Thomson Reuters Reports First-Quarter 2018 Results

TORONTO, May 11, 2018

"We are encouraged by the best first-quarter performance in several years with each business having performed at or above our expectations," said Jim Smith, president and chief executive officer of Thomson Reuters. "The health of our Q1 results gives us even greater conviction in our ability to stay focused on the opportunities at hand, while simultaneously working quickly to close the proposed F&R/Blackstone partnership and prepare both companies for future success. We are excited about the potential to further strengthen our Legal and Tax businesses -- both organically and inorganically, with the financial wherewithal and flexibility to deliver for our customers and shareholders."

Consolidated Financial Highlights – First Quarter 2018

Unless otherwise noted, all results are from continuing operations and exclude the results of the company's Financial & Risk (F&R) business unit. F&R is now classified as a discontinued operation, Reuters News is now a reportable segment and prior-year results have been restated accordingly to reflect these changes. Please see the tables appended to this news release for additional information.

On January 30, 2018, Thomson Reuters announced that it signed a definitive agreement to sell a 55% majority stake in the F&R business and enter into a strategic partnership with private equity funds managed by Blackstone. Thomson Reuters will receive approximately $17 billion in gross proceeds at closing (subject to purchase price adjustments) and will retain a 45% interest in the partnership. The transaction is expected to close in the second half of 2018 and is subject to specified regulatory approvals and customary closing conditions.

Three Months Ended March 31, (Millions of U.S. dollars, except for adjusted EBITDA margin and EPS) ARIVA.DE Börsen-Geflüster Kurse Thomson Reuters 152,90 $ +0,18% (unaudited)
IFRS Financial Measures(1)	2018	2017	Change	Change at  Constant Currency
Revenues	$1,379	$1,331	4%
Operating profit	$268	$274	-2%
Diluted (loss) earnings per share (EPS) (includes discontinued operations)	$(0.48)	$0.41	n/m
Cash flow from operations (includes discontinued operations)	$419	$(368)	n/m
Non-IFRS Financial Measures(1)
Revenues	$1,379	$1,331	4%	3%
Adjusted EBITDA	$430	$415	4%	3%
Adjusted EBITDA margin	31.2%	31.2%	0bp	0bp
Adjusted EPS	$0.28	$0.25	12%	12%
Free cash flow (includes discontinued operations)	$120	$(585)	n/m
n/m:     not meaningful (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 4% due to higher recurring revenues and a positive impact from foreign currency.

• At constant currency, revenues increased 3%.

Operating profit decreased 2% due to the unfavorable impact of a prior-year period gain on an investment.

• Adjusted EBITDA increased 4% and the margin was unchanged at 31.2%.

Diluted loss per share reflects an $844 million deferred tax charge associated with the proposed sale of a 55% interest in the company's Financial & Risk business. The tax charge is required to be recorded when a business is first considered held for sale, rather than when the sale is completed. The company estimates that a cash tax payment of approximately $300 million will arise in 2018 in connection with the closing of the transaction and the remainder deferred until such time as the company disposes of its 45% interest in the new partnership.

• Adjusted EPS, which excludes discontinued operations, was $0.28 and increased 12%, or $0.03 per share, due to higher adjusted EBITDA and lower interest expense.

Cash flow from operations increased $787 million primarily because the prior-year period included a $500 million pension contribution as well as severance payments. 

• Free cash flow increased $705 million reflecting similar factors.

Highlights by Business Unit – Three Months Ended March 31

(Millions of U.S. dollars, except for adjusted EBITDA margins) (unaudited)
		Three Months Ended
		March 31,			Change
		2018	2017		Total	Foreign  Currency	Constant Currency
Revenues
Legal(1)		$872	$841		4%	2%	2%
Tax & Accounting		437	417		5%	0%	5%
Reuters News		72	74		-3%	4%	-7%
Eliminations		(2)	(1)
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