2016 Annual Report
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Annual Report 2016 March 9, 2017 Thomson Reuters Annual Report 2016 Information in this annual report is provided as of March 1, 2017, unless otherwise indicated. Certain statements in this annual report are forward-looking. These forward-looking statements are based on certain assumptions and reflect our current expectations. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Some of the factors that could cause actual results to differ materially from current expectations are discussed in the “Risk Factors” section of this annual report as well as in materials that we from time to time file with, or furnish to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. There is no assurance that any forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking statements, which reflect expectations only as of the date of this annual report. Except as may be required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements. The following terms in this annual report have the following meanings, unless otherwise indicated: Š “Thomson Reuters,” “we,” “us” and “our” each refers to Thomson Reuters Corporation and its consolidated subsidiaries, unless the context otherwise requires; Š “Woodbridge” refers to The Woodbridge Company Limited and other companies affiliated with it; and Š “$,” “US$” or “dollars” are to U.S. dollars. When we refer to our performance before the impact of foreign currency (or at “constant currency”), we mean that we apply the same foreign currency exchange rates for the current and equivalent prior period. We believe this provides the best basis to measure the performance of our business as it removes distortion from the effects of foreign currency movements during the period. Non-International Financial Reporting Standards (IFRS) financial measures are defined and reconciled to the most directly comparable IFRS measures in the “Management’s Discussion and Analysis” section of this annual report. For information regarding our disclosure requirements under applicable Canadian and U.S. laws and regulations, please see the “Cross Reference Tables” section of this annual report. Information contained on our website or any other websites identified in this annual report is not part of this annual report. All website addresses listed in this annual report are intended to be inactive, textual references only. The Thomson Reuters logo and our other trademarks, trade names and service names mentioned in this annual report are the property of Thomson Reuters. Thomson Reuters Annual Report 2016 Table of Contents Business ............................................................................................ 2 Overview ............................................................................................ 2 Financial & Risk ...................................................................................... 7 Legal ............................................................................................... 10 Tax & Accounting ..................................................................................... 12 Global Growth Organization ............................................................................ 13 Reuters ............................................................................................. 13 Additional Business Information ......................................................................... 14 Risk Factors ......................................................................................... 18 Management’s Discussion and Analysis ................................................................... 29 Consolidated Financial Statements ...................................................................... 88 Executive Officers and Directors ......................................................................... 153 Executive Officers ..................................................................................... 153 Other Executive Committee Members .................................................................... 153 Directors ............................................................................................ 156 Audit Committee ..................................................................................... 159 Principal Accountant Fees and Services ................................................................... 160 Controlled Company .................................................................................. 161 Independent Directors ................................................................................. 161 Presiding Directors at Meetings of Non-Management and Independent Directors ................................. 162 Code of Business Conduct and Ethics ..................................................................... 163 Additional Disclosures ................................................................................. 163 Additional Information ................................................................................ 164 Description of Capital Structure ......................................................................... 164 Market for Securities ................................................................................... 165 Dividends ........................................................................................... 166 Woodbridge ......................................................................................... 167 Transfer Agents and Registrars .......................................................................... 168 Ratings of Debt Securities .............................................................................. 168 Material Contracts .................................................................................... 169 Principal Subsidiaries .................................................................................. 171 Interests of Experts .................................................................................... 172 Further Information and Disclosures ...................................................................... 173 Cross Reference Tables ................................................................................ 175 Annual Information Form (Form 51-102F2) Cross Reference Table ............................................. 175 Form 40-F Cross Reference Table ........................................................................ 176 Page 1 Thomson Reuters Annual Report 2016 Business Overview Thomson Reuters is the world’s leading source of news and information for professional markets. Our customers rely on us to deliver the intelligence, technology and expertise they need to find trusted answers. The business has operated in more than 100 countries for more than 100 years. We are a Canadian company with shares listed on the Toronto Stock Exchange and New York Stock Exchange (symbol: TRI). Our website is www.thomsonreuters.com. We are organized in three business units supported by a corporate center: Financial & Risk A leading provider of critical news, information and analytics, enabling transactions and connecting communities of trading, investment, financial and corporate professionals. Financial & Risk also provides leading regulatory and operational risk management solutions. Legal A leading provider of critical online and print information, decision tools, software and services that support legal, investigation, business and government professionals around the world. Tax & Accounting A leading provider of integrated tax compliance and accounting information, software and services for professionals in accounting firms, corporations, law firms and government. We also operate: Š Reuters, a leading provider of real-time, high-impact, multimedia news and information services to newspapers, television and cable networks, radio stations and websites around the globe. Š A Global Growth Organization (GGO) that works across our business units to combine our global capabilities and expand our local presence and development in countries and regions where we believe the greatest growth opportunities exist. GGO supports our businesses in Latin America, China, India, the Middle East, Africa, the Association of Southeast Asian Nations, North Asia, Russia and countries comprising the Commonwealth of Independent States and Turkey. Š An Enterprise Technology & Operations (ET&O) group which drives the transformation of our company into a more integrated enterprise by unifying infrastructure across our organization, including technology platforms, data centers, real estate, products and services. In October 2016, we sold our Intellectual Property & Science business for gross proceeds of $3.55 billion. Intellectual Property & Science was classified as a discontinued operation for 2016 reporting purposes through the closing date of the sale. The business was subsequently renamed Clarivate Analytics. Page 2 Thomson Reuters Annual Report 2016 Business Model and Key Operating Characteristics We derive the majority of our revenues from selling electronic content and services to professionals, primarily on a subscription basis. Our businesses provide solutions, software and workflow tools which integrate our core data and information. The table below describes some of our