REUTERS / Vasily Fedosenko REUTERS / Mike Blake. Leonhard Foeger THOMSON REUTERS SUMMER 2018

Transcription

1 REUTERS / Vasily Fedosenko REUTERS / Mike Blake Leonhard Foeger THOMSON REUTERS SUMMER 2018

2 Special Note Safe Harbor / Forward-Looking Statements This presentation consists of these slides and the associated remarks and comments, which are related and intended to be presented and understood together. Certain statements in this presentation and discussion are forward-looking, including, but not limited to, the company s 2018 outlook and statements regarding the timing for closing of the Financial & Risk transaction, the company s anticipated uses of proceeds from the transaction, the anticipated benefits of the proposed strategic partnership with Blackstone, future growth and efficiency opportunities for Financial & Risk and Thomson Reuters Legal, Tax & Accounting and Reuters News businesses, and Corporate costs. These forwardlooking statements are based on certain assumptions and reflect the company s current expectations. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Some of the factors that could cause actual results to differ materially from current expectations are discussed in the Risk Factors section of our 2017 annual report as well as in other materials that we from time to time file with, or furnish to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. There is no assurance that a transaction involving all or part of the Financial & Risk business will be completed or that any other forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking statements, which reflect expectations only as of this date. Except as may be required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements. Our outlook is provided for the purpose of providing information about current expectations for This information may not be appropriate for other purposes. This presentation and discussion does not constitute an offer to purchase, or a solicitation of an offer to sell, securities of the company, nor is it a substitute for any substantial issuer bid/tender offer documents that may be filed in the future with the Canadian securities regulatory authorities or the U.S. Securities and Exchange Commission. Non-IFRS Financial Measures This presentation contains disclosures of certain non-ifrs financial measures. These measures include adjusted EBITDA and the related margin, free cash flow, adjusted earnings and adjusted EPS and selected measures before the impact of currency. Please see our earnings release dated August 8, 2018, which is available on for a reconciliation of each of these measures to the most directly comparable IFRS financial measure. You can also find IFRS reconciliations in the Investor Relations section of our website. 2

3 A TRANSFORMATIONAL PARTNERSHIP: TR s FINANCIAL SERVICES BUSINESS & BLACKSTONE 3

4 A Transformational Partnership Blackstone has agreed to buy 55% of Thomson Reuters financial services business - one of the largest global financial information services companies Blackstone is a strategic partner and is well positioned to accelerate Financial & Risk s progress Blackstone has deep understanding of the financial services ecosystem and a global footprint A platform to build upon Repositions our financial services business for growth in a consolidating industry Blackstone is uniquely positioned to identify & shape trends in the financial services industry, navigate ongoing industry consolidation & drive further efficiencies in our financial business Blackstone has capacity and flexibility to invest for the long-term organically and inorganically Blackstone provides customers and investors with assurance that our financial business has the capacity and ability to compete in a rapidly evolving marketplace TR financial services business is a highly cash generative & diversified business that can support significant leverage Strong and predictable subscription revenue base (~80% of revenues) Strong cash flow generation dynamics Thomson Reuters retains significant stake with upside potential 45% equity stake in a well positioned financial business with a strong strategic partner Reuters News will continue to remain part of Thomson Reuters The financial services business will enter into a 30-year contract for news content ($325M p.a.) 4

5 Why Now and Why Blackstone? 1. Take advantage of a favorable valuation environment and demand for information services businesses 2. Thomson Reuters has successfully invested in stabilizing and growing our financial services business and sees further opportunity ahead with a motivated partner and a portfolio of leading products 3. Progress turning our financial business around and its future potential is reflected by Blackstone s interest 4. Blackstone is uniquely positioned to identify and shape trends in the financial services industry and will drive further efficiencies and navigate ongoing industry consolidation 5. Strengthens our position across financial market segments and improves growth trajectory 6. Thomson Reuters can streamline its profile and focus on driving growth and expanding its reach in Legal, Tax & Accounting and Regulatory market segments 5

6 Update on Financial & Risk Strategic Partnership Regulatory Approval Progress Transaction is expected to close early in the fourth quarter Substantially all required regulatory approvals have been received at this time Operational Progress Employees notified on March 31 of business allocation for post-closing assignments Allocation of costs & other resources completed June 30 Essentially began operating as two separate companies on July 1 Stranded costs identified with pathway to reduce / eliminate by 2020 Financing Structure Anticipate Blackstone will begin debt raise in September On Target To Close Deal Early Q

7 Expected Use of Proceeds from Sale of 55% of F&R $17 billion of cash proceeds allocated to future growth investments, maintaining a strong capital structure and returning capital to shareholders Debt Pay Down ~$3-4B Return of Capital to Shareholders ~$9-10B Investment Fund: ~$1-3B Taxes, Fees & Expenses ~$ B 7

8 A Win Win Transaction Financial Benefits Provides TRI shareholders total return in the form of cash proceeds from buyback and attractive financial profile of remaining investment Dividend maintained at $1.38 per share for 2018 Maintains strong/stable capital structure with flexibility Strategic Benefits Streamlines business profile & enables management to focus on businesses in higher growth areas Thomson Reuters Strengths Highly stable, growing and profitable assets that generate significant free cash flow (~80% subscription) #1 or #2 positions in key Legal & Regulatory and Tax & Accounting market segments Higher historical growth rate than Financial business with potential to accelerate growth trajectory $1 $3 billion investment fund to bolster position in key growth market segments Retain a robust & vibrant News operation funded by the financial services business ($325M revenue stream for 30 years) De-Risking Benefits Reduces exposure to financial services industry while maintaining upside potential Blackstone s expertise in M&A will enable the partnership to enhance acquisition driven growth Reduced volatility of Thomson Reuters, driving increased stability & predictability of cash flows 8

9 THOMSON REUTERS NEW OPERATING STRUCTURE 9

10 Thomson Reuters New Operating Structure Thomson Reuters Legal Professionals Tax Professionals Corporates Reuters News Global Print Legal Professionals Tax Professionals Corporates Reuters News Global Print % of Revenues 43% 14% 23% 6% 14% 80% of 2017 Revenue Base 10

11 Preview of New Operating / Reporting Structure 2017 Revenue & Organic Growth by Current BU 2017 Revenue & Organic Growth by New Customer Segment Reuters News Reuters News Tax & Accounting $1.6B +6% $0.3B -3% $5.3 Billion +2% $3.5B +1% Legal Corporates Global Print $1.2B +6% $0.8B -6% $0.3B -3% $5.3 Billion +2% $0.8B +8% Tax Professionals $2.3B +2% Legal Professionals 80% of revenues growing 4.4% organically 11 Note: Individual segments do not sum to total due to rounding

12 BUSINESS OVERVIEW 12

13 Key Investment Highlights Industry Leader Balanced & Diversified Attractive Business Model A leader in most of the market segments that we serve Deep and broad industry knowledge Products and services tailored for professionals Distinct core customer group revenues and geographical diversity: Financial & Risk, Legal, Tax & Accounting and Reuters News 62% Americas, 27% EMEA, 11% Asia No single customer greater than ~2% of revenues 86% of total revenues from subscription and similar arrangements 93% of total revenues are delivered electronically or as software and services Strong & consistent cash generation capabilities Strong Competitive Positioning Disciplined Financial Policies Proprietary databases and deeply embedded workflow tools and analytics Technology and operating platforms are built to address the global marketplace Strong brand: ranked #66 Best Global Brands (1) Focus on Free Cash Flow growth Maintain strong and stable capital structure Balance investing in business and returning capital to shareholders Committed to maintaining solid investment grade credit rating 13 (1) Interbrand 2017 Best Global Brands ranking

14 Returning Value to Shareholders 2017 FCF* per share - $2.32 FCF* Yield 5.7% Dividend Yield 3.3% 2.7 (U.S.$ billions) Cash Returned ~$12 Billion (2012 to 2017) ~$6.2 Billion Dividends ~$5.7 Billion Share Repurchases Dividends (net of dividend reinvestment) Share Repurchases *Free Cash Flow adds back one-time charges related to pension contribution and severance payments of $500m and $142m respectively 14

15 Highly Free Cash Flow Generative Consistent free cash flow has enabled investment through cycles & steady dividend increases (U.S.$ billions) Reported Free Cash Flow Adds Back One-Time Items* 15 *Adds back pension contributions and severance related payments in 2013 and 2017 and severance related payments in 2014

16 Positive Trend - Return on Invested Capital 7.4% 0.7% 5.3% 5.8% 6.7% 6.7% 7.7% 7.2% WACC Reported ROIC Excluding Charges 16

17 CAPITAL ALLOCATION 17

18 Capital Strategy Principles Thomson Reuters approaches capital management and balance sheet strength in a consistent and disciplined manner Capital Strategy is as critical as the business strategy Key element in supporting and growing our businesses Disciplined approach is consistent with how we drive and operate the business Maintain a Strong / Stable Capital Structure with Ample Liquidity Target Solid Investment Grade Credit Rating Balance Investing in Business and Returning Capital to Shareholders Maintain Financial Flexibility Relentless Focus on FCF per Share 18

19 2017 Debt Profile Debt Outstanding = $7.3 billion Net Debt / EBITDA <2.5x Average maturity of term debt ~7 years Average interest rate <5% * *Commercial Paper

20 Strong Commitment To A Healthy Dividend $1.38 per share dividend maintained following announcement of strategic partnership with Blackstone U.S. $ per share

21 2017 FINANCIAL RESULTS (INCLUDES FINANCIAL & RISK) 21

22 2017 Results by Segment $11.3 billion revenues +2% 30.3% Adjusted EBITDA margin +180 bp Financial & Risk Legal Tax & Accounting $6.1 billion 2017 revenues 31.3% EBITDA margin 1% +1% +6% $3.4 billion 2017 revenues 37.7% EBITDA margin $1.6 billion 2017 revenues 31.9% EBITDA margin Financial Risk U.S. Online Legal Information Solutions Businesses U.S. Print Professional Corporate Knowledge Solutions Government Revenue growth rates are before the impact of currency Adjusted EBITDA improvement excludes the impact of $212m charges taken in the fourth quarter of 2016 Segments do not add to total due to Corporate & Other (including Media) and eliminations 22

23 2017 Results by Segment Revenues: $11.3B Adjusted EBITDA: $3.4B 54% 30% 52% 35% 2% 14% 13% Financial & Risk Legal Tax & Accounting Corporate & Other (includes Media) 86% Recurring Revenues / 93% Electronic, Software & Services 23

24 2017 Revenues by Region Consolidated $11.3B Financial & Risk $6.1B Legal $3.4B 62% 31% 12% 27% 43% 42% 41% 41% 16% 17% 10% 86% 4% 86% 11% 3% Americas EMEA Asia Americas EMEA Asia 11% Tax & Accounting $1.6B Americas Europe, Middle East & Africa Asia 3% 95% 2% 2% 3% 95% Americas EMEA Asia 24 Segments do not add to total due to Corporate & Other (including Media) and eliminations.

25 Adjusted EBITDA Margin Progression 30.3% 25.9% 26.9% 1.2% 27.4% 28.4% 1.9% 2.1% 23.8% 25.7% 26.5% Note: Margins presented exclude IP & Science Reported Adjusted EBITDA Margin Excluding Charges 25

26 2018 SECOND-QUARTER FINANCIAL RESULTS FOR CONTINUING OPERATIONS (EXCLUDES FINANCIAL & RISK) 26

27 Consolidated Results (Excludes Financial & Risk which is now classified as a discontinued operation) ($ millions) Second-Quarter Six-Months Change Change Before Currency Change Change Before Currency Revenues 1,311 1,280 +2% +2% 2,690 2,611 +3% +2% Adjusted EBITDA % -8% % -2% Adjusted EBITDA Margin 26.5% 29.7% -320 bp -290 bp 28.9% 30.4% -150 bp -140 bp 27

28 Q Results DISCONTINUED OPERATION Thomson Reuters (excluding F&R) F&R Reported Revenue Growth: +2% +3% Revenue Growth at Constant Currency: +2% +2%* Print -4% / $0.2B Recoveries -3% / $0.1B Recurring +4% / $1.0B Transactions -2% / $0.2B Recurring (Ex. Recoveries) +2% / $1.2B Transactions +7% / $0.2B 28 *F&R Constant currency growth of 2% includes a negative impact from the adoption of a new accounting standard, IFRS 15. On an organic basis revenues increased 3% Note: Individual segments do not sum to total due to rounding

29 Legal Revenue By Segment Global Solutions +6% $355 million (40% of Revenue) Global Print -5% (-6% Organic) $163 million (18% of Revenue) Recurring: +7% (81% of revenue) Transactions: -1% (19% of revenue) Second-Quarter Revenues $0.9 billion / +2% (excluding Global Print +4%) EBITDA Margin 36.4% Findlaw (Business Development) Clear (Public Records) Elite/Tracker (Financial & Practice Management) LMS/eDiscovery: (Outsourcing & Research) U.S. Online Legal Information +2% $364 million (42% of Revenue) 29 Global Solutions includes Risk businesses being retained by Thomson Reuters

30 Westlaw Edge elevates research so practitioners can work, think and deliver faster Built for ALL customers: Large, Mid and Small law firms Corporate Counsels & Government Attorneys Expected to accelerate online legal revenues Pricing is in addition to current Westlaw contract Customers I loved it! That was awesome! I found the quick answer in a third of the time. But the real benefit was answer certainty. I felt more confident. Manually pulling all the decisions from the judge and getting this kind of information it took me around 80 hours. This does it in 5 minutes. Journalists / Blogs AI is only as good as the data off which it runs; if data is the new oil, then Westlaw is the new Exxon. Few can match what Westlaw Edge brings. In the field of data analytics Westlaw Edge really shines. It s borderline malpractice not to have and use this tool. That pretty much says it all.

31 1. WESTSEARCH PLUS - RESPONSIVE Next generation of legal search with superior predictive research suggestions and the most responsive legal text for user questions 2. LITIGATION ANALYTICS - STRATEGIC Relevant data-driven insights on judges, courts, attorneys, law firms and case types to build the strongest case strategy, anticipate resource needs given a judge s prior rulings on matters to better manage client expectations 3. KEYCITE OVERRULING RISK - AWARE Only Westlaw Edge has a warning that alerts researchers when a point of law has been implicitly undermined based on similarity to an overruled or otherwise invalid prior decision 4. STATUTES COMPARE - INFORMED With a single click understand complex statutory changes over time

32 Legal Products, Customers & Competition Segment Major Brands Type of Product/Service Target Customers Findlaw Online Legal directory, website creation and hosting services; law firm marketing; peer rating Law firm professionals, marketers and consumers Global Solutions Elite / Legal Tracker CLEAR Suite of integrated software applications that assist with business management, including financial, practice management, records, and analytics Public and proprietary records about individuals and companies with tools for immediately usable results Law firms and legal, finance and technology professionals Fraud prevention and investigative professionals Legal Managed Services Outsourced legal services (formerly known as Pangea 3) Corporate legal and law firm professionals U.S. Online Legal Information Westlaw/ Practical Law Legal, regulatory and compliance information-based product and services; The primary online legal research delivery platform in the U.S., with authoritative content, powerful search functionality and research organization Law firm, corporate and trademark professionals, law students, law librarians, government agencies Global Print Global Print Legal publications Lawyers, law firm leadership, general counsels Legal Business Competition RELX Group (LexisNexis) Wolters Kluwer Bloomberg BNA Practice and matter management software companies Client development providers Other service providers who support legal professionals 32

33 Legal Customers & Key Products 86% North America 10% EMEA 4% Asia Segments & Customers Legal Products Investigative/Regulatory Firm Management Firm Development Large and Medium Law Firms Lawyers Law librarians CMOs, CTOs, CIOs (and staff) Paralegals & other legal professionals Small Law Firms Lawyers Law firm management professionals Paralegals and other legal professionals Corporate Segment General Counsel Corporate legal professionals investigators, risk, compliance, security Government Government agencies National, state and local courts Law enforcement Cross Segment Products Westlaw (Practice) Practical Law (Practice/ Know How) Legal Managed Services (Practice) ediscovery Point ProView and Print Titles (Global Print) Global Businesses U.K. Sweet & Maxwell Canada Carswell Australia Thomson Reuters Spain Aranzadi Argentina La Ley LatAM Legal One CLEAR Regulatory Intelligence Compliance Learning CLEAR PeopleMap Drafting Assistant Elite Business Development Premier Monitor Suite and Peer Monitor Firm Central FindLaw ProLaw Legal Tracker Legal Tracker C-Track 33

34 Tax & Accounting Revenue By Segment Professional +10% $115 million (32% of Revenue) Corporate +2% $138 million (39% of Revenue) Second-Quarter Revenues $0.4 billion / +4% EBITDA Margin 25.3% Knowledge Solutions +1% $94 million (26% of Revenue) Government +5% $12 million (3% of Revenue) 34

35 Tax & Accounting Products, Customers & Competition Segment Major Brands Type of Product/Service Target Customers Corporate ONESOURCE Comprehensive global tax compliance solution with local, country-specific, focus to manage a company s entire tax lifecycle Tax departments of multinational and domestic corporations, accounting firms, financial institutions and tax authorities Professional CS Professional Suite / Onvio A scalable, integrated suite of desktop software applications that cater to the key aspects of a professional accounting firm s operations Accounting firms Knowledge Solutions Checkpoint Integrated information solution delivering research, expert guidance, applications and workflow tools Accounting firms, corporate tax, finance and accounting departments, trade professionals, law firms and governments Government Aumentum Integrated software solution for governments to manage the entire property lifecycle in order to simplify property tax functions and improve services to taxpayers Government offices (treasurers, tax collectors, auditors, clerks, assessors, land managers) Tax & Accounting Business Competition Corporate Software and Services: Professional Software and Services: Knowledge Solutions: Wolters Kluwer (CCH Integrator) Wolters Kluwer (CCH Axcess, ifirm) Bloomberg BNA (tax research) CSC (CORPTAX) Intuit Other providers of software and services ERP vendors 35

36 Tax & Accounting Customers & Key Products 95% North America 3% EMEA 2% Asia Segments & Customers Professional (37% of Revenues) Solutions for accounting firms Corporate (40% of Revenues) Corporate tax departments Banks and trusts Large accounting firms Government (2% of Revenues) National, state and local governments responsible for property registration, tax generation and collection Key Products Onvio (global) CS Professional Suite (U.S.), DT Professional Suite (Canada), Digita Professional Suite (UK), Software Assistant (Australia), Dominio (Brazil), Sistemas Bejerman (Argentina), etc. ONESOURCE Aumentum Knowledge Solutions - all segments and customers (21% of Revenues) Accounting firms Corporate tax departments Finance and accounting departments Law firms and government agencies Checkpoint Checkpoint Catalyst Checkpoint World Global Solution 36

37 Reuters News (Does not include Financial & Risk payment of $325m annually) ($ millions) Second-Quarter Six-Months Change Change Before Currency Change Change Before Currency Revenues % -5% % -6% Adjusted EBITDA % -22% % -32% Adjusted EBITDA Margin 11.1% 12.2% -110 bp -210 bp 11.1% 14.9% -380 bp -410 bp 37

38 Reuters Customers & Key Products 49% EMEA - 30% North America - 21% Asia Segments & Customers News agencies and brands Broadcasters Publishers Brands Agencies Professionals Financial professionals Legal professionals Tax and accounting professionals Consumers Key Products Newswires Digital news services Pictures Graphics Videos Archives Reuters Content Solutions Reuters news delivered via Thomson Reuters products (e.g., Eikon, Westlaw) Reuters.com Reuters TV The Wider Image 38

39 FINANCIAL & RISK DISCONTINUED OPERATION 2018 SECOND-QUARTER FINANCIAL RESULTS 39

40 Financial & Risk (Discontinued Operation) ($ millions) Second-Quarter Six-Months Change Change Before Currency Change Change Before Currency Revenues 1,553 1,501 +3% +2% (1) 3,136 2,986 +5% +3% Recurring ex. Recoveries 1,197 1,161 +3% +2% 2,409 2,311 +4% +2% Transactions % +7% % +10% Recoveries % -3% % -4% Adjusted EBITDA % +4% % +7% Adjusted EBITDA Margin 30.4% 30.5% -10 bp +50 bp 31.8% 30.8% +100 bp +120 bp Capital Expenditures % % Free Cash Flow (2) % % Debt Outstanding N/A N/A N/A N/A N/A N/A 40 All figures exclude Risk products being retained by Thomson Reuters (1) F&R constant currency growth of 2% includes a negative impact from the adoption of a new accounting standard, IFRS 15. On an organic basis, revenues increased 3% (2) 2017 Six-month Free Cash Flow negatively impacted by $68M of payments related to Q4-16 Charge, 2018 impact $4M

41 Financial Products, Customers & Competition Segment Major Brands Type of Product/Service Target Customers Desktop Thomson Reuters EIKON Thomson ONE Flagship desktop platform providing pre-trade decision-making tools, news, real-time pricing, research and analysis, charting, analytics, portfolio tools, trading connectivity and collaboration tools Integrated access to information, analytics and tools designed specifically for each customer s workflow Trading & investment professionals, brokers & financial analysts, Investment banks, asset managers Wealth management firms, corporate customers, inc. strategy, research, and finance professionals ELEKTRON Data Platform ELEKTRON Data Platform Global, proprietary, flexible, high speed, cross asset data feeds and trading infrastructure. Scalable and robust technology platforms that enable financial institutions to control real-time information flows Investment Banks, asset managers, custodians, hedge funds, MTFs prop. traders, inter-dealer brokers and Financial Institutions Tradeweb Global electronic multi-dealer-to-customer marketplace for trading fixed income, derivatives and money market products Institutional traders Transactions Thomson Reuters BETA A complete suite of integrated, intelligent solutions to manage retail brokerage operations Wealth management firms FX Trading Solutions Foreign Exchange (FX) Trading (Premium pre-trade, execution and post-trade desktop), Electronic Trading (e-commerce solution for automated FX price distr.) and FXall ( Dealer-to-client multibank trading and workflow solutions) FX and money market traders, sales desks, hedge funds and alternative market makers, asset managers, banks, broker/dealers and prime brokers Financial Business Competition Bloomberg FIS Dow Jones IT Vendors FactSet ICE Data Services NEX Group EBS platform Single/Multi-dealer portals S&P (Capital IQ) Telekurs MarketAxess Other specialist providers 41

42 Risk Products, Customers & Competition Segment Major Brands Type of Product/Service Target Customers Customer and Third Party Risk Information, software products and services: Thomson Reuters Org ID (KYC compliance), World-check data, screening software and due diligence reports Corporate compliance, risk professionals, money laundering reporting officers and business leaders Internal Audit and Controls Audit and controls testing, including risk assessment, global issue tracking and administration Audit management professionals, business leaders and boards of directors Risk Enterprise Risk Management Risk management solution that helps identify, document and assess strategic and operational risks Risk management professionals, business leaders, boards of directors and law firms Pricing and Reference Services Data delivery platform for non-streaming cross-asset class content globally Custodians, banks, insurance companies, fund administrators, pension funds, hedge funds, and market makers Regulatory Change Management Information and software products providing global coverage of over 750 regulatory bodies and over 2500 rulebooks with exclusive news and analysis from our global team of regulatory experts Corporate compliance, risk professionals, general counsels, business leaders, boards of directors and law firms Risk Business Competition Regulatory Change Management: Customer and 3 rd Party Risk: Pricing & Reference: Wolters Kluwer Dow Jones ICE Data Services IBM Watson Analytics LexisNexis Bloomberg Nasdaq Bwise Asset pricing and reference data providers 42

43 Financial & Risk Customers & Key Products 42% North America 41% EMEA 17% Asia Customers Trading professionals, sales professionals, brokers and financial analysts Investment banks, asset managers, custodians, hedge funds, prime brokers and proprietary traders Key Products Eikon Elektron Enterprise Platform Eikon Messenger Portfolio managers, buy-side research analysts, investment bankers, consultants, private equity professionals, wealth management professionals Tax and accounting professionals and lawyers FX and money market traders Sales desks, hedge funds and voice brokers Institutional fixed-income traders Banking and corporate compliance officers Audit and risk management professionals Corporations DataScope Starmine Eikon Lipper FX Trading FXall Tradeweb World-Check Org ID Regulatory Change Management 43

44 ADJUSTED EARNINGS PER SHARE FREE CASH FLOW 44

45 Adjusted Earnings Per Share (EPS) ($ millions except per share amounts & share count) Second-Quarter Six-Months 2018 Change % Change 2018 Change % Change Adjusted EBITDA $348 ($32) $778 ($17) Depreciation & Computer Software Amortization ($129) ($2) ($257) ($6) Interest Expense ($81) $8 ($159) $22 Income Tax ($19) $5 ($45) ($3) Dividend declared on preference shares $0 $0 ($1) $0 Adjusted Earnings $119 ($21) $316 ($4) Adjusted EPS $0.17 ($0.02) -11% $0.44 $0.00 0% Currency Impact $0.00 $0.00 Diluted Weighted Average Common Shares 710.1M 710.8M 45

46 Consolidated Free Cash Flow ($ millions) Second-Quarter Six-Months Change Change Comparable Free Cash Flow (Continuing Operations) $267 $291 ($24) $297 $323 ($26) Other Items (Q4-16 Charges paid and 2017 $500m pension contribution) $1 $16 ($15) $2 $548 ($546) Free Cash Flow (Continuing Operations) $266 $275 ($9) $295 ($225) $520 Free Cash Flow IP & Science $0 ($8) $8 $0 ($49) $49 Free Cash Flow Financial & Risk $289 $313 ($24) $380 $269 $111 Free Cash Flow $555 $580 ($25) $675 ($5) $680 46

47 2018 OUTLOOK 47

48 Estimated Corporate Costs 2018 Full Year: ~$500M-$600M ~$500M - $550M ~$210M ~$175M - $275M ~$190M $44M $72M Q1-18 Q2-18 Q3-18 Q

49 2018 Outlook Thomson Reuters Restated 2017 (excluding F&R) 2018 Outlook (1) Before Currency Revenue Growth $5.3 billion Low single digit (2) Adjusted EBITDA $1.6 billion $1.2 - $1.3 billion Corporate Costs $244 million $500 - $600 million Depreciation & Amortization of computer software $496 million $500 million - $525 million Capital Expenditures % of Revenue 9.9% In line with 2017 Effective Tax Rate on Adjusted Earnings 11.4% 14-16% (1) 2018 Outlook is before currency (2) Revenue Growth Outlook excludes the impact of Reuters News payment from Financial & Risk post transaction close 49