Thomson Reuters Reports Full-Year and Fourth-Quarter 2011 Results
(Thomson Reuters ONE) -
* Revenues grew 5% for full year and fourth quarter, before currency
* Adjusted EBITDA and underlying operating profit margins expanded for full
year and fourth quarter
* Full-year adjusted EPS was $1.98 and $0.54 in fourth quarter
* $3.0 billion non-cash goodwill impairment charge incurred
* Board approved $0.04 annual dividend increase to $1.28 per share
* 2012 Outlook provided
NEW YORK, February 9, 2012 - Thomson Reuters (TSX / NYSE: TRI), the world's
leading source of intelligent information for businesses and professionals,
today reported results for the full year and fourth quarter ended December
31, 2011. Results include a $50 million charge primarily related to a
reorganization of the former Markets division incurred in the fourth quarter.
The company also announced it had taken a $3.0 billion non-cash goodwill
impairment charge related to its financial services business. This charge is
excluded from adjusted earnings, adjusted EBITDA and underlying operating
profit.
The company reported full-year revenues from ongoing businesses of $12.9
billion, an increase of 5% before currency from the prior year. Adjusted EBITDA
increased 20% from the prior year with the corresponding margin up 280 basis
points to 26.4%. Underlying operating profit increased 9% from the prior year
with the corresponding margin up 50 basis points to 20.0%. The reorganization
charge had a 40 basis point negative impact on both the full-year adjusted
EBITDA and underlying operating profit margins.
"Our results once again proved the resilience of our business," said James C.
Smith, chief executive officer of Thomson Reuters. "The units in the former
Professional division continued to perform well and we made significant strides
in kick-starting the growth engine in our former Markets division."
"We have simplified our organization; we have strengthened our management team;
and we are making progress toward improving our execution capability," Mr. Smith
said. "We are focused in 2012 on a series of product launches and service
improvements across all our key customer groups."
Consolidated Financial Highlights - Full-Year Results
Twelve Months Ended December 31,
(Millions of U.S. dollars, except EPS and
margins)
IFRS Financial Measures 2011 2010 Change
Revenues $13,807 $13,070 6%
Operating (loss) profit ($705) $1,419 nm[1]
Diluted (loss) earnings per share
(EPS) ($1.67) $1.08 nm
Cash flow from operations $2,597 $2,672 -3%
Change
Before
Non-IFRS Financial Measures 2011 2010 Change Currency
Revenues from ongoing businesses $12,916 $12,108 7% 5%
Adjusted EBITDA $3,412 $2,852 20% 17%
Adjusted EBITDA margin 26.4% 23.6% 280bp 280bp
Underlying operating profit $2,579 $2,356 9% 7%
Underlying operating profit margin 20.0% 19.5% 50bp 40bp
Adjusted earnings per share (EPS) $1.98 $1.56 27%
Free cash flow $1,602 $1,563 2%
[1] nm - not meaningful
[2] 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. Adjusted EBITDA, underlying operating profit and the related margins
and adjusted EPS as disclosed in this news release exclude the impact of the
company's $3.0 billion non-cash goodwill impairment charge as the company
believes removing this charge will assist investors in assessing its underlying
operations. Additional information is provided in the explanatory note at the
end of this news release.
* Revenues from ongoing businesses were $12.9 billion, a 5% increase before
currency. Strong growth across the Professional division, up 9%, and a 2%
increase in Markets division revenues drove the overall increase.
* Adjusted EBITDA increased 20% and the corresponding margin was 26.4% versus
23.6% in the prior year. Excluding the reorganization charge, adjusted
EBITDA increased 21% and the corresponding margin increased 320 basis points
to 26.8%.
* Underlying operating profit increased 9% and the corresponding margin was
20.0% versus 19.5% in 2010. Excluding the reorganization charge, underlying
operating profit increased 12% and the corresponding margin increased 90
basis points to 20.4%.
* Adjusted EBITDA growth and underlying operating profit growth across both
divisions was due to flow-through from higher revenues, integration savings
and the benefit of currency. Adjusted EBITDA also benefited from lower
integration expenses. Excluding currency, adjusted EBITDA increased 17% and
underlying operating profit increased 7%.
* Adjusted EPS was $1.98 compared to $1.56 in the prior year. The increase was
largely attributable to higher underlying operating profit and lower
integration expenses. Adjusted EPS excluding the reorganization charge was
$2.03. Currency had a $0.06 favorable impact on adjusted EPS.
* Free cash flow was $1.6 billion, up 2%. Corporate expenses were $273 million
versus $249 million in the prior year.
* The company incurred a $3.0 billion goodwill impairment charge in the fourth
quarter. This non-cash charge was the result of the company's annual
goodwill impairment testing required under IFRS and related to the company's
financial services business. On an IFRS basis, EPS including the goodwill
impairment charge was a diluted loss per share of $1.67 for the full year.
This non-cash charge will not impact the company's normal business
operations, nor will it affect liquidity, cash flow from operations or
financial covenants under the company's outstanding public debt securities
or syndicated credit facility.
Consolidated Financial Highlights - Fourth-Quarter Results
Three Months Ended December 31,
(Millions of U.S. dollars, except EPS and
margins)
IFRS Financial Measures 2011 2010 Change
Revenues $3,577 $3,458 3%
Operating (loss) profit ($2,593) $307 nm
Diluted (loss) earnings per share
(EPS) ($3.11) $0.27 nm
Cash flow from operations $942 $1,003 -6%
Change
Before
Non-IFRS Financial Measures[2] 2011 2010 Change Currency
Revenues from ongoing businesses $3,355 $3,201 5% 5%
Adjusted EBITDA $864 $685 26% 26%
Adjusted EBITDA margin 25.8% 21.4% 440bp 420bp
Underlying operating profit $657 $611 8% 7%
Underlying operating profit margin 19.6% 19.1% 50bp 40bp
Adjusted earnings per share (EPS) $0.54 $0.37 46%
Free cash flow $669 $711 -6%
* Revenues from ongoing businesses were $3.4 billion, a 5% 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 26%, and the corresponding margin was 25.8% versus
21.4% in the prior-year period primarily due to flow-through from higher
revenues, integration savings and lower integration expenses. Excluding the
reorganization charge, adjusted EBITDA increased 33% and the corresponding
margin increased 580 basis points.
* Underlying operating profit increased 8% and the corresponding margin was
19.6%, versus 19.1% in the prior-year period. Excluding the reorganization
charge, underlying operating profit increased 16% and the corresponding
margin increased 200 basis points.
* Adjusted EPS was $0.54 compared to $0.37 in the prior-year period. The
increase was largely attributable to higher underlying operating profit and
lower integration expenses. Adjusted EPS excluding the reorganization charge
was $0.59. On an IFRS basis, EPS including the goodwill impairment charge
was a diluted loss per share of $3.11 for the fourth quarter.
Full-Year and Fourth-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. Results discussed in
this news release reflect the company's organizational structure through
December 31, 2011. Effective January 1, 2012, Thomson Reuters eliminated its
Professional and Markets divisions and future results will be reported for its
Legal, Tax & Accounting, Intellectual Property & Science and Financial & Risk
segments.( )
Professional Division - Full-Year Results
Twelve Months Ended December 31,
(Millions of U.S. dollars, except
margins)
Change
Before
2011 2010 Change Currency
Revenues
Legal $3,434 $3,157 9% 8%
Tax & Accounting $1,149 $1,006 14% 14%
Intellectual Property &
Science $852 $789 8% 7%
Professional Division Total $5,435 $4,952 10% 9%
Margin
Adjusted EBITDA 2011( ) 2010
Legal $1,233 $1,161 6% 35.9% 36.8%
Tax & Accounting $359 $307 17% 31.2% 30.5%
Intellectual Property &
Science $296 $263 13% 34.7% 33.3%
Professional Division Total $1,888 $1,731 9% 8%
Adjusted EBITDA Margin 34.7% 35.0% -30bp -20bp
Operating profit
Legal $943 $892 6% 27.5% 28.3%
Tax & Accounting $261 $223 17% 22.7% 22.2%
Intellectual Property &
Science $237 $209 13% 27.8% 26.5%
Professional Division Total $1,441 $1,324 9% 8%
Operating Profit Margin 26.5% 26.7% -20bp -10bp
Professional Division - Fourth-Quarter Results
Three Months Ended December 31,
(Millions of U.S. dollars, except
margins)
Change
Before
2011 2010 Change Currency
Revenues
Legal $907 $862 5% 5%
Tax & Accounting $369 $310 19% 19%
Intellectual Property &
Science $225 $207 9% 9%
Professional Division Total $1,501 $1,379 9% 9%
Margin
Adjusted EBITDA 2011( ) 2010
Legal $318 $307 4% 35.1% 35.6%
Tax & Accounting $145 $132 10% 39.3% 42.6%
Intellectual Property &
Science $80 $65 23% 35.6% 31.4%
Professional Division Total $543 $504 8% 8%
Adjusted EBITDA Margin 36.2% 36.5% -30bp -40bp
Operating profit
Legal $251 $238 5% 27.7% 27.6%
Tax & Accounting $118 $110 7% 32.0% 35.5%
Intellectual Property &
Science $64 $53 21% 28.4% 25.6%
Professional Division Total $433 $401 8% 8%
Operating Profit Margin 28.8% 29.1% -30bp -20bp
* Full-year revenues increased 9%, driven by solid growth across all
businesses. Legal grew 8%, Tax & Accounting increased 14% and Intellectual
Property & Science was up 7%.
* Full-year EBITDA increased 9%. The corresponding margin was 34.7%, a
decrease of 30 basis points as flow-through from higher revenues was offset
by a change in business mix in the Legal segment and the dilutive effect of
acquisitions.
* Full-year operating profit increased 9% and the corresponding margin was
26.5%, 20 basis points lower than the prior year with acquisitions
negatively impacting the margin by 80 basis points.
* Fourth-quarter revenues increased 9%, driven by solid growth across all
businesses. Legal grew 5%, Tax & Accounting increased 19% and Intellectual
Property & Science was up 9%.
* Fourth-quarter EBITDA increased 8%. The corresponding margin was 36.2%, a
decrease of 30 basis points as flow-through from higher revenues was offset
by the change in business mix in the Legal segment and the dilutive effect
of acquisitions.
* Fourth-quarter operating profit increased 8%. The corresponding margin was
28.8%, 30 basis points lower than the prior-year period.
Legal
* Full-year revenues increased 8%. US Law Firm Solutions grew 3% as a 17%
increase in Business of Law (FindLaw and Elite) was offset by a 2% decline
in research-related revenues. Corporate, Government & Academic and Risk &
Compliance revenues increased 13% (4% organic). Global businesses grew 13%
(4% organic) with solid growth in Latin America.
* Full-year EBITDA increased 6% and the corresponding margin was 35.9%
compared to 36.8% in the prior year.
* Full-year operating profit increased 6% and the corresponding margin was
27.5% compared to 28.3% in the prior year. The decline in operating margin
was primarily due to a change in business mix and the dilutive effect of
acquisitions.
* Fourth-quarter revenues increased 5%. US Law Firm Solutions grew 3% (1%
organic) as 17% growth in Business of Law (FindLaw and Elite) was partly
offset by a 3% decline in core legal research revenues. Corporate,
Government & Academic and Risk & Compliance revenues increased 11% (2%
organic). Global businesses grew 5% (1% organic) with strong growth in Latin
America offsetting declines in the UK and Spain. US print revenues declined
3%.
* Fourth-quarter EBITDA increased 4% and the associated margin declined 50
basis points to 35.1% due to a change in business mix.
* Fourth-quarter operating profit increased 5% and the associated margin was
27.7% compared to 27.6% in the prior-year period.
* WestlawNext has been sold to over 34,000 customers since its launch in
February 2010 - representing 54% of Westlaw's revenue base.
Tax & Accounting
* Full-year revenues increased 14%, driven by growth in income tax software
sales and electronic filing of tax returns and acquisitions.
* Full-year EBITDA increased 17% and the corresponding margin increased 70
basis points to 31.2%.
* Full-year operating profit increased 17% and the corresponding margin
increased 50 basis points to 22.7% due to strong revenue flow-through and
efficiency initiatives, partly offset by the dilutive effect of
acquisitions.
* Fourth-quarter revenues increased 19%, led by growth in income tax software
sales, Checkpoint and acquisitions.
* Fourth-quarter EBITDA increased 10% and the related margin decreased 330
basis points to 39.3%.
* Fourth-quarter operating profit increased 7% and the related margin
decreased 350 basis points to 32.0%. The decrease was primarily due to the
timing of expenses.
* Small movements in the timing of expenses can impact margins in any given
quarter for the Tax & Accounting business. Full-year margins are more
reflective of underlying performance.
Intellectual Property & Science
* Full-year revenues increased 7%. Growth was driven by IP Solutions
businesses. Scientific & Scholarly Research grew 5% related to higher Web of
Knowledge subscriptions. Life Sciences increased 12% due to continued demand
for biology and disease analytics products and acquisitions.
* Full-year EBITDA increased 13% with the corresponding margin increasing 140
basis points to 34.7%.
* Full-year operating profit increased 13% with the corresponding margin
increasing 130 basis points to 27.8%. Increases in EBITDA and operating
profit margins were primarily due to revenue flow-through and expense
management.
* Fourth-quarter revenues increased 9% attributable to the same factors as the
full year.
* Fourth-quarter EBITDA increased 23% with the corresponding margin increasing
420 basis points to 35.6%.
* Fourth-quarter operating profit increased 21% with the corresponding margin
increasing 280 basis points to 28.4%. Increases in EBITDA and operating
profit margins were primarily due to revenue flow-through and expense
timing.
* Small movements in the timing of expenses can impact margins in any given
quarter for the Intellectual Property & Science business. Full-year margins
are more reflective of underlying performance.
Markets Division - Full-Year Results
Twelve Months Ended December 31,
(Millions of U.S. dollars, except margins)
Change
Before
2011 2010 Change Currency
Revenues
Sales & Trading $3,715 $3,543 5% 2%
Investment & Advisory $2,208 $2,208 0% -2%
Enterprise $1,235 $1,093 13% 10%
Media $336 $324 4% 0%
Markets Division Total $7,494 $7,168 5% 2%
Adjusted EBITDA $1,992 $1,808 10% 6%
Adjusted EBITDA Margin 26.6% 25.2% 140bp 110bp
Operating Profit $1,411 $1,281 10% 5%
Operating Profit Margin 18.8% 17.9% 90bp 60bp
Markets Division - Fourth-Quarter Results
Three Months Ended December 31,
(Millions of U.S. dollars, except margins)
Change
Before
2011 2010 Change Currency
Revenues
Sales & Trading $912 $899 1% 2%
Investment & Advisory $540 $549 -2% -3%
Enterprise $318 $292 9% 10%
Media $87 $86 1% 1%
Markets Division Total $1,857 $1,826 2% 2%
Adjusted EBITDA $464 $433 7% 6%
Adjusted EBITDA Margin 25.0% 23.7% 130bp 110bp
Operating Profit $311 $298 4% 3%
Operating Profit Margin 16.7% 16.3% 40bp 30bp
* Full-year revenues increased 2%. Strong revenue growth in Enterprise and
Tradeweb was partly offset by weakness in Investment Management and Exchange
Traded Instruments.
* Full-year and fourth-quarter EBITDA and operating profit margins include a
reorganization charge of approximately $44 million (which is part of the
previously mentioned $50 million reorganization charge).
* Full-year EBITDA was $2.0 billion, an increase of 10% with a related margin
of 26.6%.
* Full-year operating profit was $1.4 billion, an increase of 10% with a
related margin of 18.8%.
* Fourth-quarter recurring subscription-related revenues grew 1%.
Transactions-related revenues increased 4% due to Tradeweb. Recoveries
revenues declined 2% and Outright revenues rose 23%.
* By geography, fourth-quarter revenues in Asia increased 3%; revenues in
Europe, Middle East and Africa (EMEA) rose 3% while revenues in the Americas
declined 1%.
* Fourth-quarter EBITDA was $464 million, an increase of 7%, with a related
margin of 25.0% and benefited from expense timing.
* Fourth-quarter operating profit was $311 million, an increase of 4%, with a
related margin of 16.7% and benefited from expense timing.
* Eikon desktops now total 15,000, up from 8,000 on September 30, 2011.
Sales & Trading
* Full-year revenues increased 2% driven by 8% organic growth at Tradeweb and
acquisitions. Revenue growth was partly offset by an 8% decline in
recoveries. Excluding recoveries, revenues grew 4%.
* Fourth-quarter revenues increased 2% driven by 5% organic growth at Tradeweb
and acquisitions. Revenue growth was partly offset by a 5% decline in
recoveries. Excluding recoveries, revenues grew 3%.
Investment & Advisory
* Full-year revenues declined 2%. A 2% increase in Corporates revenues was
offset by flat Investment Banking-related revenues and negative performance
in Investment Management which declined 6%.
* Fourth-quarter revenues declined 3%. A 1% increase in Corporates revenues
was offset by flat Investment Banking-related revenues and an improving but
negative performance in Investment Management which declined 4%. Fourth-
quarter results were an improvement from the 8% decline in the third quarter
and were the best quarterly results for the business since the second
quarter of 2009.
Enterprise
* Full-year and fourth-quarter revenues increased 10% driven by a continuing
trend among customers to invest in pricing and reference data, low-latency
data feeds and hosting solutions.
* The Enterprise Content business grew 17% in the fourth quarter, driven by
growth in pricing and reference data. The Elektron Real-Time and Enterprise
platform business grew 7% in the fourth quarter.
* 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 hosting centers are
up and running.
Media
* Full-year revenues were flat. Fourth-quarter revenues increased 1%, with the
News Agency business up 1% and the Consumer business up 9% due to strong
online sales in the Americas.
Integration Programs
At the end of 2011, the company completed the Reuters integration and achieved
combined run rate savings of $1.7 billion from the Reuters integration and
legacy savings programs. An incremental $65 million in run-rate savings was
achieved during the fourth quarter of 2011.
Integration-related costs totaled $64 million in the fourth quarter and $215
million for the full year.
Recent Developments
Today, the company announced its intention to sell three businesses which are
expected to close by mid-year. Those businesses are: Tax & Accounting's Property
Tax Services; Legal's Law School Publishing business; and, Financial & Risk's
eXimius business - part of the Retail Wealth Management organization. The three
businesses collectively had approximately $155 million of revenues in 2011.
This news release includes the results of these disposals within ongoing
businesses for comparability purposes since the company owned and managed the
businesses for the entire reporting period.
Results for previously announced disposals and the Healthcare business are
included within the "Other Businesses" line in the company's financial
statements.
Business Outlook (Before Currency)
Thomson Reuters expects its revenues to grow low single-digits in 2012.
Thomson Reuters expects its adjusted EBITDA margin to range between 27% and 28%
in 2012.
The company forecasts its underlying operating profit margin to range between
18% and 19% in 2012 due to higher depreciation and amortization expense.
Thomson Reuters expects reported free cash flow to grow 5% to 10% and free cash
flow from ongoing operations to grow 15% to 20% in 2012.
The information in this section is forward-looking and should be read in
conjunction with the section below entitled "Special Note Regarding Forward-
Looking Statements, Material Assumptions and Material Risks."
Dividend and Share Repurchases
The board of directors approved a $0.04 per share increase in the annual
dividend to $1.28 per share. A quarterly dividend of $0.32 per share is payable
on March 15, 2012 to shareholders of record as of February 22, 2012. This
dividend increase marks the 19(th) consecutive annual dividend increase by the
company.
In 2011, the company repurchased 10.8 million shares for an aggregate purchase
price of $326 million pursuant to its Normal Course Issuer Bid (NCIB).
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. Thomson
Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol:
TRI). For more information, go towww.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
which include Appendix A.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL ASSUMPTIONS AND
MATERIAL RISKS
Certain statements in this news release, including, but not limited to,
statements in the "Business Outlook (Before Currency)" section and Mr. Smith's
comments, are forward-looking. 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 2012. This
information may not be appropriate for other purposes. You are cautioned not to
place undue reliance on forward-looking statements which reflect expectations
only as of the date of this news release. Except as may be required by
applicable law, Thomson Reuters disclaims any obligation to update or revise any
forward-looking statements.
The company's 2012 business outlook is based on various external and internal
assumptions. Economic and market assumptions include, but are not limited to,
positive GDP growth in the countries where Thomson Reuters operates 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
initiatives.
Some of the material risk factors that could cause actual results or events to
differ materially from those expressed in or implied by forward-looking
statements in this news release include, but are not limited to, changes in the
general economy (including the current European Union debt crisis); 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; additional 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; and failure to
fully derive anticipated benefits from future or existing acquisitions, joint
ventures, investments or dispositions. 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 ofwww.thomsonreuters.com.
CONTACT
MEDIA INVESTORS
Calvin Mitchell Frank J. Golden
Senior Vice President, Corporate Affairs Senior Vice President, Investor
+1 646 223 5285 Relations
calvin.mitchell(at)thomsonreuters.com +1 646 223 5288
frank.golden(at)thomsonreuters.com
Thomson Reuters will webcast a discussion of its full-year and fourth-quarter
2011 results today beginning at 8:30 a.m. Eastern Standard Time (EST). You can
access the webcast by visiting the "Investor Relations" section
ofwww.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 Twelve Months
Ended Ended
December 31, December 31,
---------------------------------------------------------------
2011 2010 Change Organic 2011 2010 Change Organic
Revenues
Legal [1] $907 $862 5% 1% $3,434 $3,157 9% 3%
Tax &
Accounting [1] 369 310 19% 6% 1,149 1,006 14% 6%
Intellectual
Property &
Science [1] 225 207 9% 7% 852 789 8% 5%
---------------- ------------------
Professional
Division 1,501 1,379 9% 3% 5,435 4,952 10% 4%
Sales &
Trading( ) 912 899 1% 0% 3,715 3,543 5% -1%
Investment
& Advisory( ) 540 549 -2% -3% 2,208 2,208 0% -2%
Enterprise( ) 318 292 9% 10% 1,235 1,093 13% 10%
Media 87 86 1% 1% 336 324 4% 0%
---------------- ------------------
Markets
Division 1,857 1,826 2% 1% 7,494 7,168 5% 1%
Eliminations (3) (4) (13) (12)
---------------- ------------------
Revenues from
ongoing
businesses [2] 3,355 3,201 5% 2% 12,916 12,108 7% 2%
Before currency 5% 5%
Other
businesses(
(3)) 222 257 891 962
---------------- ------------------
Revenues $3,577 $3,458 3% $13,807 $13,070 6%
---------------- ------------------
Adjusted EBITDA
[4]
Legal [1] $318 $307 4% $1,233 $1,161 6%
Tax &
Accounting [1] 145 132 10% 359 307 17%
Intellectual
Property &
Science [1] 80 65 23% 296 263 13%
---------------- ------------------
Professional
Division 543 504 8% 1,888 1,731 9%
Markets
Division 464 433 7% 1,992 1,808 10%
Corporate
expenses (79) (79) (253) (224)
Integration
programs
expenses (64) (173) (215) (463)
---------------- ------------------
Adjusted EBITDA $864 $685 26% $3,412 $2,852 20%
---------------- ------------------
Underlying
Operating
Profit [5]
Legal [1] $251 $238 5% $943 $892 6%
Tax &
Accounting [1] 118 110 7% 261 223 17%
Intellectual
Property &
Science [1] 64 53 21% 237 209 13%
---------------- ------------------
Professional
Division 433 401 8% 1,441 1,324 9%
Markets
Division 311 298 4% 1,411 1,281 10%
Corporate
expenses (87) (88) (273) (249)
---------------- ------------------
Underlying
operating
profit $657 $611 8% $2,579 $2,356 9%
---------------- ------------------
Thomson Reuters Corporation
Reconciliation of Operating (Loss) Profit to Underlying Operating Profit [5] and
Adjusted EBITDA [4]
(millions of U.S. dollars)
(unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
----------------------- ----------------------
2011( ) 2010 Change 2011( ) 2010 Change
Operating (loss) profit ($2,593) $307 nm ($705) $1,419 nm
Adjustments:
Goodwill impairment 3,010 - 3,010 -
Amortization of other 146 612 545
identifiable intangible assets 166
Integration programs expenses 64 173 215 463
Fair value adjustments (37) 42 (149) 117
Other operating losses 1 (204) 16
(gains), net 98
Operating profit from Other (58) (200) (204)
businesses [3] (51)
---------------- ----------------
Underlying operating profit $657 $611 8% $2,579 $2,356 9%
Adjustments:
Integration programs expenses (64) (173) (215) (463)
Depreciation and amortization of 1,048 959
computer software (excluding Other
businesses [3] 271 247
---------------- ----------------
Adjusted EBITDA $864 $685 26% $3,412 $2,852 20%
---------------- ----------------
Underlying operating profit margin 19.6% 19.1% 50bp 20.0% 19.5% 50bp
---------------- ----------------
Adjusted EBITDA margin 25.8% 21.4% 440bp 26.4% 23.6% 280bp
---------------- ----------------
Thomson Reuters Corporation
Reconciliation of (Loss) Earnings from Continuing Operations to Adjusted EBITDA
[4]
(millions of U.S. dollars)
(unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
----------------------- -----------------------
2011( ) 2010 Change 2011( ) 2010 Change
(Loss) earnings from continuing $225 $933
operations ($2,604) nm ($1,396) nm
Adjustments:
Tax (benefit) expense (78) (4) 293 139
Other finance (income) costs (4) (8) 15 (28)
Net interest expense 95 96 396 383
Amortization of other 146 545
identifiable intangible assets 166 612
Amortization of computer 155 572
software 178 659
Depreciation 114 110 438 457
---------------- -----------------
EBITDA ($2,133) $720 $1,017 $3,001
Adjustments:
Share of post tax earnings in (2) (8)
equity method investees (2) (13)
Other operating losses (gains), 1 16
net 98 (204)
Goodwill impairment 3,010 - 3,010 -
Fair value adjustments (37) 42 (149) 117
EBITDA from Other businesses [3] (72) (76) (249) (274)
---------------- -----------------
Adjusted EBITDA $864 $685 26% $3,412 $2,852 20%
---------------- -----------------
Adjusted EBITDA margin 25.8% 21.4% 440bp 26.4% 23.6% 280bp
---------------- -----------------
Thomson Reuters Corporation
Reconciliation of Underlying Operating Profit [5] to Adjusted EBITDA [4] by
Division and Business Segment
(millions of U.S. dollars)
(unaudited)
Three Months Ended Three Months Ended
December 31, 2011 December 31, 2010
---------------------------------- ---------------------------------
Add:
Depreciation
Add:
and Depreciation
Amortization and
of Amortization
Underlying Computer Underlying of
Operating Software( Adjusted Operating Computer Adjusted
Profit )** EBITDA Profit Software ** EBITDA
---------------------------------- ---------------------------------
Legal [1] $251 $67 $318 $238 $69 $307
Tax &
Accounting
[1] 118 27 145 110 22 132
Intellectual
Property &
Science [1] 64 16 80 53 12 65
---------------------------------- ---------------------------------
Professional
Division 433 110 543 401 103 504
Markets
Division 311 153 464 298 135 433
Corporate
expenses (87) 8 (79) (88) 9 (79)
Integration
programs
expenses na na (64) na na (173)
---------------------------------- ---------------------------------
$657 $271 $864 $611 $247 $685
---------------------------------- ---------------------------------
Twelve Months Ended Twelve Months Ended
December 31, 2011 December 31, 2010
---------------------------------- ---------------------------------
Add: Add:
Depreciation Depreciation
and and
Amortization Amortization
of of
Underlying Computer Underlying Computer
Operating Software ** Adjusted Operating Software ** Adjusted
Profit EBITDA Profit EBITDA
---------------------------------- ---------------------------------
Legal [1] $943 $290 $1,233 $892 $269 $1,161
Tax &
Accounting
[1] 261 98 359 223 84 307
Intellectual
Property &
Science [1] 237 59 296 209 54 263
---------------------------------- ---------------------------------
Professional
Division 1,441 447 1,888 1,324 407 1,731
Markets
Division 1,411 581 1,992 1,281 527 1,808
Corporate
expenses (273) 20 (253) (249) 25 (224)
Integration
programs
expenses na na (215) na na (463)
---------------------------------- ---------------------------------
$2,579 $1,048 $3,412 $2,356 $959 $2,852
---------------------------------- ---------------------------------
----------------------------------
** excludes Other businesses [3]
na = not applicable
Thomson Reuters Corporation
Reconciliation of (Loss) 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 Twelve Months
Ended Ended
December 31, December 31,
-----------------------------------
2011( ) 2010 2011( ) 2010
(Loss) earnings attributable to common $224 $909
shareholders ($2,572) ($1,390)
Adjustments:
Goodwill impairment 3,010 - 3,010 -
Goodwill impairment attributable to non- - -
controlling interests (40) (40)
Operating profit from Other businesses (58) (204)
[3] (51) (200)
Fair value adjustments (37) 42 (149) 117
Other operating losses (gains), net 98 1 (204) 16
Other finance (income) costs (4) (8) 15 (28)
Share of post tax earnings in equity (2) (8)
method investees (2) (13)
Tax on above items (51) (11) 129 9
Interim period effective tax rate 22 -
normalization [7] 10 -
Discrete tax items (72) (47) (105) (47)
Amortization of other identifiable intangible 146 545
assets 166 612
Discontinued operations (2) - (4) -
Dividends declared on preference shares (1) (1) (3) (3)
-----------------------------------
Adjusted earnings from continuing operations $452 $308 $1,658 $1,306
-----------------------------------
Adjusted earnings per share from continuing $0.37 $1.56
operations $0.54 $1.98
-----------------------------------
-----------------------------------
Diluted weighted average common shares (in
millions) 829.7 837.7 835.8 836.4
-----------------------------------
Thomson Reuters Corporation
Reconciliation of Net Cash Provided by Operating Activities
to Underlying Free Cash Flow [8], [9]
(millions of U.S. dollars)
(unaudited)
Three Months
Ended Twelve Months Ended
December 31, December 31,
------------------ ------------------------
2011 2010 2011 2010
Net cash provided by operating
activities $942 $1,003 $2,597 $2,672
Capital expenditures, less proceeds
from disposals (282) (297) (1,041) (1,114)
Other investing activities 10 6 49 8
Dividends paid on preference shares (1) (1) (3) (3)
------------------ ------------------------
Free cash flow 669 711 1,602 1,563
Integration programs costs 88 129 286 450
------------------ ------------------------
Underlying free cash flow $757 $840 $1,888 $2,013
------------------ ------------------------
Footnotes
(1) Thomson Reuters reorganized its reportable segments in the second quarter of
2011. 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. Other businesses do not qualify as a component of the
company's four reportable segments, nor as a separate reportable segment.
Other businesses include the Healthcare business, for which the divestiture
process has been suspended until market conditions improve.
Three Twelve
Months Months
(millions of U.S. dollars) Ended Ended
December December
31, 31,
------------------------
Other businesses 2011 2010 2011 2010
Revenues $222 $257 $891 $962
------------------------
Operating profit $51 $58 $200 $204
Depreciation and amortization of computer software 21 18 49 70
------------------------
EBITDA $72 $76 $249 $274
------------------------
(4) 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 or loss per share attributable to
shareholders.
Because Thomson Reuters reported a "net loss from continuing operations"
under IFRS for the fourth quarter and full year 2011, the weighted average
common shares used to compute diluted EPS are the same as basic EPS, with no
adjustment for potential common shares that would reduce the loss per share
and therefore be anti-dilutive. Since adjusted earnings from continuing
operations is a profit, as it excludes the $3.0 billion goodwill impairment
charge, potential common shares are included, as they lower adjusted EPS and
are therefore dilutive.
The following table reconciles IFRS and non-IFRS common share information:
(weighted average common shares) Three Months Ended Twelve Months Ended
December 31, 2011
---------------------------------------
IFRS: Basic and Diluted 828,185,741 833,459,452
Effect of stock options and other equity
incentive awards 1,489,159 2,297,510
---------------------------------------
Non- IFRS 829,674,900 835,756,962
---------------------------------------
(7) Adjustment to reflect income taxes based on estimated full-year effective
tax rate. Reported earnings or loss for interim periods reflect income taxes
based on the estimated effective tax rates of each of the jurisdictions in
which Thomson Reuters operates. The adjustment reallocates estimated full-
year income taxes between interim periods, but has no effect on full year
income taxes.
(8) Underlying free cash flow is free cash flow excluding one-time cash costs
associated with integration programs. 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.
(9) 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.
Thomson Reuters Corporation
Consolidated Income Statement
(millions of U.S. dollars, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------------------------------
2011 2010 2011 2010
Revenues $3,577 $3,458 $13,807 13,070
Operating expenses (2,604) (2,739) (9,997) (10,061)
Depreciation (114) (110) (438) (457)
Amortization of computer
software (178) (155) (659) (572)
Amortization of other
identifiable intangible assets (166) (146) (612) (545)
Goodwill impairment (3,010) - (3,010) -
Other operating (losses) gains,
net (98) (1) 204 (16)
-------------------------------------------------
Operating (loss) profit (2,593) 307 (705) 1,419
Finance costs, net:
Net interest expense (95) (96) (396) (383)
Other finance income
(costs) 4 8 (15) 28
-------------------------------------------------
(Loss) income before tax and
equity method investees (2,684) 219 (1,116) 1,064
Share of post tax earnings in
equity method investees 2 2 13 8
Tax benefit (expense) 78 4 (293) (139)
-------------------------------------------------
(Loss) earnings from continuing
operations (2,604) 225 (1,396) 933
Earnings from discontinued
operations, net of tax 2 - 4 -
-------------------------------------------------
Net (loss) earnings ($2,602) $225 ($1,392) $933
-------------------------------------------------
(Loss) earnings attributable
to:
Common shareholders (2,572) 224
Unternehmensinformation / Kurzprofil:
Datum: 09.02.2012 - 13:02 Uhr
Sprache: Deutsch
News-ID 112956
Anzahl Zeichen: 65579
contact information:
Kategorie:
Business News
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"Thomson Reuters Reports Full-Year and Fourth-Quarter 2011 Results"
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