2001 Thomson Annual Report
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The Thomson Corporation Annual Report 2001 Providing inintegratedtegrated infinformationormation solutionssolutions worldwide THOMSON LEGAL & REGULAREGULATORYTORY THOMSON LEARNING THOMSON FINANCIAL THOMSON SCIENTIFIC & HEALTHCARE 39% of TTotalotal ReRevenuesvenues 226%6% of TotalTotal ReRevenuesvenues 22% of Total Revenues 10% of Total Revenues 2001 22000000 Change 2001 22000000 Change 2001 2000 Change 2001 2000 Change ReRevenuesvenues 2,827 2,619 + 7.9% ReRevenuesvenues 1,851 1,388 + 33.4% Revenues 1,590 1,201 + 32.4% Revenues 697 653 + 6.7% EBITDA1 855 775 + 10.3% EBITDA1 406 358 + 13.4% EBITDA1 405 330 + 22.7% EBITDA1 176 164 + 7.3% AdAdjustedjusted operatingoperating profitprofit 2 708 647 + 9.4% AdAdjustedjusted operatingoperating profitprofit 2 264 234 + 12.8% Adjusted operating profit 2 257 220 + 16.8% Adjusted operating profit 2 151 140 + 7.9% 1717,000,000 peoplepeople basedbased in 30 countries / Led by West,West, Thomson 13,013,00000 peoplepeople basedbased in 26 countries / Thomson LearningLearning 9,200 people based in 27 countries / Thomson Financial serves 3,800 people based in 13 countries / Thomson Scientific & LegLegalal & RegulatoRegulatoryry sserveserves tthehe leglegal,al, tax, accounting, intellectuaintellectuall seservesrves thethe higher education,education, ccorporate,orporate, professionalprofessional and gogov-v- financial professionals, including investment bankers, stock- Healthcare serves researchers and other professionals in the propeproperty,rty, compliancecompliance and businessbusiness professional.professional. OtOtherher majormajor eernmentalrnmental mamarketplaces.rketplaces. SoluSolutionstions aaddressddress botbothh traditional brokers, portfolio managers, financial planners and corporate healthcare, academic, scientific and governmental marketplaces. businebusinessessses and brands iincludenclude AranzadiAranzadi,, BrBrookers,ookers, CCarswell,arswell, clclassroomassroom and online learninlearning.g. MMajorajor bbusinessesusinesses and brands executives. Major businesses and brands include AutEx, Major businesses and brands include American Health Consul- ELLIS, IOB, La Ley,Ley, LawbookLawbook CCo.,o., RIA, SweeSweett & MaMaxwellxwell andand include CourseCourse Technology,Technology,D Delmar,elmar, EducationEducationD Direct,irect,G Gale,ale, Disclosure, First Call, IFR, ILX Systems and Investext. Thomson tants, Derwent Information, ISI Web of Science, MICROMEDEX Thomson & ThomsonThomson.. Thomson electronic legal research services HeHeinle,inle,N Nelson,elson, NETg,NETg, Prome Prometric,tric, SoutSouth-Westernh-Western and Wadsworth.Wadsworth. is the source most quoted by the financial media for equity and PDR (Physicians’ Desk Reference). Thomson information are preferred by 555%5% of US law firms.firms. Thomson products are used in 100100%% of public and academic earnings forecasts. is used in more than 1,400 academic and research institutions in libraries in the United States. more than 100 countries. All resultsresults for ongoingongoing businesses,businesses, eexcludingxcluding didisposals;sposals; millions of US dollardollars.s. 1E1 Earningsarnings before interest, tax, depreciationdepreciation,, amoamortization,rtization, restructuring chchargesarges and YYearear 20200000 costscosts.. 2B2 Beforeefore amoramortization,tization, restructuring chchargesarges and YYearear 20200000 costscosts.. Providing integrated information solutions worldwide THOMSON LEGAL & REGULATORY THOMSON LEARNING THOMSON FINANCIAL THOMSON SCIENTIFIC & HEALHEALTHCARETHCARE 39% of Total Revenues 26% of Total Revenues 22% of TTotalotal ReRevenuesvenues 1010%% of TTotalotal ReRevenuesvenues 2001 2000 Change 2001 2000 Change 2001 22000000 Change 2001 22000000 ChangChangee Revenues 2,827 2,619 + 7.9% Revenues 1,851 1,388 + 33.4% ReRevenuesvenues 1,590 1,201 + 32.4% ReRevenuesvenues 697 653 + 6.7% EBITDA1 855 775 + 10.3% EBITDA1 406 358 + 13.4% EBITDA1 405 330 + 22.7% EBITDA1 176 164 + 7.3% Adjusted operating profit 2 708 647 + 9.4% Adjusted operating profit 2 264 234 + 12.8% AdAdjustedjusted operatingoperating profitprofit 2 257 220 + 16.8% AdAdjustedjusted operatingoperating profitprofit 2 151 140 + 7.9% 17,000 people based in 30 countries / Led by West, Thomson 13,000 people based in 26 countries / Thomson Learning 9,209,2000p peopleeople bas baseded iinn2 277 countries /T / Thomsonhomson Fi Financialnancials serveserves 3,83,80000 ppeopleeople bbasedased in 13 ccountriesountries / ThomsonThomson ScientificScientific & Legal & Regulatory serves the legal, tax, accounting, intellectual serves the higher education, corporate, professional and gov- fifinancialnancial professionals,professionals, iincludingncluding iinvestmentnvestment bankebankers,rs, stock- HHealthcareealthcare servesserves researchers and otherother professionalsprofessionals in tthehe property, compliance and business professional. Other major ernmental marketplaces. Solutions address both traditional brokerbrokers,s, portfolioportfolio managers,managers, financialfinancial plplannersanners and corporatcorporatee healthealthcare,hcare, academic, scientiscientificfic and gogovernmentalvernmental mmarketplaces.arketplaces. businesses and brands include Aranzadi, Brookers, Carswell, classroom and online learning. Major businesses and brands exexecutives.ecutives. MajorMajorb businessesusinessesa andnd brands includeAutEx, MaMajorjor bbusinessesusinesses and brands iincludenclude American HealthHealth Consul-Consul- ELLIS, IOB, La Ley, Lawbook Co., RIA, Sweet & Maxwell and include Course Technology, Delmar, Education Direct, Gale, DisclosDisclosure,ure,F Firstirst Ca Call,ll, IFIFRR, ILILXX SysSystemstems and Investext.Investext. Thomson tantstants,, DerwentDerwent Information,Information, ISI WWebeb of Science, MICROMEDEX Thomson & Thomson. Thomson electronic legal research services Heinle, Nelson, NETg, Prometric, South-Western and Wadsworth. is the source most quoted by the fifinancialnancial media for equity and PDR (PPhysicians’hysicians’ DDeskesk Reference). Thomson information are preferred by 55% of US law firms. Thomson products are used in 100% of public and academic earnings forecasts. is uusedsed in more than 1,4001,400 academic and research institutions in libraries in the United States. more than 100 countries. All results for ongoing businesses, excluding disposals; millions of US dollars. 1 Earnings before interest, tax, depreciation, amortization, restructuring charges and Year 2000 costs. 2 Before amortization, restructuring charges and Year 2000 costs. FINANCIAL HIGHLIGHTS † FIVE-YEAR REVENUES 2001 22000000 Change 97 98 99 00 01 ReRevenuesvenues 7,237 6,514 + 11.1% 8,000 EBITDA1 1,786 1,534 + 16.4% 6,000 AdAdjustedjusted operatingoperating profitprofit 2 1,310 1,118 + 17.2% 4,000 AdAdjustedjusted EPS3 $ 0.72 $ 0.75 – 4.0% 2,000 SShareholders’hareholders’ equityequity 8,220 7,818 + 5.1% 0 FIVE-YEAR EBITDA 1 FIVE-YEAR ADJUSTED EARNINGS PER COMMONCOMMONS SHAREHARE3 97 98 99 00 01 97 98 99 00 01 2,000 $0$0.80.80 1,500 0.60 1,000 0.40 505000 0.20 0 0 † CoContinuingntinuing operations; millions of US dolldollarsars eexceptxcept per common shshareare amountsamounts.. 1E1 Earningsarnings before interest, tax,tax, depreciatiodepreciation,n, amoamortization,rtization, restructuringrestructuring chchargesarges and and Y Yearear 20 200000 costs costs.. 2B2 Beforeefore amoramortization,tization, restructuring cchargesharges andand YYearear 20200000 costscosts.. 3A3 Adjusteddjusted earnings per common shshareare beforebefore restructuringrestructuring chcharges,arges, YYearear 20 200000 costscosts,, nenett dis disposalposal g gainsains and and,, in 202000,00, one-timeone-time tax benebenefits.fits. Thomson: in demand, on demand Our customers need to know. The success of their businesses, organizations and research depends on their ability to make better decisions faster. Thomson is the leading provider of need-to-know information of unparalleled breadth and depth. We develop and apply innovative technologies to ensure that the information and knowledge in demand is available on demand. Cover: Citigroup, New York City Led by Managing Director Paul S. Galant (back row, fifth from right), Citigroup team members gather for a weekly project review. KENNETH R. THOMSON RICHARD J. HARRINGTON Chairman President and Chief Executive Officer Letter to Shareholders The Thomson Corporation achieved significant gains in revenues and earnings before interest, taxes, depre- ciation and amortization (EBITDA) in 2001, despite volatility in global markets. Revenues from continuing operations, excluding disposals, were $7.2 billion, an increase of 18 percent from the previous year. EBITDA from continuing operations, excluding disposals, was $1.8 billion, an increase of 17 percent from 2000. The Company’s strong financial performance reflects our ability to execute on our strategy of providing business and professional customers with high-quality, must-have information and solutions that increase their productivity and give them competitive advantages in their markets. This strategy has made us a leader in each of the marketplaces in which we operate, and we are confident that it will continue to do so. In 2001, we made strategic investments and acquisitions in our core markets. For example, our $2 billion acquisition of Harcourt General Inc.’s higher education and lifelong learning assets expanded our array of Thomson Learning products and opened additional opportunities for growth in that market. We also acquired the outstanding minority interest in Thomson/First Call,