Thomson Reuters Reports Full-Year and Fourth-Qu...
* Sales building momentum on the back of positive Q4 2009
* Full-year revenues and underlying operating margin comparable with 2008
* Full-year underlying free cash flow exceeds $2 billion, up 9%
* Fourth-quarter total revenues down 3% before currency; Professional division
up 1%, Markets division down 5%
* Adjusted EPS $1.85 for full-year and $0.44 for fourth quarter
* Integration savings target raised by $200 million to $1.6 billion
* Board approves $0.04 annual dividend increase to $1.16 per share
NEW YORK, NY, February 24, 2010 - 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 the fourth quarter ended December
31, 2009. Despite challenging global markets, the company successfully held
annual revenues for 2009, grew underlying profit margins to 21.3% and achieved
strong free cash flow growth. For the year, the Professional division grew
revenues 3% while Markets division revenues declined 2% due to negative net
sales and a difficult prior year comparison (up 6%). The underlying operating
profit margin improvement was driven by continuing progress on the integration
program, strong cost management and the benefit of currency.
Fourth-quarter net sales on a consolidated basis were positive and the best of
the year, as an improving operating environment complemented product and service
improvements and a reallocation of resources to faster growing markets. Revenues
(before currency) declined 3%, with the Professional division up 1% and the
Markets division down 5%, as revenue flow-through from weak sales earlier in
2009 held back strong performances in Tax & Accounting, Healthcare & Science and
Markets' Enterprise. The underlying operating profit margin was 19.7% in the
fourth quarter, reflecting revenue declines and product mix.
"I am pleased with the resilient performance of the company in 2009. Despite the
worst global operating environment any of us has faced, Thomson Reuters was able
to hold or improve on our prior-year results, with revenues comparable to 2008
and underlying operating margin and free cash flow up on the prior year. I am
also pleased that our net sales performance improved significantly through the
year, with the fourth quarter recording positive net sales for the company as a
whole. We are off to a strong start in sales in 2010 with the launch of the
innovative WestlawNext in Legal, and positive net sales in Markets," said Thomas
H. Glocer, chief executive officer of Thomson Reuters.
"Given our improving sales figures, I am confident that 2009 was the bottom of
the sales cycle for us and that 2010 will see the corresponding bottom in
period-on-period reported revenues. I expect that we will return to revenue
growth in the second half of 2010."
"2010 will be another year of important investment for Thomson Reuters, with the
final year of heavy integration spending in Markets, the release of important
new product platforms, such as WestlawNext in Legal and 'Project Utah' in
Markets, targeted investments in higher growth units such as Tax & Accounting,
Enterprise and Healthcare & Science, as well as in emerging markets. While these
investments will have a short-term impact on operating margin, they are designed
to accelerate future growth and we expect operating margin to rebound in 2011,"
Mr. Glocer added.
Consolidated Financial Highlights - Full-Year Results
Twelve Months Ended December 31,
(Millions of U.S. dollars, except EPS and profit
 margin)
IFRS Financial Measures 2009 2008 Change
Revenues $12,997 $11,707 11%
Operating profit $ 1,575 $1,668 -6%
Diluted earnings per share $1.01 $1.68
(EPS) -40%
Cash flow from operations  $2,666 $2,761 -3%
Non-IFRS Financial Measures
(1) 2009 2008 Change Change Before Currency
Revenues from ongoing $12,948 $13,283
businesses -3% 0%
Underlying operating profit $2,754 $2,778 -1%
Underlying operating profit 21.3% Â 20.9%
margin +40bp
Adjusted earnings per share $1.85 $1.82
(EPS) 2%
Underlying free cash flow $2,058 $1,885 9%
(1)Â Â Â Â These and other non-IFRS financial measures are defined and reconciled
to the most directly comparable IFRS measure in the tables appended to this news
release. Additional information is provided in the explanatory note at the end
of this news release.
* Revenues from ongoing businesses were $13 billion, comparable with 2008
before currency and down 3% after currency.
* IFRS revenues increased 11% after currency and only include Reuters results
subsequent to its acquisition on April 17, 2008.
* Underlying operating profit margin increased 40 basis points to 21.3% due to
integration savings, continued commitment to strong cost management and the
benefit of currency. Underlying operating profit declined 1%, primarily
attributable to an increase in non-cash pension expense of approximately $30
million resulting from the company's conversion to IFRS in 2009.
* Adjusted earnings per share were $1.85, compared to $1.82 in 2008 and
included integration-related costs of $0.51 per share in 2009 and $0.45 in
2008 which are included in adjusted earnings but not in underlying operating
profit.
* Integration and legacy savings programs reached a run-rate savings of $1.1
billion, $300 million higher than originally estimated at the close of the
Reuters acquisition. The 2011 run-rate savings target has been raised to
$1.6 billion (up $200 million), with $1.2 billion attributable to
integration savings and the balance derived from the company's legacy
savings programs.
* Underlying free cash flow was strong for the year at $2.1 billion compared
to $1.9 billion in 2008.
Consolidated Financial Highlights - Fourth-Quarter Results
 Three Months Ended December 31,
(Millions of U.S. dollars, except EPS and
 profit margin)
IFRS Financial Measures 2009 2008 Change
Revenues $3,357 $3,395 -1%
Operating profit $346 $633 -45%
Diluted earnings per share
(EPS) Â $0.21 $0.67 -69%
Cash flow from operations $896 $1,005 -11%
Non-IFRS Financial Measures 2009 2008 Change Change Before Currency
Revenues from ongoing
businesses $3,349 $3,329 1% -3%
Underlying operating profit $661 $788 -16%
Underlying operating profit
margin 19.7% 23.7% -400bp
Adjusted earnings per share
(EPS) $0.44 Â $0.50 -12%
Underlying free cash flow $675 $829 -19%
* Revenues from ongoing businesses declined 3% before currency (down 1% on an
IFRS basis), with strong growth in Tax & Accounting, Markets' Enterprise,
Healthcare & Science and Legal's subscription business offset by weaker
performance in Markets' other units and in print and transaction revenues in
Legal.Fourth-quarter 2008 revenue growth of 5% provided a challenging
comparison.
* Underlying operating profit, as anticipated, declined 16% against a strong
prior year when profits grew 13%. This decline was due to flow-through from
lower revenues, product mix, ongoing investments and an increase in benefit
expenses including the impact of adopting IFRS pension accounting.
* Adjusted earnings per share were $0.44 compared to $0.50 in the prior-year
period and included integration-related costs of $0.17 per share ($0.16 in
Q408), which are included in adjusted earnings but excluded from underlying
operating profit.
Fourth-Quarter and Full-Year Business Segment Highlights
Unless otherwise noted, all revenue growth comparisons in this news release are
before the impact of foreign currency as Thomson Reuters believes this provides
the best basis to measure the performance of its business. All revenue growth
and operating profit comparisons are based upon results from ongoing businesses
and exclude the results of disposals.
Professional Division
Professional Division - Full-Year Results
Twelve Months Ended December 31,
(Millions of U.S. dollars, except profit
margin)
 2009 2008 Change Change before currency
Revenues
Legal $3,586 $3,639 -1% 0%
Tax & Accounting $1,006 $926 9% 9%
Healthcare & Science  $829  $784 6% 7%
Professional Division Total $5,421 $5,349 1% 3%
Operating Profit
Legal $1,155 $1,192 -3%
Tax & Accounting $214 $216 -1%
Healthcare & Science  $185  $169 9%
Professional Division Total $1,554 $1,577 -1%
Operating Profit Margin %
Legal 32.2% 32.8%
Tax & Accounting 21.3% 23.3%
Healthcare & Science  22.3%  21.6%
Professional Division Total 28.7% 29.5%
Professional Division -Fourth-Quarter Results
Three Months Ended December 31,
(Millions of U.S. dollars, except profit
margin)
 2009 2008 Change Change before currency
Revenues
Legal $903 $912 -1% -3%
Tax & Accounting $311 $280 11% 10%
Healthcare & Science  $224  $213 5% 4%
Professional Division Total $1,438 $1,405 2% 1%
Operating Profit
Legal $268 $297 -10%
Tax & Accounting $101 $98 3%
Healthcare & Science   $52   $62 -16%
Professional Division Total $421 $457 -8%
Operating Profit Margin %
Legal 29.7% 32.6%
Tax & Accounting 32.5% 35.0%
Healthcare & Science  23.2%  29.1%
Professional Division Total 29.3% 32.5%
* Full-year revenues grew 3%, led by strong growth in Tax & Accounting and
Healthcare & Science which were up a combined 8%, and Legal's recurring
subscription business.
* Full-year operating profit declined 1% and the corresponding margin
decreased 80 basis points as tight cost controls and efficiency initiatives
were offset by lower revenue growth, business mix and the dilutive effect of
acquisitions.
* Fourth-quarter revenues rose 1%, driven by growth in Tax & Accounting,
Healthcare & Science and subscription legal products, but offset by a
continued decline in print products.
* Fourth-quarter operating profit declined 8% primarily due to the same
factors that impacted full-year profitability.
           Legal
* Full-year revenues were flat as strong growth from FindLaw (up 13%) and
subscription-related products (up 6%) were offset by a 5% decline in print
and a 13% decline in non-subscription products.
* Full-year operating profit declined 3% and the corresponding margin declined
60 basis points to 32.2%. Savings from efficiency initiatives and tight
cost controls were not enough to offset flow-through on flat revenues,
revenue mix and investments in growth initiatives.
* Fourth-quarter revenues declined 3% as growth from subscription-related
products (up 4%) and FindLaw (up 9%) was offset by declines of 13% in print
and 14% in non-subscription products.
* Fourth-quarter operating profit declined 10% and the associated margin was
29.7% versus 32.6% in the prior-year period. Lower revenues, particularly
from profitable print and non-subscription products, as well as the impact
of foreign exchange, more than offset efficiency savings.
           Tax & Accounting
* Full-year revenues grew 9%. Double-digit growth in software and service
offerings in the Professional and Corporate software and services
businesses, coupled with continued good performance from Checkpoint (up
6%), were slightly offset by a 10% decline in print/CD revenues.
* Full-year operating profit declined 1% and the related margin declined 200
basis points to 21.3%. Good flow-through on revenues was offset by
acquisition accounting related to software amortization, a shift towards
higher growth but lower initial margin businesses and technology-related
product investments.
* Fourth-quarter revenues grew 10%. Across both the Professional and
Corporate customer segments, Tax & Accounting continued to see strong demand
with good growth from UltraTax and ONESOURCE. Checkpoint grew 8% and had a
very strong sales quarter. Nearly 50% of this segment's 2009 profits were
generated in the fourth quarter.
* Fourth-quarter operating profit grew 3% and the related margin was 32.5%.
The 250 basis point margin decline, compared to the prior-year period, was
largely driven by acquisition accounting related to software amortization, a
shift towards higher growth but lower initial margin businesses and
technology-related product investments.
           Healthcare & Science
* Full-year revenues grew 7%. This strong revenue growth was led by a 17%
increase in the Payer business as well as 7% growth across the Science
businesses.
* Full-year operating profit increased 9% and the related margin grew 70 basis
points versus 2008 from flow-through on revenues and favorable foreign
currency effects.
* Fourth-quarter revenues grew 4%. Growth was driven by continued demand for
healthcare spending analytics in Payer (up 10%), supplemented by good growth
across the Science businesses.
* Fourth-quarter operating profit declined 16% versus 2008, and the
corresponding margin was 23.2%. The expected decline in operating profit
was attributable to technology costs and the timing of expenses.
Markets Division
Markets Division - Full-Year Results
 Twelve Months Ended December 31,
(Millions of U.S. dollars, except profit
margin)
 2009 2008 Change Change before currency
Revenues
Sales & Trading $3,550 $3,852 -8% -4%
Investment & Advisory $2,304 $2,371 -3% -2%
Enterprise $1,316 $1,295 2% 6%
Media  $365  $426 -14% -8%
Markets Division Total $7,535 $7,944 -5% -2%
Operating Profit $1,453 $1,406 3%
Operating Profit Margin % 19.3% 17.7%
Markets Division - Fourth-Quarter Results
 Three Months Ended December 31,
(Millions of U.S. dollars, except profit
margin)
 2009 2008 Change Change before currency
Revenues
Sales & Trading $875 $893 -2% -7%
Investment & Advisory $573 $582 -2% -5%
Enterprise $371 $350 6% 1%
Media   $95  $101 -6% -8%
Markets Division Total $1,914 $1,926 -1% -5%
Operating Profit  $323 $365 -12%
Operating Profit Margin % 16.9% 19.0%
* Full-year revenues declined 2% reflecting negative net sales, especially in
the first half of the year, and strong prior-year period revenue growth of
6%. Recurring subscription revenues (75% of total revenues) grew 1% but were
offset by an 11% decline in transaction revenues, an 8% decline in
recoveries and 17% decline in outright revenues.
* By geography, Asia grew 2%, while Europe, Middle East and Africa (EMEA) and
the Americas declined 1% and 5%, respectively.
* By market, growth in Enterprise and Commodities & Energy was more than
offset by declines in Sales & Trading and Investment Management.
* Full-year operating profit increased 3% and the margin expanded 160 basis
points as integration savings, tight cost controls and favorable foreign
exchange more than offset revenue declines.
* Fourth-quarter revenues declined 5% against a difficult comparable in 2008
when revenues grew 4%. The revenue decline was attributable to flow-through
from weaker 2009 net sales, continued pressure on recoveries, tough
comparables for outright sales and a decline in transaction revenues.
* Fourth-quarter operating profit declined 12% with the related margin
declining 210 basis points. Â The margin decline was attributable to the
impact of lower revenues, offset by integration savings and the benefit of
currency.
           Sales & Trading
* Full-year revenues decreased 4%. A modest decline in recurring revenues
attributable to desktop cancellations was further impacted by declines in
transactions and recoveries. By market, the Commodities & Energy and
Treasury businesses both achieved revenue growth for the year.
* Fourth-quarter revenues decreased 7%. The decline was due to continued
pressure on recoveries revenues and reductions in desktops in the Exchange
Traded Instruments and Fixed Income segments. Commodities & Energy was flat
in the quarter and Treasury declined slightly, reflecting an improving trend
in foreign currency exchange transactions, which were broadly flat versus
2008.
           Investment & Advisory
* Full-year revenues declined 2%. Corporate's growth of 1% was offset by a
slight decline in Retail Wealth Management, a 3% decline in Investment
Management and a 6% decline in Investment Banking.
* Fourth-quarter revenues declined 5%. While the Investment Banking business
returned to growth in the fourth quarter, the Investment Management business
was impacted by cancellations stemming from customer closures and lower
assets under management. Retail Wealth Management was impacted by lower
recoveries as customers reduced their purchases of exchange data.
           Enterprise
* Full-year revenues increased 6%. Enterprise Information, which comprises
more than half of the Enterprise segment's revenues, grew 17% and the Trade
and Risk Management business grew 3%.
* Fourth-quarter revenues increased 1%, despite an extremely challenging
prior-year comparable when revenues grew 13%. Enterprise Information grew
9% in the quarter with continued demand for pricing and reference data, and
helped offset a 10% decline in outright revenues.
           Media
* Full-year revenues declined 8%. The decline was attributable to continued
pressure on the Professional Publishing and Advertising businesses. Agency
business revenues declined 5% due to further consolidation in traditional
media outlets and customer budget constraints.
* Fourth-quarter revenues declined 8% for reasons that mirror those of the
full year.
Corporate & Other
Full-year corporate costs were $929 million comprised of core corporate costs of
$253 million (including an increase in non-cash pension expense of approximately
$30 million resulting from the company's conversion to IFRS in 2009), fair-value
currency-related adjustments (non-cash) of $170 million and integration program
costs of $506 million.
Fourth-quarter corporate costs were $281 million, compared to $152 million in
the prior period, and were comprised of core corporate costs of $83 million (up
$49 million due to higher benefit costs, including the impact of adopting IFRS
pension accounting), fair-value currency-related adjustments (non-cash) of $35
million (up $75 million) and integration program costs of $163 million (up $5
million).
Integration Programs
At year-end 2009, Thomson Reuters had achieved combined run-rate savings of $1.1
billion from the Reuters integration, as well as legacy savings programs. The
higher savings were principally related to the elimination of redundant
positions and the retirement of legacy products.
Given the progress the company continues to make on the integration program, the
company is raising its combined run-rate savings target by $200 million to $1.6
billion by year-end 2011.
The company expects to spend an additional $275 million in one-time integration
costs through the end of 2011 to achieve incremental run-rate savings of $325
million in 2010 and $200 million in 2011.
Recent Developments
WestlawNext, an entirely new version of our market-leading, online legal
information service, was launched as planned on February 1, 2010. The new
service, which had been over five years in the making with the participation of
more than 1,000 Thomson Reuters technologists, information specialists and
attorneys, provides a modern, clean user interface, natural language search and
highly advanced algorithms and back-end technology to advance significantly the
speed, simplicity and productivity of legal research. Third party reviews and
customer uptake have been very favorable, with early sales exceeding our launch
targets.
Business Outlook (Before Currency)
Based on the current environment in the markets that the company serves, Thomson
Reuters expects its revenues to be flat to slightly down in 2010 due to the
impact of negative net sales in 2009. The company expects net sales to
strengthen throughout 2010.
The company expects its underlying operating profit margin to be comparable to
2009 before investments in the major new products and platforms launching this
year. These investments are expected to have an impact of approximately 100
basis points.
The company's plan to continue its aggressive investment focus to drive growth
and capture efficiencies is likely to result in 2010 underlying free cash flow
being slightly down on the prior year.
The information in this section is forward-looking and should be read in
conjunction with the section below entitled "Special Note Regarding
Forward-Looking Statements, Material Assumptions and Material Risks".
Dividend
The board of directors approved a $0.04 per share increase in the annual
dividend to $1.16 per share. The quarterly dividend of $0.29 per share is
payable on March 26, 2010 to shareholders of record as of March 8, 2010. This
dividend increase marks the 17th consecutive annual dividend increase by the
company.
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 50,000 people and operates in over 100 countries. Thomson
Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol:
TRI). For more information, go to www.thomsonreuters.com.
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 measures) are defined and reconciled to the most directly comparable
IFRS measures in the appended tables.
PRO FORMA FINANCIAL INFORMATION
Thomson acquired Reuters on April 17, 2008 and changed its name to Thomson
Reuters that day. Under applicable accounting rules, Reuters results are only
included from the closing date of the acquisition (and not for periods prior to
that date). For informational purposes, this news release includes "pro forma"
financial information for 2008. Pro forma financial information presents the
hypothetical performance of the Thomson Reuters business as if Reuters had been
part of the company for all of 2008. These pro forma results provide a better
comparison of 2009 and 2008 performance. Pro forma financial information
included in this news release is unaudited and was prepared in U.S. dollars in a
manner consistent with accounting policies that applied to Thomson prior to the
closing of the Reuters acquisition and which currently apply to Thomson 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.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL ASSUMPTIONS AND
MATERIAL RISKS
Certain statements in this news release, including, but not limited to
statements in the "Integration Programs" and "Business Outlook (Before
Currency)" sections and Mr. Glocer's comments, are forward-looking. These
forward-looking statements are based on certain assumptions and reflect our
company's current expectations. As a result, forward-looking statements are
subject to a number of risks and uncertainties that could cause actual results
or events to differ materially from current expectations. There is no assurance
that the events described in any forward-looking statement will materialize. A
business outlook is provided for the purpose of presenting information about
current expectations for 2010. This information may not be appropriate for other
purposes. You are cautioned not to place undue reliance on forward-looking
statements which reflect expectations only as of the date of this news release.
Except as may be required by applicable law, Thomson Reuters disclaims any
obligation to update or revise any forward-looking statements.
The material assumptions underlying the company's 2010 business outlook are
based on various external and internal assumptions. Economic and market
assumptions include, but are not limited to, positive global GDP growth led by
rapidly developing economies and a continued increase in the number of
professionals around the world and their demand for high quality information and
services. Internal financial and operational assumptions include, but are not
limited to, the successful execution of the company's new product release
programs, globalization strategy, other growth initiatives and efficiency
programs including the integration program.
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 legislation and regulations; 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 ofwww.thomsonreuters.com
<
http://www.thomsonreuters.com>.
CONTACTS
MEDIA INVESTORS
Calvin Mitchell III Frank 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
<mailto:calvin.mitchell@thomsonreuters. <mailto:frank.golden@thomsonreuters.co
com> m>
Victoria Brough
Head of External Affairs, EMEA
+44 (0)207 542 8763
victoria.brough@thomsonreuters.com
<mailto:victoria.brough@thomsonreuters.
com>
Thomson Reuters will webcast a discussion of its full-year and fourth-quarter
results today beginning at 8:30 a.m. U.S. Eastern Standard Time (EST). You can
access the webcast by visiting www.thomsonreuters.com
<
http://www.thomsonreuters.com> and clicking on "Investor Relations" at the top
of the page and then "Thomson Reuters Reports Full-Year and Fourth-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.
IFRS and Pro Forma Results
Thomson Reuters Corporation
Division and Business Segment Information
(millions of U.S. dollars)
(unaudited)
 Three Months Twelve Months
Ended    Ended
 December 31,    December 31,
------------------------------ --------------------------
 Pro
Forma
2008 2008(
2009 (1) Change Organic  2009 )(1)(2) Change Organic
Revenues
    Legal $903 $912 -1% -3%  $3,586 $3,639 -1% -1%
    Tax &
Accounting 311 280 11% 5% Â 1,006 926 9% 4%
    Healthcare
& Science 224 213 5% 4% Â 829 784 6% 7%
--------------- -----------------
Professional
Division 1,438 1,405 2% 0% Â 5,421 5,349 1% 1%
    Sales &
Trading 875 893 -2% -7% Â 3,550 3,852 -8% -4%
    Investment
& Advisory 573 582 -2% -6% Â 2,304 2,371 -3% -3%
    Enterprise 371 350 6% 1%  1,316 1,295 2% 6%
    Media 95 101 -6% -8%  365 426 -14% -8%
--------------- -----------------
Markets
Division 1,914 1,926 -1% -6% Â 7,535 7,944 -5% -2%
Eliminations (3) (2) Â Â Â (8) (10)
--------------- -----------------
Revenues from
ongoing
businesses(3) 3,349 3,329 1% -4% Â 12,948 13,283 -3% -1%
Before currency   -3%     0%
Disposals((3)) 8 66 Â Â Â 49 158
--------------- -----------------
Revenues $3,357 $3,395 -1% Â Â $12,997 $13,441 -3%
Operating
Profit
Legal $268 $297 -10% Â Â $1,155 $1,192 -3%
Tax &
Accounting 101 98 3% Â Â 214 216 -1%
Healthcare &
Science 52 62 -16% Â Â 185 169 9%
--------------- -----------------
Professional
Division 421 457 -8% Â Â 1,554 1,577 -1%
Markets
Division 323 365 -12% Â Â 1,453 1,406 3%
Corporate &
Other (281) (152) Â Â Â (929) (556)
Amortization of
other
intangible
assets (132) (119) Â Â Â (499) (505)
--------------- -----------------
Operating
profit from
ongoing
businesses(3) 331 551 -40% Â Â 1,579 1,922 -18%
Disposals(3) (1) 40 Â Â Â (13) 38
Impairment of
assets held for
sale - 3 Â Â Â - (86)
Other operating
gains, net 16 39 Â Â Â 9 68
--------------- -----------------
Operating
profit $346 $633 -45% Â Â $1,575 $1,942 -19%
Thomson Reuters Corporation
Reconciliation of Operating Profit to Underlying Operating Profit (4)
(millions of U.S. dollars)
(unaudited)
 Three Months Twelve Months
Ended  Ended
December 31, Â Â December 31,
------------------------- -----------------------------
 Pro Forma 2008
2009 2008( )(1) Change  2009 (1)(2) Change
Operating profit $346 $633 -45% Â $1,575 $1,942 -19%
Adjustments:
    Integration
program costs 163 158 Â Â 506 468
    Amortization
of other
intangible assets 132 119 Â Â 499 505
    Fair value
adjustments 35 (40) Â Â 170 (117)
    Disposals 1 (40)   13 (38)
    Other
operating gains,
net (16) (39) Â Â (9) (68)
    Impairment of
assets held for
sale - (3) Â Â - 86
------------------ -------------------
Underlying
operating profit $661 $788 -16% Â $2,754 $2,778 -1%
Underlying
operating profit
margin 19.7% 23.7% Â Â 21.3% 20.9%
IFRS and Pro Forma Results
Thomson Reuters Corporation
Reconciliation of Earnings Attributable to Common Shareholders
to Adjusted Earnings from Continuing Operations (5)
(millions of U.S. dollars, except as otherwise indicated and except for per
share data)
(unaudited)
 Three Months Ended  Twelve Months Ended
December 31, Â December 31,
------------------------- --------------------------
Pro Forma
 2009  2008( )(1) (6)  2009( )  2008( )(1) (6)
Earnings attributable to
common shareholders ((7)) $177 Â Â Â $844
Adjustments:
    Disposals 1    13
    Fair value adjustments 35    170
    Other operating gains,
net (16) Â Â Â (9)
    Other finance costs 178    242
    Other non-operating
charge 59 Â Â Â 385
    Share of post tax
earnings in equity method
investees (5) Â Â Â (7)
    Tax on above items (8)    (40)
Interim period effective
tax rate normalization (8) (9) Â Â Â -
Amortization of other
intangible assets 132 Â Â Â 499
Discrete tax items (175) Â Â Â (531)
Discontinued operations (6) Â Â Â (23)
Dividends declared on
preference shares - Â Â Â (2)
-------- ---------------- --------- ----------------
Adjusted earnings from
continuing operations $363 Â $419 Â $1,541 Â $1,512
Adjusted earnings per share
from continuing operations $0.44 Â $0.50 Â $1.85 Â $1.82
Weighted average shares
(in millions) (7) Â 834.2 Â 831.7 Â Â 832.9 Â 833.0
IFRS and Pro Forma Results
Thomson Reuters Corporation
Division and Business Segment Depreciation and Amortization of Computer Software
(millions of U.S. dollars)
(unaudited)
 Three Months Twelve Months
Ended  Ended
December 31, Â December 31,
----------------- -------------------
Depreciation and amortization Pro Forma 2008(1)
of computer software 2009 Â 2008(1) Â 2009 Â (2)
  Legal (68)  (63)  (262)  (250)
  Tax & Accounting (21)  (15)  (78)  (57)
  Healthcare & Science (15)  (17)  (67)  (59)
----------------- -------------------
Professional Division (104) Â (95) Â (407) Â (366)
Markets Division (170) Â (161) Â (619) Â (635)
Corporate & Other (9) Â (6) Â (27) Â (19)
----------------- -------------------
Depreciation - Ongoing
Businesses (283) Â (262) Â (1,053) Â (1,020)
Disposals - Â (1) Â (4) Â (6)
----------------- -------------------
Total depreciation and
amortization of computer
software (283) Â (263) Â (1,057) Â (1,026)
(1)Â Â Â Â 2008 segment results have been restated to be comparable to the
presentation for 2009.
(2)Â Â Â Â The results for the twelve months ended December 31, 2008 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)Â Â Â Â 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)Â Â Â Â 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)Â Â Â Â 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 (income) costs, Thomson Reuters
share of post-tax earnings in equity method investees, discontinued operations
and other items affecting comparability. Adjusted earnings per share from
continuing operations is calculated using diluted weighted average shares and
does not represent actual earnings per share attributable to shareholders.
(6)Â Â Â Â In 2008, Thomson Reuters calculated its adjusted earnings by deducting
from 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 underlying operating
profit to adjusted earnings from continuing operations for the three and twelve
months ended December 31, 2008.
--------------------------------------------------------- ----------------------
Pro Forma
 Three Months Ended  Twelve Months Ended
(millions of U.S. dollars, except
as otherwise indicated and except
per share data) December 31, 2008(a) Â December 31, 2008(a)
--------------------------------------------------------- ----------------------
Underlying operating profit 788 Â 2,778
Adjustments:
Integration program costs (158) Â (468)
Net interest expense (b) (103) Â (437)
Income taxes (calculated using an
estimated effective tax rate of
25%) (101) Â (342)
Earnings attributable to
non-controlling interests (6) Â (14)
Dividends declared on preference
shares (1) Â (5)
--------------------------------------------------------- ----------------------
Adjusted earnings from continuing
operations 419 Â 1,512
--------------------------------------------------------- ----------------------
Adjusted earnings per share from
continuing operations $0.50 Â $1.82
--------------------------------------------------------- ----------------------
--------------------------------------------------------- ----------------------
Weighted average shares
outstanding (in millions)(7) 831.7 Â 833.0
--------------------------------------------------------- ----------------------
a)Â Â Â Â Â Â This calculation has been restated to be comparable to the 2009
presentation of disposals.
b)Â Â Â Â Â Â Pro forma interest expense for the three-month period reflected actual
interest expense, which approximates a proportional amount of the full year pro
forma run rate. For the twelve-month period, pro forma interest expense was
derived as the sum of the actual 3rd and 4th quarter 2008 interest expense plus
the proportion of the pro forma full year run rate used for the six months ended
June 30, 2008.
Weighted average common shares outstanding reflected the actual reported diluted
weighted average common 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)Â Â Â Â On September 10, 2009, all then-outstanding Thomson Reuters PLC ordinary
shares were exchanged for an equivalent number of Thomson Reuters Corporation
common shares in connection with unification of the dual listed company (DLC)
structure.
(8)Â Â Â Â 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 Twelve Months Ended
  December 31,  December 31,
------------------------- -------------------------
  2009 2008  2009 2008
Revenues  $3,357 $3,395  $12,997 $11,707
Operating expenses  (2,612) (2,422)  (9,875) (8,700)
Depreciation  (139) (125)  (509) (414)
Amortization of computer
software (144) (138) Â (548) (482)
Amortization of other
intangible assets (132) (119) Â (499) (425)
Impairment of assets held
for sale - 3 Â - (86)
Other operating gains, net  16 39  9 68
------------------------- -------------------------
Operating profit  346 633  1,575 1,668
Finance costs, net:
    Net interest expense  (88) (103)  (410) (224)
    Other finance (costs)
income (178) 213 Â (242) 231
Other non-operating charge  (59) -  (385) -
------------------------- -------------------------
Income before tax and
equity method investees 21 743 Â 538 1,675
Share of post tax earnings
(loss) in equity method
investees 5 (7) Â 7 (5)
Tax benefit (expense) Â 150 (186) Â 299 (350)
------------------------- -------------------------
Earnings from continuing
operations 176 550 Â 844 1,320
Earnings from discontinued
operations, net of tax 6 16 Â 23 1
------------------------- -------------------------
Net earnings  $182 $566  $867 $1,321
Earnings attributable to:
Common shareholders(1) Â 177 560 Â 844 1,307
Non-controlling interests  5 6  23 14
Basic earnings per share $0.21 $0.68 Â Â $1.01 Â $1.69
Diluted earnings per share  $0.21 $0.67   $1.01  $1.68
Basic weighted average
common shares(1) 830,822,775 825,737,282 Â 829,998,907 770,837,612
Diluted weighted average
common shares(1) 834,151,200 831,688,580 Â 832,942,338 775,179,027
(1)Â Â Â Â On September 10, 2009, all then-outstanding Thomson Reuters PLC ordinary
shares were exchanged for an equivalent number of Thomson Reuters Corporation
common shares in connection with unification of the dual listed company
structure.
Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
 December 31,  December 31,
2009 Â 2008
-------------- --------------
Assets
Cash and cash equivalents $1,111 Â $841
Trade and other receivables 1,742 Â 1,818
Other financial assets 76 Â 261
Prepaid expenses and other current assets 734 Â Â 766
-------------- --------------
Current assets 3,663 Â 3,686
Computer hardware and other property, net 1,546 Â 1,556
Computer software, net 1,495 Â 1,299
Other identifiable intangible assets, net 8,694 Â 8,702
Goodwill 18,130 Â 18,324
Other financial assets 383 Â 286
Other non-current assets 649 Â 627
Deferred tax 13 Â Â 109
-------------- --------------
Total assets $34,573 Â $34,589
Liabilities and equity
Liabilities
Current indebtedness $782 Â $688
Payables, accruals and provisions 2,651 Â 2,704
Deferred revenue 1,187 Â 1,193
Other financial liabilities 92 Â Â 60
-------------- --------------
Current liabilities 4,712 Â 4,645
Long-term indebtedness 6,821 Â 6,783
Provisions and other non-current liabilities 1,878 Â 1,798
Other financial liabilities 42 Â 222
Deferred tax 1,785 Â 2,653
-------------- --------------
Total liabilities 15,238 Â 16,101
Equity
Capital 10,177 Â 10,034
Retained earnings 10,561 Â 10,650
Accumulated other comprehensive loss (1,471) Â Â (2,268)
-------------- --------------
Total shareholders' equity 19,267 Â Â 18,416
Non-controlling interests 68 Â 72
-------------- --------------
Total equity 19,335 Â 18,488
-------------- --------------
Total liabilities and equity $34,573 Â $34,589
Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
 (unaudited)
 Three Months Ended Twelve Months Ended
December 31, Â December 31,
-------------------------- ---------------------------
 2009 2008  2009 2008
Cash provided by (used
in):
Operating activities
Net earnings $182 $566 Â $867 $1,321
Adjustments for:
Depreciation 139 125 Â 509 414
Amortization of computer
software 144 138 Â 548 482
Amortization of other
intangible assets 132 119 Â 499 425
Impairment of assets held
for sale - (3) Â - 86
Deferred tax (98) 117 Â (544) 31
Embedded derivatives fair
value adjustments 29 (44) Â 147 (124)
Net losses (gains) on
foreign exchange and
    derivative financial
instruments 167 (215) Â 182 (257)
Other non-operating
charge 59 - Â 385 -
Other 35 5 Â 290 104
Changes in working
capital and other items 112 195 Â (219) 299
-------------------------- ---------------------------
Operating cash flows from
continuing operations 901 1,003 Â 2,664 2,781
Operating cash flows from
discontinued operations (5) 2 Â 2 (20)
-------------------------- ---------------------------
Net cash provided by
operating activities 896 1,005 Â 2,666 2,761
-------------------------- ---------------------------
Investing activities
Acquisitions, less cash
acquired (251) (204) Â (349) (8,502)
Proceeds from other
disposals, net of taxes
paid 41 (27) Â 56 244
Capital expenditures,
less proceeds from
disposals (377) (324) Â (1,097) (939)
Other investing
activities 2 14 Â 3 7
-------------------------- ---------------------------
Investing cash flows from
continuing operations (585) (541) Â (1,387) (9,190)
Investing cash flows from
discontinued operations - - Â 22 (72)
-------------------------- ---------------------------
Net cash used in
investing activities (585) (541) Â (1,365) (9,262)
-------------------------- ---------------------------
Financing activities
Proceeds from debt - - Â 1,107 7,600
Repayments of debt (851) (408) Â (1,249) (5,487)
Net borrowings
(repayments) under
short-termloan facilities 11 - Â 4 (1,065)
Share repurchases - (11) Â - (522)
Dividends paid on
preference shares - (1) Â (2) (5)
Dividends paid on common
shares (1) (223) (180) Â (905) (596)
Dividend payable assumed
from Reuters Group PLC - - Â - (246)
Other financing
activities - 2 Â (6) 207
-------------------------- ---------------------------
Net cash used in
financing activities (1,063) (598) Â (1,051) (114)
-------------------------- ---------------------------
Translation adjustments 3 (8) Â 20 (41)
-------------------------- ---------------------------
(Decrease) increase in
cash and cash equivalents (749) (142) Â 270 (6,656)
Cash and cash equivalents
at beginning of period 1,860 983 Â 841 7,497
-------------------------- ---------------------------
Cash and cash equivalents
at end of period $1,111 $841 Â $1,111 $841
(1)Â Â Â Â On September 10, 2009, all then-outstanding Thomson Reuters PLC ordinary
shares were exchanged for an equivalent number of Thomson Reuters Corporation
common shares in connection with unification of the dual listed company
structure.
Thomson Reuters Corporation
Reconciliation of Net Cash Provided by Operating Activities
to Free Cash Flow(1)
(millions of U.S. dollars)
(unaudited)
 Three Months Twelve Months
Ended  Ended
December 31, Â December 31,
------------------ -------------------
 2009 2008  2009 2008
Net cash provided by operating activities $896 $1,005 Â $2,666 $2,761
Capital expenditures, less proceeds from
disposals (377) (324) Â (1,097) (939)
Other investing activities 2 14 Â 3 7
Investing activities of discontinued
operations - - Â - (7)
Dividends paid on preference shares - (1) Â (2) (5)
------------------ -------------------
Free cash flow (1) $521 $694 Â $1,570 $1,817
(1)Â Â Â Â 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.
Thomson Reuters Corporation
Reconciliation of Free Cash Flow to Underlying Free Cash Flow (1)
(millions of U.S. dollars)
(unaudited)
 Three Months Twelve Months
Ended  Ended
December 31, Â December 31,
------------------ -------------------
 2009 2008  2009 2008
Free cash flow $521 $694 Â $1,570 $1,817
One-time Reuters acquisition, integration
program costs 154 135 Â 488 518
Normalization adjustments( )(2) - - Â - (450)
------------------ -------------------
Underlying free cash flow $675 $829 Â $2,058 $1,885
(1)    Free cash flow was affected by certain unusual items. These items are
removed to derive underlying free cash flow.
(2)Â Â Â Â To provide a more meaningful comparison of underlying free cash flow for
the twelve months ended December 31, 2009 to the prior year period, the 2008
free cash flow number is adjusted for two timing related items:
·        Interest costs which were substantially lower in 2008 since we
benefited from having interest income and no cash interest costs associated with
$3.0 billion in Reuters acquisition-related debt.
·        Last year's figure does not include what is traditionally negative
free cash flow from the Reuters business in the first quarter of the year, which
was included in 2009.
[HUG#1387619]
Full-Year and Fourth-Quarter 2009 Results:
http://hugin.info/142273/R/1387619/346119.pdf
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