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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Thomson Reuters Corp | LSE:0Q89 | London | Ordinary Share | CA8849038085 | THOMSON REUTERS ORD SHS |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 99.8142 | 91.91 | 100.54 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Miscellaneous Publishing | 6.79B | 2.7B | 5.8086 | 28.74 | 77.46B |
TIDM0Q89 Thomson Reuters Reports First-Quarter 2022 Results TORONTO, May 3, 2022 /PRNewswire/ -- Thomson Reuters (TSX/NYSE: TRI) today reported results for the first quarter ended March 31, 2022: Logo - https://mma.prnewswire.com/media/13199/THOMSON_REUTERS_LOGO.jpg * Strong revenue and sales growth continued in the first quarter + Total company revenue up 6% / organic revenue up 7% o Organic revenue up 7% for the "Big 3" (Legal Professionals, Corporates and Tax & Accounting Professionals) * Raised full-year 2022 revenue guidance + Total company revenue forecast increased to approximately 5.5% from approximately 5.0% + "Big 3" segments revenue forecast increased to approximately 6.5% from a range of 6.0% - 6.5% + No other changes to full-year 2022 outlook, reaffirmed full-year 2023 outlook * Change Program on track - $305 million run-rate operating expense savings at quarter-end "The momentum we saw throughout 2021 continued to build in the first quarter of 2022, with both sales and revenue exceeding our expectations. The strong start to the year gives us confidence we are on the right path to achieve our 2022 and 2023 targets," said Steve Hasker, President and CEO of Thomson Reuters. Mr. Hasker added, "Our businesses are benefiting from significant prevailing tailwinds driven by a step change in the complexity of compliance in our legal, tax, and risk-related markets. The resulting need for trusted, accurate and actionable content and technology plays to our strengths. Against this backdrop, we will continue to invest in our businesses, our employees and our customers' success as we work to translate our current momentum into sustainable long-term value creation." Consolidated Financial Highlights - Three Months Ended March 31 Three Months Ended March 31, (Millions of U.S. dollars, except for adjusted EBITDA margin and EPS) (unaudited) IFRS Financial Measures(1) 2022 2021 Change Change at Constant Currency Revenues $1,674 $1,580 6% Operating profit $414 $387 7% Diluted earnings per share (EPS) $2.06 $10.13 -80% Net cash provided by operating activities $275 $380 -28% Non-IFRS Financial Measures(1) Revenues $1,674 $1,580 6% 7% Adjusted EBITDA $600 $558 7% 7% Adjusted EBITDA margin 35.8% 35.3% 50bp 20bp Adjusted EPS $0.66 $0.58 14% 14% Free cash flow $86 $239 -64% (1) In addition to results reported in accordance with International Financial Reporting Standards (IFRS), the company uses certain non-IFRS financial measures as supplemental indicators of its operating performance and financial position. See the "Non-IFRS Financial Measures" section and the tables appended to this news release for additional information on these and other non-IFRS financial measures, including how they are defined and reconciled to the most directly comparable IFRS measures. Revenues increased 6%, driven by growth across four of the company's five business segments. Foreign currency had a 1% negative impact on revenues. * Organic revenues increased 7%, driven by 7% growth in recurring revenues (78% of total revenues) as well as 8% growth in transactions revenues. Global Print revenues were flat compared to the prior-year period. + Organic growth of 7% included an approximately 100bp benefit resulting primarily from transactional revenue that is unlikely to recur at this level and, to a lesser extent, timing. The company expects organic growth to normalize in the remainder of the year and be in line with full-year guidance. * The company's "Big 3" segments (Legal Professionals, Corporates and Tax & Accounting Professionals) reported organic revenue growth of 7% and collectively comprised 81% of total revenues. Operating profit increased 7% as higher revenues more than offset higher costs, which included investments associated with the company's Change Program. * Adjusted EBITDA increased 7% due to the same factors as operating profit. The related margin increased to 35.8% from 35.3% in the prior-year period. Investments in the Change Program negatively impacted the first-quarter adjusted EBITDA margin by 210bp. Diluted earnings per share (EPS) was $2.06 per share compared to $10.13 per share in the prior-year period. The current period included a benefit from an increase in the value of the company's investment in London Stock Exchange Group (LSEG), while the prior-year period included a gain of approximately $8.1 billion on the sale of Refinitiv to LSEG. * Adjusted EPS, which excludes the change in value of the company's LSEG investment, the gain on the sale of Refinitiv and other adjustments, increased to $0.66 per share from $0.58 per share in the prior-year period, primarily due to higher adjusted EBITDA. Net cash provided by operating activities decreased due to higher payments associated with the Change Program as well as higher annual incentive plan bonuses. * Free cash flow decreased $153 million due to lower cash flows from operating activities and higher capital expenditures associated with the Change Program. Highlights by Customer Segment - Three Months Ended March 31 (Millions of U.S. dollars, except for adjusted EBITDA margins) (unaudited) Three Months Ended March 31, Change 2022 2021(2) Total Constant Currency Organic(1)(3) (1) Revenues Legal Professionals $698 $668 4% 5% 6% Corporates 411 382 8% 8% 8% Tax & Accounting Professionals 253 227 11% 11% 11% "Big 3" Segments Combined(1) 1,362 1,277 7% 7% 7% Reuters News 176 165 7% 9% 9% Global Print 142 143 -1% 0% 0% Eliminations/Rounding (6) (5) Revenues $1,674 $1,580 6% 7% 7% Adjusted EBITDA(1) Legal Professionals $305 $279 9% 10% Corporates 157 145 8% 7% Tax & Accounting Professionals 122 99 23% 22% "Big 3" Segments Combined(1) 584 523 11% 11% Reuters News 37 28 31% 23% Global Print 53 57 -8% -7% Corporate costs (74) (50) n/a n/a Adjusted EBITDA $600 $558 7% 7% Adjusted EBITDA Margin(1) Legal Professionals 43.7% 41.8% 190bp 190bp Corporates 38.1% 38.0% 10bp -20bp Tax & Accounting Professionals 48.3% 43.8% 450bp 420bp "Big 3" Segments Combined(1) 42.9% 41.0% 190bp 160bp Reuters News 21.0% 17.1% 390bp 240bp Global Print 37.0% 39.9% -290bp -300bp Adjusted EBITDA margin 35.8% 35.3% 50bp 20bp (1) See the "Non-IFRS Financial Measures" section and the tables appended to this news release for additional information on these and other non-IFRS financial measures. (2) For comparative purposes, 2021 segment results have been revised to reflect the current period presentation. For additional information, see the "Revision to Prior-Year Segment Results" section of this news release. (3) Computed for revenue growth only. n/a: not applicable Unless otherwise noted, all revenue growth comparisons by customer segment in this news release are at constant currency (or exclude the impact of foreign currency) as Thomson Reuters believes this provides the best basis to measure their performance. Legal Professionals Revenues increased 5% (6% organic) to $698 million. * Recurring revenues grew 6% (94% of total, all organic), primarily due to strong performances from the Government business, Westlaw, Practical Law, FindLaw and the segment's business in Canada and Asia & Emerging Markets. * Transactions revenues decreased 3% (6% of total, decreased 2% organic). Adjusted EBITDA increased 9% to $305 million. * The margin increased to 43.7% from 41.8%, primarily due to higher revenues and Change Program savings. Corporates
Revenues increased 8% (all organic) to $411 million. Revenues benefited from transactional revenue strength that is unlikely to recur at first-quarter levels. * Recurring revenues grew 8% (77% of total, all organic) driven by Practical Law, CLEAR and Indirect Tax. * Transactions revenues grew 8% (23% of total, all organic), driven by Confirmation as well as the company's businesses in Latin America and Asia & Emerging Markets. Adjusted EBITDA increased 8% to $157 million. * The margin increased to 38.1% from 38.0%, as higher expenses largely offset higher revenues. Tax & Accounting Professionals Revenues increased 11% (all organic) to $253 million. Revenues benefited from a change in the year-over-year timing of the U.S. federal tax filing deadlines for individuals, which returned to April in 2022 compared to the extended deadline in May 2021. This benefited organic revenues by 150bp in the first quarter of 2022 and will reverse in the second quarter of 2022. * Recurring revenues grew 12% (72% of total, all organic), driven by strong growth from UltraTax and the company's Latin America businesses. * Transactions revenues increased 10% (28% of total, all organic), primarily due to the year-over-year timing of the U.S. federal tax filing deadlines for individuals and audit products. Adjusted EBITDA increased 23% to $122 million. * The margin increased to 48.3% from 43.8%, primarily due to higher revenues and Change Program savings. The Tax & Accounting Professionals segment is the company's most seasonal business with approximately 60% of full-year revenues typically generated in the first and fourth quarters. As a result, the margin performance of this segment has been generally higher in the first and fourth quarters as costs are typically incurred in a more linear fashion throughout the year. Reuters News Revenues of $176 million increased 9% (all organic), primarily driven by the Professionals business and the increase in the company's LSEG news agreement. Adjusted EBITDA increased 31% to $37 million, primarily due to higher revenues. Global Print Revenues were flat compared to the prior-year period, which was better than the decline that the company expected due to higher third-party revenues for printing services and the timing of new sales. Adjusted EBITDA decreased 8% to $53 million. * The margin decreased to 37.0% from 39.9% due to the dilutive effect of third-party print revenue. Corporate Costs Corporate costs at the adjusted EBITDA level were $74 million and included $34 million of Change Program costs. Corporate costs were $50 million in the prior-year period and included $11 million of Change Program costs. Additional information regarding the Change Program is provided below. Change Program In February 2021, the company announced a two-year Change Program to transition from a holding company to an operating company, and from a content provider to a content-driven technology company. The company is 15 months into the program, which is expected to be largely complete by the end of 2022. The program is projected to require an investment of approximately $600 million during that time of which $357 million has been invested as of March 31, 2022. The company continues to anticipate that Change Program spending will be approximately 60% operating expenses and 40% capital expenditures. 2022 and 2023 Outlook The company's updated outlook for 2022 and reaffirmed outlook for 2023 (which is reflected in the table below) incorporates the forecasted impacts associated with the Change Program, assumes constant currency rates, and excludes the impact of any future acquisitions or dispositions that may occur during those periods. Thomson Reuters believes that this type of guidance provides useful insight into the performance of its businesses. The company expects its second-quarter 2022 revenue growth rate will be comparable to its full-year 2022 outlook targets and second-quarter 2022 adjusted EBITDA margin to be approximately 200bp below its full-year 2022 outlook targets. While the company's first-quarter 2022 performance provides it with increasing confidence about its outlook, the global economy has recently experienced substantial disruption due to concerns regarding economic effects associated with the pandemic, ongoing geopolitical risks and other events and macroeconomic factors. Any worsening of the global economic or business environment could impact the company's ability to achieve its outlook. Updated Full-Year 2022 Outlook Total Thomson FY 2022 FY 2022 FY 2022 Reuters Outlook Outlook Outlook 2/23/21 2/8/22 5/3/22 Total Revenue 4.0% - 5.0% 5% 5.5% Growth Organic Revenue 4.0% - 5.0% 5% 5.5% Growth(1) Adjusted EBITDA 34% - 35% 35% Unchanged Margin(1) Corporate Costs $245 - $280 million $280 - $330 million Unchanged Core $120 - $130 million Unchanged Unchanged Corporate Costs $125 - $150 million $160 - $200 million Unchanged Change Program Opex Free Cash Flow(1) $1.2 - $1.3 billion $1.3 billion Unchanged Accrued Capex as % 7.5% - 8.0% Unchanged Unchanged of Revenue(1) $75 - $100 million $100 - $140 million Unchanged Change Program Accrued Capex Depreciation & $620 - $645 million Unchanged Unchanged Amortization of Computer Software Interest Expense $190 - $210 million Unchanged Unchanged (P&L) Effective Tax Rate n/a 19% - 21% Unchanged on Adjusted Earnings(1) "Big 3" Segments FY 2022 FY 2022 FY 2022 (1) Outlook Outlook Outlook 2/23/21 2/8/22 5/3/22 Total Revenue 5.5% - 6.5% 6.0% - 6.5% 6.5% Growth Organic Revenue 5.5% - 6.5% 6.0% - 6.5% 6.5% Growth Adjusted EBITDA 41% - 42% 42% Unchanged Margin (1) Non-IFRS financial measures. See the "Non-IFRS Financial Measures" section below as well as the tables and footnotes appended to this news release for more information. Reported Full-Year 2021 and Updated Full-Year 2022 - 2023 Outlook Total Thomson FY 2021 FY 2022 FY 2023 Reuters Reported Outlook Outlook Updated Reaffirmed Total Revenue 6.1% 5.5% 5.5% - 6.0% Growth Organic Revenue 5.2% 5.5% 5.5% - 6.0% Growth(1) Adjusted EBITDA 31.0% 35% 39% - 40% Margin(1) Corporate Costs $325 million $280 - $330 million $110 - $120 million Core $142 million $120 - $130 million $110 - $120 million Corporate Costs $183 million $160 - $200 million $0 Change Program Opex Free Cash Flow(1) $1.3 billion $1.3 billion $1.9 - $2.0 billion Accrued Capex as % 8.5% 7.5% - 8.0% 6.0% - 6.5% of Revenue(1) $112 million $100 - $140 million $0 Change Program Accrued Capex Depreciation & $651 million $620 - $645 million $580 - $605 million Amortization of Computer Software Interest Expense $196 million $190 - $210 million $190 - $210 million (P&L) Effective Tax Rate 13.9% 19% - 21% n/a on Adjusted Earnings(1) "Big 3" Segments FY 2021 FY 2022 FY 2023 (1) Reported Outlook Outlook Updated Reaffirmed Total Revenue 6.9% 6.5% 6.5% - 7.0% Growth Organic Revenue 6.2% 6.5% 6.5% - 7.0% Growth Adjusted EBITDA 38.8% 42% 44% - 45% Margin (1) Non-IFRS financial measures. See the "Non-IFRS Financial Measures" section below as well as the tables and footnotes appended to this news release for more information. The information in this section is forward-looking. Actual results, which will include the impact of currency and future acquisitions and dispositions completed during 2022 and 2023, may differ materially from the company's outlook. The information in this section should also be read in conjunction with the section below entitled "Special Note Regarding Forward-Looking Statements, Material Risks and Material Assumptions." Dividends and Share Repurchases In February 2022, the company announced a 10% or $0.16 per share annualized increase in the dividend to $1.78 per common share, representing the 29th consecutive year of dividend increases. A quarterly dividend of $0.445 per share is payable on June 15, 2022 to common shareholders of record as of May 26, 2022. The company did not repurchase any of its shares in the first quarter of 2022. As of May 2, 2022, Thomson Reuters had approximately 487.1 million common shares outstanding. LSEG Ownership Interest In January 2021, Thomson Reuters and private equity funds affiliated with Blackstone sold Refinitiv to LSEG in an all-share transaction. Thomson Reuters indirectly owns LSEG shares through an entity that it jointly owns with Blackstone's consortium and a group of current LSEG and former Refinitiv senior management.
As of May 2, 2022, Thomson Reuters indirectly owned approximately 72.4 million LSEG shares which had a market value of approximately $7.2 billion based on LSEG's closing share price on that day. Thomson Reuters Thomson Reuters is a leading provider of business information services. Our products include highly specialized information-enabled software and tools for legal, tax, accounting and compliance professionals combined with the world's most global news service - Reuters. For more information on Thomson Reuters, visit tr.com and for the latest world news, reuters.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, which include ratios that incorporate one or more non-IFRS financial measures, such as adjusted EBITDA and the related margin (other than at the customer segment level), free cash flow, adjusted EPS and the effective tax rate on adjusted EPS, accrued capital expenditures expressed as a percentage of revenues, selected measures excluding the impact of foreign currency, changes in revenues computed on an organic basis as well as all financial measures for the "Big 3". Thomson Reuters uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position as well as for internal planning purposes and the company's business outlook. Additionally, Thomson Reuters uses non-IFRS measures as the basis for management incentive programs. 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. The company's outlook contains various non-IFRS financial measures. The company believes that providing reconciliations of forward-looking non-IFRS financial measures in its outlook would be potentially misleading and not practical due to the difficulty of projecting items that are not reflective of ongoing operations in any future period. The magnitude of these items may be significant. Consequently, for outlook purposes only, the company is unable to reconcile these non-IFRS measures to the most directly comparable IFRS measures because it cannot predict, with reasonable certainty, the 2022 and 2023 impacts of changes in foreign exchange rates which impact (i) the translation of its results reported at average foreign currency rates for the year, and (ii) other finance income or expense related to intercompany financing arrangements and foreign exchange contracts. Additionally, the company cannot reasonably predict (i) its share of post-tax earnings (losses) in equity method investments, which is subject to changes in the stock price of LSEG or (ii) the occurrence or amount of other operating gains and losses that generally arise from business transactions that the company does not currently anticipate. ROUNDING Other than EPS, the company reports its results in millions of U.S. dollars, but computes percentage changes and margins using whole dollars to be more precise. As a result, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding. REVISION TO PRIOR-YEAR SEGMENT RESULTS In the first quarter of 2022, the company made two changes to its segment reporting to reflect how it currently manages its businesses. The changes (i) reflect the transfer of certain revenues from its Corporates business to its Tax & Accounting Professionals business where they are better aligned; and (ii) record intercompany revenue in Reuters News for content-related services that it provides to Legal Professionals, Corporates and Tax & Accounting Professionals. Previously, these services had been reported as a transfer of expense from Reuters News to these businesses. These changes impact the financial results of the company's segments, but do not change the company's consolidated financial results. The table below summarizes the changes to the company's first-quarter 2021 results. Three Months Ended March 31, 2021 (millions of U.S. dollars) As Reported Adjustments As Revised Revenues Legal Professionals $668 - $668 Corporates 384 $(2) 382 Tax & Accounting Professionals 225 2 227 "Big 3" Segments Combined (1) 1,277 - 1,277 Reuters News 160 5 165 Global Print 143 - 143 Eliminations/Rounding - (5) (5) Revenues $1,580 - $1,580 Adjusted EBITDA(1) Legal Professionals $279 - $279 Corporates 146 $(1) 145 Tax & Accounting Professionals 98 1 99 "Big 3" Segments Combined (1) 523 - 523 Reuters News 28 - 28 Global Print 57 - 57 Corporate costs (50) - (50) Adjusted EBITDA $558 - $558 (1) See "Non-IFRS Financial Measures" section and the tables appended to this news release for additional information on these and other non-IFRS financial measures. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL RISKS AND MATERIAL ASSUMPTIONS Certain statements in this news release, including, but not limited to, statements in Mr. Hasker's comments and the "Change Program," "2022 and 2023 Outlook" and "LSEG Ownership Interest" sections, are forward-looking. The words "will", "expect", "believe", "target", "estimate", "could", "should", "intend", "predict", "project" and similar expressions identify forward-looking statements. While the company believes that it has a reasonable basis for making forward-looking statements in this news release, they are not a guarantee of future performance or outcomes and there is no assurance that any of the other events described in any forward-looking statement will materialize. Forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from current expectations. Many of these risks, uncertainties and assumptions are beyond the company's control and the effects of them can be difficult to predict. 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, those discussed on pages 17-30 in the "Risk Factors" section of the company's 2021 annual report. These and other risk 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 (SEC). Thomson Reuters annual and quarterly reports are also available in the "Investor Relations" section of tr.com. The company's business outlook is based on information currently available to the company and is based on various external and internal assumptions made by the company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the company believes are appropriate under the circumstances. Material assumptions and material risks may cause actual performance to differ from the company's expectations underlying its business outlook. For a discussion of material assumptions and material risks related to the company's 2022 and 2023 outlook, please see pages 62-63 of the company's 2021 annual report. Material assumptions and material risks related to the company's outlook will also be included in the company's first-quarter management's discussion and analysis for the period ended March 31, 2022, which is expected to be filed shortly. The company's quarterly MD&A and annual report are filed with, or furnished to, the Canadian securities regulatory authorities and the U.S. SEC and are also available in the "Investor Relations" section of tr.com. The company has provided an outlook for the purpose of presenting information about current expectations for the periods presented. 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. CONTACTS MEDIA INVESTORS Melissa Cassar Gary Bisbee Head of Commercial Communications & Corporate Head of Investor Relations Affairs +1 646 540 3249 +1 437 388 3619 gary.bisbee@tr.com melissa.cassar@tr.com Thomson Reuters will webcast a discussion of its first-quarter 2022 results and
its business outlook today beginning at 9:00 a.m. Eastern Daylight Time (EDT). You can access the webcast by visiting ir.tr.com. An archive of the webcast will be available following the presentation. Thomson Reuters Corporation Consolidated Income Statement (millions of U.S. dollars, except per share data) (unaudited) Three Months Ended March 31, 2022 2021 CONTINUING OPERATIONS Revenues $1,674 $1,580 Operating expenses (1,081) (1,018) Depreciation (38) (46) Amortization of computer software (114) (115) Amortization of other identifiable intangible assets (26) (31) Other operating (losses) gains, net (1) 17 Operating profit 414 387 Finance costs, net: Net interest expense (48) (51) Other finance income (costs) 94 (6) Income before tax and equity method investments 460 330 Share of post-tax earnings in equity method investments 798 6,297 Tax expense (240) (1,594) Earnings from continuing operations 1,018 5,033 (Loss) earnings from discontinued operations, net of (11) 3 tax Net earnings $1,007 $5,036 Earnings attributable to common shareholders $1,007 $5,036 Earnings per share: Basic earnings (loss) per share: From continuing operations $2.09 $10.15 From discontinued operations (0.02) - Basic earnings per share $2.07 $10.15 Diluted earnings (loss) per share: From continuing operations $2.09 $10.13 From discontinued operations (0.03) - Diluted earnings per share $2.06 $10.13 Basic weighted-average common shares 486,708,758 495,939,970 Diluted weighted-average common shares 487,513,216 496,938,318 Thomson Reuters Corporation Consolidated Statement of Financial Position (millions of U.S. dollars) (unaudited) March 31, December 31, 2022 2021(1) Assets Cash and cash equivalents $654 $778 Trade and other receivables 982 1,057 Other financial assets 49 108 Prepaid expenses and other current 445 462 assets Current assets excluding assets 2,130 2,405 held for sale Assets held for sale 211 48 Current assets 2,341 2,453 Property and equipment, net 479 502 Computer software, net 826 822 Other identifiable intangible 3,302 3,331 assets, net Goodwill 5,882 5,940 Equity method investments 7,545 6,736 Other non-current assets 1,312 1,226 Deferred tax 1,142 1,139 Total assets $22,829 $22,149 Liabilities and equity Liabilities Payables, accruals and provisions $1,050 $1,326 Current tax liabilities 211 169 Deferred revenue 824 874 Other financial liabilities 78 175 Current liabilities excluding 2,163 2,544 liabilities associated with assets held for sale Liabilities associated with assets 158 37 held for sale Current liabilities 2,321 2,581 Long-term indebtedness 3,800 3,786 Provisions and other non-current 881 943 liabilities Deferred tax 1,202 1,005 Total liabilities 8,204 8,315 Equity Capital 5,485 5,496 Retained earnings 9,974 9,149 Accumulated other comprehensive (834) (811) loss Total equity 14,625 13,834 Total liabilities and equity $22,829 $22,149 (1) Prior-year period amounts have been revised to reflect the current period presentation. Thomson Reuters Corporation Consolidated Statement of Cash Flow (millions of U.S. dollars) (unaudited) Three Months Ended March 31, 2022 2021 Cash provided by (used in): Operating activities Earnings from continuing operations $1,018 $5,033 Adjustments for: Depreciation 38 46 Amortization of computer software 114 115 Amortization of other identifiable intangible assets 26 31 Share of post-tax earnings in equity method investments (798) (6,297) Deferred tax 166 674 Other (39) 30 Changes in working capital and other items (191) 785 Operating cash flows from continuing operations 334 417 Operating cash flows from discontinued operations (59) (37) Net cash provided by operating activities 275 380 Investing activities Acquisitions, net of cash acquired (8) (3) Proceeds from disposals of businesses and investments - 5 Dividend from sale of LSEG shares - 994 Capital expenditures (171) (120) Other investing activities - 1 Taxes paid on sale of Refinitiv and LSEG shares - (6) Investing cash flows from continuing operations (179) 871 Investing cash flows from discontinued operations - (42) Net cash (used in) provided by investing activities (179) 829 Financing activities Payments of lease principal (17) (21) Repurchases of common shares - (200) Dividends paid on preference shares (1) (1) Dividends paid on common shares (209) (194) Other financing activities 7 5 Net cash used in financing activities (220) (411) Translation adjustments - (1) (Decrease) increase in cash and cash equivalents (124) 797 Cash and cash equivalents at beginning of period 778 1,787 Cash and cash equivalents at end of period $654 $2,584 Thomson Reuters Corporation Reconciliation of Earnings from Continuing Operations to Adjusted EBITDA(1) (millions of U.S. dollars, except for margins) (unaudited) Three Months Ended Year Ended March 31, December 31, 2022 2021 2021 Earnings from continuing operations $1,018 $5,033 $5,687 Adjustments to remove: Tax expense 240 1,594 1,607 Other finance (income) costs (94) 6 (8) Net interest expense 48 51 196
Amortization of other identifiable 26 31 119 intangible assets Amortization of computer software 114 115 474 Depreciation 38 46 177 EBITDA $1,390 $6,876 $8,252 Adjustments to remove: Share of post-tax earnings in equity (798) (6,297) (6,240) method investments Other operating losses (gains), net 1 (17) (34) Fair value adjustments* 7 (4) (8) Adjusted EBITDA(1) $600 $558 $1,970 Adjusted EBITDA margin(1) 35.8% 35.3% 31.0% * Fair value adjustments, a component of operating expenses, primarily represent gains or losses due to changes in foreign currency exchange rates on intercompany balances that arise in the ordinary course of business. 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 Year Ended March 31, December 31, 2022 2021 2021 Net cash provided by operating activities $275 $380 $1,773 Capital expenditures (171) (120) (487) Other investing activities - 1 81 Payments of lease principal (17) (21) (109) Dividends paid on preference shares (1) (1) (2) Free cash flow(1) $86 $239 $1,256 Year Ended December 31, 2021 Capital expenditures $487 Remove: IFRS adjustment to cash 54 basis Accrued capital expenditures (1) $541 Accrued capital expenditures as a 8.5% percentage of revenues(1) (1) Refer to page 18 for additional information on non-IFRS financial measures. Thomson Reuters Corporation Reconciliation of Net Earnings to Adjusted Earnings(1) Reconciliation of Total Change in Adjusted EPS to Change in Constant Currency (1) (millions of U.S. dollars, except for share and per share data) (unaudited) Three Months Ended Year Ended March 31, December 31, 2022 2021 2021 Net earnings $1,007 $5,036 $5,689 Adjustments to remove: Fair value 7 (4) (8) adjustments* Amortization 26 31 119 of other identifiable intangible assets Other 1 (17) (34) operating losses (gains), net Other (94) 6 (8) finance (income) costs Share of (798) (6,297) (6,240) post-tax earnings in equity method investments Tax on above 206 1,535 1,475 items(1) Tax items (44) 1 (24) impacting comparability(1) Loss 11 (3) (2) (earnings) from discontinued operations, net of tax Interim period 1 1 - effective tax rate normalization(1) Dividends (1) (1) (2) declared on preference shares Adjusted earnings $322 $288 $965 (1) Adjusted EPS(1) $0.66 $0.58 Total change 14% Foreign currency 0% Constant currency 14% 487.5 496.9 Diluted weighted-average common shares (millions) Year-ended December 31, 2021 Adjusted earnings $965 Plus: Dividends declared on preference shares 2 Plus: Tax expense on adjusted earnings 156 Pre-Tax Adjusted earnings $1,123 IFRS Tax expense $1,607 Remove tax related to: Amortization of other identifiable intangible assets 26 Share of post-tax earnings in equity method investments (1,497) Other operating gains, net (9) Other items 5 Subtotal - Tax on pre-tax items removed from adjusted earnings (1,475) Remove: Tax items impacting comparability 24 Total: Remove all items above impacting comparability (1,451) Tax expense on adjusted earnings $156 Effective tax rate on adjusted earnings 13.9% * Fair value adjustments, a component of operating expenses, primarily represent gains or losses due to changes in foreign currency exchange rates on intercompany balances that arise in the ordinary course of business. (1) Refer to page 18 for additional information on non-IFRS financial measures. Thomson Reuters Corporation Reconciliation of Changes in Revenues to Changes in Revenues on a Constant Currency(1) and Organic Basis(1) (millions of U.S. dollars) (unaudited) Three Months Ended March 31, Change 2022 2021 Total SUBTOTAL (2) Foreign Constant Acquisitions/ Currency Currency (Divestitures) Organic Total Revenues Legal Professionals $698 $668 4% -1% 5% 0% 6% Corporates 411 382 8% 0% 8% 0% 8% Tax & Accounting 253 227 11% 0% 11% 0% 11% Professionals "Big 3" Segments Combined 1,362 1,277 7% 0% 7% 0% 7% (1) Reuters News 176 165 7% -2% 9% 0% 9% Global Print 142 143 -1% -1% 0% 0% 0% Eliminations/Rounding (6) (5) Revenues $1,674 $1,580 6% -1% 7% 0% 7% Recurring Revenues Legal Professionals $653 $621 5% -1% 6% 0% 6% Corporates 316 293 8% 0% 8% 0% 8% Tax & Accounting 182 162 12% 0% 12% 0% 12% Professionals "Big 3" Segments Combined 1,151 1,076 7% 0% 7% 0% 8% (1) Reuters News 155 149 5% -2% 6% 0% 6% Eliminations/Rounding (6) (5) Total Recurring Revenues $1,300 $1,220 7% -1% 7% 0% 7% Transactions Revenues Legal Professionals $45 $47 -4% -1% -3% -1% -2% Corporates 95 89 7% -1% 8% 0% 8%
Tax & Accounting 71 65 10% 0% 10% 0% 10% Professionals "Big 3" Segments Combined 211 201 5% 0% 6% 0% 6% (1) Reuters News 21 16 27% -5% 32% 0% 32% Total Transactions $232 $217 7% -1% 8% 0% 8% Revenues Year Ended December 31, Change 2020 Total SUBTOTAL 2021(2) (2) Foreign Constant Acquisitions/ Currency Currency (Divestitures) Organic Total Revenues Legal Professionals $2,712 $2,535 7% 1% 6% 0% 6% Corporates 1,440 1,361 6% 1% 5% 0% 5% Tax & Accounting 915 842 9% 0% 9% 0% 9% Professionals "Big 3" Segments Combined 5,067 4,738 7% 1% 6% 0% 6% (1) Reuters News 694 645 8% 1% 7% 0% 7% Global Print 609 620 -2% 1% -3% 0% -3% Eliminations/Rounding (22) (19) Revenues $6,348 $5,984 6% 1% 5% 0% 5% Growth percentages are computed using whole dollars. As a result, percentages calculated from reported amounts may differ from those presented, and growth components may not total due to rounding. (1) Refer to page 18 for additional information on non-IFRS financial measures. (2) Revised to reflect the changes made to the company's segment reporting in the first quarter of 2022. Thomson Reuters Corporation Reconciliation of Changes in Adjusted EBITDA(1) to Changes on a Constant Currency Basis(1) (millions of U.S. dollars) (unaudited) Three Months Ended March 31, Change 2022 2021 (2) Total Foreign Constant Currency Currency Adjusted EBITDA(1) Legal Professionals $305 $279 9% -1% 10% Corporates 157 145 8% 1% 7% Tax & Accounting Professionals 122 99 23% 1% 22% "Big 3" Segments Combined(1) 584 523 11% 0% 11% Reuters News 37 28 31% 8% 23% Global Print 53 57 -8% 0% -7% Corporate costs (74) (50) n/a n/a n/a Adjusted EBITDA $600 $558 7% 0% 7% Adjusted EBITDA Margin(1) Legal Professionals 43.7% 41.8% 190bp 0bp 190bp Corporates 38.1% 38.0% 10bp 30bp -20bp Tax & Accounting Professionals 48.3% 43.8% 450bp 30bp 420bp "Big 3" Segments Combined(1) 42.9% 41.0% 190bp 30bp 160bp Reuters News 21.0% 17.1% 390bp 150bp 240bp Global Print 37.0% 39.9% -290bp 10bp -300bp Adjusted EBITDA margin 35.8% 35.3% 50bp 30bp 20bp Year Ended December 31, 2021(2) Adjusted EBITDA(1) Legal Professionals $1,091 Corporates 496 Tax & Accounting Professionals 379 "Big 3" Segments Combined(1) 1,966 Reuters News 103 Global Print 226 Corporate costs (325) Adjusted EBITDA $1,970 Adjusted EBITDA Margin(1) Legal Professionals 40.2% Corporates 34.4% Tax & Accounting Professionals 41.3% "Big 3" Segments Combined(1) 38.8% Reuters News 14.8% Global Print 37.1% Adjusted EBITDA margin 31.0% n/a: not applicable Growth percentages and margins are computed using whole dollars. As a result, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding. (1) Refer to page 18 for additional information on non-IFRS financial measures. (2) Revised to reflect the changes made to the company's segment reporting in the first quarter of 2022. Non-IFRS Definition Why Useful to the Company Financial and Investors Measures Adjusted Represents earnings or losses from Provides a consistent basis EBITDA and continuing operations before tax to evaluate operating the related expense or benefit, net interest profitability and margin expense, other finance costs or performance trends by income, depreciation, amortization of excluding items that the software and other identifiable company does not consider intangible assets, Thomson Reuters to be controllable share of post-tax earnings or losses activities for this in equity method investments, other purpose. operating gains and losses, certain asset impairment charges and fair Also, represents a measure value adjustments. commonly reported and widely used by investors as Adjusted EBITDA margin is adjusted a valuation metric, as well EBITDA expressed as a percentage of as to assess the company's revenues. ability to incur and service debt. Adjusted Net earnings or loss including Provides a more comparable earnings and dividends declared on preference basis to analyze earnings. adjusted EPS shares but excluding the post-tax impacts of fair value adjustments, These measures are commonly amortization of other identifiable used by shareholders to intangible assets, other operating measure performance. gains and losses, certain asset impairment charges, other finance costs or income, Thomson Reuters share of post-tax earnings or losses in equity method investments, discontinued operations and other items affecting comparability. The post-tax amount of each item is excluded from adjusted earnings based on the specific tax rules and tax rates associated with the nature and jurisdiction of each item. Adjusted EPS is calculated from adjusted earnings using diluted weighted-average shares and does not represent actual earnings or loss per share attributable to shareholders. Effective Adjusted tax expense divided by Provides a basis to analyze tax rate on pre-tax adjusted earnings. Adjusted the effective tax rate adjusted tax expense is computed as income tax associated with adjusted earnings (benefit) expense plus or minus the earnings. income tax impacts of all items impacting adjusted earnings (as Because the geographical described above), and other tax items mix of pre-tax profits and affecting comparability. losses in interim periods
may be different from that In interim periods, we also make an for the full year, our adjustment to reflect income taxes effective tax rate computed based on the estimated full-year in accordance with IFRS may effective tax rate. Earnings or be more volatile by losses for interim periods under IFRS quarter. Therefore, we reflect income taxes based on the believe that using the estimated effective tax rates of each expected full-year of the jurisdictions in which Thomson effective tax rate provides Reuters operates. The non-IFRS more comparability among adjustment reallocates estimated interim periods. full-year income taxes between interim periods but has no effect on full-year income taxes. Free cash Net cash provided by operating Helps assess the company's flow activities, proceeds from disposals ability, over the long of property and equipment, and other term, to create value for investing activities, less capital its shareholders as it expenditures, payments of lease represents cash available principal and dividends paid on the to repay debt, pay common company's preference shares. dividends and fund share repurchases and acquisitions. Changes The changes in revenues, adjusted Provides better before the EBITDA and the related margin, and comparability of business impact of adjusted EPS before currency (at trends from period to foreign constant currency or excluding the period. currency or effects of currency) are determined at "constant by converting the current and currency" equivalent prior period's local currency results using the same foreign currency exchange rate. Changes in Represents changes in revenues of the Provides further insight revenues company's existing businesses at into the performance of the computed on constant currency. The metric company's existing an "organic" excludes the distortive impacts of businesses by excluding basis acquisitions and dispositions from distortive impacts and not owning the business in both serves as a better measure comparable periods. of the company's ability to grow its business over the long term. Accrued Accrued capital expenditures divided Reflects the basis on which capital by revenues, where accrued capital the company manages capital expenditures expenditures include amounts that expenditures for internal as a remain unpaid at the end of the budgeting purposes. percentage reporting period. of revenues Prior to December 31, 2021, the company used capital expenditures paid in this calculation, from its consolidated statement of cash flow, as measured under IFRS. The prior period has been revised to reflect the current methodology. "Big 3" The company's combined Legal Information for the "Big 3" segments Professionals, Corporates and Tax & segments comprise 81% of Accounting Professionals segments. revenues and represent the All measures reported for the "Big 3" core of the company's segments are non-IFRS financial business information measures. service product offerings. Please refer to reconciliations for the most directly comparable IFRS financial measures. END
(END) Dow Jones Newswires
May 03, 2022 06:31 ET (10:31 GMT)
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