BUSINESS ACQUISITION REPORT
Item 1 | Identity of Company | |
1.1 | Name and Address of Company | |
Thomson Reuters Corporation Suite 2706, Toronto Dominion Bank Tower Toronto-Dominion Centre Toronto, Ontario M5K 1A1 Canada | ||
1.2 | Executive Officer | |
Deirdre Stanley, Executive Vice President and General Counsel (646) 223-8756 | ||
Item 2 | Details of Acquisition | |
2.1 | Nature of Business Acquired | |
On April 17, 2008, The Thomson Corporation (“Thomson”) acquired Reuters Group PLC (“Reuters”), a global information company serving professionals in the financial services, media and corporate markets, by implementing a dual listed company (“DLC”) structure (the “Transaction”). | ||
Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. By combining Thomson’s strength in North America with Reuters strength in Europe, the Middle East and Asia, Thomson Reuters created a business with a global brand and presence that will allow it to grow faster than either Thomson or Reuters could have on its own. Thomson Reuters expects to achieve this by: |
• | capitalizing on a global brand and presence to drive international growth; | |
• | delivering greater value to customers through a broader range of electronically delivered critical information and decision support tools; | |
• | integrating Thomson and Reuters businesses to accelerate growth and capture synergies; and | |
• | leveraging increased revenue diversity and scale, financial strength and capital deployment to maximize shareholder return. |
Thomson Reuters is organized in two divisions: |
• | Markets, which consists of the financial businesses, which are a combination of those operated by Reuters and Thomson Financial prior to the closing; and | |
• | Professional, which consists of the Legal, Tax & Accounting, Scientific and Healthcare segments. |
1
Under the DLC structure, Thomson Reuters has two parent companies, both of which are publicly listed — Thomson Reuters Corporation, an Ontario corporation, which was previously named The Thomson Corporation, and Thomson Reuters PLC, a new English company in which Reuters shareholders received shares as part of their consideration in the Transaction. Thomson Reuters Corporation and Thomson Reuters PLC operate as a unified group pursuant to contractual arrangements as well as provisions in their organizational documents. Under the DLC structure, shareholders of Thomson Reuters Corporation and Thomson Reuters PLC both have a stake in Thomson Reuters, with cash dividend, capital distribution and voting rights that are comparable to the rights they would have if they were holding shares in one company carrying on the Thomson Reuters business. | ||
Key features of the DLC structure include the following: |
• | 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 those of other parties to the extent they are guaranteed by 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. |
In connection with the Transaction, Thomson Reuters adopted the Reuters Trust Principles, which include the preservation of integrity, reliability of news, development of the news business and related principles. | ||
Thomson Reuters corporate headquarters is located in New York, New York, with key staff also located in Stamford, Connecticut and London, United Kingdom. Thomson Reuters employs more than 50,000 people in 93 countries. Thomson Reuters shares are listed on the New York Stock Exchange (NYSE: TRI); Toronto Stock Exchange (TSX: TRI); London Stock Exchange (LSE: TRIL); and Nasdaq (NASDAQ: TRIN). | ||
2.2 | Date of Acquisition | |
April 17, 2008 | ||
2.3 | Consideration | |
Under the terms of the Transaction, all of the issued and outstanding Reuters ordinary shares were cancelled and Reuters shareholders were entitled to receive, for each Reuters ordinary share held, 352.5 pence in cash and 0.16 Thomson Reuters PLC ordinary shares. As of the closing of the Transaction, one Thomson Reuters PLC ordinary share was equivalent to one Thomson Reuters Corporation common share under the DLC structure. Thomson shareholders continued to hold their shares of Thomson, renamed Thomson Reuters Corporation. |
2
Subject to certain exceptions, all options and awards outstanding under Reuters share-based employee compensation plans vested and became fully exercisable prior to the closing of the Transaction. Assuming all outstanding Reuters in-the-money share options and other share-based awards were exercised, Reuters shareholders were entitled to receive aggregate cash consideration of approximately $8.7 billion (based on the $/£ exchange rate of $1.9756/£1 per the noon buying rate of the Federal Reserve Bank of New York on April 16, 2008) on May 1, 2008. Thomson Reuters funded cash consideration using proceeds from the sale of its Thomson Learning businesses as well as borrowings under a £2.5 billion acquisition credit facility. As of April 30, 2008, Thomson Reuters Corporation had borrowed US$3 billion under this facility to finance the Transaction. | ||
194,107,278 Thomson Reuters PLC ordinary shares were issued to Reuters shareholders on completion of the Transaction. | ||
The final amount of consideration is subject to change based on certain equity awards of Reuters employees which have an exercise period of up to six months from the completion of the Transaction. | ||
2.4 | Effect on Financial Position | |
Thomson Reuters believes its future results will reflect savings as a result of the previously announced Thomson and Reuters efficiency initiatives, THOMSONplusand Core Plus, as well as the combination of the two businesses. Thomson Reuters estimates that it will achieve run rate savings of US$1.0 billion by December 31, 2010, earlier than originally anticipated, and US$1.2 billion by December 31, 2011. The aggregate savings through 2011 includes the benefits from THOMSONplus(US$160 million), Core Plus (US$300 million) and Thomson Reuters integration-related savings (US$750 million). | ||
At March 31, 2008, the THOMSONplusand Core Plus programs had achieved combined run rate savings of US$300 million, leaving an additional US$900 million to be realized by December 31, 2011. The cost to achieve the savings to date has been approximately US$570 million. The estimated cash cost to achieve the remaining US$900 million of savings is US$1.2 billion through 2011. | ||
In order to obtain antitrust clearance for the Transaction, Thomson Reuters agreed to sell a copy of the Thomson Fundamentals (Worldscope), Reuters Estimates, Reuters Aftermarket Research and Reuters Economics (EcoWin) databases. The sales include copies of the databases, source data and training materials, as well as certain contracts and, potentially, employees connected to the databases. Thomson Reuters is in discussions with several potential buyers, and expects to complete the sales within the next few months. | ||
2.5 | Prior Valuations | |
None. | ||
2.6 | Parties to Transaction | |
Not applicable. |
3
2.7 | Date of Report | |
May 15, 2008 | ||
Item 3 | Financial Statements | |
The unaudited pro forma consolidated financial statements of Thomson Reuters Corporation for the year ended December 31, 2007, included in the section entitled “Unaudited Canadian GAAP Pro Forma Consolidated Financial Statements of Thomson Reuters Corporation” on pages 12 through 38 of Thomson Reuters PLC’s annual report on Form 20-F for the year ended December 31, 2007 (the “Thomson Reuters PLC Annual Report”) which was filed with the securities regulatory authorities in Canada and furnished to the SEC on Form 6-K on April 17, 2008, are specifically incorporated by reference in this business acquisition report. | ||
A copy of the Thomson Reuters PLC Annual Report is available at the Canadian securities regulatory authorities’ website at www.sedar.com, at the SEC’s website at www.sec.gov and at Thomson Reuters website at www.thomsonreuters.com. | ||
The consolidated financial statements of Reuters as at and for the years ended December 31, 2007, 2006 and 2005 and the accompanying auditors’ report thereon attached as Annex A hereto are included in this business acquisition report. |
4
CONSOLIDATED FINANCIAL STATEMENTS
AS AT AND FOR THE YEARS ENDED
31 DECEMBER 2007, 2006 AND 2005
Page | ||
Report of Independent Registered Public Accounting Firm to the Shareholder of Reuters Group Limited (formerly Reuters Group PLC) | A-2 | |
Consolidated income statement for the years ended 31 December 2007, 2006 and 2005 | A-3 | |
Consolidated statement of recognised income and expense for the year ended 31 December 2007, 2006, and 2005 | A-4 | |
Consolidated balance sheet as of 31 December 2007, 2006 and 2005 | A-5 | |
Consolidated cash flow statement for the years ended 31 December 2007, 2006 and 2005 | A-6 | |
Group Accounting Policies | A-7.1 | |
Notes to the financial statements | A-8.1 |
A-1
London
A-2
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
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
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
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
A-7.1
• | 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
A-7.3
A-7.4
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
• | financial assets at fair value through profit and loss; |
• | loans and receivables; |
• | available-for-sale financial assets. |
A-7.6
A-7.7
• | 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
A-7.9
A-7.10
A-7.11
A-8.1
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
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
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
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
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 | |||||||||
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
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
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
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
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
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
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
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
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
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) | 4,197 | 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
Company | ||||||||
contribution | ||||||||
in respect | ||||||||
of period | ||||||||
Age | £000 | |||||||
Tom Glocer | 48 | 226 | ||||||
David Grigson | 53 | 28 | ||||||
Devin Wenig | 41 | 28 |
A-8.16
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
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
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
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
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
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
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
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
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
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
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
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 Instinet 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
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
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
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
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 | |||||||||||||||
Depreciation: | ||||||||||||||||||||
1 January 2005 | (70 | ) | (93 | ) | (708 | ) | (166 | ) | (1,037 | ) | ||||||||||
Exchange differences | (1 | ) | (3 | ) | (29 | ) | (3 | ) | (36 | ) | ||||||||||
Charged in the year | (4 | ) | (13 | ) | (73 | ) | (13 | ) | (103 | ) | ||||||||||
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
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
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
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
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
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
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 | 166 | 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
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
• | 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
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
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 | ) |
Moodys (RCF/Net Debt**) | Standard & Poors (FFO/Net 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
A-8.43
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
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
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
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
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
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
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
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
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
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
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
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 | ||||||||||||||||||||
Rationalisation | 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
A-8.56
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
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
�� | ||||||||||||||||||||||||||||||||||||||||||||||||
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
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
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
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
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
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 | — | — | — |
A-8.64
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
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
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
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
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
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
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
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 |
A-8.72
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 |
A-8.73
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 |
A-8.74
A-8.75
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 |
A-8.76
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. |
A-8.77
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 |
A-8.78
2005 | ||||||||||||||||||||
SAYE Plan | DSOP | ABPSP | RSP | LTIP | ||||||||||||||||
Weighted average fair value (£) | 1.61 | 1.30 | 3.95 | 3.81 | 2.49 | |||||||||||||||
Monte Carlo | ||||||||||||||||||||
Black Scholes | Black Scholes | Black Scholes | Black Scholes | simulation based | ||||||||||||||||
options | options | options | options | customised options | ||||||||||||||||
Options pricing model used | pricing model | pricing model | pricing model | pricing model | pricing model | |||||||||||||||
Key assumptions used: | ||||||||||||||||||||
Weighted average share price (£) | 4.12 | 3.97 | 4.05 | 4.04 | 4.05 | |||||||||||||||
Range of exercise prices (£) | 3.33 | 3.89-4.05 | Nil | Nil | Nil | |||||||||||||||
Range of expected volatility (%) | 47% | 28%-54% | 37% | 28%-54% | 48% | |||||||||||||||
Range of risk-free rates (%) | 5% | 4%-5% | 5% | 4%-5% | 5% | |||||||||||||||
Range of expected option term (life) | 3 years | 4 to 7 years | 2 years | 1 to 4 years | 3 years | |||||||||||||||
Expected dividends (per year) | 10p | 10p | 10p | 10p | 10p |
A-8.79
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). |
A-8.80
A-8.81
A-8.82
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 |
A-8.83
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 | |||||||||
Goodwill | 6 | |||||||||||
Total consideration | 12 | |||||||||||
Consideration satisfied by: | ||||||||||||
Cash | 12 |
£m | ||||
Cash consideration | 12 | |||
Cash acquired | (2 | ) | ||
Total outflow of cash and cash equivalents | 10 |
A-8.84
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 |
A-8.85
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 |
A-8.86
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 |
A-8.87
A-8.88
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. |
A-8.89
For the year ended | ||||||||
31 December 2007 | ||||||||
£m | ||||||||
Profit as previously reported by Reuters under IFRS | 227 | |||||||
Differences in GAAP increasing / (decreasing) reported profit: | ||||||||
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 under Thomson Canadian GAAP accounting policies | 88 |
As at | ||||||||
31 December 2007 | ||||||||
£m | ||||||||
Shareholders’ equity 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 under Thomson Canadian GAAP accounting policies | 567 |
A-8.90
A-8.91
A-8.92
A-8.93
A-8.94
recognised as part of allocating the cost of a combination if they exist at the date of acquisition and meet certain recognition criteria. Provisions for future losses or other costs expected to be incurred as a result of a business combination are not recognised.
A-8.95
A-8.96
Research & Asset | ||||||||||||||||||||
Goodwill | Sales & Trading | Management | Enterprise | Media | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Cost: | ||||||||||||||||||||
01 January 2007 | 315 | 164 | 121 | 25 | 5 | |||||||||||||||
Exchange differences | (1 | ) | (1 | ) | (1 | ) | 1 | — | ||||||||||||
Additions: | ||||||||||||||||||||
Acquisition of subsidiaries | 13 | 4 | 6 | 3 | — | |||||||||||||||
Other additions | — | — | — | — | — | |||||||||||||||
Reclassifications | — | — | — | — | — | |||||||||||||||
31 December 2007 | 327 | 167 | 126 | 29 | 5 | |||||||||||||||
Amortisation and impairment: | ||||||||||||||||||||
01 January 2007 | (18 | ) | (18 | ) | — | — | — | |||||||||||||
Exchange differences | — | — | — | — | — | |||||||||||||||
Charged in the year: | ||||||||||||||||||||
Amortisation | — | — | — | — | — | |||||||||||||||
Impairment | — | — | — | — | — | |||||||||||||||
Reclassifications | — | — | — | — | — | |||||||||||||||
31 December 2007 | (18 | ) | (18 | ) | — | — | — | |||||||||||||
Carrying amount: | ||||||||||||||||||||
31 December 2006 | 297 | 146 | 121 | 25 | 5 | |||||||||||||||
31 December 2007 | 309 | 149 | 126 | 29 | 5 |
By geographical location: | ||||||||
Europe, Middle East & Africa | 89 | |||||||
Americas | 193 | |||||||
Asia | 27 | |||||||
309 | ||||||||
A-8.97
Rationalisation | Research & Asset | |||||||||||||||||||
provisions | Sales & Trading | Management | Enterprise | Media | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
1 January 2007 | 95 | 58 | 15 | 17 | 5 | |||||||||||||||
Exchange differences | 1 | 1 | — | — | — | |||||||||||||||
Charged in the year | 14 | 9 | 2 | 2 | 1 | |||||||||||||||
Utilised in the year | (32 | ) | (23 | ) | (2 | ) | (7 | ) | — | |||||||||||
Released | (10 | ) | (7 | ) | (2 | ) | (1 | ) | — | |||||||||||
Provisions acquired through business combinations | — | — | — | — | — | |||||||||||||||
Reclassifications | — | — | — | — | — | |||||||||||||||
Unwinding of discount | 1 | 1 | — | — | — | |||||||||||||||
31 December 2007 | 69 | 39 | 13 | 11 | 6 |
A-8.98
Market price of | Weighted average | Weighted average | ||||||||||
Date | Number granted | Reuters share | exercise price | fair value | ||||||||
SAYE 25 | 3rd April 07 | 4,470,556 | £4.82 | £3.52 | £1.67 | |||||||
DSOP March 2007 | 13th March 07 | 2,023,720 | £4.38 | £4.42 | £1.53 | |||||||
DSOP August 2007 | 7th Aug 07 | 1,250,000 | £6.20 | £6.19 | £0.44 | |||||||
RSP March 2007 | 13th March 07 | 4,654,928 | £4.38 | £0.00 | £4.13 | |||||||
RSP August 2007 | 7th Aug 07 | 275,736 | £6.20 | £0.00 | £6.14 | |||||||
LTIP March 2007 | 13th March 07 | 3,031,936 | £4.38 | £0.00 | £2.95 | |||||||
LTIP August 2006 | 7th Aug 07 | 44,288 | £6.20 | £0.00 | £6.75 |
Number of shares: | ||
Share options | Nil |
A-8.99
15 May 2008
B-1