TIDM0Q89
Thomson Reuters Reports Fourth-Quarter and Full-Year 2021 Results
TORONTO, Feb. 8, 2022 /PRNewswire/ -- Thomson Reuters (TSX/NYSE: TRI) today
reported results for the fourth quarter and full year ended December 31, 2021:
* Strong revenue and sales growth for the fourth quarter and full year
+ Full-year total company revenue up 6% / organic revenue up 5%
+ Fourth-quarter total company revenue up 6% / organic revenue up 6%
o Organic revenue up 7% for the "Big 3" (Legal Professionals,
Corporates, and Tax & Accounting Professionals)
* Global Legal, Tax, Risk, Fraud & Compliance markets continue to be robust,
providing a tailwind
* Raised 2022/2023 guidance for organic revenue growth, adjusted EBITDA
margin and free cash flow
* Change Program on track - $217 million run-rate operating expense savings
at year-end
* Increased annualized dividend per share by 10% (29th consecutive annual
increase/largest increase since 2008)
"The momentum we saw in the first nine months of the year continued in the
fourth quarter. Revenue and sales growth were again strong and exceeded our
expectations, enabling us to finish the year on a solid footing. Our
performance has increased momentum moving into 2022, helping to build
confidence as we work to achieve our higher 2022 and 2023 targets," said Steve
Hasker, President and CEO of Thomson Reuters.
Mr. Hasker added, "Our professional markets continue to grow helped by a
significant global shift by customers to upgrade Legal, Tax and Risk, Fraud and
Compliance products. Our products are proving well suited to enable them to
effectively serve their clients. We are targeting investment in products that
are driving faster growth and where we have strong positions in growing
markets, and we continue to look to supplement organic growth with targeted
acquisitions that can bolster our positions and where we are an advantaged
owner. We look forward to continued progress in 2022 as we work to further
strengthen our positions across our businesses."
Consolidated Financial Highlights - Three Months Ended December 31
Three Months Ended December 31,
(Millions of U.S. dollars, except for adjusted EBITDA margin and EPS)
(unaudited)
IFRS Financial Measures(1) 2021 2020 Change Change at
Constant
Currency
Revenues $1,710 $1,616 6%
Operating profit $257 $956 -73%
Diluted (loss) earnings per share (EPS) $(0.36) $1.13 n/m
Net cash provided by operating activities $397 $566 -30%
Non-IFRS Financial Measures(1)
Revenues $1,710 $1,616 6% 6%
Adjusted EBITDA $452 $525 -14% -14%
Adjusted EBITDA margin 26.4% 32.5% -610bp -610bp
Adjusted EPS $0.43 $0.54 -20% -20%
Free cash flow $255 $449 -43%
(1) In addition to results reported in accordance with International
Financial Reporting Standards (IFRS), the company uses certain non-IFRS
financial measures as supplemental indicators of its operating performance and
financial position. See "Non-IFRS Financial Measures" section and the tables
appended to this news release for additional information on these and other
non-IFRS financial measures, including how they are defined and reconciled to
the most directly comparable IFRS measures.
n/m: not meaningful
Revenues increased 6%, before and after the impact of foreign currency, driven
by growth across four of the company's five business segments.
* Organic revenues increased 6%, driven by 6% growth in recurring revenues
(80% of total revenues), as well as 16% growth in transactions revenues.
Global Print revenues declined 4%.
* The company's "Big 3" segments (Legal Professionals, Corporates and Tax &
Accounting Professionals) reported organic revenue growth of 7% and
collectively comprised 79% of total revenues.
Operating profit decreased 73%, primarily because the prior year included
significant gains from the sale of an investment and an amendment to a pension
plan. Additionally, higher revenues were more than offset by higher costs,
primarily related to investments associated with the company's Change Program
and higher performance bonus expense. Information regarding the Change Program
is provided later in this news release.
Fourth-quarter costs also included a $25 million investment to better position
the business for 2022, which was allocated to go-to-market and product
development initiatives, and data and analytics tools to improve the customer
experience.
* Adjusted EBITDA, which excludes the gains from the sale of the investment
and the pension plan amendment among other items, declined 14% as higher
revenues were more than offset by higher costs. The related margin
decreased to 26.4% from 32.5% primarily due to higher costs, including
those associated with the Change Program, which negatively impacted the
margin by 470bp.
Diluted loss per share was $0.36 compared to diluted earnings per share of
$1.13 in the prior-year period due to lower operating profit and a decrease in
value of the company's LSEG investment, which is discussed in more detail in
the "London Stock Exchange Group (LSEG) Ownership Interest" section of this
news release.
* Adjusted EPS, which excludes the change in value of the company's LSEG
investment, as well as other adjustments, decreased to $0.43 per share from
$0.54 per share in the prior-year period primarily due to lower adjusted
EBITDA. Adjusted EPS was $0.04 lower due to the $25 million of additional
investment previously noted.
Net cash provided by operating activities decreased as higher revenues were
more than offset by higher expenses, which included Change Program costs, and
unfavorable movements in working capital.
* Free cash flow decreased $194 million due to lower cash flow from operating
activities.
Highlights by Customer Segment - Three Months Ended December 31
(Millions of U.S. dollars, except for adjusted EBITDA margins)
(unaudited)
Three Months Change
Ended
December 31,
2021 2020 Total Constant Organic(1)
Currency (2)
(1)
Revenues
Legal Professionals $689 $653 5% 5% 6%
Corporates 361 338 7% 7% 7%
Tax & Accounting 309 285 9% 9% 9%
Professionals
"Big 3" Segments Combined(1) 1,359 1,276 6% 7% 7%
Reuters News 182 164 11% 12% 12%
Global Print 170 177 -4% -4% -4%
Eliminations/Rounding (1) (1)
Revenues $1,710 $1,616 6% 6% 6%
Adjusted EBITDA(1)
Legal Professionals $239 $245 -3% -2%
Corporates 95 105 -10% -10%
Tax & Accounting 154 145 6% 7%
Professionals
"Big 3" Segments Combined(1) 488 495 -2% -1%
Reuters News 15 6 139% 107%
Global Print 61 61 0% -1%
Corporate costs (112) (37) n/a n/a
Adjusted EBITDA $452 $525 -14% -14%
Adjusted EBITDA Margin(1)
Legal Professionals 34.5% 37.5% -300bp -270bp
Corporates 26.3% 31.1% -480bp -480bp
Tax & Accounting 49.8% 51.1% -130bp -120bp
Professionals
"Big 3" Segments Combined(1) 35.8% 38.8% -300bp -280bp
Reuters News 8.3% 3.9% 440bp 450bp
Global Print 35.9% 34.6% 130bp 110bp
Corporate costs n/a n/a n/a n/a
Adjusted EBITDA margin 26.4% 32.5% -610bp -610bp
(1) See "Non-IFRS Financial Measures" section and the tables appended to
this news release for additional information on these and other non-IFRS
financial measures.
(2) Computed for revenue growth only.
n/a: not applicable
Unless otherwise noted, all revenue growth comparisons by customer segment in
this news release are at constant currency (or exclude the impact of foreign
currency) as Thomson Reuters believes this provides the best basis to measure
their performance.
Legal Professionals
Revenues increased 5% (6% organic) to $689 million.
* Recurring revenues grew 5% (93% of total, 6% organic), primarily due to
strong performances from Practical Law, Elite, FindLaw and the Government
business, as well as contributions from the company's Canadian, European
and Latin American businesses.
* Transactions revenues grew 4% (7% of total, 6% organic), primarily related
to the Elite, Government, and Asia and Emerging Markets businesses.
Adjusted EBITDA decreased 3% to $239 million.
* The margin decreased to 34.5% from 37.5%, primarily due to higher
performance bonus expense.
Corporates
Revenues increased 7% (all organic) to $361 million.
* Recurring revenues grew 7% (87% of total, all organic) driven by Practical
Law, Indirect Tax, CLEAR and Legal software, as well as the company's
businesses in Latin America.
* Transactions revenues grew 4% (13% of total, all organic).
Adjusted EBITDA decreased 10% to $95 million.
* The margin decreased to 26.3% from 31.1%, primarily due to higher
performance bonus expense.
Tax & Accounting Professionals
Revenues increased 9% (all organic) to $309 million.
* Recurring revenues grew 9% (89% of total, all organic), driven by strong
growth from Audit Solutions, Tax Compliance and the company's Latin America
businesses.
* Transactions revenues increased 10% (11% of total, all organic).
Adjusted EBITDA increased 6% to $154 million.
* The margin decreased to 49.8% from 51.1%, primarily due to higher
performance bonus expense.
The Tax & Accounting Professionals segment is the company's most seasonal
business with approximately 60% of full-year revenues typically generated in
the first and fourth quarters. As a result, the margin performance of this
segment has been generally higher in the first and fourth quarters as costs are
typically incurred in a more linear fashion throughout the year.
Reuters News
Revenues of $182 million increased 12% (all organic), driven by growth in all
businesses, including Reuters Events as it continues to recover from the
negative impact from COVID-19 in 2020.
Adjusted EBITDA increased 139% to $15 million, primarily due to higher
revenues.
Global Print
Revenues decreased 4% to $170 million.
Adjusted EBITDA was unchanged from the prior-year period at $61 million.
* The margin increased to 35.9% from 34.6% due to year-over-year timing of
expenses.
Corporate Costs
Corporate costs at the adjusted EBITDA level were $112 million and included $78
million of Change Program costs. Corporate costs were $37 million in the
prior-year period. Additional information regarding the Change Program is
provided below.
Consolidated Financial Highlights - Year Ended December 31
Year Ended December 31,
(Millions of U.S. dollars, except for adjusted EBITDA margin and EPS)
(unaudited)
IFRS Financial Measures(1) 2021 2020 Change Change at
Constant
Currency
Revenues $6,348 $5,984 6%
Operating profit $1,242 $1,929 -36%
Diluted earnings per share (EPS) $11.50 $2.25 n/m
Net cash provided by operating activities $1,773 $1,745 2%
Non-IFRS Financial Measures(1)
Revenues $6,348 $5,984 6% 5%
Adjusted EBITDA $1,970 $1,975 0% -1%
Adjusted EBITDA margin 31.0% 33.0% -200bp -190bp
Adjusted EPS $1.95 $1.85 5% 5%
Free cash flow $1,256 $1,330 -6%
(1) In addition to results reported in accordance with IFRS, the company
uses certain non-IFRS financial measures as supplemental indicators of its
operating performance and financial position. See "Non-IFRS Financial Measures"
section and the tables appended to this news release for additional information
on these and other non-IFRS financial measures, including how they are defined
and reconciled to the most directly comparable IFRS measures.
n/m: not meaningful
Revenues increased 6% driven by growth in recurring and transactions revenues
and a 1% favorable impact from foreign currency.
* Organic revenues increased 5%, primarily due to 5% growth in recurring
revenues (79% of total revenues), as well as 13% growth in transactions
revenues. Global Print revenues declined.
+ Organic growth of 5% included an approximate 100bp benefit resulting
from easier year-over-year comparisons due to the negative impact of
COVID-19 on the business in 2020.
* The company's "Big 3" segments, which collectively comprised 80% of total
revenues, reported organic revenue growth of 6%.
Operating profit declined 36%, primarily because the prior year included
significant gains from the sale of an investment and from an amendment to a
pension plan.
* Adjusted EBITDA, which excludes the gains from the sale of the investment
and the pension plan amendment among other items, was unchanged on a
year-over-year basis as higher revenues were offset by higher costs, which
included investments associated with the company's Change Program and
higher performance bonus expense. The related margin decreased to 31.0%
from 33.0% in the prior year. Adjusted EBITDA margin was negatively
impacted by 290bp due to Change Program costs.
Diluted EPS increased to $11.50 per share from $2.25 per share in the prior
year due to the gain on the sale of Refinitiv to LSEG in January 2021.
* Adjusted EPS, which excludes the gain on the sale of Refinitiv and other
adjustments, increased to $1.95 per share from $1.85 per share in the prior
year, primarily due to lower depreciation and software amortization and
lower income tax expense.
Net cash provided by operating activities increased as higher revenues more
than offset higher tax payments and expenses, which included Change Program
costs.
* Free cash flow decreased by $74 million as higher cash flows from operating
activities were more than offset by a prior-year benefit from the proceeds
associated with the sale of real estate.
Highlights by Customer Segment - Year Ended December 31
(Millions of U.S. dollars, except for adjusted EBITDA margins)
(unaudited)
Year Ended Change
December
31,
2021 2020 Total Constant Organic(1)
Currency(1) (2)
Revenues
Legal Professionals $2,712 $2,535 7% 6% 6%
Corporates 1,449 1,367 6% 5% 5%
Tax & Accounting 906 836 8% 9% 9%
Professionals
"Big 3" Segments Combined(1) 5,067 4,738 7% 6% 6%
Reuters News 674 628 7% 7% 7%
Global Print 609 620 -2% -3% -3%
Eliminations/Rounding (2) (2)
Revenues $6,348 $5,984 6% 5% 5%
Adjusted EBITDA(1)
Legal Professionals $1,091 $1,001 9% 7%
Corporates 502 460 9% 9%
Tax & Accounting 373 330 13% 13%
Professionals
"Big 3" Segments Combined(1) 1,966 1,791 10% 9%
Reuters News 103 73 40% 51%
Global Print 226 242 -7% -8%
Corporate costs (325) (131) n/a n/a
Adjusted EBITDA $1,970 $1,975 0% -1%
Adjusted EBITDA Margin(1)
Legal Professionals 40.2% 39.5% 70bp 50bp
Corporates 34.6% 33.7% 90bp 100bp
Tax & Accounting 41.1% 39.5% 160bp 170bp
Professionals
"Big 3" Segments Combined(1) 38.8% 37.8% 100bp 90bp
Reuters News 15.2% 11.7% 350bp 500bp
Global Print 37.1% 39.0% -190bp -210bp
Corporate costs n/a n/a n/a n/a
Adjusted EBITDA margin 31.0% 33.0% -200bp -190bp
(1) See "Non-IFRS Financial Measures" section and the tables appended to
this news release for additional information on these and other non-IFRS
financial measures.
(2) Computed for revenue growth only.
n/a: not applicable
Thomson Reuters Change Program and Outlook
In February 2021, the company announced a two-year Change Program to transition
from a holding company to an operating company, and from a content provider to
a content-driven technology company. The company is 12 months into the program,
which is expected to be largely complete by the end of 2022. The program is
projected to require an investment of approximately $600 million during that
time of which $295 million was invested in 2021.
The company's updated outlook for 2022 and 2023 incorporates the forecasted
impacts associated with the Change Program, assumes constant currency rates,
and excludes the impact of any future acquisitions or dispositions that may
occur during those periods. Thomson Reuters believes that this type of guidance
provides useful insight into the performance of its businesses. The company
expects its first-quarter 2022 revenue growth rate and adjusted EBITDA margin
will be comparable to its full-year 2022 outlook targets.
While the company's full-year 2021 performance provides it with increasing
confidence about its outlook, the global economy has recently experienced
substantial disruption due to concerns regarding resurgences and new strains of
COVID-19, measures intended to mitigate the pandemic's impact, and other events
and macroeconomic factors. Any worsening of the global economic or business
environment could impact the company's ability to achieve its outlook.
Reported Full-Year 2021 and Updated Full-Year 2022 - 2023 Outlook
Total Thomson Reuters FY 2021 2/23/21 2/23/21 2/8/22 2/8/22
Reported FY 2022 FY 2023 FY 2022 FY 2023
Outlook Outlook Outlook Outlook
Total Revenue Growth 6.1% 4.0% - 5.0% 5.0% - 6.0% 5% 5.5% - 6.0%
Organic Revenue Growth 5.2% 4.0% - 5.0% 5.0% - 6.0% 5% 5.5% - 6.0%
(1)
Adjusted EBITDA Margin 31.0% 34% - 35% 38% - 40% 35% 39% - 40%
(1)
Corporate Costs $325 $245 - $280 $110 - $120 $280 - $330 Unchanged
Core Corporate million million million million Unchanged
Costs $142 $120 - $130 $110 - $120 Unchanged Unchanged
Change Program million million million $160 - $200
Opex $183 $125 - $150 $0 million
million million
Free Cash Flow(1) $1.3 $1.2 - $1.3 $1.8 - $2.0 $1.3 $1.9 -
billion billion billion billion $2.0
billion
Accrued Capex as % of 8.5% 7.5% - 8.0% 6.0% - 6.5% Unchanged Unchanged
Revenue(1) $112 $75 - $100 $0 $100 - $140 Unchanged
Change Program million million million
Accrued Capex
Depreciation & $651 $620 - $645 $580 - $605 Unchanged Unchanged
Amortization of million million million
Computer Software
Interest Expense (P&L) $196 $190 - $210 $190 - $210 Unchanged Unchanged
million million million
Effective Tax Rate on 13.9% n/a n/a 19% - 21% n/a
Adjusted Earnings(1)
"Big 3"(1) FY 2021 2/23/21 2/23/21 2/8/22 2/8/22
Reported FY 2022 FY 2023 FY 2022 FY 2023
Outlook Outlook Outlook Outlook
Total Revenue Growth 6.9% 5.5% - 6.5% 6.0% - 7.0% 6.0% - 6.5% 6.5% - 7.0%
Organic Revenue Growth 6.2% 5.5% - 6.5% 6.0% - 7.0% 6.0% - 6.5% 6.5% - 7.0%
Adjusted EBITDA Margin 38.8% 41% - 42% 43% - 45% 42% 44% - 45%
(1) Non-IFRS financial measures. See the "Non-IFRS Financial Measures" section
below as well as the tables and footnotes appended to this news release for
more information.
The information in this section is forward-looking. Actual results, which will
include the impact of currency and future acquisitions and dispositions
completed during 2022 and 2023, may differ materially from the company's
outlook. The information in this section should also be read in conjunction
with the section below entitled "Special Note Regarding Forward-Looking
Statements, Material Risks and Material Assumptions."
Dividends and Share Repurchases
The company announced today that its Board of Directors approved a 10% or $0.16
per share annualized increase in the dividend to $1.78 per common share,
representing the 29th consecutive year of dividend increases. A quarterly
dividend of $0.445 per share is payable on March 15, 2022 to common
shareholders of record as of February 24, 2022.
In the fourth quarter of 2021, the company completed a previously announced
plan to buy back up to $1.2 billion of its common shares. This buyback program
was in addition to the $200 million repurchase program that was completed
earlier in 2021. As of February 7, 2022, Thomson Reuters had approximately
486.2 million common shares outstanding.
In 2021, Thomson Reuters returned a total of $2.2 billion of cash to
shareholders through dividends and share repurchases.
London Stock Exchange Group (LSEG) Ownership Interest
In January 2021, Thomson Reuters and private equity funds affiliated with
Blackstone sold Refinitiv to LSEG in an all-share transaction. Thomson Reuters
indirectly owns LSEG shares through an entity that it jointly owns with
Blackstone's consortium and a group of current LSEG and former Refinitiv senior
management.
As of February 7, 2022, Thomson Reuters indirectly owned approximately 72.4
million LSEG shares which had a market value of approximately $7.0 billion
based on LSEG's closing share price on that day. The company received $51
million of dividends from its LSEG investment in June 2021 and an additional
$24 million in October 2021.
In March 2021, as permitted under a lock-up exception, Thomson Reuters sold
approximately 10.1 million LSEG shares for pre-tax net proceeds of $994
million. Over the course of 2021, Thomson Reuters paid $223 million of tax on
the sale of these shares and used the after-tax proceeds to pay $627 million of
tax that became payable when the Refinitiv sale closed. In 2021, the company
paid $850 million of taxes related to these transactions.
Thomson Reuters
Thomson Reuters is a leading provider of business information services. Our
products include highly specialized information-enabled software and tools for
legal, tax, accounting and compliance professionals combined with the world's
most global news service - Reuters. For more information on Thomson Reuters,
visit tr.com and for the latest world news, reuters.com.
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its financial statements in accordance with
International Financial Reporting Standards (IFRS), as issued by the
International Accounting Standards Board (IASB).
This news release includes certain non-IFRS financial measures, which include
ratios that incorporate one or more non-IFRS financial measures, such as
adjusted EBITDA and the related margin (other than at the customer segment
level), free cash flow, adjusted EPS, accrued capital expenditures expressed as
a percentage of revenues, selected measures excluding the impact of foreign
currency, changes in revenues computed on an organic basis as well as all
financial measures for the "Big 3". Thomson Reuters uses these non-IFRS
financial measures as supplemental indicators of its operating performance and
financial position as well as for internal planning purposes and the company's
business outlook. Additionally, Thomson Reuters uses non-IFRS measures as the
basis for management incentive programs. These measures do not have any
standardized meanings prescribed by IFRS and therefore are unlikely to be
comparable to the calculation of similar measures used by other companies and
should not be viewed as alternatives to measures of financial performance
calculated in accordance with IFRS. Non-IFRS financial measures are defined and
reconciled to the most directly comparable IFRS measures in the appended
tables.
The company's outlook contains various non-IFRS financial measures. The company
believes that providing reconciliations of forward-looking non-IFRS financial
measures in its outlook would be potentially misleading and not practical due
to the difficulty of projecting items that are not reflective of ongoing
operations in any future period. The magnitude of these items may be
significant. Consequently, for outlook purposes only, the company is unable to
reconcile these non-IFRS measures to the most directly comparable IFRS measures
because it cannot predict, with reasonable certainty, the 2022 and 2023 impacts
of changes in foreign exchange rates which impact (i) the translation of its
results reported at average foreign currency rates for the year, and (ii) other
finance income or expense related to intercompany financing arrangements.
Additionally, the company cannot reasonably predict (i) its share of post-tax
earnings (losses) in equity method investments, which is subject to changes in
the stock price of LSEG or (ii) the occurrence or amount of other operating
gains and losses that generally arise from business transactions that the
company does not currently anticipate.
ROUNDING
Other than EPS, the company reports its results in millions of U.S. dollars,
but computes percentage changes and margins using whole dollars to be more
precise. As a result, percentages and margins calculated from reported amounts
may differ from those presented, and growth components may not total due to
rounding.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL RISKS AND MATERIAL
ASSUMPTIONS
Certain statements in this news release, including, but not limited to,
statements in Mr. Hasker's comments and the "Thomson Reuters Change Program and
Outlook" section, are forward-looking. The words "will", "expect", "believe",
"target", "estimate", "could", "should", "intend", "predict", "project" and
similar expressions identify forward-looking statements. While the company
believes that it has a reasonable basis for making forward-looking statements
in this news release, they are not a guarantee of future performance or
outcomes and there is no assurance that any of the other events described in
any forward-looking statement will materialize. Forward-looking statements are
subject to a number of risks, uncertainties and assumptions that could cause
actual results or events to differ materially from current expectations. Many
of these risks, uncertainties and assumptions are beyond the company's control
and the effects of them can be difficult to predict.
Some of the material risk factors that could cause actual results or events to
differ materially from those expressed in or implied by forward-looking
statements in this news release include, but are not limited to, those
discussed on pages 16-30 in the "Risk Factors" section of the company's 2020
annual report. A "Risk Factors" section will also be included in the company's
2021 annual report, which the company plans to file in March. These and other
risk factors are discussed in materials that Thomson Reuters from time-to-time
files with, or furnishes to, the Canadian securities regulatory authorities and
the U.S. Securities and Exchange Commission (SEC). Thomson Reuters annual and
quarterly reports are also available in the "Investor Relations" section of
tr.com.
The company's business outlook is based on information currently available to
the company and is based on various external and internal assumptions made by
the company in light of its experience and perception of historical trends,
current conditions and expected future developments, as well as other factors
that the company believes are appropriate under the circumstances. Material
assumptions and material risks may cause actual performance to differ from the
company's expectations underlying its business outlook. For a discussion of
material assumptions and material risks related to the company's 2022 and 2023
updated outlook, please see pages 22-23 of the company's third-quarter
management's discussion and analysis (MD&A) for the period ended September 30,
2021. In addition to those material assumptions and material risks, material
assumptions related to the company's updated 2022 and 2023 outlook include the
following updates: (i) the company's revenue outlook now assumes that there
will be improved global economic conditions throughout 2022 and 2023, despite
periods of volatility due to disruption caused by COVID-19, measures intended
to mitigate the pandemic's impact, and other events and macroeconomic factors;
(ii) the company's adjusted EBITDA margin outlook assumes Change Program
operating expenditures between $160 million and $200 million in 2022; (iii) the
company's free cash flow outlook now assumes accrued capital expenditures
between 7.5% and 8% of revenues in 2022 and between 6% and 6.5% of revenues in
2023; and (iv) the company's effective tax rate on adjusted earnings outlook
now assumes (a) the mix of taxing jurisdictions where the company recognized
pre-tax profit or losses in 2021 does not significantly change; (b) there will
be minimal changes in tax laws and treaties within the jurisdictions where the
company operates; (c) the imposition of minimum taxes in various jurisdictions;
(d) no significant benefits from the finalization of prior tax years; (e)
depreciation and amortization of computer software between $620 million and
$645 million in 2022; and (f) interest expense between $190 million and $210
million in 2022. Material assumptions and material risks related to the
company's outlook will also be included in the company's 2021 annual report,
which the company plans to file in March. The company's quarterly MD&A and
annual report are filed with, or furnished to, the Canadian securities
regulatory authorities and the U.S. SEC and are also available in the "Investor
Relations" section of tr.com.
The company has provided an updated Outlook for the purpose of presenting
information about current expectations for the periods presented. This
information may not be appropriate for other purposes. You are cautioned not to
place undue reliance on forward-looking statements which reflect expectations
only as of the date of this news release.
Except as may be required by applicable law, Thomson Reuters disclaims any
obligation to update or revise any forward-looking statements.
CONTACTS
MEDIA INVESTORS
Melissa Cassar Frank J. Golden
Head of Commercial Communications & Corporate Head of Investor Relations
Affairs +1 332 219 1111
+1 437 388 3619 frank.golden@tr.com
melissa.cassar@tr.com
Thomson Reuters will webcast a discussion of its fourth-quarter and full-year
2021 results and its two-year business outlook today beginning at 9:00 a.m.
Eastern Standard Time (EST). You can access the webcast by visiting ir.tr.com.
An archive of the webcast will be available following the presentation.
Thomson Reuters Corporation
Consolidated Income Statement
(millions of U.S. dollars, except per share data)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
2021 2020 2021 2020
CONTINUING OPERATIONS
Revenues $1,710 $1,616 $6,348 $5,984
Operating expenses (1,256) (1,098) (4,370) (3,999)
Depreciation (49) (40) (177) (184)
Amortization of computer (118) (123) (474) (485)
software
Amortization of other (29) (31) (119) (123)
identifiable intangible
assets
Other operating (losses) (1) 632 34 736
gains, net
Operating profit 257 956 1,242 1,929
Finance costs, net:
Net interest expense (50) (49) (196) (195)
Other finance (costs) (22) (6) 8 30
income
Income before tax and equity 185 901 1,054 1,764
method investments
Share of post-tax (losses) (477) (159) 6,240 (544)
earnings in equity method
investments
Tax benefit (expense) 115 (155) (1,607) (71)
(Loss) earnings from (177) 587 5,687 1,149
continuing operations
Earnings (loss) from 2 (25) 2 (27)
discontinued operations, net
of tax
Net (loss) earnings $(175) $562 $5,689 $1,122
(Loss) earnings attributable $(175) $562 $5,689 $1,122
to common shareholders
Earnings (loss) per share:
Basic (loss) earnings per
share:
From continuing operations $(0.36) $1.18 $11.52 $2.31
From discontinued - (0.05) 0.01 (0.06)
operations
Basic (loss) earnings per $(0.36) $1.13 $11.53 $2.25
share
Diluted (loss) earnings per
share:
From continuing operations $(0.36) $1.18 $11.50 $2.30
From discontinued - (0.05) - (0.05)
operations
Diluted (loss) earnings per $(0.36) $1.13 $11.50 $2.25
share
Basic weighted-average common 487,297,738 497,372,688 493,444,031 496,722,292
shares
Diluted weighted-average 487,297,738 498,809,560 494,504,504 498,032,006
common shares
Thomson Reuters Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited)
December 31, December 31,
2021 2020
Assets
Cash and cash equivalents $778 $1,787
Trade and other receivables 1,057 1,151
Other financial assets 108 612
Prepaid expenses and other current assets 510 425
Current assets 2,453 3,975
Property and equipment, net 502 545
Computer software, net 822 830
Other identifiable intangible assets, net 3,331 3,427
Goodwill 5,940 5,976
Equity method investments 6,736 1,136
Other non-current assets 1,226 788
Deferred tax 1,139 1,204
Total assets $22,149 $17,881
Liabilities and equity
Liabilities
Payables, accruals and provisions $1,363 $1,159
Current tax liabilities 169 251
Deferred revenue 874 866
Other financial liabilities 175 376
Current liabilities 2,581 2,652
Long-term indebtedness 3,786 3,772
Provisions and other non-current liabilities 943 1,083
Deferred tax 1,005 394
Total liabilities 8,315 7,901
Equity
Capital 5,496 5,458
Retained earnings 9,149 5,211
Accumulated other comprehensive loss (811) (689)
Total equity 13,834 9,980
Total liabilities and equity $22,149 $17,881
Thomson Reuters Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
Three Months Year Ended
Ended December 31,
December 31,
2021 2020 2021 2020
Cash provided by (used in):
Operating activities
(Loss) earnings from continuing operations $(177) $587 $5,687 $1,149
Adjustments for:
Depreciation 49 40 177 184
Amortization of computer software 118 123 474 485
Amortization of other identifiable intangible 29 31 119 123
assets
Share of post-tax losses (earnings) in equity 477 159 (6,240) 544
method investments
Net gains on disposals of businesses and - (472) (5) (471)
investments
Deferred tax (108) (41) 662 (231)
Other 74 (106) 135 (123)
Changes in working capital and other items (69) 249 832 102
Operating cash flows from continuing operations 393 570 1,841 1,762
Operating cash flows from discontinued 4 (4) (68) (17)
operations
Net cash provided by operating activities 397 566 1,773 1,745
Investing activities
Acquisitions, net of cash acquired (13) (2) (18) (167)
Proceeds from disposals of businesses and - 366 28 367
investments, net of
taxes paid
Dividend from sale of LSEG shares - - 994 -
Capital expenditures (123) (100) (487) (504)
Proceeds from disposals of property and - - - 162
equipment
Other investing activities 25 2 81 4
Taxes paid on sale of Refinitiv and LSEG shares (188) - (850) -
Investing cash flows from continuing operations (299) 266 (252) (138)
Investing cash flows from discontinued - - (252) -
operations
Net cash (used in) provided by investing (299) 266 (504) (138)
activities
Financing activities
Proceeds from debt - - - 2,019
Repayments of debt - - - (1,645)
Net repayments under short-term loan facilities - - - (2)
Payments of lease principal (44) (19) (109) (75)
Repurchases of common shares (597) - (1,400) (200)
Dividends paid on preference shares - - (2) (2)
Dividends paid on common shares (191) (183) (773) (730)
Other financing activities 3 1 11 (9)
Net cash used in financing activities (829) (201) (2,273) (644)
(Decrease) increase in cash and bank overdrafts (731) 631 (1,004) 963
Translation adjustments (2) 4 (5) (1)
Cash and bank overdrafts at beginning of period 1,511 1,152 1,787 825
Cash and bank overdrafts at end of period $778 $1,787 $778 $1,787
Cash and bank overdrafts at end of period
comprised of:
Cash and cash equivalents $778 $1,787 $778 $1,787
Thomson Reuters Corporation
Reconciliation of (Loss) Earnings from Continuing Operations to Adjusted EBITDA
(1)
(millions of U.S. dollars, except for margins)
(unaudited)
Three Months Year Ended
Ended
December 31, December 31,
2021 2020 2021 2020
(Loss) earnings from continuing operations $(177) $587 $5,687 $1,149
Adjustments to remove:
Tax (benefit) expense (115) 155 1,607 71
Other finance costs (income) 22 6 (8) (30)
Net interest expense 50 49 196 195
Amortization of other identifiable intangible 29 31 119 123
assets
Amortization of computer software 118 123 474 485
Depreciation 49 40 177 184
EBITDA $(24) $991 $8,252 $2,177
Adjustments to remove:
Share of post-tax losses (earnings) in equity 477 159 (6,240) 544
method investments
Other operating losses (gains), net 1 (632) (34) (736)
Fair value adjustments* (2) 7 (8) (10)
Adjusted EBITDA(1) $452 $525 $1,970 $1,975
Adjusted EBITDA margin(1) 26.4% 32.5% 31.0% 33.0%
* Fair value adjustments, a component of operating expenses, primarily
represent gains or losses due to changes in foreign currency exchange rates on
intercompany balances that arise in the ordinary course of business.
Thomson Reuters Corporation
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
(1)
(millions of U.S. dollars)
(unaudited)
Three Months Year Ended
Ended
December 31, December 31,
2021 2020 2021 2020
Net cash provided by operating activities $397 $566 $1,773 $1,745
Capital expenditures (123) (100) (487) (504)
Proceeds from disposals of property and equipment - - - 162
Other investing activities 25 2 81 4
Payments of lease principal (44) (19) (109) (75)
Dividends paid on preference shares - - (2) (2)
Free cash flow(1) $255 $449 $1,256 $1,330
Thomson Reuters Corporation
Reconciliation of Capital Expenditures to Accrued Capital Expenditures(1)
(millions of U.S. dollars)
(unaudited)
Year Ended
December 31,
2021 2020
Capital expenditures $487 $504
Remove: IFRS adjustment to cash basis 54 (37)
Accrued capital expenditures (1) $541 $467
Accrued capital expenditures as a percentage of revenues(1) 8.5% 7.8%
(1) Refer to page 21 for additional information on non-IFRS financial
measures.
Thomson Reuters Corporation
Reconciliation of Net (Loss) Earnings to Adjusted Earnings(1)
Reconciliation of Total Change in Adjusted EPS(1) to Change in Constant
Currency(1)
(millions of U.S. dollars, except for share and per share data)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
2021 2020 Change 2021 2020 Change
Net (loss) earnings $ $562 $5,689 $1,122
(175)
Adjustments to remove:
Fair value adjustments* (2) 7 (8) (10)
Amortization of other identifiable 29 31 119 123
intangible assets
Other operating losses (gains), net 1 (632) (34) (736)
Other finance costs (income) 22 6 (8) (30)
Share of post-tax losses (earnings) 477 159 (6,240) 544
in equity method investments
Tax on above items(1) (141) 119 1,475 19
Tax items impacting comparability(1) (9) (29) (24) (136)
(Earnings) loss from discontinued (2) 25 (2) 27
operations, net of tax
Interim period effective tax rate 10 21 - -
normalization(1)
Dividends declared on preference - - (2) (2)
shares
Adjusted earnings(1) $210 $269 $965 $921
Adjusted EPS(1) $0.43 $0.54 -20% $1.95 $1.85 5%
Foreign currency 0% 1%
Constant currency -20% 5%
Diluted weighted-average common 488.6 498.8 494.5 498.0
shares (millions)**
* Fair value adjustments, a component of operating expenses, primarily
represent gains or losses due to changes in foreign currency exchange rates on
intercompany balances that arise in the ordinary course of business.
** Because Thomson Reuters reported a net loss for continuing operations under
IFRS for the three months ended December 31, 2021, the weighted-average number
of common shares used for basic and diluted loss per share is the same for all
per-share calculations in the period, as the effect of stock options and other
equity incentive awards would reduce the loss per share, and therefore be
anti-dilutive. Since the company's non-IFRS measure "adjusted earnings" is a
profit, potential common shares are included, as they lower adjusted EPS and
are therefore dilutive. The following table reconciles IFRS and non-IFRS common
share information:
(weighted-average common shares) Three
Months
Ended
December
31, 2021
IFRS: Basic and Diluted 487,297,738
Effect of stock options and other 1,291,196
equity incentive awards
Non-IFRS Diluted 488,588,934
(1) Refer to page 21 for additional information on non-IFRS financial measures.
Thomson Reuters Corporation
Reconciliation of Changes in Revenues to Changes in Revenues on a Constant
Currency(1) and Organic Basis(1)
(millions of U.S. dollars)
(unaudited)
Three Months Ended
December 31, Change
2021 2020 Total Foreign SUBTOTAL Acquisitions/ Organic
Currency Constant (Divestitures)
Currency
Total Revenues
Legal Professionals $689 $653 5% 0% 5% 0% 6%
Corporates 361 338 7% 0% 7% 0% 7%
Tax & Accounting 309 285 9% -1% 9% 0% 9%
Professionals
"Big 3" Segments Combined(1) 1,359 1,276 6% 0% 7% 0% 7%
Reuters News 182 164 11% -1% 12% 0% 12%
Global Print 170 177 -4% 0% -4% 0% -4%
Eliminations/Rounding (1) (1)
Revenues $1,710 $1,616 6% 0% 6% 0% 6%
Recurring Revenues
Legal Professionals $642 $608 6% 0% 5% 0% 6%
Corporates 314 293 7% 0% 7% 0% 7%
Tax & Accounting 276 255 9% 0% 9% 0% 9%
Professionals
"Big 3" Segments Combined(1) 1,232 1,156 7% 0% 7% 0% 7%
Reuters News 145 142 2% -1% 3% 0% 3%
Total Recurring Revenues $1,377 $1,298 6% 0% 6% 0% 6%
Transactions Revenues
Legal Professionals $47 $45 4% 0% 4% -2% 6%
Corporates 47 45 4% 0% 4% 0% 4%
Tax & Accounting 33 30 9% -1% 10% 0% 10%
Professionals
"Big 3" Segments Combined(1) 127 120 5% 0% 6% -1% 6%
Reuters News 37 22 66% 2% 64% 0% 64%
Total Transactions Revenues $164 $142 15% 0% 15% -1% 16%
Growth percentages are computed using whole dollars. As a result, percentages
calculated from reported amounts may differ from those presented, and growth
components may not total due to rounding.
(1) Refer to page 21 for additional information on non-IFRS financial measures.
Thomson Reuters Corporation
Reconciliation of Changes in Revenues to Changes in Revenues on a Constant
Currency(1) and Organic Basis(1)
(millions of U.S. dollars)
(unaudited)
Year Ended
December 31, Change
2021 2020 Total SUBTOTAL
Foreign Constant Acquisitions/
Currency Currency (Divestitures) Organic
Total Revenues
Legal Professionals $2,712 $2,535 7% 1% 6% 0% 6%
Corporates 1,449 1,367 6% 1% 5% 0% 5%
Tax & Accounting 906 836 8% 0% 9% 0% 9%
Professionals
"Big 3" Segments Combined(1) 5,067 4,738 7% 1% 6% 0% 6%
Reuters News 674 628 7% 1% 7% 0% 7%
Global Print 609 620 -2% 1% -3% 0% -3%
Eliminations/Rounding (2) (2)
Revenues $6,348 $5,984 6% 1% 5% 0% 5%
Recurring Revenues
Legal Professionals $2,523 $2,367 7% 1% 6% 0% 5%
Corporates 1,218 1,143 7% 1% 6% 0% 6%
Tax & Accounting 733 682 8% 0% 8% 0% 8%
Professionals
"Big 3" Segments Combined(1) 4,474 4,192 7% 1% 6% 0% 6%
Reuters News 576 566 2% 1% 1% 0% 1%
Total Recurring Revenues $5,050 $4,758 6% 1% 5% 0% 5%
Transactions Revenues
Legal Professionals $189 $168 13% 2% 11% -1% 12%
Corporates 231 224 3% 0% 3% 0% 3%
Tax & Accounting 173 154 12% 0% 12% 0% 12%
Professionals
"Big 3" Segments Combined(1) 593 546 9% 1% 8% 0% 8%
Reuters News 98 62 57% 2% 55% 0% 55%
Total Transactions Revenues $691 $608 14% 1% 13% 0% 13%
Growth percentages are computed using whole dollars. As a result, percentages
calculated from reported amounts may differ from those presented, and growth
components may not total due to rounding.
(1) Refer to page 21 for additional information on non-IFRS financial measures.
Thomson Reuters Corporation
Reconciliation of Changes in Adjusted EBITDA(1) to Changes on a Constant
Currency Basis(1)
(millions of U.S. dollars)
(unaudited)
Three Months Ended
December 31, Change
2021 2020 Total Foreign Constant
Currency Currency
Adjusted EBITDA(1)
Legal Professionals $239 $245 -3% 0% -2%
Corporates 95 105 -10% 0% -10%
Tax & Accounting Professionals 154 145 6% -1% 7%
"Big 3" Segments Combined(1) 488 495 -2% 0% -1%
Reuters News 15 6 139% 32% 107%
Global Print 61 61 0% 1% -1%
Corporate costs (112) (37) n/a n/a n/a
Adjusted EBITDA $452 $525 -14% 0% -14%
Adjusted EBITDA Margin(1)
Legal Professionals 34.5% 37.5% -300bp -30bp -270bp
Corporates 26.3% 31.1% -480bp 0bp -480bp
Tax & Accounting Professionals 49.8% 51.1% -130bp -10bp -120bp
"Big 3" Segments Combined(1) 35.8% 38.8% -300bp -20bp -280bp
Reuters News 8.3% 3.9% 440bp -10bp 450bp
Global Print 35.9% 34.6% 130bp 20bp 110bp
Corporate costs n/a n/a n/a n/a n/a
Adjusted EBITDA margin 26.4% 32.5% -610bp 0bp -610bp
n/a: not applicable
Growth percentages and margins are computed using whole dollars. As a result,
percentages and margins calculated from reported amounts may differ from those
presented, and growth components may not total due to rounding.
(1) Refer to page 21 for additional information on non-IFRS financial measures.
Thomson Reuters Corporation
Reconciliation of Changes in Adjusted EBITDA(1) to Changes on a Constant
Currency Basis(1)
(millions of U.S. dollars)
(unaudited)
Year Ended
December 31, Change
2021 2020 Total Foreign Constant
Currency Currency
Adjusted EBITDA(1)
Legal Professionals $1,091 $1,001 9% 2% 7%
Corporates 502 460 9% 0% 9%
Tax & Accounting Professionals 373 330 13% 0% 13%
"Big 3" Segments Combined(1) 1,966 1,791 10% 1% 9%
Reuters News 103 73 40% -11% 51%
Global Print 226 242 -7% 2% -8%
Corporate costs (325) (131) n/a n/a n/a
Adjusted EBITDA $1,970 $1,975 0% 0% -1%
Adjusted EBITDA Margin(1)
Legal Professionals 40.2% 39.5% 70bp 20bp 50bp
Corporates 34.6% 33.7% 90bp -10bp 100bp
Tax & Accounting Professionals 41.1% 39.5% 160bp -10bp 170bp
"Big 3" Segments Combined(1) 38.8% 37.8% 100bp 10bp 90bp
Reuters News 15.2% 11.7% 350bp -150bp 500bp
Global Print 37.1% 39.0% -190bp 20bp -210bp
Corporate costs n/a n/a n/a n/a n/a
Adjusted EBITDA margin 31.0% 33.0% -200bp -10bp -190bp
n/a: not applicable
Growth percentages and margins are computed using whole dollars. As a result,
percentages and margins calculated from reported amounts may differ from those
presented, and growth components may not total due to rounding.
(1) Refer to page 21 for additional information on non-IFRS financial measures.
Non-IFRS Definition Why Useful to the Company and
Financial Investors
Measures
Segment Earnings or losses from continuing Provides a consistent basis to
adjusted operations before tax expense or evaluate operating
EBITDA, benefit, net interest expense, profitability and performance
adjusted other finance costs or income, trends by excluding items that
EBITDA and depreciation, amortization of the company does not consider
adjusted software and other identifiable to be controllable activities
EBITDA intangible assets, Thomson Reuters for this purpose.
margin share of post-tax earnings or
losses in equity method Also, represents a measure
investments, other operating gains commonly reported and widely
and losses, certain asset used by investors as a
impairment charges, fair value valuation metric, as well as to
adjustments and corporate related assess a company's ability to
items. incur and service debt.
Consolidated adjusted EBITDA is
comprised of adjusted EBITDA of
the business segments and
corporate costs.
Adjusted EBITDA margin is adjusted
EBITDA expressed as a percentage
of revenues.
Adjusted Net earnings or loss including Provides a more comparable
earnings and dividends declared on preference basis to analyze earnings.
adjusted shares but excluding the post-tax
earnings per impacts of fair value adjustments, These measures are commonly
share amortization of other identifiable used by shareholders to measure
intangible assets, other operating the company's performance.
gains and losses, certain asset
impairment charges, other finance
costs or income, Thomson Reuters
share of post-tax earnings or
losses in equity method
investments, discontinued
operations and other items
affecting comparability.
The post-tax amount of each item
is excluded from adjusted earnings
based on the specific tax rules
and tax rates associated with the
nature and jurisdiction of each
item.
Adjusted EPS is calculated from
adjusted earnings using diluted
weighted-average shares and does
not represent actual earnings or
loss per share attributable to
shareholders.
Effective Adjusted tax expense divided by Provides a basis to analyze the
tax rate on pre-tax adjusted earnings. effective tax rate associated
adjusted Adjusted tax expense is computed with adjusted earnings.
earnings as Income tax (benefit) expense
plus or minus the income tax
impacts of all items impacting
adjusted earnings (as described Because the geographical mix of
above), and other tax items pre-tax profits and losses in
affecting comparability. interim periods may be
different from that for the
In interim periods, we also make full year, our effective tax
an adjustment to reflect income rate computed in accordance
taxes based on the estimated with IFRS may be more volatile
full-year effective tax rate. by quarter. Therefore, we
Earnings or losses for interim believe that using the expected
periods under IFRS reflect income full-year effective tax rate
taxes based on the estimated provides more comparability
effective tax rates of each of the among interim periods.
jurisdictions in which Thomson
Reuters operates. The non-IFRS
adjustment reallocates estimated
full-year income taxes between
interim periods but has no effect
on full-year income taxes.
Free cash Net cash provided by operating Helps assess the company's
flow activities, proceeds from ability, over the long term, to
disposals of property and create value for its
equipment, and other investing shareholders as it represents
activities less capital cash available to repay debt,
expenditures, payments of lease pay common dividends and fund
principal and dividends paid on share repurchases and
the company's preference shares. acquisitions.
Changes The changes in revenues, adjusted Provides better comparability
before the EBITDA and the related margins, of business trends from period
impact of and adjusted earnings per share to period.
foreign before currency (at constant
currency currency or excluding the effects
"constant of currency) are determined by
currency" converting the current and
prior-year period's local currency
equivalent using the same exchange
rates.
Organic Represents changes in revenues of Provides further insight into
revenue the company's existing businesses the performance of its existing
growth at constant currency. The metric businesses by excluding
excludes the distortive impacts of distortive impacts and serves
acquisitions and dispositions from as a better measure of the
not owning the business in both company's ability to grow its
comparable periods. business over the long term.
Accrued Accrued capital expenditures Reflects the basis on which the
capital divided by revenues, where accrued company manages capital
expenditures capital expenditures include expenditures for internal
as a amounts that remain unpaid at the budgeting purposes.
percentage end of the reporting period.
of revenues
Prior to December 31, 2021, the
company used capital expenditures
paid in this calculation, from its
consolidated statement of cash
flow, as measured under IFRS. The
prior period has been revised to
reflect the current methodology.
"Big 3" The combined Legal Professionals, Information for the "Big 3"
segments Corporates and Tax & Accounting segments comprise 80% of
Professionals segments. All revenues and represent the core
measures reported for the "Big 3" of the company's business
segments are non-IFRS financial information service product
measures. offerings.
Please refer to reconciliations for most directly comparable IFRS measures.
END
(END) Dow Jones Newswires
February 08, 2022 06:35 ET (11:35 GMT)
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