© REUTERS / Mike Blake THOMSON REUTERS
FOURTH QUARTER 2012 (INCLUDES Q3 FINANCIAL SUMMARY) Special Note
Safe Harbor / Forward-Looking Statements • The following discussion contains forward-looking statements, including those about Thomson Reuters outlook and ppprospects. Forward-looking statements are those which are not historical facts. These and other statements that relate to future results and events are based on Thomson Reuters current expectations. • Our actual results in future periods may differ materially from those currently expected because of a number of risks and uncertainties. The risks and uncertainties that we believe are material are outlined in our disclosure filings and materials, which you can find on www.thomsonreuters.com. Please consult these documents for a more complete understanding of these risks and uncertainties. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. Our outlook is provided for the purpose of providing information about current expectations for 2012. This information may not be appropriate for other purposes. Non-IFRS Financial Measures • This presentation contains disclosures of certain non-IFRS financial measures. These measures include revenues from ongoing businesses, adjusted EBITDA and the related margin, underlying operating profit and the related margin, free cash flow, free cash flow from ongoing businesses and adjusted EPS. • Please see the “Investor Relations” section of our website for a reconciliation of each of these measures to the most directly comparable IFRS financial measure. You can also find IFRS reconciliations in the tables attached to our earnings release dated November 2, 2012, which is also available on www.thomsonreuters.com.
2 BUSINESS OVERVIEW Thomson Reuters Substantial Scale
• Leadership positions in the market segments we serve
• $12.7 billion revenues – high-quality & geographically diverse
• $3.4 billion of EBITDA – high margin
• Free cash flow approaching $2 billion
• $23 billion market capitalization
Note: Results are from ongoing businesses as of December 31, 2011. 4 Thomson Reuters Structure Thomson Reuters $12.7 billion 2011 revenues 26.4% adjusted EBITDA margin 19. 9% underlying operating profit margin
Financial Tax & IP & Legal & Risk Accounting Science
$7.3 billion 2011 revenues $3.2 billion 2011 revenues $1.1 billion 2011 revenues $0.9 billion 2011 revenues 27.0% EBITDA margin 37.6% EBITDA margin 31.6% EBITDA margin 34.7% EBITDA margin 19.1% operating profit margin 29.2% operating profit margin 22.6% operating profit margin 27.8% operating profit margin Intellectual Trading Small Law Firms Knowledge Solutions PtProperty Scientific & Scholarly Investors Large Law Firms Corporate Research
Marketplaces General Counsels Professional Life Sciences
Governance, Risk & Compliance (GRC) Government Government
Glob al G rowth & O perati ons
News Note: Results from ongoing businesses. 5 Thomson Reuters 2011 Results byyg Segment
Revenues $12.7B Underlying Operating Profit $2.8B
57% 25% 34% 50%
8% 8% 3% 7% 8%
Corporate & Other Financial & Risk Legal Tax & Accounting IP & Science (includes Media)
86% recurring revenue 90% electronic, software and services
Note: Underlying operating profit and underlying operating profit pie chart exclude corporate and other (including Media) 6 and are based on ongoing businesses. Thomson Reuters 2011 Revenues byyg Region
Financial & Risk Legal Consolidated $12.7B $7.3B $3.2B
88% 44% 31% 12%
38% 57% 31% 18% 8% 4%
Americas EMEA Asia Americas EMEA Asia Intellectual Property 12%57% Tax & Accounting & Science $1.1B $0.9B
93% Americas 70% Europe, Middle East & Africa 24% Asia 3% 4% 6%
Americas Asia EMEA Americas EMEA Asia Revenues for ongoing businesses. Segments do not add to total due to Corporate & Other (including Media) and eliminations. 7 80% of Our Business Grew In 2011 With Nearly 50% Growing Faster Than 5%
LEGAL FINANCIAL & RISK
U.S. Law Firm Solutions
TRADING Corporate, Government & Academic
Global Legal Businesses $12.7 Billion 2011 revenues1 INTELLECTUAL PROPERTY & SCIENCE
INVESTORS TAX & ACCOUNTING
Media
GRC Pre-FX Growth MARKETPLACES >5% 0% to 5% <0%
1 Revenues from ongoing businesses. 8 Keyyp Operatin g Characteristics
• The world’s leading source of intelligent information for businesses and Industry Leader professionals • #1 or #2 in our markets • Serve four core customer groups in global professional markets
• Balanced revenue stream • 59% F&R, 26% Legal, 8% T&A and 7% IP&S Balanced & Diversified • 57% Americas , 31% EMEA, 12% Asia • No single customer greater than 1% of revenues
Attractive Business • Predominantly subscription-based revenues • 86% of portfolio recurring revenue Model • Strong & consistent cash generation capabilities
Strong Competitive • Proprietary databases and deeply embedded workflow tools and analytics • 90% electronic, software and services Positioning • Strong b rand : rank ed #37 B est Gl o ba l Bran ds
Disciplined Financial • Focus on Free Cash Flow growth • Maintain strong and stable capital structure (Q4 Net Debt/EBITDA = 1.9x) Policies • Dividends key component of total shareholder return
Note: Results are from ongoing businesses as of December 31, 2011. 9 2011 Currency Profile
Revenues by Currency1 Operating Expenses by Currency1,2
16% 19% 62% 59%
7% 13% 15% 9%
U.S. Dollars Other Euro British Pound Sterling
1 Excludes the results of disposals. 10 2 Expenses includes all costs applied to the underlying operational profit figure. 2012 KEY PRIORITIES Key Priorities for 2012
1 2 3 4
Grow our Financial Invest in higher Exploit franchise Accelerate & Risk business growing segments strengths development and close adjacent in fast-growing markets geographies
We have outlined a clear We are refining our focus on No other information We have launched a new strategy, put new leaders in where to compete and company has the breadth of Global Growth & Operations place, organized around continuing to shift investment product, the geographic unit. Just getting better in our customers and set clear toward faster growing reach and global customer core markets will not be accountabilities. segments and emerging relationships of Thomson sufficient if the majority of opportunities. Reuters. global growth happens We are enriching our product One of our fastest growth We are working in new ways elsewhere. pipeline to drive sales. opportunities lies at the across business units to intersection of regulation and build products that meet We spent two-thirds of our We are dramatically finance. Given our strong customers’ unique needs acquis ition do llars in 2011 improving customer market position in financial through components outside North America, and experience to achieve services and in risk and contributed by our structure and talent are significant improvement to compliance, we have a all our units. organized to support our our customer satisfaction global strategy. unique opportunity to expand News and insight will ratings. our position i n thi s grow ing become an increasingly market. important part of all our flagship products. 12 2012 Outlook
Expectations:
• Revenues to grow low-single digit
• Adjusted EBITDA margin 27% - 28%
• Underlying operating profit margin 18% - 19%
• Reported free cash flow to grow 5% - 10% – Ongoing free cash flow to grow 15% - 20%
13 Free Cash Flow 2012 Outlook
Reported Reported +5-10% +2% $1.6B $1.6B
$1.4B $1.3B Ongoing +15-20% Ongoing +7%
2010 2011 2012 Outlook
(1) Disposals include Property Tax Services, Law School Publishing, eXimius (2011: $41 million) and businesses announced for disposal in 2011 (2011: $174 million).
Ongoing FCF Disposals (1) 14 CAPITAL ALLOCATION Strong Free Cash Flow Growth
Growing free cash flow enables investment through cycles and steady dividend increases
FCF History (($U.S.$ billions ) 1.8 1.6 1.6 1.6 1.4 121.2 111.1 1.1 1.0 1.0
0.6
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Reported Free Cash Flow Thomson Learning FCF (business sold in 2007)
16 Consistent Dividend Growth
• 2012 dividend increase of $0.04 per share to $1.28 – 19th consecutive increase
Dividend History (U.S.$ per share) 1.24 1281.28 1.16 1.08 1.12 0.98 0.88 0790.79 0.73 0760.76
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
17 Returninggp Capital to Shareholders
~$9 billion returned to shareholders since 2001
Returning Capital to Shareholders History 1.4 (U.S.$ billions) 1.3
1.0 0.9 0.9 0.8 0.8 070.7 0.5
0.3 0.3
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Dividend per share 1% 1% 3% 4% 4% 11% 11% 10% 4% 4% 7% growth
Dividends (net of dividend reinvestment) Share Repurchases 18 THIRD-QUARTER 2012 RESULTS Third-Quarter 2012 Results
• Revenues up 1%
• EBITDA down 5%
– Margin = 27.3% vs. 28.5% in prior-year period
• Underlying operating profit down 15%
– Margin=185%vs216%inpriorMargin = 18.5% vs. 21.6% in prior-year period
• Adjusted EPS $0.54 vs. $0.54 in prior-year period
• Acquired FXall & MarkMonitor in Q3
• 2012 Outlook affirmed Revenue growth excludes the impact of currency. Results for ongoing businesses.
20 Third-Quarter 2012 Revenue Growth by Business
Financial & Risk Tax & Accounting IP & Science Legal +0% +10% +3% +2%
Knowledge Intellectual Small Law Trading Sol uti on s Propert y Firms
Scientific & Large Law Investors Corporate Scholarly Firms Research General Marketplaces Professional Life Sciences Counsels
GRC Government Government
Global Growth & Operations (results included above) +16% (%(8% organic )
21 Third-Quarter 2012 Market & Oppperational Update • Market & economic conditions continue to be challenging ‒ Global financial services market still volatile ‒ Glo ba l ban ks rema in un der pressure
• Controllinggg the things within our control ‒ Greater transparency & accountability = better execution
• More rigorous and disciplined approach in Financial & Risk – Steady Progress ‒ Streamlining administrative and commercial processes ‒ Improving customer service and enhancing customer experience ‒ Launchingggy() new products and accelerating deployment of Eikon (up 35%) ‒ Better metrics across the business – sales, finance, product development
• Q4 – Expecting sequential growth - revenues, EBITDA & OI margins
22 Executing Against 2012 Key Priorities Better Positioned Entering 2013
9Focused on building a consistent execution capability & performance culture
9Investing in higher growing segments and close adjacencies
9Exploiting our strong position at the intersection of regulation & finance
‒ Governance, Risk & Compliance YTD organic growth = 17%
9Accelerating development in fast-growing geographies
‒ GGO YTD growth 18% (8% organic)
Targeting sustainable, predictable cash flow & earnings growth
23 Consolidated Results
($ Millions) Third Quarter Nine Months
2012 2011 Change 2012 2011 Change
Revenues $3,165 $3,197 -1% $9,541 $9,435 1%
BfBefore Currency 1% 3%
Adjusted EBITDA $864 $911 -5% $2,581 $2,516 3%
Adjusted EBITDA Margin 27.3% 28.5% 27.1% 26.7%
Underlying Operating Profit $585 $690 -15% $1,747 $1,895 -8%
Underlying Operating Profit Margin 18.5% 21.6% 18.3% 20.1%
Results for ongoing businesses.
24 Legal
($ Millions) Third Quarter Nine Months
2012 2011 Change 2012 2011 Change
Revenues $830 $821 1% $2,425 $2,378 2%
BfBefore Currency 2% 3%
EBITDA $327 $323 1% $916 $898 2%
EBITDA Margin 39.4% 39.3% 37.8% 37.8%
Operating Profit $256 $257 0% $707 $697 1%
Operating Profit Margin 30.8% 31.3% 29.2% 29.3%
Results for ongoing businesses.
25 Legal 60% of Revenues Grew at 6% in Q3
BUSINESS OF LAW U.S. LAW FIRM +13% SOLUTIONS +0%
$0.1B $0.2B CORPORATE, GOVERNMENT & ACADEMIC +1%
$0.8 Billion revenues1
CORE LEGAL RESEARCH $0.2B $0.3B (Westlaw & Print) -3% GLOBAL +9%
1 Q3 2012 Revenues from ongoing businesses. Tax & Accounting
($ Millions) Third Quarter Nine Months
2012 2011 Change 2012 2011 Change
Revenues $262 $242 8% $855 $709 21%
BfBefore Currency 10% 22%
EBITDA $65 $63 3% $245 $196 25%
EBITDA Margin 24.8% 26.0% 28.7% 27.6%
Operating Profit $34 $37 -8% $158 $127 24%
Operating Profit Margin 13.0% 15.3% 18.5% 17.9%
Results for ongoing businesses.
27 Intellectual Proppyerty & Science
($ Millions) Third Quarter Nine Months
2012 2011 Change 2012 2011 Change
Revenues $219 $215 2% $644 $627 3%
BfBefore Currency 3% 4%
EBITDA $72 $79 -9% $219 $216 1%
EBITDA Margin 32.9% 36.7% 34.0% 34.4%
Operating Profit $55 $64 -14% $169 $173 -2%
Operating Profit Margin 25.1% 29.8% 26.2% 27.6%
Results for ongoing businesses.
28 Financial & Risk
($ Millions) Third Quarter Nine Months
2012 2011 Change 2012 2011 Change
Revenues $1,778 $1,839 -3% $5,381 $5,482 -2%
BfBefore Currency 0% 1%
EBITDA $440 $523 -16% $1,359 $1,514 -10%
EBITDA Margin 24.7% 28.4% 25.3% 27.6%
Operating Profit $283 $380 -26% $891 $1,084 -18%
Operating Profit Margin 15.9% 20.7% 16.6% 19.8%
Results for ongoing businesses.
29 Financial & Risk Revenues
($ Millions) Third Quarter Nine Months
2012 2011 Change 2012 2011 Change
Trading $816 $887 -8% $2,515 $2,668 -6%
BfBefore Currency -4% -3%
Investors $604 $616 -2% $1,815 $1,866 -3%
Before Currency 0% -1%
Marketplaces $303 $289 5% $893 $844 6%
Before Currency 7% 8% Governance, Risk & $55 $47 17% $158 $104 52% Compliance
Before Currency 17% 53%
Results for ongoing businesses.
30 BUSINESSES CUSTOMERS COMPETITORS Balanced Portfolio of Businesses
LEGAL FINANCIAL & RISK 25% Data Feeds 57% & Platform U.S. Law Firm Solutions Equ ities, Deri vati v es & Options
7% 14% 6% Fixed Income Corporate, Government TRADING & Academic 5% 6% Foreign Exchange (FX) 4% Global Legal Businesses 5% Commodities & 3% Energy $12.7 Billion 2011 revenues1 3% CitiCommunications INTELLECTUAL 7% & Omgeo PROPERTY 6% & SCIENCE Investment Management 8% 5% INVESTORS TAX & ACCOUNTING 3% 4% 1% 2% Wealth Management 9% 2%
Media Investment Banking Corporate GRC Enterprise Content
MARKETPLACES 1 Revenues from ongoing businesses. 32 Financial & Risk
Principal BusinessKey Products Customers Competitors
Eikon • Tradinggp professionals, salesp eop le, Bloomberg Elektron brokers & financial analysts IDC Trading 3000Xtra • Investment banks, asset managers, Markit Real Time Feeds custodians, hedge funds, prime SunGard Enterprise Platform brokers and proprietary traders Telekurs
• Portfolio managers, buy-side Eikon Bloomberg research analysts, investment Thomson ONE FactSet bankers, consultants, private equity Investors Datascope Morningstar professionals, wealth management Datastream Pro S&P/Capital IQ professionals and lawyers
• FX & money market traders Dealing Bloomberg • Sales desks, hedge funds and voice Matching ICAP EBS Marketplaces brokers Tradeweb MarketAxess • Institutional fixed income traders
• Banking & Corporate compliance Bwise Governance, officers Dow Jones Risk & Accelus • Audit and risk management Protiviti Compliance professionals Reed Elsevier • Law firms Wolters Kluwer
33 Legal
Principal Business Key Products Customers Competitors
WestlawNext Aderant Large Law Print • Lawyers Bloomberg (BNA) Westlaw Litigator • Legal librarians Reed Elsevier Firms Elite 3E • Other legal professionals SAP Hubbard One Wolters Kluwer
WestlawNext • Lawyers Bloomberg (BNA) Small Law Print • Legal librarians Reed Elsevier Westlaw Litigator Firms • Other legal professionals Wolters Kluwer Findlaw
WestlawNext Bloomberg (BNA) Corporate Print • Corporate legal professionals Reed Elsevier Pangea3 Counsel Wolters Kluwer Serengeti
WestlawNext Bloomberg (BNA) Westlaw PeopleMap • Government agencies Reed Elsevier Government Print • National, State & Local Courts Wolters Kluwer CLEAR
34 Tax & Accounting
Principal Business Key Products Customers Competitors
• Corporations CCH (Wolters • Law firms Kluwer) ONESOURCE Corporate • Banks & Trusts CSC (CORPTAX) • Large accounting firms Vertex
CCH (Wolters CS Professional • Large accounting firms Kluwer) Suite Professional • Small to medium accounting firms Drake Software Enterprise Suite Intuit
• Accounting firms Knowledge Checkpoint • Corporate tax departments CCH (Wolters Solutions Print • Finance & accounting departments Kluwer) • Law firms & Government agencies
Government • National, state and local CCI Revenue governments responsible for Local government Government Management property registration, tax generation ERP vendors (GRM) andlltid collection
35 Intellectual Proppyerty & Science
Principal Business Key Products Customers Competitors
• IP counsel, attorneys, information professionals Coresearch Serion • Heads of research & development CPA Global Intellectual Thomson IP Manager • Licensing & marketing executives, Minesoft Westlaw IP Property business strategists, trademark Patent office sites Thomson Innovation attorneys, paralegals & intelligence Reed Elsevier analysts in corporations & law firms
• Research libraries and Aries Scientific & Web of Knowledge administrators at academic & EBSCO Endnote government organizations Google Scholar Scholarly ScholarOne • Research scientists & scholars ProQuest Research Incites • Scientific, Technical and Medical Reed Elsevier (STM) publishers & funders Wolters Kluwer
Cortellis • Business development, licensing, CAS Integrity investment professionals & research Informa GeneGo Life Sciences scientists at pharmaceutical & Reed Elsevier IDRAC biot ech nol ogy compani es WltWolters Kluwer Newport
36