REG-Thomson Reuters: 1st Quarter Results
03/05/2022 11:45
Thomson Reuters Reports First-Quarter 2022 Results
TORONTO, May 3, 2022 /PRNewswire/ -- Thomson Reuters (TSX/NYSE: TRI) today
reported results for the first quarter ended March 31,
2022:
Logo - https://mma.prnewswire.com/media/13199/THOMSON_REUTERS_LOGO.jpg
* Strong revenue and sales growth continued in the first quarter * Total
company revenue up 6% / organic revenue up 7% * Organic revenue up 7% for the
"Big 3" (Legal Professionals, Corporates and Tax & Accounting Professionals)
* Raised full-year 2022 revenue guidance * Total company revenue forecast
increased to approximately 5.5% from approximately 5.0%
* "Big 3" segments revenue forecast increased to approximately 6.5% from a
range of 6.0% - 6.5%
* No other changes to full-year 2022 outlook, reaffirmed full-year 2023
outlook
* Change Program on track - $305 million run-rate operating expense savings at
quarter-end
"The momentum we saw throughout 2021 continued to build in the first quarter
of 2022, with both sales and revenue exceeding our expectations. The strong
start to the year gives us confidence we are on the right path to achieve our
2022 and 2023 targets," said Steve Hasker, President and CEO of Thomson
Reuters.
Mr. Hasker added, "Our businesses are benefiting from significant prevailing
tailwinds driven by a step change in the complexity of compliance in our
legal, tax, and risk-related markets. The resulting need for trusted, accurate
and actionable content and technology plays to our strengths. Against this
backdrop, we will continue to invest in our businesses, our employees and our
customers' success as we work to translate our current momentum into
sustainable long-term value creation."
Consolidated Financial Highlights - Three Months Ended March 31
Three Months Ended March 31, (Millions of U.S. dollars, except for adjusted EBITDA margin and EPS) (unaudited)
IFRS Financial Measures ((1)) 2022 2021 Change Change at
Constant
Currency
Revenues $1,674 $1,580 6%
Operating profit $414 $387 7%
Diluted earnings per share (EPS) $2.06 $10.13 -80%
Net cash provided by operating activities $275 $380 -28%
Non-IFRS Financial Measures ((1))
Revenues $1,674 $1,580 6% 7%
Adjusted EBITDA $600 $558 7% 7%
Adjusted EBITDA margin 35.8% 35.3% 50bp 20bp
Adjusted EPS $0.66 $0.58 14% 14%
Free cash flow $86 $239 -64%
(1) In addition to results reported in accordance with International Financial Reporting Standards (IFRS), the company uses certain non-IFRS
financial measures as supplemental indicators of its operating performance and financial position. See the "Non-IFRS Financial
Measures" section and the tables appended to this news release for additional information on these and other non-IFRS financial
measures, including how they are defined and reconciled to the most directly comparable IFRS measures.
Revenues increased 6%, driven by growth across four of the company's five
business segments. Foreign currency had a 1% negative impact on revenues.
* Organic revenues increased 7%, driven by 7% growth in recurring revenues
(78% of total revenues) as well as 8% growth in transactions revenues. Global
Print revenues were flat compared to the prior-year period. * Organic growth
of 7% included an approximately 100bp benefit resulting primarily from
transactional revenue that is unlikely to recur at this level and, to a lesser
extent, timing. The company expects organic growth to normalize in the
remainder of the year and be in line with full-year guidance.
* The company's "Big 3" segments (Legal Professionals, Corporates and Tax &
Accounting Professionals) reported organic revenue growth of 7% and
collectively comprised 81% of total revenues.
Operating profit increased 7% as higher revenues more than offset higher
costs, which included investments associated with the company's Change
Program.
* Adjusted EBITDA increased 7% due to the same factors as operating profit.
The related margin increased to 35.8% from 35.3% in the prior-year period.
Investments in the Change Program negatively impacted the first-quarter
adjusted EBITDA margin by 210bp.
Diluted earnings per share (EPS) was $2.06 per share compared to $10.13 per
share in the prior-year period. The current period included a benefit from an
increase in the value of the company's investment in London Stock Exchange
Group (LSEG), while the prior-year period included a gain of approximately
$8.1 billion on the sale of Refinitiv to LSEG.
* Adjusted EPS, which excludes the change in value of the company's LSEG
investment, the gain on the sale of Refinitiv and other adjustments, increased
to $0.66 per share from $0.58 per share in the prior-year period, primarily
due to higher adjusted EBITDA.
Net cash provided by operating activities decreased due to higher payments
associated with the Change Program as well as higher annual incentive plan
bonuses.
* Free cash flow decreased $153 million due to lower cash flows from
operating activities and higher capital expenditures associated with the
Change Program.
Highlights by Customer Segment - Three Months Ended March 31
(Millions of U.S. dollars, except for adjusted EBITDA margins) (unaudited)
Three Months Ended
March 31, Change
2022 2021 ((2)) Total Constant Organic ((1)(3))
Currency ((1))
Revenues
Legal Professionals $698 $668 4% 5% 6%
Corporates 411 382 8% 8% 8%
Tax & Accounting Professionals 253 227 11% 11% 11%
"Big 3" Segments Combined ((1)) 1,362 1,277 7% 7% 7%
Reuters News 176 165 7% 9% 9%
Global Print 142 143 -1% 0% 0%
Eliminations/Rounding (6) (5)
Revenues $1,674 $1,580 6% 7% 7%
Adjusted EBITDA (()(1))
Legal Professionals $305 $279 9% 10%
Corporates 157 145 8% 7%
Tax & Accounting Professionals 122 99 23% 22%
"Big 3" Segments Combined ((1)) 584 523 11% 11%
Reuters News 37 28 31% 23%
Global Print 53 57 -8% -7%
Corporate costs (74) (50) n/a n/a
Adjusted EBITDA $600 $558 7% 7%
Adjusted EBITDA Margin (()(1))
Legal Professionals 43.7% 41.8% 190bp 190bp
Corporates 38.1% 38.0% 10bp -20bp
Tax & Accounting Professionals 48.3% 43.8% 450bp 420bp
"Big 3" Segments Combined ((1)) 42.9% 41.0% 190bp 160bp
Reuters News 21.0% 17.1% 390bp 240bp
Global Print 37.0% 39.9% -290bp -300bp
Adjusted EBITDA margin 35.8% 35.3% 50bp 20bp
(1) See the "Non-IFRS Financial Measures" section and the tables appended to this news release for additional information on these and other non-IFRS financial measures. (2) For comparative purposes, 2021 segment results have been revised to reflect the current period presentation. For additional information, see the "Revision to Prior-Year Segment Results" section of this news release. (3) Computed for revenue growth only. n/a: not applicable
Unless otherwise noted, all revenue growth comparisons by customer segment in
this news release are at constant currency (or exclude the impact of
foreign currency) as Thomson Reuters believes this provides the best basis to
measure their performance.
Legal Professionals
Revenues increased 5% (6% organic) to $698 million.
* Recurring revenues grew 6% (94% of total, all organic), primarily due to
strong performances from the Government business, Westlaw, Practical Law,
FindLaw and the segment's business in Canada and Asia & Emerging Markets.
* Transactions revenues decreased 3% (6% of total, decreased 2% organic).
Adjusted EBITDA increased 9% to $305 million.
* The margin increased to 43.7% from 41.8%, primarily due to higher revenues
and Change Program savings.
Corporates
Revenues increased 8% (all organic) to $411 million. Revenues benefited from
transactional revenue strength that is unlikely to recur at first-quarter
levels.
* Recurring revenues grew 8% (77% of total, all organic) driven by Practical
Law, CLEAR and Indirect Tax.
* Transactions revenues grew 8% (23% of total, all organic), driven by
Confirmation as well as the company's businesses in Latin America and Asia &
Emerging Markets.
Adjusted EBITDA increased 8% to $157 million.
* The margin increased to 38.1% from 38.0%, as higher expenses largely offset
higher revenues.
Tax & Accounting Professionals
Revenues increased 11% (all organic) to $253 million. Revenues benefited from
a change in the year-over-year timing of the U.S. federal tax filing deadlines
for individuals, which returned to April in 2022 compared to the extended
deadline in May 2021. This benefited organic revenues by 150bp in the first
quarter of 2022 and will reverse in the second quarter of 2022.
* Recurring revenues grew 12% (72% of total, all organic), driven by strong
growth from UltraTax and the company's Latin America businesses.
* Transactions revenues increased 10% (28% of total, all organic), primarily
due to the year-over-year timing of the U.S. federal tax filing deadlines for
individuals and audit products.
Adjusted EBITDA increased 23% to $122 million.
* The margin increased to 48.3% from 43.8%, primarily due to higher revenues
and Change Program savings.
The Tax & Accounting Professionals segment is the company's most seasonal
business with approximately 60% of full-year revenues typically generated in
the first and fourth quarters. As a result, the margin performance of this
segment has been generally higher in the first and fourth quarters as costs
are typically incurred in a more linear fashion throughout the year.
Reuters News
Revenues of $176 million increased 9% (all organic), primarily driven by the
Professionals business and the increase in the company's LSEG news agreement.
Adjusted EBITDA increased 31% to $37 million, primarily due to higher
revenues.
Global Print
Revenues were flat compared to the prior-year period, which was better than
the decline that the company expected due to higher third-party revenues for
printing services and the timing of new sales.
Adjusted EBITDA decreased 8% to $53 million.
* The margin decreased to 37.0% from 39.9% due to the dilutive effect of
third-party print revenue.
Corporate Costs
Corporate costs at the adjusted EBITDA level were $74 million and included
$34 million of Change Program costs. Corporate costs were $50 million in the
prior-year period and included $11 million of Change Program costs. Additional
information regarding the Change Program is provided below.
Change Program
In February 2021, the company announced a two-year Change Program to
transition from a holding company to an operating company, and from a content
provider to a content-driven technology company. The company is 15 months into
the program, which is expected to be largely complete by the end of 2022. The
program is projected to require an investment of approximately $600 million
during that time of which $357 million has been invested as of March 31, 2022.
The company continues to anticipate that Change Program spending will be
approximately 60% operating expenses and 40% capital expenditures.
2022 and 2023 Outlook
The company's updated outlook for 2022 and reaffirmed outlook for 2023 (which
is reflected in the table below) incorporates the forecasted impacts
associated with the Change Program, assumes constant currency rates, and
excludes the impact of any future acquisitions or dispositions that may occur
during those periods. Thomson Reuters believes that this type of guidance
provides useful insight into the performance of its businesses.
The company expects its second-quarter 2022 revenue growth rate will be
comparable to its full-year 2022 outlook targets and second-quarter 2022
adjusted EBITDA margin to be approximately 200bp below its full-year 2022
outlook targets.
While the company's first-quarter 2022 performance provides it with increasing
confidence about its outlook, the global economy has recently experienced
substantial disruption due to concerns regarding economic effects associated
with the pandemic, ongoing geopolitical risks and other events and
macroeconomic factors. Any worsening of the global economic or business
environment could impact the company's ability to achieve its outlook.
Updated Full-Year 2022 Outlook
Total Thomson Reuters FY 2022 Outlook 2/23/21 FY 2022 Outlook 2/8/22 FY 2022 Outlook 5/3/22
Total Revenue Growth 4.0% - 5.0% ~ 5% ~ 5.5%
Organic Revenue Growth ((1)) 4.0% - 5.0% ~ 5% ~ 5.5%
Adjusted EBITDA Margin ((1)) 34% - 35% ~ 35% Unchanged
Corporate Costs Core Corporate Costs Change Program Opex $245 - $280 million $120 - $130 million $125 - $150 million $280 - $330 million Unchanged $160 - $200 million Unchanged Unchanged Unchanged
Free Cash Flow ((1)) $1.2 - $1.3 billion ~ $1.3 billion Unchanged
Accrued Capex as % of Revenue ((1)) Change Program Accrued Capex 7.5% - 8.0% $75 - $100 million Unchanged $100 - $140 million Unchanged Unchanged
Depreciation & Amortization of Computer Software $620 - $645 million Unchanged Unchanged
Interest Expense (P&L) $190 - $210 million Unchanged Unchanged
Effective Tax Rate on Adjusted Earnings ((1)) n/a 19% - 21% Unchanged
"Big 3" Segments ((1)) FY 2022 Outlook 2/23/21 FY 2022 Outlook 2/8/22 FY 2022 Outlook 5/3/22
Total Revenue Growth 5.5% - 6.5% 6.0% - 6.5% ~ 6.5%
Organic Revenue Growth 5.5% - 6.5% 6.0% - 6.5% ~ 6.5%
Adjusted EBITDA Margin 41% - 42% ~ 42% Unchanged
(1) Non-IFRS financial measures. See the "Non-IFRS Financial Measures" section below as well as the tables and footnotes appended to this news release for more information.
Reported Full-Year 2021 and Updated Full-Year 2022 – 2023 Outlook
Total Thomson Reuters FY 2021 Reported FY 2022 Outlook Updated FY 2023 Outlook Reaffirmed
Total Revenue Growth 6.1% ~ 5.5% 5.5% - 6.0%
Organic Revenue Growth ((1)) 5.2% ~ 5.5% 5.5% - 6.0%
Adjusted EBITDA Margin ((1)) 31.0% ~ 35% 39% - 40%
Corporate Costs Core Corporate Costs Change Program Opex $325 million $142 million $183 million $280 - $330 million $120 - $130 million $160 - $200 million $110 - $120 million $110 - $120 million $0
Free Cash Flow ((1)) $1.3 billion ~ $1.3 billion $1.9 – $2.0 billion
Accrued Capex as % of Revenue ((1)) Change Program Accrued Capex 8.5% $112 million 7.5% - 8.0% $100 - $140 million 6.0% - 6.5% $0
Depreciation & Amortization of Computer Software $651 million $620 - $645 million $580 - $605 million
Interest Expense (P&L) $196 million $190 - $210 million $190 - $210 million
Effective Tax Rate on Adjusted Earnings ((1)) 13.9% 19% - 21% n/a
"Big 3" Segments ((1)) FY 2021 Reported FY 2022 Outlook Updated FY 2023 Outlook Reaffirmed
Total Revenue Growth 6.9% ~ 6.5% 6.5% - 7.0%
Organic Revenue Growth 6.2% ~ 6.5% 6.5% - 7.0%
Adjusted EBITDA Margin 38.8% ~ 42% 44% – 45%
(1) Non-IFRS financial measures. See the "Non-IFRS Financial Measures" section below as well as the tables and footnotes appended to this news release for more information.
The information in this section is forward-looking. Actual results, which
will include the impact of currency and future acquisitions and dispositions
completed during 2022 and 2023, may differ materially from the company's
outlook. The information in this section should also be read in conjunction
with the section below entitled "Special Note Regarding Forward-Looking
Statements, Material Risks and Material Assumptions."
Dividends and Share Repurchases
In February 2022, the company announced a 10% or $0.16 per share annualized
increase in the dividend to $1.78 per common share, representing the
29(th) consecutive year of dividend increases. A quarterly dividend of $0.445
per share is payable on June 15, 2022 to common shareholders of record as of
May 26, 2022.
The company did not repurchase any of its shares in the first quarter of 2022.
As of May 2, 2022, Thomson Reuters had approximately 487.1 million common
shares outstanding.
LSEG Ownership Interest
In January 2021, Thomson Reuters and private equity funds affiliated with
Blackstone sold Refinitiv to LSEG in an all-share transaction. Thomson Reuters
indirectly owns LSEG shares through an entity that it jointly owns with
Blackstone's consortium and a group of current LSEG and former Refinitiv
senior management.
As of May 2, 2022, Thomson Reuters indirectly owned approximately 72.4 million
LSEG shares which had a market value of approximately $7.2 billion based on
LSEG's closing share price on that day.
Thomson Reuters
Thomson Reuters is a leading provider of business information services. Our
products include highly specialized information-enabled software and tools for
legal, tax, accounting and compliance professionals combined with the world's
most global news service – Reuters. For more information on Thomson Reuters,
visit tr.com
(https://c212.net/c/link/?t=0&l=en&o=3523380-1&h=2056047892&u=http%3A%2F%2Fwww.tr.com%2F&a=tr.com) and
for the latest world news, reuters.com
(https://c212.net/c/link/?t=0&l=en&o=3523380-1&h=462303030&u=http%3A%2F%2Fwww.reuters.com%2F&a=reuters.com).
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its financial statements in accordance with
International Financial Reporting Standards (IFRS), as issued by the
International Accounting Standards Board (IASB).
This news release includes certain non-IFRS financial measures, which include
ratios that incorporate one or more non-IFRS financial measures, such as
adjusted EBITDA and the related margin (other than at the customer segment
level), free cash flow, adjusted EPS and the effective tax rate on adjusted
EPS, accrued capital expenditures expressed as a percentage of revenues,
selected measures excluding the impact of foreign currency, changes in
revenues computed on an organic basis as well as all financial measures for
the "Big 3". Thomson Reuters uses these non-IFRS financial measures as
supplemental indicators of its operating performance and financial position as
well as for internal planning purposes and the company's business outlook.
Additionally, Thomson Reuters uses non-IFRS measures as the basis for
management incentive programs. These measures do not have any standardized
meanings prescribed by IFRS and therefore are unlikely to be comparable to the
calculation of similar measures used by other companies and should not be
viewed as alternatives to measures of financial performance calculated in
accordance with IFRS. Non-IFRS financial measures are defined and reconciled
to the most directly comparable IFRS measures in the appended tables.
The company's outlook contains various non-IFRS financial measures. The
company believes that providing reconciliations of forward-looking non-IFRS
financial measures in its outlook would be potentially misleading and not
practical due to the difficulty of projecting items that are not reflective of
ongoing operations in any future period. The magnitude of these items may be
significant. Consequently, for outlook purposes only, the company is unable to
reconcile these non-IFRS measures to the most directly comparable IFRS
measures because it cannot predict, with reasonable certainty, the 2022 and
2023 impacts of changes in foreign exchange rates which impact (i) the
translation of its results reported at average foreign currency rates for the
year, and (ii) other finance income or expense related to intercompany
financing arrangements and foreign exchange contracts. Additionally, the
company cannot reasonably predict (i) its share of post-tax earnings (losses)
in equity method investments, which is subject to changes in the stock price
of LSEG or (ii) the occurrence or amount of other operating gains and losses
that generally arise from business transactions that the company does not
currently anticipate.
ROUNDING
Other than EPS, the company reports its results in millions of U.S. dollars,
but computes percentage changes and margins using whole dollars to be more
precise. As a result, percentages and margins calculated from reported amounts
may differ from those presented, and growth components may not total due to
rounding.
REVISION TO PRIOR-YEAR SEGMENT RESULTS
In the first quarter of 2022, the company made two changes to its segment
reporting to reflect how it currently manages its businesses. The changes
(i) reflect the transfer of certain revenues from its Corporates business to
its Tax & Accounting Professionals business where they are better aligned; and
(ii) record intercompany revenue in Reuters News for content-related services
that it provides to Legal Professionals, Corporates and Tax & Accounting
Professionals. Previously, these services had been reported as a transfer of
expense from Reuters News to these businesses. These changes impact the
financial results of the company's segments, but do not change the company's
consolidated financial results. The table below summarizes the changes to the
company's first-quarter 2021 results.
Three Months Ended March 31, 2021
(millions of U.S. dollars) As Reported Adjustments As Revised
Revenues
Legal Professionals $668 - $668
Corporates 384 $(2) 382
Tax & Accounting Professionals 225 2 227
"Big 3" Segments Combined ((1)) 1,277 - 1,277
Reuters News 160 5 165
Global Print 143 - 143
Eliminations/Rounding - (5) (5)
Revenues $1,580 - $1,580
Adjusted EBITDA ((1))
Legal Professionals $279 - $279
Corporates 146 $(1) 145
Tax & Accounting Professionals 98 1 99
"Big 3" Segments Combined ((1)) 523 - 523
Reuters News 28 - 28
Global Print 57 - 57
Corporate costs (50) - (50)
Adjusted EBITDA $558 - $558
(1) See "Non-IFRS Financial Measures" section and the tables appended to this news release for additional information on these and other non-IFRS financial measures.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL RISKS AND MATERIAL
ASSUMPTIONS
Certain statements in this news release, including, but not limited to,
statements in Mr. Hasker's comments and the "Change Program," "2022 and 2023
Outlook" and "LSEG Ownership Interest" sections, are forward-looking. The
words "will", "expect", "believe", "target", "estimate", "could", "should",
"intend", "predict", "project" and similar expressions identify
forward-looking statements. While the company believes that it has a
reasonable basis for making forward-looking statements in this news release,
they are not a guarantee of future performance or outcomes and there is no
assurance that any of the other events described in any forward-looking
statement will materialize. Forward-looking statements are subject to a number
of risks, uncertainties and assumptions that could cause actual results or
events to differ materially from current expectations. Many of these risks,
uncertainties and assumptions are beyond the company's control and the effects
of them can be difficult to predict.
Some of the material risk factors that could cause actual results or events to
differ materially from those expressed in or implied by forward-looking
statements in this news release include, but are not limited to, those
discussed on pages 17-30 in the "Risk Factors" section of the company's 2021
annual report. These and other risk factors are discussed in materials that
Thomson Reuters from time to time files with, or furnishes to, the Canadian
securities regulatory authorities and the U.S. Securities and Exchange
Commission (SEC). Thomson Reuters annual and quarterly reports are also
available in the "Investor Relations" section of tr.com
(https://c212.net/c/link/?t=0&l=en&o=3523380-1&h=3754465458&u=http%3A%2F%2Fwww.thomsonreuters.com%2F&a=tr.com).
The company's business outlook is based on information currently available to
the company and is based on various external and internal assumptions made by
the company in light of its experience and perception of historical trends,
current conditions and expected future developments, as well as other factors
that the company believes are appropriate under the circumstances. Material
assumptions and material risks may cause actual performance to differ from the
company's expectations underlying its business outlook. For a discussion of
material assumptions and material risks related to the company's 2022 and 2023
outlook, please see pages 62-63 of the company's 2021 annual report. Material
assumptions and material risks related to the company's outlook will also be
included in the company's first-quarter management's discussion and analysis
for the period ended March 31, 2022, which is expected to be filed shortly.
The company's quarterly MD&A and annual report are filed with, or furnished
to, the Canadian securities regulatory authorities and the U.S. SEC and are
also available in the "Investor Relations" section of tr.com
(https://c212.net/c/link/?t=0&l=en&o=3523380-1&h=1800084406&u=http%3A%2F%2Fwww.tr.com%2F&a=%C2%A0tr.com).
The company has provided an outlook for the purpose of presenting information
about current expectations for the periods presented. This information may not
be appropriate for other purposes. You are cautioned not to place undue
reliance on forward-looking statements which reflect expectations only as of
the date of this news release.
Except as may be required by applicable law, Thomson Reuters disclaims any
obligation to update or revise any forward-looking statements.
CONTACTS
MEDIA Melissa Cassar Head of Commercial Communications & Corporate Affairs +1 437 388 3619 melissa.cassar@tr.com INVESTORS Gary Bisbee Head of Investor Relations +1 646 540 3249 gary.bisbee@tr.com
Thomson Reuters will webcast a discussion of its first-quarter 2022 results
and its business outlook today beginning at 9:00 a.m. Eastern Daylight Time
(EDT). You can access the webcast by visiting ir.tr.com
(https://c212.net/c/link/?t=0&l=en&o=3523380-1&h=2402279779&u=https%3A%2F%2Fir.thomsonreuters.com%2F&a=ir.tr.com).
An archive of the webcast will be available following the presentation.
Thomson Reuters Corporation
Consolidated Income Statement
(millions of U.S. dollars, except per share data)
(unaudited)
Three Months Ended
March 31,
2022 2021
CONTINUING OPERATIONS
Revenues $1,674 $1,580
Operating expenses (1,081) (1,018)
Depreciation (38) (46)
Amortization of computer software (114) (115)
Amortization of other identifiable intangible assets (26) (31)
Other operating (losses) gains, net (1) 17
Operating profit 414 387
Finance costs, net:
Net interest expense (48) (51)
Other finance income (costs) 94 (6)
Income before tax and equity method investments 460 330
Share of post-tax earnings in equity method investments 798 6,297
Tax expense (240) (1,594)
Earnings from continuing operations 1,018 5,033
(Loss) earnings from discontinued operations, net of tax (11) 3
Net earnings $1,007 $5,036
Earnings attributable to common shareholders $1,007 $5,036
Earnings per share:
Basic earnings (loss) per share:
From continuing operations $2.09 $10.15
From discontinued operations (0.02) -
Basic earnings per share $2.07 $10.15
Diluted earnings (loss) per share:
From continuing operations $2.09 $10.13
From discontinued operations (0.03) -
Diluted earnings per share $2.06 $10.13
Basic weighted-average common shares 486,708,758 495,939,970
Diluted weighted-average common shares 487,513,216 496,938,318
Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
March 31, December 31,
2022 2021 ((1))
Assets
Cash and cash equivalents $654 $778
Trade and other receivables 982 1,057
Other financial assets 49 108
Prepaid expenses and other current assets 445 462
Current assets excluding assets held for sale 2,130 2,405
Assets held for sale 211 48
Current assets 2,341 2,453
Property and equipment, net 479 502
Computer software, net 826 822
Other identifiable intangible assets, net 3,302 3,331
Goodwill 5,882 5,940
Equity method investments 7,545 6,736
Other non-current assets 1,312 1,226
Deferred tax 1,142 1,139
Total assets $22,829 $22,149
Liabilities and equity
Liabilities
Payables, accruals and provisions $1,050 $1,326
Current tax liabilities 211 169
Deferred revenue 824 874
Other financial liabilities 78 175
Current liabilities excluding liabilities associated with assets held for sale 2,163 2,544
Liabilities associated with assets held for sale 158 37
Current liabilities 2,321 2,581
Long-term indebtedness 3,800 3,786
Provisions and other non-current liabilities 881 943
Deferred tax 1,202 1,005
Total liabilities 8,204 8,315
Equity
Capital 5,485 5,496
Retained earnings 9,974 9,149
Accumulated other comprehensive loss (834) (811)
Total equity 14,625 13,834
Total liabilities and equity $22,829 $22,149
(1) Prior-year period amounts have been revised to reflect the current period presentation.
Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
Three Months Ended
March 31,
2022 2021
Cash provided by (used in):
Operating activities
Earnings from continuing operations $1,018 $5,033
Adjustments for:
Depreciation 38 46
Amortization of computer software 114 115
Amortization of other identifiable intangible assets 26 31
Share of post-tax earnings in equity method investments (798) (6,297)
Deferred tax 166 674
Other (39) 30
Changes in working capital and other items (191) 785
Operating cash flows from continuing operations 334 417
Operating cash flows from discontinued operations (59) (37)
Net cash provided by operating activities 275 380
Investing activities
Acquisitions, net of cash acquired (8) (3)
Proceeds from disposals of businesses and investments - 5
Dividend from sale of LSEG shares - 994
Capital expenditures (171) (120)
Other investing activities - 1
Taxes paid on sale of Refinitiv and LSEG shares - (6)
Investing cash flows from continuing operations (179) 871
Investing cash flows from discontinued operations - (42)
Net cash (used in) provided by investing activities (179) 829
Financing activities
Payments of lease principal (17) (21)
Repurchases of common shares - (200)
Dividends paid on preference shares (1) (1)
Dividends paid on common shares (209) (194)
Other financing activities 7 5
Net cash used in financing activities (220) (411)
Translation adjustments - (1)
(Decrease) increase in cash and cash equivalents (124) 797
Cash and cash equivalents at beginning of period 778 1,787
Cash and cash equivalents at end of period $654 $2,584
Thomson Reuters Corporation
Reconciliation of Earnings from Continuing Operations to Adjusted EBITDA ((1))
(millions of U.S. dollars, except for margins)
(unaudited)
Three Months Ended Year Ended
March 31, December 31,
2022 2021 2021
Earnings from continuing operations $1,018 $5,033 $5,687
Adjustments to remove:
Tax expense 240 1,594 1,607
Other finance (income) costs (94) 6 (8)
Net interest expense 48 51 196
Amortization of other identifiable intangible assets 26 31 119
Amortization of computer software 114 115 474
Depreciation 38 46 177
EBITDA $1,390 $6,876 $8,252
Adjustments to remove:
Share of post-tax earnings in equity method investments (798) (6,297) (6,240)
Other operating losses (gains), net 1 (17) (34)
Fair value adjustments (*) 7 (4) (8)
Adjusted EBITDA ((1)) $600 $558 $1,970
Adjusted EBITDA margin ((1)) 35.8% 35.3% 31.0%
* Fair value adjustments, a component of operating expenses, primarily represent gains or losses due to changes in foreign currency exchange rates on intercompany balances that arise in the ordinary course of business.
Thomson Reuters Corporation
Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow ((1))
(millions of U.S. dollars)
(unaudited)
Three Months Ended Year Ended
March 31, D
e
c
e
m
b
e
r
3
1
,
2022 2021 2021
Net cash provided by operating activities $275 $380 $1,773
Capital expenditures (171) (120) (487)
Other investing activities - 1 81
Payments of lease principal (17) (21) (109)
Dividends paid on preference shares (1) (1) (2)
Free cash flow ((1)) $86 $239 $1,256
Year Ended
De
ce
mb
er
31
,
2021
Capital expenditures $487
Remove: IFRS adjustment to cash basis 54
Accrued capital expenditures ((1)) $541
Accrued capital expenditures as a percentage of revenues ((1)) 8.5%
(1) Refer to page 18 for additional information on non-IFRS financial measures.
Thomson Reuters Corporation
Reconciliation of Net Earnings to Adjusted Earnings ((1))
Reconciliation of Total Change in Adjusted EPS to Change in Constant Currency ((1))
(millions of U.S. dollars, except for share and per share data)
(unaudited)
Three Months Ended Year Ended
March 31, December 31,
2022 2021 2021
Net earnings $1,007 $5,036 $5,689
Adjustments to remove:
Fair value adjustments* 7 (4) (8)
Amortization of other identifiable intangible assets 26 31 119
Other operating losses (gains), net 1 (17) (34)
Other finance (income) costs (94) 6 (8)
Share of post-tax earnings in equity method investments (798) (6,297) (6,240)
Tax on above items ((1)) 206 1,535 1,475
Tax items impacting comparability ((1)) (44) 1 (24)
Loss (earnings) from discontinued operations, net of tax 11 (3) (2)
Interim period effective tax rate normalization ((1)) 1 1 -
Dividends declared on preference shares (1) (1) (2)
Adjusted earnings ((1)) $322 $288 $965
Adjusted EPS ((1)) $0.66 $0.58
Total change 14%
Foreign currency 0%
Constant currency 14%
Diluted weighted-average common shares (millions) 487.5 496.9
Year-ended
December 31,
2021
Adjusted earnings $965
Plus: Dividends declared on preference shares 2
Plus: Tax expense on adjusted earnings 156
Pre-Tax Adjusted earnings $1,123
IFRS Tax expense $1,607
Remove tax related to:
Amortization of other identifiable intangible assets 26
Share of post-tax earnings in equity method investments (1,497)
Other operating gains, net (9)
Other items 5
Subtotal - Tax on pre-tax items removed from adjusted earnings (1,475)
Remove: Tax items impacting comparability 24
Total: Remove all items above impacting comparability (1,451)
Tax expense on adjusted earnings $156
Effective tax rate on adjusted earnings 13.9%
* Fair value adjustments, a component of operating expenses, primarily represent gains or losses due to changes in foreign currency exchange rates on intercompany balances that arise in the ordinary course of business.
(1) Refer to page 18 for additional information on non-IFRS financial measures.
Thomson Reuters Corporation
Reconciliation of Changes in Revenues to Changes in Revenues on a Constant Currency ((1))and Organic Basis ((1))
(millions of U.S. dollars)
(unaudited)
Three Months Ended
March 31, Change
2022 2021 ((2)) Total Foreign SUBTOTAL Constant Acquisitions/ Organic
Currency Currency (Divestitures)
Total Revenues
Legal Professionals $698 $668 4% -1% 5% 0% 6%
Corporates 411 382 8% 0% 8% 0% 8%
Tax & Accounting Professionals 253 227 11% 0% 11% 0% 11%
"Big 3" Segments Combined ((1)) 1,362 1,277 7% 0% 7% 0% 7%
Reuters News 176 165 7% -2% 9% 0% 9%
Global Print 142 143 -1% -1% 0% 0% 0%
Eliminations/Rounding (6) (5)
Revenues $1,674 $1,580 6% -1% 7% 0% 7%
Recurring Revenues
Legal Professionals $653 $621 5% -1% 6% 0% 6%
Corporates 316 293 8% 0% 8% 0% 8%
Tax & Accounting Professionals 182 162 12% 0% 12% 0% 12%
"Big 3" Segments Combined ((1)) 1,151 1,076 7% 0% 7% 0% 8%
Reuters News 155 149 5% -2% 6% 0% 6%
Eliminations/Rounding (6) (5)
Total Recurring Revenues $1,300 $1,220 7% -1% 7% 0% 7%
Transactions Revenues
Legal Professionals $45 $47 -4% -1% -3% -1% -2%
Corporates 95 89 7% -1% 8% 0% 8%
Tax & Accounting Professionals 71 65 10% 0% 10% 0% 10%
"Big 3" Segments Combined ((1)) 211 201 5% 0% 6% 0% 6%
Reuters News 21 16 27% -5% 32% 0% 32%
Total Transactions Revenues $232 $217 7% -1% 8% 0% 8%
Year Ended
December 31, Change
2021 ((2)) 2020 ((2)) Total Foreign SUBTOTAL Constant Acquisitions/ Organic
Currency Currency (Divestitures)
Total Revenues
Legal Professionals $2,712 $2,535 7% 1% 6% 0% 6%
Corporates 1,440 1,361 6% 1% 5% 0% 5%
Tax & Accounting Professionals 915 842 9% 0% 9% 0% 9%
"Big 3" Segments Combined ((1)) 5,067 4,738 7% 1% 6% 0% 6%
Reuters News 694 645 8% 1% 7% 0% 7%
Global Print 609 620 -2% 1% -3% 0% -3%
Eliminations/Rounding (22) (19)
Revenues $6,348 $5,984 6% 1% 5% 0% 5%
Growth percentages are computed using whole dollars. As a result, percentages calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.
(1) Refer to page 18 for additional information on non-IFRS financial measures.
(2) Revised to reflect the changes made to the company's segment reporting in the first quarter of 2022.
Thomson Reuters Corporation
Reconciliation of Changes in Adjusted EBITDA ((1))to Changes on a Constant Currency Basis ((1))
(millions of U.S. dollars)
(unaudited)
Three Months Ended
March 31, Change
2022 2021 ((2)) Total Foreign Currency Constant Currency
Adjusted EBITDA ((1))
Legal Professionals $305 $279 9% -1% 10%
Corporates 157 145 8% 1% 7%
Tax & Accounting Professionals 122 99 23% 1% 22%
"Big 3" Segments Combined ((1)) 584 523 11% 0% 11%
Reuters News 37 28 31% 8% 23%
Global Print 53 57 -8% 0% -7%
Corporate costs (74) (50) n/a n/a n/a
Adjusted EBITDA $600 $558 7% 0% 7%
Adjusted EBITDA Margin ((1))
Legal Professionals 43.7% 41.8% 190bp 0bp 190bp
Corporates 38.1% 38.0% 10bp 30bp -20bp
Tax & Accounting Professionals 48.3% 43.8% 450bp 30bp 420bp
"Big 3" Segments Combined ((1)) 42.9% 41.0% 190bp 30bp 160bp
Reuters News 21.0% 17.1% 390bp 150bp 240bp
Global Print 37.0% 39.9% -290bp 10bp -300bp
Adjusted EBITDA margin 35.8% 35.3% 50bp 30bp 20bp
Year Ended
December 31,
2021 ((2))
Adjusted EBITDA ((1))
Legal Professionals $1,091
Corporates 496
Tax & Accounting Professionals 379
"Big 3" Segments Combined ((1)) 1,966
Reuters News 103
Global Print 226
Corporate costs (325)
Adjusted EBITDA $1,970
Adjusted EBITDA Margin ((1))
Legal Professionals 40.2%
Corporates 34.4%
Tax & Accounting Professionals 41.3%
"Big 3" Segments Combined ((1)) 38.8%
Reuters News 14.8%
Global Print 37.1%
Adjusted EBITDA margin 31.0%
n/a: not applicable
Growth percentages and margins are computed using whole dollars. As a result, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.
(1) Refer to page 18 for additional information on non-IFRS financial measures.
(2) Revised to reflect the changes made to the company's segment reporting in the first quarter of 2022.
Non-IFRS Financial Measures Definition Why Useful to the Company and Investors
Adjusted EBITDA and the related margin Represents earnings or losses from continuing operations before tax expense or benefit, net interest expense, other finance Provides a 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. 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 debt.
costs or income, depreciation, amortization of software and other identifiable intangible assets, Thomson Reuters share of post
-tax earnings or losses in equity method investments, other operating gains and losses, certain asset impairment charges and
fair value adjustments. Adjusted EBITDA margin is adjusted EBITDA expressed as a percentage of revenues.
Adjusted earnings and adjusted EPS Net earnings or loss including dividends declared on preference shares but excluding the post-tax impacts of fair value Provides a more comparable basis to analyze earnings. These measures are commonly used by shareholders to measure performance.
adjustments, amortization of other identifiable intangible assets, 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,
discontinued operations and other items affecting comparability. The post-tax amount of each item is excluded from adjusted
earnings based on the specific tax rules and tax rates associated with the nature and jurisdiction of each item. Adjusted EPS
is calculated from adjusted earnings using diluted weighted-average shares and does not represent actual earnings or loss per
share attributable to shareholders.
Effective tax rate on adjusted earnings Adjusted tax expense divided by pre-tax adjusted earnings. Adjusted tax expense is computed as income tax (benefit) expense plus Provides a basis to analyze the effective tax rate associated with adjusted earnings. 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 the expected full-year effective tax rate provides more comparability among interim periods.
or minus the income tax impacts of all items impacting adjusted earnings (as described above), and other tax items affecting
comparability. In interim periods, we also make an 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 Reuters operates. The non-IFRS adjustment reallocates estimated full-year
income taxes between interim periods but has no effect on full-year income taxes.
Free cash flow Net cash provided by operating activities, proceeds from disposals of property and equipment, and other investing activities, Helps 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.
less capital expenditures, payments of lease principal and dividends paid on the company's preference shares.
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 Provides better comparability of business trends from period to period.
excluding the effects of currency) are determined by converting the current and equivalent prior period's local currency results
using the same foreign currency exchange rate.
Changes in revenues computed on an "organic" basis Represents changes in revenues of the company's existing businesses at constant currency. The metric excludes the distortive Provides further insight into the performance of the company's 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.
impacts of acquisitions and dispositions from not owning the business in both comparable periods.
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 Reflects the basis on which the company manages capital expenditures for internal budgeting purposes.
end of the reporting period. Prior to December 31, 2021, the company used capital expenditures paid in this calculation, from
its consolidated statement of cash flow, as measured under IFRS. The prior period has been revised to reflect the current
methodology.
"Big 3" segments The company's combined Legal Professionals, Corporates and Tax & Accounting Professionals segments. All measures reported for Information for the "Big 3" segments comprise 81% of revenues and represent the core of the company's business information service product offerings.
the "Big 3" segments are non-IFRS financial measures.
Please refer to reconciliations for the most directly comparable IFRS financial measures.
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