Thomson Reports 9% Revenue Growth and 11% Earnings Per Share Growth for the Third Quarter of 2004
STAMFORD, Conn., Oct. 26 /PRNewswire-FirstCall/ -- The Thomson Corporation (NYSE: TOC; TSX: TOC), one of the world's leading information services providers, today reported solid revenue and earnings growth in the third quarter of 2004 compared to the same period last year.
Revenues rose 9% to $2.22 billion in the quarter and earnings increased
11% to $0.52 per share. After adjusting for discontinued operations, one-time
items, and the impact from a tax accounting change, earnings increased 9% to
$0.47 per share.
Thomson President and CEO Richard J. Harrington commented, "Thomson posted
revenue increases across each of our businesses, including double-digit gains
at our Financial and Scientific & Healthcare market groups. Overall revenue
growth once again came largely from our core operations, where we continue to
see strong sales of electronically-delivered products, software tools and
services, as well as improving conditions in some of our important markets.
"We also benefited from the contribution of recent acquisitions,
particularly at Thomson Financial, where TradeWeb and CCBN -- both acquired
this year -- continue to perform above our initial expectations. Acquisitions
help to round out our content and software offerings and enable us to ling about $1.5 billion so far in 2004. We
don't anticipate any significant additional activity for the balance of the
year and will likely see a return to a more normal level in 2005.
"We are pleased with our performance so far this year and we remain on
track to achieve full-year 2004 revenue growth in line with our 7 to 9 percent
long-term target. More important, we are positioning Thomson for continued
success by offering our customers information solutions that are critical to
their daily workflow needs and make them more productive while also
strengthening Thomson's position as a trusted business partner."
Results for the Third Quarter of 2004
Revenues increased 9% to $2.22 billion in the third quarter of 2004 as a
result of core growth, acquisitions and favorable currency translation.
Excluding the effects of currency translation, revenues rose 7% in the
quarter.
Earnings attributable to common shares were $344 million, or $0.52 per
share, in the third quarter of 2004, compared to $306 million, or $0.47
per share, in the third quarter of 2003. After adjusting for
discontinued operations, one-time items, and the impact from a tax
accounting change, underlying earnings were $308 million, or $0.47 per
share, for the third quarter this year, compared to $280 million, or
$0.43 per share, in the third quarter of 2003. The major one-time item
in the quarter was a $35 million tax benefit resulting from a UK tax
law change.
Adjusted EBITDA increased 10% to $735 million in the quarter. Adjusted
EBITDA margin increased to 33.1% for the third quarter from 32.8% in the
prior-year period.
Free cash flow in the third quarter was up 25% to $360 million, compared
to $287 million in 2003 primarily due to higher adjusted EBITDA and a
voluntary pension contribution made in the prior-year period for which
there was no comparable outlay in 2004.
Market Group Third-Quarter Highlights
Legal & Regulatory
* Revenues were $840 million, a 6% increase over the prior-year period,
and adjusted EBITDA grew 4% to $272 million.
* Revenue growth was largely driven by sales of U.S. and international
online legal services, strong demand for legal software, growth in the
legal education business primarily as a result of increased
enrollments, and strong growth in FindLaw, a marketing platform for law
firms.
* As the Legal & Regulatory group continued to shift print customers to
online products and services, print and CD sales declined slightly in
the quarter.
* Adjusted EBITDA growth benefited from higher revenues, partially offset
by increased spending related to growth initiatives.
Learning
* Revenues were $752 million, a 5% increase over the prior-year period
and adjusted EBITDA grew 9% to $302 million.
* Revenue growth was largely the result of increased sales in higher
education, library reference electronic products, and international
operations. Revenue growth also reflected increased sales in
professional e-testing, corporate e-learning, and vocational education.
Growth was offset, in part, by continued weakness in the IT training
market.
Financial
* Revenues grew to $455 million, an increase of 22% over the third
quarter of 2003, and adjusted EBITDA increased 21% to $128 million.
* Revenue growth was due primarily to acquired companies (primarily CCBN
and TradeWeb). Thomson Financial also posted core revenue growth for
the second consecutive quarter.
* The Thomson ONE suite of products continued to gain traction in the
marketplace, as sales of Thomson ONE workstations increased 12% in the
third quarter of 2004, and increased 46% for the nine-month period, due
to new client wins and user migration from legacy products.
Scientific & Healthcare
* Revenues were $187 million, up 11% from the third quarter of 2003,
while adjusted EBITDA increased 25% to $50 million.
* Revenue growth was driven by acquisitions, including BIOSIS, continued
strong subscription growth of Web of Science, Web of Knowledge and
MICROMEDEX, increased revenues from healthcare print products,
primarily due to a shift in timing from the fourth quarter to the third
quarter of 2004, and growth in customer spending for healthcare
decision support products.
* Adjusted EBITDA growth reflected higher revenues and cost management
efforts.
Corporate & Other
* On October 8, 2004, Thomson announced it had signed a definitive
agreement to sell the Thomson Media group for $350 million in cash to
Investcorp. The transaction is expected to close by year-end, subject
to regulatory approvals and other customary closing conditions.
Beginning in the second quarter of 2004, results for Thomson Media have
been reported as discontinued operations and prior periods have been
reclassified to reflect this change.
Nine-Months Results
Revenues for the first nine months of 2004 increased 9% to $5.77 billion.
Excluding the effects of currency translation, revenues rose 7% in the
first nine months.
Earnings attributable to common shares were $571 million, or $0.87 per
common share, for the first nine months of 2004, compared to
$482 million, or $0.74 per common share, in the comparable 2003 period.
Adjusted earnings for the nine months of 2004, which exclude discontinued
operations, one-time items, and the impact from a tax accounting change,
were $481 million, or $0.73 per common share, compared to $356 million,
or $0.54 per common share, for the comparable period in 2003. The major
one-time items in the nine months of 2004, included a $22 million pretax
gain from a legal settlement, as well as a $35 million tax benefit
resulting from a UK tax law change.
Free cash flow for the first nine months of 2004 increased to
$691 million, versus $501 million in the comparable 2003 period.
2004 Financial Outlook
Thomson expects full-year 2004 revenue growth to be in line with the Corporation's long-term target of 7% to 9% (excluding the effects of currency translation). Full-year 2004 revenue growth will continue to be driven by growth from existing businesses and supplemented by acquisitions.
Adjusted EBITDA is expected to continue to grow in the fourth quarter versus last year. Full-year adjusted EBITDA margin is expected to improve slightly reflecting continued operating improvements, partially offset by higher pension costs and corporate expenses.
As stated in the previous outlook, overall adjusted earnings in the second half of the year are expected to grow at a lower rate than in the first half due largely to higher depreciation and a higher effective tax rate versus the second half of 2003.
Thomson also expects to continue to generate strong free cash flow through the end of 2004.
The Thomson Corporation
The Thomson Corporation (http://www.thomson.com), with 2003 revenues from
continuing operations of $7.44 billion, is a global leader in providing
integrated information solutions to business and professional customers.
Thomson provides value-added information, software tools and applications to
more than 20 million users in the fields of law, tax, accounting, financial
services, higher education, reference information, corporate training and
assessment, scientific research and healthcare. With operational headquarters
in Stamford, Conn., Thomson has approximately 38,000 employees and provides
services in approximately 130 countries. The Corporation's common shares are
listed on the New York and Toronto stock exchanges (NYSE: TOC; TSX: TOC).
The Thomson Corporation will webcast a discussion of third-quarter results
beginning at 10:30 am EDT today. To participate in the webcast, please visit
http://www.thomson.com and click on the "Investor Relations" link located at
the top of the page.
Note: The Corporation's financial statements are prepared in accordance
with Canadian generally accepted accounting principles (GAAP) and are reported
in U.S. dollars. Prior periods have been restated for discontinued
operations. Segmented results are presented on the basis of ongoing
businesses, which exclude disposals. Disposals are businesses sold or held
for sale, which do not qualify as discontinued operations. Adjusted EBITDA,
adjusted EBITDA margin, adjusted operating profit, free cash flow and adjusted
earnings from continuing operations are used by Thomson to measure the
Corporation's and its segments' performance but do not have any standardized
meaning prescribed by GAAP and therefore are unlikely to be comparable with
the calculation of similar measures used by other companies, and should not be
viewed as alternatives to operating profit, operating profit as a percentage
of revenues, net earnings, cash flow from operations or other measures of
financial performance calculated in accordance with GAAP. We reconcile non-
GAAP financial measures to the most directly comparable GAAP measure in the
following tables. We define adjusted EBITDA as earnings from continuing
operations before interest, taxes, depreciation and amortization, net other
income and equity in net losses of associates, net of tax. Because adjusted
EBITDA excludes interest and taxes, it provides a more standard comparison
among businesses by eliminating differences that arise due to the manner in
which they were acquired or funded. We use the measure as a supplemental cash
flow metric as adjusted EBITDA also excludes depreciation and amortization of
identifiable intangible assets, which are both non-cash charges. Net other
income, which normally includes items such as gains and losses on sales of
businesses, is excluded from adjusted EBITDA, as this item is not considered
relevant to operating performance. Finally, as the results of equity in
associates are not directly under our control, we exclude this item from our
analysis of current operating performance. We also use adjusted EBITDA
margin, which we define as adjusted EBITDA as a percentage of revenues.
Adjusted operating profit is defined as operating profit before amortization
of identifiable intangible assets. We use this measure for our segments
because we do not consider such amortization to be a controllable operating
cost for purposes of assessing the current performance of our segments. We
also use adjusted operating profit margin, which we define as adjusted
operating profit as a percentage of revenues. We evaluate our operating
performance based on free cash flow, which we define as net cash provided by
operating activities less additions to property and equipment, 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 dividends and fund new acquisitions. We present our earnings
attributable to common shares and per share amounts after adjusting for non-
recurring items, discontinued operations, and other items affecting
comparability, which we refer to as adjusted earnings from continuing
operations and adjusted earnings per common share from continuing operations.
We use these measures to assist in comparisons from one period to another.
Adjusted earnings per common share from continuing operations do not represent
actual earnings per share attributable to shareholders.
This news release, in particular the section under the heading "2004
Financial Outlook," includes forward-looking statements that are based on
certain assumptions and reflect the Corporation's current expectations. These
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. Some of the factors that could cause actual results to differ
materially from current expectations are: actions of our competitors; failure
of our significant investments in technology to increase our revenues or
decrease our operating costs; failure to fully derive anticipated benefits
from our acquisitions; failure to develop additional products and services to
meet our customers' needs, attract new customers or expand into new geographic
markets; failure to meet the special challenges involved in expansion of our
operations outside North America; failure to recruit and retain high quality
management and key employees; consolidation of our customers; increased self-
sufficiency of our customers; increased accessibility by our customers to free
or relatively inexpensive information sources; failure to maintain the
availability of information obtained through licensing arrangements and
changes in the terms of our licensing arrangements; changes in the global
economic conditions; inadequate protection of our intellectual property
rights; an increase in our effective income tax rate; impairment loss
affecting our goodwill and identifiable intangible assets recorded on our
balance sheet; and failures or disruptions of our electronic delivery systems
or the Internet. Additional factors are discussed in the Corporation's
materials filed with the securities regulatory authorities in Canada and the
United States from time to time, including the Corporation's annual
information form, which is contained in its annual report on Form 40-F for the
year ended December 31, 2003. The Corporation disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Consolidated Statement of Earnings
(millions of U.S. dollars, except per common share data)
(unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30 September 30
------------------ -----------------
2004 2003 (1) 2004 2003 (1)
----- ----- ------ -----
(restated) (restated)
Revenues 2,223 2,044 5,771 5,305
Cost of sales, selling,
marketing, general and
administrative
expenses (1,488) (1,373) (4,261) (3,972)
Depreciation (173) (162) (454) (430)
Amortization (70) (69) (210) (210)
------- -------- -------- -------
Operating profit 492 440 846 693
Net other (expense) income (1) 23 28 79
Net interest expense and
other financing costs (63) (64) (176) (192)
Income taxes (100) (101) (148) (133)
Equity in net losses of
associates, net of tax -- (3) (1) (12)
------- ------- -------- -------
Earnings from continuing
operations 328 295 549 435
Earnings from discontinued
operations, net of tax 16 12 24 34
------- ------- -------- -------
Net earnings 344 307 573 469
Dividends declared on
preference shares -- (1) (2) (8)
Net gain on redemption
of Series V preference
shares -- -- -- 21
------- ------- --------- ------
Earnings attributable
to common shares 344 306 571 482
======= ======= ========== ======
Basic and diluted
earnings per common
share $0.52 $0.47 $0.87 $0.74
======== ======= ========== =======
Supplemental earnings
---------------------
information:
------------
Earnings attributable
to common shares,
as above 344 306 571 482
Adjustments:
One time items:
Net other expense (income) 1 (23) (28) (79)
Tax on above item -- 9 11 8
Release of tax credits (35) -- (35) --
Net gain on redemption of
Series V preference
shares -- -- -- (21)
Interim period effective
tax rate normalization(2) 14 -- (14) --
Discontinued operations (16) (12) (24) (34)
-------- ------- --------- ------
Adjusted earnings from
continuing operations 308 280 481 356
======== ======= ======== ======
Adjusted basic and diluted
earnings per common share
from continuing
operations $0.47 $0.43 $0.73 $0.54
========= ======= ======= =======
Notes to consolidated statement of earnings
-------------------------------------------
(1) Effective January 1, 2004, Thomson adopted a new accounting standard
related to the recognition of liabilities for asset retirement
obligations comprising obligations to restore leased facilities on
termination of leases. This standard required restatement of all
prior periods. In the consolidated statements of earnings and cash
flow, for the three and nine months ended September 30, 2003,
depreciation expense was increased by $1 million and $2 million,
respectively, and income taxes were decreased by $1 million in each
period, resulting in no change in net earnings for the three months
ended September 30, 2003 and a decrease of $1 million in net earnings
for the nine months ended September 30, 2003. In addition, the
company restated all periods to reflect Thomson Media as a
discontinued operation.
(2) Adjustment to reflect income taxes based on the estimated full year
effective tax rate of the consolidated group. As a result of this
tax accounting change, reported earnings for the three and nine
months ended September 30, 2004 reflect income taxes based on
estimated effective tax rates of each of the group's jurisdictions.
The adjustment reallocates estimated full-year income taxes between
interim periods, but has no effect on full year income taxes.
Consolidated Balance Sheet
(millions of U.S. dollars)
September 30, December 31,
2004 2003(1)
(unaudited) (restated)
Assets
Cash and cash equivalents 374 683
Accounts receivable, net of allowances 1,389 1,497
Inventories 324 309
Prepaid expenses and other current assets 303 307
Deferred income taxes 181 181
Current assets of discontinued operations 30 67
------------
------------
Current assets 2,601 3,044
Property and equipment, net 1,579 1,538
Identifiable intangible assets, net 4,499 4,334
Goodwill 8,594 8,089
Other non-current assets 1,316 1,247
Non-current assets of discontinued operations 202 433
----------- ------------
Total assets 18,791 18,685
===========
============
Liabilities and shareholders' equity
Liabilities
Short-term indebtedness 19 87
Accounts payable and accruals 1,407 1,520
Deferred revenue 871 939
Current portion of long-term debt 211 484
Current liabilities of discontinued operations 54 115
---------- ------------
Current liabilities 2,562 3,145
Long-term debt 4,106 3,684
Other non-current liabilities 1,028 998
Deferred income taxes 1,602 1,608
Non-current liabilities of discontinued operations 29 57
------- ------------
Total liabilities 9,327 9,492
Shareholders' equity
Capital 2,683 2,639
Cumulative translation adjustment 285 259
Retained earnings 6,496 6,295
--------
------------
Total shareholders' equity 9,464 9,193
--------
------------
Total liabilities and shareholders' equity 18,791 18,685
=========
============
(1) Effective January 1, 2004, Thomson adopted a new accounting standard
related to the recognition of liabilities for asset retirement
obligations comprising obligations to restore leased facilities on
termination of leases. This standard required restatement of all
prior periods. In the consolidated balance sheet, retained earnings
at December 31, 2003 were reduced by $7 million. In addition, the
company restated the December 31, 2003 balance sheet to reflect
Thomson Media as a discontinued operation.
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
Three Months Nine Months Ended
------------ -----------------
Ended Ended
----- -----
September 30 September 30
------------ ------------
2004 2003 2004 2003
----------------- -----------------
(restated) (restated)
Cash provided by (used in):
Operating activities
--------------------
Net earnings 344 307 573 469
Remove earnings from
discontinued operations (16) (12) (24) (34)
Add back (deduct) items
not involving cash:
Amortization of
development costs
and capitalized
software 9 7 24 31
Depreciation 173 162 454 430
Amortization 70 69 210 210
Net losses (gains)
on disposals of
businesses and
investments 1 (1) (4) (57)
Deferred income taxes (9) 85 4 99
Equity in losses of
associates, net of tax -- 3 1 12
Other, net 12 18 102 83
Voluntary pension
contribution -- (50) -- (50)
Changes in working capital
and other items (68) (162) (205) (294)
Cash provided by operating
activities - discontinued
operations 15 27 30 46
------------------ -------------------
Net cash provided by
operating activities 531 453 1,165 945
------------------ -------------------
Investing activities
--------------------
Acquisitions (155) (64) (810) (186)
Proceeds from disposals -- -- 11 284
Additions to property
and equipment, less
proceeds from disposals (159) (147) (430) (368)
Other investing activities (12) (14) (40) (61)
Additions to property and
equipment of discontinued
operations -- (3) (2) (6)
Proceeds from disposals
of discontinued operations -- -- 137 2
Cash used in other investing
activities - discontinued
operations -- 2 (5) (15)
------------------- -------------------
Net cash used in investing
activities (326) (226) (1,139) (350)
------------------- -------------------
Financing activities
--------------------
Proceeds from debt -- 450 434 451
Repayments of debt (332) (250) (332) (250)
Net borrowings
(repayments) under
short-term loan
facilities 13 (257) (75) 4
Redemption of Series V
preference shares -- -- -- (311)
Dividends paid on
preference shares -- (2) (2) (9)
Dividends paid on common
shares (122) (115) (362) (540)
Other financing
activities, net 1 (2) 2 (1)
------------------- --------------------
Net cash used in financing
activities (440) (176) (335) (656)
------------------- --------------------
Translation adjustments -- 7 -- 8
------------------- --------------------
(Decrease) increase in
cash and cash
equivalents (235) 58 (309) (53)
Cash and cash
equivalents at
beginning of period 609 598 683 709
------------------- --------------------
Cash and cash equivalents
at end of period 374 656 374 656
==================== ====================
Supplemental cash flow information:
----------------------------------
Net cash provided by
operating activities,
as above 531 453 1,165 945
Additions to property
and equipment, as above (159) (147) (430) (368)
Other investing activities,
as above (12) (14) (40) (61)
Additions to property and
equipment of discontinued
operations -- (3) (2) (6)
Dividends paid on
preference shares,
as above -- (2) (2) (9)
-------------------- --------------------
Free cash flow 360 287 691 501
==================== ====================
Business Segment Information *
(millions of U.S. dollars)
(unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30 September 30
-------------- ---------------
2004 2003(4) Change 2004 2003(4) Change
---- ---- ------ ---- ----- ------
Revenues:
Legal & Regulatory 840 793 6% 2,447 2,236 9%
Learning 752 714 5% 1,531 1,438 6%
Financial 455 372 22% 1,260 1,127 12%
Scientific &
Healthcare 187 169 11% 564 519 9%
Intercompany
eliminations (11) (8) (33) (30)
------- -------- ------- -------
Total ongoing
businesses 2,223 2,040 9% 5,769 5,290 9%
Disposals (2) -- 4 2 15
------- --------- ------- --------
Total revenues 2,223 2,044 9% 5,771 5,305 9%
====== ========= ======= ========
Adjusted EBITDA: (3)
Legal & Regulatory 272 262 4% 751 657 14%
Learning 302 278 9% 337 301 12%
Financial 128 106 21% 340 301 13%
Scientific &
Healthcare 50 40 25% 134 120 12%
Corporate and
other(1) (17) (15) (49) (49)
------- --------- -------- --------
Total ongoing
businesses 735 671 10% 1,513 1,330 14%
Disposals (2) -- -- (3) 3
------- --------- -------- --------
Total Adjusted
EBITDA 735 671 10% 1,510 1,333 13%
======== ========= ======== ========
Operating Profit: (3)
Adjusted Operating
Profit by Segment
Legal & Regulatory 223 215 4% 606 523 16%
Learning 237 218 9% 194 170 14%
Financial 80 62 29% 206 170 21%
Scientific &
Healthcare 43 33 30% 113 97 16%
Corporate and
other(1) (21) (19) (60) (60)
-------- -------- --------- --------
Total ongoing
businesses 562 509 10% 1,059 900 18%
Disposals (2) -- -- (3) 3
-------- -------- --------- --------
Total adjusted
operating profit 562 509 10% 1,056 903 17%
Amortization (70) (69) (210) (210)
-------- -------- --------- --------
Operating Profit 492 440 12% 846 693 22%
======== ======== ========= ========
*Notes to business segment information for continuing operations
---------------------------------------------------------------
(1) Corporate and other includes corporate costs and costs associated
with the Corporation's stock related compensation expense.
(2) Disposals consist of the results of businesses sold or held for sale,
which do not qualify as discontinued operations.
(3) Please see reconciliations to GAAP measures in the following tables.
(4) Effective January 1, 2004, Thomson adopted a new accounting standard
related to the recognition of liabilities for asset retirement
obligations. This standard required restatement of all prior
periods. For the three and nine months ended September 30, 2003,
adjusted operating profit was decreased by $1 million and $2 million,
respectively.
Reconciliations
Reconciliation of Adjusted EBITDA to Net Earnings and Adjusted Operating
Profit to Operating Profit
(millions of U.S. dollars, unaudited)
For the Three Months Ended September 30, 2004
----------------------------------------------
Scientific
Legal & Corp.
& Health- and
Regulatory Learning Financial care Other Ongoing Disposals Total
---------------------------------------------------------------------------
Adjusted
EBITDA 272 302 128 50 (17) 735 -- 735
Less:
Deprecia-
tion (49) (65) (48) (7) (4) (173) -- (173)
--------------------------------------------------------------------------
Adjusted
operating
profit 223 237 80 43 (21) 562 -- 562
Less:
Amorti-
zation (24) (17) (23) (6) -- (70) -- (70)
--------------------------------------------------------------------------
Operating
profit 199 220 57 37 (21) 492 -- 492
=========================================================
Net other expense
(1)
Net interest expense
and other financing costs
(63)
Income taxes
(100)
Equity in net losses of associates, net of tax
--
------
Earnings from continuing operations
328
Earnings from discontinued operations, net of tax
16
------
Net earnings 344
======
For Three Months Ended September 30, 2003
------------------------------------------
Scientific
Legal & Corp.
& Health- and
Regulatory Learning Financial care Other Ongoing Disposals Total
---------------------------------------------------------------------------
Adjusted
EBITDA 262 278 106 40 (15) 671 -- 671
Less:
Deprecia-
tion (47) (60) (44) (7) (4) (162) -- (162)
-------------------------------------------------------------------------
Adjusted
operating
profit 215 218 62 33 (19) 509 -- 509
Less:
Amortiza-
tion (31) (17) (16) (5) -- (69) -- (69)
-------------------------------------------------------------------------
Operating
profit 184 201 46 28 (19) 440 -- 440
==========================================================
Net other
income
23
Net interest expense and other financing costs
(64)
Income taxes
(101)
Equity in net losses of associates, net of tax
(3)
------
Earnings from continuing operations
295
Earnings from discontinued operations, net of tax
12
------
Net earnings 307
======
Reconciliation of Adjusted EBITDA to Net Earnings and Adjusted Operating
Profit to Operating Profit (continued)
(millions of U.S. dollars, unaudited)
For the Nine Months Ended September 30, 2004
----------------------------------------------
Scientific
Legal & Corp.
& Health- and
Regulatory Learning Financial care Other Ongoing Disposals Total
---------------------------------------------------------------------------
Adjusted
EBITDA 751 337 340 134 (49) 1,513 (3) 1,510
Less:
Deprecia-
tion (145) (143) (134) (21) (11) (454) -- (454)
---------------------------------------------------------------------------
Adjusted
operating
profit 606 194 206 113 (60) 1,059 (3) 1,056
Less:
Amortiza-
tion (78) (52) (59) (21) -- (210) -- (210)
----------------------------------------------------------------------------
Operating
profit 528 142 147 92 (60) 849 (3) 846
===========================================================
Net other income
28
Net interest expense and other financing costs
(176)
Income taxes
(148)
Equity in net losses of associates, net of tax
(1)
-----
Earnings from continuing operations
549
Earnings from discontinued operations, net of tax 24
-----
Net earnings 573
=====
For the Nine Months Ended September 30, 2003
----------------------------------------------
Scientific
Legal & Corp.
& Health- and
Regulatory Learning Financial care Other Ongoing Disposals Total
---------------------------------------------------------------------------
Adjusted
EBITDA 657 301 301 120 (49) 1,330 3 1,333
Less:
Deprecia-
tion (134) (131) (131) (23) (11) (430) -- (430)
--------------------------------------------------------------------------
Adjusted
operating
profit 523 170 170 97 (60) 900 3 903
Less:
Amortiza-
tion (80) (63) (47) (20) -- (210) -- (210)
---------------------------------------------------------------------------
Operating
profit 443 107 123 77 (60) 690 3 693
===========================================================
Net other income
79
Net interest expense and other financing costs
(192)
Income taxes
(133)
Equity in net losses of associates, net of tax
(12)
-----
Earnings from continuing operations
435
Earnings from discontinued operations, net of tax 34
-----
Net earnings 469
=====
Reconciliation of Adjusted EBITDA Margin and Adjusted Operating Profit Margin
to Operating Profit Margin
(as a percentage of revenue, unaudited)
For the Three Months Ended September 30, 2004
----------------------------------------------
Scientific
Legal &
& Health-
Regulatory Learning Financial care Ongoing Disposals Total
--------------------------------------------------------------------------
Adjusted
EBITDA 32.4% 40.2% 28.1% 26.7% 33.1% -- 33.1%
Less:
Deprecia-
tion (5.9%) (8.7%) (10.5%) (3.7%) (7.8%) -- (7.8%)
--------------------------------------------------------------------------
Adjusted
operating
profit 26.5% 31.5% 17.6% 23.0% 25.3% -- 25.3%
Less:
Amortiza-
tion (2.8%) (2.2%) (5.1%) (3.2%) (3.2%) -- (3.2%)
--------------------------------------------------------------------------
Operating
profit 23.7% 29.3% 12.5% 19.8% 22.1% -- 22.1%
==========================================================================
For the Three Months Ended September 30, 2003
-----------------------------------------------
Scientific
Legal &
& Health-
Regulatory Learning Financial care Ongoing Disposals Total
--------------------------------------------------------------------------
Adjusted
EBITDA 33.0% 38.9% 28.5% 23.7% 32.9% -- 32.8%
Less:
Deprecia-
tion (5.9%) (8.4%) (11.8%) (4.2%) (7.9%) -- (7.9%)
--------------------------------------------------------------------------
Adjusted
operating
profit 27.1% 30.5% 16.7% 19.5% 25.0% -- 24.9%
Less:
Amortiza-
tion (3.9%) (2.3%) (4.3%) (2.9%) (3.4%) -- (3.4%)
--------------------------------------------------------------------------
Operating
profit 23.2% 28.2% 12.4% 16.6% 21.6% -- 21.5%
==========================================================================
For the Nine Months Ended September 30, 2004
---------------------------------------------
Scientific
Legal &
& Health-
Regulatory Learning Financial care Ongoing Disposals Total
--------------------------------------------------------------------------
Adjusted
EBITDA 30.7% 22.0% 27.0% 23.8% 26.2% (150.0%) 26.2%
Less:
Deprecia-
tion (5.9%) (9.3%) (10.7%) (3.8%) (7.8%) -- (7.9%)
--------------------------------------------------------------------------
Adjusted
operating
profit 24.8% 12.7% 16.3% 20.0% 18.4% (150.0%) 18.3%
Less:
Amortiza-
tion (3.2%) (3.4%) (4.6%) (3.7%) (3.7%) -- (3.6%)
--------------------------------------------------------------------------
Operating
profit 21.6% 9.3% 11.7% 16.3% 14.7% (150.0%) 14.7%
==========================================================================
For the Nine Months Ended September 30, 2003
---------------------------------------------
Scientific
Legal &
& Health-
Regulatory Learning Financial care Ongoing Disposals Total
--------------------------------------------------------------------------
Adjusted
EBITDA 29.4% 20.9% 26.7% 23.1% 25.1% 20.0% 25.1%
Less:
Deprecia-
tion (6.0%) (9.1%) (11.6%) (4.4%) (8.1%) -- (8.1%)
--------------------------------------------------------------------------
Adjusted
operating
profit 23.4% 11.8% 15.1% 18.7% 17.0% 20.0% 17.0%
Less:
Amortiza-
tion (3.6%) (4.4%) (4.2%) (3.9%) (4.0%) -- (3.9%)
--------------------------------------------------------------------------
Operating
profit 19.8% 7.4% 10.9% 14.8% 13.0% 20.0% 13.1%
==========================================================================
Media Contact: Investor Contact:
Jason Stewart Frank J. Golden
Vice President, Media Relations Vice President, Investor Relations
(203) 539-8339 (203) 539-8470
jason.stewart@thomson.com frank.golden@thomson.com
SOURCE The Thomson Corporation
-0- 10/26/2004
/CONTACT: Media, Jason Stewart, Vice President, Media Relations,
+1-203-539-8339, jason.stewart@thomson.com; or Investors, Frank J. Golden,
Vice President, Investor Relations, +1-203-539-8470, frank.golden@thomson.com,
all of The Thomson Corporation/
/Web site: /
(TOC TOC.)
CO: The Thomson Corporation
ST: Ontario
IN: CPR PUB MLM
SU: ERN CCA
MP
-- NYTU031 --
5096 10/26/2004 09:03 EDT http://www.prnewswire.com