Print attrition has slowed substantially from the prior-year period
and is nearing historical levels.
* Second-quarter operating profit declined 10% and the associated margin was
32.7%. Lower revenues from high-margin print and non-subscription products
and the impact of investments in strategic growth initiatives more than
offset efficiency savings. Over time, margins are expected to return to
historical levels as revenues recover.
* WestlawNext has been sold to approximately 5,700 customers to date since its
launch in February 2010. We are well ahead of the company's initial
expectations and customer feedback continues to be extremely positive.
Tax & Accounting
* Second-quarter revenues grew 8%. Workflow & Software Solutions, which
comprise two-thirds of the segment's revenues, grew 12%, led by income tax
products and growth in the global tax businesses. Business Compliance &
Knowledge Solutions revenues were flat versus the prior-year period as
Checkpoint's growth of 8% was offset in part by a continued decline in
print, which comprised 10% of the segment's revenues.
* Second-quarter operating profit declined 11% and the related margin fell to
13.2%. The anticipated declines were largely attributable to the dilutive
impact of 2009 acquisitions. Tax & Accounting is a seasonal business with
nearly 50% of its operating profit historically generated in the fourth
quarter.
Healthcare & Science
* Second-quarter revenues grew 3%. Growth was driven by continued demand for
healthcare spending analytics in the Payer business, which was up 6%, offset
by an expected short-term decline in the Provider business, which was down
6%. Growth in Scientific & Scholarly Research, which was up 10%, was driven
by core information offerings.
* Second-quarter operating profit decreased 8% versus 2009, and the
corresponding margin was 22.4%. The decline in operating profit was
primarily attributable to timing and a difficult prior-year comparison.
Year-to-date, the margin is 21.8%, up 100 basis points versus 2009.
Markets Division
Three Months Ended June 30,
(Millions of U.S. dollars, except profit margin)
2010 2009 Change Change Before
Currency
Revenues
Sales & Trading $869 $925 -6% -5%
Investment & Advisory $551 $587 -6% -6%
Enterprise $326 $314 4% 6%
Media $79 $82 -4% -3%
Markets Division Total $1,825 $1,908 -4% -3%
Operating Profit $319 $424 -25% -15%
Operating Profit Margin % 17.5% 22.2%
* Revenue trends continue to improve with second quarter revenues down 3%
compared to a 4% decline in the first quarter, and a 5% decline in the
fourth quarter of 2009. The decline was attributable to flow-through from
weak 2009 net sales and some one-time revenues in the second quarter of last
year.
* The second quarter marked the second consecutive quarter of sequential
revenue growth (Q2 2010 vs. Q1 2010), led by growth in transactions and
recurring subscriptions.
* By geography, Asia declined 1%, while Europe, Middle East and Africa (EMEA)
and the Americas declined 3% and 4%, respectively.
* By market, growth in Enterprise, Corporates and Commodities & Energy was
more than offset by weak performance in Exchange Traded Instruments and
Investment Management.
* Second-quarter operating profit was $319 million (down 25%) with the related
margin declining, as expected, to 17.5%. The margin decline was attributable
to the flow-through from lower revenues, investment in new product platforms
and a challenging prior-year comparison. Excluding the impact of currency,
operating profit declined 15%.
* As scheduled, the innovative Thomson Reuters Eikon desktop went into broad
beta release in the second quarter and is on track for full commercial
launch in the second half of the year.
* In addition, Reuters Insider was launched in the second quarter and has
already captured 40,000 subscribers from approximately 8,000 companies.
Sales & Trading
* Second-quarter revenues decreased 5%. The decline was due to continued
pressure on recoveries revenues and desktop reductions in the Exchange
Traded Instruments and Fixed Income businesses, where revenues have been
negatively impacted by the retirement of low margin legacy products.
Tradeweb revenues rose 4% due to stronger volumes from U.S. federal
government treasuries and Commodities & Energy revenues grew 3%.
* The Treasury business declined 1% in the quarter due to the flow-through
from weak 2009 net sales, despite a significant increase in foreign exchange
volumes. Overall, Sales & Trading transaction revenues were up 6%.
Investment & Advisory
* Second-quarter revenues declined 6%. The Corporates business grew 9%
primarily driven by the acquisition of the Hugin Group that occurred in the
fourth quarter of 2009, offset by several timing-related items and declines
in other parts of the business due to weak prior-year sales. However, the
Investment Management business declined 10% and continues to be impacted by
2009 cost cutting initiatives from buy-side customers.
* Wealth Management declined 7%, attributable to the planned retirement of
certain products and difficult prior-year comparables which included
one-time benefits.
* Momentum in Investment & Advisory has continued to improve in 2010 with
positive net sales recorded in June.
Enterprise
* Second-quarter revenues grew 6%, driven by continued strong demand for data
feeds. The Enterprise Information segment, comprised of both real-time and
historical data, grew 9%. The Risk Management business grew 6%, led by
strong outright sales of software. The Platform business (formerly
Information Management Systems) also grew 6%, driven by good sales of
recurring products. Omgeo's revenues were flat in the quarter.
* Elektron, Thomson Reuters next generation data distribution platform, was
launched in the second quarter and has seen strong customer uptake.
Media
* Second-quarter revenues declined 3%, driven by weakness in the Agency
business which continues to be impacted by tightened customer budgets.
However, net sales in the quarter turned positive driven by the win of a
major contract at CNN.
* The Consumer business experienced double-digit revenue growth in the quarter
due to improved advertising activity. In addition, the Consumer business has
successfully launched several new mobile products, including NewsPro for the
iPad.
Corporate & Other
Second-quarter corporate costs were $104 million compared to $255 million in the
prior-year period. The decrease was primarily related to changes in fair value
currency-related adjustments (non-cash) which provided a benefit of $36 million
in the second quarter of 2010, versus an expense of $87 million in the
prior-year period in 2009. In addition, integration program costs of $90 million
were $17 million less than the prior year. Core corporate costs were $50
million, down $11 million, benefiting from tight cost controls.
Financial Highlights - Six Months 2010
Six Months Ended June 30,
(Millions of U.S. dollars, except EPS and profit
margin)
IFRS Financial Measures 2010 2009 Change
Revenues $6,356 $6,424 -1%
Operating profit $756 $851 -11%
Diluted earnings per share $0.50 $0.60 -17%
(EPS)
Cash flow from operations $1,097 $1,257 -13%
Change Before
Non-IFRS Financial Measures[1] 2010 2009 Change Currency
Revenues from ongoing $6,355 $6,394 -1% -2%
businesses
Underlying operating profit $1,210 $1,382 -12% -12%
Underlying operating profit 19.0% 21.6% -260bp
margin
Adjusted earnings per share $0.84 $0.98 -14%
(EPS)
Underlying free cash flow $858 $988 -13%
* Revenues from ongoing businesses were $6.4 billion, a decrease of 1% after
currency and a decrease of 2% before currency.
* Underlying operating profit was $1.2 billion, down 12% compared to the
prior-year period, with a corresponding margin of 19.0%.
* Adjusted earnings per share were $0.84 compared to $0.98 in the prior-year
period.
* Underlying free cash flow was $858 million, down 13% compared to the
prior-year period.
Integration Programs
Thomson Reuters achieved combined run-rate savings of $1.3 billion at the end of
the second quarter of 2010 from the Reuters integration and legacy savings
programs. The incremental $75 million in run-rate savings during the quarter was
largely attributable to further communications, content and data center
consolidation within the Markets division and leveraging of the Thomson Reuters
global footprint by the Professional division.
Integration-related costs totaled $90 million in the quarter, and $187 million
year-to-date. Full-year costs may come in slightly below the previously forecast
$475 million, with the balance shifted into 2011.
Business Outlook (Before Currency)
Thomson Reuters today reaffirmed its business outlook for 2010 that was first
communicated in February and later confirmed in May as part of the company's
first-quarter results.
Based on the current environment in the markets that the company serves, Thomson
Reuters expects its revenues to be flat to slightly down in 2010 due to the
impact of negative net sales in 2009. The company expects net sales to
strengthen throughout 2010.
The company expects its underlying operating profit margin to be comparable to
2009 before investments in the major new products and platforms launching this
year. These investments are expected to have an impact of approximately 100
basis points.
The company's plan to continue its aggressive investment focus to drive growth
and capture efficiencies is likely to result in 2010 underlying free cash flow
being slightly down on the prior year.
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
As previously announced in February, Thomson Reuters increased its 2010 dividend
by $0.04 per share, resulting in a quarterly dividend of $0.29 per share and an
annualized dividend of $1.16 per share. Thomson Reuters will pay a quarterly
dividend on September 15, 2010 to shareholders of record as of August 19, 2010.
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 55,000 people and operates in over 100 countries. 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 "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 2010. 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 2010 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 new product release
programs, globalization strategy, other growth initiatives and efficiency
programs, including the integration 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; 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 Golden
Senior Vice President, Corporate Affairs Senior Vice President, Investor
+1 646 223 5285 Relations
calvin.mitchell@thomsonreuters.com +1 646 223 5288
frank.golden@thomsonreuters.com
Victoria Brough
Head of External Affairs, EMEA
+44 (0)207 542 8763
victoria.brough@thomsonreuters.com
Thomson Reuters will webcast a discussion of its second-quarter 2010 results
today beginning at 8:30 a.m. Eastern Daylight Time (EDT). You can access the
webcast by visitingwww.thomsonreuters.com and clicking on "Investor Relations"
at the top of the page and then "Thomson Reuters Reports Second-Quarter 2010
Results" on the right side of the page. 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 Six Months
Ended Ended
June 30, June 30,
--------------------------------- ------------------------------
2010 2009 Change Organic 2010 2009 Change Organic
Revenues
Legal $936 $934 0% -1% $1,761 $1,766 0% -2%
Tax & 8% 3% 7% 2%
Accounting 243 225 505 470
Healthcare & 2% 0% 6% 3%
Science 214 210 422 399
------------------ ----------------
Professional 2% 0% 2% -1%
Division 1,393 1,369 2,688 2,635
Sales & -6% -5% -4% -6%
Trading[1] 869 925 1,760 1,838
Investment & -6% -7% -4% -6%
Advisory[1] 551 587 1,111 1,153
Enterprise[1] 326 314 4% 6% 641 608 5% 4%
Media[1] 79 82 -4% -4% 159 163 -2% -5%
------------------ ----------------
Markets Division 1,825 1,908 -4% -4% 3,671 3,762 -2% -5%
Eliminations (2) (2) (4) (3)
------------------ ----------------
Revenues from
ongoing
businesses[2] 3,216 3,275 -2% -2% 6,355 6,394 -1% -3%
Before currency -1% -2%
Disposals[2] - 18 1 30
------------------ ----------------
Revenues $3,216 $3,293 -2% $6,356 $6,424 -1%
Operating Profit
Legal $306 $341 -10% $516 $582 -11%
Tax & Accounting 32 36 -11% 67 77 -13%
Healthcare &
Science 48 52 -8% 92 83 11%
------------------ ----------------
Professional
Division 386 429 -10% 675 742 -9%
Markets Division 319 424 -25% 642 761 -16%
Corporate &
Other (104) (255) (267) (404)
Amortization of
other intangible
assets (132) (124) (261) (243)
------------------ ----------------
Operating profit
from ongoing
businesses[2] 469 474 -1% 789 856 -8%
Disposals[2] - 1 - (5)
Other operating
losses, net (34) - (33) -
------------------ ----------------
Operating profit $435 $475 -8% $756 $851 -11%
Thomson Reuters Corporation
Reconciliation of Operating Profit to Underlying Operating Profit[3]
(millions of U.S. dollars)
(unaudited)
Three
Months Six Months
Ended Ended
June 30, June 30,
-------------------- ----------------------
2010 2009 Change 2010( ) 2009 Change
Operating profit $435 $475 -8% $756 $851 -11%
Adjustments:
Amortization of other intangible
assets 132 124 261 243
Integration programs expense 90 107 187 195
Other operating losses, net 34 - 33 -
Fair value adjustments (36) 87 (27) 88
Disposals - (1) - 5
------------- ----------------
Underlying operating profit $655 $792 -17% $1,210 $1,382 -12%
Underlying operating profit margin 20.4% 24.2% 19.0% 21.6%
Thomson Reuters Corporation
Reconciliation of Earnings Attributable to Common Shareholders
to Adjusted Earnings from Continuing Operations[4](
)(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,
----------------- ----------------
2010( ) 2009 2010( ) 2009
Earnings attributable to common shareholders $290 $315 $417 $505
Adjustments:
Disposals - (1) - 5
Fair value adjustments (36) 87 (27) 88
Other operating losses, net 34 - 33 -
Other finance (income) costs (39) 34 24 57
Share of post tax earnings in equity method
investees (3) - (3) (1)
Tax on above items 4 (31) - (36)
Interim period effective tax rate
normalization[5] 7 (42) (11) (35)
Amortization of other intangible assets 132 124 261 243
Discontinued operations 6 (2) 6 (6)
Dividends declared on preference shares - - (1) (1)
--------- ------- --------- ------
Adjusted earnings from continuing operations $395 $484 $699 $819
Adjusted earnings per share from continuing
operations $0.47 $0.58 $0.84 $0.98
Diluted weighted average common shares (in
millions) 835.8 836.5 835.3 835.6
Thomson Reuters Corporation
Division and Business Segment Depreciation and Amortization of Computer Software
(millions of U.S. dollars)
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
----------------- ----------------
Depreciation and amortization of computer
software 2010 2009 2010 2009
Legal $(70) $(65) $(139) $(128)
Tax & Accounting (24) (19) (47) (38)
Healthcare & Science (17) (19) (35) (35)
----------------- -----------------
Professional Division (111) (103) (221) (201)
Markets Division (121) (133) (284) (297)
Corporate & Other (6) (5) (12) (10)
----------------- -----------------
Ongoing businesses (238) (241) (517) (508)
Disposals - (1) - (3)
----------------- -----------------
Total depreciation and amortization of
computer software $(238) $(242) $(517) $(511)
[1] Results for 2009 have been restated to reflect the 2010 presentation.
[2] Revenues and operating profit from ongoing businesses exclude the results of
disposals. Disposals include the results of businesses sold or held for sale
that do not qualify as discontinued operations.
[3] Underlying operating profit excludes amortization of other intangible
assets, 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] 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 intangible assets as well as the post-tax impacts of fair value
adjustments, other operating gains and losses, impairment charges, the results
of disposals (see note (2) above), other 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.
[5] 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 Six Months Ended
June 30, June 30,
------------------------- ------------------------
2010 2009 2010 2009
Revenues $3,216 $3,293 $6,356 $6,424
Operating expenses (2,377) (2,452) (4,789) (4,819)
Depreciation (105) (113) (243) (242)
Amortization of computer
software (133) (129) (274) (269)
Amortization of other
intangible assets (132) (124) (261) (243)
Other operating losses, net (34) - (33) -
------------------------- ------------------------
Operating profit 435 475 756 851
Finance costs, net:
Net interest expense (95) (104) (188) (200)
Other finance income
(costs) 39 (34) (24) (57)
------------------------- ------------------------
Income before tax and equity
method investees 379 337 544 594
Share of post tax earnings in
equity method investees 3 - 3 1
Tax expense (79) (14) (110) (83)
------------------------- ------------------------
Earnings from continuing
operations 303 323 437 512
(Losses) earnings from
discontinued operations, net
of tax (6) 2 (6) 6
------------------------- ------------------------
Net earnings $297 $325 $431 $518
Earnings attributable to:
Common shareholders 290 315 417 505
Non-controlling interests 7 10 14 13
Basic earnings per share $0.35 $0.38 $0.50 $0.61
Diluted earnings per share $0.35 $0.38 $0.50 $0.60
Basic weighted average common
shares 831,962,410 829,065,567 831,429,258 828,691,308
Diluted weighted average
common shares 835,827,289 836,493,404 835,335,292 835,577,207
Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
June 30, December 31,
2010 2009
------------ ---------------
Assets
Cash and cash equivalents $508 $1,111
Trade and other receivables 1,620 1,742
Other financial assets 122 76
Prepaid expenses and other current assets 783 734
------------ ---------------
Current assets 3,033 3,663
Computer hardware and other property, net 1,434 1,546
Computer software, net 1,532 1,495
Other identifiable intangible assets, net 8,412 8,694
Goodwill 17,961 18,130
Other financial assets 314 383
Other non-current assets 617 649
Deferred tax 46 13
------------ ---------------
Total assets $33,349 $34,573
Liabilities and equity
Liabilities
Current indebtedness $648 $782
Payables, accruals and provisions 2,367 2,651
Deferred revenue 1,211 1,187
Other financial liabilities 191 92
------------ ---------------
Current liabilities 4,417 4,712
Long-term indebtedness 6,573 6,821
Provisions and other non-current liabilities 2,268 1,878
Other financial liabilities 75 42
Deferred tax 1,603 1,785
------------ ---------------
Total liabilities 14,936 15,238
Equity
Capital 10,276 10,177
Retained earnings 10,221 10,561
Accumulated other comprehensive loss (2,149) (1,471)
------------ ---------------
Total shareholders' equity 18,348 19,267
Non-controlling interests 65 68
------------ ---------------
Total equity 18,413 19,335
------------ ---------------
Total liabilities and equity $33,349 $34,573
Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
------------------ ---------------
2010 2009 2010 2009
Cash provided by (used in):
Operating activities
Net earnings 297 325 431 518
Adjustments for:
Depreciation 105 113 243 242
Amortization of computer software 133 129 274 269
Amortization of other intangible assets 132 124 261 243
Deferred tax (28) (75) (66) (66)
Loss from redemption of debt securities - - 62 -
Other 82 204 162 259
Changes in working capital and other items 167 186 (264) (208)
------------------ ---------------
Operating cash flows from continuing
operations 888 1,006 1,103 1,257
Operating cash flows from discontinued
operations - - (6) -
------------------ ---------------
Net cash provided by operating activities 888 1,006 1,097 1,257
------------------ ---------------
Investing activities
Acquisitions, less cash acquired (415) (25) (478) (45)
Proceeds from other disposals 4 3 18 3
Capital expenditures, less proceeds from
disposals (248) (268) (462) (466)
Other investing activities 4 - 3 (1)
------------------ ---------------
Investing cash flows from continuing
operations (655) (290) (919) (509)
Investing cash flows from discontinued
operations - - - 22
------------------ ---------------
Net cash used in investing activities (655) (290) (919) (487)
------------------ ---------------
Financing activities
Proceeds from debt 147 - 638 609
Repayments of debt (442) (189) (913) (192)
Net (repayments) borrowings under short-term
loan facilities (14) 2 (14) (8)
Dividends paid on preference shares - - (1) (1)
Dividends paid on common shares (232) (226) (463) (454)
Other financing activities - (3) (6) (5)
------------------ ---------------
Net cash used in financing activities (541) (416) (759) (51)
------------------ ---------------
Translation adjustments on cash and cash
equivalents (12) 21 (22) 12
------------------ ---------------
(Decrease) increase in cash and cash
equivalents (320) 321 (603) 731
Cash and cash equivalents at beginning of
period 828 1,251 1,111 841
------------------ ---------------
Cash and cash equivalents at end of period 508 1,572 508 1,572
Thomson Reuters Corporation
Reconciliation of Net Cash Provided by Operating Activities
to Underlying Free Cash Flow[1](
)(millions of U.S. dollars)
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
------------------ ---------------
2010 2009 2010 2009
Net cash provided by operating activities $888 $1,006 $1,097 $1,257
Capital expenditures, less proceeds from
disposals (248) (268) (462) (466)
Other investing activities 4 - 3 (1)
Dividends paid on preference shares - - (1) (1)
------------------ ---------------
Free cash flow[1] 644 738 637 789
Integration programs cost 107 108 221 199
------------------ ---------------
Underlying free cash flow[2] $751 $846 $858 $988
[1] Free cash flow is net cash provided by operating activities less capital
expenditures, other investing activities, investing activities of discontinued
operations 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.
[HUG#1434666]
Earnings Release Q2 2010 PDF: http://hugin.info/142273/R/1434666/380231.pdf
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Source: Thomson Reuters Corporation via Thomson Reuters ONE
