Thomson Reuters Logo

Print Page   Close Window

Financial News Release

Second Quarter Results
RNS Number : 9966W
Thomson Reuters PLC
06 August 2009
 

Thomson Reuters Reports Second-Quarter 2009 Results 

 

·        Revenues up 2% before currency, reflecting resilience and diversity of the company's businesses  
·        Underlying operating profit rises 11% on integration savings and cost management
·        Free cash flow increases 16%, to $738 million, in quarter 


NEW YORK, NY, August 6, 2009 Thomson Reuters (NYSE: TRI; TSX: TRI; LSE: TRIL; NASDAQ: TRIN), the world's leading source of intelligent information for businesses and professionals, today reported results for the second quarter ended June 30, 2009.  Despite difficult global economic conditions, Thomson Reuters achieved revenue growth and margin expansion as a result of its balanced portfolio of businesses, continuing progress on the Reuters integration and effective cost management.


Thomson Reuters said its second-quarter results reflect the resilience of its business model of providing essential information to professional customers around the world, principally on a recurring subscription basis. The company also said its market-leading positions and continuing strong operating performance are the direct result of continuing to invest across its businesses through the economic cycle. 



Three Months Ended June 30,

(Millions of U.S. dollars, except EPS and Profit Margin) 

IFRS Financial Measures

2009

2008


Change

Revenues

$3,293

$3,133


5%

Operating profit

$475

$254


87%

Diluted earnings per share (EPS)

$0.38

$0.19


100%

Cash flow from operations

$1,006

$880


14%






Non-IFRS Financial Measures1

2009

20082 

Change Before Currency

Change

Revenues from ongoing businesses

$3,282

$3,413

2%

-4% 

Underlying operating profit

$793

$713


11%

Underlying operating profit margin

24.2%

20.9%


+330bps

Adjusted earnings per share (EPS)

$0.58

$0.39


49%

Free cash flow

$738

$636


16%


Unless otherwise noted, all revenue growth comparisons in this news release are before the impact of foreign currency translation as Thomson Reuters believes this provides the best basis to measure the performance of its business.


1. These 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. 

2. This 2008 financial information has been prepared on a pro forma basis and assumes that Thomson's acquisition of Reuters closed on January 1, 2007.  Thomson Reuters believes that pro forma financial information provides more meaningful period-to-period comparisons of its performance because Reuters results prior to the April 17, 2008 closing are not included in IFRS results.  2009 results include the impact of the acquisition for the entire period. For more information, see the explanatory note at the end of this news release.


  • Revenues from ongoing businesses were $3.3 billion, an increase of 2% before currency compared to second-quarter 2008 pro forma revenues.  

  • IFRS revenues increased 5% after currency primarily as a result of the Reuters acquisition completed on April 17, 2008.

  • Underlying operating profit increased 11% to $793 million, with the related margin expanding 330 basis points, primarily due to integration-related savings, effective cost management and the benefit of currency.

  • Adjusted earnings per share were $0.58 compared to $0.39 a year ago, driven by underlying profit growth and lower integration costs.  

  • Net cash provided by operations was $1 billion in the quarter, up 14% from a year ago.  Free cash flow of $738 million was up 16% from a year ago. These increases were attributable to higher operating profits and lower tax payments.

  • Integration and legacy savings programs are tracking against the accelerated plan with $925 million of run-rate savings (against a 2011 target of $1.4 billion) achieved by quarter-end. Thomson Reuters now expects to achieve at least $1 billion of run-rate savings by the end of 2009.


"I am pleased with our solid second-quarter operating results despite the continued weakness in the global economy," said Thomas H. Glocer, chief executive officer of Thomson Reuters.  "Our revenues continued to grow in both the Professional and Markets divisions, which is a testament not only to the choice and balance of the markets in which we operate, but also the strength of our franchises in the challenging financial services and legal segments."


"Our Tax & Accounting and Healthcare & Science businesses reported accelerating revenues thanks to the very timely products these units provide to handle ever-changing tax rules and increase the efficiency and quality of healthcare and research." 


"Tomorrow, our shareholders will be asked to approve the plan to unify our dual listed company structure. We believe that unification is in the best interests of our shareholders because it will improve trading liquidity in our shares and simplify our capital structure. We are gratified by the support we are receiving from shareholders around the world," said Mr. Glocer.


Second-Quarter Business Segment Highlights


Professional Division


Three Months Ended June 30,

(Millions of U.S. dollars, unless otherwise indicated)

Revenues

2009

2008

Change

Change Before Currency


Legal

$934

$950

-2%

2%


Tax & Accounting

225

209

8%

9%


Healthcare & Science

217

206

5%

7%


Professional Division Total

1,376

1,365

1%

4%








Operating Profit

2009

2008

Change

2009 Margin

2008 Margin

Legal

$341

$340

0%

36.5%

35.8%

Tax & Accounting

36

34

6%

16.0%

16.3%

Healthcare & Science

53

42

26%

24.4%

20.4%

Professional Division Total

430

416

3%

31.3%

30.5%


All revenue growth and operating profit comparisons are based upon results from ongoing businesses and exclude the results of disposals.


  • Revenues increased 4%, 2% of which was organic, with all segments contributing to growth, including strong performances from the core Westlaw and international online legal businesses, as well as Tax & Accounting and Healthcare & Science.

  • Revenue growth in the division continues to be driven by online products, software and services, which increased 5% and represented 80% of the division's revenues

  • Operating profit increased 3% and the related margin expanded 80 basis points, due to the benefits of currency and efficiency initiatives, which were partly offset by dilution from recent acquisitions in Tax & Accounting.


Legal


  • Revenues increased 2%, with organic growth of 1%, driven by continued growth in Westlaw, FindLaw and online international legal businesses. Growth was partly offset by lower revenues in ancillary services and declines in practice management software and consulting revenues. By customer segment, revenue growth was driven by small law firms and government units.  

  • Operating profit increased slightly, while the related margin expanded 70 basis points, primarily due to the benefits of efficiency initiatives and currency


Tax & Accounting


  • Revenues were up 9%, 5% of which was organic. Growth was driven by strength in core products such as the UltraTax suite of solutions as well as software and services led by Property Tax and Tax Stream.  Checkpoint revenues grew in line with Tax & Accounting's organic growth. Acquisitions contributed 4% growth, primarily from compliance software provider Paisley. The Tax & Accounting segment's strong market position and breadth of products continues to enable it to take share and grow at above-market rates. Revenue growth is expected to continue to accelerate over the balance of the year.

  • Operating profit increased 6% and the related margin decreased 30 basis points, primarily due to lower initial margins for certain acquisitions due to accounting adjustments. 


Healthcare & Science


  • Revenues increased 7%, all of which was organic, driven by strength in the Payer decision-support business, which experienced significant demand in both the Federal and Employer segments, where the business is well positioned to improve the efficiency and quality of healthcare.  

  • Operating profit increased 26% and the related margin expanded 400 basis points driven by strong revenue flow-through, effective cost management and currency.


Markets Division    


Three Months Ended June 30,

(Millions of U.S. dollars unless otherwise indicated)


Revenues

2009

2008

Change

Change Before Currency


Sales & Trading

$903

$1,008

-10%

-1%


Investment & Advisory

590

593

-1%

0%


Enterprise

324

338

-4%

7%


Media

91

112

-19%

-6%


Markets Division Total

1,908

2,051

-7%

0.3%


Operating Profit

2009

2008

Change

2009 Margin

2008 Margin

Markets Division Total

424

367

16%

22.2%

17.9%




·        Organic revenues grew 0.2% (2% growth in recurring subscription revenues) compared to 7% pro forma organic growth in the same period a year ago. The Markets division's geographic, customer and product diversity enabled it to grow at above-market rates, despite the challenges presented by the financial crisis and ongoing global recession. 
·        Recurring revenues grew despite a decline in recoveries. Recoveries are primarily low margin, third-party information feeds, such as exchange data.
·        A 9% decline in transaction revenues was due to lower foreign exchange volumes for Reuters Matching and lower equity volumes affecting Omgeo, Markets' trade processing joint venture.
·        Outright (one-time) revenues also declined, as clients' purchases of large software systems slowed.
·        The Europe, Middle East and Africa (EMEA) and Asia regions each grew 2%, while revenues from the Americas decreased 2%.
·        Operating profit increased 16% with the corresponding margin expanding 430 basis points due to integration savings, effective cost management and the benefit of currency. 
 
 
Sales & Trading
·     Revenues decreased 1% due to lower foreign exchange transaction volumes, a 6% decline in recoveries and declines in desktops partly offset by growth in Commodities & Energy and Tradeweb.  
 
Investment & Advisory
·     Revenues were unchanged for the quarter. Revenue growth in Asia and demand for high-value analytics were offset by lower desktop revenues as investment managers reduced costs and headcount. Strong demand for ThomsonONE.com among mid-size and boutique investment banks helped to slow the quarter's Investment Banking revenue decline to 3% as compared to 17% in the first quarter. Corporate Services declined slightly, with Investor Relations and Business Intelligence products failing to offset declines in transaction-based Advisory and Communications services.  
 
Enterprise
·     Revenues rose 7% against very strong results from a year ago, when organic revenues grew 14%.  Enterprise information continued to benefit from strong customer demand for reference data, independently validated pricing services and data to automate front, middle- and back-office applications. The breadth of the Enterprise segment's offerings continues to create significant business opportunities and market share gains. 

Media
·     Revenues declined 6%, hurt by continued declines in the professional publishing and consumer businesses. The core news agency business declined 4% as a result of consolidation in traditional media outlets.
 
Corporate and Other
 
Corporate and Other expenses decreased $20 million, to $255 million, mainly reflecting benefits from synergy programs. Core Corporate Costs accounted for $9 million of the $20 million decline. 



Financial Highlights - Six-Months 2009




Six Months Ended June 30

(Millions of U.S. dollars, except EPS and Profit Margin)


IFRS Financial Measures

2009

2008


Change

Revenues

$6,424

$4,973


29%

Operating profit

851

482


77%

Diluted earnings per share (EPS)

$0.60

$0.47


28%

Cash flow from operations

$1,257

$1,164


8%







Non-IFRS Financial Measures

2009

2008

Change Before Currency

Change

Revenues from ongoing businesses

$6,409

$6,646

2%

-4%

Underlying operating profit

1,383

1,302


6%

Underlying operating profit margin

21.6%

19.6%


+200bps

Adjusted earnings per share (EPS)

$0.98

$0.84


17%

Free cash flow

$789

$791


0%


  • Revenues from ongoing businesses increased 2% before currency, to $6.4 billion.

  • IFRS revenues increased 29% after currency.

  • Underlying operating profit increased 6%, to $1.4 billion, and the related margin increased 200 basis points.

  • Adjusted earnings per share were $0.98.

  • Net cash provided by operations was $1.3 billion, up 8% compared with the first half of 2008.  This growth resulted from higher operating profits and lower tax payments, and reflected an increase of over $200 million in net interest payments in 2009.  Free cash flow of $789 million was comparable to the prior year period, despite the higher interest payments, and reflected an increase in capital expenditures on platform and product development initiatives.


Integration Programs


  • Thomson Reuters previously announced that it expects to achieve $1 billion in annualized cost savings from the Reuters integration by the end of 2011, up from $750 million in savings projected in May 2008. This raised the overall savings target (including legacy efficiency programs) to $1.4 billion.  

  • Thomson Reuters achieved combined run-rate savings of $925 million in the first half of 2009. Given the progress the company continues to make on its integration programs, Thomson Reuters now expects to achieve at least $1 billion of run-rate savings by year-end 2009, up from the previous estimate of $975 million. Savings were principally achieved through elimination of redundant positions and the retirement of legacy products.

  • The first-half costs required to achieve these savings were $195 million.  


Proposed DLC Unification


In June 2009, Thomson Reuters announced a plan to unify its dual listed company (DLC) structure by exchanging each outstanding Thomson Reuters PLC ordinary share for one Thomson Reuters Corporation common share. Each outstanding Thomson Reuters PLC American Depositary Share (ADS) will be exchanged for six Thomson Reuters Corporation common shares. Current holders of Thomson Reuters Corporation common shares will continue to hold their existing shares.   If unification is approved, Thomson Reuters shares will remain listed on the Toronto Stock Exchange and New York Stock Exchange and will no longer be listed on the London Stock Exchange and Nasdaq. 


Thomson Reuters is seeking shareholder approval to approve the DLC unification at meetings to be held tomorrow in Toronto and London.  The DLC unification is also subject to UK court approval, which Thomson Reuters plans to seek on August 25, 2009. If shareholder and court approvals are obtained, the unification will be completed on September 10, 2009, and the last day of trading of Thomson Reuters PLC ordinary shares on the London Stock Exchange and ADSs on Nasdaq will be September 9, 2009.  


Business Outlook (Before Currency)


Based on the current environment in the markets it serves, Thomson Reuters reaffirms its previous outlook that revenues are expected to grow in 2009 and underlying operating margin and free cash flow (adjusted for certain timing-related items) will be comparable to 2008


Dividend 


Thomson Reuters will pay a quarterly dividend of $0.28 per share on September 15, 2009 to shareholders of record as of August 21, 2009.


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 EaganMinnesota, Thomson Reuters employs more than 50,000 people and operates in over 100 countries. Thomson Reuters shares are listed on the New York Stock Exchange (NYSE: TRI); Toronto Stock Exchange (TSX: TRI); London Stock Exchange (LSE: TRIL); and Nasdaq (NASDAQ: TRIN). For more information, go to www.thomsonreuters.com.


CONTACTS

Fred Hawrysh 

Senior Vice President, Corporate Affairs
+1.646 223 5285
fred.hawrysh@thomsonreuters.com

Frank Golden

Senior Vice President, Investor Relations 

+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 results today beginning at 10:00 a.m. U.S. Eastern Daylight Time (EDT) / 3:00 p.m. British Summer Time (BST).  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 Second-Quarter 2009 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 is incorporated in OntarioCanada with a registered office at Suite 2706Toronto Dominion Bank Tower, P.O. Box 24, Toronto-Dominion Centre, TorontoOntario M5K 1A1Canada. Thomson Reuters PLC (registered no. 06141013) is registered in England & Wales with a registered office at The Thomson Reuters Building, South Colonnade, Canary WharfLondon E14 5EPUnited Kingdom. Thomson Reuters primary financial statements are the consolidated financial statements of Thomson Reuters Corporation. Those statements account for Thomson Reuters PLC as a subsidiary.


All references to growth rate percentages compare the results of the period to those of the prior year comparable period. Unless otherwise stated, revenue growth discussions in this news release are before currency.


Thomson Reuters currently prepares its financial statements under International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). Previously, Thomson Reuters prepared its financial statements in accordance with Canadian GAAP. 


NON-IFRS FINANCIAL MEASURES

This news release includes certain non-IFRS financial measures, including pro forma financial information as described herein. 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 (other than pro forma financial information) are defined and reconciled to the most directly comparable IFRS measures in the following tables.


PRO FORMA FINANCIAL INFORMATION 

Pro forma financial information included in this news release is for information purposes only and is unaudited. Pro forma financial information was prepared in U.S. dollars in a manner consistent with accounting policies that applied to Thomson prior to the closing of the acquisition and which currently apply to Thomson Reuters as though Reuters was acquired on January 1, 2007. Pro forma financial information should not be considered indicative of actual balance sheet data or operating results that would have been achieved had Thomson acquired Reuters on January 1, 2007, or of results which may occur in the future. Pro forma financial information should be read in conjunction with historical financial results for Thomson and Reuters. Pro forma financial information reflects the impacts of purchase accounting but excludes deal-related expenses and an initial one-time purchase accounting adjustment related to deferred revenue.


CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS

This news release, in particular the sections under the headings "Integration Programs", "Proposed DLC Unification" and "Business Outlook (Before Currency)" includes forward-looking statements that are based on certain assumptions and reflect Thomson Reuters current expectations. Forward-looking statements are those that are not historical facts and also include Thomson Reuters expectations about its future prospects. 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. Some of the factors that could cause actual results to differ materially from current expectations include risks related to Thomson Reuters ability to achieve the anticipated benefits from the Reuters transaction and other integration program initiatives (including within the time periods currently expected), develop additional products and services to meet customers' needs, attract new customers, general economic conditions and actions of competitors. These and other factors are discussed in materials that Thomson Reuters Corporation and Thomson Reuters PLC from time to time file with, or furnish to, securities regulatory authorities. Thomson Reuters disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law, rule or regulation.


2009 IFRS Results Compared to 2008 Pro Forma Results

Thomson Reuters Corporation

Division and Business Segment Information

(millions of U.S. dollars)

(unaudited)



Three Months Ended




Six Months Ended




June 30,




June 30,




2009

2008(1) (2)

Change

Organic


2009

2008(1) (2)

Change

Organic

Revenues










  Legal 

$934

$950

-2%

1%


$1,766

$1,787

-1%

1%

  Tax & Accounting

225

209

8%

5%


470

436

8%

5%

  Healthcare & Science

 217

206

5%

7%


 414

394

5%

7%

Professional Division

 1,376

 1,365

1%

2%


 2,650

 2,617

1%

3%

  Sales & Trading

903

1,008

-10%

-1%


1,793

1,989

-10%

-2%

  Investment & Advisory

590

593

-1%

0%


1,161

1,189

-2%

0%

   Enterprise

324

338

-4%

7%


628

638

-2%

8%

  Media

 91

112

-19%

-6%


 180

220

-18%

-7%

Markets Division

 1,908

 2,051

-7%

0%


 3,762

 4,036

-7%

0%

Eliminations

 (2)

 (3)




 (3)

 (7)



Revenues from ongoing businesses(3)

 3,282

3,413

-4%

1%


 6,409

6,646

-4%

1%

Disposals(3)

 11

 34




 15

 61



Revenues

$3,293

$3,447

-4%



$6,424

$6,707

-4%



 





 




Operating Profit 










Legal 

$341

$340

0%



$582

$573

2%


Tax & Accounting

36

34

6%



77

78

-1%


Healthcare & Science 

 53

42

26%



 84

71

18%


Professional Division

 430

 416

3%



 743

 722

3%


Markets Division

424

367

16%



761

705

8%


Corporate and Other

(255)

(275)




(404)

(323)



Amortization of other intangible assets

 (124)

 (131)




 (243)

 (260)



Operating profit from ongoing  

  businesses(3)

475 

377

26%



 857

844

2%


Disposals(3)

4




 (6)

1



Impairment of assets held for sale

(89)




(89)



Operating profit

$475

$292

63%



$851

$756

13%



Thomson Reuters Corporation

Reconciliation of Operating Profit to Underlying Operating Profit (4)

 (millions of U.S. dollars)

(unaudited)



Three Months Ended



Six Months Ended


June 30,


June 30,



2009

2008(2)

Change


2009

2008(2)

Change









Operating profit

$475 

$292 

63%


$851 

$756 

13%

Adjustments:








  Amortization of other intangible assets

124

131



243

260


  Disposals

-

(4)



6

(1)


  Impairment of assets held for sale

-

89



-

89


  Fair value adjustments

87

4



88

(16)


  Integration program costs

107

201



195

214


Underlying operating profit

$793 

$713 

11%


$1,383 

$1,302 

6%

Underlying operating profit margin 

24.2%

20.9%



21.6%

19.6%



2009 IFRS Results Compared to 2008 Pro Forma Results


Thomson Reuters Corporation

Reconciliation of Earnings Attributable to Common and Ordinary Shares

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


Six Months Ended

June 30,


June 30,


2009


2008(6)


2009


2008(6)

Earnings attributable to common and ordinary shares

$315


 


$505


 

Adjustments:



 




 

  Disposals

-


 


6


 

  Fair value adjustments

87


 


88


 

   Other finance costs

34


 


57


 

  Share of post tax earnings in equity method investees

-




(1)



  Tax on above items

(31)


 


(36)


 

Interim period effective tax rate normalization (7)

(42)


 


(35)


 

Amortization of other intangible assets

124


 


243


 

Discontinued operations

(2)




(6)



Dividends declared on preference shares

-


 


(1)


 

Adjusted earnings from continuing operations

$485


$328


$820


$703

Adjusted earnings per share from continuing operations

$0.58


$0.39


$0.98


$0.84









Weighted average common and ordinary shares  (in millions)

 836.5


 836.5


 835.6


 837.3




2009 IFRS Results Compared to 2008 Pro Forma Results

Thomson Reuters Corporation

Division and Business Segment Depreciation and Amortization of Computer Software

 (millions of U.S. dollars)

(unaudited)



Three Months Ended


Six Months Ended

June 30,


June 30,

Depreciation and amortization of computer software

2009


2008(1) (2)


2009


2008(1) (2)









  Legal 

(65)


(65)


(128)


(125)

   Tax & Accounting

(19)


(13)


(38)


(27)

  Healthcare & Science

(20)


 (16)


(37)


 (28)

Professional Division

 (104)

 

(94)


 (203)

 

(180)

Markets Division

(133)


(154)


(297)


(314)

Corporate and Other 

 (5)

 

 (3)


 (10)

 

 (4)

Depreciation - Ongoing Businesses

(242)


(251)


(510)


(498)

Disposals

 -

 

 (1)


 (1)

 

 (3)

Total Depreciation and amortization of computer software

 (242)

 

 (252)


 (511)

 

 (501)


 

1         2008 segment results have been restated to be comparable to the presentation for 2009.
2         2008 results are shown on a pro forma basis which assumes that Thomson acquired Reuters on January 1, 2007. These amounts reflect the impacts of purchase accounting, but exclude deal-related expenses and an initial one-time purchase accounting adjustment related to deferred revenue.
3         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.
4         Underlying operating profit excludes amortization of other intangible assets, impairment charges, fair value adjustments, integration program costs, 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.  
5         Adjusted earnings from continuing operations and adjusted earnings per share from continuing operations include dividends declared on preference shares and integration program costs, 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 (3) above), other finance costs, Thomson Reuters share of post-tax earnings in equity method investees and discontinued operations.  Adjusted earnings per share from continuing operations is calculated using diluted weighted average common and ordinary shares and does not represent actual earnings per share attributable to shareholders.
6         In 2008, Thomson Reuters calculated its pro forma adjusted earnings by deducting from pro forma underlying operating profit certain normally recurring items appearing below operating profit on the income statement. Additionally, Thomson Reuters deducted costs associated with its integration program as well as earnings attributable to non-controlling interests and dividends declared on preference shares. The table below presents a reconciliation of pro forma underlying operating profit to pro forma adjusted earnings from continuing operations for the three and six months ended June 30, 2008.  
 
 

(millions of U.S. dollars, except as otherwise indicated and except per share data)

Three Months Ended


Six Months Ended

Pro forma basis

June 30, 2008(a)


June 30, 2008(a)

Underlying operating profit

713


1,302

Adjustments:




Integration program costs

(201)


(214)

Net interest expense (calculated as pro rata $450 million annualized)

(112)


(225)

Income taxes (calculated using an estimated effective tax rate of 25%)

(67)


(151)

Earnings attributable to non-controlling interests

(4)


(6)

Dividends declared on preference shares

(1)


(3)

Adjusted earnings from continuing operations

328


703

Adjusted earnings per share from continuing operations

$0.39


$0.84

 




Weighted average common and ordinary shares outstanding (in millions)

836.5


837.3


          (a)  This calculation has been restated to be comparable to the 2009 presentation of disposals.
Weighted average common and ordinary shares outstanding reflected the actual reported diluted weighted average common and ordinary shares outstanding adjusted as if the approximately 194 million Thomson Reuters PLC shares issued to Reuters shareholders on April 17, 2008 were outstanding from the beginning of the period presented, as well as the effect of the approximately 34 million Reuters Group PLC share options assumed as part of the acquisition.

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.


Consolidated IFRS Results


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,



2009

2008


2009

2008








Revenues


$3,293

$3,133


$6,424

$4,973

Operating expenses


(2,452)

(2,432)


(4,819)

(3,851)

Depreciation


(113)

(112)


(242)

(167)

Amortization of computer software


(129)

(128)


(269)

(204)

Amortization of other intangible assets


(124)

(118)


(243)

(180)

Impairment of assets held for sale


-

 (89)


-

(89)

Operating profit


 475

 254


 851

 482

Finance costs, net:







   Net interest expense


(104)

(50)


(200)

(12)

  Other finance costs 


(34)

(44)


(57)

(72)

Income before tax and equity method investees


337

160


594

398

Share of post tax earnings in equity method investees


-

1


1

1

Tax expense


 (14)

 (1)


 (83)

 (46)

Earnings from continuing operations


323

160 


512

353 

Earnings from discontinued operations, net of tax


 2

(6) 


 6

(4) 

Net earnings


$325

$154


$518

$349








Earnings attributable to:







Common and ordinary shareholders


315

150


505

343

Non-controlling interests


10

4


13

6








Basic earnings per share

$0.38

$0.19

 $0.61

 $0.47

Diluted earnings per share


$0.38

$0.19


 $0.60

 $0.47











 



 

Basic weighted average common and ordinary shares


829,065,567

792,544,170


828,691,308

716,323,549

Diluted weighted average common and ordinary shares


836,493,404

797,766,197


835,577,207

720,098,337


 Thomson Reuters Corporation

Consolidated Statement of Financial Position

(millions of U.S. dollars)

(unaudited)



June 30,


December 31,

2009


2008

Assets




Cash and cash equivalents

$1,572


$841

Trade and other receivables

1,746


1,818

Other financial assets

114


261

Prepaid expenses and other current assets

 658


 766

Current assets

4,090


3,686





Computer hardware and other property, net 

1,508


1,556

Computer software, net

1,398


1,299

Other identifiable intangible assets, net

8,830


8,702

Goodwill

18,640


18,324

Other financial assets

322


286

Other non-current assets

634


627

Deferred tax

 95


 109

Total assets

$35,517


$34,589





Liabilities and equity




Liabilities




Current indebtedness

$735


$688

Payables, accruals and provisions

2,450


2,704

Deferred revenue

1,183


1,193

Other financial liabilities

 34


 60

Current liabilities

4,402


4,645





Long-term indebtedness

7,255


6,783

Provisions and other non-current liabilities

1,862


1,798

Other financial liabilities

193


222

Deferred tax

2,686


2,653

Total liabilities

16,398


16,101





Equity




Capital

10,099


10,034

Retained earnings

10,678


10,650

Accumulated other comprehensive loss

 (1,728)


 (2,268)

Total shareholders' equity

19,049


 18,416

Non-controlling interests

70


72

Total equity

19,119


18,488

Total liabilities and equity

$35,517


$34,589


Thomson Reuters Corporation

Consolidated Statement of Cash Flow

(millions of U.S. dollars) (unaudited)


Three Months Ended June 30,


Six Months Ended June 30,


2009

2008


2009

2008

Cash provided by (used in):






Operating activities






Net earnings

$325

$154


$518

$349

Add back (deduct) items not involving cash:






Depreciation

113

112


242

167

Amortization of computer software

129

128


269

204

Amortization of other intangible assets

124

118


243

180

Impairment of assets held for sale

-

89


-

89

Deferred tax

(75)

(99)


(66)

(140)

Other

204

45


259

113

Changes in working capital and other items

186

340


(208)

222

Operating cash flows from continuing operations

1,006

887


1,257

1,184

Operating cash flows from discontinued operations

-

 (7)


 -

 (20)

Net cash provided by operating activities

1,006

880 


 1,257

1,164 







Investing activities






Acquisitions, less cash acquired 

(25)

(8,147)


(45)

(8,270)

Proceeds from other disposals, net of tax paid 

3

-


3

154

Capital expenditures, less proceeds from disposals

(268)

(239)


(466)

(356)

Other investing activities

-

(4)


(1)

(7)

Investing cash flows from continuing operations

(290)

(8,390)


(509)

(8,479)

Investing cash flows from discontinued operations

-

-


22

(60)

Net cash used in investing activities

(290) 

 (8,390)


 (487)

 (8,539)







Financing activities






Proceeds from debt

-

5,921


609

7,600

Repayments of debt

(189)

(4,679)


(192)

(5,079)

Net borrowings (repayments) under short-term loan facilities

2

(1,426)


(8)

(1,072)

Share repurchases

-

(458)


-

(458)

Dividends paid on preference shares

-

(1)


(1)

(3)

Dividends paid on common and ordinary shares

(226)

(144)


(454)

(270)

Dividend payable assumed from Reuters Group PLC

-

(246)


-

(246)

Other financing activities

(3)

192


(5)

194

Net cash (used in) provided by financing activities

 (416)

 (841)


 (51)

 666







Translation adjustments

 21

(82) 


 12

1 

Increase (decrease) in cash and cash equivalents 

321

(8,433)


731

(6,708)

Cash and cash equivalents at beginning of period

 1,251

 9,222


 841

 7,497

Cash and cash equivalents at end of period

$1,572

$789


$1,572

$789


Thomson Reuters Corporation

Reconciliation of Net Cash Provided by Operating Activities 

to Free Cash Flow(1)

(millions of U.S. dollars) 

(unaudited)



Three Months Ended


Six Months Ended

June 30,


June 30,


2009

2008


2009

2008

Net cash provided by operating activities

$1,006

$880


$1,257

$1,164

Capital expenditures, less proceeds from disposals

(268)

(239)


(466)

(356)

Other investing activities

-

(4)


(1)

(7)

Investing activities of discontinued operations

-

-


-

(7)

Dividends paid on preference shares

 -

 (1)


 (1)

 (3)

Free cash flow (1)

$738

$636


$789

$791



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 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.








This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR DGGGRLVMGLZG