6-K
Thomson Reuters Corp /Can/ (TRI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OFFOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
| For the month of February 2022 | Commission File Number: 1-31349 |
|---|
THOMSON REUTERS CORPORATION
(Translation of registrant’s name into English)
333 BayStreet, Suite 300
Toronto, Ontario M5H 2R2, Canada
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☐ Form 40-F ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| THOMSON REUTERS CORPORATION<br><br><br>(Registrant) | |
|---|---|
| By: | /s/ Marc E. Gold |
| Name: Marc E. Gold | |
| Title: Deputy Company Secretary |
Date: February 8, 2022
EXHIBIT INDEX
| Exhibit Number | Description |
|---|---|
| 99.1 | News release dated February 8, 2022 – Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results |
Exhibit 99.1 - Earnings Release
Exhibit 99.1
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
TORONTO, February 8, 2022 – Thomson Reuters (TSX/NYSE: TRI) today reported results for the fourth quarter and full year ended December 31, 2021:
| • | Strong revenue and sales growth for the fourth quarter and full year |
|---|---|
| o | Full-year total company revenue up 6% / organic revenue up 5% |
| --- | --- |
| o | Fourth-quarter total company revenue up 6% / organic revenue up 6% |
| --- | --- |
| ◾ | Organic revenue up 7% for the “Big 3” (Legal Professionals, Corporates, and Tax & Accounting<br>Professionals) |
| --- | --- |
| • | Global Legal, Tax, Risk, Fraud & Compliance markets continue to be robust, providing a tailwind<br> |
| --- | --- |
| • | Raised 2022/2023 guidance for organic revenue growth, adjusted EBITDA margin and free cash flow |
| --- | --- |
| • | Change Program on track - $217 million run-rate operating expense savings at year-end |
| --- | --- |
| • | Increased annualized dividend per share by 10% (29^th^ consecutive<br>annual increase/largest increase since 2008) |
| --- | --- |
“The momentum we saw in the first nine months of the year continued in the fourth quarter. Revenue and sales growth were again strong and exceeded our expectations, enabling us to finish the year on a solid footing. Our performance has increased momentum moving into 2022, helping to build confidence as we work to achieve our higher 2022 and 2023 targets,” said Steve Hasker, President and CEO of Thomson Reuters.
Mr. Hasker added, “Our professional markets continue to grow helped by a significant global shift by customers to upgrade Legal, Tax and Risk, Fraud and Compliance products. Our products are proving well suited to enable them to effectively serve their clients. We are targeting investment in products that are driving faster growth and where we have strong positions in growing markets, and we continue to look to supplement organic growth with targeted acquisitions that can bolster our positions and where we are an advantaged owner. We look forward to continued progress in 2022 as we work to further strengthen our positions across our businesses.”
Consolidated Financial Highlights — Three Months EndedDecember 31
| Three MonthsEnded December 31,<br> <br>(Millions of U.S. dollars, except for adjusted EBITDA margin and EPS)<br><br><br>(unaudited) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | Change | Change atConstantCurrency | |||||||||
| IFRS Financial Measures^(1)^ | ||||||||||||
| Revenues | $ | 1,710 | $ | 1,616 | 6 | % | ||||||
| Operating profit | $ | 257 | $ | 956 | -73 | % | ||||||
| Diluted (loss) earnings per share (EPS) | $ | (0.36 | ) | $ | 1.13 | n/m | ||||||
| Net cash provided by operating activities | $ | 397 | $ | 566 | -30 | % | ||||||
| Non-IFRS FinancialMeasures^(1)^ | ||||||||||||
| Revenues | $ | 1,710 | $ | 1,616 | 6 | % | 6 | % | ||||
| Adjusted EBITDA | $ | 452 | $ | 525 | -14 | % | -14 | % | ||||
| Adjusted EBITDA margin | 26.4 | % | 32.5 | % | -610bp | -610bp | ||||||
| Adjusted EPS | $ | 0.43 | $ | 0.54 | -20 | % | -20 | % | ||||
| Free cash flow | $ | 255 | $ | 449 | -43 | % | ||||||
| (1) In addition to results reported in accordance with International Financial Reporting Standards (IFRS), thecompany uses certain non-IFRS financial measures as supplemental indicators of its operating performance and financial position. See “Non-IFRS FinancialMeasures” 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 directlycomparable IFRS measures.<br> <br>n/m: not meaningful |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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Revenues increased 6%, before and after the impact of foreign currency, driven by growth across four of the company’s five business segments.
| o | Organic revenues increased 6%, driven by 6% growth in recurring revenues (80% of total revenues), as well as 16% growth<br>in transactions revenues. Global Print revenues declined 4%. |
|---|---|
| o | The company’s “Big 3” segments (Legal Professionals, Corporates and Tax & Accounting<br>Professionals) reported organic revenue growth of 7% and collectively comprised 79% of total revenues. |
| --- | --- |
Operating profit decreased 73%, primarily because the prior year included significant gains from the sale of an investment and an amendment to a pension plan. Additionally, higher revenues were more than offset by higher costs, primarily related to investments associated with the company’s Change Program and higher performance bonus expense. Information regarding the Change Program is provided later in this news release.
Fourth-quarter costs also included a $25 million investment to better position the business for 2022, which was allocated to go-to-market and product development initiatives, and data and analytics tools to improve the customer experience.
| o | Adjusted EBITDA, which excludes the gains from the sale of the investment and the pension plan amendment among<br>other items, **** declined 14% as higher revenues were more than offset by higher costs. The related margin decreased to 26.4% from 32.5% primarily due to higher costs, including those associated with the Change Program, which negatively impacted<br>the margin by 470bp. |
|---|
Diluted loss per share was $0.36 compared to diluted earnings per share of $1.13 in the prior-year period due to lower operating profit and a decrease in value of the company’s LSEG investment, which is discussed in more detail in the “London Stock Exchange Group (LSEG) Ownership Interest” section of this news release.
| o | Adjusted EPS, which excludes the change in value of the company’s LSEG investment, as well as other<br>adjustments, decreased to $0.43 per share from $0.54 per share in the prior-year period primarily due to lower adjusted EBITDA. Adjusted EPS was $0.04 lower due to the $25 million of additional investment previously noted.<br> |
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Net cash provided by operating activities decreased as higher revenues were more than offset by higher expenses, which included Change Program costs, and unfavorable movements in working capital.
| o | Free cash flow decreased $194 million due to lower cash flow from operating activities.<br> |
|---|
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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Highlights by Customer Segment – Three Months Ended December 31
| (Millions of U.S.dollars, except for adjusted EBITDA margins)<br> <br>(unaudited) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | |||||||||||||||
| December 31, | Change | ||||||||||||||
| 2021 | 2020 | Total | ConstantCurrency^(1)^ | Organic^(1)(2)^ | |||||||||||
| Revenues | |||||||||||||||
| Legal Professionals | $ | 689 | $ | 653 | 5 | % | 5 | % | 6 | % | |||||
| Corporates | 361 | 338 | 7 | % | 7 | % | 7 | % | |||||||
| Tax & Accounting Professionals | 309 | 285 | 9 | % | 9 | % | 9 | % | |||||||
| “Big 3” Segments Combined^(1)^ | 1,359 | 1,276 | 6 | % | 7 | % | 7 | % | |||||||
| Reuters News | 182 | 164 | 11 | % | 12 | % | 12 | % | |||||||
| Global Print | 170 | 177 | -4 | % | -4 | % | -4 | % | |||||||
| Eliminations/Rounding | (1 | ) | (1 | ) | |||||||||||
| Revenues | $ | 1,710 | **** | $ | 1,616 | **** | **** | 6 | % | **** | 6 | % | **** | 6 | % |
| Adjusted EBITDA^(^^1)^ | |||||||||||||||
| Legal Professionals | $ | 239 | $ | 245 | -3 | % | -2 | % | |||||||
| Corporates | 95 | 105 | -10 | % | -10 | % | |||||||||
| Tax & Accounting Professionals | 154 | 145 | 6 | % | 7 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 488 | 495 | -2 | % | -1 | % | |||||||||
| Reuters News | 15 | 6 | 139 | % | 107 | % | |||||||||
| Global Print | 61 | 61 | 0 | % | -1 | % | |||||||||
| Corporate costs | (112 | ) | (37 | ) | n/a | n/a | |||||||||
| Adjusted EBITDA | $ | 452 | **** | $ | 525 | **** | **** | -14 | % | **** | -14 | % | |||
| Adjusted EBITDA Margin^(^^1)^ | |||||||||||||||
| Legal Professionals | 34.5 | % | 37.5 | % | -300bp | -270bp | |||||||||
| Corporates | 26.3 | % | 31.1 | % | -480bp | -480bp | |||||||||
| Tax & Accounting Professionals | 49.8 | % | 51.1 | % | -130bp | -120bp | |||||||||
| “Big 3” Segments Combined^(1)^ | 35.8 | % | 38.8 | % | -300bp | -280bp | |||||||||
| Reuters News | 8.3 | % | 3.9 | % | 440bp | 450bp | |||||||||
| Global Print | 35.9 | % | 34.6 | % | 130bp | 110bp | |||||||||
| Corporate costs | n/a | n/a | n/a | n/a | |||||||||||
| Adjusted EBITDA margin | **** | 26.4 | % | **** | 32.5 | % | **** | -610bp | **** | **** | -610bp | **** | |||
| (1) See “Non-IFRS Financial Measures” section and the tablesappended to this news release for additional information on these and other non-IFRS financial measures.<br><br><br>(2) Computed for revenue growth only.<br><br><br>n/a: not applicable |
Unless otherwise noted, all revenue growth comparisons by customer segment in this news release are atconstant currency (or exclude the impact of foreign currency) as Thomson Reuters believes this provides the best basis to measure their performance.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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Legal Professionals
Revenues increased 5% (6% organic) to $689 million.
| o | Recurring revenues grew 5% (93% of total, 6% organic), primarily due to strong performances from Practical Law, Elite,<br>FindLaw and the Government business, as well as contributions from the company’s Canadian, European and Latin American businesses. |
|---|---|
| o | Transactions revenues grew 4% (7% of total, 6% organic), primarily related to the Elite, Government, and Asia and<br>Emerging Markets businesses. |
| --- | --- |
Adjusted EBITDA decreased 3% to $239 million.
| o | The margin decreased to 34.5% from 37.5%, primarily due to higher performance bonus expense. |
|---|
Corporates
Revenues increased 7% (all organic) to $361 million.
| o | Recurring revenues grew 7% (87% of total, all organic) driven by Practical Law, Indirect Tax, CLEAR and Legal software,<br>as well as the company’s businesses in Latin America. |
|---|---|
| o | Transactions revenues grew 4% (13% of total, all organic). |
| --- | --- |
Adjusted EBITDA decreased 10% to $95 million.
| o | The margin decreased to 26.3% from 31.1%, primarily due to higher performance bonus expense. |
|---|
Tax & Accounting Professionals
Revenues increased 9% (all organic) to $309 million.
| o | Recurring revenues grew 9% (89% of total, all organic), driven by strong growth from Audit Solutions, Tax Compliance and<br>the company’s Latin America businesses. |
|---|---|
| o | Transactions revenues increased 10% (11% of total, all organic). |
| --- | --- |
Adjusted EBITDA increased 6% to $154 million.
| o | The margin decreased to 49.8% from 51.1%, primarily due to higher performance bonus expense. |
|---|
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.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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Reuters News
Revenuesof $182 million **** increased 12% (all organic), driven by growth in all businesses, including Reuters Events as it continues to recover from the negative impact from COVID-19 in 2020.
Adjusted EBITDA increased 139% to $15 million, primarily due to higher revenues.
Global Print
Revenues decreased 4% to $170 million.
Adjusted EBITDA was unchanged from the prior-year period at $61 million.
| o | The margin increased to 35.9% from 34.6% due to year-over-year timing of expenses. |
|---|
Corporate Costs
Corporate costs at the adjusted EBITDA level were $112 million and included $78 million of Change Program costs. Corporate costs were $37 million in the prior-year period. Additional information regarding the Change Program is provided below.
Consolidated Financial Highlights – Year Ended December 31
| Year EndedDecember 31,<br> <br>**(**Millions of U.S. dollars, except for adjusted EBITDA margin and EPS)<br><br><br>(unaudited) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | Change | Change atConstantCurrency | |||||||||
| IFRS Financial Measures^(1)^ | ||||||||||||
| Revenues | $ | 6,348 | $ | 5,984 | 6 | % | ||||||
| Operating profit | $ | 1,242 | $ | 1,929 | -36 | % | ||||||
| Diluted earnings per share (EPS) | $ | 11.50 | $ | 2.25 | n/m | |||||||
| Net cash provided by operating activities | $ | 1,773 | $ | 1,745 | 2 | % | ||||||
| Non-IFRS FinancialMeasures^(1)^ | ||||||||||||
| Revenues | $ | 6,348 | $ | 5,984 | 6 | % | 5 | % | ||||
| Adjusted EBITDA | $ | 1,970 | $ | 1,975 | 0 | % | -1 | % | ||||
| Adjusted EBITDA margin | 31.0 | % | 33.0 | % | -200bp | -190bp | ||||||
| Adjusted EPS | $ | 1.95 | $ | 1.85 | 5 | % | 5 | % | ||||
| Free cash flow | $ | 1,256 | $ | 1,330 | -6 | % | ||||||
| (1) In addition to results reported in accordance with IFRS, the company uses certain non-IFRS financial measures as supplemental indicators of its operating performance and financial position. See “Non-IFRS Financial Measures” section and the tablesappended 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.<br><br><br>n/m: not meaningful |
Revenues increased 6% driven by growth in recurring and transactions revenues and a 1% favorable impact from foreign currency.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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| o | Organic revenues increased 5%, primarily due to 5% growth in recurring revenues (79% of total revenues), as well as 13%<br>growth in transactions revenues. Global Print revenues declined. |
|---|---|
| • | Organic growth of 5% included an approximate 100bp benefit resulting from easier year-over-year comparisons due to the<br>negative impact of COVID-19 on the business in 2020. |
| --- | --- |
| o | The company’s “Big 3” segments, which collectively comprised 80% of total revenues, reported organic<br>revenue growth of 6%. |
| --- | --- |
Operating profit declined 36%, primarily because the prior year included significant gains from the sale of an investment and from an amendment to a pension plan.
| o | Adjusted EBITDA, which excludes the gains from the sale of the investment and the pension plan amendment among<br>other items, **** was unchanged on a year-over-year basis as higher revenues were offset by higher costs, which included investments associated with the company’s Change Program and higher performance bonus expense. The related margin<br>decreased to 31.0% from 33.0% in the prior year. Adjusted EBITDA margin was negatively impacted by 290bp due to Change Program costs. |
|---|
DilutedEPS increased to $11.50 per share from $2.25 per share in the prior year due to the gain on the sale of Refinitiv to LSEG in January 2021.
| o | Adjusted EPS, which excludes the gain on the sale of Refinitiv and other adjustments, increased to $1.95 per share<br>from $1.85 per share in the prior year, primarily due to lower depreciation and software amortization and lower income tax expense. |
|---|
Net cashprovided by operating activities increased as higher revenues more than offset higher tax payments and expenses, which included Change Program costs.
| o | Free cash flow decreased by $74 million as higher cash flows from operating activities were more than offset<br>by a prior-year benefit from the proceeds associated with the sale of real estate. |
|---|
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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Highlights by Customer Segment – Year Ended December 31
| (Millions of U.S.<br>dollars, except for adjusted EBITDA margins)<br> <br>(unaudited) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year Ended | |||||||||||||||
| December 31, | Change | ||||||||||||||
| 2021 | 2020 | Total | ConstantCurrency^(^^1)^ | Organic^(1)(2)^ | |||||||||||
| Revenues | |||||||||||||||
| Legal Professionals | $ | 2,712 | $ | 2,535 | 7 | % | 6 | % | 6 | % | |||||
| Corporates | 1,449 | 1,367 | 6 | % | 5 | % | 5 | % | |||||||
| Tax & Accounting Professionals | 906 | 836 | 8 | % | 9 | % | 9 | % | |||||||
| “Big 3” Segments Combined^(1)^ | 5,067 | 4,738 | 7 | % | 6 | % | 6 | % | |||||||
| Reuters News | 674 | 628 | 7 | % | 7 | % | 7 | % | |||||||
| Global Print | 609 | 620 | -2 | % | -3 | % | -3 | % | |||||||
| Eliminations/Rounding | (2 | ) | (2 | ) | |||||||||||
| Revenues | $ | 6,348 | **** | $ | 5,984 | **** | **** | 6 | % | **** | 5 | % | **** | 5 | % |
| Adjusted EBITDA^(^^1)^ | |||||||||||||||
| Legal Professionals | $ | 1,091 | $ | 1,001 | 9 | % | 7 | % | |||||||
| Corporates | 502 | 460 | 9 | % | 9 | % | |||||||||
| Tax & Accounting Professionals | 373 | 330 | 13 | % | 13 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 1,966 | 1,791 | 10 | % | 9 | % | |||||||||
| Reuters News | 103 | 73 | 40 | % | 51 | % | |||||||||
| Global Print | 226 | 242 | -7 | % | -8 | % | |||||||||
| Corporate costs | (325 | ) | (131 | ) | n/a | n/a | |||||||||
| Adjusted EBITDA | $ | 1,970 | **** | $ | 1,975 | **** | **** | 0 | % | **** | -1 | % | |||
| Adjusted EBITDA Margin^(1)^ | |||||||||||||||
| Legal Professionals | 40.2 | % | 39.5 | % | 70bp | 50bp | |||||||||
| Corporates | 34.6 | % | 33.7 | % | 90bp | 100bp | |||||||||
| Tax & Accounting Professionals | 41.1 | % | 39.5 | % | 160bp | 170bp | |||||||||
| “Big 3” Segments Combined^(1)^ | 38.8 | % | 37.8 | % | 100bp | 90bp | |||||||||
| Reuters News | 15.2 | % | 11.7 | % | 350bp | 500bp | |||||||||
| Global Print | 37.1 | % | 39.0 | % | -190bp | -210bp | |||||||||
| Corporate costs | n/a | n/a | n/a | n/a | |||||||||||
| Adjusted EBITDA margin | **** | 31.0 | % | **** | 33.0 | % | **** | -200bp | **** | **** | -190bp | **** | |||
| (1) See “Non-IFRS Financial Measures” section and the tablesappended to this news release for additional information on these and other non-IFRS financial measures.<br><br><br>(2) Computed for revenue growth only.<br><br><br>n/a: not applicable |
Thomson Reuters Change Program and Outlook
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 12 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 $295 million was invested in 2021.
The company’s updated outlook for 2022 and 2023 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
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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useful insight into the performance of its businesses. The company expects its first-quarter 2022 revenue growth rate and adjusted EBITDA margin will be comparable to its full-year 2022 outlook targets.
While the company’s full-year 2021 performance provides it with increasing confidence about its outlook, the global economy has recently experienced substantial disruption due to concerns regarding resurgences and new strains of COVID-19, measures intended to mitigate the pandemic’s impact, 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.
Reported Full-Year 2021 and Updated Full-Year 2022 – 2023 Outlook
| Total Thomson Reuters | FY 2021<br><br><br>Reported | 2/23/21<br><br><br>FY 2022<br> <br>Outlook | 2/23/21<br><br><br>FY 2023<br> <br>Outlook | 2/8/22<br><br><br>FY 2022<br> <br>Outlook | 2/8/22<br><br><br>FY 2023<br><br><br>Outlook |
|---|---|---|---|---|---|
| Total Revenue Growth | 6.1% | 4.0% - 5.0% | 5.0% - 6.0% | ~ 5% | 5.5% - 6.0% |
| Organic Revenue<br>Growth^(1)^ | 5.2% | 4.0% - 5.0% | 5.0% - 6.0% | ~ 5% | 5.5% - 6.0% |
| Adjusted EBITDA Margin^(1)^ | 31.0% | 34% - 35% | 38% – 40% | ~ 35% | 39% - 40% |
| Corporate<br>Costs | $325 million | $245 - $280 million | $110 - $120 million | $280 - $330 million | Unchanged |
| Core Corporate<br>Costs | $142 million | $120 - $130 million | $110 - $120 million | Unchanged | Unchanged |
| Change Program<br>Opex | $183 million | $125 - $150 million | $0 | $160 - $200 million | Unchanged |
| Free Cash Flow^(1)^ | $1.3 billion | $1.2 - $1.3 billion | $1.8 - $2.0 billion | ~ $1.3 billion | $1.9 – $2.0 billion |
| Accrued Capex as % of<br>Revenue^(1)^ | 8.5% | 7.5% - 8.0% | 6.0% - 6.5% | Unchanged | Unchanged |
| Change Program<br>Accrued Capex | $112 million | $75 - $100 million | $0 | $100 - $140 million | Unchanged |
| Depreciation & Amortization of<br><br><br>Computer Software | $651 million | $620 - $645 million | $580 - $605 million | Unchanged | Unchanged |
| Interest Expense<br>(P&L) | $196 million | $190 - $210 million | $190 - $210 million | Unchanged | Unchanged |
| Effective Tax Rate on Adjusted Earnings^(1)^ | 13.9% | n/a | n/a | 19% - 21% | n/a |
| “Big3”^(1)^ | FY 2021<br><br><br>Reported | 2/23/21<br><br><br>FY 2022<br> <br>Outlook | 2/23/21<br><br><br>FY 2023<br> <br>Outlook | 2/8/22<br><br><br>FY 2022<br> <br>Outlook | 2/8/22<br> <br>FY 2023<br><br><br>Outlook |
| Total Revenue Growth | 6.9% | 5.5% - 6.5% | 6.0% - 7.0% | 6.0% - 6.5% | 6.5% - 7.0% |
| Organic Revenue<br>Growth | 6.2% | 5.5% - 6.5% | 6.0% - 7.0% | 6.0% - 6.5% | 6.5% - 7.0% |
| Adjusted EBITDA Margin | 38.8% | 41% - 42% | 43% - 45% | ~42% | 44% - 45% |
| (1) | Non-IFRS financial measures. See the<br>“Non-IFRS Financial Measures” section below as well as the tables and footnotes appended to this news release for more information. | ||||
| --- | --- |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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The information in this section is forward-looking. Actual results, which will include the impact of currency andfuture 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 NoteRegarding Forward-Looking Statements, Material Risks and Material Assumptions.”
Dividends and Share Repurchases
The company announced today that its Board of Directors approved a 10% or $0.16 per share annualized increase in the dividend to $1.78 per common share, representing the 29^th^ consecutive year of dividend increases. A quarterly dividend of $0.445 per share is payable on March 15, 2022 to common shareholders of record as of February 24, 2022.
In the fourth quarter of 2021, the company completed a previously announced plan to buy back up to $1.2 billion of its common shares. This buyback program was in addition to the $200 million repurchase program that was completed earlier in 2021. As of February 7, 2022, Thomson Reuters had approximately 486.2 million common shares outstanding.
In 2021, Thomson Reuters returned a total of $2.2 billion of cash to shareholders through dividends and share repurchases.
London Stock Exchange Group (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 February 7, 2022, Thomson Reuters indirectly owned approximately 72.4 million LSEG shares which had a market value of approximately $7.0 billion based on LSEG’s closing share price on that day. The company received $51 million of dividends from its LSEG investment in June 2021 and an additional $24 million in October 2021.
In March 2021, as permitted under a lock-up exception, Thomson Reuters sold approximately 10.1 million LSEG shares for pre-tax net proceeds of $994 million. Over the course of 2021, Thomson Reuters paid $223 million of tax on the sale of these shares and used the after-tax proceeds to pay $627 million of tax that became payable when the Refinitiv sale closed. In 2021, the company paid $850 million of taxes related to these transactions.
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 FINANCIALMEASURES
Thomson Reuters prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by theInternational 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, accruedcapital 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 Reutersuses 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
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies andshould 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 IFRSmeasures in the appended tables.
The company’s outlook contains various non-IFRS financial measures. Thecompany 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 thatare 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-IFRSmeasures 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 averageforeign currency rates for the year, and (ii) other finance income or expense related to intercompany financing arrangements. Additionally, the company cannot reasonably predict (i) its share ofpost-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 arisefrom 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 aresult, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.
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 “Thomson Reuters Change Program andOutlook” section, 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 oroutcomes 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 resultsor 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 inthis news release include, but are not limited to, those discussed on pages 16-30 in the “Risk Factors” section of the company’s 2020 annual report. A “Risk Factors” section will alsobe included in the company’s 2021 annual report, which the company plans to file in March. These and other risk factors are discussed in materials that Thomson Reuters fromtime-to-time files with, or furnishes to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission (SEC). Thomson Reuters annualand quarterly reports are also available in the “Investor Relations” section of tr.com.
The company’s business outlook is based oninformation 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 wellas 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 discussionof material assumptions and material risks related to the company’s 2022 and 2023 updated outlook, please see pages 22-23 of the company’s third-quarter management’s discussion and analysis(MD&A) for the period ended September 30, 2021. In addition to those material assumptions and material risks, material assumptions related to the company’s updated 2022 and 2023 outlook include the following updates: (i) thecompany’s revenue outlook now assumes that there will be improved global economic conditions throughout 2022 and 2023, despite periods of volatility due to disruption caused by COVID-19, measures intendedto mitigate the pandemic’s impact, and other events and macroeconomic factors; (ii) the company’s adjusted EBITDA margin outlook assumes Change Program operating expenditures between $160 million and $200 million in 2022;(iii) the company’s free cash flow outlook now assumes accrued capital expenditures between 7.5% and 8%
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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of revenues in 2022 and between 6% and 6.5% of revenues in 2023; and (iv) the company’s effective tax rate onadjusted earnings outlook now assumes (a) the mix of taxing jurisdictions where the company recognized pre-tax profit or losses in 2021 does not significantly change; (b) there will be minimalchanges in tax laws and treaties within the jurisdictions where the company operates; (c) the imposition of minimum taxes in various jurisdictions; (d) no significant benefits from the finalization of prior tax years; (e) depreciationand amortization of computer software between $620 million and $645 million in 2022; and (f) interest expense between $190 million and $210 million in 2022. Material assumptions and material risks related to thecompany’s outlook will also be included in the company’s 2021 annual report, which the company plans to file in March. The company’s quarterly MD&A and annual report are filed with, or furnished to, the Canadian securitiesregulatory authorities and the U.S. SEC and are also available in the “Investor Relations” section of tr.com.
The company has provided anupdated 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 statementswhich reflect expectations only as of the date of this news release.
Except as may be required by applicable law, Thomson Reuters disclaims any obligationto update or revise any forward-looking statements.
CONTACTS
| MEDIA<br> <br>Melissa Cassar<br><br><br>Head of Commercial Communications & Corporate Affairs<br> <br>+1 437 388 3619<br><br><br>melissa.cassar@tr.com | INVESTORS<br> <br>Frank J. Golden<br><br><br>Head of Investor Relations<br> <br>+1 332 219 1111<br><br><br>frank.golden@tr.com |
|---|
Thomson Reuters will webcast a discussion of its fourth-quarter and full-year 2021 results and itstwo-year business outlook today beginning at 9:00 a.m. Eastern Standard Time (EST). You can access the webcast by visiting ir.tr.com. An archive of the webcast will be available following thepresentation.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
Page 12 of 21
Thomson Reuters Corporation
Consolidated Income Statement
(millions of U.S. dollars, except per share data)
(unaudited)
| Three Months Ended | Year Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| CONTINUING OPERATIONS | ||||||||||||
| Revenues | $ | 1,710 | $ | 1,616 | $ | 6,348 | $ | 5,984 | ||||
| Operating expenses | (1,256 | ) | (1,098 | ) | (4,370 | ) | (3,999 | ) | ||||
| Depreciation | (49 | ) | (40 | ) | (177 | ) | (184 | ) | ||||
| Amortization of computer software | (118 | ) | (123 | ) | (474 | ) | (485 | ) | ||||
| Amortization of other identifiable intangible assets | (29 | ) | (31 | ) | (119 | ) | (123 | ) | ||||
| Other operating (losses) gains, net | (1 | ) | 632 | 34 | 736 | |||||||
| Operating profit | 257 | 956 | 1,242 | 1,929 | ||||||||
| Finance costs, net: | ||||||||||||
| Net interest expense | (50 | ) | (49 | ) | (196 | ) | (195 | ) | ||||
| Other finance (costs) income | (22 | ) | (6 | ) | 8 | 30 | ||||||
| Income before tax and equity method investments | 185 | 901 | 1,054 | 1,764 | ||||||||
| Share of post-tax (losses) earnings in equity method<br>investments | (477 | ) | (159 | ) | 6,240 | (544 | ) | |||||
| Tax benefit (expense) | 115 | (155 | ) | (1,607 | ) | (71 | ) | |||||
| (Loss) earnings from continuing operations | (177 | ) | 587 | 5,687 | 1,149 | |||||||
| Earnings (loss) from discontinued operations, net of tax | 2 | (25 | ) | 2 | (27 | ) | ||||||
| Net (loss) earnings | $ | (175 | ) | $ | 562 | $ | 5,689 | $ | 1,122 | |||
| (Loss) earnings attributable to common shareholders | $ | (175 | ) | $ | 562 | $ | 5,689 | $ | 1,122 | |||
| Earnings (loss) per share: | ||||||||||||
| Basic (loss) earnings per share: | ||||||||||||
| From continuing operations | $ | (0.36 | ) | $ | 1.18 | $ | 11.52 | $ | 2.31 | |||
| From discontinued operations | — | (0.05 | ) | 0.01 | (0.06 | ) | ||||||
| Basic (loss) earnings per share | $ | (0.36 | ) | $ | 1.13 | $ | 11.53 | $ | 2.25 | |||
| Diluted (loss) earnings per share: | ||||||||||||
| From continuing operations | $ | (0.36 | ) | $ | 1.18 | $ | 11.50 | $ | 2.30 | |||
| From discontinued operations | — | (0.05 | ) | — | (0.05 | ) | ||||||
| Diluted (loss) earnings per share | $ | (0.36 | ) | $ | 1.13 | $ | 11.50 | $ | 2.25 | |||
| Basic weighted-average common shares | 487,297,738 | 497,372,688 | 493,444,031 | 496,722,292 | ||||||||
| Diluted weighted-average common shares | 487,297,738 | 498,809,560 | 494,504,504 | 498,032,006 |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
| December 31, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Assets | ||||||
| Cash and cash equivalents | $ | 778 | $ | 1,787 | ||
| Trade and other receivables | 1,057 | 1,151 | ||||
| Other financial assets | 108 | 612 | ||||
| Prepaid expenses and other current assets | 510 | 425 | ||||
| Current assets | 2,453 | 3,975 | ||||
| Property and equipment, net | 502 | 545 | ||||
| Computer software, net | 822 | 830 | ||||
| Other identifiable intangible assets, net | 3,331 | 3,427 | ||||
| Goodwill | 5,940 | 5,976 | ||||
| Equity method investments | 6,736 | 1,136 | ||||
| Other non-current assets | 1,226 | 788 | ||||
| Deferred tax | 1,139 | 1,204 | ||||
| Total assets | $ | 22,149 | $ | 17,881 | ||
| Liabilities and equity | ||||||
| Liabilities | ||||||
| Payables, accruals and provisions | $ | 1,363 | $ | 1,159 | ||
| Current tax liabilities | 169 | 251 | ||||
| Deferred revenue | 874 | 866 | ||||
| Other financial liabilities | 175 | 376 | ||||
| Current liabilities | 2,581 | 2,652 | ||||
| Long-term indebtedness | 3,786 | 3,772 | ||||
| Provisions and other non-current liabilities | 943 | 1,083 | ||||
| Deferred tax | 1,005 | 394 | ||||
| Total liabilities | 8,315 | 7,901 | ||||
| Equity | ||||||
| Capital | 5,496 | 5,458 | ||||
| Retained earnings | 9,149 | 5,211 | ||||
| Accumulated other comprehensive loss | (811 | ) | (689 | ) | ||
| Total equity | 13,834 | 9,980 | ||||
| Total liabilities and equity | $ | 22,149 | $ | 17,881 |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
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Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Cash provided by (used in): | ||||||||||||
| Operating activities | ||||||||||||
| (Loss) earnings from continuing operations | $ | (177 | ) | $ | 587 | $ | 5,687 | $ | 1,149 | |||
| Adjustments for: | ||||||||||||
| Depreciation | 49 | 40 | 177 | 184 | ||||||||
| Amortization of computer software | 118 | 123 | 474 | 485 | ||||||||
| Amortization of other identifiable intangible assets | 29 | 31 | 119 | 123 | ||||||||
| Share of post-tax losses (earnings) in equity method<br>investments | 477 | 159 | (6,240 | ) | 544 | |||||||
| Net gains on disposals of businesses and investments | — | (472 | ) | (5 | ) | (471 | ) | |||||
| Deferred tax | (108 | ) | (41 | ) | 662 | (231 | ) | |||||
| Other | 74 | (106 | ) | 135 | (123 | ) | ||||||
| Changes in working capital and other items^^ | (69 | ) | 249 | 832 | 102 | |||||||
| Operating cash flows from continuing operations | 393 | 570 | 1,841 | 1,762 | ||||||||
| Operating cash flows from discontinued operations | 4 | (4 | ) | (68 | ) | (17 | ) | |||||
| Net cash provided by operating activities | 397 | 566 | 1,773 | 1,745 | ||||||||
| Investing activities | ||||||||||||
| Acquisitions, net of cash acquired | (13 | ) | (2 | ) | (18 | ) | (167 | ) | ||||
| Proceeds from disposals of businesses and investments, net of taxes paid | — | 366 | 28 | 367 | ||||||||
| Dividend from sale of LSEG shares | — | — | 994 | — | ||||||||
| Capital expenditures^^ | (123 | ) | (100 | ) | (487 | ) | (504 | ) | ||||
| Proceeds from disposals of property and equipment | — | — | — | 162 | ||||||||
| Other investing activities | 25 | 2 | 81 | 4 | ||||||||
| Taxes paid on sale of Refinitiv and LSEG shares | (188 | ) | — | (850 | ) | — | ||||||
| Investing cash flows from continuing operations | (299 | ) | 266 | (252 | ) | (138 | ) | |||||
| Investing cash flows from discontinued operations | — | — | (252 | ) | — | |||||||
| Net cash (used in) provided by investing activities | (299 | ) | 266 | (504 | ) | (138 | ) | |||||
| Financing activities | ||||||||||||
| Proceeds from debt | — | — | — | 2,019 | ||||||||
| Repayments of debt | — | — | — | (1,645 | ) | |||||||
| Net repayments under short-term loan facilities | — | — | — | (2 | ) | |||||||
| Payments of lease principal | (44 | ) | (19 | ) | (109 | ) | (75 | ) | ||||
| Repurchases of common shares | (597 | ) | — | (1,400 | ) | (200 | ) | |||||
| Dividends paid on preference shares | — | — | (2 | ) | (2 | ) | ||||||
| Dividends paid on common shares | (191 | ) | (183 | ) | (773 | ) | (730 | ) | ||||
| Other financing activities | 3 | 1 | 11 | (9 | ) | |||||||
| Net cash used in financing activities | (829 | ) | (201 | ) | (2,273 | ) | (644 | ) | ||||
| (Decrease) increase in cash and bank overdrafts | (731 | ) | 631 | (1,004 | ) | 963 | ||||||
| Translation adjustments | (2 | ) | 4 | (5 | ) | (1 | ) | |||||
| Cash and bank overdrafts at beginning of period | 1,511 | 1,152 | 1,787 | 825 | ||||||||
| Cash and bank overdrafts at end of period | $ | 778 | $ | 1,787 | $ | 778 | $ | 1,787 | ||||
| Cash and bank overdrafts at end of period comprised of: | ||||||||||||
| Cash and cash equivalents | $ | 778 | $ | 1,787 | $ | 778 | $ | 1,787 |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
Page 15 of 21
| Thomson Reuters Corporation<br><br><br>Reconciliation of (Loss) Earnings from Continuing Operations to Adjusted EBITDA^(1)^<br><br><br>(millions of U.S. dollars, except for margins)<br><br><br>(unaudited) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Year Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| (Loss) earnings from continuing operations | $ | (177 | ) | $ | 587 | $ | 5,687 | $ | 1,149 | |||
| Adjustments to remove: | ||||||||||||
| Tax (benefit) expense | (115 | ) | 155 | 1,607 | 71 | |||||||
| Other finance costs (income) | 22 | 6 | (8 | ) | (30 | ) | ||||||
| Net interest expense | 50 | 49 | 196 | 195 | ||||||||
| Amortization of other identifiable intangible assets | 29 | 31 | 119 | 123 | ||||||||
| Amortization of computer software | 118 | 123 | 474 | 485 | ||||||||
| Depreciation | 49 | 40 | 177 | 184 | ||||||||
| EBITDA | $ | (24 | ) | $ | 991 | $ | 8,252 | $ | 2,177 | |||
| Adjustments to remove: | ||||||||||||
| Share of post-tax losses (earnings) in equity method<br>investments | 477 | 159 | (6,240 | ) | 544 | |||||||
| Other operating losses (gains), net | 1 | (632 | ) | (34 | ) | (736 | ) | |||||
| Fair value adjustments^*^ | (2 | ) | 7 | (8 | ) | (10 | ) | |||||
| Adjusted EBITDA^(1)^ | $ | 452 | $ | 525 | $ | 1,970 | $ | 1,975 | ||||
| Adjusted EBITDA margin^(1)^ | 26.4 | % | 32.5 | % | 31.0 | % | 33.0 | % | ||||
| * | Fair value adjustments, a component of operating expenses, primarily represent gains or losses due to changes inforeign currency exchange rates on intercompany balances that arise in the ordinary course of business. | |||||||||||
| --- | --- |
Thomson ReutersCorporation
Reconciliation of Net Cash Provided by Operating Activities to Free CashFlow^(1)^
(millions of U.S. dollars)
(unaudited)
| Three Months Ended | Year Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net cash provided by operating activities | $ | 397 | $ | 566 | $ | 1,773 | $ | 1,745 | ||||
| Capital expenditures | (123 | ) | (100 | ) | (487 | ) | (504 | ) | ||||
| Proceeds from disposals of property and equipment | — | — | — | 162 | ||||||||
| Other investing activities | 25 | 2 | 81 | 4 | ||||||||
| Payments of lease principal | (44 | ) | (19 | ) | (109 | ) | (75 | ) | ||||
| Dividends paid on preference shares | — | — | (2 | ) | (2 | ) | ||||||
| Free cash flow^(1)^ | $ | 255 | $ | 449 | $ | 1,256 | $ | 1,330 |
Thomson Reuters Corporation
Reconciliation of Capital Expenditures to Accrued Capital Expenditures^(1)^
(millions of U.S. dollars)
(unaudited)
| Year Ended | ||||||
|---|---|---|---|---|---|---|
| December 31, | ||||||
| 2021 | 2020 | |||||
| Capital expenditures | $ | 487 | $ | 504 | ||
| Remove: IFRS adjustment to cash basis | 54 | (37 | ) | |||
| Accrued capital expenditures^(1)^ | $ | 541 | $ | 467 | ||
| Accrued capital expenditures as a percentage ofrevenues^(1)^ | 8.5 | % | 7.8 | % |
(1) Refer to page 21 for additional information on non-IFRS financial measures.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
Page 16 of 21
Thomson Reuters Corporation
Reconciliation of Net (Loss) Earnings to Adjusted Earnings^(1)^
Reconciliation of Total Change in Adjusted EPS^(1)^ to Change in Constant Currency^(1)^
(millions of U.S. dollars, except for share and per share data)
(unaudited)
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021^^ | 2020 | Change | 2021^^ | 2020 | Change | |||||||||||||
| Net (loss) earnings | $ | (175 | ) | $ | 562 | $ | 5,689 | $ | 1,122 | |||||||||
| Adjustments to remove: | ||||||||||||||||||
| Fair value adjustments* | (2 | ) | 7 | (8 | ) | (10 | ) | |||||||||||
| Amortization of other identifiable intangible assets | 29 | 31 | 119 | 123 | ||||||||||||||
| Other operating losses (gains), net | 1 | (632 | ) | (34 | ) | (736 | ) | |||||||||||
| Other finance costs (income) | 22 | 6 | (8 | ) | (30 | ) | ||||||||||||
| Share of post-tax losses (earnings) in equity method<br>investments | 477 | 159 | (6,240 | ) | 544 | |||||||||||||
| Tax on above items^(1)^ | (141 | ) | 119 | 1,475 | 19 | |||||||||||||
| Tax items impacting comparability^(1)^ | (9 | ) | (29 | ) | (24 | ) | (136 | ) | ||||||||||
| (Earnings) loss from discontinued operations, net of tax | (2 | ) | 25 | (2 | ) | 27 | ||||||||||||
| Interim period effective tax rate<br>normalization^(1)^ | 10 | 21 | — | — | ||||||||||||||
| Dividends declared on preference shares | — | — | (2 | ) | (2 | ) | ||||||||||||
| Adjusted earnings^(1)^ | $ | 210 | $ | 269 | $ | 965 | $ | 921 | ||||||||||
| Adjusted EPS^(1)^ | $ | 0.43 | $ | 0.54 | -20 | % | $ | 1.95 | $ | 1.85 | 5 | % | ||||||
| Foreign currency | 0 | % | 1 | % | ||||||||||||||
| Constant currency | -20 | % | 5 | % | ||||||||||||||
| Diluted weighted-average common shares<br>(millions)^**^ | 488.6 | 498.8 | 494.5 | 498.0 | ||||||||||||||
| * | Fair value adjustments, a component of operating expenses, primarily represent gains or losses due to changes inforeign currency exchange rates on intercompany balances that arise in the ordinary course of business. | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ** | Because Thomson Reuters reported a net loss for continuing operations under IFRS for the three months ended<br>December 31, 2021, the weighted-average number of common shares used for basic and diluted loss per share is the same for all per-share calculations in the period, as the effect of stock options and other<br>equity incentive awards would reduce the loss per share, and therefore be anti-dilutive. Since the company’s non-IFRS measure “adjusted earnings” is a profit, potential common shares are<br>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<br>December 31, 2021 | |||||||||||||||||
| --- | --- | --- | ||||||||||||||||
| IFRS: Basic and Diluted | 487,297,738 | |||||||||||||||||
| Effect of stock options and other equity incentive awards | 1,291,196 | |||||||||||||||||
| Non-IFRS Diluted | 488,588,934 |
(1) Refer to page 21 for additional information on non-IFRS financial measures.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
Page 17 of 21
Thomson Reuters Corporation
Reconciliation of Changes in Revenues to Changes in Revenues on a Constant Currency^(1)^ and OrganicBasis^(1)^
(millions of U.S. dollars)
(unaudited)
| Three Months EndedDecember 31, | Change | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SUBTOTAL | |||||||||||||||||||||
| 2021 | 2020 | Total | ForeignCurrency | ConstantCurrency | Acquisitions/(Divestitures) | Organic | |||||||||||||||
| Total Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 689 | $ | 653 | 5 | % | 0 | % | 5 | % | 0 | % | 6 | % | |||||||
| Corporates | 361 | 338 | 7 | % | 0 | % | 7 | % | 0 | % | 7 | % | |||||||||
| Tax & Accounting Professionals | 309 | 285 | 9 | % | -1 | % | 9 | % | 0 | % | 9 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 1,359 | 1,276 | 6 | % | 0 | % | 7 | % | 0 | % | 7 | % | |||||||||
| Reuters News | 182 | 164 | 11 | % | -1 | % | 12 | % | 0 | % | 12 | % | |||||||||
| Global Print | 170 | 177 | -4 | % | 0 | % | -4 | % | 0 | % | -4 | % | |||||||||
| Eliminations/Rounding | (1 | ) | (1 | ) | |||||||||||||||||
| Revenues | $ | 1,710 | **** | $ | 1,616 | **** | **** | 6 | % | **** | 0 | % | **** | 6 | % | **** | 0 | % | **** | 6 | % |
| Recurring Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 642 | $ | 608 | 6 | % | 0 | % | 5 | % | 0 | % | 6 | % | |||||||
| Corporates | 314 | 293 | 7 | % | 0 | % | 7 | % | 0 | % | 7 | % | |||||||||
| Tax & Accounting Professionals | 276 | 255 | 9 | % | 0 | % | 9 | % | 0 | % | 9 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 1,232 | 1,156 | 7 | % | 0 | % | 7 | % | 0 | % | 7 | % | |||||||||
| Reuters News | 145 | 142 | 2 | % | -1 | % | 3 | % | 0 | % | 3 | % | |||||||||
| Total Recurring Revenues | $ | 1,377 | **** | $ | 1,298 | **** | **** | 6 | % | **** | 0 | % | **** | 6 | % | **** | 0 | % | **** | 6 | % |
| Transactions Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 47 | $ | 45 | 4 | % | 0 | % | 4 | % | -2 | % | 6 | % | |||||||
| Corporates | 47 | 45 | 4 | % | 0 | % | 4 | % | 0 | % | 4 | % | |||||||||
| Tax & Accounting Professionals | 33 | 30 | 9 | % | -1 | % | 10 | % | 0 | % | 10 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 127 | 120 | 5 | % | 0 | % | 6 | % | -1 | % | 6 | % | |||||||||
| Reuters News | 37 | 22 | 66 | % | 2 | % | 64 | % | 0 | % | 64 | % | |||||||||
| Total Transactions Revenues | $ | 164 | **** | $ | 142 | **** | **** | 15 | % | **** | 0 | % | **** | 15 | % | **** | -1 | % | **** | 16 | % |
Growth percentages are computed using whole dollars. As a result, percentages calculated from reported amounts may differ from thosepresented, and growth components may not total due to rounding.
(1) Refer to page 21 for additional information on non-IFRS financial measures.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
Page 18 of 21
Thomson Reuters Corporation
Reconciliation of Changes in Revenues to Changes in Revenues on a Constant Currency^(1)^ and OrganicBasis^(1)^
(millions of U.S. dollars)
(unaudited)
| Year EndedDecember 31, | Change | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SUBTOTAL | |||||||||||||||||||||
| 2021 | 2020 | Total | ForeignCurrency | ConstantCurrency | Acquisitions/(Divestitures) | Organic | |||||||||||||||
| Total Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 2,712 | $ | 2,535 | 7 | % | 1 | % | 6 | % | 0 | % | 6 | % | |||||||
| Corporates | 1,449 | 1,367 | 6 | % | 1 | % | 5 | % | 0 | % | 5 | % | |||||||||
| Tax & Accounting Professionals | 906 | 836 | 8 | % | 0 | % | 9 | % | 0 | % | 9 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 5,067 | 4,738 | 7 | % | 1 | % | 6 | % | 0 | % | 6 | % | |||||||||
| Reuters News | 674 | 628 | 7 | % | 1 | % | 7 | % | 0 | % | 7 | % | |||||||||
| Global Print | 609 | 620 | -2 | % | 1 | % | -3 | % | 0 | % | -3 | % | |||||||||
| Eliminations/Rounding | (2 | ) | (2 | ) | |||||||||||||||||
| Revenues | $ | 6,348 | **** | $ | 5,984 | **** | **** | 6 | % | **** | 1 | % | **** | 5 | % | **** | 0 | % | **** | 5 | % |
| Recurring Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 2,523 | $ | 2,367 | 7 | % | 1 | % | 6 | % | 0 | % | 5 | % | |||||||
| Corporates | 1,218 | 1,143 | 7 | % | 1 | % | 6 | % | 0 | % | 6 | % | |||||||||
| Tax & Accounting Professionals | 733 | 682 | 8 | % | 0 | % | 8 | % | 0 | % | 8 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 4,474 | 4,192 | 7 | % | 1 | % | 6 | % | 0 | % | 6 | % | |||||||||
| Reuters News | 576 | 566 | 2 | % | 1 | % | 1 | % | 0 | % | 1 | % | |||||||||
| Total Recurring Revenues | $ | 5,050 | **** | $ | 4,758 | **** | **** | 6 | % | **** | 1 | % | **** | 5 | % | **** | 0 | % | **** | 5 | % |
| Transactions Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 189 | $ | 168 | 13 | % | 2 | % | 11 | % | -1 | % | 12 | % | |||||||
| Corporates | 231 | 224 | 3 | % | 0 | % | 3 | % | 0 | % | 3 | % | |||||||||
| Tax & Accounting Professionals | 173 | 154 | 12 | % | 0 | % | 12 | % | 0 | % | 12 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 593 | 546 | 9 | % | 1 | % | 8 | % | 0 | % | 8 | % | |||||||||
| Reuters News | 98 | 62 | 57 | % | 2 | % | 55 | % | 0 | % | 55 | % | |||||||||
| Total Transactions Revenues | $ | 691 | **** | $ | 608 | **** | **** | 14 | % | **** | 1 | % | **** | 13 | % | **** | 0 | % | **** | 13 | % |
Growth percentages are computed using whole dollars. As a result, percentages calculated from reported amounts may differ from thosepresented, and growth components may not total due to rounding.
(1) Refer to page 21 for additional information on non-IFRS financial measures.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
Page 19 of 21
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 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | Change | ||||||||||||||
| 2021 | 2020 | Total | Foreign<br>Currency | Constant<br>Currency | |||||||||||
| Adjusted EBITDA^(1)^ | |||||||||||||||
| Legal Professionals | $ | 239 | $ | 245 | -3 | % | 0 | % | -2 | % | |||||
| Corporates | 95 | 105 | -10 | % | 0 | % | -10 | % | |||||||
| Tax & Accounting Professionals | 154 | 145 | 6 | % | -1 | % | 7 | % | |||||||
| “Big 3” Segments Combined^(1)^ | 488 | 495 | -2 | % | 0 | % | -1 | % | |||||||
| Reuters News | 15 | 6 | 139 | % | 32 | % | 107 | % | |||||||
| Global Print | 61 | 61 | 0 | % | 1 | % | -1 | % | |||||||
| Corporate costs | (112 | ) | (37 | ) | n/a | n/a | n/a | ||||||||
| Adjusted EBITDA | $ | 452 | **** | $ | 525 | **** | **** | -14 | % | **** | 0 | % | **** | -14 | % |
| Adjusted EBITDA Margin^(1)^ | |||||||||||||||
| Legal Professionals | 34.5 | % | 37.5 | % | -300bp | -30bp | -270bp | ||||||||
| Corporates | 26.3 | % | 31.1 | % | -480bp | 0bp | -480bp | ||||||||
| Tax & Accounting Professionals | 49.8 | % | 51.1 | % | -130bp | -10bp | -120bp | ||||||||
| “Big 3” Segments Combined^(1)^ | 35.8 | % | 38.8 | % | -300bp | -20bp | -280bp | ||||||||
| Reuters News | 8.3 | % | 3.9 | % | 440bp | -10bp | 450bp | ||||||||
| Global Print | 35.9 | % | 34.6 | % | 130bp | 20bp | 110bp | ||||||||
| Corporate costs | n/a | n/a | n/a | n/a | n/a | ||||||||||
| Adjusted EBITDA margin | **** | 26.4 | % | **** | 32.5 | % | **** | -610bp | **** | **** | 0bp | **** | **** | -610bp | **** |
n/a: not applicable
Growth percentages andmargins 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 21 for additional information on non-IFRS financial measures.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
Page 20 of 21
Thomson Reuters Corporation
Reconciliation of Changes in Adjusted EBITDA^(1)^ to Changes on a Constant Currency^^Basis^(1)^
(millions of U.S. dollars)
(unaudited)
| Year Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | Change | ||||||||||||||
| 2021 | 2020 | Total | Foreign<br>Currency | Constant<br>Currency | |||||||||||
| Adjusted EBITDA^(1)^ | |||||||||||||||
| Legal Professionals | $ | 1,091 | $ | 1,001 | 9 | % | 2 | % | 7 | % | |||||
| Corporates | 502 | 460 | 9 | % | 0 | % | 9 | % | |||||||
| Tax & Accounting Professionals | 373 | 330 | 13 | % | 0 | % | 13 | % | |||||||
| “Big 3” Segments Combined^(1)^ | 1,966 | 1,791 | 10 | % | 1 | % | 9 | % | |||||||
| Reuters News | 103 | 73 | 40 | % | -11 | % | 51 | % | |||||||
| Global Print | 226 | 242 | -7 | % | 2 | % | -8 | % | |||||||
| Corporate costs | (325 | ) | (131 | ) | n/a | n/a | n/a | ||||||||
| Adjusted EBITDA | $ | 1,970 | **** | $ | 1,975 | **** | **** | 0 | % | **** | 0 | % | **** | -1 | % |
| Adjusted EBITDA Margin^(1)^ | |||||||||||||||
| Legal Professionals | 40.2 | % | 39.5 | % | 70bp | 20bp | 50bp | ||||||||
| Corporates | 34.6 | % | 33.7 | % | 90bp | -10bp | 100bp | ||||||||
| Tax & Accounting Professionals | 41.1 | % | 39.5 | % | 160bp | -10bp | 170bp | ||||||||
| “Big 3” Segments Combined^(1)^ | 38.8 | % | 37.8 | % | 100bp | 10bp | 90bp | ||||||||
| Reuters News | 15.2 | % | 11.7 | % | 350bp | -150bp | 500bp | ||||||||
| Global Print | 37.1 | % | 39.0 | % | -190bp | 20bp | -210bp | ||||||||
| Corporate costs | n/a | n/a | n/a | n/a | n/a | ||||||||||
| Adjusted EBITDA margin | **** | 31.0 | % | **** | 33.0 | % | **** | -200bp | **** | **** | -10bp | **** | **** | -190bp | **** |
n/a: not applicable
Growth percentages andmargins 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 21 for additional information on non-IFRS financial measures.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
Page 21 of 21
| Non-IFRS Financial Measures | Definition | Why Useful to the Company and Investors |
|---|---|---|
| Segment adjusted EBITDA, adjusted EBITDA and adjusted EBITDA margin | Earnings or losses from<br>continuing operations before tax expense or benefit, net interest expense, other finance costs or income, depreciation, amortization of software and other identifiable intangible assets, Thomson Reuters share of<br>post-tax earnings or losses in equity method investments, other operating gains and losses, certain asset impairment charges, fair value adjustments and corporate related items.<br><br><br><br> <br>Consolidated adjusted EBITDA is comprised of adjusted EBITDA of the business<br>segments and corporate costs.<br> <br><br> <br>Adjusted EBITDA margin is adjusted EBITDA<br>expressed as a percentage of revenues. | Provides a<br>consistent basis to evaluate operating profitability and performance trends by excluding items that the company does not consider to be controllable activities for this purpose.<br><br><br><br> <br>Also, represents a measure commonly reported and widely used by investors as<br>a valuation metric, as well as to assess a company’s ability to incur and service debt. |
| Adjusted earnings and adjusted earnings per share | Net earnings or loss<br>including dividends declared on preference shares but excluding the post-tax impacts of fair value adjustments, amortization of other identifiable intangible assets, other operating gains and losses, certain<br>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.<br><br><br><br> <br>The post-tax amount of each item is<br>excluded from adjusted earnings based on the specific tax rules and tax rates associated with the nature and jurisdiction of each item.<br> <br><br><br><br>Adjusted EPS is calculated from adjusted earnings using diluted weighted-average shares and does not represent actual earnings or loss per share<br>attributable to shareholders. | Provides a<br>more comparable basis to analyze earnings.<br> <br><br> <br>These measures are commonly<br>used by shareholders to measure the company’s performance. |
| Effective tax rate on adjusted earnings | Adjusted tax expense divided<br>by pre-tax adjusted earnings. Adjusted tax expense is computed as Income tax (benefit) expense plus or minus the income tax impacts of all items impacting adjusted earnings (as described above), and other tax<br>items affecting comparability.<br> <br><br> <br>In interim periods, we also make an<br>adjustment to reflect income taxes based on the estimated full-year effective tax rate. Earnings or losses for interim periods under IFRS reflect income taxes based on the estimated effective tax rates of each of the jurisdictions in which Thomson<br>Reuters operates. The non-IFRS adjustment reallocates estimated full-year income taxes between interim periods but has no effect on full-year income taxes. | Provides a<br>basis to analyze the effective tax rate associated with adjusted earnings.<br> <br><br> <br><br><br><br><br> <br>Because the geographical mix of<br>pre-tax profits and losses in interim periods may be different from that for the full year, our effective tax rate computed in accordance with IFRS may be more volatile by quarter. Therefore, we believe that<br>using the expected full-year effective tax rate provides more comparability among interim periods. |
| Free cash flow | Net cash provided by<br>operating activities, proceeds from disposals of property and equipment, and other investing activities less capital expenditures, payments of lease principal and dividends paid on the company’s preference shares. | Helps<br>assess the company’s ability, over the long term, to create value for its shareholders as it represents cash available to repay debt, pay common dividends and fund share repurchases and acquisitions. |
| Changes before the impact of foreign currency “constant<br>currency” | The changes in revenues,<br>adjusted EBITDA and the related margins, and adjusted earnings per share before currency (at constant currency or excluding the effects of currency) are determined by converting the current and prior-year period’s local currency equivalent<br>using the same exchange rates. | Provides<br>better comparability of business trends from period to period. |
| Organic revenue growth | Represents changes in<br>revenues of the company’s existing businesses at constant currency. The metric excludes the distortive impacts of acquisitions and dispositions from not owning the business in both comparable periods. | Provides<br>further insight into the performance of its existing businesses by excluding distortive impacts and serves as a better measure of the company’s ability to grow its business over the long term. |
| Accrued capital expenditures as a percentage of revenues | Accrued capital expenditures<br>divided by revenues, where accrued capital expenditures include amounts that remain unpaid at the end of the reporting period.<br> <br><br><br><br>Prior to December 31, 2021, the company used capital expenditures paid in this calculation, from its consolidated statement of cash flow, as<br>measured under IFRS. The prior period has been revised to reflect the current methodology. | Reflects<br>the basis on which the company manages capital expenditures for internal budgeting purposes. |
| “Big 3” segments | The combined Legal<br>Professionals, Corporates and Tax & Accounting Professionals segments. All measures reported for the “Big 3” segments are non-IFRS financial measures. | Information for the “Big 3” segments comprise 80% of revenues and represent the core of the company’s business information service<br>product offerings. |
Please refer to reconciliations for most directly comparable IFRS measures.