Thomson Reuters Reports First-Quarter 2018 Results

Transcription

1 TORONTO, May 11, 2018 Thmsn Reuters (TSX/NYSE: TRI) tday reprted results fr the first quarter ended The cmpany als issued a full-year 2018 Outlk fr its cntinuing peratins and annunced a new $500 millin share repurchase prgram. We are encuraged by the best first-quarter perfrmance in several years with each business having perfrmed at r abve ur expectatins, said Jim Smith, president and chief executive fficer f Thmsn Reuters. The health f ur Q1 results gives us even greater cnvictin in ur ability t stay fcused n the pprtunities at hand, while simultaneusly wrking quickly t clse the prpsed F&R/Blackstne partnership and prepare bth cmpanies fr future success. We are excited abut the ptential t further strengthen ur Legal and Tax businesses -- bth rganically and inrganically, with the financial wherewithal and flexibility t deliver fr ur custmers and sharehlders. Cnslidated Financial Highlights First Quarter 2018 Unless therwise nted, all results are frm cntinuing peratins and exclude the results f the cmpany's Financial & Risk (F&R) business unit. F&R is nw classified as a discntinued peratin, Reuters News is nw a reprtable segment and prir-year results have been restated accrdingly t reflect these changes. Please see the tables appended t this news release fr additinal infrmatin. On January 30, 2018, Thmsn Reuters annunced that it signed a definitive agreement t sell a 55% majrity stake in the F&R business and enter int a strategic partnership with private equity funds managed by Blackstne. Thmsn Reuters will receive apprximately $17 billin in grss prceeds at clsing (subject t purchase price adjustments) and will retain a 45% interest in the partnership. The transactin is expected t clse in the secnd half f 2018 and is subject t specified regulatry apprvals and custmary clsing cnditins. (Millins f U.S. dllars, except fr adjusted EBITDA margin and EPS) IFRS Financial Measures (1) Change Revenues $1,379 $1,331 4% Operating prfit $268 $274-2% Diluted (lss) earnings per share (EPS) (includes discntinued peratins) $(0.48) $0.41 n/m Cash flw frm peratins (includes discntinued peratins) $419 $(368) n/m Change at Cnstant Currency Nn-IFRS Financial Measures (1) Revenues $1,379 $1,331 4% 3% Adjusted EBITDA $430 $415 4% 3% Adjusted EBITDA margin 31.2% 31.2% 0bp 0bp Adjusted EPS $0.28 $ % 12% Free cash flw (includes discntinued peratins) $120 $(585) n/m n/m: nt meaningful (1) In additin t results reprted in accrdance with Internatinal Financial Reprting Standards (IFRS), the cmpany uses certain nn-ifrs financial measures as supplemental indicatrs f its perating perfrmance and financial psitin. These and ther nn-ifrs financial measures are defined and recnciled t the mst directly cmparable IFRS measures in the tables appended t this news release. Revenues increased 4% due t higher recurring revenues and a psitive impact frm freign currency. At cnstant currency, revenues increased 3%. Operating prfit decreased 2% due t the unfavrable impact f a prir-year perid gain n an investment. Adjusted EBITDA increased 4% and the margin was unchanged at 31.2%. Diluted lss per share reflects an $844 millin deferred tax charge assciated with the prpsed sale f a 55% interest in the cmpany s Financial & Risk business. The tax charge is required t be recrded when a business is first cnsidered held fr sale, rather than when the sale is cmpleted. The cmpany estimates that a cash tax

2 Page 2 f 14 payment f apprximately $300 millin will arise in 2018 in cnnectin with the clsing f the transactin and the remainder deferred until such time as the cmpany dispses f its 45% interest in the new partnership. Adjusted EPS, which excludes discntinued peratins, was $0.28 and increased 12%, r $0.03 per share, due t higher adjusted EBITDA and lwer interest expense. Cash flw frm peratins increased $787 millin primarily because the prir-year perid included a $500 millin pensin cntributin as well as severance payments. Free cash flw increased $705 millin reflecting similar factrs. Highlights by Business Unit March 31 (Millins f U.S. dllars, except fr adjusted EBITDA margins) Change Freign Currency Cnstant Currency Ttal Revenues Legal (1) $872 $841 4% 2% 2% Tax & Accunting % 0% 5% Reuters News % 4% -7% Eliminatins (2) (1) Revenues $1,379 $1,331 4% 1% 3% Adjusted EBITDA Legal (1) $319 $314 2% 1% 1% Tax & Accunting % -1% 5% Reuters News % 0% -38% Crprate (44) (53) n/a n/a n/a Adjusted EBITDA $430 $415 4% 1% 3% Adjusted EBITDA Margin Legal (1) 36.6% 37.3% -70bp -20bp -50bp Tax & Accunting 33.6% 33.8% -20bp -30bp 10bp Reuters News 11.1% 17.6% -650bp -60bp -590bp Crprate n/a n/a n/a n/a n/a Adjusted EBITDA margin 31.2% 31.2% 0bp 0bp 0bp n/a: nt applicable (1) Includes certain prtins f the Risk business (Regulatry Intelligence and Cmpliance Learning) that will be retained by the Legal segment in cnnectin with the prpsed sale f 55% f the F&R business. These businesses generated apprximately $69 millin f annual revenues in Unless therwise nted, all revenue grwth cmparisns by business unit in this news release are at cnstant currency (r exclude the impact f freign currency) as Thmsn Reuters believes this prvides the best basis t measure their perfrmance. Legal Revenues increased 2% t $872 millin. Recurring revenues grew 4% (73% f ttal) Print revenues declined 2% (18% f ttal) Transactins revenues declined 1% (9% f ttal) Adjusted EBITDA increased 2% t $319 millin. The margin decreased t 36.6% frm 37.3% due t prduct and marketing investments. In cnstant currency, the margin decreased 50 basis pints.

3 Page 3 f 14 Tax & Accunting Revenues increased 5% t $437 millin. Recurring revenues grew 8% (71% f ttal) Transactins revenues declined 1% (26% f ttal) Print revenues declined 7% (3% f ttal) Adjusted EBITDA increased 4% t $147 millin. The margin decreased t 33.6% frm 33.8%. In cnstant currency, the margin increased 10 basis pints. Reuters News Revenues decreased 7% t $72 millin due t a reductin in Agency spend, and a cntractual payment received in the first quarter f 2017, which created a difficult year-n-year cmparisn. When the F&R transactin clses, Reuters News and the new F&R partnership will enter int a 30-year agreement fr Reuters News t supply news and editrial cntent t the partnership fr a minimum amunt f $325 millin per year. Reuters News revenues will nt reflect F&R payments until after the transactin clses. Recurring revenues declined 6% (86% f ttal) Transactins revenues declined 9% (14% f ttal) Adjusted EBITDA decreased 38% t $8 millin. The margin decreased t 11.1% frm 17.6%. In cnstant currency, the margin decreased 590 basis pints due t lwer revenues. Crprate Crprate csts at the adjusted EBITDA level were $44 millin, cmpared t $53 millin in the prir-year perid, a decrease f 17%, largely timing related. Crprate csts are expected t increase ver the balance f the year as the cmpany expects t retain stranded csts (as previusly annunced) that will nt be eliminated with the sale f the 55% interest in F&R. These stranded csts are expected t decline t $50 millin r less by The cmpany als expects t incur cash csts and t make investments in 2018 and 2019 in the nging Thmsn Reuters business resulting frm the peratinal separatin f F&R frm the rest f the cmpany. These cash csts and investments are expected t be incurred ver the next tw years starting in the secnd quarter f 2018 and will be reflected in Crprate csts. Financial & Risk Discntinued Operatin (Millins f U.S. dllars, except fr adjusted EBITDA margin) Financial & Risk (Discntinued Operatins) (1) Change Freign Cnstant Ttal Currency Currency (2) Revenues $1,583 $1,485 7% 4% 3% Adjusted EBITDA % 5% 9% Adjusted EBITDA margin 33.2% 31.0% 220bp 20bp 200bp Cash flw frm peratins $210 $70 n/m Free cash flw (nn-ifrs measure) (2) $91 $(44) n/m Capital expenditures $108 $105 3% n/m: nt meaningful (1) Excludes certain prtins f the Risk business (Regulatry Intelligence and Cmpliance Learning) that will be retained by the Legal segment in cnnectin with the prpsed sale f 55% f the F&R business. These businesses generated apprximately $69 millin f annual revenues in (2) In additin t results reprted in accrdance with IFRS, the cmpany uses certain nn-ifrs financial measures as supplemental indicatrs f its perating perfrmance and financial psitin. These and ther nn-ifrs financial measures are defined and recnciled t the mst directly cmparable IFRS measures in the tables appended t this news release.

4 Page 4 f 14 Revenues increased 3% t $1.6 billin. Recurring revenues grew 1% (77% f ttal) Transactins revenues grew 14% (16% f ttal) Grwth was driven by increased market vlatility in the quarter. Recveries revenues decreased 5% (7% f ttal). Adjusted EBITDA increased 14% t $526 millin. The margin increased t 33.2% frm 31.0%. In cnstant currency, the margin increased 200 basis pints. Cash flw frm peratins increased $140 millin primarily due t higher earnings, excluding nn-cash items, and severance payments in the prir-year perid. Free cash flw increased $135 millin reflecting similar factrs. Dividend & Share Repurchases; Financial & Risk Transactin Prceeds Update In January 2018, the Thmsn Reuters bard f directrs apprved an annual dividend f $1.38 per cmmn share fr the year. A quarterly dividend f $0.345 per share is payable n June 15, 2018 t cmmn sharehlders f recrd as f May 17, The cmpany has nt repurchased any shares t date in Tday, the cmpany annunced that it may buy back up t $500 millin f its shares prir t the clsing f the prpsed Financial & Risk transactin under its nrmal curse issuer bid (NCIB). The cmpany's current NCIB expires later this mnth and the cmpany plans t renew its NCIB fr a new 12 mnth perid. Any repurchases under the NCIB prir t the clsing f the prpsed Financial & Risk transactin will reduce the size f a cntemplated pst-clsing substantial issuer bid/tender ffer made t all sharehlders, which may be at a premium t the then-current market price f the cmpany s shares. The cmpany currently expects t use between $9 billin and $10 billin f the estimated $17 billin f grss prceeds f the transactin t return capital t its sharehlders thrugh a substantial issuer bid/tender ffer. The cmpany's principal sharehlder (Wdbridge) is expected t participate pr rata in the substantial issuer bid/tender ffer. The price that Thmsn Reuters will pay fr shares in pen market transactins under its NCIB will be the market price at the time f purchase r such ther price as may be permitted by the Trnt Stck Exchange. The amunt f shares that Thmsn Reuters buys back under the new repurchase prgram will be dependent n the timing f the clsing f the transactin and ther factrs, such as market cnditins, share price and ther pprtunities t invest capital fr grwth. Thmsn Reuters may elect t suspend r discntinue share repurchases at any time, in accrdance with applicable laws. The cmpany nw expects t use between $3.0 billin and $4.0 billin f the prceeds frm the prpsed Financial & Risk transactin t repay debt. Therefre, the cmpany des nt anticipate the need t establish a dividend reinvestment plan (DRIP). As previusly disclsed, the cmpany intends t utilize the remaining $1.0 billin t $3.0 billin f prceeds t fund strategic, targeted acquisitins t blster its psitins in key grwth segments f its Legal and Tax businesses. The cmpany als expects t use between $1.5 billin and $2.5 billin fr: cash taxes, pensin cntributins, bnd redemptin csts, and ther fees and utflws related t the transactin. These funds include $500 millin t $600 millin f spend that the cmpany views as necessary t eliminate stranded csts as well as investments t re-psitin the cmpany fllwing the separatin f the businesses.

5 Page 5 f 14 Business Outlk 2018 (At Cnstant Currency) Thmsn Reuters tday prvided its Outlk fr The cmpany s 2018 Outlk assumes cnstant currency rates cmpared t 2017 and des nt factr in the impact f acquisitins r divestitures that may ccur, except fr the cmpany s planned sale f a 55% interest in the F&R business. F&R is cnsidered a discntinued peratin fr the full-year 2018 and is excluded frm the cmpany s 2018 Outlk. Fr the full-year 2018, the cmpany expects: Lw single-digit revenue grwth (excludes 2018 payment t Reuters News frm F&R fllwing the clsing f the transactin) Adjusted EBITDA t range between $1.2 billin - $1.3 billin (including the csts referred t belw) Ttal Crprate csts between $500 millin and $600 millin (including stranded csts and investments t repsitin the cmpany fllwing the separatin f the businesses) Depreciatin and Amrtizatin f cmputer sftware between $500 millin and $525 millin Capital expenditures f apprximately 10% f revenues Interest expense f apprximately $165 millin fr the first half f the year. The cmpany plans t prvide an utlk fr its secnd half interest expense at a later date as thse expenses are based n the clsing date f the F&R transactin Effective tax rate n adjusted earnings between 14% - 16% The infrmatin in this sectin is frward-lking and shuld be read in cnjunctin with the sectin belw entitled Special Nte Regarding Frward-Lking Statements, Material Assumptins and Material Risks. Thmsn Reuters Thmsn Reuters is the wrld s leading surce f news and infrmatin fr prfessinal markets. Our custmers rely n us t deliver the intelligence, technlgy and expertise they need t find trusted answers. The business has perated in mre than 100 cuntries fr mre than 100 years. Thmsn Reuters shares are listed n the Trnt and New Yrk Stck Exchanges (symbl: TRI). Fr mre infrmatin, visit NON-IFRS FINANCIAL MEASURES Thmsn Reuters prepares its financial statements in accrdance with Internatinal Financial Reprting Standards (IFRS), as issued by the Internatinal Accunting Standards Bard (IASB). This news release includes certain nn-ifrs financial measures, such as adjusted EBITDA and the related margin (ther than at the business unit r segment level), free cash flw, adjusted EPS, and selected measures excluding the impact f freign currency. Thmsn Reuters uses these nn-ifrs financial measures as supplemental indicatrs f its perating perfrmance and financial psitin. These measures d nt have any standardized meanings prescribed by IFRS and therefre are unlikely t be cmparable t the calculatin f similar measures used by ther cmpanies, and shuld nt be viewed as alternatives t measures f financial perfrmance calculated in accrdance with IFRS. Nn-IFRS financial measures are defined and recnciled t the mst directly cmparable IFRS measures in the appended tables. The term rganic refers t Thmsn Reuters existing businesses befre the impact f acquisitins. The cmpany's business utlk cntains varius nn-ifrs financial measures. Fr utlk purpses nly, the cmpany is unable t recncile these nn-ifrs measures t the mst cmparable IFRS measures because it cannt predict, with reasnable certainty, the 2018 impact f changes in freign exchange rates which impact (i) the translatin f its results reprted at average freign currency rates fr the year, and (ii) ther finance incme r expense related t freign exchange cntracts and intercmpany financing arrangements. Additinally, the cmpany cannt reasnably predict the ccurrence r amunt f ther perating gains and lsses, which generally arise frm business transactins that it des nt anticipate.

6 Page 6 f 14 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL ASSUMPTIONS AND MATERIAL RISKS Certain statements in this news release, including, but nt limited t, statements in the "Business Outlk 2018 (At Cnstant Currency)" sectin, Mr. Smith s cmments and statements regarding the prpsed strategic partnership with Blackstne invlving the Financial & Risk business and the new share repurchase prgram are frward-lking. As a result, frward-lking statements are subject t a number f risks and uncertainties that culd cause actual results r events t differ materially frm current expectatins. There is n assurance that a transactin invlving all r part f the F&R business will be cmpleted r that the events described in any ther frward-lking statement will materialize. A business utlk is prvided fr the purpse f presenting infrmatin abut current expectatins fr This infrmatin may nt be apprpriate fr ther purpses. Yu are cautined nt t place undue reliance n frward-lking statements which reflect expectatins nly as f the date f this news release. Except as may be required by applicable law, Thmsn Reuters disclaims any bligatin t update r revise any frward-lking statements. The cmpany's 2018 business utlk is based n varius external and internal assumptins. Ecnmic and market assumptins include, but are nt limited t, GDP grwth in mst f the cuntries where Thmsn Reuters perates, a cntinued increase in demand fr high quality infrmatin and wrkflw slutins and a cntinued need fr trusted prducts and services that help custmers navigate changing geplitical, ecnmic and regulatry envirnments. Internal financial and peratinal assumptins include, but are nt limited t, the successful executin f sales initiatives, nging prduct release prgrams, ur glbalizatin strategy and ther grwth and efficiency initiatives. Sme f the material risk factrs that culd cause actual results r events t differ materially frm thse expressed in r implied by frward-lking statements in this news release include, but are nt limited t, changes in the general ecnmy; actins f cmpetitrs; failure t develp new prducts, services, applicatins and functinalities t meet custmers' needs, attract new custmers and retain existing nes, r expand int new gegraphic markets and identify areas f higher grwth; fraudulent r unpermitted data access r ther cyber-security r privacy breaches; failures r disruptins f telecmmunicatins, data centers, netwrk systems r the Internet; increased accessibility t free r relatively inexpensive infrmatin surces; failure t meet the challenges invlved in perating glbally; failure t maintain a high renewal rate fr recurring, subscriptin-based services; dependency n third parties fr data, infrmatin and ther services; changes t law and regulatins; tax matters, including changes t tax laws, regulatins and treaties; fluctuatins in freign currency exchange and interest rates; failure t adapt t rganizatinal changes and effectively implement strategic initiatives; failure t attract, mtivate and retain high quality management and key emplyees; failure t prtect the brands and reputatin f Thmsn Reuters; inadequate prtectin f intellectual prperty rights; threat f legal actins and claims; dwngrading f credit ratings and adverse cnditins in the credit markets; failure t derive fully the anticipated benefits frm existing r future acquisitins, jint ventures, investments r dispsitins; the effect f factrs utside f the cntrl f Thmsn Reuters n funding bligatins in respect f pensin and pst-retirement benefit arrangements, risk f antitrust/cmpetitin-related claims r investigatins; impairment f gdwill and ther identifiable intangible assets; actins r ptential actins that culd be taken by the cmpany s principal sharehlder, The Wdbridge Cmpany Limited; failure t cmplete the prpsed Financial & Risk transactin; difficulties separating Financial & Risk frm the cmpany; and failure t realize the benefits f the strategic Financial & Risk partnership. These and ther factrs are discussed in materials that Thmsn Reuters frm time t time files with, r furnishes t, the Canadian securities regulatry authrities and the U.S. Securities and Exchange Cmmissin. Thmsn Reuters annual and quarterly reprts are als available in the Investr Relatins sectin f CONTACTS MEDIA David Crundwell Senir Vice President, Crprate Affairs david.crundwell@tr.cm INVESTORS Frank J. Glden Senir Vice President, Investr Relatins frank.glden@tr.cm Thmsn Reuters will webcast a discussin f its first-quarter 2018 results tday beginning at 8:30 a.m. Eastern Daylight Time (EDT). Yu can access the webcast by visiting ir.thmsnreuters.cm. An archive f the webcast will be available fllwing the presentatin.

7 Page 7 f 14 CONTINUING OPERATIONS Cnslidated Incme Statement (millins f U.S. dllars, except per share data) Revenues $1,379 $1,331 Operating expenses (952) (911) Depreciatin (30) (28) Amrtizatin f cmputer sftware (98) (96) Amrtizatin f ther identifiable intangible assets (29) (35) Other perating (lsses) gains, net (2) 13 Operating prfit Finance csts, net: Net interest expense (78) (92) Other finance incme (csts) 7 (28) Incme befre tax and equity methd investments Share f pst-tax earnings in equity methd investments 2 2 Tax expense (27) (11) Earnings frm cntinuing peratins (Lss) earnings frm discntinued peratins, net f tax (483) 169 Net (lss) earnings $(311) $314 (Lss) earnings attributable t: Cmmn sharehlders (339) 297 Nn-cntrlling interests (Lss) earnings per share: Basic and diluted (lss) earnings per share: Frm cntinuing peratins $0.24 $0.20 Frm discntinued peratins (0.72)* 0.21 Basic and diluted (lss) earnings per share $(0.48) $0.41 Basic weighted-average cmmn shares 710,763, ,200,617 Diluted weighted-average cmmn shares 711,498, ,194,404 Basic and diluted lss per share frm discntinued peratins reflects an $844 millin deferred tax charge assciated with the prpsed sale f a 55% interest in ur Financial & Risk business. The tax charge is required t be recrded when a business is first cnsidered held fr sale, rather than when the sale is cmpleted. The cmpany estimates that a cash tax payment f apprximately $300 millin will arise in 2018 in cnnectin with the clsing f the transactin and the remainder deferred until such time as the cmpany dispses f its 45% interest in the new partnership.

8 Page 8 f 14 Cnslidated Statement f Financial Psitin (millins f U.S. dllars) December 31, Assets Cash and cash equivalents $502 $874 Trade and ther receivables 839 1,457 Other financial assets Prepaid expenses and ther current assets Current assets excluding assets held fr sale 1,791 2,977 Assets held fr sale 14,687 - Current assets 16,478 2,977 Cmputer hardware and ther prperty, net Cmputer sftware, net 892 1,458 Other identifiable intangible assets, net 3,335 5,315 Gdwill 5,061 15,042 Other financial assets Other nn-current assets Deferred tax Ttal assets $26,958 $26,480 Liabilities and equity Liabilities Current indebtedness $1,760 $1,644 Payables, accruals and prvisins 1,022 2,086 Deferred revenue Other financial liabilities Current liabilities excluding liabilities assciated with assets held fr sale 3,543 4,796 Liabilities assciated with assets held fr sale 1,813 - Current liabilities 5,356 4,796 Lng-term indebtedness 5,343 5,382 Prvisins and ther nn-current liabilities 1,263 1,740 Other financial liabilities Deferred tax 1, Ttal liabilities 13,574 12,905 Equity Capital 9,541 9,549 Retained earnings 6,829 7,201 Accumulated ther cmprehensive lss (3,502) (3,673) Ttal sharehlders equity 12,868 13,077 Nn-cntrlling interests Ttal equity 13,384 13,575 Ttal liabilities and equity $26,958 $26,480

9 Page 9 f 14 Cash prvided by (used in): Operating activities Cnslidated Statement f Cash Flw (millins f U.S. dllars) Earnings frm cntinuing peratins $172 $145 Adjustments fr: Depreciatin Amrtizatin f cmputer sftware Amrtizatin f ther identifiable intangible assets Deferred tax 5 4 Other Pensin cntributin - (500) Changes in wrking capital and ther items (172) (265) Operating cash flws frm cntinuing peratins 209 (397) Operating cash flws frm discntinued peratins Net cash prvided by (used in) perating activities 419 (368) Investing activities Acquisitins, net f cash acquired (27) - Prceeds frm dispsals f businesses and investments - 10 Capital expenditures, less prceeds frm dispsals (179) (108) Other investing activities - 6 Investing cash flws frm cntinuing peratins (206) (92) Investing cash flws frm discntinued peratins (108) (283) Net cash used in investing activities (314) (375) Financing activities Prceeds frm debt 1,370 - Repayments f debt - (550) Net (repayments) brrwings under shrt-term lan facilities (1,252) 255 Repurchases f cmmn shares - (284) Dividends paid n preference shares (1) (1) Dividends paid n cmmn shares (236) (242) Other financing activities - 5 Financing cash flws frm cntinuing peratins (119) (817) Financing cash flws frm discntinued peratins (11) (9) Net cash used in financing activities (130) (826) Decrease in cash and bank verdrafts (25) (1,569) Translatin adjustments 1 2 Cash and bank verdrafts at beginning f perid 868 2,367 Cash and bank verdrafts at end f perid $844 $800 Cash and bank verdrafts at end f perid cmprised f: Cash and cash equivalents $502 $812 Cash and cash equivalents in assets held fr sale Bank verdrafts (4) (12) $844 $800

10 Page 10 f 14 Recnciliatin f Earnings frm Cntinuing Operatins t Adjusted EBITDA (1) (millins f U.S. dllars, except fr margins) Change Earnings frm cntinuing peratins $172 $145 19% Adjustments t remve: Tax expense Other finance (incme) csts (7) 28 Net interest expense Amrtizatin f ther identifiable intangible assets Amrtizatin f cmputer sftware Depreciatin EBITDA $427 $435 Adjustments t remve: Share f pst-tax earnings in equity methd investments (2) (2) Other perating lsses (gains), net 2 (13) Fair value adjustments 3 (5) Adjusted EBITDA $430 $415 4% Adjusted EBITDA margin (1) 31.2% 31.2% 0bp Recnciliatin f Net Earnings t Adjusted Earnings (2) (millins f U.S. dllars, except fr share and per share data) Change Net (lss) earnings $(311) $314 n/m Adjustments t remve: Fair value adjustments 3 (5) Amrtizatin f ther identifiable assets Other perating lsses (gains), net 2 (13) Other finance (incme) csts (7) 28 Share f pst-tax earnings in equity methd investments (2) (2) Tax n abve items (5) (2) Tax items impacting cmparability 2 - Lss (earnings) frm discntinued peratins, net f tax 483 (169) Interim perid effective tax rate nrmalizatin (3) 4 (5) Dividends declared n preference shares (1) (1) Adjusted earnings $197 $180 9% Adjusted EPS $0.28 $ % Freign currency (4) 0% Befre currency (4) 12% Diluted weighted-average cmmn shares (millins) n/m: nt meaningful Refer t page 12 fr ftntes.

11 Page 11 f 14 Recnciliatin f Earnings frm Discntinued Operatins t Financial & Risk Adjusted EBITDA (1) (millins f U.S. dllars, except fr margins) Change (Lss) earnings frm discntinued peratins $(483) $169 n/m Adjustments t remve: Tax expense (benefit) 868 (2) Other finance csts (incme) 5 (1) Net interest expense 4 1 Amrtizatin f ther identifiable intangible assets Amrtizatin f cmputer sftware Depreciatin EBITDA $466 $379 Adjustments t remve: Other perating lsses, net 41 9 Fair value adjustments IP & Science discntinued peratins 1 3 Financial & Risk discntinued peratins adjusted EBITDA $526 $461 14% Adjusted EBITDA margin (1) 33.2% 31.0% 220bp n/m: nt meaningful Recnciliatin f Net Cash Prvided by Operating Activities t Free Cash Flw (5) (millins f U.S. dllars) Net cash prvided by perating activities $419 $(368) Capital expenditures, less prceeds frm dispsals (179) (108) Capital expenditures frm discntinued peratins (108) (105) Other investing activities - 6 Dividends paid n preference shares (1) (1) Dividends paid t nn-cntrlling interests frm discntinued peratins (11) (9) Free cash flw $120 $(585) Recnciliatin f Operating Cash Flws frm Discntinued Operatins t Financial & Risk Free Cash Flw (5) (millins f U.S. dllars) Operating cash flws frm discntinued peratins $210 $29 Remve: Operating cash flws - IP & Science discntinued peratins - 41 Capital expenditures frm discntinued peratins (108) (105) Dividends paid t nn-cntrlling interests frm discntinued peratins (11) (9) Free cash flw - Financial & Risk discntinued peratins $91 $(44) Refer t page 12 fr ftntes.

12 Page 12 f 14 Ftntes (1) Thmsn Reuters defines adjusted EBITDA fr its business units as earnings frm cntinuing peratins, r fr F&R as (lss) earnings frm discntinued peratins, befre tax expense r benefit, net interest expense, ther finance csts r incme, depreciatin, amrtizatin f sftware and ther identifiable intangible assets, Thmsn Reuters share f pst-tax (earnings) lsses in equity methd investments, ther perating gains and lsses, certain asset impairment charges, fair value adjustments and crprate related items. Cnslidated adjusted EBITDA is cmprised f adjusted EBITDA fr its business units and Crprate. Adjusted EBITDA margin is adjusted EBITDA expressed as a percentage f revenues. Thmsn Reuters uses adjusted EBITDA because it prvides a cnsistent basis t evaluate perating prfitability and perfrmance trends by excluding items that the Cmpany des nt cnsider t be cntrllable activities fr this purpse. Adjusted EBITDA als represents a measure cmmnly reprted and widely used by investrs as a valuatin metric. Additinally, this measure is used by Thmsn Reuters and investrs t assess a cmpany s ability t incur and service debt. (2) Adjusted earnings and adjusted EPS include dividends declared n preference shares but exclude the pst-tax impacts f fair value adjustments, amrtizatin f ther identifiable intangible assets, ther perating gains and lsses, certain asset impairment charges, ther finance csts r incme, Thmsn Reuters share f pst-tax (earnings) lsses in equity methd investments, discntinued peratins and ther items affecting cmparability. Thmsn Reuters calculates the pst-tax amunt f each item excluded frm adjusted earnings based n the specific tax rules and tax rates assciated with the nature and jurisdictin f each item. Adjusted EPS is calculated using diluted weighted-average shares and des nt represent actual earnings r lss per share attributable t sharehlders. Thmsn Reuters uses adjusted earnings and adjusted EPS as they prvide a mre cmparable basis t analyze earnings and they are als measures cmmnly used by sharehlders t measure the cmpany's perfrmance. (3) Adjustment t reflect incme taxes based n estimated full-year effective tax rate. Earnings r lsses fr interim perids under IFRS reflect incme taxes based n the estimated effective tax rates f each f the jurisdictins in which Thmsn Reuters perates. The nn-ifrs adjustment reallcates estimated full-year incme taxes between interim perids, but has n effect n full-year incme taxes. (4) The changes in revenues, adjusted EBITDA and the related margins, and adjusted earnings per share befre currency (at cnstant currency r excluding the effects f currency) are determined by cnverting the current and prir-year perid s lcal currency equivalent using the same exchange rates. (5) Free cash flw (includes free cash flw frm cntinuing and discntinued peratins) is net cash prvided by (used in) perating activities, and ther investing activities less capital expenditures, dividends paid n the cmpany s preference shares, and dividends paid t nn-cntrlling interests frm discntinued peratins. Thmsn Reuters uses free cash flw as it helps assess the cmpany's ability, ver the lng term, t create value fr its sharehlders as it represents cash available t repay debt, pay cmmn dividends and fund share repurchases and new acquisitins. Depreciatin and Amrtizatin f Cmputer Sftware by Business Segment (millins f U.S. dllars) Legal $63 $64 Tax & Accunting Reuters News 4 4 Crprate Ttal depreciatin and amrtizatin f cmputer sftware $128 $124 Supplemental

13 Page 13 f 14 Appendix A The fllwing supplemental infrmatin prvides revised 2017 business segment infrmatin excluding the Financial & Risk (F&R) business, which was classified as a discntinued peratin beginning in the first quarter f The infrmatin prvided illustrates the cmpany s business n a cntinuing peratins basis. As it includes certain estimates, it is subject t revisin until the prpsed F&R transactin is cmpleted. Revised Business Segment Infrmatin (Excluding the F&R Segment) (millins f U.S. dllars except fr per share amunts) Year Ended December 31, 2017 Adjustments Remve F&R Add Back Previusly Segment Retained Reprted Results Businesses (3) Other Adjustments (4) Year Ended December 31, 2017 Revised Excluding F&R Revenues Financial & Risk $6,112 (6,112) Legal 3, $3,459 Tax & Accunting 1, ,551 Reuters News (1) Eliminatins (16) (9) Revenues frm cntinuing peratins $11,333 (6,105) 69 - $5,297 Adjusted EBITDA (2) Financial & Risk $1,916 (1,916) Legal 1, $1,307 Tax & Accunting Reuters News (1) Crprate (280) (244) Adjusted EBITDA $3,437 (1,916) $1,585 Adjusted earnings (2) Adjusted EBITDA $3,437 (1,916) $1,585 Depreciatin and amrtizatin f cmputer sftware (995) 581 (10) (72) (496) Adjustments: Interest (362) (358) Tax (205) 121 (2) 3 (83) Nn-cntrlling interests (64) Dividends declared n preference shares (2) (2) Adjusted earnings $1,809 (1,214) $646 Adjusted EPS (2) $2.51 (1.68) $0.90 (1) Effective January 1, 2018, Reuters News is a reprtable segment. (2) Refer t the explanatry ftntes n page 12 fr definitins f ur nn-ifrs measures. Refer t the cmpany s 2017 Annual Reprt fr a recnciliatin f this nn-ifrs financial measure t the mst directly cmparable IFRS measure. (3) Represents the Regulatry Intelligence and Cmpliance Learning businesses that will be retained by the cmpany s Legal segment fllwing the clsing f the prpsed F&R transactin. (4) Other adjustments include the fllwing: Adjusted EBITDA cntains csts primarily fr real estate ptimizatin that relate t prperties t be transferred with the Financial & Risk business. Depreciatin and amrtizatin f cmputer sftware relates t assets that will nt be transferred with the Financial & Risk business. Nn-cntrlling interests relates t third party sharehldings in Tradeweb that will be transferred with the Financial & Risk business.

14 Page 14 f 14 Appendix A The fllwing supplemental infrmatin prvides revised 2017 business segment infrmatin excluding the F&R business, which was classified as a discntinued peratin beginning in the first quarter f The infrmatin prvided illustrates the cmpany s business n a cntinuing peratins basis. As it includes certain estimates, perids subsequent t 2017 are subject t revisin until the prpsed F&R transactin is cmpleted. Revised Business Segment Infrmatin (Excluding the F&R Segment) (millins f U.S. dllars except fr per share amunts and margins) 2017 First Quarter Secnd Quarter Third Quarter Furth Quarter Full Year Revenues Legal $841 $858 $860 $900 $3,459 Tax & Accunting ,551 Reuters News Eliminatins (1) (2) (2) (4) (9) Revenues frm cntinuing peratins $1,331 $1,280 $1,272 $1,414 $5,297 Adjusted EBITDA (1) Legal $314 $325 $345 $323 $1,307 Tax & Accunting Reuters News (2) 27 Crprate (53) (57) (60) (74) (244) Adjusted EBITDA $415 $380 $387 $403 $1,585 Adjusted earnings (1) Adjusted EBITDA $415 $380 $387 $403 $1,585 Depreciatin and amrtizatin f cmputer sftware (124) (127) (117) (128) (496) Adjustments: Interest (92) (89) (89) (88) (358) Tax (18) (24) (1) (40) (83) Dividends declared n preference shares (1) - (1) - (2) Adjusted earnings $180 $140 $179 $147 $646 Adjusted EPS (1) $0.25 $0.19 $0.25 $0.21 $0.90 Adjusted EBITDA margin (1) Legal 37.3% 37.9% 40.1% 35.9% 37.8% Tax & Accunting 33.8% 29.4% 27.9% 35.2% 31.9% Reuters News 17.6% 12.2% 9.6% n/m 9.1% Crprate n/a n/a n/a n/a n/a Adjusted EBITDA margin 31.2% 29.7% 30.4% 28.5% 29.9% n/m nt meaningful n/a nt applicable (1) Refer t the explanatry ftntes n page 12 fr definitins f ur nn-ifrs measures.