* Revenues grew 5% before currency
* Underlying operating profit up 12%
* Underlying operating profit margin was 22.0%, up 80 basis points
* Adjusted earnings per share were $0.56 vs. $0.45 in third quarter 2010
* 2011 Outlook affirmed
NEW YORK, November 1, 2011 Â - Thomson Reuters (TSX / NYSE: TRI), the world's
leading source of intelligent information for businesses and professionals,
today reported results for the third quarter ended September 30, 2011. The
company reported ongoing revenues of $3.3 billion, a 5% increase before currency
(8% including currency), and underlying operating profit of $717 million, up
12%.
Adjusted earnings per share (EPS) were $0.56 compared to $0.45 in the prior-year
period.
"I am pleased with the performance of our business in the third quarter, a
period during which we continued to grow revenues and expand margins," said
Thomas H. Glocer, chief executive officer of Thomson Reuters.
"In the quarter we also initiated a set of strategic, product and organizational
changes to address those parts of our current Markets division that are not
performing up to our expectations. We expect the benefit of these changes will
improve sales performance in 2012 and benefit 2013 revenue growth."
Consolidated Financial Highlights
Three Months Ended September 30,
(Millions of U.S. dollars, except EPS and
margins)
IFRS Financial Measures 2011 2010 Change
Revenues $3,453 $3,256 6%
Operating profit $659 $356 85%
Diluted earnings per share (EPS) $0.44 $0.32 38%
Cash flow from operations $576 $476 21%
Change Before
Non-IFRS Financial Measures[1] 2011 2010 Change Currency
Revenues from ongoing businesses $3,258 $3,030 8% 5%
Adjusted EBITDA $940 $767 23% 20%
Adjusted EBITDA margin 28.9% 25.3% 360bp 370bp
Underlying operating profit $717 $642 12% 10%
Underlying operating profit margin 22.0% 21.2% 80bp 90bp
Adjusted earnings per share (EPS) $0.56 $0.45 24%
Free cash flow $360 $215 67%
[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 $3.3 billion, a 5% increase before
currency. Strong growth across the Professional division, up 10%, and a 1%
increase in Markets division revenues drove the overall increase.
* Adjusted EBITDA increased 23% and the corresponding margin was 28.9% versus
25.3% in the prior-year period. Excluding currency, adjusted EBITDA
increased 20% and the corresponding margin increased 370 basis points.
* Underlying operating profit increased 12% and the corresponding margin was
22.0% versus 21.2% in the same period in 2010. Excluding currency,
underlying operating profit increased 10% and the corresponding margin
increased 90 basis points.
* Adjusted EBITDA growth and underlying operating profit growth across both
divisions were due to flow-through from higher revenues, integration savings
and the benefit of currency.
* Adjusted EPS was $0.56 compared to $0.45 in the prior-year period. The
increase was largely attributable to higher underlying operating profit and
lower integration costs.
Third-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 businesses that have been or are expected to be sold
or closed.
Professional Division
  Three Months Ended September 30,
(Millions of U.S. dollars, except margins)
   Change Before
2011( ) 2010 Â Â Change Currency
Revenues
Legal $896 $825 9% 8%
Tax & Accounting $272 $226 20% 20%
Intellectual Property &
Science $215 $193 11% 10%
Professional Division
Total $1,383 $1,244 11% 10%
 Margin
Adjusted EBITDA 2011( ) 2010
Legal $343 $321 7% 38.3% 38.9%
Tax & Accounting $77 $62 24% 28.3% 27.4%
Intellectual Property &
Science $79 $64 23% 36.7% 33.2%
Professional Division
Total $499 $447 12% 11%
Adjusted EBITDA Margin 36.1% 35.9% 20bp 10bp
Operating profit
Legal $270 $252 7% 30.1% 30.5%
Tax & Accounting $50 $41 22% 18.4% 18.1%
Intellectual Property &
Science $64 $50 28% Â Â 29.8% Â Â 25.9%
Professional Division
Total $384 $343 12% 11%
Operating Profit Margin   27.8%   27.6% 20bp 30bp
* Revenues were up 10%, driven by solid growth across all businesses. Legal
grew 8%, Tax & Accounting increased 20% and Intellectual Property & Science
was up 10%.
* EBITDA increased 12% compared to the prior-year period. The corresponding
margin was 36.1%, an increase of 20 basis points as flow-through from higher
revenues was partly offset by the negative impact of the revenue mix in the
Legal segment and the dilutive effect of acquisitions.
* Operating profit was up 12% compared to the prior-year period. The
corresponding margin was 27.8%, 20 basis points higher than the prior-year
period. Acquisitions negatively impacted the margin by 110 basis points.
Legal
* Revenues increased 8% compared to the prior-year period. US Law Firm
Solutions grew 3% as a 17% increase in Business of Law (FindLaw and Elite)
was offset by a 3% decline in research-related revenues. Corporate,
Government & Academic and Risk & Compliance revenues increased 13% (3%
organic and 10% from acquisitions). Global businesses grew 10% (4% organic
and 6% from acquisitions) with strong growth in Latin America and Canada.
* EBITDA increased 7% and the associated margin was 38.3% compared to 38.9% in
the prior-year period.
* Operating profit increased 7% and the associated margin was 30.1% compared
to 30.5% in the prior-year period. The margin decrease was primarily due to
a change in business mix and the dilutive effect of acquisitions.
* WestlawNext has been sold to over 29,000 customers since its launch in
February 2010 - representing 46% of Westlaw's revenue base.
Tax & Accounting
* Revenues were up 20% compared to the prior-year period, led by growth in
income tax software sales and electronic filing of tax returns, strong
growth in Checkpoint and acquisitions.
* EBITDA increased 24% and the related margin increased 90 basis points to
28.3% primarily driven by strong flow-through from revenues and the result
of efficiency initiatives.
* Operating profit increased 22% and the related margin increased 30 basis
points to 18.4%. The increase was due to strong flow-through from revenues
and efficiency initiatives, partly offset by the dilutive effect of
acquisitions.
Intellectual Property & Science
* Revenues were up 10% compared to the prior-year period. Growth was driven by
IP Solutions, which was up 12%, led by IP Management Services. Scientific &
Scholarly Research grew 8% due to timing benefits related to significant
backfile sales and growth in core information offerings. Life Sciences
increased 9% due to continued demand for biology and disease analytics
products and acquisitions.
* EBITDA was up 23% with the corresponding margin increasing 350 basis points
to 36.7%.
* Operating profit was up 28% with the corresponding margin increasing to
29.8%. The increase in EBITDA and operating profit margins was primarily due
to revenue flow-through and included timing benefits. The year-to-date
operating profit margin of 27.6% is believed to be more reflective of the
business segment's full-year performance.
Markets Division
Three Months Ended September 30,
(Millions of U.S. dollars, except margins)
  Change Before
 2011 2010   Change Currency
Revenues
Sales & Trading $936 $886 6% 2%
Investment & Advisory $550 $550 0% -3%
Enterprise $309 $273 13% 8%
Media $83 $79 5% 0%
Markets Division Total   $1,878   $1,788 5% 1%
Adjusted EBITDA $525 $473 11% 8%
Adjusted EBITDA Margin 28.0% 26.5% 150bp 170bp
Operating Profit $382 $353 8% 4%
Operating Profit Margin 20.3% 19.7% 60bp 60bp
* Revenues increased 1%. Strong revenue growth in Enterprise and Tradeweb was
partly offset by weakness in Investment Management and Exchange Traded
Instruments. Revenue growth would have been 2% excluding a 5% decline in
recoveries (pass-through revenues from third-party services such as exchange
fees).
* Recurring subscription-related revenues were flat. Transactions-related
revenues increased 15% due to the increase in the company's ownership in
Tradeweb and higher transaction volumes. Outright revenues declined 9%.
* By geography, revenues in Asia increased 2%; revenues in Europe, Middle East
and Africa (EMEA) were flat while revenues in the Americas increased 1%.
* EBITDA was $525 million, up 11%, with a related margin of 28.0%. Excluding
currency, EBITDA increased 8% and the related margin rose 170 basis points.
* Operating profit was $382 million, up 8%, with a related margin of 20.3%.
Excluding currency, operating profit increased 4% and the related margin
rose 60 basis points due to flow-through of integration savings.
* Markets has sold or migrated more than 32,000 Thomson Reuters Eikon desktops
since the launch of the new desktop offering in September 2010.
* A number of operational and organizational changes were made during the
quarter that are intended to drive growth and capture operating
efficiencies, including reorganizing the sales force, flattening the
management structure and reprioritizing the product development roadmap.
Sales & Trading
* Revenues were up 2% driven by 11% organic growth at Tradeweb and an increase
in Thomson Reuters ownership in the business. Revenue growth was partly
offset by a 9% decline in recoveries. Excluding recoveries, revenues grew
4%.
* The Treasury business was up 1% in the quarter.
* 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 3%. A 4% increase in Corporates revenues and flat revenues
in Investment Banking were offset by weak performance in Investment
Management which declined 8%.
* Improving performance in Investment Management is a key objective of the
recent reorganization of the Markets division.
Enterprise
* Revenues grew 8% driven by the continuing trend among customers to invest in
pricing and reference data, low-latency data feeds and hosting solutions.
* The Enterprise Content business grew 16%, driven by growth in pricing and
reference data. Omgeo's revenues grew 12% due to higher 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, 14 data hosting
centers are up and running.
Media
* Revenues were flat with a decline in the News Agency business offset by
growth in the Consumer business.
* The News Agency business decreased 1% due to the planned shutdown of the
Agency's studio business. The Consumer business was up 5% due to higher
advertising sales in the Americas.
Financial Highlights - Nine Months
Nine Months Ended September 30,
(Millions of U.S. dollars, except EPS and
 margins)
IFRS Financial Measures 2011 2010 Change
Revenues $10,230 $9,612 6%
Operating profit $1,888 $1,112 70%
Diluted earnings per share (EPS) $1.41 $0.82 72%
Cash flow from operations $1,655 $1,669 -1%
Change Before
Non-IFRS Financial Measures1 2011 2010 Change Currency
Revenues from ongoing businesses $9,561 $8,907 7% 4%
Adjusted EBITDA $2,548 $2,167 18% 14%
Adjusted EBITDA margin 26.6% 24.3% 230bp 230bp
Underlying operating profit $1,922 $1,745 10% 7%
Underlying operating profit margin 20.1% 19.6% 50bp 40bp
Adjusted earnings per share (EPS) $1.44 $1.19 21%
Free cash flow $933 $852 10%
* Revenues from ongoing businesses were $9.6 billion, a 4% increase before
currency. Strong growth across the Professional division, up 9%, and a 2%
increase in the Markets division revenues contributed to the overall
increase.
* Adjusted EBITDA increased 18%, and the corresponding margin was 26.6% versus
24.3% in the prior-year period primarily due to flow-through from higher
revenues, integration savings and the benefit of currency. Excluding
currency, EBITDA increased 14% and the corresponding margin increased 230
basis points.
* Underlying operating profit increased 10% and the corresponding margin was
20.1%, versus 19.6% in the same period in 2010. Excluding currency,
underlying operating profit increased 7% and the corresponding margin
increased 40 basis points.
* Adjusted EPS was $1.44 compared to $1.19 in the prior-year period. The
increase was largely attributable to higher underlying operating profit and
lower integration costs.
* Free cash flow was $933 million, up 10% compared to the prior-year period.
Corporate expenses were $186 million versus $161 million in the prior-year
period.
Integration Programs
At the end of the third quarter of 2011, Thomson Reuters had achieved combined
run-rate savings of $1.6 billion from the Reuters integration and legacy savings
programs. An incremental $65 million in run-rate-savings was achieved during the
third quarter of 2011.
Integration-related costs totaled $39 million in the third quarter and are
forecast to be approximately $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. The business outlook is provided for
ongoing businesses and is based on 2010 results that have been restated to
remove the results of the Healthcare business as well as other disposals.
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.
The company expects that strong adjusted EBITDA growth in 2011 will contribute
to a 20% - 25% increase in reported free cash flow.
Dividend and Share Repurchases
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 December 15, 2011 to shareholders of record as of November 17, 2011.
As of October 31, 2011 the company has repurchased 10.8 million shares for an
aggregate purchase price of $325 million pursuant to its Normal Course Issuer
Bid (NCIB). The NCIB program which was renewed on May 6, 2011, authorizes the
company to purchase up to 15 million shares.
Recent Developments
The company announced on September 28, 2011 that James C. Smith, former chief
executive officer of the Professional division, was named chief operating
officer of Thomson Reuters. In connection with the creation of this new role,
the company announced that it will disband its current divisional structure
(Markets and Professional divisions) and transition to a set of focused business
units. For the balance of the year, the company will maintain its current
financial reporting structure.
Separately, Robert D. Daleo, chief financial officer, informed the Board of his
intention to retire in July 2012 when he turns 63 years old. Mr. Daleo has
served as CFO since 1998. The company announced that Stephane Bello, currently
chief financial officer of the Professional division, will succeed him as chief
financial officer of Thomson Reuters, effective January 1, 2012, and Mr. Daleo
will then serve as vice chairman of the company until his retirement.
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 third-quarter 2011 results
today beginning at 8:30 a.m. Eastern Daylight Time (EDT). Â You can access the
webcast by visiting the "Investor Relations" section of www.thomsonreuters.com.
An archive of the webcast will be available following the presentation.
Thomson Reuters Corporation
Division and Business Segment Information
 (millions of U.S. dollars)
(unaudited)
Three Months Nine Months
 Ended Ended
 September 30, September 30,
------------------------------------------------------------------
 2011 2010 Change  Organic 2011 2010 Change  Organic
Revenues
  Legal
((1)) $896 $825 9% 2% $2,527 $2,295 10% 3%
  Tax &
Accounting
((1)) 272 226 20% 6% 780 696 12% 5%
Intellectual
Property &
Science
((1)) 215 193 11% 8% 627 582 8% 4%
----------------- ------------------
Professional
Division 1,383 1,244 11% 4% 3,934 3,573 10% 4%
  Sales &
Trading( ) 936 886 6% 0% 2,803 2,644 6% -1%
Investment &
Advisory( ) 550 550 0% -3% 1,668 1,659 1% -2%
Enterprise(
) 309 273 13% 8% 917 801 14% 10%
  Media 83 79 5% 0% 249 238 5% 0%
----------------- ------------------
Markets
Division 1,878 1,788 5% 0% 5,637 5,342 6% 1%
Eliminations (3) (2) (10) (8)
----------------- ------------------
Revenues
from ongoing
businesses(
(2)) 3,258 3,030 8% 2% 9,561 8,907 7% 2%
  Before
currency    5%   4%
Other
businesses(
(3)) 195 226 669 705
----------------- ------------------
Revenues   $3,453 $3,256 6%   $10,230 $9,612 6%
----------------- ------------------
Adjusted
EBITDA ((4))
  Legal(
(1)) $343 $321 7% $915 $854 7%
  Tax &
Accounting(
(1)) 77 62 24% 214 175 22%
Intellectual
Property &
Science
((1)) 79 64 23% 216 198 9%
----------------- ------------------
Professional
Division 499 447 12% 1,345 1,227 10%
Markets
Division 525 473 11% 1,528 1,375 11%
Corporate
expenses  (45) (50)  (174) (145)
Integration
programs
expenses (39) (103) Â (151) (290)
----------------- ------------------
Adjusted
EBITDA $940 $767 23% $2,548 $2,167 18%
----------------- ------------------
Underlying
Operating
Profit(
)((5))
  Legal
((1)) $270 $252 7% $692 $654 6%
  Tax &
Accounting
((1)) 50 41 22% 143 113 27%
Intellectual
Property &
Science
((1)) 64 50 28% 173 156 11%
----------------- ------------------
Professional
Division 384 343 12% 1,008 923 9%
Markets
Division 382 353 8% 1,100 983 12%
Corporate
expenses  (49) (54)  (186) (161)
----------------- ------------------
Underlying
operating
profit $717 $642 12% $1,922 $1,745 10%
----------------- ------------------
Thomson Reuters Corporation
Reconciliation of Operating Profit to Underlying Operating Profit( (5)) and
Adjusted EBITDA( (4))
 (millions of U.S. dollars)
(unaudited)
 Three Months Nine Months Ended
Ended
September 30, Â September 30,
----------------------------------------------------
 2011( ) 2010  Change 2011( ) 2010  Change
Operating profit $659 $356 85% $1,888 Â $1,112 70%
Adjustments:
  Amortization of other 138 399
identifiable intangible
assets 152 446
  Integration programs 103 290
expenses 39 151
  Fair value adjustments  (102) 102  (112) 75
   Other operating losses (18) 15
(gains), net 17 Â (302)
   Operating profit from (39) (146)
Other businesses( )((3)) Â (48) Â (149)
------------------ -------------------
Underlying operating profit $717 $642 12% $1,922 $1,745 10%
Adjustments:
  Integration programs (103) (290)
expenses  (39) (151)
  Depreciation and
amortization of computer
  software (excluding Other
businesses( (3))) 262 228 777 712
------------------ -------------------
Adjusted EBITDA $940 $767 23% Â Â Â $2,548 $2,167 18%
------------------ -------------------
Underlying operating profit 21.2% 19.6%
margin 22.0% 80bp 20.1% 50bp
------------------ -------------------
Adjusted EBITDA margin    28.9% 25.3% 360bp 26.6% 24.3% 230bp
------------------ -------------------
Thomson Reuters Corporation
Reconciliation of Earnings from Continuing Operations to Adjusted EBITDA( (4))
(millions of U.S. dollars)
(unaudited)
 Three Months Nine Months
Ended  Ended
September 30, Â September 30,
---------------------------------------------------
 2011( ) 2010  Change 2011( ) 2010  Change
Earnings from continuing $271 $708
operations $381 41% $1,208 71%
Adjustments:
   Tax expense 145 33 371 143
  Other finance costs (44) (20)
(income) 35 19
  Net interest expense 102 99 301 287
  Amortization of other 138 399
identifiable intangible
assets 152 446
  Amortization of computer 143 417
software 155 481
  Depreciation 107 104 324 347
------------------ ------------------
EBITDA Â Â Â $1,077 $744 45% Â Â Â $3,150 $2,281 38%
Adjustments:
  Share of post tax (3) (6)
earnings in equity
  method investees  (4)  (11)
  Other operating losses (18) 15
(gains), net 17 Â (302)
  Fair value adjustments  (102) 102  (112) 75
  EBITDA from Other (58) (198)
businesses( (3)) Â (48) Â (177)
------------------ ------------------
Adjusted EBITDA $940 $767 23% $2,548 $2,167 18%
------------------ ------------------
Adjusted EBITDA margin 28.9% 25.3% 360bp 26.6% 24.3% 230bp
------------------ ------------------
Thomson Reuters Corporation
Reconciliation of Underlying Operating Profit to Adjusted EBITDA( (4)) by
Division and Business Segment
(millions of U.S. dollars)
(unaudited)
Three Months Ended Three Months Ended
 September 30, 2011 September 30, 2010
-----------------------------------------------------------------------
Add:
 Depreciation Add:
and  Depreciation
Amortization and
Underlying of Computer Underlying Amortization
Operating Software(  Adjusted Operating of Computer  Adjusted
 Profit  )**  EBITDA Profit Software **  EBITDA
-----------------------------------------------------------------------
  Legal
((1)) $270 $73 $343 $252 $69 $321
  Tax &
Accounting
((1)) 50 27 77 41 21 62
 Intellectual
Property &
Science ((1)) 64 15 79 50 14 64
-----------------------------------------------------------------------
Professional
Division 384 115 499 343 104 447
Markets
Division 382 143 525 353 120 473
Corporate
expenses  (49) 4 (45) (54) 4 (50)
Integration
programs
expenses na na (39) na na (103)
-----------------------------------------------------------------------
$717 $262 Â $940 $642 $228 $767
-----------------------------------------------------------------------
Nine Months Ended Nine Months Ended
 September 30, 2011 September 30, 2010
-----------------------------------------------------------------------
Add:
 Depreciation Add:
and  Depreciation
Amortization and
Underlying of Computer Underlying Amortization
Operating Software(  Adjusted Operating of Computer  Adjusted
 Profit  )**  EBITDA Profit Software **  EBITDA
-----------------------------------------------------------------------
  Legal
((1)) $692 $223 $915 $654 $200 $854
  Tax &
Accounting
((1)) 143 71 214 113 62 175
 Intellectual
Property &
Science ((1)) 173 43 216 156 42 198
-----------------------------------------------------------------------
Professional
Division 1,008 337 1,345 923 304 1,227
Markets
Division 1,100 428 1,528 983 392 1,375
Corporate
expenses  (186) 12  (174) (161) 16 (145)
Integration
programs
expenses na na (151) na na (290)
-----------------------------------------------------------------------
$1,922 $777 $2,548 $1,745 $712 $2,167
-----------------------------------------------------------------------
------------------------------------
** excludes Other businesses ((3))
na = not applicable
Thomson Reuters Corporation
Reconciliation of Earnings Attributable to Common Shareholders
 to Adjusted Earnings from Continuing Operations( (6))
(millions of U.S. dollars, except as otherwise indicated and except for per
share data)
(unaudited)
Three Months Nine Months
 Ended Ended
 September 30, September 30,
----------------------------------
 2011( ) 2010 2011( ) 2010
Earnings attributable to common shareholders  $369 $268  $1,182 $685
Adjustments:
  Operating profit from Other businesses (3)  (48) (39)  (149) (146)
   Fair value adjustments  (102) 102  (112) 75
  Other operating losses (gains), net 17 (18)  (302) 15
  Other finance costs (income) 35 (44) 19 (20)
  Share of post tax earnings in equity (3) (6)
method investees (4) Â (11)
  Tax on above items 53 (9) 180 20
Interim period effective tax rate (11) Â (22)
normalization( (7)) Â (15) Â (10)
Discrete tax item 13 - Â (33) -
Amortization of other identifiable intangible 138 399
assets 152 446
Discontinued operations  -  (6)  (2) -
Dividends declared on preference shares  -  (1)  (2) (2)
----------------------------------
Adjusted earnings from continuing operations $ 470 $377 Â $ 1,206 $998
----------------------------------
Adjusted earnings per share from continuing $0.45 $1.19
operations $ 0.56 Â $ 1.44
----------------------------------
----------------------------------
Diluted weighted average common shares (in
millions) Â Â Â 836.7 836.8 838.2 835.9
----------------------------------
(1)Â Â Thomson Reuters reorganized its reportable segments in the second quarter
of 2011. The company's four reportable segments are Legal, Tax &
Accounting, Intellectual Property & Science and Markets. Prior-period
amounts have been reclassified to reflect the current presentation.
(2) Revenues from ongoing businesses are revenues from reportable segments
(which excludes Other businesses (see note (3) below)) less eliminations.
(3) 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. Â Other businesses do not qualify as a component
of the company's four reportable segments, nor as a separate reportable
segment.
Three Months Nine Months
(millions of US. dollars) Ended Ended
September 30, September 30,
----------------------------------
Other businesses 2011 2010 2011 2010
Revenues $195 $226 $669 $705
Operating profit $48 $39 $149 $146
Depreciation and amortization of computer
software - 19 28 52
----------------------------------
EBITDA $48 $58 $177 $198
----------------------------------
(4)Â Â Thomson Reuters defines adjusted EBITDA as underlying operating profit
excluding the related depreciation and amortization of computer software
but including integration programs expense. Adjusted EBITDA margin is
adjusted EBITDA expressed as a percentage of revenues from ongoing
businesses.
(5) Underlying operating profit is operating profit from reportable segments
and corporate expenses. Underlying operating profit margin is the
underlying operating profit expressed as a percentage of revenues from
ongoing businesses.
(6) 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 Other businesses (see
note (3) 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.
(7) 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 Nine Months Ended
 September 30, September 30,
----------------------------- ---------------------------
 2011 2010 2011 2010
Revenues $3,453 $3,256 $10,230 $9,612
Operating expenses  (2,363)  (2,533)  (7,393)  (7,322)
Depreciation  (107)  (104)  (324)  (347)
Amortization of
computer software  (155)  (143)  (481) (417)
Amortization of other
identifiable intangible
assets  (152)  (138)  (446) (399)
Other operating
(losses) gains, net  (17) 18 302  (15)
----------------------------- ---------------------------
Operating profit 659 Â 356 1,888 1,112
Finance costs, net:
  Net interest
expense (102) Â (99) (301) (287)
  Other finance
(costs) income (35) 44 (19) 20
----------------------------- ---------------------------
Income before tax and
equity method investees 522 301 1,568 Â 845
Share of post tax
earnings in equity
method investees 4 3 11 6
Tax expense (145) (33) (371) Â (143)
----------------------------- ---------------------------
Earnings from
continuing operations 381 271 1,208 708
Earnings from
discontinued
operations, net of tax - Â 6 2 Â -
----------------------------- ---------------------------
Net earnings $381 $277 $1,210 $708
----------------------------- ---------------------------
Earnings attributable
to:
  Common shareholders 369 268 1,182 685
  Non-controlling
interests 12 9 28 23
Basic and diluted
earnings per share $0.44 $0.32 $1.41 Â $0.82
----------------------------- ---------------------------
Basic weighted average
common shares 834,645,519 832,808,582 835,624,471 831,894,085
----------------------------- ---------------------------
Diluted weighted
average common shares   836,712,254   836,819,348  838,203,018   835,906,590
----------------------------- ---------------------------
Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
September 30, December 31,
2011 2010
--------------- -------------
Assets
Cash and cash equivalents $589 $864
Trade and other receivables 1,745 1,809
Other financial assets 56 74
Prepaid expenses and other current assets 562 912
--------------- -------------
Current assets excluding assets held for sale 2,952 3,659
Assets held for sale 1,189 -
--------------- -------------
Current assets 4,141 3,659
Computer hardware and other property, net 1,413 1,567
Computer software, net 1,612 1,613
Other identifiable intangible assets, net 8,433 8,714
Goodwill 18,815 18,892
Other financial assets 379 460
Other non-current assets 557 558
Deferred tax 44 68
--------------- -------------
Total assets $35,394 $35,531
--------------- -------------
Liabilities and equity
Liabilities
Current indebtedness $1,083 $645
Payables, accruals and provisions 2,454 2,924
Deferred revenue 1,130 1,300
Other financial liabilities 59 142
--------------- -------------
Current liabilities excluding liabilities
associated with assets held for sale 4,726 5,011
Liabilities associated with assets held for sale 193 -
--------------- -------------
Current liabilities 4,919 5,011
Long-term indebtedness 6,754 6,873
Provisions and other non-current liabilities 2,462 2,217
Other financial liabilities 89 71
Deferred tax 1,455 1,684
--------------- -------------
Total liabilities 15,679 15,856
Equity
Capital 10,276 10,284
Retained earnings 10,562 10,518
Accumulated other comprehensive loss (1,472) (1,480)
--------------- -------------
Total shareholders' equity 19,366 19,322
Non-controlling interests 349 353
--------------- -------------
Total equity 19,715 19,675
--------------- -------------
Total liabilities and equity $35,394 $35,531
--------------- -------------
Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
2011 2010 2011 2010
Cash provided by (used in):
Operating activities
Net earnings $381 $277 $1,210 $708
Adjustments for:
  Depreciation 107 104 324 347
  Amortization of computer software 155 143 481 417
  Amortization of other identifiable
intangible assets 152 138 446 399
  Net gains on disposals of
businesses and investments (3) (20) (389) Â (26)
  Deferred tax (55)  (2) (229)  (68)
  Other (3) 101 161 331
Changes in working capital and other
items( (1)) Â Â Â (158) Â Â Â (265) (349) Â (433)
-------------------- ---------------------
Operating cash flows from continuing
operations 576 476 Â Â Â 1,655 Â Â Â 1,675
Operating cash flows from discontinued
operations - Â - Â - Â (6)
-------------------- ---------------------
Net cash provided by operating
activities( (1)) 576 476 1,655 1,669
-------------------- ---------------------
Investing activities
Acquisitions, net of cash acquired (388) Â (100) (1,114) (578)
(Payments for) proceeds from other
disposals, net of taxes paid (5) 12 505 30
Capital expenditures, less proceeds
from disposals( (1)) (218) Â (259) (759) Â (817)
Other investing activities 2 Â (1) 39 2
-------------------- ---------------------
Investing cash flows from continuing
operations (609) Â (348) (1,329) (1,363)
Investing cash flows from discontinued
operations 12 Â - Â 51 Â -
-------------------- ---------------------
Net cash used in investing activities(
(1)) (597) Â (348) Â Â Â (1,278) Â (1,363)
-------------------- ---------------------
Financing activities
Proceeds from debt - 729 - 1,367
Repayments of debt    (593) (5) (646) (918)
Net borrowings (repayments) under
short-term loan facilities 1,083 13 1,063 Â (1)
Repurchases of common shares (319) -Â (319) -
Dividends paid on preference shares - Â (1) (2) Â (2)
Dividends paid on common shares (247) Â (232) (712) Â (695)
Other financing activities (17) 1 (31) Â (5)
-------------------- ---------------------
Net (cash used in) provided by
financing activities (93) 505 (647) Â (254)
-------------------- ---------------------
Translation adjustments on cash and
cash equivalents (10) 17 (5) Â (5)
-------------------- ---------------------
(Decrease) increase in cash and cash
equivalents (124) 650 (275) Â 47
Cash and cash equivalents at beginning
of period 713 508 864 1,111
Cash and cash equivalents at end of
period $589 Â Â Â $1,158 $589 Â Â Â $1,158
-------------------- ---------------------
(1)Â Â In the second quarter of 2011, Thomson Reuters revised certain prior-
period amounts in the consolidated statement of cash flow. Specifically,
capital expenditures include only cash payments, whereas prior to the
revision they also included accruals relating to capital expenditures. The
revision had no impact on prior-periods' increase or decrease in cash and
cash equivalents, financial position or results of operations.
Capital expenditures including accrued amounts were $258 million and $720
million for the three and nine months ended September 30, 2010,
respectively.
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  Nine Months
Ended Ended
September 30, September 30,
------------------ ----------------
2011 2010 2011 2010
Net cash provided by operating activities(
(3)) $576 $476 $1,655 $1,669
Capital expenditures, less proceeds from
disposal( (3)) (218) (259) (759) (817)
Other investing activities 2 (1) 39 2
Dividends paid on preference shares - (1) (2) (2)
------------------ ----------------
Free cash flow ((2),(3)) 360 215 933 852
Integration programs costs 58 100 198 321
------------------ ----------------
Underlying free cash flow ((1),(3)) $418 $315 $1,131 $1,173
------------------ ----------------
(1)Â Â Underlying free cash flow is free cash flow excluding one-time cash costs
associated with integration programs.
(2) 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. 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.
(3) There was no impact on free cash flow or underlying free cash flow as a
result of the revision of prior-period amounts for "net cash provided by
operating activities" and "capital expenditures, less proceeds from
disposals." See the "Consolidated Statement of Cash Flow" in this news
release for additional information.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Thomson Reuters Corporation via Thomson Reuters ONE
[HUG#1559689]