UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2015
Commission File Number: 1-31349
THOMSON REUTERS CORPORATION
(Translation of registrant’s name into English)
3 Times Square
New York, New York 10036, United States
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ¨ Form 40-F x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| THOMSON REUTERS CORPORATION (Registrant) | ||||||
| By: | /s/ Marc E. Gold | |||||
| Name: Marc E. Gold | ||||||
| Title: Assistant Secretary | ||||||
Date: October 23, 2015
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | News release dated October 23, 2015 – Thomson Reuters Reports Third-Quarter 2015 Results | |
Exhibit 99.1
Thomson Reuters Reports Third-Quarter 2015 Results
Third-quarter performance consistent with full-year expectations
NEW YORK, October 23, 2015 – Thomson Reuters (TSX / NYSE: TRI) today reported results for the third quarter ended September 30, 2015. The company also reaffirmed its full-year 2015 outlook.
| • | Reported revenues were down 4% as the negative impact of foreign currency reduced revenues by 5% |
| • | Revenues before currency grew 1% |
| • | Financial & Risk’s organic revenues were unchanged from the prior-year period |
| • | Legal, Tax & Accounting and Intellectual Property & Science’s revenues grew 3% in aggregate |
| • | Financial & Risk net sales were positive for the sixth consecutive quarter |
| • | Adjusted EBITDA grew 2% to $838 million |
| • | The margin increased to 28.1% vs. 26.5% in the prior-year period, up 160 basis points |
| • | Excluding the impact of currency, adjusted EBITDA grew 7% and the margin was 160 basis points higher than the prior-year period |
| • | Underlying operating profit increased 7% to $565 million |
| • | The margin increased to 19.0% vs. 17.1% in the prior-year period, up 190 basis points |
| • | Excluding the impact of currency, underlying operating profit grew 13% and the margin was 200 basis points higher than the prior-year period |
| • | Free cash flow increased 25% to $1.1 billion for the first nine months of the year |
| • | Adjusted EPS was up 16% to $0.52 vs. $0.45 in the prior-year period |
| • | Excluding the impact of currency, adjusted EPS was up 24% or $0.11 better than the prior-year period |
| • | Returned $1.25 billion to shareholders through the repurchase of 31.7 million shares in the first nine months of the year |
“I am pleased to report another quarter of steady progress,” said James C. Smith, president and chief executive officer of Thomson Reuters. “I am encouraged by the way we continue to execute against our key priorities, by the progress towards our financial targets and especially by the underlying performance of our subscription revenues.”
Consolidated Financial Highlights – Third Quarter
| Three Months Ended September 30, | ||||||||||||
| (Millions of U.S. dollars, except EPS and margins) | ||||||||||||
| IFRS Financial Measures | 2015 | 2014 | Change | |||||||||
| Revenues |
$ | 2,979 | $ | 3,107 | -4 | % | ||||||
| Operating profit |
$ | 419 | $ | 466 | -10 | % | ||||||
| Diluted earnings per share (EPS) |
$ | 0.36 | $ | 0.28 | 29 | % | ||||||
| Cash flow from operations |
$ | 665 | $ | 585 | 14 | % | ||||||
The decrease in operating profit was primarily due to lower favorable fair value adjustments largely associated with foreign currency embedded derivatives in certain customer contracts. The increase in diluted EPS resulted from lower finance costs associated with foreign currency fluctuations, which more than offset the decrease in operating profit.
| Non-IFRS Financial Measures (1) | 2015 | 2014 | Change | Change Before Currency |
||||||||||||
| Revenues from ongoing businesses |
$ | 2,979 | $ | 3,107 | -4 | % | 1 | % | ||||||||
| Adjusted EBITDA |
$ | 838 | $ | 822 | 2 | % | 7 | % | ||||||||
| Adjusted EBITDA margin |
28.1 | % | 26.5 | % | 160bp | 160bp | ||||||||||
| Underlying operating profit |
$ | 565 | $ | 530 | 7 | % | 13 | % | ||||||||
| Underlying operating profit margin |
19.0 | % | 17.1 | % | 190bp | 200bp | ||||||||||
| Adjusted earnings per share (adjusted EPS) |
$ | 0.52 | $ | 0.45 | 16 | % | 24 | % | ||||||||
| Free cash flow |
$ | 449 | $ | 358 | 25 | % | ||||||||||
| (1) | These and other non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the tables appended to this news release. Additional information is provided in the explanatory footnotes to the appended tables. |
Thomson Reuters Reports Third-Quarter 2015 Results
Page 2 of 15
| • | Revenues from ongoing businesses increased 1% (before currency) from the prior-year period driven by the Legal, Tax & Accounting and Intellectual Property & Science businesses, which grew 3% in aggregate. |
| • | Adjusted EBITDA increased 2% from the prior-year period and the margin increased 160 basis points to 28.1%. Excluding the impact of currency in the quarter, adjusted EBITDA increased 7% and the margin was 160 basis points higher than the prior-year period. |
| • | Underlying operating profit increased 7% from the prior-year period and the margin increased 190 basis points to 19.0%. Excluding the impact of currency, underlying operating profit increased 13% and the margin was 200 basis points higher than the prior-year period. |
| • | Adjusted EPS was $0.52, up $0.07 from the prior-year period despite foreign currency having had a $0.04 negative impact. |
Third-Quarter Business Segment Highlights
Unless otherwise noted, all revenue growth comparisons in this news release are before the impact of foreign currency (constant currency) as Thomson Reuters believes this provides the best basis to measure the performance of its business.
Financial & Risk
| • | Revenues were unchanged compared to the prior-year period. Revenue growth exceeded 2% before the impact of lower recoveries revenues and pricing adjustments related to the migration of remaining legacy foreign exchange and buy-side customers onto Financial & Risk’s unified platform. |
| • | Recurring revenues (77% of the segment’s revenues) increased 1% as an annual price increase and the impact of positive net sales more than offset the price adjustments related to the legacy product migration described above. |
| • | Transactions-related revenues (13% of the segment’s revenues) were unchanged. |
| • | Recoveries revenues (10% of the segment’s revenues) were down 7% and are low-margin revenues. Recoveries revenues are expected to continue to decline in the fourth quarter and throughout 2016 as more third-party partners move to direct billing with our customers. |
| • | By geography, revenues in the Americas and Asia were up 2%, while revenues in Europe, Middle East and Africa (EMEA) were down 2%. |
| • | Net sales were positive overall and were positive in all regions, except for EMEA. This marked the sixth consecutive quarter of positive net sales. However, net sales were lower than the third quarter of last year due to a difficult quarterly comparison, as the third quarter of 2014 was the strongest net sales quarter of the year. |
| • | EBITDA increased 3% primarily due to savings related to efficiency initiatives, which were partially offset by the impact of foreign currency. |
| • | The margin was 27.7%, up 260 basis points from the prior-year period due to efficiency initiatives undertaken in 2014. |
| • | Excluding the impact of currency from both periods and the impact of $18 million of charges taken by the company in the third quarter of 2014, the margin was up 260 basis points to 28.8% compared to the prior-year period. |
| • | Foreign currency had a 110 basis point negative impact on the margin. |
| • | Operating profit increased 8% compared to the prior-year period, primarily due to the same factors that impacted EBITDA. |
| • | The margin was 17.9%, up 240 basis points from the prior-year period. |
| • | Before currency and one-time charges, the margin was up 280 basis points from the prior-year period. |
| • | Foreign currency had a 150 basis point negative impact on the margin. |
Thomson Reuters Reports Third-Quarter 2015 Results
Page 3 of 15
Legal
| • | Revenues increased 1%. Excluding US print, revenues grew 3%. |
| • | Solutions businesses (46% of the segment’s revenues) grew 4%, slightly lower than the first half of the year due to timing factors. Revenue growth was driven by Elite, Serengeti, Pangea3 legal managed services, and the Investigations and Public Records business. Solutions businesses represent all of Legal’s revenues excluding US print and US online legal information. |
| • | US online legal information (40% of the segment’s revenues) grew 2%, reflecting growth for the third consecutive quarter. |
| • | US print (14% of the segment’s revenues) declined 8%, as expected. |
| • | EBITDA was unchanged and the margin increased 90 basis points to 38.8% compared to 37.9% in the prior-year period. Excluding the benefit of currency, the margin increased 30 basis points. |
| • | Operating profit increased 4% and the margin increased 200 basis points to 31.7% compared to 29.7% in the prior-year period. Excluding the benefit of currency, the margin increased 130 basis points due to lower depreciation and amortization expense. |
Tax & Accounting
| • | Revenues increased 8% driven by the Corporate, Professional and Knowledge Solutions businesses, partially offset by a decline in the Government business. Recurring revenues were up 9% organically. |
| • | EBITDA increased 10% and the margin increased 180 basis points to 25.7% compared to 23.9% in the prior-year period. Excluding the benefit of currency, the margin was up 110 basis points. |
| • | Operating profit increased 16% and the margin increased 200 basis points to 16.3% compared to 14.3% in the prior-year period. Excluding the benefit of currency, the margin was up 120 basis points. |
| • | Small movements in the timing of revenues and expenses can impact margins in any given quarter for the Tax & Accounting business. Full-year margins are more reflective of the segment’s underlying performance. |
Intellectual Property & Science
| • | Revenues were up 2% as subscription revenue (approximately 80% of the segment’s revenues) growth of 4% was partially offset by a 7% decline in transactions revenues as fewer one-time deals affected the growth rate in the quarter. |
| • | Both EBITDA and operating profit margins were affected by the 7% decline in transactions revenues, which are highly profitable. |
| • | EBITDA was relatively unchanged with a margin of 30.9% compared to 30.6% in the prior-year period. Excluding the benefit of currency, the margin declined 90 basis points compared to the prior-year period. |
| • | Operating profit decreased 2% with a margin of 21.5% compared to 21.8% in the prior-year period. Excluding the benefit of currency, the margin declined 120 basis points compared to the prior-year period. |
| • | Small movements in the timing of revenues and expenses can impact margins in any given quarter for the Intellectual Property & Science business. Full-year margins are more reflective of the segment’s underlying performance. |
Corporate & Other (Including Reuters News)
| • | Reuters News revenues were $74 million, up 3% compared to the prior-year period. |
| • | Corporate & Other costs were $74 million compared to $73 million in the prior-year period. |
Thomson Reuters Reports Third-Quarter 2015 Results
Page 4 of 15
Consolidated Financial Highlights – Nine Months
| Nine Months Ended September 30, | ||||||||||||||||
| (Millions of U.S. dollars, except EPS and margins) | ||||||||||||||||
| IFRS Financial Measures | 2015 | 2014 | Change | |||||||||||||
| Revenues |
$ | 9,061 | $ | 9,396 | -4 | % | ||||||||||
| Operating profit |
$ | 1,231 | $ | 1,206 | 2 | % | ||||||||||
| Diluted earnings per share (EPS) |
$ | 1.07 | $ | 0.93 | 15 | % | ||||||||||
| Cash flow from operations |
$ | 1,833 | $ | 1,574 | 16 | % | ||||||||||
| Non-IFRS Financial Measures (1) | 2015 | 2014 | Change | Change Before Currency |
||||||||||||
| Revenues from ongoing businesses |
$ | 9,061 | $ | 9,394 | -4 | % | 1 | % | ||||||||
| Adjusted EBITDA |
$ | 2,497 | $ | 2,519 | -1 | % | 5 | % | ||||||||
| Adjusted EBITDA margin |
27.6 | % | 26.8 | % | 80bp | 80bp | ||||||||||
| Underlying operating profit |
$ | 1,656 | $ | 1,639 | 1 | % | 8 | % | ||||||||
| Underlying operating profit margin |
18.3 | % | 17.4 | % | 90bp | 120bp | ||||||||||
| Adjusted earnings per share (adjusted EPS) |
$ | 1.48 | $ | 1.41 | 5 | % | 16 | % | ||||||||
| Free cash flow |
$ | 1,093 | $ | 875 | 25 | % | ||||||||||
| • | Revenues from ongoing businesses increased 1% (before currency) from the prior-year period driven by the Legal, Tax & Accounting and Intellectual Property & Science businesses, which grew 3% in aggregate. |
| • | Adjusted EBITDA decreased 1% from the prior-year period and the margin increased 80 basis points to 27.6%. Excluding the impact of currency, adjusted EBITDA increased 5% and the margin was 80 basis points higher than the prior-year period. |
| • | Underlying operating profit increased 1% from the prior-year period and the margin increased 90 basis points to 18.3%. Excluding the impact of currency, underlying operating profit increased 8% and the margin was 120 basis points higher than the prior-year period. |
| • | Adjusted EPS was $1.48 compared to $1.41 in the prior-year period. |
| • | Excluding the impact of currency, adjusted EPS was up 16%, $0.22 better than the prior-year period. |
| • | Currency had a negative impact of $0.15 on adjusted EPS. |
| • | Free cash flow for the first nine months of the year was $1.1 billion compared to $875 million in the prior-year period, primarily due to lower severance payments than in the prior-year period. |
| (1) | These and other non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the tables appended to this news release. Additional information is provided in the explanatory footnotes to the appended tables. |
Thomson Reuters Reports Third-Quarter 2015 Results
Page 5 of 15
Business Outlook (Before Currency)
Thomson Reuters today re-affirmed its full-year Business Outlook for 2015, which was previously communicated in February 2015. The company’s 2015 Outlook assumes constant currency rates compared to 2014 and is based on the expected performance of the company’s existing businesses and does not factor in the impact of any acquisitions or divestitures that may occur during the year. In light of the increased volatility recently seen in the foreign currency markets, the company continues to believe that currency is likely to have a higher-than-usual impact on its results in 2015.
The company continues to expect:
| • | Positive organic revenue growth; |
| • | Adjusted EBITDA margin to range between 27.5% and 28.5%; |
| • | Underlying operating profit margin to range between 18.5% and 19.5%; and |
| • | Free cash flow to range between $1.550 billion and $1.750 billion in 2015. |
The information in this section is forward-looking and should be read in conjunction with the section below entitled “Special Note Regarding Forward-Looking Statements, Material Assumptions and Material Risks.”
Dividend and Share Repurchases
In February 2015, Thomson Reuters board of directors approved a $0.02 per share annualized increase in the dividend to $1.34 per share. A quarterly dividend of $0.335 per share is payable on December 15, 2015 to common shareholders of record as of November 19, 2015.
From January 1, 2015 through September 30, 2015, the company repurchased approximately 31.7 million shares at a cost of approximately $1.25 billion. Of this amount, 14.4 million shares were repurchased in the third quarter at a cost of approximately $550 million.
Under the current $1.0 billion share repurchase program announced in May 2015, the company has returned approximately $650 million to shareholders through the repurchase of approximately 16.9 million shares.
Thomson Reuters
Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world’s most trusted news organization. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, go to www.thomsonreuters.com.
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).
This news release includes certain non-IFRS financial measures, such as revenues from ongoing businesses, adjusted EBITDA and the related margin, underlying operating profit and the related margin, free cash flow, adjusted EPS, and selected measures before the impact of foreign currency. Thomson Reuters uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position. These measures do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS. Non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the appended tables.
Thomson Reuters Reports Third-Quarter 2015 Results
Page 6 of 15
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL ASSUMPTIONS AND MATERIAL RISKS
Certain statements in this news release, including, but not limited to, statements in the “Business Outlook (Before Currency)” section and Mr. Smith’s comments, are forward-looking. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. There is no assurance that the events described in any forward-looking statement will materialize. A business outlook is provided for the purpose of presenting information about current expectations for 2015. This information may not be appropriate for other purposes. You are cautioned not to place undue reliance on forward-looking statements which reflect expectations only as of the date of this news release. Except as may be required by applicable law, Thomson Reuters disclaims any obligation to update or revise any forward-looking statements.
The company’s 2015 business outlook is based on various external and internal assumptions. Economic and market assumptions include, but are not limited to, GDP growth in the countries where Thomson Reuters operates. Internal financial and operational assumptions include, but are not limited to, continuing operational improvement in the Financial & Risk business and the successful execution of new sales initiatives, ongoing product release programs, globalization strategy and other growth and efficiency initiatives.
Some of the material risk factors that could cause actual results or events to differ materially from those expressed in or implied by forward-looking statements in this news release include, but are not limited to, changes in the general economy; actions of competitors; failure to develop new products, services, applications and functionalities to meet customers’ needs, attract new customers or expand into new geographic markets and identify areas of higher growth; failures or disruptions of telecommunications, network systems or the Internet; fraudulent or unpermitted data access or other cyber-security or privacy breaches; increased accessibility to free or relatively inexpensive information sources; failure to maintain a high renewal rate for subscription-based services; dependency on third parties for data, information and other services; changes to law and regulations, including the impact of the Dodd-Frank legislation and similar financial services laws around the world; tax matters, including changes to tax laws, regulations and treaties; fluctuations in foreign currency exchange and interest rates; failure to adapt to recent organizational changes and effectively implement strategic initiatives; failure to recruit, motivate and retain high quality management and key employees; failure to meet the challenges involved in operating globally; failure to derive fully the anticipated benefits from existing or future acquisitions, joint ventures, investments or dispositions; failure to protect the brands and reputation of Thomson Reuters; impairment of goodwill and identifiable intangible assets; inadequate protection of intellectual property rights; threat of legal actions and claims; risk of antitrust/competition-related claims or investigations; downgrading of credit ratings and adverse conditions in the credit markets; the effect of factors outside of the control of Thomson Reuters on funding obligations in respect of pension and post-retirement benefit arrangements; and actions or potential actions that could be taken by the company’s principal shareholder, The Woodbridge Company Limited. These and other factors are discussed in materials that Thomson Reuters from time to time files with, or furnishes to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. Thomson Reuters annual and quarterly reports are also available in the “Investor Relations” section of www.thomsonreuters.com.
CONTACTS
| MEDIA | INVESTORS | |
| David Crundwell | Frank J. Golden | |
| Senior Vice President, Corporate Affairs | Senior Vice President, Investor Relations | |
| +1 646 223 5285 david.crundwell@thomsonreuters.com |
+1 646 223 5288 frank.golden@thomsonreuters.com |
Thomson Reuters will webcast a discussion of its third-quarter 2015 results today beginning at 8:30 a.m. Eastern Time (ET). You can access the webcast by visiting the “Investor Relations” section of www.thomsonreuters.com. An archive of the webcast will be available following the presentation.
Thomson Reuters Reports Third-Quarter 2015 Results
Page 7 of 15
Thomson Reuters Corporation
Business Segment Information
(millions of U.S. dollars)
(unaudited)
| Three Months Ended September 30, |
Change | |||||||||||||||||||
| 2015 | 2014 | Total | Before Currency (5) |
Organic | ||||||||||||||||
| Revenues |
||||||||||||||||||||
| Financial & Risk |
$ | 1,517 | $ | 1,628 | -7 | % | 0 | % | 0 | % | ||||||||||
| Legal |
837 | 854 | -2 | % | 1 | % | 1 | % | ||||||||||||
| Tax & Accounting |
307 | 301 | 2 | % | 8 | % | 8 | % | ||||||||||||
| Intellectual Property & Science |
246 | 248 | -1 | % | 2 | % | 2 | % | ||||||||||||
| Corporate & Other (includes Reuters News) |
74 | 79 | -6 | % | 3 | % | 3 | % | ||||||||||||
| Eliminations |
(2 | ) | (3 | ) | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Revenues from ongoing businesses (1) |
2,979 | 3,107 | -4 | % | 1 | % | 1 | % | ||||||||||||
| Other Businesses (2) |
— | — | ||||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Revenues |
$ | 2,979 | $ | 3,107 | -4 | % | ||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Margin | ||||||||||||||||||||||||
| Change | 2015 | 2014 | Change | |||||||||||||||||||||
| Adjusted EBITDA (3) |
||||||||||||||||||||||||
| Financial & Risk |
$ | 420 | $ | 408 | 3 | % | 27.7 | % | 25.1 | % | 260bp | |||||||||||||
| Legal |
325 | 324 | 0 | % | 38.8 | % | 37.9 | % | 90bp | |||||||||||||||
| Tax & Accounting |
79 | 72 | 10 | % | 25.7 | % | 23.9 | % | 180bp | |||||||||||||||
| Intellectual Property & Science |
76 | 76 | 0 | % | 30.9 | % | 30.6 | % | 30bp | |||||||||||||||
| Corporate & Other (includes Reuters News) |
(62 | ) | (58 | ) | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Adjusted EBITDA |
$ | 838 | $ | 822 | 2 | % | 28.1 | % | 26.5 | % | 160bp | |||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Underlying Operating Profit (4) |
||||||||||||||||||||||||
| Financial & Risk |
$ | 271 | $ | 252 | 8 | % | 17.9 | % | 15.5 | % | 240bp | |||||||||||||
| Legal |
265 | 254 | 4 | % | 31.7 | % | 29.7 | % | 200bp | |||||||||||||||
| Tax & Accounting |
50 | 43 | 16 | % | 16.3 | % | 14.3 | % | 200bp | |||||||||||||||
| Intellectual Property & Science |
53 | 54 | -2 | % | 21.5 | % | 21.8 | % | -30bp | |||||||||||||||
| Corporate & Other (includes Reuters News) |
(74 | ) | (73 | ) | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Underlying operating profit |
$ | 565 | $ | 530 | 7 | % | 19.0 | % | 17.1 | % | 190bp | |||||||||||||
|
|
|
|
|
|||||||||||||||||||||
Refer to page 12 for explanation of footnotes.
Thomson Reuters Reports Third-Quarter 2015 Results
Page 8 of 15
Thomson Reuters Corporation
Business Segment Information
(millions of U.S. dollars)
(unaudited)
| Nine Months Ended September 30, |
Change | |||||||||||||||||||
| 2015 | 2014 | Total | Before Currency (5) |
Organic | ||||||||||||||||
| Revenues |
||||||||||||||||||||
| Financial & Risk |
$ | 4,621 | $ | 4,941 | -6 | % | 0 | % | 0 | % | ||||||||||
| Legal |
2,487 | 2,507 | -1 | % | 2 | % | 2 | % | ||||||||||||
| Tax & Accounting |
1,007 | 973 | 3 | % | 8 | % | 7 | % | ||||||||||||
| Intellectual Property & Science |
731 | 742 | -1 | % | 1 | % | 1 | % | ||||||||||||
| Corporate & Other (includes Reuters News) |
222 | 240 | -8 | % | 2 | % | 2 | % | ||||||||||||
| Eliminations |
(7 | ) | (9 | ) | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Revenues from ongoing businesses (1) |
9,061 | 9,394 | -4 | % | 1 | % | 1 | % | ||||||||||||
| Other Businesses (2) |
— | 2 | ||||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Revenues |
$ | 9,061 | $ | 9,396 | -4 | % | ||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Margin | ||||||||||||||||||||||||
| Change | 2015 | 2014 | Change | |||||||||||||||||||||
| Adjusted EBITDA (3) |
||||||||||||||||||||||||
| Financial & Risk |
$ | 1,251 | $ | 1,233 | 1 | % | 27.1 | % | 25.0 | % | 210bp | |||||||||||||
| Legal |
918 | 939 | -2 | % | 36.9 | % | 37.5 | % | -60bp | |||||||||||||||
| Tax & Accounting |
295 | 285 | 4 | % | 29.3 | % | 29.3 | % | 0bp | |||||||||||||||
| Intellectual Property & Science |
217 | 233 | -7 | % | 29.7 | % | 31.4 | % | -170bp | |||||||||||||||
| Corporate & Other (includes Reuters News) |
(184 | ) | (171 | ) | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Adjusted EBITDA |
$ | 2,497 | $ | 2,519 | -1 | % | 27.6 | % | 26.8 | % | 80bp | |||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Underlying Operating Profit (4) |
||||||||||||||||||||||||
| Financial & Risk |
$ | 786 | $ | 758 | 4 | % | 17.0 | % | 15.3 | % | 170bp | |||||||||||||
| Legal |
729 | 730 | 0 | % | 29.3 | % | 29.1 | % | 20bp | |||||||||||||||
| Tax & Accounting |
211 | 192 | 10 | % | 21.0 | % | 19.7 | % | 130bp | |||||||||||||||
| Intellectual Property & Science |
149 | 167 | -11 | % | 20.4 | % | 22.5 | % | -210bp | |||||||||||||||
| Corporate & Other (includes Reuters News) |
(219 | ) | (208 | ) | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Underlying operating profit |
$ | 1,656 | $ | 1,639 | 1 | % | 18.3 | % | 17.4 | % | 90bp | |||||||||||||
|
|
|
|
|
|||||||||||||||||||||
Refer to page 12 for explanation of footnotes.
Thomson Reuters Reports Third-Quarter 2015 Results
Page 9 of 15
Thomson Reuters Corporation
Reconciliation of Operating Profit to Adjusted EBITDA (3)
(millions of U.S. dollars)
(unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||
| 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||||
| Operating profit |
$ | 419 | $ | 466 | -10 | % | $ | 1,231 | $ | 1,206 | 2 | % | ||||||||||||
| Adjustments to remove: |
||||||||||||||||||||||||
| Amortization of other identifiable intangible assets |
144 | 160 | 440 | 488 | ||||||||||||||||||||
| Fair value adjustments |
(8 | ) | (88 | ) | (2 | ) | (53 | ) | ||||||||||||||||
| Other operating losses (gains), net |
10 | (9 | ) | (13 | ) | (4 | ) | |||||||||||||||||
| Operating loss from Other Businesses (2) |
— | 1 | — | 2 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Underlying operating profit |
$ | 565 | $ | 530 | 7 | % | $ | 1,656 | $ | 1,639 | 1 | % | ||||||||||||
| Remove: depreciation and amortization of computer software (excluding Other Businesses (2)) |
273 | 292 | 841 | 880 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Adjusted EBITDA |
$ | 838 | $ | 822 | 2 | % | $ | 2,497 | $ | 2,519 | -1 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Underlying operating profit margin (4) |
19.0 | % | 17.1 | % | 190bp | 18.3 | % | 17.4 | % | 90bp | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Adjusted EBITDA margin (3) |
28.1 | % | 26.5 | % | 160bp | 27.6 | % | 26.8 | % | 80bp | ||||||||||||||
|
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|
|
|
|
|
|
|||||||||||||||||
Thomson Reuters Corporation
Reconciliation of Net Earnings to Adjusted EBITDA (3)
(millions of U.S. dollars)
(unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||
| 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||||
| Net earnings |
$ | 293 | $ | 250 | 17 | % | $ | 894 | $ | 802 | 11 | % | ||||||||||||
| Adjustments to remove: |
||||||||||||||||||||||||
| Tax expense |
11 | 26 | 53 | 53 | ||||||||||||||||||||
| Other finance costs (income) |
14 | 82 | (23 | ) | 25 | |||||||||||||||||||
| Net interest expense |
102 | 110 | 314 | 329 | ||||||||||||||||||||
| Amortization of other identifiable intangible assets |
144 | 160 | 440 | 488 | ||||||||||||||||||||
| Amortization of computer software |
186 | 195 | 572 | 586 | ||||||||||||||||||||
| Depreciation |
87 | 97 | 269 | 294 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| EBITDA |
$ | 837 | $ | 920 | $ | 2,519 | $ | 2,577 | ||||||||||||||||
| Adjustments to remove: |
||||||||||||||||||||||||
| Share of post-tax earnings in equity method investments |
(1 | ) | (2 | ) | (7 | ) | (3 | ) | ||||||||||||||||
| Other operating losses (gains), net |
10 | (9 | ) | (13 | ) | (4 | ) | |||||||||||||||||
| Fair value adjustments |
(8 | ) | (88 | ) | (2 | ) | (53 | ) | ||||||||||||||||
| EBITDA from Other Businesses (2) |
— | 1 | — | 2 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Adjusted EBITDA |
$ | 838 | $ | 822 | 2 | % | $ | 2,497 | $ | 2,519 | -1 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Refer to page 12 for explanation of footnotes.
Thomson Reuters Reports Third-Quarter 2015 Results
Page 10 of 15
Thomson Reuters Corporation
Reconciliation of Underlying Operating Profit (4) to Adjusted EBITDA (3) by Business Segment
(millions of U.S. dollars)
(unaudited)
| Three Months Ended September 30, 2015 |
Three Months Ended September 30, 2014 |
|||||||||||||||||||||||
| Underlying Operating Profit |
Add: Depreciation and Amortization of Computer Software |
Adjusted EBITDA |
Underlying Operating Profit |
Add: Depreciation and Amortization of Computer Software ** |
Adjusted EBITDA |
|||||||||||||||||||
| Financial & Risk |
$ | 271 | $ | 149 | $ | 420 | $ | 252 | $ | 156 | $ | 408 | ||||||||||||
| Legal |
265 | 60 | 325 | 254 | 70 | 324 | ||||||||||||||||||
| Tax & Accounting |
50 | 29 | 79 | 43 | 29 | 72 | ||||||||||||||||||
| Intellectual Property & Science |
53 | 23 | 76 | 54 | 22 | 76 | ||||||||||||||||||
| Corporate & Other (includes Reuters News) |
(74 | ) | 12 | (62 | ) | (73 | ) | 15 | (58 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| $ | 565 | $ | 273 | $ | 838 | $ | 530 | $ | 292 | $ | 822 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Nine Months Ended September 30, 2015 |
Nine Months Ended September 30, 2014 |
|||||||||||||||||||||||
| Underlying Operating Profit |
Add: Depreciation and Amortization of Computer Software |
Adjusted EBITDA |
Underlying Operating Profit |
Add: Depreciation and Amortization of Computer Software ** |
Adjusted EBITDA |
|||||||||||||||||||
| Financial & Risk |
$ | 786 | $ | 465 | $ | 1,251 | $ | 758 | $ | 475 | $ | 1,233 | ||||||||||||
| Legal |
729 | 189 | 918 | 730 | 209 | 939 | ||||||||||||||||||
| Tax & Accounting |
211 | 84 | 295 | 192 | 93 | 285 | ||||||||||||||||||
| Intellectual Property & Science |
149 | 68 | 217 | 167 | 66 | 233 | ||||||||||||||||||
| Corporate & Other (includes Reuters News) |
(219 | ) | 35 | (184 | ) | (208 | ) | 37 | (171 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| $ | 1,656 | $ | 841 | $ | 2,497 | $ | 1,639 | $ | 880 | $ | 2,519 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| ** | Excludes Other Businesses (2) |
Refer to page 12 for explanation of footnotes.
Thomson Reuters Reports Third-Quarter 2015 Results
Page 11 of 15
Thomson Reuters Corporation
Reconciliation of Changes in Adjusted EBITDA (5), Underlying Operating Profit (5) and the Related Margins, and Adjusted Earnings Per Share (EPS) (5) Excluding the Effects of Foreign Currency
(millions of U.S. dollars, except for per share amounts, and margins)
(unaudited)
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| % Change | BP Change | |||||||||||||||||||||||||||||||||||||||
| 2015 | 2014 | Total | Foreign Currency |
Before Currency |
2015 Margin |
2014 Margin |
Total | Foreign Currency |
Before Currency |
|||||||||||||||||||||||||||||||
| Adjusted EBITDA |
$ | 838 | $ | 822 | 2 | % | (5 | %) | 7 | % | 28.1 | % | 26.5 | % | 160bp | 0bp | 160bp | |||||||||||||||||||||||
| Underlying operating profit |
$ | 565 | $ | 530 | 7 | % | (6 | %) | 13 | % | 19.0 | % | 17.1 | % | 190bp | (10 | )bp | 200bp | ||||||||||||||||||||||
| Adjusted EPS |
$ | 0.52 | $ | 0.45 | 16 | % | (8 | %) | 24 | % | n/a | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| % Change | BP Change | |||||||||||||||||||||||||||||||||||||||
| 2015 | 2014 | Total | Foreign Currency |
Before Currency |
2015 Margin |
2014 Margin |
Total | Foreign Currency |
Before Currency |
|||||||||||||||||||||||||||||||
| Adjusted EBITDA |
$ | 2,497 | $ | 2,519 | (1 | %) | (6 | %) | 5 | % | 27.6 | % | 26.8 | % | 80bp | 0bp | 80bp | |||||||||||||||||||||||
| Underlying operating profit |
$ | 1,656 | $ | 1,639 | 1 | % | (7 | %) | 8 | % | 18.3 | % | 17.4 | % | 90bp | (30 | )bp | 120bp | ||||||||||||||||||||||
| Adjusted EPS |
$ | 1.48 | $ | 1.41 | 5 | % | (11 | %) | 16 | % | n/a | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||
n/a – not applicable
Thomson Reuters Corporation
Reconciliation of Earnings Attributable to Common Shareholders
to Adjusted Earnings (6)
(millions of U.S. dollars, except for share and per share data)
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Earnings attributable to common shareholders |
$ | 280 | $ | 231 | $ | 847 | $ | 762 | ||||||||
| Adjustments to remove: |
||||||||||||||||
| Operating loss from Other Businesses (2) |
— | 1 | — | 2 | ||||||||||||
| Fair value adjustments |
(8 | ) | (88 | ) | (2 | ) | (53 | ) | ||||||||
| Other operating losses (gains), net |
10 | (9 | ) | (13 | ) | (4 | ) | |||||||||
| Other finance costs (income) |
14 | 82 | (23 | ) | 25 | |||||||||||
| Share of post-tax earnings in equity method investments |
(1 | ) | (2 | ) | (7 | ) | (3 | ) | ||||||||
| Tax on above items |
(5 | ) | 14 | (2 | ) | 10 | ||||||||||
| Tax items impacting comparability |
3 | (10 | ) | 1 | (10 | ) | ||||||||||
| Amortization of other identifiable intangible assets |
144 | 160 | 440 | 488 | ||||||||||||
| Interim period effective tax rate normalization (7) |
(9 | ) | 5 | (6 | ) | — | ||||||||||
| Tax charge amortization (8) |
(22 | ) | (22 | ) | (65 | ) | (65 | ) | ||||||||
| Dividends declared on preference shares |
(1 | ) | (1 | ) | (2 | ) | (2 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted earnings |
$ | 405 | $ | 361 | $ | 1,168 | $ | 1,150 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted earnings per share |
$ | 0.52 | $ | 0.45 | $ | 1.48 | $ | 1.41 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted weighted-average common shares (millions) |
781.2 | 807.6 | 788.8 | 814.0 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Refer to page 12 for explanation of footnotes.
Thomson Reuters Reports Third-Quarter 2015 Results
Page 12 of 15
Thomson Reuters Corporation
Reconciliation of Net Cash Provided by Operating Activities
to Free Cash Flow from Ongoing Businesses (9)
(millions of U.S. dollars)
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net cash provided by operating activities |
$ | 665 | $ | 585 | $ | 1,833 | $ | 1,574 | ||||||||
| Capital expenditures, less proceeds from disposals |
(217 | ) | (231 | ) | (743 | ) | (704 | ) | ||||||||
| Other investing activities |
2 | 5 | 5 | 7 | ||||||||||||
| Dividends paid on preference shares |
(1 | ) | (1 | ) | (2 | ) | (2 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Free cash flow |
449 | 358 | 1,093 | 875 | ||||||||||||
| Remove: Other Businesses (2) |
— | (2 | ) | — | (1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Free cash flow from ongoing businesses |
$ | 449 | $ | 356 | $ | 1,093 | $ | 874 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Footnotes
| (1) | Revenues from ongoing businesses are revenues from reportable segments and Corporate & Other (which includes Reuters News) less eliminations. Other Businesses (see note (2) below) are excluded. |
| (2) | Other Businesses are businesses that have been or are expected to be exited through sale or closure that did not qualify for discontinued operations classification. |
| (3) | Thomson Reuters defines adjusted EBITDA as underlying operating profit excluding the related depreciation and amortization of computer software. Adjusted EBITDA margin is adjusted EBITDA expressed as a percentage of revenues from ongoing businesses. |
| (4) | Underlying operating profit is operating profit from reportable segments and Corporate & Other (includes Reuters News). Underlying operating profit margin is the underlying operating profit expressed as a percentage of revenues from ongoing businesses. |
| (5) | The changes in revenues from ongoing businesses, adjusted EBITDA and underlying operating profit and the related margins, and adjusted earnings per share before currency (at constant currency or excluding the effects of currency) are determined by converting the current and prior period’s local currency equivalent using the same exchange rates. |
| (6) | Adjusted earnings and adjusted earnings per share include dividends declared on preference shares and amortization of the 2013 tax charges associated with the consolidation of technology and content assets but exclude the pre-tax impacts of amortization of other identifiable intangible assets as well as the post-tax impacts of fair value adjustments, other operating (gains) and losses, certain impairment charges, the results of Other Businesses (see note (2) above), other finance (income) costs, Thomson Reuters share of post-tax (earnings) losses in equity method investments, discontinued operations and other items affecting comparability. Adjusted earnings per share is calculated using diluted weighted-average shares and does not represent actual earnings or loss per share attributable to shareholders. |
| (7) | Adjustment to reflect income taxes based on estimated full-year effective tax rate. Reported earnings or loss for interim periods reflect income taxes based on the estimated effective tax rates of each of the jurisdictions in which Thomson Reuters operates. The adjustment reallocates estimated full-year income taxes between interim periods, but has no effect on full-year income taxes. |
| (8) | Reflects amortization of the 2013 tax charges associated with the consolidation of the ownership and management of technology and content assets. For the non-IFRS measure, the majority of the charges are amortized over seven years, the period over which the tax is expected to be paid. |
| (9) | Free cash flow is net cash provided by operating activities and other investing activities less capital expenditures and dividends paid on the company’s preference shares. Other Businesses (see note (2) above) are also removed to arrive at free cash flow from ongoing businesses. |
Thomson Reuters Reports Third-Quarter 2015 Results
Page 13 of 15
Thomson Reuters Corporation
Consolidated Income Statement
(millions of U.S. dollars, except per share data)
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenues |
$ | 2,979 | $ | 3,107 | $ | 9,061 | $ | 9,396 | ||||||||
| Operating expenses |
(2,133 | ) | (2,198 | ) | (6,562 | ) | (6,826 | ) | ||||||||
| Depreciation |
(87 | ) | (97 | ) | (269 | ) | (294 | ) | ||||||||
| Amortization of computer software |
(186 | ) | (195 | ) | (572 | ) | (586 | ) | ||||||||
| Amortization of other identifiable intangible assets |
(144 | ) | (160 | ) | (440 | ) | (488 | ) | ||||||||
| Other operating (losses) gains, net |
(10 | ) | 9 | 13 | 4 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating profit |
419 | 466 | 1,231 | 1,206 | ||||||||||||
| Finance costs, net: |
||||||||||||||||
| Net interest expense |
(102 | ) | (110 | ) | (314 | ) | (329 | ) | ||||||||
| Other finance (costs) income |
(14 | ) | (82 | ) | 23 | (25 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before tax and equity method investments |
303 | 274 | 940 | 852 | ||||||||||||
| Share of post-tax earnings in equity method investments |
1 | 2 | 7 | 3 | ||||||||||||
| Tax expense |
(11 | ) | (26 | ) | (53 | ) | (53 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net earnings |
$ | 293 | $ | 250 | $ | 894 | $ | 802 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings attributable to: |
||||||||||||||||
| Common shareholders |
280 | 231 | 847 | 762 | ||||||||||||
| Non-controlling interests |
13 | 19 | 47 | 40 | ||||||||||||
| Basic earnings per share |
$ | 0.36 | $ | 0.29 | $ | 1.08 | $ | 0.94 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted earnings per share |
$ | 0.36 | $ | 0.28 | $ | 1.07 | $ | 0.93 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic weighted-average common shares |
778,334,806 | 804,034,944 | 785,932,003 | 810,582,179 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted weighted-average common shares |
781,170,075 | 807,567,416 | 788,797,817 | 813,987,831 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Thomson Reuters Reports Third-Quarter 2015 Results
Page 14 of 15
Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
| September 30, | December 31, | |||||||
| 2015 | 2014 | |||||||
| Assets |
||||||||
| Cash and cash equivalents |
$ | 710 | $ | 1,018 | ||||
| Trade and other receivables |
1,633 | 1,810 | ||||||
| Other financial assets |
159 | 161 | ||||||
| Prepaid expenses and other current assets |
726 | 657 | ||||||
|
|
|
|
|
|||||
| Current assets |
3,228 | 3,646 | ||||||
| Computer hardware and other property, net |
1,047 | 1,182 | ||||||
| Computer software, net |
1,481 | 1,529 | ||||||
| Other identifiable intangible assets, net |
6,579 | 7,124 | ||||||
| Goodwill |
16,006 | 16,403 | ||||||
| Other financial assets |
123 | 127 | ||||||
| Other non-current assets |
537 | 536 | ||||||
| Deferred tax |
47 | 50 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 29,048 | $ | 30,597 | ||||
|
|
|
|
|
|||||
| Liabilities and equity |
||||||||
| Liabilities |
||||||||
| Current indebtedness |
$ | 1,619 | $ | 534 | ||||
| Payables, accruals and provisions |
2,079 | 2,443 | ||||||
| Deferred revenue |
1,228 | 1,355 | ||||||
| Other financial liabilities |
69 | 265 | ||||||
|
|
|
|
|
|||||
| Current liabilities |
4,995 | 4,597 | ||||||
| Long-term indebtedness |
6,874 | 7,576 | ||||||
| Provisions and other non-current liabilities |
2,246 | 2,171 | ||||||
| Other financial liabilities |
368 | 161 | ||||||
| Deferred tax |
1,294 | 1,433 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
15,777 | 15,938 | ||||||
| Equity |
||||||||
| Capital |
9,918 | 10,157 | ||||||
| Retained earnings |
6,421 | 7,168 | ||||||
| Accumulated other comprehensive loss |
(3,557 | ) | (3,147 | ) | ||||
|
|
|
|
|
|||||
| Total shareholders’ equity |
12,782 | 14,178 | ||||||
| Non-controlling interests |
489 | 481 | ||||||
|
|
|
|
|
|||||
| Total equity |
13,271 | 14,659 | ||||||
|
|
|
|
|
|||||
| Total liabilities and equity |
$ | 29,048 | $ | 30,597 | ||||
|
|
|
|
|
|||||
Thomson Reuters Reports Third-Quarter 2015 Results
Page 15 of 15
Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Cash provided by (used in): |
||||||||||||||||
| Operating activities |
||||||||||||||||
| Net earnings |
$ | 293 | $ | 250 | $ | 894 | $ | 802 | ||||||||
| Adjustments for: |
||||||||||||||||
| Depreciation |
87 | 97 | 269 | 294 | ||||||||||||
| Amortization of computer software |
186 | 195 | 572 | 586 | ||||||||||||
| Amortization of other identifiable intangible assets |
144 | 160 | 440 | 488 | ||||||||||||
| Net losses (gains) on disposals of businesses and investments |
1 | (2 | ) | (24 | ) | (1 | ) | |||||||||
| Deferred tax |
(43 | ) | (112 | ) | (109 | ) | (187 | ) | ||||||||
| Other |
89 | 37 | 191 | 148 | ||||||||||||
| Changes in working capital and other items |
(92 | ) | (40 | ) | (400 | ) | (556 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by operating activities |
665 | 585 | 1,833 | 1,574 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investing activities |
||||||||||||||||
| Acquisitions, net of cash acquired |
(2 | ) | (28 | ) | (17 | ) | (165 | ) | ||||||||
| Proceeds from disposals of businesses and investments, net of taxes paid |
— | 2 | 75 | 14 | ||||||||||||
| Capital expenditures, less proceeds from disposals |
(217 | ) | (231 | ) | (743 | ) | (704 | ) | ||||||||
| Other investing activities |
2 | 5 | 5 | 7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash used in investing activities |
(217 | ) | (252 | ) | (680 | ) | (848 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Financing activities |
||||||||||||||||
| Proceeds from debt |
4 | 997 | 4 | 997 | ||||||||||||
| Repayments of debt |
(593 | ) | — | (593 | ) | — | ||||||||||
| Net borrowings under short-term loan facilities |
529 | — | 1,099 | — | ||||||||||||
| Repurchases of common shares |
(554 | ) | (109 | ) | (1,250 | ) | (726 | ) | ||||||||
| Dividends paid on preference shares |
(1 | ) | (1 | ) | (2 | ) | (2 | ) | ||||||||
| Dividends paid on common shares |
(253 | ) | (258 | ) | (765 | ) | (778 | ) | ||||||||
| Other financing activities |
11 | 19 | 63 | 148 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash (used in) provided by financing activities |
(857 | ) | 648 | (1,444 | ) | (361 | ) | |||||||||
|
|
|
|
|
|
|
|
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| (Decrease) increase in cash and bank overdrafts |
(409 | ) | 981 | (291 | ) | 365 | ||||||||||
| Translation adjustments |
(10 | ) | (17 | ) | (19 | ) | (14 | ) | ||||||||
| Cash and bank overdrafts at beginning of period |
1,124 | 699 | 1,015 | 1,312 | ||||||||||||
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| Cash and bank overdrafts at end of period |
$ | 705 | $ | 1,663 | $ | 705 | $ | 1,663 | ||||||||
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| Cash and bank overdrafts at end of period comprised of: |
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| Cash and cash equivalents |
$ | 710 | $ | 1,686 | $ | 710 | $ | 1,686 | ||||||||
| Bank overdrafts |
(5 | ) | (23 | ) | (5 | ) | (23 | ) | ||||||||
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| $ | 705 | $ | 1,663 | $ | 705 | $ | 1,663 | |||||||||
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