Thomson Reuters
Reports Fourth-Quarter and Full-Year 2020 Results
Two-Year Change
Program Announced
Fourth-Quarter
Highlights
IFRS revenues and organic revenues up
2%
"Big 3" revenues up 4%; organic
revenues up 5%
IFRS operating profit up 343%
Adjusted EBITDA up 33%; adjusted
EBITDA margin of 32.5%
Accelerating to 3.0: Two Powerful Levers to Drive Both Growth
& Efficiencies
Holding Company to Operating
Company
Content Provider to Content-Driven
Technology Company
2021-2023 Outlook
Provided*
Organic revenue growth of 5% - 6% in
2023
Adjusted EBITDA margin of 38% - 40%
in 2023
Free cash flow of $1.8 billion - $2.0
billion in 2023
Investment of $500 million - $600
million (2021 & 2022)
TORONTO, Feb. 23, 2021 /PRNewswire/ -- Thomson
Reuters (TSX/NYSE: TRI) today reported results for the fourth
quarter and full year ended December 31,
2020. The company also announced a two-year Change Program,
provided a financial outlook for the next three years and announced
a $0.10 increase in its annualized
common share dividend.
"We are very pleased with our results for the fourth quarter and
the full year. We began 2020 with optimism and momentum as our
sales, revenue growth and profitability were accelerating. Despite
challenges from the ongoing COVID-19 pandemic, our 2020
performance reaffirmed the resilience of our markets and businesses
and enabled us to meet or exceed each of the financial
guidance metrics we provided throughout the year. We are confident
that we can build on this performance in 2021 and in future years,"
said Steve Hasker, President and CEO
of Thomson Reuters.
Mr. Hasker added, "This morning, we also announced a two-year
Change Program that will transition Thomson Reuters from a holding
company to an operating company and from a content provider to a
content-driven technology company. We are fortunate to begin this
program from a position of strength with growing Legal, Tax &
Accounting and Government businesses operating in healthy and
evolving markets. Prevailing tailwinds are favorable and play
to our strengths. COVID-19 has changed how, when and where
professionals work. Their need for trusted, authoritative
'always-on' actionable content combined with unique data,
AI/machine learning and software will only increase – a real
opportunity for us to better serve our customers.
This is an organic growth program, and our experienced team has
begun to execute with urgency and rigor. Upon completion, I am
confident Thomson Reuters will be a far more streamlined,
integrated and agile operating company, and will deliver a
best-in-class customer experience, which will drive strong
operating and financial results and greater value for our customers
and shareholders."
* The company's outlook reflects non-IFRS financial measures and
forward-looking statements and should be read in conjunction with
the sections of this news release entitled "Thomson Reuters
Change Program and Outlook," "Non-IFRS Financial Measures" and
"Special Note Regarding Forward-Looking Statements, Material Risks
and Material Assumptions".
Consolidated Financial Highlights -
Three Months Ended December 31
Three Months Ended
December 31,
(Millions of U.S. dollars, except for adjusted EBITDA margin and
EPS)
(unaudited) |
| IFRS Financial Measures(1) |
2020 |
2019 |
Change |
Change at
Constant
Currency |
| Revenues |
$1,616 |
$1,583 |
2% |
|
| Operating profit |
$956 |
$216 |
343% |
|
| Diluted earnings per share (EPS) |
$1.13 |
$2.64 |
-57% |
|
| Cash flow from operations |
$566 |
$355 |
60% |
|
| Non-IFRS Financial
Measures(1) |
|
|
|
|
| Revenues |
$1,616 |
$1,583 |
2% |
2% |
| Adjusted EBITDA |
$525 |
$396 |
33% |
32% |
| Adjusted EBITDA margin |
32.5% |
25.0% |
750bp |
730bp |
| Adjusted EPS |
$0.54 |
$0.37 |
46% |
43% |
| Free cash flow |
$449 |
$209 |
114% |
|
(1)
In addition to results reported in accordance with International
Financial Reporting Standards (IFRS),
the
company uses certain non-IFRS financial measures as supplemental
indicators of its operating
performance
and financial position. 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. |
Revenues increased 2% as growth in recurring revenues
more than offset declines in transactions and Global Print
revenues. Foreign currency had no impact on revenue growth in the
quarter.
- Organic revenues also increased 2% driven by 5% growth in
recurring revenues, which comprised 80% of total revenues.
- The company's "Big 3" segments (Legal Professionals, Corporates
and Tax & Accounting Professionals), which collectively
comprised 79% of total revenues, reported organic revenue growth of
5%.
Operating profit increased due to a significant gain from
the sale of an investment, a gain from an amendment to a pension
plan and lower costs, in addition to higher revenues. Lower
costs reflected the completion of the repositioning of the company
in 2019 following the separation from its former Financial &
Risk (F&R) business, which is now the Refinitiv business of
London Stock Exchange Group (LSEG).
- Adjusted EBITDA, which excludes the gains from the sale
of the investment and the pension plan amendment, among other
items, increased 33% due to lower costs and higher revenues. The
related margin increased to 32.5% from 25.0% in the prior-year
period.
Diluted EPS decreased to $1.13 per share from $2.64 per share in the prior-year period, as the
prior-year period included a $1.2
billion non-cash deferred tax benefit associated with the
reorganization of certain foreign operations.
- Adjusted EPS, which excludes the tax benefit as well as
other adjustments, increased to $0.54
per share from $0.37 per share in the
prior-year period due to higher adjusted EBITDA, which was partly
offset by higher income tax expense.
Cash flow from operations increased primarily because the
prior-year period included significantly higher costs and
investments to reposition the company following the separation from
Refinitiv and higher tax payments.
- Free cash flow was strong in the quarter at $449 million, with the increase primarily due to
higher cash flow from operations.
Highlights by Customer Segment - Three
Months Ended December 31
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited) |
|
|
Three Months
Ended |
|
|
|
|
December
31, |
|
Change |
|
|
2020 |
2019(1) |
|
Total |
Constant
Currency |
Organic(2) |
| Revenues |
|
|
|
|
|
|
|
| Legal Professionals |
|
$653 |
$621 |
|
5% |
5% |
4% |
| Corporates |
|
338 |
328 |
|
3% |
4% |
3% |
| Tax & Accounting Professionals |
|
285 |
274 |
|
4% |
6% |
8% |
| "Big 3" Segments Combined |
|
1,276 |
1,223 |
|
4% |
5% |
5% |
| Reuters News |
|
164 |
164 |
|
0% |
-1% |
-3% |
| Global Print |
|
177 |
196 |
|
-10% |
-10% |
-10% |
| Eliminations/Rounding |
|
(1) |
- |
|
|
|
|
| Revenues |
|
$1,616 |
$1,583 |
|
2% |
2% |
2% |
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
|
|
|
|
|
|
|
| Legal Professionals |
|
$245 |
$215 |
|
14% |
13% |
|
| Corporates |
|
105 |
98 |
|
7% |
6% |
|
| Tax & Accounting Professionals |
|
145 |
134 |
|
9% |
10% |
|
| "Big 3" Segments Combined |
|
495 |
447 |
|
11% |
11% |
|
| Reuters News |
|
6 |
10 |
|
-41% |
-34% |
|
| Global Print |
|
61 |
77 |
|
-21% |
-22% |
|
| Corporate costs |
|
(37) |
(138) |
|
n/a |
n/a |
|
| Adjusted EBITDA |
|
$525 |
$396 |
|
33% |
32% |
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA Margin |
|
|
|
|
|
|
|
| Legal Professionals |
|
37.5% |
34.5% |
|
300bp |
270bp |
|
| Corporates |
|
31.1% |
30.0% |
|
110bp |
70bp |
|
| Tax & Accounting Professionals |
|
51.1% |
48.7% |
|
240bp |
200bp |
|
| "Big 3" Segments Combined |
|
38.8% |
36.5% |
|
230bp |
210bp |
|
| Reuters News |
|
3.9% |
6.5% |
|
-260bp |
-240bp |
|
| Global Print |
|
34.6% |
39.4% |
|
-480bp |
-530bp |
|
| Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
|
| Adjusted EBITDA margin |
|
32.5% |
25.0% |
|
750bp |
730bp |
|
|
|
|
|
|
|
|
|
n/a: not applicable
(1) For comparative purposes, 2019 segment results have been
adjusted to reflect the current period presentation. For additional
information, see the "Adjustments to Prior-Period Segment Results"
section of this news release.
(2) Computed for revenue growth only. |
|
Unless otherwise noted, all revenue
growth comparisons by customer segment in this news release are at
constant currency (or exclude the impact of foreign
currency) as Thomson Reuters believes this provides the best basis
to measure their performance.
Legal Professionals
Revenues increased 5% (4% organic) to $653 million.
- Recurring revenues grew 6% (93% of total), driven by organic
revenue growth of 5% with strong performance from Practical Law,
Westlaw Edge, the segment's businesses in Europe and Canada and its Government business.
- Transactions revenues declined 5% (7% of total), primarily due
to the Elite business. Transactions revenues declined 6%
organically.
Adjusted EBITDA increased 14% to $245 million.
- The margin increased to 37.5% from 34.5%, primarily due to
higher revenues.
Corporates
Revenues increased 4% (3% organic) to $338 million.
- Recurring revenues grew 6% (87% of total), all organic.
- Transactions revenues declined 11% (13% of total), primarily
due to lower software implementation revenues.
Adjusted EBITDA increased 7% to $105 million.
- The margin increased to 31.1% from 30.0%, primarily due to
higher revenues.
Tax & Accounting Professionals
Revenues of $285
million increased 6% (8% organic), primarily due to strong
recurring revenue growth of 7%, which included a 2% benefit from
the accelerated release of some UltraTax state tax software from
January to December to align with the traditional December release
of the segment's US Federal Government software. Excluding this
timing benefit, organic revenues were up 5%. Revenue growth was
negatively impacted by the loss of revenues from the Aumentum
government business, which was sold in November 2019.
- Recurring revenues grew 7% (89% of total), driven by organic
revenue growth of 9%, and were slightly offset by the loss of
revenues from the sale of the Aumentum government business.
- Transactions revenues declined 4% (11% of total), primarily due
to lower software implementation revenues.
Adjusted EBITDA grew 9% to $145 million.
- The margin increased to 51.1% from 48.7%, primarily due to
higher revenues.
- The Tax & Accounting Professionals segment is the company's
most seasonal business with approximately 60% of full-year revenues
typically generated in the first and fourth quarters. As a result,
the margin performance of this segment has been generally higher in
the first and fourth quarters as costs are typically incurred in a
more linear fashion throughout the year.
Reuters News
Revenues of $164
million decreased 1% and organic revenues decreased 3%,
primarily due to lower revenues in the news agency business and the
cancellation of in-person conferences at Reuters Events due to
COVID-19.
- Reuters Events is assessing if and when in-person conferences
can resume in 2021. As a result, the business is preparing a hybrid
events strategy that can accommodate both in-person and virtual
options.
Adjusted EBITDA was $6
million, down $4 million from
the prior-year period, primarily due to non-recurring costs
incurred in the quarter.
Global Print
Revenues decreased 10% to $177 million, as expected. An improvement in
Global Print's 2021 performance is expected, with revenues forecast
to decline between 4%-7%.
Adjusted EBITDA decreased 21% to
$61 million.
- The margin decreased from 39.4% to 34.6% due to the decline in
revenues.
Corporate Costs
Corporate costs at the adjusted EBITDA level were
$37 million compared to $138 million in the prior-year period. The
decline primarily reflected the completion of the repositioning of
the company in 2019 following the separation of Refinitiv, which
required significant costs and investments.
Consolidated Financial Highlights –
Year Ended December 31
Year Ended December
31,
(Millions of U.S. dollars, except for adjusted EBITDA margin and
EPS)
(unaudited) |
| IFRS Financial Measures(1) |
2020 |
2019 |
Change |
Change at
Constant
Currency |
| Revenues |
$5,984 |
$5,906 |
1% |
|
| Operating profit |
$1,929 |
$1,199 |
61% |
|
| Diluted EPS |
$2.25 |
$3.11 |
-28% |
|
| Cash flow from operations |
$1,745 |
$702 |
148% |
|
| Non-IFRS Financial
Measures(1) |
|
|
|
|
| Revenues |
$5,984 |
$5,906 |
1% |
2% |
| Adjusted EBITDA |
$1,975 |
$1,493 |
32% |
32% |
| Adjusted EBITDA margin |
33.0% |
25.3% |
770bp |
760bp |
| Adjusted EPS |
$1.85 |
$1.29 |
43% |
43% |
| Free cash flow |
$1,330 |
$159 |
735% |
|
(1)
In addition to results reported in accordance with IFRS, the
company uses certain non-IFRS financial measures as
supplemental
indicators
of its operating performance and financial position. 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. |
Revenues increased 1%, as growth in recurring revenues
more than offset a decline in Global Print revenues and a negative
impact from foreign currency that reduced revenues by $44 million (approximately 1%).
- Organic revenues increased 1%, driven by 4% growth in recurring
revenues, which comprised 80% of total revenues.
- The company's "Big 3" segments, which collectively comprised
approximately 79% of total revenues, reported organic revenue
growth of 4%.
Operating profit increased 61%, primarily due to a
significant gain from the sale of an investment, lower costs and
higher revenues.
- Adjusted EBITDA, which excludes the gain on sale of the
investment, among other items, increased 32% primarily due to lower
costs and higher revenues. The related margin increased to 33.0%
from 25.3% in the prior year. Lower costs reflected the completion
of the repositioning of the company in 2019 following the
separation from Refinitiv, which required significant costs and
investments in the prior year, and lower expenses from the
company's COVID-19-related cost mitigation efforts.
Diluted EPS decreased to $2.25 per share from $3.11 per share in the prior year, as the prior
year included a $1.2 billion non-cash
deferred tax benefit associated with the reorganization of certain
foreign operations.
- Adjusted EPS, which excludes the tax benefit, as well as
other adjustments, increased to $1.85
per share from $1.29 per share in the
prior year primarily due to higher adjusted EBITDA, which was
partly offset by higher income tax and depreciation and software
amortization expense.
Cash flow from operations increased primarily because the
prior year included a $167 million
pension contribution, as well as significantly higher costs and
investments to reposition the company following the separation from
Refinitiv. In 2020, cash flow benefited from savings related to the
company's COVID-19-related cost mitigation efforts and lower income
tax payments.
- Free cash flow for the full year was strong at
$1.3 billion, which reflected higher
cash flow from operations and the resilience of the company's
businesses and markets.
Highlights by Customer Segment – Year
Ended December 31
(Millions of U.S.
dollars, except for adjusted EBITDA margins)
(unaudited) |
|
|
Year Ended |
|
|
|
|
|
|
December
31, |
|
Change |
|
|
2020 |
2019(1) |
|
Total |
Constant
Currency |
Organic(2) |
| Revenues |
|
|
|
|
|
|
|
| Legal Professionals |
|
$2,535 |
$2,433 |
|
4% |
4% |
3% |
| Corporates |
|
1,367 |
1,308 |
|
5% |
5% |
5% |
| Tax & Accounting
Professionals |
|
836 |
843 |
|
-1% |
2% |
4% |
| "Big 3" Segments Combined |
|
4,738 |
4,584 |
|
3% |
4% |
4% |
| Reuters News |
|
628 |
630 |
|
0% |
0% |
-5% |
| Global Print |
|
620 |
693 |
|
-11% |
-10% |
-10% |
|
Eliminations/Rounding |
|
(2) |
(1) |
|
|
|
|
| Revenues |
|
$5,984 |
$5,906 |
|
1% |
2% |
1% |
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
|
|
|
|
|
|
|
| Legal Professionals |
|
$1,001 |
$895 |
|
12% |
12% |
|
| Corporates |
|
460 |
412 |
|
12% |
11% |
|
| Tax & Accounting
Professionals |
|
330 |
318 |
|
4% |
6% |
|
| "Big 3" Segments Combined |
|
1,791 |
1,625 |
|
10% |
10% |
|
| Reuters News |
|
73 |
68 |
|
7% |
-1% |
|
| Global Print |
|
242 |
294 |
|
-18% |
-18% |
|
| Corporate costs |
|
(131) |
(494) |
|
n/a |
n/a |
|
| Adjusted EBITDA |
|
$1,975 |
$1,493 |
|
32% |
32% |
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA
Margin |
|
|
|
|
|
|
|
| Legal Professionals |
|
39.5% |
36.8% |
|
270bp |
250bp |
|
| Corporates |
|
33.7% |
31.5% |
|
220bp |
180bp |
|
| Tax & Accounting
Professionals |
|
39.5% |
37.6% |
|
190bp |
160bp |
|
| "Big 3" Segments Combined |
|
37.8% |
35.4% |
|
240bp |
210bp |
|
| Reuters News |
|
11.7% |
10.9% |
|
80bp |
-10bp |
|
| Global Print |
|
39.0% |
42.5% |
|
-350bp |
-390bp |
|
| Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
|
| Adjusted EBITDA margin |
|
33.0% |
25.3% |
|
770bp |
760bp |
|
|
|
|
|
|
|
n/a: not applicable
(1) For comparative purposes, 2019 segment results have been
adjusted to reflect the current period presentation. For additional
information, see the "Adjustments to Prior-Period Segment Results"
section of this news release.
(2) Computed for revenue growth only. |
|
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Thomson Reuters Change Program and
Outlook
The company also announced a new two-year Change Program to
transition from a holding company to an operating company and from
a content provider to a content-driven technology company. The
program is expected to take 24 months (2021-2022) to largely
complete and is projected to require an investment of between
$500 million and $600 million during the course of that time. In
2023, the program is forecast to:
- Achieve organic revenue growth of 5% - 6% including additional
annual revenues of $100 million;
- Achieve an Adjusted EBITDA margin of 38% - 40%;
- Achieve free cash flow of $1.8
billion - $2.0 billion;
- Achieve annual operating expense savings of $600 million, of which $200 million is expected to be reinvested in
growth initiatives; and
- Reduce capital expenditures as a percentage of revenue to
between 6.0% and 6.5%.
The company's outlook for 2021, 2022 and 2023 incorporates the
forecasted impacts associated with the Change Program; assumes
constant currency rates; and excludes the impact of any future
acquisitions or dispositions that may occur during those periods.
Thomson Reuters believes that this type of guidance provides useful
insight into the performance of its businesses.
While the company's fourth-quarter 2020 performance provides it
with increasing confidence about its outlook, the global economy
continues to experience substantial disruption due to concerns
regarding the spread of COVID-19, as well as from the measures
intended to mitigate its impact. Any worsening of the global
economic or business environment could impact the company's ability
to achieve its outlook.
First-Quarter 2021 Outlook
Total company revenues and total organic revenues for the first
quarter of 2021 are expected to increase between 1.5% and 2.5%,
primarily impacted by a decline in Global Print revenue of between
13% and 15%.
The Big 3 total revenue growth and organic revenue growth in the
first quarter is forecast to range between 4% and 5%.
Global Print revenues are expected to decline between 4% and 7%
in the full year.
2021 - 2023 Outlook
| Total Thomson Reuters |
2020
Reported |
2021
Outlook |
2022
Outlook |
2023
Outlook |
| Total Revenue Growth |
1.3% |
3.0% - 4.0% |
4.0% - 5.0% |
5.0% - 6.0% |
| Organic Revenue Growth |
1.2% |
3.0% - 4.0% |
4.0% - 5.0% |
5.0% - 6.0% |
| Adjusted EBITDA Margin |
33.0% |
30% - 31% |
34% - 35% |
38% – 40% |
Corporate Costs
Core Corporate Costs
Change Program Operating Expenses |
$131 million |
$305 - $340 million
$130 - $140 million
$175 - $200 million |
$245 - $280 million
$120 - $130 million
$125 - $150 million |
$110 - $120 million
$110 - $120 million
$0 |
| Free Cash Flow |
$1.3 billion |
$1.0 - $1.1 billion |
$1.2 - $1.3 billion |
$1.8 - $2.0 billion |
Capital Expenditures - % of
Revenue
Change Program Capital Expenditures |
8.4% |
9.0% - 9.5%
$125 - $150 million |
7.5% - 8.0%
$75 - $100 million |
6.0% - 6.5%
$0 |
Depreciation & Amortization
of
Computer Software |
$669 million |
$650 - $675 million |
$620 - $645 million |
$580 - $605 million |
| Interest Expense (P&L) |
$195 million |
$190 - $210 million |
$190 - $210 million |
$190 - $210 million |
| Effective Tax Rate on Adjusted Earnings |
16.9% |
16% - 18% |
n/a |
n/a |
|
|
|
|
|
| Big 3 |
2020
Reported |
2021
Outlook |
2022
Outlook |
2023
Outlook |
| Total Revenue Growth |
3.4% |
4.5% - 5.5% |
5.5% - 6.5% |
6.0% - 7.0% |
| Organic Revenue Growth |
3.8% |
4.5% - 5.5% |
5.5% - 6.5% |
6.0% - 7.0% |
| Adjusted EBITDA Margin |
37.8% |
38% - 39% |
41% - 42% |
43% - 45% |
The information in
this section is forward-looking. Actual results, which include the
impact of currency and future acquisitions and dispositions
completed during 2021, 2022 and 2023, may differ materially from
the company's outlook. Some of the forward-looking financial
measures in the outlook above are provided on a non-IFRS basis. See
the section below entitled "Non-IFRS Financial Measures" for more
information. The information in this section should also be read in
conjunction with the section below entitled "Special Note Regarding
Forward-Looking Statements, Material Risks and Material
Assumptions."
COVID-19 Update
Thomson Reuters has not experienced any significant disruptions
to its business and continues to be fully operational. Most
employees continue to work remotely from their homes, enabled by
technology that allows them to collaborate with customers and each
other. Essential employees who cannot work from home, such as
Reuters News journalists and those working in the company's Global
Print facilities, follow various health and safety standards. While
the company cancelled or postponed nearly all in-person
conferences, primarily in its Reuters Events business, many of
these events were replaced with virtual meetings. The company
continues to act based on guidance from global health
organizations, relevant governments and evolving best
practices.
The company has approximately 500,000 customers that are largely
comprised of legal and tax professionals in corporations and
professional service firms, many of whom are also working remotely.
The company's products enable its customers to remain productive
while they work remotely because they can access most Thomson
Reuters products and services through the Internet.
The company continues to believe it is well positioned to
weather the economic crisis because its business is supported by a
solid financial foundation with access to liquidity resources that
it believes are adequate to support it through a gradual
recovery. Thomson Reuters principal sources of liquidity
continue to be cash on hand, cash provided by its operations, its
$1.8 billion syndicated credit
facility and its $1.8 billion
commercial paper program. From time to time, the company also
issues debt securities under a prospectus. As set forth in its
full-year 2021 outlook, the company expects to generate between
$1.0 billion and $1.1 billion of free cash flow this year. As of
December 31, 2020, Thomson Reuters
had $1.8 billion of cash and cash
equivalents on hand, and none of its debt securities are scheduled
to mature until 2023.
Dividends and Share Repurchases
The company announced today that its Board of Directors approved
a $0.10 per share annualized increase
in the dividend to $1.62 per common
share, representing the 28th consecutive year of
dividend increases. A quarterly dividend of $0.405 per share is payable on March 17, 2021 to common shareholders of record
as of March 5, 2021.
The company also announced today that it recently completed the
repurchase of $200 million of its
common shares under its normal course issuer bid (NCIB), which
began in January 2021. Thomson
Reuters does not currently intend to repurchase additional shares
in 2021. Thomson Reuters has set a target to maintain approximately
500 million common shares outstanding by using share repurchases to
offset dilution associated with its dividend reinvestment and
equity incentive plans.
Sale of Refinitiv to London Stock
Exchange Group (LSEG)
On January 29, 2021, Thomson
Reuters and private equity funds affiliated with
Blackstone closed the sale of Refinitiv to LSEG in
an all-share transaction. A majority interest in Refinitiv was
previously sold to Blackstone's consortium
in October 2018. Thomson Reuters and Blackstone's
consortium subsequently agreed to sell Refinitiv to
LSEG in August 2019.
Thomson Reuters now indirectly owns approximately 82.5
million LSEG shares, which have a market value of
approximately $11.2 billion based on LSEG's closing
share price on February 22, 2021. Thomson Reuters
interest in LSEG shares are held through an entity jointly owned by
Blackstone's consortium and Thomson Reuters.
While Thomson Reuters expects that the LSEG transaction will be
predominantly tax deferred, approximately $700 million of
tax became payable when the deal closed. As permitted
under a transaction agreement, Thomson
Reuters plans to sell approximately $1
billion of its LSEG shares to generate
approximately $750 million of total net proceeds, but the
company does not plan to sell any LSEG shares prior to LSEG's
announcement of its full-year 2020 results on March 5, 2021. Subject to certain
exceptions, Thomson Reuters and Blackstone's
consortium have otherwise agreed to be subject to a
lock-up for their LSEG shares until January 29, 2023. In each of the three and four
years following the closing (starting on January 30, 2023 and January 30, 2024, respectively), Thomson Reuters
and Blackstone's consortium will become entitled to sell in
aggregate one-third of the LSEG shares issued to them. The lock-up
arrangement will terminate on January
29, 2025.
Reuters News' 30-year agreement to supply news and
editorial content to Refinitiv continues under the same terms and
conditions after the closing and is scheduled to run to
2048.
Thomson Reuters financial results for the fourth quarter and
full-year 2020 (which reflect periods prior to the closing of the
sale of Refinitiv to LSEG) include its share of post-tax losses
from its previous 45% interest in Refinitiv, which was then
considered an equity method investment, in its net earnings. For
purposes of those financial results, Thomson Reuters removed these
amounts from its non-IFRS calculation of adjusted EPS.
Refinitiv achieved its targeted run-rate cost savings of
$650 million as of December 31, 2020. Additional information
regarding Refinitiv's financial results is provided in the appendix
to this news release.
Thomson Reuters
Thomson Reuters is a leading provider of business information
services. Our products include highly specialized
information-enabled software and tools for legal, tax, accounting
and compliance professionals combined with the world's most global
news service – Reuters. For more information on Thomson Reuters,
visit tr.com and for the latest world news,
reuters.com.
NON-IFRS FINANCIAL MEASURES
Thomson Reuters prepares its
financial statements in accordance with International Financial
Reporting Standards (IFRS), as issued by the International
Accounting Standards Board (IASB).
This news release includes certain
non-IFRS financial measures, such as adjusted EBITDA and the
related margin (other than at the customer segment level), net debt
to adjusted EBITDA leverage ratio, free cash flow, adjusted EPS,
selected measures excluding the impact of foreign currency, and
changes in revenues computed on an organic basis. 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.
The company's outlook contains
various non-IFRS financial measures. The company believes that
providing reconciliations of forward-looking non-IFRS financial
measures in its outlook would be potentially misleading and not
practical due to the difficulty of projecting items that are not
reflective of ongoing operations in any future period. The
magnitude of these items may be significant. Consequently, for
outlook purposes only, the company is unable to reconcile these
non-IFRS measures to the most comparable IFRS measures because it
cannot predict, with reasonable certainty, the 2021, 2022 and 2023
impacts of changes in foreign exchange rates which impact (i) the
translation of its results reported at average foreign currency
rates for the year, and (ii) other finance income or expense
related to intercompany financing arrangements. Additionally, the
company cannot reasonably predict the occurrence or amount of other
operating gains and losses, that generally arise from business
transactions that the company does not currently anticipate.
ROUNDING
Other than EPS, the company reports
its results in millions of U.S. dollars, but computes percentage
changes and margins using whole dollars to be more precise. As a
result, percentages and margins calculated from reported amounts
may differ from those presented, and growth components may not
total due to rounding.
ADJUSTMENTS TO PRIOR-PERIOD SEGMENT
RESULTS
In the first quarter of 2020, the
company reassessed its methodology for allocating costs to its
business segments and adjusted its allocations in connection with
the completion of the repositioning of its businesses in 2019 after
the separation of Refinitiv. The company adjusted its prior-period
segment amounts to reflect the current presentation. The 2019
segment amounts were also adjusted to reflect the transfer of
certain revenues among the segments to where they are better
aligned. These changes impacted the 2019 financial results of the
segments but did not change the consolidated 2019 financial
results. The table below summarizes the changes:
|
Three
Months Ended
December 31, 2019 |
|
Year
Ended
December 31, 2019 |
|
|
| (millions of U.S. dollars) |
As Reported |
Adjustments |
As Revised |
|
As Reported |
Adjustments |
As Revised |
|
| Revenues |
|
|
|
|
|
|
|
|
| Legal Professionals |
$617 |
$4 |
$621 |
|
$2,419 |
$14 |
$2,433 |
|
| Corporates |
331 |
(3) |
328 |
|
1,321 |
(13) |
1,308 |
|
| Tax & Accounting Professionals |
274 |
- |
274 |
|
844 |
(1) |
843 |
|
| Reuters News |
164 |
- |
164 |
|
630 |
- |
630 |
|
| Global Print |
196 |
- |
196 |
|
693 |
- |
693 |
|
| Eliminations/Rounding |
1 |
(1) |
- |
|
(1) |
- |
(1) |
|
| Total revenues |
$1,583 |
- |
$1,583 |
|
$5,906 |
- |
$5,906 |
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
|
|
|
|
|
|
|
|
| Legal Professionals |
$215 |
- |
$215 |
|
$901 |
$(6) |
$895 |
|
| Corporates |
103 |
$(5) |
98 |
|
433 |
(21) |
412 |
|
| Tax & Accounting Professionals |
135 |
(1) |
134 |
|
323 |
(5) |
318 |
|
| Reuters News |
4 |
6 |
10 |
|
35 |
33 |
68 |
|
| Global Print |
77 |
- |
77 |
|
295 |
(1) |
294 |
|
| Corporate costs |
(138) |
- |
(138) |
|
(494) |
- |
(494) |
|
| Total adjusted EBITDA |
$396 |
- |
$396 |
|
$1,493 |
- |
$1,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS, MATERIAL RISKS AND MATERIAL ASSUMPTIONS
Certain statements in this news
release, including, but not limited to, statements in Mr. Hasker's
comments, the "Thomson Reuters Change Program and Outlook"
section, statements regarding the potential or expected impact of
the COVID-19 pandemic on Thomson Reuters, its customers and the
general economy, the company's expectations regarding Reuters News,
Global Print, share repurchases and its liquidity and capital
resources, the company's expectations regarding the
tax consequences of the LSEG transaction and
its intentions related to future sales of LSEG shares,
are forward-looking. The words "will", "expect", "believe",
"target", "estimate", "could", "should", "intend", "predict",
"project" and similar expressions identify forward-looking
statements. While the company believes that it has a reasonable
basis for making forward-looking statements in this news release,
they are not a guarantee of future performance or outcomes and
there is no assurance that any of the other events described in any
forward-looking statement will materialize. Forward-looking
statements, including those related to the COVID-19 pandemic, are
subject to a number of risks, uncertainties and assumptions that
could cause actual results or events to differ materially from
current expectations. Many of these risks, uncertainties and
assumptions are beyond the company's control and the effects of
them can be difficult to predict. In particular, the full extent of
the impact of the COVID-19 pandemic on the company's business,
operations and financial results will depend on numerous evolving
factors that it may not be able to accurately predict.
Some of the material risk factors that could cause actual
results or events to differ materially from those expressed in or
implied by forward-looking statements in this news release include,
but are not limited to, uncertainty, downturns and changes in the
markets that the company serves, the ongoing impact of the COVID-19
pandemic on the company's business and risks that the pandemic
could have a longer duration or a more significant impact on
Thomson Reuters than the company currently expects; fraudulent or
unpermitted data access or other cyber-security or privacy
breaches; failures or disruptions of data centers, network systems,
telecommunications, or the Internet; failure to keep pace with
technological developments to provide new products, services,
applications and functionalities to meet customers' needs, attract
new customers and retain existing ones, or expand into new
geographic markets and identify areas of higher growth; inadequate
protection of intellectual property rights; actions of competitors;
failure to adapt to organizational changes and effectively
implement strategic initiatives; failure to attract, motivate and
retain high quality, talented and diverse management and key
employees; failure to derive fully the anticipated benefits from
existing or future acquisitions, joint ventures, investments or
dispositions; failure to meet the challenges involved in operating
globally; failure to maintain a high renewal rate for recurring,
subscription-based services; dependency on third parties for data,
information and other services; impairment of goodwill and other
identifiable intangible assets; changes to law and regulations
related to privacy, data security, data protection and other areas;
tax matters, including changes to tax laws, regulations and
treaties; threat of legal actions and claims; risk of
antitrust/competition-related claims or investigations;
fluctuations in foreign currency exchange and interest rates;
downgrading of credit ratings and adverse conditions in the credit
markets; the effect of factors outside of the control of Thomson
Reuters on funding obligations in respect of pension and
post-retirement benefit arrangements; failure to protect the brands
and reputation of Thomson Reuters; actions or potential actions
that could be taken by the company's principal shareholder, The
Woodbridge Company Limited; and the ability of Thomson Reuters
Founders Share Company to affect the company's governance and
management. Many of the foregoing risks are, and could be,
exacerbated by the COVID-19 pandemic and any worsening of
the global business and economic environment as a result. These
and other risk factors are discussed in materials that Thomson
Reuters from time to time files with, or furnishes to, the Canadian
securities regulatory authorities and the U.S. Securities and
Exchange Commission. Thomson Reuters annual and quarterly reports
are also available in the "Investor Relations" section of
www.thomsonreuters.com.
The company's business outlook
is based on information currently available to the company and is
based on various external and internal assumptions made by the
company in light of its experience and perception of historical
trends, current conditions and expected future developments
(including those related to the COVID-19 pandemic), as well as
other factors that the company believes are appropriate under the
circumstances. Material assumptions and material risks may cause
actual performance to differ from the company's expectations
underlying its business outlook, which reflects the global economic
crisis caused by the COVID-19 pandemic. Material assumptions
related to the company's revenue outlook are that there will be
improved global economic conditions throughout 2021 to
2023, despite periods of volatility due to disruption caused
by COVID-19 and the measures intended to mitigate its impact; there
will be a continued need for trusted products and services that
help customers navigate evolving and complex legal, tax,
accounting, regulatory, geopolitical and commercial changes,
developments and environments, and for cloud-based digital tools
that drive productivity; Thomson Reuters will have a continued
ability to deliver innovative products that meet evolving customer
demands; the company will acquire new customers through expanded
and improved digital platforms, simplification of the product
portfolio and through other sales initiatives; and the
company will improve customer retention through commercial
simplification efforts and customer service improvements. Material
assumptions related to the company's adjusted EBITDA margin outlook
are its ability to achieve revenue growth targets; the company's
business mix continues to shift to higher-growth product offerings;
Change Program expenses are $500
million to $600 million in
2021 and 2022; and Change Program investments will drive higher
adjusted EBITDA margin through higher revenues and efficiencies by
2023. Material assumptions related to the company's free cash
flow outlook are its ability to achieve its revenue and adjusted
EBITDA margin targets; and capital expenditures are between the
percentages of revenues in 2021, 2022 and 2023 as set forth in the
company's outlook. Material assumptions related to the
company's effective tax rate on adjusted earnings outlook are its
ability to achieve its adjusted EBITDA target; the mix of taxing
jurisdictions where the company recognized pre-tax profit or losses
in 2020 does not significantly change; no unexpected changes in tax
laws or treaties within the jurisdictions where the company
operates; depreciation and amortization of computer software for
2021 as set forth in the company's outlook; and interest expense
for 2021 as set forth in the company's outlook.
Material risks related to the company's revenue outlook are
that business disruptions associated with the COVID-19 pandemic,
including government enforced quarantines and stay-at-home orders,
may continue longer than the company expects or may be interrupted
by future outbreaks and resurgences of the virus, delaying the
anticipated recovery of the global economy; global economic
uncertainty due to the COVID-19 pandemic as well as related
regulatory reform and changes in the political environment may lead
to limited business opportunities for the company's customers,
creating significant cost pressures for them and potentially
constraining the number of professionals employed, which could lead
to lower demand for Thomson Reuters products and services; demand
for the company's products and services could be reduced by changes
in customer buying patterns or in its inability to execute on key
product design or customer support initiatives; competitive pricing
actions and product innovation could impact the company's revenues;
and the company's sales, commercial simplification and product
initiatives may be insufficient to retain customers or generate new
sales. Material risks related to the company's adjusted
EBITDA margin outlook are the same as the risks above related to
the revenue outlook; the costs to execute the Change Program may be
higher than current expectations or the expected benefits by 2023
may be lower than current expectations; and acquisition and
disposal activity may dilute the company's adjusted EBITDA margin.
Material risks related to the company's free cash flow outlook are
the same as the risks above related to the revenue and adjusted
EBITDA margin outlook; a weaker macroeconomic environment could
negatively impact working capital performance, including the
ability of our customers to pay us; capital expenditures may be
higher than currently expected; and the timing and amount of tax
payments to governments may differ from the company's
expectations. Material risks related to the company's
effective tax rate on adjusted earnings outlook are the same as the
risks above related to adjusted EBITDA; a material change in the
geographical mix of the company's pre-tax profits and losses; a
material change in current tax laws or treaties to which the
company is subject, and did not expect; and depreciation and
amortization of computer software as well as interest expense may
be significantly higher or lower than expected.
The company has provided an Outlook
for the purpose of presenting information about current
expectations for 2021, 2022 and 2023. 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, including those related
to the COVID-19 pandemic.
CONTACTS
MEDIA
Melissa Cassar
Head of Commercial Communications & Corporate Affairs
+1 437 388 3619
melissa.cassar@tr.com |
INVESTORS
Frank J. Golden
Head of Investor Relations
+1 332 219 1111
frank.golden@tr.com |
Thomson Reuters will webcast a
discussion of its fourth-quarter and full-year 2020 results and its
three-year business outlook today beginning at 8:30 a.m. Eastern Standard Time (EST). You can
access the webcast by visiting ir.thomsonreuters.com. An archive of
the webcast will be available following the presentation.
Thomson Reuters
Corporation
Consolidated Income Statement
(millions of U.S. dollars, except per share data)
(unaudited) |
|
|
Three Months
Ended |
|
Year Ended |
|
December
31, |
|
December
31, |
|
2020 |
2019 |
|
2020 |
2019 |
| CONTINUING OPERATIONS |
|
|
|
|
|
| Revenues |
$1,616 |
$1,583 |
|
$5,984 |
$5,906 |
| Operating expenses |
(1,098) |
(1,193) |
|
(3,999) |
(4,413) |
| Depreciation |
(40) |
(44) |
|
(184) |
(154) |
| Amortization of computer software |
(123) |
(123) |
|
(485) |
(449) |
| Amortization of other identifiable intangible
assets |
(31) |
(34) |
|
(123) |
(114) |
| Other operating gains, net |
632 |
27 |
|
736 |
423 |
| Operating profit |
956 |
216 |
|
1,929 |
1,199 |
| Finance costs, net: |
|
|
|
|
|
| Net interest expense |
(49) |
(51) |
|
(195) |
(163) |
| Other finance (costs)
income |
(6) |
(33) |
|
30 |
(65) |
| Income before tax and equity method
investments |
901 |
132 |
|
1,764 |
971 |
| Share of post-tax losses in equity method
investments |
(159) |
(44) |
|
(544) |
(599) |
| Tax (expense) benefit |
(155) |
1,233 |
|
(71) |
1,198 |
| Earnings from continuing operations |
587 |
1,321 |
|
1,149 |
1,570 |
| (Loss) earnings from discontinued operations, net
of tax |
(25) |
3 |
|
(27) |
(6) |
| Net earnings |
$562 |
$1,324 |
|
$1,122 |
$1,564 |
| Earnings attributable to common shareholders |
$562 |
$1,324 |
|
$1,122 |
$1,564 |
|
|
|
|
|
|
| Earnings (loss) per share: |
|
|
|
|
|
| Basic earnings (loss) per share: |
|
|
|
|
|
| From continuing operations |
$1.18 |
$2.64 |
|
$2.31 |
$3.13 |
| From discontinued operations |
(0.05) |
0.01 |
|
(0.06) |
(0.01) |
| Basic earnings per share |
$1.13 |
$2.65 |
|
$2.25 |
$3.12 |
|
|
|
|
|
|
| Diluted earnings (loss) per share: |
|
|
|
|
|
| From continuing operations |
$1.18 |
$2.63 |
|
$2.30 |
$3.12 |
| From discontinued operations |
(0.05) |
0.01 |
|
(0.05) |
(0.01) |
| Diluted earnings per share |
$1.13 |
$2.64 |
|
$2.25 |
$3.11 |
|
|
|
|
|
|
| Basic weighted-average common shares |
497,372,688 |
499,180,148 |
|
496,722,292 |
500,829,753 |
| Diluted weighted-average common shares |
498,809,560 |
501,134,127 |
|
498,032,006 |
502,521,200 |
Thomson Reuters
Corporation
Consolidated Statement of Financial Position
(millions of U.S. dollars)
(unaudited) |
|
|
December 31, |
|
December 31, |
| 2020 |
|
2019 |
| Assets |
|
|
|
| Cash and cash equivalents |
$1,787 |
|
$825 |
| Trade and other receivables |
1,151 |
|
1,167 |
| Other financial assets |
612 |
|
533 |
| Prepaid expenses and other current assets |
425 |
|
546 |
| Current assets |
3,975 |
|
3,071 |
|
|
|
|
| Property and equipment, net |
545 |
|
615 |
| Computer software, net |
830 |
|
900 |
| Other identifiable intangible assets, net |
3,427 |
|
3,518 |
| Goodwill |
5,976 |
|
5,853 |
| Equity method investments |
1,136 |
|
1,551 |
| Other non-current assets |
788 |
|
611 |
| Deferred tax |
1,204 |
|
1,176 |
| Total assets |
$17,881 |
|
$17,295 |
|
|
|
|
| Liabilities and equity |
|
|
|
| Liabilities |
|
|
|
| Current indebtedness |
- |
|
$579 |
| Payables, accruals and provisions |
1,410 |
|
1,373 |
| Deferred revenue |
866 |
|
833 |
| Other financial liabilities |
376 |
|
434 |
| Current liabilities |
2,652 |
|
3,219 |
|
|
|
|
| Long-term indebtedness |
3,772 |
|
2,676 |
| Provisions and other non-current liabilities |
1,083 |
|
1,264 |
| Deferred tax |
394 |
|
576 |
| Total liabilities |
7,901 |
|
7,735 |
|
|
|
|
| Equity |
|
|
|
| Capital |
5,458 |
|
5,377 |
| Retained earnings |
5,211 |
|
4,965 |
| Accumulated other comprehensive loss |
(689) |
|
(782) |
| Total equity |
9,980 |
|
9,560 |
| Total liabilities and equity |
$17,881 |
|
$17,295 |
Thomson Reuters
Corporation
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited) |
|
|
|
|
|
Three Months
Ended
December 31, |
|
Year Ended
December 31, |
|
2020 |
2019 |
|
2020 |
2019 |
| Cash provided by (used in): |
|
|
|
|
|
| Operating activities |
|
|
|
|
|
| Earnings from continuing operations |
$587 |
$1,321 |
|
$1,149 |
$1,570 |
| Adjustments for: |
|
|
|
|
|
| Depreciation |
40 |
44 |
|
184 |
154 |
| Amortization of computer software |
123 |
123 |
|
485 |
449 |
| Amortization of other identifiable intangible
assets |
31 |
34 |
|
123 |
114 |
| Net (gains) losses on disposals of businesses and
investments |
(472) |
23 |
|
(471) |
3 |
| Deferred tax |
(41) |
(1,250) |
|
(231) |
(1,395) |
| Other |
53 |
65 |
|
421 |
385 |
| Pension contribution |
- |
- |
|
- |
(167) |
| Changes in working capital and other
items |
249 |
1 |
|
102 |
(247) |
| Operating cash flows from continuing
operations |
570 |
361 |
|
1,762 |
866 |
| Operating cash flows from discontinued
operations |
(4) |
(6) |
|
(17) |
(164) |
| Net cash provided by operating activities |
566 |
355 |
|
1,745 |
702 |
|
|
|
|
|
|
| Investing activities |
|
|
|
|
|
| Acquisitions, net of cash acquired |
(2) |
(177) |
|
(167) |
(998) |
| Proceeds from disposals of businesses and
investments, net of taxes paid |
366 |
12 |
|
367 |
74 |
| Capital expenditures |
(100) |
(140) |
|
(504) |
(505) |
| Proceeds from disposals of property and
equipment |
- |
7 |
|
162 |
7 |
| Other investing activities |
2 |
4 |
|
4 |
9 |
| Investing cash flows from continuing
operations |
266 |
(294) |
|
(138) |
(1,413) |
| Investing cash flows from discontinued
operations |
- |
- |
|
- |
29 |
| Net cash provided by (used in) investing
activities |
266 |
(294) |
|
(138) |
(1,384) |
|
|
|
|
|
|
| Financing activities |
|
|
|
|
|
| Proceeds from debt |
- |
- |
|
2,019 |
- |
| Repayments of debt |
- |
- |
|
(1,645) |
- |
| Net repayments under short-term loan
facilities |
- |
- |
|
(2) |
- |
| Payments of lease principal |
(19) |
(16) |
|
(75) |
(51) |
| Repurchases of common shares |
- |
(200) |
|
(200) |
(488) |
| Dividends paid on preference shares |
- |
(1) |
|
(2) |
(3) |
| Dividends paid on common shares |
(183) |
(174) |
|
(730) |
(698) |
| Other financing activities |
1 |
1 |
|
(9) |
39 |
| Net cash used in financing activities |
(201) |
(390) |
|
(644) |
(1,201) |
| Increase (decrease) in cash and bank
overdrafts |
631 |
(329) |
|
963 |
(1,883) |
| Translation adjustments |
4 |
7 |
|
(1) |
5 |
| Cash and bank overdrafts at beginning of
period |
1,152 |
1,147 |
|
825 |
2,703 |
| Cash and bank overdrafts at end of period |
$1,787 |
$825 |
|
$1,787 |
$825 |
| Cash and bank overdrafts at end of period
comprised of: |
|
|
|
|
|
| Cash and cash equivalents |
$1,787 |
$825 |
|
$1,787 |
$825 |
| Thomson Reuters
Corporation |
|
| Reconciliation of
Earnings from Continuing Operations to Adjusted EBITDA
(1) |
|
| (millions of U.S.
dollars, except for margins) |
|
| (unaudited) |
|
|
|
|
Three Months
Ended |
|
Year Ended |
|
| December
31, |
|
December
31, |
|
|
2020 |
2019 |
|
2020 |
2019 |
|
|
|
|
|
|
|
|
| Earnings from continuing operations |
$587 |
$1,321 |
|
$1,149 |
$1,570 |
|
| Adjustments to remove: |
|
|
|
|
|
|
| Tax expense (benefit) |
155 |
(1,233) |
|
71 |
(1,198) |
|
| Other finance costs (income) |
6 |
33 |
|
(30) |
65 |
|
| Net interest expense |
49 |
51 |
|
195 |
163 |
|
| Amortization of other identifiable intangible
assets |
31 |
34 |
|
123 |
114 |
|
| Amortization of computer software |
123 |
123 |
|
485 |
449 |
|
| Depreciation |
40 |
44 |
|
184 |
154 |
|
| EBITDA |
$991 |
$373 |
|
$2,177 |
$1,317 |
|
| Adjustments to remove: |
|
|
|
|
|
|
| Share of post-tax losses in equity method
investments |
159 |
44 |
|
544 |
599 |
|
| Other operating gains, net |
(632) |
(27) |
|
(736) |
(423) |
|
| Fair value adjustments |
7 |
6 |
|
(10) |
- |
|
| Adjusted EBITDA (1) |
$525 |
$396 |
|
$1,975 |
$1,493 |
|
| Adjusted EBITDA margin (1) |
32.5% |
25.0% |
|
33.0% |
25.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Thomson Reuters
Corporation |
| Reconciliation of
Net Earnings to Adjusted Earnings (2) |
| Reconciliation of
Total Change in Adjusted EPS to Change in Constant Currency
(4) |
| (millions of U.S.
dollars, except for share and per share data) |
| (unaudited) |
|
|
Three
Months Ended
December 31, |
|
Year
Ended
December 31, |
|
|
|
2020 |
2019 |
Change |
|
2020 |
2019 |
Change |
| Net earnings |
$562 |
$1,324 |
|
|
$1,122 |
$1,564 |
|
| Adjustments to remove: |
|
|
|
|
|
|
|
| Fair value adjustments |
7 |
6 |
|
|
(10) |
- |
|
| Amortization of other identifiable intangible
assets |
31 |
34 |
|
|
123 |
114 |
|
| Other operating gains, net |
(632) |
(27) |
|
|
(736) |
(423) |
|
| Other finance costs (income) |
6 |
33 |
|
|
(30) |
65 |
|
| Share of post-tax losses in equity method
investments |
159 |
44 |
|
|
544 |
599 |
|
| Tax on above items |
119 |
(15) |
|
|
19 |
(72) |
|
| Tax items impacting comparability |
(29) |
(1,211) |
|
|
(136) |
(1,204) |
|
| Loss (earnings) from discontinued operations, net
of tax |
25 |
(3) |
|
|
27 |
6 |
|
| Interim period effective tax rate normalization
(3) |
21 |
1 |
|
|
- |
- |
|
| Dividends declared on preference shares |
- |
(1) |
|
|
(2) |
(3) |
|
| Adjusted earnings (2) |
$269 |
$185 |
|
|
$921 |
$646 |
|
| Adjusted EPS (2) |
$0.54 |
$0.37 |
46% |
|
$1.85 |
$1.29 |
43% |
| Foreign currency |
|
|
3% |
|
|
|
0% |
| Constant currency (4) |
|
|
43% |
|
|
|
43% |
|
|
|
|
|
|
|
|
| Diluted weighted-average common shares
(millions) |
498.8 |
501.1 |
|
|
498.0 |
502.5 |
|
|
| Refer to page 23 for footnotes. |
| Thomson Reuters
Corporation |
| Reconciliation of
Net Cash Provided by Operating Activities to Free Cash Flow
(5) |
| (millions of U.S.
dollars) |
| (unaudited) |
|
|
Three Months
Ended |
|
Year Ended |
| December
31, |
|
December
31, |
|
2020 |
2019 |
|
2020 |
2019 |
| Net cash provided by operating
activities |
$566 |
$355 |
|
$1,745 |
$702 |
| Capital expenditures |
(100) |
(140) |
|
(504) |
(505) |
| Proceeds from disposals of property and
equipment |
- |
7 |
|
162 |
7 |
| Other investing activities |
2 |
4 |
|
4 |
9 |
| Payments of lease principal |
(19) |
(16) |
|
(75) |
(51) |
| Dividends paid on preference shares |
- |
(1) |
|
(2) |
(3) |
| Free cash flow (5) |
$449 |
$209 |
|
$1,330 |
$159 |
|
|
|
|
|
|
|
| Thomson Reuters
Corporation |
| Reconciliation of
Net Debt and Leverage Ratio of Net Debt to Adjusted EBITDA
(7) |
| (millions of U.S.
dollars) |
| (unaudited) |
|
|
|
December 31,
2020 |
| Long-term indebtedness |
|
$3,772 |
| Total debt |
|
3,772 |
| Swaps |
|
(100) |
| Total debt after swaps |
|
3,672 |
| Remove fair value adjustments for hedges |
|
1 |
| Total debt after currency arrangements |
|
3,673 |
| Remove transaction costs, premiums or discounts
included in the carrying value of debt |
|
38 |
| Add: lease liabilities (current and
non-current) |
|
306 |
| Less: cash and cash equivalents |
|
(1,787) |
| Net debt (7) |
|
$2,230 |
|
|
|
| Adjusted EBITDA (1) |
|
$1,975 |
| Net Debt / Adjusted EBITDA
(7) |
|
1.1:1 |
|
| Refer to page 23 for footnotes. |
| Thomson Reuters
Corporation |
| Reconciliation of
Changes in Revenues to Changes in Revenues on a Constant Currency
(4) and Organic Basis (6) |
| (millions of U.S.
dollars) |
| (unaudited) |
|
|
|
|
Three Months
Ended |
|
|
|
|
|
|
|
|
December
31, |
|
Change |
|
|
2020 |
2019* |
|
Total |
Foreign
Currency |
SUBTOTAL
Constant
Currency (4) |
Acquisitions/
(Divestitures) |
Organic
(6) |
| Total Revenues |
|
|
|
|
|
|
|
|
|
| Legal Professionals |
|
$653 |
$621 |
|
5% |
0% |
5% |
1% |
4% |
| Corporates |
|
338 |
328 |
|
3% |
-1% |
4% |
0% |
3% |
| Tax & Accounting
Professionals |
|
285 |
274 |
|
4% |
-2% |
6% |
-2% |
8% |
| "Big 3" Segments Combined |
|
1,276 |
1,223 |
|
4% |
0% |
5% |
0% |
5% |
| Reuters News |
|
164 |
164 |
|
0% |
1% |
-1% |
2% |
-3% |
| Global Print |
|
177 |
196 |
|
-10% |
0% |
-10% |
0% |
-10% |
| Eliminations/Rounding |
|
(1) |
- |
|
|
|
|
|
|
| Revenues |
|
$1,616 |
$1,583 |
|
2% |
0% |
2% |
0% |
2% |
|
|
|
|
|
|
|
|
|
|
| Recurring Revenues |
|
|
|
|
|
|
|
|
|
| Legal Professionals |
|
$608 |
$574 |
|
6% |
0% |
6% |
1% |
5% |
| Corporates |
|
293 |
276 |
|
6% |
-1% |
6% |
0% |
6% |
| Tax & Accounting
Professionals |
|
255 |
243 |
|
5% |
-2% |
7% |
-2% |
9% |
| "Big 3" Segments Combined |
|
1,156 |
1,093 |
|
6% |
0% |
6% |
0% |
6% |
| Reuters News |
|
142 |
143 |
|
-1% |
1% |
-2% |
0% |
-2% |
| Total Recurring Revenues |
|
$1,298 |
$1,236 |
|
5% |
0% |
5% |
0% |
5% |
|
|
|
|
|
|
|
|
|
|
| Transactions Revenues |
|
|
|
|
|
|
|
|
|
| Legal Professionals |
|
$45 |
$47 |
|
-4% |
1% |
-5% |
1% |
-6% |
| Corporates |
|
45 |
52 |
|
-12% |
-1% |
-11% |
0% |
-11% |
| Tax & Accounting
Professionals |
|
30 |
31 |
|
-4% |
0% |
-4% |
-3% |
-1% |
| "Big 3" Segments Combined |
|
120 |
130 |
|
-7% |
0% |
-7% |
0% |
-7% |
| Reuters News |
|
22 |
21 |
|
5% |
-2% |
7% |
17% |
-10% |
| Total Transactions
Revenues |
|
$142 |
$151 |
|
-5% |
0% |
-5% |
2% |
-7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| * For comparative purposes, 2019
segment results have been adjusted to reflect the current period
presentation. For additional information, see the "Adjustments to
Prior-Period Segment Results" section of this news
release. |
|
| Growth percentages are computed
using whole dollars. As a result, percentages calculated from
reported amounts may differ from those presented, and growth
components may not total due to rounding. |
|
| Refer to page 23 for footnotes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Thomson Reuters
Corporation |
| Reconciliation of
Changes in Revenues to Changes in Revenues on a Constant Currency
(4) and Organic Basis (6) |
| (millions of U.S.
dollars) |
| (unaudited) |
|
|
|
|
Year Ended |
|
|
|
|
|
|
|
December
31, |
|
Change |
|
|
2020 |
2019* |
|
Total |
Foreign
Currency |
SUBTOTAL
Constant
Currency (4) |
Acquisitions/
(Divestitures) |
Organic
(6) |
| Total Revenues |
|
|
|
|
|
|
|
|
|
| Legal Professionals |
|
$2,535 |
$2,433 |
|
4% |
0% |
4% |
1% |
3% |
| Corporates |
|
1,367 |
1,308 |
|
5% |
-1% |
5% |
1% |
5% |
| Tax & Accounting
Professionals |
|
836 |
843 |
|
-1% |
-3% |
2% |
-3% |
4% |
| "Big 3" Segments Combined |
|
4,738 |
4,584 |
|
3% |
-1% |
4% |
0% |
4% |
| Reuters News |
|
628 |
630 |
|
0% |
0% |
0% |
5% |
-5% |
| Global Print |
|
620 |
693 |
|
-11% |
-1% |
-10% |
0% |
-10% |
| Eliminations/Rounding |
|
(2) |
(1) |
|
|
|
|
|
|
| Revenues |
|
$5,984 |
$5,906 |
|
1% |
-1% |
2% |
1% |
1% |
|
|
|
|
|
|
|
|
|
|
| Recurring Revenues |
|
|
|
|
|
|
|
|
|
| Legal Professionals |
|
$2,367 |
$2,249 |
|
5% |
0% |
6% |
1% |
4% |
| Corporates |
|
1,143 |
1,079 |
|
6% |
-1% |
7% |
1% |
6% |
| Tax & Accounting
Professionals |
|
682 |
703 |
|
-3% |
-3% |
0% |
-5% |
5% |
| "Big 3" Segments Combined |
|
4,192 |
4,031 |
|
4% |
-1% |
5% |
0% |
5% |
| Reuters News |
|
566 |
573 |
|
-1% |
0% |
-2% |
0% |
-2% |
| Total Recurring Revenues |
|
$4,758 |
$4,604 |
|
3% |
-1% |
4% |
0% |
4% |
|
|
|
|
|
|
|
|
|
|
| Transactions Revenues |
|
|
|
|
|
|
|
|
|
| Legal Professionals |
|
$168 |
$184 |
|
-9% |
0% |
-9% |
0% |
-9% |
| Corporates |
|
224 |
229 |
|
-2% |
-1% |
-1% |
3% |
-4% |
| Tax & Accounting
Professionals |
|
154 |
140 |
|
10% |
-1% |
11% |
8% |
2% |
| "Big 3" Segments Combined |
|
546 |
553 |
|
-1% |
-1% |
-1% |
3% |
-4% |
| Reuters News |
|
62 |
57 |
|
9% |
-3% |
12% |
41% |
-29% |
| Total Transactions
Revenues |
|
$608 |
$610 |
|
0% |
-1% |
0% |
8% |
-7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| * For comparative purposes, 2019
segment results have been adjusted to reflect the current period
presentation. For additional information, see the "Adjustments to
Prior-Period Segment Results" section of this news
release. |
|
| Growth percentages are computed
using whole dollars. As a result, percentages calculated from
reported amounts may differ from those presented, and growth
components may not total due to rounding. |
|
| Refer to page 23 for footnotes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Thomson Reuters
Corporation |
| Reconciliation of
Changes in Adjusted EBITDA to Changes on a Constant
Currency Basis (4) |
| (millions of U.S.
dollars) |
| (unaudited) |
|
|
|
|
Three Months
Ended |
|
|
|
|
|
December
31, |
|
Change |
|
|
2020 |
2019* |
|
Total |
Foreign
Currency |
Constant
Currency (4) |
| Adjusted EBITDA |
|
|
|
|
|
|
|
| Legal Professionals |
|
$245 |
$215 |
|
14% |
1% |
13% |
| Corporates |
|
105 |
98 |
|
7% |
1% |
6% |
| Tax & Accounting Professionals |
|
145 |
134 |
|
9% |
-1% |
10% |
| "Big 3" Segments Combined |
|
495 |
447 |
|
11% |
0% |
11% |
| Reuters News |
|
6 |
10 |
|
-41% |
-7% |
-34% |
| Global Print |
|
61 |
77 |
|
-21% |
1% |
-22% |
| Corporate costs |
|
(37) |
(138) |
|
n/a |
n/a |
n/a |
| Adjusted EBITDA |
|
$525 |
$396 |
|
33% |
1% |
32% |
|
|
|
|
|
|
|
|
| Adjusted EBITDA Margin |
|
|
|
|
|
|
|
| Legal Professionals |
|
37.5% |
34.5% |
|
300bp |
30bp |
270bp |
| Corporates |
|
31.1% |
30.0% |
|
110bp |
40bp |
70bp |
| Tax & Accounting Professionals |
|
51.1% |
48.7% |
|
240bp |
40bp |
200bp |
| "Big 3" Segments Combined |
|
38.8% |
36.5% |
|
230bp |
20bp |
210bp |
| Reuters News |
|
3.9% |
6.5% |
|
-260bp |
-20bp |
-240bp |
| Global Print |
|
34.6% |
39.4% |
|
-480bp |
50bp |
-530bp |
| Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
| Adjusted EBITDA margin |
|
32.5% |
25.0% |
|
750bp |
20bp |
730bp |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| n/a: not applicable |
|
| * For comparative purposes, 2019
segment results have been adjusted to reflect the current period
presentation. For additional information, see the "Adjustments to
Prior-Period Segment Results" section of this news
release. |
|
| Growth percentages and margins are
computed using whole dollars. As a result, percentages and margins
calculated from reported amounts may differ from those presented,
and growth components may not total due to rounding. |
|
| Refer to page 23 for footnotes. |
|
|
|
|
|
|
|
|
|
|
|
| Thomson Reuters
Corporation |
| Reconciliation of
Changes in Adjusted EBITDA to Changes on a Constant
Currency Basis (4) |
| (millions of U.S.
dollars) |
| (unaudited) |
|
|
|
|
Year Ended |
|
|
|
|
December
31, |
|
Change |
|
|
2020 |
2019* |
|
Total |
Foreign
Currency |
Constant
Currency (4) |
| Adjusted EBITDA |
|
|
|
|
|
|
|
| Legal Professionals |
|
$1,001 |
$895 |
|
12% |
0% |
12% |
| Corporates |
|
460 |
412 |
|
12% |
0% |
11% |
| Tax & Accounting
Professionals |
|
330 |
318 |
|
4% |
-2% |
6% |
| "Big 3" Segments Combined |
|
1,791 |
1,625 |
|
10% |
0% |
10% |
| Reuters News |
|
73 |
68 |
|
7% |
8% |
-1% |
| Global Print |
|
242 |
294 |
|
-18% |
0% |
-18% |
| Corporate costs |
|
(131) |
(494) |
|
n/a |
n/a |
n/a |
| Adjusted EBITDA |
|
$1,975 |
$1,493 |
|
32% |
0% |
32% |
|
|
|
|
|
|
|
|
| Adjusted EBITDA
Margin |
|
|
|
|
|
|
|
| Legal Professionals |
|
39.5% |
36.8% |
|
270bp |
20bp |
250bp |
| Corporates |
|
33.7% |
31.5% |
|
220bp |
40bp |
180bp |
| Tax & Accounting
Professionals |
|
39.5% |
37.6% |
|
190bp |
30bp |
160bp |
| "Big 3" Segments Combined |
|
37.8% |
35.4% |
|
240bp |
30bp |
210bp |
| Reuters News |
|
11.7% |
10.9% |
|
80bp |
90bp |
-10bp |
| Global Print |
|
39.0% |
42.5% |
|
-350bp |
40bp |
-390bp |
| Corporate costs |
|
n/a |
n/a |
|
n/a |
n/a |
n/a |
| Adjusted EBITDA margin |
|
33.0% |
25.3% |
|
770bp |
10bp |
760bp |
|
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|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
| n/a: not applicable |
|
| * For comparative purposes, 2019
segment results have been adjusted to reflect the current period
presentation. For additional information, see the "Adjustments to
Prior-Period Segment Results" section of this news
release. |
|
| Growth percentages and margins are
computed using whole dollars. As a result, percentages and margins
calculated from reported amounts may differ from those presented,
and growth components may not total due to rounding. |
|
| Refer to page 23 for footnotes. |
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| Footnotes |
| (1) |
Thomson Reuters defines adjusted EBITDA for its
business segments as earnings or losses from continuing operations
before tax expense or benefit, net interest expense, other finance
costs or income, depreciation, amortization of software and other
identifiable intangible assets, Thomson Reuters share of post-tax
earnings or losses in equity method investments, other operating
gains and losses, certain asset impairment charges, fair value
adjustments and corporate related items. Consolidated adjusted
EBITDA is comprised of adjusted EBITDA for its business segments
and corporate costs. Adjusted EBITDA margin is adjusted EBITDA
expressed as a percentage of revenues. Thomson Reuters uses
adjusted EBITDA because it provides a consistent basis to evaluate
operating profitability and performance trends by excluding items
that the company does not consider to be controllable activities
for this purpose. Adjusted EBITDA also represents a measure
commonly reported and widely used by investors as a valuation
metric. Additionally, this measure is used by Thomson Reuters and
investors to assess a company's ability to incur and service
debt. |
| (2) |
Thomson Reuters defines adjusted earnings as net
earnings or loss including dividends declared on preference shares
but excluding the post-tax impacts of fair value adjustments,
amortization of other identifiable intangible assets, other
operating gains and losses, certain asset impairment charges, other
finance costs or income, Thomson Reuters share of post-tax earnings
or losses in equity method investments, discontinued operations and
other items affecting comparability. Thomson Reuters calculates the
post-tax amount of each item excluded from adjusted earnings based
on the specific tax rules and tax rates associated with the nature
and jurisdiction of each item. Adjusted EPS is calculated from
adjusted earnings using diluted weighted-average shares and does
not represent actual earnings or loss per share attributable to
shareholders. Thomson Reuters uses adjusted earnings and adjusted
EPS as they provide a more comparable basis to analyze earnings and
they are also measures commonly used by shareholders to measure the
company's performance. |
| (3) |
Adjustment to reflect income taxes based on
estimated full-year effective tax rate. Earnings or losses for
interim periods under IFRS reflect income taxes based on the
estimated effective tax rates of each of the jurisdictions in which
Thomson Reuters operates. The non-IFRS adjustment reallocates
estimated full-year income taxes between interim periods, but has
no effect on full-year income taxes. |
| (4) |
The changes in revenues, adjusted EBITDA and the
related margins, and adjusted earnings per share before currency
(at constant currency or excluding the effects of currency) are
determined by converting the current and prior-year period's local
currency equivalent using the same exchange rates. |
| (5) |
Free cash flow is net cash provided by operating
activities, proceeds from disposals of property and equipment, and
other investing activities less capital expenditures, payments of
lease principal, dividends paid on the company's preference shares,
and dividends paid to non-controlling interests. Thomson Reuters
uses free cash flow as it helps assess the company's ability, over
the long term, to create value for its shareholders as it
represents cash available to repay debt, pay common dividends and
fund share repurchases and new acquisitions. |
| (6) |
Represents changes in revenues of our existing
businesses at constant currency. The metric excludes the distortive
impacts of acquisitions and dispositions from not owning the
business in both comparable periods. Thomson Reuters uses organic
growth because it provides further insight into the performance of
its existing businesses by excluding distortive impacts and serves
as a better measure of the company's ability to grow its business
over the long term. |
| (7) |
Net debt is total indebtedness (excluding the
associated unamortized transaction costs and premiums or discounts)
plus the currency related fair value of associated hedging
instruments, and lease liabilities less cash and cash equivalents.
For purposes of calculating the leverage ratio, net debt is divided
by adjusted EBITDA for the previous twelve-month period ending with
the current fiscal quarter. |
APPENDIX –
INFORMATION ABOUT REFINITIV
At December 31, 2020, Thomson
Reuters owned a 45% interest in Refinitiv, which was formerly its
wholly owned F&R business. 55% of Refinitiv was owned by
private equity funds affiliated with Blackstone. Thomson Reuters
IFRS results include the company's 45% share of Refinitiv's results
reported in a single line item on the company's consolidated income
statement titled "Share of post-tax losses in equity
method investments."
Thomson Reuters non-IFRS measures, including
adjusted earnings, exclude its
share of post-tax results in Refinitiv and
other equity method investments.
The table below sets forth selected financial information for
100% of Refinitiv for the three months and year ended December 31, 2020 and 2019 on both an IFRS and
non-IFRS basis. Refinitiv reports on a US GAAP basis and provides a
reconciliation to IFRS in accordance with Thomson Reuters
accounting policies. A reconciliation from the IFRS measures to the
related non-IFRS measures is also included in this appendix.
On January 29, 2021, Thomson
Reuters and private equity funds affiliated with Blackstone sold
Refinitiv to LSEG, in an all share transaction.
|
Refinitiv |
|
Financial
Data |
|
(millions of U.S.
dollars, except for margins) |
|
(unaudited) |
|
|
|
Three Months
Ended
December 31, |
|
Year Ended
December 31, |
|
|
|
Change |
|
|
Change |
|
2020 |
2019 |
Total |
Before
Currency &
Excluding
Businesses
Disposed |
|
2020 |
2019 |
Total |
Before
Currency &
Excluding
Businesses
Disposed |
| IFRS Measures |
|
|
|
|
|
|
|
|
|
| Revenues |
$1,677 |
$1,576 |
6% |
4% |
|
$6,513 |
$6,250 |
4% |
4% |
|
|
|
|
|
|
|
|
|
|
| Net loss |
$(329) |
$(77) |
|
|
|
$(1,137) |
$(1,278) |
|
|
| Cash flow from operations |
$354 |
$256 |
|
|
|
$1,287 |
$733 |
|
|
Capital expenditures,
less
proceeds from disposals |
$109 |
$94 |
|
|
|
$584 |
$513 |
|
|
Debt at December 31, 2020 and
December 31, 2019 |
|
|
|
|
|
$14,678 |
$13,877 |
|
|
|
|
|
|
|
|
|
|
|
|
| Non-IFRS Measures |
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
$665 |
$553 |
|
|
|
$2,539 |
$2,208 |
|
|
| Adjusted EBITDA margin |
39.7% |
35.1% |
|
|
|
39.0% |
35.3% |
|
|
| Free cash flow |
$233 |
$147 |
|
|
|
$669 |
$106 |
|
|
|
|
|
|
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|
|
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|
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|
|
|
The following reconciliations of IFRS measures to non-IFRS
measures are based on Refinitiv's definition of non-GAAP measures,
which is not the same as the definitions used by Thomson
Reuters.
| Refinitiv |
| Reconciliation of
Net Loss to Adjusted EBITDA |
| (millions of U.S.
dollars, except for margins) |
| (unaudited) |
|
|
Three Months
Ended |
|
Year Ended |
|
|
|
| December
31, |
|
December
31, |
|
|
|
|
2020 |
2019 |
|
2020 |
2019 |
|
|
|
| Net loss |
$(329) |
$(77) |
|
$(1,137) |
$(1,278) |
|
|
|
| Adjustments to remove: |
|
|
|
|
|
|
|
|
| Tax expense (benefit) |
20 |
(92) |
|
59 |
(114) |
|
|
|
| Finance costs |
299 |
102 |
|
1,009 |
1,176 |
|
|
|
| Depreciation and amortization |
548 |
470 |
|
2,022 |
1,901 |
|
|
|
| EBITDA |
$538 |
$403 |
|
$1,953 |
$1,685 |
|
|
|
| Adjustments to remove: |
|
|
|
|
|
|
|
|
| Share of post-tax earnings in equity method
investments |
- |
(1) |
|
- |
(2) |
|
|
|
| Other operating losses |
40 |
22 |
|
94 |
2 |
|
|
|
| Fair value adjustments |
(7) |
4 |
|
23 |
49 |
|
|
|
| Share-based compensation |
10 |
11 |
|
36 |
53 |
|
|
|
| Transformation-related costs |
84 |
114 |
|
433 |
421 |
|
|
|
| Adjusted EBITDA |
$665 |
$553 |
|
$2,539 |
$2,208 |
|
|
|
| Adjusted EBITDA margin |
39.7% |
35.1% |
|
39.0% |
35.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Refinitiv |
| Reconciliation of
Net Cash Provided By Operating Activities to Free Cash
Flow |
| (millions of U.S.
dollars) |
| (unaudited) |
|
|
Three Months
Ended |
|
Year Ended |
|
| December
31, |
|
December
31, |
|
|
2020 |
2019 |
|
2020 |
2019 |
|
| Net cash provided by operating
activities |
$354 |
$256 |
|
$1,287 |
$733 |
|
| Capital expenditures, less proceeds from
disposals |
(109) |
(94) |
|
(584) |
(513) |
|
| Other investing activities |
- |
- |
|
1 |
1 |
|
| Dividends paid to non-controlling interests
|
(12) |
(15) |
|
(35) |
(115) |
|
| Free cash flow |
$233 |
$147 |
|
$669 |
$106 |
|
|
|
|
|
|
|
|
|
|
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|
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