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SECURITIES AND EXCHANGE COMMISSION
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2007 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Jurisdiction of incorporation or organization)
New York, New York 10036
(Address of principal executive offices)
Title of each class | Name of each exchange on which registered | |
Ordinary shares of £10 each | The Nasdaq Stock Market LLC |
None
None
Ordinary Shares of £10* | ||
Reuters Founders Share of £11 |
* | The Registrant issued 194,107,278 Thomson Reuters PLC ordinary shares to Reuters Group PLC shareholders on completion of the Transaction (as defined below). At December 31, 2007, Reuters Group PLC had 1,401,838,175 of its ordinary shares of 25p each outstanding and 1 Reuters Founders Share of £1 outstanding. |
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EX-3.1: MEMORANDUM OF ASSOCIATION | ||||||||
EX-3.2: ARTICLES OF ASSOCIATION | ||||||||
EX-15.1: CONSENT OF PRICEWATERHOUSECOOPERS LLP LONDON, ENGLAND FOR REUTERS | ||||||||
EX-31.1: CERTIFICATION | ||||||||
EX-31.2: CERTIFICATION | ||||||||
EX-32.1: CERTIFICATION | ||||||||
EX-32.2: CERTIFICATION | ||||||||
EX-99.1: MANAGEMENT'S DISCUSSION AND ANALYSIS | ||||||||
EX-99.2: AUDITED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||
EX-99.12: SUMMARY DESCRIPTION OF THE AMERICAN DEPOSITARY SHARES |
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• | in relation to the Transaction and the DLC structure: |
- | failure to achieve benefits from the Transaction to the extent, or within the time period currently expected, which could eliminate, reduce or delay the achievement of synergies expected to be generated by the Transaction; | ||
- | failure to maximize the growth potential of, or deliver greater value for, Thomson Reuters beyond the level that either Thomson or Reuters could have achieved on its own; | ||
- | the relationship of the value of Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares to the economic performance of Thomson Reuters; | ||
- | differences in the trading prices of Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares; | ||
- | adverse effects of changes to legislation and regulations on the DLC structure; | ||
- | risks and costs not associated with more common acquisition structures; | ||
- | exposure of each of Thomson Reuters Corporation and Thomson Reuters PLC to the credit risk of the other; | ||
- | changes in the tax residence of Thomson Reuters Corporation; or Thomson Reuters PLC: | ||
- | classification of Thomson Reuters PLC as a passive foreign investment company under US federal income tax laws; | ||
- | failure of US shareholders to qualify for special reduced withholding rates on payments of future dividends from Thomson Reuters PLC; | ||
- | ability of Reuters Founders Share Company to affect Thomson Reuters governance and management; | ||
- | prevention or discouragement of take-over bids because of provisions in the DLC Documents; | ||
- | different laws and regulations governing the rights and privileges of Thomson Reuters Corporation shareholders and Thomson Reuters PLC shareholders; |
• | changes in the general economy; | ||
• | actions of competitors; | ||
• | changes to legislation and regulations; |
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• | increased accessibility to free or relatively inexpensive information sources; | ||
• | failure to derive fully anticipated benefits from future or existing acquisitions, joint ventures, investments or dispositions; | ||
• | failure to develop new products, services, applications and functionalities to meet customers’ needs, attract new customers or expand into new geographic markets; | ||
• | failure of electronic delivery systems, network systems or the Internet; | ||
• | detrimental reliance on third parties for information; | ||
• | failure to meet the challenges involved in the expansion of international operations; | ||
• | failure to realize the anticipated cost savings and operating efficiencies from the THOMSONplus initiative, the Reuters Core Plus program and other cost-saving initiatives, including those designed to make Thomson Reuters a more integrated group; | ||
• | failure to protect the reputation of Thomson Reuters; | ||
• | impairment of goodwill and identifiable intangible assets; | ||
• | failure of significant investments in technology to increase revenues or decrease operating costs; | ||
• | increased self-sufficiency of customers; | ||
• | inadequate protection of intellectual property rights; | ||
• | downgrading of credit ratings or adverse conditions in the credit markets; | ||
• | threat of legal actions and claims; | ||
• | changes in foreign currency exchange and interest rates; | ||
• | failure to recruit and retain high quality management and key employees; | ||
• | effect of factors outside the control of Thomson Reuters on funding obligations in respect of pension and post-retirement benefit arrangements; and | ||
• | actions or potential actions that could be taken by Woodbridge. |
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ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. | KEY INFORMATION |
ITEM 3A. | Selected Financial Data |
• | have been prepared for illustrative purposes only, and because of their nature, address a hypothetical situation and, therefore do not represent Thomson Reuters Corporation’s actual financial position or results; | ||
• | do not purport to represent what the consolidated results of operations actually would have been if the Transaction had occurred on January 1, 2007 or what those results will be for any future periods or what the consolidated balance sheet would have been if the Transaction had occurred on December 31, 2007. The pro forma adjustments are based on information current as at April 16, 2008 (being the latest practicable date prior to the publication of this Form 20-F); and | ||
• | have not been adjusted to reflect any matters not directly attributable to implementing the Transaction. No adjustment, therefore, has been made for actions which may be taken once the Transaction is complete, such as any integration plans of Thomson Reuters. |
• | Financial information on Thomson as at and for the year ended December 31, 2007 has been extracted without material adjustment from Thomson’s audited consolidated financial statements set out in Exhibit 99.2 filed as part of this Annual Report on Form 20-F. |
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• | Canadian GAAP and US GAAP financial information on Reuters as at and for the year ended December 31, 2007 has been extracted without material adjustment, except for currency translation as noted below, from (a) the Reuters unaudited reconciliations summarizing the material differences between IFRS as applied by Reuters and Canadian GAAP as applied by Thomson and (b) the Reuters unaudited reconciliations summarizing the material differences between Canadian GAAP as applied by Thomson and US GAAP set out in Note 7 “ Reconciliation to Canadian GAAP as applied by The Thomson Corporation” below and Note 6 “Pro Forma Summary of Differences Between Canadian GAAP and US GAAP” below, respectively. | ||
• | The Reuters figures have been translated from £ to $ using average exchange rates applicable during the period presented for the unaudited pro forma consolidated statement of earnings and the period end exchange rate for the unaudited pro forma consolidated balance sheet. |
$/£1 | ||||||
December 31, 2007 | Average Spot Rate | 2.0016 | ||||
December 31, 2007 | Period End Rate | 1.9843 |
Pro forma | ||||||||||||||||||||
Pro forma adjustments | Thomson | |||||||||||||||||||
(in millions of US dollars, except common share amounts) | Thomson | Reuters | Other | Note | Reuters | |||||||||||||||
Revenues | 7,296 | 5,232 | (86 | ) | 3(b | ) | 12,442 | |||||||||||||
Cost of sales, selling, marketing, general and administrative expenses | (5,275 | ) | (4,678 | ) | 431 | 3(c), 3(d), 3(e), 3(f | ) | (9,522 | ) | |||||||||||
Depreciation | (468 | ) | (280 | ) | (57 | ) | 3(e | ) | (805 | ) | ||||||||||
Amortization | (256 | ) | (88 | ) | (297 | ) | 3(e | ) | (641 | ) | ||||||||||
Operating profit | 1,297 | 186 | (9 | ) | 1,474 | |||||||||||||||
Net other income (expense) | (34 | ) | 162 | — | 128 | |||||||||||||||
Net interest expense and other financing costs | (12 | ) | (172 | ) | (243 | ) | 3(g | ) | (427 | ) | ||||||||||
Income tax expense | (155 | ) | (28 | ) | 73 | 3(h | ) | (110 | ) | |||||||||||
Earnings from continuing operations | 1,096 | 148 | (179 | ) | 1,065 | |||||||||||||||
Basic earnings per common share from continuing operations | $1.70 | $1.26 | ||||||||||||||||||
Diluted earnings per common share from continuing operations | $1.69 | $1.26 |
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Pro forma | ||||||||||||||||||||
Pro forma adjustments | Thomson | |||||||||||||||||||
(in millions of US dollars) | Thomson | Reuters | Other | Note | Reuters | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | 7,497 | 510 | (4,041 | ) | 3(a)(i) | 3,966 | ||||||||||||||
Accounts receivable, net of allowances | 1,565 | 234 | — | 1,799 | ||||||||||||||||
Prepaid expenses and other current assets | 508 | 384 | (18 | ) | 3(a)ii, 3(a)(iii) | 874 | ||||||||||||||
Deferred income taxes | 104 | 236 | — | 340 | ||||||||||||||||
Current assets of discontinued operations | 4 | — | — | 4 | ||||||||||||||||
Current assets | 9,678 | 1,364 | (4,059 | ) | 6,983 | |||||||||||||||
Computer hardware and other property, net | 731 | 933 | 221 | 3(a)(iii) | 1,885 | |||||||||||||||
Computer software, net | 721 | 77 | 1,023 | 3(a)(iii) | 1,821 | |||||||||||||||
Identifiable intangible assets, net | 3,438 | 534 | 4,866 | 3(a)(iii) | 8,838 | |||||||||||||||
Goodwill | 6,935 | 810 | (810 | ) | 3(a)(iii) | 6,935 | ||||||||||||||
Unallocated purchase price | — | — | 12,530 | 3(a)(iii) | 12,530 | |||||||||||||||
Other non-current assets | 1,322 | 762 | 406 | 3(a)(iii) | 2,490 | |||||||||||||||
Deferred income taxes | — | 331 | — | 331 | ||||||||||||||||
Non-current assets of discontinued operations | 6 | — | — | 6 | ||||||||||||||||
Total assets | 22,831 | 4,811 | 14,177 | 41,819 |
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Pro forma | ||||||||||||||||||||
Pro forma adjustments | Thomson | |||||||||||||||||||
Thomson | Reuters | Other | Note | Reuters | ||||||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Short-term indebtedness | 183 | 155 | 4,939 | 3(a)(i) | 5,277 | |||||||||||||||
Accounts payable and accruals | 1,532 | 1,579 | 87 | 3(a)(ii), 3(a)(iii) | 3,198 | |||||||||||||||
Deferred revenue | 1,108 | 73 | (7 | ) | 3(a)(iii) | 1,174 | ||||||||||||||
Current portion of long-term debt | 412 | 365 | — | 777 | ||||||||||||||||
Current liabilities of discontinued operations | 4 | — | — | 4 | ||||||||||||||||
Current liabilities | 3,239 | 2,172 | 5,019 | 10,430 | ||||||||||||||||
Long-term debt | 4,264 | 864 | — | 5,128 | ||||||||||||||||
Other non-current liabilities | 783 | 260 | 52 | 3(a)(iii) | 1,095 | |||||||||||||||
Deferred income taxes | 974 | 389 | 1,802 | 3(a)(iii) | 3,165 | |||||||||||||||
Total liabilities | 9,260 | 3,685 | 6,873 | 19,818 | ||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Capital | 2,932 | 1,070 | 7,360 | 3(a)(i) | 11,362 | |||||||||||||||
Retained earnings | 10,355 | 3,368 | (3,368 | ) | 3(a)(i) | 10,355 | ||||||||||||||
Accumulated other comprehensive income | 284 | (3,312 | ) | 3,312 | 3(a)(i) | 284 | ||||||||||||||
Total shareholders’ equity | 13,571 | 1,126 | 7,304 | 22,001 | ||||||||||||||||
Total liabilities and shareholders’ equity | 22,831 | 4,811 | 14,177 | 41,819 |
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(a) | Estimated purchase consideration and related excess purchase consideration over fair value of net assets acquired are as follows: |
(US$ millions) | ||||||||||||||||||||
Estimated Purchase Consideration | Notes | |||||||||||||||||||
Ordinary shares, Thomson Reuters PLC | 8,430 | (i | ) | |||||||||||||||||
Cash | 8,657 | (i | ) | |||||||||||||||||
Transaction costs | 135 | (ii | ) | |||||||||||||||||
Estimated purchase consideration | 17,222 | |||||||||||||||||||
Less: fair value of net (assets) liabilities acquired | 1,808 | |||||||||||||||||||
Excess of purchase consideration over fair value of net assets acquired | 19,030 |
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(i) | To effect the Transaction, Reuters was acquired by a subsidiary of Thomson Reuters PLC, through the Reuters Scheme in which each holder of one Reuters ordinary share was entitled to 352.5 pence in cash and 0.16 Thomson Reuters PLC ordinary shares. Under the terms of the agreement: |
• | Thomson funded the cash consideration; and | ||
• | on closing, one Thomson Reuters PLC ordinary share was equivalent to one Thomson Reuters Corporation common share under the DLC structure. |
• | Disbursement of $535 million by Reuters to repurchase its ordinary shares during the period from January 1, 2008 to February 19, 2008 and from March 10, 2008 to April 9, 2008; | ||
• | Disbursement of $8,657 million in cash by Thomson being funded by $3,718 million in available cash and $4,939 million drawn from Thomson’s credit facilities; | ||
• | The effect of $212 million in cash received by Reuters relating to exercise of Reuters share-based employee awards; |
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• | Equity of $8,430 million attributable to the issuance of 198.9 million Thomson Reuters PLC ordinary shares; and | ||
• | Elimination of Reuters historical shareholders’ equity balances in capital of $1,070 million, retained earnings of $3,368 million and accumulated other comprehensive income of ($3,312) million. |
(ii) | Transaction costs represent Thomson’s estimated direct costs of carrying out the Transaction that may be capitalized as part of the overall consideration. |
• | An adjustment of $52 million has been made to reclassify this amount out of current assets and treat it as part of unallocated purchase price. | ||
• | Of the $135 million in total Transaction costs, $83 million had not been incurred as at December 31, 2007 and, accordingly, an adjustment has been made to increase accounts payable and accruals as if those charges had occurred. |
(US$ millions) | ||||
Cash adjustment | ||||
Cash funding | (8,657 | ) | ||
Funding provided by credit facilities | 4,939 | |||
Funding from available cash | (3,718 | ) | ||
Cash used by Reuters for share buy-back program | (535 | ) | ||
Cash received by Reuters relating to exercise of share-based employee awards | 212 | |||
Cash adjustment | (4,041 | ) | ||
Accounts payable and accruals adjustment | ||||
Transaction costs accrual | 83 | |||
Current portion of unfavorable leases | 4 | |||
Accounts payable and accruals adjustment | 87 | |||
Capital | ||||
Issuance of new shares | 8,430 | |||
Less: elimination of Reuters capital | (1,070 | ) | ||
Capital adjustment | 7,360 |
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(US$ millions) | ||||
Transaction costs | ||||
Reclassified from prepaid and other current assets | 52 | |||
Transaction costs accrual | 83 | |||
Transaction costs | 135 |
(iii) | Pro forma purchase price allocation |
As at December 31, 2007 | ||||||||||||
Pro forma | ||||||||||||
Purchase | ||||||||||||
Reuters | Fair Value | Price | ||||||||||
(US$ millions) | Book Value | Increment | Allocation | |||||||||
Assets | ||||||||||||
Cash and cash equivalents | 187 | — | 187 | |||||||||
Accounts receivable, net of allowances | 234 | — | 234 | |||||||||
Prepaid expenses and other current assets | 384 | 34 | 418 | |||||||||
Deferred income taxes | 236 | — | 236 | |||||||||
Current assets | 1,041 | 34 | 1,075 | |||||||||
Computer hardware and other property, net | 933 | 221 | 1,154 | |||||||||
Computer software, net | 77 | 1,023 | 1,100 | |||||||||
Identified intangible assets, net | 534 | 4,866 | 5,400 | |||||||||
Goodwill | 810 | (810 | ) | — | ||||||||
Unallocated purchase price | — | 12,530 | 12,530 | |||||||||
Other non-current assets | 762 | 406 | 1,168 | |||||||||
Deferred income taxes | 331 | — | 331 | |||||||||
Total assets | 4,488 | 18,270 | 22,758 | |||||||||
Liabilities | ||||||||||||
Short-term indebtedness | 155 | — | 155 | |||||||||
Accounts payable and accruals | 1,579 | 4 | 1,583 | |||||||||
Deferred revenue | 73 | (7 | ) | 66 | ||||||||
Current portion of long-term debt | 365 | — | 365 | |||||||||
Current liabilities | 2,172 | (3 | ) | 2,169 |
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As at December 31, 2007 | ||||||||||||
Pro forma | ||||||||||||
Purchase | ||||||||||||
Reuters | Fair Value | Price | ||||||||||
(US$ millions) | Book Value | Increment | Allocation | |||||||||
Long term debt | 864 | — | 864 | |||||||||
Other non-current liabilities | 260 | 52 | 312 | |||||||||
Deferred income taxes | 389 | 1,802 | 2,191 | |||||||||
Total liabilities | 3,685 | 1,851 | 5,536 | |||||||||
Total net assets acquired | 803 | 16,419 | 17,222 |
Book value after | ||||||||||||||||
As at | share buy-back and | |||||||||||||||
December 31, | Share buy-back | Exercise of | exercise of | |||||||||||||
(US$ millions) | 2007 | program | share-based awards | share-based awards | ||||||||||||
Reuters reconciliation of selected book values | ||||||||||||||||
Cash and cash equivalents | 510 | (535 | ) | 212 | 187 |
• | An adjustment of $221 million was recorded to increase the carrying value of real property and buildings. | ||
• | An adjustment of ($7) million was recorded to reduce the carrying value of Reuters deferred revenue to $66 million, which represents an estimate of the fair value of the obligation assumed. | ||
• | A net adjustment of $384 million was recorded to reflect the estimated fair value increment of favorable and unfavorable leases. The following table details the fair value increment. |
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(US$ millions) | Fair Value Increment | |||
Prepaid expenses and other current assets | 34 | |||
Other non-current assets | 406 | |||
Less: Accounts payable and accruals | 4 | |||
Less: Other non-current liabilities | 52 | |||
Total | 384 |
• | Deferred income taxes attributed to the fair value increments, described above and in section (iv) that follows immediately below, were $1,802 million. | |
(iv) | Preliminary estimates of the fair value of identified intangible assets and developed technology and their respective estimated useful lives as at December 31, 2007 are summarized in the following table. |
(US$ millions) | Estimated Fair Value | Estimated Useful life | ||||||
Trade name | $ | 2,000 | Indefinite | |||||
Customer relationships | 2,400 | 8 — 18 years | ||||||
Other | 1,000 | 5 years | ||||||
Identified intangible assets | $ | 5,400 | ||||||
Developed technology | $ | 1,100 | 5 — 10 years |
(b) | An adjustment of $86 million was recorded to reduce revenues. The adjustment was a result of reducing the carrying value of Reuters deferred revenue obligation as at January 1, 2007 to its estimated fair value. | ||
(c) | Thomson and Reuters have incurred integration planning and other Transaction-related costs that do not qualify to be capitalized as part of estimated purchase consideration. These items were initially recorded as expenses in the statement of earnings. An adjustment of $166 million has been made to reverse the expenses incurred for the year ended December 31, 2007. This adjustment was recorded because the pro forma statement of earnings has been prepared as if the Transaction had occurred on January 1, 2007. Therefore these expenses would have been incurred prior to the closing of the Transaction. Additionally, these expenses are non-recurring in nature and are not expected to have a continuing impact on the consolidated results. | ||
(d) | An adjustment of $322 million was recorded to reduce cost of sales, selling, marketing, general and administrative expenses, eliminating amortization expense related to past service costs and net actuarial gains and losses in connection with Reuters pension and other post-retirement benefit plans. This amount was removed as retirement plan assets and obligations would have been reflected at their fair values on January 1, 2007. | ||
(e) | Amortization and depreciation |
• | An adjustment of $297 million was recorded to reflect additional amortization attributable to the preliminary fair value increment allocated to identified intangible assets. | ||
• | An adjustment of $57 million was recorded to reflect additional depreciation attributable to the preliminary fair value increment allocated to computer hardware and other property, and internal use software. |
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• | An adjustment of $27 million was recorded in cost of sales, selling, marketing, general and administrative expenses to reflect additional amortization attributable to the preliminary fair value increment allocated to capitalized software to be sold externally. |
Pro forma amortization and depreciation expense exclude the total amount of the purchase price allocation not subject to amortization of approximately $14,530 million, representing $12,530 million in unallocated purchase price and $2,000 million attributed to the preliminary estimated fair value of the Reuters trade name. | ||
On finalization of the purchase price allocation, if the amount not subject to amortization is allocated to operating assets subject to amortization, pro forma amortization would increase by approximately $1,751 million, before taxes. Pro forma amortization and the above noted sensitivity have been based on a remaining weighted average estimated economic life of 8.3 years. | ||
A reduction of one year in the weighted average estimated economic life would increase pro forma amortization by $74 million. | ||
(f) | An adjustment of $30 million was recorded to reflect additional rent expense attributable to amortization of the preliminary fair value increment allocated to favorable and unfavorable leases. | |
(g) | An adjustment of $243 million was recorded to reflect pro forma interest expense. The interest charges relate to the $4,939 million drawn from credit facilities to finance a portion of the estimated cash consideration, as if such amount was borrowed from January 1, 2007 and outstanding as at December 31, 2007. These interest charges will have a continuing impact on the consolidated results until all borrowings under credit facilities are repaid. | |
(h) | The estimated tax benefits of the above adjustments are $73 million. The estimates reflect the tax rates of Thomson and Reuters separately and tax jurisdictions in which the pro forma adjustments were assumed to occur. |
(US$ millions) | ||||||||||||||||||||||||||||||||
Adjustment | b) | c) | d) | e) | f) | g) | h) | Total | ||||||||||||||||||||||||
Revenues | (86 | ) | — | — | — | — | — | — | (86 | ) | ||||||||||||||||||||||
Cost of sales, selling, marketing, general and administrative expenses | — | 166 | 322 | (27 | ) | (30 | ) | — | — | 431 | ||||||||||||||||||||||
Depreciation | — | — | — | (57 | ) | — | — | — | (57 | ) | ||||||||||||||||||||||
Amortization | — | — | — | (297 | ) | — | — | — | (297 | ) | ||||||||||||||||||||||
Operating profit | (86 | ) | 166 | 322 | (381 | ) | (30 | ) | — | — | (9 | ) | ||||||||||||||||||||
Net interest expense and other financing costs | — | — | — | — | — | (243 | ) | — | (243 | ) | ||||||||||||||||||||||
Income tax expense | NA | NA | NA | NA | NA | NA | 73 | 73 | ||||||||||||||||||||||||
Net earnings | NA | NA | NA | NA | NA | NA | NA | (179 | ) |
NA — Income tax expense and net earnings presented on a consolidated basis. |
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Year ended | ||||
December 31, 2007 | ||||
Basic and diluted pro forma earnings per share from continuing operations computation | ||||
Numerator (millions of US dollars): | ||||
Pro forma earnings from continuing operations | 1,065 | |||
Dividends declared on preference shares | (6 | ) | ||
Pro forma earnings from continuing operations attributable to common shares | 1,059 | |||
Denominator: | ||||
Thomson weighted-average outstanding common shares | 641.2 | |||
Shares of Thomson Reuters PLC | 198.9 | |||
Basic pro forma weighted - average outstanding common shares | 840.1 | |||
Thomson effect of stock and other incentive plans | 3.3 | |||
Diluted pro forma weighted - average outstanding common shares | 843.4 | |||
Basic pro forma earnings per share from continuing operations | $1.26 | |||
Diluted pro forma earnings per share from continuing operations | $1.26 |
Pro forma | ||||||||||||||||||||
Pro forma adjustment | Thomson | |||||||||||||||||||
Thomson | Reuters | Other | Reuters | % of Total | ||||||||||||||||
Thomson Financial | 2,186 | — | 2,186 | |||||||||||||||||
Reuters | — | 5,232 | (86 | ) | 5,146 | |||||||||||||||
Markets division | 2,186 | 5,232 | (86 | ) | 7,332 | 59 | % | |||||||||||||
Thomson Legal | 3,318 | — | — | 3,318 | ||||||||||||||||
Thomson Tax & Accounting | 705 | — | — | 705 | ||||||||||||||||
Thomson Scientific | 651 | — | — | 651 | ||||||||||||||||
Thomson Healthcare | 452 | — | — | 452 | ||||||||||||||||
Professional division | 5,126 | — | — | 5,126 | 41 | % | ||||||||||||||
Eliminations | (16 | ) | — | — | (16 | ) | ||||||||||||||
Total | 7,296 | 5,232 | (86 | ) | 12,442 | 100 | % |
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See Note 3(b) above for discussion of ($86) million revenue reduction. | ||
6. | PRO FORMA SUMMARY OF DIFFERENCES BETWEEN CANADIAN GAAP AND US GAAP | |
The reconciliations of Reuters historical financial information from Canadian GAAP as applied by Thomson to US GAAP are set out in Note 8 “Unaudited Canadian GAAP to US GAAP Reconciliations”. The reconciliations of Thomson’s historical financial information from Canadian GAAP to US GAAP are set out in Exhibit 99.2 filed as part of this Annual Report on Form 20-F. The unaudited pro forma consolidated financial statements should be read in conjunction with those reconciliations. | ||
Summary adjustments made to present shareholders equity and earnings from continuing operations as at and for the year ended December 31, 2007 in accordance with US GAAP were extracted from the reconciliations and are identified in the table below as “Canadian GAAP to US GAAP Summary Difference” for Thomson and Reuters, respectively. | ||
No additional differences between Canadian GAAP and US GAAP arose as a consequence of the pro forma adjustments described in Note 3 “Pro Forma Adjustments” above. | ||
The following reconciliation presents the effect of material differences between Canadian GAAP as applied by Thomson and US GAAP with respect to pro forma net earnings from continuing operations and shareholders’ equity. |
Year ended | ||||
December 31, | ||||
(in millions of U.S. dollars) | 2007 | |||
Reconciliation of pro forma earnings from continuing operations | ||||
Earnings from continuing operations under Canadian GAAP as applied by Thomson | 1,065 | |||
Differences in accounting principles increasing (decreasing) earnings: | ||||
Canadian GAAP to US GAAP Summary Difference — Thomson | — | |||
Canadian GAAP to US GAAP Summary Difference — Reuters | 190 | |||
Earnings from continuing operations under US GAAP | 1,255 |
As at | ||||
December 31, | ||||
(in millions of U.S. dollars) | 2007 | |||
Reconciliation of pro forma shareholders’ equity | ||||
Shareholders’ equity under Canadian GAAP as applied by Thomson | 22,001 | |||
Differences in accounting principles increasing (decreasing) shareholders’ equity: | ||||
Canadian GAAP to US GAAP Summary Difference — Thomson | (559 | ) | ||
Canadian GAAP to US GAAP Summary Difference — Reuters | (205 | ) | ||
Shareholders’ equity under US GAAP | 21,237 |
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For the year ended | ||||||||
December 31, 2007 | ||||||||
£m | ||||||||
Profit from continuing operations attributable to ordinary shareholders as previously reported by Reuters under IFRS | 213 | |||||||
Differences in GAAP increasing / (decreasing) reported profit net earnings: | ||||||||
Business combinations | 1 | (4 | ) | |||||
Other intangibles | 2 | (2 | ) | |||||
Employee benefits — pensions | 3 | (161 | ) | |||||
Stock-based compensation | 4 | 3 | ||||||
Derivative instruments and hedging activities | 5 | (12 | ) | |||||
Sale and leaseback transactions | 7 | — | ||||||
Property, plant and equipment | 8 | (16 | ) | |||||
Joint ventures and associates | 9 | — | ||||||
Restructuring | 10 | 7 | ||||||
Taxation | 12 | 46 | ||||||
Net earnings from continuing operations attributable to ordinary shareholders under Thomson Canadian GAAP accounting policies | 74 |
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As at | ||||||||
December 31, 2007 | ||||||||
£m | ||||||||
Shareholders’ equity attributable to ordinary shareholders as previously reported by Reuters under IFRS | 138 | |||||||
Differences increasing / (decreasing) reported Shareholders’ equity: | ||||||||
Business combinations | 1 | 105 | ||||||
Other intangibles | 2 | (6 | ) | |||||
Employee benefits — pensions | 3 | 251 | ||||||
Stock-based compensation | 4 | 10 | ||||||
Derivative instruments and hedging activities | 5 | (28 | ) | |||||
Investments | 6 | (2 | ) | |||||
Sale and leaseback transactions | 7 | (2 | ) | |||||
Property, plant and equipment | 8 | — | ||||||
Joint ventures and associates | 9 | 2 | ||||||
Restructuring | 10 | (5 | ) | |||||
Shares to be repurchased | 11 | 169 | ||||||
Taxation | 12 | (65 | ) | |||||
Shareholders’ equity attributable to ordinary shareholders under Thomson Canadian GAAP accounting policies | 567 |
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For the year ended December 31, 2007 | ||||||||||||||||
Canadian | ||||||||||||||||
Adj. | IFRS | Adjustments | GAAP | |||||||||||||
Ref. | £m | £m | £m | |||||||||||||
Revenues | 9 | 2,605 | 9 | 2,614 | ||||||||||||
Cost of sales, selling, marketing, general and administrative expenses | (2,147 | ) | (190 | ) | (2,337 | ) | ||||||||||
2 | (15 | ) | ||||||||||||||
3 | (161 | ) | ||||||||||||||
4 | 3 | |||||||||||||||
5 | (11 | ) | ||||||||||||||
7 | 1 | |||||||||||||||
9 | (14 | ) | ||||||||||||||
10 | 7 | |||||||||||||||
Depreciation | (108 | ) | (32 | ) | (140 | ) | ||||||||||
2 | (15 | ) | ||||||||||||||
7 | (1 | ) | ||||||||||||||
8 | (16 | ) | ||||||||||||||
Amortization | (68 | ) | 24 | (44 | ) | |||||||||||
1 | (4 | ) | ||||||||||||||
2 | 28 | |||||||||||||||
Operating profit | 282 | (189 | ) | 93 | ||||||||||||
Net other (expense)/income | 25 | 56 | 81 | |||||||||||||
5 | 51 | |||||||||||||||
9 | 5 | |||||||||||||||
Net interest expense and other financing costs | 5 | (34 | ) | (52 | ) | (86 | ) | |||||||||
Income taxes | 12 | (60 | ) | 46 | (14 | ) | ||||||||||
Earnings from continuing operations | 213 | (139 | ) | 74 |
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As | ||||||||||||||||
presented in | ||||||||||||||||
Reuters | ||||||||||||||||
As presented in | published | |||||||||||||||
the table above | Reclassifications | report | ||||||||||||||
Canadian GAAP format | £m | £m | £m | IFRS format | ||||||||||||
Revenues | 2,605 | — | 2,605 | Revenue | ||||||||||||
Cost of sales, selling, marketing, general and administrative expenses | (2,147 | ) | (208 | ) | (2,355 | ) | Operating cost | |||||||||
— | 42 | 42 | Other operating income | |||||||||||||
Depreciation | (108 | ) | 108 | |||||||||||||
Amortization | (68 | ) | 68 | |||||||||||||
Operating profit | 282 | 10 | 292 | Operating profits | ||||||||||||
Net other income | 25 | (10 | ) | 15 | Profit on disposal/Share of losses of JVs and associates | |||||||||||
Net interest expense and other financing costs | (34 | ) | 151 | 117 | Finance Income | |||||||||||
— | (151 | ) | (151 | ) | Finance cost | |||||||||||
Income taxes | (60 | ) | — | (60 | ) | Taxation | ||||||||||
Earnings from continuing operations | 213 | — | 213 | Profit for the year from continuing operations | ||||||||||||
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As at December 31, 2007 | ||||||||||||||||
Canadian | ||||||||||||||||
Adjustment | IFRS | Adjustments | GAAP | |||||||||||||
reference | £m | £m | £m | |||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | 9 | 251 | 6 | 257 | ||||||||||||
Accounts receivable, net of allowances | 9 | 107 | 11 | 118 | ||||||||||||
Inventories | — | — | ||||||||||||||
Prepaid expenses and other current assets | 1 | 189 | 4 | 193 | ||||||||||||
Deferred income taxes | 12 | — | 119 | 119 | ||||||||||||
Current assets | 547 | 140 | 687 | |||||||||||||
Computer hardware and other property, net | 404 | 66 | 470 | |||||||||||||
7 | 16 | |||||||||||||||
8 | 5 | |||||||||||||||
9 | 45 | |||||||||||||||
Computer software, net | 2 | — | 39 | 39 | ||||||||||||
Identifiable intangible assets | 305 | (36 | ) | 269 | ||||||||||||
1 | 2 | |||||||||||||||
2 | (45 | ) | ||||||||||||||
9 | 7 | |||||||||||||||
Goodwill | 1 | 309 | 99 | 408 | ||||||||||||
Other non-current assets | 142 | 242 | 384 | |||||||||||||
3 | 262 | |||||||||||||||
6 | (2 | ) | ||||||||||||||
9 | (18 | ) | ||||||||||||||
Deferred income taxes | 12 | 286 | (119 | ) | 167 | |||||||||||
Total assets | 1,993 | 431 | 2,424 | |||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||||
Liabilities | ||||||||||||||||
Short term indebtedness | (78 | ) | — | (78 | ) | |||||||||||
Current portion of long-term debt | (184 | ) | — | (184 | ) | |||||||||||
Accounts payable and accruals | (969 | ) | 173 | (796 | ) | |||||||||||
4 | 10 | |||||||||||||||
5 | (23 | ) | ||||||||||||||
8 | (5 | ) | ||||||||||||||
9 | (6 | ) | ||||||||||||||
10 | 12 | |||||||||||||||
11 | 169 | |||||||||||||||
12 | 16 | |||||||||||||||
Deferred revenue | (37 | ) | — | (37 | ) | |||||||||||
Current liabilities | (1,268 | ) | 173 | (1,095 | ) | |||||||||||
Long term debt | (370 | ) | (65 | ) | (435 | ) | ||||||||||
5 | (5 | ) | ||||||||||||||
7 | (18 | ) | ||||||||||||||
9 | (42 | ) | ||||||||||||||
Other non-current liabilities | (102 | ) | (29 | ) | (131 | ) | ||||||||||
3 | (11 | ) | ||||||||||||||
9 | (1 | ) | ||||||||||||||
10 | (17 | ) | ||||||||||||||
Deferred income taxes | 12 | (115 | ) | (81 | ) | (196 | ) | |||||||||
Total liabilities | (1,855 | ) | (2 | ) | (1,857 | ) | ||||||||||
Net assets | 138 | 429 | 567 | |||||||||||||
Shareholders’ equity | ||||||||||||||||
Capital | (539 | ) | — | (539 | ) | |||||||||||
Retained earnings | (1,309 | ) | (388 | ) | (1,697 | ) | ||||||||||
Accumulated other comprehensive income | 1,710 | (41 | ) | 1,669 | ||||||||||||
Total shareholders’ equity | (138 | ) | (429 | ) | (567 | ) | ||||||||||
Total liabilities and shareholders’ equity | (1,993 | ) | (431 | ) | (2,424 | ) |
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As | As presented | ||||||||||||||||
presented in | in Reuters | ||||||||||||||||
the table | published | ||||||||||||||||
above | Reclassifications | report | |||||||||||||||
Canadian GAAP format | £m | £m | £m | IFRS format | |||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | 251 | — | 251 | Cash and cash equivalents | |||||||||||||
Accounts receivable, net of allowances | 107 | 148 | 255 | Trade and other receivables | |||||||||||||
Inventories | — | — | — | Inventories | |||||||||||||
Prepaid expenses and other current assets | 189 | (189 | ) | ||||||||||||||
29 | 29 | Other financial assets and derivatives | |||||||||||||||
12 | 12 | Current tax debtors | |||||||||||||||
Deferred income taxes | — | ||||||||||||||||
Current assets | 547 | — | 547 | Current assets | |||||||||||||
Computer hardware and other property, net | 404 | — | 404 | Property, plant and equipment | |||||||||||||
Identifiable intangible assets | 305 | 309 | 614 | Intangible assets | |||||||||||||
Goodwill | 309 | (309 | ) | ||||||||||||||
27 | 27 | Investments | |||||||||||||||
Other non-current assets | 142 | (80 | ) | 62 | Other financial assets and derivatives | ||||||||||||
Deferred income taxes | 286 | — | 286 | Deferred tax assets | |||||||||||||
39 | 39 | Retirement benefit obligations | |||||||||||||||
Non-current assets of discontinued operations | |||||||||||||||||
Non-current assets | 1,446 | (14 | ) | 1,432 | Non-current assets | ||||||||||||
14 | 14 | Non-current assets held for resale | |||||||||||||||
Total assets | 1,993 | — | 1,993 | Total assets | |||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||
Liabilities | |||||||||||||||||
Short-term indebtedness | (78 | ) | (214 | ) | (292 | ) | Other financial liabilities and derivatives | ||||||||||
Current portion of long term debt | (184 | ) | 184 | ||||||||||||||
Accounts payable and accruals | (969 | ) | 277 | (692 | ) | Trade and other payables | |||||||||||
Deferred revenue | (37 | ) | 37 | ||||||||||||||
(247 | ) | (247 | ) | Current tax liabilities | |||||||||||||
(37 | ) | (37 | ) | Provisions for liabilities and charges | |||||||||||||
Current liabilities | (1,268 | ) | — | (1,268 | ) | Current liabilities | |||||||||||
Long-term debt | (370 | ) | — | (370 | ) | Other financial liabilities and derivatives | |||||||||||
(102 | ) | (102 | ) | Provisions for liabilities and charges | |||||||||||||
Other non-current liabilities | (102 | ) | 102 | ||||||||||||||
Deferred income taxes | (115 | ) | — | (115 | ) | Deferred tax liabilities | |||||||||||
Non-current liabilities | (587 | ) | — | (587 | ) | Non-current liabilities | |||||||||||
Total liabilities | (1,855 | ) | — | (1,855 | ) | Total liabilities | |||||||||||
Net assets | 138 | — | 138 | Net assets |
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representing the valuation allowance resulting from unrecoverable surplus taken to the income statement under Canadian GAAP. Under IFRS, the equivalent charge is recognized in the statement of recognized income and expense.
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For the year ended December 31 | ||||||||||||||||
2007 | ||||||||||||||||
£m | ||||||||||||||||
Net earnings from continuing operations attributable to ordinary shareholders under Thomson Canadian GAAP | 74 | |||||||||||||||
Differences in GAAP increasing / (decreasing) reported profit net earnings: | ||||||||||||||||
Employee benefits – pensions | 1 | 125 | ||||||||||||||
Stock-based compensation | 2 | (9 | ) | |||||||||||||
Taxation | 3 | (21 | ) | |||||||||||||
Net earnings from continuing operations attributable to ordinary shareholders under Thomson US GAAP accounting policies | 169 | |||||||||||||||
As at December 31 | ||||||||||||||||
2007 | ||||||||||||||||
£m | ||||||||||||||||
Shareholders’ equity attributable to ordinary shareholders under Thomson Canadian GAAP | 567 | |||||||||||||||
Differences increasing / (decreasing) reported Shareholders’ equity: | ||||||||||||||||
Employee benefits – pensions | 1 | (120 | ) | |||||||||||||
Stock-based compensation | 2 | (18 | ) | |||||||||||||
Taxation | 3 | 35 | ||||||||||||||
Shareholders’ equity attributable to ordinary shareholders under Thomson US GAAP accounting policies | 464 | |||||||||||||||
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Year Ended December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
High | 1.1853 | 1.1726 | 1.2704 | 1.3968 | 1.5747 | |||||||||||||||
Low | 0.9170 | 1.0990 | 1.1507 | 1.1774 | 1.2924 | |||||||||||||||
Rate at end of period | 0.9881 | 1.1653 | 1.1659 | 1.2036 | 1.2924 | |||||||||||||||
Average rate for period | 1.0748 | 1.1341 | 1.2116 | 1.3015 | 1.4015 |
2008 | 2007 | |||||||||||||||||||||||||||
April 1 to | ||||||||||||||||||||||||||||
April 16 | March | February | January | December | November | October | ||||||||||||||||||||||
High | 1.0270 | 1.0279 | 1.0190 | 1.0324 | 1.0217 | 1.0008 | 1.0004 | |||||||||||||||||||||
Low | 1.0025 | 0.9798 | 0.9719 | 0.9905 | 0.9785 | 0.9170 | 0.9499 | |||||||||||||||||||||
Rate at end of period | 1.0025 | 1.0279 | 0.9798 | 1.0022 | 0.9881 | 1.0008 | 0.9499 | |||||||||||||||||||||
Average rate for period | 1.0157 | 1.0010 | 0.9991 | 1.011 | 1.0030 | 0.9671 | 0.9752 |
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Year Ended December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
High | 2.1104 | 1.9794 | 1.9292 | 1.9482 | 1.7842 | |||||||||||||||
Low | 1.9235 | 1.7256 | 1.7138 | 1.7544 | 1.5500 | |||||||||||||||
Rate at end of period | 1.9843 | 1.9586 | 1.7188 | 1.9160 | 1.7842 | |||||||||||||||
Average rate for period | 2.0020 | 1.8434 | 1.8204 | 1.8330 | 1.6347 |
2008 | 2007 | |||||||||||||||||||||||||||
April 1 to | ||||||||||||||||||||||||||||
April 16 | March | February | January | December | November | October | ||||||||||||||||||||||
High | 1.9961 | 2.0311 | 1.9923 | 1.9895 | 2.0658 | 2.1104 | 2.0777 | |||||||||||||||||||||
Low | 1.9627 | 1.9823 | 1.9405 | 1.9515 | 1.9774 | 2.0478 | 2.0279 | |||||||||||||||||||||
Rate at end of period | 1.9756 | 1.9855 | 1.9864 | 1.9895 | 1.9843 | 2.0567 | 2.0777 | |||||||||||||||||||||
Average rate for period | 1.9786 | 2.0015 | 1.9646 | 1.9702 | 2.0161 | 2.0701 | 2.0449 |
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£m (except per share data) | Notes | 2007 | 2006 | 2005 | 2004 | |||||||||||||||
Amounts in accordance with IFRS | ||||||||||||||||||||
Continuing activities: | ||||||||||||||||||||
Revenue | 2,605 | 2,566 | 2,409 | 2,339 | ||||||||||||||||
Operating profit | 292 | 256 | 207 | 194 | ||||||||||||||||
Profit before taxation | 273 | 313 | 238 | 396 | ||||||||||||||||
Profit after taxation | 213 | 293 | 229 | 356 | ||||||||||||||||
Profit from discontinued activities | 14 | 12 | 253 | 19 | ||||||||||||||||
Profit for the year | 227 | 305 | 482 | 375 | ||||||||||||||||
Basic earnings per ordinary share | 18.4p | 23.6p | 32.6p | 26.0 | ||||||||||||||||
Basic earnings per ordinary share — continuing | 17.3p | 22.6p | 16.3p | 25.4 | ||||||||||||||||
Diluted earnings per ordinary share | 18.0p | 23.1p | 31.7p | 25.4 | ||||||||||||||||
Diluted earnings per ordinary share — continuing | 16.9p | 22.2p | 15.9p | 24.8 | ||||||||||||||||
Basic earnings per ADS | 1 | 110.1p | 141.9p | 195.8p | 156.1 | |||||||||||||||
Basic earnings per ADS — continuing | 1 | 103.5p | 135.6p | 97.8p | 152.7 | |||||||||||||||
Diluted earnings per ADS | 1 | 107.9p | 138.7p | 190.3p | 152.2 | |||||||||||||||
Diluted earnings per ADS — continuing | 1 | 101.4p | 133.1p | 95.4p | 148.8 | |||||||||||||||
Dividends declared per ordinary share | 2 | 11.9p | 10.25p | 10.0p | 10.0 | |||||||||||||||
Dividends declared per ADS: | 2 | |||||||||||||||||||
Expressed in UK currency | 71.4p | 61.5p | 60.0p | 60.0 | ||||||||||||||||
Expressed in US currency | 142.8c | 115.1c | 111.4c | 105.8 | ||||||||||||||||
Weighted average number of ordinary shares (in millions) | 1,239 | 1,297 | 1,396 | 1,400 |
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2007 | 2006 | 2005 | 2004 | |||||||||||||
£m | £m | £m | £m | |||||||||||||
Amounts in accordance with IFRS | ||||||||||||||||
Total assets | 1,993 | 1,920 | 2,137 | 2,580 | ||||||||||||
Net assets | 138 | 172 | 511 | 570 | ||||||||||||
Shareholders’ equity (attributable to the parent) | 138 | 172 | 511 | 371 | ||||||||||||
Share capital | 539 | 496 | 467 | 455 |
1. | Each ADS (American Depositary Share) represents six ordinary shares. |
2. | Dividends declared for 2004-2007 exclude UK tax credits. Amounts receivable could be higher for US shareholders who have elected to retain benefits of the old US/UK tax treaty. |
• | unexpected integration issues, higher than expected integration costs and an overall post-closing integration process that takes longer than originally anticipated; | ||
• | the inability to successfully integrate operations, technologies, products and services; | ||
• | inconsistent and/or incompatible business practices, operating procedures, information systems, financial controls and procedures, cultures and compensation structures between the companies; | ||
• | difficulty coordinating sales, distribution and marketing efforts to effectively promote Thomson Reuters products; |
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• | loss of key employees; | ||
• | modification or termination of existing agreements with customers and suppliers and delayed entry into new agreements with prospective customers and suppliers; and | ||
• | the diversion of management’s attention from day-to-day business as a result of the need to deal with integration issues. |
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• | the emergence of proprietary data feeds from other markets; | ||
• | high market volatility; | ||
• | decimalization; | ||
• | reductions in trade sizes resulting in more transactions; | ||
• | new derivative instruments; | ||
• | increased automatically-generated algorithmic and program trading; | ||
• | market fragmentation resulting in an increased number of trading venues; and | ||
• | multiple listings of options and other securities. |
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• | each of Thomson Reuters Corporation and Thomson Reuters PLC covenant to use its best endeavors to ensure that the Reuters Trust Principles as applied to Thomson Reuters will be complied with; | ||
• | the Thomson Reuters Corporation Articles and the Thomson Reuters PLC Articles contain provisions to safeguard the Reuters Trust Principles on a basis that, after giving effect to the Transaction, correspond to the principal protections currently contained in the Reuters Articles; | ||
• | each of Thomson Reuters Corporation and Thomson Reuters PLC issue to Reuters Founders Share Company a share with extraordinary voting powers similar to those of the Founders Share in the capital of Reuters currently held by Reuters Founders Share Company; and | ||
• | Woodbridge undertake to use its best endeavors as a shareholder to support the Reuters Trust Principles in relation to Thomson Reuters and exercise its voting rights to give effect to this support. |
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• | Thomson’s name was changed from “The Thomson Corporation” to “Thomson Reuters Corporation”; |
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• | Thomson’s articles of incorporation were amended and restated in the form of the Thomson Reuters Corporation Articles; | ||
• | Thomson’s by-laws were amended and restated in the form of the Thomson Reuters Corporation By-Laws; | ||
• | each of the Equalization and Governance Agreement, the Cross-Guarantees, the Thomson Reuters Corporation Special Voting Share Trust Deed, the Thomson Reuters PLC Special Voting Share Trust Deed and the Special Voting Share Agreement was deemed to become effective and the rights and obligations of Thomson Reuters Corporation pursuant thereto became binding on and enforceable against Thomson Reuters Corporation in accordance with its terms; | ||
• | the Amended Deed of Mutual Covenant was deemed to become effective and the rights and obligations of Thomson Reuters Corporation pursuant thereto became binding on and enforceable against Thomson Reuters Corporation in accordance with its terms; | ||
• | Thomson Reuters Corporation issued the Reuters Founders Share to Reuters Founders Share Company; | ||
• | Thomson Reuters Corporation issued the Equalization Share to Thomson Reuters PLC; and | ||
• | Thomson Reuters Corporation issued its Special Voting Share to the Thomson Reuters Corporation Special Voting Share Trustee. |
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• | Thomson Reuters Corporation and Thomson Reuters PLC remain separate publicly listed companies; | ||
• | the boards of directors of the two companies comprise the same individuals, as do the companies’ executive management; | ||
• | shareholders of the two companies ordinarily vote together as a single decision-making body, including in the election of directors; | ||
• | shareholders of the two companies receive equivalent cash dividends and capital distributions; | ||
• | each company has guaranteed all contractual obligations of the other company and will guarantee other obligations as agreed; and | ||
• | a take-over bid or similar transaction is required to be made for shares of both companies on an equivalent basis. |
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1. | Includes Woodbridge, which as of April 11, 2008 beneficially owned approximately 70% of the outstanding Thomson common shares. | |
2. | In addition to common shares, Thomson had 6,000,000 Series II Preference Shares issued and outstanding as of April 11, 2008. | |
3. | Includes ADSs, each of which represented six Reuters ordinary shares. |
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1. | Includes Woodbridge, which as of April 11, 2008 beneficially owned approximately 70% of the outstanding Thomson common shares. | |
2. | Thomson Reuters Corporation continues to have 6,000,000 Series II Preference Shares issued and outstanding. | |
3. | Includes ADSs, each of which represents six Thomson Reuters PLC ordinary shares. | |
4. | Reuters Group Limited is an indirect wholly-owned subsidiary of Thomson Reuters PLC (except for Reuters ordinary shares held by employee benefit trusts of Reuters). | |
5. | Reflects the initial asset reorganization that Thomson Reuters Corporation and Thomson Reuters PLC intend to implement following the Transaction. Thomson Reuters Corporation and Thomson Reuters PLC may carry out other reorganizations of their assets from time to time. See “The Dual Listed Company Structure” in this Item 4A. |
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• | Thomson Reuters PLC must undertake a Matching Action to ensure that the economic benefits and voting rights of a holder of one Thomson Reuters PLC ordinary share relative to a holder of one Thomson Reuters Corporation common share are maintained in proportion to the then prevailing Equalization Ratio; or | ||
• | an appropriate adjustment to the Equalization Ratio must be made, to ensure that there is equitable treatment (having regard to the then prevailing Equalization Ratio) for a holder of one Thomson Reuters PLC ordinary share relative to a holder of one Thomson Reuters Corporation common share, |
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• | the appointment, election, re-election or removal of any director of Thomson Reuters Corporation or Thomson Reuters PLC; | ||
• | to the extent such receipt or adoption is required by applicable laws, the receipt or adoption of the financial statements or accounts of Thomson Reuters Corporation or Thomson Reuters PLC, or financial statements or accounts prepared on a consolidated basis, other than any financial statements or accounts in respect of the period(s) ended prior to the Effective Date; | ||
• | a change of name of Thomson Reuters Corporation or Thomson Reuters PLC; and | ||
• | the appointment or removal of the auditors of Thomson Reuters Corporation or Thomson Reuters PLC. |
• | the voluntary liquidation of either company; | ||
• | any adjustment to the Equalization Ratio other than in accordance with the Equalization and Governance Agreement; | ||
• | any amendment to, or termination of, the Equalization and Governance Agreement, the Special Voting Share Agreements or the Cross-Guarantees, other than: (i) any amendment which is formal or technical in nature and which is not materially prejudicial to the interests of Thomson Reuters Corporation shareholders or Thomson Reuters PLC shareholders; or (ii) is necessary to correct any inconsistency or manifest error as may be agreed by the Thomson Reuters board; | ||
• | any amendment to, removal or alteration of the effect of (which includes the ratification of any breach of) any of the Thomson Reuters Corporation Entrenched Provisions or the Thomson Reuters PLC Entrenched Provisions other than: (i) any amendment which is formal or technical in nature and which is not materially prejudicial to the interests of Thomson Reuters Corporation shareholders or Thomson Reuters PLC shareholders; or (ii) is necessary to correct any inconsistency or manifest error as may be agreed by the Thomson Reuters board; | ||
• | a change in the corporate status of Thomson Reuters Corporation from a corporation existing under the OBCA with its primary listing on the TSX or the NYSE or of Thomson Reuters PLC from a public limited company incorporated in England and Wales with its primary listing on the Official List of the UKLA (unless such change occurs in connection with a termination of the Equalization and Governance Agreement in circumstances not requiring approval as a Class Rights Action); |
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• | any other action or matter the Thomson Reuters board determines (either in a particular case or generally) should be approved as a Class Rights Action; and | ||
• | any action to be approved as a Class Rights Action pursuant to the Equalization and Governance Agreement. |
• | that certain people be allowed to attend or be excluded from attending a meeting; | ||
• | that discussion be closed and a question put to a vote (provided no amendments have been raised); | ||
• | that a question under discussion not be put to a vote; | ||
• | to proceed with matters in an order other than that set out in the notice of a meeting; | ||
• | to adjourn a debate (for example, to a subsequent meeting); and | ||
• | to adjourn a meeting. |
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• | are made to all holders of Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares; | ||
• | are undertaken with respect to the Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares at or about the same time; and | ||
• | are equivalent (although not necessarily the same) in all material respects to the holders of Thomson Reuters Corporation common shares, on the one hand, and the holders of Thomson Reuters PLC ordinary shares, on the other hand, including with respect to: |
- | the consideration offered for such shares (taking into account exchange rates and the Equalization Ratio); | ||
- | the information provided to such holders; | ||
- | the time available to such holders to consider such offers; and | ||
- | the conditions to which the offers are subject. |
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• | either prior to or simultaneously with the Triggering Event, such party makes a Qualifying Take-Over Bid (and, in the event that such Qualifying Take-Over Bid was made prior to the Triggering Event, such Qualifying Take-Over Bid has not been withdrawn, abandoned or terminated prior to or simultaneously with the Triggering Event); or | ||
• | the Triggering Event was an offer to acquire, or an acquisition of, outstanding Thomson Reuters Corporation common shares and/or Thomson Reuters PLC ordinary shares made pursuant to an exemption from the take-over bid provisions of applicable laws, where the value of the consideration paid for any such shares acquired is not in excess of the respective market values thereof at the date of acquisition. |
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• | that Thomson Reuters shall at no time pass into the hands of any one interest, group or faction; | ||
• | that the integrity, independence and freedom from bias of Thomson Reuters shall at all times be fully preserved; | ||
• | that Thomson Reuters shall supply unbiased and reliable news services to newspapers, news agencies, broadcasters and other media subscribers and to businesses, governments, institutions, individuals and others with whom Thomson Reuters has or may have contracts; | ||
• | that Thomson Reuters shall pay due regard to the many interests which it serves in addition to those of the media; and | ||
• | that no effort shall be spared to expand, develop and adapt the news and other services and products of Thomson Reuters so as to maintain its leading position in the international news and information business. |
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• | Each of Thomson Reuters Corporation, Thomson Reuters PLC and Reuters Founders Share Company covenants with the Press Associations to use its best endeavors to ensure that the Reuters Trust Principles are complied with. | ||
• | The Thomson Reuters board will have due regard to the Reuters Trust Principles and to the rights and duties of the Reuters Trustees insofar as, by the proper exercise of its powers and in accordance with the other duties of directors, those principles are capable of being observed by the Thomson Reuters board. | ||
• | Thomson Reuters Corporation and Thomson Reuters PLC will have an office of editor-in-chief of the news services of Thomson Reuters and will provide Reuters Founders Share Company with the opportunity to consult with the Thomson Reuters board prior to appointing an individual to, or removing an individual from, such office. | ||
• | Thomson Reuters Corporation and Thomson Reuters PLC will keep Reuters Founders Share Company informed of material matters relating to the business and affairs of Thomson Reuters that may reasonably be expected to affect the interests of Reuters Founders Share Company in relation to the Reuters Trust Principles. | ||
• | Reuters Founders Share Company will keep Thomson Reuters Corporation and Thomson Reuters PLC informed regarding its views on matters relating to the conduct of the business and affairs of Thomson Reuters in relation to the Reuters Trust Principles. |
• | As holder of the Reuters Founders Share, Reuters Founders Share Company is entitled to receive notice of all meetings of shareholders and is entitled to attend and speak at any such meeting. It is entitled to vote separately as a class in respect of a resolution pertaining to any matter for which its prior written consent is required. | ||
• | The rights attaching to the Reuters Founders Share may not be varied or abrogated in any respect without the prior written consent of Reuters Founders Share Company. | ||
• | Without the prior written consent of Reuters Founders Share Company, Thomson Reuters Corporation may not take certain fundamental corporate actions, including liquidation, dissolution or winding-up, paying dividends in kind, effecting a reorganization (other than an internal reorganization involving entities within Thomson Reuters), amalgamating with unaffiliated entities and removing or altering certain provisions in the Thomson Reuters Corporation Articles and the Thomson Reuters Corporation By-Laws relating to Reuters Founders Share Company and the Reuters Founders Share. | ||
• | If any party, other than an Approved Person or an entity within Thomson Reuters, has become or becomes the beneficial owner of 15% or more of the outstanding voting shares of Thomson Reuters Corporation, the Reuters Founders Share will carry voting rights that allow it to negate the voting power of such party by casting the same number of votes as are cast, and in the same manner as such votes are cast (for, against, withheld or abstain), by the Thomson Reuters Corporation Special Voting Share Trustee and holders of voting shares of Thomson Reuters Corporation (aside from such party), in each case multiplied by one hundred. | ||
• | If any party, other than an Approved Person or an entity within Thomson Reuters, becomes or is attempting to become, directly or indirectly, the beneficial owner of 30% or more of the outstanding voting shares of Thomson Reuters Corporation, the Reuters Founders Share will carry the following voting rights in respect of Joint Electorate Actions, or Class Rights Actions if the proposed action has been approved at the parallel meeting of the Thomson Reuters PLC shareholders: (i) if there are no Approved Persons or |
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Approved Persons beneficially own shares to which are attached not more than 35% of the votes entitled to be cast on the proposed resolution, the right to cast a sufficient number of votes to approve or defeat such resolution; (ii) if Approved Persons beneficially own shares to which are attached more than 35% but less than the requisite majority of the votes entitled to be cast on such resolution, the right to cast the greater of (x) a number of votes equal to the number of votes attached to voting shares beneficially owned by such party plus one and (y) a number of votes sufficient to constitute the requisite majority of votes entitled to be cast on such resolution, in combination with votes attached to all voting shares beneficially owned by Approved Persons and cast in accordance with the Relevant Terms of Approval; or (iii) if Approved Persons beneficially own, and cast in accordance with the Relevant Terms of Approval the votes attached to, voting shares to which are attached the requisite majority of the voting shares entitled to be cast on such resolution, no right to cast any vote. | |||
• | Reuters Founders Share Company has the right to requisition a meeting of Thomson Reuters Corporation shareholders. | ||
• | For so long as Reuters Founders Share Company is the holder of the Reuters Founders Share, the Thomson Reuters Corporation board of directors may invite the Reuters Trustees to attend meetings of the Thomson Reuters Corporation board of directors and to confer with the Thomson Reuters Corporation board of directors. Reuters Founders Share Company will make representations to the Thomson Reuters Corporation board of directors on matters of general interest to Thomson Reuters Corporation and will cause the Reuters Trustees to be generally available for consultation with the Thomson Reuters Corporation board of directors. | ||
• | The directors of Thomson Reuters Corporation will, in the performance of their duties, have due regard to the Reuters Trust Principles insofar as, by the proper exercise of their powers as directors and in accordance with their other duties as directors, the Reuters Trust Principles are capable of being observed by the directors. |
• | As holder of the Reuters Founders Share, Reuters Founders Share Company is entitled to receive notice of all meetings of shareholders and will be entitled to attend and speak at any such meeting. It is entitled to vote separately as a class in respect of a resolution pertaining to any matter for which the prior written consent of Reuters Founders Share Company is required. | ||
• | The rights attaching to the Reuters Founders Share may not be varied or abrogated in any respect without the prior written consent of Reuters Founders Share Company. | ||
• | Without the prior written consent of Reuters Founders Share Company, Thomson Reuters PLC may not take certain fundamental corporate actions, including liquidation or winding-up, paying dividends in kind, effecting a reconstruction and amending, removing or altering certain provisions in the Thomson Reuters PLC Articles relating to Reuters Founders Share Company and the Reuters Founders Share. | ||
• | If any party, other than an Approved Person or an entity within Thomson Reuters, becomes interested in 15% or more of the outstanding voting shares of Thomson Reuters PLC, the Reuters Founders Share will carry voting rights that allow it to negate the voting power of such party by casting the same number of votes as are cast, and in the same manner as such votes are cast (for, against, withheld or abstain), by the Thomson Reuters PLC Special Voting Share Trustee and holders of voting shares of Thomson Reuters PLC (aside from such party), in each case multiplied by one hundred. | ||
• | If any party, other than an Approved Person or an entity within Thomson Reuters, has obtained or is attempting to obtain the ability to control the exercise of 30% or more of the voting rights ordinarily exercisable at meetings of shareholders of Thomson Reuters PLC, the Reuters Founders Share will carry the following voting rights in respect of Joint Electorate Actions or Class Rights |
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Actions if the proposed action has been approved at the parallel meeting of the Thomson Reuters Corporation shareholders: (i) if there are no Approved Persons or Approved Persons are interested in shares to which are attached not more than 35% of the votes entitled to be cast on the proposed resolution, the right to cast a sufficient number of votes to approve or defeat such resolution; (ii) if Approved Persons are interested in shares to which are attached more than 35% but less than the requisite majority of the votes entitled to be cast on such resolution, the right to cast the greater of (x) a number of votes equal to the number of votes attached to voting shares in which such party is interested plus one and (y) a number of votes sufficient to constitute the requisite majority of votes entitled to be cast on such resolution, in combination with votes attached to all voting shares in which Approved Persons are interested and cast in accordance with the Relevant Terms of Approval; or (iii) if Approved Persons are interested in, and cast in accordance with the Relevant Terms of Approval the votes attached to, voting shares to which are attached the requisite majority of the voting shares entitled to be cast on such resolution, no right to cast any vote. | |||
• | Reuters Founders Share Company has the right to requisition a meeting of Thomson Reuters PLC shareholders. | ||
• | For so long as Reuters Founders Share Company is the holder of the Reuters Founders Share, the Thomson Reuters PLC board of directors may invite the Reuters Trustees to attend meetings of the Thomson Reuters PLC board of directors and to confer with the Thomson Reuters PLC board of directors. Reuters Founders Share Company will make representations to the Thomson Reuters PLC board of directors on matters of general interest to Thomson Reuters PLC and will cause the Reuters Trustees to be generally available for consultation with the Thomson Reuters PLC board of directors. | ||
• | The directors of Thomson Reuters PLC will, in the performance of their duties, have due regard to the Reuters Trust Principles insofar as, by the proper exercise of their powers as directors and in accordance with their other duties as directors, the Reuters Trust Principles are capable of being observed by the directors. |
• | Reuters Founders Share Company has designated Woodbridge as an Approved Person for the purposes of the Thomson Reuters Corporation Articles and the Thomson Reuters PLC Articles. This designation is irrevocable for so long as Woodbridge is controlled by members of the Thomson family, companies controlled by them and trusts for their benefit. | ||
• | Woodbridge will vote its voting shares of Thomson Reuters Corporation and Thomson Reuters PLC in a manner consistent with the Reuters Trust Principles. | ||
• | Woodbridge will give Reuters Founders Share Company as much advance notice as practicable in the circumstances of how it intends to vote at meetings of shareholders of Thomson Reuters Corporation and Thomson Reuters PLC with a view to providing Reuters Founders Share Company with a reasonable opportunity to determine whether the manner in which Woodbridge intends to vote is inconsistent with the Reuters Trust Principles. Woodbridge will use its best efforts to give such notice to Reuters Founders Share Company before meeting materials are disseminated to shareholders but will, in any event, give such notice to Reuters Founders Share Company not less than ten days prior to the date of the applicable shareholders’ meeting. Reuters Founders Share Company will notify Woodbridge of its determination as soon as practicable. All disagreements and disputes between Woodbridge and Reuters Founders Share Company as to the manner in which Woodbridge intends to vote at shareholders’ meetings will be brought to the attention of the President of Woodbridge and the Chairman of Reuters Founders Share Company, who will try to resolve the disagreement or dispute, failing which the disagreement or dispute will be submitted to final and binding arbitration. Where a shareholders’ meeting of Thomson Reuters Corporation or Thomson Reuters PLC is to be held before the disagreement or dispute is resolved, Woodbridge will, subject to applicable laws, take all actions within its control as are necessary or appropriate to |
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• | Woodbridge will use its best efforts as a shareholder of Thomson Reuters Corporation and Thomson Reuters PLC to ensure that the Reuters Trust Principles are complied with in relation to Thomson Reuters. | ||
• | Without the prior written consent of Reuters Founders Share Company, Woodbridge will not transfer any voting shares of Thomson Reuters Corporation or Thomson Reuters PLC to any person that is not an Approved Person, where the transferee would become an Acquiring Person under the Thomson Reuters Corporation Articles or the Thomson Reuters PLC Articles. | ||
• | Without the prior written consent of Reuters Founders Share Company, Woodbridge will not purchase securities of any class of Thomson Reuters Corporation or Thomson Reuters PLC if, as a result of such transaction, securities of that company would cease to be eligible for listing on a stock exchange on which that company’s securities are then listed. | ||
• | Upon the request of Reuters Founders Share Company, Woodbridge will promptly requisition the Thomson Reuters board to call a meeting of shareholders of Thomson Reuters Corporation and/or Thomson Reuters PLC for such purpose as Reuters Founders Share Company, in its sole and absolute discretion, thinks fit. |
• | Markets, which consists of the previous Reuters business combined with Thomson Financial; and |
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• | Professional, which consists of Thomson’s previous non-financial business segments — Legal, Tax & Accounting, Scientific and Healthcare. |
Revenues | $12.4 billion | |
59% — Markets | ||
41% — Professional | ||
Operating profit | $1.5 billion | |
Operating profit margin | 11.8% | |
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• | Sales & Trading— a leading provider of information, trading and post-trade connectivity requirements of buy-side and sell-side customers in the foreign exchange, fixed income, equities and other exchange-traded instruments, and commodities and energy markets. The Sales & Trading unit consists of Reuters existing unit and Thomson Financial’s Fixed Income and Institutional Equities businesses and Omgeo. | ||
• | Enterprise— a leading provider of information and software that supports business automation within the capital markets. The Enterprise unit consists of Reuters existing unit and Thomson Financial’s enterprise businesses. Major brands include Kondor+, RMDS, Datascope, and PORTIA. | ||
• | Investment & Advisory— a leading provider of information and decision support tools and integration services to portfolio managers, wealth managers, investment bankers, research analysts and corporate executives. The Investment & Advisory unit consists of Reuters existing Research & Asset Management businesses and Thomson Financial’s Investment Management, Investment Banking, Wealth Management, Corporate Services and Content Strategy businesses. Major brands include Lipper, First Call, Reuters Knowledge, Datastream and Thomson ONE. | ||
• | Media— a leading provider of comprehensive and timely global information and news services to the world’s newspapers, television and cable networks, radio stations and websites, as well as directly to consumers through Reuters-branded digital services online, mobile and IPTV platforms. |
• | Legal— a leading provider of critical information, decision support tools and services to legal, intellectual property, compliance, business and government professionals throughout the world. Major brands include Westlaw, Aranzadi, BAR/BRI, Carswell, Thomson CompuMark, Thomson Elite, FindLaw, LIVEDGAR and Sweet & Maxwell. | ||
• | Tax & Accounting— a leading provider of critical information, decision support tools and software applications for tax and accounting professionals in North America. Major brands include Checkpoint, Creative Solutions and RIA. | ||
• | Scientific— a leading provider of critical information and decision support tools to researchers, scientists and information professionals in the academic, scientific, corporate and government marketplaces. Major brands include Derwent World Patents Index, MicroPatent, Thomson Pharma, Web of Science and ISI Web of Knowledge. | ||
• | Healthcare— a leading provider of critical information and decision support tools to physicians and other professionals in the healthcare, corporate and government marketplaces. Major brands include Medstat, Micromedex, PDR (Physicians’ Desk Reference) and Solucient. |
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• | Strategy and capital allocation.Thomson Reuters will deploy its capital in opportunities in existing and new businesses that it believes will provide the highest returns with appropriate levels of risk. Allocation decisions will be made based on measurable return estimates and detailed risk analysis. | ||
• | Innovation.Thomson Reuters plans to develop new products and services, technologies and business models informed by the current and future needs of customers. In depth understandings of the relevant markets and the ability to respond to changes will be fostered and rewarded at all levels of the organization. Thomson Reuters strength in technology will help promote innovation. | ||
• | Talent.Thomson Reuters senior management understands that attracting, retaining and motivating talented employees is crucial to the success of its businesses. Talent management will be aligned with business strategy and integrated into organizational processes, helping drive a world-class, integrated and engaging approach to attracting, developing, motivating and retaining a talented workforce. |
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Thomson Reuters | ||||||||||
Corporation & | ||||||||||
Thomson | ||||||||||
Thomson | Reuters | Reuters PLC | ||||||||
March/May 20081 | $ | 0.27000 | £0.07000 | — | ||||||
Record Date | 02/21/2008 | 03/25/2008 | — | |||||||
Payment Date | 03/17/2008 | 05/01/2008 | — | |||||||
April 2008 – Interim Dividends – Closing2 | $ | 0.31747 | £0.03240 | — | ||||||
Record Date | 04/16/2008 | 04/16/2008 | — | |||||||
Payment Date | 05/01/2008 | 05/01/2008 | — | |||||||
June 20083 | — | — | — | |||||||
Record Date | — | — | — | |||||||
Payment Date | — | — | — | |||||||
September 20084 | — | — | 0.22253 | |||||||
Record Date | — | — | 08/21/2008 | |||||||
Payment Date | — | — | 09/15/2008 | |||||||
December 2008 | — | — | 0.27000 | |||||||
Record Date | — | — | 11/20/2008 | |||||||
Payment Date | — | — | 12/15/2008 |
1. | Represents a regular quarterly dividend for Thomson shareholders in relation to the fourth quarter of 2007, and a second-half 2007 dividend for Reuters shareholders. |
2. | Represents accrued/pro-rated dividends from January 1, 2008 through April 16, 2008. For Thomson shareholders, the accrual/pro-ration is based on $0.27 per share. For Reuters shareholders, the accrual/pro-ration is based on £0.0551 per share. |
3. | As a result of the interim dividends to be paid for the period up to April 16, 2008, we do not contemplate paying a dividend in June, as has been Thomson’s practice. |
4. | Represents an accrued/pro-rated dividend from April 17, 2008 through June 30, 2008, based on a quarterly dividend of $0.27 per share. |
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Jurisdiction of | ||
Subsidiary | Incorporation/Formation | |
Thomson Canada Limited | Ontario, Canada | |
Thomson Holdings S.A. | Luxembourg | |
Thomson Finance S.A. | Luxembourg | |
LiveNote Technologies Ltd. | England and Wales | |
LiveNote Inc. | Delaware, U.S.A. | |
Engate LLC | Delaware, U.S.A. | |
Emica Corporation | Delaware, U.S.A. | |
Thomson U.S. Holdings Inc. | Delaware, U.S.A. | |
THI (U.S.) Inc. | Delaware, U.S.A. | |
Thomson U.S. Inc. | Delaware, U.S.A. | |
The Thomson Corporation Delaware Inc. | Delaware, U.S.A. | |
Thomson Holdings Inc. | Delaware, U.S.A. | |
Thomson Finance Company | Delaware, U.S.A. | |
Thomson TradeWeb LLC | Delaware, U.S.A. | |
Thomson Healthcare Inc. | Delaware, U.S.A. | |
Physicians’ Desk Reference Inc. | Florida, U.S.A. | |
Thomson Financial Holdings Inc. | Delaware, U.S.A. | |
Thomcorp Holdings Inc. | New York, U.S.A. | |
Thomson Scientific Inc. | Pennsylvania, U.S.A. | |
Thomson Professional & Regulatory Inc. | Texas, U.S.A. | |
Quantitative Analytics, Inc. | Illinois, U.S.A. | |
Thomson Financial LLC | Delaware, U.S.A. | |
Thomson Legal & Regulatory Inc. | Minnesota, U.S.A. | |
West Publishing Corporation | Minnesota, U.S.A. | |
West Services Inc. | Delaware, U.S.A. | |
Thomson International SA | Luxembourg | |
The Thomson Corporation PLC | England and Wales | |
The Thomson Organization Limited | England and Wales | |
TTC (1994) Limited | England and Wales | |
Thomson Information & Publishing Holdings Limited | England and Wales | |
Thomson Information & Solutions Limited | England and Wales | |
Thomson Legal & Regulatory Limited | England and Wales | |
Thomson Financial Limited | England and Wales |
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• | serve business and professional customers; | ||
• | target customer segments and sub-segments that it believes provide the best opportunities for growth and profitability; | ||
• | integrate critical, must-have data with software, tools and services; | ||
• | generate subscription-based or recurring revenues; | ||
• | reach customers directly through a technology platform; | ||
• | integrate into customers’ workflows; and | ||
• | are scalable and leverageable. |
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% of 2007 | ||||||||||||||||||||
Revenues from | ||||||||||||||||||||
Electronic, | ||||||||||||||||||||
20071 | % of 2007 | Software and | Countries with | |||||||||||||||||
Revenues | Revenues | Services | Operations | Employees | ||||||||||||||||
Thomson Legal | 3,318 | 45 | 67 | 21 | 12,900 | |||||||||||||||
Thomson Financial | 2,186 | 30 | 98 | 35 | 8,600 | |||||||||||||||
Thomson Tax & Accounting | 705 | 10 | 88 | 3 | 3,800 | |||||||||||||||
Thomson Scientific | 651 | 9 | 96 | 23 | 2,700 | |||||||||||||||
Thomson Healthcare | 452 | 6 | 83 | 9 | 1,800 | |||||||||||||||
Corporate | — | — | — | 24 | 3,100 | |||||||||||||||
Eliminations | (16 | ) | — | — | — | — | ||||||||||||||
Total | 7,296 | 100 | 82 | 44 | 32,900 |
1. | Audited; in millions of US dollars. See “Note 23: Segment Information” in Thomson’s audited financial information for the year ended December 31, 2007 set out in Exhibit 99.2 filed as part of this Annual Report on Form 20-F. |
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• | North American Legal; and | ||
• | International Legal & Regulatory. |
% of Total Revenues | ||||||||
2007 | 2006 | |||||||
Electronic, software and services | 67 | % | 66 | % | ||||
From North America | 84 | % | 84 | % | ||||
Recurring/subscription-based | 83 | % | 84 | % |
Major Brands | Principal Products and Services | Customers | ||
West Westlaw Westlaw Litigator Westlaw Business | Legal, regulatory and compliance information-based products and services | Lawyers, law students, law librarians and other legal professionals | ||
LiveNote | Deposition, transcript and court reporting software and services | Lawyers, courts and court reporters and investigators | ||
Carswell (Canada) | Legal, regulatory and compliance information-based products and services | Lawyers, law students, law librarians and other legal professionals | ||
WestlaweCarswell (Canada) | Legal, regulatory and compliance information-based products and services | Lawyers, law students, law librarians and other legal professionals | ||
West km | Integrated knowledge management software | Lawyers, law students, law librarians and other legal professionals | ||
Thomson Elite Elite 3E | Law firm management software, competitive intelligence | Lawyers, law firm finance and operations and business development professionals |
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Major Brands | Principal Products and Services | Customers | ||
West Monitor Suite | Business and market intelligence solutions | Lawyers, law firm finance, operations and business development professionals | ||
ProLaw | Law firm management software, competitive intelligence | Lawyers, law firm finance, operations and business development professionals | ||
Hildebrandt International Baker Robbins | Strategic, technology and information consulting advisory services | Lawyers, law firm finance, operations and business development professionals | ||
Thomson Litigation Consulting | Litigation consulting and support services | Lawyers, law firm finance, operations and business development professionals | ||
FindLaw HubbardOne | Web-based legal directory, website creation and hosting services and law firm marketing solutions | Lawyers and legal professionals | ||
Foundation Press West Law School Publishing BAR/BRI West LegalEdcenter LegalWorks | Textbooks, study aids, bar review courses, continuing education materials and seminars | Law students, lawyers and legal professionals |
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Major Brands | Principal Products and Services | Customers | ||
Westlaw1 Sweet & Maxwell (UK, Asia) IDS (UK) Aranzadi (Spain) Civitas (Spain) Karnov (Denmark and Sweden) Lawbook (Australia) Brookers (New Zealand) La Ley (Argentina) Lawtel (UK) | Legal information-based products and services | Lawyers, law students, law librarians, corporate legal professionals, government agencies and trademark professionals | ||
White Book (UK, Asia) | ||||
Archbold (UK) | ||||
Taxpoint (Australia) PowerTax (Australia) | Tax and accounting information and software-based products and services | Professional accounting firms, corporate, finance and accounting departments, law firms and governments | ||
Thomson CompuMark SAEGIS (North America, EMEA) | Trademark search and protection information services | Business and legal and trademark professionals |
1. | United Kingdom, Denmark, Hong Kong, Spain, Sweden and through a joint venture, Japan. |
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• | Corporate, Investment Banking & Investment Management; | ||
• | Equities, Fixed Income & Wealth Management; and | ||
• | Omgeo. |
% of Total Revenues | ||||||||
2007 | 2006 | |||||||
Electronic, software and services | 98 | % | 98 | % | ||||
From North America | 75 | % | 79 | % | ||||
Recurring/subscription-based | 80 | % | 82 | % |
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• | Investment banking; | ||
• | Wealth management; | ||
• | Investment management; | ||
• | Institutional equities; | ||
• | Fixed income; | ||
• | Corporate management; | ||
• | Institutional research; | ||
• | Hedge funds; and | ||
• | Private equity and consultants. |
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Major Brands | Principal Products and Services | Customers | ||
Thomson ONE Investment Banking | Analytical tools and databases of brokerage research, transactional data, institutional holdings data, current and historical earnings estimates, pricing information, SEC filings and news | Investment bankers and private equity professionals | ||
SDC Platinum Investext Global Access Thomson Research Thomson ONE Investment Management Quantitative Analytics (TQA) Datastream I/B/E/S First Call Baseline StreetEvents | Security and portfolio analytical tools as well as databases of real-time equity and fixed income brokerage research, current and historical analyst forecast estimates, investor presentations, company accounts data, pricing data, global aggregated forecast data at the country, sector and industry levels, market indices data, institutional holdings data, SEC filings and news | Portfolio managers, portfolio analysts, buy-side traders and research analysts | ||
Thomson ONE Investor Relations Thomson ONE Corporate Development | Internet-based software applications providing corporate information and news, stock surveillance services and outbound communications services | Investor relations professionals and corporate financial executives | ||
Capital Markets Intelligence (CMI) | Market intelligence and analytical services for market valuation analysis | Investor relations professionals and corporations |
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Major Brands | Principal Products and Services | Customers | ||
Thomson ONE Wealth Management Thomson ONE Equity Sales Thomson ONE Fixed Income Thomson ONE Hedge Fund Trading InvestmentView Global Topic ILX | Electronic financial information, including real-time market data, such as pricing data, company information, news and analytics | Institutional traders, retail traders, investment advisors and hedge fund professionals | ||
TradeWeb TradeWeb Retail | Online marketplace for fixed income securities and derivatives | Institutional and retail traders | ||
Thomson Transaction Services | Back office data processing services | Brokers and dealers | ||
AutEx | Electronic database and real-time network for trade order indications and trade executions | Equity traders | ||
Thomson Transaction Analytics | Transaction cost analysis and trade execution compliance services | Brokers, market makers and exchanges | ||
eXimius | Front-office private client investment management application | Wealth managers and investment advisors |
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• | Research & Guidance; | ||
• | Professional Software & Services; and | ||
• | Corporate Software & Services. |
% of Total Revenues | ||||||||
2007 | 2006 | |||||||
Electronic, software and services | 88% | 84% | ||||||
From North America | 100% | 100% | ||||||
Recurring/subscription-based | 94% | 95% |
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Major Brands | Principal Products and Services | Customers | ||
Research & Guidance: RIA PPC Checkpoint Quickfinder Warren Gorham & Lamont (WG&L) | Tax and accounting information-based products and services | Professional accounting firms, corporate, finance and accounting departments, law firms and governments | ||
Professional Software & Services: Creative Solutions GoSystem UltraTax GoFileRoom | Tax and accounting software and services focused on compliance and management solutions | Professional accounting firms, tax preparers, bookkeepers and enrolled agents | ||
Corporate Software & Services: InSource CrossBorder Solutions Tax Partners TrustEase eComply Fiduciary Practice Systems ePropertyTax | Tax and accounting software and services focused on compliance and document management | Corporate tax departments and financial services firms |
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% of Total Revenues | ||||||||
2007 | 2006 | |||||||
Electronic, software and services | 96% | 95% | ||||||
From North America | 72% | 70% | ||||||
Recurring/subscription-based | 74% | 76% |
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Major Brands | Principal Products and Services | Customers | ||
ISI Web of Knowledge | Comprehensive and integrated platform that includes the Web of Science as well as third party hosted content, editorially selected websites, and tools to access, analyze and manage research information | Research scientists and scholars, government agencies, research libraries and universities and colleges | ||
Web of Science | Comprehensive database providing a source for journal article-cited references and access to abstracted and indexed journals | Research scientists and scholars, government agencies, research libraries and universities and colleges | ||
Thomson Pharma | Integrated web platform that delivers scientific literature, patents, commercial and regulatory information, company news communications, professional meeting reports and other relevant content | Intellectual property professionals, R&D professionals, lawyers, business intelligence staff | ||
Thomson Innovation | Integrated web platform providing a global collection of intellectual property content, scientific literature, analytical and visualization tools, and document services | Pharmaceutical and biotechnology companies | ||
Derwent World Patents Index | Comprehensive database of English language patent abstracts from approximately 40 patent authorities around the world including coverage of China, Japan and Korea | Intellectual property professionals, R&D professionals, lawyers and business intelligence staff | ||
Prous Integrity | Integrated web platform delivering drug discovery content and analytic functionality for biologists and chemists | Pharmaceutical and biotechnology companies, academic centers and research institutes |
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% of Total Revenues | ||||||||
2007 | 2006 | |||||||
Electronic, software and services | 83% | 76% | ||||||
From North America | 100% | 100% | ||||||
Recurring/subscription-based | 70% | 65% |
Major Brands | Principal Products and Services | Customers | ||
Micromedex | Comprehensive database set of drugs, disease information, medical emergency and poison control procedures, patient education and other relevant clinical, toxicological and environmental health and safety information | Physicians, pharmacists, health professionals, pharmaceutical companies, hospitals, poison control centers, corporations, government agencies and insurance companies | ||
MercuryMD | Medical reference and decision support tool for personal digital assistants, delivering real-time patient data to clinicians | Physicians, health professionals and hospitals | ||
PDR (Physicians’ Desk Reference) | Database of US Food and Drug Administration (FDA) approved drug monographs, delivered in print and electronic format | Physicians, health professionals, pharmaceutical companies and government agencies | ||
Medstat Advantage Suite | Decision support products integrating benchmarks and analytics, designed for managing healthcare costs and quality and employee wellness and productivity | Large and mid-size employers, governmental healthcare purchasers, managed care and insurance companies, pharmaceutical companies and health services research providers | ||
Solucient | Benchmark, comparative and market databases, integrated with analytics to support marketing and planning, operational improvement and clinical performance improvement | Hospitals, researchers, service planners, patient safety and quality managers and financial and administrative staff |
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Facility | Approx. Sq. Ft. | Owned/Leased | Principal Use | |||||
Eagan, Minnesota | 2,792,000 | Owned | Thomson Legal’s North American Legal headquarters and West operating facilities | |||||
New York, New York | 435,200 | Leased | Thomson Financial offices and headquarters | |||||
Carrollton, Texas | 409,150 | Owned | Thomson Tax & Accounting operating facilities | |||||
Boston, Massachusetts (1) | 370,000 | Leased | Thomson Financial offices |
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Jurisdiction of Incorporation/ | ||||
Subsidiary | Formation | Principal area of operation | ||
Reuters AG | Germany | Germany | ||
Reuters America Holdings Inc. | USA | Worldwide | ||
Reuters America LLC | USA | USA | ||
Reuters Australia Pty Limited | Australia | Australia | ||
Reuters BV | Netherlands | Netherlands | ||
Reuters Canada Limited | Canada | Canada/USA | ||
Reuters Europe SA | Switzerland | Spain/Portugal | ||
Reuters Finance PLC | UK | UK | ||
Reuters France SNC | France | France | ||
Reuters Group Overseas Holdings (UK) Limited | UK | Worldwide | ||
Reuters Holdings Limited | UK | UK | ||
Reuters Hong Kong Limited | Cook Islands | Hong Kong | ||
Reuters International Holdings SARL | Switzerland | Worldwide | ||
Reuters Investment Limited | UK | UK | ||
Reuters Italia SpA | Italy | Italy | ||
Reuters Japan Kabushiki Kaisha | Japan | Japan | ||
Reuters Limited | UK | Worldwide | ||
Reuters Middle East Limited | Cook Islands | Middle East | ||
Reuters Nederland BV | Netherlands | Netherlands | ||
Reuters Research Inc | USA | USA | ||
Reuters SA | Switzerland | Worldwide | ||
Reuters Singapore Pte Limited | Singapore | Singapore | ||
Reuters Svenska AB | Sweden | Sweden | ||
Reuters Transaction Services Limited | UK | Worldwide |
Jurisdiction of | Principal area of | Percentage of | ||||
Joint ventures and associates | incorporation/Formation | operation | equity shares held | |||
3 Times Square Associates LLC | USA | USA | 501 | |||
FXMarketSpace Limited | UK | Worldwide | 50 | |||
Times Global Broadcasting Company Limited | India | India | 26 |
1. | This is the equity interest of Reuters but the effective economic interest at December 31, 2007 was 35%. |
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Restated | Restated | |||||||||||
2007 | 2006 | 2005 | ||||||||||
Business division: | ||||||||||||
Sales & Trading* | 1,430 | 1,301 | 987 | |||||||||
Research & Asset Management | 895 | 800 | 658 | |||||||||
Enterprise | 1,491 | 1,241 | 925 | |||||||||
Media | 220 | 189 | 109 | |||||||||
Shared divisional resources | 3,706 | 3,182 | 3,504 | |||||||||
Total divisions | 7,472 | 6,713 | 6,183 | |||||||||
Global Sales & Service Organization | 5,843 | 5,717 | 4,988 | |||||||||
Editorial | 2,351 | 2,321 | 2,210 | |||||||||
Corporate Services* | 1,526 | 1,551 | 1,637 | |||||||||
Total continuing operations | 17,462 | 16,302 | 15,018 | |||||||||
Discontinued operations | — | — | 846 | |||||||||
Total average number of employees | 17,462 | 16,302 | 15,864 | |||||||||
By location: | ||||||||||||
Europe, Middle East and Africa | 7,359 | 7,174 | 6,962 | |||||||||
Americas | 4,219 | 4,252 | 4,292 | |||||||||
Asia | 5,884 | 4,876 | 3,764 | |||||||||
Total continuing operations | 17,462 | 16,302 | 15,018 | |||||||||
Discontinued operations | — | — | 846 | |||||||||
Total average number of employees | 17,462 | 16,302 | 15,864 | |||||||||
By function: | ||||||||||||
Production and communications | 10,335 | 9,438 | 8,498 | |||||||||
Selling and marketing | 4,609 | 4,572 | 4,179 | |||||||||
Support services and administration | 2,518 | 2,292 | 2,341 | |||||||||
Total continuing operations | 17,462 | 16,302 | 15,018 | |||||||||
Discontinued operations | — | — | 846 | |||||||||
Total average number of employees | 17,462 | 16,302 | 15,864 | |||||||||
The above include: | ||||||||||||
Development staff | 3,120 | 2,670 | 2,332 |
* | 2006 and 2005 have been restated to reflect the way that Reuters was managed in 2007, Transaction Sales and Hosted are now shown within Sales & Trading rather than in Shared divisional resources and Global Sales & Service Organization, respectively. Chief Technology Office is now included in Corporate Services rather than in Shared Divisional resources. |
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2007 | 2006 | 2005 | ||||||||||
Research and Development Expenditure | 100 | 83 | 92 | |||||||||
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• | Reuters DataScope real-time datafeeds, streams of machine-readable price data delivered over Reuters networks at high speed for use in customers’ information and trading services; | ||
• | Reuters DataScope pricing and reference data which help banks and financial organizations achieve regulatory compliance by delivering accurate financial instrument prices and reference material for the capital markets globally. In 2006, a new distribution platform, Reuters DataScope Select, was launched to support back office and fund valuation processes; | ||
• | Reuters Market Data System, a resilient content distribution software platform that enables banks to deliver high volume and low latency data into a wide variety of financial systems; | ||
• | Trade and Risk Management systems to help banks manage their trading position and monitor their exposure to trading risk. In 2006, Reuters acquired Application Networks Inc., whose coverage of credit derivatives and structured financial products complements Reuters existing strengths in foreign exchange and treasury risk management; and | ||
• | Reuters Messaging, a secure online messaging service that connects financial professionals within and across existing communities of interest. |
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Salaries and short-term employee benefits | 16 | 12 | 8 | |||||||||
Post-employment benefits | 1 | 1 | 1 | |||||||||
Termination benefits | — | — | 1 | |||||||||
Share-based payments | 9 | 8 | 6 | |||||||||
Total | 26 | 21 | 16 |
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December 31, | Amounts | Amounts | December 31, | Amounts | Amounts | December 31, | ||||||||||||||||||||||
2005 | invoiced | collected | 2006 | invoiced | collected | 2007 | ||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | ||||||||||||||||||||||
Amounts receivable: | ||||||||||||||||||||||||||||
Joint ventures: | ||||||||||||||||||||||||||||
Factiva* | 4 | 30 | (33 | ) | 1 | — | (1 | ) | — | |||||||||||||||||||
FXMarketSpace | — | 6 | — | 6 | 10 | (15 | ) | 1 | ||||||||||||||||||||
Other | — | 1 | (1 | ) | — | 1 | (1 | ) | — | |||||||||||||||||||
Associates | — | — | — | — | 1 | (1 | ) | — | ||||||||||||||||||||
Total amounts receivable | 4 | 37 | (34 | ) | 7 | 12 | (18 | ) | 1 | |||||||||||||||||||
Amounts payable: | ||||||||||||||||||||||||||||
Joint ventures: | ||||||||||||||||||||||||||||
Factiva | 1 | 4 | (5 | ) | — | — | — | — | ||||||||||||||||||||
3 Times Square Associates | — | 19 | (19 | ) | — | 16 | (16 | ) | — | |||||||||||||||||||
Associates | — | 2 | (2 | ) | — | 5 | (4 | ) | — | |||||||||||||||||||
Total amounts payable | 1 | 25 | (26 | ) | — | 21 | (20 | ) | — |
* | Reuters disposed of the majority of its investment in Factiva in December 2006. Consequently, the £1 million receivable from Factiva at December 31, 2006 has been presented within other receivables. |
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2007 | 2006 | 2005 | ||||||||||
Year to December 31 | £m | £m | £m | |||||||||
Revenue | 2,605 | 2,566 | 2,409 | |||||||||
Operating costs | (2,355 | ) | (2,351 | ) | (2,251 | ) | ||||||
Other operating income | 42 | 41 | 49 | |||||||||
Operating profit | 292 | 256 | 207 | |||||||||
Net finance costs | (34 | ) | (15 | ) | (12 | ) | ||||||
Profit on disposal of associates, joint ventures and available-for-sale financial assets | 21 | 76 | 38 | |||||||||
Share of post-taxation (losses)/profit from associates and joint ventures | (6 | ) | (4 | ) | 5 | |||||||
Profit before taxation | 273 | 313 | 238 | |||||||||
Taxation | (60 | ) | (20 | ) | (9 | ) | ||||||
Profit for the year from continuing operations | 213 | 293 | 229 | |||||||||
Discontinued operations | ||||||||||||
Profit for the year from discontinued operations | 14 | 12 | 253 | |||||||||
Profit for the year | 227 | 305 | 482 | |||||||||
Basic EPS | 18.4 p | 23.6 p | 32.6 p | |||||||||
Adjusted EPS | 23.0 p | 17.1 p | 13.8 p |
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2007 | 2006 | Actual | Underlying | 2005 | ||||||||||||||||
Year to December 31 | £m | £m | change | change | £m | |||||||||||||||
Recurring | 2,394 | 2,363 | 1 | % | 7 | % | 2,235 | |||||||||||||
Usage | 139 | 132 | 6 | % | 15 | % | 104 | |||||||||||||
Outright | 72 | 71 | 1 | % | 1 | % | 70 | |||||||||||||
Total revenue | 2,605 | 2,566 | 2 | % | 7 | % | 2,409 | |||||||||||||
Operating costs | (2,355 | ) | (2,351 | ) | — | — | (2,251 | ) | ||||||||||||
Operating profit | 292 | 256 | 14 | % | — | 207 | ||||||||||||||
Operating margin | 11 | % | 10 | % | — | — | 9 | % | ||||||||||||
Trading costs | (2,220 | ) | (2,258 | ) | (2 | %) | 3 | % | (2,075 | ) | ||||||||||
Trading profit | 385 | 308 | 25 | % | 43 | % | 334 | |||||||||||||
Trading margin | 15 | % | 12 | % | — | — | 14 | % |
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Full year | Full year | |||||||
Average Exchange Rates | 2007 | 2006 | ||||||
£/$US | 2.00 | 1.83 | ||||||
£/ € | 1.47 | 1.47 | ||||||
£/¥ | 235.29 | 212.92 |
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2007 | 2006 | 2005 | ||||||||||
Year to December 31 | £m | £m | £m | |||||||||
Net cash inflow from operating activities | 476 | 258 | 253 | |||||||||
Acquisitions and disposals | 6 | (2 | ) | 206 | ||||||||
Purchases of property, plant and equipment, and intangibles | (225 | ) | (228 | ) | (185 | ) | ||||||
Proceeds from sale of property, plant and equipment | 19 | 5 | 3 | |||||||||
Dividends received | 3 | 3 | 5 | |||||||||
Proceeds from issue of shares | 47 | 32 | 10 | |||||||||
Share buy-back | (174 | ) | (527 | ) | (223 | ) | ||||||
Equity dividends paid to shareholders | (147 | ) | (134 | ) | (140 | ) | ||||||
Equity dividends paid to minority interests | — | — | (23 | ) | ||||||||
Other movements | (49 | ) | 7 | 21 | ||||||||
Movement in net (debt)/funds | (44 | ) | (586 | ) | (73 | ) | ||||||
Opening net (debt)/funds | (333 | ) | 253 | 326 | ||||||||
Closing net (debt)/funds | (377 | ) | (333 | ) | 253 |
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2007 | 2006 | 2005 | ||||||||||
Year to December 31 | £m | £m | £m | |||||||||
Cash flow from continuing operations | 534 | 311 | 268 | |||||||||
Net interest paid | (32 | ) | (19 | ) | (7 | ) | ||||||
Tax paid | (26 | ) | (34 | ) | (11 | ) | ||||||
Capital expenditure | (225 | ) | (228 | ) | (178 | ) | ||||||
Transaction-related costs | 21 | — | — | |||||||||
Special contributions to pension schemes | 4 | 187 | — | |||||||||
Proceeds from sale of property, plant and equipment | 19 | 5 | 3 | |||||||||
Dividends received | 3 | 3 | 5 | |||||||||
Interim funding repayment from Telerate | — | — | (18 | ) | ||||||||
Repayment of funds to BTC | — | — | 26 | |||||||||
Free cash flow | 298 | 225 | 88 |
• | Free cash inflows of £298 million, as noted above; | ||
• | The cost of the share buy-back program of £174 million; | ||
• | Dividend payments of £147 million; | ||
• | Net inflow from acquisitions and disposals of £6 million; and |
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• | Other movements largely consisting of foreign exchange movements on borrowings. |
• | The capital expenditure on property, plant and equipment and intangible assets of £272 million, offset by annual depreciation and amortization of £158 million. | ||
• | A reduction to the net pension obligations of £120 million resulting from movements in the valuations of defined benefit obligations that have reduced the reported deficits of several schemes. |
2007 | 2006 | 2005 | ||||||||||
Year to December 31 | £m | £m | £m | |||||||||
Non-current assets | 1,432 | 1,314 | 1,179 | |||||||||
Current assets | 547 | 606 | 957 | |||||||||
Non-current assets classified as held for sale | 14 | — | 1 | |||||||||
Total assets | 1,993 | 1,920 | 2,137 | |||||||||
Current liabilities | (1,268 | ) | (913 | ) | (797 | ) | ||||||
Non-current liabilities | (587 | ) | (835 | ) | (829 | ) | ||||||
Total liabilities | (1,855 | ) | (1,748 | ) | (1,626 | ) | ||||||
Net assets | 138 | 172 | 511 | |||||||||
Total shareholders’ equity | 138 | 172 | 511 |
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��� | Free cash inflows of £225 million, as noted above; | ||
• | Special contributions of £187 million towards funding the deficit in two UK defined benefit pension schemes; | ||
• | The ongoing cost of the share buy-back program, amounting to £527 million; | ||
• | Dividend payments of £134 million; and | ||
• | Net outflow from acquisitions and disposals of £2 million, including £79 million from the disposal of Factiva. |
• | The capitalization of property, plant and equipment and intangible assets of £290 million, offset by annual depreciation and amortization charges of £141 million. |
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• | A change in the composition of net debt (net funds in 2005), with lower cash holdings and higher debt being offset by lower pension obligations due to the special contributions towards funding the deficits in two UK defined benefit pension schemes. |
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2007 | 2006 | Actual | Underlying | |||||||||||||
Year to December 31 | £m | £m | change | change | ||||||||||||
Revenue | 1,619 | 1,661 | (2 | %) | 3 | % | ||||||||||
Trading costs | (1,376 | ) | (1,439 | ) | (4 | %) | — | |||||||||
Restructuring charges | — | (12 | ) | |||||||||||||
Other operating income (in trading costs) | (22 | ) | (20 | ) | ||||||||||||
Impairments & amortization of business combination intangibles | (33 | ) | (17 | ) | ||||||||||||
Fair value movements in expenses | (9 | ) | (18 | ) | ||||||||||||
Operating Costs | (1,440 | ) | (1,506 | ) | (4 | %) | ||||||||||
Other operating income | 27 | 27 | — | |||||||||||||
Operating Profit | 206 | 182 | 13 | % | ||||||||||||
Operating margin | 13 | % | 11 | % | ||||||||||||
Trading margin | 15 | % | 13 | % |
• | Reuters Xtra family revenues, which grew by 4% to £1,042 million (underlying 10%). Usage revenues grew by 9% (underlying 19%), reflecting the strength of Reuters foreign exchange franchise as Reuters Prime Brokerage, Reuters Matching and Reuters Electronic Trading benefited from increased trading volumes in buoyant foreign exchange markets. |
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• | Revenue from Trader family products, which declined 24% to £279 million (20% on an underlying basis). This reflects customer migrations from legacy products, principally Telerate and the 2000/3000 series. Revenue attrition from Telerate has remained at around two percentage points of Sales & Trading revenue (one percentage point of Reuters revenue), as expected. The Telerate migration is now substantially complete. |
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2007 | 2006 | Actual | Underlying | |||||||||||||
Year to December 31 | £m | £m | change | change | ||||||||||||
Revenue | 363 | 304 | 20 | % | 25 | % | ||||||||||
Trading costs | (328 | ) | (314 | ) | 5 | % | 10 | % | ||||||||
Other operating income (in trading costs) | (5 | ) | (4 | ) | ||||||||||||
Impairments & amortization of business combination intangibles | (4 | ) | (3 | ) | ||||||||||||
Fair value movements in expenses | (2 | ) | (3 | ) | ||||||||||||
Operating costs | (339 | ) | (324 | ) | 5 | % | ||||||||||
Other operating income | 5 | 5 | — | |||||||||||||
Operating Profit/(Loss) | 29 | (15 | ) | 293 | % | |||||||||||
Operating margin | 8 | % | (5 | %) | ||||||||||||
Trading margin | 10 | % | (3 | %) |
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• | Reuters DataScope real-time datafeeds, streams of machine- readable price data delivered over our networks at high speed for use in customers’ information and trading services; | ||
• | Reuters DataScope pricing and reference data which help banks and financial organizations achieve regulatory compliance by delivering accurate financial instrument prices and reference material for the capital markets globally. In 2006 we launched a new distribution platform, Reuters DataScope Select, to support back office and fund valuation processes; | ||
• | Reuters Market Data System, a resilient content distribution software platform that enables banks to deliver high volume and low latency data into a wide variety of financial systems; | ||
• | Trade and Risk Management systems to help banks manage their trading position and monitor their exposure to trading risk. In 2006, we acquired Application Networks Inc., whose coverage of credit derivatives and structured financial products complements our existing strengths in FX and treasury risk management; and | ||
• | Reuters Messaging, a secure online messaging service that connects financial professionals within and across existing communities of interest. |
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2007 | 2006 | Actual | Underlying | |||||||||||||
Year to December 31 | £m | £m | change | change | ||||||||||||
Revenue | 451 | 431 | 5 | % | 10 | % | ||||||||||
Trading costs | (360 | ) | (350 | ) | 3 | % | 7 | % | ||||||||
Restructuring charges | — | (1 | ) | |||||||||||||
Other operating income (in trading costs) | (6 | ) | (5 | ) | ||||||||||||
Impairments & amortization of business combination intangibles | (3 | ) | (3 | ) | ||||||||||||
Fair value movements in expenses | (2 | ) | (3 | ) | ||||||||||||
Operating Costs | (371 | ) | (362 | ) | 2 | % | ||||||||||
Other operating income | 7 | 6 | — | |||||||||||||
Operating Profit | 87 | 75 | 16 | % | ||||||||||||
Operating margin | 19 | % | 18 | % | ||||||||||||
Trading margin | 20 | % | 19 | % |
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2007 | 2006 | Actual | Underlying | |||||||||||||
Year to December 31 | £m | £m | change | change | ||||||||||||
Revenue | 172 | 170 | 1 | % | 6 | % | ||||||||||
Trading costs | (156 | ) | (155 | ) | — | 4 | % | |||||||||
Other operating income (in trading costs) | (3 | ) | (2 | ) | ||||||||||||
Impairments & amortization of business combination intangibles | — | (1 | ) | |||||||||||||
Fair value movements in expenses | (1 | ) | (1 | ) | ||||||||||||
Operating Costs | (160 | ) | (159 | ) | 1 | % | ||||||||||
Other operating income | 3 | 3 | — | |||||||||||||
Operating Profit | 15 | 14 | 7 | % | ||||||||||||
Operating margin | 9 | % | 8 | % | ||||||||||||
Trading margin | 9 | % | 9 | % |
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Total number of | ||||||||||||
shares purchased as | ||||||||||||
part of a publicly | Average price paid | Cost of shares | ||||||||||
Month | announced program | per share (£) | purchased (£m) | |||||||||
January | 20,975,000 | 5.99 | 127 | |||||||||
February | 6,965,000 | 6.03 | 42 | |||||||||
March | 7,700,000 | 5.92 | 46 | |||||||||
April | 9,310,000 | 5.97 | 56 |
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Payments due by period | ||||||||||||||||||||
Less than | 1-3 | 3-5 | After 5 | |||||||||||||||||
Total | 1 year | years | years | years | ||||||||||||||||
as at December 31, 2007 | £m | £m | £m | £m | £m | |||||||||||||||
Finance lease payables | 12 | 5 | 7 | — | — | |||||||||||||||
Debt obligations (including future interest payments) | 809 | 331 | 477 | 1 | — | |||||||||||||||
Pension obligations* | 66 | 66 | — | — | — | |||||||||||||||
Other provisions and liabilities** | 74 | 35 | 31 | 6 | 2 | |||||||||||||||
Operating leases | 650 | 94 | 158 | 118 | 280 | |||||||||||||||
Purchase obligations | 1,708 | 410 | 489 | 572 | 237 | |||||||||||||||
Total contractual obligations | 3,319 | 941 | 1,162 | 697 | 519 |
* | Net pension obligations are recorded on the balance sheet at £11 million (£43 million pension obligations less £32 million pension funds in surplus). The £66 million represents the expected payments to be made to the defined benefit schemes in 2008. | |
** | Other provisions and liabilities (excluding net pension obligation) recorded on the balance sheet total £96 million. Of this, £74 million are financial liabilities that require settlement in cash. Additionally, the balance sheet contains a deferred tax liability of £115 million. No estimate has been provided for deferred tax in the table above as it is not a contractually obligated financial liability. |
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Operating | Operating | |||||||||||
Revenue | cost | profit | ||||||||||
Currency impact | £m | £m | £m | |||||||||
Impact of: | ||||||||||||
Stable euro | 1 | (1 | ) | — | ||||||||
Weaker dollar | (112 | ) | 85 | (27 | ) | |||||||
Weaker yen | (15 | ) | 6 | (9 | ) | |||||||
Other currencies | (13 | ) | 11 | (2 | ) | |||||||
Exchange rate movements | (139 | ) | 101 | (38 | ) | |||||||
Change in currency mix | 4 | (2 | ) | 2 | ||||||||
Total currency movements | (135 | ) | 99 | (36 | ) |
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• | Constant currency results are calculated excluding the impact of currency fluctuations. Variations in currency exchange rates impact the results because Reuters generates revenues and incurs costs in currencies other than its reporting currency. Year-on-year, currency exchange rate movements will influence reported numbers to a greater or lesser extent, and therefore they are discussed separately from underlying results to make clear their impact on the overall growth or decline in operations. Constant currency results are calculated by restating the prior periods’ results using the current period’s exchange rates. This also reflects the variables over which management has control, as business units do not actively manage currency exposure, and business division operating performance is managed against targets set on a constant currency basis. Currency exposure is described in “Treasury Policies” above. | ||
• | Underlying results are calculated excluding the impact of currency fluctuations as well as the results of entities acquired or disposed of during the current or prior periods from the results of each period under review. Underlying results reflect the operating results of the ongoing elements of each business division, and measure the performance of management against variables over which they have control, without the year-on-year impact of a step change in revenue and costs that can result from currency movements and acquisition or disposal activity. |
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2007 | 2007 | 2006 | 2006 | 2005 | 2005 | |||||||||||||||||||
Year to December 31 | £m | % | £m | % | £m | % | ||||||||||||||||||
Operating profit from continuing activities/margin | 292 | 11 | 256 | 10 | 207 | 9 | ||||||||||||||||||
Excluding: | ||||||||||||||||||||||||
Restructuring charges | — | — | 13 | — | 112 | 4 | ||||||||||||||||||
Transaction-related costs | 45 | 2 | — | — | — | — | ||||||||||||||||||
Impairments and amortization of business combination intangibles | 40 | 2 | 24 | 1 | 22 | 1 | ||||||||||||||||||
Investment income | (1 | ) | — | — | — | (1 | ) | — | ||||||||||||||||
Profit on disposal of subsidiaries | (3 | ) | — | (4 | ) | — | (4 | ) | — | |||||||||||||||
Fair value movements | 12 | — | 19 | 1 | (2 | ) | — | |||||||||||||||||
Reuters trading profit/margin | 385 | 15 | 308 | 12 | 334 | 14 |
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2007 | 2007 | 2006 | 2006 | 2005 | 2005 | |||||||||||||||||||
Year to December 31 | £m | % | £m | % | £m | % | ||||||||||||||||||
Profit before tax/margin from continuing operations | 273 | 11 | 313 | 12 | 238 | 10 | ||||||||||||||||||
Excluding: | ||||||||||||||||||||||||
Impairments and amortization of business combination intangibles | 40 | 2 | 24 | — | 22 | 1 | ||||||||||||||||||
Transaction-related costs | 45 | 2 | — | — | — | — | ||||||||||||||||||
Investment income | (1 | ) | — | — | — | (1 | ) | — | ||||||||||||||||
Profit on disposal of subsidiaries, associates and joint ventures | (24 | ) | (1 | ) | (80 | ) | (3 | ) | (42 | ) | (2 | ) | ||||||||||||
Fair value movements | 12 | — | 19 | 1 | (2 | ) | — | |||||||||||||||||
Profit before tax/margin before impairments and amortization of business combination intangibles, Transaction-related costs, investment income, profit on disposals and fair value movements (Adjusted profit before tax) | 345 | 14 | 276 | 11 | 215 | 9 |
2007 | 2007 | 2006 | 2006 | 2005 | 2005 | |||||||||||||||||||
Year to December 31 | £m | EPS Pence | £m | EPS Pence | £m | EPS Pence | ||||||||||||||||||
Profit/basic EPS from continuing activities | 213 | 17.3 | 293 | 22.6 | 229 | 16.3 | ||||||||||||||||||
Excluding: | ||||||||||||||||||||||||
Impairments and amortization of business combination intangibles | 40 | 3.3 | 24 | 1.8 | 22 | 1.6 | ||||||||||||||||||
Transaction-related costs | 45 | 3.6 | — | — | — | — | ||||||||||||||||||
Investment income | (1 | ) | (0.1 | ) | — | — | (1 | ) | (0.1 | ) | ||||||||||||||
Profit on disposal of subsidiaries, associates and joint ventures | (24 | ) | (2.0 | ) | (80 | ) | (6.3 | ) | (42 | ) | (2.9 | ) | ||||||||||||
Fair value movements | 12 | 0.9 | 19 | 1.5 | (2 | ) | (0.2 | ) | ||||||||||||||||
Adjustments to tax charge for tax effect of excluded items | — | — | (34 | ) | (2.5 | ) | (13 | ) | (0.9 | ) | ||||||||||||||
Profit/basic EPS from continuing operations before impairments and amortization of business combination intangibles, Transaction-related costs, investment income, profit on disposals, fair value movements and related taxation effects (Adjusted EPS) | 285 | 23.0 | 222 | 17.1 | 193 | 13.8 |
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Impact of | ||||||||||||||||
Underlying | Impact of | acquisitions | Actual | |||||||||||||
% change versus year ended December 31, 2006 | change | currency | & disposals | change | ||||||||||||
Recurring | 2 | % | (5 | %) | — | (3 | %) | |||||||||
Usage | 19 | % | (10 | %) | — | 9 | % | |||||||||
Outright | (4 | %) | (5 | %) | — | (9 | %) | |||||||||
Sales & Trading | 3 | % | (5 | %) | — | (2 | %) | |||||||||
Recurring | 25 | % | (6 | %) | 1 | % | 20 | % | ||||||||
Usage | 4 | % | (7 | %) | — | (3 | %) | |||||||||
Outright | (25 | %) | (5 | %) | — | (30 | %) | |||||||||
Research & Asset Management | 25 | % | (6 | %) | 1 | % | 20 | % | ||||||||
Recurring | 11 | % | (6 | %) | — | 5 | % | |||||||||
Usage | 2 | % | (2 | %) | 2 | % | 2 | % | ||||||||
Enterprise | 10 | % | (6 | %) | 1 | % | 5 | % | ||||||||
Recurring | 6 | % | (5 | %) | — | 1 | % | |||||||||
Usage | 6 | % | (7 | %) | — | (1 | %) | |||||||||
Media | 6 | % | (5 | %) | — | 1 | % | |||||||||
Recurring | 7 | % | (6 | %) | — | 1 | % | |||||||||
Usage | 15 | % | (9 | %) | — | 6 | % | |||||||||
Outright | 1 | % | (3 | %) | 3 | % | 1 | % | ||||||||
Total revenue | 7 | % | (5 | %) | — | 2 | % |
Impact of | ||||||||||||||||
Underlying | Impact of | acquisitions | Actual | |||||||||||||
% change versus year ended December 31, 2005 | change | currency | & disposals | change | ||||||||||||
Recurring | 4 | % | — | 2 | % | 6 | % | |||||||||
Outright | 24 | % | — | 2 | % | 26 | % | |||||||||
Usage | 4 | % | (2 | %) | 1 | % | 3 | % | ||||||||
Total revenue | 5 | % | — | 2 | % | 7 | % |
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Impact of | ||||||||||||||||
Underlying | Impact of | acquisitions | Actual | |||||||||||||
% change versus year ended December 31, 2006 | change | currency | & disposals | change | ||||||||||||
Reuters Xtra | 10 | % | (6 | %) | — | 4 | % | |||||||||
Reuters Trader | (20 | %) | (4 | %) | — | (24 | %) | |||||||||
Recoveries | 10 | % | (5 | %) | — | 5 | % | |||||||||
Sales & Trading | 3 | % | (5 | %) | — | (2 | %) | |||||||||
Investment Banking, Investment Management & Corporate | 34 | % | (4 | %) | — | 30 | % | |||||||||
Reuters Wealth Manager | 11 | % | (7 | %) | 1 | % | 5 | % | ||||||||
Research & Asset Management | 25 | % | (6 | %) | 1 | % | 20 | % | ||||||||
Reuters Enterprise Information | 18 | % | (6 | %) | — | 12 | % | |||||||||
Reuters Information Management Systems | (15 | %) | (5 | %) | 1 | % | (19 | %) | ||||||||
Reuters Trade and Risk Management | 14 | % | (5 | %) | 1 | % | 10 | % | ||||||||
Enterprise | 10 | % | (6 | %) | 1 | % | 5 | % | ||||||||
Agency Services | 5 | % | (5 | %) | — | — | ||||||||||
Consumer Media | 15 | % | (9 | %) | — | 6 | % | |||||||||
Media | 6 | % | (5 | %) | — | 1 | % | |||||||||
Total revenue | 7 | % | (5 | %) | — | 2 | % |
Impact of | ||||||||||||||||
Underlying | Impact of | acquisitions | Actual | |||||||||||||
% change versus year ended December 31, 2006 | change | currency | & disposals | change | ||||||||||||
Europe, Middle East & Africa | 6 | % | (3 | %) | — | 3 | % | |||||||||
Americas | 7 | % | (8 | %) | — | (1 | %) | |||||||||
Asia | 9 | % | (9 | %) | — | — | ||||||||||
Total revenue | 7 | % | (5 | %) | — | 2 | % |
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2007* | ||||||||||||||||||||
Research | ||||||||||||||||||||
Sales & | & Asset | |||||||||||||||||||
Trading | Management | Enterprise | Media | Reuters | ||||||||||||||||
Year to December 31 | £m | £m | £m | £m | £m | |||||||||||||||
Operating costs | 1,440 | 339 | 371 | 160 | 2,355 | |||||||||||||||
Impairments and amortization of business combination intangibles | (33 | ) | (4 | ) | (3 | ) | — | (40 | ) | |||||||||||
Transaction-related costs | — | — | — | — | (45 | ) | ||||||||||||||
Fair value movements (in expenses) | (9 | ) | (2 | ) | (2 | ) | (1 | ) | (14 | ) | ||||||||||
Other operating income | (22 | ) | (5 | ) | (6 | ) | (3 | ) | (36 | ) | ||||||||||
Trading costs | 1,376 | 328 | 360 | 156 | 2,220 |
2006** restated | ||||||||||||||||||||
Research | ||||||||||||||||||||
Sales & | & Asset | |||||||||||||||||||
Trading | Management | Enterprise | Media | Reuters | ||||||||||||||||
Year to December 31 | £m | £m | £m | £m | £m | |||||||||||||||
Operating costs | 1,506 | 324 | 362 | 159 | 2,351 | |||||||||||||||
Restructuring charges | (12 | ) | — | (1 | ) | — | (13 | ) | ||||||||||||
Impairments and amortization of business combination intangibles | (17 | ) | (3 | ) | (3 | ) | (1 | ) | (24 | ) | ||||||||||
Fair value movements (in expenses) | (18 | ) | (3 | ) | (3 | ) | (1 | ) | (25 | ) | ||||||||||
Other operating income | (20 | ) | (4 | ) | (5 | ) | (2 | ) | (31 | ) | ||||||||||
Trading costs | 1,439 | 314 | 350 | 155 | 2,258 |
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2005 restated** | ||||||||||||||||||||
Research | ||||||||||||||||||||
Sales & | & Asset | |||||||||||||||||||
Trading | Management | Enterprise | Media | Total | ||||||||||||||||
Year to December 31 | £m | £m | £m | £m | £m | |||||||||||||||
Operating costs | 1,482 | 298 | 323 | 148 | 2,251 | |||||||||||||||
Restructuring charges | (76 | ) | (11 | ) | (17 | ) | (8 | ) | (112 | ) | ||||||||||
Impairments and amortization of business combination intangibles | (14 | ) | (3 | ) | (4 | ) | (1 | ) | (22 | ) | ||||||||||
Fair value movements (in expenses) | (16 | ) | — | — | — | (16 | ) | |||||||||||||
Other operating income | (16 | ) | (3 | ) | (5 | ) | (2 | ) | (26 | ) | ||||||||||
Trading costs | 1,360 | 281 | 297 | 137 | 2,075 |
Notes: | ||
* | Divisional operating costs are stated prior to any impact of £45 million of Transaction-related costs in 2007, which relate to Reuters as a whole and cannot be directly attributed or allocated to divisions on a reasonable basis. | |
** | In 2007, Reuters made changes to the allocation of revenue and trading costs between Business Divisions, to reflect changes in the management of Communications revenues and Reuters Messaging products, and to reflect improvements to the allocation methodology. Prior year comparatives have therefore been restated to decrease Sales & Trading revenue by £29 million (2005: £17 million) and operating costs by £37 million (2005: £13 million). Research & Asset Management revenues increased by £6 million (2005: £5 million) and operating costs by £9 million (2005: £5 million). Enterprise revenues increased by £23 million (2005: £12 million) and operating costs by £27 million (2005: £6 million). Media operating costs increased by £1 million (2005: £2 million). |
2007* | ||||||||||||||||||||
Research | ||||||||||||||||||||
Sales & | & Asset | |||||||||||||||||||
Trading | Management | Enterprise | Media | Reuters | ||||||||||||||||
Year to December 31 | £m | £m | £m | £m | £m | |||||||||||||||
Operating profit | 206 | 29 | 87 | 15 | 292 | |||||||||||||||
Impairments and amortization of business combination intangibles | 33 | 4 | 3 | — | 40 | |||||||||||||||
Transaction-related costs | — | — | — | — | 45 | |||||||||||||||
Investment income | (1 | ) | — | — | — | (1 | ) | |||||||||||||
(Profit)/loss on disposal of subsidiaries | (2 | ) | — | (1 | ) | — | (3 | ) | ||||||||||||
Fair value movements | 7 | 2 | 2 | 1 | 12 | |||||||||||||||
Trading profit | 243 | 35 | 91 | 16 | 385 |
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2006 restated ** | ||||||||||||||||||||
Research & | ||||||||||||||||||||
Sales & | Asset | |||||||||||||||||||
Trading | Management | Enterprise | Media | Reuters | ||||||||||||||||
Year to December 31 | £m | £m | £m | £m | £m | |||||||||||||||
Operating profit/(loss) | 182 | (15 | ) | 75 | 14 | 256 | ||||||||||||||
Restructuring charges | 12 | — | 1 | — | 13 | |||||||||||||||
Impairments and amortization of business combination intangibles | 17 | 3 | 3 | 1 | 24 | |||||||||||||||
(Profit)/loss on disposal of subsidiaries | (3 | ) | — | — | (1 | ) | (4 | ) | ||||||||||||
Fair value movements | 14 | 2 | 2 | 1 | 19 | |||||||||||||||
Trading profit/(loss) | 222 | (10 | ) | 81 | 15 | 308 |
2005 restated ** | ||||||||||||||||||||
Research & | ||||||||||||||||||||
Sales & | Asset | |||||||||||||||||||
Trading | Management | Enterprise | Media | Reuters | ||||||||||||||||
Year to December 31 | £m | £m | £m | £m | £m | |||||||||||||||
Operating profit/(loss) | 151 | (35 | ) | 82 | 9 | 207 | ||||||||||||||
Restructuring charges | 76 | 11 | 17 | 8 | 112 | |||||||||||||||
Impairments and amortization of business combination intangibles | 14 | 3 | 4 | 1 | 22 | |||||||||||||||
(Profit)/loss on disposal of subsidiaries | (1 | ) | — | — | — | (1 | ) | |||||||||||||
Fair value movements | (7 | ) | 5 | (1 | ) | (1 | ) | (4 | ) | |||||||||||
Trading profit/(loss) | 3 | (2 | ) | (2 | ) | (1 | ) | (2 | ) | |||||||||||
236 | (18 | ) | 100 | 16 | 334 |
Notes: | ||
* | Divisional operating costs are stated prior to any impact of £45 million of Transaction-related costs in 2007, which relate to Reuters as a whole and cannot be directly attributed or allocated to divisions on a reasonable basis. | |
** | In 2007, Reuters made changes to the allocation of revenue and trading costs between Business Divisions, to reflect changes in the management of Communications revenues and Reuters Messaging products, and to reflect improvements to the allocation methodology. Prior year comparatives have therefore been restated to decrease Sales & Trading revenue by £29 million (2005: £17 million) and operating costs by £37 million (2005: £13 million). Research & Asset Management revenues increased by £6 million (2005: £5 million) and operating costs by £9 million (2005: £5 million). Enterprise revenues increased by £23 million (2005: £12 million) and operating costs by £27 million (2005: £6 million). Media operating costs increased by £1 million (2005: £2 million). |
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2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||
Dis- | Dis- | Dis- | ||||||||||||||||||||||||||||||||||
Continuing | continued | Continuing | continued | Continuing | continued | |||||||||||||||||||||||||||||||
operations | operations | Reuters | operations | operations | Reuters | operations | operations | Reuters | ||||||||||||||||||||||||||||
Year to December 31 | £m | £m | £m | £m | £m | £m | £m | £m | £m | |||||||||||||||||||||||||||
Cash generated from operations | 534 | — | 534 | 311 | — | 311 | 268 | 3 | 271 | |||||||||||||||||||||||||||
Interest received | 67 | — | 67 | 42 | — | 42 | 42 | 13 | 55 | |||||||||||||||||||||||||||
Interest paid | (99 | ) | — | (99 | ) | (61 | ) | — | (61 | ) | (49 | ) | — | (49 | ) | |||||||||||||||||||||
Tax paid | (26 | ) | — | (26 | ) | (34 | ) | — | (34 | ) | (11 | ) | (13 | ) | (24 | ) | ||||||||||||||||||||
Cash flow from operating activities | 476 | — | 476 | 258 | — | 258 | 250 | 3 | 253 | |||||||||||||||||||||||||||
Purchases of property, plant and equipment | (116 | ) | — | (116 | ) | (122 | ) | — | (122 | ) | (138 | ) | (7 | ) | (145 | ) | ||||||||||||||||||||
Proceeds from sale of property, plant and equipment | 19 | — | 19 | 5 | — | 5 | 3 | — | 3 | |||||||||||||||||||||||||||
Purchases of intangible assets | (109 | ) | — | (109 | ) | (106 | ) | — | (106 | ) | (40 | ) | — | (40 | ) | |||||||||||||||||||||
Interim funding payment from Telerate | — | — | — | — | — | — | (18 | ) | — | (18 | ) | |||||||||||||||||||||||||
Transaction-related costs paid | 21 | — | 21 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Dividends received | 3 | — | 3 | 3 | — | 3 | 5 | — | 5 | |||||||||||||||||||||||||||
Special contributions to pension schemes | 4 | — | 4 | 187 | — | 187 | — | — | — | |||||||||||||||||||||||||||
Repayment of funds to/(from) BTC | — | — | — | — | — | — | 26 | (26 | ) | — | ||||||||||||||||||||||||||
Free cash flow | 298 | — | 298 | 225 | — | 225 | 88 | (30 | ) | 58 | ||||||||||||||||||||||||||
Interest received | (67 | ) | — | (67 | ) | (42 | ) | — | (42 | ) | (42 | ) | (13 | ) | (55 | ) | ||||||||||||||||||||
Interest paid | 99 | — | 99 | 61 | — | 61 | 49 | — | 49 | |||||||||||||||||||||||||||
Tax paid | 26 | — | 26 | 34 | — | 34 | 11 | 13 | 24 | |||||||||||||||||||||||||||
Restructuring | 11 | — | 11 | 52 | — | 52 | 147 | — | 147 | |||||||||||||||||||||||||||
Other | (14 | ) | — | (14 | ) | 13 | — | 13 | 3 | (4 | ) | (1 | ) | |||||||||||||||||||||||
Trading cash flow | 353 | — | 353 | 343 | — | 343 | 256 | (34 | ) | 222 | ||||||||||||||||||||||||||
Trading cash conversion* | 92 | % | 111 | % | 77 | % |
Note: | ||
* | Trading cash conversion = trading cash flow/trading profit |
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2007 | 2006 | 2005 | ||||||||||
Year to December 31 | £m | £m | £m | |||||||||
Cash and cash equivalents | 251 | 129 | 662 | |||||||||
Bank overdrafts | (9 | ) | (24 | ) | (25 | ) | ||||||
242 | 105 | 637 | ||||||||||
Short-term deposit | 3 | 198 | 1 | |||||||||
Borrowings (excluding bank overdrafts) | (622 | ) | (636 | ) | (385 | ) | ||||||
Net (debt)/funds | (377 | ) | (333 | ) | 253 |
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• | 2007 was the first year in which Reuters European corporate and investment banking revenues surpassed those in the US. | ||
• | Changing demographics, the expansion of the middle classes in emerging markets and new pools of investment money from sovereign wealth funds and petrodollars are all potential catalysts for growth in asset and wealth management, particularly in Asia. |
• | A combination of increasingly complex financial instruments, changing investment strategies and regulation is highlighting the importance of risk management, particularly on the buy side. | ||
• | The credit crisis has reinforced the importance of consistent risk management throughout financial institutions. Demand for risk products and data for use in risk systems is expected to increase. |
• | Traditional media companies are continuing to embrace online social networks, video and user-generated content to engage their audiences. | ||
• | Online audiences and advertising revenues are growing at a faster rate than revenues from traditional media. |
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• | Nine of the directors were directors of Thomson prior to the closing of the Transaction, including David Thomson, who is the Chairman, and W. Geoffrey Beattie, who is a Deputy Chairman. | ||
• | Five of the directors were directors of Reuters prior to the closing of the Transaction, including Niall FitzGerald, who is a Deputy Chairman. | ||
• | Tom Glocer, the Chief Executive Officer of Thomson Reuters, is also a director. |
David Thomson1 | Thomson Reuters Board/Committee Membership | Thomson Reuters Securities Held | ||
Age: 50 | Board of Directors | Common Shares: 6,070 | ||
Toronto, Ontario, Canada | Ordinary Shares: 800 | |||
Other Public Board Memberships | RSUs: 0 | |||
None | DSUs: 0 | |||
Options: 0 | ||||
Thomson Director Since 1998 Non-independent | David Thomson is Chairman of Thomson Reuters and a Chairman of Woodbridge. Previously, Mr. Thomson was a Deputy Chairman of Woodbridge. Mr. Thomson was named Chairman of Thomson in May 2002. |
1. | David Thomson and Peter Thomson, who is also a director, are brothers. |
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W. Geoffrey Beattie | Thomson Reuters Board/Committee Membership | Thomson Reuters Securities Held | ||
Age: 48 | Board of Directors Corporate Governance Committee Human Resources Committee | Common Shares: 200,500 Ordinary Shares: 0 RSUs: 116,103 DSUs: 0 Options: 200,000 | ||
Toronto, Ontario, Canada | Other Public Board Memberships Royal Bank of Canada | |||
Thomson Director Since 1998 Non-independent | W. Geoffrey Beattie is Deputy Chairman of Thomson Reuters and President of Woodbridge. Mr. Beattie was named Deputy Chairman of Thomson in 2000. |
Niall FitzGerald, | Thomson Reuters Board/Committee Membership | Thomson Reuters Securities Held | ||
KBE Age: 62 | Board of Directors Corporate Governance Committee Human Resources Committee | Common Shares: 27,658 Ordinary Shares: 0 RSUs: 0 DSUs: 0 Options: 0 | ||
London, United Kingdom | Other Public Board Memberships None | |||
Reuters Director Since 2003 Senior Independent Director | Niall FitzGerald, KBE, is Deputy Chairman of Thomson Reuters. Mr. FitzGerald was Chairman of Reuters from 2004. Mr. FitzGerald was Chairman and Chief Executive Officer of Unilever from 1996 until his retirement in 2004. Mr. FitzGerald was Chair of the Reuters Nominations Committee. |
Tom Glocer | Thomson Reuters Board/Committee Membership | Thomson Reuters Securities Held | ||
Age: 48 | Board of Directors | Common Shares: 0 Ordinary Shares: 452,722 RSUs: 0 DSUs: 0 | ||
New York, New York, United States | Other Public Board Memberships Merck & Co., Inc. | Ordinary Shares Underlying Reuters Options: 639,5612 Long-Term Incentives: 0 | ||
Reuters Director Since 2000 Non-Independent | Tom Glocer is Chief Executive Officer of Thomson Reuters. Mr. Glocer joined Reuters in 1993 and held a number of key leadership positions during his Reuters career, including Chief Executive Officer of Reuters Information and President and Senior Company Officer, Reuters America. In 2001, he became Chief Executive Officer of Reuters. |
2. | Tom Glocer currently holds 3,997,262 options related to Reuters ordinary shares. On exercise of these options, Mr. Glocer will receive, for each option held, 352.5 pence in cash and 0.16 Thomson Reuters PLC ordinary shares. If Mr. Glocer exercised all of these options, he would be entitled to receive 639,561 Thomson Reuters PLC ordinary shares. This number does not account for fractional entitlements on exercise. |
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Mary Cirillo Age: 60 | Thomson Reuters Board/Committee Membership Board of Directors Corporate Governance Committee Human Resources Committee | Thomson Reuters Securities Held Common Shares: 0 Ordinary Shares: 0 RSUs: 0 DSUs: 7,159 Options: 0 | ||
New York, New York, United States | Other Public Board Memberships Healthcare Property Investors, Inc. DealerTrack Holdings, Inc. ACE Ltd. | |||
Thomson Director Since 2005 Independent | Mary Cirillo is a corporate director. Ms. Cirillo was Chair and Chief Executive Officer of Opcenter, LLC, an Internet consulting firm, from 2000 to 2003. Prior to that, Ms. Cirillo was Chief Executive Officer of Global Institutional Services at Deutsche Bank. |
Steven A. Denning | Thomson Reuters Board/Committee Membership | Thomson Reuters Securities Held | ||
Age: 59 New York, New York, United States | Board of Directors Human Resources Committee Other Public Board Memberships Hewitt Associates Inc. IHS, Inc. Eclipsys Corporation Genpact Limited | Common Shares: 20,000 Ordinary Shares: 0 RSUs: 0 DSUs: 17,213 Options: 0 | ||
Thomson Director Since 2000 Independent | Steven Denning is Chairman of General Atlantic LLC, a private equity investment firm. |
Lawton Fitt | Thomson Reuters Board/Committee Membership | Thomson Reuters Securities Held | ||
Age: 54 | Board of Directors Audit Committee | Common Shares: 0 Ordinary Shares: 4,000 RSUs: 0 DSUs: 0 Options: 0 | ||
New York, New York, United States | Other Public Board Memberships CIENA Corporation Overture Acquisitions Corp. | |||
Reuters Director Since 2004 Independent | Lawton Fitt is a corporate director. From October 2002 to March 2005, Ms. Fitt served as Secretary (CEO) of the Royal Academy of Arts in London. From 1979 to October 2002, Ms. Fitt was an investment banker with Goldman Sachs & Co., where she was a partner from 1994 to October 2002, and a managing director from 1996 to October 2002. |
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Roger L. Martin Age: 51 New York, New York, United States | Thomson Reuters Board/Committee Membership Board of Directors Audit Committee Other Public Board Memberships Research in Motion Limited | Thomson Reuters Securities Held Common Shares: 6,000 Ordinary Shares: 0 RSUs: 0 DSUs: 18,207 Options: 0 | ||
Thomson Director Since 1999 Independent | Roger Martin is Dean of the Joseph L. Rotman School of Management at the University of Toronto, a post-secondary educational institution. |
Sir Deryck Maughan | Thomson Reuters Board/Committee Membership | Thomson Reuters Securities Held | ||
Age: 60 | Board of Directors Corporate Governance Committee | Common Shares: 0 Ordinary Shares: 0 RSUs: 0 DSUs: 0 Options: 0 | ||
New York, New York, United States | Other Public Board Memberships GlaxoSmithKline plc BlackRock Inc. | |||
Reuters Director Since 2005 Independent | Sir Deryck Maughan is a Managing Director of Kohlberg Kravis Roberts & Co. Sir Deryck was Chairman and Chief Executive Officer of Citigroup International until 2004. |
Ken Olisa | Thomson Reuters Board/Committee Membership | Thomson Reuters Securities Held | ||
Age: 56 | Board of Directors Audit Committee | Ordinary Shares: 408 RSUs: 0 DSUs: 0 Options: 0 | ||
London, United Kingdom | Other Public Board Memberships Open Text Corporation Eurasian Natural Resources Corporation PLC | |||
Reuters Director Since 2004 Independent | Ken Olisa is the founder and Chairman of Restoration Partners Limited, a boutique technology merchant bank. Mr. Olisa was Chairman of Interregnum plc from 2000 to 2006 and Chief Executive Officer since its inception in 1992. |
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Richard L. Olver3 Age: 61 London, United Kingdom | Thomson Reuters Board/Committee Membership Board of Directors Human Resources Committee Other Public Board Memberships BAE Systems PLC | Thomson Reuters Securities Held Common Shares: 0 Ordinary Shares: 1,600 RSUs: 0 DSUs: 0 Options: 0 | ||
Reuters Director Since 1997 Independent | Richard Olver is Chairman of BAE Systems PLC, a global defence and aerospace company. Mr. Olver was Deputy Group Chief Executive of BP PLC until 2004. He was also Chief Executive Officer of BP Exploration and Production Division between 1998 and 2002. |
3. | Mr. Olver was a director of AOA Sidanco from June 1998 to June 1999. On January 28, 1999, AOA Sidanco filed for bankruptcy protection and subsequently came out of bankruptcy to merge with TNK to form TNK-BP Ltd. |
Vance K. Opperman | Thomson Reuters Board/Committee Membership | Thomson Reuters Securities Held | ||
Age: 65 Minneapolis, Minnesota, United States | Board of Directors Audit Committee Other Board Memberships DeCare Dental LLC Blue Cross/Blue Shield of Minnesota Avenet LLC | Common Shares: 50,000 Ordinary Shares: 0 RSUs: 0 DSUs: 23,037 Options: 0 | ||
Thomson Director Since 1996 Independent | Vance Opperman is President and Chief Executive Officer of Key Investment, Inc., a holding company. Previously, Mr. Opperman was President of West Publishing Company. |
John M. Thompson4 Age: 65 New York, New York, United States | Thomson Reuters Board/Committee Membership Board of Directors Audit Committee Corporate Governance Committee Other Public Board Memberships The Toronto-Dominion Bank Royal Phillips Electronics N.V. | Thomson Reuters Securities Held Common Shares: 2,500 Ordinary Shares: 0 RSUs: 0 DSUs: 13,436 Options: 0 | ||
Thomson Director Since 2003 Independent | John Thompson is Chairman of the Board of The Toronto-Dominion Bank, a financial institution. Mr. Thompson was Vice Chairman of the Board of IBM until 2002. |
4. | Mrs. J.M. Thompson owned 300 common shares of Thomson as of April 17, 2008. |
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Peter J. Thomson Age: 42 Toronto, Ontario, Canada | Thomson Reuters Board/Committee Membership Board of Directors Other Public Board Memberships None | Thomson Reuters Securities Held Common Shares: 0 Ordinary Shares: 0 RSUs: 0 DSUs: 1,553 Options: 0 | ||
Thomson Director Since 1995 Non-Independent | Peter Thomson is Chairman of Woodbridge. |
John A. Tory | Thomson Reuters Board/Committee Membership | Thomson Reuters Securities Held | ||
Age: 78 Toronto, Ontario, Canada | Board of Directors Human Resources Committee Other Public Board Memberships Rogers Communications Inc. | Common Shares: 501,670 Ordinary Shares: 0 RSUs: 0 DSUs: 2,726 Options: 0 | ||
Thomson Director Since 1978 Non-Independent | John Tory is a director of Woodbridge and was President of Woodbridge from 1973 to 1998 and Deputy Chairman of Thomson from 1978 to 1997. |
Tom Glocer | Chief Executive Officer. Tom Glocer, 48, was the Chief Executive Officer of Reuters prior to the closing of the Transaction. Mr. Glocer joined Reuters in 1993 and has held a number of key leadership positions during his Reuters career, including Chief Executive Officer of Reuters Information and President and Senior Company Officer, Reuters America. In 2001, Mr. Glocer became Chief Executive Officer of Reuters. Mr. Glocer is a director of Merck & Co. Inc. and a former non-executive director of Instinet Group. Mr. Glocer has been a director of Reuters since 2000. | |
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Robert D. Daleo | Executive Vice President and Chief Financial Officer. Bob Daleo, 58, was Executive Vice President and Chief Financial Officer of Thomson prior to the closing of the Transaction. Mr. Daleo began his career with Thomson in 1994 when he joined Thomson Newspapers as Senior Vice President and Chief Financial Officer. In 1996, he was appointed Chief Operating Officer of Thomson Newspapers, assuming responsibility for a significant portion of US operations. At the beginning of 1997, he joined Thomson’s corporate headquarters as Senior Vice President, Finance and Business Development. In 1998, Mr. Daleo became Chief Financial Officer of Thomson and has been a director of Thomson since 2001. Mr. Daleo is a director of Equifax Inc. and serves on the board of trustees for the New Jersey Community Development Corporation. | |
James C. Smith | Chief Executive Officer — Professional. Jim Smith, 48, was the Executive Vice President and Chief Operating Officer of Thomson prior to the closing of the Transaction. Previously, Mr. Smith served as President and Chief Executive Officer of Thomson Learning’s Academic and Reference Group. Before that, Mr. Smith served as Executive Vice President, Human Resources and Administration of Thomson. Mr. Smith joined the Thomson Newspaper Group in 1987. Mr. Smith held several staff and operating positions of increasing responsibility within that group, culminating in his role as head of operations for Thomson Newspapers — US. | |
Devin Wenig | Chief Executive Officer — Markets. Devin Wenig, 41, was the Chief Operating Officer of Reuters prior to the closing of the Transaction. Mr. Wenig joined Reuters in 1993 as Corporate Counsel, Reuters America and held a number of senior management positions before being appointed President, Investment Banking & Brokerage Services in January 2001. Mr. Wenig was President, Business Divisions from 2003 until his appointment as Chief Operating Officer of Reuters in 2006. Mr. Wenig also serves on the board of directors of Nastech Pharmaceutical Company. He is a former non-executive director of Instinet Group. Mr. Wenig was a director of Reuters from 2003 until completion of the Transaction on April 17, 2008. | |
Michael E. Wilens | Executive Vice President of Strategy, Technology and Innovation. Mike Wilens, 54, was Executive Vice President and Chief Technology Officer of Thomson prior to the closing of the Transaction. From 2000 to 2006, Mr. Wilens was President and Chief Executive Officer of Thomson Legal & Regulatory’s North American Legal organization. Prior to that, Mr. Wilens was Chief Technology Officer for Thomson and Thomson West. Before joining Thomson, Mr. Wilens held senior management positions with Groupe Lagardère, Lawyers Cooperative Publishing and HCIA. | |
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Gustav Carlson | Executive Vice President and Chief Marketing & Communications Officer. Gus Carlson, 50, was Senior Vice President, Chief Marketing & Communications Officer of Thomson prior to the closing of the Transaction. Mr. Carlson has more than 25 years of experience as a senior communications professional, award-winning national business journalist and author. Before joining Thomson in 2006, Mr. Carlson held senior communications positions at Accenture, Standard & Poor’s, PaineWebber, Barnes & Noble and Hill & Knowlton. Mr. Carlson is a former business news editor forThe New York TimesandThe Miami Herald. | |
Stephen Dando | Executive Vice President and Chief Human Resources Officer. Stephen Dando, 46, was Group Human Resources Director for Reuters prior to the closing of the Transaction. Prior to joining Reuters in 2006, Mr. Dando was Director, BBC People and a member of the BBC’s Executive Committee and Executive Board for five years. Mr. Dando held various appointments at Diageo over a 12-year period including Global HR Director, Guinness. | |
Deirdre Stanley | Executive Vice President and General Counsel. Deirdre Stanley, 43, was Senior Vice President and General Counsel of Thomson prior to the closing of the Transaction. Prior to joining Thomson in 2002, Ms. Stanley served in various senior executive positions, including Deputy General Counsel at USA Networks, Inc. and its successor companies. From 1995 through 1997, Ms. Stanley served as Associate General Counsel for GTE Corporation, where she headed the mergers and acquisitions practice group. | |
Annual retainer for Directors | $ | 150,000 | ||
Annual retainer for Audit Committee and Human Resources Committee Chairs | $ | 20,000 | ||
Annual retainer for Corporate Governance Committee Chair | $ | 10,000 | ||
Annual retainer for Chairman | $ | 600,000 | ||
Annual retainer for each Deputy Chairman | $ | 300,000 | 1 |
Note: | ||
1. | Mr. FitzGerald also receives RSUs annually with a value at the time of issue equal to the difference between £600,000 and $300,000. He does not receive a separate retainer for serving as Chair of the Corporate Governance Committee. |
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Thomson | Committee | Thomson Board | Committee | |||||||||||||||||
Board | Chair | Attendance | Attendance | Total | ||||||||||||||||
Name | Retainer ($) | Retainer ($) | fees ($) | fees ($) | fees ($) | |||||||||||||||
David Thomson | 500,000 | — | — | — | 500,000 | |||||||||||||||
W. Geoffrey Beattie | 250,000 | — | — | — | 250,000 | |||||||||||||||
Mary Cirillo | 80,000 | — | 13,000 | 2,000 | 95,000 | |||||||||||||||
Steven A. Denning | 80,000 | 10,000 | 12,000 | 5,000 | 107,000 | |||||||||||||||
Roger L. Martin | 80,000 | — | 13,000 | 16,000 | 109,000 | |||||||||||||||
Vance K. Opperman | 80,000 | 10,000 | 13,000 | 16,000 | 119,000 | |||||||||||||||
John M. Thompson | 80,000 | 10,000 | 11,000 | 15,000 | 116,000 | |||||||||||||||
Peter J. Thomson | 80,000 | — | 13,000 | — | 93,000 | |||||||||||||||
John A. Tory | 80,000 | — | 13,000 | 5,000 | 98,000 | |||||||||||||||
Total | 1,310,000 | 30,000 | 88,000 | 59,000 | 1,487,000 |
2007 | ||||||||||||||||||||||||
Compensation | ||||||||||||||||||||||||
for Loss of | ||||||||||||||||||||||||
Salary/Fees | Bonus | Benefits1 | Allowance2&5 | Office | Total | |||||||||||||||||||
£000 | £000 | £000 | £000 | £000 | £000 | |||||||||||||||||||
Niall FitzGerald, KBE3&4 | 525 | — | 3 | — | — | 528 | ||||||||||||||||||
Lawton Fitt6 | 69 | — | — | 30 | — | 99 | ||||||||||||||||||
Sir Deryck Maughan7 | 54 | — | — | 25 | — | 79 | ||||||||||||||||||
Ken Olisa8 | 55 | — | — | 10 | — | 65 | ||||||||||||||||||
Dick Olver9 | 67 | — | — | 10 | — | 77 | ||||||||||||||||||
Tom Glocer10&12 | 888 | 1,267 | 451 | — | — | 2,606 | ||||||||||||||||||
Total emoluments of directors11 | 1,658 | 1,267 | 454 | 75 | — | 3,454 | ||||||||||||||||||
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1. | Items included under Benefits are those provided as goods and services received during the year. | |
2. | Items included under Allowances are contractual benefits, which are paid in cash rather than as goods and services during the year. | |
3. | Non-cash benefits received by Niall FitzGerald consist of chauffeur benefits of £2,661. | |
4. | Niall FitzGerald has waived his £10,000 Nominations Committee chairman fee. | |
5. | Allowances paid to Lawton Fitt, Deryck Maughan, Ken Olisa, and Dick Olver represent travel allowances to attend overseas board meetings. | |
6. | Fees paid to Lawton Fitt include £18,333 in respect of her position as Chairman of the Audit Committee. | |
7. | Fees paid to Deryck Maughan include £3,333 as a member of the Remuneration Committee. | |
8. | Fees paid to Ken Olisa include £5,000 member of the Audit Committee. | |
9. | Fees paid to Dick Olver include £5,000 in respect of his position as member of the Audit Committee, and £11,667 in respect of his position as the Senior Independent Director. Dick Olver was over-paid in error by the company in 2007 by £8,351 and the amount was repaid after year end. | |
10. | Non-cash benefits received by Tom Glocer included accommodation costs of £268,143, tax services of £109,681 (including those related to the Thomson transaction), company car and healthcare benefits totalling £36,210, long-term disability insurance of £2,100, and family travel of £34,473. | |
11. | The total aggregate emoluments for the directors for the period 1 January 2007 to 31 December 2007 were £5.9m. The total emoluments for 2006 were £5.3m. | |
12. | During the year a group company paid certain personal expenses on behalf of Tom Glocer. The amount due from Tom Glocer at 31 December 2007, which was the maximum outstanding during the year, was £1,435. No interest was charged. Tom Glocer repaid the amount as soon as he was informed that any personal expenses had been borne by the company. |
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• | to the company or to an associated company (an associated company is, in effect, a company in the same group); | ||
• | to pay a criminal fine or a regulatory penalty; | ||
• | in defending criminal proceedings in which the director is convicted; | ||
• | in defending civil proceedings brought by the company, or an associated company, in which judgment is given against the director; or | ||
• | in an unsuccessful application for relief from liability under the UK Companies Act. |
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• | link compensation with Thomson Reuters annual and long-term strategic and financial objectives; | ||
• | align executives’ interests with those of Thomson Reuters shareholders, with the ultimate goal of improving shareholder value; | ||
• | encourage executives to achieve exceptional performance and provide an opportunity for senior executives to be compensated in the top quartile of the compensation paid by competitors when superior results are achieved; | ||
• | attract, motivate and retain high-quality key employees needed to support financial, operational and strategic growth and success; | ||
• | provide flexibility to recognize and reward an individual executive’s performance, responsibilities, experience, skills, value and contribution; and | ||
• | structure the compensation program to be regarded positively by shareholders, employees, the financial community and the public in general. |
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• | a base salary; | ||
• | a performance-based annual incentive bonus, which will usually be paid in cash; | ||
• | long-term incentive bonus awards, including periodic grants (generally annual) of long-term incentives, such as stock options and/or RSUs, which may be subject to performance-based and/or time-based vesting requirements; | ||
• | retirement and health and welfare-related benefits; and | ||
• | in some instances, perquisites and other personal benefits. |
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• | 45% based on revenue growth; | ||
• | 45% based on growth of operating profit before amortization; and | ||
• | 10% based on free cash flow growth. |
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Thomson common shares | Aggregate of Thomson Reuters | |||||||||||||||
reserved for | Corporation common shares and | |||||||||||||||
issuance as at | Thomson Reuters PLC ordinary shares | |||||||||||||||
April 17, 2008 | reserved for issuance as at April 17, 2008 | |||||||||||||||
% of | % of | |||||||||||||||
Plan | Number | Total1 | Number | Total2 | ||||||||||||
Stock incentive plan | 40,000,000 | 6.3 | 50,000,000 | 6.0 | ||||||||||||
Employee stock purchase plans | ||||||||||||||||
US | 6,000,000 | 0.9 | 8,000,000 | 1.0 | ||||||||||||
Global | 2,000,000 | 0.3 | 6,000,000 | 0.7 | ||||||||||||
Deferred compensation plan | 6,000,000 | 0.9 | 7,000,000 | 0.8 | ||||||||||||
Total | 54,000,000 | 8.4 | 71,000,000 | 8.5 |
Notes: | ||
1. | Based on 640,617,002 Thomson common shares outstanding as at April 15, 2008. | |
2. | Based on the aggregate number of (i) 640,617,002 Thomson common shares outstanding as at April 15, 2008; and (ii) 194,107,278 Thomson Reuters PLC ordinary shares issued to Reuters shareholders on completion of the Transaction. |
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• | The maximum number of shares that may be issued under the stock incentive plan is 50,000,000 (provided that not more than 5,000,000 shares may be issued under grants other than stock options, SARs or RSUs). Shares may consist, in whole or in part, of Thomson Reuters Corporation common shares or Thomson Reuters PLC ordinary shares issued from treasury or Thomson Reuters Corporation common shares or Thomson Reuters PLC ordinary shares purchased on the open market or any combination thereof. | ||
• | The maximum number of shares that may be issued under plan awards held by any one person under the stock incentive plan must not exceed 5% of the aggregate number of outstanding Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares determined on a non-diluted basis. The maximum number of shares for which plan awards may be granted and which may be otherwise awarded under the stock incentive plan to any individual during any one year period is 2,500,000. | ||
• | The maximum number of shares which may be issued under plan awards held by a participant granted under the stock incentive plan and under any other share compensation arrangement of Thomson Reuters (i) to all “insiders” may not exceed 10% of the aggregate number of outstanding Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares at such time determined on a non-diluted basis, and (ii) to all “insiders” and such insiders’ “associates” during any one year period may not exceed 5% of the aggregate number of outstanding Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares, at such time determined on a non-diluted basis. | ||
• | The maximum number of shares that may be issued through ISOs under the stock incentive plan will be 5,000,000. Shares subject to awards which are cancelled, expired, forfeited or terminated without having been exercised shall be available for new awards under the stock incentive plan. |
• | increases the maximum number of shares that can be issued under the stock incentive plan, including an increase to a fixed number of such shares or a change from a fixed number of such shares to a fixed maximum percentage; | ||
• | increases the maximum number of shares which may be issued under the awards held by a participant; | ||
• | reduces the exercise price of an award (including a cancellation and re-grant of an award, constituting a reduction of the exercise price of such award), except in connection with maintaining the value of an award in connection with a change in the number of outstanding Thomson Reuters Corporation common shares and/or Thomson Reuters PLC ordinary shares, by reason of a stock dividend or split, recapitalization, reorganization, merger, amalgamation, consolidation, combination or exchange of shares or other corporate change affecting such shares; | ||
• | extends the term of an award beyond its original expiry date, except where the expiry date would have occurred in a blackout period; |
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• | changes the provisions relating to the transferability of an award, other than for a transfer by will or the laws of descent and distribution, a transfer by a grantee to an entity which is controlled by the grantee or a transfer to a former spouse or domestic partner in connection with a legal obligation or settlement; | ||
• | changes the provisions relating to adjustments in the number or kind of shares or securities reserved for issuance or subject to outstanding awards or the exercise price, in the event of any change in the number of outstanding Thomson Reuters Corporation common shares and/or Thomson Reuters PLC ordinary shares, by reason of a stock dividend or split, recapitalization, reorganization, merger, amalgamation, consolidation, combination or exchange of shares or other corporate change affecting such shares; | ||
• | extends eligibility to participate in the stock incentive plan to a non-employee director; | ||
• | changes the rights attaching to the Thomson Reuters Corporation common shares and/or Thomson Reuters PLC ordinary shares; or | ||
• | is required to be approved by shareholders under applicable laws, regulations or stock exchange rules. |
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2007 | 2007 | |||||||
Salary | Bonus | |||||||
£000’s | £000’s | |||||||
Tom Glocer | 888 | 1,267 | ||||||
David Grigson | 482 | 579 | ||||||
Devin Wenig | 448 | 532 |
1 | Trading profit is calculated by excluding the following from operating profit from continuing operations: restructuring charges associated with acquisitions, Transaction-related costs, impairments and amortization of intangibles acquired via business combinations, investment income, profits from disposals of subsidiaries and fair value movements. Trading margin is trading profit expressed as a percentage of revenue. | |
2 | Free cash flow measures cash flows from continuing operations, other than those which are either discretionary in nature or unrelated to ongoing recurring operating activities such as special contributions toward funding defined pension deficits, Transaction-related costs, acquisitions and dispositions and dividends paid out by Reuters. |
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• | minimum 6% a year growth in adjusted EPS4 will be required for 50% of options to vest; | ||
• | 9% a year growth will be required for 100% of options to vest; | ||
• | between 6% and 9% growth options will vest on a proportionate basis. |
3 | Adjusted profit before tax is calculated as profit before tax from continuing operations before restructuring charges associated with acquisition Transaction-related costs, restructuring charges associated with acquisitions, impairments and amortization of business combination intangibles, investment income, profit on disposals and fair value movements. | |
4 | Adjusted EPS is calculated as basic EPS from continuing operations before impairments and amortization of intangibles acquired via business combinations, Transaction-related costs, investment income, fair value movements, disposal profit/losses and related tax effects. |
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• | One of the directors (Tom Glocer) is not independent because he is the Chief Executive Officer of Thomson Reuters. | ||
• | Four of the directors (David Thomson, W. Geoffrey Beattie, Peter J. Thomson and John A. Tory) are not independent because they are directors and current or former executive officers of Woodbridge, the controlling shareholder of Thomson Reuters. None of these individuals are members of Thomson Reuters executive management team. | ||
• | The remaining 10 directors are independent. |
• | Mr. Denning is a director of Hewitt Associates Inc. In February 2005, Thomson entered into an agreement with Hewitt Associates Inc. to outsource certain human resources administrative functions in order to improve operating and cost efficiencies. When Thomson initially entered into the agreement, it expected to pay Hewitt an aggregate of $115 million over a five-year period. This agreement was subsequently renegotiated and extended in September 2006. Under the new terms, Thomson expects to pay Hewitt an aggregate of $165 million over a 10-year period. In 2007, Thomson paid Hewitt $11 million for its services. Mr. Denning did not participate in negotiations related to the agreement and has refrained from deliberating and voting on any matters relating to Hewitt Associates Inc. by Thomson’s Human Resources Committee and board of directors. | ||
• | Mr. Thompson is the non-executive independent Chairman of the board of The Toronto-Dominion Bank. In the normal course of business, Thomson has a banking relationship with The Toronto-Dominion Bank and one of the bank’s affiliates has served as a dealer for Thomson’s recent offerings of debt securities in the United States. |
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Human | ||||||||||||
Audit | Corporate Governance | Resources | ||||||||||
Director | Committee | Committee | Committee | |||||||||
David Thomson | ||||||||||||
W. Geoffrey Beattie | • | • | ||||||||||
Niall FitzGerald, KBE | Chair | • | ||||||||||
Tom Glocer | ||||||||||||
Mary Cirillo | • | • | ||||||||||
Steven A. Denning | Chair | |||||||||||
Lawton Fitt | • | |||||||||||
Roger L. Martin | • | |||||||||||
Sir Deryck Maughan | • | |||||||||||
Ken Olisa | • | |||||||||||
Richard L. Olver | • | |||||||||||
Vance K. Opperman | Chair | |||||||||||
John M. Thompson | • | • | ||||||||||
Peter J. Thomson | ||||||||||||
John A. Tory | • |
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• | corporate governance, including the effectiveness of the Thomson Reuters board; | ||
• | appointment of the Chief Executive Officer and other members of senior management and related succession planning; | ||
• | development of the long-term business strategy of Thomson Reuters and assessment of its implementation; and | ||
• | capital strategy. |
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1 | None of these parties is the beneficial owner of 5% or more of Thomson Reuters. |
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Number of | Percentage of | Number of | Number of | Number of | ||||||||||||||||
shares held on | issued share | shares held on | shares held on | shares held on | ||||||||||||||||
March 17, 2008 | capital | March 9, 2007 | March 7, 2006 | March 2, 2005 | ||||||||||||||||
Schroders Plc | 62,544,396 | 5.05 | 99,602,990 | — | — | |||||||||||||||
ValueAct Capital Master Fund L.P. | 48,243,934 | 3.90 | 83,551,212 | — | — | |||||||||||||||
Fidelity International Limited | — | — | 82,177,979 | 150,753,687 | 130,364,252 | |||||||||||||||
AMVESCAP plc | 62,194,192 | 5.02 | 62,194,192 | — | — | |||||||||||||||
BlackRock Inc. | 48,978,642 | 3.95 | 48,978,642 | 48,978,642 | 48,978,642 | |||||||||||||||
Legal & General Investment Management | 51,519,332 | 4.16 | 44,901,479 | 55,230,590 | 58,006,887 | |||||||||||||||
Barclays PLC | 40,069,073 | 3.24 | 40,069,073 | — | 53,902,608 | |||||||||||||||
Capital Group of Companies, Inc. | — | — | 39,399,900 | 42,135,514 | — | |||||||||||||||
Credit Suisse | 136,431,306 | 11.01 | — | — | — | |||||||||||||||
Deutsche Bank AG | 64,268,832 | 5.19 | — | — | — |
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TSX | NYSE | |||||||||||||||
Canadian dollars per share | US dollars per share | |||||||||||||||
High | Low | High | Low | |||||||||||||
Annual market prices | ||||||||||||||||
2003 | 47.31 | 36.85 | 36.50 | 25.00 | ||||||||||||
2004 | 47.99 | 39.86 | 37.29 | 29.84 | ||||||||||||
2005 | 45.50 | 38.80 | 38.55 | 31.09 | ||||||||||||
2006 | 49.54 | 39.50 | 43.41 | 34.01 | ||||||||||||
2007 | 51.95 | 36.44 | 47.26 | 36.93 | ||||||||||||
Quarterly market prices | ||||||||||||||||
2006 | ||||||||||||||||
First quarter | 44.48 | 39.50 | 38.96 | 34.01 | ||||||||||||
Second quarter | 46.50 | 42.64 | 42.24 | 35.88 | ||||||||||||
Third quarter | 45.80 | 42.40 | 41.02 | 37.66 | ||||||||||||
Fourth quarter | 49.54 | 43.65 | 43.41 | 38.42 | ||||||||||||
Quarterly market prices | ||||||||||||||||
2007 | ||||||||||||||||
First quarter | 51.95 | 46.30 | 44.19 | 39.46 | ||||||||||||
Second quarter | 50.00 | 43.17 | 44.93 | 39.75 | ||||||||||||
Third quarter | 46.19 | 41.00 | 44.36 | 38.27 | ||||||||||||
Fourth quarter | 44.69 | 36.44 | 47.26 | 36.93 | ||||||||||||
Monthly market prices | ||||||||||||||||
2007 | ||||||||||||||||
October | 44.69 | 41.63 | 47.26 | 42.11 | ||||||||||||
November | 44.16 | 36.44 | 47.00 | 36.93 | ||||||||||||
December | 40.83 | 37.49 | 41.25 | 37.01 | ||||||||||||
Monthly market prices | ||||||||||||||||
2008 | ||||||||||||||||
January | 40.70 | 32.30 | 41.16 | 32.37 | ||||||||||||
February | 36.79 | 32.60 | 36.82 | 33.21 | ||||||||||||
March | 38.80 | 31.67 | 39.05 | 31.96 | ||||||||||||
April 1 to April 16 | 38.18 | 34.55 | 38.12 | 33.69 |
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The London Stock | ||||||||||||||||
exchange | Nasdaq | |||||||||||||||
pounds per share | US dollars per ADS | |||||||||||||||
High | Low | High | Low | |||||||||||||
Annual market prices | ||||||||||||||||
2003 | 2.68 | 0.96 | 27.09 | 9.59 | ||||||||||||
2004 | 4.29 | 2.41 | 49.15 | 25.72 | ||||||||||||
2005 | 4.31 | 3.52 | 49.35 | 37.33 | ||||||||||||
2006 | 4.75 | 3.49 | 54.25 | 38.51 | ||||||||||||
2007 | 6.69 | 4.12 | 83.70 | 48.18 | ||||||||||||
Quarterly market prices | ||||||||||||||||
2006 | ||||||||||||||||
First quarter | 4.61 | 3.80 | 48.44 | 39.67 | ||||||||||||
Second quarter | 4.10 | 3.54 | 45.71 | 38.67 | ||||||||||||
Third quarter | 4.43 | 3.49 | 50.06 | 38.51 | ||||||||||||
Fourth quarter | 4.75 | 4.31 | 54.25 | 48.20 | ||||||||||||
Quarterly market prices | ||||||||||||||||
2007 | ||||||||||||||||
First quarter | 4.71 | 4.12 | 55.32 | 48.18 | ||||||||||||
Second quarter | 6.59 | 4.66 | 81.03 | 55.81 | ||||||||||||
Third quarter | 6.60 | 5.71 | 79.90 | 71.33 | ||||||||||||
Fourth quarter | 6.69 | 5.74 | 83.70 | 70.87 |
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The London Stock | ||||||||||||||||
exchange | Nasdaq | |||||||||||||||
pounds per share | US dollars per ADS | |||||||||||||||
High | Low | High | Low | |||||||||||||
Monthly market prices | ||||||||||||||||
2007 | ||||||||||||||||
October | 6.69 | 6.31 | 83.40 | 78.25 | ||||||||||||
November | 6.65 | 5.74 | 83.70 | 71.25 | ||||||||||||
December | 6.52 | 5.80 | 76.87 | 70.87 | ||||||||||||
Monthly market prices | ||||||||||||||||
2008 | ||||||||||||||||
January | 6.49 | 5.35 | 75.80 | 66.64 | ||||||||||||
February | 6.22 | 5.84 | 73.49 | 69.52 | ||||||||||||
March | 6.14 | 5.68 | 75.00 | 68.76 | ||||||||||||
April 1 to April 16 | 6.31 | 5.80 | 74.74 | 69.68 |
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• | to enter into, operate and carry into effect various agreements relating to the Transaction with Thomson Reuters Corporation; and | ||
• | to carry on business as a general commercial company and to carry on any trade or business whatsoever. |
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• | 399,950,000 ordinary shares of £10 each; | ||
• | one Thomson Reuters PLC Special Voting Share of £500,000; and | ||
• | one Thomson Reuters PLC Reuters Founders Share of £1. |
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• | in relation to a resolution of Thomson Reuters PLC to approve a Joint Electorate Action, the rights: |
- | to cast such number of votes in favor of such resolution as were cast in favor of the Equivalent Resolution by holders of Thomson Reuters Corporation common shares at the parallel shareholder meeting; | ||
- | to cast such number of votes against such resolution as were cast against the Equivalent Resolution by holders of Thomson Reuters Corporation common shares at the parallel shareholder meeting; | ||
- | to withhold such number of votes from such resolution as were withheld from the Equivalent Resolution by holders of Thomson Reuters Corporation common shares at the parallel shareholder meeting; and | ||
- | to abstain from voting such number of votes in respect of such resolution as were recorded as abstentions in respect of the Equivalent Resolution by holders of Thomson Reuters Corporation common shares at the parallel shareholder meeting; | ||
in each case divided by the Equalization Ratio in effect at the time such rights are exercised and rounded up to the nearest whole number, and provided that, for greater certainty, if the holder of the Thomson Reuters PLC Special Voting Share exercises its voting rights in relation to any such resolution, it shall be required to exercise all, but not less than all, of such voting rights; |
• | in relation to a resolution of Thomson Reuters PLC to approve a Class Rights Action: |
- | if the Equivalent Resolution was approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-laws and applicable laws) of the holders of Thomson Reuters Corporation common shares at the parallel shareholder meeting, no right to cast any vote; and |
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- | if the Equivalent Resolution was not approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-laws and applicable laws) of the holders of Thomson Reuters Corporation common shares at the parallel shareholder meeting, the right to cast such number of votes against such resolution as would be sufficient to defeat it; |
• | in relation to any Procedural Resolution, no right to cast any vote; and | ||
• | in relation to any resolution pertaining to any matter on which the holder of the Thomson Reuters PLC Special Voting Share is required by applicable laws to vote separately as a class, the right to cast one vote. |
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• | on presentation to the Thomson Reuters PLC board of directors of a notice or instrument of transfer purporting to require or demand registration or acknowledgement of the transfer of the Thomson Reuters PLC Special Voting Share by the Thomson Reuters PLC Special Voting Share Trustee out of the Thomson Reuters PLC Special Voting Share Trust to (or at the direction of) the Beneficiaries (as defined in the Thomson Reuters PLC Special Voting Share Trust Deed) of the Thomson Reuters PLC Special Voting Share Trust; or | ||
• | on the Thomson Reuters PLC Special Voting Share Trust being terminated in respect of the Thomson Reuters PLC Special Voting Share or the Thomson Reuters PLC Special Voting Share becoming held by the Thomson Reuters PLC Special Voting Share Trustee on terms other than as set out in the Thomson Reuters PLC Special Voting Share Trust Deed (as it may be amended from time to time in accordance with its terms). |
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• | any special resolution the effect of which, if duly passed, would be to amend, remove or alter the effect of (which shall include the ratification of any breach of) any of the Reuters Founders Share Provisions (as defined in the Thomson Reuters PLC Articles); | ||
• | any resolution to wind up Thomson Reuters PLC voluntarily or pursuant to paragraph (a) of section 122 of the Insolvency Act 1986; | ||
• | any resolution for, or approving or sanctioning, any reconstruction of Thomson Reuters PLC (other than internal reorganizations involving Thomson Reuters PLC and its subsidiaries); | ||
• | any resolution the effect of which, if duly passed, would be to attach or to authorize the attachment to any share (whether issued or unissued) of any voting rights which are not identical in all respects with those attached to the Thomson Reuters PLC ordinary shares; and | ||
• | any resolution to amend any such resolution as is described in any of the preceding sub-paragraphs of this paragraph. |
• | in relation to a resolution of Thomson Reuters PLC to approve a Joint Electorate Action, the rights: |
- | to cast such number of votes in favor of and against such resolution, to withhold such number of votes from such resolution and to abstain from voting such number of votes in respect of such resolution as were cast in favor of and against such resolution, withheld therefrom or recorded as abstentions in respect thereof, respectively, by the holder of the Thomson Reuters PLC Special Voting Share; |
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- | to cast such number of votes in favor of such resolution as were cast in favor of such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | ||
- | to cast such number of votes against such resolution as were cast against such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | ||
- | to withhold such number of votes from such resolution as were withheld from such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; and | ||
- | to abstain from voting such number of votes in respect of such resolution as were recorded as abstentions in respect of such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; |
in each case multiplied by one hundred, and provided that, for greater certainty, if the holder of the Thomson Reuters PLC Reuters Founders Share exercises its voting rights in relation to any such resolution, it shall be required to exercise all, but not less than all, of such voting rights; |
• | in relation to a resolution of Thomson Reuters PLC to approve a Class Rights Action, |
- | if the Equivalent Resolution is approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-Laws and applicable laws) of the holders of Thomson Reuters Corporation common shares at the parallel shareholder meeting, the rights: |
o | to cast such number of votes in favor of such resolution as were cast in favor of such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | ||
o | to cast such number of votes against such resolution as were cast against such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | ||
o | to withhold such number of votes from such resolution as were withheld from such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; and | ||
o | to abstain from voting such number of votes in respect of such resolution as were recorded as abstentions in respect of such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; |
in each case multiplied by one hundred, and provided that, for greater certainty, if the holder of the Thomson Reuters PLC Reuters Founders Share exercises its voting rights in relation to any such resolution, it shall be required to exercise all, but not less than all, of such voting rights; and |
- | if the Equivalent Resolution is not approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-laws and applicable laws) of the holders of Thomson Reuters Corporation common shares at the parallel shareholder meeting, no right to cast any vote; |
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• | in relation to a Procedural Resolution, the rights: |
- | to cast such number of votes in favor of such Procedural Resolution as were cast in favor of such Procedural Resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | ||
- | to cast such number of votes against such Procedural Resolution as were cast against such Procedural Resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | ||
- | to withhold such number of votes from such Procedural Resolution as were withheld from such Procedural Resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; and | ||
- | to abstain from voting such number of votes in respect of such Procedural Resolution as were recorded as abstentions in respect of such Procedural Resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; |
• | in respect of any resolution pertaining to any matter on which the holder of the Thomson Reuters PLC Reuters Founders Share is required by applicable laws or otherwise entitled to vote separately as a class, the right to cast one vote. |
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• | in relation to a resolution of Thomson Reuters PLC to approve a Joint Electorate Action, the right: |
- | if, at the time such votes are cast, there are no Approved Persons or Approved Persons are interested in such number of outstanding Thomson Reuters PLC ordinary shares and/or Thomson Reuters Corporation common shares to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast not more than 35% of all votes entitled to be cast on that Joint Electorate Action by all shareholders of Thomson Reuters PLC and Thomson Reuters Corporation (excluding the holder of the Thomson Reuters PLC Special Voting Share and the holder of the Thomson Reuters Corporation Special Voting Share), to cast such number of votes as would be sufficient to approve or defeat such resolution; | ||
- | if, at the time such votes are cast, Approved Persons are interested in such number of outstanding Thomson Reuters PLC ordinary shares and/or Thomson Reuters Corporation common shares to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast more than 35% but less than the requisite majority of all votes entitled to be cast on that Joint Electorate Action by all shareholders of Thomson Reuters PLC and Thomson Reuters Corporation (excluding the holder of the Thomson Reuters PLC Special Voting Share and the holder of the Thomson Reuters Corporation Special Voting Share), to cast the greater of: |
o | such number of votes as is equal to the sum of (x) the number of votes attached to all voting shares in which Acquiring Persons are interested and (y) one vote; and |
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o | such number of votes as will cause the votes attached to all voting shares in which Approved Persons are interested, and which are cast in accordance with the Relevant Terms of Approval, when combined with the votes entitled to be cast by the holder of the Thomson Reuters PLC Reuters Founders Share, to constitute the requisite majority of all votes entitled to be cast on such resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share); and |
- | if, at the time such votes are cast, Approved Persons are interested in, and cast in accordance with the Relevant Terms of Approval the votes attached to, such number of outstanding Thomson Reuters PLC ordinary shares and/or Thomson Reuters Corporation common shares to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast at least the requisite majority of all votes entitled to be cast on that Joint Electorate Action by all shareholders of Thomson Reuters PLC and Thomson Reuters Corporation (excluding the holder of the Thomson Reuters PLC Special Voting Share and the holder of the Thomson Reuters Corporation Special Voting Share), no right to cast any vote; |
• | in relation to a resolution to approve a Class Rights Action: |
- | if the Equivalent Resolution is approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-laws and applicable laws) of the holders of Thomson Reuters Corporation common shares at the parallel shareholder meeting, the rights: |
o | if, at the time such votes are cast, there are no Approved Persons or Approved Persons are interested in such number of outstanding Thomson Reuters PLC ordinary shares to which are attached, in the aggregate, the right to cast not more than 35% of all votes entitled to be cast on such resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), to cast such number of votes as would be sufficient to approve or defeat such resolution; | ||
o | if, at the time such votes are cast, Approved Persons are interested in such number of outstanding Thomson Reuters PLC ordinary shares to which are attached, in the aggregate, the right to cast more than 35% but less than the requisite majority of all votes entitled to be cast on such resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), to cast the greater of: | ||
o | such number of votes as is equal to the sum of (x) the number of votes attached to all voting shares in which Acquiring Persons are interested and (y) one vote; and | ||
o | such number of votes as will cause the votes attached to all voting shares in which Approved Persons are interested, and which are cast in accordance with the Relevant Terms of Approval, when combined with the votes entitled to be cast by the holder of the Thomson Reuters PLC Reuters Founders Share, to constitute the requisite majority of all votes entitled to be cast on such resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share); | ||
o | if, at the time such votes are cast, Approved Persons are interested in, and cast in accordance with the Relevant Terms of Approval the votes attached to, such number of outstanding Thomson Reuters PLC ordinary shares to which are attached, in the aggregate, the right to cast at least the requisite majority of all votes entitled to be |
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cast on such resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), no right to cast any vote; |
- | if the Equivalent Resolution is not approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters By-Laws and applicable laws) of the holders of Thomson Reuters Corporation common shares at the parallel shareholder meeting, no right to cast any vote; |
• | in relation to a Procedural Resolution, the rights: |
- | if, at the time such votes are cast, there are no Approved Persons or Approved Persons are interested in such number of outstanding Thomson Reuters PLC ordinary shares to which are attached, in the aggregate, the right to cast not more than 35% of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), to cast such number of votes as would be sufficient to approve or defeat such Procedural Resolution; | ||
- | if, at the time such votes are cast, Approved Persons are interested in such number of outstanding Thomson Reuters PLC ordinary shares to which are attached, in the aggregate, the right to cast more than 35% but less than the requisite majority of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), to cast the greater of: |
o | such number of votes as is equal to the sum of (x) the number of votes attached to all voting shares in which Acquiring Persons are interested and (y) one vote; and | ||
o | such number of votes as will cause the votes attached to all voting shares in which Approved Persons are interested, and which are cast in accordance with the Relevant Terms of Approval, when combined with the votes entitled to be cast by the holder of the Thomson Reuters PLC Reuters Founders Share, to constitute the requisite majority of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share); and |
- | if, at the time such votes are cast, Approved Persons are interested in, and cast in accordance with the Relevant Terms of Approval the votes attached to, such number of outstanding Thomson Reuters PLC ordinary shares to which are attached, in the aggregate, the right to cast at least the requisite majority of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), no right to cast any vote; and |
• | at any meeting of the holder of the Thomson Reuters PLC Reuters Founders Share at which the holder of the Thomson Reuters PLC Reuters Founders Share is entitled to vote separately as a class, the right to cast one vote. |
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• | consolidate and divide all or any of its capital (other than the Thomson Reuters PLC Reuters Founders Share) into shares of larger amounts than its existing shares; | ||
• | cancel any shares (other than the Thomson Reuters PLC Reuters Founders Share) which, at the date of the passing of the resolution, have not been taken, or agreed to be taken, by any person and diminish the amount of its capital by the amount of the shares so cancelled; and | ||
• | sub-divide its shares, or any of them (other than the Thomson Reuters PLC Reuters Founders Share), into shares of smaller amounts than is fixed by the Thomson Reuters PLC Memorandum (subject nevertheless to the provisions of the applicable laws), and so that the resolution whereby any share is sub-divided may determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may, as compared with the others, have any such preferred, deferred or other special rights, or be subject to any such restrictions, as Thomson Reuters PLC has power to attach to unissued or new shares. |
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• | in connection with a rights issue; and | ||
• | otherwise than in connection with a rights issue, up to an aggregate nominal amount equal to the section 89 amount; |
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• | in respect of the shares in relation to which the default occurred the shareholder shall not be entitled to attend or vote (either in person or by proxy) at a general meeting or at a separate general meeting of the holders of a class of shares or on a poll; and | ||
• | where the default shares represent at least 0.25% of the class of shares concerned (excluding any shares of that class held as treasury shares), then the direction notice may additionally direct that any of the following shall be effected: |
- | in respect of the default shares any dividend or other money which would otherwise be payable on such shares shall be retained by Thomson Reuters PLC without any liability to pay interest thereon when such money is finally paid to the shareholder and any shares issued in lieu of dividend be withheld by Thomson Reuters PLC; | ||
- | no transfer of any default shares which are held in certificated form shall be registered unless the transfer is an approved transfer or |
o | the shareholder is not himself in default as regards supplying the information requested; and | ||
o | the transfer is of part only of the shareholder’s holding and when presented for registration is accompanied by a certificate from the shareholder in a form satisfactory to the Thomson Reuters PLC board of directors to the effect that after due and careful enquiry the shareholder is satisfied that no person in default as regards supplying such information is interested in any of the shares the subject of the transfer; and |
- | if the Thomson Reuters PLC board of directors so determines, Thomson Reuters PLC shall be entitled to require the holder of any such default shares which are held in uncertificated form, by notice in writing to the holder concerned, to change his holding of uncertificated default shares to certificated form within such period as may be specified in the notice and require such holder to continue to hold such default shares in certificated form for so long as the default subsists. The Thomson Reuters PLC board of directors may also appoint any person to take such other steps, by instruction by means of a Relevant System or otherwise, in the name of the holder of such default shares, to effect conversion of such shares to certificated form and such steps shall be as effective as if they had been taken by the registered holder of the uncertificated default shares. |
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• | in the case of an annual general meeting by all the shareholders entitled to attend and vote thereat which for this purpose shall include the holder of the Thomson Reuters PLC Reuters Founders Share; and | ||
• | in the case of any other general meeting by a majority in number of the shareholders having a right to attend and vote thereat, being a majority together holding not less than 95% in nominal value of the shares giving that right, and by the holder of the Thomson Reuters PLC Reuters Founders Share. | ||
• | A Thomson Reuters PLC director is entitled to attend and speak at a general meeting and at a separate general meeting of the holders of a class of shares or debentures whether or not he is a shareholder. | ||
• | A quorum for the transaction of business at a meeting of Thomson Reuters PLC shareholders shall be either two qualifying persons entitled to vote (unless (i) each is a qualifying person only because he is authorized to act as the representative of a corporation in relation to the meeting, and they are representatives of the same corporation; or (ii) each is a qualifying person only because he is appointed as proxy of a shareholder in relation to the meeting, and they are proxies of the same shareholder) or the holder of the Thomson Reuters PLC Reuters Founders Share provided that: | ||
• | at any meeting the business of which includes the consideration of any resolution on which the holder of the Thomson Reuters PLC Special Voting Share is entitled to vote, a quorum shall not be present for any purpose unless the holder of the Thomson Reuters PLC Special Voting Share is present in person or by proxy or is represented by a duly authorized representative; and | ||
• | at any meeting the business of which includes the consideration of any resolution on which the holder of the Thomson Reuters PLC Reuters Founders Share is entitled to vote, a quorum shall not be present for any purpose unless the holder of the Thomson Reuters PLC Reuters Founders Share is present in person or by proxy or is represented by a duly authorized representative. |
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• | if he shall become prohibited by law from acting as a Thomson Reuters PLC director; |
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• | if he shall resign by writing under his hand left at the Office (as defined in the Thomson Reuters PLC Articles) or if he shall in writing offer to resign and the Thomson Reuters PLC board of directors shall resolve to accept such offer; | ||
• | if he shall have a receiving order made against him or shall compound with his creditors generally or shall apply to the court for an interim order under section 253 of the Insolvency Act 1986 in connection with a voluntary arrangement under that Act; and/or | ||
• | if in England and Wales or elsewhere an order shall be made by any court claiming jurisdiction in that behalf on the ground (however formulated) of mental disorder for his detention or for the appointment of a guardian or for the appointment of a receiver or other person (by whatever name called) to exercise powers with respect to his property or affairs. |
• | where at such meeting it is expressly resolved not to fill such office or a resolution for the re-election of such Thomson Reuters PLC director is put to the meeting and lost; | ||
• | where such Thomson Reuters PLC director has given notice in writing to Thomson Reuters PLC that he is unwilling to be re-elected; or | ||
• | where the default is due to the moving of a resolution in contravention of the next following paragraph, |
• | Thomson Reuters PLC may by ordinary resolution appoint any person to be a Thomson Reuters PLC director either to fill a casual vacancy or as an additional Thomson Reuters PLC director; and | ||
• | without prejudice to the above paragraph the Thomson Reuters PLC board of directors may at any time appoint any person to be a Thomson Reuters PLC director either to fill a casual vacancy or as an additional Thomson Reuters PLC director. |
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• | the giving of any guarantee, security or indemnity (including loans made in connection therewith) to him in respect of money lent or obligations incurred by him or any other person at the request of or for the benefit of Thomson Reuters PLC or any of its subsidiary undertakings; | ||
• | the giving of any guarantee, security or indemnity to a third party in respect of a debt or obligation of Thomson Reuters PLC or any of its subsidiary undertakings for which he himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security; | ||
• | any proposal concerning an offer of shares or debentures or other securities of or by Thomson Reuters PLC or any of its subsidiary undertakings for subscription or purchase in which offer he is or may be entitled to participate as a holder of securities or is to be interested as a participant in the underwriting or sub-underwriting thereof; | ||
• | any proposal concerning any other company in which he is interested, directly or indirectly and whether as an officer or shareholder or otherwise howsoever, provided that he does not to his knowledge hold an interest in shares (as that term is used in sections 820 to 824 of the UK Companies Act 2006) representing 1% or more of the issued shares of any class of such company (excluding any shares of that class held as treasury shares) (or of any third company through which his interest is derived) or of the voting rights available to members of the relevant company (any such interest being deemed for the purpose of the Thomson Reuters PLC Articles to be a material interest in all circumstances); | ||
• | any proposal concerning the adoption, modification or operation of any pension, superannuation or similar scheme or retirement, death or disability benefits scheme or employees’ share scheme which has been approved by HMRC or is conditional upon such approval or does not award him any privilege or benefit not awarded to the employees to whom such scheme relates; and/or |
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• | any proposal concerning any insurance which Thomson Reuters PLC is empowered to purchase and/or maintain for or for the benefit of any Thomson Reuters PLC directors or for persons who include Thomson Reuters PLC directors. |
• | during the period of twelve years prior to the date of the publication of the advertisements referred to below (or, if published on different dates, the first thereof) no communication has been received by Thomson Reuters PLC from the shareholder or the person entitled by transmission and no cheque or warrant sent by Thomson Reuters PLC through the post in a pre-paid letter addressed to the shareholder or to the person entitled by transmission to the shares at his postal address on the Register or otherwise the last known postal address given by the shareholder or the person entitled by transmission to which cheques and warrants are to be sent has been cashed or no payment made by Thomson Reuters PLC by any other means permitted by the Thomson Reuters PLC Articles has been claimed or accepted and at least three dividends in respect of the shares in question have become payable and no dividend in respect of those shares has been claimed; |
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• | Thomson Reuters PLC shall on expiry of the said period of twelve years have inserted advertisements in both a national daily newspaper and in a newspaper circulating in the area in which the last known postal address of the shareholder or the postal address at which service of notices may be effected in the manner authorized by the Thomson Reuters PLC Articles is located giving notice of its intention to sell the said shares; and | ||
• | during the said period of twelve years and the period of three months following the publication of the said advertisements Thomson Reuters PLC shall have received no communication from such shareholder or person. |
• | co-ordinate with the Thomson Reuters Corporation board to agree to the amount of any Equivalent Distributions; | ||
• | co-ordinate with the Thomson Reuters Corporation board to agree to the basis of exchange rates on which the amounts of any Equivalent Distributions shall be calculated; | ||
• | co-ordinate with the Thomson Reuters Corporation board to ensure that the record dates for receipt of Equivalent Distributions are as close as is practicable to the record dates for cash distributions to the holders of Thomson Reuters Corporation common shares; and | ||
• | generally co-ordinate with the Thomson Reuters Corporation board regarding the timing of all other aspects of the payment or making of any Equivalent Distributions. |
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• | Thomson Reuters PLC shall have an irrevocable authority to redeem the Thomson Reuters PLC Special Voting Share at a sum equal to the amount for the time being paid up on the Thomson Reuters PLC Special Voting Share together with all unpaid dividends on the Thomson Reuters PLC Special Voting Share, whether or not such dividends have been earned or declared, calculated down to the redemption date at any time specified by the Thomson Reuters PLC board of directors provided always that if Thomson Reuters PLC shall at any time be unable in compliance with applicable laws to redeem the Thomson Reuters PLC Special Voting Share on the date specified by the Thomson Reuters PLC board of directors, then Thomson Reuters PLC shall redeem the Thomson Reuters PLC Special Voting Share as soon as it is able to comply with such provisions of the applicable laws; | ||
• | the Thomson Reuters PLC Entrenched Provisions and all references in the Thomson Reuters PLC Articles thereto shall be null and void and of no further force or effect; | ||
• | only in the case of Thomson Reuters PLC becoming a wholly-owned subsidiary of Thomson Reuters Corporation and, for so long as Reuters Founders Share Company is the holder of the Thomson Reuters PLC Reuters Founders Share, so long as the effect thereof is, to the satisfaction of the Reuters Trustees, substantially to preserve and not to impair the legal rights of the holder of the Thomson Reuters Corporation Reuters Founders Share in relation to the Thomson Reuters group, Thomson Reuters PLC shall have an irrevocable authority to redeem the Thomson Reuters PLC Reuters Founders Share at its nominal value at any time specified by the Thomson Reuters PLC board of directors provided always that if Thomson Reuters PLC shall at any time be unable in compliance with applicable laws to redeem the Thomson Reuters PLC Reuters Founders Share on the date specified by the Thomson Reuters PLC board of directors then Thomson Reuters PLC shall redeem the Thomson Reuters PLC Reuters Founders Share as soon as it is able to comply with such provisions of the applicable laws; | ||
• | only in the case of Thomson Reuters PLC becoming a wholly-owned subsidiary of Thomson Reuters Corporation and, for so long as Reuters Founders Share Company is the holder of the Thomson Reuters PLC Reuters Founders Share, so long as the effect thereof is, to the satisfaction of the Reuters Trustees, substantially to preserve and not to impair the legal rights of the holder of the Thomson Reuters Corporation Reuters Founders Share in relation to the Thomson Reuters group, the Thomson Reuters PLC Reuters Founders Share Provisions and all references in the Thomson Reuters PLC Articles thereto shall be null and void and of no further force or effect; and | ||
• | the Thomson Reuters PLC Articles shall be restated as amended with such incidental or consequential modifications as are necessary to give effect to the foregoing. |
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• | in relation to a resolution to approve a Joint Electorate Action, the rights: |
- | to cast such number of votes in favor of such resolution as were cast in favor of the Equivalent Resolution by holders of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson Reuters PLC shareholders; | ||
- | to cast such number of votes against such resolution as were cast against the Equivalent Resolution by holders of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson Reuters PLC shareholders; | ||
- | to withhold such number of votes from such resolution as were withheld from the Equivalent Resolution by holders of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson Reuters PLC shareholders; and | ||
- | to abstain from voting such number of votes in respect of such resolution as were recorded as abstentions in respect of the Equivalent Resolution by holders of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson Reuters PLC shareholders; |
in each case multiplied by the Equalization Ratio in effect at such time and rounded up to the nearest whole number, and provided that, if the Thomson Reuters Corporation Special Voting Share Trustee exercises its voting rights in relation to any such resolution, it will be required to exercise all, but not less than all, of such voting rights; | |||
• | in relation to a resolution to approve a Class Rights Action: |
- | if the Equivalent Resolution was approved by the requisite number of holders of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson Reuters PLC shareholders, no right to cast any vote; and | ||
- | if the Equivalent Resolution was not approved by the requisite number of holders of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson Reuters PLC shareholders, the right to cast such number of votes against such resolution as would be sufficient to defeat it; |
• | in relation to a Procedural Resolution, no right to cast any vote; and | ||
• | in relation to any resolution pertaining to any matter on which the Thomson Reuters Corporation Special Voting Share Trustee is required by applicable laws to vote separately as a class, the right to cast one vote. |
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• | in relation to a resolution to approve a Joint Electorate Action, the rights: |
- | to cast such number of votes in favor of and against such resolution, to withhold such number of votes from such resolution and to abstain from voting such number of votes in respect of such resolution as were cast in favor of and against such resolution, withheld therefrom or recorded as abstentions in respect thereof, respectively, by the Thomson Reuters Corporation Special Voting Share Trustee; |
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- | to cast such number of votes in favor of such resolution as were cast in favor of such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; | ||
- | to cast such number of votes against such resolution as were cast against such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; | ||
- | to withhold such number of votes from such resolution as were withheld from such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; and | ||
- | to abstain from voting such number of votes in respect of such resolution as were recorded as abstentions in respect of such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; |
in each case multiplied by one hundred, and provided that, for greater certainty, if Reuters Founders Share Company exercises its voting rights in relation to any such resolution, it will be required to exercise all, but not less than all, of such voting rights; | |||
• | in relation to a resolution to approve a Class Rights Action, |
- | if the Equivalent Resolution is approved by the requisite number (as determined in accordance with the Thomson Reuters PLC Articles and applicable laws) of the holders of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson Reuters PLC shareholders, the rights: |
o | to cast such number of votes in favor of such resolution as were cast in favor of such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; | ||
o | to cast such number of votes against such resolution as were cast against such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; | ||
o | to withhold such number of votes from such resolution as were withheld from such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; and | ||
o | to abstain from voting such number of votes in respect of such resolution as were recorded as abstentions in respect of such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; |
in each case multiplied by one hundred, and provided that, for greater certainty, if Reuters Founders Share Company exercises its voting rights in relation to any such resolution, it will be required to exercise all, but not less than all, of such voting rights; | |||
- | if the Equivalent Resolution is not approved by the requisite number (as determined in accordance with the Thomson Reuters PLC Articles and applicable laws) of the holders of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson Reuters PLC shareholders, no right to cast any vote; |
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• | in relation to a Procedural Resolution, the rights: |
- | to cast such number of votes in favor of such Procedural Resolution as were cast in favor of such Procedural Resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; | ||
- | to cast such number of votes against such Procedural Resolution as were cast against such Procedural Resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; | ||
- | to withhold such number of votes from such Procedural Resolution as were withheld from such Procedural Resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; and | ||
- | to abstain from voting such number of votes in respect of such Procedural Resolution as were recorded as abstentions in respect of such Procedural Resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person; |
in each case multiplied by one hundred, and provided that, for greater certainty, if Reuters Founders Share Company exercises its voting rights in relation to any such Procedural Resolution, it will be required to exercise all, but not less than all, of such voting rights; and | |||
• | in respect of any resolution pertaining to any matter on which Reuters Founders Share Company is required by applicable laws or otherwise entitled to vote separately as a class, the right to cast one vote. |
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• | in relation to a resolution to approve a Joint Electorate Action, the rights: |
- | if, at the time such votes are cast, there are no Approved Persons or Approved Persons beneficially own such number of outstanding Thomson Reuters Corporation common shares and/or Thomson Reuters PLC ordinary shares to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast not more than 35% of all votes entitled to be cast on that Joint Electorate Action by all shareholders of Thomson Reuters Corporation and Thomson Reuters PLC (excluding the Thomson Reuters Corporation Special Voting Share Trustee and the Thomson Reuters PLC Special Voting Share Trustee), to cast such number of votes as would be sufficient to approve or defeat such resolution; | ||
- | if, at the time such votes are cast, Approved Persons beneficially own such number of outstanding Thomson Reuters Corporation common shares and/or Thomson Reuters PLC ordinary shares to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast more than 35% but less than the requisite majority of all votes entitled to be cast on that Joint Electorate Action by all shareholders of Thomson Reuters Corporation and Thomson Reuters PLC (excluding the Thomson Reuters Corporation Special Voting Share Trustee and the Thomson Reuters PLC Special Voting Share Trustee), to cast the greater of: |
o | such number of votes as is equal to the sum of (x) the number of votes attached to all voting shares beneficially owned by all Acquiring Persons and (y) one vote; and | ||
o | such number of votes as will cause the votes attached to all voting shares beneficially owned, and cast in accordance with the Relevant Terms of Approval, by Approved Persons, when combined with the votes entitled to be cast by Reuters Founders Share Company, to constitute the requisite majority of all votes entitled to be cast on such resolution by all Thomson Reuters Corporation shareholders (excluding the Thomson Reuters Corporation Special Voting Share Trustee); and |
- | if, at the time such votes are cast, Approved Persons beneficially own, and cast in accordance with the Relevant Terms of Approval, the votes attached to, such number of outstanding Thomson Reuters Corporation common shares and/or Thomson Reuters PLC ordinary shares to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast at least the requisite majority of all votes entitled to be cast on that Joint Electorate Action by all shareholders of Thomson Reuters Corporation and Thomson Reuters PLC (excluding the Thomson Reuters Corporation Special Voting Share Trustee and the Thomson Reuters PLC Special Voting Share Trustee), no right to cast any vote; |
• | in relation to a resolution to approve a Class Rights Action: |
- | if the Equivalent Resolution is approved by the requisite number (as determined in accordance with the Thomson Reuters PLC Articles and applicable laws) of the holders of Thomson Reuters PLC ordinary shares at the parallel meeting of |
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Thomson Reuters PLC shareholders, the rights: |
o | if, at the time such votes are cast, there are no Approved Persons or Approved Persons beneficially own such number of outstanding Thomson Reuters Corporation common shares to which are attached, in the aggregate, the right to cast not more than 35% of all votes entitled to be cast on such resolution by all Thomson Reuters Corporation shareholders (excluding the Thomson Reuters Corporation Special Voting Share Trustee), to cast such number of votes as would be sufficient to approve or defeat such resolution; | ||
o | if, at the time such votes are cast, Approved Persons beneficially own such number of outstanding Thomson Reuters Corporation common shares to which are attached, in the aggregate, the right to cast more than 35% but less than the requisite majority of all votes entitled to be cast on such resolution by all Thomson Reuters Corporation shareholders (excluding the Thomson Reuters Corporation Special Voting Share Trustee), to cast the greater of: |
§ | such number of votes as is equal to the sum of (x) the number of votes attached to all voting shares beneficially owned by all Acquiring Persons and (y) one vote; and | ||
§ | such number of votes as will cause the votes attached to all voting shares beneficially owned, and cast in accordance with the Relevant Terms of Approval, by Approved Persons, when combined with the votes entitled to be cast by Reuters Founders Share Company, to constitute the requisite majority of all votes entitled to be cast on such resolution by all Thomson Reuters Corporation shareholders (including the Thomson Reuters Corporation Special Voting Share Trustee); and |
o | if, at the time such votes are cast, Approved Persons beneficially own, and cast in accordance with the Relevant Terms of Approval, the votes attached to, such number of outstanding Thomson Reuters Corporation common shares to which are attached, in the aggregate, the right to cast at least the requisite majority of all votes entitled to be cast on such resolution by all Thomson Reuters Corporation shareholders (excluding the Thomson Reuters Corporation Special Voting Share Trustee), no right to cast any vote; |
- | if the Equivalent Resolution is not approved by the requisite number (as determined in accordance with the Thomson Reuters PLC Articles and applicable laws) of the holders of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson Reuters PLC shareholders, no right to cast any vote; |
• | in relation to a Procedural Resolution, the rights: |
- | if, at the time such votes are cast, there are no Approved Persons or Approved Persons beneficially own such number of outstanding Thomson Reuters Corporation common shares to which are attached, in the aggregate, the right to cast not more than 35% of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters Corporation (excluding the Thomson Reuters Corporation Special Voting Share Trustee), to cast such number of votes as would be sufficient to approve or defeat such Procedural Resolution; | ||
- | if, at the time such votes are cast, Approved Persons beneficially own such number of outstanding Thomson Reuters Corporation common shares to which are attached, in the aggregate, the right to cast more than 35% but less than the requisite majority of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters Corporation |
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(excluding the Thomson Reuters Corporation Special Voting Share Trustee), to cast the greater of: |
o | such number of votes as is equal to the sum of (x) the number of votes attached to all voting shares beneficially owned by all Acquiring Persons and (y) one vote; and | ||
o | such number of votes as will cause the votes attached to all voting shares beneficially owned, and cast in accordance with the Relevant Terms of Approval, by Approved Persons, when combined with the votes entitled to be cast by Reuters Founders Share Company, to constitute the requisite majority of all votes entitled to be cast on that Procedural Resolution by all Thomson Reuters Corporation shareholders (excluding the Thomson Reuters Corporation Special Voting Share Trustee); and |
- | if, at the time such votes are cast, Approved Persons beneficially own, and cast in accordance with the Relevant Terms of Approval, the votes attached to, such number of outstanding Thomson Reuters Corporation common shares to which are attached, in the aggregate, the right to cast at least the requisite majority of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters Corporation (excluding the Thomson Reuters Corporation Special Voting Share Trustee), no right to cast any vote; and |
• | at any meeting of the holder of the Reuters Founders Share at which Reuters Founders Share Company is entitled to vote separately as a class, the right to cast one vote. |
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• | coordinates with the Thomson Reuters PLC board of directors to agree to the amount of any Equivalent Distributions; |
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• | coordinates with the Thomson Reuters PLC board of directors to agree to the basis of exchange rates on which the amounts of any Equivalent Distributions will be calculated; | ||
• | coordinates with the Thomson Reuters PLC board of directors to ensure that the record dates for receipt of Equivalent Distributions are as close in time as is practicable to record dates for cash distributions to the holders of Thomson Reuters Corporation common shares; and | ||
• | generally coordinates with the Thomson Reuters PLC board of directors regarding the timing of all other aspects of the payment or making of any Equivalent Distributions. |
• | the Equalization Share will be deemed to have been purchased for cancellation by Thomson Reuters Corporation upon its payment to the holder thereof of the sum of $1.00; | ||
• | the Special Voting Share will be deemed to have been purchased for cancellation by Thomson Reuters Corporation upon its payment to Thomson Reuters Corporation Special Voting Share Trust of the sum of $1.00; | ||
• | the Thomson Reuters Corporation Entrenched Articles and all references in the Thomson Reuters Corporation Articles thereto will be null and void and of no further force or effect; | ||
• | only in the case of Thomson Reuters Corporation becoming a wholly-owned subsidiary of Thomson Reuters PLC and so long as the effect thereof is, to the satisfaction of the Reuters Trustees, substantially to preserve and not to impair the legal rights of the holder of the Reuters Founders Share in the capital of Thomson Reuters PLC in relation to Thomson Reuters, the Reuters Founders Share will be deemed to have been purchased for cancellation by Thomson Reuters Corporation upon its payment to Reuters Founders Share Company of the sum of $1.00; | ||
• | only in the case of Thomson Reuters Corporation becoming a wholly-owned subsidiary of Thomson Reuters PLC and, for so long as Reuters Founders Share Company is the holder of the Reuters Founders Share, so long as the effect thereof is, to the satisfaction of the Reuters Trustees, substantially to preserve and not to impair the legal rights of the holder of the Reuters Founders Share in the capital of Thomson Reuters PLC in relation to Thomson Reuters, certain provisions in the Thomson Reuters Corporation Articles relating to Reuters Founders Share Company and the references in the Thomson Reuters Corporation Articles thereto will be null and void and of no further force or effect; and | ||
• | the Thomson Reuters Corporation Articles will be restated as amended with such incidental or consequential modifications as are necessary to give effect to the foregoing. |
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• | at any meeting the business of which includes the consideration of any resolution on which the Thomson Reuters Corporation Special Voting Share Trustee is entitled to vote, a quorum is not present for any purpose unless the Thomson Reuters Corporation Special Voting Share Trustee is present (through a duly authorized representative) or represented by proxy; and | ||
• | at any meeting the business of which includes the consideration of any resolution on which Reuters Founders Share Company is entitled to vote, a quorum is not present for any purpose unless Reuters Founders Share Company is present (through a duly authorized representative) or represented by proxy. |
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• | the Thomson Reuters Corporation board of directors must (unless such action is proposed for an annual meeting of Thomson Reuters Corporation shareholders) convene a special meeting of shareholders as close in time as practicable to the Thomson Reuters PLC shareholders’ meeting at which such Joint Electorate Action or Class Rights Action is to be proposed; | ||
• | the Thomson Reuters Corporation board of directors must propose for consideration at such meeting an Equivalent Resolution in respect of such Joint Electorate Action or Class Rights Action; | ||
• | the Thomson Reuters Corporation board of directors must submit such Equivalent Resolution to shareholders as an ordinary resolution unless otherwise required to be approved as a special resolution; and |
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• | Thomson Reuters Corporation will co-operate fully with Thomson Reuters PLC in preparing resolutions, information circulars or statements, explanatory memoranda or any other information or material required in connection with the proposed Joint Electorate Action or Class Rights Action. |
• | that Thomson Reuters shall at no time pass into the hands of any one interest, group or faction; | ||
• | that the integrity, independence and freedom from bias of Thomson Reuters shall at all times be fully preserved; | ||
• | that Thomson Reuters shall supply unbiased and reliable news services to newspapers, news agencies, broadcasters and other media subscribers and to businesses, governments, institutions, individuals and others with whom Thomson Reuters has or may have contracts; | ||
• | that Thomson Reuters shall pay due regard to the many interests which it serves in addition to those of the media; and | ||
• | that no effort shall be spared to expand, develop and adapt the news and other services and products of Thomson Reuters so as to maintain its leading position in the international news and information business. |
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• | Thomson Reuters Corporation, Thomson Reuters PLC and their respective subsidiaries operate as a unified group; | ||
• | the boards of directors of Thomson Reuters Corporation and Thomson Reuters PLC are comprised of the same individuals, as are the companies’ executive management; and | ||
• | the directors of Thomson Reuters Corporation and Thomson Reuters PLC, in addition to their duties to the company concerned, have regard to, and take into account in the exercise of their powers, the best interests of the other company, and of both the holders of Thomson Reuters Corporation common shares and the holders of Thomson Reuters PLC ordinary shares. |
• | is entitled to receive from Thomson Reuters PLC distributions of capital or income equivalent to those of a holder of one Thomson Reuters Corporation common share; and | ||
• | enjoys equivalent rights as to voting in relation to Joint Electorate Actions as those of a holder of one Thomson Reuters Corporation common share, |
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• | Thomson Reuters PLC will undertake an action such that the economic and voting rights (in relation to Joint Electorate Actions) of a holder of a Thomson Reuters PLC ordinary share determined by reference to a holder of a Thomson Reuters Corporation common share are maintained in proportion to the then prevailing Equalization Ratio (the “Matching Action”); or | ||
• | an appropriate adjustment to the Equalization Ratio will be made in order to ensure that there is equitable treatment (having regard to the then prevailing Equalization Ratio) for a holder of one Thomson Reuters PLC ordinary share relative to a holder of one Thomson Reuters Corporation common share. |
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• | the appointment, election, re-election or removal of any director of Thomson Reuters Corporation or Thomson Reuters PLC; | ||
• | to the extent such receipt or adoption is required by applicable laws, the receipt or adoption of the financial statements or accounts of Thomson Reuters Corporation or Thomson Reuters PLC, or financial statements or accounts prepared on a combined basis, other than any financial statements or accounts in respect of the period(s) ended prior to the Effective Date; | ||
• | a change of name of Thomson Reuters Corporation or Thomson Reuters PLC; and | ||
• | the appointment or removal of the auditors of Thomson Reuters Corporation or Thomson Reuters PLC. |
• | the voluntary liquidation of either company; | ||
• | any adjustment to the Equalization Ratio other than in accordance with the Equalization and Governance Agreement; | ||
• | any amendment to, or termination of, the Equalization and Governance Agreement, the Special Voting Share Agreements or the Cross-Guarantees, other than: (i) any amendment which is formal or technical in nature and which is not materially prejudicial to the interests of Thomson Reuters Corporation shareholders or Thomson Reuters PLC shareholders; or (ii) is necessary to correct any inconsistency or manifest error as may be agreed by the Thomson Reuters board; |
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• | any amendment to, removal or alteration of the effect of (which will include the ratification of any breach of) any of the Thomson Reuters Corporation Entrenched Provisions or the Thomson Reuters PLC Entrenched Provisions; | ||
• | a change in the corporate status of Thomson Reuters Corporation from a corporation existing under the OBCA with its primary listing on the TSX or the NYSE or of Thomson Reuters PLC from a public limited company incorporated in England and Wales with its primary listing on the Official List of the UKLA (unless such change occurs in connection with termination of the Equalization and Governance Agreement in circumstances not requiring approval as a Class Rights Action); | ||
• | any other action or matter the Thomson Reuters board determines (either in a particular case or generally) should be approved as a Class Rights Action; and | ||
• | any action to be approved as a Class Rights Action pursuant to the Equalization and Governance Agreement. |
• | that certain persons be allowed to attend or be excluded from attending a meeting; | ||
• | that discussion be closed and a question put to a vote (provided no amendments have been raised); | ||
• | that a question under discussion not be put to a vote; | ||
• | to proceed with matters in an order other than that set out in the notice of a meeting; | ||
• | to adjourn a debate (for example, to a subsequent meeting); and | ||
• | to adjourn a meeting. |
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• | either prior to or simultaneously with the Triggering Event, such person makes a Qualifying Take-Over Bid (and, in the event that such Qualifying Take-Over Bid was made prior to the Triggering Event, such Qualifying Take-Over Bid has not been withdrawn, abandoned or terminated prior to or simultaneously with the Triggering Event); or | ||
• | the Triggering Event was a Permitted Bid Acquisition. |
• | are made to all holders of Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares; | ||
• | are undertaken with respect to the Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares at or about the same time; and | ||
• | are equivalent (although not necessarily the same) in all material respects to the holders of Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares, including with respect to: |
- | the consideration offered for such shares (taking into account exchange rates and the Equalization Ratio); | ||
- | the information provided to such holders; | ||
- | the time available to such holders to consider such offers; and | ||
- | the conditions to which the offers are subject. |
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• | beneficial ownership of 20% or more of the outstanding Thomson Reuters Corporation common shares; | ||
• | an interest in 30% or more of the outstanding Thomson Reuters PLC ordinary shares (taking into account Thomson Reuters PLC ordinary shares in which persons acting in concert are interested); or | ||
• | an interest in such number of outstanding Thomson Reuters Corporation common shares and/or Thomson Reuters PLC ordinary shares (taking into account Thomson Reuters Corporation common shares and/or Thomson Reuters PLC ordinary shares in which persons acting in concert are interested) to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast 30% or more of all votes entitled to be cast on a Joint Electorate Action by all shareholders of Thomson Reuters Corporation and Thomson Reuters PLC (excluding the holder of the Thomson Reuters Corporation Special Voting Share and the holder of the Thomson Reuters PLC Special Voting Share), in each case calculated in accordance with applicable laws governing take-over bids. |
• | to offer irrevocably Thomson Reuters Corporation common shares to holders of Thomson Reuters PLC ordinary shares pro rata to their holdings of Thomson Reuters PLC ordinary shares in consideration for such Thomson Reuters PLC ordinary shares; or | ||
• | to make a payment to holders of Thomson Reuters PLC ordinary shares, |
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• | by mutual agreement of Thomson Reuters Corporation and Thomson Reuters PLC and upon approval as a Class Rights Action; or | ||
• | after all insolvency obligations have been satisfied. |
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• | if such amendment does not materially and adversely affect the rights of any holder of Thomson Reuters Corporation common shares under the Thomson Reuters PLC Special Voting Share Trust Deed; | ||
• | to cure any ambiguity or to correct or supplement any provision in the Thomson Reuters PLC Special Voting Share Trust Deed which may be defective or inconsistent with any other provision in such deed or the Thomson Reuters PLC Articles; | ||
• | to add to the covenants, restrictions or obligations for the benefit of holders of Thomson Reuters Corporation common shares; | ||
• | to comply with the requirements of the law governing the Thomson Reuters PLC Special Voting Share Trust Deed; | ||
• | to comply with any requirements imposed by the US Internal Revenue Code of 1986, as amended (the “US Tax Code”) or to qualify the Thomson Reuters PLC Special Voting Share Trust as a “grantor trust” under the US Tax Code; | ||
• | to amend or waive the terms of the trustee limitation of liability provision of the Thomson Reuters PLC Special Voting Share Trust Deed in any manner which will not adversely affect the holders of Thomson Reuters Corporation common shares in any material respect; or | ||
• | to evidence and provide for the acceptance of appointment under the Thomson Reuters PLC Special Voting Share Trust Deed by a successor trustee. |
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• | any contractual obligations owed to creditors of Thomson Reuters PLC as of, or incurred after, the Effective Date; | ||
• | any contractual obligations of certain other persons, referred to as principal debtors, which are guaranteed by Thomson Reuters PLC as of, or incurred after, the Effective Date; and | ||
• | any other obligations of Thomson Reuters PLC or any principal debtor of any kind which may be agreed to in writing between Thomson Reuters Corporation and Thomson Reuters PLC, |
• | to the extent covered by the terms of any policy of insurance (or indemnity in the nature of insurance) of which Thomson Reuters PLC (or the principal debtor) has the benefit and which is in full force and effect; |
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• | explicitly guaranteed in writing by Thomson Reuters Corporation (otherwise than under the Thomson Reuters Corporation Guarantee) or for which Thomson Reuters Corporation has agreed in writing to act as co-obligor or co-issuer; | ||
• | under an arrangement which explicitly provides that the obligation is not to be guaranteed by Thomson Reuters Corporation; | ||
• | owed to Thomson Reuters Corporation, a subsidiary of Thomson Reuters Corporation or to any of the subsidiaries of Thomson Reuters PLC, save where such obligation is owed expressly to any subsidiary in its capacity as trustee for a registered occupational pension scheme; | ||
• | under or in connection with any guarantee by Thomson Reuters PLC of any obligation of Thomson Reuters Corporation or any subsidiary of Thomson Reuters Corporation; | ||
• | excluded from the scope of the Thomson Reuters Corporation Guarantee (see below); | ||
• | consisting of an obligation to pay a creditor an amount to compensate for any deduction or withholding for or on account of tax from any payment to that creditor, where no such deduction or withholding would be required as a result of payment being made by Thomson Reuters Corporation under the Thomson Reuters Corporation Guarantee rather than by the relevant principal debtor under the guaranteed obligation; | ||
• | under a guarantee to the extent that the guaranteed obligation is not a contractual obligation or is of a type excluded as referred to above; or | ||
• | owed to holders of Thomson Reuters PLC ordinary shares, in their capacity or otherwise flowing from their status as holders of such shares. |
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• | the Equalization and Governance Agreement terminates or ceases to have effect; | ||
• | the Thomson Reuters PLC Guarantee terminates or ceases to have effect; or | ||
• | a resolution is passed or an order is made for the liquidation of Thomson Reuters PLC. |
• | any contractual obligations owed to creditors of Thomson Reuters Corporation as of, or incurred after, the Effective Date; | ||
• | any contractual obligations of certain other persons, referred to as principal debtors, which are guaranteed by Thomson Reuters Corporation as of, or incurred after, the Effective Date; and | ||
• | any other obligations of Thomson Reuters Corporation or any principal debtor of any kind which may be agreed to in writing between Thomson Reuters PLC and Thomson Reuters Corporation, |
• | to the extent covered by the terms of any policy of insurance (or indemnity in the nature of insurance) of which Thomson Reuters Corporation (or the principal debtor) has the benefit and which is in full force and effect; | ||
• | explicitly guaranteed in writing by Thomson Reuters PLC (otherwise than under the Thomson Reuters PLC Guarantee) or for which Thomson Reuters PLC has agreed in writing to act as co-obligor or co-issuer; | ||
• | under an arrangement which explicitly provides that the obligation is not to be guaranteed by Thomson Reuters PLC; | ||
• | owed to Thomson Reuters PLC, a subsidiary of Thomson Reuters PLC or to any of the subsidiaries of Thomson Reuters Corporation, save where such obligation is owed expressly to any subsidiary in its capacity as trustee for a registered occupational pension scheme; |
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• | under or in connection with any guarantee by Thomson Reuters Corporation of any obligation of Thomson Reuters PLC or any subsidiary of Thomson Reuters PLC; | ||
• | excluded from the scope of the Thomson Reuters PLC Guarantee (see below); | ||
• | consisting of an obligation to pay a creditor an amount to compensate for any deduction or withholding for or on account of tax from any payment to that creditor, where no such deduction or withholding would be required as a result of payment being made by Thomson Reuters PLC under the Thomson Reuters PLC Guarantee rather than by the relevant principal debtor under the guaranteed obligation; | ||
• | under a guarantee to the extent that the guaranteed obligation is not a contractual obligation or is of a type excluded as referred to above; or | ||
• | owed to holders of Thomson Reuters Corporation common shares, in their capacity or otherwise flowing from their status as holders of such shares. |
• | the Equalization and Governance Agreement terminates or ceases to have effect; | ||
• | the Thomson Reuters Corporation Guarantee terminates or ceases to have effect; or |
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• | a resolution is passed or an order is made for the liquidation of Thomson Reuters Corporation. |
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• | Woodbridge uses its best efforts as a shareholder of Thomson Reuters Corporation and Thomson Reuters PLC to ensure that the Reuters Trust Principles are complied with in relation to Thomson Reuters; | ||
• | Without the prior written consent of Reuters Founders Share Company, Woodbridge will not transfer any voting shares of Thomson Reuters Corporation or Thomson Reuters PLC to any person that is not an Approved Person, where the transferee would become an Acquiring Person under the Thomson Reuters Corporation Articles or the Thomson Reuters PLC Articles; | ||
• | Without the prior written consent of Reuters Founders Share Company, Woodbridge will not purchase securities of any class of Thomson Reuters Corporation or Thomson Reuters PLC if, as a result of such transaction, securities of that company would cease to be eligible for listing on a stock exchange on which that company’s securities are then listed; and | ||
• | Upon the request of Reuters Founders Share Company, Woodbridge will promptly requisition the Thomson Reuters board to call a meeting of shareholders of Thomson Reuters Corporation and/or Thomson Reuters PLC for such purpose as Reuters Founders Share Company, in its sole and absolute discretion, thinks fit. |
• | to cooperate and take or cause to be taken all such steps as are within their power and as may be necessary or desirable to implement the Transaction as soon as reasonably practicable; and | ||
• | without prior consent of the parties, not to take a step which they believe could significantly frustrate Thomson Reuters from obtaining the benefits of the Transaction. |
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• | the approval of all resolutions necessary for the completion of the Transaction by Reuters shareholders; | ||
• | the approval of all resolutions necessary for the completion of the Transaction by Thomson shareholders; | ||
• | the approval of the Reuters Scheme by the English Court and the obtaining of the Interim Order and Final Order from the Ontario Court; | ||
• | the admission of Thomson Reuters PLC ordinary shares to listing on the Official List of the UKLA, and their admission to trading on the LSE’s main market for listed securities; and | ||
• | that no material adverse change in the business, assets, position or profits of Reuters or Thomson occurred, such condition being waivable by Thomson or Reuters in respect of a material adverse change of the other company. |
• | not to issue such number of Thomson common shares which would result in Woodbridge holding less than 662/3% of the then outstanding Thomson common shares; | ||
• | not to take or omit to take any action which, if the Equalization and Governance Agreement were in force, would require an adjustment to the Equalization Ratio (which until the Effective Date is deemed to be 0.16 Thomson common shares to one Reuters ordinary share), a Matching Action or a Class Rights Action; and | ||
• | not to participate in substantive meetings or discussions with any regulatory authority in respect of the Antitrust Conditions or the other conditions without the prior consent of Reuters. |
• | at the request of Thomson, to agree to divest, hold separate or take any other action that limits its freedom of action with respect to, or its ability to retain, its businesses, services or assets, provided that any such action may be conditioned on the Transaction having been completed; | ||
• | not to solicit an offer from any person wishing to undertake an offer in respect of a significant proportion of Reuters ordinary shares, not to sell the whole of or a substantial part of its consolidated assets, and not to partake in any transaction inconsistent with the completion of the Transaction; | ||
• | not to engage in any act or omission which would require the consent of Reuters shareholders under applicable laws, other than as required to implement the Transaction, or pursuant to a pre-existing contractual obligation, without the prior consent of Thomson; |
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• | not to borrow any funds other than in the ordinary course of business or to meet its pre-existing obligations, or agree to any additional restrictions with its existing lenders on its ability to declare dividends and/or transfer assets to Thomson or any affiliate of Thomson, without the prior consent of Thomson; | ||
• | not to take or omit to take any action which, if the Equalization and Governance Agreement were in force, would require an adjustment to the Equalization Ratio (which until the Effective Date is deemed to be 0.16 Thomson common shares to one Reuters ordinary share), a Matching Action or a Class Rights Action; and | ||
• | not to participate in substantive meetings or discussions with any regulatory authority in respect of the Antitrust Conditions or the other conditions without the prior consent of Thomson. |
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• | Reuters shareholders did not approve the Reuters Scheme; | ||
• | Thomson failed to obtain the Interim Order or the Final Order; | ||
• | the English Court failed to sanction the Reuters Scheme; | ||
• | the Transaction was not completed by December 31, 2008; or | ||
• | any of the Antitrust Conditions or other conditions were (or became) incapable of satisfaction and, where such condition was capable of waiver, were not waived. |
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(in millions of US dollars) | 2007 | 2006 | ||||||
Audit fees | $ | 13.7 | $ | 21.1 | ||||
Audit-related fees | 19.0 | 11.5 | ||||||
Tax fees | 10.9 | 7.4 | ||||||
All other fees | 0.2 | 0.1 | ||||||
Total | $ | 43.8 | $ | 40.1 | ||||
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Exhibit | ||
Reuters Information | ||
Index to consolidated financial statements | Annex A-1 | |
Report of Independent Registered Public Accounting Firm to the Members of Reuters Group PLC | Annex A-2 | |
Consolidated income statement for the years ended December 31, 2007, 2006 and 2005 | Annex A-3 | |
Consolidated statement of recognized income and expense for the years ended December 31, 2007, 2006 and 2005 | Annex A-4 | |
Consolidated balance sheet as of December 31, 2007, 2006 and 2005 | Annex A-5 | |
Consolidated cash flow statement for the years ended December 31, 2007, 2006 and 2005 | Annex A-6 | |
Group accounting policies | Annex A-7 | |
Notes to the financial statements | Annex A-8 |
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Number | Description | |
3.1 | Thomson Reuters PLC Memorandum of Association filed herewith | |
3.2 | Thomson Reuters PLC Articles of Association filed herewith | |
4.1 | Implementation Agreement, dated May 15, 2007, among The Thomson Corporation, Reuters Group PLC, The Woodbridge Company Limited and Thomson-Reuters Limited, together with the agreed forms of Equalization and Governance Agreement, Thomson-Reuters PLC Deed of Guarantee and The Thomson Corporation Deed of Guarantee (incorporated by reference to Exhibit 99.1 from Reuters Form 6-K (File No. 333-08354), dated May 24, 2007) | |
4.2 | Credit Agreement dated as of August 14, 2007 (incorporated by reference to Exhibit 99.1 from Thomson Reuters Corporation’s Form 6-K dated August 31, 2007) | |
4.3 | 364-Day Revolving Credit Agreement dated as of May 24, 2007 and as amended on June 27, 2007 (incorporated by reference to Exhibit 99.2 from Thomson Reuters Corporation’s Form 6-K dated August 31, 2007) | |
4.4 | Trust Indenture dated as of November 20, 2007 (incorporated by reference to Exhibit 7.1 from Thomson Reuters Corporation’s Form F-9 registration statement, dated November 9, 2007) | |
4.5 | Deposit Agreement, dated as of April 17, 2008, by and among Thomson Reuters PLC, Deutsche Bank Trust Company Americas, as depositary, and all Holders and Beneficial Owners from time to time of American Depositary Shares evidenced by American Depositary Receipts issued thereunder (including the form of American Depositary Receipt to be issued thereunder, attached as Exhibit A thereto)(incorporated by reference to Exhibit A from Thomson Reuters PLC’s Form F-6 registration statement dated April 17, 2008) | |
4.6 | Service Agreement of Thomas H. Glocer with Reuters Group. PLC dated as of March 9, 2007 (incorporated by reference to Exhibit 4.10.1 from Reuters Group PLC’s Annual Report on Form 20-F dated March 16, 2007) | |
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Number | Description | |
4.7 | Amended and Restated Programme Agreement, dated June 9, 2006, between Reuters Group PLC, as Issuer and Guarantor, and Reuters Finance PLC, as Issuer, in respect of a £1,000,000,000 Euro Medium Term Note Programme (incorporated by reference to Exhibit 4.6 from Reuters Form 20-F annual report (File No. 333-08354), as amended, dated March 16, 2007) | |
4.8 | Amended and Restated Trust Deed, dated June 9, 2006, among Reuters Group PLC, as Issuer and as Guarantor, and Reuters Finance PLC, as Issuer, and Citicorp Trustee Company Limited, in respect of a £1,000,000,000 Euro Medium Term Note Programme (incorporated by reference to Exhibit 4.6.1 from Reuters Form 20-F annual report (File No. 333-08354), as amended, dated March 16, 2007) | |
4.9 | Amended and Restated Agency Agreement, dated June 9, 2006, among Reuters Group PLC as Issuer and Guarantor; Reuters Finance PLC as Issuer; Citibank, N.A. as Agent; Citigroup Global Markets Deutschland AG & CO. KGaA as Paying Agent; and Citicorp Trustee Company Limited as Trustee, in respect of a £1,000,000,000 Euro Medium Term Note Programme (incorporated by reference to Exhibit 4.6.2 from Reuters Form 20-F annual report (File No. 333-08354), as amended, dated March 16, 2007) | |
4.10 | Final Terms dated November 24, 2006, in respect of Reuters Group PLC Issue of EUR 250,000,000 Floating Rate Notes due November 2008 under the £1,000,000,000 Euro Medium Term Note Programme (incorporated by reference to Exhibit 4.6.7 from Reuters Form 20-F annual report (File No. 333-08354), dated March 16, 2007) | |
4.11 | Subscription Agreement of Reuters Group PLC, dated November 24, 2006, with respect to EUR 250,000,000 Floating Rate Notes due November 2008 (incorporated by reference to Exhibit 4.6.8 from Reuters Form 20-F annual report (File No. 333-08354), dated March 16, 2007) | |
4.12 | £680,000,000 Multicurrency Revolving Facility Agreement of Reuters Group PLC, dated October 26, 2006, arranged by Citigroup Global Markets Limited; Commerzbank AG London Branch; Deutsche Bank AG, London Branch; Dresdner Bank AG Niederlassung Luxembourg; HSBC Bank plc; J.P. Morgan plc; Lloyds TSB Bank PLC; Morgan Stanley Bank International Limited; Société Générale; Standard Chartered Bank; The Royal Bank of Scotland plc; and UBS Limited, with HSBC Bank plc acting as Agent (incorporated by reference to Exhibit 4.7 from Reuters Form 20-F annual report (File No. 333-08354), dated March 16, 2007) |
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Number | Description | |
15.1 | Consent of PricewaterhouseCoopers LLP London | |
31.1 | Certification of Thomson Reuters PLC’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of Thomson Reuters PLC’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of Thomson Reuters PLC’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification of Thomson Reuters PLC’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
99.1 | Thomson’s management’s discussion and analysis for the year ended December 31, 2007 filed herewith | |
99.2 | Thomson’s audited consolidated financial statements for the year ended December 31, 2007 filed herewith | |
99.3 | Equalization and Governance Agreement (incorporated by reference to Exhibit 99.3 from Thomson Reuters Corporation’s Form 6-K dated April 17, 2008) | |
99.4 | Thomson Reuters Corporation Deed of Guarantee (incorporated by reference to Exhibit 99.4 from Thomson Reuters Corporation’s Form 6-K dated April 17, 2008) | |
99.5 | Thomson Reuters PLC Deed of Guarantee (incorporated by reference to Exhibit 99.5 from Thomson Reuters Corporation’s Form 6-K dated April 17, 2008) | |
99.6 | Thomson Reuters Corporation Voting Share Trust Deed (incorporated by reference to Exhibit 99.6 from Thomson Reuters Corporation’s Form 6-K dated April 17, 2008) | |
99.7 | Thomson Reuters PLC Voting Share Trust Deed (incorporated by reference to Exhibit 99.7 from Thomson Reuters Corporation’s Form 6-K dated April 17, 2008) | |
99.8 | Special Voting Share Agreement (incorporated by reference to Exhibit 99.8 from Thomson Reuters Corporation’s Form 6-K dated April 17, 2008) | |
99.9 | Reuters Trust Principles Support Agreement (incorporated by reference to Exhibit 99.9 from Thomson Reuters Corporation’s Form 6-K dated April 17, 2008) |
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Number | Description | |
99.10 | Amended and Restated Deed of Mutual Covenant (incorporated by reference to Exhibit 99.10 from Thomson Reuters Corporation’s Form 6-K dated April 17, 2008) | |
99.11 | Engagement Letter of Niall FitzGerald with Reuters Group PLC dated as of March 2, 2004 (incorporated by reference to Exhibit 4.10.5 from Reuters Group PLC’s Annual Report on Form 20-F dated March 16, 2004) | |
99.12 | Summary Description of the Thomson Reuters PLC American Depositary Shares, evidenced by American Depositary Receipts filed herewith | |
99.13 | Woodbridge Undertaking (incorporated by reference to Exhibit 99.11 from Thomson Reuters Corporation’s Form 6-K dated April 17, 2008) |
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Table of Contents
Dated: April 17, 2008 | THOMSON REUTERS PLC | |||
By: | /s/ Deirdre Stanley | |||
Name: | Deirdre Stanley | |||
Title: | Executive Vice President and General Counsel |
-261-
Table of Contents
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2007
Table of Contents
Page | ||
Report of Independent Registered Public Accounting Firm to the Members of Reuters Group PLC | A-2 | |
Consolidated income statement for the years ended December 31, 2007, 2006 and 2005 | A-3 | |
Consolidated statement of recognized income and expense for the year ended December 31, 2007, 2006, and 2005 | A-4 | |
Consolidated balance sheet as of December 31, 2007, 2006 and 2005 | A-5 | |
Consolidated cash flow statement for the years ended December 31, 2007, 2006 and 2005 | A-6 | |
Group Accounting Policies | A-7.1 | |
Notes to the financial statements | A-8.1 |
A-1
Table of Contents
![(PRICEWATERHOUSECOOPERS LLP)](https://capedge.com/proxy/20-F/0000950123-08-004309/y54276y5427607.gif)
19 March 2008
A-2
Table of Contents
2007 | 2006 | 2005 | ||||||||||||||
Notes | £m | £m | £m | |||||||||||||
Revenue | 01,02 | 2,605 | 2,566 | 2,409 | ||||||||||||
Operating costs | 03 | (2,355 | ) | (2,351 | ) | (2,251 | ) | |||||||||
Other operating income | 04 | 42 | 41 | 49 | ||||||||||||
Operating profit | 292 | 256 | 207 | |||||||||||||
Finance income | 05 | 117 | 72 | 41 | ||||||||||||
Finance costs | 05 | (151 | ) | (87 | ) | (53 | ) | |||||||||
Profit on disposal of associates, joint ventures and available-for-sale financial assets | 21 | 76 | 38 | |||||||||||||
Share of post-tax (losses)/profits from associates and joint ventures* | 15 | (6 | ) | (4 | ) | 5 | ||||||||||
Profit before tax | 273 | 313 | 238 | |||||||||||||
Taxation | 06 | (60 | ) | (20 | ) | (9 | ) | |||||||||
Profit for the year from continuing operations | 213 | 293 | 229 | |||||||||||||
Profit for the year from discontinued operations | 07 | 14 | 12 | 253 | ||||||||||||
Profit for the year | 227 | 305 | 482 | |||||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | 11 | 227 | 305 | 456 | ||||||||||||
Minority interest | 11 | — | — | 26 | ||||||||||||
Earnings per share | ||||||||||||||||
From continuing and discontinued operations | ||||||||||||||||
Basic earnings per ordinary share | 08 | 18.4p | 23.6p | 32.6p | ||||||||||||
Diluted earnings per ordinary share | 08 | 18.0p | 23.1p | 31.7p | ||||||||||||
From continuing operations | ||||||||||||||||
Basic earnings per ordinary share | 08 | 17.3p | 22.6p | 16.3p | ||||||||||||
Diluted earnings per ordinary share | 08 | 16.9p | 22.2p | 15.9p |
* | Share of post-tax (losses)/profits from associates and joint ventures includes a tax charge of £1 million (2006: £2 million, 2005: £1 million). |
A-3
Table of Contents
2007 | 2006 | 2005 | ||||||||||||||
Notes | £m | £m | £m | |||||||||||||
Profit for the year | 227 | 305 | 482 | |||||||||||||
Actuarial gains/(losses) on defined benefit plans | 11,25 | 98 | 6 | (48 | ) | |||||||||||
Exchange differences taken directly to reserves | 11,28 | 20 | (95 | ) | 118 | |||||||||||
Exchange differences taken to the income statement on disposal of assets | 11,28 | — | — | (2 | ) | |||||||||||
Fair value gains/(losses) on available-for-sale financial assets | 11,28 | 11 | 6 | (15 | ) | |||||||||||
Fair value gains on available-for-sale financial assets taken to the income statement on disposal of assets | 11 | (18 | ) | — | (73 | ) | ||||||||||
Fair value gains/(losses) on net investment hedges | 11,28 | 4 | 34 | (39 | ) | |||||||||||
Fair value gains taken to the income statement on disposal of net investment hedges | 11,28 | — | — | (14 | ) | |||||||||||
Taxation on the items taken directly to or transferred from equity | 11 | (20 | ) | (4 | ) | 14 | ||||||||||
Net gains/(losses) not recognised in income statement | 11 | 95 | (53 | ) | (59 | ) | ||||||||||
Total recognised income for the year | 322 | 252 | 423 | |||||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | 322 | 252 | 374 | |||||||||||||
Minority interest | — | — | 49 |
A-4
Table of Contents
2007 | 2006 | 2005 | ||||||||||||||
Notes | £m | £m | £m | |||||||||||||
Assets | ||||||||||||||||
Non-current assets: | ||||||||||||||||
Intangible assets | 13 | 614 | 559 | 487 | ||||||||||||
Property, plant and equipment | 14 | 404 | 371 | 358 | ||||||||||||
Investments accounted for using the equity method: | ||||||||||||||||
Investments in joint ventures | 15 | 21 | 19 | 32 | ||||||||||||
Investments in associates | 15 | 6 | 19 | 4 | ||||||||||||
Deferred tax assets | 26 | 286 | 281 | 276 | ||||||||||||
Other financial assets and derivatives | 16 | 62 | 47 | 22 | ||||||||||||
Retirement benefit assets | 25 | 39 | 18 | — | ||||||||||||
1,432 | 1,314 | 1,179 | ||||||||||||||
Current assets: | ||||||||||||||||
Inventories | 18 | — | 1 | 1 | ||||||||||||
Trade and other receivables | 19 | 255 | 258 | 270 | ||||||||||||
Other financial assets and derivatives | 16 | 29 | 210 | 18 | ||||||||||||
Current tax debtors | 12 | 8 | 6 | |||||||||||||
Cash and cash equivalents | 20 | 251 | 129 | 662 | ||||||||||||
547 | 606 | 957 | ||||||||||||||
Non-current assets classified as held for sale | 21 | 14 | — | 1 | ||||||||||||
Total assets | 1,993 | 1,920 | 2,137 | |||||||||||||
Liabilities | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Trade and other payables | 22 | (692 | ) | (491 | ) | (456 | ) | |||||||||
Current tax liabilities | 23 | (247 | ) | (196 | ) | (228 | ) | |||||||||
Provisions for liabilities and charges | 24 | (37 | ) | (60 | ) | (64 | ) | |||||||||
Other financial liabilities and derivatives | 16 | (292 | ) | (166 | ) | (49 | ) | |||||||||
(1,268 | ) | (913 | ) | (797 | ) | |||||||||||
Non-current liabilities: | ||||||||||||||||
Provisions for liabilities and charges | 24 | (102 | ) | (204 | ) | (392 | ) | |||||||||
Other financial liabilities and derivatives | 16 | (370 | ) | (521 | ) | (371 | ) | |||||||||
Deferred tax liabilities | 26 | (115 | ) | (110 | ) | (66 | ) | |||||||||
(587 | ) | (835 | ) | (829 | ) | |||||||||||
Total liabilities | (1,855 | ) | (1,748 | ) | (1,626 | ) | ||||||||||
Net assets | 138 | 172 | 511 | |||||||||||||
Shareholders’ equity | ||||||||||||||||
Share capital | 27 | 539 | 496 | 467 | ||||||||||||
Other reserves | 28 | (1,710 | ) | (1,738 | ) | (1,692 | ) | |||||||||
Retained earnings | 11 | 1,309 | 1,414 | 1,736 | ||||||||||||
Total parent shareholders’ equity | 138 | 172 | 511 | |||||||||||||
Minority interest in equity | — | — | — | |||||||||||||
Total equity | 138 | 172 | 511 |
Tom Glocer | David Grigson | |
CEO | CFO |
A-5
Table of Contents
2007 | 2006 | 2005 | ||||||||||||||
Notes | £m | £m | £m | |||||||||||||
Cash flows from operating activities | ||||||||||||||||
Cash generated from operations | 29 | 534 | 311 | 271 | ||||||||||||
Interest received | 67 | 42 | 55 | |||||||||||||
Interest paid | (99 | ) | (61 | ) | (49 | ) | ||||||||||
Tax paid | (26 | ) | (34 | ) | (24 | ) | ||||||||||
Net cash flow from operating activities | 476 | 258 | 253 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||
Acquisitions, net of cash acquired | 30 | (39 | ) | (67 | ) | (124 | ) | |||||||||
Disposals, net of cash disposed | 30 | 23 | 65 | 246 | ||||||||||||
Purchases of property, plant and equipment | (116 | ) | (122 | ) | (145 | ) | ||||||||||
Proceeds from sale of property, plant and equipment | 19 | 5 | 3 | |||||||||||||
Purchases of intangible assets | (109 | ) | (106 | ) | (40 | ) | ||||||||||
Purchases of available-for-sale financial assets | (1 | ) | — | (1 | ) | |||||||||||
Proceeds from sale of available-for-sale financial assets | 23 | — | 85 | |||||||||||||
Proceeds from closing of derivative contract | 2 | — | — | |||||||||||||
Dividends received | 3 | 3 | 5 | |||||||||||||
Net cash used in investing activities | (195 | ) | (222 | ) | 29 | |||||||||||
Cash flows from financing activities | ||||||||||||||||
Proceeds from issue of shares | 47 | 32 | 10 | |||||||||||||
Share buyback | (174 | ) | (527 | ) | (223 | ) | ||||||||||
Decrease/(increase) in short-term investments | �� | 194 | (196 | ) | 248 | |||||||||||
(Decrease)/increase in borrowings | (66 | ) | 270 | (144 | ) | |||||||||||
Equity dividends paid to shareholders | (147 | ) | (134 | ) | (140 | ) | ||||||||||
Equity dividends paid to minority interests | — | — | (23 | ) | ||||||||||||
Net cash used in financing activities | (146 | ) | (555 | ) | (272 | ) | ||||||||||
Exchange gains/(losses) on cash and cash equivalents | 2 | (13 | ) | 66 | ||||||||||||
Net increase/(decrease) in cash and cash equivalents | 137 | (532 | ) | 76 | ||||||||||||
Cash and cash equivalents at the beginning of the year | 105 | 637 | 561 | |||||||||||||
Cash and cash equivalents at the end of the year | 31 | 242 | 105 | 637 |
A-6
Table of Contents
A-7.1
Table of Contents
• | income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rate prevailing on the transaction date, in which case income and expenses are translated at the date of the transaction); |
• | assets and liabilities are translated at the closing exchange rate at the date of the balance sheet; and |
• | all resulting exchange differences are recognised as a separate component of equity. |
A-7.2
Table of Contents
A-7.3
Table of Contents
A-7.4
Table of Contents
Freehold land | Not depreciated | |
Freehold buildings | Normally 50 years | |
Leasehold property | Over the term of the lease | |
Computer systems equipment, office equipment and motor vehicles | 2 to 5 years |
A-7.5
Table of Contents
• | financial assets at fair value through profit and loss; |
• | loans and receivables; |
• | available-for-sale financial assets. |
A-7.6
Table of Contents
A-7.7
Table of Contents
• | hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); |
• | hedges of highly probable forecast transactions (cash flow hedges); or |
• | hedges of net investments in foreign operations (net investment hedges). |
A-7.8
Table of Contents
A-7.9
Table of Contents
A-7.10
Table of Contents
A-7.11
Table of Contents
A-8.1
Table of Contents
2007 | ||||||||||||||||||||
Research | ||||||||||||||||||||
& Asset | ||||||||||||||||||||
Sales & | Manage- | |||||||||||||||||||
Trading | ment | Enterprise | Media | Total | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Revenue | 1,619 | 363 | 451 | 172 | 2,605 | |||||||||||||||
Operating costs | (1,440 | ) | (339 | ) | (371 | ) | (160 | ) | (2,310 | ) | ||||||||||
Other operating income | 27 | 5 | 7 | 3 | 42 | |||||||||||||||
Divisional operating profit* | 206 | 29 | 87 | 15 | 337 | |||||||||||||||
Thomson deal related costs | (45 | ) | ||||||||||||||||||
Operating profit | 292 | |||||||||||||||||||
Finance income | 117 | |||||||||||||||||||
Finance costs | (151 | ) | ||||||||||||||||||
Profit on disposal of associates, joint ventures and available-for-sale financial assets | 21 | |||||||||||||||||||
Share of post-taxation losses from associates and joint ventures | (6 | ) | ||||||||||||||||||
Profit before taxation | 273 | |||||||||||||||||||
Taxation | (60 | ) | ||||||||||||||||||
Profit for the year from continuing operations | 213 |
* | Divisional operating profit is operating profit less Thomson deal-related costs |
A-8.2
Table of Contents
Restated | ||||||||||||||||||||
2006 | ||||||||||||||||||||
Research | ||||||||||||||||||||
& Asset | ||||||||||||||||||||
Sales & | Manage- | |||||||||||||||||||
Trading | ment | Enterprise | Media | Total | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Revenue | 1,661 | 304 | 431 | 170 | 2,566 | |||||||||||||||
Operating costs | (1,506 | ) | (324 | ) | (362 | ) | (159 | ) | (2,351 | ) | ||||||||||
Other operating income | 27 | 5 | 6 | 3 | 41 | |||||||||||||||
Operating profit | 182 | (15 | ) | 75 | 14 | 256 | ||||||||||||||
Finance income | 72 | |||||||||||||||||||
Finance costs | (87 | ) | ||||||||||||||||||
Profit on disposal of associates, joint ventures and available-for-sale financial assets | 76 | |||||||||||||||||||
Share of post-taxation profits from associates and joint ventures | (4 | ) | ||||||||||||||||||
Profit before tax | 313 | |||||||||||||||||||
Taxation | (20 | ) | ||||||||||||||||||
Profit for the year from continuing operations | 293 |
A-8.3
Table of Contents
Restated | ||||||||||||||||||||
2005 | ||||||||||||||||||||
Research | ||||||||||||||||||||
& Asset | ||||||||||||||||||||
Sales & | Manage- | |||||||||||||||||||
Trading | ment | Enterprise | Media | Total | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Revenue | 1,596 | 263 | 397 | 153 | 2,409 | |||||||||||||||
Operating costs | (1,482 | ) | (298 | ) | (323 | ) | (148 | ) | (2,251 | ) | ||||||||||
Other operating income | 37 | — | 8 | 4 | 49 | |||||||||||||||
Operating profit | 151 | (35 | ) | 82 | 9 | 207 | ||||||||||||||
Finance income | 41 | |||||||||||||||||||
Finance costs | (53 | ) | ||||||||||||||||||
Profit on disposal of associates, joint ventures and available-for-sale financial assets | 38 | |||||||||||||||||||
Share of post-taxation profits from associates and joint ventures | 5 | |||||||||||||||||||
Profit before tax | 238 | |||||||||||||||||||
Taxation | (9 | ) | ||||||||||||||||||
Profit for the year from continuing operations | 229 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Sales & Trading | (5 | ) | (4 | ) | 2 | |||||||
Research & Asset Management | 1 | — | — | |||||||||
Enterprise | — | — | — | |||||||||
Media | (2 | ) | — | 3 | ||||||||
Share of post-taxation (losses)/profits from associates and joint ventures | (6 | ) | (4 | ) | 5 |
A-8.4
Table of Contents
2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||
Depreciation | Other | Depreciation | Other | Depreciation | Other | |||||||||||||||||||||||||||||||
and | non-cash | and | non-cash | and | non-cash | |||||||||||||||||||||||||||||||
amortisation | Impairments | expenses | amortisation | Impairments | expenses | amortisation | Impairments | expenses | ||||||||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | £m | £m | ||||||||||||||||||||||||||||
Sales & Trading | 99 | 20 | 27 | 95 | — | 36 | 89 | 1 | 39 | |||||||||||||||||||||||||||
Research & Asset Management | 19 | — | 6 | 19 | — | 7 | 19 | — | 4 | |||||||||||||||||||||||||||
Enterprise | 32 | 1 | 6 | 22 | — | 8 | 20 | 1 | 2 | |||||||||||||||||||||||||||
Media | 7 | — | 2 | 5 | — | 3 | 4 | 1 | 1 | |||||||||||||||||||||||||||
Total | 157 | 21 | 41 | 141 | — | 54 | 132 | 3 | 46 |
2007 | 2006 | 2005 | ||||||||||
Revenue | £m | £m | £m | |||||||||
Europe, Middle East & Africa* | 1,441 | 1,396 | 1,330 | |||||||||
Americas | 701 | 709 | 651 | |||||||||
Asia | 463 | 461 | 428 | |||||||||
Total revenue | 2,605 | 2,566 | 2,409 |
* | To reflect the way Reuters was managed from 2006, UK & Ireland, EMEA West and EMEA East have been combined into one geographical location. |
A-8.5
Table of Contents
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Recurring | 2,394 | 2,363 | 2,235 | |||||||||
Usage | 139 | 132 | 104 | |||||||||
Outright | 72 | 71 | 70 | |||||||||
Total revenue | 2,605 | 2,566 | 2,409 |
2007 | 2006 | 2005 | ||||||||||
Costs by nature | £m | £m | £m | |||||||||
Salaries, commission and allowances | 756 | 763 | 761 | |||||||||
Social security costs | 78 | 64 | 67 | |||||||||
Share-based payments (see note 33) | 36 | 30 | 30 | |||||||||
Pension costs (see note 25) | 40 | 61 | 55 | |||||||||
Total staff costs | 910 | 918 | 913 | |||||||||
Services* | 529 | 512 | 455 | |||||||||
Depreciation | 96 | 95 | 99 | |||||||||
Data | 319 | 323 | 281 | |||||||||
Communications | 249 | 279 | 289 | |||||||||
Space | 156 | 151 | 162 | |||||||||
Amortisation of intangibles | 61 | 46 | 33 | |||||||||
Impairments | 21 | — | 3 | |||||||||
Losses on derivative financial instruments | 14 | 25 | — | |||||||||
Losses on ineffective portion of net investment hedges | — | — | 1 | |||||||||
Losses on financial assets designated at fair value through profit and loss | — | — | 15 | |||||||||
Foreign exchange losses | — | 2 | — | |||||||||
Total operating costs | 2,355 | 2,351 | 2,251 |
2007 | 2006 | 2005 | ||||||||||
Costs by nature | £m | £m | £m | |||||||||
Operating costs include: | ||||||||||||
Research and development expenditure | 100 | 83 | 92 | |||||||||
Operating lease expenditure: | ||||||||||||
Hire of equipment | 9 | 6 | 6 | |||||||||
Other, principally property | 76 | 74 | 67 | |||||||||
Advertising | 15 | 19 | 17 |
* | Services include equipment hire and bought-in services, including consultancy and contractors, advertising and publicity, professional fees and staff-related expenses. |
A-8.6
Table of Contents
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Fees payable to the company’s auditor for the audit of the company’s annual accounts | 2.5 | 2.2 | 2.9 | |||||||||
Fees payable to the company’s auditor and its associates for other services: | ||||||||||||
The audit of the company’s subsidiaries, pursuant to legislation | 1.9 | 1.3 | 1.3 | |||||||||
Other services pursuant to legislation | 3.4 | 0.6 | 0.4 | |||||||||
Tax services | 0.7 | 1.0 | 2.6 | |||||||||
Services relating to corporate finance transactions | — | 0.2 | 0.4 | |||||||||
All other services | 0.3 | 0.2 | 0.3 | |||||||||
Total fees payable | 8.8 | 5.5 | 7.9 | |||||||||
United Kingdom | 7.3 | 3.9 | 3.8 | |||||||||
Overseas | 1.5 | 1.6 | 4.1 |
A-8.7
Table of Contents
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Profit on disposal of subsidiaries | 3 | 4 | 4 | |||||||||
Gains on derivative financial instruments | 1 | 5 | 18 | |||||||||
Gains on ineffective portion of net investment hedges | 1 | 1 | — | |||||||||
Investment income | 1 | — | 1 | |||||||||
Foreign exchange gains | 4 | — | 3 | |||||||||
Profit on disposal of property, plant and equipment | 10 | 2 | — | |||||||||
Other income | 22 | 29 | 23 | |||||||||
Total other operating income | 42 | 41 | 49 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Interest receivable from: | ||||||||||||
Available-for-sale assets — listed investments | — | — | 1 | |||||||||
Loans and receivables — unlisted investments | 18 | 16 | 18 | |||||||||
Derivative financial instruments — hedging instruments | 49 | 33 | 18 | |||||||||
Fair value gains on financial instruments: | ||||||||||||
Derivative financial instruments: fair value hedges | 46 | 3 | 1 | |||||||||
Fair value adjustment to borrowings relating to interest rate risk | 4 | 13 | — | |||||||||
Foreign exchange gain on retranslation of borrowings | — | 7 | 3 | |||||||||
Total finance income | 117 | 72 | 41 | |||||||||
Interest payable on: | ||||||||||||
Financial liabilities measured at amortised cost — bank loans and overdrafts | (2 | ) | (6 | ) | (4 | ) | ||||||
Financial liabilities measured at amortised cost — other borrowings | (38 | ) | (23 | ) | (23 | ) | ||||||
Derivative financial instruments — hedging instruments | (54 | ) | (35 | ) | (17 | ) | ||||||
Fair value losses on financial instruments: | ||||||||||||
Derivative financial instruments: fair value hedges | — | (19 | ) | (1 | ) | |||||||
Fair value adjustment to borrowings relating to interest rate risk | — | — | (1 | ) | ||||||||
Foreign exchange retranslation of borrowings | (50 | ) | — | — | ||||||||
Derivative financial instruments at fair value — held for trading: | ||||||||||||
Interest payable | (6 | ) | (3 | ) | (5 | ) | ||||||
Unwinding of discounts | (1 | ) | (1 | ) | (2 | ) | ||||||
Total finance costs | (151 | ) | (87 | ) | (53 | ) |
A-8.8
Table of Contents
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Current taxation: | ||||||||||||
Continuing operations | 81 | (10 | ) | (10 | ) | |||||||
Discontinued operations | (4 | ) | 12 | 50 | ||||||||
77 | 2 | 40 | ||||||||||
Deferred taxation (see note 26): | ||||||||||||
Continuing operations | (21 | ) | 30 | 19 | ||||||||
Discontinued operations | — | (12 | ) | 13 | ||||||||
(21 | ) | 18 | 32 | |||||||||
Continuing operations | 60 | 20 | 9 | |||||||||
Discontinued operations | (4 | ) | — | 63 | ||||||||
Total taxation | 56 | 20 | 72 |
2007 | 2006 | 2005 | ||||||||||||||||||||||||
Continuing | Discontinued | Continuing | Discontinued | Continuing | Discontinued | |||||||||||||||||||||
£m | £m | £m | £m | £m | £m | |||||||||||||||||||||
Current tax credit on unrealised exchange movements | (2 | ) | — | (7 | ) | — | — | — | ||||||||||||||||||
Deferred tax charge/(credit) on actuarial losses on defined benefit plans | 21 | — | 1 | — | (10 | ) | — | |||||||||||||||||||
Deferred tax credit on stock options | (4 | ) | — | (1 | ) | — | (10 | ) | (1 | ) | ||||||||||||||||
Current tax charge/(credit) on revaluations and fair value movements | 1 | — | 10 | — | (4 | ) | — |
A-8.9
Table of Contents
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Profit before tax | 273 | 313 | 238 | |||||||||
Profit before tax multiplied by standard rate of corporation tax in the UK of 30% (2006: 30%, 2005: 30%) | 82 | 94 | 71 | |||||||||
Effects of: | ||||||||||||
Non-tax deductible amortisation and impairment of intangibles | 5 | 5 | 4 | |||||||||
Expenses not deductible for tax purposes | 12 | 2 | 4 | |||||||||
Non-taxable investment disposals and impairments | (6 | ) | (15 | ) | (13 | ) | ||||||
Adjustments in respect of prior years | (11 | ) | (56 | ) | (23 | ) | ||||||
Recognition of tax losses that arose in prior years | — | (4 | ) | (33 | ) | |||||||
Effects of changes in tax rates on deferred taxes | 8 | — | — | |||||||||
Other differences | (30 | ) | (6 | ) | (1 | ) | ||||||
Total taxation for continuing operations | 60 | 20 | 9 |
A-8.10
Table of Contents
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Profits after tax of subsidiaries (net of tax £nil, 2006: £nil, 2005: £20 million) | — | — | 69 | |||||||||
Profit on disposal of subsidiaries (net of tax, £nil 2006: £nil, 2005: £43 million) | 14 | 12 | 184 | |||||||||
Profit for the year from discontinued operations | 14 | 12 | 253 | |||||||||
Basic earnings per ordinary share for discontinued operations | 1.1p | 1.0p | 16.3p | |||||||||
Diluted earnings per ordinary share for discontinued operations | 1.1p | 0.9p | 15.8p |
A-8.11
Table of Contents
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Results of Instinet and BTC | ||||||||||||
Revenue | — | — | 466 | |||||||||
Operating costs | — | — | (402 | ) | ||||||||
Operating profit | — | — | 64 | |||||||||
Finance income | — | — | 13 | |||||||||
Profit on disposal of available-for-sale financial assets | — | — | 12 | |||||||||
Profit before taxation | — | — | 89 | |||||||||
Taxation | — | — | (20 | ) | ||||||||
Profit for the period | — | — | 69 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Cash generated from discontinued operations (see note 29) | — | — | 3 | |||||||||
Tax paid | — | — | (13 | ) | ||||||||
Interest received | — | — | 13 | |||||||||
Interest paid | — | — | — | |||||||||
Net cash flow from operating activities | — | — | 3 | |||||||||
Net cash flow from investing activities* | — | — | (474 | ) | ||||||||
Net cash flow from financing activities | — | — | (85 | ) | ||||||||
Exchange gains on cash and cash equivalents | — | — | 57 | |||||||||
Decrease in cash and cash equivalents from discontinued operations | — | — | (499 | ) |
* | Net cash flow from investing activities in 2005 includes £582 million relating to cash held by subsidiaries at the date of disposal. |
A-8.12
Table of Contents
2007 | 2006 | 2005 | ||||||||||
Weighted average number in millions | £m | £m | £m | |||||||||
Ordinary shares in issue | 1,479 | 1,455 | 1,438 | |||||||||
Non-vested shares held by Employee Share Ownership Trusts | (28 | ) | (30 | ) | (32 | ) | ||||||
Shares repurchased | (212 | ) | (128 | ) | (10 | ) | ||||||
Basic earnings per share denominator | 1,239 | 1,297 | 1,396 | |||||||||
Issuable under employee share schemes | 25 | 24 | 41 | |||||||||
Diluted earnings per share denominator | 1,264 | 1,321 | 1,437 | |||||||||
Earnings per share from continuing and discontinued operations | 2007 | 2006 | 2005 | |||||||||
Profit attributable to equity holders of the company (£m) | 227 | 305 | 456 | |||||||||
Basic earnings per share | 18.4p | 23.6p | 32.6p | |||||||||
Diluted earnings per share | 18.0p | 23.1p | 31.7p | |||||||||
Earnings per share from continuing operations | 2007 | 2006 | 2005 | |||||||||
Profit attributable to equity holders of the company (£m) | 213 | 293 | 229 | |||||||||
Basic earnings per share | 17.3p | 22.6p | 16.3p | |||||||||
Diluted earnings per share | 16.9p | 22.2p | 15.9p |
A-8.13
Table of Contents
Salary/ | Compensation | 2007 | 2006 | |||||||||||||||||||||||||
Fees | Bonus | Benefits1 | Allowance2&5 | for Loss of Office | Total | Total | ||||||||||||||||||||||
£000 | £000 | £000 | £000 | £000 | £000 | £000 | ||||||||||||||||||||||
Niall FitzGerald, KBE3&4 | 525 | — | 3 | — | — | 528 | 503 | |||||||||||||||||||||
Lawton Fitt6 | 69 | — | — | 30 | — | 99 | 88 | |||||||||||||||||||||
Penny Hughes7 | 54 | — | — | 10 | — | 64 | 50 | |||||||||||||||||||||
Ed Kozel16 | 17 | — | — | 10 | — | 27 | 85 | |||||||||||||||||||||
Sir Deryck Maughan7 | 54 | — | — | 25 | — | 79 | 70 | |||||||||||||||||||||
Nandan Nilekani8 | 55 | — | — | 25 | — | 80 | — | |||||||||||||||||||||
Ken Olisa8 | 55 | — | — | 10 | — | 65 | 50 | |||||||||||||||||||||
Dick Olver9 | 67 | — | — | 10 | — | 77 | 68 | |||||||||||||||||||||
Ian Strachan10 | 64 | — | — | 10 | — | 74 | 60 | |||||||||||||||||||||
Tom Glocer11&15 | 888 | 1,267 | 451 | — | — | 2,606 | 2,265 | |||||||||||||||||||||
David Grigson12 | 482 | 579 | 13 | 80 | — | 1,154 | 1,087 | |||||||||||||||||||||
Devin Wenig13 | 448 | 532 | 43 | 10 | — | 1,033 | 1,001 | |||||||||||||||||||||
Total emoluments of directors14 | 2,778 | 2,378 | 510 | 220 | — | 5,886 | 5,327 |
1 | Items included under Benefits are those provided as goods and services received during the year. | |
2 | Items included under Allowances are contractual benefits, which are paid in cash rather than as goods and services during the year. | |
3 | Non-cash benefits received by Niall FitzGerald consist of chauffeur benefits of £2,661. | |
4 | Niall FitzGerald has waived his £10,000 Nominations Committee chairman fee. | |
5 | Allowances paid to Lawton Fitt, Penny Hughes, Ed Kozel, Deryck Maughan, Nandan Nilekani, Ken Olisa, Dick Olver and Ian Strachan represent travel allowances to attend overseas board meetings. |
A-8.14
Table of Contents
6 | Fees paid to Lawton Fitt include £18,333 in respect of her position as Chairman of the Audit Committee. | |
7 | Fees paid to Penny Hughes and Deryck Maughan include £3,333 each as members of the Remuneration Committee. | |
8 | Fees paid to Nandan Nilekani and Ken Olisa include £5,000 each as members of the Audit Committee. | |
9 | Fees paid to Dick Olver include £5,000 in respect of his position as member of the Audit Committee, and £11,667 in respect of his position as the Senior Independent Director. Dick Olver was over-paid in error by the company in 2007 by £8,351 and the amount was repaid after year end. | |
10 | Fees paid to Ian Strachan include £13,333 in respect of his position as Chairman of the Remuneration Committee. | |
11 | Non-cash benefits received by Tom Glocer included accommodation costs of £268,143, tax services of £109,681 (including those related to the Thomson transaction), company car and healthcare benefits totalling £36,210, long-term disability insurance of £2,100, and family travel of £34,473. | |
12 | Non-cash benefits received by David Grigson included healthcare benefits of £1,311 and long-term disability insurance of £1,300, tax services of £3,231 and a car benefit of £6,425. Cash allowances consisted of an annual car allowance of £7,420, of which £3,188 was repaid after year end in lieu of his car benefit and a retirement allowance of £74,930. | |
13 | Non-cash benefits received by Devin Wenig consisted of healthcare benefits of £36,323 and tax services of £6,081. Cash allowances consisted of a car allowance of £9,600. Devin Wenig’s salary is paid in US dollars and the total amount reflected in the table is contractually split between his role as executive director and Chief Operating Officer. | |
14 | The total aggregate emoluments for the directors for the period 1 January 2007 to 31 December 2007 were £5.9m. The total emoluments for 2006 were £5.3m. | |
15 | During the year a group company paid certain personal expenses on behalf of Tom Glocer. The amount due from Tom Glocer at 31 December 2007, which was the maximum outstanding during the year, was £1,435. No interest was charged. Tom Glocer repaid the amount as soon as he was informed that any personal expenses had been borne by the company. | |
16 | Ed Kozel resigned as a director on 27 April 2007. |
Compensation | ||||||||||||||||||||||||||||
Salary/ | for Loss | 2007 | 2006 | |||||||||||||||||||||||||
Fees | Bonus1 | Benefits | Allowance | of Office | Total | Total | ||||||||||||||||||||||
£000 | £000 | £000 | £000 | £000 | £000 | £000 | ||||||||||||||||||||||
Other senior managers as a group (16 persons) (2006: | ||||||||||||||||||||||||||||
17 persons) | 4197 | 5,047 | 202 | 228 | — | 9,674 | 7,019 |
Notes: | ||
All amounts have been rounded up to the nearest thousand. | ||
The following conversion rates were used: US$2: £1, Swiss Franc 2.4: £1, Hong Kong $15.59: £1. These were the average rates in effect during 2007. | ||
1 | In 2007, in addition to the annual bonus scheme, the Remuneration Committee approved an additional one-off bonus to selected employees (excluding executive directors) on profits over and above a target trading profit. |
A-8.15
Table of Contents
Company | ||||||||
contribution | ||||||||
in respect | ||||||||
of period | ||||||||
Age | £000 | |||||||
Tom Glocer | 48 | 226 | ||||||
David Grigson | 53 | 28 | ||||||
Devin Wenig | 41 | 28 |
A-8.16
Table of Contents
Market | ||||||||||||||||||||||||||||||||||||||||||||||||
Market | price | Number | ||||||||||||||||||||||||||||||||||||||||||||||
price | per | at 31 Dec | ||||||||||||||||||||||||||||||||||||||||||||||
Number at 1 | Number | per | Number | share | Number | Number | 2007 (or | |||||||||||||||||||||||||||||||||||||||||
Date | Jan 2007 (or | granted | share | vested | at | (released) | (lapsed) | earlier | End of | |||||||||||||||||||||||||||||||||||||||
of | later date of | during | at | during | vesting | during | during | date of | qualifying | Expiry | ||||||||||||||||||||||||||||||||||||||
Plan | award | appointment) | period | grant | period | date | period | period | departure) | period | date | |||||||||||||||||||||||||||||||||||||
Thomas Glocer | LTIP1&2 | 20-Feb-02 | 234,974 | — | — | — | — | — | (234,974 | ) | — | 31-Dec-06 | 01-Jan-07 | |||||||||||||||||||||||||||||||||||
24-Feb-03 | 1,731,277 | — | — | — | — | — | — | 1,731,277 | 31-Dec-07 | 01-Jan-08 | ||||||||||||||||||||||||||||||||||||||
23-Feb-04 | 544,094 | — | — | 544,094 | £ | 4.35 | (544,094 | ) | — | — | 31-Dec-06 | 01-Jan-07 | ||||||||||||||||||||||||||||||||||||
11-Mar-05 | 417,228 | — | — | — | — | — | — | 417,228 | 31-Dec-07 | 01-Jan-08 | ||||||||||||||||||||||||||||||||||||||
15-Mar-06 | 500,000 | — | — | — | — | — | — | 500,000 | 31-Dec-08 | 01-Jan-09 | ||||||||||||||||||||||||||||||||||||||
13-Mar-073 | — | 500,000 | £ | 4.42 | — | — | — | — | 500,000 | 31-Dec-09 | 01-Jan-10 | |||||||||||||||||||||||||||||||||||||
Total | 3,427,573 | 500,000 | 544,094 | (544,094 | ) | (234,974 | ) | 3,148,505 | ||||||||||||||||||||||||||||||||||||||||
Devin Wenig | LTIP1&2 | 20-Feb-02 | 22,047 | — | — | — | — | — | (22,047 | ) | — | 31-Dec-06 | 01-Jan-07 | |||||||||||||||||||||||||||||||||||
24-Feb-03 | 200,000 | — | — | — | — | — | — | 200,000 | 31-Dec-07 | 01-Jan-08 | ||||||||||||||||||||||||||||||||||||||
23-Feb-04 | 200,000 | — | — | 200,000 | £ | 4.35 | (200,000 | ) | — | — | 31-Dec-06 | 01-Jan-07 | ||||||||||||||||||||||||||||||||||||
11-Mar-05 | 163,468 | — | — | — | — | — | — | 163,468 | 31-Dec-07 | 01-Jan-08 | ||||||||||||||||||||||||||||||||||||||
15-Mar-06 | 250,000 | — | — | — | — | — | — | 250,000 | 31-Dec-08 | 01-Jan-09 | ||||||||||||||||||||||||||||||||||||||
13-Mar-073 | — | 300,000 | £ | 4.42 | — | — | — | — | 300,000 | 31-Dec-09 | 01-Jan-10 | |||||||||||||||||||||||||||||||||||||
Total | 835,515 | 300,000 | 200,000 | (200,000 | ) | (22,047 | ) | 913,468 | ||||||||||||||||||||||||||||||||||||||||
David Grigson | LTIP1&2 | 20-Feb-02 | 37,205 | — | — | — | — | — | (37,205 | ) | — | 31-Dec-06 | 01-Jan-07 | |||||||||||||||||||||||||||||||||||
24-Feb-03 | 200,000 | — | — | — | — | — | — | 200,000 | 31-Dec-07 | 01-Jan-08 | ||||||||||||||||||||||||||||||||||||||
23-Feb-04 | 200,000 | — | — | 200,000 | £ | 4.35 | (200,000 | ) | — | — | 31-Dec-06 | 01-Jan-07 | ||||||||||||||||||||||||||||||||||||
11-Mar-05 | 163,468 | — | — | — | — | — | — | 163,468 | 31-Dec-07 | 01-Jan-08 | ||||||||||||||||||||||||||||||||||||||
15-Mar-06 | 200,000 | — | — | — | — | — | — | 200,000 | 31-Dec-08 | 01-Jan-09 | ||||||||||||||||||||||||||||||||||||||
13-Mar-073 | — | 200,000 | £ | 4.42 | — | — | — | — | 200,000 | 31-Dec-09 | 01-Jan-10 | |||||||||||||||||||||||||||||||||||||
Total | 800,673 | 200,000 | 200,000 | (200,000 | ) | (37,205 | ) | 763,468 | ||||||||||||||||||||||||||||||||||||||||
Notes: | ||
1 | The LTIP awards are subject to certain performance conditions. | |
2 | LTIP awards to executive directors prior to 2004 are subject to a retention period of two years from vesting, save that this is reduced to one year where the performance period has been extended to five years. For awards made in or prior to 2003, the plan permits the measurement period to be extended by up to two years under a re-testing provision. For LTIP awards made from 2004 onwards no re-testing is permitted. | |
LTIP 2002 did not meet performance conditions and therefore lapsed. Had the awards vested, they would have been released in March 2007. | ||
LTIP 2003 and 2005 did not meet performance conditions and subsequently lapsed in February 2008. | ||
3 | 2007 awards. | |
4 | Subject to performance conditions being met, share awards are due for release as soon as possible after vesting (subject to any restricted period). |
A-8.17
Table of Contents
Market | ||||||||||||||||||||||||||||||||||||||||||||||||
Market | price | Number | ||||||||||||||||||||||||||||||||||||||||||||||
price | per | at 31 Dec | ||||||||||||||||||||||||||||||||||||||||||||||
Number at 1 | Number | per | Number | share | Number | Number | 2007 (or | |||||||||||||||||||||||||||||||||||||||||
Date | Jan 2007 (or | granted | share | vested | at | (released) | (lapsed) | earlier | End of | |||||||||||||||||||||||||||||||||||||||
of | later date of | during | at | during | vesting | during | during | date of | qualifying | Expiry | ||||||||||||||||||||||||||||||||||||||
Plan | award | appointment) | period | grant | period4 | date | period4 | period | departure) | period | date | |||||||||||||||||||||||||||||||||||||
Other senior managers as a group (16 persons) (2006: | ||||||||||||||||||||||||||||||||||||||||||||||||
17 persons)5 | LTIP1&2 | 20-Feb-02 | 96,017 | — | — | — | — | — | (96,017 | ) | — | 31-Dec-06 | 01-Jan-07 | |||||||||||||||||||||||||||||||||||
24-Feb-03 | 650,145 | — | — | — | — | — | — | 650,145 | 31-Dec-07 | 01-Jan-08 | ||||||||||||||||||||||||||||||||||||||
23-Feb-04 | 290,022 | — | — | 290,022 | £ | 4.35 | (290,022 | ) | — | — | 31-Dec-06 | 01-Jan-07 | ||||||||||||||||||||||||||||||||||||
03-Dec-04 | 92,368 | — | — | 92,368 | £ | 4.35 | (92,368 | ) | — | — | 31-Dec-06 | 01-Jan-07 | ||||||||||||||||||||||||||||||||||||
11-Mar-05 | 336,602 | — | — | — | — | — | — | 336,602 | 31-Dec-07 | 01-Jan-08 | ||||||||||||||||||||||||||||||||||||||
15-Mar-06 | 479,937 | — | — | — | — | — | — | 479,937 | 31-Dec-08 | 01-Jan-09 | ||||||||||||||||||||||||||||||||||||||
02-Aug-06 | 64,000 | — | — | — | — | — | — | 64,000 | 31-Dec-08 | 01-Jan-09 | ||||||||||||||||||||||||||||||||||||||
13-Mar-07 | — | 884,556 | £ | 4.42 | — | — | — | — | 884,556 | 31-Dec-09 | 01-Jan-10 | |||||||||||||||||||||||||||||||||||||
RSP3 | 27-Aug-04 | 52,450 | — | £ | 3.21 | 26,225 | £ | 6.32 | (26,225 | ) | — | 26,225 | 27-Aug-06 | 27-Aug-08 | ||||||||||||||||||||||||||||||||||
03-Dec-04 | 17,238 | — | £ | 3.89 | 8,619 | £ | 6.32 | (8,619 | ) | — | 8,619 | 03-Dec-06 | 03-Dec-08 | |||||||||||||||||||||||||||||||||||
11-Mar-05 | 158,235 | — | £ | 4.19 | 52,745 | £ | 4.42 | (52,745 | ) | — | 105,490 | 11-Mar-06 | 11-Mar-09 | |||||||||||||||||||||||||||||||||||
02-Aug-05 | 14,724 | — | £ | 3.89 | 4,908 | £ | 6.09 | (4,908 | ) | — | 9,816 | 02-Aug-06 | 02-Aug-09 | |||||||||||||||||||||||||||||||||||
15-Mar-06 | 292,867 | — | £ | 3.93 | 168,637 | £ | 4.28 | (168,637 | ) | — | 124,230 | 15-Mar-07 | 15-Mar-10 | |||||||||||||||||||||||||||||||||||
13-Mar-07 | — | 293,124 | — | — | — | — | — | 293,124 | 13-Mar-08 | 13-Mar-11 | ||||||||||||||||||||||||||||||||||||||
07-Aug-07 | — | 131,252 | — | — | — | — | — | 131,252 | 07-Aug-08 | 07-Aug-11 | ||||||||||||||||||||||||||||||||||||||
Total | 2,544,605 | 1,308,932 | 643,524 | (643,524 | ) | (96,017 | ) | 3,113,996 | ||||||||||||||||||||||||||||||||||||||||
Notes: | ||
1 | The LTIP awards are subject to certain performance conditions. | |
2 | For awards made in or prior to 2004, the plan permits the measurement period to be extended by up to two years under a re-testing provision. For LTIP awards made from 2004 onwards no re-testing is permitted. | |
LTIP 2002 did not meet performance conditions and therefore lapsed. Had the awards vested, they would have been released in March 2007. | ||
LTIP 2003 and 2005 did not meet performance conditions and subsequently lapsed in February 2008. | ||
3 | The restricted share plan was introduced in 2004. Restricted shares will not normally be granted for long-term incentive purposes to executive directors or members of the GLT. The indicated awards were made prior to the appointment of the relevant individuals as GLT members. RSP awards were also made to GLT members in lieu of the DSOP awards due to them in August 2007. Awards are normally granted with a four year vesting period, vesting 25% each year. Therefore, 25% vested in 2007 on the anniversary of the date of grant. If this date fell on a non-trading date, the shares vested at the next available trading date. | |
4 | Subject to performance conditions being met, share awards are due for release as soon as possible after vesting (subject to any restricted period). | |
5 | Other senior managers as a group were 15 persons at 1 January 2007 and were 15 persons at 31 December 2007. Lee Ann Daly and David Craig were appointed to GLT on 1 January 2007 and 1 March 2007 respectively. Alex Hungate resigned on 30 September 2007. |
A-8.18
Table of Contents
Number at | Number at | |||||||||||||||||||||||||||||||||||||||||||
1 Jan 2007 | Number | Number | Number | Number | 31 Dec 2007 | |||||||||||||||||||||||||||||||||||||||
(or later | granted | vested | (exercised) | (lapsed) | (or earlier | Earliest | ||||||||||||||||||||||||||||||||||||||
Date of | Exercise | date of | during | during | during | during | date of | exercise | Expiry | |||||||||||||||||||||||||||||||||||
Name | Plan | grant | price | appointment) | period | period | period | period | departure) | date | date | |||||||||||||||||||||||||||||||||
Thomas Glocer6 | DSOP3 | 20-Feb-02 | £ | 5.28 | 461,295 | — | — | — | (461,295 | ) | — | 20-Feb-07 | 20-Feb-12 | |||||||||||||||||||||||||||||||
02-Aug-02 | £ | 2.66 | 915,654 | — | — | — | (915,654 | ) | — | 02-Aug-07 | 02-Aug-12 | |||||||||||||||||||||||||||||||||
24-Feb-03 | £ | 1.35 | 1,307,514 | — | — | (1,307,514 | ) | — | — | 24-Feb-06 | 24-Feb-13 | |||||||||||||||||||||||||||||||||
04-Aug-03 | £ | 2.45 | 706,594 | — | — | (706,594 | ) | — | — | 04-Aug-06 | 04-Aug-13 | |||||||||||||||||||||||||||||||||
23-Feb-04 | £ | 4.07 | 789,430 | — | 789,430 | (789,430 | ) | — | — | 23-Feb-07 | 23-Feb-14 | |||||||||||||||||||||||||||||||||
27-Aug-04 | £ | 3.21 | 1,000,928 | — | 1,000,928 | (1,000,928 | ) | — | — | 27-Aug-07 | 27-Aug-14 | |||||||||||||||||||||||||||||||||
11-Mar-05 | £ | 4.19 | 719,473 | — | — | — | — | 719,473 | 11-Mar-08 | 11-Mar-15 | ||||||||||||||||||||||||||||||||||
02-Aug-05 | £ | 3.89 | 774,959 | — | — | — | — | 774,959 | 02-Aug-08 | 02-Aug-15 | ||||||||||||||||||||||||||||||||||
15-Mar-06 | £ | 3.93 | 625,000 | — | — | — | — | 625,000 | 15-Mar-09 | 15-Mar-16 | ||||||||||||||||||||||||||||||||||
02-Aug-06 | £ | 3.93 | 625,000 | — | — | — | — | 625,000 | 02-Aug-09 | 02-Aug-16 | ||||||||||||||||||||||||||||||||||
13-Mar-075 | £ | 4.42 | — | 625,000 | — | — | — | 625,000 | 13-Mar-10 | 13-Mar-17 | ||||||||||||||||||||||||||||||||||
07-Aug-075 | £ | 6.19 | — | 625,000 | — | — | — | 625,000 | 07-Aug-10 | 07-Aug-17 | ||||||||||||||||||||||||||||||||||
SAYE4 | 07-Apr-04 | £ | 3.14 | 1,200 | — | 1,200 | (1,200 | ) | — | — | 01-Jun-07 | 01-Dec-07 | ||||||||||||||||||||||||||||||||
14-Apr-05 | £ | 3.33 | 569 | — | — | — | — | 569 | 01-Jun-08 | 01-Dec-08 | ||||||||||||||||||||||||||||||||||
10-Apr-06 | £ | 3.14 | 1,191 | — | — | — | — | 1,191 | 01-Jun-09 | 01-Dec-09 | ||||||||||||||||||||||||||||||||||
03-Apr-075 | £ | 3.53 | — | 1,070 | — | — | — | 1,070 | 01-Jun-10 | 01-Dec-10 | ||||||||||||||||||||||||||||||||||
Total | 7,928,807 | 1,251,070 | 1,791,558 | (3,805,666 | ) | (1,376,949 | ) | 3,997,262 | ||||||||||||||||||||||||||||||||||||
A-8.19
Table of Contents
Number at | Number at | |||||||||||||||||||||||||||||||||||||||||||
1 Jan 2007 | Number | Number | Number | Number | 31 Dec 2007 | |||||||||||||||||||||||||||||||||||||||
(or later | granted | vested | (exercised) | (lapsed) | (or earlier | Earliest | ||||||||||||||||||||||||||||||||||||||
Date of | Exercise | date of | during | during | during | during | date of | exercise | Expiry | |||||||||||||||||||||||||||||||||||
Name | Plan | grant | price | appointment) | period | period | period | period | departure) | date | date | |||||||||||||||||||||||||||||||||
Devin Wenig6 | DSOP3 | 27-Dec-002&3 | £ | 11.39 | 6,913 | — | — | — | (6,913 | ) | — | 27-Dec-01 | 27-Dec-07 | |||||||||||||||||||||||||||||||
25-Jun-012&3 | £ | 8.62 | 9,135 | — | — | — | — | 9,135 | 25-Jun-02 | 25-Jun-11 | ||||||||||||||||||||||||||||||||||
20-Feb-022&3 | £ | 5.28 | 25,936 | — | — | — | — | 25,936 | 20-Feb-03 | 20-Feb-12 | ||||||||||||||||||||||||||||||||||
02-Aug-022&3 | £ | 2.66 | 200,000 | — | — | — | — | 200,000 | 02-Aug-03 | 02-Aug-12 | ||||||||||||||||||||||||||||||||||
24-Feb-03 | £ | 1.35 | 200,000 | — | — | — | — | 200,000 | 24-Feb-06 | 24-Feb-13 | ||||||||||||||||||||||||||||||||||
04-Aug-03 | £ | 2.45 | 200,000 | — | — | — | — | 200,000 | 04-Aug-06 | 04-Aug-13 | ||||||||||||||||||||||||||||||||||
23-Feb-04 | £ | 4.07 | 122,950 | — | 122,950 | — | — | 122,950 | 23-Feb-07 | 23-Feb-14 | ||||||||||||||||||||||||||||||||||
27-Aug-04 | £ | 3.21 | 155,892 | — | 155,892 | — | — | 155,892 | 27-Aug-07 | 27-Aug-14 | ||||||||||||||||||||||||||||||||||
11-Mar-05 | £ | 4.19 | 281,886 | — | — | — | — | 281,886 | 11-Mar-08 | 11-Mar-15 | ||||||||||||||||||||||||||||||||||
02-Aug-05 | £ | 3.89 | 303,625 | — | — | — | — | 303,625 | 02-Aug-08 | 02-Aug-15 | ||||||||||||||||||||||||||||||||||
15-Mar-06 | £ | 3.93 | 325,000 | — | — | — | — | 325,000 | 15-Mar-09 | 15-Mar-16 | ||||||||||||||||||||||||||||||||||
02-Aug-06 | £ | 3.93 | 325,000 | — | — | — | — | 325,000 | 02-Aug-09 | 02-Aug-16 | ||||||||||||||||||||||||||||||||||
13-Mar-075 | £ | 4.42 | — | 375,000 | — | — | — | 375,000 | 13-Mar-10 | 13-Mar-17 | ||||||||||||||||||||||||||||||||||
07-Aug-075 | £ | 6.19 | — | 375,000 | — | — | — | 375,000 | 07-Aug-10 | 07-Aug-17 | ||||||||||||||||||||||||||||||||||
SAYE4 | 07-Apr-041 | $ | 7.27 | 1,200 | — | 1,200 | (1,200 | ) | — | — | 01-Jun-07 | 01-Dec-07 | ||||||||||||||||||||||||||||||||
14-Apr-051 | $ | 7.93 | 1,134 | — | — | — | — | 1,134 | 01-Jun-08 | 01-Dec-08 | ||||||||||||||||||||||||||||||||||
Total | 2,158,671 | 750,000 | 280,042 | (1,200 | ) | (6,913 | ) | 2,900,558 | ||||||||||||||||||||||||||||||||||||
A-8.20
Table of Contents
Number at | Number at | |||||||||||||||||||||||||||||||||||||||||||
1 Jan 2007 | Number | Number | Number | Number | 31 Dec 2007 | |||||||||||||||||||||||||||||||||||||||
(or later | granted | vested | (exercised) | (lapsed) | (or earlier | Earliest | ||||||||||||||||||||||||||||||||||||||
Date of | Exercise | date of | during | during | during | during | date of | exercise | Expiry | |||||||||||||||||||||||||||||||||||
Name | Plan | grant | price | appointment) | period | period | period | period | departure) | date | date | |||||||||||||||||||||||||||||||||
David Grigson6 | DSOP3 | 20-Feb-02 | £ | 5.28 | 75,757 | — | — | — | (75,757 | ) | — | 20-Feb-07 | 20-Feb-12 | |||||||||||||||||||||||||||||||
02-Aug-02 | £ | 2.66 | 150,375 | — | — | — | (150,375 | ) | — | 02-Aug-07 | 02-Aug-12 | |||||||||||||||||||||||||||||||||
24-Feb-03 | £ | 1.35 | 200,000 | — | — | — | — | 200,000 | 24-Feb-06 | 24-Feb-13 | ||||||||||||||||||||||||||||||||||
04-Aug-03 | £ | 2.45 | 200,000 | — | — | — | — | 200,000 | 04-Aug-06 | 04-Aug-13 | ||||||||||||||||||||||||||||||||||
23-Feb-04 | £ | 4.07 | 122,950 | — | 122,950 | — | — | 122,950 | 23-Feb-07 | 23-Feb-14 | ||||||||||||||||||||||||||||||||||
27-Aug-04 | £ | 3.21 | 155,892 | — | 155,892 | — | — | 155,892 | 27-Aug-07 | 27-Aug-14 | ||||||||||||||||||||||||||||||||||
11-Mar-05 | £ | 4.19 | 281,886 | — | — | — | — | 281,886 | 11-Mar-08 | 11-Mar-15 | ||||||||||||||||||||||||||||||||||
02-Aug-05 | £ | 3.89 | 303,625 | — | — | — | — | 303,625 | 02-Aug-08 | 02-Aug-15 | ||||||||||||||||||||||||||||||||||
15-Mar-06 | £ | 3.93 | 250,000 | — | — | — | — | 250,000 | 15-Mar-09 | 15-Mar-16 | ||||||||||||||||||||||||||||||||||
02-Aug-06 | £ | 3.93 | 250,000 | — | — | — | — | 250,000 | 02-Aug-09 | 02-Aug-16 | ||||||||||||||||||||||||||||||||||
13-Mar-075 | £ | 4.42 | — | 250,000 | — | — | — | 250,000 | 13-Mar-10 | 13-Mar-17 | ||||||||||||||||||||||||||||||||||
07-Aug-075 | £ | 6.19 | — | 250,000 | — | — | — | 250,000 | 07-Aug-10 | 07-Aug-17 | ||||||||||||||||||||||||||||||||||
SAYE4 | 07-Apr-04 | £ | 3.14 | 1,200 | — | 1,200 | (1,200 | ) | — | — | 01-Jun-07 | 01-Dec-07 | ||||||||||||||||||||||||||||||||
14-Apr-05 | £ | 3.33 | 569 | — | — | — | — | 569 | 01-Jun-08 | 01-Dec-08 | ||||||||||||||||||||||||||||||||||
03-Apr-075 | £ | 3.53 | — | 1,070 | — | — | — | 1,070 | 01-Jun-10 | 01-Dec-10 | ||||||||||||||||||||||||||||||||||
Total | 1,992,254 | 501,070 | 280,042 | (1,200 | ) | (226,132 | ) | 2,265,992 | ||||||||||||||||||||||||||||||||||||
Notes: | ||
1 | The options indicated are over American Depositary Shares (ADSs). Each ADS represents six ordinary shares, is denominated in US dollars and trades on The NASDAQ Global Select Market. For the purposes of this disclosure, ADSs have been converted into the equivalent number of ordinary shares and an equivalent option price. | |
2 | The indicated awards were made prior to the appointment of the relevant individual as an executive director. The DSOP options granted prior to the appointment as an executive director have no performance condition. | |
3 | Save as disclosed in note 2 above, exercise of each DSOP award is conditional on performance criteria. Performance conditions were varied during 2006. | |
4 | Options granted under the SAYE Plan have no performance conditions. | |
5 | 2007 award. | |
6 | There were total gains of £14,904,955.09 on the exercise of share options in 2007 (2006: £27,384). |
At 31 December 2007, the market close price of our shares was 637.00 pence per share and $76.09 per ADS. The highest prices during the year were 668.50 pence per share and $83.70 per ADS and the lowest were 418.89 pence per share and $48.18 per ADS. |
A-8.21
Table of Contents
Number at | Number at | |||||||||||||||||||||||||||||||||||||||||||
1 Jan 2007 | Number | Number | Number | Number | 31 Dec 2007 | |||||||||||||||||||||||||||||||||||||||
(or later | granted | vested | (exercised) | (lapsed) | (or earlier | Earliest | ||||||||||||||||||||||||||||||||||||||
Date of | Exercise | date of | during | during | during | during | date of | exercise | Expiry | |||||||||||||||||||||||||||||||||||
Name | Plan | grant | price | appointment) | period | period | period | period | departure) | date | date | |||||||||||||||||||||||||||||||||
Other senior managers as a group (16 persons) (2006: | ||||||||||||||||||||||||||||||||||||||||||||
17 persons)4 | DSOP3 | 27-Dec-00 | £ | 11.39 | 25,414 | — | — | — | (19,883 | ) | 5,531 | 27-Dec-01 | 27-Dec-07 | |||||||||||||||||||||||||||||||
25-Jun-01 | £ | 8.62 | 54,347 | — | — | — | — | 54,347 | 25-Jun-02 | 25-Jun-11 | ||||||||||||||||||||||||||||||||||
21-Dec-01 | £ | 6.92 | 15,425 | — | — | — | — | 15,425 | 21-Dec-02 | 21-Dec-11 | ||||||||||||||||||||||||||||||||||
20-Feb-02 | £ | 5.28 | 5,697 | — | — | — | (5,697 | ) | — | 20-Feb-03 | 20-Feb-07 | |||||||||||||||||||||||||||||||||
20-Feb-02 | £ | 5.28 | 107,260 | — | — | (23,148 | ) | — | 84,112 | 20-Feb-03 | 20-Feb-12 | |||||||||||||||||||||||||||||||||
02-Aug-02 | £ | 2.66 | 641,708 | — | — | (200,000 | ) | — | 441,708 | 02-Aug-03 | 02-Aug-12 | |||||||||||||||||||||||||||||||||
24-Feb-03 | £ | 1.35 | 277,775 | — | 105,893 | (103,575 | ) | — | 174,200 | 24-Feb-04 | 24-Feb-13 | |||||||||||||||||||||||||||||||||
01-Apr-03 | £ | 1.08 | 18,750 | — | 18,750 | — | — | 18,750 | 01-Apr-04 | 01-Apr-13 | ||||||||||||||||||||||||||||||||||
04-Aug-03 | £ | 2.45 | 501,250 | — | 170,625 | (142,500 | ) | — | 358,750 | 04-Aug-04 | 04-Aug-13 | |||||||||||||||||||||||||||||||||
23-Feb-04 | £ | 4.07 | 277,375 | — | 69,344 | (63,750 | ) | — | 213,625 | 23-Feb-05 | 23-Feb-14 | |||||||||||||||||||||||||||||||||
27-Aug-04 | £ | 3.21 | 199,064 | — | 49,766 | (61,812 | ) | — | 137,252 | 27-Aug-05 | 27-Aug-14 | |||||||||||||||||||||||||||||||||
11-Mar-05 | £ | 4.19 | 113,308 | — | 28,327 | (36,162 | ) | — | 77,146 | 11-Mar-06 | 11-Mar-15 | |||||||||||||||||||||||||||||||||
02-Aug-05 | £ | 3.89 | 122,044 | — | 30,511 | (38,950 | ) | — | 83,094 | 02-Aug-06 | 02-Aug-15 | |||||||||||||||||||||||||||||||||
15-Mar-06 | £ | 3.93 | 148,000 | — | 37,000 | (17,750 | ) | — | 130,250 | 15-Mar-07 | 15-Mar-16 | |||||||||||||||||||||||||||||||||
02-Aug-06 | £ | 3.93 | 233,000 | — | 58,250 | (17,750 | ) | — | 215,250 | 02-Aug-07 | 02-Aug-16 | |||||||||||||||||||||||||||||||||
13-Mar-07 | £ | 4.42 | — | 731,032 | — | — | — | 731,032 | 13-Mar-08 | 13-Mar-17 | ||||||||||||||||||||||||||||||||||
SAYE1 | 11-Apr-02 | £ | 4.48 | 2,216 | — | 2,216 | (2,216 | ) | — | — | 01-Jun-07 | 01-Dec-07 | ||||||||||||||||||||||||||||||||
11-Apr-022 | $ | 8.05 | 1,806 | — | 1,806 | (1,806 | ) | — | — | 01-Jun-07 | 01-Dec-07 | |||||||||||||||||||||||||||||||||
07-Apr-04 | £ | 3.14 | 7,200 | — | 7,200 | (7,200 | ) | — | — | 01-Jun-07 | 01-Dec-07 | |||||||||||||||||||||||||||||||||
07-Apr-042 | $ | 7.27 | 1,200 | — | 1,200 | (1,200 | ) | — | — | 01-Jun-07 | 01-Dec-07 | |||||||||||||||||||||||||||||||||
14-Apr-05 | £ | 3.33 | 3,072 | — | — | — | — | 3,072 | 01-Jun-08 | 01-Dec-08 | ||||||||||||||||||||||||||||||||||
10-Apr-06 | £ | 3.14 | 3,554 | — | — | — | — | 3,554 | 01-Jun-09 | 01-Dec-09 | ||||||||||||||||||||||||||||||||||
10-Apr-062 | $ | 6.77 | 1,188 | — | — | — | (1,188 | ) | — | 01-Jun-09 | 01-Dec-09 | |||||||||||||||||||||||||||||||||
03-Apr-07 | £ | 3.53 | — | 7,215 | — | — | — | 7,215 | 01-Jun-10 | 01-Dec-10 | ||||||||||||||||||||||||||||||||||
Total | 2,760,653 | 738,247 | 580,888 | (717,819 | ) | (26,768 | ) | 2,754,313 | ||||||||||||||||||||||||||||||||||||
Notes: | ||
1 | Options granted under the SAYE Plan have no performance conditions. | |
2 | The options indicated are over American Depositary Shares (ADSs). Each ADS represents six ordinary shares, is denominated in US dollars and trades on NASDAQ. For the purposes of this disclosure, ADSs have been converted into the equivalent number of ordinary shares and an equivalent option price. | |
3 | The DSOP was approved by the shareholders in April 2001. Awards are normally granted with a four year vesting period, vesting 25% each year. Therefore, 25% vested in 2007 on the anniversary of the date of grant. If this date fell on a non-trading date, the shares vested at the next available trading date. | |
4 | Other senior managers as a group were 15 persons at 1 January 2007 and were 15 persons at 31 December 2007. Lee Ann Daly and David Craig were appointed to GLT on 1 January 2007 and 1 March 2007 respectively. Alex Hungate resigned on 30 September 2007. | |
At 31 December 2007, the market close price of our shares was 637.00 pence per share and $76.09 per ADS. The highest prices during the year were 668.50 pence per share and $83.70 per ADS and the lowest were 418.89 pence per share and $48.18 per ADS. |
A-8.22
Table of Contents
Restated | Restated | |||||||||||
2007 | 2006 | 2005 | ||||||||||
Business division: | ||||||||||||
Sales & Trading* | 1,430 | 1,301 | 987 | |||||||||
Research & Asset Management | 895 | 800 | 658 | |||||||||
Enterprise | 1,491 | 1,241 | 925 | |||||||||
Media | 220 | 189 | 109 | |||||||||
Shared divisional resources | 3,706 | 3,182 | 3,504 | |||||||||
Total divisions | 7,472 | 6,713 | 6,183 | |||||||||
Global Sales & Service Organisation | 5,843 | 5,717 | 4,988 | |||||||||
Editorial | 2,351 | 2,321 | 2,210 | |||||||||
Corporate Services* | 1,526 | 1,551 | 1,637 | |||||||||
Total continuing operations | 17,462 | 16,302 | 15,018 | |||||||||
Discontinued operations | — | — | 846 | |||||||||
Total average number of employees | 17,462 | 16,302 | 15,864 | |||||||||
By location: | ||||||||||||
Europe, Middle East and Africa | 7,359 | 7,174 | 6,962 | |||||||||
Americas | 4,219 | 4,252 | 4,292 | |||||||||
Asia | 5,884 | 4,876 | 3,764 | |||||||||
Total continuing operations | 17,462 | 16,302 | 15,018 | |||||||||
Discontinued operations | — | — | 846 | |||||||||
Total average number of employees | 17,462 | 16,302 | 15,864 | |||||||||
By function: | ||||||||||||
Production and communications | 10,335 | 9,438 | 8,498 | |||||||||
Selling and marketing | 4,609 | 4,572 | 4,179 | |||||||||
Support services and administration | 2,518 | 2,292 | 2,341 | |||||||||
Total continuing operations | 17,462 | 16,302 | 15,018 | |||||||||
Discontinued operations | — | — | 846 | |||||||||
Total average number of employees | 17,462 | 16,302 | 15,864 | |||||||||
The above include: | ||||||||||||
Development staff | 3,120 | 2,670 | 2,332 |
* | 2006 and 2005 have been restated to reflect the way that Reuters was managed in 2007, Transaction Sales and Hosted are now shown within Sales & Trading rather than in Shared divisional resources and Global Sales & Service Organisation, respectively. Chief Technology Office is now included in Corporate Services rather than in Shared Divisional resources. |
A-8.23
Table of Contents
Attributable to equity | Minority | Total | ||||||||||||||||||||||
holders of the parent | interest | equity | ||||||||||||||||||||||
Share | Other | Retained | ||||||||||||||||||||||
capital | reserves | earnings | ||||||||||||||||||||||
Note | £m | £m | £m | £m | £m | |||||||||||||||||||
1 January 2005 | 455 | (1,647 | ) | 1,690 | 201 | 699 | ||||||||||||||||||
Actuarial losses on defined benefit plans | 25 | — | — | (48 | ) | — | (48 | ) | ||||||||||||||||
Exchange differences taken directly to reserves | — | 97 | — | 21 | 118 | |||||||||||||||||||
Exchange differences taken to the income statement on disposal of assets | — | (2 | ) | — | — | (2 | ) | |||||||||||||||||
Fair value losses on available-for-sale financial assets | 16 | — | (22 | ) | — | 7 | (15 | ) | ||||||||||||||||
Fair value gains on available-for-sale financial assets taken to the income statement on disposal of assets | 16 | — | (68 | ) | — | (5 | ) | (73 | ) | |||||||||||||||
Fair value losses on net investment hedges | 16 | — | (39 | ) | — | — | (39 | ) | ||||||||||||||||
Fair value gains taken to the income statement on disposal of net investments | — | (14 | ) | — | — | (14 | ) | |||||||||||||||||
Taxation on the items taken directly to or transferred from equity | — | 4 | 10 | — | 14 | |||||||||||||||||||
Net expense recognised directly in equity | — | (44 | ) | (38 | ) | 23 | (59 | ) | ||||||||||||||||
Profit for the year | — | — | 456 | 26 | 482 | |||||||||||||||||||
Total recognised (expense)/income for 2005 | — | (44 | ) | 418 | 49 | 423 | ||||||||||||||||||
Employee share schemes | — | — | 42 | 7 | 49 | |||||||||||||||||||
Taxation on employee share schemes | — | — | 11 | — | 11 | |||||||||||||||||||
Repurchase of own shares | — | — | (224 | ) | — | (224 | ) | |||||||||||||||||
Shares to be repurchased | — | — | (59 | ) | — | (59 | ) | |||||||||||||||||
Proceeds from shares issued to ordinary shareholders | 27 | 12 | — | (2 | ) | — | 10 | |||||||||||||||||
Proceeds of shares issued to minority shareholders of Instinet | — | — | — | 3 | 3 | |||||||||||||||||||
Dividends: | 32 | |||||||||||||||||||||||
Final dividend for 2004 | — | — | (86 | ) | — | (86 | ) | |||||||||||||||||
Interim dividend for 2005 | — | — | (54 | ) | — | (54 | ) | |||||||||||||||||
Share of Instinet’s dividend paid to minority shareholders | — | — | — | (23 | ) | (23 | ) | |||||||||||||||||
Other movements in equity | — | (1 | ) | — | — | (1 | ) | |||||||||||||||||
Minority interest in subsidiary disposed in the year | — | — | — | (237 | ) | (237 | ) | |||||||||||||||||
31 December 2005 | 467 | (1,692 | ) | 1,736 | — | 511 |
A-8.24
Table of Contents
Attributable to equity | Minority | Total | ||||||||||||||||||||||
holders of the parent | interest | equity | ||||||||||||||||||||||
Share | Other | Retained | ||||||||||||||||||||||
capital | reserves | earnings | ||||||||||||||||||||||
Note | £m | £m | £m | £m | £m | |||||||||||||||||||
1 January 2006 | 467 | (1,692 | ) | 1,736 | — | 511 | ||||||||||||||||||
Actuarial gains on defined benefit plans | 25 | — | — | 6 | — | 6 | ||||||||||||||||||
Exchange differences taken directly to reserves | — | (95 | ) | — | — | (95 | ) | |||||||||||||||||
Fair value gains on available-for-sale financial assets | 16 | — | 6 | — | — | 6 | ||||||||||||||||||
Fair value gains on net investment hedges | 16 | — | 34 | — | — | 34 | ||||||||||||||||||
Tax on items taken directly to or transferred from equity | — | (3 | ) | (1 | ) | — | (4 | ) | ||||||||||||||||
Net expense recognised directly in equity | — | (58 | ) | 5 | — | (53 | ) | |||||||||||||||||
Profit for the year | — | — | 305 | — | 305 | |||||||||||||||||||
Total recognised (expense)/income for 2006 | — | (58 | ) | 310 | — | 252 | ||||||||||||||||||
Employee share schemes | — | — | 30 | — | 30 | |||||||||||||||||||
Tax on employee share schemes | — | — | 1 | — | 1 | |||||||||||||||||||
Repurchase of own shares | — | — | (467 | ) | — | (467 | ) | |||||||||||||||||
Shares to be repurchased | — | — | (53 | ) | — | (53 | ) | |||||||||||||||||
Shares allotted during the year | 27 | 41 | — | (9 | ) | — | 32 | |||||||||||||||||
Shares cancelled during the year | 27 | (12 | ) | 12 | — | — | — | |||||||||||||||||
Dividends: | 32 | |||||||||||||||||||||||
Final dividend for 2005 | — | — | (81 | ) | — | (81 | ) | |||||||||||||||||
Interim dividend for 2006 | — | — | (53 | ) | — | (53 | ) | |||||||||||||||||
31 December 2006 | 496 | (1,738 | ) | 1,414 | — | 172 |
A-8.25
Table of Contents
Attributable to equity | Minority | Total | ||||||||||||||||||||||
holders of the parent | interest | equity | ||||||||||||||||||||||
Share | Other | Retained | ||||||||||||||||||||||
capital | reserves | earnings | ||||||||||||||||||||||
Note | £m | £m | £m | £m | £m | |||||||||||||||||||
1 January 2007 | 496 | (1,738 | ) | 1,414 | — | 172 | ||||||||||||||||||
Actuarial gains on defined benefit plans | 25 | — | — | 98 | — | 98 | ||||||||||||||||||
Exchange differences taken directly to reserves | — | 20 | — | — | 20 | |||||||||||||||||||
Fair value gains on available-for-sale financial assets | 16 | — | 11 | — | — | 11 | ||||||||||||||||||
Fair value gains on available-for-sale financial assets taken to the income statement on disposal of assets | 16 | — | (18 | ) | — | — | (18 | ) | ||||||||||||||||
Fair value gains on net investment hedges | 16 | — | 4 | — | — | 4 | ||||||||||||||||||
Tax on items taken directly to or transferred from equity | — | 1 | (21 | ) | — | (20 | ) | |||||||||||||||||
Net income recognised directly in equity | — | 18 | 77 | — | 95 | |||||||||||||||||||
Profit for the year | — | — | 227 | — | 227 | |||||||||||||||||||
Total recognised income for 2007 | — | 18 | 304 | — | 322 | |||||||||||||||||||
Employee share schemes | — | — | 30 | — | 30 | |||||||||||||||||||
Tax on employee share schemes | — | — | 4 | — | 4 | |||||||||||||||||||
Repurchase of own shares | — | — | (121 | ) | — | (121 | ) | |||||||||||||||||
Shares to be repurchased | — | — | (169 | ) | — | (169 | ) | |||||||||||||||||
Shares allotted during the year | 27 | 53 | — | (6 | ) | — | 47 | |||||||||||||||||
Shares cancelled during the year | 27 | (10 | ) | 10 | — | — | — | |||||||||||||||||
Dividends: | 32 | |||||||||||||||||||||||
Final dividend for 2006 | — | — | (86 | ) | — | (86 | ) | |||||||||||||||||
Interim dividend for 2007 | — | — | (61 | ) | — | (61 | ) | |||||||||||||||||
31 December 2007 | 539 | (1,710 | ) | 1,309 | — | 138 |
A-8.26
Table of Contents
31 December 2007 | ||||||||||||||||||||||||
Research | ||||||||||||||||||||||||
& | �� | |||||||||||||||||||||||
`Sales & | Asset Man- | |||||||||||||||||||||||
Trading | agement | Enterprise | Media | Shared | Total | |||||||||||||||||||
£m | £m | £m | £m | £m | £m | |||||||||||||||||||
Assets (excluding investment in associates and joint ventures) | 764 | 271 | 227 | 83 | 621 | 1,966 | ||||||||||||||||||
Investment in associates and joint ventures | 18 | 4 | 1 | 4 | — | 27 | ||||||||||||||||||
Total assets | 782 | 275 | 228 | 87 | 621 | 1,993 | ||||||||||||||||||
Total liabilities | (386 | ) | (122 | ) | (112 | ) | (50 | ) | (1,185 | ) | (1,855 | ) | ||||||||||||
Capital expenditure | 160 | 52 | 49 | 11 | — | 272 |
Restated | ||||||||||||||||||||||||
31 December 2006 | ||||||||||||||||||||||||
Research | ||||||||||||||||||||||||
& | ||||||||||||||||||||||||
`Sales & | Asset Man- | |||||||||||||||||||||||
Trading | agement | Enterprise | Media | Shared | Total | |||||||||||||||||||
£m | £m | £m | £m | £m | £m | |||||||||||||||||||
Assets (excluding investment in associates and joint ventures) | 745 | 243 | 182 | 56 | 656 | 1,882 | ||||||||||||||||||
Investment in associates and joint ventures | 15 | 4 | 1 | 18 | — | 38 | ||||||||||||||||||
Total assets | 760 | 247 | 183 | 74 | 656 | 1,920 | ||||||||||||||||||
Total liabilities | (430 | ) | (116 | ) | (115 | ) | (57 | ) | (1,030 | ) | (1,748 | ) | ||||||||||||
Capital expenditure | 172 | 32 | 76 | 10 | — | 290 |
A-8.27
Table of Contents
Restated | ||||||||||||||||||||||||
31 December 2005 | ||||||||||||||||||||||||
Research | ||||||||||||||||||||||||
& | ||||||||||||||||||||||||
`Sales & | Asset Man- | |||||||||||||||||||||||
Trading | agement | Enterprise | Media | Shared | Total | |||||||||||||||||||
£m | £m | £m | £m | £m | £m | |||||||||||||||||||
Assets (excluding investment in associates and joint ventures) | 667 | 246 | 178 | 49 | 961 | 2,101 | ||||||||||||||||||
Investment in associates and joint ventures | 11 | 5 | 3 | 17 | — | 36 | ||||||||||||||||||
Total assets | 678 | 251 | 181 | 66 | 961 | 2,137 | ||||||||||||||||||
Total liabilities | (542 | ) | (141 | ) | (150 | ) | (76 | ) | (717 | ) | (1,626 | ) | ||||||||||||
Capital expenditure* | 241 | 53 | 38 | 14 | — | 346 |
* | Capital expenditure in 2005 excludes Instinct Group, which was classified as a discontinued operation prior to its disposal. |
31 December 2007 | 31 December 2006 | 31 December 2005 | ||||||||||||||||||||||
Total | Capital | Total | Capital | Total | Capital | |||||||||||||||||||
assets | expenditure | assets | expenditure | assets | expenditure | |||||||||||||||||||
By geographical location | £m | £m | £m | £m | £m | £m | ||||||||||||||||||
Europe, Middle East & Africa | 710 | 144 | 616 | 124 | 589 | 191 | ||||||||||||||||||
Americas | 531 | 89 | 522 | 108 | 520 | 99 | ||||||||||||||||||
Asia | 228 | 39 | 194 | 58 | 143 | 56 | ||||||||||||||||||
Central | 524 | — | 588 | — | 885 | — | ||||||||||||||||||
Total | 1,993 | 272 | 1,920 | 290 | 2,137 | 346 |
A-8.28
Table of Contents
Internally | ||||||||||||||||||||||||||||
Trade | Customer | Technology | generated | Purchased | ||||||||||||||||||||||||
Goodwill | names | relationships | know-how | software | software | Total | ||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | ||||||||||||||||||||||
Cost: | ||||||||||||||||||||||||||||
1 January 2005 | 209 | 29 | 1 | 144 | 44 | 54 | 481 | |||||||||||||||||||||
Exchange differences | 24 | 3 | 4 | 6 | 1 | 2 | 40 | |||||||||||||||||||||
Additions: | ||||||||||||||||||||||||||||
Acquisition of subsidiaries | 103 | 4 | 59 | 4 | — | — | 170 | |||||||||||||||||||||
Other additions | — | — | — | — | 29 | 11 | 40 | |||||||||||||||||||||
Reclassifications** | (9 | ) | (3 | ) | — | (65 | ) | — | (3 | ) | (80 | ) | ||||||||||||||||
31 December 2005 | 327 | 33 | 64 | 89 | 74 | 64 | 651 | |||||||||||||||||||||
Exchange differences | (32 | ) | (4 | ) | (7 | ) | (7 | ) | (1 | ) | (2 | ) | (53 | ) | ||||||||||||||
Additions: | ||||||||||||||||||||||||||||
Acquisition of subsidiaries | 18 | 1 | 11 | 16 | — | — | 46 | |||||||||||||||||||||
Other additions | — | — | — | — | 93 | 21 | 114 | |||||||||||||||||||||
Adjustments* | 2 | — | — | — | — | — | 2 | |||||||||||||||||||||
31 December 2006 | 315 | 30 | 68 | 98 | 166 | 83 | 760 | |||||||||||||||||||||
Exchange differences | (1 | ) | (1 | ) | 1 | (1 | ) | 3 | — | 1 | ||||||||||||||||||
Additions: | ||||||||||||||||||||||||||||
Acquisition of subsidiaries | 13 | 4 | 1 | 10 | — | — | 28 | |||||||||||||||||||||
Other additions | — | — | — | — | 90 | 19 | 109 | |||||||||||||||||||||
31 December 2007 | 327 | 33 | 70 | 107 | 259 | 102 | 898 | |||||||||||||||||||||
Amortisation and impairment: | ||||||||||||||||||||||||||||
1 January 2005 | (18 | ) | (11 | ) | — | (66 | ) | (38 | ) | (32 | ) | (165 | ) | |||||||||||||||
Exchange differences | — | (2 | ) | — | (3 | ) | — | (2 | ) | (7 | ) | |||||||||||||||||
Charged in the year: | ||||||||||||||||||||||||||||
Amortisation | — | (3 | ) | (4 | ) | (15 | ) | (3 | ) | (10 | ) | (35 | ) | |||||||||||||||
Impairment | — | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||||||||
Reclassifications** | — | 3 | — | 38 | — | 3 | 44 | |||||||||||||||||||||
31 December 2005 | (18 | ) | (13 | ) | (4 | ) | (46 | ) | (42 | ) | (41 | ) | (164 | ) | ||||||||||||||
Exchange differences | — | 2 | 1 | 4 | — | 2 | 9 | |||||||||||||||||||||
Charged in the year: | ||||||||||||||||||||||||||||
Amortisation | — | (4 | ) | (7 | ) | (13 | ) | (10 | ) | (12 | ) | (46 | ) | |||||||||||||||
31 December 2006 | (18 | ) | (15 | ) | (10 | ) | (55 | ) | (52 | ) | (51 | ) | (201 | ) | ||||||||||||||
Exchange differences | — | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||||||||
Charged in the year: | ||||||||||||||||||||||||||||
Amortisation | — | (3 | ) | (7 | ) | (12 | ) | (28 | ) | (11 | ) | (61 | ) | |||||||||||||||
Impairment | — | (9 | ) | — | (9 | ) | (2 | ) | (1 | ) | (21 | ) | ||||||||||||||||
31 December 2007 | (18 | ) | (27 | ) | (17 | ) | (76 | ) | (83 | ) | (63 | ) | (284 | ) | ||||||||||||||
Carrying amount: | ||||||||||||||||||||||||||||
31 December 2005 | 309 | 20 | 60 | 43 | 32 | 23 | 487 | |||||||||||||||||||||
31 December 2006 | 297 | 15 | 58 | 43 | 114 | 32 | 559 | |||||||||||||||||||||
31 December 2007 | 309 | 6 | 53 | 31 | 176 | 39 | 614 |
* | Adjustments of £2 million to goodwill in 2006 relate to the finalisation of fair value adjustments in respect of the acquisition of Telerate. Fair value adjustments are based on an independent valuation performed by professionally-qualified valuers. | |
** | Reclassifications in 2005 relate to Instinet Group, which was classified as a discontinued operation prior to its disposal. |
A-8.29
Table of Contents
Nature (included in | Date of | Carrying amount | Remaining amortisation | |||||||
Arising on acquisition of | category) | acquisition | £m | period | ||||||
Telerate | Customer relationships | June 2005 | 35 | 7 years, 5 months | ||||||
Application Networks | Technology know-how | June 2006 | 10 | 3 years, 5 months |
A-8.30
Table of Contents
Carrying amount of goodwill at | ||||||||||||||
31 December 2007 | 31 December 2006 | 31 December 2005 | ||||||||||||
Business division | Cash Generating Unit | £m | £m | £m | ||||||||||
Sales & Trading | Sales & Trading | 149 | 146 | 157 | ||||||||||
Research & Asset Management | Investment Banking & Investment Management | 93 | 93 | 103 | ||||||||||
Wealth Management | — | — | — | |||||||||||
Lipper | 33 | 28 | 31 | |||||||||||
Enterprise | Enterprise (excluding Risk) | 7 | 3 | 4 | ||||||||||
Risk | 22 | 22 | 9 | |||||||||||
Media | Media | 5 | 5 | 5 | ||||||||||
Total | 309 | 297 | 309 |
A-8.31
Table of Contents
Office | ||||||||||||||||||||
Computer | equipment | |||||||||||||||||||
Freehold | Leasehold | systems | and motor | |||||||||||||||||
property | property | equipment | vehicles | Total | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Cost: | ||||||||||||||||||||
1 January 2005 | 153 | 187 | 858 | 193 | 1,391 | |||||||||||||||
Exchange differences | 1 | 8 | 36 | 4 | 49 | |||||||||||||||
Additions | 5 | 41 | 80 | 11 | 137 | |||||||||||||||
Acquisitions | — | — | 1 | 1 | 2 | |||||||||||||||
Disposals | — | (8 | ) | (91 | ) | (15 | ) | (114 | ) | |||||||||||
Reclassifications* | (1 | ) | (62 | ) | (41 | ) | (36 | ) | (140 | ) | ||||||||||
31 December 2005 | 158 | 166 | 843 | 158 | 1,325 | |||||||||||||||
Exchange differences | (5 | ) | (10 | ) | (57 | ) | (10 | ) | (82 | ) | ||||||||||
Additions | 9 | 37 | 75 | 9 | 130 | |||||||||||||||
Disposals | — | (4 | ) | (193 | ) | (24 | ) | (221 | ) | |||||||||||
31 December 2006 | 162 | 189 | 668 | 133 | 1,152 | |||||||||||||||
Exchange differences | 2 | 4 | 16 | 5 | 27 | |||||||||||||||
Additions | 1 | 44 | 83 | 6 | 134 | |||||||||||||||
Acquisitions | — | — | 1 | — | 1 | |||||||||||||||
Disposals | (1 | ) | (3 | ) | (53 | ) | (30 | ) | (87 | ) | ||||||||||
31 December 2007 | 164 | 234 | 715 | 114 | 1,227 | |||||||||||||||
Disposals | — | 8 | 89 | 14 | 111 | |||||||||||||||
Reclassifications* | — | 31 | 33 | 34 | 98 | |||||||||||||||
31 December 2005 | (75 | ) | (70 | ) | (688 | ) | (134 | ) | (967 | ) | ||||||||||
Exchange differences | 2 | 4 | 47 | 9 | 62 | |||||||||||||||
Charged in the year | (4 | ) | (15 | ) | (67 | ) | (9 | ) | (95 | ) | ||||||||||
Disposals | — | 3 | 192 | 24 | 219 | |||||||||||||||
31 December 2006 | (77 | ) | (78 | ) | (516 | ) | (110 | ) | (781 | ) | ||||||||||
Exchange differences | (1 | ) | (2 | ) | (14 | ) | (5 | ) | (22 | ) | ||||||||||
Charged in the year | (4 | ) | (15 | ) | (69 | ) | (8 | ) | (96 | ) | ||||||||||
Acquisitions | — | — | (1 | ) | — | (1 | ) | |||||||||||||
Disposals | — | 2 | 47 | 28 | 77 | |||||||||||||||
31 December 2007 | (82 | ) | (93 | ) | (553 | ) | (95 | ) | (823 | ) | ||||||||||
Carrying amount: | ||||||||||||||||||||
31 December 2005 | 83 | 96 | 155 | 24 | 358 | |||||||||||||||
31 December 2006 | 85 | 111 | 152 | 23 | 371 | |||||||||||||||
31 December 2007 | 82 | 141 | 162 | 19 | 404 |
* | Reclassifications in 2005 relate to Instinet Group, which was classified as a discontinued operation prior to its disposal, other assets held for sale at the balance sheet date and depreciation capitalised as intangible assets. |
A-8.32
Table of Contents
2007 | 2006 | 2005 | ||||||||||
Carrying amount of leasehold property | £m | £m | £m | |||||||||
Long-term leaseholds | 96 | 66 | 33 | |||||||||
Short-term leaseholds | 45 | 45 | 63 | |||||||||
Total leasehold property | 141 | 111 | 96 |
A-8.33
Table of Contents
Interests | Interests | |||||||||||
in joint | in | |||||||||||
ventures | associates | Total | ||||||||||
£m | £m | £m | ||||||||||
Net assets/cost: | ||||||||||||
1 January 2005 | 29 | 5 | 34 | |||||||||
Exchange differences | 2 | — | 2 | |||||||||
Arising in year – share of: | ||||||||||||
Operating profits | 5 | — | 5 | |||||||||
Interest receivable | 1 | — | 1 | |||||||||
Taxation | (1 | ) | — | (1 | ) | |||||||
Additions | 1 | — | 1 | |||||||||
Dividends received | (4 | ) | — | (4 | ) | |||||||
Disposals | (1 | ) | — | (1 | ) | |||||||
Impairments | — | (2 | ) | (2 | ) | |||||||
31 December 2005 | 32 | 3 | 35 | |||||||||
Reclassifications* | (14 | ) | — | (14 | ) | |||||||
Exchange differences | (3 | ) | (1 | ) | (4 | ) | ||||||
Arising in year – share of: | ||||||||||||
Operating profits | — | 1 | 1 | |||||||||
Interest receivable | 1 | — | 1 | |||||||||
Taxation | (2 | ) | — | (2 | ) | |||||||
Additions | 8 | — | 8 | |||||||||
Dividends received | (3 | ) | — | (3 | ) | |||||||
31 December 2006 | 19 | 3 | 22 | |||||||||
Reclassifications** | — | 2 | 2 | |||||||||
Exchange differences | — | 1 | 1 | |||||||||
Arising in year – share of: | ||||||||||||
Operating losses | (5 | ) | (1 | ) | (6 | ) | ||||||
Additions | 9 | — | 9 | |||||||||
Dividends received | (2 | ) | — | (2 | ) | |||||||
31 December 2007 | 21 | 5 | 26 |
* | Reclassifications in 2006 relate to Reuters’ investment in Factiva, which was classified as a non-current asset held for sale and sold during the year. | |
** | Reclassifications in 2007 relate to Reuters’ investment in TIMES NOW, which was classified as a non-current asset held for sale, and Pluck which was classified as an available-for-sale asset. |
A-8.34
Table of Contents
Interests | Interests | |||||||||||
in joint | in | |||||||||||
ventures | associates | Total | ||||||||||
£m | £m | £m | ||||||||||
Goodwill: | ||||||||||||
1 January 2005 | — | 1 | 1 | |||||||||
31 December 2005 | — | 1 | 1 | |||||||||
Additions | — | 15 | 15 | |||||||||
31 December 2006 | — | 16 | 16 | |||||||||
Additions | — | 5 | 5 | |||||||||
Reclassifications** | — | (20 | ) | (20 | ) | |||||||
31 December 2007 | — | 1 | 1 | |||||||||
Carrying amount: | ||||||||||||
31 December 2005 | 32 | 4 | 36 | |||||||||
31 December 2006 | 19 | 19 | 38 | |||||||||
31 December 2007 | 21 | 6 | 27 |
* | Reclassifications in 2006 relate to Reuters’ investment in Factiva, which was classified as a non-current asset held for sale and sold during the year. | |
** | Reclassifications in 2007 relate to Reuters’ investment in TIMES NOW, which was classified as a non-current asset held for sale, and Pluck which was classified as an available-for-sale asset. |
A-8.35
Table of Contents
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Operating profits | (5 | ) | 1 | 5 | ||||||||
Interest receivable | — | 1 | 1 | |||||||||
Taxation | (1 | ) | (2 | ) | (1 | ) | ||||||
Set-up costs of FXMarketSpace | — | (4 | ) | — | ||||||||
Share of post-taxation (losses)/profits from associates and joint ventures | (6 | ) | (4 | ) | 5 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Income | 7 | 63 | 83 | |||||||||
Expenses | (12 | ) | (64 | ) | (78 | ) | ||||||
(Losses)/profit | (5 | ) | (1 | ) | 5 | |||||||
Non-current assets | 54 | 61 | 76 | |||||||||
Current assets | 16 | 18 | 37 | |||||||||
Current liabilities | (41 | ) | (49 | ) | (20 | ) | ||||||
Non-current liabilities | (8 | ) | (11 | ) | (61 | ) | ||||||
Carrying value | 21 | 19 | 32 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Revenues | 5 | 10 | 21 | |||||||||
(Loss)/Profit | (1 | ) | 1 | — | ||||||||
Assets | 10 | 48 | 19 | |||||||||
Liabilities | (4 | ) | (29 | ) | (15 | ) | ||||||
Carrying value | 6 | 19 | 4 |
A-8.36
Table of Contents
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Available-for-sale financial assets: | ||||||||||||
Equity securities | 14 | 17 | 13 | |||||||||
Other available-for-sale financial assets | 4 | 9 | 5 | |||||||||
Short-term deposits | 3 | 198 | 1 | |||||||||
Derivative financial instruments (see note 17): | ||||||||||||
Cross-currency interest rate swaps – fair value hedges < 1 year | 14 | — | — | |||||||||
Cross-currency interest rate swaps – fair value hedges > 1 year | 20 | — | 14 | |||||||||
Cross-currency interest rate swaps – net investment hedges | 34 | 30 | — | |||||||||
Forward foreign exchange contracts – held for trading | 1 | — | — | |||||||||
Embedded derivatives in revenue contracts | — | — | 7 | |||||||||
Embedded derivatives in supplier contracts | 1 | 3 | — | |||||||||
Total | 91 | 257 | 40 | |||||||||
Less: Non-current portion | (62 | ) | (47 | ) | (22 | ) | ||||||
Current portion | 29 | 210 | 18 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
1 January | 26 | 18 | 158 | |||||||||
Additions | 1 | — | 1 | |||||||||
Fair value adjustments transferred to equity | 11 | 6 | (50 | ) | ||||||||
Reclassifications* | 4 | 4 | (23 | ) | ||||||||
Disposals | (24 | ) | (2 | ) | (68 | ) | ||||||
31 December | 18 | 26 | 18 |
* | The reclassification in 2007 relates to the 17% interest in Pluck Corporation reclassified following the expiry of an option to acquire 100% of the equity interest. Reclassifications in 2006 relate to a minority preference share interest in a Factiva entity that Reuters retained following the disposal of the majority of Reuters’ investment in Factiva. Reclassifications in 2005 include balances transferred to assets held for sale and liabilities associated with assets held for sale. |
A-8.37
Table of Contents
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Borrowings: | ||||||||||||
Bank overdrafts | 9 | 24 | 25 | |||||||||
Term notes and commercial paper | 610 | 632 | 383 | |||||||||
Finance lease payables | 12 | 4 | 2 | |||||||||
Total borrowings | 631 | 660 | 410 | |||||||||
Derivative financial instruments (see note 17) | ||||||||||||
Cross-currency interest rate swaps – fair value hedges < 1 year | 1 | 2 | — | |||||||||
Cross-currency interest rate swaps – fair value hedges > 1 year | — | 7 | — | |||||||||
Cross-currency interest rate swaps – net investment hedges | — | — | 9 | |||||||||
Forward foreign exchange contracts – held for trading | 1 | — | — | |||||||||
Embedded derivatives in revenue contracts | 28 | 18 | — | |||||||||
Embedded derivatives in supplier contracts | 1 | — | 1 | |||||||||
Total | 662 | 687 | 420 | |||||||||
Less: Non–current portion | (370 | ) | (521 | ) | (371 | ) | ||||||
Current portion | 292 | 168 | 49 |
Minimum | Present value of | |||||||||||||||||||||||
lease payments | minimum lease payments | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||
£m | £m | £m | £m | £m | £m | |||||||||||||||||||
Within one year | 6 | 2 | 1 | 5 | 2 | 1 | ||||||||||||||||||
One to five years | 7 | 2 | 1 | 7 | 2 | 1 | ||||||||||||||||||
Total | 13 | 4 | 2 | 12 | 4 | 2 |
A-8.38
Table of Contents
2007 | 2006 | 2005 | ||||||||||||||||||||||
Fair value | Fair value | Fair value | ||||||||||||||||||||||
gain/(loss) | Fair value | gain/(loss) | Fair value | gain/(loss) | Fair value | |||||||||||||||||||
in income | gain/(loss) | in income | gain/(loss) | in income | gain/(loss) | |||||||||||||||||||
statement | in equity | statement | equity | statement | in equity | |||||||||||||||||||
£m | £m | £m | £m | £m | £m | |||||||||||||||||||
Available-for-sale financial assets | — | 11 | — | 6 | — | (50 | ) | |||||||||||||||||
Embedded derivatives in revenue contracts | (10 | ) | — | (24 | ) | — | 21 | — | ||||||||||||||||
Embedded derivatives in supplier contracts | (3 | ) | — | 4 | — | (2 | ) | — | ||||||||||||||||
Hedging instruments: | ||||||||||||||||||||||||
Cross-currency interest rate swaps — fair value hedges | 50 | — | (3 | ) | — | (1 | ) | — | ||||||||||||||||
Cross-currency interest rate swaps — net investment hedges | 1 | 4 | 1 | 34 | (1 | ) | (39 | ) | ||||||||||||||||
Other derivatives: | ||||||||||||||||||||||||
Gains | — | — | 1 | — | — | — | ||||||||||||||||||
Losses | (1 | ) | — | (1 | ) | — | — | — | ||||||||||||||||
Other financial assets | — | — | — | — | (16 | ) | — | |||||||||||||||||
Total | 37 | 15 | (22 | ) | 40 | 1 | (89 | ) |
A-8.39
Table of Contents
• | the undiscounted contractual maturities of the financial assets; and |
• | the undiscounted contractual maturities of the financial liabilities, including interest that will accrue to those liabilities, except where Reuters is entitled and intends to repay the liability before its maturity. |
A-8.40
Table of Contents
2007 | ||||||||||||||||||||||||||||
Contractual maturity | ||||||||||||||||||||||||||||
Within | One to | Two to | Three to | Four to | More than | |||||||||||||||||||||||
one year | two years | three years | four years | five years | five years | Total | ||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | ||||||||||||||||||||||
Available-for-sale financial assets | 18 | — | — | — | — | — | 18 | |||||||||||||||||||||
Short-term investments | 3 | — | — | — | — | — | 3 | |||||||||||||||||||||
Cash and cash equivalents | 251 | — | — | — | — | — | 251 | |||||||||||||||||||||
Other financial assets | 203 | — | — | 2 | — | 4 | 209 | |||||||||||||||||||||
Derivative receivable leg, settled gross | 661 | 41 | 693 | — | — | — | 1,395 | |||||||||||||||||||||
Derivative payable leg, settled gross | (632 | ) | (40 | ) | (637 | ) | — | — | — | (1,309 | ) | |||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||
Borrowings | (284 | ) | (21 | ) | (388 | ) | — | — | — | (693 | ) | |||||||||||||||||
Other financial liabilities | (680 | ) | (20 | ) | (12 | ) | (4 | ) | (2 | ) | (2 | ) | (720 | ) | ||||||||||||||
Total | (460 | ) | (40 | ) | (344 | ) | (2 | ) | (2 | ) | 2 | (846 | ) | |||||||||||||||
2006 | ||||||||||||||||||||||||||||
Contractual maturity | ||||||||||||||||||||||||||||
Within | One to | Two to | Three to | Four to | More than | |||||||||||||||||||||||
one year | two years | three years | four years | five years | five years | Total | ||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | ||||||||||||||||||||||
Available-for-sale financial assets | 26 | — | — | — | — | — | 26 | |||||||||||||||||||||
Short-term investments | 198 | — | — | — | — | — | 198 | |||||||||||||||||||||
Cash and cash equivalents | 129 | — | — | — | — | — | 129 | |||||||||||||||||||||
Other financial assets | 224 | 2 | 1 | — | — | 7 | 234 | |||||||||||||||||||||
Derivative receivable leg, settled gross | 319 | 331 | 36 | 682 | — | — | 1,368 | |||||||||||||||||||||
Derivative payable leg, settled gross | (321 | ) | (334 | ) | (38 | ) | (671 | ) | — | — | (1,364 | ) | ||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||
Borrowings | (171 | ) | (197 | ) | (16 | ) | (353 | ) | — | — | (737 | ) | ||||||||||||||||
Other financial liabilities | (507 | ) | (19 | ) | (7 | ) | (5 | ) | (3 | ) | (5 | ) | (546 | ) | ||||||||||||||
Total | (103 | ) | (217 | ) | (24 | ) | (347 | ) | (3 | ) | 2 | (692 | ) |
A-8.41
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2005 | ||||||||||||||||||||||||||||
Contractual maturity | ||||||||||||||||||||||||||||
Within | One to | Two to | Three to | Four to | More than | |||||||||||||||||||||||
one year | two years | three years | four years | five years | five years | Total | ||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | ||||||||||||||||||||||
Available-for-sale financial assets | 18 | — | — | — | — | — | 18 | |||||||||||||||||||||
Short-term investments | 1 | — | — | — | — | — | 1 | |||||||||||||||||||||
Cash and cash equivalents | 662 | — | — | — | — | — | 662 | |||||||||||||||||||||
Other financial assets | 218 | 1 | 3 | 1 | — | 7 | 230 | |||||||||||||||||||||
Derivative receivable leg, settled gross | 186 | 34 | 34 | 34 | 687 | — | 975 | |||||||||||||||||||||
Derivative payable leg, settled gross | (183 | ) | (33 | ) | (33 | ) | (33 | ) | (693 | ) | — | (975 | ) | |||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||
Borrowings | (63 | ) | (16 | ) | (20 | ) | (16 | ) | (360 | ) | — | (475 | ) | |||||||||||||||
Other financial liabilities | (473 | ) | (30 | ) | (8 | ) | (8 | ) | (4 | ) | (7 | ) | (530 | ) | ||||||||||||||
Total | 366 | (44 | ) | (24 | ) | (22 | ) | (370 | ) | — | (94 | ) |
Standard & Poors (FFO/Net | ||||||||||||||||||||||||
Moodys (RCF/Net Debt**) | Debt***) | |||||||||||||||||||||||
Rating Agency | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | ||||||||||||||||||
Target Credit Rating | Baa1 | A3 | A3 | BBB+ | A - | A - | ||||||||||||||||||
Target % set by Agency | 17 | %* | 20 | % | 20 | % | 30 | %* | 35 | % | 35 | % | ||||||||||||
Reuters Actual % | 39 | %* | 28 | % | 31 | % | 62 | % | 39 | % | 67 | % |
* | Percentages based on Reuters estimates | |
** | RCF (Retained Cashflow) | |
*** | FFO (Funds from Operations) |
A-8.42
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A-8.43
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10% | Total | |||||||||||||||
10% | 7% | weakening | weakening | |||||||||||||
weakening | weakening | in other | in all | |||||||||||||
in US dollar | in Euro | currencies | currencies | |||||||||||||
against £ | against £ | against £ | against £ | |||||||||||||
2007 | £ m | £ m | £ m | £ m | ||||||||||||
Total change in fair value | 38 | (12 | ) | (8 | ) | 18 | ||||||||||
Impact recognised in income statement | 6 | (11 | ) | (8 | ) | (13 | ) | |||||||||
Impact recognised in equity | 32 | (1 | ) | — | 31 | |||||||||||
2006 | ||||||||||||||||
Total change in fair value | 36 | — | 7 | 43 | ||||||||||||
Impact recognised in income statement | 3 | 1 | 4 | 8 | ||||||||||||
Impact recognised in equity | 33 | (1 | ) | 3 | 35 | |||||||||||
2005 | ||||||||||||||||
Total change in fair value | 18 | (6 | ) | (6 | ) | 6 | ||||||||||
Impact recognised in income statement | (9 | ) | (4 | ) | (8 | ) | (21 | ) | ||||||||
Impact recognised in equity | 27 | (2 | ) | 2 | 27 |
A-8.44
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
100 basis points increase in US Dollar Interest Rate | (3 | ) | (3 | ) | (3 | ) | ||||||
100 basis points increase in Sterling Interest Rate | — | — | 5 | |||||||||
100 basis points increase in Euro Interest Rate | — | — | — | |||||||||
Total | (3 | ) | (3 | ) | 2 | |||||||
Impact recognised in income statement | (3 | ) | (3 | ) | 2 | |||||||
Impact recognised in equity | — | — | — |
A-8.45
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Gross | ||||||||||||||||
Contract | ||||||||||||||||
Period | Amount | |||||||||||||||
Received | Paid | Hedged Risk | (Years) | £m | ||||||||||||
2007 Net investment hedges: | ||||||||||||||||
Sterling floating | US dollar floating | Foreign exchange | 2010 | 280 | ||||||||||||
Sterling floating | US dollar floating | Foreign exchange | 2008 | 102 | ||||||||||||
Sterling floating | Euro floating | Foreign exchange | 2010 | 10 | ||||||||||||
2006 Net investment hedges: | ||||||||||||||||
Sterling floating | US dollar floating | Foreign exchange | 2010 | 280 | ||||||||||||
Sterling floating | US dollar floating | Foreign exchange | 2008 | 102 | ||||||||||||
Sterling floating | Swiss franc floating | Foreign exchange | 2010 | 34 | ||||||||||||
Sterling floating | Euro floating | Foreign exchange | 2010 | 10 | ||||||||||||
2005 Net investment hedges: | ||||||||||||||||
Sterling floating | US dollar floating | Foreign exchange | 2010 | 280 | ||||||||||||
Sterling floating | Swiss franc floating | Foreign exchange | 2010 | 24 |
A-8.46
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Gross | ||||||||||||||||
Contract | ||||||||||||||||
Period | Amount | |||||||||||||||
Received | Paid | Hedged Risk | (Years) | £m | ||||||||||||
2007 Fair value hedges: | ||||||||||||||||
Japanese yen fixed | Sterling floating | Interest rate and foreign | ||||||||||||||
exchange | 2008 | 5 | ||||||||||||||
Euro fixed | Sterling floating | Interest rate | 2010 | 332 | ||||||||||||
Euro fixed | Sterling floating | Interest rate | 2010 | 10 | ||||||||||||
Euro floating | Sterling floating | Foreign exchange | 2008 | 169 | ||||||||||||
2006 Fair value hedges: | ||||||||||||||||
Japanese yen fixed | Sterling floating | Interest rate and foreign | ||||||||||||||
exchange | 2008 | 5 | ||||||||||||||
Euro fixed | Sterling floating | Interest rate | 2010 | 332 | ||||||||||||
Euro fixed | Sterling floating | Interest rate | 2010 | 10 | ||||||||||||
Euro floating | Sterling floating | Foreign exchange | 2008 | 169 | ||||||||||||
2005 Fair value hedges: | ||||||||||||||||
Japanese yen fixed | Sterling floating | Interest rate and foreign | ||||||||||||||
exchange | 2008 | 5 | ||||||||||||||
Euro fixed | Sterling floating | Interest rate | 2008 | 351 | ||||||||||||
Euro fixed | Sterling floating | Interest rate | 2010 | 10 |
A-8.47
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Assets a | Liabilities at | |||||||||||||||||||||||||||
fair value | fair value | |||||||||||||||||||||||||||
through | through | Derivatives | Other | |||||||||||||||||||||||||
Loans and | the profit | the profit | used for | Available | financial | |||||||||||||||||||||||
Receivables | and loss | and loss | hedging | for sale | liabilities | Total | ||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | ||||||||||||||||||||||
2007 | ||||||||||||||||||||||||||||
Financial assets as per balance sheet | ||||||||||||||||||||||||||||
Other financial assets and derivatives | 3 | 2 | — | 68 | 18 | — | 91 | |||||||||||||||||||||
Trade and other receivables | 255 | — | — | — | — | — | 255 | |||||||||||||||||||||
Cash and cash equivalents (see note 20) | 251 | — | — | — | — | — | 251 | |||||||||||||||||||||
Financial liabilities as per balance sheet | ||||||||||||||||||||||||||||
Other financial liabilities and derivatives | — | — | (30 | ) | (1 | ) | — | (631 | ) | (662 | ) | |||||||||||||||||
31 December 2007 | 509 | 2 | (30 | ) | 67 | 18 | (631 | ) | (65 | ) | ||||||||||||||||||
2006 | ||||||||||||||||||||||||||||
Financial assets as per balance sheet | ||||||||||||||||||||||||||||
Other financial assets and derivatives | 198 | 3 | — | 30 | 26 | — | 257 | |||||||||||||||||||||
Trade and other receivables | 258 | — | — | — | — | — | 258 | |||||||||||||||||||||
Cash and cash equivalents (see note 20) | 129 | — | — | — | — | — | 129 | |||||||||||||||||||||
Financial liabilities as per balance sheet | ||||||||||||||||||||||||||||
Other financial liabilities and derivatives | — | — | (18 | ) | (9 | ) | — | (660) | (687 | ) | ||||||||||||||||||
Total | 585 | 3 | (18 | ) | 21 | 26 | (660 | ) | (43 | ) |
A-8.48
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Assets a | Liabilities at | |||||||||||||||||||||||||||
fair value | fair value | |||||||||||||||||||||||||||
through | through | Derivatives | Other | |||||||||||||||||||||||||
Loans and | the profit | the profit | used for | Available | financial | |||||||||||||||||||||||
Receivables | and loss | and loss | hedging | for sale | liabilities | Total | ||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | ||||||||||||||||||||||
2005 | ||||||||||||||||||||||||||||
Financial assets as per balance sheet | ||||||||||||||||||||||||||||
Other financial assets and derivatives | 1 | 7 | — | 14 | 18 | — | 40 | |||||||||||||||||||||
Trade and other receivables | 270 | — | — | — | — | — | 270 | |||||||||||||||||||||
Cash and cash equivalents (see note 20) | 662 | — | — | — | — | — | 662 | |||||||||||||||||||||
Financial liabilities as per balance sheet | ||||||||||||||||||||||||||||
Other financial liabilities and derivatives | — | — | (1 | ) | (9 | ) | — | (410 | ) | (420 | ) | |||||||||||||||||
Total | 933 | 7 | (1 | ) | 5 | 18 | (410 | ) | 552 |
A-8.49
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2007 | 2006 | 2005 | ||||||||||
% | % | % | ||||||||||
Financial institutions | 62 | 65 | 72 | |||||||||
Corporations in other sectors | 21 | 21 | 14 | |||||||||
Newspapers, broadcast news media & news agencies | 14 | 11 | 9 | |||||||||
Governments, central banks & other organisations | 3 | 3 | 5 | |||||||||
Total | 100 | 100 | 100 |
A-8.50
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Work in progress on contracts | — | 1 | 1 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Trade receivables | 118 | 123 | 138 | |||||||||
Less: Provision for impairment | (11 | ) | (13 | ) | (18 | ) | ||||||
107 | 110 | 120 | ||||||||||
Amounts owed by associates and joint ventures | 1 | 6 | 4 | |||||||||
Other receivables | 57 | 80 | 68 | |||||||||
Prepayments and accrued income | 90 | 62 | 78 | |||||||||
Total trade and other receivables | 255 | 258 | 270 |
A-8.51
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Balance at 1 January | (13 | ) | (18 | ) | (31 | ) | ||||||
Utilisation of provision | 3 | 4 | 5 | |||||||||
Unused provision released to profit | 3 | 3 | 4 | |||||||||
Increase in provision | (4 | ) | (3 | ) | (5 | ) | ||||||
Disposals* | — | — | 10 | |||||||||
Foreign exchange differences | — | 1 | (1 | ) | ||||||||
Balance at 31 December | (11 | ) | (13 | ) | (18 | ) |
* | The disposal of £10 million in 2005 relates to Instinet. |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Not overdue | 43 | 52 | 58 | |||||||||
Past due 0-30 days | 22 | 11 | 18 | |||||||||
Past due 31-60 days | 22 | 20 | 18 | |||||||||
Past due 61-90 days | 10 | 16 | 13 | |||||||||
Past due 91-180 days | 7 | 8 | 8 | |||||||||
Past due 181-365 days | 3 | 3 | 5 | |||||||||
107 | 110 | 120 |
A-8.52
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Canadian Dollar | 6 | 6 | 3 | |||||||||
Swiss Franc | 2 | 3 | 4 | |||||||||
Euro | 37 | 34 | 36 | |||||||||
United Kingdom Pounds Sterling | 48 | 53 | 65 | |||||||||
Japanese Yen | 11 | 13 | 11 | |||||||||
Singapore Dollar | 2 | 3 | 2 | |||||||||
US Dollar | 73 | 95 | 90 | |||||||||
Other | 30 | 26 | 19 | |||||||||
209 | 233 | 230 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Cash: | ||||||||||||
Cash in hand and at bank | 106 | 79 | 98 | |||||||||
Unlisted cash equivalents: | ||||||||||||
Term deposits — UK | 26 | 2 | 12 | |||||||||
Term deposits — overseas | 2 | 5 | 3 | |||||||||
Other investments — UK | 117 | 37 | 546 | |||||||||
Other investments — overseas | — | 6 | 3 | |||||||||
Cash and cash equivalents | 251 | 129 | 662 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Brazil | 2 | 1 | 2 | |||||||||
China | — | — | 1 | |||||||||
Venezuela | 4 | 3 | 2 | |||||||||
Total restricted cash | 6 | 4 | 5 |
A-8.53
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Non-current assets classified as held for sale: | ||||||||||||
Property, plant and equipment | — | — | 1 | |||||||||
Assets of associate held exclusively for resale | 14 | — | — | |||||||||
Total assets classified as held for sale | 14 | — | 1 | |||||||||
Liabilities directly associated with non-current assets classified as held for sale: | ||||||||||||
Liabilities of associate held exclusively for resale | — | — | — | |||||||||
Total net assets classified as held for sale | 14 | — | 1 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Trade payables | 62 | 56 | 14 | |||||||||
Accruals | 336 | 276 | 264 | |||||||||
Deferred income | 33 | 31 | 25 | |||||||||
Amounts owed to associates and joint ventures | 1 | 1 | 11 | |||||||||
Other payables | 215 | 94 | 107 | |||||||||
Other taxation and social security | 45 | 33 | 35 | |||||||||
Total trade and other payables | 692 | 491 | 456 |
A-8.54
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Current tax liabilities | 247 | 196 | 228 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Provisions for post-employment benefits (see note 25) | 43 | 145 | 317 | |||||||||
Other provisions for liabilities and charges | 96 | 119 | 139 | |||||||||
Total provisions | 139 | 264 | 456 | |||||||||
Less: Non-current portion | (102 | ) | (204 | ) | (392 | ) | ||||||
Current portion | 37 | 60 | 64 |
Other | ||||||||||||||||||||
Rationalization | Legal/compliance | property | Other | Total | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
1 January 2007 | 95 | 7 | 2 | 15 | 119 | |||||||||||||||
Exchange differences | 1 | — | — | — | 1 | |||||||||||||||
Charged in the year | 14 | 3 | 3 | 14 | 34 | |||||||||||||||
Utilised in the year | (32 | ) | (2 | ) | (1 | ) | (7 | ) | (42 | ) | ||||||||||
Released | (10 | ) | — | — | (7 | ) | (17 | ) | ||||||||||||
Unwinding of discounts | 1 | — | — | — | 1 | |||||||||||||||
31 December 2007 | 69 | 8 | 4 | 15 | 96 |
A-8.55
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A-8.56
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Company | ||||||||
contribution | ||||||||
% of employees | % of basic salary | |||||||
Reuters Retirement Plan | 16.1 | 11.0 | * | |||||
Reuters 401(k) Pension Plans | 20.0 | 6.0 |
* | 7.0% plus 4% through salary sacrifice arrangements. |
A-8.57
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
1 January | (131 | ) | (317 | ) | (263 | ) | ||||||
Income statement (see note 3): | ||||||||||||
Defined benefit plans* | (8 | ) | (30 | ) | (27 | ) | ||||||
Post-retirement medical benefits | (1 | ) | — | (3 | ) | |||||||
Actuarial gains and losses taken directly to reserves: | ||||||||||||
Defined benefit plans* | 97 | 8 | (46 | ) | ||||||||
Post-retirement medical benefits | 1 | (2 | ) | (2 | ) | |||||||
Exchange differences | ||||||||||||
Defined benefit plans* | — | 1 | — | |||||||||
Post-retirement medical benefits | — | 1 | — | |||||||||
(42 | ) | (339 | ) | (341 | ) | |||||||
Contributions paid | 31 | 208 | 24 | |||||||||
Net scheme surpluses/provisions | (11 | ) | (131 | ) | (317 | ) | ||||||
Schemes in surplus recognised within non-current assets | (32 | ) | (14 | ) | — | |||||||
31 December | (43 | ) | (145 | ) | (317 | ) | ||||||
Composed of: | ||||||||||||
Defined benefit plans* | (28 | ) | (129 | ) | (302 | ) | ||||||
Post-retirement medical benefits | (8 | ) | (9 | ) | (8 | ) | ||||||
Other | (7 | ) | (7 | ) | (7 | ) | ||||||
31 December | (43 | ) | (145 | ) | (317 | ) |
* | The figures for defined benefit plans include a number of immaterial schemes which have not been valued under IAS 19. |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Schemes in surplus | 32 | 14 | — | |||||||||
Reimbursement rights | 7 | 4 | — | |||||||||
Total retirement benefit assets | 39 | 18 | — |
A-8.58
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Post | ||||||||||||||||||||||||||||||||||||||||||||||||
retirement | ||||||||||||||||||||||||||||||||||||||||||||||||
Overseas | medical | |||||||||||||||||||||||||||||||||||||||||||||||
UK Plans | Plans | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |||||||||||||||||||||||||||||||||||||
Present value of funded obligations | (1,067 | ) | (1,233 | ) | (1,148 | ) | (133 | ) | (157 | ) | (167 | ) | — | — | — | (1,200 | ) | (1,390 | ) | (1,315 | ) | |||||||||||||||||||||||||||
Fair value of plan assets | 1,202 | 1,158 | 902 | 143 | 140 | 139 | — | — | — | 1,345 | 1,298 | 1,041 | ||||||||||||||||||||||||||||||||||||
135 | (75 | ) | (246 | ) | 10 | (17 | ) | (28 | ) | — | — | — | 145 | (92 | ) | (274 | ) | |||||||||||||||||||||||||||||||
Present value of unfunded obligations | (16 | ) | (15 | ) | (19 | ) | (4 | ) | (3 | ) | (4 | ) | (8 | ) | (9 | ) | (8 | ) | (28 | ) | (27 | ) | (31 | ) | ||||||||||||||||||||||||
119 | (90 | ) | (265 | ) | 6 | (20 | ) | (32 | ) | (8 | ) | (9 | ) | (8 | ) | 117 | (119 | ) | (305 | ) | ||||||||||||||||||||||||||||
Plan asset not recognised in the balance sheet | (111 | ) | — | — | (8 | ) | (3 | ) | (3 | ) | — | — | — | (119 | ) | (3 | ) | (3 | ) | |||||||||||||||||||||||||||||
IAS 19 deficit recognised in the balance sheet | (16 | ) | (102 | ) | (265 | ) | (10 | ) | (25 | ) | (35 | ) | (8 | ) | (9 | ) | (8 | ) | (34 | ) | (136 | ) | (308 | ) | ||||||||||||||||||||||||
IAS 19 surplus recognised in the balance sheet | 24 | 12 | — | 8 | 2 | — | — | — | — | 32 | 14 | — | ||||||||||||||||||||||||||||||||||||
Fair value of reimbursement rights not recognised as pension plan assets | 1 | — | — | 4 | 4 | 4 | — | — | — | 5 | 4 | 4 |
A-8.59
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Post | ||||||||||||||||||||||||||||||||||||||||||||||||
retirement | ||||||||||||||||||||||||||||||||||||||||||||||||
Overseas | medical | |||||||||||||||||||||||||||||||||||||||||||||||
UK Plans | Plans | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |||||||||||||||||||||||||||||||||||||
Current service cost | 20 | 23 | 19 | 8 | 10 | 11 | — | — | — | 28 | 33 | 30 | ||||||||||||||||||||||||||||||||||||
Interest cost | 61 | 55 | 52 | 5 | 5 | 5 | 1 | — | — | 67 | 60 | 57 | ||||||||||||||||||||||||||||||||||||
Expected gain on plan assets | (72 | ) | (61 | ) | (51 | ) | (6 | ) | (6 | ) | (7 | ) | — | — | — | (78 | ) | (67 | ) | (58 | ) | |||||||||||||||||||||||||||
Past service cost | — | 6 | 1 | — | — | — | — | — | 2 | — | 6 | 3 | ||||||||||||||||||||||||||||||||||||
Gains on curtailments | (1 | ) | (3 | ) | (2 | ) | (7 | ) | — | (3 | ) | — | — | — | (8 | ) | (3 | ) | (5 | ) | ||||||||||||||||||||||||||||
Gains on settlements | — | — | (1 | ) | — | — | — | — | — | — | — | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Total recognised in the income statement | 8 | 20 | 18 | — | 9 | 6 | 1 | — | 2 | 9 | 29 | 26 | ||||||||||||||||||||||||||||||||||||
Included within: | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating profit | 8 | 22 | 20 | — | 9 | 6 | 1 | — | 2 | 9 | 31 | 28 | ||||||||||||||||||||||||||||||||||||
Profit on disposal of associates, joint ventures and available-for-sale financial assets | — | (2 | ) | — | — | — | — | — | — | — | — | (2 | ) | — | ||||||||||||||||||||||||||||||||||
Profit for the year from discontinued operations | — | — | (2 | ) | — | — | — | — | — | — | — | — | (2 | ) | ||||||||||||||||||||||||||||||||||
Total recognised in the income statement | 8 | 20 | 18 | — | 9 | 6 | 1 | — | 2 | 9 | 29 | 26 | ||||||||||||||||||||||||||||||||||||
Actual return on plan assets | 50 | 92 | 146 | 5 | 10 | 18 | — | — | — | 55 | 102 | 164 |
A-8.60
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Post | ||||||||||||||||||||||||||||||||||||||||||||||||
retirement | ||||||||||||||||||||||||||||||||||||||||||||||||
Overseas | medical | |||||||||||||||||||||||||||||||||||||||||||||||
UK Plans | Plans | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |||||||||||||||||||||||||||||||||||||
Actuarial losses/(gains) | (192 | ) | 5 | 46 | (20 | ) | (13 | ) | (3 | ) | (2 | ) | 2 | 2 | (214 | ) | (6 | ) | 45 | |||||||||||||||||||||||||||||
Effect of asset ceiling | 111 | — | — | 5 | — | 3 | — | — | — | 116 | — | 3 | ||||||||||||||||||||||||||||||||||||
(81 | ) | 5 | 46 | (15 | ) | (13 | ) | — | (2 | ) | 2 | 2 | (98 | ) | (6 | ) | 48 | |||||||||||||||||||||||||||||||
Deferred taxation impact of actuarial gains and losses recognised in the statement of recognised income and expense | 18 | (1 | ) | (10 | ) | 3 | 3 | — | — | (1 | ) | — | 21 | 1 | (10 | ) | ||||||||||||||||||||||||||||||||
Total recognised in the statement of recognised income and expense | (63 | ) | 4 | 36 | (12 | ) | (10 | ) | — | (2 | ) | 1 | 2 | (77 | ) | (5 | ) | 38 |
Post | ||||||||||||||||||||||||||||||||||||||||||||||||
retirement | ||||||||||||||||||||||||||||||||||||||||||||||||
Overseas | medical | |||||||||||||||||||||||||||||||||||||||||||||||
UK Plans | Plans | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |||||||||||||||||||||||||||||||||||||
Balance of actuarial losses at 1 January | 246 | 241 | 195 | (6 | ) | 7 | 10 | 4 | 2 | — | 244 | 250 | 205 | |||||||||||||||||||||||||||||||||||
Net actuarial losses/(gains) recognised in year | (192 | ) | 5 | 46 | (20 | ) | (13 | ) | (3 | ) | (2 | ) | 2 | 2 | (214 | ) | (6 | ) | 45 | |||||||||||||||||||||||||||||
Balance of actuarial losses/(gains) at 31 December | 54 | 246 | 241 | (26 | ) | (6 | ) | 7 | 2 | 4 | 2 | 30 | 244 | 250 | ||||||||||||||||||||||||||||||||||
Balance of asset limit effects at 1 January | — | — | — | 3 | 3 | — | — | — | — | 3 | 3 | — | ||||||||||||||||||||||||||||||||||||
Effects of the asset ceiling in the year | 111 | — | — | 5 | — | 3 | — | — | — | 116 | — | 3 | ||||||||||||||||||||||||||||||||||||
Balance of asset limit effects at 31 December | 111 | — | — | 8 | 3 | 3 | — | — | — | 119 | 3 | 3 |
A-8.61
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Post | ||||||||||||||||||||||||||||||||||||||||||||||||
retirement | ||||||||||||||||||||||||||||||||||||||||||||||||
Overseas | medical | |||||||||||||||||||||||||||||||||||||||||||||||
UK Plans | Plans | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |||||||||||||||||||||||||||||||||||||
Opening defined benefit obligation | (1,248 | ) | (1,167 | ) | (995 | ) | (160 | ) | (171 | ) | (160 | ) | (9 | ) | (8 | ) | (3 | ) | (1,417 | ) | (1,346 | ) | (1,158 | ) | ||||||||||||||||||||||||
Current service cost | (20 | ) | (23 | ) | (19 | ) | (8 | ) | (10 | ) | (11 | ) | — | — | — | (28 | ) | (33 | ) | (30 | ) | |||||||||||||||||||||||||||
Past service cost | — | (6 | ) | (1 | ) | — | — | — | — | — | (2 | ) | — | (6 | ) | (3 | ) | |||||||||||||||||||||||||||||||
Interest cost | (61 | ) | (55 | ) | (52 | ) | (5 | ) | (5 | ) | (5 | ) | (1 | ) | — | — | (67 | ) | (60 | ) | (57 | ) | ||||||||||||||||||||||||||
Gains on curtailments | 1 | 3 | 2 | 7 | — | 3 | — | — | — | 8 | 3 | 5 | ||||||||||||||||||||||||||||||||||||
Liabilities extinguished on settlements | 2 | — | 8 | 3 | 1 | — | — | — | — | 5 | 1 | 8 | ||||||||||||||||||||||||||||||||||||
Actuarial gains/ (losses) | 214 | (36 | ) | (141 | ) | 21 | 9 | (8 | ) | 2 | (2 | ) | (2 | ) | 237 | (29 | ) | (151 | ) | |||||||||||||||||||||||||||||
Contributions by employees | — | (1 | ) | (3 | ) | (3 | ) | (4 | ) | (4 | ) | — | — | — | (3 | ) | (5 | ) | (7 | ) | ||||||||||||||||||||||||||||
Benefits paid | 29 | 37 | 34 | 14 | 8 | 14 | — | — | — | 43 | 45 | 48 | ||||||||||||||||||||||||||||||||||||
Exchange differences on overseas plans | — | — | — | (6 | ) | 12 | — | — | 1 | (1 | ) | (6 | ) | 13 | (1 | ) | ||||||||||||||||||||||||||||||||
Closing defined benefit obligation | (1,083 | ) | (1,248 | ) | (1,167 | ) | (137 | ) | (160 | ) | (171 | ) | (8 | ) | (9 | ) | (8 | ) | (1,228 | ) | (1,417 | ) | (1,346 | ) |
A-8.62
Table of Contents
�� | ||||||||||||||||||||||||||||||||||||||||||||||||
Post | ||||||||||||||||||||||||||||||||||||||||||||||||
retirement | ||||||||||||||||||||||||||||||||||||||||||||||||
Overseas | medical | |||||||||||||||||||||||||||||||||||||||||||||||
UK Plans | Plans | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |||||||||||||||||||||||||||||||||||||
Opening fair value of plan assets | 1,158 | 902 | 781 | 140 | 139 | 124 | — | — | — | 1,298 | 1,041 | 905 | ||||||||||||||||||||||||||||||||||||
Expected return | 72 | 61 | 51 | 6 | 6 | 7 | — | — | — | 78 | 67 | 58 | ||||||||||||||||||||||||||||||||||||
Assets transferred on settlements | (2 | ) | — | (7 | ) | (3 | ) | (1 | ) | — | — | — | — | (5 | ) | (1 | ) | (7 | ) | |||||||||||||||||||||||||||||
Actuarial gains/(losses) | (22 | ) | 31 | 95 | (1 | ) | 4 | 11 | — | — | — | (23 | ) | 35 | 106 | |||||||||||||||||||||||||||||||||
Contributions by employer | 25 | 200 | 13 | 6 | 7 | 6 | — | — | — | 31 | 207 | 19 | ||||||||||||||||||||||||||||||||||||
Contributions by employees | — | 1 | 3 | 3 | 4 | 4 | — | — | — | 3 | 5 | 7 | ||||||||||||||||||||||||||||||||||||
Benefits paid | (29 | ) | (37 | ) | (34 | ) | (14 | ) | (8 | ) | (14 | ) | — | — | — | (43 | ) | (45 | ) | (48 | ) | |||||||||||||||||||||||||||
Exchange differences on overseas plans | — | — | — | 6 | (11 | ) | 1 | — | — | — | 6 | (11 | ) | 1 | ||||||||||||||||||||||||||||||||||
Closing fair value of plan assets | 1,202 | 1,158 | 902 | 143 | 140 | 139 | — | — | — | 1,345 | 1,298 | 1,041 |
A-8.63
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Post | ||||||||||||||||||||||||||||||||||||||||||||||||
retirement | ||||||||||||||||||||||||||||||||||||||||||||||||
Overseas | medical | |||||||||||||||||||||||||||||||||||||||||||||||
UK Plans | Plans | benefits | Total | |||||||||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||||||||||||||
% | % | % | % | % | % | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||
Equities | 43 | 44 | 55 | 44 | 45 | 46 | — | — | — | 43 | 44 | 54 | ||||||||||||||||||||||||||||||||||||
Bonds | 44 | 45 | 36 | 48 | 47 | 45 | — | — | — | 44 | 45 | 37 | ||||||||||||||||||||||||||||||||||||
Property | 6 | 7 | 7 | — | — | — | — | — | — | 5 | 6 | 6 | ||||||||||||||||||||||||||||||||||||
Cash | — | 1 | 2 | 3 | 4 | 5 | — | — | — | 1 | 2 | 2 | ||||||||||||||||||||||||||||||||||||
Other | 7 | 3 | — | 5 | 4 | 4 | — | — | — | 7 | 3 | 1 |
Overseas | Post retirement | |||||||||||||||||||||||||||||||||||
UK Plans | Plans | medical benefits | ||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||
% | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||
Discount rate | 5.80 | 4.93 | 4.75 | 4.11 | 3.49 | 3.29 | 6.50 | 6.00 | 5.50 | |||||||||||||||||||||||||||
Inflation assumption | 3.30 | 3.00 | 2.75 | 1.77 | 1.57 | 1.47 | — | — | — | |||||||||||||||||||||||||||
Rate of increase in salaries | 4.55 | 4.25 | 4.00 | 2.82 | 2.61 | 2.39 | — | — | — | |||||||||||||||||||||||||||
Rate of increase in pensions in payment | 3.00 | 3.00 | 2.75 | 1.54 | 1.38 | 1.38 | — | — | — | |||||||||||||||||||||||||||
Medical cost trend | — | — | — | — | — | — | 5.00 | 5.00 | 5.50 | |||||||||||||||||||||||||||
Expected rate of return on reimbursement rights | — | 5.10 | — | — | 4.75 | 4.25 | — | — | — | |||||||||||||||||||||||||||
Expected rate of return on assets: | ||||||||||||||||||||||||||||||||||||
Equities | 8.20 | 8.10 | 8.00 | 6.18 | 6.42 | 7.10 | — | — | — | |||||||||||||||||||||||||||
Bonds | 5.80 | 4.49 | 4.00 | 3.53 | 3.14 | 2.92 | — | — | — | |||||||||||||||||||||||||||
Property | 6.40 | 6.20 | 6.00 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Cash | 4.50 | 4.25 | 4.00 | 2.68 | 2.28 | 2.44 | — | — | — | |||||||||||||||||||||||||||
Other | 4.50 | 4.25 | — | 2.10 | 6.05 | 5.47 | — | — | — |
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Life expectation in years | ||||||||
Male | Female | |||||||
31 December 2007 | ||||||||
Retiring at reporting date at age 65 | 22 | 24 | ||||||
Retiring at reporting date + 25 years at age 65 | 23 | 25 |
Life expectation in years | ||||||||
Male | Female | |||||||
31 December 2006 | ||||||||
Retiring at reporting date at age 65 | 21 | 24 | ||||||
Retiring at reporting date + 25 years at age 65 | 22 | 24 |
A-8.65
Table of Contents
2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||
Post | Post | Post | ||||||||||||||||||||||||||||||||||||||||||||||
retirement | retirement | retirement | ||||||||||||||||||||||||||||||||||||||||||||||
UK | Overseas | medical | UK | Overseas | medical | UK | Overseas | medical | ||||||||||||||||||||||||||||||||||||||||
Plans | Plans | benefits | Total | Plans | Plans | benefits | Total | Plans | Plans | benefits | Total | |||||||||||||||||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |||||||||||||||||||||||||||||||||||||
Defined benefit obligation | (1,083 | ) | (137 | ) | (8 | ) | (1,228 | ) | (1,248 | ) | (160 | ) | (9 | ) | (1,417 | ) | (1,167 | ) | (171 | ) | (8 | ) | (1,346 | ) | ||||||||||||||||||||||||
Plan assets | 1,202 | 143 | — | 1,345 | 1,158 | 140 | — | 1,298 | 902 | 139 | — | 1,041 | ||||||||||||||||||||||||||||||||||||
Deficit | 119 | 6 | (8 | ) | 117 | (90 | ) | (20 | ) | (9 | ) | (119 | ) | (265 | ) | (32 | ) | (8 | ) | (305 | ) | |||||||||||||||||||||||||||
Experience adjustments on plan liabilities | (81 | ) | (11 | ) | (1 | ) | (93 | ) | 14 | (3 | ) | 3 | 14 | (16 | ) | 6 | (1 | ) | (11 | ) | ||||||||||||||||||||||||||||
Experience adjustments on plan assets | 22 | 1 | — | 23 | 31 | 4 | — | 35 | 95 | 11 | — | 106 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
1 January 2007 | 171 | 210 | 247 | |||||||||
Acquisitions/disposals | (4 | ) | (11 | ) | (46 | ) | ||||||
Income statement (credit)/charge) | 21 | (18 | ) | (19 | ) | |||||||
Equity (charge)/credit | (21 | ) | (1 | ) | 10 | |||||||
Exchange differences | — | (10 | ) | 8 | ||||||||
Stock options deferred tax in equity | 4 | 1 | 10 | |||||||||
31 December 2007 | 171 | 171 | 210 |
A-8.66
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Fixed | ||||||||||||
Assets | Other | Total | ||||||||||
£m | £m | £m | ||||||||||
1 January 2007 | (12 | ) | (98 | ) | (110 | ) | ||||||
Acquisitions/Disposals | — | (4 | ) | (4 | ) | |||||||
Exchange differences | — | — | — | |||||||||
Charged to income statement | (1 | ) | — | (1 | ) | |||||||
31 December 2007 | (13 | ) | (102 | ) | (115 | ) |
Fixed | Stock | |||||||||||||||||||
Assets | Losses | options | Other | Total | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
1 January 2007 | 62 | 111 | 17 | 91 | 281 | |||||||||||||||
Credited/ (charged) to income statement | 13 | (15 | ) | 5 | 19 | 22 | ||||||||||||||
Credited/(charged) in equity | — | 15 | 4 | (36 | ) | (17 | ) | |||||||||||||
Realisation of stock option deductions | — | 8 | (8 | ) | — | — | ||||||||||||||
Exchange differences | — | — | — | — | — | |||||||||||||||
31 December 2007 | 75 | 119 | 18 | 74 | 286 | |||||||||||||||
Net Deferred Tax Asset | ||||||||||||||||||||
31 December 2006 | 171 | |||||||||||||||||||
31 December 2007 | 171 |
A-8.67
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Called up | ||||||||||||
share | Share | Share | ||||||||||
capital | premium | capital | ||||||||||
£m | £m | £m | ||||||||||
1 January 2005 | 359 | 96 | 455 | |||||||||
Shares allotted during the year | 1 | 11 | 12 | |||||||||
31 December 2005 | 360 | 107 | 467 | |||||||||
Shares allotted during the year | 7 | 34 | 41 | |||||||||
Shares cancelled during the year | (12 | ) | — | (12 | ) | |||||||
31 December 2006 | 355 | 141 | 496 | |||||||||
Shares allotted during the year | 5 | 48 | 53 | |||||||||
Shares cancelled during the year | (10 | ) | — | (10 | ) | |||||||
31 December 2007 | 350 | 189 | 539 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Authorised: | ||||||||||||
One Founders Share of £1 | — | — | — | |||||||||
2,100 million ordinary shares of 25p each | 525 | 525 | 525 | |||||||||
525 | 525 | 525 | ||||||||||
Allotted, called up and fully paid: | ||||||||||||
One Founders Share of £1 | — | — | — | |||||||||
Ordinary shares of 25p each | 350 | 355 | 360 | |||||||||
350 | 355 | 360 | ||||||||||
Number of ordinary shares of 25p each (millions) | 1,401 | 1,422 | 1,441 | |||||||||
Shares allotted during the year in millions | ||||||||||||
18,557,662 shares in Reuters Group PLC were issued under employee share schemes at prices ranging from £nil to 630p per share. Transaction costs incurred on issue of shares amounted to £nil (2006: £nil, 2005: £nil) | 19 | 29 | 6 |
A-8.68
Table of Contents
Total number | ||||||||||||
of shares | Approximate | |||||||||||
purchased as | value of shares | |||||||||||
part of | that may | |||||||||||
publicly | Average price | be purchased | ||||||||||
announced | paid per | under the | ||||||||||
Month | programme | share (£) | programme (£m) | |||||||||
2005 : | ||||||||||||
July | 1,500,000 | 3.89 | 994 | |||||||||
August | 8,500,000 | 3.70 | 962 | |||||||||
September | 7,150,000 | 3.73 | 936 | |||||||||
October | 2,800,000 | 3.53 | 926 | |||||||||
November | 22,800,000 | 3.89 | 836 | |||||||||
December | 14,650,000 | 4.08 | 776 | |||||||||
2006 : | ||||||||||||
January | 10,500,000 | 4.32 | 731 | |||||||||
February | 18,450,000 | 4.06 | 655 | |||||||||
March | 13,725,000 | 3.89 | 601 | |||||||||
April | 6,000,000 | 3.98 | 577 | |||||||||
May | 9,435,000 | 3.86 | 541 | |||||||||
June | 17,750,000 | 3.67 | 475 | |||||||||
July | 6,770,000 | 3.75 | 450 | |||||||||
August | 13,000,000 | 3.89 | 399 | |||||||||
September | 9,750,000 | 4.11 | 358 | |||||||||
October | 8,725,000 | 4.43 | 319 | |||||||||
November | 9,500,000 | 4.57 | 276 | |||||||||
December | 5,594,000 | 4.55 | 250 | |||||||||
2007 : | ||||||||||||
January | 5,700,000 | 4.43 | 225 | |||||||||
February | 6,300,000 | 4.32 | 197 | |||||||||
March | 11,850,000 | 4.41 | 145 | |||||||||
April | 7,675,000 | 4.85 | 107 |
A-8.69
Table of Contents
Total number | ||||||||||||
of shares | ||||||||||||
purchased as | Total | |||||||||||
part of publicly | Average price | cost of shares | ||||||||||
announced | paid per | purchased | ||||||||||
Month | programme | share (£) | (£m) | |||||||||
2007 : | ||||||||||||
December | 5,050,000 | 6.14 | 31 |
A-8.70
Table of Contents
Capital | Available | Total | ||||||||||||||||||||||
redemption | Other | for-sale | Hedging | Translation | other | |||||||||||||||||||
reserve | reserve | reserve | reserve | reserve | reserves | |||||||||||||||||||
£m | £m | £m | £m | £m | £m | |||||||||||||||||||
1 January 2005 | 1 | (1,718 | ) | 94 | 30 | (54 | ) | (1,647 | ) | |||||||||||||||
Exchange differences taken directly to reserves | — | — | — | — | 97 | 97 | ||||||||||||||||||
Exchange differences taken to the income statement on disposal of assets | — | — | — | — | (2 | ) | (2 | ) | ||||||||||||||||
Fair value losses on available-for-sale financial assets | — | — | (22 | ) | — | — | (22 | ) | ||||||||||||||||
Fair value gains on available-for-sale financial assets taken to the income statement on disposal of assets | — | — | (68 | ) | — | — | (68 | ) | ||||||||||||||||
Fair value losses on net investment hedges | — | — | — | (39 | ) | — | (39 | ) | ||||||||||||||||
Fair value gains taken to the income statement on disposal of net investments | — | — | — | (14 | ) | — | (14 | ) | ||||||||||||||||
Other movements | — | (1 | ) | — | — | — | (1 | ) | ||||||||||||||||
Tax on items taken directly to or transferred from reserves | — | — | — | 16 | (12 | ) | 4 | |||||||||||||||||
31 December 2005 | 1 | (1,719 | ) | 4 | (7 | ) | 29 | (1,692 | ) | |||||||||||||||
Exchange differences taken directly to reserves | — | — | — | — | (95 | ) | (95 | ) | ||||||||||||||||
Fair value gains on available-for-sale financial assets | — | — | 6 | — | — | 6 | ||||||||||||||||||
Fair value gains on net investment hedges | — | — | — | 34 | — | 34 | ||||||||||||||||||
Redemption of share capital | 12 | — | — | — | — | 12 | ||||||||||||||||||
Tax on items taken directly to or transferred from reserves | — | — | — | (10 | ) | 7 | (3 | ) | ||||||||||||||||
31 December 2006 | 13 | (1,719 | ) | 10 | 17 | (59 | ) | (1,738 | ) | |||||||||||||||
Exchange differences taken directly to reserves | — | — | — | — | 20 | 20 | ||||||||||||||||||
Fair value gains on available-for-sale financial assets | — | — | 11 | — | — | 11 | ||||||||||||||||||
Fair value gains on available-for-sale financial assets taken to the income statement on disposal of assets | — | — | (18 | ) | — | — | (18 | ) | ||||||||||||||||
Fair value gains on net investment hedges | — | — | — | 4 | — | 4 | ||||||||||||||||||
Redemption of share capital | 10 | — | — | — | — | 10 | ||||||||||||||||||
Tax on items taken directly to or transferred from reserves | — | — | — | (1 | ) | 2 | 1 | |||||||||||||||||
31 December 2007 | 23 | (1,719 | ) | 3 | 20 | (37 | ) | (1,710 | ) |
A-8.71
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Profit for the year from continuing operations | 213 | 293 | 229 | |||||||||
Adjustments for: | ||||||||||||
Depreciation | 96 | 95 | 99 | |||||||||
Impairment of associates and joint ventures | — | — | 2 | |||||||||
Impairment of intangibles | 21 | — | 1 | |||||||||
Amortisation of intangibles | 61 | 46 | 33 | |||||||||
Profit on disposal of property, plant and equipment | (10 | ) | (2 | ) | — | |||||||
Employee share scheme charges | 34 | 30 | 30 | |||||||||
Foreign exchange losses/(gains) | 18 | (14 | ) | (8 | ) | |||||||
Fair value movements on derivatives | 13 | 19 | (18 | ) | ||||||||
Fair value movements on other financial assets | — | — | 16 | |||||||||
Profits on disposals | (24 | ) | (80 | ) | (42 | ) | ||||||
Income from investments | (1 | ) | — | (1 | ) | |||||||
Share of post-taxation losses/(profits) of associates and joint ventures | 6 | 4 | (5 | ) | ||||||||
Finance income | (117 | ) | (72 | ) | (41 | ) | ||||||
Finance costs | 151 | 87 | 53 | |||||||||
Taxation | 60 | 20 | 9 | |||||||||
Movements in working capital: | ||||||||||||
Decrease in inventories | 1 | — | 2 | |||||||||
(Increase)/decrease in trade and other receivables | (12 | ) | 23 | 3 | ||||||||
Increase/(decrease) in trade and other payables | 75 | 51 | (52 | ) | ||||||||
(Decrease)/increase in pensions deficit | (26 | ) | (176 | ) | 9 | |||||||
Decrease in provisions | (25 | ) | (13 | ) | (27 | ) | ||||||
Decrease in amounts payable to discontinued operations | — | — | (24 | ) | ||||||||
Cash generated from continuing operations | 534 | 311 | 268 | |||||||||
Profit for the year from discontinued operations | 14 | 12 | 253 | |||||||||
Adjustments for: | ||||||||||||
Depreciation | — | — | 4 | |||||||||
Amortisation of intangibles | — | — | 2 | |||||||||
Loss on disposal of property, plant and equipment | — | — | 4 | |||||||||
Employee share scheme charges | — | — | 18 | |||||||||
Profits on disposals | (14 | ) | (12 | ) | (278 | ) | ||||||
Finance income | — | — | (13 | ) | ||||||||
Taxation | — | — | 20 | |||||||||
Movements in working capital: | ||||||||||||
Increase in trade and other receivables | — | — | (28 | ) | ||||||||
Decrease in trade and other payables | — | — | (17 | ) | ||||||||
Increase in provisions | — | — | 14 | |||||||||
Decrease in amounts receivable from continuing operations | — | — | 24 | |||||||||
Cash generated from discontinued operations | — | — | 3 | |||||||||
Cash generated from operations | 534 | 311 | 271 |
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Acquisitions (including joint ventures and associates): | ||||||||||||
Subsidiary undertakings (see note 36) | (23 | ) | (32 | ) | (135 | ) | ||||||
Joint ventures and associates | (14 | ) | (27 | ) | (1 | ) | ||||||
Deferred payments for acquisitions in prior years | (4 | ) | (9 | ) | (8 | ) | ||||||
(41 | ) | (68 | ) | (144 | ) | |||||||
Less: cash acquired | 2 | 1 | 20 | |||||||||
Acquisitions, net of cash acquired | (39 | ) | (67 | ) | (124 | ) | ||||||
Disposals (including joint ventures and associates): | ||||||||||||
Subsidiary undertakings* | 24 | (15 | ) | 824 | ||||||||
Joint ventures and associates | (1 | ) | 80 | 1 | ||||||||
Instinet (deemed disposal) | — | — | 3 | |||||||||
23 | 65 | 828 | ||||||||||
Add: cash disposed | — | — | (582 | ) | ||||||||
Disposals, net of cash disposed | 23 | 65 | 246 |
* | The cash inflow of £24 million for subsidiary undertakings principally consists of a tax settlement on disposal of Instinet Group which was completed in December 2005. (2006 outflow of £15 million for subsidiary undertakings represents transaction fees on the disposal of Instinet Group). |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Cash and cash equivalents (see note 20) | 251 | 129 | 662 | |||||||||
Bank overdrafts | (9 | ) | (24 | ) | (25 | ) | ||||||
Total cash and cash equivalents | 242 | 105 | 637 |
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Prior year final paid | 86 | 81 | 86 | |||||||||
Current year interim paid | 61 | 53 | 54 | |||||||||
147 | 134 | 140 | ||||||||||
Per ordinary share | Pence | Pence | Pence | |||||||||
Prior year final paid | 6.90 | 6.15 | 6.15 | |||||||||
Current year interim paid | 5.00 | 4.10 | 3.85 |
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Weighted | ||||||||||||||||||||||||||||
average | ||||||||||||||||||||||||||||
exercise | ||||||||||||||||||||||||||||
price for | ||||||||||||||||||||||||||||
SAYE | Plan | DSOP | LTIP & | option | ||||||||||||||||||||||||
Plan | 2000 | & RSP | ABSP | PRSP | Total | plans £ | ||||||||||||||||||||||
Ordinary shares under option in millions (including ADSs): | ||||||||||||||||||||||||||||
At 31 January 2005 | 29.9 | 11.4 | 59.2 | — | 14.6 | 115.1 | 2.71 | |||||||||||||||||||||
Granted | 3.4 | — | 7.5 | 2.3 | 2.2 | 15.4 | 2.07 | |||||||||||||||||||||
Forfeited | (2.5 | ) | (0.4 | ) | (2.5 | ) | (0.1 | ) | (0.4 | ) | (5.9 | ) | 4.60 | |||||||||||||||
Exercised | (1.2 | ) | — | (4.8 | ) | (0.1 | ) | (0.7 | ) | (6.8 | ) | 1.66 | ||||||||||||||||
Expired or lapsed | (1.4 | ) | (10.3 | ) | (4.0 | ) | — | (4.4 | ) | (20.1 | ) | 3.88 | ||||||||||||||||
31 December 2005 | 28.2 | 0.7 | 55.4 | 2.1 | 11.3 | 97.7 | 2.70 | |||||||||||||||||||||
Granted | 5.3 | — | 9.0 | — | 2.8 | 17.1 | 1.68 | |||||||||||||||||||||
Forfeited | (0.9 | ) | — | (1.6 | ) | (0.1 | ) | (0.2 | ) | (2.8 | ) | 1.64 | ||||||||||||||||
Exercised | (20.7 | ) | — | (7.7 | ) | (2.0 | ) | — | (30.4 | ) | 1.08 | |||||||||||||||||
Expired or lapsed | (0.6 | ) | (0.7 | ) | (4.1 | ) | — | (0.6 | ) | (6.0 | ) | 4.12 | ||||||||||||||||
31 December 2006 | 11.3 | — | 51.0 | — | 13.3 | 75.6 | 2.56 | |||||||||||||||||||||
Granted | 4.4 | — | 8.3 | — | 3.1 | 15.8 | 2.14 | |||||||||||||||||||||
Forfeited | (1.2 | ) | — | (3.5 | ) | — | (0.5 | ) | (5.2 | ) | 3.18 | |||||||||||||||||
Exercised | (3.6 | ) | — | (15.5 | ) | — | (2.4 | ) | (21.5 | ) | 2.29 | |||||||||||||||||
Expired or lapsed | — | — | — | — | (8.5 | ) | (8.5 | ) | — | |||||||||||||||||||
31 December 2007 | 10.9 | — | 40.3 | — | 5.0 | 56.2 | 2.84 | |||||||||||||||||||||
Of which exercisable | 0.2 | 19.6 | — | 19.8 | ||||||||||||||||||||||||
Number of participants at 31 December 2007 | 6,558 | 5,102 | 135 |
Expense included in the | ||||||||||||||||||||||||
income statement for year | ||||||||||||||||||||||||
ended | £m | £m | £m | £m | £m | £m | ||||||||||||||||||
31 December 2005 | 5 | — | 18 | 2 | 5 | 30 | ||||||||||||||||||
31 December 2006 | 6 | — | 16 | 1 | 7 | 30 | ||||||||||||||||||
31 December 2007 | 5 | — | 25 | — | 6 | 36 |
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Exercisable | ||||||||||||||||||||||||
weighted | ||||||||||||||||||||||||
average | ||||||||||||||||||||||||
Weighted | exercise | |||||||||||||||||||||||
average | Options | Options | Options | price for | ||||||||||||||||||||
remaining | exercisable at | exercisable at | exercisable at | options | ||||||||||||||||||||
Total shares | contractual | 31 December | 31 December | 31 December | exercisable at | |||||||||||||||||||
under option | life | 2007 | 2006 | 2005 | 31 December | |||||||||||||||||||
Range of exercise prices | (million) | (months) | (million) | (million) | (million) | 2007 | ||||||||||||||||||
Ordinary shares | ||||||||||||||||||||||||
£0.00 — £2.00 | 18.5 | 31 | 2.6 | 6.8 | 2.5 | £ | 1.32 | |||||||||||||||||
£2.01 — £5.00 | 29.0 | 59 | 10.6 | 17.1 | 12.0 | £ | 2.89 | |||||||||||||||||
£5.01 — £7.00 | 4.8 | 67 | 3.6 | 5.7 | 5.1 | £ | 5.69 | |||||||||||||||||
£7.01 — £9.00 | 3.0 | 42 | 3.0 | 3.6 | 4.6 | £ | 8.62 | |||||||||||||||||
£9.01 — £11.00 | — | — | — | — | 0.4 | £ | 0.00 | |||||||||||||||||
ADSs* | ||||||||||||||||||||||||
$10.01 — $30.00 | — | — | — | — | 0.1 | $ | 0.00 | |||||||||||||||||
$30.01 — $50.00 | 0.6 | 19 | — | — | — | $ | 42.86 | |||||||||||||||||
$50 + | 0.3 | 35 | — | — | — | $ | 51.09 | |||||||||||||||||
56.2 | — | 19.8 | 33.2 | 24.7 |
* | One ADS is equivalent to six ordinary shares. |
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2007 | ||||||||||||||||
SAYE Plan | DSOP | RSP | LTIP | |||||||||||||
Weighted average fair value (£) | 1.67 | 1.14 | 4.25 | 2.95 |
Monte Carlo | ||||||||||||||||
Black Scholes | Black Scholes | Black Scholes | simulation based | |||||||||||||
options | options | options | customised options | |||||||||||||
Options pricing model used | pricing model | pricing model | pricing model | pricing model | ||||||||||||
Key assumptions used: | ||||||||||||||||
Weighted average share price (£) | 4.82 | 5.04 | 4.50 | 4.33 | ||||||||||||
Range of exercise prices (£) | 3.53 | 4.42-6.19 | Nil | Nil | ||||||||||||
Range of expected volatility (%) | 27 | % | 22%-46 | % | 22%-34 | % | 26 | % | ||||||||
Range of risk-free rates (%) | 6 | % | 5%-6 | % | 5%-6 | % | 6 | % | ||||||||
Range of expected option term (life) | 3 years | 0.5 to 7 years | 0.5 to 4 years | 3 years | ||||||||||||
Range of expected dividend yields | 2.5 | % | 2.1%-2.5 | % | 2.1%-2.5 | % | 2.5 | % |
2006 | ||||||||||||||||
SAYE Plan | DSOP | RSP | LTIP | |||||||||||||
Weighted average fair value (£) | 1.17 | 1.73 | 3.65 | 3.39 |
Monte Carlo | ||||||||||||||||
Black Scholes | Black Scholes | Black Scholes | simulation based | |||||||||||||
options | options | options | customised options | |||||||||||||
Options pricing model used | pricing model | pricing model | pricing model | pricing model | ||||||||||||
Key assumptions used: | ||||||||||||||||
Weighted average share price (£) | 3.77 | 4.20 | 3.88 | 4.53 | ||||||||||||
Range of exercise prices (£) | 3.14 | 3.93 | Nil | Nil | ||||||||||||
Range of expected volatility (%) | 35 | % | 23%-48 | % | 25%-41 | % | 36 | % | ||||||||
Range of risk-free rates (%) | 5 | % | 4%-5 | % | 5 | % | 5 | % | ||||||||
Range of expected option term (life) | 3 years | 4 to 7 years | 1 to 4 years | 3 years | ||||||||||||
Expected dividends (per year) | 10p | 10p-10.65p | 10p-10.65p | 10p |
2005 | ||||||||||||||||
SAYE Plan | DSOP | RSP | LTIP | |||||||||||||
Weighted average fair value (£) | 1.61 | 1.30 | 3.81 | 2.49 |
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Monte Carlo | ||||||||||||||||
Black Scholes | Black Scholes | Black Scholes | simulation based | |||||||||||||
options | options | options | customised options | |||||||||||||
Options pricing model used | pricing model | pricing model | pricing model | pricing model | ||||||||||||
Key assumptions used: | ||||||||||||||||
Weighted average share price (£) | 4.12 | 3.97 | 4.04 | 4.05 | ||||||||||||
Range of exercise prices (£) | 3.33 | 3.89-4.05 | Nil | Nil | ||||||||||||
Range of expected volatility (%) | 47 | % | 28%-54 | % | 28%-54 | % | 48 | % | ||||||||
Range of risk-free rates (%) | 5 | % | 4%-5 | % | 4%-5 | % | 5 | % | ||||||||
Range of expected option term (life) | 3 years | 4 to 7 years | 1 to 4 years | 3 years | ||||||||||||
Expected dividends (per year) | 10p | 10p | 10p | 10p |
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Salaries and short-term employee benefits | 16 | 12 | 8 | |||||||||
Post-employment benefits | 1 | 1 | 1 | |||||||||
Termination benefits | — | — | 1 | |||||||||
Share-based payments | 9 | 8 | 6 | |||||||||
Total | 26 | 21 | 16 |
31 | 31 | 31 | ||||||||||||||||||||||||||
December | Amounts | Amounts | December | Amounts | Amounts | December | ||||||||||||||||||||||
2005 | invoiced | collected | 2006 | invoiced | collected | 2007 | ||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | ||||||||||||||||||||||
Amounts receivable: | ||||||||||||||||||||||||||||
Joint ventures: | ||||||||||||||||||||||||||||
Factiva* | 4 | 30 | (33 | ) | 1 | — | (1 | ) | — | |||||||||||||||||||
FXMarketSpace | — | 6 | — | 6 | 10 | (15 | ) | 1 | ||||||||||||||||||||
Other | — | 1 | (1 | ) | — | 1 | (1 | ) | — | |||||||||||||||||||
Associates | — | — | — | — | 1 | (1 | ) | — | ||||||||||||||||||||
Total amounts receivable | 4 | 37 | (34 | ) | 7 | 12 | (18 | ) | 1 | |||||||||||||||||||
Amounts payable: | ||||||||||||||||||||||||||||
Joint ventures: | ||||||||||||||||||||||||||||
Factiva | 1 | 4 | (5 | ) | — | — | — | — | ||||||||||||||||||||
3 Times Square Associates | — | 19 | (19 | ) | — | 16 | (16 | ) | — | |||||||||||||||||||
Associates | — | 2 | (2 | ) | — | 5 | (4 | ) | 1 | |||||||||||||||||||
Total amounts payable | 1 | 25 | (26 | ) | — | 21 | (20 | ) | 1 |
* | Reuters disposed of the majority of its investment in Factiva in December 2006. Consequently, the £1 million receivable from Factiva at 31 December 2006 has been presented within other receivables (see note 19). |
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2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Property, plant and equipment | 14 | 10 | 16 | |||||||||
Intangible assets | 26 | 9 | 13 | |||||||||
Total capital commitments | 40 | 19 | 29 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Year ended 31 December | ||||||||||||
2006 | — | — | 79 | |||||||||
2007 | — | 88 | 74 | |||||||||
2008 | 94 | 79 | 63 | |||||||||
2009 | 85 | 70 | 54 | |||||||||
2010 | 73 | 60 | 51 | |||||||||
2011 | 62 | 55 | 47 | |||||||||
2012 (and thereafter for 2005 comparatives) | 56 | 51 | 305 | |||||||||
2013 and thereafter | 280 | 249 | — | |||||||||
Total operating lease payables | 650 | 652 | 673 |
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Book | Fair value | Provisional | ||||||||||
value | adjustments | fair value | ||||||||||
£m | £m | £m | ||||||||||
Non-current assets: | ||||||||||||
Intangible assets | — | 8 | 8 | |||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 2 | — | 2 | |||||||||
Current liabilities | (2 | ) | — | (2 | ) | |||||||
Non-current liabilities | ||||||||||||
Deferred tax | — | (2 | ) | (2 | ) | |||||||
Net (liabilities)/assets acquired | — | 6 | 6 | |||||||||
Total consideration | 12 | |||||||||||
Consideration satisfied by: | ||||||||||||
Cash | 12 |
£m | ||||
Cash consideration | 12 | |||
Cash acquired | (2 | ) | ||
Total outflow of cash and cash equivalents | 10 |
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Book | Fair value | Provisional | ||||||||||
value | adjustments | fair value | ||||||||||
£m | £m | £m | ||||||||||
Non-current assets: | ||||||||||||
Intangible assets | — | 6 | 6 | |||||||||
Current assets: | ||||||||||||
Other current assets | 1 | — | 1 | |||||||||
Current liabilities | (2 | ) | — | (2 | ) | |||||||
Non-current liabilities | ||||||||||||
Deferred tax | — | (2 | ) | (2 | ) | |||||||
Net liabilities acquired | (1 | 4 | 3 | |||||||||
Goodwill | 7 | |||||||||||
Total consideration | 10 | |||||||||||
Consideration satisfied by: | ||||||||||||
Cash | 10 |
£m | ||||
Cash consideration | 10 | |||
Total outflow of cash and cash equivalents | 10 |
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Book | Fair value | Provisional | ||||||||||
value | adjustments | fair value | ||||||||||
£m | £m | £m | ||||||||||
Non-current assets: | ||||||||||||
Intangible assets | — | 1 | 1 | |||||||||
Net assets acquired | — | 1 | 1 | |||||||||
Goodwill | — | |||||||||||
Total consideration | 1 |
£m | ||||
Cash consideration | 1 | |||
Total outflow of cash and cash equivalents | 1 |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
On disposal of subsidiary undertakings | 3 | 4 | 4 | |||||||||
On disposal of associates, joint ventures and available-for-sale financial assets | 21 | 76 | 38 | |||||||||
Recorded in the income statement | 24 | 80 | 42 |
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Total number | ||||||||||||
of shares | ||||||||||||
purchased as | ||||||||||||
part of | Total cost of | |||||||||||
publicly | Average price | shares | ||||||||||
announced | paid per | purchased | ||||||||||
Month | programme | share (£) | (£m) | |||||||||
January | 20,975,000 | 5.99 | 127 | |||||||||
February | 6,965,000 | 6.03 | 42 | |||||||||
March | 3,100,000 | 6.00 | 19 |
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Principal area of | Percentage of equity | |||||||||||
Subsidiary undertakings | Country of incorporation | operation | shares held | |||||||||
Reuters AG | Germany | Germany | 100 | |||||||||
Reuters America Holdings Inc* | USA | Worldwide | 100 | |||||||||
Reuters America LLC | USA | USA | 100 | |||||||||
Reuters Australia Pty Limited | Australia | Australia | 100 | |||||||||
Reuters BV | Netherlands | Netherlands | 100 | |||||||||
Reuters Canada Limited | Canada | Canada/USA | 100 | |||||||||
Reuters Europe SA | Switzerland | Spain/Portugal | 100 | |||||||||
Reuters France SAS | France | France | 100 | |||||||||
Reuters Finance PLC* | UK | UK | 100 | |||||||||
Reuters Group Overseas Holdings (UK) Ltd* | UK | Worldwide | 100 | |||||||||
Reuters Holdings Limited* | UK | UK | 100 | |||||||||
Reuters Hong Kong Limited | Cook Islands | Hong Kong | 100 | |||||||||
Reuters International Holdings SARL* | Switzerland | Worldwide | 100 | |||||||||
Reuters Investments Limited* | UK | UK | 100 | |||||||||
Reuters Italia SpA | Italy | Italy | 100 | |||||||||
Reuters Japan Kabushiki Kaisha | Japan | Japan | 100 | |||||||||
Reuters Limited | UK | Worldwide | 100 | |||||||||
Reuters Middle East Limited | Cook Islands | Middle East | 100 | |||||||||
Reuters Nederland BV* | Netherlands | Netherlands | 100 | |||||||||
Reuters Research Inc | USA | USA | 100 | |||||||||
Reuters SA | Switzerland | Worldwide | 100 | |||||||||
Reuters Singapore Pte Limited | Singapore | Singapore | 100 | |||||||||
Reuters Svenska AB | Sweden | Sweden | 100 | |||||||||
Reuters Transaction Services Limited | UK | Worldwide | 100 |
Principal area of | Percentage of equity | |||||||||||
Joint ventures | Country of incorporation | operation | shares held | |||||||||
3 Times Square Associates LLC | USA | USA | 50 | ** | ||||||||
FXMarketSpace Limited | UK | Worldwide | 50 |
* | Denotes investment companies. All other entities are operating companies. | |
** | The Group has an equity shareholding of 50% in 3 Times Square Associates LLC. However, Reuters has an effective economic interest of 35% at 31 December 2007. |
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