SOURCE: Thomson Reuters Corporation

Thomson Reuters Corporation

July 28, 2011 07:00 ET

Thomson Reuters Reports Second-Quarter 2011 Results

NEW YORK, NY--(Marketwire - Jul 28, 2011) - Thomson Reuters (TSX: TRI) (NYSE: TRI)

  • Revenues grew 4%, before currency
  • Underlying operating profit up 17%
  • Underlying operating profit margin was 20.9%, up 140 basis points
  • Adjusted earnings per share were $0.51 vs. $0.41 in second quarter 2010
  • Markets division reorganized to drive growth
  • 2011 Outlook affirmed

Thomson Reuters (TSX: TRI) (NYSE: TRI), the world's leading source of intelligent information for businesses and professionals, today reported results for the second quarter ended June 30, 2011. The company reported ongoing revenues of $3.2 billion, a 4% increase before currency (9% including currency), and underlying operating profit of $669 million, up 17%.

Adjusted earnings per share (EPS) were $0.51 compared to $0.41 in the prior-year period. The increase was largely attributable to higher underlying operating profit and lower integration costs.

"Thanks to the strong growth of our Professional division and margin improvement across the company, Thomson Reuters posted healthy second-quarter results," said Thomas H. Glocer, chief executive officer of Thomson Reuters.

"Nonetheless, revenue growth in our Markets division is below our expectations, and I have decided to accelerate the transformation in Markets, delayer the organization following a similar move in the Professional division earlier this year, and make a series of changes in the leadership team. I am confident that these changes will result in improved performance."

Consolidated Financial Highlights


                                           Three Months Ended June 30,
                                        ----------------------------------
                                             (Millions of U.S. dollars,
                                               except EPS and margin)

IFRS Financial Measures                   2011     2010   Change
                                        -------  -------  -------
Revenues                                $ 3,447  $ 3,216        7%
Operating profit                        $   833  $   435       91%
Diluted earnings per share (EPS)        $  0.67  $  0.35       91%
Cash flow from operations               $   879  $   889       -1%

                                                                    Change
                                                                    Before
Non-IFRS Financial Measures(1)            2011     2010   Change   Currency
                                        -------  -------  -------  -------
Revenues from ongoing businesses        $ 3,195  $ 2,942        9%       4%
Adjusted EBITDA                         $   887  $   705       26%      20%
Adjusted EBITDA margin                     27.8%    24.0%   380bp    360bp
Underlying operating profit             $   669  $   573       17%       9%
Underlying operating profit margin         20.9%    19.5%   140bp    100bp
Adjusted earnings per share (EPS)       $  0.51  $  0.41       24%
Free cash flow                          $   633  $   644       -2%


(1) These and other non-IFRS financial measures are defined and reconciled
    to the most directly comparable IFRS measures in the tables appended to
    this news release.  Additional information is provided in the
    explanatory note at the end of this news release.

  • Revenues from ongoing businesses were $3.2 billion, a 4% increase before currency. Strong growth across the Professional division, up 8%, and a 1% increase in Markets division revenues contributed to the overall increase.
  • Adjusted EBITDA increased 26%, and the corresponding margin was 27.8% versus 24.0% in the prior-year period. Excluding currency, adjusted EBITDA increased 20% and the corresponding margin increased 360 basis points.
  • Underlying operating profit increased 17% and the corresponding margin was 20.9%, versus 19.5% in the same period in 2010. Excluding currency, underlying operating profit increased 9% and the corresponding margin increased 100 basis points.
  • Adjusted EBITDA growth and underlying operating profit growth across both divisions was due to flow-through from higher revenues, integration savings, timing benefits in Markets and the benefit of currency.
  • Adjusted EPS was $0.51 compared to $0.41 in the prior-year period. The increase was largely attributable to higher underlying operating profit and lower integration costs.

Second-Quarter Business Segment Highlights
Unless otherwise noted, all revenue growth comparisons in this news release are before the impact of foreign currency as Thomson Reuters believes this provides the best basis to measure the performance of its business. All revenue growth and operating profit comparisons are based upon results from ongoing businesses and exclude the results of businesses that have been or are expected to be exited.

Professional Division


                                Three Months Ended June 30,
                        -----------------------------------------
                        (Millions of U.S. dollars, except margin)

                                                 Change
                                                 Before
                        2011     2010   Change  Currency
                      -------  -------  ------  --------

Revenues
Legal                 $   843  $   761      11%        9%
Tax & Accounting      $   252  $   226      12%       10%
Intellectual Property
 & Science            $   211  $   197       7%        4%
                      -------  -------
Professional Division
 Total                $ 1,306  $ 1,184      10%        8%
                                                                 Margin
                                                             -------------
Adjusted EBITDA                                              2011     2010
                                                             ----     ----
Legal                 $   314  $   287       9%              37.2%    37.7%
Tax & Accounting      $    72  $    56      29%              28.6%    24.8%
Intellectual Property
 & Science            $    71  $    70       1%              33.6%    35.5%
                      -------  -------
Professional Division
 Total                $   457  $   413      11%       10%
Adjusted EBITDA
 Margin                  35.0%    34.9%   10bp      50bp

Operating profit
Legal                 $   236  $   220       7%              28.0%    28.9%
Tax & Accounting      $    50  $    35      43%              19.8%    15.5%
Intellectual Property
 & Science            $    57  $    56       2%              27.0%    28.4%
                      -------  -------
Professional Division
 Total                $   343  $   311      10%        9%
Operating Profit
 Margin                  26.3%    26.3%      -      20bp

  • During the second quarter, Thomson Reuters announced its intention to sell its Healthcare business. The planned sale of Healthcare and disposal of three smaller businesses resulted in a realignment of the company's existing Intellectual Property and Science businesses into a single operating unit. Prior-period results have been reclassified to conform to the current presentation.
  • Revenues were up 8%, driven by solid growth across all businesses, in particular Legal which grew 9% and Tax & Accounting which grew 10%.
  • EBITDA increased 11% compared to the prior-year period. The corresponding margin was 35.0% compared to 34.9% for the prior-year period. EBITDA margin was largely unchanged as flow-through from higher revenues was partly offset by the dilutive effect from acquisitions.
  • Operating profit was up 10% compared to the prior-year period. The corresponding margin was 26.3%, unchanged from the prior-year period. Acquisitions negatively impacted the margin by 140 basis points.

Legal

  • Revenues increased 9% from the prior-year period. US Law Firm Solutions grew 2% led by a 12% increase in Business of Law (FindLaw and Elite) and offset by a 2% decline in research-related revenues. Corporate, Government & Academic and Risk & Compliance revenues increased 16% (5% organic and 11% from acquisitions). Global businesses grew 19% (5% organic and 14% from acquisitions) with strong growth in Latin America and Canada.
  • EBITDA increased 9% and the associated margin was 37.2%, compared to 37.7% in the prior-year period.
  • Operating profit increased 7% and the associated margin was 28.0%, compared to 28.9% in the prior-year period. The decrease was primarily due to the dilutive effect of acquisitions.
  • WestlawNext has been sold to over 24,000 customers since its launch in February 2010 -- representing 41% of Westlaw's revenue base. Customer feedback continues to be very positive.

Tax & Accounting

  • Revenues were up 10%. The Professional business grew 13%, the Corporate business grew 5% led by growth in income tax provisions and indirect tax products and the Knowledge Solutions business grew 7% primarily from strong growth in Checkpoint.
  • EBITDA increased 29% and the related margin increased 380 basis points to 28.6% primarily driven by strong flow-through from revenues and the result of efficiency initiatives.
  • Operating profit increased 43% and the related margin increased 430 basis points to 19.8%. The increase was due to strong flow-through from revenues, efficiency initiatives and the decline of acquisition accounting-related costs.

Intellectual Property & Science

  • Revenues were up 4% from the prior-year period. Growth was driven by Scientific & Scholarly Research revenues which were up 5%, led by Web of Knowledge subscriptions and the Life Sciences business, which was up 11% due to strong demand for biology and disease analytics products and acquisitions. IP Solutions was up 2%, driven by growth in Patents and Services.
  • EBITDA was up 1% with the corresponding margin decreasing 190 basis points to 33.6%.
  • Operating profit was up 2% with the corresponding margin decreasing to 27.0%. The decline in EBITDA and operating profit margins was primarily due to investments in content and technology initiatives to drive growth.

Markets Division


                                            Three Months Ended June 30,
                                       -----------------------------------
                                           (Millions of U.S. dollars,
                                                 except margin)

                                                                   Change
                                                                   Before
                                          2011     2010   Change  Currency
                                       -------  -------  -------  --------
Revenues
Sales & Trading                        $   940  $   868        8%        1%
Investment & Advisory                  $   558  $   550        1%       -2%
Enterprise                             $   312  $   265       18%       10%
Media                                  $    84  $    79        6%       -1%
                                       -------  -------
Markets Division Total                 $ 1,894  $ 1,762        7%        1%

Adjusted EBITDA                        $   532  $   427       25%       13%
Adjusted EBITDA Margin                    28.1%    24.2%   390bp     300bp

Operating Profit                       $   388  $   312       24%       11%
Operating Profit Margin                   20.5%    17.7%   280bp     170bp

  • Revenues increased 1%. Strong revenue growth in Enterprise, Commodities & Energy and Tradeweb was partly offset by weakness in Investment Management and Exchange Traded Instruments. Revenue growth would have been 2% excluding a 6% decline in recoveries (pass-through revenues from third-party services such as exchange fees).
  • Recurring subscription-related revenues increased 1%. Transactions-related revenues increased 7%, primarily due to the increase in the company's ownership in Tradeweb. Outright revenues increased 19%.
  • By geography, revenues in Asia increased 5%; revenues in Europe, Middle East and Africa (EMEA) increased 2% while revenues in the Americas declined 1%.
  • EBITDA was $532 million, up 25%, with a related margin of 28.1%. Excluding currency, EBITDA increased 13% and the related margin rose 300 basis points.
  • Operating profit was $388 million, up 24%, with a related margin of 20.5%. Excluding currency, operating profit increased 11% and the margin rose 170 basis points due to flow-through of integration savings and timing of expenses.
  • Markets has sold or migrated more than 28,000 Thomson Reuters Eikon desktops since the launch of the new desktop offering in September 2010.

Sales & Trading

  • Revenues were up 1% driven by 7% organic growth at Tradeweb and the company's increased ownership in the business. Revenue growth was partly offset by a 10% decline in recoveries. Excluding recoveries, revenues grew 4%.
  • The Treasury business was flat in the quarter with growth impacted by 2010 subscription cancellations.
  • Revenues from Commodities & Energy grew 5% primarily due to an acquisition, while Exchange Traded Instruments declined 7%, due to planned shutdowns of low-margin products and the continued reduction of recoveries revenues as exchanges move to direct billing.

Investment & Advisory

  • Revenues declined 2%. Increases in Corporates, Investment Banking and Wealth Management revenues were offset by weak performance in Investment Management which declined 8%.
  • Improving performance in Investment Management is a key objective of the recent reorganization of the Markets division which is described below.

Enterprise

  • Revenues grew 10%, driven by continued strong customer demand. The Enterprise Real Time Solutions business grew 9% as customers continued to invest in low-latency data feeds and hosting solutions. The Enterprise Content business grew 20%, driven by growth in pricing and reference data. The Platform business grew 15%, driven by strong performance in both recurring and outright revenues. Omgeo's revenues declined 3% due to lower volumes.
  • Thomson Reuters Elektron continued to gain momentum as customers in established and emerging markets adopted its combination of hosted and deployed information and trading solutions. In total, 12 data hosting centers are up and running.

Media

  • Revenues decreased 1% as a result of lower online sales.
  • The News Agency business was flat due to tight customer budgets. The Consumer business was down 3% in the second quarter, due to lower online sales primarily in EMEA and the Americas.

Financial Highlights - Six Months

                                            Six Months Ended June 30,
                                        ----------------------------------
                                        (Millions of U.S. dollars, except
                                                  EPS and margin)

IFRS Financial Measures                   2011     2010    Change
                                        -------  -------  -------
Revenues                                $ 6,777  $ 6,356        7%
Operating profit                        $ 1,229  $   756       63%
Diluted earnings per share (EPS)        $  0.97  $  0.50       94%
Cash flow from operations               $ 1,079  $ 1,193      -10%

                                                                    Change
                                                                    Before
Non-IFRS Financial Measures(1)            2011     2010    Change  Currency
                                        -------  -------  -------  -------
Revenues from ongoing businesses        $ 6,303  $ 5,877        7%       4%
Adjusted EBITDA                         $ 1,608  $ 1,400       15%      11%
Adjusted EBITDA margin                     25.5%    23.8%   170bp    160bp
Underlying operating profit             $ 1,205  $ 1,103        9%       5%
Underlying operating profit margin         19.1%    18.8%    30bp     10bp
Adjusted earnings per share (EPS)       $  0.88  $  0.74       19%
Free cash flow                          $   573  $   637      -10%

  • Revenues from ongoing businesses were $6.3 billion, a 4% increase before currency. Strong growth across the Professional division, up 8%, and a 2% increase in Markets division revenues contributed to the overall increase.
  • Adjusted EBITDA increased 15%, and the corresponding margin was 25.5% versus 23.8% in the prior-year period primarily due to flow-through from higher revenues, integration savings and timing benefits in Markets and the benefit of currency. Excluding currency, EBITDA increased 11% and the corresponding margin increased 160 basis points.
  • Underlying operating profit increased 9% and the corresponding margin was 19.1%, versus 18.8% in the same period in 2010. Underlying operating profit growth across both divisions was partly offset by the dilutive effects of acquisitions. Excluding currency, underlying operating profit increased 5% and the corresponding margin increased 10 basis points.
  • Adjusted EPS was $0.88 compared to $0.74 in the prior-year period. The increase was largely attributable to higher underlying operating profit and lower integration costs.
  • Free cash flow was $573 million, down 10% compared to the prior-year period. Corporate expenses were $137 million versus $107 million in the prior-year period.

Integration Programs

At the end of the second quarter of 2011, Thomson Reuters had achieved combined run-rate savings of $1.54 billion from the Reuters integration and legacy savings programs. An incremental $40 million in run-rate savings was achieved during the second quarter of 2011 and included the retirement of legacy products.

Integration-related costs totaled $42 million in the second quarter and are forecast to be approximately $200 million for the full-year 2011.

Business Outlook (Before Currency)

The information in this section is forward-looking and should be read in conjunction with the section below entitled "Special Note Regarding Forward-Looking Statements, Material Assumptions and Material Risks."

Thomson Reuters today reaffirmed its business outlook for 2011 that was previously communicated in February. The business outlook is provided for ongoing businesses and based on 2010 results that have been restated to remove the results of the Healthcare business as well as other disposals.

Thomson Reuters expects revenues to grow mid-single digits in 2011.

Thomson Reuters expects adjusted EBITDA margin to increase by at least 300 basis points in 2011 reflecting revenue growth and the completion of integration programs.

Thomson Reuters expects underlying operating profit margin to increase by at least 100 basis points in 2011.

The company expects that strong adjusted EBITDA growth in 2011 will contribute to a 20% - 25% increase in reported free cash flow.

Dividend

As previously announced, Thomson Reuters increased its 2011 annual dividend by $0.08 per share to $1.24 per share. A quarterly dividend of $0.31 per share is payable on September 15, 2011 to shareholders of record as of August 18, 2011.

Recent Developments

The company announced on July 21, 2011 that it was streamlining its Markets division by combining the current Sales & Trading and Investment & Advisory businesses into one unit to be called "Financial Professionals & Marketplaces" to focus on services for professionals delivered to screens and trading marketplaces. The current Enterprise business has also been expanded into "Enterprise Solutions" to focus on services and infrastructure for financial firms as a whole. These changes are designed to accelerate growth by simplifying the business while improving collaboration across the company.

On June 6, 2011, the company announced its intention to divest its Healthcare business. The Healthcare business provides data, analytics and performance benchmarking solutions and services to companies, government agencies and healthcare professionals. The sale process is ongoing and the company expects the divestiture to close before the end of the year.

Thomson Reuters

Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world's most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 55,000 people and operates in over 100 countries. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, go to www.thomsonreuters.com.

NON-IFRS FINANCIAL MEASURES

Thomson Reuters prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).

This news release includes certain non-IFRS financial measures. Thomson Reuters uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position. These measures do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS. Non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the appended tables.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS, MATERIAL ASSUMPTIONS AND MATERIAL RISKS

Certain statements in this news release, including, but not limited to, statements in the "Integration Programs" and "Business Outlook (Before Currency)" sections and Mr. Glocer's comments, are forward-looking. These forward-looking statements are based on certain assumptions and reflect our 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. There is no assurance that the events described in any forward-looking statement will materialize. A business outlook is provided for the purpose of presenting information about current expectations for 2011. This information may not be appropriate for other purposes. You are cautioned not to place undue reliance on forward-looking statements which reflect expectations only as of the date of this news release. Except as may be required by applicable law, Thomson Reuters disclaims any obligation to update or revise any forward-looking statements.

The material assumptions underlying the company's 2011 business outlook are based on various external and internal assumptions. Economic and market assumptions include, but are not limited to, positive global GDP growth led by rapidly developing economies and a continued increase in the number of professionals around the world and their demand for high quality information and services. Internal financial and operational assumptions include, but are not limited to, the successful execution of the company's ongoing product release programs, globalization strategy, other growth initiatives and efficiency programs.

Some of the material risk factors that could cause actual results or events to differ materially from those expressed in or implied by forward-looking statements in this news release include, but are not limited to, changes in the general economy; actions of competitors; increased accessibility to free or relatively inexpensive information sources; failure to develop new products, services, applications and functionalities to meet customers' needs, attract new customers or expand into new geographic markets; failure to maintain a high renewal rate for subscription-based services; failures or disruptions of network systems or the Internet; detrimental reliance on third parties for information and other services; changes to law and regulations, including the impact of the Dodd-Frank legislation and similar financial services laws around the world; failure to meet the challenges involved in operating globally; failure to protect the reputation of Thomson Reuters; impairment of goodwill and identifiable intangible assets; inadequate protection of intellectual property rights; threat of legal actions and claims; downgrading of credit ratings and adverse conditions in the credit markets; fluctuations in foreign currency exchange and interest rates; failure to recruit and retain high quality management and key employees; the effect of factors outside of the control of Thomson Reuters on funding obligations in respect of pension and post-retirement benefit arrangements; actions or potential actions that could be taken by the company's principal shareholder, The Woodbridge Company Limited; failure to fully derive anticipated benefits from future or existing acquisitions, joint ventures, investments or dispositions; and failure to achieve benefits from integration programs to the extent, or within the time period, currently expected. These and other factors are discussed in materials that Thomson Reuters from time to time files with, or furnishes to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. Thomson Reuters annual and quarterly reports are also available in the "Investor Relations" section of www.thomsonreuters.com.

Thomson Reuters will webcast a discussion of its second-quarter 2011 results today beginning at 8:30 a.m. Eastern Daylight Time (EDT). You can access the webcast by visiting www.thomsonreuters.com and clicking on "Investor Relations" at the top of the page and then "Thomson Reuters Reports Second-Quarter 2011 Results." An archive of the webcast will be available in the "Investor Relations" section of the Thomson Reuters website.

                        Thomson Reuters Corporation
                Division and Business Segment Information
                        (millions of U.S. dollars)
                                (unaudited)



               Three Months                    Six Months
                  Ended                          Ended
                 June 30,                       June 30,
              -----------------------------  -----------------------------
               2011    2010  Change  Organic  2011    2010  Change  Organic
              ------  ------  -----  ------  ------  ------  -----  ------
Revenues
  Legal (1)   $  843  $  761     11%      3% $1,631  $1,470     11%      3%
  Tax &
   Accounting(1) 252     226     12%      7%    508     470      8%      5%
  Intellectual
   Property &
   Science(1)    211     197      7%      2%    412     389      6%      3%
              ------  ------                 ------  ------
Professional
 Division     $1,306   1,184     10%      4%  2,551   2,329     10%      4%
  Sales &
   Trading       940     868      8%     -1%  1,867   1,758      6%     -1%
  Investment
   & Advisory    558     550      1%     -2%  1,118   1,109      1%     -2%
  Enterprise     312     265     18%     10%    608     528     15%     10%
  Media           84      79      6%     -1%    166     159      4%      0%
              ------  ------                 ------  ------
Markets
 Division      1,894   1,762      7%      0%  3,759   3,554      6%      1%
Eliminations      (5)     (4)                    (7)     (6)
              ------  ------                 ------  ------
Revenues from
 ongoing
 businesses(2) 3,195   2,942      9%      1%  6,303   5,877      7%      2%
   Before
    currency                      4%                             4%
Other
 businesses(3)   252     274                    474     479
              ------  ------                 ------  ------
Revenues      $3,447  $3,216      7%         $6,777  $6,356      7%
              ======  ======                 ======  ======

Adjusted
 EBITDA(4)
  Legal(1)    $  314  $  287      9%         $  572  $  533      7%
  Tax &
   Accounting(1)  72      56     29%            137     113     21%
  Intellectual
   Property &
   Science(1)     71      70      1%            137     134      2%
              ------  ------                 ------  ------
Professional
 Division        457     413     11%            846     780      8%
Markets
 Division        532     427     25%          1,003     902     11%
Corporate
 expenses        (60)    (45)                  (129)    (95)
Integration
 programs
 expenses        (42)    (90)                  (112)   (187)
              ------  ------                 ------  ------
Adjusted
 EBITDA       $  887  $  705     26%         $1,608  $1,400     15%
              ======  ======                 ======  ======

Underlying
 Operating
 Profit(5)
  Legal(1)    $  236  $  220      7%         $  422  $  402      5%
  Tax &
   Accounting(1)  50      35     43%             93      72     29%
  Intellectual
   Property &
   Science(1)     57      56      2%            109     106      3%
              ------  ------                 ------  ------
Professional
 Division        343     311     10%            624     580      8%
Markets
 Division        388     312     24%            718     630     14%
Corporate
 expenses        (62)    (50)                  (137)   (107)
              ------  ------                 ------  ------
Underlying
 operating
 profit       $  669  $  573     17%         $1,205  $1,103      9%
              ======  ======                 ======  ======




                        Thomson Reuters Corporation
Reconciliation of Operating Profit to Underlying Operating Profit (5) and
                            Adjusted EBITDA (4)
                        (millions of U.S. dollars)
                                (unaudited)



                            Three Months             Six Months
                                Ended                  Ended
                              June 30,                June 30,
                            ---------------------  -----------------------
                            2011   2010   Change    2011    2010   Change
                            -----  -----  -------  ------  ------  -------

Operating profit            $ 833  $ 435       91% $1,229  $  756       63%
Adjustments:
  Amortization of other
   identifiable intangible
   assets                     150    132              294     261
  Integration programs
   expenses                    42     90              112     187
  Fair value adjustments       (8)   (36)             (10)    (27)
  Other operating (gains)
   losses, net               (286)    34             (319)     33
  Operating profit from
   Other businesses (3)       (62)   (82)            (101)   (107)
                            -----  -----           ------  ------
Underlying operating profit $ 669  $ 573       17% $1,205  $1,103        9%
Adjustments:
  Integration programs
   expenses                   (42)   (90)            (112)   (187)
  Depreciation and
   amortization of
   computer software
   (excluding Other
   businesses (3))            260    222              515     484
                            -----  -----           ------  ------
Adjusted EBITDA             $ 887  $ 705       26% $1,608  $1,400       15%
                            =====  =====           ======  ======

Underlying operating profit
 margin                      20.9%  19.5%   140bp    19.1%   18.8%    30bp
                            =====  =====           ======  ======
Adjusted EBITDA margin       27.8%  24.0%   380bp    25.5%   23.8%   170bp
                            =====  =====           ======  ======




                        Thomson Reuters Corporation
          Reconciliation of Earnings from Continuing Operations to
                            Adjusted EBITDA (4)
                        (millions of U.S. dollars)
                                (unaudited)



                              Three Months            Six Months
                                  Ended                 Ended
                                June 30,               June 30,
                              --------------------  ----------------------
                               2011   2010  Change   2011    2010   Change
                              ------  ----  ------  ------  ------  ------

Earnings from continuing
 operations                   $  572  $303      89% $  827  $  437      89%
Adjustments:
  Tax expense                    174    79             226     110
  Other finance (income)
   cost, net                      (9)  (39)            (16)     24
  Net interest expense            98    95             199     188
  Amortization of other
   identifiable intangible
   assets                        150   132             294     261
  Amortization of computer
   software                      162   133             326     274
  Depreciation                   110   105             217     243
                              ------  ----          ------  ------
EBITDA                        $1,257  $808      56% $2,073  $1,537      35%
Adjustments:
  Share of post tax earnings
   in equity method
   investees                      (2)   (3)             (7)     (3)
  Other operating (gains)
   losses, net                  (286)   34            (319)     33
  Fair value adjustments          (8)  (36)            (10)    (27)
  EBITDA from Other
   businesses (3)                (74)  (98)           (129)   (140)
                              ------  ----          ------  ------
Adjusted EBITDA               $  887  $705      26% $1,608  $1,400      15%
                              ======  ====          ======  ======
Adjusted EBITDA margin          27.8% 24.0%  380bp    25.5%   23.8%  170bp
                              ======  ====          ======  ======




                        Thomson Reuters Corporation
  Reconciliation of Underlying Operating Profit to Adjusted EBITDA (4) by
                      Division and Business Segment
                        (millions of U.S. dollars)
                                (unaudited)



                     Three Months Ended             Three Months Ended
                        June 30, 2011                  June 30,  2010
                ----------------------------  ----------------------------
                            Add:                            Add:
                       Depreciation                     Depreciation
                            and                             and
                       Amortization                     Amortization
                            of                              of
              Underlying  Computer           Underlying  Computer
               Operating  Software  Adjusted Operating   Software  Adjusted
                 Profit      **      EBITDA    Profit       **      EBITDA
                --------  --------- --------  --------  --------- --------

  Legal(1)      $    236  $      78 $    314  $    220  $      67 $    287
  Tax &
   Accounting(1)      50         22       72        35         21       56
  Intellectual
   Property &
   Science(1)         57         14       71        56         14       70
                --------  --------- --------  --------  --------- --------
Professional
 Division            343        114      457       311        102      413
Markets
 Division            388        144      532       312        115      427
Corporate
 expenses            (62)         2      (60)      (50)         5      (45)
Integration
 programs
 expenses             na         na      (42)       na         na      (90)
                --------  --------- --------  --------  --------- --------
                $    669  $     260 $    887  $    573  $     222 $    705
                ========  ========= ========  ========  ========= ========



                      Six Months Ended               Six Months Ended
                        June 30, 2011                 June 30,  2010
                ----------------------------  ----------------------------
                            Add:                            Add:
                       Depreciation                     Depreciation
                            and                             and
                       Amortization                     Amortization
                            of                              of
              Underlying  Computer           Underlying  Computer
               Operating  Software  Adjusted Operating   Software  Adjusted
                 Profit      **      EBITDA    Profit       **      EBITDA
                --------  --------- --------  --------  --------- --------

  Legal(1)      $    422  $     150 $    572  $    402  $     131 $    533
  Tax &
   Accounting(1)      93         44      137        72         41      113
  Intellectual
   Property &
   Science(1)        109         28      137       106         28      134
                --------  --------- --------  --------  --------- --------
Professional
 Division            624        222      846       580        200      780
Markets
 Division            718        285    1,003       630        272      902
Corporate
 expenses           (137)         8     (129)     (107)        12      (95)
Integration
 programs
 expenses             na         na     (112)       na         na     (187)
                --------  --------- --------  --------  --------- --------
                $  1,205  $     515 $  1,608  $  1,103  $     484 $  1,400
                ========  ========= ========  ========  ========= ========




                        Thomson Reuters Corporation
      Reconciliation of Earnings Attributable to Common Shareholders
            to Adjusted Earnings from Continuing Operations (6)
(millions of U.S. dollars, except as otherwise indicated and except for per
                                share data)
                                (unaudited)

                                    Three Months Ended   Six Months Ended
                                         June 30,            June 30,
                                    ------------------  ------------------
                                      2011      2010      2011      2010
                                    --------  --------  --------  --------
 Earnings attributable to common
  shareholders                      $    563  $    290  $    813  $    417
 Adjustments:
      Operating profit from Other
       businesses (3)                    (62)      (82)     (101)     (107)
      Fair value adjustments              (8)      (36)      (10)      (27)
      Other operating (gains)
       losses, net                      (286)       34      (319)       33
      Other finance (income) costs        (9)      (39)      (16)       24
      Share of post tax earnings in
       equity method investees            (2)       (3)       (7)       (3)
      Tax on above items                 115        30       127        29
 Interim period effective tax rate
  normalization (7)                       15         7         5       (11)
 Discrete tax item                       (46)        -       (46)        -
 Amortization of other identifiable
  intangible assets                      150       132       294       261
 Discontinued operations                   -         6        (2)        6
 Dividends declared on preference
  shares                                  (1)        -        (2)       (1)
                                    --------  --------  --------  --------
 Adjusted earnings from continuing
  operations                        $    429  $    339  $    736  $    621
                                    ========  ========  ========  ========
 Adjusted earnings per share from
  continuing operations             $   0.51  $   0.41  $   0.88  $   0.74
                                    ========  ========  ========  ========

                                    ========  ========  ========  ========
 Diluted weighted average common
  shares (in millions)                 839.8     835.8     839.0     835.3
                                    ========  ========  ========  ========



(1) Thomson Reuters reorganized its reportable segments in the second
    quarter of 2011. The company's four reportable segments are Legal, Tax
    & Accounting, Intellectual Property & Science and Markets. Prior-period
    amounts have been reclassified to reflect the current presentation.
(2) Revenues from ongoing businesses are revenues from reportable segments
    (which excludes Other businesses (see note (3) below)) less
    eliminations.
(3) Other businesses are businesses that have been or are expected to be
    exited through sale or shut-down that did not qualify for discontinued
    operations classification. Other businesses do not qualify as a
    component of the company's four reportable segments, nor as a separate
    reportable segment.

    (millions of U.S. dollars)      Three Months Ended   Six Months Ended
                                         June 30,            June 30,
                                    ------------------- -------------------
    Other businesses                  2011      2010      2011      2010
                                    --------- --------- --------- ---------
    Revenues                        $     252 $     274 $     474 $     479

    Operating profit                $      62 $      82 $     101 $     107
    Depreciation and amortization
     of computer software                  12        16        28        33
                                    --------- --------- --------- ---------
    EBITDA                          $      74 $      98 $     129 $     140
                                    ========= ========= ========= =========

(4) Thomson Reuters defines adjusted EBITDA as underlying operating profit
    excluding the related depreciation and amortization of computer
    software but including integration programs expense. Adjusted EBITDA
    margin is adjusted EBITDA expressed as a percentage of revenues from
    ongoing businesses.
(5) Underlying operating profit is operating profit from reportable
    segments and corporate expenses. Underlying operating profit margin is
    the underlying operating profit expressed as a percentage of revenues
    from ongoing businesses.
(6) Adjusted earnings from continuing operations and adjusted earnings per
    share from continuing operations include dividends declared on
    preference shares and integration programs expense, but exclude the
    pre-tax impacts of amortization of other identifiable intangible assets
    as well as the post-tax impacts of fair value adjustments, other
    operating gains and losses, certain impairment charges, the results of
    Other businesses (see note (3) above), other net finance (income)
    costs, Thomson Reuters share of post-tax (earnings) losses in equity
    method investees, discontinued operations and other items affecting
    comparability. Adjusted earnings per share from continuing operations
    is calculated using diluted weighted average shares and does not
    represent actual earnings per share attributable to shareholders.
(7) Adjustment to reflect income taxes based on estimated full-year
    effective tax rate. Reported earnings for interim periods reflect
    income taxes based on the estimated effective tax rates of each of the
    jurisdictions in which Thomson Reuters operates. The adjustment
    reallocates estimated full-year income taxes between interim periods,
    but has no effect on full year income taxes.




                        Thomson Reuters Corporation                        
                      Consolidated Income Statement
            (millions of U.S. dollars, except per share data)
                                (unaudited)



                           Three Months Ended         Six Months Ended
                                June 30,                  June 30,
                        ------------------------  ------------------------
                            2011         2010         2011         2010
                        -----------  -----------  -----------  -----------

Revenues                $     3,447  $     3,216  $     6,777  $     6,356
Operating expenses           (2,478)      (2,377)      (5,030)      (4,789)
Depreciation                   (110)        (105)        (217)        (243)
Amortization of
 computer software             (162)        (133)        (326)        (274)
Amortization of other
 identifiable
 intangible assets             (150)        (132)        (294)        (261)
Other operating gains
 (losses), net                  286          (34)         319          (33)
                        -----------  -----------  -----------  -----------
Operating profit                833          435        1,229          756
Finance costs, net:
    Net interest
     expense                    (98)         (95)        (199)        (188)
    Other finance
     income (costs)               9           39           16          (24)
                        -----------  -----------  -----------  -----------
Income before tax and
 equity method
 investees                      744          379        1,046          544
Share of post tax
 earnings in equity
 method investees                 2            3            7            3
Tax expense                    (174)         (79)        (226)        (110)
                        -----------  -----------  -----------  -----------
Earnings from
 continuing operations          572          303          827          437
(Losses) earnings from
 discontinued
 operations, net of tax           -           (6)           2           (6)
                        -----------  -----------  -----------  -----------
Net earnings            $       572  $       297  $       829  $       431
                        ===========  ===========  ===========  ===========

Earnings attributable
 to:
  Common shareholders           563          290          813          417
  Non-controlling
   interests                      9            7           16           14

Basic and diluted
 earnings per share     $      0.67  $      0.35  $      0.97  $      0.50
                        ===========  ===========  ===========  ===========


Basic weighted average
 common shares          837,096,717  831,962,410  836,129,383  831,429,258
                        ===========  ===========  ===========  ===========
Diluted weighted
 average common shares  839,846,235  835,827,289  839,025,585  835,335,292
                        ===========  ===========  ===========  ===========




                        Thomson Reuters Corporation
               Consolidated Statement of Financial Position
                        (millions of U.S. dollars)
                                (unaudited)

                                                  June 30,    December 31,
                                                    2011          2010
                                                ------------  ------------
Assets
Cash and cash equivalents                       $        713  $        864
Trade and other receivables                            1,653         1,809
Other financial assets                                    97            74
Prepaid expenses and other current assets                662           912
                                                ------------  ------------
Current assets excluding assets held for sale          3,125         3,659
Assets held for sale                                   1,144             -
                                                ------------  ------------
Current assets                                         4,269         3,659

Computer hardware and other property, net              1,464         1,567
Computer software, net                                 1,573         1,613
Other identifiable intangible assets, net              8,620         8,714
Goodwill                                              18,906        18,892
Other financial assets                                   524           460
Other non-current assets                                 567           558
Deferred tax                                              61            68
                                                ------------  ------------
Total assets                                    $     35,984  $     35,531
                                                ============  ============

Liabilities and equity
Liabilities
Current indebtedness                            $        634  $        645
Payables, accruals and provisions                      2,502         2,924
Deferred revenue                                       1,223         1,300
Other financial liabilities                              117           142
                                                ------------  ------------
Current liabilities excluding liabilities
 associated with assets held for sale                  4,476         5,011
Liabilities associated with assets held for
 sale                                                    219             -
                                                ------------  ------------
Current liabilities                                    4,695         5,011

Long-term indebtedness                                 6,955         6,873
Provisions and other non-current liabilities           2,207         2,217
Other financial liabilities                               24            71
Deferred tax                                           1,600         1,684
                                                ------------  ------------
Total liabilities                                     15,481        15,856

Equity
Capital                                               10,407        10,284
Retained earnings                                     10,808        10,518
Accumulated other comprehensive loss                  (1,062)       (1,480)
                                                ------------  ------------
Total shareholders' equity                            20,153        19,322
Non-controlling interests                                350           353
                                                ------------  ------------
Total equity                                          20,503        19,675
                                                ------------  ------------
Total liabilities and equity                    $     35,984  $     35,531
                                                ============  ============




                        Thomson Reuters Corporation
                    Consolidated Statement of Cash Flow
                        (millions of U.S. dollars)
                                (unaudited)


                                    Three Months Ended   Six Months Ended
                                         June 30,            June 30,
                                    ------------------  ------------------
                                      2011      2010      2011      2010
                                    --------  --------  --------  --------
Cash provided by (used in):
Operating activities
Net earnings                        $    572  $    297  $    829  $    431
Adjustments for:
  Depreciation                           110       105       217       243
  Amortization of computer software      162       133       326       274
  Amortization of other
   identifiable intangible assets        150       132       294       261
  Deferred tax                          (142)      (28)     (174)      (66)
  Other                                 (253)       82      (222)      224
Changes in working capital and
 other items (1)                         280       168      (191)     (168)
                                    --------  --------  --------  --------
Operating cash flows from
 continuing operations                   879       889     1,079     1,199
Operating cash flows from
 discontinued operations                   -         -         -        (6)
                                    --------  --------  --------  --------
Net cash provided by operating
 activities (1)                          879       889     1,079     1,193
                                    --------  --------  --------  --------

Investing activities
Acquisitions, less cash acquired        (672)     (415)     (726)     (478)
Proceeds from other disposals            495         4       510        18
Capital expenditures, less proceeds
 from disposals (1)                     (247)     (249)     (541)     (558)
Other investing activities                 2         4        37         3
                                    --------  --------  --------  --------
Investing cash flows from
 continuing operations                  (422)     (656)     (720)   (1,015)
Investing cash flows from
 discontinued operations                  18         -        39         -
                                    --------  --------  --------  --------
Net cash used in investing
 activities (1)                         (404)     (656)     (681)   (1,015)
                                    --------  --------  --------  --------

Financing activities
Proceeds from debt                         -       147         -       638
Repayments of debt                       (48)     (442)      (53)     (913)
Net repayments under short-term
 loan facilities                         (63)      (14)      (20)      (14)
Dividends paid on preference shares       (1)        -        (2)       (1)
Dividends paid on common shares         (248)     (232)     (465)     (463)
Other financing activities               (14)        -       (14)       (6)
                                    --------  --------  --------  --------
Net cash used in financing
 activities                             (374)     (541)     (554)     (759)
                                    --------  --------  --------  --------

Translation adjustments on cash and
 cash equivalents                          1       (12)        5       (22)
                                    --------  --------  --------  --------
Increase (decrease) in cash and
 cash equivalents                        102      (320)     (151)     (603)
Cash and cash equivalents at
 beginning of period                     611       828       864     1,111
                                    --------  --------  --------  --------
Cash and cash equivalents at end of
 period                             $    713  $    508  $    713  $    508
                                    ========  ========  ========  ========

(1) Certain prior-period amounts have been revised in the consolidated
    statement of cash flow. Specifically, capital expenditures now include
    only cash payments, whereas previously they also included accruals
    relating to capital expenditures. The revision had no impact on prior
    periods' increase or decrease in cash and cash equivalents, financial
    position or results of operations.

    Capital expenditures including accrued amounts were $233 million and
    $248 million for the three months ended June 30, 2011 and 2010,
    respectively, and $451 million and $462 million for the six months
    ended June 30, 2011 and 2010, respectively.




                        Thomson Reuters Corporation
        Reconciliation of Net Cash Provided by Operating Activities
                   to Underlying Free Cash Flow (1),(2)
                        (millions of U.S. dollars)
                                (unaudited)



                                    Three Months Ended   Six Months Ended
                                         June 30,            June 30,
                                    ------------------  ------------------
                                        2011      2010      2011      2010
                                    --------  --------  --------  --------
Net cash provided by operating
 activities (3)                     $    879  $    889  $  1,079  $  1,193
Capital expenditures, less proceeds
 from disposals (3)                     (247)     (249)     (541)     (558)
Other investing activities                 2         4        37         3
Dividends paid on preference shares       (1)        -        (2)       (1)
                                    --------  --------  --------  --------
Free cash flow (2),(3)                   633       644       573       637
Integration programs costs                67       107       140       221
                                    --------  --------  --------  --------
Underlying free cash flow (1),(3)   $    700  $    751  $    713  $    858
                                    ========  ========  ========  ========

(1) Underlying free cash flow is free cash flow excluding one-time cash
    costs associated with integration programs.
(2) Free cash flow is net cash provided by operating activities less
    capital expenditures, other investing activities and dividends paid on
    our preference shares. Thomson Reuters uses free cash flow as a
    performance measure because it represents cash available to repay debt,
    pay dividends and fund share repurchases and new acquisitions.
(3) There was no impact on free cash flow or underlying free cash flow as a
    result of the revision of prior-period amounts for "net cash provided
    by operating activities" and "capital expenditures, less proceeds from
    disposals." See the "Consolidated Statement of Cash Flow" in this news
    release for additional information.

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