o
|
REGISTRATION
STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF
1934
|
þ
|
ANNUAL
REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
|
For
the fiscal year ended December 31,
2008
|
o
|
REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
þ
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the fiscal year ended December 31,
2008
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
SHELL
COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
Form 40-F
|
Form
20-F
|
|||
THOMSON
REUTERS CORPORATION
|
(Exact
name of Registrant as specified in its charter)
|
THOMSON
REUTERS
PLC
|
||
Ontario,
Canada
|
(Province
or other jurisdiction of incorporation or organization)
|
England
and Wales
|
||
2741
|
(Primary
Standard Industrial Classification Code Number)
|
2741
|
||
98-0176673
|
(I.R.S.
Employer Identification No. (if applicable))
|
Not
Applicable
|
Title
of each class
|
Name
of each exchange on which registered
|
|
Common
Shares
|
New
York Stock Exchange
|
þ Annual
information form
|
þ Audited annual
financial statements
|
Yes o
|
82-
|
No þ
|
Yes þ
|
No o
|
Title
of each class
|
Name
of each exchange on which registered
|
|
American
Depositary Shares, each representing six ordinary shares, £0.25 nominal
value each
|
The
Nasdaq Stock Market LLC
|
|
Ordinary shares, £0.25 nominal value each* |
U.S.
GAAP o
|
International
Financial Reporting Standards as issued by the International Accounting
Standards Board o
|
Other
þ
|
|
(1)
|
Thomson
Reuters Corporation has previously filed a Form F-X in connection
with the class of securities in relation to which the obligation to file
this report arises.
|
(2)
|
Any
change to the name or address of Thomson Reuters Corporation’s agent for
service shall be communicated promptly to the Commission by amendment to
Form F-X referencing the file number of Thomson
Reuters Corporation.
|
THOMSON
REUTERS CORPORATION
(Registrant)
|
||||
By:
|
/s/
Deirdre Stanley
|
|||
Name:
|
Deirdre
Stanley
|
|||
Title:
|
Executive
Vice President and General Counsel
|
|||
Date:
March 30, 2009
|
Number
|
Description
|
|
Annual
Report for the year ended December 31, 2008 (which constitutes an Annual
Information Form and includes Management’s Discussion and Analysis and
Audited Financial Statements for the year ended December 31,
2008)
|
||
Consent
of PricewaterhouseCoopers LLP, Toronto
|
||
Certification
of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
||
Certification
of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
||
Certification
of the Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
||
Certification
of the Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
||
99.7
|
Code
of Ethics (incorporated by reference to Exhibit 99.1 from Thomson Reuters
Corporation’s Form 6-K dated November 10, 2008)
|
|
Thomson
Reuters Audit Committee Charter
|
||
99.9 | Thomson Reuters Corporation Restated Articles of Incorporation (incorporated by reference to Exhibit 99.1 from Thomson Reuters Corporation's Form 6-K dated April 17, 2008) | |
99.10 | Thomson Reuters Corporation Amended and Restated By-Laws (incorporated by reference to Exhibit 99.2 from Thomson Reuters Corporation's Form 6-K dated April 17, 2008) |
MARCH
26, 2009
|
·
|
“Common
shares” refers to common shares of Thomson Reuters
Corporation;
|
·
|
“DLC
structure” refers to the dual listed company structure under which Thomson
Reuters Corporation, Thomson Reuters PLC and their respective consolidated
subsidiaries operate as a unified
group;
|
·
|
“Ordinary
shares” refers to ordinary shares of Thomson Reuters PLC and references
also include American Depositary Shares (ADSs), each of which represents
six ordinary shares;
|
·
|
“Reuters”
refers to Reuters Group PLC before its acquisition by Thomson on April 17,
2008;
|
·
|
Thomson”
refers to The Thomson Corporation (now Thomson Reuters Corporation) before
its acquisition of Reuters on April 17,
2008;
|
·
|
Thomson
Reuters,” “we,” “us” and “our” each refers collectively to Thomson Reuters
Corporation, Thomson Reuters PLC and their respective consolidated
subsidiaries operating as a unified group pursuant to the DLC
structure;
|
·
|
Thomson
Reuters board” or “board” refers to the board of directors of each of
Thomson Reuters Corporation and Thomson Reuters
PLC;
|
·
|
Woodbridge”
refers to The Woodbridge Company Limited and other companies affiliated
with it; and
|
·
|
“$”,
“US$” or “dollars” are to U.S.
dollars.
|
1
|
Business
|
12
|
Risk
Factors
|
18
|
Management
s Discussion and Analysis
|
60
|
Financial
Statements
|
110
|
Senior
Management and Directors
|
117
|
Additional
Information
|
137
|
Cross
Reference Tables
|
141
|
Corporate
Information
|
·
|
Markets, which consists
of our financial and media businesses;
and
|
·
|
Professional,
which consists of our legal, tax and accounting, healthcare and science
businesses.
|
2008
and 2009 Priorities
|
2008
Progress
|
|
Integrate
Thomson and Reuters businesses to drive long-term growth and capture
synergies
|
As
we progressed with integrating Reuters, we identified significant
additional opportunities for cost savings. We currently expect $1.0
billion in annualized cost savings from integration programs by the end of
2011. Our overall savings target (including legacy efficiency programs) is
currently $1.4 billion
|
|
The
Markets division sales organization was integrated in the first 90 days
after closing and product roadmaps were delivered to
customers
|
||
Real
estate moves were completed in 39 locations (over 10,000 employees
worldwide)
|
||
We
made significant progress developing a common platform and product
roadmap
|
||
We
introduced cross-divisional products that position us to grow our
businesses, such as the inclusion of Reuters News in Thomson ONE and
Professional division products, and StreetEvents in Reuters
3000Xtra
|
||
Capitalize
on a global brand and presence to drive international
growth
|
Westlaw
expanded in China and Japan and we launched a smaller-scale, lower-cost
Westlaw platform that can be used globally, eliminating the need to create
a new online platform for each country or region
|
|
We
began working on an important cross-divisional initiative, Islamic
Finance
|
||
The
new Thomson Reuters brand was ranked #44 in Business Week’s 100 Best Global Brands
for 2008 – higher than either Thomson or Reuters had ever achieved on its
own
|
||
We
reorganized our Legal and Tax & Accounting businesses on a global
basis to facilitate the creation of more international solutions for our
customers and to follow the expansion of our customers around the
world
|
||
Achieve
scale economics and make the whole of Thomson Reuters greater than the sum
of its parts
|
Our
business units have been collaborating to offer new services, grow
revenues and achieve cost efficiencies
|
|
We
refinanced $3 billion of debt financing at favorable interest rates and we
fully repaid our bridge credit facility used to finance the Reuters
acquisition
|
No.
1
Invest
to drive long-term growth and returns
|
No.
2
Focus
on free cash flow
|
No.
3
Support
business objectives with a robust capital strategy
|
||
Capital
expenditure management process
|
Disciplined
capital spending
|
Target
net debt/EBITDA ratio of 2.0x
|
||
Acquisition
process and metrics
|
Working
capital management
|
Access
to capital markets
|
||
Portfolio
optimization process
|
Performance
improvement included in management incentives
|
Focus
on balancing investments and
returns
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Major
Brands
|
Type
of Product/Service Target
|
Customers
|
||
Reuters
3000 Xtra
|
Premium
desktop product providing pre-trade decision-making tools, news, real-time
pricing and trading connectivity
|
Trading
professionals, salespeople, brokers and financial
analysts
|
||
Dealing
on Reuters
|
Peer-to-peer
conversational trading product primarily related to foreign exchange
(FX) and money markets
|
FX
and money market traders, sales desks, hedge funds and voice
brokers
|
||
Matching
on Reuters
|
Electronic
FX trade matching system
|
FX
traders, sales desks and hedge funds
|
||
Reuters
Messaging
|
Collaboration/messaging
service
|
Financial
professionals
|
||
Tradeweb
|
Online
multi-dealer marketplace for fixed income securities and
derivatives
|
Institutional
traders
|
||
AutEx
and Tradeweb Routing Network
|
Electronic
database and real-time network for trade order indications and trade
executions
|
Equity
traders
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Major
Brands and Product Categories
|
Type
of Product/Service
|
Target
Customers
|
||
ThomsonONE.com
Investment Banking
|
Market
prices, Reuters News and comprehensive reference data on companies,
industries and events
|
Investment
bankers, consultants, lawyers and private equity
professionals
|
||
SDC
Platinum
|
Database
for analyzing investment banking and deal trends
|
Investment
bankers, consultants, lawyers and private equity
professionals
|
||
Thomson ONE Investment
Management
|
Timely
and accurate fundamental information with real-time pre-trade analytics to
help understand a firm’s relative valuation and times market entry
and exit points
|
Portfolio
managers, portfolio analysts, buy-side traders and research
analysts
|
||
Investor
Relations (IR) solutions
|
Online
desktop solution advisory services and online communications
tools
|
Investor
relations professionals and corporate financial
executives
|
||
Business
Intelligence solutions
|
Institutional
quality information and analytics for company and market valuation
analysis
|
Corporate
clients including strategy and research professionals, treasurers and
finance professionals
|
||
Corporate
Communications services
|
Webcasting
solutions
|
Corporate
communications, employee communications, marketing and PR
professionals
|
||
Thomson ONE
Wealth Management
|
Wealth
management tools, real-time market data and back-office data
processing
|
Wealth
management professionals and high net worth
professionals
|
||
Reuters
Knowledge Direct API for Wealth Management
|
Premium
content including exchange data, news, company fundamentals, broker
research and consensus reports
|
Wealth
management professionals and individual investors
|
||
eXimius
|
Client
relationship system with portfolio management capabilities
|
Ultra
high net worth professionals
|
||
BETA
Systems
|
Brokerage
processing system
|
Retail
and institutional wealth management professionals
|
||
Lipper
|
Mutual
fund information, benchmarking data, performance information and
analysis
|
Asset
managers, financial intermediaries and individual
investors
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Major
Brands
|
Type
of Product/Service
|
Target
Customers
|
||
Reuters DataScope
Real-Time
|
Real-time
market information targeting programmatic/automated trading, market/credit
risk, instrument pricing and portfolio management and
valuations
|
Traders,
hedge funds, brokers, asset managers, program traders, quantitative
analysts, global custodians and credit and risk
managers
|
||
Reuters
Data Feed Direct
|
Ultra
high-speed datafeeds, direct from exchanges to the
customer
|
Algorithmic
traders, program traders and quantitative funds
|
||
Reuters NewsScope
|
Reuters
News for use in trading applications
|
Algorithmic
traders, program traders and quantitative funds
|
||
Reuters
Market Data System
|
Software
platform for integrating and distributing real-time and historical
financial information
|
Financial
institutions requiring a data integration platform
|
||
Kondor+
|
Position
keeping and risk management applications
|
Banks,
broker-dealers and hedge funds
|
||
PORTIA
|
Portfolio
accounting and reporting application
|
Money
managers, hedge funds, insurance companies, bank trusts, plan sponsors and
corporate treasury departments
|
||
Omgeo*
|
Post-trade
processing, portfolio reconciliation and collateral
management
|
Investment
managers, hedge funds, broker/dealers, custodian banks and investment
management
outsourcers
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Major
Product Categories
|
Type
of Product/Service
|
Target
Customers
|
||
Text
newswires
|
Instant
coverage of global news and events plus feature stories, analyses and
essential news planning tools
|
Newspapers,
television and cable networks, radio stations and
websites
|
||
Video
|
Video
relating to breaking news, sports, financial and general
news
|
Newspapers,
television and cable networks and websites
|
||
Pictures
and graphics
|
Up-to-the-minute
news photographs and an online photo archive
|
Newspapers,
websites, advertising agencies, television and cable
networks
|
||
Digital
multimedia
|
Prioritized,
ready-to-publish online reports, online video and online
pictures
|
Websites
|
||
Reuters.com
|
Direct-to-consumer
publishing and network of regional sites, online video and electronic
out-of-home display
|
Business
professionals
|
||
Real-time
financial markets
commentary
and analysis
|
IFR
Markets, Dealwatch
|
Trading
professionals, research analysts and portfolio
managers
|
||
Magazines
and online
publications
|
International
Financing Review (IFR), Project Finance International, Buyouts, PE Week,
Acquisitions Monthly and Venture Capital Journal
|
Investment
bankers, corporate finance and private equity
professionals
|
||
Conferences
and events
|
Annual
awards, editorially-driven conferences and
roundtables
|
Advisors,
companies and investors
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
·
|
We
created an intellectual property (IP) business, which became part of the
Legal segment, by combining all of our Professional division-wide assets
and capabilities related to patents, trademarks and standards. This
includes products such as the Derwent World Patents Index, CompuMark and
Thomson Innovation.
|
·
|
We
created a new strategic business unit, Healthcare and Science, which
manages all of the businesses of the previous individual Healthcare and
Scientific segments.
|
·
|
We
reorganized our Legal and Tax & Accounting businesses on a global
basis to facilitate the creation of more international solutions for our
customers and to follow the expansion of our customers around the
world.
|
·
|
Westlaw
includes KeyCite, an online citation research service that traces the
history of a case, statute, administrative decision or regulation to
determine if it is still
authoritative.
|
·
|
Westlaw
Litigator assists attorneys with all phases of litigation by combining
relevant case law research materials with practical tools for case
evaluation, pre-trial investigation, settlement negotiation and trial
preparation and presentation.
|
·
|
Through Westlaw Business, we
provide corporate and transactional lawyers with value-added services for
preparing and completing commercial transactions, such as securities
offerings, mergers and acquisitions and investment management. Westlaw
Business includes LIVEDGAR securities filing
content.
|
Major
Brands
|
Type
of Product/Service
|
Target
Customers
|
||
West
Westlaw
Westlaw
Litigator
Westlaw
Business
|
Legal,
regulatory and compliance information-based products and
services
|
Lawyers,
law students, law librarians and other legal
professionals
|
||
Foundation
Press
West Law School
Publishing
BAR/BRI
West
LegalEdcenter
Legalworks
|
Textbooks,
study aids, bar review courses, continuing education materials and
seminars
|
Law
students, lawyers and legal professionals
|
||
Sweet
& Maxwell (U.K., Asia)
IDS
(U.K.)
Aranzadi
(Spain)
Karnov
(Denmark and Sweden)
Lawbook
(Australia)
Brookers
(New Zealand)
La
Ley (Argentina)
Lawtel
(U.K.)
|
Legal
information-based products and services
|
Lawyers,
law students, law librarians, corporate legal professionals, government
agencies and trademark professionals
|
||
Carswell
(Canada)
|
Legal,
regulatory and compliance information-based products and
services
|
Lawyers,
law students, law librarians and other legal
professionals
|
||
Thomson CompuMark
SAEGIS
(North America, EMEA)
|
Trademark
search and protection information services
|
Business,
legal and trademark professionals
|
||
Elite
Elite
3E
|
Law
firm operations and financial management software, business
intelligence
|
Lawyers,
law firm finance and operations
|
||
FindLaw
HubbardOne
|
Online
legal directory, website creation and hosting services and law firm
marketing solutions
|
Lawyers
and legal professionals
|
||
LiveNote
|
Deposition,
transcript and court reporting software and services
|
Lawyers,
courts and court reporters and investigators
|
||
Hildebrandt
International
Baker
Robbins
|
Strategic,
technology, operations and information consulting advisory
services
|
Lawyers,
law firm finance, operations and business development
professionals
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Major
Brands
|
Type
of Product/Service
|
Target
Customers
|
||
Research
& Guidance:
RIA
PPC
Checkpoint
AuditWatch
Quickfinder
Warren Gorham
& Lamont Paisley
|
Integrated
information-based solutions, expert guidance, workflow tools and
continuing professional education (CPE)
|
Professional
accounting firms, corporate, finance and accounting departments, law firms
and governments
|
||
Professional
Software & Services:
CS
Professional Suite
Enterprise
Suite
myPay
Solutions
|
Software
and online products and services that provide business automation
solutions for tax compliance, firm management and client
services
|
Professional
accounting firms
|
||
Corporate
Software & Services:
ONESOURCE
|
Integrated
online software and managed services that help automate various areas of
taxation and corporate compliance
|
Corporate,
legal, bank and trust
market
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Major
Brands
|
Type
of Product/Service
|
Target
Customers
|
||
ISI
Web of Knowledge
|
Comprehensive
and integrated platform that includes the Web of Science as well as
third-party-hosted content, editorially selected websites, and tools to
access, analyze and manage research information
|
Research
scientists and scholars, government agencies, research libraries and
universities and colleges
|
||
Web
of Science
|
Comprehensive
database providing a source for journal article-cited references and
access to abstracted and indexed journals
|
Research
scientists and scholars, government agencies, research libraries and
universities and colleges
|
||
Thomson Pharma
|
Integrated
online platform that delivers scientific literature, patents, commercial
and regulatory information, company news communications, professional
meeting reports and other relevant content
|
Pharmaceutical
and biotechnology companies
|
||
Thomson
Innovation
|
Integrated
online platform providing a global collection of IP content, scientific
literature, analytical and visualization tools and document
services
|
IP
professionals, R&D professionals, lawyers and business intelligence
staff
|
||
Derwent
World Patents Index
|
Comprehensive
database of English language patent abstracts from patent authorities
around the world
|
IP
professionals, R&D professionals, lawyers and business intelligence
staff
|
||
Prous
Integrity
|
Integrated
online platform delivering drug discovery content and analytic
functionality for biologists and chemists
|
Pharmaceutical
and biotechnology companies, academic centers and research
institutes
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Major
Brands
|
Type
of Product/Service
|
Target
Customers
|
||
Micromedex
|
Comprehensive
database set of drugs, disease information, medical emergency and poison
control procedures, patient education and other relevant clinical,
toxicological and environmental health and safety
information
|
Physicians,
pharmacists, health professionals, pharmaceutical companies, hospitals,
poison control centers, corporations, government agencies and insurance
companies
|
||
Medstat
Advantage
Suite
|
Decision
support products integrating benchmarks and analytics, designed for
managing healthcare costs and quality and employee wellness and
productivity
|
Large
and mid-size employers, governmental healthcare purchasers, managed care
and insurance companies, pharmaceutical companies and health services
research providers
|
||
Solucient
|
Benchmark,
comparative and market databases, integrated with analytics to support
marketing and planning, operational improvement and clinical performance
improvement
|
Hospitals,
researchers, service planners, patient safety and quality managers and
financial and administrative
staff
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
•
|
licensing
and registration;
|
•
|
disclosure/reporting,
conduct and recordkeeping
requirements;
|
•
|
maintaining
any applicable minimum financial/capital
requirements;
|
•
|
operating
appropriate systems and controls related to antimony laundering and
prevention of other financial crimes;
and
|
•
|
cooperating
with any periodic reviews or
audits.
|
As
of December 31
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Thomson Reuters
|
53,700 | 32,900 | 32,400 | |||||||||
Americas
|
28,400 | 22,800 | 23,200 | |||||||||
Europe,
Middle East and Africa
|
12,200 | 4,500 | 4,900 | |||||||||
Asia
|
13,100 | 5,600 | 4,300 | |||||||||
Markets
division
|
27,200 | 8,600 | 9,300 | |||||||||
Professional
division
|
23,100 | 21,200 | 22,600 | |||||||||
Legal
|
14,300 | 12,900 | 14,600 | |||||||||
Tax
& Accounting
|
4,100 | 3,800 | 3,000 | |||||||||
Scientific
|
2,800 | 2,700 | 2,400 | |||||||||
Healthcare
|
1,900 | 1,800 | 2,600 | |||||||||
Corporate
headquarters
|
3,400 | 3,100 | 475 | |||||||||
Total
number of countries with employees
|
93 | 44 | 37 |
Facility
|
Approx.
sq.
ft.
|
Owned/
leased
|
Principal
use
|
||
610
Opperman Drive, Eagan, Minnesota
|
|
2,792,000
|
Owned
|
Legal
headquarters and West
operating facilities
|
|
3
Times Square, New
York, New York
|
692,000
|
Owned/leased2
|
Thomson Reuters
headquarters
and Markets
division operating
facilities
|
||
195
Broadway, New
York, New York
|
|
435,200
|
Leased
|
Markets
division and Tax &
Accounting offices
|
|
2395
Midway Road, Carrollton, Texas
|
409,150
|
Owned
|
Tax
& Accounting operating
facilities
|
||
Boston,
Massachusetts1
|
370,000
|
Leased
|
Markets
division operating
facilities
|
||
Canary Wharf,
London,
United
Kingdom
|
281,000
|
Leased
|
Markets
division operating
facilities
|
||
RMZ
Infinity, Bangalore,
India
|
|
247,500
|
Leased
|
Markets
division operating
facilities
|
1
|
Consists
of three addresses.
|
2
|
In
connection with the acquisition of Reuters, we assumed a lease agreement
with 3XSQ Associates, an entity now owned by our company and Rudin Times
Square Associates LLC that was formed to build and operate the 3 Times
Square property and building in New York, New York that now serves as our
corporate headquarters.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
•
|
the
emergence of proprietary data feeds from other
markets;
|
•
|
high
market volatility;
|
•
|
decimalization;
|
•
|
reductions
in trade sizes resulting in more
transactions;
|
•
|
new
derivative instruments;
|
•
|
increased
automatically-generated algorithmic and program
trading;
|
•
|
market
fragmentation resulting in an increased number of trading venues;
and
|
•
|
multiple
listings of options and other
securities.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
•
|
unexpected
issues, higher than expected costs and an overall process that takes
longer than originally anticipated;
|
•
|
our
inability to successfully integrate operations, technologies, products and
services;
|
•
|
loss
of key employees;
|
•
|
modification
or termination of existing agreements with customers and suppliers and
delayed entry into new agreements with prospective customers and
suppliers; and
|
•
|
the
diversion of management’s attention from day-to-day business or developing
longer-term strategy as a result of the need to deal with integration and
savings program issues.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
·
|
Overview
– a brief discussion of our business and how we earn revenues,
together with information on key factors and trends affecting our
business;
|
·
|
Results
of Operations – a discussion that compares our results from year to
year, both on a consolidated and a segment
basis;
|
·
|
Liquidity
and Capital Resources – a discussion of changes in our cash flow,
together with information about our outstanding debt and resources
available to us to finance existing and future
commitments;
|
·
|
Outlook
– our business outlook for
2009;
|
·
|
Related
Party Transactions – a discussion of transactions that we have
entered into with our principal shareholder and others;
and
|
·
|
Accounting
Policies – a discussion of changes in our accounting policies, as
well as important accounting policies that require critical judgments and
estimates by our management.
|
·
|
Markets,
which consists of our financial and media businesses;
and
|
·
|
Professional,
which in 2008 consisted of our legal, tax and accounting, scientific and
healthcare businesses.
|
·
|
We
created an intellectual property (IP) business, which became part of the
Legal segment, by combining all of our Professional division-wide assets
and capabilities related to patents, trademarks and
standards.
|
·
|
We
created a new strategic business unit, Healthcare and Science, which
manages all of the businesses of the previous individual Healthcare and
Scientific segments.
|
·
|
We
reorganized our Legal and Tax & Accounting businesses on a global
basis to facilitate the creation of more international solutions for our
customers and to follow the expansion of our customers around the
world.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
·
|
Integrate
the acquired Reuters businesses to drive long-term growth and capture
synergies;
|
·
|
Capitalize
on a global brand and presence to drive international growth;
and
|
·
|
Achieve
scale economics and make the whole of Thomson Reuters greater that
the sum of its parts.
|
·
|
Invest
to drive long-term growth and
returns;
|
·
|
Focus
on free cash flow; and
|
·
|
Support
business objectives with a robust capital
strategy.
|
·
|
Thomson
Reuters Corporation, an Ontario, Canada corporation;
and
|
·
|
Thomson
Reuters PLC, a UK company.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
REVENUE BY MEDIA1
Electronic.....................90%
Print..............................10%
|
|
|
REVENUE BY TYPE1
Recurring.....................86%
Non-recurring.............14%
|
|
REVENUE BY GEOGRAPHY1
Americas......................58%
EMEA...........................32%
Asia .............................10%
|
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Year |
Number
of acquisitions
|
Net
aggregate cash cost (millions of
U.S. dollars)
|
||||||
2008
|
23 | 8,5021 | ||||||
2007
|
33 | 488 | ||||||
2006
|
25 | 744 |
·
|
All
of the issued and outstanding Reuters ordinary shares were
cancelled;
|
·
|
Reuters
shareholders received, for each Reuters ordinary share
held:
|
°
|
352.5
pence in cash; and
|
°
|
0.16
Thomson Reuters PLC ordinary
shares;
|
·
|
One
Thomson Reuters PLC ordinary share is equivalent to one Thomson Reuters
Corporation common share under the DLC structure;
and
|
·
|
Thomson
shareholders continued to hold their shares of Thomson, renamed as Thomson
Reuters Corporation.
|
(millions
of U.S. dollars)
|
||||
Cash
(paid on May 1, 2008)
|
8,450 | |||
Thomson
Reuters PLC ordinary shares (194,107,278 issued on April 17,
2008)
|
8,226 | |||
Reuters
Group PLC options
|
195 | |||
Transaction
costs
|
138 | |||
Total
purchase consideration
|
17,009 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
●
|
Revenue
and operating profit from ongoing businesses. We believe our revenue and profits are best
measured based on our ability to grow our ongoing businesses over the long
term. Accordingly, we evaluate our revenue and operating profit excluding
results from disposals, which are defined as businesses sold or held for
sale that do not qualify for discontinued operations
classification.
|
●
|
Net
debt. We define our net debt as our total indebtedness, including
associated fair value hedging instruments (swaps) on our debt, less cash
and cash equivalents. Given that we hedge some of our debt to reduce risk,
we include hedging instruments as we believe it provides a better measure
of the total obligation associated with our outstanding debt. However,
because we intend to hold our debt and related hedges to maturity, we do
not consider the associated fair market value of cash flow hedges in our
measurements. We reduce gross indebtedness by cash and cash equivalents on
the basis that they could be used to pay down debt. See the reconciliation
of this measure to the most directly comparable Canadian GAAP measure in
the “Liquidity and Capital Resources” section of this management’s
discussion and analysis.
|
●
|
Free
cash flow. We evaluate our operating performance based on free cash
flow, which we define as net cash provided by operating activities less
capital expenditures, other investing activities and dividends paid on our
preference shares. We use free cash flow as a performance measure because
it represents cash available to repay debt, pay common and ordinary
dividends and fund share repurchases and new acquisitions. See the
reconciliation of this measure to the most directly comparable Canadian
GAAP measure in the “Liquidity and Capital Resources” section of this
management’s discussion and
analysis.
|
●
|
Underlying
free cash flow. We define underlying free cash flow as free cash
flow excluding one-time cash costs related to the Reuters acquisition and
costs associated with integration and synergy programs. We use underlying
free cash flow as a performance measure because it represents free cash
flow generated by our operations excluding certain unusual items. See the
analysis of this measure compared to free cash flow in the “Liquidity and
Capital Resources” section of this management’s discussion and
analysis.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
For
the year ended December 31
|
||||||||
(millions
of U.S. dollars, except per share amounts)
|
2008
|
2007
|
||||||
Pro
forma results (unaudited)
|
||||||||
Pro
forma revenues
|
13,441 | 12,442 | ||||||
Pro
forma operating profit
|
1,936 | 1,571 | ||||||
Pro
forma revenues from ongoing businesses
|
13,399 | 12,442 | ||||||
Pro
forma underlying operating profit
|
2,773 | 2,337 | ||||||
Pro
forma underlying operating profit margin
|
20.7 | % | 18.8 | % | ||||
Pro
forma adjusted diluted earnings per share from continuing
operations
|
$ | 1.91 | n/a |
•
|
has
not been audited;
|
•
|
has
been prepared for informational purposes only, and because of its nature,
addresses a hypothetical situation and, therefore, does not represent our
actual financial position or
results;
|
•
|
does
not purport to represent what our consolidated results of operations
actually would have been if the acquisition had occurred on January 1,
2007 or what those results will be for any future periods. The pro forma
adjustments are based on current information;
and
|
•
|
has not been adjusted to reflect
any matters not directly attributable to the acquisition. No adjustment,
therefore, has been made to periods prior to the closing date (April 17,
2008) for actions which have or may be taken upon
completion of the acquisition, such as any of our integration
plans.
|
Percentage
change due to:
|
||||||||||||||||||||||||
Year
ended
December
31
|
Existing
|
Acquired
|
Foreign currency
|
|||||||||||||||||||||
(millions
of U.S. dollars)
|
2008
|
|
2007
|
businesses
|
businesses
|
translation
|
|
Total
|
||||||||||||||||
Revenues
from ongoing businesses
|
13,399 | 12,442 | 6 | % | 2 | % | 0 | % | 8 | % |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Year
ended December 31
|
||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
||||||
Pro
forma operating profit
|
1,936 | 1,571 | ||||||
Adjustments:
|
||||||||
Amortization
|
511 | 524 | ||||||
Purchase
accounting difference
|
– | 86 | ||||||
Disposals
|
(5 | ) | (11 | ) | ||||
Impairment
of assets held for sale
|
72 | – | ||||||
Fair
value adjustments
|
(103 | ) | 48 | |||||
Integration
and synergy program costs
|
362 | 153 | ||||||
Pension
settlement
|
– | (34 | ) | |||||
Pro
forma underlying operating profit
|
2,773 | 2,337 | ||||||
Pro
forma underlying operating profit margin
|
20.7 | % | 18.8 | % |
(millions
of U.S. dollars,
|
Year
ended December 31
|
|||
except
per share amounts)
|
2008
|
|||
Pro
forma underlying operating profit
|
2,773 | |||
Adjustments:
|
||||
Integration
and synergy program costs
|
(362 | ) | ||
Net
interest expense
|
(434 | ) | ||
Income
taxes
|
(367 | ) | ||
Tradeweb
ownership interests
|
(17 | ) | ||
Dividends
declared on preference shares
|
(5 | ) | ||
Pro
forma adjusted earnings from continuing operations
|
1,588 | |||
Pro
forma adjusted earnings per share from continuing
operations
|
$ | 1.92 | ||
Pro
forma adjusted diluted earnings per share from continuing
operations
|
$ | 1.91 |
Year
ended December 31
|
||||||||||||
(millions
of U.S. dollars, except per share amounts)
|
2008
|
2007
|
2006
|
|||||||||
Revenues
|
11,707 | 7,296 | 6,591 | |||||||||
Operating
profit
|
1,693 | 1,297 | 1,248 | |||||||||
Earnings
from continuing operations
|
1,405 | 1,096 | 912 | |||||||||
Net
earnings
|
1,405 | 4,004 | 1,120 | |||||||||
Diluted
earnings per share from continuing operations
|
$ | 1.81 | $ | 1.69 | $ | 1.41 | ||||||
Diluted
earnings per share
|
$ | 1.81 | $ | 6.20 | $ | 1.73 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
In
2008, income taxes included an $80 million benefit associated with
currency and exchange gains taxable at rates lower than those in Canada.
This item reduced our 2008 effective tax rate by approximately
5%.
|
•
|
In
2007, our provision included benefits of $60 million resulting primarily
from the recognition of Canadian tax losses, but also reflecting a change
in Australian tax law. These benefits reduced our 2007 effective tax rate
by approximately 5%. The Canadian tax losses were recognized in
anticipation of using them against taxable income from the sale of Thomson
Learning’s Canadian education operations, which was completed in July
2007.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
In
2006, we increased valuation allowances against deferred tax assets which
increased our tax rate by 4%. The net change in the valuation allowance
included benefits associated with our Thomson Learning segment which,
under the requirements of discontinued operations accounting, were not
allowed to be reclassified to discontinued operations along with the other
results for the business. The impact of including the benefits related to
the Thomson Learning segment in our continuing operations tax charge
reduced our effective tax rate by 3% in
2006.
|
Percentage
change due to:
|
||||||||||||||||||||||||
|
Foreign
|
|||||||||||||||||||||||
Year
ended December 31
|
Existing
|
Acquired
|
currency
|
|||||||||||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
businesses
|
businesses
|
translation
|
Total
|
||||||||||||||||||
Pro
forma revenues
|
||||||||||||||||||||||||
Sales
& Trading
|
3,828 | 3,640 | 4 | % | 0 | % | 1 | % | 5 | % | ||||||||||||||
Investment
& Advisory
|
2,371 | 2,207 | 7 | % | 1 | % | (1 | %) | 7 | % | ||||||||||||||
Enterprise
|
1,295 | 1,139 | 13 | % | 0 | % | 1 | % | 14 | % | ||||||||||||||
Media
|
450 | 432 | 0 | % | 0 | % | 4 | % | 4 | % | ||||||||||||||
Markets
division total
|
7,944 | 7,418 | 6 | % | 0 | % | 1 | % | 7 | % | ||||||||||||||
Pro
forma segment operating profit
|
1,406 | 1,117 | ||||||||||||||||||||||
Pro
forma segment operating profit margin
|
17.7 | % | 15.1 | % |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
Sales
& Trading pro forma revenues increased before the effects of
foreign currency primarily due to contributions from our Treasury,
Tradeweb and Commodities & Energy businesses. The increase in Treasury
revenues were a result of foreign exchange volatility and higher
transaction volumes, particularly in the first nine months of the year.
Volatility in the mortgage backed securities market resulted in increased
transaction revenue in our Tradeweb business. Commodities & Energy
revenues increased due to higher demand for our information products
resulting from sector
activity.
|
•
|
Investment
& Advisory pro forma revenues from existing businesses
increased across multiple customer groups including Investment Management,
Retail Wealth Management and Corporate. Higher revenues from Investment
Management were due to demand for datafeeds and analytics products, such
as QAI and Starmine. Retail Wealth Management benefited from Thomson ONE
and higher revenues from our BETA software and services as a result of
increased volumes. Higher Corporate revenues reflected greater
international activity relative to web cast services. Revenues from our
Investment Banking customers were comparable to the prior year as
increases from the first nine months of the year were offset by a decrease
in the fourth quarter of 2008.
|
•
|
Enterprise pro
forma revenues increased before the effects of foreign currency reflecting
higher data feed revenues and higher demand for information and risk
management systems as customers continue to seek ways to reduce risk,
drive efficiencies and increase returns.
|
•
|
Media
pro forma revenues were comparable to the prior year before the
effects of foreign currency. Revenues from agency services increased due
to higher demand, particularly in the first nine months of the year.
However, these increases were offset by decreases in our professional
publishing and consumer businesses in the fourth quarter of
2008.
|
Year
ended December 31
|
||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Revenues
|
6,210 | 2,186 | 2,025 | |||||||||
Segment
operating profit
|
1,104 | 454 | 380 | |||||||||
Segment
operating profit margin
|
17.8 | % | 20.8 | % | 18.8 | % |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
(millions
of U.S. dollars)
|
2008
percentage change
|
2007
percentage change
|
||||||||||||||||||||||||||||||||||||||||||
Year
ended December 31
|
Foreign
|
Foreign
|
||||||||||||||||||||||||||||||||||||||||||
Existing
|
Acquired
|
currency
|
Existing
|
Acquired
|
currency
|
|||||||||||||||||||||||||||||||||||||||
Revenues
|
2008
|
2007
|
2006
|
businesses
|
businesses
|
translation
|
Total
|
businesses
|
businesses
|
translation
|
Total
|
|||||||||||||||||||||||||||||||||
Ongoing
|
5,464 | 5,040 | 4,489 | 6 | % | 2 | % | – | 8 | % | 7 | % | 4 | % | 1 | % | 12 | % | ||||||||||||||||||||||||||
Disposals
|
42 | 86 | 93 | n/m | n/m | n/m | n/m | n/m | n/m | n/m | n/m | |||||||||||||||||||||||||||||||||
Total
|
5,506 | 5,126 | 4,582 | n/m | n/m | n/m | 7 | % | n/m | n/m | n/m | 12 | % |
Year
ended December 31
|
||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Operating
profit from
|
||||||||||||
ongoing
businesses
|
1,610 | 1,477 | 1,340 | |||||||||
Operating
profit from disposals
|
5 | 11 | 3 | |||||||||
Operating
profit
|
1,615 | 1,488 | 1,343 | |||||||||
Operating
profit margin for ongoing businesses
|
29.5 | % | 29.3 | % | 29.9 | % | ||||||
Operating
profit margin
|
29.3 | % | 29.0 | % | 29.3 | % |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
(millions
of U.S. dollars)
|
2008
percentage change
|
2007
percentage change
|
||||||||||||||||||||||||||||||||||||||||||
Year
ended December 31
|
Existing
|
Acquired
|
Foreign
currency
|
Existing
|
Acquired
|
Foreign
currency
|
||||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
businesses
|
businesses
|
translation
|
Total
|
businesses
|
businesses
|
translation
|
Total
|
||||||||||||||||||||||||||||||||||
Revenues
|
3,531 | 3,318 | 3,008 | 6 | % | – | – | 6 | % | 7 | % | 1 | % | 2 | % | 10 | % |
Year
ended December 31
|
||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Segment
operating profit
|
1,135 | 1,044 | 943 | |||||||||
Segment
operating profit margin
|
32.1 | % | 31.5 | % | 31.3 | % |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
(millions
of U.S. dollars)
|
2008
percentage change
|
2007
percentage change
|
||||||||||||||||||||||||||||||||||||||||||
Year
ended December 31
|
Existing
|
Acquired
|
Foreign
currency
|
Existing
|
Acquired
|
Foreign
currency
|
||||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
businesses
|
businesses
|
translation
|
Total
|
businesses
|
businesses
|
translation
|
Total
|
||||||||||||||||||||||||||||||||||
Revenues
|
861 | 705 | 598 | 10 | % | 12 | % | – | 22 | % | 10 | % | 8 | % | – | 18 | % |
Year
ended December 31
|
||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Segment
operating profit
|
219 | 184 | 168 | |||||||||
Segment
operating profit margin
|
25.4 | % | 26.1 | % | 28.1 | % |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
(millions
of U.S. dollars)
|
2008
percentage change
|
2007
percentage change
|
||||||||||||||||||||||||||||||||||||||||||
Year
ended December 31
|
Existing
|
Acquired
|
Foreign
currency
|
Existing
|
Acquired
|
Foreign
currency
|
||||||||||||||||||||||||||||||||||||||
Revenues
|
2008
|
2007
|
2006
|
businesses
|
businesses
|
translation
|
Total
|
businesses
|
businesses
|
translation
|
Total
|
|||||||||||||||||||||||||||||||||
Ongoing
|
604 | 565 | 509 | 4 | % | 4 | % | (1 | %) | 7 | % | 5 | % | 3 | % | 3 | % | 11 | % | |||||||||||||||||||||||||
Disposals
|
42 | 86 | 93 | n/m | n/m | n/m | n/m | n/m | n/m | n/m | n/m | |||||||||||||||||||||||||||||||||
Total
|
646 | 651 | 602 | n/m | n/m | n/m | (1 | %) | n/m | n/m | n/m | 8 | % |
Year
ended December 31
|
||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Operating
profit from ongoing businesses
|
171 | 164 | 148 | |||||||||
Operating
profit from disposals
|
5 | 11 | 3 | |||||||||
Operating
profit
|
176 | 175 | 151 | |||||||||
Operating
profit margin for ongoing businesses
|
28.3 | % | 29.0 | % | 29.1 | % | ||||||
Operating
profit margin
|
27.2 | % | 26.9 | % | 25.1 | % |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
(millions
of U.S. dollars)
|
2008
percentage change
|
2007
percentage change
|
||||||||||||||||||||||||||||||||||||||||||
Year
ended December 31
|
Existing
|
Acquired
|
Foreign
currency
|
Existing
|
Acquired
|
Foreign
currency
|
||||||||||||||||||||||||||||||||||||||
Revenues
|
2008
|
2007
|
2006
|
businesses
|
businesses
|
translation
|
Total
|
businesses
|
businesses
|
translation
|
Total
|
|||||||||||||||||||||||||||||||||
Revenues
|
468 | 452 | 374 | 4 | % | – | – | 4 | % | – | 21 | % | – | 21 | % |
Year
ended December 31
|
||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Segment
operating profit
|
85 | 85 | 81 | |||||||||
Segment
operating profit margin
|
18.2 | % | 18.8 | % | 21.7 | % |
Year
ended December 31
|
||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
||||||
Corporate
expenses
|
243 | 257 | ||||||
Integration
and synergy costs
|
362 | 153 | ||||||
Fair
value adjustments
|
(103 | ) | 48 | |||||
Pension
settlement
|
– | (34 | ) | |||||
Total
|
502 | 424 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Year
ended December 31
|
||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Corporate
expenses
|
218 | 194 | 175 | |||||||||
Integration
and synergy costs
|
362 | 153 | 60 | |||||||||
Reuters
transaction costs
|
68 | 76 | – | |||||||||
Fair
value adjustments
|
(105 | ) | – | – | ||||||||
Pension
settlement
|
– | (34 | ) | – | ||||||||
Total
|
543 | 389 | 235 |
Three
months ended December 31
|
||||||||
(millions
of U.S. dollars, except per share amounts)
|
2008
|
2007
|
||||||
Pro
forma results (unaudited):
|
||||||||
Pro
forma revenues
|
3,412 | 3,422 | ||||||
Pro
forma operating profit
|
610 | 574 | ||||||
Pro
forma revenues from ongoing businesses
|
3,412 | 3,401 | ||||||
Pro
forma underlying operating profit
|
833 | 736 | ||||||
Pro
forma underlying operating profit margin
|
24.4 | % | 21.6 | % | ||||
Pro
forma adjusted diluted earnings per share from continuing
operations
|
$ | 0.57 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
2008
percentage change
|
||||||||||||||||||||||||
Three
months ended
|
Foreign
|
|||||||||||||||||||||||
December
31
|
Existing
|
Acquired
|
|
currency
|
||||||||||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
businesses
|
businesses
|
translation
|
Total
|
||||||||||||||||||
Sales
& Trading
|
888 | 927 | 2 | % | 0 | % | (6 | %) | (4 | %) | ||||||||||||||
Investment
& Advisory
|
582 | 585 | 4 | % | 1 | % | (6 | %) | (1 | %) | ||||||||||||||
Enterprise
|
350 | 333 | 13 | % | 0 | % | (8 | %) | 5 | % | ||||||||||||||
Media
|
106 | 119 | (5 | %) | 0 | % | (6 | %) | (11 | %) | ||||||||||||||
Markets
division
|
1,926 | 1,964 | 4 | % | 0 | % | (6 | %) | (2 | %) | ||||||||||||||
Legal
|
887 | 875 | 5 | % | 1 | % | (5 | %) | 1 | % | ||||||||||||||
Tax
& Accounting
|
281 | 248 | 11 | % | 2 | % | 0 | % | 13 | % | ||||||||||||||
Scientific
|
159 | 159 | 6 | % | 0 | % | (6 | %) | 0 | % | ||||||||||||||
Healthcare
|
160 | 158 | 1 | % | 0 | % | 0 | % | 1 | % | ||||||||||||||
Professional
division
|
1,487 | 1,440 | 6 | % | 0 | % | (3 | %) | 3 | % | ||||||||||||||
Eliminations
|
(1 | ) | (3 | ) | n/m | n/m | n/m | n/m | ||||||||||||||||
Total
pro forma revenues from ongoing businesses
|
3,412 | 3,401 | 5 | % | 0 | % | (5 | %) | 0 | % |
Three
months
|
||||||||
ended
December 31
|
||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
||||||
Pro
forma operating profit
|
610 | 574 | ||||||
Adjustments:
|
||||||||
Amortization
|
126 | 134 | ||||||
Disposals
|
– | (2 | ) | |||||
Fair
value adjustments
|
(26 | ) | (4 | ) | ||||
Integration
and synergy program costs
|
123 | 68 | ||||||
Pension
settlement
|
– | (34 | ) | |||||
Pro
forma underlying operating profit
|
833 | 736 | ||||||
Pro
forma underlying operating profit margin
|
24.4 | % | 21.6 | % |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Three
months
|
||||
(millions
on U.S. dollars,
|
ended
December 31
|
|||
except
per share amounts)
|
2008
|
|||
Pro
forma underlying operating profit
|
833 | |||
Adjustments:
|
||||
Integration
and synergy program costs
|
(123 | ) | ||
Net
interest expense
|
(102 | ) | ||
Income
taxes
|
(121 | ) | ||
Tradeweb
ownership interests
|
(8 | ) | ||
Dividends
declared on preference shares
|
(1 | ) | ||
Pro
forma adjusted earnings from continuing operations
|
478 | |||
Pro
forma adjusted earnings per share from continuing
operations
|
$ | 0.58 | ||
Pro
forma adjusted diluted earnings per share from continuing
operations
|
$ | 0.57 |
Three
months
|
||||||||
(millions
on U.S. dollars,
|
ended
December 31
|
|||||||
except
per share amounts)
|
2008
|
2007
|
||||||
Revenues
|
3,412 | 2,033 | ||||||
Operating
profit
|
689 | 410 | ||||||
Operating
profit margin
|
20.2 | % | 20.2 | % | ||||
Net
earnings
|
657 | 434 | ||||||
Diluted
earnings per common and ordinary share
|
$ | 0.79 | $ | 0.67 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
As
of December 31
|
||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
||||||
Markets
division
|
23,844 | 3,618 | ||||||
Legal
|
6,481 | 6,562 | ||||||
Tax
& Accounting
|
1,684 | 1,440 | ||||||
Scientific
|
1,258 | 1,419 | ||||||
Healthcare
|
755 | 772 | ||||||
Professional
division
|
10,178 | 10,193 | ||||||
Segment
totals
|
34,022 | 13,811 | ||||||
Corporate
and Other
|
1,992 | 9,010 | ||||||
Discontinued
operations
|
6 | 10 | ||||||
Total
assets
|
36,020 | 22,831 |
As
of December 31
|
||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
||||||
Short-term
indebtedness
|
13 | 183 | ||||||
Current
portion of long-term debt
|
672 | 412 | ||||||
Long-term
debt
|
6,834 | 4,264 | ||||||
Total
debt
|
7,519 | 4,859 | ||||||
Swaps
|
68 | (424 | ) | |||||
Total
debt after swaps
|
7,587 | 4,435 | ||||||
Remove
fair value adjustment of cash flow hedges
|
14 | 14 | ||||||
Less:
Cash and cash equivalents
|
(841 | ) | (7,497 | ) | ||||
Net
debt
|
6,760 | (3,048 | ) | |||||
Total
shareholders’ equity
|
20,126 | 13,571 | ||||||
Net
debt/equity ratio
|
0.34:1
|
(0.22:1)
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Notes
offered
|
Principal
amount
|
U.S.
offering
|
|
5.95%
notes due 2013
|
US$750,000,000
|
6.50%
notes due 2018
|
US$1,000,000,000
|
Total
U.S. dollar-denominated notes issued
|
US$1,750,000,000
|
Canadian
offering
|
|
5.25%
notes due 2011
|
C$600,000,000
|
5.70%
notes due 2015
|
C$600,000,000
|
Total
Canadian dollar-denominated notes issued
|
C$1,200,000,000
|
–
|
A
revolving credit facility with £312 million outstanding, which was repaid
in April 2008;
|
–
|
£63
million of commercial paper outstanding, which was repaid in the second
quarter of 2008;
|
–
|
500
million Euro principal amount of debentures due 2010, for which we
subsequently entered into cross-currency interest rate swap agreements
whereby these debentures will ultimately pay a floating rate based on
LIBOR on US$762 million;
|
–
|
250
million Euro principal amount of floating rate notes which matured and
were repaid in November 2008. We entered into a cross-currency interest
rate swap agreement whereby these notes were redeemed for US$398 million
on maturity;
|
–
|
1
billion Japanese yen principal amount of bonds, which were repaid in June
2008; and
|
–
|
Certain
derivative instruments used by Reuters to hedge the above-mentioned
debentures and notes, which were settled in April
2008.
|
(millions
of U.S. dollars)
|
2008
|
2007
|
||||||
Balance
at end of prior year
|
13,571 | 10,481 | ||||||
Effect of accounting change for
income taxes 1
|
– | (33 | ) | |||||
Restated
opening balance
|
13,571 | 10,448 | ||||||
Earnings
attributable to common shares and ordinary shares for the year ended
December 31
|
1,400 | 3,998 | ||||||
Common
and ordinary share issuances
|
236 | 102 | ||||||
Issuance
of Thomson Reuters PLC ordinary shares to acquire Reuters
|
8,226 | |||||||
Additions to paid in capital
related to stock compensation plans2
|
263 | 48 | ||||||
Repurchases
of shares
|
(522 | ) | (168 | ) | ||||
Common
and ordinary share dividends declared
|
(786 | ) | (628 | ) | ||||
Net unrealized gains/(losses) on
derivatives that qualify as cash flow hedges3
|
4 | (55 | ) | |||||
Change
in translation adjustment
|
(2,266 | ) | (174 | ) | ||||
Balance
at December 31
|
20,126 | 13,571 |
1
|
Effective
January 1, 2007, we voluntarily adopted a new accounting policy for
uncertain tax positions and recorded a non-cash charge to opening retained
earnings with an offsetting increase to non-current liabilities. See the
section entitled “Accounting Changes” for further
discussion.
|
2
|
Includes
$173 million for the assumption on April 17, 2008 of certain equity-based
compensation awards granted by Reuters prior to the closing of the
acquisition.
|
3
|
Effective
January 1, 2006, the unrealized gains and losses on certain derivatives
that qualify as cash flow hedges are recorded as a component of
accumulated other comprehensive income within shareholders’ equity in our
consolidated balance sheet. See the section entitled “Accounting Changes”
for further discussion.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Standard
&
|
DBRS
|
|||
Moody’s
|
Poor’s
|
Limited
|
Fitch
|
|
Long-term
debt
|
Baa1
|
A–
|
A
(low)
|
A–
|
Commercial
paper
|
–
|
–
|
R-1
(low)
|
F2
|
Trend/outlook
|
Stable
|
Negative
|
Stable
|
Stable
|
Shares
|
Average
price
|
|||||||
Three-month
period ended
|
repurchased
|
per
share
|
||||||
Thomson
Reuters Corporation
|
||||||||
March
31, 2006
|
4,570,000 | $ | 36.83 | |||||
June
30, 2006
|
3,110,000 | $ | 39.58 | |||||
September
30, 2006
|
1,710,600 | $ | 39.27 | |||||
December
31, 2006
|
1,289,400 | $ | 41.41 | |||||
March
31, 2007
|
1,305,000 | $ | 41.74 | |||||
June
30, 2007
|
495,000 | $ | 42.68 | |||||
September
30, 2007
|
– | – | ||||||
December
31, 2007
|
2,370,500 | $ | 38.76 |
Shares
|
Average
price
|
|||||||
Month
ended
|
repurchased
|
per
share
|
||||||
Thomson
Reuters PLC
|
||||||||
April
30, 2008
|
3,297,827 | $ | 31.13 | |||||
May
31, 2008
|
6,298,500 | $ | 31.59 | |||||
June
30, 2008
|
6,049,208 | $ | 29.25 | |||||
July
31, 2008
|
825,000 | $ | 25.93 | |||||
August
31, 2008
|
– | – | ||||||
September
30, 2008
|
912,350 | $ | 23.55 | |||||
October
31, 2008
|
– | – | ||||||
November
30, 2008
|
– | – | ||||||
December
31, 2008
|
– | – |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Year
ended December 31
|
||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Dividends
declared
|
786 | 628 | 567 | |||||||||
Dividends
reinvested
|
(190 | ) | (16 | ) | (14 | ) | ||||||
Dividends
paid
|
596 | 612 | 553 |
Year
ended December 31
|
||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Net
cash provided by operating activities
|
2,761 | 1,816 | 2,125 | |||||||||
Capital
expenditures
|
(906 | ) | (608 | ) | (452 | ) | ||||||
Additions
to property and equipment of discontinued operations
|
– | (97 | ) | (185 | ) | |||||||
Other
investing activities
|
(26 | ) | (37 | ) | (26 | ) | ||||||
Dividends
paid on preference shares
|
(5 | ) | (6 | ) | (5 | ) | ||||||
Other
investing activities of discontinued operations
|
(7 | ) | (2 | ) | (17 | ) | ||||||
Free
cash flow
|
1,817 | 1,066 | 1,440 |
Year
ended
|
||||
December
31
|
||||
(millions
of U.S. dollars)
|
2008
|
|||
Free
cash flow
|
1,817 | |||
One-time
Reuters acquisition, integration and synergy costs
|
518 | |||
Underlying
free cash flow
|
2,335 | |||
Adjustments for certain items
1
|
(450 | ) | ||
1,885 |
1
|
To
provide a more normalized 2008 underlying free cash flow number, we adjust
for two timing related items:
|
|
•
|
Interest
costs which were substantially lower in 2008 since we benefited from
having interest income and only a partial year of interest expense related
to the Reuters acquisition debt.
|
|
•
|
The
2008 amount does not include what is traditionally negative free cash flow
from the Reuters business in the first quarter of the year, which will be
reflected in 2009.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
(millions of U.S. dollars)
|
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
Total
|
|||||||||||||||||||||
Long-term debt 1
|
1,051 | 1,405 | 1,131 | 946 | 1,220 | 4,070 | 9,823 | |||||||||||||||||||||
Debt-related hedges outflows
2
|
575 | 894 | 933 | 58 | 58 | 1,163 | 3,681 | |||||||||||||||||||||
Debt-related hedges inflows 2
|
(599 | ) | (839 | ) | (900 | ) | (54 | ) | (53 | ) | (1,049 | ) | (3,494 | ) | ||||||||||||||
Capital
lease payments
|
18 | 13 | 4 | – | – | – | 35 | |||||||||||||||||||||
Operating
lease payments
|
351 | 279 | 226 | 186 | 164 | 612 | 1,818 | |||||||||||||||||||||
Unconditional
purchase obligations
|
765 | 512 | 431 | 382 | 340 | 502 | 2,932 | |||||||||||||||||||||
Pension contributions3
|
49 | – | – | – | – | – | 49 | |||||||||||||||||||||
Total
|
2,210 | 2,264 | 1,825 | 1,518 | 1,729 | 5,298 | 14,844 |
1
|
Represents
our contractual principal and interest payments to holders of our debt
securities.
|
2
|
Substantially
all of our non-U.S. dollar-denominated debt has been hedged into U.S.
dollars. Debt-related hedges outflows represent our projected payments to
counterparties. Debt-related hedges inflows represent our projected cash
receipts from counterparties. We present our projected inflows along with
outflows in order to reflect the net cash flow we anticipate from our
debt-related hedging instruments in order to satisfy principal and
interest payments to our long-term debt securities
holders.
|
3
|
Represents
expected contributions to our pension plans, primarily in
the United Kingdom, in accordance with normal funding
policy. These amounts do not include voluntary contributions we may
elect to make from time to time.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
First,
we determine whether it is more likely than not that a tax position will
be sustained upon examination, including resolution of any related appeals
or litigation processes, based on the technical merits of the position. In
evaluating whether a tax position has met the more likely than not
recognition threshold, we presume that the position will be examined by
the appropriate taxing authority that has full knowledge of all relevant
information.
|
•
|
Second,
a tax position that meets the more likely than not recognition threshold
is measured to determine the amount of benefit to recognize in the
financial statements. The tax position is measured at the largest amount
of benefit that is greater than 50% likely of being realized upon ultimate
settlement. If the tax position does not meet the more-likely-than-not
recognition threshold, no benefit from the tax position is recorded. We
were not able to retroactively apply this new policy as the data to
determine the amounts and probabilities of the possible outcomes of the
various tax positions that could be realized upon ultimate settlement was
not collected in prior periods. Further, significant judgments are
involved in assessing these tax positions and we concluded that it is not
possible to estimate the effects of adopting the policy at an earlier
date.
|
•
|
an
increase of $53 million to “Other non-current assets” and “Accumulated
other comprehensive income” in the consolidated balance sheet relative to
derivative instruments that consisted primarily of interest rate
contracts, which convert floating rate debt to fixed rate debt and qualify
as cash flow hedges;
|
•
|
a
reclassification of $5 million from “Other current assets” and $3 million
from “Other current liabilities” to “Accumulated other comprehensive
income” in the consolidated balance sheet related primarily to previously
deferred gains and losses on settled cash flow
hedges;
|
•
|
an
increase of $16 million to “Other non-current assets” and “Long-term debt”
in the consolidated balance sheet related to derivative instruments and
their related hedged items. These derivative instruments consist primarily
of interest rate contracts to convert fixed rate debt to floating and
qualify as fair value hedges; and
|
•
|
a
presentational reclassification of amounts previously recorded in
“Cumulative translation adjustment” to “Accumulated other comprehensive
income.”
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
In
the first step, we determine the fair value of each reporting unit. If the
fair value of a reporting unit is less than its carrying value, this is an
indicator that the goodwill assigned to that reporting unit might be
impaired, which requires performance of the second
step.
|
•
|
In
the second step, we allocate the fair value of the reporting unit to the
assets and liabilities of the reporting unit as if it had just been
acquired in a business combination, and as if the purchase price was
equivalent to the fair value of the reporting unit. The excess of the fair
value of the reporting unit over the amounts assigned to its assets and
liabilities is referred to as the implied fair value of goodwill. We then
compare that implied fair value of the reporting unit’s goodwill to the
carrying value of that goodwill. If the implied fair value is less than
the carrying value, we recognize an impairment loss for that
excess.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
CALCULATION
OF UNAUDITED PRO FORMA INFORMATION
|
||||||||||||||||||||
The
tables below show the calculation of unaudited pro forma information for
the years ended December 31, 2008 and 2007:
|
||||||||||||||||||||
(millions
of U.S. dollars)
|
Pro
forma
|
|||||||||||||||||||
Thomson
|
Pro
forma adjustments
|
Adjustment
|
Thomson
|
|||||||||||||||||
Year
ended December 31, 2008
|
Reuters
|
Reuters1
|
Other
|
note
|
Reuters
|
|||||||||||||||
Revenues
|
11,707 | 1,699 | 35 | a | ) | 13,441 | ||||||||||||||
Cost
of sales, selling, marketing, general
and administrative
expenses
|
(8,700 | ) | (1,364 | ) | 106 | b), c), d), e) | (9,958 | ) | ||||||||||||
Depreciation
|
(831 | ) | (86 | ) | (47 | ) | d | ) | (964 | ) | ||||||||||
Amortization
|
(411 | ) | (8 | ) | (92 | ) | d | ) | (511 | ) | ||||||||||
Impairment
of assets held for sale
|
(72 | ) | - | - | (72 | ) | ||||||||||||||
Operating
profit
|
1,693 | 241 | 2 | 1,936 | ||||||||||||||||
(millions
of U.S. dollars)
|
Pro
forma
|
|||||||||||||||||||
Thomson
|
Pro
forma adjustments
|
Adjustment
|
Thomson
|
|||||||||||||||||
Year
ended December 31, 2007
|
Reuters
|
Reuters1
|
Other
|
note
|
Reuters
|
|||||||||||||||
Revenues
|
7,296 | 5,232 | (86 | ) | a | ) | 12,442 | |||||||||||||
Cost
of sales, selling, marketing, general
and administrative
expenses
|
(5,275 | ) | (4,678 | ) | 528 | b), c), d), e) | (9,425 | ) | ||||||||||||
Depreciation
|
(468 | ) | (280 | ) | (174 | ) | d | ) | (922 | ) | ||||||||||
Amortization
|
(256 | ) | (88 | ) | (180 | ) | d | ) | (524 | ) | ||||||||||
Operating
profit
|
1,297 | 186 | 88 | 1,571 |
a)
|
To
adjust the carrying value of Reuters deferred revenue obligation as
of January 1, 2007 to its estimated fair value, revenues were reduced
by $86 million for the three months ended March 31, 2007, which
carried through to the year ended December 31, 2007. Because of
Reuters contractual quarterly billing cycle, this adjustment was
reflected in its entirety in the quarter ended March 31,
2007.
|
b)
|
Thomson
and Reuters expensed integration planning and other transaction
related costs incurred prior to the acquisition closing. For purposes
of the pro forma results, $238 million and $166 million of these
expenses incurred in the years ended December 31, 2008 and 2007,
respectively, were reversed because the pro forma results have been
prepared as if the acquisition had occurred on January 1, 2007, and
these expenses would have been incurred prior to the closing
date. Additionally, these expenses are non-recurring in
nature and are not expected to have a continuing impact on
the consolidated results.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
c)
|
For
the year ended December 31, 2008, cost of sales, selling, marketing,
general and administrative expenses were increased by $140 million
(December 31, 2007 – decrease of $322 million) to eliminate
amortization related to past service costs and net actuarial gains
and losses in connection with Reuters pension and other
post-retirement benefit plans. These expenses were eliminated as
retirement plan assets and obligations would have been reflected at
their fair values on January 1,
2007.
|
d)
|
Amortization
and depreciation:
|
•
|
Adjustments
of $92 million and $180 million were recorded in the years ended
December 31, 2008 and 2007, respectively, to reflect additional
amortization attributable to the fair value increment allocated to
identifiable intangible
assets.
|
•
|
Adjustments
of $47 million and $174 million were recorded in the years ended
December 31, 2008 and 2007, respectively, to reflect additional
depreciation attributable to the fair value increment allocated to
computer hardware and other property, and internal use
software.
|
•
|
Adjustments
of $17 million and $12 million were recorded in the years ended
December 31, 2008 and 2007, respectively, to decrease cost of sales,
selling, marketing, general and administrative expenses to reflect
amortization attributable to the fair value increment allocated to
capitalized software to be sold
externally.
|
e)
|
Adjustments
of $9 million to increase expense and $28 million to decrease expense
recorded in the years ended December 31, 2008 and 2007, respectively,
attributable to amortization of the fair value increment allocated to
favorable and unfavorable leases and other operating
assets.
|
Pro
Forma Depreciation by Segment
|
||||||||||||||||
The
following table details pro forma depreciation expense by segment and
disposals for the three month period ended and years ended
December
31, 2008 and 2007:
|
||||||||||||||||
Three
months ended December 31
|
Year
ended December 31
|
|||||||||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Markets
division1
|
(157 | ) | (149 | ) | (617 | ) | (626 | ) | ||||||||
Professional
division
|
||||||||||||||||
Legal
|
(59 | ) | (52 | ) | (235 | ) | (205 | ) | ||||||||
Tax
& Accounting
|
(8 | ) | (6 | ) | (30 | ) | (21 | ) | ||||||||
Scientific
|
(10 | ) | (7 | ) | (35 | ) | (28 | ) | ||||||||
Healthcare
|
(6 | ) | (7 | ) | (25 | ) | (24 | ) | ||||||||
Corporate
and Other
|
(13 | ) | (4 | ) | (21 | ) | (14 | ) | ||||||||
Disposals
|
- | (2 | ) | (1 | ) | (4 | ) | |||||||||
Total
pro forma depreciation
|
(253 | ) | (227 | ) | (964 | ) | (922 | ) |
1
|
In
the fourth quarter of 2008, we completed our valuation of acquired Reuters
net assets. In arriving at our three-month and year ended December 31,
2008 and 2007 pro forma results, we have recast our previously reported
pro forma results to reflect the finalized assumptions. Compared to our
previously reported pro forma results, the finalization of the valuation
resulted in the following
changes:
|
|
a)
|
Markets
pro forma depreciation for the three month period ended March 31, six
month period ended June 30, and nine month period ended September 30, 2008
are ($155) million, ($305) million and ($460) million,
respectively.
|
|
b)
|
Markets
pro forma depreciation for the three month period ended March 31, six
month period ended June 30, and nine month period ended September 30, 2007
are ($157) million, ($312) million and ($477) million,
respectively.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
CALCULATION
OF RETURN ON INVESTED CAPITAL
|
||||||||||||
The
following is a calculation of our return on invested capital.
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Pro
forma1
|
(excluding
|
(as
reported)
|
||||||||||
(unaudited)
|
discontinued
|
|||||||||||
(millions
of U.S. dollars)
|
operations)2
|
|||||||||||
Calculation
of adjusted operating profit after taxes
|
||||||||||||
Operating
profit
|
1,936 | 1,297 | 1,248 | |||||||||
Add/(Deduct):
|
||||||||||||
Amortization
|
511 | 256 | 240 | |||||||||
Impairment
of assets held for sale
|
72 | - | - | |||||||||
Fair
value adjustments3
|
(103 | ) | - | - | ||||||||
Reduce
amount by Thomson Learning adjustments4
|
- | - | (19 | ) | ||||||||
Segment
operating profit of discontinued operations
|
- | - | 398 | |||||||||
Adjusted
operating profit
|
2,416 | 1,553 | 1,867 | |||||||||
Taxes
paid on operations5
|
(267 | ) | (315 | ) | (311 | ) | ||||||
Post-tax
adjusted operating profit
|
(2,149 | ) | 1,238 | 1,556 | ||||||||
Calculation
of adjusted invested capital
|
||||||||||||
Equity
|
20,126 | 13,571 | 10,481 | |||||||||
Total
debt5
|
7,519 | 4,859 | 4,321 | |||||||||
Invested
capital
|
27,645 | 18,430 | 14,802 | |||||||||
Adjustments:
|
||||||||||||
Cash
and other investments6
|
(841 | ) | (7,497 | ) | (334 | ) | ||||||
Debt
swaps7
|
68 | (424 | ) | (257 | ) | |||||||
Fair
value adjustments3
|
(103 | ) | - | - | ||||||||
Current
and long-term deferred taxes5,
6
|
2,510 | 846 | 1,122 | |||||||||
Accumulated
amortization and non-cash goodwill5,
8
|
(80 | ) | 1,844 | 2,390 | ||||||||
Present
value of operating leases5,
9
|
1,423 | 604 | 783 | |||||||||
Historical
intangible asset and equity investment write-downs10
|
87 | 124 | 162 | |||||||||
Other5,
6
|
1,485 | 778 | 798 | |||||||||
Adjusted
invested capital
|
32,194 | 14,705 | 19,466 | |||||||||
Average
invested capital
|
33,461 | 14,288 | 19,014 | |||||||||
Return
on invested capital
|
6.4 | % | 8.7 | % | 8.2 | % |
1
|
For
2008, we calculated ROIC based on pro forma operating profit. See the
section entitled "Results of Operations" for additional information.
Average invested capital was calculated assuming the Reuters acquisition
purchase price and obligations assumed were included in the invested
capital base as of the beginning of the
period.
|
2
|
For
2007, we calculated ROIC based on reported results from continuing
operations. No adjustment was made to add back the results of discontinued
operations given that numerous disposals occurred during the year and
partial year adjustments in these circumstances distort annualized
results. In particular, our largest disposal, Thomson Learning, had a
significant impact due to the fact that it was a highly seasonal business
which was disposed of mid-year. Accordingly, the 2007 ROIC calculation
excludes all impacts from businesses classified as discontinued
operations.
|
3
|
Remove
impact of change in fair value associated with foreign currency embedded
derivatives of customer contracts.
|
4
|
This
adjustment reflects the actual results of Thomson Learning's higher
education, careers and library reference, NETg and Prometric businesses in
Thomson Learning as if they had been part of continuing operations for the
periods presented. Specifically, this amount reflects depreciation expense
which is excluded from GAAP results under the accounting requirements for
discontinued operations. Costs incurred in connection with the disposal of
the businesses have been excluded.
|
5
|
For
2006 (as reported) amounts include discontinued
operations.
|
6
|
Items
excluded as not deemed components of invested capital; "Other" primarily
consists of non-current
liabilities.
|
7
|
Excludes
debt swaps as balances are financing rather than
operating-related.
|
8
|
Excludes
accumulated amortization as only gross identifiable intangible assets and
goodwill cost are considered components of invested capital. Excludes
goodwill arising from adoption of CICA 3465. This goodwill was created via
deferred tax liability instead of cash purchase
price.
|
9
|
Present
value of operating leases deemed component of invested
capital.
|
10
|
Adds
back write-downs that were not cash
transactions.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
•
|
Unrecognized
actuarial gains or losses are netted with the difference between
market-related value and fair value of plan
assets.
|
•
|
To
the extent this net amount exceeds 10% of the greater of the
projected benefit obligation or market-related value of plan assets,
it is amortized into pension expense on a straight-line basis over
the expected average service life of active participants
(approximately eight years at December 31, 2008 for the TRGP plan and
thirteen years for the RPF).
|
•
|
Unrecognized
actuarial gains and losses below the 10% corridor are
deferred.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
1.
|
Business
combinations – IFRS 3, Business
Combinations, may be applied retrospectively or prospectively. The
retrospective basis would require restatement of all business combinations
that occurred prior to the transition date. We will not elect to
retrospectively apply IFRS 3 to business combinations that occurred prior
to the Transition Date and such business combinations will not be
restated. Any goodwill arising on such business combinations before the
Transition Date will not be adjusted from the carrying value previously
determined under Canadian GAAP as a result of applying these exemptions
except as required under IFRS 1. Further, we will not early adopt IFRS 3
Revised, and instead will adopt that standard upon its effective date
which, for us, will be January 1,
2010.
|
2.
|
Fair
value as deemed cost – IFRS 1 provides a choice between measuring
property, plant and equipment at its fair value at the date of transition
and using those amounts as deemed cost or using the historical valuation
under the prior GAAP. We will continue to apply the cost model for
property, plant & equipment and will not restate property, plant &
equipment to fair value under IFRS. We will use the historical bases under
Canadian GAAP as deemed cost under IFRS at Transition
Date.
|
3.
|
Employee
benefits – IAS 19, Employee
Benefits, allows certain actuarial gains and losses to be either
deferred and amortized, subject to certain provisions (corridor approach),
or immediately recognized through equity. Retrospective application of the
corridor approach for recognition of actuarial gains and losses in
accordance with IAS 19 would require us to determine actuarial gains and
losses from the date benefit plans were established. We will elect to
recognize all cumulative actuarial gains and losses that existed at the
Transition Date in opening retained earnings for all of its employee
benefit plans.
|
4.
|
Cumulative
translation differences – Retrospective application of IFRS would
require us to determine cumulative currency translation differences in
accordance with IAS 21, The
Effects of Changes in Foreign Exchange Rates, from the date a
subsidiary or associate was formed or acquired. IFRS 1 permits cumulative
translation gains and losses to be reset to zero at the Transition Date.
We will elect to reset all cumulative translation gains and losses to zero
in opening retained earnings at the Transition
Date.
|
5.
|
Share-based
payments – IFRS 2, Share
Based Payments, encourages application of its provisions to equity
instruments granted on or before November 7, 2002, but permits the
application only to equity instruments granted after November 7, 2002 that
had not vested by the Transition Date. We will elect to avail itself of
the exemption provided under IFRS 1 and will apply IFRS 2 for all equity
instruments granted after November 7, 2002 that had not vested by January
1, 2008. Further, we will apply IFRS 2 for all liabilities arising from
share-based payment transactions that existed at January 1,
2008.
|
6.
|
Changes
in existing decommissioning, restoration and similar liabilities included
in the cost of property, plant and equipment – IFRS 1 allows for
either the retroactive adoption or prospective adoption from the
transition date of IFRIC 1, Changes
in Existing Decommissioning, Restoration and Similar Liabilities.
We will elect not to retrospectively recognize changes to liabilities
under IFRIC 1 which may have occurred before the Transition
Date.
|
1.
|
Hedge
accounting – Hedge accounting can only be applied prospectively
from the Transition Date to transactions that satisfy the hedge accounting
criteria in IAS 39 at that date. Hedging relationships cannot be
designated retrospectively and the supporting documentation cannot be
created retrospectively. As a result, only hedging relationships that
satisfied the hedge accounting criteria as of the Transition Date will be
reflected in our IFRS results.
|
2.
|
Estimates
– Hindsight is not used to create or revise estimates. The
estimates we previously made under Canadian GAAP cannot be revised for
application of IFRS except where necessary to reflect any difference in
accounting policies.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Year
ended December 31
|
||||||||||||
(millions of U.S. dollars, except per share
amounts)
|
2008
|
2007
|
2006
|
|||||||||
Net
earnings under Canadian GAAP
|
1,405 | 4,004 | 1,120 | |||||||||
Differences
in GAAP increasing (decreasing) reported earnings:
|
||||||||||||
1.
Business combinations
|
(117 | ) | (2 | ) | – | |||||||
2.
Employee benefits
|
37 | (5 | ) | 67 | ||||||||
3.
Stock-based compensation
|
(23 | ) | 3 | 15 | ||||||||
4.
Impairments
|
(8 | ) | 31 | (31 | ) | |||||||
5.
Derivative instruments and hedging activities
|
1 | (3 | ) | 3 | ||||||||
6.
Cumulative translation adjustment
|
(3 | ) | – | – | ||||||||
7.
Minority interest in equity of consolidated subsidiary
|
17 | – | – | |||||||||
8. Income taxes
|
23 | (39 | ) | (18 | ) | |||||||
Net earnings under IFRS
|
1,332 | 3,989 | 1,156 | |||||||||
Basic earnings per share
|
$ | 1.70 | $ | 6.21 | $ | 1.79 | ||||||
Diluted earnings per share
|
$ | 1.69 | $ | 6.18 | $ | 1.78 |
As
at December 31
|
||||||||||||
(millions of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Shareholders’
equity under Canadian GAAP
|
20,126 | 13,571 | 10,481 | |||||||||
Differences
increasing (decreasing) reported shareholders’ equity:
|
||||||||||||
1.
Business combinations
|
(1,159 | ) | (42 | ) | (40 | ) | ||||||
2.
Employee benefits
|
(763 | ) | (319 | ) | (487 | ) | ||||||
3.
Stock-based compensation
|
(49 | ) | (18 | ) | (12 | ) | ||||||
4.
Impairments
|
1 | – | (31 | ) | ||||||||
5.
Derivative instruments and hedging activities
|
10 | (2 | ) | 1 | ||||||||
6.
Minority interest in equity of consolidated subsidiary
|
72 | – | ||||||||||
7.
Sale of minority interest in a consolidated subsidiary
|
96 | – | – | |||||||||
8.
Share repurchase obligation
|
– | – | (24 | ) | ||||||||
9. Income taxes
|
223 | 94 | 175 | |||||||||
Shareholders’ equity under
IFRS
|
18,557 | 13,284 | 10,063 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Quarter
ended
|
Quarter
ended
|
Quarter
ended
|
Quarter
ended
|
|||||||||||||||||||||||||||||||||||||||||||||
(millions of U.S. dollars,
|
March
31
|
June
30
|
September
30
|
December
31
|
||||||||||||||||||||||||||||||||||||||||||||
except per share amounts)
|
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
2008
|
2007
|
|
|
2006
|
|
|
2008
|
|
|
2007
|
2006
|
||||||||||||||||||||||||||||||
Revenues
|
1,834 | 1,662 | 1,500 | 3,128 | 1,805 | 1,624 | 3,333 | 1,796 | 1,617 | 3,412 | 2,033 | 1,850 | ||||||||||||||||||||||||||||||||||||
Operating
profit
|
216 | 225 | 208 | 295 | 352 | 306 | 493 | 310 | 312 | 689 | 410 | 422 | ||||||||||||||||||||||||||||||||||||
Earnings
from continuing operations
|
193 | 209 | 204 | 179 | 262 | 197 | 392 | 314 | 206 | 641 | 311 | 305 | ||||||||||||||||||||||||||||||||||||
Discontinued operations, net of
tax
|
1 | 15 | (67 | ) | (6 | ) | 115 | (24 | ) | (11 | ) | 2,655 | 213 | 16 | 123 | 86 | ||||||||||||||||||||||||||||||||
Net
earnings
|
194 | 224 | 137 | 173 | 377 | 173 | 381 | 2,969 | 419 | 657 | 434 | 391 | ||||||||||||||||||||||||||||||||||||
Dividends declared on preference
shares
|
(2 | ) | (1 | ) | (1 | ) | (1 | ) | (2 | ) | (2 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (2 | ) | (1 | ) | ||||||||||||||||||||||||
Earnings attributable to common and ordinary
shares
|
192 | 223 | 136 | 172 | 375 | 171 | 380 | 2,968 | 418 | 656 | 432 | 390 | ||||||||||||||||||||||||||||||||||||
Basic
earnings per share
|
||||||||||||||||||||||||||||||||||||||||||||||||
From
continuing operations
|
$ | 0.30 | $ | 0.32 | $ | 0.31 | $ | 0.22 | $ | 0.41 | $ | 0.30 | $ | 0.47 | $ | 0.49 | $ | 0.32 | $ | 0.77 | $ | 0.48 | $ | 0.47 | ||||||||||||||||||||||||
From discontinued
operations
|
0.00 | 0.03 | (0.10 | ) | (0.00 | ) | 0.18 | (0.03 | ) | (0.01 | ) | 4.14 | 0.33 | 0.02 | 0.19 | 0.14 | ||||||||||||||||||||||||||||||||
$ | 0.30 | $ | 0.35 | $ | 0.21 | $ | 0.22 | $ | 0.59 | $ | 0.27 | $ | 0.46 | $ | 4.63 | $ | 0.65 | $ | 0.79 | $ | 0.67 | $ | 0.61 | |||||||||||||||||||||||||
Diluted
earnings per share
|
||||||||||||||||||||||||||||||||||||||||||||||||
From
continuing operations
|
$ | 0.30 | $ | 0.33 | $ | 0.31 | $ | 0.22 | $ | 0.40 | $ | 0.30 | $ | 0.47 | $ | 0.49 | $ | 0.32 | $ | 0.77 | $ | 0.48 | $ | 0.47 | ||||||||||||||||||||||||
From discontinued
operations
|
0.00 | 0.02 | (0.10 | ) | (0.00 | ) | 0.18 | (0.04 | ) | (0.01 | ) | 4.12 | 0.33 | 0.02 | 0.19 | 0.14 | ||||||||||||||||||||||||||||||||
$ | 0.30 | $ | 0.35 | $ | 0.21 | $ | 0.22 | $ | 0.58 | $ | 0.26 | $ | 0.46 | $ | 4.61 | $ | 0.65 | $ | 0.79 | $ | 0.67 | $ | 0.61 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Year
ended December 31
|
||||||||||||
(millions of U.S. dollars, except per share
amounts)
|
2008
|
2007
|
2006
|
|||||||||
Revenues
|
11,707 | 7,296 | 6,591 | |||||||||
Cost
of sales, selling, marketing, general and administrative
expenses
|
(8,700 | ) | (5,275 | ) | (4,665 | ) | ||||||
Depreciation
(notes 12 and 13)
|
(831 | ) | (468 | ) | (438 | ) | ||||||
Amortization
(note 14)
|
(411 | ) | (256 | ) | (240 | ) | ||||||
Impairment of assets held for sale (note
4)
|
(72 | ) | – | – | ||||||||
Operating
profit
|
1,693 | 1,297 | 1,248 | |||||||||
Net
other income (expense) (note 6)
|
304 | (34 | ) | 1 | ||||||||
Net
interest expense and other financing costs (note 7)
|
(224 | ) | (12 | ) | (221 | ) | ||||||
Income
taxes (note 8)
|
(351 | ) | (155 | ) | (116 | ) | ||||||
Tradeweb ownership interests, net of tax (note
21)
|
(17 | ) | – | – | ||||||||
Earnings
from continuing operations
|
1,405 | 1,096 | 912 | |||||||||
Earnings from discontinued operations, net of tax
(note 9)
|
– | 2,908 | 208 | |||||||||
Net
earnings
|
1,405 | 4,004 | 1,120 | |||||||||
Dividends declared on preference shares (note
17)
|
(5 | ) | (6 | ) | (5 | ) | ||||||
Earnings attributable to Thomson Reuters
Corporation common shares and Thomson Reuters PLC ordinary
shares
|
1,400 | 3,998 | 1,115 | |||||||||
Earnings per share (note
10)
|
||||||||||||
Basic
earnings per share:
|
||||||||||||
From
continuing operations
|
$ | 1.82 | $ | 1.70 | $ | 1.41 | ||||||
From discontinued
operations
|
– | $ | 4.54 | $ | 0.32 | |||||||
Basic earnings per share
|
$ | 1.82 | $ | 6.24 | $ | 1.73 | ||||||
Diluted
earnings per share:
|
||||||||||||
From
continuing operations
|
$ | 1.81 | $ | 1.69 | $ | 1.41 | ||||||
From discontinued
operations
|
– | $ | 4.51 | $ | 0.32 | |||||||
Diluted earnings per share
|
$ | 1.81 | $ | 6.20 | $ | 1.73 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
December
31
|
||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
||||||
ASSETS
|
||||||||
Cash
and cash equivalents
|
841 | 7,497 | ||||||
Accounts
receivable, net of allowances of $124 million (2007 – $81 million) (note
11)
|
1,780 | 1,565 | ||||||
Prepaid
expenses and other current assets
|
952 | 512 | ||||||
Deferred income taxes (note
8)
|
100 | 104 | ||||||
Current
assets
|
3,673 | 9,678 | ||||||
Computer
hardware and other property, net (note 12)
|
1,555 | 731 | ||||||
Computer
software, net (note 13)
|
1,298 | 721 | ||||||
Identifiable
intangible assets, net (note 14)
|
8,596 | 3,438 | ||||||
Goodwill
(note 15)
|
19,348 | 6,935 | ||||||
Other non-current assets
|
1,550 | 1,328 | ||||||
Total assets
|
36,020 | 22,831 | ||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Liabilities
|
||||||||
Short-term
indebtedness (note 16)
|
13 | 183 | ||||||
Accounts
payable and accruals
|
2,710 | 1,536 | ||||||
Deferred
revenue
|
1,196 | 1,108 | ||||||
Current portion of long-term debt and finance
lease obligations (note 16)
|
672 | 412 | ||||||
Current
liabilities
|
4,591 | 3,239 | ||||||
Long-term
debt and finance lease obligations (note 16)
|
6,834 | 4,264 | ||||||
Other
non-current liabilities
|
1,723 | 783 | ||||||
Deferred
income taxes (note 8)
|
2,674 | 974 | ||||||
Minority
interest in equity of consolidated affiliate (note 21)
|
72 | - | ||||||
Shareholders’
equity
|
||||||||
Capital
(note 17)
|
11,135 | 2,932 | ||||||
Retained
earnings
|
10,969 | 10,355 | ||||||
Accumulated other comprehensive (loss)
income
|
(1,978 | ) | 284 | |||||
Total shareholders’ equity
|
20,126 | 13,571 | ||||||
Total liabilities and shareholders’
equity
|
36,020 | 22,831 | ||||||
Contingencies
(note 19)
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Year
ended December 31
|
||||||||||||
(millions of U.S. dollars)
|
2008
|
2007
|
2006
|
|||||||||
Cash provided by (used in):
|
||||||||||||
OPERATING
ACTIVITIES
|
||||||||||||
Net
earnings
|
1,405 | 4,004 | 1,120 | |||||||||
Remove
earnings from discontinued operations
|
– | (2,908 | ) | (208 | ) | |||||||
Add
back (deduct) items not involving cash:
|
||||||||||||
Depreciation
(notes 12 and 13)
|
831 | 468 | 438 | |||||||||
Amortization
(note 14)
|
411 | 256 | 240 | |||||||||
Net
gains on disposals of businesses and investments (note 6)
|
(35 | ) | (8 | ) | (47 | ) | ||||||
Impairment
of assets held for sale (note 4)
|
72 | – | – | |||||||||
Deferred
income taxes (note 8)
|
32 | (124 | ) | (121 | ) | |||||||
Other,
net
|
(125 | ) | 258 | 204 | ||||||||
Changes
in working capital and other items (note 23)
|
192 | (136 | ) | (73 | ) | |||||||
Cash
(used in) provided by operating activities – discontinued operations (note
9)
|
(22 | ) | 6 | 572 | ||||||||
Net cash provided by operating
activities
|
2,761 | 1,816 | 2,125 | |||||||||
INVESTING ACTIVITIES
|
||||||||||||
Acquisitions,
less cash acquired of $473 million (2007 – $19 million, 2006 – $11
million) (note 20)
|
(8,502 | ) | (488 | ) | (744 | ) | ||||||
(Payments
for) proceeds from disposals of discontinued operations, net of income
taxes paid (note 9)
|
(65 | ) | 7,151 | 81 | ||||||||
Proceeds
from other disposals, net of income taxes paid
|
244 | 18 | 88 | |||||||||
Capital
expenditures, less proceeds from disposals of $36 million (2007 – $3
million, 2006 – $3 million)
|
(906 | ) | (608 | ) | (452 | ) | ||||||
Other
investing activities
|
(26 | ) | (37 | ) | (26 | ) | ||||||
Capital
expenditures of discontinued operations (note 9)
|
– | (97 | ) | (185 | ) | |||||||
Other
investing activities of discontinued operations
|
(7 | ) | (2 | ) | (17 | ) | ||||||
Acquisitions by discontinued
operations
|
– | (54 | ) | (35 | ) | |||||||
Net cash (used in) provided by investing
activities
|
(9,262 | ) | 5,883 | (1,290 | ) | |||||||
FINANCING
ACTIVITIES
|
||||||||||||
Proceeds
from debt (note 16)
|
7,600 | 794 | – | |||||||||
Repayments
of debt (note 16)
|
(5,487 | ) | (249 | ) | (88 | ) | ||||||
Net
(repayments) borrowings under short-term loan facilities
|
(1,065 | ) | (180 | ) | 108 | |||||||
Purchase
of sterling call options (note 16)
|
– | (76 | ) | – | ||||||||
Repurchase
of common and ordinary shares (note 17)
|
(522 | ) | (168 | ) | (412 | ) | ||||||
Dividends
paid on preference shares (note 17)
|
(5 | ) | (6 | ) | (5 | ) | ||||||
Dividends
paid on common and ordinary shares (note 17)
|
(596 | ) | (612 | ) | (553 | ) | ||||||
Dividend
payable assumed from Reuters Group PLC (note 17)
|
(246 | ) | – | – | ||||||||
Other financing activities,
net
|
207 | 33 | 38 | |||||||||
Net cash used in financing
activities
|
(114 | ) | (464 | ) | (912 | ) | ||||||
Translation adjustments
|
(41 | ) | (72 | ) | 4 | |||||||
(Decrease)
increase in cash and cash equivalents
|
(6,656 | ) | 7,163 | (73 | ) | |||||||
Cash and cash equivalents at beginning of
period
|
7,497 | 334 | 407 | |||||||||
Cash and cash equivalents at end of
period
|
841 | 7,497 | 334 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
(millions
of U.S. dollars)
|
Stated
share capital
1
|
Contributed
surplus
|
Total
capital
|
Retained
earnings
|
Accumulated
other
comprehensive income (loss) (“AOCI”)
|
Total
retained earnings and AOCI
|
Total
|
|||||||||||||||||||||
Balance,
December 31, 2007
|
2,727 | 205 | 2,932 | 10,355 | 284 | 10,639 | 13,571 | |||||||||||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||||||||||||||
Net
earnings
|
1,405 | – | 1,405 | 1,405 | ||||||||||||||||||||||||
Unrecognized
net gain on cash flow hedges
|
– | 4 | 4 | 4 | ||||||||||||||||||||||||
Foreign
currency translation adjustments
|
– | (2,103 | ) | (2,103 | ) | (2,103 | ) | |||||||||||||||||||||
Net
gain reclassified to income
|
(163 | ) | (163 | ) | (163 | ) | ||||||||||||||||||||||
Comprehensive
income (loss)
|
1,405 | (2,262 | ) | (857 | ) | (857 | ) | |||||||||||||||||||||
Issuance
of Thomson Reuters PLC shares
|
96 | 8,130 | 8,226 | 8,226 | ||||||||||||||||||||||||
Dividends
declared on preference shares
|
(5 | ) | – | (5 | ) | (5 | ) | |||||||||||||||||||||
Dividends
declared on common shares and ordinary shares
|
(786 | ) | – | (786 | ) | (786 | ) | |||||||||||||||||||||
Shares
issued under Dividend Reinvestment Plan (“DRIP”)
|
190 | – | 190 | 190 | ||||||||||||||||||||||||
Repurchases
of shares (note 17)
|
(9 | ) | (513 | ) | (522 | ) | (522 | ) | ||||||||||||||||||||
Effect
of stock compensation plans
|
46 | 263 | 309 | 309 | ||||||||||||||||||||||||
Balance,
December 31, 2008
|
3,050 | 8,085 | 11,135 | 10,969 | (1,978 | ) | 8,991 | 20,126 | ||||||||||||||||||||
(millions
of U.S. dollars)
|
Stated
share capital
1
|
Contributed
surplus
|
Total
capital
|
Retained
earnings
|
AOCI
|
Total
retained earnings and AOCI
|
Total
|
|||||||||||||||||||||
Balance,
December 31, 2006
|
2,642 | 157 | 2,799 | 7,169 | 513 | 7,682 | 10,481 | |||||||||||||||||||||
Opening
balance adjustment for income tax accounting change (note
2)
|
(33 | ) | – | (33 | ) | (33 | ) | |||||||||||||||||||||
Balance,
January 1, 2007
|
2,642 | 157 | 2,799 | 7,136 | 513 | 7,649 | 10,448 | |||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
earnings
|
4,004 | – | 4,004 | 4,004 | ||||||||||||||||||||||||
Unrecognized
net loss on cash flow hedges
|
– | (63 | ) | (63 | ) | (63 | ) | |||||||||||||||||||||
Foreign
currency translation adjustments
|
– | 89 | 89 | 89 | ||||||||||||||||||||||||
Net
gain reclassified to income
|
– | (255 | ) | (255 | ) | (255 | ) | |||||||||||||||||||||
Comprehensive
income
|
4,004 | (229 | ) | 3,775 | 3,775 | |||||||||||||||||||||||
Dividends
declared on preference shares
|
(6 | ) | – | (6 | ) | (6 | ) | |||||||||||||||||||||
Dividends
declared on common shares
|
(628 | ) | – | (628 | ) | (628 | ) | |||||||||||||||||||||
Common
shares issued under DRIP
|
16 | – | 16 | 16 | ||||||||||||||||||||||||
Repurchase
of common shares (note 17)
|
(17 | ) | – | (17 | ) | (151 | ) | – | (151 | ) | (168 | ) | ||||||||||||||||
Effect
of stock compensation plans
|
86 | 48 | 134 | 134 | ||||||||||||||||||||||||
Balance,
December 31, 2007
|
2,727 | 205 | 2,932 | 10,355 | 284 | 10,639 | 13,571 |
1
|
Includes
common, ordinary and preference share capital (note
17).
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
(millions
of U.S. dollars)
|
Stated
share capital
1
|
Contributed
surplus
|
Total
capital
|
Retained
earnings
|
AOCI
|
Total
retained earnings and AOCI
|
Total
|
|||||||||||||||||||||
Balance,
December 31, 2005
|
2,599 | 127 | 2,726 | 6,992 | 245 | 7,237 | 9,963 | |||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Opening
balance adjustment for net deferred gain on cash flow hedges (note
2)
|
– | 51 | 51 | 51 | ||||||||||||||||||||||||
Balance,
January 1, 2006
|
2,599 | 127 | 2,726 | 6,992 | 296 | 7,288 | 10,014 | |||||||||||||||||||||
Net
earnings
|
1,120 | – | 1,120 | 1,120 | ||||||||||||||||||||||||
Unrecognized
net gain on cash flow hedges
|
– | 8 | 8 | 8 | ||||||||||||||||||||||||
Foreign
currency translation adjustments
|
– | 230 | 230 | 230 | ||||||||||||||||||||||||
Net
gain reclassified to income
|
– | (21 | ) | (21 | ) | (21 | ) | |||||||||||||||||||||
Comprehensive
income
|
1,120 | 217 | 1,337 | 1,337 | ||||||||||||||||||||||||
Dividends
declared on preference shares
|
(5 | ) | – | (5 | ) | (5 | ) | |||||||||||||||||||||
Dividends
declared on common shares
|
(567 | ) | – | (567 | ) | (567 | ) | |||||||||||||||||||||
Common
shares issued under DRIP
|
14 | – | 14 | 14 | ||||||||||||||||||||||||
Repurchase
of common shares (note 17)
|
(41 | ) | – | (41 | ) | (371 | ) | – | (371 | ) | (412 | ) | ||||||||||||||||
Effect
of stock compensation plans
|
70 | 30 | 100 | 100 | ||||||||||||||||||||||||
Balance,
December 31, 2006
|
2,642 | 157 | 2,799 | 7,169 | 513 | 7,682 | 10,481 |
1
|
Includes
common, ordinary and preference share capital (note
17).
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
persuasive
evidence of an arrangement exists;
|
•
|
delivery
has occurred;
|
•
|
the
fee is fixed or determinable; and
|
•
|
collectability
is probable.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Computer
hardware
|
3–5
years
|
Buildings
and building improvements
|
5–40
years
|
Furniture,
fixtures and equipment
|
3–10
years
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Trade
names
|
2–27
years
|
Customer
relationships
|
2–32
years
|
Databases
and content
|
2–25
years
|
Publishing
rights
|
30
years
|
Other
|
2–27
years
|
•
|
In
the first step, the fair value of each reporting unit is determined. If
the fair value of a reporting unit is less than its carrying value, this
is an indicator that the goodwill assigned to that reporting unit might be
impaired, which requires performance of the second
step.
|
•
|
In
the second step, the fair value of the reporting unit is allocated to the
assets and liabilities of the reporting unit as if it had just been
acquired in a business combination, and as if the purchase price was
equivalent to the fair value of the reporting unit. The excess of the fair
value of the reporting unit over the amounts assigned to its assets and
liabilities is referred to as the implied fair value of goodwill. The
implied fair value of the reporting unit’s goodwill is then compared to
the actual carrying value of goodwill. If the implied fair value is less
than the carrying value, an impairment loss is recognized for that
excess.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
assets
and liabilities accounted for at cost, or amortized cost, which include
accounts receivable, notes receivable, short-term indebtedness and
accounts payable and accruals; and
|
•
|
assets
and liabilities accounted for at fair value, which include cash and cash
equivalents, available-for-sale investments, derivative instruments and
associated debt instruments.
|
•
|
cross-currency
swap agreements to hedge foreign currency exposures on non-U.S.
dollar-denominated debt;
|
•
|
foreign
currency contracts to hedge forecasted cash flows denominated in
currencies other than the functional currency of a particular Thomson
Reuters subsidiary;
|
•
|
interest
rate swap agreements to manage the fixed versus floating interest rate mix
of debt. Such contracts require periodic exchange of payments without the
exchange of the notional principal amount upon which the payments are
based; and
|
•
|
treasury lock
agreements to hedge against changes in interest rates for anticipated debt
offerings.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
First,
the Company determines whether it is more likely than not that a tax
position will be sustained upon examination, including resolution of any
related appeals or litigation processes, based on the technical merits of
the position. In evaluating whether a tax position has met the
more-likely-than-not recognition threshold, the Company presumes that the
position will be examined by the appropriate taxing authority that has
full knowledge of all relevant
information.
|
•
|
Second,
a tax position that meets the more-likely-than-not recognition threshold
is measured to determine the amount of benefit to recognize in the
financial statements. The tax position is measured at the largest amount
of benefit that is greater than 50% likely of being realized upon ultimate
settlement. If the tax position does not meet the more-likely-than-not
recognition threshold, no benefit from the tax position is
recorded.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
an
increase of $53 million to “Other non-current assets” and “Accumulated
other comprehensive income” in the consolidated balance sheet relative to
derivative instruments that consisted primarily of interest rate
contracts, which convert floating rate debt to fixed rate debt and qualify
as cash flow hedges;
|
•
|
a
reclassification of $5 million from “Other current assets” and $3 million
from “Other current liabilities” to “Accumulated other comprehensive
income” in the consolidated balance sheet related primarily to previously
deferred gains and losses on settled cash flow
hedges;
|
•
|
an
increase of $16 million to “Other non-current assets” and “Long-term debt”
in the consolidated balance sheet related to derivative instruments and
their related hedged items. These derivative instruments consist primarily
of interest rate contracts to convert fixed rate debt to floating and
qualify as fair value hedges; and
|
•
|
a
presentational reclassification of amounts previously recorded in
“Cumulative translation adjustment” to “Accumulated other comprehensive
income.”
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
The
two parent companies have identical boards and executive management
teams;
|
•
|
Shareholders
of each parent company have comparable rights and benefits as if they held
shares in one company carrying on the Thomson Reuters business;
and
|
•
|
The
operations of Reuters were combined with the former Thomson Financial
segment to create a global leader in electronic information services,
trading systems and
news.
|
•
|
All
of the issued and outstanding Reuters ordinary shares were cancelled;
and
|
•
|
Reuters
shareholders received, for each Reuters ordinary share
held
|
°
|
352.5
pence in cash (a total of $8,450 million paid on May 1, 2008);
and
|
°
|
0.16
Thomson Reuters PLC ordinary shares (a total of 194,107,278 issued on
closing, April 17, 2008).
|
The
purchase consideration was as follows:
|
||||
(millions
of U.S. dollars)
|
||||
Cash
|
8,450 | |||
Ordinary
shares, Thomson Reuters PLC
|
8,226 | |||
Reuters
Group PLC options
|
195 | |||
Transaction
costs
|
138 | |||
Total
purchase consideration
|
17,009 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Purchase
price allocation
|
||||||||||||
Original
|
||||||||||||
(millions
of U.S. dollars)
|
estimate
|
|
Change
|
Final
|
||||||||
Assets
|
||||||||||||
Cash
and cash equivalents
|
465 | – | 465 | |||||||||
Accounts
receivable, net of allowances
|
1,460 | (13 | ) | 1,447 | ||||||||
Prepaid
expenses and other current assets
|
391 | (31 | ) | 360 | ||||||||
Deferred
income taxes
|
93 | (35 | ) | 58 | ||||||||
Current
assets
|
2,409 | (79 | ) | 2,330 | ||||||||
Computer
hardware and other property, net
|
1,042 | (45 | ) | 997 | ||||||||
Computer
software, net
|
1,100 | (568 | ) | 532 | ||||||||
Identifiable
intangible assets, net
|
5,400 | 1,183 | 6,583 | |||||||||
Goodwill
|
12,950 | 469 | 13,419 | |||||||||
Other
non-current assets
|
918 | (229 | ) | 689 | ||||||||
Total
assets
|
23,819 | 731 | 24,550 | |||||||||
Liabilities
|
||||||||||||
Short-term
indebtedness
|
895 | – | 895 | |||||||||
Accounts
payable and accruals
|
1,497 | 141 | 1,638 | |||||||||
Deferred
revenue
|
926 | (5 | ) | 921 | ||||||||
Current
portion of long-term debt and finance lease obligations
|
409 | 47 | 456 | |||||||||
Current
liabilities
|
3,727 | 183 | 3,910 | |||||||||
Long-term
debt and finance lease obligations
|
851 | (36 | ) | 815 | ||||||||
Other
non-current liabilities
|
458 | 332 | 790 | |||||||||
Deferred
income taxes
|
1,774 | 252 | 2,026 | |||||||||
Total
liabilities
|
6,810 | 731 | 7,541 | |||||||||
Total
|
17,009 | – | 17,009 |
(millions
of U.S. dollars)
|
Fair
value
|
Useful
life
|
|||
Trade
names
|
2,397 |
Indefinite
|
|||
Customer
relationships
|
4,171 |
14–16
years
|
|||
Other
|
15 |
3
years
|
|||
Identifiable
intangible assets
|
6,583 | ||||
Developed
technology
|
532 |
3–10
years
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Balance
at
|
Additions
|
Balance
at
|
||||||||||||||||||||||
Type
of Cost
|
January
1, 2008
|
Acquisition-related1
|
Charges2
|
Utilization
|
Translation
|
December 31,
2008
|
||||||||||||||||||
Severance
|
12 | 120 | 69 | (109 | ) | (17 | ) | 75 | ||||||||||||||||
Lease
cancellation
|
- | 11 | - | - | - | 11 | ||||||||||||||||||
Total
|
12 | 131 | 69 | (109 | ) | (17 | ) | 86 |
1
|
Included
in goodwill
|
2
|
Included
in cost of sales, selling, marketing, general and administrative
expenses.
|
Year
ended December 31
|
||||||||||||
2008
|
2007
|
|
2006
|
|||||||||
Net
gains due to changes in foreign currency exchange rates
|
230 | –– | –– | |||||||||
Net
losses on freestanding derivative instruments
|
(7 | ) | (49 | ) | – | |||||||
Net
gains on disposals of businesses and investments
|
35 | 8 | 47 | |||||||||
Equity
in (losses)/earnings of unconsolidated affiliates
|
(1 | ) | 4 | – | ||||||||
Other
income (expense), net
|
47 | 3 | (46 | ) | ||||||||
Net
other income (expense)
|
304 | (34 | ) | 1 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Year
ended December 31
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Interest
income
|
164 | 230 | 24 | |||||||||
Interest
expense on short-term indebtedness
|
(9 | ) | (19 | ) | (26 | ) | ||||||
Interest
expense on long-term debt
|
(379 | ) | (223 | ) | (219 | ) | ||||||
(224 | ) | (12 | ) | (221 | ) |
Year
ended December 31
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Canada
|
(436 | ) | (206 | ) | (242 | ) | ||||||
U.S.
and other jurisdictions
|
2,209 | 1,457 | 1,270 | |||||||||
Total
earnings before taxes
|
1,773 | 1,251 | 1,028 |
Year
ended December 31
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Canada:
|
||||||||||||
Current
|
8 | 1 |
1
|
|||||||||
Deferred
|
– | (46 | ) | (20 | ) | |||||||
Total
Canadian
|
8 | (45 | ) | (19 | ) | |||||||
U.S.
and other jurisdictions:
|
||||||||||||
Current
|
311 | 278 | 236 | |||||||||
Deferred
|
32 | (78 | ) | (101 | ) | |||||||
Total
U.S. and other jurisdictions
|
343 | 200 | 135 | |||||||||
Total
worldwide
|
351 | 155 | 116 |
2008
|
2007
|
|||||||
Accrued
expenses
|
153 | 182 | ||||||
Deferred
and stock-based compensation
|
153 | 136 | ||||||
Accounts
receivable allowances
|
45 | 27 | ||||||
Tax
losses and credits
|
1,756 | 1,013 | ||||||
Other
|
208 | 81 | ||||||
Total
deferred tax asset
|
2,315 | 1,439 | ||||||
Valuation
allowance
|
(1,395 | ) | (395 | ) | ||||
Net
deferred tax asset
|
920 | 1,044 | ||||||
Intangible
assets
|
(2,942 | ) | (1,184 | ) | ||||
Other
long-lived assets1
|
(276 | ) | (36 | ) | ||||
Financial
instruments
|
(130 | ) | (539 | ) | ||||
Pension
|
(45 | ) | (130 | ) | ||||
Other
|
(38 | ) | – | |||||
Total
deferred tax liability
|
(3,431 | ) | (1,889 | ) | ||||
Net
deferred tax liability
|
(2,511 | ) | (845 | ) |
1
|
Other
long-lived assets include computer hardware and other property and
computer software.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
2008
|
2007
|
|||||||
Balance
at beginning of year
|
395 | 441 | ||||||
Additions
due to losses with no benefit
|
151 | 7 | ||||||
Prior year Canadian net operating
losses with no benefit
1
|
– | 107 | ||||||
Releases
of valuation allowances to income
|
(18 | ) | (21 | ) | ||||
Increase (reduction) due to
change in deferred tax liability related to debt instruments
2
|
250 | (244 | ) | |||||
Acquisitions
|
1,034 | – | ||||||
Translation
|
(370 | ) | 113 | |||||
Other
items
|
(47 | ) | (8 | ) | ||||
Balance
at end of year
|
1,395 | 395 |
1
|
Recognition
results from a 2007 change in tax
law.
|
2
|
Canadian
tax losses are first offset by deferred tax liabilities not related to
indefinite lived intangible assets before computing the required valuation
allowance. The deferred tax liability decreased in 2008 (increased in
2007) from the revaluation of debt and currency swaps. As the deferred tax
liability decreased, the requirement for the valuation allowance increased
by the same amount
|
2008
|
2007
|
2006
|
||||||||||
Earnings
before taxes
|
1,773 | 1,251 | 1,028 | |||||||||
Income
taxes at the Canadian corporate tax rate of 32.8% (2007 and 2006 –
35.4%)
|
582 | 443 | 364 | |||||||||
Differences
attributable to:
|
||||||||||||
Effect
of income taxes recorded at rates different from the Canadian tax
rate
|
(416 | ) | (302 | ) | (276 | ) | ||||||
Additions
to valuation allowance due to losses with no benefit
|
151 | 7 | 68 | |||||||||
Releases
of valuation allowances to income
|
(18 | ) | (21 | ) | (26 | ) | ||||||
Tax
on debt instruments 1
|
– | 42 | – | |||||||||
Impact
of tax law changes
|
(3 | ) | (14 | ) | – | |||||||
Net
change to contingent tax liabilities
|
53 | 14 | (5 | ) | ||||||||
Other,
net
|
2 | (14 | ) | (9 | ) | |||||||
Income
tax provision on continuing operations
|
351 | 155 | 116 |
1
|
Represents
tax on settlement of certain debt instruments for which there is no
corresponding pre-tax income statement
gain.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
2008
|
2007
|
|||||||
Balance
at beginning of year
|
150 | 205 | ||||||
Additions
based upon tax provision related to current year
|
57 | 14 | ||||||
Additions
for tax positions of prior years
|
1 | 6 | ||||||
Reductions
for tax positions of prior years
|
(5 | ) | (16 | ) | ||||
Acquisitions
|
194 | - | ||||||
Settlements
|
(10 | ) | (11 | ) | ||||
Reductions
due to translation, disposal of businesses, and other
|
(21 | ) | (48 | ) | ||||
Balance
at end of year
|
366 | 150 |
Jurisdiction
|
Tax
years
|
Canada
– Federal and Ontario provincial
|
1997
to 2008
|
United
States – Federal
|
2003
to 2008
|
United
Kingdom
|
2006
to
2008
|
Ÿ
|
Thomson
Learning’s higher education, careers and library reference businesses for
gross proceeds of approximately $7.6 billion and a post-tax gain of $2.7
billion;
|
Ÿ
|
NETg,
a leading provider of continuing corporate education and training, for
approximately $270 million and a post-tax loss of $10 million;
and
|
Ÿ
|
Prometric,
a provider of assessment services, for $310 million in cash and a 6%
promissory note for approximately $79 million due in 2014. The promissory
note was reflected in the financial statements at its estimated fair value
of approximately $60 million to account for the difference between the
market and stated rates of interest. The Company recognized a post-tax
gain of $18 million related to this
transaction.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Ÿ
|
GEE,
a regulatory information business in the United Kingdom within the Legal
segment;
|
Ÿ
|
Fakta,
a regulatory information business in Sweden within the Legal
segment;
|
Ÿ
|
New
England Institutional Review Board, an ethical review board that monitors
clinical research involving human subjects within the Healthcare
segment;
|
Ÿ
|
CenterWatch,
a provider of clinical research information within the Healthcare
segment;
|
Ÿ
|
The
business information and news operations within the Legal segment, which
included the Company’s Market Research and NewsEdge
businesses;
|
Ÿ
|
IOB,
a Brazilian regulatory business within the Legal
segment;
|
Ÿ
|
Thomson
Medical Education, a provider of sponsored medical education within the
Healthcare segment; and
|
Ÿ
|
The
North American operations of Thomson Education Direct, a consumer-based
distance learning career school.
|
Ÿ
|
Lawpoint
Pty Limited, an Australian provider of print and online regulatory
information services; and Law Manager, Inc., a software and services
provider, which were both within the Legal
segment;
|
Ÿ
|
Peterson’s,
a college preparatory guide, and K.G. Saur, a German publisher of
biographical and bibliographical reference titles serving the library and
academic communities; and
|
Ÿ
|
American
Health Consultants, a medical newsletter publisher and medical education
provider within the Healthcare
segment.
|
Year
ended December 31, 2007
|
||||||||||||||||||||
Legal
|
Learning
|
Healthcare
|
Other
|
Total
|
||||||||||||||||
Revenues
from discontinued operations
|
66 | 968 | 43 | – | 1,077 | |||||||||||||||
Earnings
(loss) from discontinued operations before income taxes
|
(13 | ) | 25 | (3 | ) | (1 | ) | 8 | ||||||||||||
Gain
(loss) on sale of discontinued operations
|
(5 | ) | 3,699 | 138 | – | 3,832 | ||||||||||||||
Income
taxes
|
18 | (949 | ) | (11 | ) | 10 | (932 | ) | ||||||||||||
Earnings
from discontinued operations
|
– | 2,775 | 124 | 9 | 2,908 |
Year
ended December 31, 2006
|
||||||||||||||||||||
Legal
|
Learning
|
Healthcare
|
Other
|
Total
|
||||||||||||||||
Revenues
from discontinued operations
|
131 | 2,393 | 129 | – | 2,653 | |||||||||||||||
Earnings
(loss) from discontinued operations before income taxes
|
(17 | ) | 237 | 27 | – | 247 | ||||||||||||||
Gain
on sale of discontinued operations
|
4 | 3 | 40 | 5 | 52 | |||||||||||||||
Income
taxes
|
10 | (84 | ) | (24 | ) | 7 | (91 | ) | ||||||||||||
Earnings
(loss) from discontinued operations
|
(3 | ) | 156 | 43 | 12 | 208 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
2008
|
2007
|
2006
|
||||||||||
Earnings
from continuing operations
|
1,405 | 1,096 | 912 | |||||||||
Dividends
declared on preference shares
|
(5 | ) | (6 | ) | (5 | ) | ||||||
Earnings
from continuing operations attributable to common and ordinary
shares
|
1,400 | 1,090 | 907 |
2008
|
2007
|
2006
|
||||||||||
Weighted-average
number of common and ordinary shares outstanding
|
769,920,781 | 640,304,221 | 643,454,420 | |||||||||
Vested
deferred share units
|
916,831 | 853,497 | 677,104 | |||||||||
Basic
|
770,837,612 | 641,157,718 | 644,131,524 | |||||||||
Effect
of stock and other incentive plans
|
4,341,415 | 3,273,078 | 1,894,821 | |||||||||
Diluted
|
775,179,027 | 644,430,796 | 646,026,345 |
2008
|
2007
|
|||||||
Current
|
1,350 | 1,252 | ||||||
Past
due 0–30 days
|
192 | 144 | ||||||
Past
due 31–60 days
|
167 | 93 | ||||||
Past
due 61–90 days
|
60 | 55 | ||||||
Past
due 91–180 days
|
70 | 64 | ||||||
Past
due >181 days
|
65 | 38 | ||||||
Balance
at end of year
|
1,904 | 1,646 |
2008
|
2007
|
|||||||
Balance
at beginning of year
|
81 | 97 | ||||||
Charges
|
187 | 164 | ||||||
Write-offs
|
(157 | ) | (180 | ) | ||||
Other
|
13 | – | ||||||
Balance
at end of year
|
124 | 81 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Net
computer
|
||||||||||||
hardware
|
||||||||||||
Accumulated
|
and
other
|
|||||||||||
As of December 31, 2008
|
Cost
|
depreciation
|
property
|
|||||||||
Computer
hardware
|
1,541 | (921 | ) | 620 | ||||||||
Land,
buildings and building improvements
|
982 | (262 | ) | 720 | ||||||||
Furniture,
fixtures and equipment
|
475 | (260 | ) | 215 | ||||||||
2,998 | (1,443 | ) | 1,555 |
Net
computer
|
||||||||||||
hardware
|
||||||||||||
Accumulated
|
and
other
|
|||||||||||
As of December 31, 2007
|
Cost
|
depreciation
|
property
|
|||||||||
Computer
hardware
|
1,018 | (697 | ) | 321 | ||||||||
Land,
buildings and building improvements
|
523 | (234 | ) | 289 | ||||||||
Furniture,
fixtures and equipment
|
331 | (210 | ) | 121 | ||||||||
1,872 | (1,141 | ) | 731 |
Accumulated
|
Net
computer
|
|||||||||||
As
of December 31, 2008
|
Cost
|
depreciation
|
software
|
|||||||||
Capitalized
software for internal use
|
2,972 | (1,798 | ) | 1,174 | ||||||||
Capitalized
software to be marketed
|
348 | (224 | ) | 124 | ||||||||
3,320 | (2,022 | ) | 1,298 |
Accumulated
|
Net
computer
|
|||||||||||
As
of December 31, 2007
|
Cost
|
depreciation
|
software
|
|||||||||
Capitalized
software for internal use
|
2,040 | (1,419 | ) | 621 | ||||||||
Capitalized
software to be marketed
|
266 | (166 | ) | 100 | ||||||||
2,306 | (1,585 | ) | 721 |
Gross
|
Net
|
|||||||||||
Identifiable
|
identifiable
|
|||||||||||
intangible
|
Accumulated
|
intangible
|
||||||||||
As of December 31, 2008
|
assets
|
amortization
|
assets
|
|||||||||
Finite
useful lives:
|
||||||||||||
Trade
names
|
264 | (129 | ) | 135 | ||||||||
Customer
relationships
|
6,023 | (990 | ) | 5,033 | ||||||||
Databases
and content
|
841 | (458 | ) | 383 | ||||||||
Publishing
rights
|
1,192 | (645 | ) | 547 | ||||||||
Other
|
108 | (68 | ) | 40 | ||||||||
8,428 | (2,290 | ) | 6,138 | |||||||||
Indefinite
useful lives:
|
||||||||||||
Trade names
|
2,458 | – | 2,458 | |||||||||
10,886 | (2,290 | ) | 8,596 |
Gross
|
Net
|
|||||||||||
identifiable
|
identifiable
|
|||||||||||
intangible
|
Accumulated
|
intangible
|
||||||||||
As of December 31, 2007
|
assets
|
amortization
|
assets
|
|||||||||
Finite
useful lives:
|
||||||||||||
Trade
names
|
250 | (121 | ) | 129 | ||||||||
Customer
relationships
|
2,238 | (804 | ) | 1,434 | ||||||||
Databases
and content
|
882 | (465 | ) | 417 | ||||||||
Publishing
rights
|
1,275 | (637 | ) | 638 | ||||||||
Other
|
106 | (61 | ) | 45 | ||||||||
4,751 | (2,088 | ) | 2,663 | |||||||||
Indefinite
useful lives:
|
||||||||||||
Trade names
|
775 | – | 775 | |||||||||
5,526 | (2,088 | ) | 3,438 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Tax
&
|
||||||||||||||||||||||||
Legal
|
Accounting
|
Scientific
|
Healthcare
|
Markets
1
|
Total
|
|||||||||||||||||||
Balance at December 31,
2006
|
2,932 | 536 | 655 | 357 | 2,058 | 6,538 | ||||||||||||||||||
Acquisitions
|
24 | 193 | 37 | – | 14 | 268 | ||||||||||||||||||
Adjusted
purchase price allocations
|
8 | – | (2 | ) | 23 | (2 | ) | 27 | ||||||||||||||||
Translation and other, net
|
10 | 1 | 15 | – | 76 | 102 | ||||||||||||||||||
Balance at December 31,
2007
|
2,974 | 730 | 705 | 380 | 2,146 | 6,935 | ||||||||||||||||||
Reuters
acquisition
|
– | – | – | – | 13,419 | 13,419 | ||||||||||||||||||
All
other acquisitions
|
31 | 129 | – | – | 5 | 165 | ||||||||||||||||||
Adjusted
purchase price allocations
|
– | (20 | ) | 12 | (1 | ) | (1 | ) | (10 | ) | ||||||||||||||
Translation and other, net
|
(51 | ) | – | (44 | ) | – | (1,066 | ) | (1,161 | ) | ||||||||||||||
Balance at December 31,
2008
|
2,954 | 839 | 673 | 379 | 14,503 | 19,348 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Cash
|
Trade
|
Other
financial
|
Financial
|
|||||||||||||||||
and
cash
|
and
other
|
assets
and
|
liabilities
and
|
|||||||||||||||||
At December
31, 2008
|
equivalents
|
receivables
|
derivatives
|
derivatives
|
Total
|
|||||||||||||||
Loans
and receivables
|
– | 1,974 | – | – | 1,974 | |||||||||||||||
Assets
at fair value through earnings
|
841 | – | 153 | – | 994 | |||||||||||||||
Liabilities
at fair value through earnings
|
– | – | – | (28 | ) | (28 | ) | |||||||||||||
Derivatives
used for hedging
|
– | – | 170 | (241 | ) | (71 | ) | |||||||||||||
Available
for sale
|
– | – | 18 | – | 18 | |||||||||||||||
Other financial liabilities
|
– | – | – | (10,363 | ) | (10,363 | ) | |||||||||||||
Total
|
841 | 1,974 | 341 | (10,632 | ) | (7,476 | ) |
Cash
|
Trade
|
Other
financial
|
Financial
|
|||||||||||||||||
and
cash
|
and
other
|
assets
and
|
liabilities
and
|
|||||||||||||||||
At December
31, 2007
|
equivalents
|
receivables
|
derivatives
|
derivatives
|
Total
|
|||||||||||||||
Loans
and receivables
|
– | 1,686 | – | – | 1,686 | |||||||||||||||
Assets
at fair value through earnings
|
7,497 | – | 27 | – | 7,524 | |||||||||||||||
Liabilities
at fair value through earnings
|
– | – | – | – | – | |||||||||||||||
Derivatives
used for hedging
|
– | – | 427 | (12 | ) | 415 | ||||||||||||||
Available
for sale
|
– | – | 3 | – | 3 | |||||||||||||||
Other financial liabilities
|
– | – | – | (6,565 | ) |
(6,565
|
) | |||||||||||||
Total
|
7,497 | 1,686 | 457 | (6,577 | ) | 3,063 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Carrying
amount
|
Fair
value
|
|||||||||||||||
Primary
debt
|
Derivative
|
Primary
debt
|
Derivative
|
|||||||||||||
As of December 31, 2008
|
instruments
|
instruments
|
instruments
|
instruments
|
||||||||||||
Bank
and other
|
41 | – | 41 | – | ||||||||||||
4.35% Notes,
due 2009
|
246 | – | 248 | – | ||||||||||||
4.50% Notes,
due 2009
|
205 | (22 | ) | 205 | (22 | ) | ||||||||||
5.20% Notes,
due 2014
|
514 | (44 | ) | 468 | (44 | ) | ||||||||||
5.25% Notes,
due 2011
|
522 | 70 | 489 | 70 | ||||||||||||
5.70% Notes,
due 2015
|
491 | 124 | 473 | 124 | ||||||||||||
6.85% Medium-term
notes, due 2011
|
327 | (86 | ) | 338 | (86 | ) | ||||||||||
4.625% Notes,
due 2010
|
735 | 26 | 698 | 26 | ||||||||||||
4.25% Notes,
due 2009
|
200 | – | 198 | – | ||||||||||||
4.75% Notes,
due 2010
|
250 | – | 243 | – | ||||||||||||
6.20% Notes,
due 2012
|
700 | – | 681 | – | ||||||||||||
5.25% Notes,
due 2013
|
250 | – | 228 | – | ||||||||||||
5.95% Notes,
due 2013
|
750 | – | 708 | – | ||||||||||||
5.70% Notes,
due 2014
|
800 | – | 728 | – | ||||||||||||
6.50% Notes,
due 2018
|
1,000 | – | 912 | – | ||||||||||||
5.50% Debentures,
due 2035
|
400 | – | 289 | – | ||||||||||||
7.74% Private placement, due
2010
|
75 | – | 76 | – | ||||||||||||
7,506 | 68 | 7,023 | 68 | |||||||||||||
Current portion
|
(672 | ) | 22 | |||||||||||||
6,834 | 90 |
Carrying
amount
|
Fair
value
|
|||||||||||||||
Primary
debt
|
Derivative
|
Primary
debt
|
Derivative
|
|||||||||||||
As of December 31, 2007
|
instruments
|
instruments
|
instruments
|
instruments
|
||||||||||||
Bank
and other
|
16 | – | 16 | – | ||||||||||||
4.35%
Notes, due 2009
|
306 | (60 | ) | 302 | (60 | ) | ||||||||||
4.50%
Notes, due 2009
|
255 | (70 | ) | 255 | (70 | ) | ||||||||||
5.20%
Notes, due 2014
|
616 | (131 | ) | 604 | (131 | ) | ||||||||||
6.85%
Medium-term notes, due 2011
|
408 | (161 | ) | 427 | (161 | ) | ||||||||||
5.75%
Notes, due 2008
|
400 | – | 400 | – | ||||||||||||
4.25%
Notes, due 2009
|
200 | – | 199 | – | ||||||||||||
4.75%
Notes, due 2010
|
250 | – | 251 | – | ||||||||||||
6.20%
Notes, due 2012
|
700 | – | 729 | – | ||||||||||||
5.25%
Notes, due 2013
|
250 | – | 248 | – | ||||||||||||
5.70%
Notes, due 2014
|
800 | – | 808 | – | ||||||||||||
5.50%
Debentures, due 2035
|
400 | – | 356 | – | ||||||||||||
7.74% Private placement, due
2010
|
75 | – | 81 | – | ||||||||||||
4,676 | (422 | ) | 4,676 | (422 | ) | |||||||||||
Current
portion
|
(412 | ) | – | |||||||||||||
4,264 | (422 | ) |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Year
of
|
Principal
|
||||||
Received
|
Paid
|
Hedged risk
|
maturity
|
amount
|
|||
2008
fair value hedges:
|
|||||||
Canadian
dollar fixed
|
U.S.
dollar floating
|
Interest
rate and foreign exchange
|
2011
|
593 | |||
Canadian
dollar fixed
|
U.S.
dollar floating
|
Interest
rate and foreign exchange
|
2009
|
184 | |||
Canadian
dollar fixed
|
U.S.
dollar floating
|
Interest
rate and foreign exchange
|
2014
|
123 | |||
Euro
fixed
|
U.S.
dollar floating
|
Interest
rate and foreign exchange
|
2010
|
762 | |||
|
|||||||
2007
fair value hedges:
|
|||||||
Canadian
dollar fixed
|
U.S.
dollar floating
|
Interest
rate and foreign exchange
|
2009
|
184 | |||
Canadian dollar fixed
|
U.S. dollar floating
|
Interest rate and foreign
exchange
|
2014
|
123 |
Year
of
|
Principal
|
||||||
Received
|
Paid
|
Hedged risk
|
maturity
|
amount
|
|||
2008
cash flow hedges:
|
|||||||
Canadian
dollar fixed
|
U.S.
dollar fixed
|
Foreign
exchange
|
2015
|
593 | |||
Canadian
dollar fixed
|
U.S.
dollar fixed
|
Foreign
exchange
|
2011
|
254 | |||
Canadian
dollar fixed
|
U.S.
dollar fixed
|
Foreign
exchange
|
2014
|
246 | |||
Canadian
dollar fixed
|
U.S.
dollar fixed
|
Foreign
exchange
|
2009
|
246 | |||
Canadian
dollar fixed
|
U.S.
dollar fixed
|
Foreign
exchange
|
2014
|
123 | |||
2007
cash flow hedges:
|
|||||||
Canadian
dollar fixed
|
U.S.
dollar fixed
|
Foreign
exchange
|
2011
|
254 | |||
Canadian
dollar fixed
|
U.S.
dollar fixed
|
Foreign
exchange
|
2014
|
246 | |||
Canadian
dollar fixed
|
U.S.
dollar fixed
|
Foreign
exchange
|
2009
|
246 | |||
Canadian dollar fixed
|
U.S. dollar fixed
|
Foreign exchange
|
2014
|
123 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Before
currency hedging
|
After
currency hedging
|
|||||||||||||||
arrangements
|
arrangements 1
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Canadian
dollar
|
2,306 | 1,584 | – | – | ||||||||||||
U.S.
dollar
|
4,437 | 3,077 | 7,560 | 4,253 | ||||||||||||
Euro
|
735 | – | – | – | ||||||||||||
Other currencies
|
28 | 15 | 28 | 15 | ||||||||||||
7,506 | 4,676 | 7,588 | 4,268 |
1
|
Represents
net cash outflow upon maturity and, therefore, excludes fair value
adjustment of $14 million and $14 million at December 31, 2008
and 2007, respectively.
|
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
Total
|
||||||||||||||||||||||
Before
currency hedging arrangements
|
674 | 1,074 | 853 | 700 | 1,000 | 3,205 | 7,506 | |||||||||||||||||||||
After currency
hedging arrangements 1
|
653 | 1,101 | 850 | 700 | 1,000 | 3,284 | 7,588 |
1
|
Represents
net cash outflow upon maturity and, therefore, excludes fair value
adjustment of $14 million and $14 million at December 31, 2008 and 2007,
respectively.
|
Average
|
Average
|
|||||||||||||||||||||||
interest
|
%
|
interest
|
%
|
|||||||||||||||||||||
2008
|
rate
|
share
|
2007
|
rate
|
share
|
|||||||||||||||||||
Total
fixed
|
5,923 | 5.8 | % | 78 | % | 3,951 | 5.5 | % | 93 | % | ||||||||||||||
Total floating
|
1,665 | 4.0 | % | 22 | % | 317 | 5.2 | % | 7 | % | ||||||||||||||
7,588 | 5.4 | % | 100 | % | 4,268 | 5.5 | % | 100 | % |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Principal
|
||||
amount
|
||||
(millions
of
|
||||
Notes offered
|
dollars)
|
|||
U.S.
offering
|
||||
5.95%
notes due 2013
|
US$750
|
|||
6.50% notes due 2018
|
US$1,000
|
|||
Total U.S. dollar-denominated notes
issued
|
US$1,750
|
|||
Canadian
offering
|
||||
5.25%
notes due 2011
|
C$600 | |||
5.70% notes due 2015
|
C$600 | |||
Total Canadian dollar-denominated notes
issued
|
C$1,200 |
•
|
a
revolving credit facility with £312 million outstanding, which was repaid
in April 2008;
|
•
|
£63
million of commercial paper outstanding, which was repaid in the second
quarter of 2008;
|
•
|
500
million Euro principal amount of debentures due 2010, for which the
Company subsequently entered into cross-currency interest rate swap
agreements whereby these debentures will ultimately pay a floating rate
based on LIBOR on US$762 million;
|
•
|
250
million Euro principal amount of floating rate notes which matured in
November 2008. The Company entered into a cross-currency interest rate
swap agreement whereby these notes were redeemed for US$398 million on
maturity;
|
•
|
1
billion Japanese yen principal amount of bonds, which were repaid in June
2008; and
|
•
|
certain
derivative instruments used by Reuters to hedge the above-mentioned
debentures and notes, which were settled in April
2008.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
10%
weakening in the US$ v.
|
||||||||||||||||
Other
|
||||||||||||||||
Increase/(decrease)
to earnings
|
£ |
€
|
currencies
|
Total
|
||||||||||||
Impact
on earnings from financial assets and liabilities1
|
(3 | ) | (29 | ) | – | (32 | ) | |||||||||
Impact
on earnings from non-permanent intercompany loans
|
11 | 58 | (46 | ) | 23 | |||||||||||
Total
impact on earnings
|
8 | 29 | (46 | ) | (9 | ) |
1
|
Excludes
long-term debt which has been swapped into U.S. dollar
obligations.
|
•
|
Cash
investments are placed with high-quality financial institutions with
limited exposure to any one institution. At December 31, 2008, nearly
all cash and cash equivalents were held by institutions that were
rated at least AA–;
|
•
|
Counterparties
to derivative contracts are major investment-grade international
financial institutions; and
|
•
|
Credit
limits minimize exposure to any one
customer.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Thomson Reuters
Corporation common share capital
|
Thomson
Reuters PLC ordinary share capital
|
Series
II,
cumulative
|
||||||||||||||||||||||||||
Number
of
common
shares
|
Stated
capital
|
Number
of
ordinary
shares
|
Stated
capital
|
redeemable
preference
share capital
|
Contributed
surplus
|
Total
capital
|
||||||||||||||||||||||
Balance,
December 31, 2005
|
648,948,992 | 2,489 | – | – | 110 | 127 | 2,726 | |||||||||||||||||||||
Shares
issued under the Dividend Reinvestment Plan (“DRIP”)
|
347,840 | 14 | – | – | – | – | 14 | |||||||||||||||||||||
Effect
of stock compensation plans
|
1,820,781 | 70 | – | – | – | 30 | 100 | |||||||||||||||||||||
Repurchases
of shares
|
(10,680,600 | ) | (41 | ) | – | – | – | – | (41 | ) | ||||||||||||||||||
Balance,
December 31, 2006
|
640,437,013 | 2,532 | – | – | 110 | 157 | 2,799 | |||||||||||||||||||||
Shares
issued under DRIP
|
385,233 | 16 | – | – | – | – | 16 | |||||||||||||||||||||
Effect
of stock compensation plans
|
2,031,207 | 86 | – | – | – | 48 | 134 | |||||||||||||||||||||
Repurchases
of shares
|
(4,170,500 | ) | (17 | ) | – | – | – | – | (17 | ) | ||||||||||||||||||
Balance,
December 31, 2007
|
638,682,953 | 2,617 | – | – | 110 | 205 | 2,932 | |||||||||||||||||||||
Issuance
of Thomson Reuters PLC shares
|
– | – | 194,107,278 | 96 | – | 8,130 | 8,226 | |||||||||||||||||||||
Shares
issued under DRIP
|
6,106,899 | 190 | – | – | – | – | 190 | |||||||||||||||||||||
Effect
of stock compensation plans
|
1,256,455 | 44 | 4,504,848 | 2 | – | 263 | 309 | |||||||||||||||||||||
Repurchases
of shares
|
– | – | (17,382,885 | ) | (9 | ) | – | (513 | ) | (522 | ) | |||||||||||||||||
Balance,
December 31, 2008
|
646,046,307 | 2,851 | 181,229,241 | 89 | 110 | 8,085 | 11,135 |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Three-month
period ended
|
Shares
repurchased
|
Average price
per share
|
||||||
Thomson
Reuters Corporation
|
||||||||
March
31, 2006
|
4,570,000 | $ | 36.83 | |||||
June
30, 2006
|
3,110,000 | $ | 39.58 | |||||
September
30, 2006
|
1,710,600 | $ | 39.27 | |||||
December
31, 2006
|
1,289,400 | $ | 41.41 | |||||
March
31, 2007
|
1,305,000 | $ | 41.74 | |||||
June
30, 2007
|
495,000 | $ | 42.68 | |||||
September
30, 2007
|
– | – | ||||||
December
31, 2007
|
2,370,500 | $ | 38.76 | |||||
Month
ended
|
Shares repurchased
|
Average price
per share
|
||||||
Thomson
Reuters PLC
|
||||||||
April
30, 2008
|
3,297,827 | $ | 31.13 | |||||
May
31, 2008
|
6,298,500 | $ | 31.59 | |||||
June
30, 2008
|
6,049,208 | $ | 29.25 | |||||
July
31, 2008
|
825,000 | $ | 25.93 | |||||
August
31, 2008
|
– | – | ||||||
September
30, 2008
|
912,350 | $ | 23.55 | |||||
October
31, 2008
|
– | – | ||||||
November
30, 2008
|
– | – | ||||||
December
31, 2008
|
– | – |
Moody’s
|
Standard
&Poor’s
|
DBRS Limited (DBRS)
|
Fitch
|
|||||
Long-term
debt
|
Baa1
|
A–
|
A
(low)
|
A–
|
||||
Commercial
paper
|
–
|
–
|
R-1
(low)
|
F2
|
||||
Trend/outlook
|
Stable
|
Negative
|
Stable
|
Stable
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
As
of December 31
|
||||||||
(millions
of U.S. dollars)
|
2008
|
2007
|
||||||
Short-term
indebtedness
|
13 | 183 | ||||||
Current
portion of long-term debt
|
672 | 412 | ||||||
Long-term
debt and finance lease obligations
|
6,834 | 4,264 | ||||||
Total
debt
|
7,519 | 4,859 | ||||||
Swaps
|
68 | (424 | ) | |||||
Total
debt after swaps
|
7,587 | 4,435 | ||||||
Remove
fair value adjustment of cash flow hedges1
|
14 | 14 | ||||||
Less:
Cash and cash equivalents
|
(841 | ) | (7,497 | ) | ||||
Net
debt
|
6,760 | (3,048 | ) |
1
|
Amounts
are removed to reflect net cash outflow upon
maturity.
|
|
Pensions
|
Other post-retirement
plans
|
||||||||||||||||||||||
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
|||||||||||||||||||
Assumptions
used to determine net periodic pension expense:
|
||||||||||||||||||||||||
Expected
long-term rate of return on plan assets
|
7.1% | 7.2% | 7.3% | N/A | N/A | N/A | ||||||||||||||||||
Discount
rate
|
5.9% | 1 | 5.5% | 5.4% | 6.2% | 1 | 5.9% | 5.7% | ||||||||||||||||
Rate
of compensation increase
|
4.6% | 4.5% | 4.3% | N/A |
2
|
N/A |
2
|
N/A2 | ||||||||||||||||
Assumptions
used to determine benefit obligation:
|
||||||||||||||||||||||||
Discount
rate
|
6.3% | 6.1% | 1 | 5.5% | 7.0% | 6.1% | 1 | 5.9% | ||||||||||||||||
Rate
of compensation increase
|
4.3% | 4.6% | 4.5% | N/A |
2
|
N/A2 | N/A2 |
1
|
Amounts
differ due to the inclusion of acquired plans in
2008.
|
2
|
At
the end of 2008, 2007 and 2006, these plans consisted of only a few active
participants whose life insurance benefit is based on preretirement pay,
therefore a change in rate of compensation would have nearly no impact on
benefit obligation and benefit
expense.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Other
post-
|
||||||||||||||||||||||||||||||||||||
Pensions
|
retirement
plans
|
|||||||||||||||||||||||||||||||||||
Funded
|
Unfunded
|
|||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||
Components
of net periodic benefit expense (income):
|
||||||||||||||||||||||||||||||||||||
Current
service cost
|
71
|
56
|
57
|
5
|
6
|
6
|
3
|
3
|
3
|
|||||||||||||||||||||||||||
Interest
cost
|
213
|
135
|
126
|
14
|
12
|
12
|
11
|
10
|
9
|
|||||||||||||||||||||||||||
Plan
amendments
|
–
|
–
|
3
|
1
|
–
|
(3
|
)
|
–
|
(1
|
)
|
3
|
|||||||||||||||||||||||||
Actual
return on plan assets
|
380
|
(287
|
)
|
(208
|
)
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||
Curtailment
charge
|
–
|
1
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||||
Gain
on settlement of plan
|
–
|
(34
|
)
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||||
Special
termination benefits
|
–
|
6
|
–
|
5
|
2
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||||
Actuarial
(gains) losses
|
(304
|
)
|
(88
|
)
|
15
|
(25
|
)
|
(8
|
)
|
(9
|
)
|
(30
|
)
|
(3
|
)
|
(6
|
)
|
|||||||||||||||||||
Change
in valuation allowance
|
14
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||||
Subtotal
|
374
|
(211
|
)
|
(7
|
)
|
–
|
12
|
6
|
(16
|
)
|
9
|
9
|
||||||||||||||||||||||||
Adjustments1
:
|
||||||||||||||||||||||||||||||||||||
Difference
between expected and actual return on plan assets
|
(645
|
)
|
128
|
54
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||||
Difference
between actuarial loss (gain) recognized and actual actuarial loss
(gain) on benefit obligation
|
317
|
125
|
37
|
26
|
9
|
11
|
31
|
6
|
10
|
|||||||||||||||||||||||||||
Difference
between amortization of past service costs for year and actual plan
amendments for year
|
1
|
1
|
(3
|
)
|
(1
|
)
|
1
|
4
|
–
|
1
|
(3
|
)
|
||||||||||||||||||||||||
Amortization
of transitional asset
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||
Subtotal
adjustments
|
(328
|
)
|
253
|
87
|
25
|
10
|
15
|
31
|
7
|
7
|
||||||||||||||||||||||||||
Net
defined benefit plan expense
|
46
|
42
|
80
|
25
|
22
|
21
|
15
|
16
|
16
|
1
|
Adjustments
reflect the deferral and amortization of experience gains and losses over
applicable periods.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Pensions
|
Other
post-retirement plans
|
|||||||||||||||||||||||
Funded
|
Unfunded
|
|||||||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
Benefit
obligation
|
||||||||||||||||||||||||
Beginning
benefit obligation
|
2,090
|
2,498
|
213
|
207
|
165
|
164
|
||||||||||||||||||
Current
service cost
|
71
|
56
|
5
|
6
|
3
|
3
|
||||||||||||||||||
Interest
cost
|
213
|
135
|
14
|
12
|
11
|
10
|
||||||||||||||||||
Plan
participants’ contributions
|
11
|
5
|
–
|
–
|
–
|
1
|
||||||||||||||||||
Plan
amendments
|
–
|
–
|
1
|
–
|
–
|
(1
|
)
|
|||||||||||||||||
Actuarial
(gains) losses
|
(304
|
)
|
(88
|
)
|
(25
|
)
|
(8
|
)
|
(30
|
)
|
(3
|
)
|
||||||||||||
Acquisitions,
net
|
2,409
|
–
|
42
|
1
|
16
|
–
|
||||||||||||||||||
Curtailments
|
–
|
(26
|
)
|
–
|
–
|
–
|
–
|
|||||||||||||||||
Settlements
|
–
|
(422
|
)
|
–
|
(1
|
)
|
–
|
–
|
||||||||||||||||
Special
termination benefits
|
–
|
6
|
5
|
2
|
–
|
–
|
||||||||||||||||||
Benefits
paid
|
(139
|
)
|
(114
|
)
|
(13
|
)
|
(9
|
)
|
(13
|
)
|
(10
|
)
|
||||||||||||
Translation
adjustments
|
(743
|
)
|
40
|
(14
|
)
|
3
|
(1
|
)
|
1
|
|||||||||||||||
Ending
benefit obligation
|
3,608
|
2,090
|
228
|
213
|
151
|
165
|
||||||||||||||||||
Plan
assets
|
||||||||||||||||||||||||
Beginning
fair value of plan assets
|
2,279
|
2,457
|
–
|
–
|
–
|
–
|
||||||||||||||||||
Actual
return on plan assets
|
(380
|
)
|
287
|
–
|
–
|
–
|
–
|
|||||||||||||||||
Employer
contributions
|
110
|
25
|
13
|
10
|
13
|
9
|
||||||||||||||||||
Plan
participants’ contributions
|
11
|
5
|
–
|
–
|
–
|
1
|
||||||||||||||||||
Acquisitions,
net
|
2,557
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||
Benefits
paid
|
(139
|
)
|
(114
|
)
|
(13
|
)
|
(9
|
)
|
(13
|
)
|
(10
|
)
|
||||||||||||
Other,
net
|
–
|
(422
|
)
|
–
|
(1
|
)
|
–
|
–
|
||||||||||||||||
Translation
adjustments
|
(795
|
)
|
41
|
–
|
–
|
–
|
–
|
|||||||||||||||||
Ending
fair value of plan assets
|
3,643
|
2,279
|
–
|
–
|
–
|
–
|
||||||||||||||||||
Funded
status – surplus (deficit)
|
35
|
189
|
(228
|
)
|
(213
|
)
|
(151
|
)
|
(165
|
)
|
||||||||||||||
Unamortized
net actuarial loss
|
464
|
200
|
(7
|
)
|
20
|
3
|
35
|
|||||||||||||||||
Unamortized
past service costs
|
4
|
5
|
2
|
1
|
–
|
–
|
||||||||||||||||||
Unamortized
net transitional asset
|
(2
|
)
|
(4
|
)
|
–
|
–
|
–
|
–
|
||||||||||||||||
Post-measurement
date activity1
|
–
|
12
|
4
|
3
|
4
|
4
|
||||||||||||||||||
Change
in valuation allowance
|
(97
|
)
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||
Accrued
benefit asset (liability)
|
404
|
402
|
(229
|
)
|
(189
|
)
|
(144
|
)
|
(126
|
)
|
1
|
Consists
primarily of contributions.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Percentage
of plans’ assets
|
||||||||
Asset
category
|
2008
|
2007
|
||||||
Equity
securities
|
39 | % | 52 | % | ||||
Debt
securities
|
54 | % | 48 | % | ||||
Other
|
7 | % | – | |||||
Total
|
100 | % | 100 | % |
Pensions
|
Other
post- retirement plans
|
|||||||||||
Funded
|
Unfunded
|
|||||||||||
2007
|
114 | 9 | 10 | |||||||||
2008
|
139 | 13 | 13 | |||||||||
Estimated
future payments:
|
||||||||||||
2009
|
146 | 14 | 11 | |||||||||
2010
|
145 | 15 | 11 | |||||||||
2011
|
151 | 16 | 12 | |||||||||
2012
|
157 | 17 | 13 | |||||||||
2013
|
165 | 18 | 13 | |||||||||
2014
to 2018
|
1,001 | 95 | 73 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Cash
consideration paid to former Reuters shareholders
|
8,450 | |||
Transaction
costs paid
|
138 | |||
Less:
cash acquired
|
(465 | ) | ||
8,123 |
Year
ended December 31
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
Number
of transactions
|
Cash
consideration
|
Number
of transactions
|
Cash
consideration
|
Number
of transactions
|
Cash
consideration
|
|||||||||||||||||||
Businesses
and identifiable intangible assets acquired
|
19 | 326 | 33 | 438 | 23 | 692 | ||||||||||||||||||
Contingent
consideration payment – Tradeweb
|
– | – | – | 50 | – | 50 | ||||||||||||||||||
Investments
in businesses
|
3 | 53 | – | – | 2 | 2 | ||||||||||||||||||
22 | 379 | 33 | 488 | 25 | 744 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
2008
|
2007
|
2006
|
||||||||||
Cash
and cash equivalents
|
8 | 19 | 11 | |||||||||
Accounts
receivable
|
9 | 38 | 31 | |||||||||
Prepaid
expenses and other current assets
|
2 | 19 | 12 | |||||||||
Computer
hardware and other property
|
3 | 4 | 9 | |||||||||
Computer
software
|
28 | 13 | 49 | |||||||||
Identifiable
intangible assets
|
111 | 206 | 160 | |||||||||
Goodwill
|
165 | 268 | 528 | |||||||||
Other
non-current assets
|
33 | 18 | 5 | |||||||||
Total
assets
|
359 | 585 | 805 | |||||||||
Accounts
payable and accruals
|
(7 | ) | (46 | ) | (29 | ) | ||||||
Deferred
revenue
|
(17 | ) | (39 | ) | (61 | ) | ||||||
Other
non-current liabilities
|
(1 | ) | (43 | ) | (12 | ) | ||||||
Total
liabilities
|
(25 | ) | (128 | ) | (102 | ) | ||||||
Net
assets
|
334 | 457 | 703 |
Date
|
Company
|
Acquiring
segment
|
Description
|
December
2008
|
Paisley
|
Tax
& Accounting
|
A
provider of governance, risk and compliance (GRC) software and services
for corporations and global accounting firms
|
January
2008
|
TaxStream
|
Tax
& Accounting
|
A
provider of income tax provision software for
corporations
|
October
2007
|
Deloitte
Tax LLP
Property
Tax Services
|
Tax
& Accounting
|
A
provider of property tax outsourcing and compliance services
|
September
2007
|
Prous
Science
|
Scientific
|
A
provider of life sciences information solutions
|
March
2007
|
CrossBorder
Solutions
|
Tax
& Accounting
|
A
provider of transfer pricing and income tax provision
software
|
October
2006
|
Solucient,
LLC
|
Healthcare
|
An
advanced healthcare analytics and information company
|
September
2006
|
LiveNote
Technologies
|
Legal
|
A
provider of transcript and evidence management software
|
May
2006
|
MercuryMD,
Inc.
|
Healthcare
|
A
provider of mobile information systems serving the healthcare
market
|
March
2006
|
Quantitative
Analytics, Inc.
|
Markets
|
A
provider of financial database integration and analysis
solutions
|
Weighted-average amortization
period (years)
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
|||||||||||||||||||
Finite
useful lives:
|
||||||||||||||||||||||||
Tradenames
|
7 | 17 | 16 | 6 | 8 | 10 | ||||||||||||||||||
Customer
relationships
|
94 | 149 | 116 | 10 | 10 | 10 | ||||||||||||||||||
Databases
and content
|
2 | 20 | 8 | 4 | 8 | 8 | ||||||||||||||||||
Other
|
8 | 20 | 20 | 3 | 7 | 7 | ||||||||||||||||||
111 | 206 | 160 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
2008
|
2007
|
2006
|
||||||||||||||||||||||
SARs
|
Canadian
$ weighted-average exercise price
|
SARs
|
Canadian
$ weighted-average exercise price
|
SARs
|
Canadian
$ weighted-average exercise price
|
|||||||||||||||||||
Outstanding
at beginning of year
|
799,663 | 42.72 | 1,531,558 | 40.84 | 2,209,503 | 38.66 | ||||||||||||||||||
Granted
|
– | – | – | – | – | – | ||||||||||||||||||
Exercised
|
– | – | (541,307 | ) | 37.33 | (527,000 | ) | 33.01 | ||||||||||||||||
Forfeited
|
(222,423 | ) | 40.71 | (190,588 | ) | 42.89 | (150,945 | ) | 36.26 | |||||||||||||||
Outstanding
at end of year
|
577,240 | 42.67 | 799,663 | 42.72 | 1,531,558 | 40.84 | ||||||||||||||||||
Exercisable
at end of year
|
541,210 | 42.80 | 669,938 | 43.05 | 1,197,941 | 40.65 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
SARs
outstanding
|
SARs
exercisable
|
||||||||||||||||||||
Canadian
$ range of exercise prices
|
Number
outstanding at 12/31/08
|
Weighted-average
remaining contractual life
|
Canadian
$ weighted-average exercise price
|
Number
exercisable at 12/31/08
|
Canadian
$ weighted-average exercise price
|
||||||||||||||||
36.00–41.00 | 285,811 | 4.08 | 39.42 | 249,781 | 39.23 | ||||||||||||||||
41.74–48.40 | 251,109 | 5.01 | 44.01 | 251,109 | 44.01 | ||||||||||||||||
57.40–57.45 | 40,320 | 1.97 | 57.40 | 40,320 | 57.40 |
2008
|
||||||||
SARs
|
U.S.
$ weighted-average exercise price
|
|||||||
Outstanding
at beginning of year
|
115,760 | 42.91 | ||||||
Granted
|
9,170 | 37.15 | ||||||
Exercised
|
– | – | ||||||
Forfeited
|
(28,650 | ) | 42.96 | |||||
Outstanding
at end of year
|
96,280 | 42.35 | ||||||
Exercisable
at end of year
|
21,177 | 42.89 |
SARs
outstanding
|
SARs
exercisable
|
||||||||||||||||||||
U.S.
$ range of exercise prices
|
Number
outstanding at 12/31/08
|
Weighted-average
remaining contractual life
|
U.S.
$ weighted-average exercise price
|
Number
exercisable at 12/31/08
|
U.S.
$ weighted-average exercise price
|
||||||||||||||||
42.96 | 82,110 | 8.15 | 42.96 | 20,527 | 42.96 | ||||||||||||||||
37.15-41.81 | 14,170 | 9.08 | 38.79 | 1,250 | 41.81 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
2008
|
2007
|
2006
|
||||||||||||||||||||||
Options
|
Canadian
$ weighted-average exercise price
|
Options
|
Canadian
$ weighted-average exercise price
|
Options
|
Canadian
$ weighted-average exercise price
|
|||||||||||||||||||
Outstanding
at beginning of year
|
4,703,152 | 49.80 | 5,099,392 | 49.79 | 5,451,664 | 49.67 | ||||||||||||||||||
Granted
|
– | – | – | – | – | – | ||||||||||||||||||
Exercised
|
– | – | (117,900 | ) | 44.23 | (157,800 | ) | 42.69 | ||||||||||||||||
Forfeited
|
(434,902 | ) | 51.71 | (278,340 | ) | 52.05 | (194,472 | ) | 52.16 | |||||||||||||||
Outstanding
at end of year
|
4,268,250 | 49.61 | 4,703,152 | 49.80 | 5,099,392 | 49.79 | ||||||||||||||||||
Exercisable
at end of year
|
4,267,780 | 49.61 | 4,699,984 | 49.81 | 5,067,267 | 49.85 |
Options
outstanding
|
Options
exercisable
|
||||||||||||||||||||
Canadian
$ range of exercise prices
|
Number
outstanding at 12/31/08
|
Weighted-average
remaining contractual life
|
Canadian
$ weighted-average exercise price
|
Number
exercisable at 12/31/08
|
Canadian
$ weighted-average exercise price
|
||||||||||||||||
40.69–44.40 | 997,500 | 1.35 | 41.03 | 997,030 | 41.03 | ||||||||||||||||
45.90–48.70 | 1,766,070 | 2.95 | 48.35 | 1,766,070 | 48.35 | ||||||||||||||||
50.25-57.45 | 1,504,680 | 1.94 | 56.76 | 1,504,680 | 56.76 |
2008
|
2007
|
2006
|
||||||||||||||||||||||
Options
|
U.S.
$ weighted-average exercise price
|
Options
|
U.S.
$ weighted-average exercise price
|
Options
|
U.S.
$ weighted-average exercise price
|
|||||||||||||||||||
Outstanding
at beginning of year
|
9,284,608 | 34.78 | 9,627,964 | 32.98 | 10,469,989 | 32.62 | ||||||||||||||||||
Granted
|
2,441,470 | 37.15 | 1,827,510 | 42.95 | 380,000 | 38.27 | ||||||||||||||||||
Exercised
|
(504,139 | ) | 32.94 | (1,664,029 | ) | 32.28 | (742,400 | ) | 30.83 | |||||||||||||||
Forfeited
|
(1,099,265 | ) | 37.05 | (506,837 | ) | 35.04 | (479,625 | ) | 32.66 | |||||||||||||||
Outstanding
at end of year
|
10,122,674 | 35.45 | 9,284,608 | 34.78 | 9,627,964 | 32.98 | ||||||||||||||||||
Exercisable
at end of year
|
6,585,345 | 33.87 | 7,433,244 | 31.75 | 5,094,436 | 31.39 |
Options
outstanding
|
Options
exercisable
|
||||||||||||||||||||
U.S.
$ range of exercise prices
|
Number
outstanding at 12/31/08
|
Weighted-average
remaining contractual life
|
U.S.
$ weighted-average exercise price
|
Number
exercisable at 12/31/08
|
U.S.
$ weighted-average exercise price
|
||||||||||||||||
26.06–29.70 | 984,309 | 3.95 | 26.07 | 984,309 | 26.07 | ||||||||||||||||
30.79–33.76 | 3,220,771 | 5.45 | 33.52 | 3,220,771 | 33.52 | ||||||||||||||||
33.87-42.96 | 5,917,594 | 8.19 | 38.06 | 2,380,265 | 37.57 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
2008
|
2007
|
2006
|
||||||||||
Risk-free
interest rate
|
3.5 | % | 4.6 | % | 4.6 | % | ||||||
Dividend
yield
|
3.4 | % | 2.3 | % | 2.3 | % | ||||||
Volatility
factor
|
31.5 | % | 17.1 | % | 18.5 | % | ||||||
Expected
life (in years)
|
6 | 6 | 6 |
2008
|
2007
|
2006
|
||||||||||||||||||||||
RSUs
|
U.S.
$ weighted-average value
|
RSUs
|
U.S.
$ weighted-average value
|
RSUs
|
U.S.
$ weighted-average value
|
|||||||||||||||||||
Outstanding
at beginning of year
|
493,743 | 38.10 | 407,925 | 35.89 | 223,715 | 33.86 | ||||||||||||||||||
Granted
|
2,915,751 | 35.00 | 148,761 | 42.75 | 192,098 | 38.20 | ||||||||||||||||||
Forfeited
|
(276,016 | ) | 34.01 | (36,723 | ) | 35.15 | – | – | ||||||||||||||||
Vested
|
(65,953 | ) | 34.01 | (26,220 | ) | 34.10 | (7,888 | ) | 34.79 | |||||||||||||||
Outstanding
at end of year
|
3,067,525 | 35.10 | 493,743 | 38.10 | 407,925 | 35.89 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
2008
|
2007
|
2006
|
||||||||||||||||||||||
PRSUs
|
U.S.
$ weighted-average value
|
PRSUs
|
U.S.
$ weighted-average value
|
PRSUs
|
U.S.
$ weighted-average value
|
|||||||||||||||||||
Outstanding
at beginning of year
|
1,299,757 | 41.12 | 705,109 | 38.88 | – | – | ||||||||||||||||||
Granted
|
1,745,994 | 35.76 | 761,673 | 42.87 | 705,109 | 38.88 | ||||||||||||||||||
Forfeited
|
(196,789 | ) | 39.32 | (167,025 | ) | 39.17 | – | – | ||||||||||||||||
Vested
|
– | – | – | – | – | – | ||||||||||||||||||
Outstanding
at end of year
|
2,848,962 | 37.84 | 1,299,757 | 41.12 | 705,109 | 38.88 |
2008
|
2007
|
2006
|
||||||||||
Accounts
receivable
|
1,009 | (135 | ) | (141 | ) | |||||||
Prepaid
expenses and other current assets
|
(70 | ) | (93 | ) | 2 | |||||||
Accounts
payable and accruals
|
119 | 99 | 67 | |||||||||
Deferred
revenue
|
(695 | ) | 100 | 78 | ||||||||
Income
taxes
|
41 | (27 | ) | (35 | ) | |||||||
Other
|
(212 | ) | (80 | ) | (44 | ) | ||||||
192 | (136 | ) | (73 | ) |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
(millions of U.S. dollars)
|
Revenues
|
Depreciation
|
Segment operating profit
|
Additions to
capital assets1 and goodwill
|
Total assets
|
|||||||||||||||
Markets
|
6,210 | 484 | 1,104 | 22,060 | 23,844 | |||||||||||||||
Legal
|
3,531 | 235 | 1,135 | 356 | 6,481 | |||||||||||||||
Tax
& Accounting
|
861 | 30 | 219 | 296 | 1,684 | |||||||||||||||
Scientific
|
646 | 36 | 176 | 40 | 1,258 | |||||||||||||||
Healthcare
|
468 | 25 | 85 | 37 | 755 | |||||||||||||||
Professional
|
5,506 | 326 | 1,615 | 729 | 10,178 | |||||||||||||||
Segment
totals
|
11,716 | 810 | 2,719 | 22,789 | 34,022 | |||||||||||||||
Corporate
and Other2
|
– | 21 | (543 | ) | 54 | 1,992 | ||||||||||||||
Eliminations
|
(9 | ) | – | – | – | – | ||||||||||||||
Continuing
operations
|
11,707 | 831 | 2,176 | 22,843 | 36,014 | |||||||||||||||
Discontinued
operations
|
6 | |||||||||||||||||||
Total
|
36,020 |
(millions of U.S. dollars)
|
Revenues
|
Depreciation
|
Segment Operating profit
|
Additions to capital assets1
and
goodwill
|
Total assets
|
|||||||||||||||
Markets
|
2,186 | 172 | 454 | 239 | 3,618 | |||||||||||||||
Legal
|
3,318 | 205 | 1,044 | 361 | 6,562 | |||||||||||||||
Tax
& Accounting
|
705 | 21 | 184 | 333 | 1,440 | |||||||||||||||
Scientific
|
651 | 32 | 175 | 113 | 1,419 | |||||||||||||||
Healthcare
|
452 | 24 | 85 | 44 | 772 | |||||||||||||||
Professional
|
5,126 | 282 | 1,488 | 851 | 10,193 | |||||||||||||||
Segment
totals
|
7,312 | 454 | 1,942 | 1,090 | 13,811 | |||||||||||||||
Corporate
and Other2
|
– | 14 | (389 | ) | 122 | 9,010 | ||||||||||||||
Eliminations
|
(16 | ) | – | – | – | – | ||||||||||||||
Continuing operations
|
7,296 | 468 | 1,553 | 1,212 | 22,821 | |||||||||||||||
Discontinued operations
|
10 | |||||||||||||||||||
Total
|
22,831 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
(millions of U.S. dollars)
|
Revenues
|
Depreciation
|
Segment operating profit
|
Additions to capital assets1
and goodwill
|
Total assets
|
|||||||||||||||
Markets
|
2,025 | 180 | 380 | 397 | 3,489 | |||||||||||||||
Legal
|
3,008 | 187 | 943 | 348 | 6,445 | |||||||||||||||
Tax
& Accounting
|
598 | 22 | 168 | 76 | 1,086 | |||||||||||||||
Scientific
|
602 | 23 | 151 | 62 | 1,344 | |||||||||||||||
Healthcare
|
374 | 16 | 81 | 375 | 755 | |||||||||||||||
Professional
|
4,582 | 248 | 1,343 | 861 | 9,630 | |||||||||||||||
Segment
totals
|
6,607 | 428 | 1,723 | 1,258 | 13,119 | |||||||||||||||
Corporate
and Other 2
|
– | 10 | (235 | ) | 28 | 1,452 | ||||||||||||||
Eliminations
|
(16 | ) | – | – | – | – | ||||||||||||||
Continuing operations
|
6,591 | 438 | 1,488 | 1,286 | 14,571 | |||||||||||||||
Discontinued operations
|
5,571 | |||||||||||||||||||
Total
|
20,142 |
(by country of origin)
(millions of U.S. dollars)
|
Revenues
|
Capital assets1
and goodwill
|
Total assets
|
|||||||||
Americas
(North America, Latin America, South America)
|
7,390 | 17,506 | 20,696 | |||||||||
EMEA
(Europe, Middle East and Africa)
|
3,308 | 10,794 | 12,479 | |||||||||
Asia Pacific
|
1,009 | 2,497 | 2,845 | |||||||||
Total
|
11,707 | 30,797 | 36,020 |
(by
country of origin)
(millions
of U.S. dollars)
|
Revenues
|
Capital
assets1
and
goodwill
|
Total
assets
|
|||||||||
Americas
|
6,055 | 9,845 | 15,677 | |||||||||
EMEA
|
1,011 | 1,788 | 6,851 | |||||||||
Asia
Pacific
|
230 | 192 | 303 | |||||||||
Total
|
7,296 | 11,825 | 22,831 |
(by
country of origin)
(millions
of U.S. dollars)
|
Revenues
|
Capital
assets1
and
goodwill
|
Total
assets
|
|||||||||
Americas
|
5,527 | 9,250 | 16,643 | |||||||||
EMEA
|
871 | 1,888 | 3,112 | |||||||||
Asia
Pacific
|
193 | 159 | 387 | |||||||||
Total
|
6,591 | 11,297 | 20,142 |
1
|
Capital
assets include computer hardware and other property, capitalized software
and identifiable intangible assets.
|
2
|
Corporate
and other includes corporate costs, costs associated with stock-based
compensation plans, expenses for integration and synergy programs, certain
Reuters transaction costs and certain fair value currency related
adjustments.
|
For
the year ended December 31
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Segment
operating profit
|
2,176 | 1,553 | 1,488 | |||||||||
Amortization
|
(411 | ) | (256 | ) | (240 | ) | ||||||
Impairment of assets held for
sale
|
(72 | ) | – | – | ||||||||
Operating profit
|
1,693 | 1,297 | 1,248 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
For
the year ended December 31
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Net
earnings under Canadian GAAP
|
1,405 | 4,004 | 1,120 | |||||||||
Differences
in GAAP increasing (decreasing) reported earnings:
|
||||||||||||
Business
combinations
|
17 | 92 | 17 | |||||||||
Derivative
instruments and hedging activities
|
– | (8 | ) | 12 | ||||||||
Recycling
of cumulative translation adjustment
|
(146 | ) | – | – | ||||||||
Sale
leaseback accounting
|
(33 | ) | – | – | ||||||||
Employee
future benefits
|
14 | – | – | |||||||||
Income taxes
|
7 | (26 | ) | (6 | ) | |||||||
Net earnings under U.S.
GAAP
|
1,264 | 4,062 | 1,143 | |||||||||
Earnings
under U.S. GAAP from continuing operations
|
1,264 | 1,096 | 932 | |||||||||
Earnings under U.S. GAAP from discontinued
operations
|
– | 2,966 | 211 | |||||||||
Net earnings under U.S.
GAAP
|
1,264 | 4,062 | 1,143 | |||||||||
Basic
earnings per share, under U.S. GAAP, from:
|
||||||||||||
Continuing
operations
|
$ | 1.63 | $ | 1.70 | $ | 1.44 | ||||||
Discontinued
operations
|
$ | 0.00 | $ | 4.63 | $ | 0.33 | ||||||
Basic earnings per share
|
$ | 1.63 | $ | 6.33 | $ | 1.77 | ||||||
Diluted
earnings per share, under U.S. GAAP, from:
|
||||||||||||
Continuing
operations
|
$ | 1.62 | $ | 1.69 | $ | 1.43 | ||||||
Discontinued operations
|
$ | 0.00 | $ | 4.60 | $ | 0.33 | ||||||
Diluted earnings per share
|
$ | 1.62 | $ | 6.29 | $ | 1.76 |
As
of December 31
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Shareholders’
equity under Canadian GAAP
|
20,126 | 13,571 | 10,481 | |||||||||
Differences
in GAAP increasing (decreasing) reported shareholders’ equity:
|
||||||||||||
Business
combinations
|
(481 | ) | (498 | ) | (590 | ) | ||||||
Derivative
instruments and hedging activities
|
11 | 1 | 9 | |||||||||
Sale
leaseback accounting
|
(33 | ) | – | – | ||||||||
Employee
future benefits
|
(776 | ) | (257 | ) | (512 | ) | ||||||
Income taxes
|
364 | 195 | 339 | |||||||||
Shareholders’ equity
under U.S. GAAP
|
19,211 | 13,012 | 9,727 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
FAS
158
adjustments
|
||||
Other
non-current assets
|
(380 | ) | ||
Accounts
payable and accruals
|
19 | |||
Other
non-current liabilities
|
103 | |||
Long-term
deferred income tax liability
|
(195 | ) | ||
Accumulated
other comprehensive loss
|
(307 | ) |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
FAS
158
adjustments
|
||||
Other
non-current liabilities
|
(16 | ) | ||
Retained
earnings
|
16 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
(millions
of U.S. dollars, except as otherwise indicated and except for per share
amounts)
|
For
the years ended and as at December 31
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Consolidated
statement of earnings data:
|
||||||||||||||||||||
Revenues
|
11,707 | 7,296 | 6,591 | 6,122 | 5,632 | |||||||||||||||
Operating
profit
|
1,693 | 1,297 | 1,248 | 1,159 | 1,046 | |||||||||||||||
Earnings
from continuing operations
|
1,405 | 1,096 | 912 | 652 | 639 | |||||||||||||||
Net
earnings
|
1,405 | 4,004 | 1,120 | 934 | 1,011 | |||||||||||||||
Basic
earnings per share from continuing operations
|
$ | 1.82 | $ | 1.70 | $ | 1.41 | $ | 0.99 | $ | 0.97 | ||||||||||
Basic
earnings per share
|
$ | 1.82 | $ | 6.24 | $ | 1.73 | $ | 1.42 | $ | 1.54 | ||||||||||
Diluted
earnings per share from continuing operations
|
$ | 1.81 | $ | 1.69 | $ | 1.41 | $ | 0.99 | $ | 0.97 | ||||||||||
Diluted
earnings per share
|
$ | 1.81 | $ | 6.20 | $ | 1.73 | $ | 1.42 | $ | 1.54 | ||||||||||
Consolidated
balance sheet data:
|
||||||||||||||||||||
Total
assets
|
36,020 | 22,831 | 20,142 | 19,434 | 19,643 | |||||||||||||||
Total
common and ordinary share capital
|
11,025 | 2,822 | 2,689 | 2,616 | 2,586 | |||||||||||||||
Total
shareholders’ equity
|
20,126 | 13,571 | 10,481 | 9,963 | 9,962 | |||||||||||||||
Dividend
data:
|
||||||||||||||||||||
Dividends
per Thomson Reuters Corporation
|
||||||||||||||||||||
common
share (US$)
|
$ | 1.08 | $ | 0.98 | $ | 0.88 | $ | 0.79 | $ | 0.76 | ||||||||||
Dividends
per Thomson Reuters PLC ordinary share (US$)
|
$ | 0.49 | n/m | n/m | n/m | n/m | ||||||||||||||
Dividends
per Thomson Reuters Corporation Series II preference share
(C$)
|
C
|
$ | 0.85 |
C
|
$ | 1.07 |
C
|
$ | 1.00 |
C
|
$ | 0.77 |
C
|
$ | 0.70 | |||||
Weighted
average number of shares outstanding (in millions):
|
||||||||||||||||||||
Thomson
Reuters Corporation common shares and Thomson Reuters PLC ordinary shares,
basic
|
770.8 | 641.2 | 644.1 | 654.4 | 655.3 | |||||||||||||||
Thomson
Reuters Corporation common shares and Thomson Reuters PLC ordinary shares,
diluted
|
775.2 | 644.4 | 646.0 | 655.0 | 655.9 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
The
following individuals are our executive officers:
|
||||
Name
|
Age
|
Title
|
||
Thomas H. Glocer
|
49
|
Chief
Executive Officer
|
||
Robert D. Daleo
|
59
|
Executive
Vice President and
Chief Financial Officer
|
||
James C. Smith
|
49
|
Chief
Executive Officer, Professional
Division
|
||
Devin N. Wenig
|
42
|
Chief
Executive Officer, Markets
Division
|
||
Stephen G. Dando
|
47
|
Executive
Vice President and
Chief Human Resources Officer
|
||
Deirdre
Stanley
|
44
|
Executive
Vice President and
General Counsel
|
||
Gus Carlson
|
50
|
Executive
Vice President, Chief
Marketing & Communications
Officer
|
||
James Powell
|
47
|
Executive
Vice President and
Chief Technology
Officer
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Committee
memberships
|
|||||
Name
|
Age
|
Audit
|
Corporate
Governance
|
Human
Resources
|
Director
Since
|
David Thomson,
Chairman
|
51
|
1988
|
|||
W.
Geoffrey Beattie, Deputy Chairman
|
49
|
•
|
•
|
1998
|
|
Niall FitzGerald,
KBE, Deputy Chairman
|
63
|
Chair
|
•
|
2008
|
|
Thomas H. Glocer
|
49
|
2008
|
|||
Manvinder S. Banga
|
54
|
•
|
2009
|
||
Mary Cirillo
|
61
|
•
|
•
|
2005
|
|
Steven A.
Denning
|
60
|
Chair
|
2000
|
||
Lawton
Fitt
|
55
|
•
|
2008
|
||
Roger L. Martin
|
52
|
•
|
|
|
1999
|
Sir Deryck Maughan
|
61
|
•
|
2008
|
||
Ken Olisa
|
57
|
•
|
2008
|
||
Vance K. Opperman
|
66
|
Chair
|
1996
|
||
John M. Thompson
|
66
|
•
|
•
|
2003
|
|
Peter J. Thomson
|
43
|
1995
|
|||
John A. Tory
|
79
|
•
|
1978
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
(in
millions of US dollars)
|
2008
|
2007
|
||||||
Audit
fees
|
$
|
23.0
|
$
|
13.7
|
||||
Audit-related
fees
|
3.8
|
19.0
|
||||||
Tax
fees
|
11.2
|
10.9
|
||||||
All
other fees
|
0.7
|
0.2
|
||||||
Total
|
$
|
38.7
|
$
|
43.8
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
•
|
authoring content for inclusion
in certain products and services;
and
|
•
|
French translations of our
financial statements, MD&A and financial information included in our
prospectuses and other offering
documents.
|
|
·
|
One
of the directors (Thomas H. Glocer) is not independent because he is the
CEO of Thomson Reuters.
|
|
·
|
Four
of the directors (David Thomson, W. Geoffrey Beattie, Peter J. Thomson and
John A. Tory) are considered to not be independent pursuant to applicable
rules because they are directors and current or former executive officers
of Woodbridge, the controlling shareholder of Thomson Reuters. None of
these individuals is a member of Thomson Reuters executive management
team. With its substantial equity investment in Thomson Reuters,
Woodbridge considers that its interests as a shareholder are aligned with
those of all other shareholders.
|
|
·
|
The
remaining 10 directors are
independent.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
|
·
|
Until
February 2009, Mr. Denning was a director of Hewitt Associates Inc. In
February 2005, we entered into an agreement with Hewitt Associates Inc. to
outsource certain human resources administrative functions in order to
improve operating and cost efficiencies. When we initially entered into
the agreement, we expected to pay Hewitt an aggregate of $115 million over
a five-year period. This agreement was subsequently renegotiated and
extended in September 2006. Under the new terms, we expect to pay Hewitt
an aggregate of $165 million over a 10-year period. In 2008, we paid
Hewitt $11 million for its services. Mr. Denning did not participate in
negotiations related to the agreement and has refrained from deliberating
and voting on any matters relating to Hewitt Associates Inc. by the HR
Committee and the board.
|
|
·
|
Mr.
Thompson is the non-executive independent Chairman of the board of The
Toronto-Dominion Bank. In the normal course of business, we have a banking
relationship with The Toronto-Dominion Bank and one of the bank’s
affiliates has served as a dealer for our recent offerings of debt
securities in the United States and
Canada.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Thomson
Reuters Corporation
|
Thomson
Reuters PLC
|
|||||||||||||||||||||||
January 1,
|
December 31,
|
March 26,
|
January 1,
|
December 31,
|
March 26,
|
|||||||||||||||||||
Name
|
20081 |
2008
|
2009
|
20081 |
2008
|
2009
|
||||||||||||||||||
David Thomson
|
6,070 | 6,070 | 6,070 | – | – | – | ||||||||||||||||||
W.
Geoffrey Beattie
|
200,500 | 43,500 | 43,500 | – | 263,624 | 263,624 | ||||||||||||||||||
Niall FitzGerald,
KBE
|
27,658 | 27,658 | 27,658 | – | – | – | ||||||||||||||||||
Thomas H. Glocer
|
– | – | – | 452,722 | 650,231 | 650,231 | ||||||||||||||||||
Manvinder S. Banga
|
– | – | – | – | – | – | ||||||||||||||||||
Mary Cirillo
|
– | – | 11,101 | – | – | – | ||||||||||||||||||
Steven A.
Denning
|
36,339 | 40,712 | 40,904 | – | – | – | ||||||||||||||||||
Lawton
Fitt
|
– | – | – | 4,000 | 4,000 | 4,000 | ||||||||||||||||||
Roger L. Martin
|
17,338 | 22,319 | 24,014 | – | 7,500 | 7,500 | ||||||||||||||||||
Sir Deryck Maughan
|
– | 1,142 | 2,122 | – | – | – | ||||||||||||||||||
Ken Olisa
|
– | – | 888 | 408 | 408 | 408 | ||||||||||||||||||
Vance K. Opperman
|
72,068 | 77,760 | 79,707 | – | – | – | ||||||||||||||||||
John M. Thompson2
|
15,036 | 22,521 | 23,417 | – | – | 11,400 | ||||||||||||||||||
Peter J. Thomson
|
1,366 | 1,627 | 1,644 | – | – | – | ||||||||||||||||||
John A. Tory
|
504,200 | 62,831 | 62,861 | – | 548,000 | 548,000 |
1
|
As
of the date of appointment, if later than January 1,
2008. Mr. Banga was appointed to the Thomson Reuters board on
January 1, 2009.
|
2
|
In
addition, Mrs. J.M. Thompson owns 300 Thomson Reuters
Corporation common shares.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
•
|
Thomson
Reuters Corporation and Thomson Reuters PLC are separate publicly listed
companies;
|
•
|
the
boards of directors of the two companies are comprised of the same
individuals, as are the companies’ executive
management;
|
•
|
shareholders
of the two companies ordinarily vote together as a single decision-making
body, including in the election of
directors;
|
•
|
shareholders
of the two companies receive equivalent cash dividends and capital
distributions;
|
•
|
each
company has guaranteed all contractual obligations of the other company
and will guarantee other obligations as agreed;
and
|
•
|
a
take-over bid or similar transaction is required to be made for shares of
both companies on an equivalent
basis.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Ÿ
|
Joint
Electorate Actions. Thomson Reuters Corporation shareholders and
Thomson Reuters PLC shareholders vote together as a single decision-making
body on all matters other than those which constitute “Class Rights
Actions” or “Procedural Resolutions”. These matters are called “Joint
Electorate Actions” and include the election of directors, the appointment
of auditors and the approval and receipt of financial statements and
reports.
|
Ÿ
|
Class
Rights Actions. On specified matters where the interests of Thomson
Reuters Corporation shareholders and Thomson Reuters PLC shareholders may
diverge, the shareholders of each company vote separately. These matters
are called “Class Rights Actions” and include: (i) the voluntary
liquidation of either company; (ii) any adjustment to the Equalization
Ratio other than in accordance with the Equalization and Governance
Agreement; (iii) any amendment to, or termination of, the contractual
arrangements giving effect to the DLC structure; and (iv) any amendment to
the provisions of our organizational documents giving effect to the DLC
structure. Matters that are Class Rights Actions may not be implemented
unless they have been approved by the requisite majority of the votes cast
by the Thomson Reuters Corporation shareholders and Thomson Reuters PLC
shareholders voting separately.
|
Ÿ
|
Procedural
Resolutions. Procedural or technical resolutions do not constitute
either Joint Electorate Actions or Class Rights Actions and will be voted
on separately by the relevant Thomson Reuters Corporation shareholders or
Thomson Reuters PLC shareholders.
|
Ÿ
|
For
Joint Electorate Actions, the Thomson Reuters Corporation special voting
share carries the number of votes cast at the parallel meeting of Thomson
Reuters PLC shareholders (as adjusted by the Equalization Ratio and
rounded up to the nearest whole number) and the Thomson Reuters PLC
special voting share carries the number of votes cast at the parallel
meeting of Thomson Reuters Corporation shareholders (as adjusted by the
Equalization Ratio and rounded up to the nearest whole
number).
|
Ÿ
|
For
Class Rights Actions, the special voting shares carry voting rights only
if the proposed action has not been approved at the parallel meeting of
the Thomson Reuters PLC shareholders or Thomson Reuters Corporation
shareholders, as the case may be. In that event, the special voting shares
carry such number of votes in respect of the proposed action as would be
sufficient to defeat it. These voting rights reflect the requirement that
Class Rights Actions be approved by the shareholders of each of Thomson
Reuters Corporation and Thomson Reuters PLC voting
separately.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
•
|
Thomson
Reuters Corporation’s authorized share capital consisted of an unlimited
number of common shares, an unlimited number of preference shares,
issuable in series, a Reuters Founders Share, a special voting share and
an equalization share.
|
•
|
Thomson
Reuters PLC’s authorized share capital consisted of
2,031,700,000 ordinary shares, a Reuters Founders Share and a special
voting share.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Ÿ
|
Thomson
Reuters Corporation common shares are listed in Canadian dollars on the
TSX and in US dollars on the NYSE under the symbol “TRI” and the Series II
preference shares are listed in Canadian dollars on the TSX under the
symbol “TRI.PR.B”. Prior to the closing of the Reuters acquisition, our
common shares and preference shares traded under the symbols “TOC” and
“TOC.PR.B”, respectively.
|
Ÿ
|
Thomson
Reuters PLC ordinary shares are traded in British pounds sterling on the
LSE under the symbol “TRIL”. ADSs, each representing six Thomson Reuters
PLC ordinary shares, are listed in US dollars on the Nasdaq Global Select
Market under the symbol “TRIN”. The ADSs are evidenced by American
Depositary Receipts (ADRs) issued by Deutsche Bank Trust Company Americas,
as depositary under a deposit agreement dated April 17, 2008 signed with
Thomson Reuters PLC and on behalf of ADR
holders.
|
Thomson
Reuters
Corporation
common
shares
(C$)
|
Thomson
Reuters
Corporation
common
shares
(US$)
|
Thomson
Reuters
Corporation
Series II
preferred
shares
(C$)
|
Thomson
Reuters
PLC
ordinary
shares
(£)
|
Thomson
Reuters
PLC
ADSs
(US$)
|
||||||||||||||||||||||||||||||||||||
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
|||||||||||||||||||||||||||||||
2004
|
47.99 | 39.86 | 37.29 | 29.84 | 26.10 | 24.55 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||
2005
|
45.50 | 38.80 | 38.55 | 31.09 | 26.05 | 24.61 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||
2006
|
49.54 | 39.50 | 43.41 | 34.01 | 26.49 | 25.23 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||
2007
|
51.95 | 36.44 | 47.26 | 36.93 | 28.80 | 23.25 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||
2008
|
40.70 | 24.83 | 41.16 | 19.30 | 24.45 | 9.00 | 17.12 | 8.83 | 197.65 | 86.00 |
Thomson
Reuters
Corporation
common
shares
(C$)
|
Thomson
Reuters
Corporation
common
shares
(US$)
|
Thomson
Reuters
Corporation
Series II
preferred
shares
(C$)
|
Thomson
Reuters
PLC
ordinary
shares
(£)
|
Thomson
Reuters
PLC
ADSs
(US$)
|
||||||||||||||||||||||||||||||||||||||
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
|||||||||||||||||||||||||||||||||
2007
|
||||||||||||||||||||||||||||||||||||||||||
Q1
|
51.95 | 46.30 | 44.19 | 39.46 | 28.80 | 25.27 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||||
Q2
|
50.00 | 43.17 | 44.93 | 39.75 | 26.04 | 25.00 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||||
Q3
|
46.19 | 41.00 | 44.36 | 38.27 | 25.75 | 24.77 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||||
Q4 | 44.69 | 36.44 | 47.26 | 36.93 | 25.23 | 23.25 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||||||||||||||||
Q1 | 40.70 | 31.67 | 41.16 | 31.96 | 24.45 | 21.95 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||||
Q2 | 39.78 | 32.01 | 39.75 | 31.65 | 22.45 | 21.00 | 17.12 | 12.74 | 197.65 | 157.33 | ||||||||||||||||||||||||||||||||
Q3 | 37.91 | 25.89 | 35.50 | 24.83 | 23.00 | 21.85 | 16.25 | 11.32 | 179.82 | 125.09 | ||||||||||||||||||||||||||||||||
Q4 | 35.75 | 24.83 | 29.42 | 19.30 | 22.40 | 9.00 | 15.95 | 8.83 | 142.20 | 86.00 | ||||||||||||||||||||||||||||||||
2009
|
||||||||||||||||||||||||||||||||||||||||||
Q1 | 35.51 | 27.57 | 29.99 | 21.89 | 14.49 | 10.00 | 15.89 | 13.02 | 142.71 | 108.47 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Thomson
Reuters Corporation
common
shares (C$)
|
Thomson
Reuters Corporation
common
shares (US$)
|
Thomson
Reuters Corporation
Series
II preference shares
|
||||||||||||||||||||||||||||||||||||||||||||||
High
|
Low
|
Closing
|
Trading
volume
|
High
|
Low
|
Closing
|
Trading
volume
|
High
|
Low
|
Closing
|
Trading
volume
|
|||||||||||||||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||||||||||||||||||||||
January
|
40.70 | 32.30 | 35.84 | 32,249,916 | 41.16 | 32.37 | 35.54 | 4,945,050 | 24.45 | 22.55 | 23.50 | 32,844 | ||||||||||||||||||||||||||||||||||||
February
|
36.79 | 32.60 | 32.77 | 32,983,608 | 36.82 | 33.21 | 33.27 | 3,517,685 | 23.50 | 22.70 | 22.99 | 19,206 | ||||||||||||||||||||||||||||||||||||
March
|
38.80 | 31.67 | 34.52 | 53,413,948 | 39.05 | 31.96 | 33.53 | 7,132,127 | 23.25 | 21.95 | 22.00 | 48,772 | ||||||||||||||||||||||||||||||||||||
April
|
39.78 | 34.35 | 37.30 | 49,234,412 | 39.16 | 33.69 | 37.60 | 5,194,240 | 22.38 | 21.00 | 22.00 | 17,010 | ||||||||||||||||||||||||||||||||||||
May
|
39.77 | 35.92 | 36.15 | 35,092,944 | 39.75 | 35.85 | 36.55 | 4,207,038 | 22.09 | 21.25 | 21.75 | 27,347 | ||||||||||||||||||||||||||||||||||||
June
|
37.32 | 32.01 | 32.90 | 26,663,472 | 36.94 | 31.65 | 32.19 | 3,114,202 | 22.45 | 21.75 | 22.05 | 100,726 | ||||||||||||||||||||||||||||||||||||
July
|
33.10 | 27.51 | 33.05 | 28,674,766 | 32.64 | 27.54 | 32.23 | 4,496,550 | 22.49 | 22.05 | 22.49 | 57,670 | ||||||||||||||||||||||||||||||||||||
August
|
37.91 | 32.21 | 35.75 | 20,337,464 | 35.50 | 31.38 | 33.62 | 4,234,015 | 23.00 | 22.32 | 22.99 | 31,410 | ||||||||||||||||||||||||||||||||||||
September
|
36.93 | 25.89 | 28.93 | 51,362,984 | 34.50 | 24.83 | 27.27 | 7,476,906 | 22.99 | 21.85 | 22.29 | 16,340 | ||||||||||||||||||||||||||||||||||||
October
|
31.00 | 25.02 | 28.38 | 32,493,872 | 28.60 | 19.75 | 23.48 | 8,670,302 | 22.40 | 18.00 | 19.00 | 170,855 | ||||||||||||||||||||||||||||||||||||
November
|
31.72 | 24.83 | 31.72 | 31,393,572 | 26.67 | 19.30 | 24.74 | 8,734,105 | 18.50 | 14.75 | 15.00 | 13,460 | ||||||||||||||||||||||||||||||||||||
December
|
35.75 | 26.50 | 35.60 | 35,473,184 | 29.42 | 21.35 | 29.15 | 10,866,609 | 14.99 | 9.00 | 11.50 | 196,414 | ||||||||||||||||||||||||||||||||||||
2009
|
||||||||||||||||||||||||||||||||||||||||||||||||
January
|
35.51 | 27.57 | 30.00 | 32,577,446 | 29.99 | 21.89 | 24.39 | 9,937,820 | 12.49 | 10.00 | 11.80 | 409,335 | ||||||||||||||||||||||||||||||||||||
February
|
33.33 | 28.19 | 31.54 | 31,616,264 | 27.36 | 22.52 | 24.72 | 9,969,950 | 13.99 | 11.90 | 13.99 | 25,590 | ||||||||||||||||||||||||||||||||||||
March
|
32.16 | 28.60 | 31.60 | 18,458,900 | 26.13 | 22.02 | 25.46 | 5,956,997 | 14.49 | 13.38 | 13.38 | 5,525 |
Thomson
Reuters PLC ordinary shares (£)
|
Thomson
Reuters PLC ADSs (US$)
|
|||||||||||||||||||||||||||||||
High
|
Low
|
Closing
|
Trading
volume
|
High
|
Low
|
Closing
|
Trading
volume
|
|||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||||||
April
|
17.00 | 14.96 | 15.63 | 29,562,513 | 195.25 | 182.79 | 186.88 | 306,723 | ||||||||||||||||||||||||
May
|
17.12 | 15.03 | 16.29 | 44,217,188 | 197.65 | 179.09 | 194.07 | 1,884,648 | ||||||||||||||||||||||||
June
|
16.23 | 12.74 | 13.44 | 41,868,104 | 189.67 | 157.33 | 161.90 | 531,979 | ||||||||||||||||||||||||
July
|
14.06 | 11.32 | 13.68 | 61,821,912 | 168.21 | 139.87 | 161.56 | 571,330 | ||||||||||||||||||||||||
August
|
16.25 | 13.46 | 15.37 | 37,061,428 | 179.82 | 156.85 | 168.20 | 568,009 | ||||||||||||||||||||||||
September
|
16.14 | 11.81 | 12.41 | 60,333,204 | 171.13 | 125.09 | 135.73 | 910,112 | ||||||||||||||||||||||||
October
|
13.06 | 8.83 | 10.73 | 53,054,284 | 137.82 | 86.00 | 104.56 | 1,173,348 | ||||||||||||||||||||||||
November
|
13.15 | 10.39 | 12.99 | 50,810,480 | 120.68 | 90.92 | 120.17 | 1,458,856 | ||||||||||||||||||||||||
December
|
15.95 | 12.00 | 15.10 | 32,579,992 | 142.20 | 109.44 | 135.81 | 1,013,289 | ||||||||||||||||||||||||
2009
|
||||||||||||||||||||||||||||||||
January
|
15.89 | 13.05 | 13.97 | 35,765,460 | 142.71 | 108.47 | 121.52 | 749,507 | ||||||||||||||||||||||||
February
|
15.19 | 13.02 | 14.50 | 35,776,692 | 134.40 | 114.19 | 124.30 | 922,827 | ||||||||||||||||||||||||
March
|
15.89 | 13.51 | 15.61 | 21,516,450 | 138.00 | 113.58 | 133.85 | 612,924 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Ÿ
|
US$750
million of 5.95% notes due 2013;
|
Ÿ
|
US$1
billion of 6.50% notes due 2018;
|
Ÿ
|
C$600
million of 5.25% notes due 2011;
and
|
Ÿ
|
C$600
million of 5.70% notes due
2015.
|
Ÿ
|
Holders
of Thomson Reuters Corporation common shares receive their dividends in US
dollars, unless they elect to receive their dividends in Canadian dollars
or British pounds sterling;
|
Ÿ
|
Holders
of Thomson Reuters PLC ordinary shares receive their dividends in British
pounds sterling, unless they elect to receive their dividends in US
dollars, Canadian dollars or certain other local currencies;
and
|
Ÿ
|
Holders
of Thomson Reuters PLC ADSs receive their dividends in US
dollars.
|
Thomson
|
Thomson
|
Thomson
|
||||||||||
Reuters
|
Reuters
PLC
|
Reuters
|
||||||||||
Corporation
|
ordinary
|
Corporation
|
||||||||||
common
|
shares
|
Series
II
|
||||||||||
shares
|
(US$)
|
preference
|
||||||||||
(US$)
|
shares
(C$)
|
|||||||||||
Dividend
amount per share
|
||||||||||||
2006
|
||||||||||||
Q1
|
$ | 0.220000 | - | C$ | 0.224384 | |||||||
Q2
|
$ | 0.220000 | - | C$ | 0.250437 | |||||||
Q3
|
$ | 0.220000 | - | C$ | 0.264658 | |||||||
Q4
|
$ | 0.220000 | - | C$ | 0.264658 | |||||||
2007
|
||||||||||||
Q1
|
$ | 0.245000 | - | C$ | 0.258904 | |||||||
Q2
|
$ | 0.245000 | - | C$ | 0.261781 | |||||||
Q3
|
$ | 0.245000 | - | C$ | 0.274362 | |||||||
Q4
|
$ | 0.245000 | - | C$ | 0.273921 | |||||||
2008
|
||||||||||||
Q1
|
$ | 0.270000 | - | C$ | 0.250200 | |||||||
Q2
|
$ | 0.317470 | - | C$ | 0.212800 | |||||||
Q3
|
$ | 0.222530 | $ | 0.222530 | C$ | 0.208900 | ||||||
Q4
|
$ | 0.270000 | $ | 0.270000 | C$ | 0.180355 | ||||||
2009
|
||||||||||||
Q1
|
$ | 0.280000 | $ | 0.280000 | C$ | 0.131610 |
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
•
|
corporate
governance, including the effectiveness of our
board;
|
•
|
appointment
of the Chief Executive Officer and other members of senior management and
related succession planning;
|
•
|
development
of the long-term business strategy of Thomson Reuters and assessment of
its implementation; and
|
•
|
capital
strategy.
|
Shareholder
|
Number
|
Percentage
|
Percentage
|
|||||||||
of
ordinary
|
of
ordinary
|
of
total voting
|
||||||||||
shares
|
shares
|
interests
|
||||||||||
Royal
Bank of Canada (1)
|
14,601,274 | 8.05 | % | 1.76 | % | |||||||
ValueAct Capital Master Fund L.P. | 10,833,806 | 5.97 | % | 1.30 | % | |||||||
Caisse de depot et placement du Quebec | 5,700,959 | 3.14 | % | 0.68 | % |
Estimated
|
||||||||
Registered
|
beneficial
|
|||||||
holders
|
holders
|
|||||||
Common
shares
|
2,891 | 39,385 | ||||||
Series
II preference shares
|
8 | 336 |
Estimated
|
||||||||
Registered
|
beneficial
|
|||||||
holders
|
holders
|
|||||||
Ordinary
shares
|
20,180 | N/A | ||||||
ADSs
|
1,688 | N/A |
Registered
holders
|
Number
of
shares
held
|
Percentage
of
total voting
interests
|
||||||||||
Common
shares
|
223 | 52,071,566 | 6.29 | % | ||||||||
Series
II preference shares
|
1 | 150 | N/A | |||||||||
Ordinary
shares
|
985 | 205,635 | 0.02 | % | ||||||||
ADSs
|
1,599 | 19,939,038 | 2.41 | % |
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Agreement/Document
|
Parties
|
|
Equalization
and Governance Agreement
|
Thomson
Reuters Corporation and Thomson Reuters PLC
|
|
Special
Voting Share Agreement
|
Thomson
Reuters Corporation, Thomson Reuters PLC and Computershare Trust Company
of Canada
|
|
Thomson
Reuters Corporation Special Voting Share Trust Deed
|
Thomson
Reuters Corporation and Computershare Trust Company of Canada, as Trustee
|
|
Thomson
Reuters PLC Special Voting Share Trust Deed
|
Thomson
Reuters Corporation and Computershare Trust Company of Canada, as
Trustee
|
|
Thomson
Reuters Corporation Deed of Guarantee
|
Thomson
Reuters Corporation and Thomson Reuters PLC
|
|
Thomson
Reuters PLC Deed of Guarantee
|
Thomson
Reuters Corporation and Thomson Reuters PLC
|
|
Amended
Deed of Mutual Covenant
|
Thomson
Reuters Corporation, Thomson Reuters PLC, Australian Associated Press Pty
Limited, New Zealand Press Association Limited, Reuters Founders Share
Company Limited, Reuters Group PLC, PA Group Limited and NPA Nominees
Limited
|
|
Reuters
Trust Principles Support Agreement
|
Reuters
Founders Share Company Limited and The Woodbridge Company
Limited
|
•
|
That
Thomson Reuters shall at no time pass into the hands of any one interest,
group or faction;
|
•
|
That
the integrity, independence and freedom from bias of Thomson Reuters shall
at all times be fully preserved;
|
•
|
That
Thomson Reuters shall supply unbiased and reliable news services to
newspapers, news agencies, broadcasters and other media subscribers and to
businesses, governments, institutions, individuals and others with whom
Thomson Reuters has or may have
contracts;
|
•
|
That
Thomson Reuters shall pay due regard to the many interests which it serves
in addition to those of the media;
and
|
•
|
That
no effort shall be spared to expand, develop and adapt the news and other
services and products of Thomson Reuters so as to maintain its leading
position in the international news and information
business.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
Name
|
Country
|
Director
since
|
||
Leonard Berkowitz
|
UK
|
1998
|
||
The
Honourable Mrs. Anson Chan
|
China
|
2002
|
||
Sir Michael Checkland
|
UK
|
1994
|
||
Jiri Dienstbier
|
Czech Republic
|
2005
|
||
Uffe Ellemann-Jensen | Denmark | 2001 | ||
John Fairfax
|
Australia
|
2005
|
||
Pehr Gyllenhammar
(Chairman)
|
Sweden
|
1997
|
||
Alejandro Junco de la Vega | Mexico | 2006 | ||
Joseph Lelyveld | USA | 2004 | ||
Sir Christopher Mallaby | UK | 1998 | ||
John McArthur | Canada | 2001 | ||
Mammen Matthew
|
India
|
2002
|
||
The
Right Hon. Baroness Noakes
|
UK
|
1998
|
||
Sir William Purves | UK | 1998 | ||
Jaakko Rauramo
|
Finland
|
1999
|
||
Dr. Sachio Semmoto | Japan | 2007 |
•
|
enter
into, operate and carry into effect various agreements related to the DLC
structure; and
|
•
|
carry
on business as a general commercial company and to carry on any trade or
business whatsoever.
|
•
|
relating
primarily to his or her remuneration as a director of the corporation or
an affiliate;
|
•
|
for
indemnity of or insurance for the directors as contemplated under the
OBCA; or
|
•
|
with
an affiliate.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
any
transaction or arrangement in which he or she is interested by virtue of
an interest in shares, debentures or other securities of Thomson Reuters
PLC or otherwise in or through Thomson Reuters
PLC;
|
•
|
the
giving of any guarantee, security or indemnity in respect of: (a) money
lent or obligations incurred by him or her or by any other person at the
request of, or for the benefit of, Thomson Reuters PLC or any of its
subsidiary undertakings; or (b) a debt or obligation of Thomson Reuters
PLC or any of its subsidiary undertakings for which he or she has assumed
responsibility in whole or in part (either alone or jointly with others)
under a guarantee or indemnity or by the giving of
security;
|
•
|
indemnification
(including loans made in connection with it) by Thomson Reuters PLC in
relation to the performance of his or her duties on behalf of Thomson
Reuters PLC or any of its subsidiary
undertakings;
|
•
|
any
issue or offer of shares, debentures or other securities of Thomson
Reuters PLC or any of its subsidiary undertakings in respect of which he
or she is or may be entitled to participate in his or her capacity as a
holder of any such securities or as an underwriter or
sub-underwriter;
|
•
|
any
transaction or arrangement concerning any other company in which he or she
does not hold, directly or indirectly as shareholder, or through his or
her direct or indirect holdings of financial instruments voting rights
representing 1% or more of any class of shares in the capital of that
company;
|
•
|
any
arrangement for the benefit of employees of Thomson Reuters PLC or any of
its subsidiary undertakings which does not accord to him or her any
privilege or benefit not generally accorded to the employees to whom the
arrangement relates; and
|
•
|
the
purchase or maintenance of insurance for the benefit of directors of
Thomson Reuters PLC or for the benefit of persons including directors of
Thomson Reuters PLC.
|
•
|
a
special resolution of shareholders approved as a Class Rights Action or
Joint Electorate Action, as applicable;
and
|
•
|
a
special resolution of the holders of the class of shares that is being
affected.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
•
|
in
the case of an annual general meeting, by all the shareholders entitled to
attend and vote thereat, including the holder of the Reuters Founders
Share; and
|
•
|
in
the case of any other general meeting, by a majority in number of the
shareholders having a right to attend and vote thereat, being a majority
together holding not less than 95% in nominal value of the shares giving
that right, and by the holder of the Reuters Founders
Share.
|
THOMSON REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Year
|
Average
|
Month/Year
|
High
|
Low
|
|||||||||
2004
|
1.3018 |
September
2008
|
1.0756 | 1.0342 | |||||||||
2005
|
1.2118 |
October
2008
|
1.2928 | 1.0514 | |||||||||
2006
|
1.1344 |
November
2008
|
1.2675 | 1.1564 | |||||||||
2007
|
1.0743 |
December
2008
|
1.2711 | 1.1933 | |||||||||
2008
|
1.0662 |
January
2009
|
1.2652 | 1.1857 | |||||||||
2009
|
1.2449 |
February
2009
|
1.2622 | 1.2199 | |||||||||
March
2009
|
1.2907 | 1.2413 |
Year
|
Average
|
Month/Year
|
High
|
Low
|
|||||||||
2004
|
0.5461 |
September
2008
|
0.5711 | 0.5390 | |||||||||
2005
|
0.5500 |
October
2008
|
0.6409 | 0.5560 | |||||||||
2006
|
0.5436 |
November
2008
|
0.6791 | 0.6208 | |||||||||
2007
|
0.4997 |
December
2008
|
0.6910 | 0.6442 | |||||||||
2008
|
0.5447 |
January
2009
|
0.7268 | 0.6598 | |||||||||
2009
|
0.6980 |
February
2009
|
0.7030 | 0.6739 | |||||||||
March
2009
|
0.7265 | 0.6969 |
Subsidiary
|
Jurisdiction
of incorporation/ formation
|
|
1602854
Ontario Ltd.
|
Ontario,
Canada
|
|
3097052
Nova Scotia Company
|
Ontario,
Canada
|
|
Information
Holdings Inc.
|
Delaware,
U.S.A.
|
|
International
Thomson Reuters B.V.
|
The
Netherlands
|
|
LiveNote
Technologies Limited
|
England
|
|
LiveNote,
Inc.
|
Delaware,
U.S.A.
|
|
LN
Holdings Limited
|
Bermuda
|
|
Physicians’
Desk Reference Inc.
|
Florida,
U.S.A.
|
|
Reuters
Canvas Holdings 1 Limited
|
Bermuda
|
|
Reuters
Holdings Limited
|
England
|
|
Reuters
International Holdings Sarl
|
Switzerland
|
|
Reuters
Limited
|
England
|
|
Reuters
SA
|
Switzerland
|
|
The
Thomson Organisation Limited
|
England
|
|
Thomcorp
Holdings Inc.
|
New
York, U.S.A.
|
|
Thomson
Financial Holdings Inc.
|
Delaware,
U.S.A.
|
|
Thomson
Financial LLC
|
Delaware,
U.S.A.
|
|
Thomson
Holdings Limited
|
England
|
|
Thomson
Information & Publishing Holdings Limited
|
England
|
|
Thomson
Information & Solutions (Holdings) Limited
|
England
|
|
Thomson
Information & Solutions Limited
|
England
|
|
Thomson
Organisation (No. 10)
|
England
|
|
Thomson
Publishing Group Limited
|
England
|
|
Thomson Reuters
(Healthcare) Inc.
|
Delaware,
U.S.A.
|
|
Thomson Reuters
(Legal) Inc.
|
Minnesota,
U.S.A.
|
|
Thomson Reuters
(Markets) Group
|
||
Overseas
Holdings UK Limited
|
England
|
|
Thomson Reuters
(Scientific) Inc.
|
Pennsylvania,
U.S.A.
|
|
Thomson Reuters
(Tax & Accounting) Inc.
|
Texas,
U.S.A.
|
|
Thomson Reuters
(TRI) Inc.
|
Delaware,
U.S.A.
|
|
Thomson
Reuters Applications Inc.
|
Delaware,
U.S.A.
|
|
Thomson
Reuters Canada Limited
|
Ontario,
Canada
|
|
Thomson
Reuters Finance S.A.
|
Luxembourg
|
|
Thomson Reuters
Global Resources
|
Ireland
|
|
Thomson
Reuters Group Limited
|
England
|
|
Thomson
Reuters Holdings A.G.
|
Switzerland
|
|
Thomson Reuters
Holdings B.V.
|
The
Netherlands
|
|
Thomson
Reuters Holdings Inc.
|
Delaware,
U.S.A.
|
|
Thomson
Reuters Holdings SA
|
Luxembourg
|
|
Thomson Reuters Italia
Holdings Spa
|
Italy
|
|
Thomson Reuters Netherlands Holdings
BV
|
The
Netherlands
|
|
Thomson Reuters
No. 4 Inc.
|
Delaware,
U.S.A.
|
|
Thomson Reuters
No. 5 LLC
|
Delaware,
U.S.A.
|
|
Thomson
Reuters U.S. Holdings Inc.
|
Delaware,
U.S.A.
|
|
Thomson
Reuters U.S. Inc.
|
Delaware,
U.S.A.
|
|
Thomson
Reuters U.S.A. Inc.
|
Delaware,
U.S.A.
|
|
Thomson
UK Limited
|
England
|
|
TLRS
(Holdings) Ltd.
|
England
|
|
TR
(2008) Limited
|
England
|
|
TR
Holdings Limited
|
Bermuda
|
|
TR
Netherlands Holdings Cooperatief U.A.
|
The
Netherlands
|
|
TR
Organisation PLC
|
England
|
|
TR
U.S. Inc.
|
Delaware,
U.S.A.
|
|
TTC
(1994) Limited
|
England
|
|
TTC
Holdings Limited
|
Bermuda
|
|
West
Publishing Corporation
|
Minnesota,
U.S.A.
|
|
West
Services Inc.
|
Delaware,
U.S.A.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Page/Document
|
||
ITEM
1. COVER PAGE
|
Cover
|
|
ITEM
2. TABLE OF CONTENTS
|
Inside Cover
|
|
ITEM
3. CORPORATE STRUCTURE
|
|
|
3.1
Name, Address and Incorporation
|
116
|
|
3.2
Intercorporate Relationships
|
116-119, 134
|
|
ITEM
4. GENERAL DEVELOPMENT OF THE BUSINESS
|
|
|
4.1
Three Year History
|
26-33
|
|
4.2
Significant Acquisitions
|
21-22
|
|
ITEM
5. DESCRIBE THE BUSINESS
|
|
|
5.1
General
|
1-11
|
|
|
5.2
Risk Factors
|
12-17
|
|
5.3
Companies with Asset-backed Securities Outstanding
|
N/A
|
5.4
Companies With Mineral Projects
|
N/A
|
|
5.5
Companies with Oil and Gas Activities
|
N/A
|
|
ITEM
6. DIVIDENDS
|
122
|
|
ITEM
7. DESCRIPTION OF CAPITAL STRUCTURE
|
|
|
7.1
General Description of Capital Structure
|
119
|
|
7.2
Constraints
|
N/A
|
|
7.3
Ratings
|
124
|
|
ITEM
8. MARKET FOR SECURITIES
|
|
|
8.1
Trading Price and Volume
|
120-121
|
|
8.2
Prior Sales
|
122
|
|
ITEM
9. ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTIONS
ON TRANSER
|
N/A
|
|
ITEM
10. DIRECTORS AND OFFICERS
|
||
10.1
Name, Occupation and Security Holding
|
110-115
|
|
10.2
Cease Trade Orders, Bankruptcies, Penalties or Sanctions
|
N/A
|
|
10.3
Conflicts of Interest
|
N/A
|
|
ITEM
11. PROMOTERS
|
N/A
|
|
ITEM
12. LEGAL PROCEEDINGS AND REGULATORY ACTIONS
|
||
12.1
Legal Proceedings
|
42
|
|
12.2
Regulatory Actions
|
42
|
|
ITEM
13. INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL
TRANSACTIONS
|
42-43
|
|
ITEM
14. TRANSFER AGENTS AND REGISTRARS
|
124
|
|
ITEM
15. MATERIAL CONTRACTS
|
116-118, 124-125
|
|
ITEM
16. INTEREST OF EXPERTS
|
||
16.1
Names of Experts
|
135
|
|
16.2
Interests of Experts
|
135
|
|
ITEM
17. ADDITIONAL INFORMATION
|
135
|
|
ITEM
18. ADDITIONAL DISCLOSURE FOR COMPANIES NOT SENDING INFORMATION
CIRCULARS
|
N/A
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Page/Document
|
||
PART
1 DIRECTORS' REPORT
|
||
1.1
|
Directors
|
MIC
|
1.2
|
Principal
activities
|
1-11
|
1.3
|
Dividends
|
122
|
1.4
|
Disclosure
of information to auditors
|
TR
PLC FS
|
1.5
|
Consistency
with accounts
|
TR
PLC FS
|
1.6
|
Third
party indemnity provisions
|
N/A
|
1.7
|
Disclosures
of a general nature
|
|
(a) Asset
values
|
TR
PLC FS
|
|
(b) Political
donations and expenditure
|
134
|
|
(c) Charitable
donations
|
134
|
|
(d) Financial
instruments
|
TR
PLC FS
|
|
(e) Important
events, future developments and research and development
|
1-59
|
|
(f)
Branches
|
N/A
|
|
1.8
|
Buyback
programs
|
38,
TR PLC FS
|
1.9
|
Employee
policies and involvement
|
135
|
1.10
|
Policy
and practice on payment of creditors
|
134
|
1.11
|
Disclosures
by publicly traded companies
|
|
(a) Share
capital
|
119, TR PLC FS
|
|
(b) Restrictions
on transfers
|
N/A
|
|
(c) Significant
shareholders
|
123
|
|
(d) Shareholders
with special rights
|
N/A
|
|
(e) Employee
share plans
|
MIC
|
|
(f)
Restrictions on voting rights
|
N/A
|
|
(g) Agreements
restricting transfer or voting rights
|
N/A
|
|
(h) Company
rules governing directors, amendment of articles and directors'
powers
|
126-128
|
|
(i)
Significant agreements affected by change of control
|
124-125
|
|
(j)
Compensation for loss of office
|
N/A
|
|
1.12
|
Business
review
|
|
(a) Principal
risks and uncertainties
|
12-17
|
|
(b) Key
performance indicators
|
18-59
|
|
(c) Explanation
of amounts included in accounts
|
TR
PLC FS
|
|
(d) Main
trends and factors likely to affect future performance
|
19,
27-33
|
|
(e) Environmental,
employee, social and community issues
|
10-11
|
|
(f)
Essential contracts or arrangements
|
116-118, 124-125
|
|
PART
2 DIRECTORS' REMUNERATION REPORT
|
||
2.1
|
Remuneration
committee
|
MIC
|
2.2
|
Remuneration
policy statement
|
MIC
|
2.3
|
Directors'
contracts and compensation
|
MIC
|
2.4
|
Chairman
and non-executive remuneration
|
MIC
|
2.5
|
Performance
graph
|
MIC
|
2.6
|
Audited
directors' remuneration
|
TR
PLC FS
|
PART
3 LISTING RULES
|
||
3.1
|
Capitalized
interest
|
TR
PLC FS
|
3.2
|
Profit
estimate / forecast
|
TR
PLC FS
|
3.3
|
Related
party transactions
|
42-43
|
3.4
|
Directors'
long-term incentive plans
|
MIC
|
3.5
|
Waivers
of emoluments by directors
|
N/A
|
3.6
|
Equity
securities issued for cash
|
N/A
|
3.7
|
Parent
participation in placing
|
N/A
|
3.8
|
Significant
contracts
|
116-118, 124-125
|
3.9
|
Provisions
of services by controlling shareholders
|
N/A
|
3.10
|
Waiver
of dividends
|
N/A
|
3.11
|
Director
Ownership Interests
|
111
|
3.12
|
Substantial
Shareholders
|
123
|
3.13
|
Going
concern statement
|
TR
PLC FS
|
3.14
|
Buyback
authority and programs
|
38,
TR PLC FS
|
3.15
|
Combined
Code compliance statement
|
MIC
|
3.16
|
Remuneration
policy and directors' remuneration
|
MIC,
TR PLC FS
|
3.17
|
Review
by auditors
|
TR
PLC FS
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Page/Document
|
||
PART
4 DISCLOSURE AND TRANSPARENCY RULES
|
|
|
4.1
|
Audited
financial statements
|
TR
PLC FS
|
4.2
|
Management
report
|
TR
PLC FS
|
4.3
|
Responsibility
statement
|
TR
PLC FS
|
FORM
40-F CROSS REFERENCE TABLE
|
||
|
Page/Document
|
|
ANNUAL
INFORMATION FORM
|
See AIF table
|
|
AUDITED
ANNUAL FINANCIAL STATEMENTS
|
61-108
|
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS
|
18-59
|
|
DISCLOSURE
CONTROLS AND PROCEDURES
|
47
|
|
INTERNAL
CONTROL OVER FINANCIAL REPORTING
|
||
a.
Changes in Internal Controls over Financial Reporting
|
47-48
|
|
b.
Management's Report on Internal Control over Financial
Reporting
|
60
|
|
c.
Auditor's Report on Internal Control over Financial
Reporting
|
61
|
|
NOTICE
PURSUANT TO REGULATION BTR
|
N/A
|
|
AUDIT
COMMITTEE FINANCIAL EXPERT
|
112
|
|
CODE
OF ETHICS
|
114
|
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
112-113
|
|
OFF-BALANCE
SHEET ARRANGEMENTS
|
N/A
|
|
TABULAR
DISCLOSURE OF CONTRACTUAL OBLIGATIONS
|
41
|
|
IDENTIFICATION
OF THE AUDIT COMMITTEE
|
111-112
|
|
FORM
20-F CROSS REFERENCE TABLE
|
||
PART
I
|
Page/Document
|
|
ITEM
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
N/A
|
|
ITEM
2. OFFER STATISTICS AND EXPECTED TIMETABLE
|
N/A
|
|
ITEM
3. KEY INFORMATION
|
||
ITEM
3A. Selected Financial Data
|
109
|
|
ITEM
3B. Capitalization and Indebtedness
|
N/A
|
|
ITEM
3C. Reasons for the Offer and Use of Proceeds
|
N/A
|
|
ITEM
3D. Risk Factors
|
12-17
|
|
ITEM
4. INFORMATION ON THE COMPANY
|
|
|
ITEM
4A. History and Development of the Company
|
116-119
|
|
ITEM
4B. Business
|
1-11
|
|
ITEM
4C. Organizational Structure
|
116-119, 134
|
|
ITEM
4D. Property, Plants and Equipment
|
11
|
|
ITEM
4A. UNRESOLVED STAFF COMMENTS
|
NONE
|
|
ITEM
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
||
ITEM
5A. Operating Results
|
23-26
|
|
ITEM
5B. Liquidity and Capital Resources
|
36-41
|
|
ITEM
5C. Research and Development, Patents and Licenses, etc
|
N/A
|
|
ITEM
5D. Trend Information
|
19,
27-33
|
|
ITEM
5E. Off-Balance Sheet Arrangements
|
41
|
|
ITEM
5F. Tabular Disclosure of Contractual Obligations
|
41
|
|
ITEM
5G. Safe Harbor
|
48
|
|
ITEM
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|
||
ITEM
6A. Directors and Senior Management
|
110-115
|
|
ITEM
6B. Compensation
|
MIC p. 20-23, 28-30,
32-33, 37-40(1)
|
|
ITEM
6C. Board Practices
|
MIC p. 36, 40,
44-45
|
|
ITEM
6D. Employees
|
11, 135
|
|
ITEM
6E. Share Ownership
|
114,
MIC p. 7-11, 30, 32, 39
|
|
ITEM
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
|
|
ITEM
7A. Major Shareholders
|
123
|
|
ITEM
7B. Related Party Transactions
|
42-43
|
|
ITEM
7C. Interests of Experts and Counsel
|
N/A
|
|
ITEM
8. FINANCIAL INFORMATION
|
||
ITEM
8A. Consolidated Statements and Other Financial
Information
|
62-108
|
|
ITEM
8B. Significant Changes
|
44
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Page/Document
|
||
ITEM
9. THE OFFER AND LISTING
|
|
|
ITEM
9A. Offer and Listing Details
|
120-122
|
|
ITEM
9B. Plan of Distribution
|
N/A
|
|
ITEM
9C. Markets
|
120
|
|
ITEM
9D. Selling Shareholders
|
N/A
|
|
ITEM
9E. Dilution
|
N/A
|
|
ITEM
9F. Expenses of the Issue
|
N/A
|
|
ITEM
10. ADDITIONAL INFORMATION
|
||
ITEM
10A. Share Capital
|
N/A
|
|
ITEM
10B. Memorandum and Articles of Association
|
126-128
|
|
ITEM
10C. Material Contracts
|
116-118,
124-125
|
|
ITEM
10D. Exchange Controls
|
119
|
|
ITEM
10E. Taxation
|
129-133
|
|
ITEM
10F. Dividends and Paying Agents
|
N/A
|
|
ITEM
10G. Statement by Experts
|
N/A
|
|
ITEM
10H. Documents on Display
|
135
|
|
ITEM
10I. Subsidiary Information
|
N/A
|
|
ITEM
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
42
|
|
ITEM
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|
N/A
|
|
PART
II
|
||
ITEM
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|
NONE
|
|
ITEM
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
|
N/A
|
|
ITEM
15. CONTROLS AND PROCEDURES
|
47, 60-61
|
|
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT |
112
|
|
ITEM 16B. CODE OF ETHICS |
114
|
|
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES |
112-113
|
|
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
N/A
|
|
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
38-39
|
|
PART
III
|
||
ITEM
17. FINANCIAL STATEMENTS
|
61-108
|
|
ITEM
18. FINANCIAL STATEMENTS
|
N/A
|
(1)
|
Information
regarding Thomas H. Glocer only, found on pages 20-23, 28-30 and 32-33 of
the MIC, and all information on the directors compensation, found on pages
37-40 of the MIC, are incorporated by reference herein as part of our
annual report on Form 20-F.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
Corporate
Headquarters
THOMSON REUTERS
3
Times Square
New
York, New York 10036
United
States
Tel:
+1 646 223 4000
Registered
Offices
THOMSON
REUTERS CORPORATION
Suite
2076
Toronto Dominion Bank Tower
P.O.
Box 24, Toronto-Dominion Centre
Toronto,
Ontario M5K 1A1
Canada
Tel:
+1 416 360 8700
THOMSON
REUTERS PLC
The
Thomson Reuters Building
South
Colonnade, Canary Wharf
London
E14 5EP
United
Kingdom
Tel:
+44 20 7250 1122
Registered
no. 06141013
www.thomsonreuters.com
Stock
Exchange Listings
THOMSON
REUTERS CORPORATION
Common
Shares
•
Toronto Stock Exchange (TSX)
(symbol:
TRI)
• New
York Stock Exchange (NYSE)
(symbol:
TRI)
Series
II Preference Shares
•
Toronto Stock Exchange
(symbol:
TRI.PR.B)
THOMSON
REUTERS PLC
Ordinary
Shares
•
London Stock Exchange (LSE)
(symbol:
TRIL)
American
Depositary Shares (ADSs)
•
Nasdaq
(symbol:
TRIN)
|
Transfer
Agents and Registrars
THOMSON
REUTERS CORPORATION
COMMON
AND PREFERENCE SHARES
(TRI
– TSX; TRI – NYSE)
Computershare
Trust Company of Canada
100
University Avenue, 9th Floor
Toronto,
Ontario M5J 2Y1
Canada
E-mail:
service@computershare.com
Tel:
+1 800 564 6253 (U.S./Canada)
Tel:
+1 514 982 7555 (outside U.S./Canada)
www.computershare.com
THOMSON
REUTERS PLC
ORDINARY
SHARES
(TRIL
– LSE)
Equiniti
Aspect
House
Spencer
Road, Lancing
West
Sussex BN99 6DA
United
Kingdom
Tel:
+44 871 384 2030 (U.K.)
Tel:
+44 12 1415 7047 (outside U.K.)
www.shareview.co.uk
THOMSON
REUTERS PLC ADSs
(TRIN
– NASDAQ)
Deutsche
Bank Trust Company Americas c/o American Stock Transfer & Trust
Company
Peck
Slip Station, P.S. Box 2050
New
York, New York 10272-2050
United
States
E-mail:
db@amstock.com
Tel:
+1 866 249 2593 (U.S./Canada)
Tel:
+1 718 921 8137 (outside U.S./Canada)
www.adr.db.com
Auditors
PricewaterhouseCoopers
LLP
|
Further
Information
Please
visit www.thomsonreuters.com
for
corporate and management news and more detailed information on individual
Thomson Reuters businesses, products and services.
For
investor relations queries,
please
call +1 800 969 9974 or e-mail
investor.relations@thomsonreuters.com.
|
THOMSON
REUTERS
|
ANNUAL
REPORT 2008
|
www.thomsonreuters.com
|
|
1.
|
I
have reviewed this annual report on Form 40-F of Thomson Reuters
Corporation;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
issuer as of, and for, the periods presented in this
report;
|
|
4.
|
The
issuer’s other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules13a-15(f) and 15d-15(f)) for
the issuer and have:
|
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
evaluated
the effectiveness of the issuer’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation;
and
|
|
d)
|
disclosed
in this report any change in the issuer’s internal control over financial
reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially
affect, the issuer’s internal control over financial reporting;
and
|
|
5.
|
The
issuer’s other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
issuer’s auditors and the audit committee of the issuer’s board of
directors (or persons performing the equivalent
functions):
|
|
a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the issuer’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer’s internal control
over financial reporting.
|
/s/
Thomas H. Glocer
|
||
Thomas
H. Glocer
|
||
Chief
Executive Officer
|
|
1.
|
I
have reviewed this annual report on Form 40-F of Thomson Reuters
Corporation;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
issuer as of, and for, the periods presented in this
report;
|
|
4.
|
The
issuer’s other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules13a-15(f) and 15d-15(f)) for
the issuer and have:
|
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
evaluated
the effectiveness of the issuer’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation;
and
|
|
d)
|
disclosed
in this report any change in the issuer’s internal control over financial
reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially
affect, the issuer’s internal control over financial reporting;
and
|
|
5.
|
The
issuer’s other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
issuer’s auditors and the audit committee of the issuer’s board of
directors (or persons performing the equivalent
functions):
|
|
a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the issuer’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer’s internal control
over financial reporting.
|
|
||
/s/
Robert D. Daleo
|
||
Robert
D. Daleo
|
||
Executive
Vice President and Chief Financial Officer
|
By:
|
/s/
Thomas H. Glocer
|
|
Thomas H.
Glocer
|
||
Chief
Executive Officer
|
By:
|
/s/
Robert D. Daleo
|
|
Robert
D. Daleo
|
||
Executive
Vice President and Chief Financial Officer
|
PURPOSE
|
1
|
|
2.
|
MEMBERS
|
1
|
3.
|
RESPONSIBILITIES
|
1
|
4.
|
COMPLAINTS
PROCEDURE
|
7
|
5.
|
REPORTING
|
7
|
6.
|
REVIEW
AND DISCLOSURE
|
8
|
7.
|
ASSESSMENT
|
8
|
8.
|
MEETINGS
|
8
|
9.
|
CHAIR
|
8
|
10.
|
REMOVAL
AND VACANCIES
|
8
|
11.
|
ACCESS
TO MANAGEMENT AND OUTSIDE ADVISORS
|
8
|
12.
|
DEFINITIONS
|
9
|
1.
|
PURPOSE
|
|
·
|
the
integrity of Thomson Reuters’ financial statements and other financial
information relating to Thomson
Reuters;
|
|
·
|
Thomson
Reuters’ compliance with risk management, and legal and regulatory
requirements;
|
|
·
|
the
qualifications, independence and performance of Thomson Reuters’
auditor;
|
|
·
|
the
adequacy and effectiveness of Thomson Reuters’ internal control over
financial reporting and disclosure controls and
procedures;
|
|
·
|
the
effectiveness of Thomson Reuters’ internal audit function;
and
|
|
·
|
any
additional matters delegated to the Audit Committee by the Thomson Reuters
Board.
|
2.
|
MEMBERS
|
3.
|
RESPONSIBILITIES
|
|
·
|
select,
evaluate and nominate the auditor to be proposed for appointment or
reappointment, as the case may be, by the
shareholders;
|
|
·
|
review
and approve the auditor’s engagement
letter;
|
|
·
|
after
seeking and taking into account the views of senior management and the
officer in charge of internal audit, review the independence, experience,
qualifications and performance of the auditor, including the lead audit
partner;
|
|
·
|
oversee
the auditor’s work, including investigating and resolving any
disagreements between senior management and the auditor regarding
financial reporting or the internal audit
function;
|
|
·
|
at
least annually, obtain and review a report by the auditor describing its
internal quality-control procedures, any material issues raised by the
most recent internal quality-control review, or peer review, of the firm,
or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more
independent audits carried out by the auditor and any steps taken to deal
with any such issues; and
|
|
·
|
where
appropriate, terminate the auditor.
|
|
·
|
confirm
that the auditor has submitted a formal written statement describing all
of its relationships with Thomson Reuters that in the auditor’s
professional judgment may reasonably be thought to bear on its
independence;
|
|
·
|
discuss
with the auditor any disclosed relationships or services, including any
non-audit services the auditor has provided, that may affect its
independence;
|
|
·
|
obtain
written confirmation from the auditor that it is independent with respect
to Thomson Reuters within the meaning of the Rules of Professional Conduct
adopted by the Ontario Institute of Chartered Accountants to which it
belongs, that it is an independent public accountant with respect to
Thomson Reuters within the meaning of the federal securities legislation
administered by the United States Securities and Exchange Commission (the
“SEC”), and that it complies with the UK’s Institute of Chartered
Accountants of England and Wales requirements and all applicable
regulations and professional requirements relating to the independence of
the auditors of English companies listed on the London Stock Exchange;
and
|
|
·
|
confirm
that the auditor has complied with applicable law with respect to the
rotation of certain members of the audit engagement team for Thomson
Reuters.
|
|
·
|
planning
and staffing of the audit;
|
|
·
|
any
material written communications between the auditor and senior management,
such as any management letter or schedule of unadjusted
differences;
|
|
·
|
whether
or not the auditor is satisfied with the quality and effectiveness of
financial recording procedures and
systems;
|
|
·
|
the
extent to which the auditor is satisfied with the nature and scope of its
examination;
|
|
·
|
any
instances of fraud or other illegal acts involving senior management or
employees involved in financial reporting of Thomson
Reuters;
|
|
·
|
whether
or not the auditor has received the full co-operation of senior management
and other employees of Thomson Reuters and whether the auditor has
encountered any audit problems or difficulties in the course of its audit
work, including any restrictions on the scope of the auditor’s work or
access to required information and any significant disagreements with
management (along with management’s
response);
|
|
·
|
the
auditor’s opinion of the competence and performance of the Chief Financial
Officer and other key financial personnel;
and
|
|
·
|
the
items required to be communicated to the Audit Committee under the
Canadian authoritative guidance or under Canadian generally accepted
auditing standards (“GAAS”).
|
|
·
|
the
annual and interim consolidated financial statements of Thomson Reuters
Corporation that serve as Thomson Reuters’ primary financial statements
and the related management’s discussion and
analysis;
|
|
·
|
the
annual and interim consolidated financial statements of Thomson Reuters
PLC that are prepared by Thomson Reuters to comply with UK regulatory and
filing requirements;
|
|
·
|
any
reconciliation of the consolidated financial statements of Thomson Reuters
Corporation from (i) Canadian GAAP to U.S. GAAP (so long as this is
required under applicable law) and (ii) from Canadian GAAP to
international financial reporting standards
(“IFRS”);
|
|
·
|
all
critical accounting policies and practices used or to be used by Thomson
Reuters; and
|
|
·
|
all
alternative treatments of financial information within Canadian GAAP, U.S.
GAAP or IFRS, as the case may be, that have been discussed with senior
management, ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the
auditor.
|
|
·
|
review
annual and interim earnings press releases prior to their public release,
as well as any financial information and earnings guidance provided to
analysts and rating agencies. The Audit Committee will also review the
type and presentation of information to be included in such press releases
and guidance (including the use of “pro forma” or “adjusted” non-GAAP
financial measures);
|
|
·
|
periodically
assess the adequacy of procedures that are in place for management’s
review of all other financial information extracted or derived from the
Thomson Reuters’ financial statements that were previously reviewed by the
Audit Committee before such information is released to the public,
including, without limitation, financial information or statements for use
in prospectuses or other offering or public disclosure documents and
financial statements required by regulatory
authorities;
|
|
·
|
review
major issues regarding accounting principles and financial statement
presentations, including any significant changes in Thomson Reuters’
selection or application of accounting principles, and major issues as to
the adequacy of Thomson Reuters’ internal control over financial reporting
and any special audit steps adopted in light of any material control
deficiencies;
|
|
·
|
review
analyses prepared by management and/or the auditor setting forth
significant financial reporting issues and judgments made in connection
with the preparation of Thomson Reuters’ financial statements, including
analyses of the effects of alternative GAAP methods on the financial
statements; and
|
|
·
|
review
the effect of regulatory and accounting initiatives as well as off-balance
sheet structures on the Thomson Reuters’ financial
statements.
|
|
·
|
any
material legal or regulatory matters;
and
|
|
·
|
any
material inquiries received from regulators and governmental
agencies.
|
4.
|
COMPLAINTS
PROCEDURE
|
5.
|
REPORTING
|
|
·
|
regularly
report to the Thomson Reuters Board on all significant matters it has
addressed and with respect to such other matters as are within its
responsibilities; and
|
|
·
|
oversee
the preparation of and review any disclosure with respect to its
activities in discharging the responsibilities set out in this Charter
included in materials sent to shareholders of Thomson
Reuters.
|
6.
|
REVIEW
AND DISCLOSURE
|
7.
|
ASSESSMENT
|
8.
|
MEETINGS
|
9.
|
CHAIR
|
10.
|
REMOVAL
AND VACANCIES
|
11.
|
ACCESS
TO MANAGEMENT AND OUTSIDE ADVISORS
|
12.
|
DEFINITIONS
|
|
(a)
|
an
understanding of generally accepted accounting principles and financial
statements;
|
|
(b)
|
the
ability to assess the general application of such principles in connection
with the accounting for estimates, accruals and
reserves;
|
|
(c)
|
experience
preparing, auditing, analyzing or evaluating financial statements that
present a breadth and level of complexity of accounting issues that are
generally comparable to the breadth and complexity of issues that can
reasonably be expected to be raised by Thomson Reuters’ financial
statements, or experience actively supervising one or more person’s
engaged in such activities;
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(d)
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an
understanding of internal controls and procedures for financial reporting;
and
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(e)
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an
understanding of audit committee
functions.
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(i)
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education
and experience as a principal financial officer, principal accounting
officer, controller, public accountant or auditor or experience in one or
more positions that involve the performance of similar
functions;
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(ii)
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experience
actively supervising a principal financial officer, principal accounting
officer, controller, public accountant, auditor or person performing
similar functions;
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(iii)
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experience
overseeing or assessing the performance of companies or public accountants
with respect to the preparation, auditing or evaluation of financial
statements; or
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(iv)
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other
relevant experience.
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