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 2024 | Commission File Number: 1-31349 |
|---|
THOMSON REUTERS CORPORATION
(Translation of registrant’s name into English)
19 DuncanStreet, Toronto,
Ontario M5H 3H1, 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 ☒
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 | |
|---|---|
| (Registrant) | |
| By: | /s/ Jennifer Ruddick |
| Name: Jennifer Ruddick | |
| Title: Deputy Company Secretary | |
| Date: February 8, 2024 | |
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EXHIBIT INDEX
| Exhibit Number | Description |
|---|---|
| 99.1 | News release dated February 8, 2024 – Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results |
EX-99.1 Earnings Release
Exhibit 99.1
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
TORONTO, February 8, 2024 – Thomson Reuters (TSX/NYSE: TRI) today reported results for the fourth quarter and full year ended December 31, 2023:
| • | Good revenue momentum continued in the fourth quarter and full year |
|---|---|
| o | Full-year total company revenue up 3% / organic revenue up 6% |
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| o | Fourth-quarter total company revenue up 3% / organic revenue up 7% |
| --- | --- |
| • | Organic revenue up 8% for the “Big 3” segments (Legal Professionals, Corporates and Tax & Accounting<br>Professionals) |
| --- | --- |
| • | Met or exceeded full-year 2023 outlook for organic revenue, adjusted EBITDA margin and free cash flow<br> |
| --- | --- |
| • | Full-year 2024 outlook anticipates organic revenue growth of approximately 6% and an adjusted EBITDA margin of<br>approximately 38% |
| --- | --- |
| • | Financial framework for 2025-2026 anticipates 6.5%-8% organic revenue growth and<br>rising adjusted EBITDA margins |
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| • | Increased annualized dividend per share by 10% (31^st^ consecutive<br>annual increase) |
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| • | Anticipate current $1 billion share buyback program to conclude by end of the second quarter |
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| • | Acquired a majority ownership stake in e-invoicing leader Pagero in January 2024<br> |
| --- | --- |
“Last year was one of innovation and accomplishment across our business”, said Steve Hasker, President and CEO of Thomson Reuters. “We made significant progress delivering Generative AI-powered solutions, including the launch of AI-Assisted Research on Westlaw Precision, as well as expanded features and design enhancements across our product portfolio. We plan to maintain this momentum in 2024 through a robust product roadmap positioning us to meet our customers’ evolving needs at pace.”
Mr. Hasker added, “We remain focused on allocating capital to drive long-term shareholder value creation. In 2023, we returned significant capital to shareholders and executed a number of strategic acquisitions, resulting in a stronger and more strategically aligned portfolio with improved growth prospects.”
Consolidated Financial Highlights—Three Months Ended December 31
| Three MonthsEnded December 31,<br> <br>(Millions of U.S. dollars, except for adjusted EBITDA margin and EPS)<br><br><br>(unaudited) | **** | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| IFRS Financial Measures^(1)^ | 2023 | 2022 | Change | Change atConstantCurrency | ||||||||
| Revenues | $ | 1,815 | $ | 1,765 | 3 | % | ||||||
| Operating profit | $ | 558 | $ | 631 | -11 | % | ||||||
| Diluted earnings per share (EPS) | $ | 1.49 | $ | 0.45 | 231 | % | ||||||
| Net cash provided by operating activities | $ | 705 | $ | 676 | 4 | % | ||||||
| Non-IFRS Financial Measures^(1)^ | ||||||||||||
| Revenues | $ | 1,815 | $ | 1,765 | 3 | % | 3 | % | ||||
| Adjusted EBITDA | $ | 707 | $ | 633 | 12 | % | 9 | % | ||||
| Adjusted EBITDA margin | 38.9 | % | 35.9 | % | 300bp | 210bp | ||||||
| Adjusted EPS | $ | 0.98 | $ | 0.75 | ^(2)^ | 31 | % | 28 | % | |||
| Free cash flow | $ | 613 | $ | 526 | 16 | % | ||||||
| (1) In addition to results reported in accordance with International Financial Reporting Standards (IFRS), the companyuses 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 comparableIFRS measures.<br> <br>(2) As of September 2023, we amended our definition of adjusted earnings to exclude amortizationfrom acquired computer software. The comparative 2022 period has been revised to reflect the current period presentation. For additional information, see the “Non-IFRS Financial Measures” section of this news release. |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
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Revenues increased 3%, driven by growth in recurring and transactions revenues. Net divestitures had a 4% negative impact on revenues and foreign currency had no impact.
| o | Organic revenues increased 7%, driven by 7% growth in recurring revenues (82% of total revenues) as well as 16% growth in<br>transactions revenues. Global Print revenues decreased 4% organically. |
|---|---|
| o | The company’s “Big 3” segments reported organic revenue growth of 8% and collectively comprised 80% of<br>total revenues. |
| --- | --- |
Operating profit decreased 11% because the prior-year period included gains on the sale of several non-core businesses.
| o | Adjusted EBITDA, which excludes gains on sales of businesses as well as other adjustments, increased 12% due to higher<br>revenues and lower costs. The related margin increased to 38.9% from 35.9% in the prior-year period. Lower costs reflected Change Program investments made in the prior-year period, which benefited the year-over-year change in adjusted EBITDA margin<br>by 340bp. Foreign currency contributed 90bp to the increase in adjusted EBITDA margin. |
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Diluted EPS was $1.49 compared to $0.45 in the prior-year period primarily due to an increase in value of the company’s investment in London Stock Exchange Group (LSEG), net of changes in the value of related foreign exchange contracts, and lower income tax expense, which included a non-cash tax benefit. Diluted EPS also benefited from a reduction in weighted-average common shares outstanding due to share repurchases and the company’s June 2023 return of capital transaction.
| o | Adjusted EPS, which excludes the changes in value of the company’s LSEG investment and the related foreign<br>exchange contracts, the non-cash tax benefit as well as other adjustments, increased to $0.98 per share from $0.75 per share in the prior-year period, primarily due to higher adjusted EBITDA. Adjusted EPS also<br>benefited from a reduction in weighted-average common shares. |
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Net cash provided by operating activities increased $29 million as the cash benefits from higher revenues and lower costs more than offset higher tax payments.
| o | Free cash flow increased $87 million due to higher net cash provided by operating activities and other<br>investing activities, which included proceeds from the sale of real estate. The prior-year period also included investments in the Change Program. |
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Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 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 | ||||||||||||||
| 2023 | 2022 | Total | ConstantCurrency^(1)^ | Organic^(1)(2)^ | |||||||||||
| Revenues | |||||||||||||||
| Legal Professionals | $ | 700 | $ | 704 | -1 | % | -1 | % | 7 | % | |||||
| Corporates | 402 | 379 | 6 | % | 5 | % | 7 | % | |||||||
| Tax & Accounting Professionals | 344 | 326 | 6 | % | 9 | % | 10 | % | |||||||
| “Big 3” Segments Combined^(1)^ | 1,446 | 1,409 | 3 | % | 3 | % | 8 | % | |||||||
| Reuters News | 220 | 198 | 11 | % | 10 | % | 9 | % | |||||||
| Global Print | 154 | 162 | -6 | % | -5 | % | -4 | % | |||||||
| Eliminations/Rounding | (5 | ) | (4 | ) | |||||||||||
| Revenues | $ | 1,815 | **** | $ | 1,765 | **** | **** | 3 | % | **** | 3 | % | **** | 7 | % |
| Adjusted EBITDA^(1)^ | |||||||||||||||
| Legal Professionals | $ | 298 | $ | 294 | 1 | % | -2 | % | |||||||
| Corporates | 138 | 135 | 3 | % | 1 | % | |||||||||
| Tax & Accounting Professionals | 188 | 189 | -1 | % | 1 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 624 | 618 | 1 | % | 0 | % | |||||||||
| Reuters News | 61 | 40 | 56 | % | 52 | % | |||||||||
| Global Print | 55 | 59 | -5 | % | -8 | % | |||||||||
| Corporate costs | (33 | ) | (84 | ) | n/a | n/a | |||||||||
| Adjusted EBITDA | $ | 707 | **** | $ | 633 | **** | **** | 12 | % | **** | 9 | % | |||
| Adjusted EBITDA Margin^(1)^ | |||||||||||||||
| Legal Professionals | 42.5 | % | 41.7 | % | 80bp | -50bp | |||||||||
| Corporates | 34.5 | % | 35.7 | % | -120bp | -140bp | |||||||||
| Tax & Accounting Professionals | 54.6 | % | 58.1 | % | -350bp | -430bp | |||||||||
| “Big 3” Segments Combined^(1)^ | 43.1 | % | 43.9 | % | -80bp | -150bp | |||||||||
| Reuters News | 27.9 | % | 19.8 | % | 810bp | 720bp | |||||||||
| Global Print | 36.4 | % | 36.1 | % | 30bp | -100bp | |||||||||
| Adjusted EBITDA margin | **** | 38.9 | % | **** | 35.9 | % | **** | 300bp | **** | **** | 210bp | **** | |||
| (1) See the “Non-IFRS Financial Measures” section and thetables appended to this news release for additional information on these and other non-IFRS financial measures. To compute segment and consolidated adjusted EBITDA margin, the company excludes fair valueadjustments related to acquired deferred revenues.<br> <br>(2) Computed for revenue growth only.<br><br><br>n/a: not applicable |
Unless otherwise noted, all revenue growth comparisons bycustomer 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.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
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Legal Professionals
Revenues decreased 1% to $700 million due to the negative impact from net divestitures. Organic revenues increased 7%.
| o | Recurring revenues increased 2% (96% of total, 7% organic). Organic growth was primarily driven by Westlaw, Practical<br>Law, Casetext and the segment’s international businesses. |
|---|---|
| o | Transactions revenues decreased 39% (4% of total, increased 2% organic). |
| --- | --- |
Adjusted EBITDA increased 1% to $298 million.
| o | The margin increased to 42.5% from 41.7% reflecting a 130 basis point benefit from foreign exchange.<br> |
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Corporates
Revenues increased 5% to $402 million, including a negative impact from net divestitures. Organic revenues increased 7%.
| o | Recurring revenues increased 6% (89% of total, 7% organic) primarily driven by strong growth in Practical Law, Indirect<br>Tax and our Latin America business. |
|---|---|
| o | Transactions revenues increased 4% (11% of total, 7% organic), primarily driven by our Trust offering and Confirmation.<br> |
| --- | --- |
Adjusted EBITDA increased 3% to $138 million.
| o | The margin decreased to 34.5% from 35.7%, primarily driven by higher expenses. |
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Tax & Accounting Professionals
Revenues increased 9% to $344 million, including a negative impact from net divestitures. Organic revenues increased 10%.
| o | Recurring revenues increased 8% (89% of total, 10% organic). Organic growth was driven by Ultratax and the segment’s<br>Latin America business. |
|---|---|
| o | Transactions revenues increased 22% (11% of total, 14% organic) primarily due to Confirmation and SurePrep.<br> |
| --- | --- |
Adjusted EBITDA decreased 1% to $188 million.
| o | The margin decreased to 54.6% from 58.1%, as higher revenues were more than offset by higher expenses, driven largely by<br>SurePrep seasonality and integration costs. |
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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 2023 Results
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Reuters News
Revenues of $220 million increased 10% (9% organic) driven primarily by Generative AI related content licensing revenue that was largely transactional in nature.
Adjusted EBITDA increased 56% to $61 million primarily due to higher revenues.
Global Print
Revenues decreased 5% (decreased 4% organic) to $154 million, in line with our expectations.
Adjusted EBITDA decreased 5% to $55 million.
| o | The margin increased to 36.4% from 36.1%, reflecting a 130 basis point benefit from foreign exchange.<br> |
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Corporate Costs
Corporate costs at the adjusted EBITDA level were $33 million. Corporate costs were $84 million in the prior-year period and included $60 million of Change Program costs.
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) | **** | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| IFRS Financial Measures^(1)^ | 2023 | 2022 | Change | Change atConstantCurrency | ||||||||
| Revenues | $ | 6,794 | $ | 6,627 | 3 | % | ||||||
| Operating profit | $ | 2,332 | $ | 1,834 | 27 | % | ||||||
| Diluted EPS | $ | 5.80 | $ | 2.75 | 111 | % | ||||||
| Net cash provided by operating activities | $ | 2,341 | $ | 1,915 | 22 | % | ||||||
| Non-IFRS Financial Measures^(1)^ | ||||||||||||
| Revenues | $ | 6,794 | $ | 6,627 | 3 | % | 3 | % | ||||
| Adjusted EBITDA | $ | 2,678 | $ | 2,329 | 15 | % | 14 | % | ||||
| Adjusted EBITDA margin | 39.3 | % | 35.1 | % | 420bp | 380bp | ||||||
| Adjusted EPS | $ | 3.51 | $ | 2.62 | ^(2)^ | 34 | % | 32 | % | |||
| Free cash flow | $ | 1,871 | $ | 1,340 | 40 | % | ||||||
| (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 the “Non-IFRS Financial Measures” section and thetables 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 IFRSmeasures.<br> <br>(2) As of September 2023, we amended our definition of adjusted earnings to excludeamortization from acquired computer software. The comparative 2022 period has been revised to reflect the current period presentation. For additional information, see the “Non-IFRS Financial Measures” section of this newsrelease. |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
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Revenues increased 3%, driven by recurring and transactions revenues. Net divestitures had a 3% negative impact on revenues and foreign currency had no impact.
| o | Organic revenues increased 6%, driven by 6% growth in recurring revenues (80% of total revenues) as well as 10% growth in<br>transactions revenues. Global Print revenues decreased 3% organically. |
|---|---|
| o | The company’s “Big 3” segments reported organic revenue growth of 7% and collectively comprised 81% of<br>total revenues. |
| --- | --- |
Operating profit increased 27% due to higher revenues and lower costs, as well as higher gains from the sale of non-core businesses, including the sale of a majority stake in the company’s Elite business.
| o | Adjusted EBITDA, which excludes the gains on sale of Elite and other businesses, as well as other adjustments,<br>increased 15% due to higher revenues and lower costs. The related margin increased to 39.3% from 35.1% in the prior year. Lower costs reflected Change Program investments made in the prior year, which benefited the year-over-year change in adjusted<br>EBITDA margin by 260bp. Foreign currency contributed 40bp to the change in margin. |
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Diluted EPS was $5.80 per share compared to $2.75 per share in the prior year, primarily due to higher operating profit and an increase in the value of the company’s investment in LSEG, net of changes in the value of related foreign exchange contracts. Diluted EPS also benefited from a reduction in weighted-average common shares outstanding due to share repurchases and the company’s June 2023 return of capital transaction.
| o | Adjusted EPS, which excludes the gains on sale of Elite and other businesses, changes in value of the<br>company’s LSEG investment, as well as other adjustments, increased to $3.51 per share from $2.62 per share in the prior year, primarily due to higher adjusted EBITDA. Adjusted EPS also benefited from a reduction in weighted-average common<br>shares. |
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Net cash provided by operating activities increased $426 million due to cash benefits from higher revenues and lower costs as well as favorable movements in working capital.
| o | Free cash flow increased $531 million primarily due to higher cash flows from operating activities. Free cash<br>flow also benefited from lower capital expenditures and higher other investing activities, which included proceeds from the sale of real estate. The prior year included investments in the Change Program. |
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Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
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Highlights by Customer Segment – Year Ended December 31
| (Millions of U.S.dollars, except for adjusted EBITDA margins)<br> <br>(unaudited) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year Ended | |||||||||||||||
| December 31, | Change | ||||||||||||||
| 2023 | 2022 | Total | ConstantCurrency^(1)^ | Organic^(1)(2)^ | |||||||||||
| Revenues | |||||||||||||||
| Legal Professionals | $ | 2,807 | $ | 2,803 | 0 | % | 0 | % | 6 | % | |||||
| Corporates | 1,620 | 1,536 | 5 | % | 5 | % | 7 | % | |||||||
| Tax & Accounting Professionals | 1,058 | 986 | 7 | % | 9 | % | 10 | % | |||||||
| “Big 3” Segments Combined^(1)^ | 5,485 | 5,325 | 3 | % | 4 | % | 7 | % | |||||||
| Reuters News | 769 | 733 | 5 | % | 5 | % | 4 | % | |||||||
| Global Print | 562 | 592 | -5 | % | -4 | % | -3 | % | |||||||
| Eliminations/Rounding | (22 | ) | (23 | ) | |||||||||||
| Revenues | $ | 6,794 | **** | $ | 6,627 | **** | **** | 3 | % | **** | 3 | % | **** | 6 | % |
| Adjusted EBITDA^(1)^ | |||||||||||||||
| Legal Professionals | $ | 1,299 | $ | 1,227 | 6 | % | 5 | % | |||||||
| Corporates | 619 | 578 | 7 | % | 7 | % | |||||||||
| Tax & Accounting Professionals | 490 | 451 | 8 | % | 10 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 2,408 | 2,256 | 7 | % | 6 | % | |||||||||
| Reuters News | 172 | 154 | 12 | % | 5 | % | |||||||||
| Global Print | 213 | 212 | 1 | % | 0 | % | |||||||||
| Corporate costs | (115 | ) | (293 | ) | n/a | n/a | |||||||||
| Adjusted EBITDA | $ | 2,678 | **** | $ | 2,329 | **** | **** | 15 | % | **** | 14 | % | |||
| Adjusted EBITDAMargin^(1)^ | |||||||||||||||
| Legal Professionals | 46.2 | % | 43.8 | % | 240bp | 190bp | |||||||||
| Corporates | 38.1 | % | 37.6 | % | 50bp | 50bp | |||||||||
| Tax & Accounting Professionals | 45.8 | % | 45.8 | % | 0bp | -30bp | |||||||||
| “Big 3” Segments Combined^(1)^ | 43.8 | % | 42.4 | % | 140bp | 110bp | |||||||||
| Reuters News | 22.4 | % | 21.0 | % | 140bp | 0bp | |||||||||
| Global Print | 38.0 | % | 35.7 | % | 230bp | 170bp | |||||||||
| Adjusted EBITDA margin | **** | 39.3 | % | **** | 35.1 | % | **** | 420bp | **** | **** | 380bp | **** | |||
| (1) See the “Non-IFRS Financial Measures” section and thetables appended to this news release for additional information on these and other non-IFRS financial measures. To compute segment and consolidated adjusted EBITDA margin, the company excludes fair valueadjustments related to acquired deferred revenues.<br> <br>(2) Computed for revenue growth only.<br><br><br>n/a: not applicable |
2024 Outlook
The company’s outlook for 2024 in the table below assumes constant currency rates and incorporates the recent Pagero and World Business Media acquisitions but excludes the impact of any future acquisitions or dispositions that may occur during the remainder of the year. Thomson Reuters believes that this type of guidance provides useful insight into the anticipated performance of its businesses.
The company expects its first-quarter 2024 organic revenue growth to be approximately 8%, boosted by the expectation for additional AI licensing revenue at Reuters. The company also anticipates an adjusted EBITDA margin of approximately 40%, benefiting from normal seasonal strength and the Reuters licensing revenue, partially offset by M&A dilution and select growth investments.
The company continues to operate in an uncertain macroeconomic environment, reflecting ongoing geopolitical risk, uneven economic growth and an evolving interest rate and inflationary backdrop. Any worsening of the global economic or business environment could impact the company’s ability to achieve its outlook.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
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Reported Full-Year 2023 Results and Full-Year 2024 Outlook
| Total Thomson Reuters | FY 2023 Reported | FY 2024<br><br><br>Outlook |
|---|---|---|
| Total Revenue Growth | 3% | ~ 6.5% |
| Organic Revenue Growth^(1)^ | 6% | ~ 6% |
| Adjusted EBITDA Margin^(1)^ | 39.3% | ~ 38% |
| Corporate Costs | $115 million | $120 - $130 million |
| Free Cash Flow^(1)^ | $1.9 billion | ~ $1.8 billion |
| Accrued Capex as % of Revenue^(1)^ | 7.8% | ~ 8.5% |
| Depreciation & Amortization of Computer Software<br><br><br>Depreciation & Amortization of Internally Developed Software<br><br><br>Amortization of Acquired Software | $628 million<br><br><br>$556 million<br> <br>$72 million | $730 - $750 million<br><br> <br>$595 - $615 million<br><br><br>~ $135 million |
| Interest Expense (P&L) | $164 million^(2)^ | $150 - $170 million |
| Effective Tax Rate on Adjusted Earnings^(1)^ | 16.5% | ~ 18% |
| “Big 3”Segments^(1)^ | FY2023<br> <br>Reported | FY 2024<br> <br>Outlook |
| Total Revenue Growth | 3% | ~ 8% |
| Organic Revenue Growth | 7% | ~ 7.5% |
| Adjusted EBITDA Margin | 43.8% | ~ 43% |
| (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. | |
| --- | --- | |
| (2) | Full-year 2023 interest expense excludes a $12 million benefit from the release of a tax reserve that is removed from<br>adjusted earnings. | |
| --- | --- |
2025-2026 Financial Framework
For the 2025-2026 period, the company targets an organic revenue growth range of 6.5%-8%, driven by 8%-9% for the “Big 3” segments. The company targets adjusted EBITDA margin expansion of approximately 75 basis points in 2025, followed by at least 50 basis points in 2026. It anticipates accrued capital expenditures as a percentage of revenues to be approximately 8%, and 2026 free cash flow to range from $2.0-$2.1 billion.
This financial framework assumes constant currency rates and incorporates the recent Pagero and World Business Media acquisitions but excludes the impact of any future acquisitions or dispositions that may occur during this time horizon.
The information in this section is forward-looking. Actual results, which will includethe impact of currency and future acquisitions and dispositions completed during 2024, 2025 and 2026 may differ materially from the company’s 2024 outlook and 2025-2026 financial framework. The information in this section should also be read inconjunction with the section below entitled “Special Note Regarding Forward-Looking Statements, Material Risks and Material Assumptions.” The company’s 2024 outlook and 2025-2026 financial framework are also
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
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based on certain assumptions described in the cross-referenced section, which the company believes are reasonable inthe circumstances, and is subject to a number of risks, including those specifically identified in the cross-referenced section and those facing the company generally.
Recent Acquisitions
In January 2024, the company announced a recommended public tender offer to acquire 100 per cent of the shares of Pagero Group AB (Pagero) and subsequently acquired a majority interest in Pagero. As of February 2, 2024, the company’s ownership of Pagero was approximately 84.53%. Pagero is a global leader in e-invoicing and indirect tax solutions, which it delivers through its Smart Business Network. The Company links customers, suppliers, and institutions, allowing for the automated, compliant, and secure exchange of digital orders, invoices, and other business documents. Thomson Reuters’ majority ownership of Pagero will enhance the strategic partnership announced in February 2023, accelerating the companies’ joint vision for a connected suite of global indirect tax, reporting and e-invoicing capabilities.
In January 2024, the company also acquired World Business Media Limited, a cross-platform, subscription-based provider of editorial coverage for the global P&C and specialty (re)insurance industry. This acquisition is in line with Reuters strategic priority to provide must-have news and insight for new customer markets and professional verticals.
Dividends
The company announced today that its Board of Directors approved a 10% or $0.20 per share annualized increase in the dividend to $2.16 per common share, representing the 31^st^ consecutive year of dividend increases. A quarterly dividend of $0.54 per share is payable on March 8, 2024 to common shareholders of record as of February 21, 2024.
Share Repurchases – Update on $1.0 Billion Buyback Program
In November 2023, Thomson Reuters announced its plans to repurchase up to $1.0 billion of its common shares.
From November 2023 through January 31, 2024, the company repurchased approximately 3.3 million of its common shares under this buyback program, for a total spend of $457 million. As of January 31, 2024, Thomson Reuters had approximately 452.4 million common shares outstanding.
Subject to market conditions, the company anticipates completing the $1.0 billion program by the end of the second quarter of 2024.
LSEG Ownership Interest
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. During 2023, the company sold 56.0 million shares that it indirectly owned and received nearly $5.5 billion of gross proceeds.
As of January 31, 2024, Thomson Reuters indirectly owned approximately 15.2 million LSEG shares, which had a market value of approximately $1.7 billion based on LSEG’s closing share price on that day.
Thomson Reuters
Thomson Reuters (NYSE / TSX: TRI) informs the way forward by bringing together the trusted content and technology that people and organizations need to make the right decisions. The company serves professionals across legal, tax, accounting, compliance, government, and media. Its products combine highly specialized software and insights to empower professionals with the data, intelligence, and solutions needed to make informed decisions, and to help institutions in their pursuit of justice,
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
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truth and transparency. Reuters, part of Thomson Reuters, is a world leading provider of trusted journalism and news. For more information, visit tr.com.
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International AccountingStandards Board (IASB).
This news release includes certain non-IFRS financial measures, which include ratios thatincorporate one or more non-IFRS financial measures, such as adjusted EBITDA (other than at the customer segment level) and the related margin, free cash flow, adjusted earnings and the effective tax rate onadjusted earnings, 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 forthe “Big 3” segments.
As of September 30, 2023, Thomson Reuters amended its definition of adjusted earnings to exclude amortization fromacquired computer software. While the company has always excluded amortization from acquired identifiable intangible assets other than computer software from its definition of adjusted earnings, this change aligns its treatment ofamortization for all acquired intangible assets. Prior period amounts were revised for comparability.
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, ThomsonReuters 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 thecalculation 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 definedand 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 misleadingand 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 toreconcile these non-IFRS measures to the most directly comparable IFRS measures because it cannot predict, with reasonable certainty, the impacts of changes in foreign exchange rates which impact (i) thetranslation 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 cannotreasonably predict (i) its share of post-tax earnings or losses in equity method investments, which is subject to changes in the stock price of LSEG or (ii) the occurrence or amount of otheroperating 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 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, the “2024 Outlook” section, the“2025-2026 Financial Framework” section and the company’s expectations including the impact of its recent acquisition of a majority ownership in Pagero and its acquisition of World Business Media Limited and statements regarding thecompany’s anticipated completion of its buyback program in the second quarter of 2024, 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 thisnews 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.
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 11 of 22
Many of these risks, uncertainties and assumptions are beyond the company’s control and the effects of them can bedifficult to predict.
Some of the material risk factors that could cause actual results or events to differ materially from those expressed in or implied byforward-looking statements in this news release include, but are not limited to, those discussed on pages 19-33 in the “Risk Factors” section of the company’s 2022 annual report. These and otherrisk 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 and 2025-2026 financial framework is based on information currently available to the company and is based on various external andinternal 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. In particular, the global economy has experienced substantial disruption due to concerns regardingeconomic effects associated with the macroeconomic backdrop and ongoing geopolitical risks. The company’s business outlook and 2025-2026 financial framework assumes that uncertain macroeconomic and geopolitical conditions will continue todisrupt the economy and cause periods of volatility, however, these conditions may last substantially longer than expected and any worsening of the global economic or business environment could impact the company’s ability to achieve itsoutlook and affect its results and other expectations. Material assumptions related to the company’s revenue outlook and 2025-2026 financial framework are that uncertain macroeconomic and geopolitical conditions will continue to disrupt theeconomy and cause periods of volatility; there will be a continued need for trusted products and services that help customers navigate evolving and complex legal, tax, accounting, regulatory, geopolitical and commercial changes, developments andenvironments, and for cloud-based digital tools that drive productivity; Thomson Reuters will have a continued ability to deliver innovative products that meet evolving customer demands; the company will acquire new customers through expanded andimproved digital platforms, simplification of the product portfolio and through other sales initiatives; and the company will improve customer retention through commercial simplification efforts and customer service improvements. Materialassumptions related to the company’s adjusted EBITDA margin outlook and 2025-2026 financial framework are its ability to achieve revenue growth targets; the company’s business mix continues to shift to higher-growth product offerings; andintegration expenses associated with recent acquisitions will reduce margins. Material assumptions related to the company’s free cash flow outlook and 2025-2026 financial framework are its ability to achieve its revenue and adjusted EBITDAmargin targets; and accrued capital expenditures approximate the percentage of revenues as set forth in the company’s outlook. Material assumptions related to the company’s effective tax rate on adjusted earnings outlook are its ability toachieve its adjusted EBITDA target; the mix of taxing jurisdictions where the company recognized pre-tax profit or losses in 2023 does not significantly change; no unexpected changes in tax laws or treatieswithin the jurisdictions where the company operates; significant gains that will prevent the imposition of certain minimum taxes; no significant charges or benefits from the finalization of prior tax years; depreciation and amortization ofinternally developed computer software as set forth in the company’s outlook; and interest expense as set forth in the company’s outlook.
Materialrisks related to the company’s revenue outlook and 2025-2026 financial framework are that ongoing geopolitical instability and uncertainty regarding interest rates and inflation, continue to impact the global economy. The severity and durationof any one, or a combination, of these conditions could impact the global economy and lead to lower demand for our products and services (beyond our assumption that these disruptions will cause periods of volatility); uncertainty in the legalregulatory regime relating to AI has made it difficult for the company to predict the risks associated with the use of AI in its businesses and products. Future legislation may make it harder for the company to conduct its business using AI, lead toregulatory fines or penalties, require it to change its product offerings or business practices or prevent or limit its use of AI; demand for the company’s products and services could be reduced by changes in customer buying patterns or in itsinability to execute on key product design or customer support initiatives; competitive pricing actions and product innovation could impact the company’s revenues; and the company’s sales, commercial simplification and product initiativesmay be insufficient to retain customers or generate new sales. Material risks related to the company’s adjusted EBITDA margin outlook and 2025-2026 financial framework are the same as the risks above related to the revenue outlook; higher thanexpected inflation may lead to greater than anticipated increase in labor costs, third-party supplier costs and costs of print materials; and acquisition and disposal activity may dilute the company’s adjusted EBITDA margin. Material risksrelated to the company’s free cash flow outlook are the same as the risks above related to the revenue and adjusted EBITDA margin outlook; a weaker macroeconomic environment could negatively impact working capital performance, including theability of the company’s customers to pay;
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 12 of 22
accrued capital expenditures may be higher than currently expected; and the timing and amount of tax payments togovernments may differ from the company’s expectations. Material risks related to the company’s effective tax rate on adjusted earnings outlook and 2025-2026 financial framework are the same as the risks above related to adjusted EBITDA; amaterial change in the geographical mix of the company’s pre-tax profits and losses; a material change in current tax laws or treaties to which the company is subject, and did not expect; and depreciationand amortization of internally developed computer software as well as interest expense may be significantly higher or lower than expected.
The company hasprovided an outlook and 2025-2026 financial framework 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 unduereliance 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<br> <br>Gehna Singh Kareckas<br><br><br>Senior Director, Corporate Affairs<br> <br>+1 613 979 4272<br><br><br>gehna.singhkareckas@tr.com | INVESTORS<br> <br>Gary Bisbee, CFA<br><br><br>Head of Investor Relations<br> <br>+1 646 540 3249<br><br><br>gary.bisbee@tr.com |
|---|
Thomson Reuters will webcast a discussion of its fourth-quarter and full-year 2023 results and its 2024 business outlook and2025-2026 financial framework 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 Reports Fourth-Quarter and Full-Year 2023 Results
Page 13 of 22
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, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| CONTINUING OPERATIONS | ||||||||||||
| Revenues | $ | 1,815 | $ | 1,765 | $ | 6,794 | $ | 6,627 | ||||
| Operating expenses | (1,112 | ) | (1,135 | ) | (4,134 | ) | (4,280 | ) | ||||
| Depreciation | (29 | ) | (30 | ) | (116 | ) | (140 | ) | ||||
| Amortization of computer software | (135 | ) | (131 | ) | (512 | ) | (485 | ) | ||||
| Amortization of other identifiable intangible assets | (25 | ) | (23 | ) | (97 | ) | (99 | ) | ||||
| Other operating gains, net | 44 | 185 | 397 | 211 | ||||||||
| Operating profit | 558 | 631 | 2,332 | 1,834 | ||||||||
| Finance costs, net: | ||||||||||||
| Net interest expense | (31 | ) | (51 | ) | (152 | ) | (196 | ) | ||||
| Other finance (costs) income | (117 | ) | (418 | ) | (192 | ) | 444 | |||||
| Income before tax and equity method investments | 410 | 162 | 1,988 | 2,082 | ||||||||
| Share of post-tax earnings (losses) in equity method<br>investments | 260 | 120 | 1,075 | (432 | ) | |||||||
| Tax expense | (20 | ) | (103 | ) | (417 | ) | (259 | ) | ||||
| Earnings from continuing operations | 650 | 179 | 2,646 | 1,391 | ||||||||
| Earnings (loss) from discontinued operations, net of tax | 28 | 39 | 49 | (53 | ) | |||||||
| Net earnings | $ | 678 | $ | 218 | $ | 2,695 | $ | 1,338 | ||||
| Earnings attributable to common shareholders | $ | 678 | $ | 218 | $ | 2,695 | $ | 1,338 | ||||
| Earnings per share: | ||||||||||||
| Basic earnings (loss) per share: | ||||||||||||
| From continuing operations | $ | 1.43 | $ | 0.37 | $ | 5.70 | $ | 2.87 | ||||
| From discontinued operations | 0.06 | 0.08 | 0.11 | (0.11 | ) | |||||||
| Basic earnings per share | $ | 1.49 | $ | 0.45 | $ | 5.81 | $ | 2.76 | ||||
| Diluted earnings (loss) per share: | ||||||||||||
| From continuing operations | $ | 1.43 | $ | 0.37 | $ | 5.69 | $ | 2.86 | ||||
| From discontinued operations | 0.06 | 0.08 | 0.11 | (0.11 | ) | |||||||
| Diluted earnings per share | $ | 1.49 | $ | 0.45 | $ | 5.80 | $ | 2.75 | ||||
| Basic weighted-average common shares | 454,510,754 | 478,603,748 | 463,175,043 | 483,885,501 | ||||||||
| Diluted weighted-average common shares | 455,173,945 | 479,516,003 | 463,970,070 | 484,929,605 |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 14 of 22
Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
| December 31, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Assets | ||||||
| Cash and cash equivalents | $ | 1,298 | $ | 1,069 | ||
| Trade and other receivables | 1,122 | 1,069 | ||||
| Other financial assets | 66 | 204 | ||||
| Prepaid expenses and other current assets | 435 | 469 | ||||
| Current assets | 2,921 | 2,811 | ||||
| Property and equipment, net | 447 | 414 | ||||
| Computer software, net | 1,236 | 935 | ||||
| Other identifiable intangible assets, net | 3,165 | 3,219 | ||||
| Goodwill | 6,719 | 5,869 | ||||
| Equity method investments | 2,030 | 6,199 | ||||
| Other financial assets | 444 | 527 | ||||
| Other non-current assets | 618 | 619 | ||||
| Deferred tax | 1,104 | 1,118 | ||||
| Total assets | $ | 18,684 | $ | 21,711 | ||
| Liabilities and equity | ||||||
| Liabilities | ||||||
| Current indebtedness | $ | 372 | $ | 1,647 | ||
| Payables, accruals and provisions | 1,114 | 1,222 | ||||
| Current tax liabilities | 248 | 324 | ||||
| Deferred revenue | 992 | 886 | ||||
| Other financial liabilities | 507 | 812 | ||||
| Current liabilities | 3,233 | 4,891 | ||||
| Long-term indebtedness | 2,905 | 3,114 | ||||
| Provisions and other non-current liabilities | 692 | 691 | ||||
| Other financial liabilities | 237 | 233 | ||||
| Deferred tax | 553 | 897 | ||||
| Total liabilities | 7,620 | 9,826 | ||||
| Equity | ||||||
| Capital | 3,405 | 5,398 | ||||
| Retained earnings | 8,680 | 7,642 | ||||
| Accumulated other comprehensive loss | (1,021 | ) | (1,155 | ) | ||
| Total equity | 11,064 | 11,885 | ||||
| Total liabilities and equity | $ | 18,684 | $ | 21,711 |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 15 of 22
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, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Cash provided by (used in): | ||||||||||||
| Operating activities | ||||||||||||
| Earnings from continuing operations | $ | 650 | $ | 179 | $ | 2,646 | $ | 1,391 | ||||
| Adjustments for: | ||||||||||||
| Depreciation | 29 | 30 | 116 | 140 | ||||||||
| Amortization of computer software | 135 | 131 | 512 | 485 | ||||||||
| Amortization of other identifiable intangible assets | 25 | 23 | 97 | 99 | ||||||||
| Share of post-tax (earnings) losses in equity method<br>investments | (260 | ) | (120 | ) | (1,075 | ) | 432 | |||||
| Net losses (gains) on disposals of businesses and investments | 5 | (188 | ) | (336 | ) | (217 | ) | |||||
| Deferred tax | (19 | ) | 113 | (388 | ) | (80 | ) | |||||
| Other | 110 | 466 | 298 | (276 | ) | |||||||
| Changes in working capital and other items^^ | 40 | 43 | 457 | 8 | ||||||||
| Operating cash flows from continuing operations | 715 | 677 | 2,327 | 1,982 | ||||||||
| Operating cash flows from discontinued operations | (10 | ) | (1 | ) | 14 | (67 | ) | |||||
| Net cash provided by operating activities | 705 | 676 | 2,341 | 1,915 | ||||||||
| Investing activities | ||||||||||||
| Acquisitions, net of cash acquired | (15 | ) | (1 | ) | (1,216 | ) | (191 | ) | ||||
| Proceeds from disposals of businesses and investments | — | 187 | 418 | 216 | ||||||||
| Proceeds from sales of LSEG shares | 31 | 19 | 5,424 | 43 | ||||||||
| Capital expenditures^^ | (132 | ) | (135 | ) | (544 | ) | (595 | ) | ||||
| Other investing activities | 55 | 1 | 137 | 88 | ||||||||
| Taxes paid on sales of LSEG shares and disposals of businesses | (162 | ) | (7 | ) | (705 | ) | (7 | ) | ||||
| Investing cash flows from continuing operations | (223 | ) | 64 | 3,514 | (446 | ) | ||||||
| Investing cash flows from discontinued operations | — | — | (1 | ) | (16 | ) | ||||||
| Net cash (used in) provided by investing activities | (223 | ) | 64 | 3,513 | (462 | ) | ||||||
| Financing activities | ||||||||||||
| Repayments of debt | (600 | ) | — | (600 | ) | — | ||||||
| Net (repayments) borrowings under short-term loan facilities | (513 | ) | 673 | (956 | ) | 1,042 | ||||||
| Payments of lease principal | (14 | ) | (15 | ) | (58 | ) | (65 | ) | ||||
| Payments for return of capital on common shares | — | — | (2,045 | ) | — | |||||||
| Repurchases of common shares | (361 | ) | (584 | ) | (1,079 | ) | (1,282 | ) | ||||
| Dividends paid on preference shares | (1 | ) | (1 | ) | (5 | ) | (3 | ) | ||||
| Dividends paid on common shares | (215 | ) | (207 | ) | (887 | ) | (834 | ) | ||||
| Other financing activities | 2 | 2 | 4 | (14 | ) | |||||||
| Net cash used in financing activities | (1,702 | ) | (132 | ) | (5,626 | ) | (1,156 | ) | ||||
| Translation adjustments | 2 | 2 | 1 | (6 | ) | |||||||
| (Decrease) increase in cash and cash equivalents | (1,218 | ) | 610 | 229 | 291 | |||||||
| Cash and cash equivalents at beginning of period | 2,516 | 459 | 1,069 | 778 | ||||||||
| Cash and cash equivalents at end of period | $ | 1,298 | $ | 1,069 | $ | 1,298 | $ | 1,069 |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 16 of 22
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 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Earnings from continuing operations | $ | 650 | $ | 179 | $ | 2,646 | $ | 1,391 | ||||
| Adjustments to remove: | ||||||||||||
| Tax expense | 20 | 103 | 417 | 259 | ||||||||
| Other finance costs (income) | 117 | 418 | 192 | (444 | ) | |||||||
| Net interest expense | 31 | 51 | 152 | 196 | ||||||||
| Amortization of other identifiable intangible assets | 25 | 23 | 97 | 99 | ||||||||
| Amortization of computer software | 135 | 131 | 512 | 485 | ||||||||
| Depreciation | 29 | 30 | 116 | 140 | ||||||||
| EBITDA | $ | 1,007 | $ | 935 | $ | 4,132 | $ | 2,126 | ||||
| Adjustments to remove: | ||||||||||||
| Share of post-tax (earnings) losses in equity method<br>investments | (260 | ) | (120 | ) | (1,075 | ) | 432 | |||||
| Other operating gains, net | (44 | ) | (185 | ) | (397 | ) | (211 | ) | ||||
| Fair value adjustments* | 4 | 3 | 18 | (18 | ) | |||||||
| Adjusted EBITDA^(1)^ | $ | 707 | **** | $ | 633 | **** | $ | 2,678 | **** | $ | 2,329 | **** |
| Adjusted EBITDA margin^(1)^ | **** | 38.9 | % | **** | 35.9 | % | **** | 39.3 | % | **** | 35.1 | % |
| * | Fair value adjustments primarily represent gains or losses on intercompany balances that arise in the ordinary courseof business due to changes in foreign currency exchange rates, which are a component of operating expenses, as well as adjustments related to acquired deferred revenue. | |||||||||||
| --- | --- |
Thomson Reuters Corporation
Reconciliationof Net Cash Provided By Operating Activities to Free Cash Flow^(1)^
(millions of U.S. dollars)
(unaudited)
| Three Months Ended | Year Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Net cash provided by operating activities | $ | 705 | $ | 676 | $ | 2,341 | $ | 1,915 | ||||
| Capital expenditures | (132 | ) | (135 | ) | (544 | ) | (595 | ) | ||||
| Other investing activities | 55 | 1 | 137 | 88 | ||||||||
| Payments of lease principal | (14 | ) | (15 | ) | (58 | ) | (65 | ) | ||||
| Dividends paid on preference shares | (1 | ) | (1 | ) | (5 | ) | (3 | ) | ||||
| Free cash flow^(1)^ | $ | 613 | **** | $ | 526 | **** | $ | 1,871 | **** | $ | 1,340 | **** |
Thomson Reuters Corporation
Reconciliation of Capital Expenditures to Accrued Capital Expenditures^(1)^
(millions of U.S. dollars)
(unaudited)
| Year EndedDecember 31, | |||
|---|---|---|---|
| 2023 | |||
| Capital expenditures | $ | 544 | |
| Remove: IFRS adjustment to cash basis | (12 | ) | |
| Accrued capital expenditures ^(1)^ | $ | 532 | **** |
| Accrued capital expenditures as a percentage ofrevenues^(1)^ | **** | 7.8 | % |
| (1) | Refer to page 22 for additional information on non-IFRS financial measures.<br> | ||
| --- | --- |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 17 of 22
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<br>December 31, | Year Ended<br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023^^ | 2022^^ | 2023^^ | 2022^^ | |||||||||
| Net earnings | $ | 678 | $ | 218 | $ | 2,695 | $ | 1,338 | ||||
| Adjustments to remove: | ||||||||||||
| Fair value adjustments* | 4 | 3 | 18 | (18 | ) | |||||||
| Amortization of acquired computer software | 24 | 12 | 72 | 39 | ||||||||
| Amortization of other identifiable intangible assets | 25 | 23 | 97 | 99 | ||||||||
| Other operating gains, net | (44 | ) | (185 | ) | (397 | ) | (211 | ) | ||||
| Interest benefit impacting comparability^(2)^ | — | — | (12 | ) | — | |||||||
| Other finance costs (income) | 117 | 418 | 192 | (444 | ) | |||||||
| Share of post-tax (earnings) losses in equity method<br>investments | (260 | ) | (120 | ) | (1,075 | ) | 432 | |||||
| Tax on above items^(1)^ | 38 | (24 | ) | 265 | (30 | ) | ||||||
| Tax items impacting comparability^(1)(2)^ | (108 | ) | 60 | (172 | ) | 15 | ||||||
| (Earnings) loss from discontinued operations, net of tax | (28 | ) | (39 | ) | (49 | ) | 53 | |||||
| Interim period effective tax rate normalization^(1)^ | 1 | (3 | ) | — | — | |||||||
| Dividends declared on preference shares | (1 | ) | (1 | ) | (5 | ) | (3 | ) | ||||
| Adjusted earnings^(1)^ | $ | 446 | **** | $ | 362 | **** | $ | 1,629 | **** | $ | 1,270 | **** |
| Adjusted EPS^(1)^ | $ | 0.98 | **** | $ | 0.75 | **** | $ | 3.51 | **** | $ | 2.62 | **** |
| Total change | 31 | % | 34 | % | ||||||||
| Foreign currency | 3 | % | 2 | % | ||||||||
| Constant currency | 28 | % | 32 | % | ||||||||
| Diluted weighted-average common shares (millions) | 455.2 | 479.5 | 464.0 | 484.9 | ||||||||
| Reconciliation of Effective Tax Rate on Adjusted Earnings^(1)^ | Year-endedDecember 31, | |||||||||||
| --- | --- | --- | --- | |||||||||
| 2023 | ||||||||||||
| Adjusted earnings | $ | 1,629 | **** | |||||||||
| Plus: Dividends declared on preference shares | 5 | |||||||||||
| Plus: Tax expense on adjusted earnings | 324 | |||||||||||
| Pre-Tax Adjusted earnings | $ | 1,958 | **** | |||||||||
| IFRS Tax expense | $ | 417 | **** | |||||||||
| Remove tax related to: | ||||||||||||
| Amortization of acquired computer software | 17 | |||||||||||
| Amortization of other identifiable intangible assets | 22 | |||||||||||
| Share of post-tax earnings in equity method investments**** | (253 | ) | ||||||||||
| Other finance costs | 31 | |||||||||||
| Other operating gains, net | (81 | ) | ||||||||||
| Other items | (1 | ) | ||||||||||
| Subtotal – Remove tax expense on pre-tax items removed from<br>adjusted earnings | (265 | ) | ||||||||||
| Remove: Tax items impacting comparability | 172 | |||||||||||
| Total: Remove all items impacting comparability | (93 | ) | ||||||||||
| Tax expense on adjusted earnings | $ | 324 | **** | |||||||||
| Effective tax rate on adjusted earnings | **** | 16.5 | % | |||||||||
| * | Fair value adjustments primarily represent gains or losses on intercompany balances that arise in the ordinary courseof business due to changes in foreign currency exchange rates, which are a component of operating expenses, as well as adjustments related to acquired deferred revenue. | |||||||||||
| --- | --- | |||||||||||
| (1) | Refer to page 22 for additional information on non-IFRS financial measures.<br> | |||||||||||
| --- | --- | |||||||||||
| (2) | The year ended December 31, 2023, included the release of tax and interest reserves due to the expiration of statutes<br>of limitation. | |||||||||||
| --- | --- |
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 18 of 22
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 Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | Change | ||||||||||||||||||||
| 2023 | 2022 | Total | ForeignCurrency | SUBTOTALConstantCurrency | Net<br>Acquisitions/(Divestitures) | Organic | |||||||||||||||
| Total Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 700 | $ | 704 | -1 | % | 0 | % | -1 | % | -7 | % | 7 | % | |||||||
| Corporates | 402 | 379 | 6 | % | 1 | % | 5 | % | -1 | % | 7 | % | |||||||||
| Tax & Accounting Professionals | 344 | 326 | 6 | % | -3 | % | 9 | % | -1 | % | 10 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 1,446 | 1,409 | 3 | % | -1 | % | 3 | % | -4 | % | 8 | % | |||||||||
| Reuters News | 220 | 198 | 11 | % | 1 | % | 10 | % | 2 | % | 9 | % | |||||||||
| Global Print | 154 | 162 | -6 | % | -1 | % | -5 | % | -1 | % | -4 | % | |||||||||
| Eliminations/Rounding | (5 | ) | (4 | ) | |||||||||||||||||
| Revenues | $ | 1,815 | **** | $ | 1,765 | **** | **** | 3 | % | **** | 0 | % | **** | 3 | % | **** | -3 | % | **** | 7 | % |
| Recurring Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 674 | $ | 664 | 2 | % | 0 | % | 2 | % | -5 | % | 7 | % | |||||||
| Corporates | 358 | 337 | 6 | % | 1 | % | 6 | % | -1 | % | 7 | % | |||||||||
| Tax & Accounting Professionals | 305 | 292 | 5 | % | -3 | % | 8 | % | -2 | % | 10 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 1,337 | 1,293 | 3 | % | -1 | % | 4 | % | -3 | % | 8 | % | |||||||||
| Reuters News | 157 | 153 | 3 | % | -1 | % | 3 | % | 1 | % | 2 | % | |||||||||
| Eliminations/Rounding | (5 | ) | (4 | ) | |||||||||||||||||
| Total Recurring Revenues | $ | 1,489 | **** | $ | 1,442 | **** | **** | 3 | % | **** | -1 | % | **** | 4 | % | **** | -3 | % | **** | 7 | % |
| Transactions Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 26 | $ | 40 | -36 | % | 3 | % | -39 | % | -41 | % | 2 | % | |||||||
| Corporates | 44 | 42 | 6 | % | 2 | % | 4 | % | -3 | % | 7 | % | |||||||||
| Tax & Accounting Professionals | 39 | 34 | 15 | % | -7 | % | 22 | % | 8 | % | 14 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 109 | 116 | -6 | % | 0 | % | -6 | % | -14 | % | 8 | % | |||||||||
| Reuters News | 63 | 45 | 39 | % | 5 | % | 34 | % | 3 | % | 31 | % | |||||||||
| Total Transactions Revenues | $ | 172 | **** | $ | 161 | **** | **** | 7 | % | **** | 1 | % | **** | 6 | % | **** | -10 | % | **** | 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 22 for additional information on non-IFRS financial measures.<br> |
|---|
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 19 of 22
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 Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | Change | ||||||||||||||||||||
| 2023 | 2022 | Total | ForeignCurrency | SUBTOTALConstantCurrency | Net<br>Acquisitions/(Divestitures) | Organic | |||||||||||||||
| Total Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 2,807 | $ | 2,803 | 0 | % | 0 | % | 0 | % | -6 | % | 6 | % | |||||||
| Corporates | 1,620 | 1,536 | 5 | % | 0 | % | 5 | % | -2 | % | 7 | % | |||||||||
| Tax & Accounting Professionals | 1,058 | 986 | 7 | % | -2 | % | 9 | % | -1 | % | 10 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 5,485 | 5,325 | 3 | % | 0 | % | 4 | % | -4 | % | 7 | % | |||||||||
| Reuters News | 769 | 733 | 5 | % | 0 | % | 5 | % | 1 | % | 4 | % | |||||||||
| Global Print | 562 | 592 | -5 | % | -1 | % | -4 | % | -1 | % | -3 | % | |||||||||
| Eliminations/Rounding | (22 | ) | (23 | ) | |||||||||||||||||
| Revenues | $ | 6,794 | **** | $ | 6,627 | **** | **** | 3 | % | **** | 0 | % | **** | 3 | % | **** | -3 | % | **** | 6 | % |
| Recurring Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 2,674 | $ | 2,631 | 2 | % | 0 | % | 2 | % | -4 | % | 6 | % | |||||||
| Corporates | 1,373 | 1,305 | 5 | % | 0 | % | 5 | % | -2 | % | 8 | % | |||||||||
| Tax & Accounting Professionals | 808 | 799 | 1 | % | -2 | % | 3 | % | -6 | % | 9 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 4,855 | 4,735 | 3 | % | 0 | % | 3 | % | -4 | % | 7 | % | |||||||||
| Reuters News | 625 | 612 | 2 | % | 0 | % | 3 | % | 1 | % | 2 | % | |||||||||
| Eliminations/Rounding | (22 | ) | (23 | ) | |||||||||||||||||
| Total Recurring Revenues | $ | 5,458 | **** | $ | 5,324 | **** | **** | 3 | % | **** | 0 | % | **** | 3 | % | **** | -3 | % | **** | 6 | % |
| Transactions Revenues | |||||||||||||||||||||
| Legal Professionals | $ | 133 | $ | 172 | -23 | % | 0 | % | -23 | % | -30 | % | 7 | % | |||||||
| Corporates | 247 | 231 | 7 | % | 0 | % | 7 | % | 1 | % | 5 | % | |||||||||
| Tax & Accounting Professionals | 250 | 187 | 34 | % | -3 | % | 37 | % | 20 | % | 17 | % | |||||||||
| “Big 3” Segments Combined^(1)^ | 630 | 590 | 7 | % | -1 | % | 8 | % | -2 | % | 10 | % | |||||||||
| Reuters News | 144 | 121 | 19 | % | 4 | % | 14 | % | 1 | % | 13 | % | |||||||||
| Total Transactions Revenues | $ | 774 | **** | $ | 711 | **** | **** | 9 | % | **** | 0 | % | **** | 9 | % | **** | -2 | % | **** | 10 | % |
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 22 for additional information on non-IFRS financial measures.<br> |
|---|
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 20 of 22
Thomson Reuters Corporation
Reconciliation of Changes in Adjusted EBITDA^(1)^ and Related Margin^(1)^ to Changes on a Constant Currency^^Basis^(1)^
(millions of U.S. dollars, except for margins)
(unaudited)
| Three Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | Change | ||||||||||||||
| 2023 | 2022 | Total | Foreign<br>Currency | Constant<br>Currency | |||||||||||
| Adjusted EBITDA^(1)^ | |||||||||||||||
| Legal Professionals | $ | 298 | $ | 294 | 1 | % | 3 | % | -2 | % | |||||
| Corporates | 138 | 135 | 3 | % | 1 | % | 1 | % | |||||||
| Tax & Accounting Professionals | 188 | 189 | -1 | % | -2 | % | 1 | % | |||||||
| “Big 3” Segments Combined^(1)^ | 624 | 618 | 1 | % | 1 | % | 0 | % | |||||||
| Reuters News | 61 | 40 | 56 | % | 4 | % | 52 | % | |||||||
| Global Print | 55 | 59 | -5 | % | 3 | % | -8 | % | |||||||
| Corporate costs | (33 | ) | (84 | ) | n/a | n/a | n/a | ||||||||
| Adjusted EBITDA | $ | 707 | **** | $ | 633 | **** | **** | 12 | % | **** | 2 | % | **** | 9 | % |
| Adjusted EBITDA Margin^(1)^ | |||||||||||||||
| Legal Professionals | 42.5 | % | 41.7 | % | 80bp | 130bp | -50bp | ||||||||
| Corporates | 34.5 | % | 35.7 | % | -120bp | 20bp | -140bp | ||||||||
| Tax & Accounting Professionals | 54.6 | % | 58.1 | % | -350bp | 80bp | -430bp | ||||||||
| “Big 3” Segments Combined^(1)^ | 43.1 | % | 43.9 | % | -80bp | 70bp | -150bp | ||||||||
| Reuters News | 27.9 | % | 19.8 | % | 810bp | 90bp | 720bp | ||||||||
| Global Print | 36.4 | % | 36.1 | % | 30bp | 130bp | -100bp | ||||||||
| Adjusted EBITDA margin | **** | 38.9 | % | **** | 35.9 | % | **** | 300bp | **** | **** | 90bp | **** | **** | 210bp | **** |
Thomson Reuters Corporation
Reconciliation of Changes in Adjusted EBITDA^(1)^ and Related Margin^(1)^ to Changes on a Constant Currency^^Basis^(1)^
(millions of U.S. dollars, except for margins)
(unaudited)
| Year Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | Change | ||||||||||||||
| 2023 | 2022 | Total | Foreign<br>Currency | Constant<br>Currency | |||||||||||
| Adjusted EBITDA^(1)^ | |||||||||||||||
| Legal Professionals | $ | 1,299 | $ | 1,227 | 6 | % | 1 | % | 5 | % | |||||
| Corporates | 619 | 578 | 7 | % | 0 | % | 7 | % | |||||||
| Tax & Accounting Professionals | 490 | 451 | 8 | % | -1 | % | 10 | % | |||||||
| “Big 3” Segments Combined^(1)^ | 2,408 | 2,256 | 7 | % | 0 | % | 6 | % | |||||||
| Reuters News | 172 | 154 | 12 | % | 7 | % | 5 | % | |||||||
| Global Print | 213 | 212 | 1 | % | 1 | % | 0 | % | |||||||
| Corporate costs | (115 | ) | (293 | ) | n/a | n/a | n/a | ||||||||
| Adjusted EBITDA | $ | 2,678 | **** | $ | 2,329 | **** | **** | 15 | % | **** | 1 | % | **** | 14 | % |
| Adjusted EBITDA Margin^(1)^ | |||||||||||||||
| Legal Professionals | 46.2 | % | 43.8 | % | 240bp | 50bp | 190bp | ||||||||
| Corporates | 38.1 | % | 37.6 | % | 50bp | 0bp | 50bp | ||||||||
| Tax & Accounting Professionals | 45.8 | % | 45.8 | % | 0bp | 30bp | -30bp | ||||||||
| “Big 3” Segments Combined^(1)^ | 43.8 | % | 42.4 | % | 140bp | 30bp | 110bp | ||||||||
| Reuters News | 22.4 | % | 21.0 | % | 140bp | 140bp | 0bp | ||||||||
| Global Print | 38.0 | % | 35.7 | % | 230bp | 60bp | 170bp | ||||||||
| Adjusted EBITDA margin | **** | 39.3 | % | **** | 35.1 | % | **** | 420bp | **** | **** | 40bp | **** | **** | 380bp | **** |
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 22 for additional information on non-IFRS financial measures.<br> |
|---|
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 21 of 22
Reconciliation of adjusted EBITDA margin^(1)^
To compute segment and consolidated adjusted EBITDA margin, we exclude fair value adjustments related to acquired deferred revenue from our IFRS revenues. The chart below reconciles IFRS revenues to revenues used in the calculation of adjusted EBITDA margin, which excludes fair value adjustments related to acquired deferred revenue.
| Three months ended December 31,2023 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| IFRS revenues | Remove fair valueadjustments toacquired deferredrevenue | Revenues excludingfair valueadjustments toacquired deferredrevenue | Adjusted EBITDA | Adjusted EBITDAMargin | ||||||||||
| Legal Professionals | $ | 700 | $ | 1 | $ | 701 | $ | 298 | 42.5 | % | ||||
| Corporates | 402 | — | 402 | 138 | 34.5 | % | ||||||||
| Tax & Accounting Professionals | 344 | — | 344 | 188 | 54.6 | % | ||||||||
| “Big 3” Segments Combined | 1,446 | 1 | 1,447 | 624 | 43.1 | % | ||||||||
| Reuters News | 220 | — | 220 | 61 | 27.9 | % | ||||||||
| Global Print | 154 | — | 154 | 55 | 36.4 | % | ||||||||
| Eliminations/ Rounding | (5 | ) | — | (5 | ) | — | n/a | |||||||
| Corporate costs | — | — | — | (33 | ) | n/a | ||||||||
| Consolidated totals | $ | 1,815 | $ | 1 | $ | 1,816 | $ | 707 | 38.9 | % | ||||
| Year ended December 31,2023 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| IFRS revenues | Remove fair valueadjustments toacquired deferredrevenue | Revenues excludingfair valueadjustments toacquired deferredrevenue | Adjusted EBITDA | Adjusted EBITDAMargin | ||||||||||
| Legal Professionals | $ | 2,807 | $ | 1 | $ | 2,808 | $ | 1,299 | 46.2 | % | ||||
| Corporates | 1,620 | 3 | 1,623 | 619 | 38.1 | % | ||||||||
| Tax & Accounting Professionals | 1,058 | 11 | 1,069 | 490 | 45.8 | % | ||||||||
| “Big 3” Segments Combined | 5,485 | 15 | 5,500 | 2,408 | 43.8 | % | ||||||||
| Reuters News | 769 | 1 | 770 | 172 | 22.4 | % | ||||||||
| Global Print | 562 | — | 562 | 213 | 38.0 | % | ||||||||
| Eliminations/ Rounding | (22 | ) | — | (22 | ) | — | n/a | |||||||
| Corporate costs | — | — | — | (115 | ) | n/a | ||||||||
| Consolidated totals | $ | 6,794 | $ | 16 | $ | 6,810 | $ | 2,678 | 39.3 | % |
Margins are computed using whole dollars, as a result, margins calculated from reported amounts may differ from those presented due torounding.
n/a: not applicable
| (1) | Refer to page 22 for additional information on non-IFRS financial measures.<br> |
|---|
Thomson Reuters Reports Fourth-Quarter and Full-Year 2023 Results
Page 22 of 22
| Non-IFRS Financial Measures | Definition | Why Useful to the Company and Investors |
|---|---|---|
| Adjusted EBITDA and the related<br>margin | Represents earnings or losses from continuing operations before tax expense or benefit, net<br>interest expense, other finance costs or income, depreciation, amortization of software and other identifiable intangible assets, Thomson Reuters share of post-tax earnings or losses in equity method<br>investments, other operating gains and losses, certain asset impairment charges and fair value adjustments, including those related to acquired deferred revenue.<br> <br><br><br><br>The related margin is adjusted EBITDA expressed as a percentage of revenues. For purposes of this calculation, revenues are before fair value adjustments to acquired<br>deferred revenue. | Provides a consistent basis to evaluate<br>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 a valuation metric, as well as to assess the company’s ability to incur and service<br>debt. |
| Adjusted earnings and adjusted EPS | Net earnings or loss including dividends declared on preference shares but excluding the post-tax impacts of fair value adjustments, including those related to acquired deferred revenue, amortization of acquired intangible assets (attributable to other identifiable intangible assets and acquired<br>computer software), other operating 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,<br>discontinued operations and other items affecting comparability. Acquired intangible assets contribute to the generation of revenues from acquired companies, which are included in our computation of adjusted earnings.<br><br><br><br> <br>The post-tax amount of each item is excluded from adjusted<br>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 attributable to<br>shareholders. | Provides a more comparable basis to<br>analyze earnings.<br> <br><br> <br>These measures are commonly used by shareholders to measure<br>performance. |
| Effective tax rate on adjusted earnings | Adjusted tax expense divided by pre-tax adjusted<br>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 items impacting comparability.<br><br><br><br> <br>In interim periods, we also make an adjustment to reflect income taxes based on the estimated<br>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 Reuters operates. The<br>non-IFRS adjustment reallocates estimated full-year income taxes between interim periods but has no effect on full-year income taxes. | Provides a basis to analyze the<br>effective tax rate associated with adjusted earnings.<br> <br><br> <br>Because the geographical mix of 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 using<br>the expected full-year effective tax rate provides more comparability among interim periods. |
| Free cash flow | Net cash provided by operating activities and other investing activities, less capital expenditures, payments of lease principal and dividends paid on the company’s<br>preference shares. | Helps assess the company’s ability, over the long term, to create value for its shareholders as it represents cash<br>available to repay debt, pay common dividends and fund share repurchases and acquisitions. |
| Changes before the impact of foreign currency or at “constant currency” | The changes in revenues, adjusted EBITDA and the related margin, and adjusted EPS before currency (at constant currency or excluding the effects of currency) are determined<br>by converting the current and equivalent prior period’s local currency results using the same foreign currency exchange rate. | Provides better comparability of business trends from period to period. |
| Changes in revenues computed on an “organic” basis | Represent changes in revenues of the company’s existing businesses at constant currency. The metric excludes the distortive impacts of acquisitions and dispositions<br>from not owning the business in both comparable periods. | Provides further insight into the performance of the company’s existing businesses by excluding distortive impacts<br>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 divided by revenues, where accrued capital expenditures include amounts that remain unpaid at the end of the reporting period. For purposes of<br>this calculation, revenues are before fair value adjustments to acquired deferred revenue. | Reflects the basis on which the company manages capital expenditures for internal budgeting purposes. |
| “Big 3” segments | The company’s combined Legal Professionals, Corporates and Tax & Accounting Professionals segments. All measures reported for the “Big 3” segments<br>are non-IFRS financial measures. | The “Big 3” segments comprised approximately 80% of revenues and represent the core of the company’s<br>business information service product offerings. |
Please refer to reconciliations for the most directly comparable IFRS financial measures.