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and 5.1.2
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ii
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III, 10.1
iii
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iv
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PR Annex III, 5.1.3 | ||||
Latest time for lodging Forms of Proxy for the: | ||||
Court Meeting (blue form) | 10.00 a.m. on 24 March 2008 | 1 | ||
Reuters Extraordinary General Meeting (yellow form) | 10.15 a.m. on 24 March 2008 | 2 | ||
Latest time for receipt by the Depositary of completed white ADS Voting Instruction Cards from registered holders of Reuters ADSs | 3:00 p.m. (Eastern Time) on 19 March 2008 | 3 | ||
Scheme Voting Record Time | 6.00 p.m. on 24 March 2008 | |||
Court Meeting | 10.00 a.m. on 26 March 2008 | |||
Reuters Extraordinary General Meeting | 10.15 a.m. on 26 March 2008 | 4 | ||
Thomson Shareholders Meeting | 10.00 a.m. (Eastern Time) on 26 March 2008 | |||
Ontario Court hearing in respect of the Final Order | 28 March 2008 | |||
Latest time for lodging green Forms of Election or submitting a TTE Instruction | 11.00 a.m. on 14 April 2008 | |||
First Court Hearing to sanction the Scheme | 14 April 2008 | |||
Reorganisation Record Time | 6.00 p.m. on 15 April 2008 | 5 | ||
Latest time for settlement and registration of transfers in Reuters Shares for inclusion in the Scheme | 6.00 p.m. on 15 April 2008 | 5 | ||
Second Court Hearing to confirm the Reuters Reduction of Capital | 16 April 2008 | 5 | ||
Scheme Record Time | 6.00 p.m. on 16 April 2008 | 5 | ||
Effective Date of the Scheme | 17 April 2008 | 5 | ||
Cancellation of listing of Reuters Shares | by 8.00 a.m. on 17 April 2008 | 5 | ||
Issue of Thomson Reuters PLC Shares | 8.00 a.m. on 17 April 2008 | 5 | ||
Commencement of dealings in Thomson Reuters PLC Shares | 8.00 a.m. on 17 April 2008 | 5 | ||
Commencement of dealings in Thomson Reuters PLC ADSs | 9.30 a.m. (Eastern Time) on 17 April 2008 | 5 | ||
Crediting of Thomson Reuters PLC Shares to CREST accounts | 17 April 2008 | 5 | ||
Court Hearing to confirm the Thomson Reuters PLC Reduction of Capital | 21 April 2008 | 5 | ||
Thomson Reuters PLC Reduction of Capital becomes effective | 22 April 2008 | 5 | ||
Latest date for despatch of cheques and share certificates, issue of Loan Note certificates and settlement through CREST in respect of the consideration due under the Scheme | 1 May 2008 | 5 | ||
PR Annex III, 5.1.8 |
1 | It is requested that blue Forms of Proxy for the Court Meeting be lodged at least 48 hours prior to the time appointed for the Court Meeting. Blue Forms of Proxy not so lodged may be handed to the Registrars or the chairman of the meeting at the Court Meeting. | |
2 | Yellow Forms of Proxy for the Extraordinary General Meeting must be lodged at least 48 hours prior to the time appointed for the Extraordinary General Meeting. | |
3 | If you hold your Reuters ADSs indirectly you must rely on the procedures of the bank, broker, financial institution or share plan administrator through which you hold your Reuters ADSs if you wish to vote. | |
4 | Or as soon thereafter as the Court Meeting shall have concluded or been adjourned. | |
5 | These dates are indicative only and will depend, among other things, on the date upon which the Court sanctions the Scheme. | |
For information on dividends refer to Section 2 of Part X of this document. | ||
All references in this document to times are to London time unless otherwise stated. |
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FSMA 2000 PR
2.2.10 and 2.1.5
1. | Background |
2. | The DLC structure |
3. | Overview of Thomson Reuters |
• | Markets, which will consist of the existing Reuters business combined with Thomson Financial; and |
• | Professional, which will consist of Thomson’s existing non-financial business segments — Legal, Tax & Accounting, Scientific and Healthcare. |
4. | Strategy of Thomson Reuters |
• | Capitalise on global brand and presence to drive international growth. |
• | Deliver greater value to customers through a broader range of electronically delivered critical information and decision support tools. |
• | Integrate Thomson and Reuters businesses to accelerate growth and capture synergies. |
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• | Leverage increased revenue diversity and scale, financial strength and capital deployment to maximise shareholder return. |
5. | Board and management |
• | Nine of the Thomson Reuters Proposed Directors will be current directors of Thomson, including David Thomson, who will be the Chairman, and W. Geoffrey Beattie, who will be a Deputy Chairman. |
• | Five of the Thomson Reuters Proposed Directors will be current directors of Reuters, including Niall FitzGerald, who will be a Deputy Chairman and the Senior Independent Director. |
• | Tom Glocer, the Chief Executive Officer of Thomson Reuters, will also be a director. |
20.7
6. | Dividend policy |
12.1 — 12.2
7. | Current trading and prospects |
7.1 | Current trading for Reuters |
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20.4.3
7.2 | Current trading for Thomson |
7.3 | Reuters profit estimate |
7.4 | Thomson profit forecast |
7.5 | Prospects for Thomson Reuters |
8. | Listing and admission to trading |
9. | Controlling shareholder of Thomson Reuters |
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10. | Reuters Founders Share Company |
11. | Risk factors |
• | There can be no certainty that the Transaction will be completed. |
• | The consideration payable to Reuters Shareholders pursuant to the Transaction is based on a fixed exchange ratio that does not account for changes in share prices or exchange rates prior to the Effective Date. |
• | Benefits from the Transaction may not be achieved to the extent, or within the time period currently expected, which could eliminate, reduce or delay the achievement of synergies expected to be generated by the Transaction. |
• | The Transaction may not maximise the growth potential of, or deliver greater value for, Thomson Reuters beyond the level that either Reuters or Thomson could have achieved on its own. |
• | The value of Thomson Reuters PLC Shares and Thomson Reuters Corporation Shares will be related to the economic performance of Thomson Reuters. |
• | The trading prices of the Thomson Reuters PLC Shares and the Thomson Reuters Corporation Shares may not be the same and the difference between them may be material. |
9.2.3
• | The DLC structure may be adversely affected by changes to legislation and regulations. |
• | The DLC structure involves risks and costs not associated with more common acquisition structures. |
• | Each of Thomson Reuters PLC and Thomson Reuters Corporation will be exposed to the credit risk of the other. |
9.2.3
• | Changes in the tax residence of Thomson Reuters PLC or Thomson Reuters Corporation could cause adverse tax consequences for Thomson Reuters. |
• | If Thomson Reuters PLC were classified as a passive foreign investment company under US federal income tax laws, it could have adverse consequences for US shareholders of Thomson Reuters PLC Shares (including those represented by Thomson Reuters PLC ADSs). |
• | US shareholders of Thomson Reuters PLC Shares who do not hold their shares through Thomson Reuters PLC ADSs might not qualify for special reduced withholding rates on payments of future dividends from Thomson Reuters PLC. |
• | Reuters Founders Share Company will hold a Founders Share in each of Thomson Reuters PLC and Thomson Reuters Corporation and may be in a position to affect the governance and management of Thomson Reuters. |
• | Provisions in the DLC Documents that are designed to ensure that shareholders of Thomson Reuters PLC and Thomson Reuters Corporation are treated on an equivalent basis with respect to takeover bids and similar transactions may prevent or discourage takeover bids or similar transactions. |
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• | The rights and privileges of Thomson Reuters PLC Shareholders and Thomson Reuters Corporation Shareholders will be governed by different laws and regulations. |
• | Thomson Reuters may be adversely affected by changes in the general economy. |
• | Thomson Reuters will operate in highly competitive markets and may be adversely affected by this competition. |
9.2.3
• | Thomson Reuters may be adversely affected by changes in legislation and regulation. |
• | Increased accessibility to free or relatively inexpensive information sources may reduce demand for the products and services of Thomson Reuters. |
• | Thomson Reuters may be unable to derive fully the anticipated benefits from its existing or future acquisitions, joint ventures, investments or dispositions. |
• | If Thomson Reuters is unable to develop new products, services, applications and functionalities to meet its customers’ needs, attract new customers or expand into new geographic markets, its ability to generate additional revenues may be adversely affected. |
• | Thomson Reuters will rely heavily on network systems and the Internet and any failures or disruptions may adversely affect its ability to serve its customers. |
• | Thomson Reuters will be dependent on third parties for information and other services and may not be able to maintain agreements with these parties and the services provided by third parties may not be performed adequately, which may reduce profit margins or market share. |
• | Operating internationally involves challenges that Thomson Reuters may not be able to meet and that may adversely affect Thomson Reuters ability to grow. |
• | Thomson Reuters may be unable to realise all of the anticipated cost savings and operating efficiencies from its initiatives designed to make it a more integrated group. |
• | The goodwill of Thomson Reuters will be key to its ability to remain a trusted source of information and news. |
• | Thomson Reuters may be subject to impairment losses that would reduce its reported assets and earnings. |
• | Significant investments in technology by Thomson Reuters may not increase its revenues or decrease its operating costs, which may adversely affect its financial results. |
• | The customers of Thomson Reuters may become more self-sufficient, which may reduce demand for its products and services and adversely affect its financial results. |
• | The intellectual property rights of Thomson Reuters may not be adequately protected, which may adversely affect its financial results. |
• | The credit ratings of Thomson Reuters PLC and Thomson Reuters Corporation may be downgraded, or there may be adverse conditions in the credit markets, which may impede Thomson Reuters access to the debt markets or raise its borrowing rates. |
• | Thomson Reuters may operate in an increasingly litigious environment, which may adversely affect its financial results. |
9.2.3
• | Currency fluctuations and interest rate fluctuations may have a significant impact on the reported revenues and earnings of Thomson Reuters. |
• | If Thomson Reuters does not continue to recruit and retain high quality management and key employees, it may not be able to execute its strategy. |
• | Thomson Reuters will have significant funding obligations in respect of pension and post-retirement benefit arrangements that are affected by factors outside the control of Thomson Reuters. |
• | Woodbridge will control Thomson Reuters and will be in a position to affect Thomson Reuters governance and operations. |
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1. | Risks related to the Transaction |
1.1 | There can be no certainty that the Transaction will be completed. |
1.2 | The consideration payable to Reuters Shareholders pursuant to the Transaction is based on a fixed exchange ratio that does not account for changes in share prices or exchange rates prior to the Effective Date. |
1.3 | Benefits from the Transaction may not be achieved to the extent, or within the time period currently expected, which could eliminate, reduce or delay the achievement of synergies expected to be generated by the Transaction. |
• | unexpected integration issues, higher than expected integration costs and an overall post-closing integration process that takes longer than originally anticipated; |
• | the inability to successfully integrate operations, technologies, products and services; |
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• | inconsistentand/or incompatible business practices, operating procedures, information systems, financial controls and procedures, cultures and compensation structures between the companies; |
• | difficulty co-ordinating sales, distribution and marketing efforts to effectively promote Thomson Reuters products; |
• | loss of key employees; |
• | modification or termination of existing agreements with customers and suppliers and delayed entry into new agreements with prospective customers and suppliers; and |
• | the diversion of management’s attention from day-to-day business as a result of the need to deal with integration issues. |
1.4 | The Transaction may not maximise the growth potential of, or deliver greater value for, Thomson Reuters beyond the level that either Reuters or Thomson could have achieved on its own. |
1.5 | The value of Thomson Reuters PLC Shares and Thomson Reuters Corporation Shares will be related to the economic performance of Thomson Reuters. |
1.6 | The trading prices of the Thomson Reuters PLC Shares and the Thomson Reuters Corporation Shares may not be the same and the difference between them may be material. |
9.2.3
1.7 | The DLC structure may be adversely affected by changes to legislation and regulations. |
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1.8 | The DLC structure involves risks and costs not associated with more common acquisition structures. |
1.9 | Each of Thomson Reuters PLC and Thomson Reuters Corporation will be exposed to the credit risk of the other. |
9.2.3
1.10 | Changes in the tax residence of Thomson Reuters PLC or Thomson Reuters Corporation could cause adverse tax consequences for Thomson Reuters. |
1.11 | If Thomson Reuters PLC were classified as a passive foreign investment company under US federal income tax laws, it could have adverse tax consequences for US shareholders of Thomson Reuters PLC Shares (including those represented by Thomson Reuters PLC ADSs). |
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1.12 | US shareholders of Thomson Reuters PLC Shares who do not hold their shares through Thomson Reuters PLC ADSs might not qualify for special reduced withholding rates on payments of future dividends from Thomson Reuters PLC. |
1.13 | Reuters Founders Share Company will hold a Founders Share in each of Thomson Reuters PLC and Thomson Reuters Corporation and may be in a position to affect the governance and management of Thomson Reuters. |
1.14 | Provisions in the DLC Documents that are designed to ensure that shareholders of Thomson Reuters PLC and Thomson Reuters Corporation are treated on an equivalent basis with respect to takeover bids and similar transactions may prevent or discourage takeover bids or similar transactions. |
9.2.3
1.15 | The rights and privileges of Thomson Reuters PLC Shareholders and Thomson Reuters Corporation Shareholders will be governed by different laws and regulations. |
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2. | Risks related to the business and operations of Thomson Reuters |
2.1 | Thomson Reuters may be adversely affected by changes in the general economy. |
2.2 | Thomson Reuters will operate in highly competitive markets and may be adversely affected by this competition. |
9.2.3
2.3 | Thomson Reuters may be adversely affected by changes in legislation and regulation. |
2.4 | Increased accessibility to free or relatively inexpensive information sources may reduce demand for the products and services of Thomson Reuters. |
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2.5 | Thomson Reuters may be unable to derive fully the anticipated benefits from its existing or future acquisitions, joint ventures, investments or dispositions. |
2.6 | If Thomson Reuters is unable to develop new products, services, applications and functionalities to meet its customers’ needs, attract new customers or expand into new geographic markets, its ability to generate additional revenues may be adversely affected. |
2.7 | Thomson Reuters will rely heavily on network systems and the Internet and any failures or disruptions may adversely affect its ability to serve its customers. |
• | the emergence of proprietary data feeds from other markets; |
• | high market volatility; |
• | decimalisation; |
• | reductions in trade sizes resulting in more transactions; |
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• | new derivative instruments; |
• | increased automatically-generated algorithmic and programme trading; |
• | market fragmentation resulting in an increased number of trading venues; and |
• | multiple listings of options and other securities. |
9.2.3
2.8 | Thomson Reuters will be dependent on third parties for information and other services and may not be able to maintain agreements with these parties and the services provided by third parties may not be performed adequately, which may reduce profit margins or market share. |
2.9 | Operating internationally involves challenges that Thomson Reuters may not be able to meet and that may adversely affect Thomson Reuters ability to grow. |
9.2.3
2.10 | Thomson Reuters may be unable to realise all of the anticipated cost savings and operating efficiencies from its initiatives designed to make it a more integrated group. |
2.11 | The goodwill of Thomson Reuters will be key to its ability to remain a trusted source of information and news. |
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2.12 | Thomson Reuters may be subject to impairment losses that would reduce its reported assets and earnings. |
2.13 | Significant investments in technology by Thomson Reuters may not increase its revenues or decrease its operating costs, which may adversely affect its financial results. |
2.14 | The customers of Thomson Reuters may become more self-sufficient, which may reduce demand for its products and services and adversely affect its financial results. |
2.15 | The intellectual property rights of Thomson Reuters may not be adequately protected, which may adversely affect its financial results. |
2.16 | The credit ratings of Thomson Reuters PLC and Thomson Reuters Corporation may be downgraded, or there may be adverse conditions in the credit markets, which may impede Thomson Reuters access to the debt markets or raise its borrowing rates. |
9.2.3
2.17 | Thomson Reuters may operate in an increasingly litigious environment, which may adversely affect its financial results. |
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9.2.3
2.18 | Currency fluctuations and interest rate fluctuations may have a significant impact on the reported revenues and earnings of Thomson Reuters. |
2.19 | If Thomson Reuters does not continue to recruit and retain high quality management and key employees, it may not be able to execute its strategy. |
2.20 | Thomson Reuters will have significant funding obligations in respect of pension and post-retirement benefit arrangements that are affected by factors outside the control of Thomson Reuters. |
2.21 | Woodbridge will control Thomson Reuters and will be in a position to affect Thomson Reuters governance and operations. |
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The Reuters Building
South Colonnade
Canary Wharf
London E14 5EP
1. | Introduction |
16
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2. | Summary of the terms of the Transaction |
5.1.2
17
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3. | Board and management |
4. | Annual general meetings and accounts |
5. | Employees and employee share schemes |
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6. | Reuters Meetings |
6.1 | Court Meeting |
6.2 | Extraordinary General Meeting |
(a) | special resolutions approving items necessary or desirable for the implementation of the Transaction, including: |
• | approving the reorganisation of Reuters share capital as described in Section 2.1 of Part XX of this document; |
• | amending the Reuters Articles in the manner described in Section 2.2 of Part XX of this document; |
• | approving the cancellation of the Scheme Shares and subsequent issue of new Reuters Shares to TR (2008) and Thomson Reuters PLC in accordance with the Scheme; and |
• | approving the Thomson Reuters PLC Reduction of Capital; and |
(b) | ordinary resolutions to: |
• | approve the waiver by the Panel of the requirement of Woodbridge to make a general offer, which would otherwise be required under Rule 9 of the City Code; and |
• | approve the adoption of the Thomson Reuters Share Plans. |
6.3 | Reorganisation of Reuters share capital |
(1), (2), (3)
6.4 | Amendments to Reuters Articles |
(1), (2), (3)
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6.5 | Cancellation of the Scheme Shares |
(1), (2), (3)
6.6 | Thomson Reuters PLC Reduction of Capital |
(1), (2), (3)
6.7 | Rule 9 waiver |
(1), (2), (3)
6.8 | Thomson Reuters Share Plans |
(1), (2), (3)
7. | Recommendation |
8. | What you need to do if you wish to approve the terms of the Transaction |
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1. | Introduction |
LR 13.3.1(2)
the Act
• | represent a simple majority in number of those Reuters Shareholders present and voting in person or by proxy; and |
• | represent three-fourths in value of the Reuters Shares held by those Reuters Shareholders present and voting in person or by proxy. |
2. | Forms of Proxy |
3. | CREST members |
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4. | Reuters ADSs Holders |
5. | Loan Note Option |
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(a) | Reuters Shares in certificated form |
(b) | Holders of Reuters Shares in uncertificated form (i.e. through CREST) |
• | the ISIN number for the Reuters Shares. This is GB0002369139; |
• | the number of Reuters Shares to be transferred to an escrow balance. This is the number of Reuters Shares in respect of which you wish to elect for the Loan Note Option; |
• | your member account ID; |
• | your participant ID; |
• | the participant account ID of the escrow agent, Equiniti Limited. This is 2RA14; |
• | the member account ID of the escrow agent, Equiniti Limited. This is RA846101; |
• | the intended settlement date. This should be as soon as possible and in any event not later than 11.00 a.m. on 14 April, 2008; |
• | the TTE Instruction should be inputted with a CREST standard delivery instruction priority of 80; and |
• | your contact name and telephone number inserted in the shared note field. |
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6. | Dealing Facility |
7. | Helplines |
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and (3)
1. | What are Reuters Shareholders being asked to vote on? |
2. | What is the DLC structure? |
• | Thomson Reuters PLC and Thomson Reuters Corporation will remain separate publicly-listed companies; |
• | the boards of directors of the two companies will comprise the same individuals, as will the companies’ executive management; |
• | shareholders of the two companies will ordinarily vote together as a single decision-making body, including in the election of directors; |
• | shareholders of the two companies will receive equivalent cash dividends and capital distributions; |
• | each parent company will guarantee all contractual obligations of the other company and other obligations as agreed; and |
• | a takeover bid or similar transaction will be required to be made for shares of both companies on an equivalent basis. |
3. | Why is Thomson proposing to acquire Reuters by implementing a DLC structure? |
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5.1.1
4. | What closing conditions are still required to be satisfied? |
• | the approval of the Scheme of Arrangement by Reuters Shareholders and the Court; |
• | the approval of the Thomson Arrangement by Thomson Shareholders and the Ontario Court; and |
• | the absence of any action by any governmental authority that would prohibit or otherwise materially restrict, delay or interfere with the completion of the Transaction. |
5. | Is the Reuters Board recommending the Transaction? |
6. | Is the Thomson Board recommending the Transaction? |
7. | Has Thomson’s controlling shareholder, Woodbridge, committed to vote in favour of the Transaction? |
8. | What consideration will Reuters Shareholders receive as part of the Transaction? |
9. | What consideration are Reuters ADS Holders receiving as part of the Transaction? |
10. | Does this consideration reflect a premium for the Reuters Shares? |
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11. | When do Reuters and Thomson expect to complete the Transaction? |
12. | What will happen to a Reuters Shareholder’s ordinary shares if the Transaction is completed? |
13. | Will Reuters Shareholders be able to attend annual general meetings of shareholders of Thomson Reuters? |
18.3
14. | What will happen to a Reuters Shareholder’s dividends if the Transaction is completed? |
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15. | Will Woodbridge have voting control of Thomson Reuters if the Transaction is completed? |
16. | Why is Thomson Reuters adopting the Reuters Trust Principles? |
17. | Are there risks associated with the Transaction that Reuters Shareholders and Reuters ADS Holders should consider in deciding whether to approve the Scheme and that potential investors should consider in deciding whether to invest in Thomson Reuters? |
18. | What happens if Reuters Shareholders fail to approve the Transaction or receive a better offer? |
19. | What happens if Thomson Shareholders fail to approve the Transaction? |
20. | What if a Reuters Shareholder or Reuters ADS Holder has questions or needs assistance voting his or her shares? |
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21. | Will there be any tax consequences for Reuters Shareholders if the Transaction is completed? |
22. | Can a Reuters Shareholder or Reuters ADS Holder elect to sell some of its Thomson Reuters PLC Shares through the Dealing Facility? |
23. | If a Reuters Shareholder holds more than 2,500 Reuters Shares, can it sell the Thomson Reuters PLC Shares it receives in respect of the first 2,500 Reuters Shares through the Dealing Facility? |
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1. | Introduction |
5.1.1
2. | Summary of the terms of the Transaction and the Scheme |
2.1 | DLC structure |
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2.2 | The Transaction |
for each Reuters Share | 0.16 Thomson Reuters PLC Shares and 352.5 pence in cash |
5.1.2
for each Reuters ADS | 0.16 Thomson Reuters PLC ADSs and 2,115 pence in cash |
2.3 | Conditions |
5.1.1 and 5.2.3(g)
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2.4 | The Scheme |
2.5 | Amendments to Reuters Articles |
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2.6 | Implementation Agreement |
2.7 | Share capital reorganisation |
3. | Thomson Reuters PLC Reduction of Capital |
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4. | Financial effects of the Transaction |
5.3.1
Increase in Capital Value Under the Terms of the Transaction1 | ||||
£ | ||||
Market value of Thomson Reuters PLC Shares equivalent to 16 Thomson Shares (approximate)2 | 352.42 | |||
Cash consideration for 100 Reuters Shares | 352.50 | |||
Total value of consideration in respect of 100 Reuters Shares | 704.92 | |||
Market value of 100 Reuters Shares3 | 492.25 | |||
Increase / (decrease) in Capital Value | 212.67 | |||
Percentage Increase in Capital Value | 43.20 | |||
Increase in gross income under the terms of the Offer | ||||
Gross annual dividend income from Thomson Reuters PLC Shares4 (equivalent to 16 Thomson Shares) | 7.29 | |||
Income from cash consideration5 | 15.86 | |||
Total income in respect of consideration for 100 Reuters Shares | 23.15 | |||
Gross annual dividend income from 100 Reuters Shares6 | 11.00 | |||
Increase/ (decrease) in gross income | 12.15 | |||
Percentage increase in gross income | 110.44 | |||
1 | In assessing the financial effects of receiving new Thomson Reuters PLC Shares, no account has been taken of any potential taxation liability of a Reuters Shareholder or any timing differences in the payment of dividends. | |
2 | Based on the closing price of a Thomson Share of C$48.46 and an exchange rate of 2.2001 C$ to £ on 3 May 2007 (the last Business Day before the commencement of the “offer period”, within the meaning of the City Code). | |
3 | The market value of Reuters Shares is based on the closing price of 492.25 pence per share on 3 May 2007 (the last Business Day before the commencement of the “offer period”, within the meaning of the City Code). | |
4 | The gross dividend income from 16 Thomson Reuters PLC Shares (equivalent to 16 Thomson Shares) is based on aggregate gross dividends of US$0.905 per Thomson Share paid in respect of the twelve month period immediately prior to announcement of the Transaction, being the total of the US$0.22 second quarter dividend declared on 27 April 2006, the US$0.22 third quarter dividend declared on 28 July 2006, the US$0.22 fourth quarter dividend declared on 26 October 2006 and the US$0.245 first quarter dividend declared on 8 February 2007, and US$1.9875 to £ spot exchange rate on 3 May 2007. | |
5 | The income from the cash consideration has been calculated on the assumption that the cash component is reinvested for the period of twelve months to yield 4.50 per cent. per annum, being the yield shown by the FTSE UK Gilts of five-year maturities, as published in theFinancial Timeson 22 February 2008 being the latest practicable day before the publication of this document). | |
6 | The dividend income from 100 Reuters Shares is based on aggregated gross dividends of 11 pence per Reuters Share, being the total of the 4.10 pence gross interim dividend for the six month period ended 30 June 2006 and the 6.9 pence gross final dividend for the year ended 31 December 2006. |
5. | Loan Note Option |
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6. | Dealing Facility |
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4.9
7. | Rule 9 waiver |
18.3
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8. | Reuters Meetings |
8.1 | Court Meeting |
8.2 | Extraordinary General Meeting |
(a) | special resolutions approving items necessary or desirable for the implementation of the Transaction, including: |
• | approving the reorganisation of Reuters share capital as described in Section 2.7 above; | |
• | amending the Reuters Articles in the manner described in Section 2.5 above; |
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• | approving the cancellation of the Scheme Shares and subsequent issue of new Reuters Shares to TR (2008) and Thomson Reuters PLC in accordance with the Scheme; and | |
• | approving the Thomson Reuters PLC Reduction of Capital; and |
(b) | ordinary resolutions to: |
• | approve the waiver by the Panel of the requirement of Woodbridge to make a general offer, which would otherwise be required under Rule 9 of the City Code; and | |
• | approve the adoption of the Thomson Reuters Share Plans. |
of the Act
9. | The Reuters Directors and the effect of the Scheme on their interests |
10. | Listings, dealings and settlement |
(c)
4.7 and 6.1
and (h)
LR 13.3.1(11)
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5.1.8
10.2 | Settlement |
4.3
LR 13.3.1(7), (9)(e), 10
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• | where, immediately prior to the Reorganisation Record Time, a Relevant Holder holds Reuters Shares in certificated form, settlement of any cash consideration to which the Relevant Holder is entitled (including in respect of the sale proceeds of fractional entitlements to Thomson Reuters PLC Shares) shall be settled by cheque drawn on a branch of a clearing bank in the United Kingdom. Cheques shall be despatched not later than the fourteenth day following the Effective Date; and |
• | where, immediately prior to the Reorganisation Record Time, a Relevant Holder holds Reuters Shares in uncertificated form, settlement of any cash consideration to which the Relevant Holder is entitled (including in respect of the sale proceeds of fractional entitlements to Thomson Reuters PLC Shares) shall be paid by means of CREST by TR (2008) procuring a CREST payment obligation in favour of the Relevant Holder’s payment bank in respect of the cash consideration due not later than the fourteenth day following the Effective Date, in accordance with the CREST payment arrangements. TR (2008) reserves the right to settle all or any part of the cash consideration in the manner referred to in the sub-paragraph above if, for reasons outside its reasonable control, it is not able to effect settlement through CREST in accordance with this sub-paragraph. |
• | Holders of Reuters ADSs will receive any cash consideration to which they are entitled under the Transaction in respect of the Reuters Shares underlying their Reuters ADSs in US dollars from the Depositary in accordance with the terms of the Deposit Agreement upon surrender of their ADSs. |
4.11
11. | United Kingdom taxation |
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11.1 | United Kingdom tax consequences of the Scheme |
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45
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11.7 | UK taxation of non-UK residents |
12. | Reuters Share Schemes |
13. | Overseas holders of Reuters Shares and Reuters ADSs |
the Act
14. | Actions to be taken |
15. | Further information |
for and on behalf of UBS Limited | for and on behalf of The Blackstone Group International Limited | |||||
Robin Budenberg | James Hartop | Jonathan Koplovitz | ||||
Managing Director | Managing Director | Senior Managing Director |
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1. | Key Terms and Conditions |
1.1 | DLC structure |
1.2 | Consideration payable to Reuters Shareholders |
5.1.2
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1.3 | Conditions to the Transaction |
• | the approval of the Scheme by Reuters Shareholders and the Court; |
• | the approval of the Thomson Arrangement by Thomson Shareholders and the Ontario Court; and |
• | the absence of any action by any governmental authority that would prohibit or otherwise materially restrict, delay or interfere with the completion of the Transaction. |
1.4 | Alternative Proposals |
1.5 | Reuters Share Schemes |
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1.6 | Woodbridge undertaking to support Transaction |
5.1.4
1.7 | Termination of the Implementation Agreement |
• | the Transaction is not completed by 31 December 2008; |
• | Reuters Shareholders fail to approve the Scheme at the Extraordinary General Meeting or the Court Meeting or Reuters fails to obtain the requisite approval of the Court to proceed with the Scheme; |
• | Thomson fails to obtain the requisite approval of the Ontario Court to proceed with the Thomson Arrangement; or |
• | any of the conditions to closing is or becomes incapable of satisfaction and, where such condition is capable of waiver by Thomson alone, Thomson notifies Reuters that it will not waive such condition or, where such condition is capable of waiver by Reuters alone, Reuters notifies Thomson that it will not waive such condition. |
1.8 | Termination Fee |
2. | Background to the Transaction |
2.1 | 2006 Discussions |
2.2 | 2007 Negotiations and Agreement |
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3. | Recommendation of the Reuters Board |
4. | Arrangements relating to the Reuters Trust Principles |
• | each of Thomson Reuters PLC and Thomson Reuters Corporation covenant to use its best endeavours to ensure that the Reuters Trust Principles as applied to Thomson Reuters will be complied with; |
• | the Thomson Reuters PLC Articles and the Thomson Reuters Corporation Articles contain provisions to safeguard the Reuters Trust Principles on a basis that, after giving effect to the Transaction, correspond to the principal protections currently contained in the Reuters Articles; |
• | each of Thomson Reuters Corporation and Thomson Reuters PLC issue to Reuters Founders Share Company a share with extraordinary voting powers similar to those of the Founders Share in the capital of Reuters currently held by Reuters Founders Share Company; and |
• | Woodbridge undertakes to use its best endeavours as a shareholder to support the Reuters Trust Principles in relation to Thomson Reuters and exercise its voting rights to give effect to this support. |
5. | Regulatory Matters |
5.1 | Merger Regulation (EU) |
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6. | Scheme of Arrangement |
7. | Thomson Arrangement |
7.1 | Required Approvals |
8. | Timing of the Transaction |
9. | Taxation of Thomson Reuters |
9.1 | UK Taxation |
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• | It is intended that Thomson Reuters PLC will be resident in the UK for UK taxation purposes (and that Reuters will remain resident in the UK for UK taxation purposes). |
• | The tax treatment of Thomson Reuters PLC for dividends paid on its shares will be the same after the Transaction as it is currently for Reuters. |
• | The implementation of the DLC structure will not result in a change in the legal or beneficial ownership of Reuters assets or the assets of its subsidiaries and, therefore, will not result in a taxable disposition of those assets. |
• | Entering into the DLC Documents to implement the Transaction does not give rise to any taxable receipt of money, property or other consideration by Reuters from Thomson. |
• | It is expected that, upon completion of the Transaction, transactions between Thomson Reuters PLC and Thomson Reuters Corporation will be subject to UK transfer pricing tax laws which require transactions between associated persons to be treated as conducted on an arm’s length basis with arm’s length fees. |
• | Reuters understands that HMRC has confirmed that Thomson Reuters PLC will not, as at the date of the completion of the Transaction, be treated as a “close company” for UK taxation purposes. Thomson Reuters PLC will, as at the date of completion of the Transaction, be a company to which section 704D of the Income and Corporation Taxes Act 1988 applies or a “relevant company” for the purposes of Section 691 of the Income Tax Act 2007. This is not expected to lead to any material tax costs for Reuters or Thomson Reuters PLC. |
• | It is intended that Thomson will remain resident in Canada for Canadian taxation purposes. |
• | Thomson will remain a public company for purposes of the Tax Act (Canada). |
• | The tax treatment of Thomson for dividends paid on its shares will be the same after the Transaction as it is currently. |
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• | The implementation of the DLC structure will not result in a change in the legal or beneficial ownership of Thomson’s assets or the assets of its subsidiaries and, therefore, will not result in a taxable disposition of those assets. |
• | Entering into the DLC Documents to implement the Transaction does not give rise to any taxable receipt of money, property or other consideration by Thomson from Reuters. |
• | It is expected that upon completion of the Transaction, transactions between Thomson Reuters PLC and Thomson Reuters Corporation will be subject to Canadian transfer pricing tax laws which require transactions between non-arm’s length persons to be treated as conducted on an arm’s length basis with arm’s length fees. |
10. | Ongoing Reporting Obligations |
6.1.3.1(c)
6.1.3.1(d)
11. | Stock Exchange Listings and Index Participation |
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12. | Financing |
13. | Transaction Expenses |
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1. | Overview |
• | Thomson Reuters PLC and Thomson Reuters Corporation will remain separate publicly listed companies; |
• | the boards of directors of the two companies will comprise the same individuals, as will the companies’ executive management; |
• | shareholders of the two companies will ordinarily vote together as a single decision-making body, including in the election of directors; |
• | shareholders of the two companies will receive equivalent cash dividends and capital distributions; |
• | each company will guarantee all contractual obligations of the other company and other obligations as agreed; and |
• | a takeover bid or similar transaction will be required to be made for shares of both companies on equivalent basis. |
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9.2.3
(1) | Includes Woodbridge, which, as of 22 February 2008 (the latest practicable date prior to the publication of this document), beneficially owned approximately 70 per cent. of the outstanding Thomson Shares. | |
(2) | In addition to the Thomson Shares, Thomson had 6,000,000 Series II Preference Shares issued and outstanding as of 22 February 2008. | |
(3) | Includes ADSs, each of which represents six Reuters Shares. |
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(1) | Includes Woodbridge, which, as of 22 February, 2008, beneficially owned approximately 70 per cent. of the outstanding Thomson Shares. | |
(2) | Thomson Reuters Corporation will continue to have 6,000,000 Series II Preference Shares issued and outstanding following the Transaction. No changes are being made to the terms of those shares in connection with the Transaction. | |
(3) | Includes ADSs, each of which will represent six Thomson Reuters PLC ordinary shares. | |
(4) | Reuters Group Limited will be an indirect wholly-owned subsidiary of Thomson Reuters PLC (except for Reuters Shares held by an Employee Benefit Trust). | |
(5) | Reflects the initial asset reorganisation that Thomson Reuters Corporation and Thomson Reuters PLC intend to implement following the Transaction. Thomson Reuters Corporation and Thomson Reuters PLC may carry out other reorganizations of their assets from time to time in the ordinary course of business. See “Unified Board and Management”. |
2. | Key Features of the DLC structure |
2.1 | Separate Entities and Listings |
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2.2 | Unified Board and Management |
2.3 | Equalisation of Economic and Voting Interests |
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20.7
• | Thomson Reuters PLC must undertake a Matching Action to ensure that the economic benefits and voting rights of a holder of one Thomson Reuters PLC Share relative to a holder of one Thomson Reuters Corporation Share are maintained in proportion to the then prevailing Equalization Ratio; or |
• | an appropriate adjustment to the Equalization Ratio must be made to ensure that there is equitable treatment (having regard to the then prevailing Equalization Ratio) for a holder of one Thomson Reuters PLC Share relative to a holder of one Thomson Reuters Corporation Share, |
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20.7
• | the appointment, election, re-election or removal of any director of Thomson Reuters PLC or Thomson Reuters Corporation; |
• | to the extent such receipt or adoption is required by applicable laws, the receipt or adoption of the financial statements or accounts of Thomson Reuters PLC or Thomson Reuters Corporation, or financial statements or accounts prepared on a consolidated basis, other than any financial statements or accounts in respect of the period(s) ended prior to the Effective Date; |
• | a change of name of Thomson Reuters PLC or Thomson Reuters Corporation; and |
• | the appointment or removal of the auditors of Thomson Reuters PLC or Thomson Reuters Corporation. |
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• | the voluntary liquidation of either company; |
• | any adjustment to the Equalization Ratio other than in accordance with the Equalization and Governance Agreement; |
• | any amendment to, or termination of, the Equalization and Governance Agreement, the Special Voting Share Agreement or the Cross-Guarantees, other than: (i) any amendment which is formal or technical in nature and which is not materially prejudicial to the interests of Thomson Reuters Corporation Shareholders or Thomson Reuters PLC Shareholders; or (ii) is necessary to correct any inconsistency or manifest error as may be agreed by the Thomson Reuters Board; |
• | any amendment to, removal or alteration of the effect of (which will include the ratification of any breach of) any of the Thomson Reuters Corporation Entrenched Provisions or the Thomson Reuters PLC Entrenched Provisions; |
• | a change in the corporate status of Thomson Reuters Corporation from a corporation existing under the OBCA with its primary listing on the TSX or the NYSE or of Thomson Reuters PLC from a public limited company incorporated in England and Wales with its primary listing on the Official List (unless such change occurs in connection with a termination of the Equalization and Governance Agreement in circumstances not requiring approval as a Class Rights Action); |
• | any other action or matter the Thomson Reuters Board determines (either in a particular case of generally) should be approved as a Class Rights Action; and |
• | any action to be approved as a Class Rights Action pursuant to the Equalization and Governance Agreement. |
• | that certain people be allowed to attend or be excluded from attending a meeting; |
• | that discussion be closed and a question put to a vote (provided no amendments have been raised); |
• | that a question under discussion not be put to a vote; |
• | to proceed with matters in an order other than that set out in the notice of a meeting; |
• | to adjourn a debate (for example, to a subsequent meeting); and |
• | to adjourn a meeting. |
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• | are made to all holders of Thomson Reuters PLC Shares and Thomson Reuters Corporation Shares; |
• | are undertaken with respect to the Thomson Reuters PLC Shares and Thomson Reuters Corporation Shares at or about the same time; and |
• | are equivalent (although not necessarily the same) in all material respects to the holders of Thomson Reuters Corporation Shares, on the one hand, and the holders of Thomson Reuters PLC Shares, on the other hand, including with respect to: |
(i) | the consideration offered for such shares (taking into account exchange rates and the Equalization Ratio); | |
(ii) | the information provided to such holders; | |
(iii) | the time available to such holders to consider such offers; and | |
(iv) | the conditions to which the offers are subject. |
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• | either prior to or simultaneously with the Triggering Event, such party makes a Qualifying Takeover Bid (and, in the event that such Qualifying Takeover Bid was made prior to the Triggering Event, such Qualifying Takeover Bid has not been withdrawn, abandoned or terminated prior to or simultaneously with the Triggering Event); or |
• | the Triggering Event was an offer to acquire, or an acquisition of, outstanding Thomson Reuters PLC Sharesand/or Thomson Reuters Corporation Shares made pursuant to an exemption from the takeover offer provisions of applicable laws, where the value of the consideration paid for any such shares acquired is not in excess of the respective market values thereof at the date of acquisition. |
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1. | Reuters Trust Principles |
21.2.6
Reuters Trustee since | |||
Leonard Berkowitz | 1998 | ||
The Honourable Mrs. Anson Chan, GBM, CBE, JP | 2002 | ||
Sir Michael Checkland | 1994 | ||
Bertrand Collomb | 2004 | ||
Jiri Dienstbier | 2005 | ||
Uffe Ellemann-Jensen | 2001 | ||
John Fairfax, AM | 2005 | ||
Pehr Gyllenhammar (Chairman) | 1997 | ||
Alejandro Junco de la Vega | 2006 | ||
Joseph Lelyveld | 2004 | ||
Sir Christopher Mallaby, GCMG, GCVO | 1998 | ||
Mammen Mathew | 2002 | ||
John McArthur | 2001 | ||
The Right Hon. Baroness Noakes, DBE | 1998 | ||
Sir William Purves, CBE, DSO | 1998 | ||
Jaako Rauramo | 1999 | ||
Dr. Sachio Semmoto | 2007 | ||
Dr. Mark Wössner | 2001 |
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2. | Effect of the Transaction |
• | that Thomson Reuters shall at no time pass into the hands of any one interest, group or faction; |
• | that the integrity, independence and freedom from bias of Thomson Reuters shall at all times be fully preserved; |
• | that Thomson Reuters shall supply unbiased and reliable news services to newspapers, news agencies, broadcasters and other media subscribers and to businesses, governments, institutions, individuals and others with whom Thomson Reuters has or may have contracts; |
• | that Thomson Reuters shall pay due regard to the many interests which it serves in addition to those of the media; and |
• | that no effort shall be spared to expand, develop and adapt the news and other services and products of Thomson Reuters so as to maintain its leading position in the international news and information business. |
21.2.6
18.2
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3. | Amended Deed of Mutual Covenant |
• | Each of Thomson Reuters PLC, Thomson Reuters Corporation and Reuters Founders Share Company covenants with the Press Associations to use its best endeavours to ensure that the Reuters Trust Principles are complied with. |
• | The Thomson Reuters Board will have due regard to the Reuters Trust Principles and to the rights and duties of the Reuters Trustees insofar as, by the proper exercise of its powers and in accordance with the other duties of directors, those principles are capable of being observed by the Thomson Reuters Board. |
• | Thomson Reuters PLC and Thomson Reuters Corporation will have an office ofeditor-in-chief of the news services of Thomson Reuters and will provide Reuters Founders Share Company with the opportunity to consult with the Thomson Reuters Board prior to appointing an individual to, or removing an individual from, such office. |
• | Thomson Reuters PLC and Thomson Reuters Corporation will keep Reuters Founders Share Company informed of material matters relating to the business and affairs of Thomson Reuters that may reasonably be expected to affect the interests of Reuters Founders Share Company in relation to the Reuters Trust Principles. |
• | Reuters Founders Share Company will keep Thomson Reuters PLC and Thomson Reuters Corporation informed regarding its views on matters relating to the conduct of the business and affairs of Thomson Reuters in relation to the Reuters Trust Principles. |
21.2.6
4. | Thomson Reuters Corporation Articles |
• | One Founders Share in the capital of Thomson Reuters Corporation will be created and issued to Reuters Founders Share Company. |
• | As holder of the Founders Share, Reuters Founders Share Company will be entitled to receive notice of all meetings of shareholders and will be entitled to attend and speak at any such meeting. It will be entitled to vote separately as a class in respect of a resolution pertaining to any matter for which its prior written consent is required. |
• | The rights attaching to the Founders Share may not be varied or abrogated in any respect without the prior written consent of Reuters Founders Share Company. |
• | Without the prior written consent of Reuters Founders Share Company, Thomson Reuters Corporation may not take certain fundamental corporate actions, including liquidation, dissolution orwinding-up, paying dividends in kind, effecting a reorganisation (other than an internal reorganisation involving entities within Thomson Reuters), amalgamating with unaffiliated entities and removing or altering certain provisions in the Thomson Reuters Corporation Articles and Thomson |
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Reuters Corporation By-laws relating to Reuters Founders Share Company and the Founders Share. |
• | If any party, other than an Approved Person or an entity within Thomson Reuters, has become or becomes the beneficial owner of 15 per cent. or more of the outstanding voting shares of Thomson Reuters Corporation, the Founders Share will carry voting rights that allow it to negate the voting power of such party by casting the same number of votes as are cast, and in the same manner as such votes are cast (for, against, withheld or abstain), by the Thomson Reuters Corporation Special Voting Share Trustee and holders of voting shares of Thomson Reuters Corporation (aside from such party), in each case multiplied by one hundred. |
• | If any party, other than an Approved Person or an entity within Thomson Reuters, becomes or is attempting to become, directly or indirectly, the beneficial owner of 30 per cent. or more of the outstanding voting shares of Thomson Reuters Corporation, the Founders Share will carry the following voting rights in respect of Joint Electorate Actions, or Class Rights Actions if the proposed action has been approved at the parallel meeting of the Thomson Reuters PLC Shareholders: (i) if there are no Approved Persons or Approved Persons beneficially own shares which carry not more than 35 per cent. of the votes entitled to be cast on the proposed resolution, the right to cast a sufficient number of votes to approve or defeat such resolution; (ii) if Approved Persons beneficially own shares which carry more than 35 per cent. but less than the requisite majority of the votes entitled to be cast on such resolution, the right to cast the greater of (x) a number of votes equal to the number of votes attached to voting shares beneficially owned by such party plus one and (y) a number of votes sufficient to constitute the requisite majority of votes entitled to be cast on such resolution, in combination with votes attached to all voting shares beneficially owned by Approved Persons and cast in accordance with the Relevant Terms of Approval; or (iii) if Approved Persons beneficially own, and cast in accordance with the Relevant Terms of Approval the votes attached to, voting shares to which are attached the requisite majority of the voting shares entitled to be cast on such resolution, no right to cast any vote. |
• | Reuters Founders Share Company will have the right to requisition a meeting of Thomson Reuters Corporation Shareholders. |
• | For so long as Reuters Founders Share Company is the holder of the Reuters Founders Share, the Thomson Reuters Corporation Board may invite the Reuters Trustees to attend meetings of the Thomson Reuters Corporation Board and to confer with the Thomson Reuters Corporation Board. Reuters Founders Share Company will make representations to the Thomson Reuters Corporation Board on matters of general interest to Thomson Reuters Corporation and will cause the Reuters Trustees to be generally available for consultation with the Thomson Reuters Corporation Board. |
• | The directors of Thomson Reuters Corporation will, in the performance of their duties, have due regard to the Reuters Trust Principles insofar as, by the proper exercise of their powers as directors and in accordance with their other duties as directors, the Reuters Trust Principles are capable of being observed by the directors. |
21.2.6
5. | Thomson Reuters PLC Articles |
• | One Founders Share in the capital of Thomson Reuters PLC will be created and issued to Reuters Founders Share Company. |
• | As holder of the Founders Share, Reuters Founders Share Company will be entitled to receive notice of all meetings of shareholders and will be entitled to attend and speak at any such meeting. It will be entitled to vote separately as a class in respect of a resolution pertaining to any matter for which the prior written consent of Reuters Founders Share Company is required. |
• | The rights attaching to the Founders Share may not be varied or abrogated in any respect without the prior written consent of Reuters Founders Share Company. |
• | Without the prior written consent of Reuters Founders Share Company, Thomson Reuters PLC may not take certain fundamental corporate actions, including liquidation orwinding-up, paying dividends in kind, effecting a reconstruction and amending, removing or altering certain provisions in the Thomson Reuters PLC Articles relating to Reuters Founders Share Company and the Founders Share. |
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• | If any party, other than an Approved Person or an entity within Thomson Reuters, becomes interested in 15 per cent. or more of the outstanding voting shares of Thomson Reuters PLC, the Founders Share will carry voting rights that allow it to negate the voting power of such party by casting the same number of votes as are cast, and in the same manner as such votes are cast (for, against, withheld or abstain), by the Thomson Reuters PLC Special Voting Share Trustee and holders of voting shares of Thomson Reuters PLC (aside from such party), in each case multiplied by one hundred. |
• | If any party, other than an Approved Person or an entity within Thomson Reuters, has obtained or is attempting to obtain the ability to control the exercise of 30 per cent. or more of the voting rights ordinarily exercisable at meetings of shareholders of Thomson Reuters PLC, the Founders Share will carry the following voting rights in respect of Joint Electorate Actions or Class Rights Actions if the proposed action has been approved at the parallel meeting of the Thomson Reuters Corporation Shareholders: (i) if there are no Approved Persons or Approved Persons are interested in shares to which are attached not more than 35 per cent. of the votes entitled to be cast on the proposed resolution, the right to cast a sufficient number of votes to approve or defeat such resolution; (ii) if Approved Persons are interested in shares to which are attached more than 35 per cent. but less than the requisite majority of the votes entitled to be cast on such resolution, the right to cast the greater of (x) a number of votes equal to the number of votes attached to voting shares in which such party is interested plus one and (y) a number of votes sufficient to constitute the requisite majority of votes entitled to be cast on such resolution, in combination with votes attached to all voting shares in which Approved Persons are interested and cast in accordance with the Relevant Terms of Approval; or (iii) if Approved Persons are interested in, and cast in accordance with the Relevant Terms of Approval the votes attached to, voting shares to which are attached the requisite majority of the voting shares entitled to be cast on such resolution, no right to cast any vote. |
• | Reuters Founders Share Company will have the right to requisition a meeting of Thomson Reuters PLC Shareholders. |
• | For so long as Reuters Founders Share Company is the holder of the Thomson Reuters PLC Founders Share, the Thomson Reuters PLC directors may invite the Reuters Trustees to attend meetings of the Thomson Reuters PLC board of directors and to confer with the Thomson Reuters PLC board of directors. Reuters Founders Share Company will make representations to the Thomson Reuters PLC board of directors on matters of general interest to Thomson Reuters PLC and will cause the Reuters Trustees to be generally available for consultation with the Thomson Reuters PLC board of directors. |
• | The Thomson Reuters PLC directors will, in the performance of their duties, have due regard to the Reuters Trust Principles insofar as, by the proper exercise of their powers as directors and in accordance with their other duties as directors, the Reuters Trust Principles are capable of being observed by the directors. |
6. | Reuters Trust Principles Support Agreement |
• | Reuters Founders Share Company will designate Woodbridge and its affiliates as an Approved Person for the purposes of the Thomson Reuters Corporation Articles and the Thomson Reuters PLC Articles. This designation will be irrevocable for so long as Woodbridge is controlled by members of the Thomson family, companies controlled by them and trusts for their benefit. |
• | Woodbridge will vote its voting shares of Thomson Reuters Corporation and Thomson Reuters PLC held by it in a manner consistent with the Reuters Trust Principles. |
• | Woodbridge will give Reuters Founders Share Company as much advance notice as practicable in the circumstances of how it intends to vote at meetings of shareholders of Thomson Reuters Corporation and Thomson Reuters PLC with a view to providing Reuters Founders Share Company with a reasonable opportunity to determine whether the manner in which Woodbridge intends to vote is inconsistent with the Reuters Trust Principles. Woodbridge will use its best efforts to give such notice to Reuters Founders Share Company before meeting materials are disseminated to shareholders but will, in any event, give such notice to Reuters Founders Share Company not less than 10 days prior to the date of the applicable shareholders’ meeting. Reuters Founders Share Company will notify Woodbridge of its determination as soon as practicable. All disagreements |
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and disputes between Woodbridge and Reuters Founders Share Company as to the manner in which Woodbridge intends to vote at shareholders’ meetings will be brought to the attention of the President of Woodbridge and the Chairman of Reuters Founders Share Company, who will try to resolve the disagreement or dispute, failing which the disagreement or dispute will be submitted to final and binding arbitration. Where a shareholders’ meeting of Thomson Reuters Corporation or Thomson Reuters PLC is to be held before the disagreement or dispute is resolved, Woodbridge will, subject to applicable laws, take all actions within its control as are necessary or appropriate to ensure that the subject of the disagreement or dispute is not proposed for consideration at such meeting, including by voting in favour of the postponement or adjournment of the shareholders’ meeting, and refrain from voting on the disputed matter. |
• | Woodbridge will use its best efforts as a shareholder of Thomson Reuters Corporation and Thomson Reuters PLC to ensure that the Reuters Trust Principles are complied with in relation to Thomson Reuters. |
• | Without the prior written consent of Reuters Founders Share Company, Woodbridge will not transfer any voting shares of Thomson Reuters Corporation or Thomson Reuters PLC to any person that is not an Approved Person, where the transferee would become an Acquiring Person under the Thomson Reuters Corporation Articles or the Thomson Reuters PLC Articles. |
• | Without the prior written consent of Reuters Founders Share Company, Woodbridge will not purchase securities of any class of Thomson Reuters Corporation or Thomson Reuters PLC if, as a result of such transaction, securities of that company would cease to be eligible for listing on a stock exchange on which that company’s securities are then listed. |
• | Upon the request of Reuters Founders Share Company, Woodbridge will promptly requisition the Thomson Reuters Board to call a meeting of shareholders of Thomson Reuters Corporationand/or Thomson Reuters PLC for such purpose as Reuters Founders Share Company, in its sole and absolute discretion, thinks fit. |
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1. | Business of Thomson Reuters |
1.1 | Overview |
• | Markets, which will consist of the existing Reuters business combined with Thomson Financial; and |
• | Professional, which will consist of Thomson’s existing non-financial business segments — Legal, Tax & Accounting, Scientific and Healthcare. |
1.2 | Key Pro Forma Financial Information |
Revenues | US$11.4 billion | |
60 per cent. — Markets | ||
40 per cent. — Professional | ||
Operating profit | US$1.8 billion | |
Operating profit margin | 15.6 per cent. |
1.3 | Strategy |
• | Capitalise on global brand and presence to drive international growth. |
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• | Deliver greater value to customers through a broader range of electronically delivered critical information and decision support tools. |
• | Integrate Thomson and Reuters businesses to accelerate growth and capture synergies. |
• | Leverage increased revenue diversity and scale, financial strength and capital deployment to maximise shareholder returns. |
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6.1.1
1.4 | Businesses, Products and Services |
• | Sales & Trading — a leading provider of information, trading and post-trade connectivity requirements of buy-side and sell-side customers in the foreign exchange, fixed income, equities and other exchange-traded instruments, and commodities and energy markets. The Sales & Trading unit will consist of Reuters existing unit and Thomson Financial’s Fixed Income and Institutional Equities businesses. |
• | Enterprise — a leading provider of information and software that supports business automation within the capital markets. The Enterprise unit will consist of Reuters existing unit and Thomson Financial’s enterprise businesses. Major brands include Kondor+, RMDS, Datascope, PORTIA and Omgeo. |
• | Investment & Advisory — a leading provider of information and decision support tools and integration services to portfolio managers, wealth managers, investment bankers, research analysts and corporate executives. The Investment & Advisory unit will consist of Reuters existing Research & Asset Management businesses and Thomson Financial’s Investment Management, Investment Banking, Wealth Management, Corporate Services and Content Strategy businesses. Major brands include Lipper, First Call, Reuters Knowledge, Datastream and Thomson ONE. |
• | Media — a leading provider of comprehensive and timely global information and news services to the world’s newspapers, television and cable networks, radio stations and websites, as well as directly to consumers through Reuters-branded digital services online, mobile and IPTV platforms. |
• | Legal — a leading provider of critical information, decision support tools and services to legal, intellectual property, compliance, business and government professionals throughout the world. Major brands include Westlaw, Aranzadi, BAR/BRI, Carswell, Thomson CompuMark, Thomson Elite, FindLaw, LIVEDGAR and Sweet & Maxwell. |
• | Tax & Accounting — a leading provider of critical information, decision support tools and software applications for tax and accounting professionals in North America. Major brands include Checkpoint, Creative Solutions and RIA. |
• | Scientific — a leading provider of critical information and decision support tools to researchers, scientists and information professionals in the academic, scientific, corporate and government marketplaces. Major brands include Derwent World Patents Index, MicroPatent, Thomson Pharma, Web of Science and ISI Web of Knowledge. |
• | Healthcare — a leading provider of critical information and decision support tools to physicians and other professionals in the healthcare, corporate and government marketplaces. Major brands include Medstat, Micromedex, PDR (Physicians’ Desk Reference) and Solucient. |
1.5 | Corporate Headquarters |
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• | Strategy and capital allocation. Thomson Reuters will deploy its capital in opportunities in existing and new businesses that it believes will provide the highest returns with appropriate levels of risk. Allocation decisions will be made based on measurable return estimates and detailed risk analysis. |
• | Innovation. Thomson Reuters plans to develop new products and services, technologies and business models informed by the current and future needs of customers. In depth understandings of the relevant markets and the ability to effectively respond to changes will be fostered and rewarded at all levels of the organisation. Thomson Reuters strength in technology will help promote innovation. |
• | Talent. Thomson Reuters senior management understands that attracting, retaining and motivating talented employees is crucial to the success of its businesses. Talent management will be aligned with business strategy and integrated into organisational processes, helping drive a world-class, integrated and engaging approach to attracting, developing, motivating and retaining a talented workforce. |
17.1
1.6 | Employees |
1.7 | Integration Planning |
• | Thomson Reuters workstreams have been focusing on group-wide integration opportunities, such as sharing the best technology, finance and people processes; considering how to integrate the two corporate headquarters’ operations; and providing overall direction to the integration planning effort reflecting the purpose and vision of Thomson Reuters; |
• | Markets workstreams have been focusing on the integration of Thomson Financial with Reuters to produce a leader in the financial information market; |
• | Professional workstreams have been focusing on capturing the benefits from the Reuters integration for the businesses in the Professional division; and |
• | Programme management workstreams have been focusing on key areas such as programme planning and tracking, communications, human resources and finance, as well as the steps for completing the Transaction. |
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2. | Dividend policy of Thomson Reuters |
Thomson Reuters | ||||||||||||
Corporation & | ||||||||||||
Thomson | Reuters | Thomson Reuters PLC | ||||||||||
March/May 2008(1) | US$ | 0.27000 | £0.07000 | — | ||||||||
Record Date | 21/02/2008 | 25/03/2008 | — | |||||||||
Payment Date | 17/03/2008 | 01/05/2008 | — | |||||||||
April 2008 — Interim Dividends — Closing(2) | US$ | 0.31747 | £0.03240 | — | ||||||||
Record Date | 16/04/2008 | 16/04/2008 | — | |||||||||
Payment Date | 01/05/2008 | 01/05/2008 | — | |||||||||
June 2008(3) | — | — | — | |||||||||
Record Date | — | — | — | |||||||||
Payment Date | — | — | — | |||||||||
September 2008(4) | — | — | US$ | 0.22253 | ||||||||
Record Date | — | — | 21/08/2008 | |||||||||
Payment Date | — | — | 15/09/2008 | |||||||||
December 2008 | — | — | US$ | 0.27000 | ||||||||
Record Date | — | — | 20/11/2008 | |||||||||
Payment Date | — | — | 15/12/2008 |
(1) | Represents a regular quarterly dividend for Thomson Shareholders in relation to the fourth quarter 2007, and a second-half 2007 dividend for Reuters Shareholders. |
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(2) | Represents accrued/pro-rated dividends from 1 January 2008 through 16 April 2008 the day before the anticipated Effective Date. For Thomson Shareholders, the accrual/pro-ration is based on US$0.27 per share. For Reuters Shareholders, the accrual/pro-ration is based on £0.0551 per share. | |
(3) | As a result of the interim dividends to be paid for the period up to the day before the anticipated Effective Date, Thomson Reuters does not contemplate paying a dividend in June, as has been Thomson’s practice. | |
(4) | Represents an accrued/pro-rated dividend from 17 April 2008 through 30 June 2008, based on a quarterly dividend of US$0.27 per share. |
20.7.1
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Dividend Amount per Reuters | |||
Period | Ordinary Share (Pence) | ||
2007 | |||
Fourth Quarter | — | ||
Third Quarter | 7.00 | ||
Second Quarter | — | ||
First Quarter | 5.00 | ||
2006 | |||
Fourth Quarter | — | ||
Third Quarter | 6.90 | ||
Second Quarter | — | ||
First Quarter | 4.10 | ||
2005 | |||
Fourth Quarter | — | ||
Third Quarter | 6.15 | ||
Second Quarter | — | ||
First Quarter | 3.85 | ||
2004 | |||
Fourth Quarter | — | ||
Third Quarter | 6.15 | ||
Second Quarter | — | ||
First Quarter | 3.85 |
20.7.1
Dividend Amount per Thomson | |||
Period | Common Share (US$) | ||
2008 | |||
First Quarter | 0.270 | ||
2007 | |||
Fourth Quarter | 0.245 | ||
Third Quarter | 0.245 | ||
Second Quarter | 0.245 | ||
First Quarter | 0.245 | ||
2006 | |||
Fourth Quarter | 0.220 | ||
Third Quarter | 0.220 | ||
Second Quarter | 0.220 | ||
First Quarter | 0.220 | ||
2005 | |||
Fourth Quarter | 0.200 | ||
Third Quarter | 0.200 | ||
Second Quarter | 0.200 | ||
First Quarter | 0.190 | ||
2004 | |||
Fourth Quarter | 0.190 | ||
Third Quarter | 0.190 | ||
Second Quarter | 0.190 | ||
First Quarter | 0.185 |
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Dividend Amount per Thomson | |||
Period | Series II Preference Share (C$) | ||
2007 | |||
Fourth Quarter | 0.273921 | ||
Third Quarter | 0.274362 | ||
Second Quarter | 0.261781 | ||
First Quarter | 0.258904 | ||
2006 | |||
Fourth Quarter | 0.264658 | ||
Third Quarter | 0.264658 | ||
Second Quarter | 0.250437 | ||
First Quarter | 0.224384 | ||
2005 | |||
Fourth Quarter | 0.208197 | ||
Third Quarter | 0.188789 | ||
Second Quarter | 0.185428 | ||
First Quarter | 0.183390 | ||
2004 | |||
Fourth Quarter | 0.184314 | ||
Third Quarter | 0.165839 | ||
Second Quarter | 0.164906 | ||
First Quarter | 0.185792 |
3. | Management and Governance of Thomson Reuters |
• | Nine of the Thomson Reuters Proposed Directors will be current directors of Thomson, including David Thomson, who will be the Chairman, and W. Geoffrey Beattie, who will be a Deputy Chairman. |
• | Five of the Thomson Reuters Proposed Directors will be current directors of Reuters, including Niall FitzGerald, who will be a Deputy Chairman and the Senior Independent Director. |
• | Tom Glocer, the Chief Executive Officer of Thomson Reuters, will also be a director. |
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David Thomson
Age: 50
Toronto, Ontario, Canada
Thomson Director Since 1988
Non-independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |||||
Board of Directors | None | |||||
Thomson Securities Held* Common Shares | RSUs | DSUs | Options | |||
6,070 | 0 | 0 | 0 |
W. Geoffrey Beattie
Age: 47
Toronto, Ontario, Canada
Thomson Director Since 1998
Non-independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |||||
Board of Directors | Royal Bank of Canada | |||||
Corporate Governance Committee Human Resources Committee | ||||||
Thomson Securities Held Common Shares | RSUs | DSUs | Options | |||
200,500 | 115,982 | 0 | 200,000 |
Niall FitzGerald, KBE
Age: 62
London, United Kingdom
Reuters Director Since 2003
Independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |||
Board of Directors | None | |||
Corporate Governance Committee | ||||
Human Resources Committee | ||||
Reuters Securities Held |
Ordinary Shares | Long-Term Incentives | Options | ||
80,000 | 0 | 0 |
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Tom Glocer
Age: 48
New York, New York, United States
Reuters Director Since 2000 Non-independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors | Merck & Co., Inc. |
Reuters Securities Held(1) | ||||||
Ordinary Shares | Long-Term Incentives | Options | ||||
1,889,515 | 1,000,000 | 3,997,262 |
Mary Cirillo
Age: 60
New York, New York, United
States
Thomson Director Since 2005
Independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors Corporate Governance Committee Human Resources Committee | Healthcare Property Investors, Inc. DealerTrack Holdings, Inc. ACE Ltd. |
Thomson Securities Held Common Shares | RSUs | DSUs | Options | |||
0 | 0 | 6,449 | 0 |
Steven A. Denning
Age: 59
Greenwich, Connecticut,
United States
Thomson Director Since 2000
Independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors Human Resources Committee | Hewitt Associates Inc. IHS, Inc. Eclipsys Corporation Genpact Limited |
Thomson Securities Held Common Shares | RSUs | DSUs | Options | |||
20,000 | 0 | 16,339 | 0 |
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Lawton Fitt
Age: 54
New York, New York, United States
Reuters Director Since 2004
Independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors Audit Committee | CIENA Corporation Overture Acquisitions Corp. |
Reuters Securities Held Ordinary Shares | Long-Term Incentives | Options | ||||
25,000 | 0 | 0 |
Roger L. Martin
Age: 51
Toronto, Ontario, Canada
Thomson Director Since 1999
Independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors Audit Committee | Research in Motion Limited | |
Thomson Securities Held Common Shares | RSUs | DSUs | Options | |||
6,000 | 0 | 17,338 | 0 |
Sir Deryck Maughan
Age: 60
New York, New York, United States
Reuters Director Since 2005
Independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors Corporate Governance Committee | GlaxoSmithKline plc BlackRock Inc. |
Reuters Securities Held Ordinary Shares | Long-Term Incentives | Options | ||||
0 | 0 | 0 |
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Kenneth Olisa
Age: 56
London, United Kingdom
Reuters Director Since 2004
Independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors Audit Committee | Open Text Corporation Eurasian Natural Resources Corporation PLC |
Reuters Securities Held Ordinary Shares | Long-Term Incentives | Options | ||||
2,550 | 0 | 0 |
Richard L. Olver
Age: 61
London, United Kingdom
Reuters Director Since 1997
Independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors Human Resources Committee | BAE Systems PLC |
Reuters Securities Held Ordinary Shares | Long-Term Incentives | Options | ||||
10,000 | 0 | 0 |
Vance K. Opperman
Age: 65
Minneapolis, Minnesota,
United States
Thomson Director Since 1996
Independent
Thomson Reuters Board/Committee Membership | Board Memberships | |
Board of Directors Audit Committee | DeCare Dental LLC Blue Cross/Blue Shield of Minnesota Avenet LLC |
Thomson Securities Held Common Shares | RSUs | DSUs | Options | |||
50,000 | 0 | 22,068 | 0 |
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John M. Thompson
Age: 65
Toronto, Ontario, Canada
Thomson Director Since 2003
Independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors Audit Committee Corporate Governance Committee | The Toronto-Dominion Bank Royal Phillips Electronics N.V. |
Thomson Securities Held Common Shares | RSUs | DSUs | Options | |||
2,500(2) | 0 | 12,536 | 0 |
Peter J. Thomson
Age: 42
Toronto, Ontario, Canada
Thomson Director Since 1995
Non-independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors | None |
Thomson Securities Held Common Shares | RSUs | DSUs | Options | |||
0 | 0 | 1,366 | 0 |
John A. Tory
Age: 77
Toronto, Ontario, Canada
Thomson Director Since 1978
Non-independent
Thomson Reuters Board/Committee Membership | Public Board Memberships | |
Board of Directors Human Resources Committee | Rogers Communications Inc. |
Thomson Securities Held Common Shares | RSUs | DSUs | Options | |||
501,670 | 0 | 2,530 | 0 |
(1) | Mr. Glocer’s options and other share awards will vest and/or become fully exercisable when the Scheme is sanctioned by the Court. |
(2) | In addition, Mrs. J.M. Thompson owned 300 common shares of Thomson as of 25 February 2008. |
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PR Annex I, 1.1
PR Annex III, 1.1
3.2 | Executive Officers |
Tom Glocer | Chief Executive Officer. Tom Glocer, 48, is currently the Chief Executive Officer of Reuters. Mr. Glocer joined Reuters in 1993 and has held a number of key leadership positions during his Reuters career, including Chief Executive Officer of Reuters Information and President and Senior Company Officer, Reuters America. In 2001, Mr. Glocer became Chief Executive Officer of Reuters. Mr. Glocer is a director of Merck & Co. Inc. and a former non-executive director of Instinet Group. Mr. Glocer has been a director of Reuters since 2000. | |
Robert D. Daleo | Chief Financial Officer. Bob Daleo, 58, is currently Executive Vice President and Chief Financial Officer of Thomson. Mr. Daleo began his career with Thomson in 1994 when he joined Thomson Newspapers as Senior Vice President and Chief Financial Officer. In 1996, he was appointed Chief Operating Officer of Thomson Newspapers, assuming responsibility for a significant portion of US operations. At the beginning of 1997, he joined Thomson’s Corporate headquarters as Senior Vice President, Finance and Business Development. In 1998, Mr. Daleo became Chief Financial Officer of Thomson and has been a member of the board of directors of Thomson since 2001. Mr. Daleo is a member of the board of directors of Equifax Inc. and serves on the board of trustees for the New Jersey Community Development Corporation. | |
James C. Smith | Chief Executive Officer — Professional. Jim Smith, 48, is currently the Executive Vice President and Chief Operating Officer of Thomson. Previously, Mr. Smith served as President and Chief Executive Officer of Thomson Learning’s Academic and Reference Group. Before that, Mr. Smith served as Executive Vice President, Human Resources and Administration of Thomson. Mr. Smith joined the Thomson Newspaper Group in 1987. Mr. Smith held several staff and operating positions of increasing responsibility within the group, culminating in his role as head of operations for Thomson Newspapers — US. | |
Devin Wenig | Chief Executive Officer — Markets. Devin Wenig, 41, is currently the Chief Operating Officer of Reuters. Mr. Wenig joined Reuters in 1993 as Corporate Counsel, Reuters America and held a number of senior management positions before being appointed President, Investment Banking & Brokerage Services in January 2001. Mr. Wenig was President, Business Divisions from 2003 until his appointment as Chief Operating Officer of Reuters in 2006. Mr. Wenig also serves on the board of directors of Nastech Pharmaceutical Company. Mr. Wenig is a former non-executive director of Instinet Group. He has been a director of Reuters since 2003. | |
Michael E. Wilens | Executive Vice President of Strategy, Technology and Innovation. Mike Wilens, 54, is currently Executive Vice President and Chief Technology Officer of Thomson. From 2000 to 2006, Mr. Wilens was President and Chief Executive Officer of Thomson Legal & Regulatory’s North American Legal organisation. Prior to that, Mr. Wilens was Chief Technology Officer for Thomson and Thomson West. Before joining Thomson, Mr. Wilens held senior management positions with Groupe Lagardère, Lawyers Cooperative Publishing and HCIA. |
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Gustav Carlson | Chief Marketing & Communications Officer. Gus Carlson, 49, is currently Senior Vice President, Chief Marketing & Communications Officer of Thomson. Mr. Carlson has more than 25 years of experience as a senior communications professional, award-winning national business journalist and author. Before joining Thomson in 2006, Mr. Carlson held senior communications positions at Accenture, Standard & Poor’s, PaineWebber, Barnes & Noble and Hill & Knowlton. Mr. Carlson is a former business news editor forThe New York TimesandThe Miami Herald. | |
Stephen Dando | Chief Human Resources Officer.Stephen Dando, 46, is currently Group Human Resources Director for Reuters. Prior to joining Reuters in 2006, Mr. Dando was Director, BBC People and a member of the BBC’s Executive Committee and Executive Board for five years. Mr. Dando held various appointments at Diageo over a twelve year period including Global HR Director, Guinness. | |
Deirdre Stanley | General Counsel. Deirdre Stanley, 43, is currently Senior Vice President and General Counsel of Thomson. Prior to joining Thomson in 2002, Ms. Stanley served in various senior executive positions, including Deputy General Counsel of USA Networks, Inc. and its successor companies. From 1995 through 1997, Ms. Stanley served as Associate General Counsel for GTE Corporation, where she headed the mergers and acquisitions practice group. |
3.3 | Summary of Corporate Governance Policies and Practices |
16.4
• | David Thomson, the Chairman, will not be independent within the meaning of the Combined Code as he is an executive officer of Woodbridge, the controlling shareholder of Thomson Reuters; |
• | the Human Resources Committee (referred to as the “remuneration committee” in the Combined Code) will include two directors who will not be independent within the meaning of the Combined Code because they are directors and current or former executive officers of Woodbridge; and |
• | no individual member of the Audit Committee will have “recent and relevant financial experience” within the meaning of the Combined Code although, the Thomson Reuters Board considers that, collectively the members of the Audit Committee will have the requisite skills and experience to properly discharge their responsibilities. |
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• �� | One of the Thomson Reuters Proposed Directors (Tom Glocer) will not be independent because he will be the Chief Executive Officer of Thomson Reuters. |
• | Four of the Thomson Reuters Proposed Directors (David Thomson, W. Geoffrey Beattie, Peter J. Thomson and John A. Tory) will not be independent because they are directors and current or former executive officers of Woodbridge, the controlling shareholder of Thomson Reuters. None of these individuals will be a member of Thomson Reuters executive management team. |
• | The remaining 10 Thomson Reuters Proposed Directors will be independent. |
• | Mr Denning is a director of Hewitt Associates Inc. In February 2005, Thomson entered into an agreement with Hewitt Associates Inc. to outsource certain human resources administrative functions in order to improve operating and cost efficiencies. When Thomson initially entered into the agreement, it expected to pay Hewitt an aggregate of $115 million over a five-year period. This agreement was subsequently renegotiated and extended in September 2006. Under the new terms, Thomson expects to pay Hewitt an aggregate of $165 million over a10-year period. In 2007, Thomson paid Hewitt $11 million for its services. Mr. Denning did not participate in negotiations related to the agreement and has refrained from deliberating and voting on any matters relating to Hewitt Associates Inc. by Thomson’s Human Resources Committee and board of directors. |
• | Mr. Thomson is the non-executive independent Chairman of the board of the Toronto-Dominion Bank. In the normal course of business, Thomson has a banking relationship with The Toronto-Dominion Bank and one of the bank’s affiliates has served as a dealer for Thomson’s recent offering of debt securities in the United States. |
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Human | |||||||||
Corporate Governance | Resources | ||||||||
Director | Audit Committee | Committee | Committee | ||||||
David Thomson | |||||||||
W. Geoffrey Beattie | • | • | |||||||
Niall FitzGerald, KBE | Chair | • | |||||||
Tom Glocer | |||||||||
Mary Cirillo | • | • | |||||||
Steven A. Denning | Chair | ||||||||
Lawton Fitt | • | ||||||||
Roger L. Martin | • | ||||||||
Sir Deryck Maughan | • | ||||||||
Ken Olisa | • | ||||||||
Richard L. Olver | • | ||||||||
Vance K. Opperman | Chair | ||||||||
John M. Thompson | • | • | |||||||
Peter J. Thomson | |||||||||
John A. Tory | • |
16.3
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16.3
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3.4 | Summary of Director Compensation Arrangements |
Annual retainer for directors | US | $ | 150,000 | |||
Annual retainer for Audit Committee and Human Resources Committee Chairs | US | $ | 20,000 | |||
Annual retainer for Corporate Governance Committee Chair | US | $ | 10,000 | |||
Annual retainer for Chairman | US | $ | 600,000 | |||
Annual retainer for each Deputy Chairman | US | $ | 300,000 | (1) |
(1) | Mr. FitzGerald will also receive RSUs annually with a value at the time of issue equal to the difference between $300,000 and £600,000. He will not receive a separate retainer for serving as Chair of the Corporate Governance Committee. |
3.5 | Director Indemnification and Insurance Arrangements |
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• | to the company or to an associated company (an associated company is, in effect, a company in the same group); |
• | to pay a criminal fine or a regulatory penalty; |
• | in defending criminal proceedings in which the director is convicted; |
• | in defending civil proceedings brought by the company, or an associated company, in which judgment is given against the director; or |
• | in an unsuccessful application for relief from liability under the Act. |
4. | Executive Compensation Policies |
4.1 | Overview |
4.2 | Compensation Philosophy and Objectives |
• | link compensation with Thomson Reuters annual and long-term strategic and financial objectives; |
• | align executives’ interests with those of Thomson Reuters Shareholders, with the ultimate goal of improving shareholder value; |
• | encourage executives to achieve exceptional performance and provide an opportunity for senior executives to be compensated in the top quartile of the compensation paid by competitors when superior results are achieved; |
• | attract, motivate, reward and retain high-quality key employees needed to support financial, operational and strategic growth and success; |
• | provide flexibility to recognise and reward an individual executive’s performance, responsibilities, experience, skills, value and contribution to Thomson Reuters; and |
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• | structure the compensation programme efficiently from financial, accounting, tax and other perspectives. |
4.3 | Executive Compensation Analysis |
4.4 | Total Compensation |
• | a base salary; |
• | a performance-based annual incentive bonus, which will usually be paid in cash; |
• | long-term incentive bonus awards, including periodic grants (generally annual) of long-term incentives, such as stock optionsand/or RSUs, which may be subject to performance-basedand/or time-based vesting requirements; |
• | retirement and health and welfare-related benefits; and |
• | in some instances, perquisites and other personal benefits. |
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• | 45 per cent. based on revenue growth; |
• | 45 per cent. based on growth of operating profit before amortisation; and |
• | 10 per cent. based on free cash flow growth. |
17.3, 21.1.6
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Aggregate of Thomson Reuters | ||||||||||||||||
Corporation Shares and Thomson | ||||||||||||||||
Reuters PLC Shares to be reserved for | ||||||||||||||||
Thomson Shares reserved for issuance | issuance following completion of the | |||||||||||||||
as at 22 February 2008 | Transaction | |||||||||||||||
Plan | Number | % of Total(1) | Number | % of Total(2) | ||||||||||||
Stock incentive plan | 40,000,000 | 6.3 | 50,000,000 | 5.9 | ||||||||||||
Employee share purchase plans | ||||||||||||||||
US | 6,000,000 | 0.9 | 8,000,000 | 1.0 | ||||||||||||
Global | 2,000,000 | 0.3 | 6,000,000 | 0.7 | ||||||||||||
Deferred compensation plan | 6,000,000 | 0.9 | 7,000,000 | 0.8 | ||||||||||||
U.S. employees’ 401(k) retirement savings plan | 9,000,000 | 1.4 | 9,000,000 | 1.1 | ||||||||||||
Total | 63,000,000 | 9.9 | 80,000,000 | 9.5 | ||||||||||||
(1) | Based on 638,936,452 Thomson Shares outstanding as at 22 February 2008. | |
(2) | Based on the aggregate number of (i) 638,936,452 Thomson Shares outstanding as at 22 February 2008; and (ii) approximately 202,383,691 Thomson Reuters PLC Shares estimated to be issued to Reuters Shareholders on completion of the Transaction, assuming that all outstanding Reuters in-the-money share options and other share-based awards granted by Reuters have vested or been exercised. |
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4.5 | Share Ownership |
18.3
5. | Controlling Shareholder of Thomson Reuters |
5.1 | Woodbridge |
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• | corporate governance, including the effectiveness of the Thomson Reuters Board; |
• | appointment of the Chief Executive Officer and other members of senior management and related succession planning; |
• | development of the long-term business strategy of Thomson Reuters and assessment of its implementation; and |
• | capital strategy. |
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PR Annex II
CESR87-94
PR Annex II, 1(a)-(c)
PR Annex II, 4(a)-(b)
PR Annex II,
2, 3 and 5
1. | ACCOUNTANTS’ REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THOMSON REUTERS |
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(a) | the Unaudited pro forma financial information has been properly compiled on the basis stated; and | |
(b) | such basis is consistent with the accounting policies of Thomson Reuters Corporation. |
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2. | UNAUDITED CANADIAN GAAP PRO FORMA FINANCIAL INFORMATION OF |
• | has been prepared for illustrative purposes only, and because of its nature, addresses a hypothetical situation and, therefore, does not represent Thomson Reuters Corporations actual financial position or results; |
• | does not purport to represent what the consolidated results of operations actually would have been if the Transaction had occurred on 1 January 2006 or what those results will be for any future periods or what the consolidated balance sheet would have been if the Transaction had occurred on 30 September 2007. The pro forma adjustments are based on information current as at 22 February 2008 (being the latest practicable date prior to the publication of this document); and |
• | has not been adjusted to reflect any matters not directly attributable to implementing the Transaction. No adjustment, therefore, has been made for actions which may be taken once the Transaction is complete, such as any integration plans of Thomson Reuters. |
• | Canadian GAAP financial information on Thomson has been extracted without material adjustment from Thomson’s audited consolidated statements of earnings for the year ended 31 December 2006 and for the nine months ended 30 September 2007 and the audited consolidated balance sheet as at 30 September 2007 set out in Sections 3 and 5 of Part XIV of this document. Financial information from the reconciliations summarising the material differences between Canadian GAAP and IFRS as applied by Reuters has been extracted without material adjustment from the unaudited reconciliations set out in Section 6 of Part XIV of this document. |
• | IFRS financial information on Reuters has been extracted without material adjustment, except for currency translation as noted below, from the Reuters audited consolidated income statement for the year ended 31 December 2006, incorporated by reference into this document, and from Reuters unaudited consolidated statement of income for the nine months ended 30 September 2007 and unaudited consolidated balance sheet as at 30 September 2007, set out in Section 3 of Part XV of this document. Financial information from the reconciliations summarising the material differences between IFRS and Canadian GAAP as applied by Thomson has been extracted without material adjustment, except for currency translation as noted below, from the unaudited reconciliations set out in Section 4 of Part XV of this document. |
• | The Reuters figures have been translated from £ to US$ using average exchange rates applicable during the periods presented for the unaudited pro forma consolidated statements of earnings and the period end exchange rate for the unaudited pro forma consolidated balance sheet. |
US$/£1 | ||||
31 December 2006 | Average Spot Rate | 1.8434 | ||
30 September 2007 | Average Spot Rate | 1.9965 | ||
30 September 2007 | Period End Rate | 2.0389 |
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For the nine months ended 30 September 2007
(in millions of US dollars, except common share amounts)
20.4.3
Pro Forma | Pro Forma | |||||||||||||||||||
Adjustments | Thomson | |||||||||||||||||||
Thomson | Reuters | Other | Note | Reuters | ||||||||||||||||
Revenues | 5,278 | 3,843 | — | 9,121 | ||||||||||||||||
Cost of sales, selling, marketing, general and administrative expenses | (3,848 | ) | (3,462 | ) | 86 | 3.b | ) | (7,224 | ) | |||||||||||
Depreciation | (348 | ) | (196 | ) | — | (544 | ) | |||||||||||||
Amortisation | (189 | ) | (56 | ) | — | (245 | ) | |||||||||||||
Operating profit | 893 | 129 | 86 | 1,108 | ||||||||||||||||
Net other income (expense) | 6 | (44 | ) | — | (38 | ) | ||||||||||||||
Net interest expense and other financing costs | (64 | ) | (24 | ) | (200 | ) | 3.c | ) | (288 | ) | ||||||||||
Income tax expense | (46 | ) | (24 | ) | 43 | 3.d | ) | (27 | ) | |||||||||||
Earnings from continuing operations | 789 | 37 | (71 | ) | 755 | |||||||||||||||
Earnings from discontinued operations, net of tax | 2,781 | 18 | — | 2,799 | ||||||||||||||||
Net earnings | 3,570 | 55 | (71 | ) | 3,554 | |||||||||||||||
Basic earnings per common share | $ | 5.56 | $ | 4.23 | ||||||||||||||||
Diluted earnings per common share | $ | 5.53 | $ | 4.21 | ||||||||||||||||
Net earnings under IFRS as applied by Reuters | 3,561 | 301 | (71 | ) | 3,791 | |||||||||||||||
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20.4.3
For the year ended 31 December 2006
(in millions of US dollars, except common share amounts)
Pro Forma | Pro Forma | |||||||||||||||||||
Adjustments | Thomson | |||||||||||||||||||
Thomson | Reuters | Other | Note | Reuters | ||||||||||||||||
Revenues | 6,612 | 4,824 | — | 11,436 | ||||||||||||||||
Cost of sales, selling, marketing, general and administrative expenses | (4,678 | ) | (4,013 | ) | — | (8,691 | ) | |||||||||||||
Depreciation | (439 | ) | (212 | ) | — | (651 | ) | |||||||||||||
Amortisation | (241 | ) | (72 | ) | — | (313 | ) | |||||||||||||
Operating profit | 1,254 | 527 | — | 1,781 | ||||||||||||||||
Net other income | 1 | 124 | — | 125 | ||||||||||||||||
Net interest expense and other financing costs | (221 | ) | (24 | ) | (267 | ) | 3.c | ) | (512 | ) | ||||||||||
Income tax expense | (118 | ) | (81 | ) | 93 | 3.d | ) | (106 | ) | |||||||||||
Earnings from continuing operations | 916 | 546 | (174 | ) | 1,288 | |||||||||||||||
Earnings from discontinued operations, net of tax | 204 | 22 | — | 226 | ||||||||||||||||
Net earnings | 1,120 | 568 | (174 | ) | 1,514 | |||||||||||||||
Basic and diluted earnings per common share | $ | 1.73 | $ | 1.79 | ||||||||||||||||
Net earnings under IFRS as applied by Reuters | 1,156 | 562 | (174 | ) | 1,544 | |||||||||||||||
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20.4.3
As at 30 September 2007
(in millions of US dollars)
Pro Forma | Pro Forma | |||||||||||||||
Adjustments | Thomson | |||||||||||||||
Thomson | Reuters | Other | Note | Reuters | ||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | 7,455 | 269 | (4,042 | ) | 3.a)i. | 3,682 | ||||||||||
Accounts receivable, net of allowances | 1,327 | 314 | — | 1,641 | ||||||||||||
Inventories | 85 | 2 | — | 87 | ||||||||||||
Prepaid expenses and other current assets | 452 | 791 | (21 | ) | 3.a)ii. | 1,222 | ||||||||||
Deferred income taxes | 152 | 237 | — | 389 | ||||||||||||
Current assets of discontinued operations | 92 | — | — | 92 | ||||||||||||
Current assets | 9,563 | 1,613 | (4,063 | ) | 7,113 | |||||||||||
Computer hardware and other property, net | 643 | 936 | — | 1,579 | ||||||||||||
Computer software, net | 694 | 196 | — | 890 | ||||||||||||
Identifiable intangible assets, net | 3,484 | 263 | — | 3,747 | ||||||||||||
Goodwill | 6,804 | 811 | 16,679 | 3.a)iii. | 24,294 | |||||||||||
Other non-current assets | 1,180 | 926 | — | 2,106 | ||||||||||||
Deferred income taxes | — | 428 | — | 428 | ||||||||||||
Non-current assets of discontinued operations | 550 | — | — | 550 | ||||||||||||
Total assets | 22,918 | 5,173 | 12,616 | 40,707 | ||||||||||||
Liabilities and shareholders’equity | ||||||||||||||||
Liabilities | ||||||||||||||||
Short-term indebtedness | 3 | 693 | 4,917 | 3.a)i. | 5,613 | |||||||||||
Accounts payable and accruals | 2,562 | 1,376 | 110 | 3.a)i., 3.a)ii. | 4,048 | |||||||||||
Deferred revenue | 949 | 63 | — | 1,012 | ||||||||||||
Current portion of long-term debt | 403 | — | — | 403 | ||||||||||||
Current liabilities of discontinued operations | 79 | — | — | 79 | ||||||||||||
Current liabilities | 3,996 | 2,132 | 5,027 | 11,155 | ||||||||||||
Long-term debt | 3,418 | 1,236 | — | 4,654 | ||||||||||||
Other non-current liabilities | 833 | 461 | — | 1,294 | ||||||||||||
Deferred income taxes | 1,031 | 508 | — | 1,539 | ||||||||||||
Non-current liabilities of discontinued operations | 56 | — | — | 56 | ||||||||||||
Total liabilities | 9,334 | 4,337 | 5,027 | 18,698 | ||||||||||||
Shareholders’ equity | ||||||||||||||||
Capital | 2,904 | 1,070 | 7,355 | 3.a)i. | 11,329 | |||||||||||
Retained earnings | 10,163 | 3,214 | (3,214 | ) | 3.a)i | 10,163 | ||||||||||
Accumulated other comprehensive income | 517 | (3,448 | ) | 3,448 | 3.a)i. | 517 | ||||||||||
Total shareholders’ equity | 13,584 | 836 | 7,589 | 22,009 | ||||||||||||
Total liabilities and shareholders’ equity | 22,918 | 5,173 | 12,616 | 40,707 | ||||||||||||
Total shareholders’ equity under IFRS as applied by Reuters | 13,259 | 477 | 6,078 | 19,814 | ||||||||||||
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1. | BASIS OF PRESENTATION |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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3. | PRO FORMA ADJUSTMENTS |
Estimated Purchase Consideration | Notes | ||||||
(US$ millions) | |||||||
Ordinary Shares, Thomson Reuters PLC | 8,612 | i. | |||||
Cash | 8,805 | i. | |||||
Transaction costs | 120 | ii. | |||||
Gross estimated purchase consideration | 17,537 | ||||||
Less: estimated purchase consideration payable to ESOTs | (378 | ) | i. | ||||
Net estimated purchase consideration | 17,159 | ||||||
Add back: cash used by Reuters share buy-back programme | 395 | i. | |||||
Less: estimated effect of exercise of Reuters employee share-based awards | (39 | ) | i. | ||||
Less: book value of net assets acquired | (836 | ) | iii. | ||||
Excess of purchase consideration over book value of net assets acquired | 16,679 | iii. | |||||
i. | To effect the Transaction, Reuters will be acquired by TR (2008), a UK subsidiary of Thomson Reuters PLC, through the Scheme in which each holder of one Reuters Share will be entitled to 352.5 pence in cash and 0.16 Thomson Reuters PLC Shares. Under the terms of the agreement: |
• | Thomson will fund the cash consideration; and | |
• | on closing, one Thomson Reuters PLC Share will be equivalent to one Thomson Reuters Corporation Share under the DLC structure. |
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• | Disbursement of $395 million by Reuters to repurchase its Ordinary Shares during the period from 13 December 2007 to 19 February 2008; |
• | Disbursement of $8,805 million in cash by Thomson, including $191 million payable to consolidated ESOTs, and being funded by $3,888 million in available cash and $4,917 million drawn from Thomson’s credit facilities; |
• | The effect of $50 million in cash received by Reuters and additional accruals of $11 million relating to exercise of Reuters share-based employee awards; |
• | Equity of $8,612 million attributable to the issuance of 203.2 million Thomson Reuters PLC Shares, of which $187 million is attributable to 4.4 million shares which are issued to ESOTs; |
• | Elimination of Reuters historical shareholders’ equity balances in capital of $1,070 million, retained earnings of $3,214 million and accumulated other comprehensive income of ($3,448) million; and |
• | Reduction in equity of $187 million attributable to Thomson Reuters PLC Shares issued to ESOTs. |
ii. | Transaction costs represent Thomson’s estimated direct costs of carrying out the Transaction that may be capitalised as part of the overall consideration. |
• | An adjustment of $21 million has been made to reclassify this amount out of current assets and treat it as part of purchase consideration allocated to goodwill. | |
• | Of the $120 million in total Transaction costs, $99 million had not been incurred as at 30 September 2007 and, accordingly, an adjustment has been made to increase accounts payable and accruals as if those charges had occurred. |
(US$ millions) | ||||
Cash adjustment | ||||
Cash funding | (8,805 | ) | ||
Funding provided by credit facilities | 4,917 | |||
Funding from available cash | (3,888 | ) | ||
Cash used by Reuters on share buy-back programme | (395 | ) | ||
Cash paid to consolidated ESOTs | 191 | |||
Cash received by Reuters relating to exercise of share-based employee awards | 50 | |||
Cash adjustment | (4,042 | ) | ||
Accounts payable and accruals adjustment | ||||
Accruals by Reuters relating to exercise of share-based employee awards | 11 | |||
Transaction costs accrual | 99 | |||
Accounts payable and accruals adjustment | 110 | |||
Capital adjustment | ||||
Gross issuance of new shares | 8,612 | |||
Less: shares issued to consolidated ESOTs | (187 | ) | ||
Less: elimination of Reuters equity | (1,070 | ) | ||
Capital adjustment | 7,355 | |||
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(US$ millions) | ||||
Transaction costs | ||||
Reclassified from prepaid and other current assets | 21 | |||
Transaction costs accrual | 99 | |||
Transaction costs | 120 | |||
Estimated effect of exercise of Reuters employee share-based awards | ||||
Cash received by Reuters relating to exercise of share-based employee awards | 50 | |||
Less: Accruals by Reuters relating to exercise of share-based employee awards | (11 | ) | ||
Estimated effect of exercise of Reuters employee share-based awards | 39 | |||
iii. | Allocation of purchase price |
b) | Thomson and Reuters have incurred integration planning and other Transaction related costs that do not qualify to be capitalised as part of estimated purchase consideration. These items were initially recorded as expenses in the statement of earnings. An adjustment of $86 million has been made to reverse the expenses incurred for the nine months ended 30 September 2007. This adjustment was recorded because the pro forma statements of earnings have been prepared as if the Transaction had occurred on 1 January 2006. Therefore, these expenses would have been incurred prior to the closing of the Transaction. Additionally, these expenses are non-recurring in nature and are not expected to have a continuing impact on the consolidated results. There was no adjustment for the year ended 31 December 2006 as there were no Transaction related expenses incurred during such year. |
c) | Adjustments to record pro forma interest expense of $267 million and $200 million were made for the year ended 31 December 2006 and the nine months ended 30 September 2007, respectively. The interest charges relate to the $4,917 million drawn from credit facilities to finance a portion of the estimated cash consideration, as if such amount were borrowed from 1 January 2006 and outstanding as at 30 September 2007. These interest charges will have a continuing impact on the consolidated results until all borrowings under credit facilities are repaid. |
d) | The estimated tax benefits of the above adjustments are $93 million and $43 million for the year ended 31 December 2006 and the nine months ended 30 September 2007, respectively. The estimates reflect the tax rates of Thomson and Reuters separately and tax jurisdictions in which the pro forma adjustments were assumed to occur. |
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4. | PRO FORMA EARNINGS PER SHARE |
Nine Months Ended | Year Ended | |||||||
30 September | 31 December | |||||||
2007 | 2006 | |||||||
Basic and diluted pro forma earnings per share computation | ||||||||
Numerator (millions of US dollars): | ||||||||
Pro forma net earnings | 3,554 | 1,514 | ||||||
Dividends declared on preference shares | (4 | ) | (5 | ) | ||||
Pro forma earnings attributable to common shares | 3,550 | 1,509 | ||||||
Denominator: | ||||||||
Thomson weighted-average outstanding common shares | 641.1 | 644.1 | ||||||
Shares to be issued of Thomson Reuters PLC, net of ESOTs | 198.8 | 198.8 | ||||||
Basic pro forma weighted — average outstanding common shares | 839.9 | 842.9 | ||||||
Thomson effect of stock and other incentive plans | 3.2 | 1.9 | ||||||
Diluted pro forma weighted — average outstanding common shares | 843.1 | 844.8 | ||||||
Basic pro forma net earnings per share | $ | 4.23 | $ | 1.79 | ||||
Diluted pro forma net earnings per share | $ | 4.21 | $ | 1.79 | ||||
5. | DIVISIONAL ANALYSIS OF REVENUES |
Pro Forma | Pro Forma | |||||||||||||
Adjustment | Thomson | |||||||||||||
Thomson | Reuters | Reuters | % of Total | |||||||||||
Thomson Financial | 2,025 | — | 2,025 | |||||||||||
Reuters | — | 4,824 | 4,824 | |||||||||||
Markets division | 2,025 | 4,824 | 6,849 | 60% | ||||||||||
Thomson Legal | 3,029 | — | 3,029 | |||||||||||
Thomson Tax & Accounting | 598 | — | 598 | |||||||||||
Thomson Scientific | 602 | — | 602 | |||||||||||
Thomson Healthcare | 374 | — | 374 | |||||||||||
Professional division | 4,603 | — | 4,603 | 40% | ||||||||||
Eliminations | (16 | ) | — | (16 | ) | |||||||||
Total | 6,612 | 4,824 | 11,436 | 100% | ||||||||||
6. | PRO FORMA SUMMARY OF DIFFERENCES BETWEEN CANADIAN GAAP AND IFRS |
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Nine Months Ended | Year Ended | |||||||
30 September | 31 December | |||||||
2007 | 2006 | |||||||
(Million of US dollars) | ||||||||
Reconciliation of pro forma net earnings | ||||||||
Net earnings under Canadian GAAP | 3,554 | 1,514 | ||||||
Differences in accounting principles increasing (decreasing) net earnings: | ||||||||
Canadian GAAP to IFRS Summary Difference — Thomson | (9 | ) | 36 | |||||
Canadian GAAP to IFRS Summary Difference — Reuters | 246 | (6 | ) | |||||
Net earnings under IFRS as applied by Reuters | 3,791 | 1,544 | ||||||
As at | ||||
30 September | ||||
2007 | ||||
(Millions of US dollars) | ||||
Reconciliation of pro forma shareholders’ equity | ||||
Shareholders’ equity under Canadian GAAP | 22,009 | |||
Differences in accounting principles increasing (decreasing) shareholders’ equity: | ||||
Canadian GAAP to IFRS Summary Difference — Thomson | (325 | ) | ||
Canadian GAAP to IFRS Summary Difference — Reuters | (359 | ) | ||
Pro forma net estimated purchase consideration paid by Thomson to acquire Reuters | (1,511 | ) | ||
Shareholders’ equity under IFRS as applied by Reuters | 19,814 | |||
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7.1, 7.2 and
25.1
1. | Corporate structure |
Jurisdiction of | ||
Subsidiary | Incorporation/Formation | |
Thomson Canada Limited | Ontario, Canada | |
Thomson Holdings S.A. | Luxembourg | |
Thomson Finance SA | Luxembourg | |
LiveNote Technologies Ltd. | England and Wales | |
LiveNote Inc. | Delaware, U.S.A. | |
Engate LLC | Delaware, U.S.A. | |
Emica Corporation | Delaware, U.S.A. | |
Thomson U.S. Holdings Inc. | Delaware, U.S.A. | |
THI (U.S.) Inc. | Delaware, U.S.A. | |
Thomson U.S. Inc. | Delaware, U.S.A. | |
The Thomson Corporation Delaware Inc. | Delaware, U.S.A. | |
Thomson Holdings Inc. | Delaware, U.S.A. | |
Thomson Finance Company | Delaware, U.S.A. | |
Thomson TradeWeb LLC | Delaware, U.S.A. | |
Thomson Healthcare Inc. | Delaware, U.S.A. | |
Physicians’ Desk Reference Inc. | Florida, U.S.A. | |
Thomson Financial Holdings Inc. | Delaware, U.S.A. | |
Thomcorp Holdings Inc. | New York, U.S.A. | |
Thomson Scientific Inc. | Pennsylvania, U.S.A. | |
Thomson Professional & Regulatory Inc. | Texas, U.S.A. | |
Quantitative Analytics, Inc. | Illinois, U.S.A. | |
Thomson Financial LLC | Delaware, U.S.A. | |
Thomson Legal & Regulatory Inc. | Minnesota, U.S.A. | |
West Publishing Corporation | Minnesota, U.S.A. | |
West Services Inc. | Delaware, U.S.A. | |
Thomson International SA | Luxembourg | |
The Thomson Corporation PLC | England and Wales | |
The Thomson Organization Limited | England and Wales | |
TTC (1994) Limited | England and Wales | |
Thomson Information & Publishing Holdings Limited | England and Wales | |
Thomson Information & Solutions Limited | England and Wales | |
Thomson Legal & Regulatory Limited | England and Wales | |
Thomson Financial Limited | England and Wales |
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2. | Description of the business |
6.1 and 6.2
2.1 | Overview |
• | serve business and professional customers; |
• | target customer segments and sub-segments that it believes provide the best opportunities for growth and profitability; |
• | integrate critical, must-have data with software, tools and services; |
• | generate subscription-based or recurring revenues; |
• | reach customers directly through a technology platform; |
• | integrate into customers’ workflows; and |
• | are scalable and leverageable. |
Per cent. of 2007 | ||||||||||||||||
Revenues from | ||||||||||||||||
Electronic, | ||||||||||||||||
Per cent. of 2007 | Software and | Countries with | ||||||||||||||
2007 Revenues(1) | Revenues | Services | Operations | Employees | ||||||||||||
Thomson Legal | 3,318 | 45 | 67 | 21 | 12,900 | |||||||||||
Thomson Financial | 2,186 | 30 | 98 | 35 | 8,600 | |||||||||||
Thomson Tax & Accounting | 705 | 10 | 88 | 3 | 3,800 | |||||||||||
Thomson Scientific | 651 | 9 | 96 | 23 | 2,700 | |||||||||||
Thomson Healthcare | 452 | 6 | 83 | 9 | 1,800 | |||||||||||
Corporate | — | — | — | 24 | 3,100 | |||||||||||
Eliminations | (16 | ) | — | — | — | — | ||||||||||
Total | 7,296 | 100 | 82 | 44 | 32,900 | |||||||||||
(1) | In millions of US dollars and unaudited. |
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2.2 | Thomson Legal |
• | North American Legal; and |
• | International Legal & Regulatory. |
Per cent. of | ||||||||
Total | ||||||||
Revenues | ||||||||
2007 | 2006 | |||||||
Electronic, software and services | 67 | 66 | ||||||
From North America | 84 | 84 | ||||||
Recurring/subscription-based | 83 | 84 |
6.5
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Major Brands | Principal Products and Services | Customers | ||
West Westlaw Westlaw Litigator Westlaw Business | Legal, regulatory and compliance information-based products and services | Lawyers, law students, law librarians and other legal professionals | ||
LiveNote | Deposition, transcript and court reporting software and services | Lawyers, courts and court reporters and investigators | ||
Carswell (Canada) | Legal, regulatory and compliance information-based products and services | Lawyers, law students, law librarians and other legal professionals | ||
WestlaweCarswell (Canada) | Legal, regulatory and compliance information-based products and services | Lawyers, law students, law librarians and other legal professionals | ||
West km | Integrated knowledge management software | Lawyers, law students, law librarians and other legal professionals | ||
Thomson Elite Elite 3E | Law firm management software, competitive intelligence | Lawyers, law firm finance, operations and business development professionals | ||
West Monitor Suite | Business and market intelligence solutions | Lawyers, law firm finance, operations and business development professionals | ||
ProLaw | Law firm management software, competitive intelligence | Lawyers, law firm finance, operations and business development professionals | ||
Hildebrandt International Baker Robbins | Strategic, technology and information consulting advisery services | Lawyers, law firm finance, operations and business development professionals | ||
Thomson Litigation Consulting | Litigation consulting and support services | Lawyers, law firm finance, operations and business development professionals | ||
FindLaw HubbardOne | Web-based legal directory, website creation and hosting services and law firm marketing solutions | Lawyers and legal professionals | ||
Foundation Press West Law School Publishing BAR/BRI West LegalEdcenter LegalWorks | Textbooks, study aids, bar review courses, continuing education materials and seminars | Law students, lawyers and legal professionals | ||
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6.1.2
119
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Major Brands | Principal Products and Services | Customers | ||
Westlaw(1) Sweet & Maxwell (UK, Asia) IDS (UK) Aranzadi (Spain) Civitas (Spain) Karnov (Denmark and Sweden) Lawbook (Australia) Brookers (New Zealand) La Ley (Argentina) Lawtel (UK) White Book (UK, Asia) Archbold (UK) | Legal information-based products and services | Lawyers, law students, law librarians, corporate legal professionals, government agencies and trademark professionals | ||
Taxpoint (Australia) PowerTax (Australia) | Tax and accounting information and software-based products and services | Professional accounting firms, corporate, finance and accounting departments, law firms and governments | ||
Thomson CompuMark SAEGIS (North America, EMEA) | Trademark search and protection information services | Business, legal and trademark professionals | ||
(1) | United Kingdom, Denmark, Hong Kong, Spain, Sweden and, though a joint venture, Japan. |
6.5
6.1.2
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2.3 | Thomson Financial |
• | Corporate, Investment Banking & Investment Management; |
• | Equities, Fixed Income & Wealth Management; and |
• | Omgeo. |
Per cent. of Total Revenues | ||||||||
2007 | 2006 | |||||||
Electronic, software and services | 98 | 98 | ||||||
From North America | 75 | 79 | ||||||
Recurring/subscription-based | 80 | 82 |
• | Investment banking; |
• | Wealth management; |
• | Investment management; |
• | Institutional equities; |
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• | Fixed income; |
• | Corporate management; |
• | Institutional research; |
• | Hedge funds; and |
• | Private equity and consultants. |
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Major Brands | Principal Products and Services | Customers | ||
Thomson ONE Investment Banking | Analytical tools and databases of brokerage research, transactional data, institutional holdings data, current and historical earnings estimates, pricing information, SEC filings and news | Investment bankers and private equity professionals | ||
SDC Platinum Investext Global Access Thomson Research Thomson ONE Investment Management Quantitative Analytics (TQA) Datastream I/B/E/S First Call Baseline StreetEvents | Security and portfolio analytical tools as well as databases of real-time equity and fixed income brokerage research, current and historical analyst forecast estimates, investor presentations, company accounts data, pricing data, global aggregated forecast data at the country, sector and industry levels, market indices data, institutional holdings data, SEC filings and news | Portfolio managers, portfolio analysts, buy side traders and research analysts | ||
Thomson ONE Investor Relations Thomson ONE Corporate Development | Internet-based software applications providing corporate information and news, stock surveillance services and outbound communications services | Investor relations professionals and corporate financial executives | ||
Capital Markets Intelligence (CMI) | Market intelligence and analytical services for market valuation analysis | Investor relations professionals and corporations | ||
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Major Brands | Principal Products and Services | Customers | ||
Thomson ONE Wealth Management Thomson ONE Equity Sales Thomson ONE Fixed Income Thomson ONE Hedge Fund Trading InvestmentView Global Topic ILX | Electronic financial information, including real-time market data, such as pricing data, company information, news and analytics | Institutional traders, retail traders, investment advisers and hedge fund professionals | ||
TradeWeb TradeWeb Retail | Online marketplace for fixed income securities and derivatives | Institutional and retail traders | ||
Thomson Transaction Services | Back office data processing services | Brokers and dealers | ||
AutEx | Electronic database and real-time network for trade order indications and trade executions | Equity traders | ||
Thomson Transaction Analytics | Transaction cost analysis and trade execution compliance services | Brokers, market makers and exchanges | ||
eXimius | Front-office private client investment management application | Wealth managers, investment advisers | ||
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6.1.2
6.1.2
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2.4 | Thomson Tax & Accounting |
• | Research & Guidance; |
• | Professional Software & Services; and |
• | Corporate Software & Services. |
Per cent. of Total Revenues | ||||||||
2007 | 2006 | |||||||
Electronic, software and services | 88 | 84 | ||||||
From North America | 100 | 100 | ||||||
Recurring/subscription-based | 94 | 95 |
Major Brands | Principal Products and Services | Customers | ||
Research & Guidance: RIA PPC Checkpoint Quickfinder Warren Gorham & Lamont (WG&L) | Tax and accounting information-based products and services | Professional accounting firms, corporate, finance and accounting departments, law firms and governments | ||
Professional Software & Services: Creative Solutions GoSystem UltraTax GoFileRoom | Tax and accounting software and services focused on compliance and management solutions | Professional accounting firms, tax preparers, bookkeepers and enrolled agents | ||
Corporate Software & Services: InSource CrossBorder Solutions Tax Partners TrustEase eComply Fiduciary Practice Systems ePropertyTax | Tax and accounting software and services focused on compliance and document management | Corporate tax departments and financial services firms | ||
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2.5 | Thomson Scientific |
Per cent. of Total Revenues | ||||||||
2007 | 2006 | |||||||
Electronic, software and services | 96 | 95 | ||||||
From North America | 72 | 70 | ||||||
Recurring/subscription-based | 74 | 76 |
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Major Brands | Principal Products and Services | Customers | ||
ISI Web of Knowledge | Comprehensive and integrated platform that includes the Web of Science as well as third party hosted content, editorially selected websites, and tools to access, analyse and manage research information | Research scientists and scholars, government agencies, research libraries and universities and colleges | ||
Web of Science | Comprehensive database providing a source for journal article-cited references and access to abstracted and indexed journals | Research scientists and scholars, government agencies, research libraries and universities and colleges | ||
Thomson Pharma | Integrated web platform that delivers scientific literature, patents, commercial and regulatory information, company news communications, professional meeting reports and other relevant content | Pharmaceutical and biotechnology companies | ||
Thomson Innovation | Integrated web platform providing a global collection of intellectual property content, scientific literature, analytical and visualisation tools, and document services | Intellectual property professionals, R&D professionals, lawyer and business intelligence staff | ||
Derwent World Patents Index | Comprehensive database of English language patent abstracts from approximately 40 patent authorities around the world including coverage of China, Japan and Korea | Intellectual property professionals, R&D professionals, lawyers, business intelligence staff | ||
Prous Integrity | Integrated web platform delivering drug discovery content and analytic functionality for biologists and chemists | Pharmaceutical and biotechnology companies, academic centres and research institutes | ||
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2.6 | Thomson Healthcare |
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Per cent. of Total Revenues | ||||||||
2007 | 2006 | |||||||
Electronic, software and services | 83 | 76 | ||||||
From North America | 100 | 100 | ||||||
Recurring/subscription-based | 70 | 65 |
Major Brands | Principal Products and Services | Customers | ||
Micromedex | Comprehensive database set of drugs, disease information, medical emergency and poison control procedures, patient education and other relevant clinical, toxicological and environmental health and safety information | Physicians, pharmacists, health professionals, pharmaceutical companies, hospitals, poison control centres, corporations, government agencies and insurance companies | ||
MercuryMD | Medical reference and decision support tool for personal digital assistants, delivering real-time patient data to clinicians | Physicians, health professionals and hospitals | ||
PDR (Physicians’ Desk Reference) | Database of US Food and Drug Administration (FDA) approved drug monographs, delivered in print and electronic format | Physicians, health professionals, pharmaceutical companies and government agencies | ||
Medstat Advantage Suite | Decision support products integrating benchmarks and analytics, designed for managing healthcare costs and quality and employee wellness and productivity | Large and mid-size employers, governmental healthcare purchasers, managed care and insurance companies, pharmaceutical companies and health services research providers | ||
Solucient | Benchmark, comparative and market databases, integrated with analytics to support marketing and planning, operational improvement and clinical performance improvement | Hospitals, researchers, service planners, patient safety and quality managers, financial and administrative staff | ||
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2.7 | Technology |
131
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2.8 | Sales and Marketing |
I, 9.2.1
2.9 | Seasonality |
2.10 | Intellectual Property |
I,6.4
2.11 | Research and Development |
I, 11
2.12 | Environmental Matters |
I, 8.2
2.13 | Properties and Facilities |
I, 8.1
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Owned/ | ||||||||
Facility | Approx Sq. Ft. | Leased | Principal Use | |||||
Eagan, Minnesota | 2,792,000 | Owned | Thomson Legal’s North American Legal headquarters and West operating facilities | |||||
New York, New York | 435,200 | Leased | Thomson Financial offices and headquarters | |||||
Carrollton, Texas | 409,150 | Owned | Thomson Tax & Accounting operating facilities | |||||
Boston, Massachusetts(1) | 370,000 | Leased | Thomson Financial offices |
(1) | Consists of three addresses. |
2.14 | Employees |
3. | Legal and arbitration proceedings |
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4. | Material contracts |
5. | Description of Capital Structure |
I, 21.1.1
5.1 | Shares |
I, 21.2.3
5.2 | Preference Shares |
6. | Market quotations |
7. | Credit ratings |
7.1 | Moody’s Investor Services (“Moody’s”) |
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7.2 | Standard & Poor’s |
7.3 | DBRS Limited (“DBRS”) |
8. | Related party transactions |
135
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1. | Corporate structure |
I, 25 CESR160-
165
PR Annex
I,7.1-7.2
and 25.1
Jurisdiction of | Principal Area of | |||
Subsidiary Undertakings | Incorporation/Formation | Operation | ||
Reuters AG | Germany | Germany | ||
Reuters America Holdings Inc. | USA | Worldwide | ||
Reuters America LLC | USA | USA | ||
Reuters Australia Pty Limited | Australia | Australia | ||
Reuters BV | Netherlands | Netherlands | ||
Reuters Canada Limited | Canada | Canada/USA | ||
Reuters Europe SA | Switzerland | Spain/Portugal | ||
Reuters Finance PLC | UK | UK | ||
Reuters France SNC | France | France | ||
Reuters Group Overseas Holdings (UK) Limited | UK | Worldwide | ||
Reuters Holdings Limited | UK | UK | ||
Reuters Hong Kong Limited | Cook Islands | Hong Kong | ||
Reuters International Holdings SARL | Switzerland | Worldwide | ||
Reuters Investment Limited | UK | UK | ||
Reuters Italia SpA | Italy | Italy | ||
Reuters Japan Kabushiki Kaisha | Japan | Japan | ||
Reuters Limited | UK | Worldwide | ||
Reuters Middle East Limited | Cook Islands | Middle East | ||
Reuters Nederland BV | Netherlands | Netherlands | ||
Reuters Research Inc | USA | USA | ||
Reuters SA | Switzerland | Worldwide | ||
Reuters Singapore Pte Limited | Singapore | Singapore | ||
Reuters Svenska AB | Sweden | Sweden | ||
Reuters Transaction Services Limited | UK | Worldwide |
Country of | Principal area of | Percentage of | ||||||
Joint Ventures and Associates | Incorporation | Operation | Equity Shares Held | |||||
3 Times Square Associates LLC | USA | USA | 50 | * | ||||
FXMarketSpace Limited | UK | Worldwide | 50 | |||||
Times Global Broadcasting Company Limited | India | India | 26 |
* | This is the equity interest of the Reuters Group but the effective economic interest at 31 December 2007 was 35 per cent. |
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2. | Description of the business |
6.1.1 and 6.2
2.1 | Overview |
6.5
17.1
2006 | 2005 | 2004 | ||||||
By business division: | ||||||||
Sales & Trading | 1,062 | 491 | 305 | |||||
Research & Asset Management | 800 | 658 | 699 | |||||
Enterprise | 1,241 | 925 | 296 | |||||
Media | 189 | 109 | 64 | |||||
Shared divisional resources | 3,383 | 3,605 | 3,507 | |||||
Total divisions | 6,675 | 5,788 | 4,871 | |||||
Global Sales & Service Organisation | 5,812 | 5,438 | 5,944 | |||||
Editorial | 2,321 | 2,210 | 2,220 | |||||
Corporate Services | 1,494 | 1,582 | 1,780 | |||||
Total continuing operations | 16,302 | 15,018 | 14,815 | |||||
Discontinued operations | — | 846 | 1,165 | |||||
Total average number of employees | 16,302 | 15,864 | 15,980 | |||||
By geographical location: | ||||||||
Europe, Middle East & Africa | 7,174 | 6,962 | 7,444 | |||||
Americas | 4,252 | 4,292 | 4,550 | |||||
Asia | 4,876 | 3,764 | 2,821 | |||||
Total continuing operations | 16,302 | 15,018 | 14,815 | |||||
Discounted operations | — | 846 | 1,165 | |||||
Total average number of employees | 16,302 | 15,864 | 15,980 | |||||
By function: | ||||||||
Production and communications | 9,438 | 8,498 | 8,315 | |||||
Selling and marketing | 4,572 | 4,179 | 3,878 | |||||
Support services and administration | 2,292 | 2,341 | 2,622 | |||||
Total continuing operations | 16,302 | 15,018 | 14,815 | |||||
Discontinued operations | — | 846 | 1,165 | |||||
Total average number of employees | 16,302 | 15,864 | 15,980 | |||||
The above include: | ||||||||
Development staff | 2,670 | 2,332 | 2,282 | |||||
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2006 | 2005 | 2004 | |||||||
Research and development expenditure | 83 | 92 | 105 |
2.2 | Sales & Trading |
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2.3 | Research & Asset Management |
2.4 | Enterprise |
• | Reuters DataScope real-time datafeeds, streams of machine-readable price data delivered over Reuters networks at high speed for use in customers’ information and trading services; |
• | Reuters DataScope pricing and reference data which help banks and financial organisations achieve regulatory compliance by delivering accurate financial instrument prices and reference material for capital markets globally. In 2006 a new distribution platform, Reuters DataScope Select, was launched to support back office and fund valuation processes; |
• | Reuters Market Data System, a resilient content distribution software platform that enables banks to deliver high volume and low latency data into a wide variety of financial systems; |
• | Trade and Risk Management systems to help banks manage their trading position and monitor their exposure to trading risk. In 2006, Reuters acquired Application Networks Inc., whose coverage of credit derivatives and structured financial products complements Reuters existing strengths in FX and treasury risk management; and |
• | Reuters Messaging, a secure online messaging service that connects financial professionals within and across existing communities of interest. |
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2.5 | Media |
2.6 | Properties and facilities |
2.7 | Environmental Matters |
3. | Legal and arbitration proceedings |
3.1 | Douglas Gilstrap and Myron Tataryn v. Radianz Ltd., Radianz Americas, Inc., Reuters Limited, Blaxmill (Six) Limited, Reuters C LLC, Reuters America LLC, and British Telecommunications plc |
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3.2 | Ariel (UK) Limited v. Reuters Group PLC, Reuters C LLC, Reuters Transactions Services Limited, Instinet Group, Incorporated, the NASDAQ Stock Market Inc. and Silver Lake Partners LP |
4. | Material contracts |
5. | Description of capital structure |
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6. | Market quotations |
7. | Related party transactions |
2007 | 2006 | 2005 | ||||||||||
£m | £m | £m | ||||||||||
Salaries and short-term employee benefits | 15 | 12 | 8 | |||||||||
Post-employment benefits | 1 | 1 | 1 | |||||||||
Termination benefits | — | — | 1 | |||||||||
Share-based payments | 9 | 8 | 6 | |||||||||
Total | 25 | 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 | ) | — | 4 | (4 | ) | — | |||||||||||||||||||
Total amounts payable | 1 | 25 | (26 | ) | — | 20 | (20 | ) | — | |||||||||||||||||||
* | 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. |
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8. | Credit rating |
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Page | ||||
Section 1: Selected historical financial information: Selected audited financial information as at and for the financial years ended 31 December 2006, 2005 and 2004 and as at and for the nine months ended 30 September 2007, and selected unaudited financial information as at and for the nine months ended 30 September 2006, prepared under Thomson Canadian GAAP accounting policies | 146 | |||
Section 2: Operating and financial review for Thomson for the three year period ended 31 December 2006 and for the nine months ended 30 September 2007 | 147 | |||
Section 3: Thomson audited interim results for the nine months ended 30 September 2007 prepared under Thomson Canadian GAAP accounting policies | 180 | |||
Section 4: Independent auditors’ report on Thomson interim results for the nine months ended 30 September 2007 | 218 | |||
Section 5: Audited Thomson consolidated financial statements for the three years ended 31 December 2006 | 220 | |||
Section 6: Unaudited reconciliation of the consolidated net earnings of Thomson for each of the three financial years ended 31 December 2006 and for the nine months ended 30 September 2007 and of Thomson’s consolidated shareholders’ equity at the ends of each of those periods prepared under Canadian GAAP accounting policies applied by Thomson to that prepared under the IFRS accounting policies applied by Reuters | 274 | |||
Section 7: Report from PwC Canada on the unaudited reconciliation of Thomson financial information to IFRS as applied by Reuters | 280 | |||
Section 8: Capitalisation and indebtedness disclosures for Thomson | 282 | |||
Section 9: Thomson fourth quarter and full year 2007 results | 284 |
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1. | Selected historical financial information |
PR Annex I, 20.4.3
Nine Months Ended | ||||||||||||||||||||
30 September | Year Ended 31 December | |||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||||||||
(Audited) | (Unaudited) | (Audited) | (Audited) | (Audited) | ||||||||||||||||
(In millions of US dollars, except per common share amounts) | ||||||||||||||||||||
Consolidated statement of earnings data: | ||||||||||||||||||||
Revenues | 5,278 | 4,756 | 6,612 | 6,145 | 5,658 | |||||||||||||||
Operating profit | 893 | 831 | 1,254 | 1,166 | 1,056 | |||||||||||||||
Net other income (expense) | 6 | 36 | 1 | (28 | ) | 2 | ||||||||||||||
Net interest expense and other financing costs | (64 | ) | (168 | ) | (221 | ) | (221 | ) | (235 | ) | ||||||||||
Income taxes | (46 | ) | (89 | ) | (118 | ) | (260 | ) | (177 | ) | ||||||||||
Earnings from continuing operations | 789 | 610 | 916 | 657 | 646 | |||||||||||||||
Earnings (loss) from discontinued operations, net of tax | 2,781 | 119 | 204 | 277 | 365 | |||||||||||||||
Net earnings | 3,570 | 729 | 1,120 | 934 | 1,011 | |||||||||||||||
Dividends declared on preference shares | (4 | ) | (4 | ) | (5 | ) | (4 | ) | (3 | ) | ||||||||||
Earnings attributable to common shares | 3,566 | 725 | 1,115 | 930 | 1,008 | |||||||||||||||
Basic earnings per common share | $ | 5.56 | $ | 1.12 | $ | 1.73 | $ | 1.42 | $ | 1.54 | ||||||||||
Diluted earnings per common share | $ | 5.53 | $ | 1.12 | $ | 1.73 | $ | 1.42 | $ | 1.54 | ||||||||||
Other data (unaudited)*: | ||||||||||||||||||||
Adjusted earnings from continuing operations | 709 | 540 | 861 | 682 | 585 | |||||||||||||||
Adjusted basic and diluted earnings per common share from continuing operations | $ | 1.10 | $ | 0.84 | $ | 1.34 | $ | 1.04 | $ | 0.89 |
* | Other data reflect non-GAAP measures. See Section 2.4 (Use of Non-GAAP Financial Measures) below for a description of definitions and reconciliations to GAAP financial measures. |
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Nine Months Ended | Year Ended 31 December | |||||||||||
30 September 2007 | 2006 | 2005 | 2004 | |||||||||
(In millions of US dollars, except per common share amounts) | ||||||||||||
Results under IFRS (unaudited): | ||||||||||||
Net income | 3,561 | 1,156 | 997 | 990 | ||||||||
Basic earnings per common share | $ | 5.55 | $ | 1.79 | $ | 1.52 | $ | 1.51 | ||||
Diluted earnings per common share | $ | 5.52 | $ | 1.78 | $ | 1.52 | $ | 1.50 | ||||
Results under US GAAP (audited): | ||||||||||||
Net income | 3,579 | 1,143 | 947 | 1,016 | ||||||||
Basic earnings per common share | $ | 5.58 | $ | 1.77 | $ | 1.44 | $ | 1.55 | ||||
Diluted earnings per common share | $ | 5.55 | $ | 1.76 | $ | 1.44 | $ | 1.54 |
As at 30 September | As at 31 December | |||||||||||
2007 | 2006 | 2005 | 2004 | |||||||||
(Audited) | (Audited) | (Audited) | (Audited) | |||||||||
(In millions of US dollars) | ||||||||||||
Cash and cash equivalents | 7,455 | 334 | 407 | 405 | ||||||||
Current assets | 9,563 | 3,265 | 3,009 | 2,892 | ||||||||
Intangible assets, net | 10,288 | 9,999 | 9,452 | 9,665 | ||||||||
Total assets | 22,918 | 20,132 | 19,434 | 19,643 | ||||||||
Current liabilities | 3,996 | 3,739 | 3,107 | 3,083 | ||||||||
Long-term debt (less current portion) | 3,418 | 3,681 | 3,957 | 3,987 | ||||||||
Total shareholders’ equity | 13,584 | 10,481 | 9,963 | 9,962 |
2. | Operating and financial review |
2.1 | Introduction |
10.1 — 10.5
2.2 | Overview |
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• | Thomson Legal & Regulatory — a leading provider of information solutions to legal, tax, accounting, intellectual property, compliance and other business professionals, as well as government agencies; |
• | Thomson Learning — a leading provider of learning solutions to colleges, universities, professors, students, libraries, reference centres, government agencies, corporations and professionals; |
• | Thomson Financial — a leading provider of products and integration services to financial and technology professionals in the corporate, investment banking, institutional, retail wealth management and fixed income sectors of the global financial community; and |
• | Thomson Scientific & Healthcare — a leading provider of information and services to researchers, physicians and other professionals in the healthcare, academic, scientific, corporate and government marketplaces. |
• | Thomson Legal — a leading provider of workflow solutions to legal, intellectual property, compliance, business and government professionals throughout the world. Major brands include Westlaw, Aranzadi, BAR/BRI, Carswell, Thomson CompuMark, Thomson Elite, FindLaw, LIVEDGAR and Sweet & Maxwell; |
• | Thomson Financial — a leading provider of products and integration services to financial and technology professionals in the corporate, investment banking, institutional, wealth management and fixed income sectors of the global financial community. Its flagship brand is Thomson ONE. Other major businesses and brands include AutEx, Baseline, Datastream, First Call, I/B/E/S, Investext, IR Channel, SDC Platinum, StreetEvents, Thomson Transaction Services and TradeWeb; |
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• | Thomson Tax & Accounting — a leading provider of integrated information and workflow solutions for tax and accounting professionals in North America. Major brands include Checkpoint, Creative Solutions and RIA; |
• | Thomson Scientific — a leading provider of information and services to researchers, scientists and information professionals in the academic, scientific, corporate and government marketplaces. Major businesses and information solutions include Derwent World Patents Index, MicroPatent, Thomson Pharma, Web of Science and ISI Web of Knowledge; and |
• | Thomson Healthcare — a leading provider of information and services to physicians and other professionals in the healthcare, corporate and government marketplaces. Major businesses and information solutions include Medstat, Micromedex, PDR (Physicians’ Desk Reference) and Solucient. |
3.1 and 3.2
Nine Months | ||||||||||||||||
Ended 30 | ||||||||||||||||
September | Year Ended 31 December | |||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||||
(Millions of US dollars, except per share amounts) | ||||||||||||||||
Consolidated Statement of Earnings Data: | ||||||||||||||||
Revenues | 5,278 | 4,756 | 6,612 | 6,145 | 5,658 | |||||||||||
Operating profit | 893 | 831 | 1,254 | 1,166 | 1,056 | |||||||||||
Earnings from continuing operations(1) | 789 | 610 | 916 | 657 | 646 | |||||||||||
Earnings from discontinued operations, net of tax(1) | 2,781 | 119 | 204 | 277 | 365 | |||||||||||
Net earnings(1) | 3,570 | 729 | 1,120 | 934 | 1,011 | |||||||||||
Diluted earnings per common share from continuing operations(1) | $ | 1.22 | $ | 0.94 | $ | 1.41 | $ | 1.00 | $ | 0.98 | ||||||
Diluted earnings per common share(1) | $ | 5.53 | $ | 1.12 | $ | 1.73 | $ | 1.42 | $ | 1.54 | ||||||
Consolidated Balance Sheet Data: | ||||||||||||||||
Cash and cash equivalents | 7,455 | 491 | 334 | 407 | 405 | |||||||||||
Total assets | 22,918 | 19,776 | 20,132 | 19,434 | 19,643 | |||||||||||
Total long-term liabilities | 5,338 | 6,159 | 5,912 | 6,364 | 6,598 | |||||||||||
Total shareholders’ equity | 13,584 | 10,193 | 10,481 | 9,963 | 9,962 | |||||||||||
Dividend Data: | ||||||||||||||||
Dividends per common share (US$) | $ | 0.735 | $ | 0.660 | $ | 0.880 | $ | 0.790 | $ | 0.755 | ||||||
Dividends per Series II Preference Share (C$) | C$ | 0.80 | C$ | 0.74 | C$ | 1.00 | C$ | 0.77 | C$ | 0.70 | ||||||
Other Data(2): | ||||||||||||||||
Adjusted earnings from continuing operations | 709 | 540 | 861 | 682 | 585 | |||||||||||
Adjusted earnings per common share from continuing operations | $ | 1.10 | $ | 0.84 | $ | 1.34 | $ | 1.04 | $ | 0.89 | ||||||
Net debt | (3,996 | ) | 3,817 | 3,741 | 3,646 | 3,690 | ||||||||||
Free cash flow | 638 | 886 | 1,440 | 1,194 | 1,118 |
(1) | Results are not directly comparable due to certain one-time items. For more information, please see the “Results of Operations” section of this operating and financial review. | |
(2) | These are non-GAAP financial measures. Please see the “Use of Non-GAAP Financial Measures” section of this operating and financial review for definitions and reconciliation to GAAP financial measures. |
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Percent. of | |||
Period | Total Revenues | ||
2007 — First Nine Months | 83 | ||
2006 — First Nine Months | 82 | ||
2006 — Full Year | 80 | ||
2005 — Full Year | 79 | ||
2004 — Full Year | 78 |
Percent. of | |||
Period | Total Revenues | ||
2007 — First Nine Months | 82 | ||
2006 — First Nine Months | 83 | ||
2006 — Full Year | 83 | ||
2005 — Full Year | 83 | ||
2004 — Full Year | 83 |
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Percent. of | |||
Period | Total Revenues | ||
2007 — First Nine Months | 83 | ||
2006 — First Nine Months | 83 | ||
2006 — Full Year | 83 | ||
2005 — Full Year | 84 | ||
2004 — Full Year | 83 |
Percent. of | |||
Period | Operating Costs | ||
2007 — First Nine Months | 68 | ||
2006 — First Nine Months | 67 | ||
2006 — Full Year | 66 | ||
2005 — Full Year | 65 | ||
2004 — Full Year | 63 |
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Period | Number | Aggregate Cost | ||||
(In millions of US$) | ||||||
2007 — First Nine Months | 26 | 315 | ||||
2006 — Full Year | 25 | 744 | ||||
2005 — Full Year | 28 | 246 | ||||
2004 — Full Year | 30 | 1,123 |
• | 2007 (first nine months) — CrossBorder Solutions, a provider of tax software; |
• | 2006 — Solucient LLC, a provider of data and advanced analytics to hospitals and health systems, Quantitative Analytics, Inc., a provider of financial database integration and analysis solutions, and LiveNote Technologies, a provider of transcript and evidence management software to litigators and court reporters; |
• | 2005 — Global Securities Information (GSI), a provider of online securities and securities-related information and research services; and |
• | 2004 — Information Holdings Inc. (IHI), a provider of intellectual property and regulatory information, acquired for US$445 million, net of cash and cash equivalents received, and TradeWeb, an online trading platform for fixed income securities, acquired for US$361 million, net of cash received, plus contingent payments of up to US$150 million over a three-year period ending in 2007 based upon the achievement of certain growth targets. In each of 2007, 2006 and 2005, Thomson paid US$50 million in contingent consideration associated with the TradeWeb acquisition. |
Minority Equity | ||||||
Discontinued Operations | Investments/Businesses | |||||
Period | Proceeds | Proceeds | ||||
2007 — First Nine Months | US$ | 8 billion | US$ | 11 million | ||
2006 — Full Year | US$ | 81 million | US$ | 88 million | ||
2005 — Full Year | — | US$ | 4 million | |||
2004 — Full Year | US$ | 474 million | US$ | 87 million |
• | In July 2007, Thomson sold Thomson Learning’s higher education, careers and library reference businesses to funds advised by Apax Partners and OMERS Capital Partners for approximately |
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• | In May 2007, Thomson sold NETg, a leading provider of continuing corporate education and training, to SkillSoft PLC for approximately US$270 million. |
• | On 12 October 2007, Thomson sold Prometric, a global leader in assessment services, to ETS for $310 million in cash and a 6% promissory note of $79 million due in 2014. The principal amount of the note, which was previously reported as $125 million, was adjusted to $79 million reflecting adjustments made based on the continuity of offerings from certain customer contracts. For financial statement purposes, the promissory note was recorded at its estimated fair value of approximately $60 million to account for the difference between the market and stated rates of interest. Thomson recognized a post-tax gain of $18 million related to this transaction. |
Business | Thomson Segment | Approved for Sale | ||
Fakta — Swedish regulatory information business | Legal | April 2007 | ||
PLM — a provider of drug and therapeutic information in Latin America | Healthcare | March 2007 | ||
New England Institutional Review Board — an ethical review board that monitors clinical research involving human subjects | Healthcare | March 2007 | ||
CenterWatch — provider of clinical research information | Healthcare | March 2007 |
Thomson | ||||
Business | Segment | Closed | ||
NewsEdge — provider of business information and news | Legal | July 2007 | ||
Market Research — provider of business information and news | Legal | May 2007 | ||
IOB — Brazilian regulatory business | Legal | June 2007 | ||
Thomson Medical Education — provider of medical education | Healthcare | April 2007 | ||
North American operations of Thomson Education Direct, a consumer-based distance learning career school | Learning | March 2007 | ||
American Health Consultants — medical newsletter publisher and medical education provider | Healthcare | August 2006 | ||
K.G. Saur — German publisher of biographical and bibliographical reference titles serving the library and academic communities | Learning | August 2006 | ||
Peterson’s — college preparatory guide | Learning | July 2006 | ||
Lawpoint — Australian provider of print/online regulatory information services | Legal | June 2006 | ||
Law Manager — software and services provider | Legal | April 2006 | ||
Thomson Media — provider of largely print-based information products | Media | November 2004 | ||
Sheshunoff Information Services — provider of critical data, compliance and management tools to financial institutions | Media | May 2004 |
2.3 | THOMSONplus |
• | realigning Thomson’s business units into five segments; |
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• | streamlining and consolidating certain functions such as finance, accounting and business systems; |
• | leveraging infrastructure and technology for customer contact centres; |
• | establishing low-cost shared service centres; |
• | consolidating certain technology infrastructure operations such as voice and data networks, data centres, storage and desktop support; and |
• | re-engineering certain product development and production functions and realigning particular sales forces within its business segments. |
Year | Expenses | Savings | ||||
(Millions of US dollars) | ||||||
2006 | 70 | 12 | ||||
2007 | 130 | 65 | ||||
2008 | 50 | 130 | ||||
2009 | — | 150 | ||||
Total | 250 | |||||
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(Millions of US dollars) | Impact on | Operating | Impact on | |||||||||||
Currency | Revenue1 | Revenues | Profit1 | Operating Profit | ||||||||||
US dollar | 5,361 | — | 1,152 | — | ||||||||||
British pound sterling | 624 | 62 | 50 | 5 | ||||||||||
Euro | 197 | 20 | 38 | 4 | ||||||||||
Canadian dollar | 155 | 16 | (7 | ) | (1 | ) | ||||||||
Australian dollar | 86 | 9 | 4 | — | ||||||||||
Other | 218 | 22 | 21 | 2 | ||||||||||
Total | 6,641 | 129 | 1,258 | 10 | ||||||||||
1 | Amounts include discontinued operations. |
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2.4 | Use of Non-GAAP Financial Measures |
• | Adjusted earnings and adjusted earnings per Thomson Share from continuing operations. Thomson measures its earnings attributable to Thomson Shares and per share amounts to adjust for non-recurring items, discontinued operations and other items affecting comparability, which it refers to as adjusted earnings from continuing operations and adjusted earnings per Thomson Share from continuing operations. Thomson uses these measures to assist in comparisons from one period to another. Adjusted earnings per Thomson Share from continuing operations do not represent actual earnings per share attributable to shareholders. |
PR Annex I, 10(1)
• | Net debt. Thomson measures its net debt, which it defines as its total indebtedness, including associated fair value hedging instruments (swaps) on its debt, less cash and cash equivalents . Given that Thomson hedges some of its debt to reduce risk, it includes hedging instruments as it believes it provides a better measure of the total obligation associated with its outstanding debt. However, because Thomson intends to hold its debt and related hedges to maturity, it does not consider the associated fair market value of cash flow hedges in its measurements. Thomson reduces gross indebtedness by cash and cash equivalents on the basis that they could be used to pay down debt. See the reconciliation of this measure to the most directly comparable Canadian GAAP measure in Section 2.6, “Liquidity and Capital Resources”, of this operating and financial review. |
PR Annex I, 10(1)
• | Free cash flow. Thomson evaluates its operating performance based on free cash flow, which it defines as net cash provided by operating activities less capital expenditure, other investing activities and dividends paid on its preference shares. It uses free cash flow as a performance measure because it represents cash available to repay debt, pay common dividends and fund new acquisitions. See the reconciliation of this measure to the most directly comparable Canadian GAAP measure in Section 2.6, “Liquidity and Capital Resources”, of this operating and financial review. |
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2.5 | Results of Operations |
Nine Months Ended 30 September | Year Ended 31 December | ||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | |||||||||||
(Millions of US dollars, except per share amounts) | |||||||||||||||
Revenues | 5,278 | 4,756 | 6,612 | 6,145 | 5,658 | ||||||||||
Operating profit | 893 | 831 | 1,254 | 1,166 | 1,056 | ||||||||||
Operating profit margin | 16.9 per cent | 17.5 per cent | 19.0 per cent | 19.0 per cent | 18.7 per cent | ||||||||||
Net earnings(1) | 3,570 | 729 | 1,120 | 934 | 1,011 | ||||||||||
Diluted earnings per common shares(1) | $ | 5.53 | $ | 1.12 | $ | 1.73 | $ | 1.42 | $ | 1.54 |
(1) | Results are not directly comparable due to certain one-time items. |
• | 6 per cent. from higher revenues of existing businesses; |
• | 4 per cent. from contributions of newly acquired businesses; and |
• | 1 per cent. from the impact of foreign currency translation. |
• | 6 per cent. from higher revenues of existing businesses; |
• | 2 per cent. from contributions of newly acquired businesses; and |
• | a negligible impact from foreign currency translation. |
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• | In 2006, Thomson increased valuation allowances against deferred tax assets by US$42 million which increased its tax rate by 4 per cent. The net change in the valuation allowance included benefits associated with Thomson Learning which, under the requirements of discontinued operations accounting, were not allowed to be reclassified to discontinued operations along with the other results for the business. The impact of including the benefits related to Thomson Learning in its continuing operations tax charge reduced its effective tax rate by 3 per cent. in 2006, and 2 per cent. in 2005 and 2004. |
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• | In 2005, Thomson released US$98 million of contingent income tax liabilities based upon the outcome of certain tax audits of prior year periods. Additionally, it repatriated a substantial portion of certain of its subsidiaries’ accumulated profits. The repatriation was related to the recapitalisation of these subsidiaries, which was effected through intercompany financing arrangements. Thomson incurred a one-time tax charge of US$125 million in connection with this repatriation, which reduced its cash flow from operations and its net earnings in the fourth quarter by the same amount. The net effect of both of these one-time tax items was a US$27 million increase in the tax provision for the full year of 2005. |
• | The 2004 income tax provision included a benefit resulting from the release of a valuation allowance of US$41 million related to new legislation in the United Kingdom. |
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Nine Months Ended | ||||||||||||||||||||
30 September | Year Ended 31 December | |||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||||||||
(Millions of US dollars, except per common share amounts) | ||||||||||||||||||||
Earnings attributable to common shares | 3,566 | 725 | 1,115 | 930 | 1,008 | |||||||||||||||
Adjustment for one-time items: | ||||||||||||||||||||
Net other (income) expense | (6 | ) | (36 | ) | (1 | ) | 28 | (2 | ) | |||||||||||
Transaction costs | 31 | — | — | — | — | |||||||||||||||
Tax on above items | (8 | ) | (1 | ) | (16 | ) | (4 | ) | 1 | |||||||||||
Tax (benefits) charges | (61 | ) | (21 | ) | (33 | ) | 5 | (57 | ) | |||||||||||
Interim period effective tax rate normalisation | (32 | ) | (8 | ) | — | — | — | |||||||||||||
Discontinued operations | (2,781 | ) | (119 | ) | (204 | ) | (277 | ) | (365 | ) | ||||||||||
Adjusted earnings from continuing operations | 709 | 540 | 861 | 682 | 585 | |||||||||||||||
Adjusted earnings per common share from continuing operations | $ | 1.10 | $ | 0.84 | $ | 1.34 | $ | 1.04 | $ | 0.89 | ||||||||||
Nine Months Ended 30 September | Year Ended 31 December | ||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | |||||||||||
(Millions of US dollars) | |||||||||||||||
Revenues | 2,458 | 2,228 | 3,029 | 2,818 | 2,659 | ||||||||||
Segment operating profit | 778 | 693 | 950 | 856 | 783 | ||||||||||
Segment operating profit margin | 31.7 per cent | 31.1 per cent | 31.4 per cent | 30.4 per cent | 29.4 per cent |
• | 7 per cent. from higher revenues of existing businesses; |
• | 1 per cent. from contributions of newly acquired businesses; and |
• | 2 per cent. from the impact of foreign currency translation. |
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• | 6 per cent. from higher revenues of existing businesses; |
• | 1 per cent. from contributions of newly acquired businesses; and |
• | a negligible impact from foreign currency translation. |
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Nine Months Ended September 30 | Year Ended 31 December | ||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | |||||||||||
(Millions of US dollars) | |||||||||||||||
Revenues | 1,611 | 1,497 | 2,025 | 1,908 | 1,750 | ||||||||||
Segment operating profit | 319 | 269 | 380 | 334 | 295 | ||||||||||
Segment operating profit margin | 19.8 per cent | 18.0 per cent | 18.8 per cent | 17.5 per cent | 16.9 per cent |
PR Annex I, 9.1
• | 4 per cent. from higher revenues of existing businesses; |
• | 2 per cent. from contributions of newly acquired businesses; and |
• | 2 per cent. from the impact of foreign currency translation. |
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9.1
• | 4 per cent. from higher revenues of existing businesses; |
• | 2 per cent. from contributions of newly acquired businesses; and |
• | a negligible impact from foreign currency translation. |
9.1
Nine Months Ended 30 September | Year Ended 31 December | ||||||||||||||
(Millions of US dollars) | 2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||
Revenues | 457 | 387 | 598 | 532 | 480 | ||||||||||
Segment operating profit | 95 | 73 | 168 | 141 | 129 | ||||||||||
Segment operating profit margin | 20.8 per cent | 18.9 per cent | 28.1 per cent | 26.5 per cent | 26.9 per cent |
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9.1
• | 11 per cent. from higher revenues of existing businesses; and |
• | 7 per cent. from contributions of newly acquired businesses. |
9.1
• | 11 per cent. from higher revenues of existing businesses; and |
• | 1 per cent. from contributions of newly acquired businesses. |
9.1
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Nine Months Ended 30 September | Year Ended 31 December | ||||||||||||||
(Millions of US dollars) | 2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||
Revenues | 471 | 440 | 602 | 569 | 476 | ||||||||||
Segment operating profit | 120 | 105 | 151 | 129 | 104 | ||||||||||
Segment operating profit margin | 25.5 per cent | 23.9 per cent | 25.1 per cent | 22.7 per cent | 21.8 per cent |
• | 3 per cent. from higher revenues of existing businesses; |
• | 2 per cent. from contributions of newly acquired businesses; and |
• | 2 per cent. from the impact of foreign currency translation. |
9.1
• | 4 per cent. from higher revenues of existing businesses; |
• | 2 per cent. from contributions of newly acquired businesses; and |
• | a negligible impact from foreign currency translation. |
9.1
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Nine Months Ended 30 September | Year Ended 31 December | ||||||||||||||
(Millions of US dollars) | 2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||
Revenues | 294 | 216 | 374 | 334 | 305 | ||||||||||
Segment operating profit | 28 | 20 | 81 | 80 | 66 | ||||||||||
Segment operating profit margin | 9.5 per cent | 9.3 per cent | 21.7 per cent | 24.0 per cent | 21.6 per cent |
• | 1 per cent. from higher revenues of existing businesses; |
• | 35 per cent. from contributions of newly acquired businesses; and |
• | a negligible impact from foreign currency translation. |
• | 3 per cent. from higher revenues of existing businesses; |
• | 9 per cent. from contributions of newly acquired businesses; and |
• | a negligible impact from foreign currency translation. |
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9.1
Nine Months Ended | Year Ended | ||||||||||||||
30 September | 31 December | ||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | |||||||||||
(Millions of US dollars) | |||||||||||||||
Expenses excluding THOMSONplus expenses and Transaction costs | 142 | 120 | 175 | 139 | 115 | ||||||||||
THOMSONplusexpenses | 85 | 31 | 60 | — | — | ||||||||||
Transaction costs | 31 | — | — | — | — | ||||||||||
Total | 258 | 151 | 235 | 139 | 115 | ||||||||||
9.1
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2.6 | Liquidity and Capital Resources |
10(1)
As at | As at | |||||||||||||||
30 September | 31 December | |||||||||||||||
(Millions of US dollars) | 2007 | 2006 | 2005 | 2004 | ||||||||||||
Short-term indebtedness | 3 | 333 | 191 | 5 | ||||||||||||
Current portion of long-term debt | 403 | 264 | 98 | 295 | ||||||||||||
Long-term debt | 3,418 | 3,681 | 3,957 | 3,987 | ||||||||||||
Total debt | 3,824 | 4,278 | 4,246 | 4,287 | ||||||||||||
Swaps | (391 | ) | (257 | ) | (193 | ) | (192 | ) | ||||||||
Total debt after swaps | 3,433 | 4,021 | 4,053 | 4,095 | ||||||||||||
Remove fair value adjustment of cash flow hedges(1) | 26 | 54 | — | — | ||||||||||||
Less: Cash and cash equivalents | (7,455 | ) | (334 | ) | (407 | ) | (405 | ) | ||||||||
Net debt | (3,996 | ) | 3,741 | 3,646 | 3,690 | |||||||||||
Total shareholders’ equity | 13,584 | 10,481 | 9,963 | 9,962 | ||||||||||||
Net debt/equity ratio | (0.29:1 | ) | 0.36:1 | 0.37:1 | 0.37:1 | |||||||||||
10.1
(1) | Effective 1 January 2006, all derivatives and certain hedged items are recorded at fair value on the balance sheet. See Section 1.2 (Accounting Changes) below for further discussion. |
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Dominion Bond | ||||||||||
Moody’s | Standard & Poor’s | Rating Service (DBRS) | ||||||||
Long-term debt | Baa1 | A- | A (low | ) | ||||||
Commercial paper | — | — | R-1 (low | ) | ||||||
Trend/Outlook | Stable | Negative | Negative |
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10.2
CESR34
171
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172
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10.3
Nine Months Ended 30 | Year Ended | |||||||||||||||||||
September | 31 December | |||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||||||||
(Millions of US dollars) | ||||||||||||||||||||
Dividends declared | 471 | 425 | 567 | 517 | 495 | |||||||||||||||
Dividends reinvested | (12 | ) | (10 | ) | (14 | ) | (12 | ) | (11 | ) | ||||||||||
Dividends paid | 459 | 415 | 553 | 505 | 484 | |||||||||||||||
10.2
Nine Months Ended 30 | Year Ended | |||||||||||||||||||
September | 31 December | |||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||||||||
(Millions of US dollars) | ||||||||||||||||||||
Net cash provided by operating activities | 1,157 | 1,329 | 2,125 | 1,879 | 1,808 | |||||||||||||||
Capital expenditures | (383 | ) | (270 | ) | (453 | ) | (427 | ) | (407 | ) | ||||||||||
Other investing activities | (33 | ) | (26 | ) | (26 | ) | (25 | ) | (37 | ) | ||||||||||
Dividends paid on preference shares | (4 | ) | (4 | ) | (5 | ) | (4 | ) | (3 | ) | ||||||||||
Investing activities of discontinued operations | (99 | ) | (143 | ) | (201 | ) | (229 | ) | (243 | ) | ||||||||||
Free cash flow | 638 | 886 | 1,440 | 1,194 | 1,118 | |||||||||||||||
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10.4 and 10.1
CESR31
174
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2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | Total | |||||||||||||||
(Millions of US dollars) | |||||||||||||||||||||
Long-term debt(1) | 400 | 632 | 325 | 254 | 700 | 1,142 | 3,453 | ||||||||||||||
Operating lease payments | 145 | 127 | 98 | 75 | 63 | 199 | 707 | ||||||||||||||
Unconditional purchase obligations | 96 | 53 | 23 | 15 | 3 | 25 | 215 | ||||||||||||||
Total | 641 | 812 | 446 | 344 | 766 | 1,366 | 4,375 | ||||||||||||||
(1) | Represents hedged principal payments. As substantially all non-US dollar-denominated debt has been hedged into US dollars, amounts represent the net cash outflows to the company associated with principal payments on its long-term debt. |
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• | First, it determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, Thomson presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. |
• | Second, a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognise in the financial statements. The tax position is measured at the largest amount of benefit that is greater than a 50 per cent. likelihood of being realised upon ultimate settlement. If the tax position does not meet the more-likely-than-not recognition threshold, no benefit from the tax position is recorded. |
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• | an increase of US$53 million to “Other non-current assets” and “Accumulated other comprehensive income” in the consolidated balance sheet relative to derivative instruments that consisted primarily of interest rate contracts, which convert floating rate debt to fixed rate debt and qualify as cash flow hedges; |
• | a reclassification of US$5 million from “Other current assets” and US$3 million from “Other current liabilities” to “Accumulated other comprehensive income” in the consolidated balance sheet related primarily to previously deferred gains and losses on settled cash flow hedges; and |
• | an increase of US$16 million to “Other non-current assets” and “Long-term debt” in the consolidated balance sheet related to derivative instruments and their related hedged items. These derivative instruments consist primarily of interest rate contracts to convert fixed rate debt to floating and qualify as fair value hedges. |
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12.1 and 12.2
5.2.2
178
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3. | Audited consolidated financial statements for the nine months ended 30 September 2007 and as of 30 September 2007 and 31 December 2006 |
20.4.3
Nine Months Ended | ||||||||
30 September | ||||||||
2006 | ||||||||
(Unaudited) | ||||||||
(Millions of US dollars, except per common share amounts) | 2007 | (Note 10) | ||||||
Revenues | 5,278 | 4,756 | ||||||
Cost of sales, selling, marketing, general and administrative expenses | (3,848 | ) | (3,425 | ) | ||||
Depreciation (notes 11 and 12) | (348 | ) | (322 | ) | ||||
Amortisation | (189 | ) | (178 | ) | ||||
Operating profit | 893 | 831 | ||||||
Net other (expense) income (note 7) | 6 | 36 | ||||||
Net interest income (expense) and other financing costs (note 8) | (64 | ) | (168 | ) | ||||
Income taxes (note 9) | (46 | ) | (89 | ) | ||||
Earnings from continuing operations | 789 | 610 | ||||||
Earnings from discontinued operations, net of tax (note 10) | 2,781 | 119 | ||||||
Net earnings | 3,570 | 729 | ||||||
Dividends declared on preference shares (note 14) | (4 | ) | (4 | ) | ||||
Earnings attributable to common shares | 3,566 | 725 | ||||||
Earnings per common share(note 15): | ||||||||
Basic earnings per common share: | ||||||||
From continuing operations | 1.22 | 0.94 | ||||||
From discontinued operations | 4.34 | 0.18 | ||||||
Basic earnings per common share | 5.56 | 1.12 | ||||||
Diluted earnings per common share: | ||||||||
From continuing operations | 1.22 | 0.94 | ||||||
From discontinued operations | 4.31 | 0.18 | ||||||
Diluted earnings per common share | 5.53 | 1.12 | ||||||
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20.1(a)
30 September | 31 December | |||||
(Millions of US dollars) | 2007 | 2006 (note 10) | ||||
Assets | ||||||
Cash and cash equivalents | 7,455 | 334 | ||||
Accounts receivable, net of allowances | 1,327 | 1,362 | ||||
Inventories | 85 | 72 | ||||
Prepaid expenses and other current assets | 452 | 296 | ||||
Deferred income taxes (note 9) | 152 | 153 | ||||
Current assets of discontinued operations (note 10) | 92 | 1,048 | ||||
Current assets | 9,563 | 3,265 | ||||
Computer hardware and other property, net (note 11) | 643 | 625 | ||||
Computer software, net (note 12) | 694 | 647 | ||||
Identifiable intangible assets, net | 3,484 | 3,456 | ||||
Goodwill (note 13) | 6,804 | 6,543 | ||||
Other non-current assets | 1,180 | 1,082 | ||||
Non-current assets of discontinued operations (note 10) | 550 | 4,514 | ||||
Total assets | 22,918 | 20,132 | ||||
Liabilities and shareholders’ equity | ||||||
Liabilities | ||||||
Short-term indebtedness (note 19) | 3 | 333 | ||||
Accounts payable and accruals | 2,562 | 1,304 | ||||
Deferred revenue | 949 | 964 | ||||
Current portion of long-term debt (note 19) | 403 | 264 | ||||
Current liabilities of discontinued operations (note 10) | 79 | 874 | ||||
Current liabilities | 3,996 | 3,739 | ||||
Long-term debt (note 19) | 3,418 | 3,681 | ||||
Other non-current liabilities | 833 | 785 | ||||
Deferred income taxes (note 9) | 1,031 | 997 | ||||
Non-current liabilities of discontinued operations (note 10) | 56 | 449 | ||||
Total liabilities | 9,334 | 9,651 | ||||
Shareholders’ equity | ||||||
Capital (note 14) | 2,904 | 2,799 | ||||
Retained earnings | 10,163 | 7,169 | ||||
Accumulated other comprehensive income | 517 | 513 | ||||
Total shareholders’ equity | 13,584 | 10,481 | ||||
Total liabilities and shareholders’ equity | 22,918 | 20,132 | ||||
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20.1(d)
20.4.3
Nine Months Ended | ||||||||
30 September | ||||||||
2006 | ||||||||
(Unaudited) | ||||||||
(Millions of US dollars) | 2007 | (Note 10) | ||||||
Cash provided by (used in): | ||||||||
Operating activities | ||||||||
Net earnings | 3,570 | 729 | ||||||
Remove income from discontinued operations | (2,781 | ) | (119 | ) | ||||
Add back (deduct) items not involving cash: | ||||||||
Depreciation (notes 11 and 12) | 348 | 322 | ||||||
Amortisation | 189 | 178 | ||||||
Net gains on disposals of businesses and investments (note 7) | (8 | ) | (44 | ) | ||||
Deferred income taxes (note 9) | (70 | ) | (3 | ) | ||||
Other, net | 200 | 165 | ||||||
Pension contribution | (3 | ) | (9 | ) | ||||
Changes in working capital and other items (note 21) | (206 | ) | (151 | ) | ||||
Cash (used in) provided by operating activities — discontinued operations (note 10) | (82 | ) | 261 | |||||
Net cash provided by operating activities | 1,157 | 1,329 | ||||||
Investing activities | ||||||||
Acquisitions, less cash therein (note 18) | (315 | ) | (408 | ) | ||||
Proceeds from sales of discontinued operations (note 10) | 8,050 | 105 | ||||||
Proceeds from other disposals | 11 | 60 | ||||||
Capital expenditures, less proceeds from disposals | (383 | ) | (270 | ) | ||||
Other investing activities | (33 | ) | (26 | ) | ||||
Capital expenditures of discontinued operations (note 10) | (97 | ) | (130 | ) | ||||
Acquisitions by discontinued operations (note 10) | (54 | ) | (35 | ) | ||||
Other investing activities of discontinued operations (note 10) | (2 | ) | (13 | ) | ||||
Net cash provided by (used in) investing activities | 7,177 | (717 | ) | |||||
Financing activities | ||||||||
Repayments of debt | (249 | ) | (73 | ) | ||||
Net (repayments) borrowings of short-term loan facilities | (370 | ) | 299 | |||||
Purchase of sterling call options (note 19) | (76 | ) | — | |||||
Repurchase of common shares (note 14) | (75 | ) | (358 | ) | ||||
Dividends paid on preference shares | (4 | ) | (4 | ) | ||||
Dividends paid on common shares | (459 | ) | (415 | ) | ||||
Other financing activities, net | 19 | 21 | ||||||
Net cash used in financing activities | (1,214 | ) | (530 | ) | ||||
Translation adjustments | 1 | 2 | ||||||
Increase in cash and cash equivalents | 7,121 | 84 | ||||||
Cash and cash equivalents at beginning of period | 334 | 407 | ||||||
Cash and cash equivalents at end of period | 7,455 | 491 | ||||||
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Accumulated | |||||||||||||||||||||||||||
Other | Total | ||||||||||||||||||||||||||
Stated | Comprehensive | Retained | |||||||||||||||||||||||||
Share | Contributed | Total | Retained | Income | Earnings and | ||||||||||||||||||||||
(millions of US dollars) | Capital* | Surplus | Capital | Earnings | (‘‘AOCI”) | AOCI | Total | ||||||||||||||||||||
Balance, 31 December 2006 | 2,642 | 157 | 2,799 | 7,169 | 513 | 7,682 | 10,481 | ||||||||||||||||||||
Opening balance adjustment for income tax accounting change (note 5) | — | — | — | (33 | ) | — | (33 | ) | (33 | ) | |||||||||||||||||
Restated balance, 31 December 2006 | 2,642 | 157 | 2,799 | 7,136 | 513 | 7,649 | 10,448 | ||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||
Net earnings | 3,570 | — | 3,570 | 3,570 | |||||||||||||||||||||||
Unrecognised net loss on cash flow hedges | — | (35 | ) | (35 | ) | (35 | ) | ||||||||||||||||||||
Foreign currency translation adjustments | — | 166 | 166 | 166 | |||||||||||||||||||||||
Net gain reclassified to income | — | (127 | ) | (127 | ) | (127 | ) | ||||||||||||||||||||
Comprehensive income | 3,570 | 4 | 3,574 | 3,574 | |||||||||||||||||||||||
Dividends declared on preference shares | — | — | — | (4 | ) | — | (4 | ) | (4 | ) | |||||||||||||||||
Dividends declared on common shares | — | — | — | (471 | ) | — | (471 | ) | (471 | ) | |||||||||||||||||
Common shares issued under Dividend Reinvestment Plan (“DRIP”) | 12 | — | 12 | — | — | — | 12 | ||||||||||||||||||||
Repurchase of common shares (note 14) | (7 | ) | — | (7 | ) | (68 | ) | — | (68 | ) | (75 | ) | |||||||||||||||
Effect of stock compensation plans | 61 | 39 | 100 | — | — | — | 100 | ||||||||||||||||||||
Balance, 30 September 2007 | 2,708 | 196 | 2,904 | 10,163 | 517 | 10,680 | 13,584 | ||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||
Stated | Retained | ||||||||||||||||||||||||||||||||
(Unaudited) | Share | Contributed | Total | Retained | Earnings and | ||||||||||||||||||||||||||||
(Millions of US dollars) | Capital* | Surplus | Capital | Earnings | AOCI | AOCI | Total | ||||||||||||||||||||||||||
Balance, 31 December 2005 | 2,599 | 127 | 2,726 | 6,992 | 245 | 7,237 | 9,963 | ||||||||||||||||||||||||||
Opening balance adjustment for net deferred gain on cash flow hedges (note 5) | — | — | — | — | 51 | 51 | 51 | ||||||||||||||||||||||||||
Restated balance, 31 December, 2005 | 2,599 | 127 | 2,726 | 6,992 | 296 | 7,288 | 10,014 | ||||||||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||||||
Net earnings | 729 | — | 729 | 729 | |||||||||||||||||||||||||||||
Unrecognised net gain on cash flow hedges | — | 11 | 11 | 11 | |||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | 167 | 167 | 167 | |||||||||||||||||||||||||||||
Net gain reclassified to income | — | (19 | ) | (19 | ) | (19 | ) | ||||||||||||||||||||||||||
Comprehensive income | 729 | 159 | 888 | 888 | |||||||||||||||||||||||||||||
Dividends declared on preference shares | — | — | — | (4 | ) | — | (4 | ) | (4 | ) | |||||||||||||||||||||||
Dividends declared on common shares | (425 | ) | — | (425 | ) | (425 | ) | ||||||||||||||||||||||||||
Common shares issued under DRIP | 10 | — | 10 | — | — | — | 10 | ||||||||||||||||||||||||||
Repurchase of common shares (note 14) | (36 | ) | — | (36 | ) | (322 | ) | — | (322 | ) | (358 | ) | |||||||||||||||||||||
Effect of stock compensation plans | 37 | 31 | 68 | — | — | — | 68 | ||||||||||||||||||||||||||
Balance, 30 September 2006 | 2,610 | 158 | 2,768 | 6,970 | 455 | 7,425 | 10,193 | ||||||||||||||||||||||||||
* | Includes both common and preference share capital. |
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Note 1: | Basis of Presentation |
20.1(e)
Note 2: | Summary of Significant Accounting Policies |
• | persuasive evidence of an arrangement exists; |
• | delivery has occurred; |
• | the fee is fixed or determinable; and |
• | collectibility is probable. |
184
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185
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Computer hardware | 3- 5 years | ||
Buildings and building improvements | 5-40 years | ||
Furniture, fixtures and equipment | 3-10 years |
186
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Tradenames | 2-30 years | ||
Customer relationships | 1-40 years | ||
Databases and content | 2-25 years | ||
Publishing rights | 30 years | ||
Other | 2-29 years |
• | In the first step, the fair value of each reporting unit is determined. If the fair value of a reporting unit is less than its carrying value, this is an indicator that the goodwill assigned to that reporting unit might be impaired, which requires performance of the second step. |
• | In the second step, the fair value of the reporting unit is allocated to the assets and liabilities of the reporting unit as if it had just been acquired in a business combination, and as if the purchase price was equivalent to the fair value of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is referred to as the implied fair value of goodwill. The implied fair value of the reporting unit’s goodwill is then compared to the actual carrying value of goodwill. If the implied fair value is less than the carrying value, an impairment loss is recognised for that excess. |
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• | cross-currency swap agreements to hedge foreign currency exposures on non-US dollar denominated debt; |
• | foreign currency contracts to hedge forecasted cash flows denominated in currencies other than the functional currency of a particular Thomson subsidiary; and |
• | interest rate swap agreements to manage the fixed versus floating interest rate mix of debt. Such contracts require periodic exchange of payments without the exchange of the notional principal amount upon which the payments are based. |
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Note 3: | Seasonality |
Note 4: | Proposed Transaction with Reuters Group PLC |
5.2.2
189
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Note 5: | Changes in Accounting Policies |
• | First, the Company determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. |
• | Second, a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognise in the financial statements. The tax position is measured at the largest amount of benefit that is greater than a 50 per cent. likelihood of being realised upon ultimate settlement. If the tax position does not meet the more-likely-than-not recognition threshold, no benefit from the tax position is recorded. |
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• | An increase of $53 million to “Other non-current assets” and “Accumulated other comprehensive income” in the consolidated balance sheet relative to derivative instruments that consisted primarily of interest rate contracts, which convert floating rate debt to fixed rate debt and qualify as cash flow hedges; |
• | A reclassification of $5 million from “Other current assets” and $3 million from “Other current liabilities” to “Accumulated other comprehensive income” in the consolidated balance sheet related primarily to previously deferred gains and losses on settled cash flow hedges; |
• | An increase of $16 million to “Other non-current assets” and “Long-term debt” in the consolidated balance sheet related to derivative instruments and their related hedged items. These derivative instruments consist primarily of interest rate contracts to convert fixed rate debt to floating and qualify as fair value hedges; and |
• | A presentational reclassification of amounts previously recorded in “Cumulative translation adjustment” to “Accumulated other comprehensive income”. |
Note 6: | THOMSONplus Program |
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Note 7: | Net Other (Expense) Income |
Nine Months Ended | ||||||||
30 September | ||||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
Net gains on disposals of businesses and investments | 8 | 44 | ||||||
Equity in net earnings of associates | 4 | 1 | ||||||
Other expense | (6 | ) | (9 | ) | ||||
Net other income | 6 | 36 | ||||||
Note 8: | Net Interest Expense and Other Financing Costs |
Nine Months Ended | ||||||||
30 September | ||||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
Interest income | 113 | 17 | ||||||
Interest expense on short-term indebtedness | (18 | ) | (19 | ) | ||||
Interest expense on long-term debt | (159 | ) | (166 | ) | ||||
(64 | ) | (168 | ) | |||||
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Note 9: | Income Taxes |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
Canada | (140 | ) | (167 | ) | ||||
US and other jurisdictions | 975 | 866 | ||||||
Total earnings before taxes(1) | 835 | 699 | ||||||
(1) | Represents earnings from continuing operations before income taxes. |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
Canada: | ||||||||
Current | 1 | 1 | ||||||
Deferred | (47 | ) | (15 | ) | ||||
Total Canadian | (46 | ) | (14 | ) | ||||
US and other jurisdictions: | ||||||||
Current | 115 | 91 | ||||||
Deferred | (23 | ) | 12 | |||||
Total US and other jurisdictions | 92 | 103 | ||||||
Total worldwide | 46 | 89 | ||||||
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As at | ||||
31 December 2006 | ||||
Accrued expenses | 181 | |||
Deferred compensation and stock options | 124 | |||
Accounts receivable allowances | 32 | |||
Tax loss and credit carryforwards | 862 | |||
Other | 147 | |||
Total deferred tax asset as of 31 December, 2006 | 1,346 | |||
Valuation allowance | (441 | ) | ||
Net deferred tax asset as of 31 December, 2006 | 905 | |||
Intangible assets | (1,279 | ) | ||
Other long-lived assets1 | (37 | ) | ||
Financial instruments | (273 | ) | ||
Pension | (144 | ) | ||
Other | (16 | ) | ||
Total deferred tax liability as of 31 December, 2006 | (1,749 | ) | ||
Net deferred tax liability as of 31 December, 2006 | (844 | ) | ||
Estimated deferred tax income for the nine months ended 30 September 2007 | (70 | ) | ||
Other activity | 35 | |||
Net deferred tax liability as of 30 September 2007 | (879 | ) | ||
(1) | Other long-lived assets include Computer hardware and other property and Computer software for internal use. |
Twelve Months Ended | ||||
31 December, 2006 | ||||
Balance at beginning of period | 412 | |||
Additional Canadian and other net operating losses with no benefit | 68 | |||
Releases of valuation allowances to income | (26 | ) | ||
Reduction due to change in deferred tax liability related to debt instruments1 | (26 | ) | ||
Exchange and other items | 13 | |||
Balance at end of period | 441 | |||
1 | Canadian losses are first offset by deferred tax liabilities before computing the required valuation allowance. The deferred tax liability increased in 2006 from the revaluation of debt and currency swaps. As the deferred tax liability increased, the requirement for the valuation allowance decreased by the same amount. |
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Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
Earnings before taxes | 835 | 699 | ||||||
Income taxes at the Canadian corporate tax rate of 35.4 per cent.(2006-36.0 per cent.) | 296 | 252 | ||||||
Differences attributable to: | ||||||||
Effect of income taxes recorded at rates different from the Canadian tax rate | (230 | ) | (212 | ) | ||||
Impact of Canadian losses with no benefit | — | 45 | ||||||
Net change to contingent tax liabilities | 5 | 3 | ||||||
Impact of tax law changes | (16 | ) | (1 | ) | ||||
Other, net | (9 | ) | 2 | |||||
Income tax provision on continuing operations | 46 | 89 | ||||||
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Nine Months Ended | ||||
30 September 2007 | ||||
Balance at 1 January 2007 | 205 | |||
Additions based upon tax provision related to current year | 7 | |||
Additions for tax positions of prior years | — | |||
Reductions for tax positions of prior years | (9 | ) | ||
Settlements | (11 | ) | ||
Balance at 30 September 2007 | 192 | |||
Jurisdiction | Tax Years | ||
Canada — Federal and Ontario Province | 1997 to 2006 | ||
United States — Federal | 2003 to 2006 | ||
United Kingdom | 2005 and 2006 |
Note 10: | Discontinued Operations |
• | In July 2007, the Company completed its sale of Thomson Learning’s higher education, careers and library reference assets and Nelson Canada to a consortium of funds advised by Apax Partners and OMERS Capital Partners for approximately $7.6 billion. The Company recorded a post-tax gain on the sale of $2.7 billion. |
• | In May 2007, the Company completed the sale of NETg, a leading provider of continuing corporate education and training, to SkillSoft PLC for approximately $270 million and recorded a post-tax loss of $14 million. |
• | In October 2007, the Company completed the sale of Prometric to ETS for $310 million in cash and a 6 per cent. promissory note for $125 million due in 2014. The principal amount of the note is subject to adjustment based on continuity of offerings from certain customer contracts. |
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30 September 2007 | ||||||||||||
Legal | Learning | Healthcare | Total | |||||||||
Current assets: | ||||||||||||
Accounts receivable, net of allowances | 2 | 73 | 3 | 78 | ||||||||
Inventory | — | — | 1 | 1 | ||||||||
Other current assets | 1 | 12 | — | 13 | ||||||||
Total current assets | 3 | 85 | 4 | 92 | ||||||||
Non-current assets: | ||||||||||||
Computer hardware and other property | — | 42 | 1 | 43 | ||||||||
Computer software | — | 44 | — | 44 | ||||||||
Identifiable intangible assets | 1 | 74 | 3 | 78 | ||||||||
Goodwill | 3 | 359 | 7 | 369 | ||||||||
Other non-current assets | — | 16 | — | 16 | ||||||||
Total non-current assets | 4 | 535 | 11 | 550 | ||||||||
Current liabilities: | ||||||||||||
Accounts payable and accruals | 2 | 57 | 3 | 62 | ||||||||
Deferred revenue | 5 | 11 | 1 | 17 | ||||||||
Total current liabilities | 7 | 68 | 4 | 79 | ||||||||
Non-current liabilities: | ||||||||||||
Other non-current liabilities | — | 56 | — | 56 | ||||||||
Total non-current liabilities | — | 56 | — | 56 | ||||||||
31 December 2006 | ||||||||||||
Legal | Learning | Healthcare | Total | |||||||||
Current assets: | ||||||||||||
Accounts receivable, net of allowances | 15 | 538 | 36 | 589 | ||||||||
Inventory | 1 | 252 | 1 | 254 | ||||||||
Other current assets | 4 | 70 | 5 | 79 | ||||||||
Deferred income taxes | — | 124 | 2 | 126 | ||||||||
Total current assets | 20 | 984 | 44 | 1,048 | ||||||||
Non-current assets: | ||||||||||||
Computer hardware and other property | 7 | 157 | 8 | 172 | ||||||||
Computer software | 5 | 145 | 1 | 151 | ||||||||
Identifiable intangible assets | 29 | 838 | 18 | 885 | ||||||||
Goodwill | 8 | 3,003 | 24 | 3,035 | ||||||||
Other non-current assets | 1 | 270 | — | 271 | ||||||||
Total non-current assets | 50 | 4,413 | 51 | 4,514 | ||||||||
Current liabilities: | ||||||||||||
Accounts payable and accruals | 15 | 499 | 25 | 539 | ||||||||
Deferred revenue | 38 | 260 | 20 | 318 | ||||||||
Other current liabilities | 16 | 1 | — | 17 | ||||||||
Total current liabilities | 69 | 760 | 45 | 874 | ||||||||
Non-current liabilities: | ||||||||||||
Other non-current liabilities | 4 | 38 | 2 | 44 | ||||||||
Deferred income taxes | 12 | 385 | 8 | 405 | ||||||||
Total non-current liabilities | 16 | 423 | 10 | 449 | ||||||||
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Nine Months Ended 30 September 2007 | |||||||||||||||||||
Legal | Learning | Healthcare | Other | Total | |||||||||||||||
Revenues from discontinued operations | 46 | 942 | 38 | — | 1,026 | ||||||||||||||
(Loss) earnings from discontinued operations before income taxes | (18 | ) | 24 | (4 | ) | — | 2 | ||||||||||||
(Loss) gain on sale of discontinued operations | (23 | ) | 3,757 | 137 | — | 3,871 | |||||||||||||
Income taxes | 23 | (1,118 | ) | (8 | ) | 11 | (1,092 | ) | |||||||||||
(Loss) earnings from discontinued operations | (18 | ) | 2,663 | 125 | 11 | 2,781 | |||||||||||||
20.4.3
Nine Months Ended 30 September 2006 | ||||||||||||||||||||
(Unaudited) | Legal | Learning | Healthcare | Other | Total | |||||||||||||||
Revenues from discontinued operations | 87 | 1,721 | 98 | — | 1,906 | |||||||||||||||
(Loss) earnings from discontinued operations before income taxes | (15 | ) | 113 | 16 | — | 114 | ||||||||||||||
Gain (loss) on sale of discontinued operations | 5 | 4 | 40 | (1 | ) | 48 | ||||||||||||||
Income taxes | 8 | (35 | ) | (22 | ) | 6 | (43 | ) | ||||||||||||
(Loss) earnings from discontinued operations | (2 | ) | 82 | 34 | 5 | 119 | ||||||||||||||
Note 11: | Computer Hardware and Other Property |
Net | ||||||||||
Computer | ||||||||||
Hardware | ||||||||||
Accumulated | and Other | |||||||||
As at 30 September 2007 | Cost | Depreciation | Property | |||||||
Computer hardware | 962 | (690 | ) | 272 | ||||||
Land, buildings and building improvements | 498 | (229 | ) | 269 | ||||||
Furniture, fixtures and equipment | 309 | (207 | ) | 102 | ||||||
1,769 | (1,126 | ) | 643 | |||||||
Net | ||||||||||
Computer | ||||||||||
Hardware | ||||||||||
Accumulated | and Other | |||||||||
As at 31 December 2006 | Cost | Depreciation | Property | |||||||
Computer hardware | 958 | (678 | ) | 280 | ||||||
Land, buildings and building improvements | 463 | (206 | ) | 257 | ||||||
Furniture, fixtures and equipment | 297 | (209 | ) | 88 | ||||||
1,718 | (1,093 | ) | 625 | |||||||
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Note 12: | Computer Software |
Net | ||||||||||
Accumulated | Computer | |||||||||
As at 30 September 2007 | Cost | Amortisation | Software | |||||||
Capitalised software for internal use | 1,968 | (1,363 | ) | 605 | ||||||
Capitalised software to be marketed | 244 | (155 | ) | 89 | ||||||
2,212 | (1,518 | ) | 694 | |||||||
Net | ||||||||||
Accumulated | Computer | |||||||||
As at 31 December 2006 | Cost | Amortisation | Software | |||||||
Capitalised software for internal use | 1,791 | (1,228 | ) | 563 | ||||||
Capitalised software to be marketed | 212 | (128 | ) | 84 | ||||||
2,003 | (1,356 | ) | 647 | |||||||
Note 13: | Goodwill |
Tax and | ||||||||||||||||||||||
Legal | Financial | Accounting | Scientific | Healthcare | Total | |||||||||||||||||
Balance at 31 December, 2005 | 2,815 | 1,876 | 518 | 638 | 91 | 5,938 | ||||||||||||||||
Acquisitions | 64 | 149 | 18 | 13 | 284 | 528 | ||||||||||||||||
Adjusted purchase price allocations | 1 | (1 | ) | — | (6 | ) | (7 | ) | (13 | ) | ||||||||||||
Translation and other, net | 57 | 34 | — | 10 | (11 | ) | 90 | |||||||||||||||
Balance at 31 December, 2006 | 2,937 | 2,058 | 536 | 655 | 357 | 6,543 | ||||||||||||||||
Acquisitions | 27 | 10 | 47 | 29 | 6 | 119 | ||||||||||||||||
Adjusted purchase price allocations | 16 | — | — | — | 16 | 32 | ||||||||||||||||
Translation and other, net | 20 | 77 | — | 13 | — | 110 | ||||||||||||||||
Balance at 30 September 2007 | 3,000 | 2,145 | 583 | 697 | 379 | 6,804 | ||||||||||||||||
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Note 14: | Capital |
Series II, | ||||||||||||||||||
Cumulative | ||||||||||||||||||
Common Share Capital | Redeemable | |||||||||||||||||
Number of | Stated | Preference | Contributed | Total | ||||||||||||||
Shares | Capital | Share Capital | Surplus | Capital | ||||||||||||||
Balance, 31 December, 2005 | 648,948,992 | 2,489 | 110 | 127 | 2,726 | |||||||||||||
Common shares issued under Dividend Reinvestment Plan (“DRIP”) | 347,840 | 14 | — | — | 14 | |||||||||||||
Effect of stock compensation plans | 1,820,781 | 70 | — | 30 | 100 | |||||||||||||
Repurchase of common shares | (10,680,600 | ) | (41 | ) | — | — | (41 | ) | ||||||||||
Balance, 31 December, 2006 | 640,437,013 | 2,532 | 110 | 157 | 2,799 | |||||||||||||
Common shares issued under DRIP | 278,978 | 12 | — | — | 12 | |||||||||||||
Effect of stock compensation plans | 1,661,552 | 61 | — | 39 | 100 | |||||||||||||
Repurchase of common shares | (1,800,000 | ) | (7 | ) | — | — | (7 | ) | ||||||||||
Balance, 30 September, 2007 | 640,577,543 | 2,598 | 110 | 196 | 2,904 | |||||||||||||
20.7.1
Number of Shares | |||||||||
Shares | Average Price per | Available for | |||||||
Three-Month Period Ended | Repurchased | Share | Repurchase | ||||||
31 March 2006 | 4,570,000 | $ | 36.83 | ||||||
30 June 2006 | 3,110,000 | $ | 39.58 | ||||||
30 September 2006 | 1,710,600 | $ | 39.27 | ||||||
31 December, 2006 | 1,289,400 | $ | 41.41 | ||||||
31 March 2007 | 1,305,000 | $ | 41.74 | ||||||
30 June 2007 | 495,000 | $ | 42.68 | ||||||
30 September 2007 | — | — | 15,000,000 |
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Note 15: | Earnings per Common Share |
20.4.3
Nine Months Ended | ||||||||
30 September | ||||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
Earnings from continuing operations | 789 | 610 | ||||||
Dividends declared on preference shares | (4 | ) | (4 | ) | ||||
Earnings from continuing operations attributable to common shares | 785 | 606 |
Nine Months Ended | ||||||
30 September | ||||||
2007 | 2006 | |||||
(Unaudited) | ||||||
Weighted-average number of common shares outstanding | 640,248,541 | 644,349,186 | ||||
Vested DSUs | 829,582 | 651,383 | ||||
Basic | 641,078,123 | 645,000,569 | ||||
Effect of stock and other incentive plans | 3,211,346 | 1,734,142 | ||||
Diluted | 644,289,469 | 646,734,711 |
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Note 16: | Employee Benefit Plans |
20.4.3
Nine Months Ended 30 September | ||||||||||||||
Pensions | Other Post-Retirement Plans | |||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||
(Unaudited) | (Unaudited) | |||||||||||||
Current service cost | 56 | 47 | 3 | 2 | ||||||||||
Interest cost | 111 | 104 | 9 | 7 | ||||||||||
Expected return on plan assets | (120 | ) | (116 | ) | — | — | ||||||||
Amortisation of net actuarial losses | 33 | 40 | 3 | 3 | ||||||||||
Amortisation of prior service cost | — | 1 | — | — | ||||||||||
Net defined benefit plan expense | 80 | 76 | 15 | 12 | ||||||||||
Note 17: | Commitments and Contingencies |
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Note 18: | Acquisitions |
20.4.3
Nine Months Ended | ||||||
30 September | ||||||
Number of transactions | 2007 | 2006 | ||||
(Unaudited) | ||||||
Businesses and identifiable intangible assets acquired | 26 | 20 | ||||
Investments in businesses | — | 1 |
Nine Months Ended | ||||||
30 September | ||||||
Cash consideration | 2007 | 2006 | ||||
(Unaudited) | ||||||
Businesses and identifiable intangible assets acquired | 265 | 356 | ||||
Contingent consideration payment — TradeWeb LLC | 50 | 50 | ||||
Investments in businesses | — | 2 | ||||
Total acquisitions | 315 | 408 | ||||
Nine Months Ended | ||||||
30 September | ||||||
2007 | 2006 | |||||
(Unaudited) | ||||||
Goodwill | 118 | 216 | ||||
Identifiable intangible assets with finite lives | 182 | 145 |
Note 19: | Financial Instruments |
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10.1
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3.2
Carrying Amount | Fair Value | ||||||||||||||
Primary Debt | Derivative | Primary Debt | Derivative | ||||||||||||
As at 30 September 2007 | Instruments | Instruments | Instruments | Instruments | |||||||||||
Bank and other | 5 | — | 5 | — | |||||||||||
4.35 per cent. Notes, due 2009 | 298 | (54 | ) | 295 | (54 | ) | |||||||||
4.50 per cent. Notes, due 2009 | 247 | (63 | ) | 247 | (63 | ) | |||||||||
5.20 per cent. Notes, due 2014 | 599 | (121 | ) | 589 | (121 | ) | |||||||||
6.85 per cent. Medium-term notes, due 2011 | 397 | (153 | ) | 419 | (153 | ) | |||||||||
5.75 per cent. Notes, due 2008 | 400 | — | 401 | — | |||||||||||
4.25 per cent. Notes, due 2009 | 200 | — | 196 | — | |||||||||||
4.75 per cent. Notes, due 2010 | 250 | — | 246 | — | |||||||||||
6.20 per cent. Notes, due 2012 | 700 | — | 718 | — | |||||||||||
5.25 per cent. Notes, due 2013 | 250 | — | 244 | — | |||||||||||
5.50 per cent. Debentures, due 2035 | 400 | — | 349 | — | |||||||||||
7.74 per cent. Private placement, due 2010 | 75 | — | 79 | — | |||||||||||
3,821 | (391 | ) | 3,788 | (391 | ) | ||||||||||
Current portion | (403 | ) | — | ||||||||||||
3,418 | (391 | ) | |||||||||||||
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Carrying Amount | Fair Value | ||||||||||||||
Primary Debt | Derivative | Primary Debt | Derivative | ||||||||||||
As at 31 December, 2006 | Instruments | Instruments | Instruments | Instruments | |||||||||||
Bank and other | 111 | — | 109 | — | |||||||||||
6.50 per cent. Debentures, due 2007 | 217 | (38 | ) | 217 | (38 | ) | |||||||||
4.35 per cent. Notes, due 2009 | 258 | (21 | ) | 258 | (21 | ) | |||||||||
4.50 per cent. Notes, due 2009 | 217 | (33 | ) | 217 | (33 | ) | |||||||||
5.20 per cent. Notes, due 2014 | 522 | (58 | ) | 536 | (58 | ) | |||||||||
6.85 per cent. Medium-term notes, due 2011 | 345 | (108 | ) | 378 | (108 | ) | |||||||||
5.75 per cent. Notes, due 2008 | 400 | — | 401 | — | |||||||||||
4.25 per cent. Notes, due 2009 | 200 | — | 195 | — | |||||||||||
4.75 per cent. Notes, due 2010 | 250 | — | 245 | — | |||||||||||
6.20 per cent. Notes, due 2012 | 700 | — | 723 | — | |||||||||||
5.25 per cent. Notes, due 2013 | 250 | — | 246 | — | |||||||||||
5.50 per cent. Debentures, due 2035 | 400 | — | 363 | — | |||||||||||
Private placements, due2006-2010 | 75 | — | 81 | — | |||||||||||
3,945 | (258 | ) | 3,969 | (258 | ) | ||||||||||
Current portion | (264 | ) | 38 | ||||||||||||
3,681 | (220 | ) | |||||||||||||
Before Currency Hedging | After Currency Hedging | |||||||||||
Arrangements | Arrangements(1) | |||||||||||
9/30/07 | 12/31/06 | 9/30/07 | 12/31/06 | |||||||||
Canadian dollar | 1,542 | 1,559 | — | — | ||||||||
US dollar | 2,276 | 2,348 | 3,453 | 3,703 | ||||||||
Other currencies | 3 | 38 | 3 | 38 | ||||||||
3,821 | 3,945 | 3,456 | 3,741 | |||||||||
(1) | Represents net cash outflow upon maturity and, therefore, excludes fair value adjustments of $26 million and $54 million at 30 September 2007 and 31 December 2006, respectively. |
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2007 | 2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | Total | |||||||||||||||||
Before currency hedging arrangements | 3 | 400 | 747 | 325 | 397 | 700 | 1,249 | 3,821 | ||||||||||||||||
After currency hedging arrangements(1) | 3 | 400 | 632 | 325 | 254 | 700 | 1,142 | 3,456 |
(1) | Represents net cash outflow upon maturity and, therefore, excludes fair value adjustments of $26 million and $54 million at 30 September 2007 and 31 December 2006, respectively. |
Average | Per cent. | Average | Per cent. | |||||||||||||||
2007 | Interest Rate | Share | 2006 | Interest Rate | Share | |||||||||||||
Total fixed | 3,147 | 5.5 per cent. | 91 | 3,218 | 5.4 per cent. | 86 | ||||||||||||
Total floating | 309 | 5.5 per cent. | 9 | 523 | 5.6 per cent. | 14 | ||||||||||||
3,456 | 5.5 per cent. | 100 | 3,741 | 5.4 per cent. | 100 | |||||||||||||
Note 20: | Stock-based Compensation |
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Nine Months Ended 30 September 2007 | Twelve Months Ended 31 December 2006 | |||||||||||||
C$ | C$ | |||||||||||||
Weighted- | Weighted- | |||||||||||||
Average | Average | |||||||||||||
SARs | Exercise Price | SARs | Exercise Price | |||||||||||
Outstanding at beginning of period | 1,531,558 | 40.84 | 2,209,503 | 38.66 | ||||||||||
Granted | — | — | — | — | ||||||||||
Exercised | (326,307 | ) | 38.21 | (527,000 | ) | 33.01 | ||||||||
Forfeited | (182,588 | ) | 42.72 | (150,945 | ) | 36.26 | ||||||||
Outstanding at end of period | 1,022,663 | 41.34 | 1,531,558 | 40.84 | ||||||||||
Exercisable at end of period | 782,111 | 41.30 | 1,197,941 | 40.65 | ||||||||||
SARs outstanding | SARs exercisable | ||||||||||||||
C$ Weighted- | C$ | ||||||||||||||
Average | Weighted- | ||||||||||||||
Number | Remaining | Weighted- | Number | Average | |||||||||||
C$ range of | Outstanding at | Contractual | Average | Exercisable at | Exercise | ||||||||||
Exercise Prices | 9/30/07 | Life | Exercise Price | 9/30/07 | Price | ||||||||||
36.00 — 41.00 | 603,333 | 4.15 | 38.36 | 463,731 | 37.63 | ||||||||||
41.74 — 48.40 | 365,010 | 6.32 | 43.87 | 264,060 | 44.42 | ||||||||||
57.40 — 57.45 | 54,320 | 3.23 | 57.40 | 54,320 | 57.40 |
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Nine Months Ended 30 September 2007 | Twelve Months Ended 31 December 2006 | |||||||||||||
C$ Weighted- | C$ Weighted- | |||||||||||||
Average | Average | |||||||||||||
Exercise | Exercise | |||||||||||||
Options | Price | Options | Price | |||||||||||
Outstanding at beginning of period | 5,099,392 | 49.79 | 5,451,664 | 49.67 | ||||||||||
Granted | — | — | — | — | ||||||||||
Exercised | (93,400 | ) | 45.02 | (157,800 | ) | 42.69 | ||||||||
Forfeited | (256,340 | ) | 52.56 | (194,472 | ) | 52.16 | ||||||||
Outstanding at end of period | 4,749,652 | 49.74 | 5,099,392 | 49.79 | ||||||||||
Exercisable at end of period | 4,734,777 | 49.76 | 5,067,267 | 49.85 | ||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||
Weighted- | |||||||||||||||
Average | C$ Weighted- | C$ Weighted- | |||||||||||||
Number | Remaining | Average | Number | Average | |||||||||||
C$ Range of | Outstanding at | Contractual | Exercise | Exercisable at | Exercise | ||||||||||
Exercise Prices | 9/30/07 | Life | Price | 9/30/07 | Price | ||||||||||
40.69 — 44.40 | 1,075,000 | 2.75 | 41.06 | 1,060,125 | 41.05 | ||||||||||
45.90 — 48.70 | 1,975,472 | 4.20 | 48.36 | 1,975,472 | 48.36 | ||||||||||
50.25 — 57.45 | 1,699,180 | 3.20 | 56.84 | 1,699,180 | 56.84 |
Nine Months Ended | ||||||||||||||
30 September 2007 | Twelve Months Ended 31 December 2006 | |||||||||||||
US$ | US$ Weighted- | |||||||||||||
Weighted-Average | Average | |||||||||||||
Options | Exercise Price | Options | Exercise Price | |||||||||||
Outstanding at beginning of period | 9,627,964 | 32.98 | 10,469,989 | 32.62 | ||||||||||
Granted | 1,827,510 | 42.95 | 380,000 | 38.27 | ||||||||||
Exercised | (1,020,877 | ) | 32.22 | (742,400 | ) | 30.83 | ||||||||
Forfeited | (429,597 | ) | 34.77 | (479,625 | ) | 32.66 | ||||||||
Outstanding at end of period | 10,005,000 | 34.80 | 9,627,964 | 32.98 | ||||||||||
Exercisable at end of period | 4,753,651 | 31.76 | 5,094,436 | 31.39 | ||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||
US$ | |||||||||||||||||
Weighted- | Weighted- | US$ | |||||||||||||||
Number | Average | Average | Number | Weighted- | |||||||||||||
US$ Range of | Outstanding at | Remaining | Exercise | Exercisable at | Average | ||||||||||||
Exercise Prices | 9/30/07 | Contractual Life | Price | 9/30/07 | Exercise Price | ||||||||||||
26.06 - 29.70 | 1,332,492 | 5.20 | 26.08 | 1,332,492 | 26.08 | ||||||||||||
30.79 - 33.76 | 4,035,630 | 6.73 | 33.54 | 2,542,195 | 33.47 | ||||||||||||
33.87 - 42.96 | 4,636,878 | 8.67 | 35.54 | 878,964 | 35.43 |
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Nine Months Ended 30 | Twelve Months Ended | |||||
September 2007 | 31 December 2006 | |||||
Risk-free interest rate | 4.7 per cent | 4.6 per cent | ||||
Dividend yield | 2.3 per cent | 2.3 per cent | ||||
Volatility factor | 17.1 per cent | 18.5 per cent | ||||
Expected life (in years) | 6 | 6 |
Nine Months Ended 30 September 2007 | Twelve Months Ended 31 December 2006 | |||||||||||||
US$ | US$ | |||||||||||||
Weighted- | Weighted- | |||||||||||||
Average | Average | |||||||||||||
RSUs | Value | RSUs | Value | |||||||||||
Outstanding at beginning of period | 407,925 | 35.89 | 223,715 | 33.86 | ||||||||||
Granted | 145,637 | 42.84 | 192,098 | 38.20 | ||||||||||
Cancellations | (10,402 | ) | 32.58 | — | — | |||||||||
Vested | (26,220 | ) | 34.10 | (7,888 | ) | 34.79 | ||||||||
Outstanding at end of period | 516,940 | 38.00 | 407,925 | 35.89 | ||||||||||
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Nine Months Ended 30 September 2007 | Twelve Months Ended 31 December 2006 | ||||||||||||
US$ | US$ | ||||||||||||
Weighted- | Weighted- | ||||||||||||
Average | Average | ||||||||||||
PRSUs | Value | PRSUs | Value | ||||||||||
Outstanding at beginning of period | 705,109 | 38.88 | — | — | |||||||||
Granted | 750,347 | 42.93 | 705,109 | 38.88 | |||||||||
Cancellations | (163,789 | ) | 39.19 | — | — | ||||||||
Vested | — | — | — | — | |||||||||
Outstanding at end of period | 1,291,667 | 41.13 | 705,109 | 38.88 | |||||||||
10.2
Note 21: | Supplemental Cash Flow Information |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
Accounts receivable | 76 | 82 | ||||||
Inventories | (10 | ) | (10 | ) | ||||
Prepaid expenses and other current assets | (58 | ) | 21 | |||||
Accounts payable and accruals | (138 | ) | (139 | ) | ||||
Deferred revenue | (57 | ) | (67 | ) | ||||
Income taxes | 25 | (29 | ) | |||||
PR Annex I, 20.4.3 | ||||||||
Other | (44 | ) | (9 | ) | ||||
(206 | ) | (151 | ) | |||||
Note 22: | Related Party Transactions |
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Note 23: | Segment Information |
213
Table of Contents
Nine Months Ended | Nine Months Ended | |||||||||||||||
30 September 2007 | 30 September 2006 | |||||||||||||||
Segment | Segment | |||||||||||||||
Operating | Operating | |||||||||||||||
Revenues | Profit | Revenues | Profit | |||||||||||||
(Unaudited) | ||||||||||||||||
PR Annex I, 20.4.3 | ||||||||||||||||
Legal | 2,458 | 778 | 2,228 | 693 | ||||||||||||
Financial | 1,611 | 319 | 1,497 | 269 | ||||||||||||
Tax & Accounting | 457 | 95 | 387 | 73 | ||||||||||||
Scientific | 471 | 120 | 440 | 105 | ||||||||||||
Healthcare | 294 | 28 | 216 | 20 | ||||||||||||
Segment totals | 5,291 | 1,340 | 4,768 | 1,160 | ||||||||||||
Corporate and other1 | — | (258 | ) | — | (151 | ) | ||||||||||
Eliminations | (13 | ) | — | (12 | ) | — | ||||||||||
Total | 5,278 | 1,082 | 4,756 | 1,009 | ||||||||||||
(1) | Corporate and other includes corporate costs, certain costs associated with the Company’s stock compensation plans, THOMSONplus and Reuters Transaction costs. |
20.4.3
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
Segment operating profit | 1,082 | 1,009 | ||||||
Less: Amortisation | (189 | ) | (178 | ) | ||||
Operating profit | 893 | 831 | ||||||
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Note 24: | Reconciliation of Canadian to US GAAP |
Nine Months | ||||||||
Ended 30 September | ||||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
PR Annex I, 20.4.3 | ||||||||
Net earnings under Canadian GAAP | 3,570 | 729 | ||||||
Differences in GAAP increasing (decreasing) reported earnings: | ||||||||
Business combinations | 77 | 14 | ||||||
Derivative instruments and hedging activities | (8 | ) | 3 | |||||
Income taxes | (60 | ) | (23 | ) | ||||
Net income under US GAAP | 3,579 | 723 | ||||||
Earnings under US GAAP from continuing operations | 752 | 594 | ||||||
Earnings under US GAAP from discontinued operations | 2,827 | 129 | ||||||
Net income under US GAAP | 3,579 | 723 | ||||||
Basic earnings per common share, under US GAAP, from: | ||||||||
Continuing operations | $ | 1.17 | $ | 0.91 | ||||
Discontinued operations, net of tax | $ | 4.41 | $ | 0.20 | ||||
Basic earnings per common share | $ | 5.58 | $ | 1.11 | ||||
Diluted earnings per common share, under US GAAP, from: | ||||||||
Continuing operations | $ | 1.16 | $ | 0.91 | ||||
Discontinued operations, net of tax | $ | 4.39 | 0.20 | |||||
Diluted earnings per common share | $ | 5.55 | $ | 1.11 | ||||
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Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
PR Annex I, 20.4.3 | ||||||||
Additional provision due to different accounting principles described above | (35 | ) | (18 | ) | ||||
Tax effect of US GAAP pre-tax reconciling items | (25 | ) | (5 | ) | ||||
Total income taxes per reconciliation | (60 | ) | (23 | ) | ||||
Note 25: | Subsequent Events |
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4. | Independent auditors’ report on Thomson interim results for the nine months ended 30 September 2007 |
The Thomson Corporation
Metro Center
One Station Place
Stamford, Connecticut 06902
United States
Thomson Reuters PLC
The Quadrangle
180 Wardour Street
London W1A 4YG
United Kingdom
Citigroup Centre
33 Canada Square
Canary Wharf
London E14 5LB
United Kingdom
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5. | Audited consolidated financial statements for the three years ended 31 December 2006 |
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(1) | changes in its reportable segments that occurred effective 1 January 2007 and: |
(2) | changes in the classification of certain businesses and operations that have been, or are to be, sold and classified as discontinued operations. |
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• | In April 2007, the Company approved plans to sell Fakta, its regulatory information business in Sweden. This business was managed within Thomson Legal. |
• | In March 2007, the Company approved plans within Thomson Healthcare to sell PLM, a provider of drug and therapeutic information in Latin America; the New England Institutional Review Board, an ethical review board that monitors clinical research involving human subjects; and CenterWatch, a provider of clinical research information. |
• | In October 2006, the Company announced its intention to sell Thomson Learning through three independent processes, each on its own schedule, as follows: |
• | In May 2007, the Company agreed to sell Thomson Learning’s higher education, careers and library reference businesses. The sale was completed in July 2007. | |
• | In May 2007, the Company completed the sale of NETg, a leading provider of continuing corporate education and training. | |
• | In June 2007, the Company agreed to sell Prometric, a global leader in assessment services. The sale was completed in October 2007. |
• | In the fourth quarter of 2006 the Company approved plans within Thomson Legal to sell its business information and news operations, which include the Company’s Market Research and NewsEdge businesses. The Company completed the sale of its Market Research business in May 2007 and its NewsEdge business in July 2007. |
• | In June 2006, the Company’s board of directors approved plans to sell IOB, a Brazilian regulatory business within Thomson Legal, and Thomson Medical Education, a provider of sponsored medical education within Thomson Healthcare. The Company completed the sale of Thomson Medical Education in April 2007 and IOB in June 2007. |
• | In the first quarter of 2006, the Company approved plans within Thomson Legal to sell Lawpoint Pty Limited, an Australian provider of print and online regulatory information services; and Law Manager, Inc., a software and services provider. The Company completed the sale of Law Manager in April 2006 and Lawpoint in June 2006. |
• | In the first quarter of 2006, the Company approved plans within Thomson Learning to sell Peterson’s, a college preparatory guide; the North American operations of Thomson Education Direct, a consumer-based distance learning career school; and K.G. Saur, a German publisher of biographical and bibliographical reference titles serving the library and academic communities. The Company completed the sale of Peterson’s in July 2006 and K.G. Saur in August 2006. The Company completed the sale of its North American operations of Thomson Education Direct in March 2007. |
• | In December 2005, the Company’s board of directors approved a plan to dispose of American Health Consultants, a medical newsletter publisher and medical education provider within Thomson Healthcare. The Company completed the sale in the third quarter of 2006. |
• | In November 2004, the Company sold the Thomson Media group, a provider of largely print-based information products focused on the banking, financial services and related technology markets. |
• | In the second quarter of 2004, Thomson sold Sheshunoff Information Services Inc., a provider of critical data, compliance and management tools to financial institutions, which had been managed within Thomson Media. |
• | In February 2004, Thomson sold DBM, a provider of human resource solutions, which had been managed within Thomson Learning. |
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Year Ended 31 December | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(Note 7) | (Note 7) | (Note 7) | ||||||||||
(Millions of US dollars, except per common share amounts) | ||||||||||||
Revenues | 6,612 | 6,145 | 5,658 | |||||||||
Cost of sales, selling, marketing, general and administrative expenses | (4,678 | ) | (4,330 | ) | (3,981 | ) | ||||||
Depreciation (notes 11 and 12 ) | (439 | ) | (414 | ) | (415 | ) | ||||||
Amortisation (note 13) | (241 | ) | (235 | ) | (206 | ) | ||||||
Operating profit | 1,254 | 1,166 | 1,056 | |||||||||
Net other income (expense) (note 4) | 1 | (28 | ) | 2 | ||||||||
Net interest expense and other financing costs (note 5) | (221 | ) | (221 | ) | (235 | ) | ||||||
Income taxes (note 6) | (118 | ) | (260 | ) | (177 | ) | ||||||
Earnings from continuing operations | 916 | 657 | 646 | |||||||||
Earnings from discontinued operations, net of tax (note 7) | 204 | 277 | 365 | |||||||||
Net earnings | 1,120 | 934 | 1,011 | |||||||||
Dividends declared on preference shares (note 16) | (5 | ) | (4 | ) | (3 | ) | ||||||
Earnings attributable to common shares | 1,115 | 930 | 1,008 | |||||||||
Earnings per Common Share (Note 8) | ||||||||||||
Basic and diluted earnings per common share: | ||||||||||||
From continuing operations | $ | 1.41 | $ | 1.00 | $ | 0.98 | ||||||
From discontinued operations | 0.32 | 0.42 | 0.56 | |||||||||
Basic and diluted earnings per common share | $ | 1.73 | $ | 1.42 | $ | 1.54 | ||||||
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31 December | |||||||||
2006 | 2005 | 2004 | |||||||
(Note 7) | (Note 7) | (Note 7) | |||||||
(Millions of US dollars) | |||||||||
Assets | |||||||||
Cash and cash equivalents | 334 | 407 | 405 | ||||||
Accounts receivable, net of allowances of $97 million (2005 — $102 million, 2004 - $126 million) (note 9) | 1,362 | 1,169 | 1,110 | ||||||
Inventories (note 10) | 72 | 67 | 69 | ||||||
Prepaid expenses and other current assets | 296 | 256 | 235 | ||||||
Deferred income taxes (note 6) | 153 | 129 | 112 | ||||||
Current assets of discontinued operations (note 7) | 1,048 | 981 | 961 | ||||||
Current assets | 3,265 | 3,009 | 2,892 | ||||||
Computer hardware and other property, net (note 11) | 625 | 604 | 576 | ||||||
Computer software, net (note 12) | 647 | 568 | 588 | ||||||
Identifiable intangible assets, net (note 13) | 3,456 | 3,514 | 3,713 | ||||||
Goodwill (note 14) | 6,543 | 5,938 | 5,952 | ||||||
Other non-current assets | 1,082 | 1,129 | 1,132 | ||||||
Non-current assets of discontinued operations (note 7) | 4,514 | 4,672 | 4,790 | ||||||
Total assets | 20,132 | 19,434 | 19,643 | ||||||
Liabilities and shareholders’ equity | |||||||||
Liabilities | |||||||||
Short-term indebtedness (note 15) | 333 | 191 | 5 | ||||||
Accounts payable and accruals | 1,304 | 1,197 | 1,230 | ||||||
Deferred revenue | 964 | 791 | 757 | ||||||
Current portion of long-term debt (note 15) | 264 | 98 | 295 | ||||||
Current liabilities of discontinued operations (note 7) | 874 | 830 | 796 | ||||||
Current liabilities | 3,739 | 3,107 | 3,083 | ||||||
Long-term debt (note 15) | 3,681 | 3,957 | 3,987 | ||||||
Other non-current liabilities | 785 | 791 | 980 | ||||||
Deferred income taxes (note 6) | 997 | 1,156 | 1,164 | ||||||
Non-current liabilities of discontinued operations (note 7) | 449 | 460 | 467 | ||||||
Total liabilities | 9,651 | 9,471 | 9,681 | ||||||
Shareholders’ equity | |||||||||
Capital (note 16) | 2,799 | 2,726 | 2,696 | ||||||
Retained earnings | 7,169 | 6,992 | 6,808 | ||||||
Accumulated other comprehensive income | 513 | 245 | 458 | ||||||
Total shareholders’ equity | 10,481 | 9,963 | 9,962 | ||||||
Total liabilities and shareholders’ equity | 20,132 | 19,434 | 19,643 | ||||||
Contingencies (note 18) |
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Year Ended 31 December | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(Note 7) | (Note 7) | (Note 7) | ||||||||||
(Millions of US dollars) | ||||||||||||
Cash provided by (used in): | ||||||||||||
Operating Activities | ||||||||||||
Net earnings | 1,120 | 934 | 1,011 | |||||||||
Remove earnings from discontinued operations | (204 | ) | (277 | ) | (365 | ) | ||||||
Add back (deduct) items not involving cash: | ||||||||||||
Depreciation (notes 11 and 12) | 439 | 414 | 415 | |||||||||
Amortisation (note 13) | 241 | 235 | 206 | |||||||||
Net gains on disposals of businesses and investments (note 4) | (47 | ) | (5 | ) | (53 | ) | ||||||
Loss from redemption of bonds (notes 4 and 15) | — | 23 | 53 | |||||||||
Deferred income taxes (note 6) | (121 | ) | (58 | ) | (50 | ) | ||||||
Other, net | 204 | 56 | 120 | |||||||||
Pension contributions (note 17) | (23 | ) | (30 | ) | (7 | ) | ||||||
Changes in working capital and other items (note 21) | (46 | ) | (56 | ) | (174 | ) | ||||||
Cash provided by operating activities — discontinued operations (note 7) | 562 | 643 | 652 | |||||||||
Net cash provided by operating activities | 2,125 | 1,879 | 1,808 | |||||||||
Investing Activities | ||||||||||||
Acquisitions, less cash therein of $11 million (2005 — $8 million, 2004 — $210 million) (note 19) | (744 | ) | (246 | ) | (1,123 | ) | ||||||
Proceeds from disposals (note 19) | 88 | 4 | 87 | |||||||||
Capital expenditures, less proceeds from disposals of $3 million (2005 — $2 million, 2004 — $4 million) | (453 | ) | (427 | ) | (407 | ) | ||||||
Other investing activities | (26 | ) | (25 | ) | (37 | ) | ||||||
Capital expenditures of discontinued operations (note 7) | (184 | ) | (215 | ) | (215 | ) | ||||||
Other investing activities of discontinued operations | (17 | ) | (14 | ) | (28 | ) | ||||||
Proceeds from (income taxes paid on) disposals of discontinued operations (note 7) | 81 | (105 | ) | 474 | ||||||||
Acquisitions by discontinued operations | (35 | ) | (43 | ) | (214 | ) | ||||||
Net cash used in investing activities | (1,290 | ) | (1,071 | ) | (1,463 | ) | ||||||
Financing Activities | ||||||||||||
Proceeds from debt (note 15) | — | 401 | 1,174 | |||||||||
Repayments of debt (note 15) | (88 | ) | (621 | ) | (1,185 | ) | ||||||
Net borrowings (repayments) under short-term loan facilities | 108 | 184 | (92 | ) | ||||||||
Premium on bond redemption (note 15) | — | (22 | ) | (41 | ) | |||||||
Repurchase of common shares | (412 | ) | (256 | ) | — | |||||||
Dividends paid on preference shares (note 16) | (5 | ) | (4 | ) | (3 | ) | ||||||
Dividends paid on common shares (note 16) | (553 | ) | (505 | ) | (484 | ) | ||||||
Other financing activities, net | 38 | 25 | 2 | |||||||||
Net cash used in financing activities | (912 | ) | (798 | ) | (629 | ) | ||||||
Translation adjustments | 4 | (8 | ) | 6 | ||||||||
(Decrease) increase in cash and cash equivalents | (73 | ) | 2 | (278 | ) | |||||||
Cash and cash equivalents at beginning of period | 407 | 405 | 683 | |||||||||
Cash and cash equivalents at end of period | 334 | 407 | 405 | |||||||||
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Accumulated | ||||||||||||||||||||||||||||
Other | Total | |||||||||||||||||||||||||||
Stated | Comprehensive | Retained | ||||||||||||||||||||||||||
Share | Contributed | Total | Retained | Income | Earnings | |||||||||||||||||||||||
Capital(1) | Surplus | Capital | Earnings | (‘‘AOCI”) | and AOCI | Total | ||||||||||||||||||||||
(Millions of US Dollars) | ||||||||||||||||||||||||||||
Balance, 31 December 2005 | 2,599 | 127 | 2,726 | 6,992 | 245 | 7,237 | 9,963 | |||||||||||||||||||||
Opening balance adjustment for net deferred gain on cash flow hedges (Note 2) | — | — | — | — | 51 | 51 | 51 | |||||||||||||||||||||
Balance, 1 January 2006 | 2,599 | 127 | 2,726 | 6,992 | 296 | 7,288 | 10,014 | |||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||
Net earnings | 1,120 | — | 1,120 | 1,120 | ||||||||||||||||||||||||
Unrecognised net gain on cash flow hedges | — | 8 | 8 | 8 | ||||||||||||||||||||||||
Foreign currency translation adjustments | — | 230 | 230 | 230 | ||||||||||||||||||||||||
Net gain reclassified to income | — | (21 | ) | (21 | ) | (21 | ) | |||||||||||||||||||||
Comprehensive income | 1,120 | 217 | 1,337 | 1,337 | ||||||||||||||||||||||||
Dividends declared on preference shares | — | — | — | (5 | ) | — | (5 | ) | (5 | ) | ||||||||||||||||||
Dividends declared on common shares | — | — | — | (567 | ) | — | (567 | ) | (567 | ) | ||||||||||||||||||
Common shares issued under | ||||||||||||||||||||||||||||
Dividend reinvestment plan (“DRIP”) | 14 | — | 14 | — | — | — | 14 | |||||||||||||||||||||
Repurchase of common shares (Note 16) | (41 | ) | — | (41 | ) | (371 | ) | — | (371 | ) | (412 | ) | ||||||||||||||||
Effect of stock compensation plans | 70 | 30 | 100 | — | — | — | 100 | |||||||||||||||||||||
Balance, 31 December 2006 | 2,642 | 157 | 2,799 | 7,169 | 513 | 7,682 | 10,481 | |||||||||||||||||||||
Total | |||||||||||||||||||||||||||
Stated | Retained | ||||||||||||||||||||||||||
Share | Contributed | Total | Retained | Earnings | |||||||||||||||||||||||
Capital(1) | Surplus | Capital | Earnings | AOCI | and AOCI | Total | |||||||||||||||||||||
(Millions of US Dollars) | |||||||||||||||||||||||||||
Balance, 31 December 2004 | 2,588 | 108 | 2,696 | 6,808 | 458 | 7,266 | 9,962 | ||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||
Net earnings | 934 | — | 934 | 934 | |||||||||||||||||||||||
Foreign currency translation adjustments | — | (213 | ) | (213 | ) | (213 | ) | ||||||||||||||||||||
Comprehensive income | 934 | (213 | ) | 721 | 721 | ||||||||||||||||||||||
Dividends declared on preference shares | — | — | — | (4 | ) | — | (4 | ) | (4 | ) | |||||||||||||||||
Dividends declared on common shares | — | — | — | (517 | ) | — | (517 | ) | (517 | ) | |||||||||||||||||
Common shares issued under DRIP | 12 | — | 12 | — | — | — | 12 | ||||||||||||||||||||
Repurchase of common shares | (27 | ) | — | (27 | ) | (229 | ) | — | (229 | ) | (256 | ) | |||||||||||||||
Effect of stock compensation plans | 26 | 19 | 45 | — | — | — | 45 | ||||||||||||||||||||
Balance, 31 December 2005 | 2,599 | 127 | 2,726 | 6,992 | 245 | 7,237 | 9,963 | ||||||||||||||||||||
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Total | ||||||||||||||||||||||||
Stated | Retained | |||||||||||||||||||||||
Share | Contributed | Total | Retained | Earnings | ||||||||||||||||||||
Capital(1) | Surplus | Capital | Earnings | AOCI | and AOCI | Total | ||||||||||||||||||
(Millions of US Dollars) | ||||||||||||||||||||||||
Balance, 31 December 2003 | 2,568 | 71 | 2,639 | 6,295 | 259 | 6,554 | 9,193 | |||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||
Net earnings | 1,011 | — | 1,011 | 1,011 | ||||||||||||||||||||
Foreign currency translation adjustments | 199 | 199 | 199 | |||||||||||||||||||||
Comprehensive income | 1,011 | 199 | 1,210 | 1,210 | ||||||||||||||||||||
Dividends declared on preference shares | — | — | — | (3 | ) | — | (3 | ) | (3 | ) | ||||||||||||||
Dividends declared on common shares | — | — | — | (495 | ) | — | (495 | ) | (495 | ) | ||||||||||||||
Common shares issued under DRIP | 11 | — | 11 | — | — | — | 11 | |||||||||||||||||
Effect of stock compensation plans | 9 | 37 | 46 | — | — | — | 46 | |||||||||||||||||
Balance, 31 December, 2004 | 2,588 | 108 | 2,696 | 6,808 | 458 | 7,266 | 9,962 | |||||||||||||||||
(1) | Includes both common and preference share capital |
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20.1(e)
Note 1: | Summary of Significant Accounting Policies |
20.3
• | persuasive evidence of an arrangement exists; |
• | delivery has occurred; |
• | the fee is fixed or determinable; and |
• | collectibility is probable. |
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Computer hardware | 3-5 years | |||
Buildings and building improvements | 5-40 years | |||
Furniture, fixtures and equipment | 3-10 years |
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Trade names | 2-30 years | |||
Customer relationships | 1-40 years | |||
Databases and content | 2-25 years | |||
Publishing rights | 30 years | |||
Other | 2-29 years |
• | In the first step, the fair value of each reporting unit is determined. If the fair value of a reporting unit is less than its carrying value, this is an indicator that the goodwill assigned to that reporting unit might be impaired, which requires performance of the second step. |
• | In the second step, the fair value of the reporting unit is allocated to the assets and liabilities of the reporting unit as if it had just been acquired in a business combination, and as if the purchase price was equivalent to the fair value of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is referred to as the implied fair value of goodwill. The implied fair value of the reporting unit’s goodwill is then compared to the actual carrying value of goodwill. If the implied fair value is less than the carrying value, an impairment loss is recognised for that excess. |
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• | cross-currency swap agreements to hedge foreign currency exposures on non-US dollar denominated debt; |
• | foreign currency contracts to hedge forecasted cash flows denominated in currencies other than the functional currency of a particular Thomson subsidiary; and |
• | interest rate swap agreements to manage the fixed versus floating interest rate mix of debt. Such contracts require periodic exchange of payments without the exchange of the notional principal amount upon which the payments are based. |
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Note 2: | Changes in Accounting Policies |
• | an increase of $53 million to “Other non-current assets” and “Accumulated other comprehensive income” in the consolidated balance sheet relative to derivative instruments that consisted primarily of interest rate contracts, which convert floating rate debt to fixed rate debt and qualify as cash flow hedges; |
• | a reclassification of $5 million from “Other current assets” and $3 million from “Other current liabilities” to “Accumulated other comprehensive income” in the consolidated balance sheet related primarily to previously deferred gains and losses on settled cash flow hedges; |
• | an increase of $16 million to “Other non-current assets” and “Long-term debt” in the consolidated balance sheet related to derivative instruments and their related hedged items. These derivative instruments consist primarily of interest rate contracts to convert fixed rate debt to floating and qualify as fair value hedges; and |
• | a presentational reclassification of amounts previously recorded in “Cumulative translation adjustment” to “Accumulated other comprehensive income”. |
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Note 3: | THOMSONplus Programme |
• | realigning its business units into five segments; |
• | streamlining and consolidating certain functions such as finance, accounting and business systems; |
• | leveraging infrastructure and technology for customer contact centres; |
• | establishing low-cost shared service centres; |
• | consolidating certain technology infrastructure operations such as voice and data networks, data centres, storage and desktop support; and |
• | re-engineering certain product development and production functions and realigning particular sales forces within its business segments. |
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Note 4: | Net Other Income (Expense) |
Year Ended 31 December | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Net gains on disposals of businesses and investments | 47 | 5 | 53 | |||||||||
Loss from redemption of debt securities | — | (23 | ) | (53 | ) | |||||||
Equity in net earnings of associates | — | 5 | — | |||||||||
Other income (expense) | (46 | ) | (15 | ) | 2 | |||||||
Net other income (expense) | 1 | (28 | ) | 2 | ||||||||
Note 5: | Net Interest Expense and Other Financing Costs |
Year Ended 31 December | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Interest income | 24 | 16 | 10 | |||||||||
Interest expense on short-term indebtedness | (26 | ) | (9 | ) | (2 | ) | ||||||
Interest expense on long-term debt | (219 | ) | (228 | ) | (243 | ) | ||||||
(221 | ) | (221 | ) | (235 | ) | |||||||
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Note 6: | Income Taxes |
Year Ended 31 December | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Canada | (242 | ) | (245 | ) | (258 | ) | ||||||
US and other jurisdictions | 1,276 | 1,162 | 1,081 | |||||||||
Total earnings before taxes(1) | 1,034 | 917 | 823 | |||||||||
(1) | Represents earnings from continuing operations before income taxes. |
Year Ended 31 December | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Canada: | ||||||||||||
Current | 1 | 126 | 1 | |||||||||
Deferred | (20 | ) | (17 | ) | (15 | ) | ||||||
Total Canadian | (19 | ) | 109 | (14 | ) | |||||||
US and other jurisdictions: | ||||||||||||
Current | 238 | 192 | 226 | |||||||||
Deferred | (101 | ) | (41 | ) | (35 | ) | ||||||
Total US and other jurisdictions | 137 | 151 | 191 | |||||||||
Total worldwide | 118 | 260 | 177 | |||||||||
2006 | 2005 | 2004 | ||||||||||
Accrued expenses | 181 | 171 | 162 | |||||||||
Deferred compensation and stock options | 124 | 116 | 122 | |||||||||
Accounts receivable allowances | 32 | 38 | 35 | |||||||||
Tax loss and credit carryforwards | 862 | 794 | 766 | |||||||||
Other | 147 | 78 | 73 | |||||||||
Total deferred tax asset | 1,346 | 1,197 | 1,158 | |||||||||
Valuation allowance | (441 | ) | (412 | ) | (369 | ) | ||||||
Net deferred tax asset | 905 | 785 | 789 | |||||||||
Intangible assets | (1,279 | ) | (1,230 | ) | (1,249 | ) | ||||||
Other long-lived assets(1) | (37 | ) | (173 | ) | (191 | ) | ||||||
Financial instruments | (273 | ) | (237 | ) | (214 | ) | ||||||
Pension | (144 | ) | (147 | ) | (147 | ) | ||||||
Other | (16 | ) | (25 | ) | (40 | ) | ||||||
Total deferred tax liability | (1,749 | ) | (1,812 | ) | (1,841 | ) | ||||||
Net deferred tax liability | (844 | ) | (1,027 | ) | (1,052 | ) | ||||||
(1) | Other long-lived assets include Computer hardware and other property and Computer software for internal use. |
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2006 | 2005 | 2004 | ||||||||||
Balance at beginning of year | 412 | 369 | 406 | |||||||||
Additional Canadian and other net operating losses with no benefit | 68 | 89 | 90 | |||||||||
Releases of valuation allowances to income | (26 | ) | (16 | ) | (59 | ) | ||||||
Reduction due to change in deferred tax liability related to debt instruments(1) | (26 | ) | (63 | ) | (132 | ) | ||||||
Increase due to tax loss incurred on sale of DBM | — | — | 68 | |||||||||
Sale of Canadian subsidiary(2) | — | — | (51 | ) | ||||||||
Exchange and other items | 13 | 33 | 47 | |||||||||
Balance at end of year | 441 | 412 | 369 | |||||||||
(1) | Canadian losses are first offset by deferred tax liabilities before computing the required valuation allowance. The deferred tax liability increased in 2006, 2005 and 2004 from the revaluation of debt and currency swaps. As the deferred tax liability increased, the requirement for the valuation allowance decreased by the same amount. |
(2) | In the fourth quarter of 2004, the Company sold a wholly-owned subsidiary, whose only asset consisted of Canadian tax loss carryforwards, to a company controlled by Kenneth R. Thomson. See Note 22. |
2006 | 2005 | 2004 | ||||||||||
Earnings before taxes | 1,034 | 917 | 823 | |||||||||
Income taxes at the Canadian corporate tax rate of 35.4 per cent. (2005 and 2004 — 36.0 per cent.) | 366 | 330 | 296 | |||||||||
Differences attributable to: | ||||||||||||
Effect of income taxes recorded at rates different from the Canadian tax rate | (276 | ) | (171 | ) | (141 | ) | ||||||
Additions to valuation allowance due to losses with no benefit | 68 | 89 | 90 | |||||||||
Releases of valuation allowances to income | (26 | ) | (16 | ) | (59 | ) | ||||||
Net change to contingent tax liabilities(1) | (5 | ) | (93 | ) | 7 | |||||||
Withholding tax on repatriation of accumulated profits(2) | — | 125 | — | |||||||||
Other, net | (9 | ) | (4 | ) | (16 | ) | ||||||
Income tax provision on continuing operations | 118 | 260 | 177 | |||||||||
(1) | In 2005, this amount includes the recognition of a net tax benefit of $98 million from the release of contingent income tax liabilities. The liabilities were released upon completion of tax audits relating to prior year periods. |
(2) | During the fourth quarter of 2005, the Company repatriated a substantial portion of the accumulated profits of certain of its subsidiaries. The repatriation was related to the recapitalisation of these subsidiaries. The Company incurred a one-time withholding tax of $125 million in connection with this repatriation, which reduced cash provided by operating activities and net earnings in the fourth quarter by the same amount. |
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Note 7: | Discontinued Operations |
20.7.1
• | In May 2007, the Company completed the sale of Netg, a leading provider of continuing corporate education and training, to SkillSoft PLC for approximately $270 million and recorded a post-tax loss of $14 million. | |
• | In July 2007, the Company completed its sale of Thomson Learning’s higher education, careers and library reference assets and Nelson Canada to a consortium of funds advised by Apax Partners and OMERS Capital Partners for approximately $7.6 billion. The Company recorded a post-tax gain on the sale of $2.7 billion. | |
• | In October 2007, the Company completed the sale of Prometric to ETS for $310 million in cash and a 6 per cent. promissory note for $125 million due in 2014. The principal amount of the note is subject to adjustment based on continuity of offerings from certain customer contracts. |
5.2.2
PR Annex I,
20.7.1
5.2.2
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31 December 2006 | ||||||||||||
Legal | Learning | Healthcare | Total | |||||||||
Current assets: | ||||||||||||
Accounts receivable, net of allowances | 15 | 538 | 36 | 589 | ||||||||
Inventory | 1 | 252 | 1 | 254 | ||||||||
Other current assets | 4 | 70 | 5 | 79 | ||||||||
Deferred income taxes | — | 124 | 2 | 126 | ||||||||
Total current assets | 20 | 984 | 44 | 1,048 | ||||||||
Non-current assets: | ||||||||||||
Computer hardware and other property | 7 | 157 | 8 | 172 | ||||||||
Computer software | 5 | 145 | 1 | 151 | ||||||||
Identifiable intangible assets | 29 | 838 | 18 | 885 | ||||||||
Goodwill | 8 | 3,003 | 24 | 3,035 | ||||||||
Other non-current assets | 1 | 270 | — | 271 | ||||||||
Total non-current assets | 50 | 4,413 | 51 | 4,514 | ||||||||
Current liabilities: | ||||||||||||
Accounts payable and accruals | 15 | 499 | 25 | 539 | ||||||||
Deferred revenue | 38 | 260 | 20 | 318 | ||||||||
Other current liabilities | 16 | 1 | — | 17 | ||||||||
Total current liabilities | 69 | 760 | 45 | 874 | ||||||||
Non-current liabilities: | ||||||||||||
Other non-current liabilities | 4 | 38 | 2 | 44 | ||||||||
Deferred income taxes | 12 | 385 | 8 | 405 | ||||||||
Total non-current liabilities | 16 | 423 | 10 | 449 | ||||||||
31 December 2005 | ||||||||||||
Legal | Learning | Healthcare | Total | |||||||||
Current assets: | ||||||||||||
Accounts receivable, net of allowances | 28 | 470 | 37 | 535 | ||||||||
Inventory | 1 | 254 | — | 255 | ||||||||
Other current assets | 5 | 62 | 2 | 69 | ||||||||
Deferred income taxes | 1 | 120 | 1 | 122 | ||||||||
Total current assets | 35 | 906 | 40 | 981 | ||||||||
Non-current assets: | ||||||||||||
Computer hardware and other property | 16 | 154 | 8 | 178 | ||||||||
Computer software | 24 | 158 | — | 182 | ||||||||
Identifiable intangible assets | 44 | 907 | 20 | 971 | ||||||||
Goodwill | 11 | 3,047 | 28 | 3,086 | ||||||||
Other non-current assets | 1 | 254 | — | 255 | ||||||||
Total non-current assets | 96 | 4,520 | 56 | 4,672 | ||||||||
Current liabilities: | ||||||||||||
Accounts payable and accruals | 20 | 495 | 23 | 538 | ||||||||
Deferred revenue | 33 | 218 | 30 | 281 | ||||||||
Other current liabilities | 11 | — | — | 11 | ||||||||
Total current liabilities | 64 | 713 | 53 | 830 | ||||||||
Non-current liabilities: | ||||||||||||
Other non-current liabilities | 5 | 50 | 3 | 58 | ||||||||
Deferred income taxes | 17 | 377 | 8 | 402 | ||||||||
Total non-current liabilities | 22 | 427 | 11 | 460 | ||||||||
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31 December 2004 | ||||||||||||
Legal | Learning | Healthcare | Total | |||||||||
Current assets: | ||||||||||||
Accounts receivable, net of allowances | 31 | 473 | 34 | 538 | ||||||||
Inventory | 2 | 240 | 1 | 243 | ||||||||
Other current assets | 6 | 64 | 8 | 78 | ||||||||
Deferred income taxes | 1 | 98 | 3 | 102 | ||||||||
Total current assets | 40 | 875 | 46 | 961 | ||||||||
Non-current assets: | ||||||||||||
Computer hardware and other property | 19 | 144 | 11 | 174 | ||||||||
Computer software | 20 | 160 | — | 180 | ||||||||
Identifiable intangible assets | 46 | 944 | 18 | 1,008 | ||||||||
Goodwill | 5 | 3,128 | 35 | 3,168 | ||||||||
Other non-current assets | 1 | 259 | — | 260 | ||||||||
Total non-current assets | 91 | 4,635 | 64 | 4,790 | ||||||||
Current liabilities: | ||||||||||||
Accounts payable and accruals | 20 | 458 | 30 | 508 | ||||||||
Deferred revenue | 37 | 220 | 29 | 286 | ||||||||
Other current liabilities | 2 | — | — | 2 | ||||||||
Total current liabilities | 59 | 678 | 59 | 796 | ||||||||
Non-current liabilities: | ||||||||||||
Other non-current liabilities | 6 | 52 | 3 | 61 | ||||||||
Deferred income taxes | 17 | 383 | 6 | 406 | ||||||||
Total non-current liabilities | 23 | 435 | 9 | 467 | ||||||||
Year Ended 31 December 2006 | |||||||||||||||||||
Legal | Learning | Healthcare | Other | Total | |||||||||||||||
Revenues from discontinued operations | 110 | 2,393 | 129 | — | 2,632 | ||||||||||||||
Earnings (loss) from discontinued operations before income taxes | (23 | ) | 237 | 27 | — | 241 | |||||||||||||
Gain on sale of discontinued operations | 4 | 3 | 40 | 5 | 52 | ||||||||||||||
Income taxes | 12 | (84 | ) | (24 | ) | 7 | (89 | ) | |||||||||||
Earnings (loss) from discontinued operations | (7 | ) | 156 | 43 | 12 | 204 | |||||||||||||
Year Ended 31 December 2005 | |||||||||||||||||||
Legal | Learning | Healthcare | Other | Total | |||||||||||||||
Revenues from discontinued operations | 133 | 2,319 | 150 | — | 2,602 | ||||||||||||||
Earnings (loss) from discontinued operations before income taxes | (22 | ) | 294 | 30 | — | 302 | |||||||||||||
Gain on sale of discontinued operations | — | — | — | 2 | 2 | ||||||||||||||
Income taxes | 6 | (25 | ) | (11 | ) | 3 | (27 | ) | |||||||||||
Earnings (loss) from discontinued operations | (16 | ) | 269 | 19 | 5 | 277 | |||||||||||||
Year Ended 31 December 2004 | |||||||||||||||||||||||
Legal | Learning | Healthcare | Media | Other | Total | ||||||||||||||||||
Revenues from discontinued operations | 123 | 2,193 | 152 | 163 | — | 2,631 | |||||||||||||||||
Earnings (loss) from discontinued operations before income taxes | (21 | ) | 300 | 31 | 22 | — | 332 | ||||||||||||||||
Gain on sale of discontinued operations | — | (21 | ) | — | 163 | 2 | 144 | ||||||||||||||||
Income taxes | 6 | (57 | ) | (11 | ) | (70 | ) | 21 | (111 | ) | |||||||||||||
Earnings (loss) from discontinued operations | (15 | ) | 222 | 20 | 115 | 23 | 365 | ||||||||||||||||
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Note 8: | Earnings per Common Share |
2006 | 2005 | 2004 | ||||||||||
Earnings from continuing operations | 916 | 657 | 646 | |||||||||
Dividends declared on preference shares | (5 | ) | (4 | ) | (3 | ) | ||||||
Earnings from continuing operations attributable to common shares | 911 | 653 | 643 | |||||||||
2006 | 2005 | 2004 | |||||||
Weighted-average number of common shares outstanding | 643,454,420 | 653,862,363 | 654,827,909 | ||||||
Vested DSUs | 677,104 | 574,385 | 473,448 | ||||||
Basic | 644,131,524 | 654,436,748 | 655,301,357 | ||||||
Effect of stock and other incentive plans | 1,894,821 | 531,283 | 625,946 | ||||||
Diluted | 646,026,345 | 654,968,031 | 655,927,303 | ||||||
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Note 9: | Accounts Receivable Allowances |
2006 | 2005 | 2004 | ||||||||||
Balance at beginning of year | 102 | 126 | 123 | |||||||||
Charges | 139 | 119 | 155 | |||||||||
Write-offs | (147 | ) | (138 | ) | (160 | ) | ||||||
Other | 3 | (5 | ) | 8 | ||||||||
Balance at end of year | 97 | 102 | 126 | |||||||||
Note 10: | Inventories |
2006 | 2005 | 2004 | |||||||
Raw materials | 17 | 15 | 15 | ||||||
Work in process | 19 | 18 | 22 | ||||||
Finished goods | 36 | 34 | 32 | ||||||
72 | 67 | 69 | |||||||
Note 11: | Computer Hardware and Other Property |
Net Computer | ||||||||||
Accumulated | Hardware and | |||||||||
As at 31 December 2006 | Cost | Depreciation | Other Property | |||||||
Computer hardware | 958 | (678 | ) | 280 | ||||||
Land, buildings and building improvements | 463 | (206 | ) | 257 | ||||||
Furniture, fixtures and equipment | 297 | (209 | ) | 88 | ||||||
1,718 | (1,093 | ) | 625 | |||||||
Net Computer | ||||||||||
Accumulated | Hardware and | |||||||||
As at 31 December 2005 | Cost | Depreciation | Other Property | |||||||
Computer hardware | 978 | (725 | ) | 253 | ||||||
Land, buildings and building improvements | 438 | (176 | ) | 262 | ||||||
Furniture, fixtures and equipment | 300 | (211 | ) | 89 | ||||||
1,716 | (1,112 | ) | 604 | |||||||
Net Computer | ||||||||||
Accumulated | Hardware and | |||||||||
As at 31 December 2004 | Cost | Depreciation | Other Property | |||||||
Computer hardware | 915 | (684 | ) | 231 | ||||||
Land, buildings and building improvements | 425 | (175 | ) | 250 | ||||||
Furniture, fixtures and equipment | 299 | (204 | ) | 95 | ||||||
1,639 | (1,063 | ) | 576 | |||||||
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Note 12: | Computer Software |
Accumulated | Net Computer | |||||||||
As at 31 December, 2006 | Cost | Amortisation | Software | |||||||
Capitalised software for internal use | 1,791 | (1,228 | ) | 563 | ||||||
Capitalised software to be marketed | 212 | (128 | ) | 84 | ||||||
2,003 | (1,356 | ) | 647 | |||||||
Accumulated | Net Computer | |||||||||
As at 31 December 2005 | Cost | Amortisation | Software | |||||||
Capitalised software for internal use | 1,608 | (1,085 | ) | 523 | ||||||
Capitalised software to be marketed | 143 | (98 | ) | 45 | ||||||
1,751 | (1,183 | ) | 568 | |||||||
Accumulated | Net computer | |||||||||
As at 31 December 2004 | Cost | amortisation | software | |||||||
Capitalised software for internal use | 1,432 | (882 | ) | 550 | ||||||
Capitalised software to be marketed | 120 | (82 | ) | 38 | ||||||
1,552 | (964 | ) | 588 | |||||||
Note 13: | Identifiable Intangible Assets |
Gross Identifiable | Accumulated | Net Identifiable | ||||||||
As at 31 December 2006 | Intangible Assets | Amortisation | Intangible Assets | |||||||
Finite useful lives: | ||||||||||
Trade names | 206 | (94 | ) | 112 | ||||||
Customer relationships | 2,071 | (675 | ) | 1,396 | ||||||
Databases and content | 852 | (408 | ) | 444 | ||||||
Publishing rights | 1,250 | (573 | ) | 677 | ||||||
Other | 86 | (52 | ) | 34 | ||||||
4,465 | (1,802 | ) | 2,663 | |||||||
Indefinite useful lives: | ||||||||||
Trade names | 793 | — | 793 | |||||||
5,258 | (1,802 | ) | 3,456 | |||||||
Gross Identifiable | Accumulated | Net Identifiable | ||||||||
As at 31 December 2005 | Intangible Assets | Amortisation | Intangible Assets | |||||||
Finite useful lives: | ||||||||||
Trade names | 223 | (94 | ) | 129 | ||||||
Customer relationships | 1,961 | (560 | ) | 1,401 | ||||||
Databases and content | 817 | (338 | ) | 479 | ||||||
Publishing rights | 1,188 | (500 | ) | 688 | ||||||
Other | 62 | (38 | ) | 24 | ||||||
4,251 | (1,530 | ) | 2,721 | |||||||
Indefinite useful lives: | ||||||||||
Trade names | 793 | — | 793 | |||||||
5,044 | (1,530 | ) | 3,514 | |||||||
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Gross | ||||||||||
Identifiable | Accumulated | Net Identifiable | ||||||||
As at 31 December 2004 | Intangible Assets | Amortisation | Intangible Assets | |||||||
Finite useful lives: | ||||||||||
Trade names | 236 | (69 | ) | 167 | ||||||
Customer relationships | 1,800 | (450 | ) | 1,350 | ||||||
Databases and content | 890 | (301 | ) | 589 | ||||||
Publishing rights | 1,214 | (459 | ) | 755 | ||||||
Other | 71 | (28 | ) | 43 | ||||||
4,211 | (1,307 | ) | 2,904 | |||||||
Indefinite useful lives: | ||||||||||
Trade names | 809 | — | 809 | |||||||
5,020 | (1,307 | ) | 3,713 | |||||||
Note 14: | Goodwill |
Tax and | ||||||||||||||||||||||||
Legal | Financial | Accounting | Scientific | Healthcare | Total | |||||||||||||||||||
Balance at 31 December 2003 | 2,745 | 1,548 | 518 | 299 | 96 | 5,206 | ||||||||||||||||||
Acquisitions | 22 | 332 | 5 | 339 | — | 698 | ||||||||||||||||||
Adjusted purchase price allocations | (3 | ) | (4 | ) | (12 | ) | (11 | ) | (2 | ) | (32 | ) | ||||||||||||
Translation and other, net | 37 | 33 | — | 10 | — | 80 | ||||||||||||||||||
Balance at 31 December 2004 | 2,801 | 1,909 | 511 | 637 | 94 | 5,952 | ||||||||||||||||||
Acquisitions | 65 | 3 | 7 | 4 | 3 | 82 | ||||||||||||||||||
Adjusted purchase price allocations | (3 | ) | (5 | ) | — | 15 | — | 7 | ||||||||||||||||
Translation and other, net | (48 | ) | (31 | ) | — | (18 | ) | (6 | ) | (103 | ) | |||||||||||||
Balance at 31 December 2005 | 2,815 | 1,876 | 518 | 638 | 91 | 5,938 | ||||||||||||||||||
Acquisitions | 64 | 149 | 18 | 13 | 284 | 528 | ||||||||||||||||||
Adjusted purchase price allocations | 1 | (1 | ) | — | (6 | ) | (7 | ) | (13 | ) | ||||||||||||||
Translation and other, net | 57 | 34 | — | 10 | (11 | ) | 90 | |||||||||||||||||
Balance at 31 December 2006 | 2,937 | 2,058 | 536 | 655 | 357 | 6,543 | ||||||||||||||||||
Note 15: | Financial Instruments |
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Carrying Amount | Fair Value | ||||||||||||||
Primary Debt | Derivative | Primary Debt | Derivative | ||||||||||||
As at 31 December 2006 | Instruments | Instruments | Instruments | Instruments | |||||||||||
Bank and other | 111 | — | 109 | — | |||||||||||
6.50 per cent. Debentures, due 2007 | 217 | (38 | ) | 217 | (38 | ) | |||||||||
4.35 per cent. Notes, due 2009 | 258 | (21 | ) | 258 | (21 | ) | |||||||||
4.50 per cent. Notes, due 2009 | 217 | (33 | ) | 217 | (33 | ) | |||||||||
5.20 per cent. Notes, due 2014 | 522 | (58 | ) | 536 | (58 | ) | |||||||||
6.85 per cent. Medium-term notes, due 2011 | 345 | (108 | ) | 378 | (108 | ) | |||||||||
5.75 per cent. Notes, due 2008 | 400 | — | 401 | — | |||||||||||
4.25 per cent. Notes, due 2009 | 200 | — | 195 | — | |||||||||||
4.75 per cent. Notes, due 2010 | 250 | — | 245 | — | |||||||||||
6.20 per cent. Notes, due 2012 | 700 | — | 723 | — | |||||||||||
5.25 per cent. Notes, due 2013 | 250 | — | 246 | — | |||||||||||
5.50 per cent. Debentures, due 2035 | 400 | — | 363 | — | |||||||||||
7.74 per cent. Private placement, due 2010 | 75 | — | 81 | — | |||||||||||
3,945 | (258 | ) | 3,969 | (258 | ) | ||||||||||
Current portion | (264 | ) | 38 | ||||||||||||
3,681 | (220 | ) | |||||||||||||
Carrying Amount | Fair Value | ||||||||||||||
Primary Debt | Derivative | Primary Debt | Derivative | ||||||||||||
As at 31 December 2005 | Instruments | Instruments | Instruments | Instruments | |||||||||||
Bank and other | 182 | — | 179 | — | |||||||||||
6.50 per cent. Debentures, due 2007 | 215 | (36 | ) | 223 | (46 | ) | |||||||||
4.35 per cent. Notes, due 2009 | 258 | (12 | ) | 259 | (22 | ) | |||||||||
4.50 per cent. Notes, due 2009 | 215 | (31 | ) | 217 | (33 | ) | |||||||||
5.20 per cent. Notes, due 2014 | 516 | (24 | ) | 542 | (57 | ) | |||||||||
6.85 per cent. Medium-term notes, due 2011 | 344 | (90 | ) | 386 | (108 | ) | |||||||||
5.75 per cent. Notes, due 2008 | 400 | — | 406 | — | |||||||||||
4.25 per cent. Notes, due 2009 | 200 | — | 195 | — | |||||||||||
4.75 per cent. Notes, due 2010 | 250 | — | 247 | — | |||||||||||
6.20 per cent. Notes, due 2012 | 700 | — | 736 | — | |||||||||||
5.25 per cent. Notes, due 2013 | 250 | — | 249 | — | |||||||||||
5.50 per cent. Debentures, due 2035 | 400 | — | 387 | — | |||||||||||
Private placements, due2006-2010 | 125 | — | 133 | — | |||||||||||
4,055 | (193 | ) | 4,159 | (266 | ) | ||||||||||
Current portion | (98 | ) | — | ||||||||||||
3,957 | (193 | ) | |||||||||||||
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Carrying Amount | Fair Value | ||||||||||||||
Primary Debt | Derivative | Primary Debt | Derivative | ||||||||||||
As at 31 December 2004 | Instruments | Instruments | Instruments | Instruments | |||||||||||
Bank and other | 224 | — | 224 | — | |||||||||||
6.50 per cent. Debentures, due 2007 | 205 | (25 | ) | 221 | (45 | ) | |||||||||
4.35 per cent. Notes, due 2009 | 247 | (1 | ) | 250 | (4 | ) | |||||||||
4.50 per cent. Notes, due 2009 | 205 | (21 | ) | 210 | (26 | ) | |||||||||
5.20 per cent. Notes, due 2014 | 493 | (1 | ) | 504 | (11 | ) | |||||||||
6.90 per cent. Medium-term notes, due 2008 | 329 | (69 | ) | 362 | (78 | ) | |||||||||
6.85 per cent. Medium-term notes, due 2011 | 329 | (75 | ) | 372 | (83 | ) | |||||||||
5.75 per cent. Notes, due 2008 | 400 | — | 423 | — | |||||||||||
4.25 per cent. Notes, due 2009 | 200 | — | 202 | — | |||||||||||
4.75 per cent. Notes, due 2010 | 250 | — | 258 | — | |||||||||||
6.20 per cent. Notes, due 2012 | 700 | — | 769 | — | |||||||||||
5.25 per cent. Notes, due 2013 | 250 | — | 260 | — | |||||||||||
Floating rate notes | 125 | — | 125 | — | |||||||||||
Private placements, due2005-2010 | 325 | — | 352 | — | |||||||||||
4,282 | (192 | ) | 4,532 | (247 | ) | ||||||||||
Current portion | (295 | ) | — | ||||||||||||
3,987 | (192 | ) | |||||||||||||
Before Currency Hedging | After Currency Hedging | |||||||||||||||||||||||
Arrangements | Arrangements(1) | |||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | |||||||||||||||||||
Canadian dollar | 1,559 | 1,548 | 1,808 | — | — | — | ||||||||||||||||||
US dollar | 2,348 | 2,435 | 2,392 | 3,703 | 3,790 | 4,008 | ||||||||||||||||||
Other currencies | 38 | 72 | 82 | 38 | 72 | 82 | ||||||||||||||||||
3,945 | 4,055 | 4,282 | 3,741 | 3,862 | 4,090 | |||||||||||||||||||
(1) | Represents net cash outflow upon maturity and, therefore, excludes fair value adjustment of $54 million at 31 December 2006. |
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2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | ||||||||||||||||||||||
Before currency hedging arrangements | 264 | 436 | 676 | 352 | 345 | 1,872 | 3,945 | |||||||||||||||||||||
After currency hedging arrangements(1) | 226 | 436 | 631 | 352 | 254 | 1,842 | 3,741 |
(1) | Represents net cash outflow upon maturity and, therefore, excludes fair value adjustment of $54 million at 31 December 2006. |
Average | Per | Average | Per | Average | Per | |||||||||||||||||||||||||||||||
Interest | Cent. | Interest | Cent. | Interest | Cent. | |||||||||||||||||||||||||||||||
2006 | Rate | Share | 2005 | Rate | Share | 2004 | Share | Share | ||||||||||||||||||||||||||||
Total fixed | 3,218 | 5.40 per cent. | 86 per cent. | 3,305 | 5.40 per cent. | 86 per cent. | 3,373 | 5.60 per cent. | 82 per cent. | |||||||||||||||||||||||||||
Total floating | 523 | 5.60 per cent. | 14 per cent. | 557 | 4.60 per cent. | 14 per cent. | 717 | 2.60 per cent. | 18 per cent. | |||||||||||||||||||||||||||
3,741 | 5.40 per cent. | 100 per cent. | 3,862 | 5.20 per cent. | 100 per cent. | 4,090 | 5.10 per cent. | 100 per cent. | ||||||||||||||||||||||||||||
Cdn$250 million of 6.20 per cent. Notes, due 2006
Cdn$250 million of 7.15 per cent. Notes, due 2006
Cdn$450 million of 6.55 per cent. Notes, due 2007
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Note 16: | Capital |
Common Share Capital | Series II, Cumulative | |||||||||||||||||||
Number of | Stated | Redeemable Preference | Contributed | Total | ||||||||||||||||
Shares | Capital | Share Capital | Surplus | Capital | ||||||||||||||||
Balance, 31 December 2003 | 654,579,297 | 2,458 | 110 | 71 | 2,639 | |||||||||||||||
Common shares issued under Dividend Reinvestment Plan (“DRIP”) | 326,068 | 11 | — | — | 11 | |||||||||||||||
Common shares issued from exercise of stock options and other employee programmes | 226,462 | 7 | — | — | 7 | |||||||||||||||
Record DSUs within contributed surplus | — | — | — | 16 | 16 | |||||||||||||||
Transfer of contributed surplus for exercised stock options | — | 2 | — | (2 | ) | — | ||||||||||||||
Stock option expense | — | — | — | 23 | 23 | |||||||||||||||
Balance, 31 December 2004 | 655,131,827 | 2,478 | 110 | 108 | 2,696 | |||||||||||||||
Common shares issued under DRIP | 335,862 | 12 | — | — | 12 | |||||||||||||||
Effect of stock compensation plans | 730,703 | 26 | — | 19 | 45 | |||||||||||||||
Repurchase of common shares | (7,249,400 | ) | (27 | ) | — | — | (27 | ) | ||||||||||||
Balance, 31 December 2005 | 648,948,992 | 2,489 | 110 | 127 | 2,726 | |||||||||||||||
Common shares issued under DRIP | 347,840 | 14 | — | — | 14 | |||||||||||||||
Effect of stock compensation plans | 1,820,781 | 70 | — | 30 | 100 | |||||||||||||||
Repurchase of common shares | (10,680,600 | ) | (41 | ) | — | — | (41 | ) | ||||||||||||
Balance, 31 December 2006 | 640,437,013 | 2,532 | 110 | 157 | 2,799 | |||||||||||||||
20.7.1
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Note 17: | Employee Future Benefits |
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Pensions | Other Post-Retirement Plans | |||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | |||||||||||||||||||
Assumptions used to determine net periodic pension expense: | ||||||||||||||||||||||||
Expected long-term rate of return on plan assets | 7.3 percent. | 7.5 percent. | 7.6 per cent. | N/A | N/A | N/A | ||||||||||||||||||
Discount rate | 5.4 per cent. | 5.8 per cent. | 5.8 per cent. | 5.7 per cent. | 6.1 per cent. | 6.1 per cent. | ||||||||||||||||||
Rate of compensation increase | 4.3 per cent. | 4.3 per cent. | 4.3 per cent. | N/A(1 | ) | N/A | (1) | N/A | (1) | |||||||||||||||
Assumptions used to determine benefit obligation: | ||||||||||||||||||||||||
Discount rate | 5.5 per cent. | 5.4 per cent. | 5.8 per cent. | 5.9 per cent. | 5.7 per cent. | 6.1 per cent. | ||||||||||||||||||
Rate of compensation increase | 4.5 per cent. | 4.3 per cent. | 4.3 per cent. | N/A(1 | ) | N/A | (1) | N/A | (1) | |||||||||||||||
(1) | At the end of 2006, 2005 and 2004 these plans consisted almost entirely of retired employees. |
Pensions | ||||||||||||||||||||||||||||||||||||
Funded | Unfunded | Other Post-Retirement Plans | ||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||
Components of net periodic benefit expense (income): | ||||||||||||||||||||||||||||||||||||
Current service cost | 57 | 46 | 46 | 6 | 7 | 7 | 3 | 2 | 2 | |||||||||||||||||||||||||||
Interest cost | 126 | 120 | 113 | 12 | 11 | 10 | 9 | 9 | 9 | |||||||||||||||||||||||||||
Plan amendments | 3 | — | — | (3 | ) | 1 | — | 3 | — | (1 | ) | |||||||||||||||||||||||||
Actual return on plan assets | (208 | ) | (285 | ) | (188 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Actuarial losses (gains) | 15 | 168 | 39 | (9 | ) | 12 | (2 | ) | (6 | ) | 9 | (7 | ) | |||||||||||||||||||||||
Subtotal | (7 | ) | 49 | 10 | 6 | 31 | 15 | 9 | 20 | 3 | ||||||||||||||||||||||||||
Adjustments(1): | ||||||||||||||||||||||||||||||||||||
Difference between expected and actual return on plan assets | 54 | 130 | 32 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Difference between actuarial loss (gain) recognised and actual actuarial loss (gain) on benefit obligation | 37 | (135 | ) | (15 | ) | 11 | (11 | ) | 3 | 10 | (7 | ) | 10 | |||||||||||||||||||||||
Difference between amortisation of past service costs for year and actual plan amendments for year | (3 | ) | 1 | 1 | 4 | 1 | 2 | (3 | ) | — | 1 | |||||||||||||||||||||||||
Amortisation of transitional asset | (1 | ) | (1 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Subtotal adjustments | 87 | (5 | ) | 18 | 15 | (10 | ) | 5 | 7 | (7 | ) | 11 | ||||||||||||||||||||||||
Net defined benefit plan expense | 80 | 44 | 28 | 21 | 21 | 20 | 16 | 13 | 14 | |||||||||||||||||||||||||||
(1) | Adjustments reflect the deferral and amortisation of experience gains and losses over applicable periods. |
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Pensions | ||||||||||||||||||||||||||||||||||||
Funded | Unfunded | Other Post-Retirement Plans | ||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||
Benefit obligation | ||||||||||||||||||||||||||||||||||||
Beginning benefit obligation | 2,268 | 2,104 | 1,914 | 207 | 182 | 173 | 165 | 154 | 159 | |||||||||||||||||||||||||||
Current service cost | 57 | 46 | 46 | 6 | 7 | 7 | 3 | 2 | 2 | |||||||||||||||||||||||||||
Interest cost | 126 | 120 | 113 | 12 | 11 | 10 | 9 | 9 | 9 | |||||||||||||||||||||||||||
Plan participants’ contributions | 4 | 4 | 5 | — | — | — | — | — | 1 | |||||||||||||||||||||||||||
Plan amendments | 3 | — | — | (3 | ) | 1 | — | 3 | — | — | ||||||||||||||||||||||||||
Actuarial losses (gains) | 15 | 168 | 39 | (9 | ) | 12 | (2 | ) | (6 | ) | 9 | (7 | ) | |||||||||||||||||||||||
Non-routine events | — | (11 | ) | (4 | ) | — | — | — | — | — | (1 | ) | ||||||||||||||||||||||||
Acquisitions, net | 2 | 9 | 6 | 1 | 1 | — | — | — | 2 | |||||||||||||||||||||||||||
Benefits paid | (95 | ) | (88 | ) | (87 | ) | (7 | ) | (8 | ) | (7 | ) | (10 | ) | (9 | ) | (11 | ) | ||||||||||||||||||
Translation adjustments | 118 | (84 | ) | 72 | — | 1 | 1 | — | — | — | ||||||||||||||||||||||||||
Ending benefit obligation | 2,498 | 2,268 | 2,104 | 207 | 207 | 182 | 164 | 165 | 154 | |||||||||||||||||||||||||||
Plan assets | ||||||||||||||||||||||||||||||||||||
Beginning fair value of plan assets | 2,181 | 2,050 | 1,821 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Actual return on plan assets | 208 | 285 | 188 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Employer contributions | 37 | 15 | 44 | 7 | 8 | 7 | 10 | 9 | 10 | |||||||||||||||||||||||||||
Plan participants’ contributions | 4 | 4 | 5 | — | — | — | — | — | 1 | |||||||||||||||||||||||||||
Benefits paid | (95 | ) | (88 | ) | (87 | ) | (7 | ) | (8 | ) | (7 | ) | (10 | ) | (9 | ) | (11 | ) | ||||||||||||||||||
Other, net | 1 | (2 | ) | 7 | — | — | — | — | — | — | ||||||||||||||||||||||||||
Translation adjustments | 121 | (83 | ) | 72 | — | — | — | — | — | — | ||||||||||||||||||||||||||
Ending fair value of plan assets | 2,457 | 2,181 | 2,050 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Funded status — deficit | (41 | ) | (87 | ) | (54 | ) | (207 | ) | (207 | ) | (182 | ) | (164 | ) | (165 | ) | (154 | ) | ||||||||||||||||||
Unamortised net actuarial loss | 437 | 515 | 529 | 29 | 38 | 27 | 40 | 50 | 43 | |||||||||||||||||||||||||||
Unamortised past service costs | 7 | 4 | 5 | 2 | 6 | 7 | 2 | (1 | ) | (1 | ) | |||||||||||||||||||||||||
Unamortised net transitional asset | (4 | ) | (5 | ) | (6 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Post-measurement date activity(1) | — | 14 | 1 | 2 | 2 | 2 | 2 | 2 | 2 | |||||||||||||||||||||||||||
Accrued benefit asset (liability) | 399 | 441 | 475 | (174 | ) | (161 | ) | (146 | ) | (120 | ) | (114 | ) | (110 | ) | |||||||||||||||||||||
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Percentage of Plans’ Assets | ||||||||||||
Asset category | 2006 | 2005 | 2004 | |||||||||
Equity securities | 49 per cent. | 56 per cent. | 56 per cent. | |||||||||
Debt securities | 51 per cent. | 44 per cent. | 44 per cent. | |||||||||
Total | 100 per cent. | 100 per cent. | 100 per cent. |
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Other | |||||||||
Pensions | Post-Retirement | ||||||||
Funded | Unfunded | Plans | |||||||
2004 | 87 | 7 | 11 | ||||||
2005 | 88 | 8 | 9 | ||||||
2006 | 95 | 7 | 10 | ||||||
Estimated Future Payments: | |||||||||
2007 | 100 | 8 | 10 | ||||||
2008 | 100 | 9 | 11 | ||||||
2009 | 104 | 11 | 11 | ||||||
2010 | 108 | 12 | 12 | ||||||
2011 | 112 | 13 | 13 | ||||||
2012 to 2016 | 638 | 74 | 69 |
Note 18: | Contingencies, Commitments and Guarantees |
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5.2.1
Note 19: | Acquisitions and Disposals |
Year Ended 31 December | |||||||||||||||||
2006 | 2005 | 2004 | |||||||||||||||
Number of | Cash | Number of | Cash | Number of | Cash | ||||||||||||
Transactions | Consideration | Transactions | Consideration | Transactions | Consideration | ||||||||||||
Businesses and identifiable intangible assets acquired | 23 | 692 | 25 | 181 | 29 | 1,117 | |||||||||||
Contingent consideration payment — TradeWeb | — | 50 | — | 50 | — | — | |||||||||||
Investments in businesses | 2 | 2 | 3 | 15 | 1 | 6 | |||||||||||
25 | 744 | 28 | 246 | 30 | 1,123 | ||||||||||||
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2006 | 2005 | 2004 | ||||||||||
Cash and cash equivalents | 11 | 8 | 210 | |||||||||
Accounts receivable | 31 | 12 | 58 | |||||||||
Prepaid expenses and other current assets | 12 | 12 | 12 | |||||||||
Computer hardware and other property | 9 | 2 | 5 | |||||||||
Computer software | 49 | 5 | 68 | |||||||||
Identifiable intangible assets | 160 | 126 | 495 | |||||||||
Goodwill | 528 | 82 | 698 | |||||||||
Other non-current assets | 5 | — | 1 | |||||||||
Total assets | 805 | 247 | 1,547 | |||||||||
Accounts payable and accruals | (29 | ) | (25 | ) | (114 | ) | ||||||
Deferred revenue | (61 | ) | (12 | ) | (87 | ) | ||||||
Other non-current liabilities | (12 | ) | (21 | ) | (20 | ) | ||||||
Total liabilities | (102 | ) | (58 | ) | (221 | ) | ||||||
Net assets | 703 | 189 | 1,326 | |||||||||
5.2.1
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Acquiring Market | ||||||
Date | Company | Group | Description | |||
October 2006 | Solucient, LLC | Healthcare | An advanced healthcare analytics and information company | |||
September 2006 | LiveNote Technologies | Legal | A provider of transcript and evidence management software | |||
May 2006 | MercuryMD, Inc. | Healthcare | A provider of mobile information systems serving the healthcare market | |||
March 2006 | Quantitative Analytics, Inc. | Financial | A provider of financial database integration and analysis solutions | |||
July 2005 | Global Securities Information, Inc. | Legal | A provider of online securities and securities-related information and research services | |||
February 2005 | Tax Partners, LLC | Tax & Accounting | A provider of sales and use tax compliance services primarily servicing the telecommunications industry in the US | |||
November 2004 | Information Holdings Inc. | Scientific | A provider of intellectual property and regulatory information | |||
May 2004 | TradeWeb LLC | Financial | An online global trading platform for fixed income securities | |||
May 2004 | Starquote | Financial | A provider of financial information to the Canadian retail equity market | |||
March 2004 | CCBN.com, Inc. | Financial | A provider of web-based communications solutions for the investment community | |||
January 2004 | BIOSIS | Scientific | A provider of custom and standard information resources for biological researchers |
Weighted-Average Amortisation | ||||||||||||||||||
Amortisation Period (Years) | ||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | |||||||||||||
Finite useful lives: | ||||||||||||||||||
Tradenames | 16 | 13 | 70 | 10 | 10 | 7 | ||||||||||||
Customer relationships | 116 | 103 | 305 | 10 | 13 | 11 | ||||||||||||
Databases and content | 8 | 7 | 90 | 8 | 7 | 8 | ||||||||||||
Other | 20 | 3 | 30 | 7 | 3 | 6 | ||||||||||||
160 | 126 | 495 | ||||||||||||||||
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Note 20: | Stock-based Compensation |
2006 | 2005 | 2004 | |||||||||||||||||||
C$ Weighted- | |||||||||||||||||||||
C$ Weighted- | Average | C$ weighted- | |||||||||||||||||||
Average | Exercise | Average | |||||||||||||||||||
SARs | Exercise Price | SARs | Price | SARs | Exercise Price | ||||||||||||||||
Outstanding at beginning of year | 2,209,503 | 38.66 | 2,451,224 | 37.28 | 2,611,168 | 36.51 | |||||||||||||||
Granted | — | — | 252,154 | 40.77 | 219,467 | 41.74 | |||||||||||||||
Exercised | (527,000 | ) | 33.01 | (382,335 | ) | 28.72 | (278,827 | ) | 31.09 | ||||||||||||
Forfeited | (150,945 | ) | 36.26 | (111,540 | ) | 47.16 | (100,584 | ) | 44.18 | ||||||||||||
Outstanding at end of year | 1,531,558 | 40.84 | 2,209,503 | 38.66 | 2,451,224 | 37.28 | |||||||||||||||
Exercisable at end of year | 1,197,941 | 40.65 | 1,692,789 | 37.75 | 1,953,396 | 35.85 | |||||||||||||||
SARs Outstanding | SARs Exercisable | |||||||||||||||
Weighted- | C$ | | | |||||||||||||
C$ | Number | Average | Weighted- | Number | C$ | |||||||||||
Range of | Outstanding at | Remaining | Average | Exercisable at | Weighted-Average | |||||||||||
Exercise Prices | 31/12/06 | Contractual Life | Exercise Price | 31/12/06 | Exercise Price | |||||||||||
21.77-32.125 | 45,834 | 0.5 | 21.77 | 45,834 | 21.77 | |||||||||||
35.00-44.50 | 1,300,546 | 5.0 | 39.87 | 966,929 | 39.31 | |||||||||||
48.40-57.45 | 185,178 | 4.5 | 52.34 | 185,178 | 52.34 |
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2006 | 2005 | 2004 | |||||||||||||||||||
C$ weighted- | C$ weighted- | C$ weighted- | |||||||||||||||||||
Average | Average | Average | |||||||||||||||||||
Options | Exercise Price | Options | Exercise Price | Options | Exercise Price | ||||||||||||||||
Outstanding at beginning of year | 5,451,664 | 49.67 | 5,958,774 | 49.46 | 6,277,090 | 49.43 | |||||||||||||||
Granted | — | — | 28,000 | 40.85 | 16,500 | 41.74 | |||||||||||||||
Exercised | (157,800 | ) | 42.69 | (242,100 | ) | 41.00 | (48,400 | ) | 41.00 | ||||||||||||
Forfeited | (194,472 | ) | 52.16 | (293,010 | ) | 51.59 | (286,416 | ) | 49.77 | ||||||||||||
Outstanding at end of year | 5,099,392 | 49.79 | 5,451,664 | 49.67 | 5,958,774 | 49.46 | |||||||||||||||
Exercisable at end of year | 5,067,267 | 49.85 | 5,384,539 | 49.77 | 4,952,559 | 50.16 | |||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||
Weighted- | C$ | C$ | ||||||||||||||
C$ | Number | Average | Weighted- | Number | weighted- | |||||||||||
Range of | Outstanding at | Remaining | Average Exercise | Exercisable at | Average | |||||||||||
Exercise Prices | 31/12/06 | Contractual Life | Price | 31/12/06 | Exercise Price | |||||||||||
40.69 — 44.40 | 1,138,000 | 3.5 | 41.05 | 1,105,875 | 41.04 | |||||||||||
45.90 — 48.70 | 2,126,872 | 4.9 | 48.36 | 2,126,872 | 48.36 | |||||||||||
50.25 — 57.45 | 1,834,520 | 4.0 | 56.88 | 1,834,520 | 56.88 |
2004 | |||||||||||||||||||||
2006 | 2005 | US$ | |||||||||||||||||||
US$ Weighted- | US$ weighted- | Weighted- | |||||||||||||||||||
Average | Average | Average | |||||||||||||||||||
Options | Exercise Price | Options | Exercise Price | Options | Exercise Price | ||||||||||||||||
Outstanding at beginning of year | 10,469,989 | 32.62 | 7,956,303 | 31.38 | 5,240,395 | 29.96 | |||||||||||||||
Granted | 380,000 | 38.27 | 3,084,846 | 35.11 | 2,934,033 | 33.71 | |||||||||||||||
Exercised | (742,400 | ) | 30.83 | (330,285 | ) | 27.77 | (59,500 | ) | 26.06 | ||||||||||||
Forfeited | (479,625 | ) | 32.66 | (240,875 | ) | 30.50 | (158,625 | ) | 29.17 | ||||||||||||
Outstanding at end of year | 9,627,964 | 32.98 | 10,469,989 | 32.62 | 7,956,303 | 31.38 | |||||||||||||||
Exercisable at end of year | 5,094,436 | 31.39 | 3,392,303 | 30.41 | 1,833,015 | 28.86 | |||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||
Weighted- | US$ | US$ | ||||||||||||||
US$ Range of | Number | Average | Weighted- | Number | Weighted- | |||||||||||
Exercise | Outstanding at | Remaining | Average Exercise | Exercisable at | Average | |||||||||||
Prices | 31/12/06 | Contractual Life | Price | 31/12/06 | Exercise Price | |||||||||||
26.06 — 29.70 | 1,594,867 | 6.0 | 26.07 | 1,591,742 | 26.07 | |||||||||||
30.79 — 33.76 | 4,747,126 | 7.5 | 33.55 | 2,809,861 | 33.49 | |||||||||||
33.87 — 41.66 | 3,285,971 | 9.0 | 35.50 | 692,833 | 35.14 |
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2006 | 2005 | 2004 | |||||||
Risk-free interest rate | 4.6 per cent. | 4.4 per cent. | 3.8 per cent. | ||||||
Dividend yield | 2.3 per cent. | 2.3 per cent. | 2.3 per cent. | ||||||
Volatility factor | 18.5 per cent. | 18.8 per cent. | 22.9 per cent. | ||||||
Expected life (in years) | 6 | 6 | 6 |
2006 | 2005 | 2004 | |||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||
Weighted- | Weighted- | Weighted- | |||||||||||||||||||
Average | Average | Average | |||||||||||||||||||
RSUs | Value | RSUs | Value | RSUs | Value | ||||||||||||||||
Outstanding at beginning of year | 223,715 | 33.86 | 27,150 | 34.68 | — | — | |||||||||||||||
Granted | 192,098 | 38.20 | 201,194 | 33.77 | 30,167 | 34.68 | |||||||||||||||
Vested | (7,888 | ) | 34.79 | (4,629 | ) | 34.69 | (3,017 | ) | 34.68 | ||||||||||||
Outstanding at end of year | 407,925 | 35.89 | 223,715 | 33.86 | 27,150 | 34.68 | |||||||||||||||
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Note 21: | Supplemental Cash Flow Information |
2006 | 2005 | 2004 | ||||||||||
Accounts receivable | (140 | ) | (69 | ) | (70 | ) | ||||||
Inventories | (4 | ) | 2 | — | ||||||||
Prepaid expenses and other current assets | 2 | (16 | ) | (14 | ) | |||||||
Accounts payable and accruals | 66 | 70 | 3 | |||||||||
Deferred revenue | 81 | 38 | (28 | ) | ||||||||
Income taxes | (34 | ) | (21 | ) | (39 | ) | ||||||
Other | (17 | ) | (60 | ) | (26 | ) | ||||||
(46 | ) | (56 | ) | (174 | ) | |||||||
Note 22: | Related Party Transactions |
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Note 23: | Segment Information |
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Segment | Additions to Capital | ||||||||||||||||
Operating | Assets (1) and | Total | |||||||||||||||
Revenues | Depreciation | Profit | Goodwill | assets | |||||||||||||
(Millions of US dollars) | |||||||||||||||||
Legal | 3,029 | 188 | 950 | 329 | 6,454 | ||||||||||||
Financial | 2,025 | 180 | 380 | 395 | 3,489 | ||||||||||||
Tax & Accounting | 598 | 22 | 168 | 66 | 1,086 | ||||||||||||
Scientific | 602 | 23 | 151 | 57 | 1,344 | ||||||||||||
Healthcare | 374 | 16 | 81 | 351 | 755 | ||||||||||||
Segment totals | 6,628 | 429 | 1,730 | 1,198 | 13,128 | ||||||||||||
Corporate and other(2) | — | 10 | (235 | ) | 28 | 1,442 | |||||||||||
Eliminations | (16 | ) | — | — | — | — | |||||||||||
Continuing operations | 6,612 | 439 | 1,495 | 1,226 | 14,570 | ||||||||||||
Discontinued operations | 5,562 | ||||||||||||||||
Total | 20,132 | ||||||||||||||||
Additions to Capital | |||||||||||||||||
Segment | Assets (1) and | Total | |||||||||||||||
Revenues | Depreciation | Operating Profit | Goodwill | Assets | |||||||||||||
(Millions of US dollars) | |||||||||||||||||
Legal | 2,818 | 172 | 856 | 349 | 6,209 | ||||||||||||
Financial | 1,908 | 178 | 334 | 202 | 3,376 | ||||||||||||
Tax & Accounting | 532 | 20 | 141 | 64 | 1,030 | ||||||||||||
Scientific | 569 | 20 | 129 | 28 | 1,295 | ||||||||||||
Healthcare | 334 | 14 | 80 | 36 | 395 | ||||||||||||
Segment totals | 6,161 | 404 | 1,540 | 679 | 12,305 | ||||||||||||
Corporate and other(2) | — | 10 | (139 | ) | 12 | 1,476 | |||||||||||
Eliminations | (16 | ) | — | — | — | — | |||||||||||
Continuing operations | 6,145 | 414 | 1,401 | 691 | 13,781 | ||||||||||||
Discontinued operations | 5,653 | ||||||||||||||||
Total | 19,434 | ||||||||||||||||
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Additions to | |||||||||||||||||
Segment | Capital | ||||||||||||||||
Operating | Assets(1) | Total | |||||||||||||||
Revenues | Depreciation | Profit | and Goodwill | Assets | |||||||||||||
(Millions of US dollars) | |||||||||||||||||
Legal | 2,659 | 167 | 783 | 222 | 6,191 | ||||||||||||
Financial | 1,750 | 183 | 295 | 804 | 3,535 | ||||||||||||
Tax & Accounting | 480 | 21 | 129 | 49 | 979 | ||||||||||||
Scientific | 476 | 17 | 104 | 572 | 1,324 | ||||||||||||
Healthcare | 305 | 15 | 66 | 14 | 359 | ||||||||||||
Segment totals | 5,670 | 403 | 1,377 | 1,661 | 12,388 | ||||||||||||
Corporate and other(2) | — | 12 | (115 | ) | 5 | 1,504 | |||||||||||
Eliminations | (12 | ) | — | — | — | — | |||||||||||
Continuing operations | 5,658 | 415 | 1,262 | 1,666 | 13,892 | ||||||||||||
Discontinued operations | 5,751 | ||||||||||||||||
Total | 19,643 |
Capital Assets(1) | Total | ||||||||
(By Country of Origin) | Revenues | and Goodwill | Assets | ||||||
(Millions of US dollars) | |||||||||
United States | 5,350 | 8,962 | 15,531 | ||||||
Europe | 892 | 1,867 | 3,103 | ||||||
Asia-Pacific | 193 | 158 | 387 | ||||||
Canada | 155 | 164 | 948 | ||||||
Other countries | 22 | 36 | 163 | ||||||
Total | 6,612 | 11,187 | 20,132 | ||||||
Capital Assets(1) | Total | ||||||||
(By Country of Origin) | Revenues | and Goodwill | Assets | ||||||
(Millions of US dollars) | |||||||||
United States | 4,994 | 8,518 | 15,688 | ||||||
Europe | 806 | 1,641 | 2,738 | ||||||
Asia-Pacific | 183 | 146 | 359 | ||||||
Canada | 142 | 178 | 437 | ||||||
Other countries | 20 | 96 | 212 | ||||||
Total | 6,145 | 10,579 | 19,434 | ||||||
Capital Assets(1) | Total | ||||||||
(By Country of Origin) | Revenues | and Goodwill | Assets | ||||||
(Millions of US dollars) | |||||||||
United States | 4,596 | 8,640 | 15,558 | ||||||
Europe | 753 | 1,779 | 3,091 | ||||||
Asia-Pacific | 173 | 155 | 375 | ||||||
Canada | 117 | 178 | 423 | ||||||
Other countries | 19 | 39 | 196 | ||||||
Total | 5,658 | 10,791 | 19,643 | ||||||
(1) | Capital assets include computer hardware and other property, capitalised software for internal use and identifiable intangible assets. | |
(2) | Corporate and other includes corporate costs, THOMSONplusand costs associated with the Company’s stock-based compensation expense. |
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For the Year Ended 31 December | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Segment operating profit | 1,495 | 1,401 | 1,262 | |||||||||
Less: Amortisation | (241 | ) | (235 | ) | (206 | ) | ||||||
Operating profit | 1,254 | 1,166 | 1,056 | |||||||||
Note 24: | Reconciliation of Canadian to US GAAP |
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For the Year Ended 31 December | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Net earnings under Canadian GAAP | 1,120 | 934 | 1,011 | |||||||||
Differences in GAAP increasing (decreasing) reported earnings: | ||||||||||||
Asset retirement obligations | — | — | (11 | ) | ||||||||
Business combinations | 17 | 15 | 36 | |||||||||
Related party transaction (Note 22) | — | — | (14 | ) | ||||||||
Derivative instruments and hedging activities | 12 | 4 | 11 | |||||||||
Income taxes | (6 | ) | (6 | ) | (11 | ) | ||||||
Net other (expense) income | — | — | (6 | ) | ||||||||
Net income under US GAAP | 1,143 | 947 | 1,016 | |||||||||
Earnings under US GAAP from continuing operations | 936 | 669 | 635 | |||||||||
Earnings under US GAAP from discontinued operations | 207 | 278 | 381 | |||||||||
Net income under US GAAP | 1,143 | 947 | 1,016 | |||||||||
Basic earnings per common share, under US GAAP, from: | ||||||||||||
Continuing operations | $ | 1.45 | $ | 1.02 | $ | 0.96 | ||||||
Discontinued operations, net of tax | $ | 0.32 | $ | 0.42 | $ | 0.59 | ||||||
Basic earnings per common share | $ | 1.77 | $ | 1.44 | $ | 1.55 | ||||||
Diluted earnings per common share, under US GAAP, from: | ||||||||||||
Continuing operations | $ | 1.44 | $ | 1.02 | $ | 0.96 | ||||||
Discontinued operations, net of tax | $ | 0.32 | $ | 0.42 | $ | 0.58 | ||||||
Diluted earnings per common share | $ | 1.76 | $ | 1.44 | $ | 1.54 | ||||||
Comprehensive income under Canadian GAAP | 1,337 | 721 | 1,210 | |||||||||
Differences in GAAP increasing (decreasing) reported comprehensive income: | ||||||||||||
Differences in net income as per above | 23 | 13 | 5 | |||||||||
Foreign currency translation | (2 | ) | 2 | (1 | ) | |||||||
Pension adjustment (including tax charge of $7 million in 2006, benefits of $4 million in 2005, $1 million in 2004) | 16 | 21 | 2 | |||||||||
Net unrealised gains on cash flow hedges (net of taxes in 2006, 2005 and 2004 — nil) | — | 26 | 40 | |||||||||
Comprehensive income under US GAAP | 1,374 | 783 | 1,256 | |||||||||
As at 31 December | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Shareholders’ equity under Canadian GAAP | 10,481 | 9,963 | 9,962 | |||||||||
Differences in GAAP increasing (decreasing) reported Shareholders’ equity: | ||||||||||||
Business combinations | (590 | ) | (605 | ) | (622 | ) | ||||||
Employee future benefits | (512 | ) | (33 | ) | (50 | ) | ||||||
Derivative instruments and hedging activities | 9 | 48 | 18 | |||||||||
Income taxes | 339 | 157 | 159 | |||||||||
Shareholders’ equity under US GAAP | 9,727 | 9,530 | 9,467 | |||||||||
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FAS 158 Adjustments | ||||
Other non-current assets | (380 | ) | ||
Accounts payable and accruals | 19 | |||
Other non-current liabilities | 103 | |||
Long-term deferred income tax liability | (195 | ) | ||
Accumulated other comprehensive loss | (307 | ) |
Note 25: | Subsequent Events |
20.7.1
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5.2.2
• | The European Commission informed the Company and Reuters that it will proceed to a Phase 2 review of the Transaction in order to give it more time to examine the Transaction and its impact on the competitive environment. The Company and Reuters currently anticipate that the Phase 2 review will be completed during the first quarter of 2008. |
• | The Company and Reuters signed a timing agreement with the US Department of Justice related to its regulatory review of the transaction. Under the timing agreement, the Department of Justice will provide the Company and Reuters with a decision by 15 January 2008. |
• | The Company and Reuters signed a technical amendment related to the US regulatory pre-condition described in the joint announcement of 15 May 2007. The purpose of the amendment was to reflect the actual review procedure being conducted by the Department of Justice and the companies’ original intent in drafting the US regulatory pre-condition. For technical reasons related to the dual listed company (“DLC”) structure contemplated for Thomson Reuters, the Transaction is not subject to the filing and waiting period requirements of the HSR Act of 1976, as had been contemplated and reflected in the original wording of the US regulatory pre-condition. As previously disclosed, the Department of Justice has been conducting a review of the transaction similar to aHart-Scott-Rodino review, as is common for a Transaction of this size. |
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6. | Unaudited reconciliation of Thomson financial information to IFRS as applied by Reuters |
For the Nine | For The Year Ended | |||||||||||||||
Months Ended | 31 December | |||||||||||||||
30 September 2007 | 2006 | 2005 | 2004 | |||||||||||||
(In millions of US dollars, except per common share amounts) | ||||||||||||||||
Net earnings under Canadian GAAP | 3,570 | 1,120 | 934 | 1,011 | ||||||||||||
Differences in GAAP increasing (decreasing) reported earnings: | ||||||||||||||||
Business combinations | (1 | ) | — | (12 | ) | (28 | ) | |||||||||
Employee benefits | 78 | 67 | 43 | 28 | ||||||||||||
Stock-based compensation | 7 | 15 | (2 | ) | 5 | |||||||||||
Impairments of long-term assets | (79 | ) | (31 | ) | — | — | ||||||||||
Derivative instruments and hedging activities | (2 | ) | 3 | 6 | (8 | ) | ||||||||||
Income taxes | (12 | ) | (18 | ) | 28 | (18 | ) | |||||||||
Net earnings under IFRS as applied by Reuters | 3,561 | 1,156 | 997 | 990 | ||||||||||||
Basic earnings per common share | 5.55 | 1.79 | 1.52 | 1.51 | ||||||||||||
Diluted earnings per common share | 5.52 | 1.78 | 1.52 | 1.50 | ||||||||||||
As at | ||||||||||||||||
30 September | As at 31 December | |||||||||||||||
2007 | 2006 | 2005 | 2004 | |||||||||||||
(In millions of US dollars) | ||||||||||||||||
Shareholders’ equity under Canadian GAAP | 13,584 | 10,481 | 9,963 | 9,962 | ||||||||||||
Differences increasing (decreasing) reported shareholders’ equity: | ||||||||||||||||
Business combinations | (41 | ) | (40 | ) | (40 | ) | (28 | ) | ||||||||
Employee benefits | (276 | ) | (487 | ) | (641 | ) | (575 | ) | ||||||||
Stock-based compensation | (11 | ) | (12 | ) | (30 | ) | (27 | ) | ||||||||
Impairment of long-term assets | (110 | ) | (31 | ) | — | — | ||||||||||
Derivative instruments and hedging activities | (1 | ) | 1 | 59 | (8 | ) | ||||||||||
Share repurchases | — | (24 | ) | — | — | |||||||||||
Income taxes | 114 | 175 | 224 | 154 | ||||||||||||
Shareholders’ equity under IFRS as applied by Reuters | 13,259 | 10,063 | 9,535 | 9,478 | ||||||||||||
• | Business combinations— Thomson has elected not to apply IFRS 3, Business Combinations, retrospectively to business combinations that occurred prior to the Transition Date. Consequently, business combinations that were recognised before the Transition Date have not been restated. Any goodwill arising on such business combinations before the Transition Date was not adjusted |
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from the carrying value previously determined under Canadian GAAP as a result of applying this exemption. |
• | Employee benefits— Retrospective application of the corridor approach for recognition of actuarial gains and losses in accordance with IAS 19, Employee Benefits, would require a company to determine actuarial gains and losses from the date benefit plans were established. Thomson has elected to recognise all cumulative actuarial gains and losses that existed at the Transition Date in opening retained earnings. |
• | Currency translation differences— Retrospective application of IFRS would require Thomson to determine the translation differences in accordance with IFRS from the date a subsidiary or associate was formed or acquired. Thomson has elected to reset all cumulative translation gains and losses to zero at the Transition Date. |
• | Designation of previously recognised financial assets and liabilities— At the Transition Date, Thomson has elected to designate as at fair value through profit and loss certain financial assets or financial liabilities that qualify for such designation. |
• | Share-based payments— Thomson has elected to avail itself of the exemption provided under IFRS 1 and has applied IFRS 2, Share Based Payments, for all the equity instruments granted after 7 November 2002 that had not vested by the date of adoption of IAS 32, which for Reuters was 1 January 2005. |
• | Changes in existing decommissioning, restoration and similar liabilities included in the cost of property, plant and equipment — Thomson elected not to retroactively recognise changes to liabilities under IFRIC 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities, which may have occurred before the Transition Date. |
• | Compound financial instruments— IAS 32, Financial Instruments: Disclosures and Presentation, requires compound financial instruments to be separated into debt and equity components based on the terms of the instrument at inception. Thomson has elected the exemption not to separate the components if the liability component is not outstanding as of the date of adoption of IAS 32, which as applied by Reuters was 1 January 2005. |
• | Derecognition of financial assets and financial liabilities — IFRS 1 requires first-time adopters to apply the derecognition requirements in IAS 39, Financial Instruments: Recognition and Measurement, prospectively for transactions occurring on or after its adoption date, which for Reuters was 1 January 2005. |
• | Hedge accounting— Hedge accounting can only be applied prospectively from the date of adoption of IAS 39, which as applied by Reuters was 1 January 2005, to transactions that satisfy the hedge accounting criteria in IAS 39 at that date. Hedging relationships cannot be designated retrospectively and the supporting documentation cannot be created retrospectively. As a result, only hedging relationships that satisfied the hedge accounting criteria as of the date of adoption were reflected in Thomson’s IFRS results. |
• | Estimates— Hindsight is not used to create or revise estimates. The estimates previously made by Thomson under Canadian GAAP were not revised for application of IFRS except where necessary to reflect any difference in accounting policies. |
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Note 1: | Business Combination |
Note 2: | Employee Benefits |
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Note 3: | Stock-based Compensation |
Note 4: | Impairments of Long-Term Assets |
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Note 5: | Financial Instruments |
Note 6: | Income Taxes |
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Note 7: | Other Differences |
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7. | Report from PwC Canada on the unaudited reconciliation of Thomson financial information |
Citigroup Centre
33 Canada Square
Canary Wharf London E14 5LB
United Kingdom
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8. | Capitalisation and indebtedness disclosures for Thomson |
As at | ||||
31 December | ||||
2007 | ||||
(US dollars in millions) | ||||
Indebtedness | ||||
Total current debt | ||||
Guaranteed | — | |||
Secured | — | |||
Unguaranteed/Unsecured | (595 | ) | ||
(595 | ) | |||
Total non-current debt (excluding current portion of long-term debt) | ||||
Guaranteed | — | |||
Secured | — | |||
Unguaranteed/Unsecured | (4,264 | ) | ||
(4,264 | ) | |||
Total indebtedness | (4,859 | ) | ||
As at | |||
30 September | |||
2007 | |||
Capitalisation | |||
Share capital | 2,708 | ||
Legal reserve | — | ||
Other reserves | 196 | ||
Total capitalisation | 2,904 | ||
i. | This information is unaudited. |
ii. | The statement of indebtedness has been prepared using accounting policies which are consistent with those used in preparing Thomson’s financial statements for the nine months ended 30 September 2007. |
iii. | Capitalisation does not include the profit and loss account reserve. |
iv. | There has been no material change to the capitalisation of Thomson between 30 September 2007 and the date of this document. |
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As at | ||||
31 December | ||||
(US dollars in millions) | 2007 | |||
Net financial indebtedness | ||||
Cash and cash equivalents | 7,497 | |||
Trading securities | — | |||
Liquidity | 7,497 | |||
Current financial receivable | — | |||
Current bank debt | (26 | ) | ||
Current portion of non-current debt | (400 | ) | ||
Other current financial debt | (169 | ) | ||
Current financial debt | (595 | ) | ||
Net current liquidity | 6,902 | |||
Non-current bank loans | — | |||
Bonds issued | (4,259 | ) | ||
Other non-current loans | (5 | ) | ||
Non-current financial indebtedness | (4,264 | ) | ||
Net liquidity | 2,638 | |||
i. | This information is unaudited. |
ii. | This statement of net financial indebtedness has been prepared using accounting policies which are consistent with those used in preparing Thomson’s financial statements for the nine months ended 30 September 2007. |
iii. | Thomson held derivative financial instruments not reflected in the above analysis that are used to hedge currency and interest rate risk exposures related to Thomson’s debt. As at 31 December 2007, the fair values of these derivative financial instruments were $2 million included in prepaid expenses and other current assets and $422 million included in other non-current assets. |
iv. | Thomson held sterling call options not reflected in the above analysis. As the funding of the cash consideration required to be paid to Reuters shareholders will fluctuate based on the $/£ exchange rate, in July 2007 Thomson commenced a hedging program to mitigate exposure to changes in the $/£ exchange rate. In the third quarter of 2007, Thomson paid approximately $76 million for the purchase of several sterling call options with a cumulative notional value of £2,300 million and various strike prices of approximately $2.05/£1.00. The fair value of these options at 31 December 2007 was approximately $27 million. |
v. | In the third quarter of 2007, the US District Court for the Western District of Pennsylvania decided against Thomson in a patent infringement case related to a business formerly owned by Thomson Financial. Thomson subsequently posted a $95 million letter of credit in connection with its appeal. The letter of credit represents the amount of the districts court’s judgment, plus interest. At this time, Thomson believes that the ultimate outcome of this matter will not have a material adverse effect on its financial condition taken as a whole. |
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9. | Thomson fourth quarter report and full year 2007 result |
The Thomson Corporation Metro Center, One Station Place Stamford, CT 06902 Tel(203) 539-8000 www.thomson.com |
Media Contact: | Investor Contact: | |
Fred Hawrysh | Frank J. Golden | |
Global Director, External Communications | Vice President, Investor Relations | |
(203)539-8314 | (203) 539-8470 | |
fred.hawrysh@thomson.com | frank.golden@thomson.com |
• | Milestone year marked by strong growth, operating performance and strategic repositioning of portfolio through sale of Thomson Learning and proposed acquisition of Reuters |
• | Double-digit increases in full-year and fourth-quarter revenue and EPS reflects strong momentum entering new year |
• | Board approves 10% dividend increase, third consecutive year of double-digit dividend growth |
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• | Revenues increased 10%, to $2.0 billion, led by strong growth in the Legal, Financial, Tax & Accounting and Scientific business segments. Organic revenue growth was 6%. |
• | Operating profit decreased 3%, to $410 million in the fourth quarter. Operating profit margin was 20.2%, compared with 22.8% in the prior-year period. Underlying operating profit increased 8% and the underlying operating margin was 24.1%, compared with 24.4% in the fourth quarter of 2006. This decline was primarily due to the initial dilutive impact from acquisitions and the timing of expenses. |
• | Earnings attributable to common shares were $432 million, or $0.67 diluted earnings per share, compared to $390 million, or $0.61 diluted earnings per share, in the fourth quarter of 2006. Adjusted earnings for the period were $384 million, or $0.60 per share, compared with $320 million, or $0.50 per share, in the prior-year period, after adjusting for discontinued operations, costs related to the proposed Reuters transaction, other expenses, the gain on the settlement of a pension plan, tax expenses associated with these items, and the normalization of the tax rate. |
• | Revenues increased 11%, to $7.3 billion, driven by strong growth across all business segments. Organic revenue growth was 6%. |
• | Operating profit increased 4%, to $1.3 billion. Operating profit margin was 17.8% compared with 18.9% in 2006. Underlying operating profit increased 14%, to $1.5 billion, and underlying operating profit margin increased 60 basis points, to 20.4%. |
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• | Earnings attributable to common shares were $4.0 billion, or $6.20 diluted earnings per share, compared to $1.1 billion, or $1.73 diluted earnings per share, in 2006. Earnings in 2007 included $2.9 billion related to discontinued operations, net of tax, primarily related to the gain from the sale of Thomson Learning’s higher education assets, completed in the third quarter. Adjusted earnings were $1.1 billion, or $1.69 per share, compared with $857 million, or $1.33 per share, in 2006, after adjusting for the items noted above. |
• | Net cash provided by operations was $1.8 billion, compared with $2.1 billion in 2006. Free cash flow was $1.1 billion, compared with $1.4 billion in 2006, reflecting discontinued operations, interest income earned on the proceeds from the sale of Thomson Learning, and the special items. Excluding these, free cash flow increased 12%. |
• | In 2007, approximately 82% of revenue was derived from electronic, software and services which grew 13%, and more than 80% of revenue was recurring in nature. |
• | In October 2007, Thomson Financial announced a strategic partnership with nine of the world’s leading global dealers to further expand electronic trading using the TradeWeb platform. This partnership will help to drive the expansion of electronic trading, utilizing TradeWeb’s leading multi-dealer-to-client marketplace for fixed income and derivatives to create a global multi-asset class execution venue for clients. In January 2008, the dealers invested approximately $180 million to purchase a 15% stake in TradeWeb’s established markets. In addition, Thomson and the dealers agreed to fund additional investment in order to expand the TradeWeb platform to new asset classes, including equities and derivatives, such as interest rate and credit default swaps. |
• | Thomson’s accelerated efforts to increase operational efficiency through a series of initiatives (THOMSONplus) continued in the fourth quarter. As a result, at the end of the fourth quarter, Thomson achieved annualized run-rate savings of $120 million, investing $153 million in 2007. The aggregate amount expected to be spent on THOMSONplusremains unchanged at $250 million. However Thomson expects to achieve annualized run-rate savings of $160 million by the middle of 2008, six months ahead of schedule, and in excess of its original target of $150 million. |
• | Revenues increased 10% in both the fourth quarter and full year, to $875 million and $3.3 billion, respectively. Organic revenue growth was 7% for both the fourth quarter and full year 2007, with acquisitions contributing 1% and foreign exchange adding 2% in each period. |
• | In the fourth quarter, organic revenue growth was driven by Westlaw, which increased 8%, with solid growth across all customer segments, including strong demand for Westlaw Litigator and FindLaw. Revenues from the segment’s international online legal business grew at a double-digit rate for the third consecutive quarter. |
• | Fourth-quarter segment operating profit grew 7%, to $272 million. Operating profit growth reflected investments in developing online legal businesses in Japan and China, and some expense timing. As a result, operating margin for the quarter decreased 100 basis points, to 31.1%. |
• | For the full year, operating profit grew 11%, with the related margin increasing 20 basis points, to 31.5%. |
• | Fourth-quarter revenues grew 9%, to $575 million, with organic growth of 6%, acquisitions contributing 1%, and foreign exchange adding 2%. Organic revenue growth was driven by strength across multiple customer segments, including Investment Management, Omgeo and Corporate Services. Investment Management growth was driven by continued demand for Thomson ONE and StreetEvents. International growth was also strong as Europe and Asia each recorded double-digit organic revenue increases. |
• | For the full year, revenues grew 8%, to $2.2 billion. Organic growth was 5%, acquisitions added 1%, and foreign exchange contributed 2%. |
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• | Fourth-quarter segment operating profit grew 22%, to $135 million, and the related margin increased 250 basis points, to 23.5%, driven by strong revenue growth, operating efficiency initiatives and integration-related savings. |
• | For the full year 2007, operating profit increased 19%, to $454 million, with operating margins increasing 200 basis points, to 20.8%. |
• | Fourth-quarter revenues increased 18%, to $248 million. Organic revenues grew 8% in the quarter, and growth from acquisitions was 10%. Tax and Accounting’s revenue growth in the quarter benefited from the successful integration of its CrossBorder Solutions and Deloitte Property Tax Services acquisitions. Organic revenue growth in the quarter was due to strong performances from Checkpoint and core software products targeted to accountants and corporations, including UltraTax and InSource, reflecting strong new sales and high retention rates. |
• | For the full-year 2007, revenues rose 18%, to $705 million, with organic revenues up 10% and acquisitions adding 8%. |
• | Fourth-quarter segment operating profit declined, as expected, by 6%, to $89 million, primarily due to the dilutive effect of several acquisitions largely caused by the initial accounting for revenue. In total, acquisitions affected fourth-quarter margins by roughly 600 basis points, leading to a decline in the operating margin in the quarter to 35.9%, compared with 45% in the prior-year period. As the business integrates these acquisitions in 2008 and the requisite accounting treatment is normalized, the operating margin is expected to return to historical averages by the end of 2008. |
• | For the full year, operating profit increased 10% to $184 million, while operating profit margin decreased 200 basis points, to 26.1%, due to the dilutive effect of acquisitions mentioned above. |
• | For the fourth quarter, revenues grew 11%, to $180 million, with organic growth of 5%, acquisitions adding 4%, and foreign exchange adding 2%. Organic revenue was driven by strong growth from information solutions, led by ISI Web of Knowledge and Web of Science, and solutions targeted to corporate customers. Software solutions also contributed solid organic growth in the quarter. Revenue growth was partly offset by declines in legacy online products. |
• | For the full year, revenues grew 8% to $651 million. Organic growth was 4%, acquisitions contributed 2%, and foreign exchange 2%. |
• | Segment operating profit in the quarter increased 20%, to $55 million, while operating margin increased 220 basis points, to 30.6%, compared with the prior year. Fourth-quarter operating income growth was mainly due to the flow-through of increased revenue and efficiency savings. |
• | For 2007, operating profit grew 16% to $175 million, compared to 2006, with the related margin increasing 180 basis points, to 26.9%. |
• | Fourth-quarter revenues were $158 million, unchanged from the prior-year period. The Payer segment (25% of total revenue) was up 8%, reflecting strong renewals and new business, and, the Provider segment (40% of total revenue) was up 13% led by Solucient. However, a decline in PDR (Physicians’ Desk Reference) revenue offset revenue growth in the Payer and Provider segments, as well as 3% growth attributable to acquisitions. |
• | For the full year, revenue increased 21%, to $452 million, entirely from acquisitions. |
• | For the quarter, segment operating profit decreased 7%, to $57 million, and the operating profit margin decreased 250 basis points, to 36.1%. |
• | For 2007, operating profit increased 5% to $85 million and the related margin decreased 290 basis points, to 18.8%. |
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(millions of U.S. dollars, except per common share data)
(unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
31 December | 31 December | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenues | 2,033 | 1,850 | 7,296 | 6,591 | ||||||||||||
Cost of sales, selling, marketing, general and administrative expenses | (1,436 | ) | (1,250 | ) | (5,275 | ) | (4,665 | ) | ||||||||
Depreciation | (120 | ) | (116 | ) | (468 | ) | (438 | ) | ||||||||
Amortization | (67 | ) | (62 | ) | (256 | ) | (240 | ) | ||||||||
Operating profit | 410 | 422 | 1,297 | 1,248 | ||||||||||||
Net other (expense) income | (40 | ) | (35 | ) | (34 | ) | 1 | |||||||||
Net interest income (expense) and other financing costs | 52 | (53 | ) | (12 | ) | (221 | ) | |||||||||
Income taxes | (111 | ) | (29 | ) | (155 | ) | (116 | ) | ||||||||
Earnings from continuing operations | 311 | 305 | 1,096 | 912 | ||||||||||||
Earnings from discontinued operations, net of tax | 123 | 86 | 2,908 | 208 | ||||||||||||
Net earnings | 434 | 391 | 4,004 | 1,120 | ||||||||||||
Dividends declared on preference shares | (2 | ) | (1 | ) | (6 | ) | (5 | ) | ||||||||
Earnings attributable to common shares | 432 | 390 | 3,998 | 1,115 | ||||||||||||
Basic earnings per common share | $ | 0.67 | $ | 0.61 | $ | 6.24 | $ | 1.73 | ||||||||
Diluted earnings per common share | $ | 0.67 | $ | 0.61 | $ | 6.20 | $ | 1.73 | ||||||||
Basic weighted average common shares | 641,393,907 | 641,551,065 | 641,157,718 | 644,131,524 | ||||||||||||
Diluted weighted average common shares | 644,516,692 | 643,936,859 | 644,430,796 | 646,026,345 | ||||||||||||
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(millions of U.S. dollars, except per common share data)
(unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
31 December | 31 December | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Earnings attributable to common shares | 432 | 390 | 3,998 | 1,115 | ||||||||||||
Adjustments: | ||||||||||||||||
One-time items: | ||||||||||||||||
Net other expense (income) | 40 | 35 | 34 | (1 | ) | |||||||||||
Reuters transaction costs | 45 | — | 76 | — | ||||||||||||
Settlement of pension plan | (34 | ) | — | (34 | ) | — | ||||||||||
Tax on above items | (9 | ) | (15 | ) | (17 | ) | (16 | ) | ||||||||
Tax charges (benefits) | 1 | (12 | ) | (60 | ) | (33 | ) | |||||||||
Interim period effective tax rate normalization(2) | 32 | 8 | — | — | ||||||||||||
Discontinued operations, net of tax | (123 | ) | (86 | ) | (2,908 | ) | (208 | ) | ||||||||
Adjusted earnings from continuing operations | 384 | 320 | 1,089 | 857 | ||||||||||||
Adjusted diluted earnings per common share from continuing operations | $ | 0.60 | $ | 0.50 | $ | 1.69 | $ | 1.33 | ||||||||
(1) | Adjusted earnings from continuing operations and adjusted earnings per common share from continuing operations are earnings attributable to common shares and per share amounts after adjusting for non-recurring items, discontinued operations, and other items affecting comparability. Thomson uses these measures to assist in comparisons from one period to another. Adjusted earnings per common share from continuing operations do not represent actual earnings per share attributable to shareholders. | |
(2) | Adjustment to reflect income taxes based on the estimated full-year effective tax rate of the consolidated group. Reported earnings for interim periods reflect income taxes based on estimated effective tax rates of each of the group’s jurisdictions. The adjustment reallocates estimated full-year income taxes between interim periods, but has no effect on full-year income taxes. |
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(millions of U.S. dollars)
(unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
31 December | 31 December | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Operating profit | 410 | 422 | 1,297 | 1,248 | ||||||||||||
Adjustments: | ||||||||||||||||
THOMSONpluscosts | 68 | 29 | 153 | 60 | ||||||||||||
Reuters transaction costs | 45 | — | 76 | — | ||||||||||||
Settlement of pension plan | (34 | ) | — | (34 | ) | — | ||||||||||
Underlying operating profit | 489 | 451 | 1,492 | 1,308 | ||||||||||||
Underlying operating profit margin | 24.1 | % | 24.4 | % | 20.4 | % | 19.8 | % | ||||||||
(1) | Underlying operating profit is operating profit adjusted for items affecting comparability and costs associated with Thomson’s corporate efficiency initiatives. Underlying operating profit margin is the underlying operating profit expressed as a percentage of revenues. Thomson uses these measures to assist in comparisons from one period to another. Thomson’s definition of underlying operating profit may not be directly comparable to that of another company. |
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(millions of U.S. dollars)
(unaudited)
31 December | 31 December | |||||||
2007 | 2006 | |||||||
Assets | ||||||||
Cash and cash equivalents | 7,497 | 334 | ||||||
Accounts receivable, net of allowances | 1,565 | 1,364 | ||||||
Prepaid expenses and other current assets | 508 | 368 | ||||||
Deferred income taxes | 104 | 153 | ||||||
Current assets of discontinued operations | 4 | 1,046 | ||||||
Current assets | 9,678 | 3,265 | ||||||
Computer hardware and other property, net | 731 | 624 | ||||||
Computer software, net | 721 | 647 | ||||||
Identifiable intangible assets, net | 3,438 | 3,451 | ||||||
Goodwill | 6,935 | 6,538 | ||||||
Other non-current assets | 1,322 | 1,092 | ||||||
Non-current assets of discontinued operations | 6 | 4,525 | ||||||
Total assets | 22,831 | 20,142 | ||||||
Liabilities and shareholders’ equity | ||||||||
Liabilities | ||||||||
Short-term indebtedness | 183 | 333 | ||||||
Accounts payable and accruals | 1,532 | 1,305 | ||||||
Deferred revenue | 1,108 | 954 | ||||||
Current portion of long-term debt | 412 | 264 | ||||||
Current liabilities of discontinued operations | 4 | 883 | ||||||
Current liabilities | 3,239 | 3,739 | ||||||
Long-term debt | 4,264 | 3,681 | ||||||
Other non-current liabilities | 783 | 785 | ||||||
Deferred income taxes | 974 | 1,007 | ||||||
Non-current liabilities of discontinued operations | — | 449 | ||||||
Total liabilities | 9,260 | 9,661 | ||||||
Shareholders’ equity | ||||||||
Capital | 2,932 | 2,799 | ||||||
Retained earnings | 10,355 | 7,169 | ||||||
Accumulated other comprehensive income | 284 | 513 | ||||||
Total shareholders’ equity | 13,571 | 10,481 | ||||||
Total liabilities and shareholders’ equity | 22,831 | 20,142 | ||||||
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(millions of U.S. dollars)
(unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
31 December | 31 December | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Cash provided by (used in): | ||||||||||||||||
Operating activities | ||||||||||||||||
Net earnings | 434 | 391 | 4,004 | 1,120 | ||||||||||||
Remove earnings from discontinued operations | (123 | ) | (86 | ) | (2,908 | ) | (208 | ) | ||||||||
Add back (deduct) items not involving cash: | ||||||||||||||||
Depreciation | 120 | 116 | 468 | 438 | ||||||||||||
Amortization | 67 | 62 | 256 | 240 | ||||||||||||
Net gains on disposals of businesses and investments | — | (3 | ) | (8 | ) | (47 | ) | |||||||||
Deferred income taxes | (54 | ) | (118 | ) | (124 | ) | (121 | ) | ||||||||
Other, net | 58 | 39 | 258 | 204 | ||||||||||||
Pension contributions | — | (14 | ) | (3 | ) | (23 | ) | |||||||||
Changes in working capital and other items | 71 | 101 | (133 | ) | (50 | ) | ||||||||||
Cash provided by operating activities — discontinued operations | 86 | 308 | 6 | 572 | ||||||||||||
Net cash provided by operating activities | 659 | 796 | 1,816 | 2,125 | ||||||||||||
Investing activities | ||||||||||||||||
Acquisitions | (173 | ) | (336 | ) | (488 | ) | (744 | ) | ||||||||
Proceeds from disposals | 7 | 28 | 18 | 88 | ||||||||||||
Capital expenditures, less proceeds from disposals | (225 | ) | (182 | ) | (608 | ) | (452 | ) | ||||||||
Other investing activities | (4 | ) | — | (37 | ) | (26 | ) | |||||||||
Capital expenditures of discontinued operations | — | (55 | ) | (97 | ) | (185 | ) | |||||||||
Other investing activities of discontinued operations | — | (4 | ) | (2 | ) | (17 | ) | |||||||||
Proceeds from disposals of discontinued operations, net of income taxes paid | (899 | ) | (24 | ) | 7,151 | 81 | ||||||||||
Acquisitions by discontinued operations | — | — | (54 | ) | (35 | ) | ||||||||||
Net cash (used in) provided by investing activities | (1,294 | ) | (573 | ) | 5,883 | (1,290 | ) | |||||||||
Financing activities | ||||||||||||||||
Proceeds from debt | 794 | — | 794 | — | ||||||||||||
Repayments of debt | — | (15 | ) | (249 | ) | (88 | ) | |||||||||
Net borrowings (repayments) under short-term loan facilities | 190 | (191 | ) | (180 | ) | 108 | ||||||||||
Premium on foreign currency hedge | — | — | (76 | ) | — | |||||||||||
Repurchase of common shares | (93 | ) | (54 | ) | (168 | ) | (412 | ) | ||||||||
Dividends paid on preference shares | (2 | ) | (1 | ) | (6 | ) | (5 | ) | ||||||||
Dividends paid on common shares | (153 | ) | (138 | ) | (612 | ) | (553 | ) | ||||||||
Other financing activities, net | 14 | 17 | 33 | 38 | ||||||||||||
Net cash provided by (used in) financing activities | 750 | (382 | ) | (464 | ) | (912 | ) | |||||||||
Translation adjustments | (73 | ) | 2 | (72 | ) | 4 | ||||||||||
Increase (decrease) in cash and cash equivalents | 42 | (157 | ) | 7,163 | (73 | ) | ||||||||||
Cash and cash equivalents at beginning of period | 7,455 | 491 | 334 | 407 | ||||||||||||
Cash and cash equivalents at end of period | 7,497 | 334 | 7,497 | 334 | ||||||||||||
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(millions of U.S. dollars)
(unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
31 December | 31 December | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net cash provided by operating activities | 659 | 796 | 1,816 | 2,125 | ||||||||||||
Capital expenditures | (225 | ) | (182 | ) | (608 | ) | (452 | ) | ||||||||
Other investing activities | (4 | ) | — | (37 | ) | (26 | ) | |||||||||
Capital expenditures of discontinued operations | — | (55 | ) | (97 | ) | (185 | ) | |||||||||
Other investing activities of discontinued operations | — | (4 | ) | (2 | ) | (17 | ) | |||||||||
Dividends paid on preference shares | (2 | ) | (1 | ) | (6 | ) | (5 | ) | ||||||||
Free cash flow | 428 | 554 | 1,066 | 1,440 | ||||||||||||
Items affecting comparability: | ||||||||||||||||
Cash used in (provided by) operating and investing activities of discontinued operations | (86 | ) | (249 | ) | 93 | (370 | ) | |||||||||
Interest on proceeds from sale of Thomson Learning, net of taxes | (86 | ) | — | (155 | ) | — | ||||||||||
Spending on THOMSONplusinitiatives | 44 | 30 | 162 | 69 | ||||||||||||
Spending on Reuters related costs | 47 | — | 73 | — | ||||||||||||
Settlement of lawsuit | — | — | 36 | — | ||||||||||||
347 | 335 | 1,275 | 1,139 | |||||||||||||
(1) | Free cash flow is net cash provided by operating activities less capital expenditures, other investing activities and dividends paid on preference shares. Thomson uses free cash flow as a performance measure because it represents cash available to repay debt, pay common dividends and fund new acquisitions. |
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(millions of U.S. dollars)
(unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
31 December | 31 December | |||||||||||||||||||||||
2007 | 2006 | Change | 2007 | 2006 | Change | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Legal | 875 | 795 | 10 | % | 3,318 | 3,008 | 10 | % | ||||||||||||||||
Financial | 575 | 528 | 9 | % | 2,186 | 2,025 | 8 | % | ||||||||||||||||
Tax & Accounting | 248 | 211 | 18 | % | 705 | 598 | 18 | % | ||||||||||||||||
Scientific | 180 | 162 | 11 | % | 651 | 602 | 8 | % | ||||||||||||||||
Healthcare | 158 | 158 | 0 | % | 452 | 374 | 21 | % | ||||||||||||||||
Intercompany eliminations | (3 | ) | (4 | ) | (16 | ) | (16 | ) | ||||||||||||||||
Total revenues | 2,033 | 1,850 | 10 | % | 7,296 | 6,591 | 11 | % | ||||||||||||||||
Operating Profit: | ||||||||||||||||||||||||
Segment operating profit | ||||||||||||||||||||||||
Legal | 272 | 255 | 7 | % | 1,044 | 943 | 11 | % | ||||||||||||||||
Financial | 135 | 111 | 22 | % | 454 | 380 | 19 | % | ||||||||||||||||
Tax & Accounting | 89 | 95 | (6 | )% | 184 | 168 | 10 | % | ||||||||||||||||
Scientific | 55 | 46 | 20 | % | 175 | 151 | 16 | % | ||||||||||||||||
Healthcare | 57 | 61 | (7 | )% | 85 | 81 | 5 | % | ||||||||||||||||
Corporate and other(1) | (131 | ) | (84 | ) | (389 | ) | (235 | ) | ||||||||||||||||
Total segment operating profit | 477 | 484 | (1 | )% | 1,553 | 1,488 | 4 | % | ||||||||||||||||
Amortization | (67 | ) | (62 | ) | (256 | ) | (240 | ) | ||||||||||||||||
Operating profit | 410 | 422 | (3 | )% | 1,297 | 1,248 | 4 | % | ||||||||||||||||
(1) | Corporate and Other includes THOMSONpluscosts, corporate costs, Reuters transaction costs and certain costs associated with the company’s stock incentive and phantom stock plans. |
Three Months Ended | Twelve Months Ended | |||||||||||||||
31 December | 31 December | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Legal | (52 | ) | (50 | ) | (205 | ) | (187 | ) | ||||||||
Financial | (42 | ) | (45 | ) | (172 | ) | (180 | ) | ||||||||
Tax & Accounting | (6 | ) | (5 | ) | (21 | ) | (22 | ) | ||||||||
Scientific | (9 | ) | (7 | ) | (32 | ) | (23 | ) | ||||||||
Healthcare | (7 | ) | (5 | ) | (24 | ) | (16 | ) | ||||||||
Corporate and Other | (4 | ) | (4 | ) | (14 | ) | (10 | ) | ||||||||
(120 | ) | (116 | ) | (468 | ) | (438 | ) | |||||||||
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6.2, 20.1 and
20.3
CESR51-86
PR Annex 1,
20.7.1
LR 6.1.4(1)
LR 6.1.4(2)
LR 6.1.4(3)
PR Annex I,
20.4.1
PR Annex I,
20.5.1
Information Incorporated by Reference | Reference Document | ||
Consolidated financial information of Reuters Group PLC and its subsidiaries as at 31 December 2006, 2005 and 2004 and for each of the three years in the period ended 31 December 2006 | Reuters Group PLC Annual Report andForm 20-F 2006: Pages 75-133 | ||
Report of the Independent Registered Public Accounting Firm to the Members of Reuters Group PLC on the consolidated financial statements of Reuters Group PLC and its subsidiaries as at 31 December 2006 and 2005 and for each of the three years in the period ended 31 December 2006 | Reuters Group PLC Annual Report andForm 20-F 2006: Page 74 | ||
Consolidated financial information of Reuters Group PLC and its subsidiaries as at 31 December 2005 and 2004 and for each of the two years in the period ended 31 December 2005 | Reuters Group PLC Annual Report andForm 20-F 2005: Pages 50-108 | ||
Report of the Independent Registered Public Accounting Firm on the consolidated financial statements of Reuters Group PLC and its subsidiaries as at 31 December 2005 and 2004 and for each of the three years in the period ended 31 December 2005 | Reuters Group PLC Annual Report andForm 20-F 2005: United States opinion on page 49 | ||
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Page | ||||
Section 1: Selected historical financial information and accounting policies: Selected audited financial information as at and for each of the financial years 31 December 2006, 31 December 2005, 31 December 2004 and selected unaudited financial information for the nine months ended 30 September 2007 and 2006 prepared under Reuters IFRS accounting policies | 299 | |||
Section 2: Operating and financial review for Reuters Group PLC for the financial years 31 December 2006, 31 December 2005 and 31 December 2004 | 311 | |||
Section 3: Reuters Group PLC unaudited third quarter report for the nine months ended 30 September 2007 prepared under Reuters IFRS accounting policies | 334 | |||
Section 4: Unaudited reconciliations of the consolidated net income of Reuters Group PLC for each of the financial years ended 31 December 2006, 31 December 2005 and 31 December 2004 and for the nine months ended 30 September 2007 and of Reuters Group PLC’s shareholders’ equity at the ends of each of those periods prepared under the IFRS accounting policies applied by Reuters Group PLC in preparing its IFRS financial information for those periods to the Canadian GAAP accounting policies applied by Thomson in the preparation of its historical financial statements for the same periods. | 370 | |||
Section 5: Report from PwC UK on the unaudited reconciliations of Reuters Group PLC financial information to Canadian GAAP | 385 | |||
Section 6: Capitalisation and indebtedness disclosures for Reuters Group PLC | 387 |
298
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1. | Selected Reuters historical financial information and accounting policies |
3.1 and 3.2
Nine Months Ended 30 September | Year Ended 31 December | |||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||||||||
Unaudited | Unaudited | Audited | Audited | Audited | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Revenue | 1,914 | 1,908 | 2,566 | 2,409 | 2,339 | |||||||||||||||
Operating costs | (1,745 | ) | (1,731 | ) | (2,351 | ) | (2,251 | ) | (2,187 | ) | ||||||||||
Other operating income | 26 | 30 | 41 | 49 | 42 | |||||||||||||||
Operating profit | 195 | 207 | 256 | 207 | 194 | |||||||||||||||
Finance income | 74 | 56 | 72 | 41 | 15 | |||||||||||||||
Finance costs | (99 | ) | (63 | ) | (87 | ) | (53 | ) | (27 | ) | ||||||||||
Profit on disposal of associates, joint ventures and available-for-sale financial assets | 18 | — | 76 | 38 | 203 | |||||||||||||||
Share of post-tax (losses)/profits from associates and joint ventures | (5 | ) | (2 | ) | (4 | ) | 5 | 11 | ||||||||||||
Profit before tax | 183 | 198 | 313 | 238 | 396 | |||||||||||||||
Taxation | (41 | ) | (45 | ) | (20 | ) | (9 | ) | (40 | ) | ||||||||||
Profit for the period from continuing operations | 142 | 153 | 293 | 229 | 356 | |||||||||||||||
Profit for the period from discontinued operations | 9 | — | 12 | 253 | 19 | |||||||||||||||
Profit for the period | 151 | 153 | 305 | 482 | 375 | |||||||||||||||
Attributable to: | ||||||||||||||||||||
Equity holders of the parent | 151 | 153 | 305 | 456 | 364 | |||||||||||||||
Minority interest | — | — | — | 26 | 11 | |||||||||||||||
Earnings per share | ||||||||||||||||||||
From continuing and discontinued operations | ||||||||||||||||||||
Basic earnings per ordinary share | 12.2 | p | 11.7 | p | 23.6 | p | 32.6 | p | 26.0 | p | ||||||||||
Diluted earnings per ordinary share | 11.9 | p | 11.5 | p | 23.1 | p | 31.7 | p | 25.4 | p | ||||||||||
From continuing operations | ||||||||||||||||||||
Basic earnings per ordinary share | 11.4 | p | 11.7 | p | 22.6 | p | 16.3 | p | 25.4 | p | ||||||||||
Diluted earnings per ordinary share | 11.2 | p | 11.5 | p | 22.2 | p | 15.9 | p | 24.8 | p | ||||||||||
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20.4.3
Nine Months Ended 30 September | Year Ended 31 December | |||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||||||||
Unaudited | Unaudited | Audited | Audited | Audited | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Profit for the year | 151 | 153 | 305 | 482 | 375 | |||||||||||||||
Actuarial gains/(losses) on defined benefit plans | 109 | 60 | 6 | (48 | ) | (205 | ) | |||||||||||||
Exchange differences taken directly to reserves | (6 | ) | (77 | ) | (95 | ) | 118 | (48 | ) | |||||||||||
Exchange differences taken to the income statement on disposal of assets | — | — | — | (2 | ) | 6 | ||||||||||||||
Fair value gains/(losses) on available-for-sale financial assets | 11 | 7 | 6 | (15 | ) | — | ||||||||||||||
Fair value gains on available-for-sale financial assets taken to the income statement on disposal of assets | (18 | ) | — | — | (73 | ) | — | |||||||||||||
Fair value gains/(losses) on net investment hedges | 14 | 20 | 34 | (39 | ) | — | ||||||||||||||
Fair value gains taken to the income statement on disposal of net investment hedges | — | — | — | (14 | ) | — | ||||||||||||||
Tax on the items taken directly to or transferred from equity | (21 | ) | (14 | ) | (4 | ) | 14 | 35 | ||||||||||||
Net gains/(losses) not recognised in income statement | 89 | (4 | ) | (53 | ) | (59 | ) | (212 | ) | |||||||||||
Total recognised income for the year | 240 | 149 | 252 | 423 | 163 | |||||||||||||||
Attributable to: | ||||||||||||||||||||
Equity holders of the parent | 240 | 149 | 252 | 374 | 166 | |||||||||||||||
Minority interest | — | — | — | 49 | (3 | ) | ||||||||||||||
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20.4.3
As at 30 | ||||||||||||||||
September | As at 31 December | |||||||||||||||
2007 | 2006 | 2005 | 2004 | |||||||||||||
Unaudited | Audited | Audited | Audited | |||||||||||||
£m | £m | £m | £m | |||||||||||||
Assets | ||||||||||||||||
Non-current assets: | ||||||||||||||||
Intangible assets | 579 | 559 | 487 | 316 | ||||||||||||
Property, plant and equipment | 387 | 371 | 358 | 354 | ||||||||||||
Investments accounted for using the equity method: | ||||||||||||||||
Investments in joint ventures | 22 | 19 | 32 | 29 | ||||||||||||
Investments in associates | 20 | 19 | 4 | 6 | ||||||||||||
Deferred tax assets | 306 | 281 | 276 | 292 | ||||||||||||
Other financial assets and derivatives | 72 | 47 | 22 | 28 | ||||||||||||
Retirement benefit assets | 46 | 18 | — | — | ||||||||||||
1,432 | 1,314 | 1,179 | 1,025 | |||||||||||||
Current assets: | ||||||||||||||||
Inventories | 1 | 1 | 1 | 3 | ||||||||||||
Trade and other receivables | 293 | 258 | 270 | 535 | ||||||||||||
Other financial assets and derivatives | 220 | 210 | 18 | 287 | ||||||||||||
Current tax debtors | 17 | 8 | 6 | 7 | ||||||||||||
Cash and cash equivalents | 124 | 129 | 662 | 578 | ||||||||||||
655 | 606 | 957 | 1,410 | |||||||||||||
Non-current assets classified as held for sale | 7 | — | 1 | 145 | ||||||||||||
Total assets | 2,094 | 1,920 | 2,137 | 2,580 | ||||||||||||
Liabilities | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Trade and other payables | (430 | ) | (491 | ) | (456 | ) | (721 | ) | ||||||||
Current tax liabilities | (215 | ) | (196 | ) | (228 | ) | (260 | ) | ||||||||
Provisions for liabilities and charges | (39 | ) | (60 | ) | (64 | ) | (87 | ) | ||||||||
Other financial liabilities and derivatives | (373 | ) | (166 | ) | (49 | ) | (181 | ) | ||||||||
(1,057 | ) | (913 | ) | (797 | ) | (1,249 | ) | |||||||||
Non-current liabilities: | ||||||||||||||||
Provisions for liabilities and charges | (102 | ) | (204 | ) | (392 | ) | (340 | ) | ||||||||
Other financial liabilities and derivatives | (541 | ) | (521 | ) | (371 | ) | (329 | ) | ||||||||
Deferred tax liabilities | (160 | ) | (110 | ) | (66 | ) | (45 | ) | ||||||||
(803 | ) | (835 | ) | (829 | ) | (714 | ) | |||||||||
Liabilities directly associated with non-current assets classified as held for sale | — | — | — | (47 | ) | |||||||||||
Total liabilities | (1,860 | ) | (1,748 | ) | (1,626 | ) | (2,010 | ) | ||||||||
Net assets | 234 | 172 | 511 | 570 | ||||||||||||
Shareholders’ equity | ||||||||||||||||
Share capital | 525 | 496 | 467 | 455 | ||||||||||||
Other reserves | (1,727 | ) | (1,738 | ) | (1,692 | ) | (1,755 | ) | ||||||||
Retained earnings | 1,436 | 1,414 | 1,736 | 1,671 | ||||||||||||
Total parent shareholders’ equity | 234 | 172 | 511 | 371 | ||||||||||||
Minority interest in equity | — | — | — | 199 | ||||||||||||
Total equity | 234 | 172 | 511 | 570 | ||||||||||||
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20.4.3
Nine Months Ended 30 | ||||||||||||||||||||
September | Year Ended 31 December | |||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||||||||
Unaudited | Unaudited | Audited | Audited | Audited | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Cash generated from operations | 284 | 132 | 311 | 271 | 280 | |||||||||||||||
Interest received | 29 | 23 | 42 | 55 | 19 | |||||||||||||||
Interest paid | (59 | ) | (34 | ) | (61 | ) | (49 | ) | (30 | ) | ||||||||||
Tax paid | (23 | ) | (26 | ) | (34 | ) | (24 | ) | (43 | ) | ||||||||||
Net cash flow from operating activities | 231 | 95 | 258 | 253 | 226 | |||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Acquisitions, net of cash acquired | (38 | ) | (53 | ) | (67 | ) | (124 | ) | (78 | ) | ||||||||||
Disposals, net of cash disposed | 22 | (14 | ) | 65 | 246 | 438 | ||||||||||||||
Purchases of property, plant and equipment | (94 | ) | (79 | ) | (122 | ) | (145 | ) | (109 | ) | ||||||||||
Proceeds from sale of property, plant and equipment | 3 | 4 | 5 | 3 | 66 | |||||||||||||||
Purchases of intangible assets | (75 | ) | (79 | ) | (106 | ) | (40 | ) | (27 | ) | ||||||||||
Purchases of available-for-sale financial assets | (1 | ) | — | — | (1 | ) | (1 | ) | ||||||||||||
Proceeds from sale of available-for-sale financial assets | 23 | — | — | 85 | 25 | |||||||||||||||
Proceeds from closing of derivative contract | 2 | — | — | — | — | |||||||||||||||
Dividends received | 2 | 2 | 3 | 5 | 5 | |||||||||||||||
Net cash flow from investing activities | (156 | ) | (219 | ) | (222 | ) | 29 | 319 | ||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Proceeds from issue of shares | 31 | 26 | 32 | 10 | 6 | |||||||||||||||
Share buy-back | (143 | ) | (413 | ) | (527 | ) | (223 | ) | — | |||||||||||
(Increase)/decrease in short-term investments | (2 | ) | (1 | ) | (196 | ) | 248 | (105 | ) | |||||||||||
Increase/(decrease) in borrowings | 196 | 322 | 270 | (144 | ) | (225 | ) | |||||||||||||
Equity dividends paid to shareholders | (147 | ) | (134 | ) | (134 | ) | (140 | ) | (140 | ) | ||||||||||
Equity dividends paid to minority interests | — | — | — | (23 | ) | — | ||||||||||||||
Net cash flow from financing activities | (65 | ) | (200 | ) | (555 | ) | (272 | ) | (464 | ) | ||||||||||
Exchange (losses)/gains on cash and cash equivalents | (3 | ) | (11 | ) | (13 | ) | 66 | (33 | ) | |||||||||||
Net increase/(decrease) in cash and cash equivalents | 7 | (335 | ) | (532 | ) | 76 | 48 | |||||||||||||
Cash and cash equivalents at the beginning of the year | 105 | 637 | 637 | 561 | 513 | |||||||||||||||
Cash and cash equivalents at the end of the year | 112 | 302 | 105 | 637 | 561 | |||||||||||||||
302
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303
Table of Contents
• | income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rate prevailing on the transaction date, in which case income and expenses are translated at the date of the transaction); |
• | assets and liabilities are translated at the closing exchange rate at the date of the balance sheet; and |
• | all resulting differences are recognised as a separate component of equity. |
304
Table of Contents
305
Table of Contents
Freehold land | Not depreciated | |
Freehold buildings | Normally 50 years | |
Leasehold property | Over the term of the lease | |
Computer systems equipment, office equipment and motor vehicles | 2 to 5 years |
• | financial assets at fair value through profit and loss; |
• | loans and receivables; |
306
Table of Contents
• | held-to-maturity investments; and |
• | available-for-sale financial assets. |
307
Table of Contents
• | hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); |
• | hedges of highly probable forecast transactions (cash flow hedges); or |
• | hedges of net investments in foreign operations (net investment hedges). |
308
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309
Table of Contents
310
Table of Contents
2. | Operating and financial review for Reuters Group PLC for the financial years ended 31 December 2006, 31 December 2005 and 31 December 2004 |
PR Annex l, 10
CESR 27-32
311
Table of Contents
Year to 31 December | 2006 | 2005 | 2004 | |||||||||
£m | £m | £m | ||||||||||
Continuing operations | ||||||||||||
Revenue | 2,566 | 2,409 | 2,339 | |||||||||
Operating costs | (2,351 | ) | (2,251 | ) | (2,187 | ) | ||||||
Other operating income | 41 | 49 | 42 | |||||||||
Operating profit | 256 | 207 | 194 | |||||||||
Net finance costs | (15 | ) | (12 | ) | (12 | ) | ||||||
Profit on disposal of associates, joint ventures and available-for-sale financial assets | 76 | 38 | 203 | |||||||||
Share of post-tax (losses)/profit from associates and joint ventures | (4 | ) | 5 | 11 | ||||||||
Profit before tax | 313 | 238 | 396 | |||||||||
Taxation | (20 | ) | (9 | ) | (40 | ) | ||||||
Profit for the year from continuing operations | 293 | 229 | 356 | |||||||||
Profit for the year from discontinued operations | 12 | 253 | 19 | |||||||||
Profit for the year | 305 | 482 | 375 | |||||||||
Basic EPS | 23.6 | p | 32.6 | p | 26.0 | p | ||||||
Adjusted EPS | 17.1 | p | 13.8 | p | 11.8 | p | ||||||
Actual | Underlying | |||||||||||||||||||
Year to 31 December | 2006 | 2005 | Change | Change | 2004 | |||||||||||||||
£m | £m | £m | ||||||||||||||||||
Recurring | 2,363 | 2,235 | 6 | % | 4 | % | 2,158 | |||||||||||||
Usage | 132 | 104 | 26 | % | 24 | % | 92 | |||||||||||||
Outright | 71 | 70 | 3 | % | 4 | % | 89 | |||||||||||||
Total revenue | 2,566 | 2,409 | 7 | % | 5 | % | 2,339 | |||||||||||||
Operating costs | (2,351 | ) | (2,251 | ) | 4 | % | (2,187 | ) | ||||||||||||
�� | ||||||||||||||||||||
Operating profit | 256 | 207 | 24 | % | 194 | |||||||||||||||
Operating margin | 10 | % | 9 | % | — | 8 | % | |||||||||||||
Trading costs | (2,258 | ) | (2,075 | ) | 9 | % | 7 | % | (2,013 | ) | ||||||||||
Trading profit | 308 | 334 | (8 | )% | (11 | )% | 326 | |||||||||||||
Trading margin | 12 | % | 14 | % | — | — | 14 | % | ||||||||||||
312
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313
Table of Contents
Year to 31 December | 2006 | 2005 | 2004 | |||||||||
£m | £m | £m | ||||||||||
Net cash flow from operating activities | 258 | 253 | 226 | |||||||||
Acquisitions and disposals | (2 | ) | 206 | 384 | ||||||||
Purchases of property, plant and equipment, and intangibles | (228 | ) | (185 | ) | (136 | ) | ||||||
Proceeds from sale of property, plant and equipment | 5 | 3 | 66 | |||||||||
Dividends received | 3 | 5 | 5 | |||||||||
Proceeds from issue of shares | 32 | 10 | 6 | |||||||||
Share buy-back | (527 | ) | (223 | ) | — | |||||||
Equity dividends paid to shareholders | (134 | ) | (140 | ) | (140 | ) | ||||||
Equity dividends paid to minority interests | — | (23 | ) | — | ||||||||
Other movements | 7 | 21 | (8 | ) | ||||||||
Movement in net (debt)/funds | (586 | ) | (73 | ) | 403 | |||||||
Opening net funds/(debt) | 253 | 326 | (77 | ) | ||||||||
Closing net (debt)/funds | (333 | ) | 253 | 326 | ||||||||
Year to 31 December | 2006 | 2005 | 2004 | |||||||||
£m | £m | £m | ||||||||||
Cash flow from continuing operations | 311 | 268 | 307 | |||||||||
Net interest paid | (19 | ) | (7 | ) | (19 | ) | ||||||
Tax paid | (34 | ) | (11 | ) | (34 | ) | ||||||
Special contributions to pension schemes | 187 | — | — | |||||||||
Capital expenditure | (228 | ) | (178 | ) | (117 | ) | ||||||
Proceeds from sale of property, plant and equipment | 5 | 3 | 49 | |||||||||
Dividends received | 3 | 5 | 4 | |||||||||
Interim funding repayment from Telerate | — | (18 | ) | 18 | ||||||||
Repayment of funds to BTC | — | 26 | — | |||||||||
Free cash flow from continuing operations | 225 | 88 | 208 | |||||||||
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• | Free cash inflows of £225 million, as noted above; |
• | Special contributions of £187 million towards funding the deficit in two UK defined benefit pension schemes; |
• | The ongoing cost of the share buy-back programme, amounting to £527 million; |
• | Dividend payments of £134 million; and |
• | Net outflow from acquisitions and disposals of £2 million, including £79 million from the disposal of Factiva. |
• | The capitalisation of property, plant and equipment and intangible assets of £290 million, offset by annual depreciation and amortisation charges of £141 million. |
• | A change in the composition of Reuters net debt (net funds in 2005), with lower cash holdings and higher debt being offset by lower pension obligations due to the special contributions towards funding the deficits in two UK defined benefit pension schemes. |
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Year to 31 December | 2006 | 2005 | 2004 | |||||||||
£m | £m | £m | ||||||||||
Non-current assets | 1,314 | 1,179 | 1,025 | |||||||||
Current assets | 606 | 957 | 1,410 | |||||||||
Non-current assets classified as held for sale | — | 1 | 145 | |||||||||
Total assets | 1,920 | 2,137 | 2,580 | |||||||||
Current liabilities | (913 | ) | (797 | ) | (1,249 | ) | ||||||
Non-current liabilities | (835 | ) | (829 | ) | (714 | ) | ||||||
Liabilities associated with non-current assets classified as held for sale | — | — | (47 | ) | ||||||||
Total liabilities | (1,748 | ) | (1,626 | ) | (2,010 | ) | ||||||
Net assets | 172 | 511 | 570 | |||||||||
Shareholders’ equity | 172 | 511 | 371 | |||||||||
Minority interest | — | — | 199 | |||||||||
Total equity | 172 | 511 | 570 | |||||||||
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• | The disposal of Instinet Group — reducing both total assets and liabilities upon sale and reducing the minority interest in Instinet Group to zero. |
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• | The impact of the share buy-back programme, which decreased shareholder funds by £283 million (which includes £59 million in current liabilities resulting from irrevocable commitments entered into during the close period). |
• | An increase in non-current liabilities, principally reflecting an increase in net pension obligations from £256 million to £310 million, largely as a result of changes to key assumptions underpinning the net liability valuation (both the rate of return and discount rate decreased which resulted in a larger present value liability). |
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Actual | Underlying | |||||||||||||||
Year to 31 December | 2006 | 2005 | Change | Change | ||||||||||||
£m | £m | |||||||||||||||
Revenue | 1,690 | 1,613 | 5 | % | 3 | % | ||||||||||
Trading costs | (1,476 | ) | (1,373 | ) | 8 | % | 6 | % | ||||||||
Restructuring charges | (12 | ) | (76 | ) | ||||||||||||
Other operating income (in trading costs) | (20 | ) | (16 | ) | ||||||||||||
Impairments and amortisation of business combination intangibles | (17 | ) | (14 | ) | ||||||||||||
Fair value movements in expenses | (18 | ) | (16 | ) | ||||||||||||
Operating costs | (1,543 | ) | (1,495 | ) | 3 | % | ||||||||||
Other operating income | 27 | 37 | ||||||||||||||
Operating profit | 174 | 155 | 13 | % | ||||||||||||
Operating margin | 10 | % | 10 | % | ||||||||||||
Trading margin | 13 | % | 15 | % | ||||||||||||
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Actual | Underlying | |||||||||||||||
Year to 31 December | 2006 | 2005 | Change | Change | ||||||||||||
£m | £m | |||||||||||||||
Revenue | 298 | 258 | 15 | % | 12 | % | ||||||||||
Trading costs | (305 | ) | (276 | ) | 10 | % | 8 | % | ||||||||
Restructuring charges | — | (11 | ) | |||||||||||||
Other operating income (in trading costs) | (4 | ) | (3 | ) | ||||||||||||
Impairments and amortisation of business combination intangibles | (3 | ) | (3 | ) | ||||||||||||
Fair value movements in expenses | (3 | ) | — | |||||||||||||
Operating costs | (315 | ) | (293 | ) | 7 | % | ||||||||||
Other operating income | 5 | — | ||||||||||||||
Operating loss | (12 | ) | (35 | ) | (63 | )% | ||||||||||
Operating margin | (4 | )% | (13 | )% | ||||||||||||
Trading margin | (2 | )% | (6 | )% | ||||||||||||
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• | Reuters DataScope real-time datafeeds, streams of machine-readable price data delivered over Reuters networks at high speed for use in customers’ information and trading services; |
• | Reuters DataScope pricing and reference data which help banks and financial organisations achieve regulatory compliance by delivering accurate financial instrument prices and reference material for the capital markets globally. In 2006 Reuters launched a new distribution platform, Reuters DataScope Select, to support back office and fund valuation processes; |
• | Reuters Market Data System, a resilient content distribution software platform that enables banks to deliver high volume and low latency data into a wide variety of financial systems; |
• | Trade and Risk Management systems to help banks manage their trading position and monitor their exposure to trading risk. In 2006, Reuters acquired Application Networks Inc., whose coverage of credit derivatives and structured financial products complements Reuters existing strengths in FX and treasury risk management; and |
• | Reuters Messaging, a secure online messaging service that connects financial professionals within and across existing communities of interest. |
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Actual | Underlying | |||||||||||||||
Year to 31 December | 2006 | 2005 | Change | Change | ||||||||||||
£m | £m | |||||||||||||||
Revenue | 408 | 385 | 6 | % | 6 | % | ||||||||||
Trading costs | (323 | ) | (291 | ) | 11 | % | 10 | % | ||||||||
Restructuring charges | (1 | ) | (17 | ) | ||||||||||||
Other operating income (in trading costs) | (5 | ) | (5 | ) | ||||||||||||
Impairments and amortisation of business combination intangibles | (3 | ) | (4 | ) | ||||||||||||
Fair value movements in expenses | (3 | ) | — | |||||||||||||
Operating costs | (335 | ) | (317 | ) | 6 | % | ||||||||||
Other operating income | 6 | 8 | ||||||||||||||
Operating profit | 79 | 76 | 3 | % | ||||||||||||
Operating margin | 19 | % | 20 | % | ||||||||||||
Trading margin | 21 | % | 24 | % | ||||||||||||
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Actual | Underlying | |||||||||||||||
Year to 31 December | 2006 | 2005 | Change | Change | ||||||||||||
£m | £m | |||||||||||||||
Revenue | 170 | 153 | 11 | % | 10 | % | ||||||||||
Trading costs | (154 | ) | (135 | ) | 13 | % | 12 | % | ||||||||
Restructuring charges | — | (8 | ) | |||||||||||||
Other operating income (in trading costs) | (2 | ) | (2 | ) | ||||||||||||
Impairments and amortisation of business combination intangibles | (1 | ) | (1 | ) | ||||||||||||
Fair value movements in expenses | (1 | ) | — | |||||||||||||
Operating costs | (158 | ) | (146 | ) | 8 | % | ||||||||||
Other operating income | 3 | 4 | ||||||||||||||
Operating profit | 15 | 11 | 43 | % | ||||||||||||
Operating margin | 9 | % | 7 | % | ||||||||||||
Trading margin | 10 | % | 12 | % | ||||||||||||
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33-37
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Payments Due by Period | ||||||||||||||||||||
Less than | 1-3 | 3-5 | After 5 | |||||||||||||||||
At 31 December 2006 | Total | 1 Year | Years | Years | Years | |||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Finance lease payables | 4 | 2 | 2 | — | — | |||||||||||||||
Debt obligations (including future interest payments) | 907 | 217 | 299 | 391 | — | |||||||||||||||
Pension obligations* | 131 | 68 | 58 | 5 | — | |||||||||||||||
Other provisions and liabilities** | 95 | 59 | 23 | 8 | 5 | |||||||||||||||
Operating leases | 652 | 88 | 149 | 115 | 300 | |||||||||||||||
Purchase obligations | 981 | 164 | 293 | 370 | 154 | |||||||||||||||
Total contractual obligations | 2,770 | 598 | 824 | 889 | 459 | |||||||||||||||
* | Net pension obligations are recorded on the balance sheet at £131 million (£145 million pension obligations less £14 million pension funds in surplus). As there is discretion under the various schemes as to the amounts the Group will contribute to settlement of the net pension obligation, the amounts provided are estimates. | |
** | Other provisions and liabilities (excluding net pension obligation) on the balance sheet total £119 million. Of this, £95 million are financial liabilities that require settlement in cash. Additionally, the balance sheet contains a deferred tax liability of £110 million. No estimate has been provided for these in the table above as they are not contractually obligated financial liabilities. |
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Operating | Operating | |||||||||||
Currency Impact | Revenue | Cost | Profit | |||||||||
£m | £m | £m | ||||||||||
Impact of: | ||||||||||||
Weaker euro | (3 | ) | 1 | (2 | ) | |||||||
Stable dollar | 4 | (3 | ) | 1 | ||||||||
Weaker yen | (9 | ) | 4 | (5 | ) | |||||||
Other currencies | 1 | (1 | ) | — | ||||||||
Exchange rate movements | (7 | ) | 1 | (6 | ) | |||||||
Change in currency mix | 10 | (7 | ) | 3 | ||||||||
Total currency movements | 3 | (6 | ) | (3 | ) | |||||||
Year to 31 December | 2006 | 2006 | 2005 | 2005 | 2004 | 2004 | ||||||||||||||||||
£m | % | £m | % | £m | % | |||||||||||||||||||
Operating profit/margin from continuing operations | 256 | 10 | % | 207 | 9 | % | 194 | 8 | % | |||||||||||||||
Excluding: | ||||||||||||||||||||||||
Restructuring charges | 13 | — | 112 | 4 | % | 120 | 5 | % | ||||||||||||||||
Impairments and amortisation of business combination intangibles | 24 | 1 | % | 22 | 1 | % | 16 | 1 | % | |||||||||||||||
Investment income | — | — | (1 | ) | — | — | — | |||||||||||||||||
Profit on disposal of subsidiaries | (4 | ) | — | (4 | ) | — | (4 | ) | — | |||||||||||||||
Fair value movements | 19 | 1 | % | (2 | ) | — | — | — | ||||||||||||||||
Trading profit/margin | 308 | 12 | % | 334 | 14 | % | 326 | 14 | % | |||||||||||||||
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Year to 31 December | 2006 | 2006 | 2005 | 2005 | 2004 | 2004 | ||||||||||||||||||
£m | % | £m | % | £m | % | |||||||||||||||||||
Profit before tax/margin from continuing operations | 313 | 12 | % | 238 | 10 | % | 396 | 17 | % | |||||||||||||||
Excluding: | ||||||||||||||||||||||||
Impairments and amortisation of business combination intangibles | 24 | 1 | % | 22 | 1 | % | 16 | 1 | % | |||||||||||||||
Investment income | — | — | (1 | ) | — | — | — | |||||||||||||||||
Profit on disposal of subsidiaries, associates and joint ventures | (80 | ) | (3 | )% | (42 | ) | (2 | )% | (207 | ) | (9 | )% | ||||||||||||
Fair value movements | 19 | 1 | % | (2 | ) | — | — | — | ||||||||||||||||
Profit before tax/margin before impairments and amortisation of business combination intangibles, investment income, profit on disposals and fair value movements (Adjusted profit before tax) | 276 | 11 | % | 215 | 9 | % | 205 | 9 | % |
Year to 31 December | 2006 | 2006 | 2005 | 2005 | 2004 | 2004 | ||||||||||||||||||
£m | EPS | £m | EPS | £m | EPS | |||||||||||||||||||
Pence | Pence | Pence | ||||||||||||||||||||||
Profit/basic EPS from continuing operations | 293 | 22.6 | 229 | 16.3 | 356 | 25.4 | ||||||||||||||||||
Excluding: | ||||||||||||||||||||||||
Impairments and amortisation of business combination intangibles | 24 | 1.8 | 22 | 1.6 | 16 | 1.1 | ||||||||||||||||||
Investment income | — | — | (1 | ) | (0.1 | ) | — | — | ||||||||||||||||
Profit on disposal of subsidiaries, associates and joint ventures | (80 | ) | (6.3 | ) | (42 | ) | (2.9 | ) | (207 | ) | (14.7 | ) | ||||||||||||
Fair value movements | 19 | 1.5 | (2 | ) | (0.2 | ) | — | — | ||||||||||||||||
Adjustments to tax charge for tax effect of excluded items | (34 | ) | (2.5 | ) | (13 | ) | (0.9 | ) | — | — | ||||||||||||||
Profit/basis EPS from continuing operations before impairments and amortisation of business combination intangibles, investment income, profit on disposals, fair value movements and related taxation effects | 222 | 17.1 | 193 | 13.8 | 165 | 11.8 | ||||||||||||||||||
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Impact of | ||||||||||||||||
Underlying | Impact of | Acquisitions & | Actual | |||||||||||||
% Change Versus Year Ended 31 December 2005 | Change | Currency | Disposals | Change | ||||||||||||
Recurring | 2 | % | 1 | % | 1 | % | 4 | % | ||||||||
Usage | 23 | % | (1 | )% | — | 22 | % | |||||||||
Outright | (13 | )% | (5 | )% | — | (18 | )% | |||||||||
Sales & Trading | 3 | % | 1 | % | 1 | % | 5 | % | ||||||||
Recurring | 12 | % | — | 3 | % | 15 | % | |||||||||
Usage | 27 | % | (1 | )% | — | 26 | % | |||||||||
Outright | (37 | )% | (2 | )% | — | (39 | )% | |||||||||
Research & Asset Management | 12 | % | — | 3 | % | 15 | % | |||||||||
Recurring | 6 | % | — | — | 6 | % | ||||||||||
Outright | 7 | % | (2 | )% | 1 | % | 6 | % | ||||||||
Enterprise | 6 | % | (1 | )% | 1 | % | 6 | % | ||||||||
Recurring | 7 | % | (1 | )% | — | 6 | % | |||||||||
Usage | 29 | % | — | 7 | % | 36 | % | |||||||||
Media | 10 | % | — | 1 | % | 11 | % | |||||||||
Recurring | 4 | % | — | 2 | % | 6 | % | |||||||||
Usage | 24 | % | — | 2 | % | 26 | % | |||||||||
Outright | 4 | % | (2 | )% | 1 | % | 3 | % | ||||||||
Total revenue | 5 | % | — | 2 | % | 7 | % | |||||||||
Impact of | ||||||||||||||||
Underlying | Impact of | Acquisitions & | Actual | |||||||||||||
% Change Versus Year Ended 31 December 2004 | Change | Currency | Disposals | Change | ||||||||||||
Recurring | 1 | % | — | 3 | % | 4 | % | |||||||||
Outright | (23 | )% | 1 | % | — | (22 | )% | |||||||||
Usage | 12 | % | — | 1 | % | 13 | % | |||||||||
Total revenue | — | — | 3 | % | 3 | % | ||||||||||
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Impact of | ||||||||||||||||
Underlying | Impact of | Acquisitions & | Actual | |||||||||||||
% Change Versus Year Ended 31 December 2005 | Change | Currency | Disposals | Change | ||||||||||||
Reuters Xtra* | 7 | % | 2 | % | 1 | % | 10 | % | ||||||||
Reuters Trader | (12 | )% | (1 | )% | 4 | % | (9 | )% | ||||||||
Recoveries | 7 | % | — | 1 | % | 8 | % | |||||||||
Sales & Trading | 3 | % | 1 | % | 1 | % | 5 | % | ||||||||
Reuters Xtra | 26 | % | (1 | )% | — | 25 | % | |||||||||
Reuters Trader | 7 | % | (3 | )% | — | 4 | % | |||||||||
Reuters Knowledge | 20 | % | (1 | )% | 14 | % | 33 | % | ||||||||
Investments Banking, Investment Management & Corporates | 22 | % | (1 | )% | 6 | % | 27 | % | ||||||||
Reuters Wealth Manager | 1 | % | — | 1 | % | 2 | % | |||||||||
Research & Asset Management | 12 | % | — | 3 | % | 15 | % | |||||||||
Enterprise Information | 13 | % | — | — | 13 | % | ||||||||||
Information Management Systems | (12 | )% | — | 1 | % | (11 | )% | |||||||||
Trade and Risk Management | 12 | % | (1 | )% | 2 | % | 13 | % | ||||||||
Enterprise | 6 | % | (1 | )% | 1 | % | 6 | % | ||||||||
Agency Services | 6 | % | (1 | )% | 2 | % | 7 | % | ||||||||
Consumer Media | 39 | % | (1 | )% | — | 38 | % | |||||||||
Media | 10 | % | — | 1 | % | 11 | % | |||||||||
Total revenue | 5 | % | — | 2 | % | 7 | % | |||||||||
* | 3000 Xtra revenue in Sales & Trading grew 8% on an underlying basis. Currency and acquisition impacts were 2% for each, resulting in an actual change of 12% |
2006 | ||||||||||||||||||||
Sales & | ||||||||||||||||||||
Year to 31 December | Trading | R&AM | Enterprise | Media | Group | |||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Operating costs | 1,543 | 315 | 335 | 158 | 2,351 | |||||||||||||||
Restructuring charges | (12 | ) | — | (1 | ) | — | (13 | ) | ||||||||||||
Impairments and amortisation of business combination intangibles | (17 | ) | (3 | ) | (3 | ) | (1 | ) | (24 | ) | ||||||||||
Fair value movements (in expenses) | (18 | ) | (3 | ) | (3 | ) | (1 | ) | (25 | ) | ||||||||||
Other operating income | (20 | ) | (4 | ) | (5 | ) | (2 | ) | (31 | ) | ||||||||||
Trading costs | 1,476 | 305 | 323 | 154 | 2,258 | |||||||||||||||
2005 | ||||||||||||||||||||
Sales & | ||||||||||||||||||||
Year to 31 December | Trading | R&AM | Enterprise | Media | Group | |||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Operating costs | 1,495 | 293 | 317 | 146 | 2,251 | |||||||||||||||
Restructuring charges | (76 | ) | (11 | ) | (17 | ) | (8 | ) | (112 | ) | ||||||||||
Impairments and amortisation of business combination intangibles | (14 | ) | (3 | ) | (4 | ) | (1 | ) | (22 | ) | ||||||||||
Fair value movements (in expenses) | (16 | ) | — | — | — | (16 | ) | |||||||||||||
Other operating income | (16 | ) | (3 | ) | (5 | ) | (2 | ) | (26 | ) | ||||||||||
Trading costs | 1,373 | 276 | 291 | 135 | 2,075 | |||||||||||||||
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2004 | ||||||||||||||||||||
Sales & | ||||||||||||||||||||
Year to 31 December | Trading | R&AM | Enterprise | Media | Group | |||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Operating costs | 1,396 | 289 | 360 | 142 | 2,187 | |||||||||||||||
Restructuring charges | (63 | ) | (18 | ) | (27 | ) | (12 | ) | (120 | ) | ||||||||||
Impairments and amortisation of business combination intangibles | (10 | ) | (3 | ) | (3 | ) | — | (16 | ) | |||||||||||
Other income | (23 | ) | (5 | ) | (7 | ) | (3 | ) | (38 | ) | ||||||||||
Trading costs | 1,300 | 263 | 323 | 127 | 2,013 | |||||||||||||||
2006 | ||||||||||||||||||||
Sales & | ||||||||||||||||||||
Year to 31 December | Trading | R&AM | Enterprise | Media | Group | |||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Operating profit/(loss) | 174 | (12 | ) | 79 | 15 | 256 | ||||||||||||||
Restructuring charges | 12 | — | 1 | — | 13 | |||||||||||||||
Impairments and amortisation of business combination intangibles | 17 | 3 | 3 | 1 | 24 | |||||||||||||||
(Profit)/loss on disposal of subsidiaries | (3 | ) | — | — | (1 | ) | (4 | ) | ||||||||||||
Fair value movements | 14 | 2 | 2 | 1 | 19 | |||||||||||||||
Trading profit/(loss) | 214 | (7 | ) | 85 | 16 | 308 | ||||||||||||||
2005 | ||||||||||||||||||||
Sales & | ||||||||||||||||||||
Year to 31 December | Trading | R&AM | Enterprise | Media | Group | |||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Operating profit/(loss) | 155 | (35 | ) | 76 | 11 | 207 | ||||||||||||||
Restructuring charges | 76 | 11 | 17 | 8 | 112 | |||||||||||||||
Impairments and amortisation of business combination intangibles | 14 | 3 | 4 | 1 | 22 | |||||||||||||||
Investment income | (1 | ) | — | — | — | (1 | ) | |||||||||||||
(Profit)/loss on disposal of subsidiaries | (7 | ) | 5 | (1 | ) | (1 | ) | (4 | ) | |||||||||||
Fair value movements | 3 | (2 | ) | (2 | ) | (1 | ) | (2 | ) | |||||||||||
Trading profit/(loss) | 240 | (18 | ) | 94 | 18 | 334 | ||||||||||||||
2004 | ||||||||||||||||||||
Sales & | ||||||||||||||||||||
Year to 31 December | Trading | R&AM | Enterprise | Media | Group | |||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Operating profit/(loss) | 175 | (13 | ) | 28 | 4 | 194 | ||||||||||||||
Restructuring charges | 63 | 18 | 27 | 12 | 120 | |||||||||||||||
Impairments and amortisation of business combination intangibles | 10 | 3 | 3 | — | 16 | |||||||||||||||
(Profit)/loss on disposal of subsidiaries | 5 | (12 | ) | 2 | 1 | (4 | ) | |||||||||||||
Trading profit/(loss) | 253 | (4 | ) | 60 | 17 | 326 | ||||||||||||||
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2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Continuing | Discontinued | Continuing | Discontinued | Reuters | Continuing | Discontinued | Reuters | |||||||||||||||||||||||||||||
Year to 31 December | Operations | Operations | Reuters Group | Operations | Operations | Group | Operations | Operations | Group | |||||||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | £m | £m | £m | ||||||||||||||||||||||||||||
Cash flows from operating activities | 311 | — | 311 | 268 | 3 | 271 | 307 | (27 | ) | 280 | ||||||||||||||||||||||||||
Interest received | 42 | — | 42 | 42 | 13 | 55 | 10 | 9 | 19 | |||||||||||||||||||||||||||
Interest paid | (61 | ) | — | (61 | ) | (49 | ) | — | (49 | ) | (29 | ) | (1 | ) | (30 | ) | ||||||||||||||||||||
Tax paid | (34 | ) | — | (34 | ) | (11 | ) | (13 | ) | (24 | ) | (34 | ) | (9 | ) | (43 | ) | |||||||||||||||||||
Net cash flow from operating activities | 258 | — | 258 | 250 | 3 | 253 | 254 | (28 | ) | 226 | ||||||||||||||||||||||||||
Purchases of property, plant and equipment | (122 | ) | — | (122 | ) | (138 | ) | (7 | ) | (145 | ) | (90 | ) | (19 | ) | (109 | ) | |||||||||||||||||||
Proceeds from sale of property, plant and equipment | 5 | — | 5 | 3 | — | 3 | 49 | 17 | 66 | |||||||||||||||||||||||||||
Purchases of intangible assets | (106 | ) | — | (106 | ) | (40 | ) | — | (40 | ) | (27 | ) | — | (27 | ) | |||||||||||||||||||||
Interim funding payment from Telerate | — | — | — | (18 | ) | — | (18 | ) | 18 | — | 18 | |||||||||||||||||||||||||
Dividends received | 3 | — | 3 | 5 | — | 5 | 4 | 1 | 5 | |||||||||||||||||||||||||||
Special contributions to pension schemes | 187 | — | 187 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Repayment of funds to/(from) BTC | — | — | — | 26 | (26 | ) | — | — | — | — | ||||||||||||||||||||||||||
Free cash flow | 225 | — | 225 | 88 | (30 | ) | 58 | 208 | (29 | ) | 179 | |||||||||||||||||||||||||
Interest received | (42 | ) | — | (42 | ) | (42 | ) | (13 | ) | (55 | ) | (10 | ) | (9 | ) | (19 | ) | |||||||||||||||||||
Interest paid | 61 | — | 61 | 49 | — | 49 | 29 | 1 | 30 | |||||||||||||||||||||||||||
Tax paid | 34 | — | 34 | 11 | 13 | 24 | 34 | 9 | 43 | |||||||||||||||||||||||||||
Restructuring | 52 | — | 52 | 147 | — | 147 | 100 | 8 | 108 | |||||||||||||||||||||||||||
Other | 13 | — | 13 | 3 | (4 | ) | (1 | ) | (14 | ) | (3 | ) | (17 | ) | ||||||||||||||||||||||
Trading cash flow | 343 | — | 343 | 256 | (34 | ) | 222 | 347 | (23 | ) | 324 | |||||||||||||||||||||||||
Trading cash conversion* | 111 | % | 77 | % | 106 | % | ||||||||||||||||||||||||||||||
* | Trading cash conversion = trading cash flow/trading profits |
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As at 31 December | 2006 | 2005 | 2004 | |||||||||
£m | £m | £m | ||||||||||
Cash and cash equivalents | 129 | 662 | 578 | |||||||||
Bank overdrafts | (24 | ) | (25 | ) | (17 | ) | ||||||
105 | 637 | 561 | ||||||||||
Short-term deposits | 198 | 1 | 258 | |||||||||
Borrowings (excluding bank overdrafts) | (636 | ) | (385 | ) | (493 | ) | ||||||
Net (debt)/funds | (333 | ) | 253 | 326 | ||||||||
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3. | Reuters Group PLC unaudited third quarter report for the nine months ended 30 September 2007 prepared under Reuters IFRS accounting policies |
20.4.3
20.6.1
Nine Months Ended 30 September 2007
Unaudited Consolidated Financial Information
20.6.2
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20.4.3
Nine Months to 30 September | Percentage | |||||||||||
Business Performance* (Unaudited) | 2007 | 2006 | Change | |||||||||
£m | £m | |||||||||||
Revenue | 1,914 | 1,908 | — | |||||||||
Trading profit* | 269 | 247 | 9 | % | ||||||||
Trading margin* | 14.1 | % | 12.9 | % | ||||||||
Adjusted EPS* | 15.9 | p | 12.9 | p | 23 | % | ||||||
STATUTORY RESULTS | ||||||||||||
Operating profit | 195 | 207 | (6 | )% | ||||||||
Profit before tax | 183 | 198 | (8 | )% | ||||||||
Profit for the period from discontinued operations | 9 | — | — | |||||||||
Profit for the period | 151 | 153 | (1 | )% | ||||||||
Basic earnings per share | 12.2 | p | 11.7 | p | 4 | % |
* | This report includes certain non-GAAP figures which are business performance measures used to manage the business. See below for explanations and reconciliations to the most directly comparable statutory figures. |
1) | Underlying and constant currency results |
• | Constant currency results are calculated excluding the impact of currency fluctuations. Variations in currency exchange rates impact the results because Reuters generates revenues and incurs costs in currencies other than its reporting currency.Year-on-year, currency exchange rate movements will influence reported numbers to a greater or lesser extent, and therefore they are |
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discussed separately from underlying results to make clear their impact on the overall growth or decline in operations. Constant currency results are calculated by restating the prior periods’ results using the current period’s exchange rates. This also reflects the variables over which management has control, as business units do not actively manage currency exposure, and business division operating performance is managed against targets set on a constant currency basis. |
• | Underlying results are calculated excluding the impact of currency fluctuations as well as the results of entities acquired or disposed of during the current or prior periods from the results of each period under review. Underlying results reflect the operating results of the ongoing elements of each business division, and measure the performance of management against variables over which they have control, without theyear-on-year impact of a step change in revenue and costs that can result from currency movements and acquisition or disposal activity. |
2) | Exclusion of restructuring charges |
3) | Thomson deal-related costs |
4) | Exclusion of amortisation and impairment of intangibles acquired in a business combination, investment income, profit/(losses) from disposals, fair value movements and Thomsondeal-related costs |
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5) | Free cash flow |
6) | Net funds/(debt) |
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Percentage | Percentage | |||||||||||||||
Nine Months to 30 September | Change | Change | ||||||||||||||
2007 | 2006 | Actual | Underlying | |||||||||||||
£m | £m | |||||||||||||||
Revenue | 1,204 | 1,246 | * | (3 | )% | 3 | % | |||||||||
Trading costs | (1,027 | ) | (1,062 | ) | (3 | )% | 2 | % | ||||||||
Trading profit | 177 | 184 | (4 | )% | 9 | % | ||||||||||
Trading margin | 15 | % | 15 | % | ||||||||||||
Operating profit** | 140 | 154 | ||||||||||||||
* | 2006 comparatives have been restated to decrease recoveries revenue in Sales & Trading by £61 million, and to increase other product revenues by £38 million. | |
** | Sales & Trading operating profit is stated prior to any impact in respect of £28 million of Thomson deal-related costs, which relate to Reuters as a whole and cannot be directly attributed or allocated to divisions on a reasonable basis. |
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• | Reuters Xtra family revenue within Sales & Trading of £771 million, an underlying increase of 10 per cent. The key factors in this growth were functionality improvements to Reuters 3000 Xtra which drove successful implementation of a price increase at the start of the year, customer migration from legacy products and sales of new desktop accesses. Usage revenue from transaction systems within the Reuters Xtra family totalled £73 million, an underlying increase of 23 per cent. |
• | A 20 per cent. underlying decline in Reuters Trader family product revenues to £212 million. This reflects customer migration from legacy products, principally 2000/3000 series products. Migration of Telerate products is now almost complete and Telerate revenue attrition remains in line with full year expectations of approximately one percentage point of Reuters Group revenue. |
20.4.3
Percentage | Percentage | |||||||||||||||
Nine Months to 30 September | Change | Change | ||||||||||||||
2007 | 2006 | Actual | Underlying | |||||||||||||
£m | £m | |||||||||||||||
Revenue | 265 | 223 | * | 19 | % | 25 | % | |||||||||
Trading costs | (241 | ) | (226 | ) | 7 | % | 14 | % | ||||||||
Trading profit/(loss) | 24 | (3 | ) | — | — | |||||||||||
Trading margin | 9 | % | (1 | )% | ||||||||||||
Operating profit/(loss)** | 20 | (6 | ) | |||||||||||||
* | 2006 comparatives have been restated to increase other product revenues in Research & Asset Management by £5 million. | |
** | Research & Asset Management operating profit/(loss) is stated prior to any impact in respect of £28 million of Thomson deal-related costs, which relate to Reuters as a whole and cannot be directly attributed or allocated to divisions on a reasonable basis. |
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20.4.3
Percentage | Percentage | |||||||||||||||
Nine Months to 30 September | Change | Change | ||||||||||||||
2007 | 2006 | Actual | Underlying | |||||||||||||
£m | £m | |||||||||||||||
Revenue | 319 | 311 | * | 3 | % | 9 | % | |||||||||
Trading costs | (261 | ) | (258 | ) | 1 | % | 8 | % | ||||||||
Trading profit | 58 | 53 | 10 | % | 15 | % | ||||||||||
Trading margin | 18 | % | 17 | % | ||||||||||||
Operating profit** | 54 | 47 | ||||||||||||||
* | 2006 comparatives have been restated to increase other product revenues in Enterprise by £18 million. | |
** | Enterprise operating profit is stated prior to any impact in respect of £28 million of Thomson deal-related costs, which relate to Reuters as a whole and cannot be directly attributed or allocated to divisions on a reasonable basis. |
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20.4.3
Percentage | Percentage | |||||||||||||||
Nine Months to 30 September | Change | Change | ||||||||||||||
2007 | 2006 | Actual | Underlying | |||||||||||||
£m | £m | |||||||||||||||
Revenue | 126 | 128 | (2 | )% | 5 | % | ||||||||||
Trading costs | (116 | ) | (115 | ) | 1 | % | 6 | % | ||||||||
Trading profit | 10 | 13 | (23 | )% | (5 | )% | ||||||||||
Trading margin | 8 | % | 10 | % | ||||||||||||
Operating profit* | 9 | 12 | ||||||||||||||
* | Media operating profit is stated prior to any impact in respect of £28 million of Thomson deal-related costs, which relate to Reuters as a whole and cannot be directly attributed or allocated to divisions on a reasonable basis. |
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33-37
10.1
As at | As at | |||||||
30 September | 31 December | |||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Short-term indebtedness (including bank overdrafts) | 339 | 148 | ||||||
Long-term debt | 540 | 512 | ||||||
Total debt | 879 | 660 | ||||||
Short-term deposits | (208 | ) | (198 | ) | ||||
Cash and cash equivalents | (124 | ) | (129 | ) | ||||
Net debt | 547 | 333 | ||||||
Shareholders’ equity | 234 | 172 | ||||||
Net debt/equity ratio | 2:1 | 2:1 | ||||||
10.4
£m | ||||
Balance at 31 December 2006 | 172 | |||
Profit for the period | 151 | |||
Actuarial gains on defined benefit plans | 109 | |||
Total fair value and exchange movements taken to reserves | 1 | |||
Tax effect of items taken directly to or transferred from equity | (21 | ) | ||
Employee share scheme credits (net of tax) | 28 | |||
Repurchase of own shares | (90 | ) | ||
Shares allotted during the year | 31 | |||
Dividends paid | (147 | ) | ||
Balance at 30 September 2007 | 234 | |||
Moody’s | Standard & Poor’s | Fitch Ratings | ||||||||||
Long-term debt | Baa1 | BBB+ | BBB+ | |||||||||
Commercial paper | P2 | A-2 | F2 | |||||||||
Trend/Outlook | Stable | Positive | Positive |
10.2
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Total | Amount | |||||||||||
Facility | Utilised | Available | ||||||||||
Revolving credit facility | 680 | 157 | 523 | |||||||||
Medium Term Note Programme | 1,000 | 528 | 472 | |||||||||
Commercial Paper Programme | 1,500 | 216 | 1,284 | |||||||||
Uncommitted credit lines | 126 | 8 | 118 |
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Total | ||||||||||||
number of | ||||||||||||
shares | Cost of | |||||||||||
purchased as | Average | shares | ||||||||||
part of a | price | purchased | ||||||||||
publicly | paid per | under the | ||||||||||
announced | share | programme | ||||||||||
Month | programme | (£) | (£m) | |||||||||
December | 5,050,000 | 6.18 | 31 | |||||||||
January | 20,975,000 | 6.03 | 127 | |||||||||
February | 6,965,000 | 6.07 | 42 |
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1) | CONSOLIDATED INCOME STATEMENT FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2007 (UNAUDITED) |
Nine Months to 30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Revenue | 1,914 | 1,908 | ||||||
Operating costs | (1,745 | ) | (1,731 | ) | ||||
Other operating income | 26 | 30 | ||||||
Operating profit | 195 | 207 | ||||||
Finance income | 74 | 56 | ||||||
Finance costs | (99 | ) | (63 | ) | ||||
Profit on disposal of associates, joint ventures & available-for-sale financial assets | 18 | — | ||||||
Share of post-taxation losses from associates & joint ventures* | (5 | ) | (2 | ) | ||||
Profit before taxation | 183 | 198 | ||||||
Taxation | (41 | ) | (45 | ) | ||||
Profit for the period from continuing operations | 142 | 153 | ||||||
DISCONTINUED OPERATIONS | ||||||||
Profit for the period from discontinued operations | 9 | — | ||||||
Profit for the period | 151 | 153 | ||||||
EARNINGS PER SHARE FROM CONTINUING AND DISCONTINUED OPERATIONS | ||||||||
Basic | 12.2 | p | 11.7 | p | ||||
Diluted | 11.9 | p | 11.5 | p | ||||
EARNINGS PER SHARE FROM CONTINUING OPERATIONS | ||||||||
Basic | 11.4 | p | 11.7 | p | ||||
Diluted | 11.2 | p | 11.5 | p | ||||
* | Share of post-taxation losses from associates and joint ventures includes a taxation charge of nil at September 2007 (September 2006: £1 million). |
Dividends paid in the period were £147 million (September 2006: £134 million). |
2) | CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2007 (UNAUDITED) |
Nine Months to 30 | ||||||||
September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Profit for the period | 151 | 153 | ||||||
Actuarial gains on defined benefit plans | 109 | 60 | ||||||
Exchange differences taken directly to reserves | (6 | ) | (77 | ) | ||||
Fair value gains on available-for-sale financial assets | 11 | 7 | ||||||
Fair value gains on available-for-sale financial assets taken to the income statement on disposal of assets | (18 | ) | — | |||||
Fair value gains on net investment hedges | 14 | 20 | ||||||
Taxation on the items taken directly to or transferred from equity | (21 | ) | (14 | ) | ||||
Net gains/(losses) not recognised in income statement | 89 | (4 | ) | |||||
Total recognised income for the period | 240 | 149 | ||||||
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3) | CONSOLIDATED BALANCE SHEET AT 30 SEPTEMBER 2007 (UNAUDITED) |
As at | As at | As at | ||||||||||
30 September | 30 June | 31 December | ||||||||||
2007 | 2007 | 2006 | ||||||||||
£m | £m | £m | ||||||||||
Assets | ||||||||||||
Non-current assets: | ||||||||||||
Intangible assets | 579 | 579 | 559 | |||||||||
Property, plant and equipment | 387 | 389 | 371 | |||||||||
Investments accounted for using the equity method: | ||||||||||||
Investments in joint ventures | 22 | 22 | 19 | |||||||||
Investments in associates | 20 | 16 | 19 | |||||||||
Deferred tax assets | 306 | 286 | 281 | |||||||||
Other financial assets and derivatives | 72 | 49 | 47 | |||||||||
Retirement benefit assets | 46 | 35 | 18 | |||||||||
1,432 | 1,376 | 1,314 | ||||||||||
Current assets: | ||||||||||||
Inventories | 1 | 2 | 1 | |||||||||
Trade and other receivables | 293 | 276 | 258 | |||||||||
Other financial assets and derivatives | 220 | 217 | 210 | |||||||||
Current tax debtors | 17 | 11 | 8 | |||||||||
Cash and cash equivalents | 124 | 162 | 129 | |||||||||
655 | 668 | 606 | ||||||||||
Non-current assets classified as held for sale | 7 | — | — | |||||||||
Total assets | 2,094 | 2,044 | 1,920 | |||||||||
Liabilities | ||||||||||||
Current liabilities: | ||||||||||||
Trade and other payables | (430 | ) | (428 | ) | (491 | ) | ||||||
Current tax liabilities | (215 | ) | (218 | ) | (196 | ) | ||||||
Provisions for liabilities and charges | (39 | ) | (43 | ) | (60 | ) | ||||||
Other financial liabilities and derivatives | (373 | ) | (384 | ) | (166 | ) | ||||||
(1,057 | ) | (1,073 | ) | (913 | ) | |||||||
Non-current liabilities: | ||||||||||||
Provisions for liabilities and charges | (102 | ) | (96 | ) | (204 | ) | ||||||
Other financial liabilities and derivatives | (541 | ) | (523 | ) | (521 | ) | ||||||
Deferred tax liabilities | (160 | ) | (133 | ) | (110 | ) | ||||||
(803 | ) | (752 | ) | (835 | ) | |||||||
Total liabilities | (1,860 | ) | (1,825 | ) | (1,748 | ) | ||||||
Net assets | 234 | 219 | 172 | |||||||||
Shareholders’ equity | ||||||||||||
Share capital | 350 | 349 | 360 | |||||||||
Share premium | 175 | 167 | 136 | |||||||||
Other reserves | (1,727 | ) | (1,748 | ) | (1,738 | ) | ||||||
Retained earnings | 1,436 | 1,451 | 1,414 | |||||||||
Total equity | 234 | 219 | 172 | |||||||||
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4) | CONSOLIDATED CASH FLOW STATEMENT FOR THE NINE MONTHS ENDED |
Nine Months to 30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Cash flows from operating activities | ||||||||
Cash generated from operations | 284 | 132 | ||||||
Interest received | 29 | 23 | ||||||
Interest paid | (59 | ) | (34 | ) | ||||
Tax paid | (23 | ) | (26 | ) | ||||
Net cash flow from operating activities | 231 | 95 | ||||||
Cash flows from investing activities | ||||||||
Acquisitions, net of cash acquired | (38 | ) | (53 | ) | ||||
Disposals, net of cash disposed | 22 | (14 | ) | |||||
Purchases of property, plant and equipment | (94 | ) | (79 | ) | ||||
Proceeds from sale of property, plant and equipment | 3 | 4 | ||||||
Purchases of intangible assets | (75 | ) | (79 | ) | ||||
Purchases of available-for-sale financial assets | (1 | ) | — | |||||
Proceeds from sale of available-for-sale financial assets | 23 | — | ||||||
Proceeds from closing of derivative contract | 2 | — | ||||||
Dividends received | 2 | 2 | ||||||
Net cash used by investing activities | (156 | ) | (219 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from issue of shares | 31 | 26 | ||||||
Share buyback | (143 | ) | (413 | ) | ||||
Increase in short-term deposits | (2 | ) | (1 | ) | ||||
Increase in borrowings | 196 | 322 | ||||||
Equity dividends paid to shareholders | (147 | ) | (134 | ) | ||||
Net cash flow used in financing activities | (65 | ) | (200 | ) | ||||
Exchange losses on cash and cash equivalents | (3 | ) | (11 | ) | ||||
Net increase/(decrease) in cash and cash equivalents | 7 | (335 | ) | |||||
Total cash and cash equivalents at the beginning of the period | 105 | 637 | ||||||
Total cash and cash equivalents at the end of the period | 112 | 302 | ||||||
5) | BASIS OF CONSOLIDATION (UNAUDITED) |
6) | BASIS OF PREPARATION (UNAUDITED) |
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7) | SEASONALITY (UNAUDITED) |
8) | SEGMENTAL ANALYSIS — INCOME STATEMENT (UNAUDITED) |
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30 September 2007 | ||||||||||||||||||||
Research | ||||||||||||||||||||
Sales & | & Asset | |||||||||||||||||||
Trading | Management | Enterprise | Media | Total | ||||||||||||||||
£m | £m | £m | £m | £m | ||||||||||||||||
Revenue | 1,204 | 265 | 319 | 126 | 1,914 | |||||||||||||||
Operating costs | (1,080 | ) | (249 | ) | (269 | ) | (119 | ) | (1,717 | ) | ||||||||||
Other operating income | 16 | 4 | 4 | 2 | 26 | |||||||||||||||
Divisional operating profit* | 140 | 20 | 54 | 9 | 223 | |||||||||||||||
Thomson deal-related costs | (28 | ) | ||||||||||||||||||
Operating profit | 195 | |||||||||||||||||||
Finance income | 74 | |||||||||||||||||||
Finance costs | (99 | ) | ||||||||||||||||||
Profit on disposal of associates, joint ventures and available-for-sale financial assets | 18 | |||||||||||||||||||
Share of post-taxation losses from associates and joint ventures | (5 | ) | ||||||||||||||||||
Profit before taxation | 183 | |||||||||||||||||||
Taxation | (41 | ) | ||||||||||||||||||
Profit for the period from continuing operations | 142 | |||||||||||||||||||
30 September 2006 | ||||||||||||||||||||
Research | ||||||||||||||||||||
Sales & | & Asset | |||||||||||||||||||
Trading | Management | Enterprise | Media | Total | ||||||||||||||||
£m | £m | £m | £m | |||||||||||||||||
£m | ||||||||||||||||||||
Revenue | 1,246 | 223 | 311 | 128 | 1,908 | |||||||||||||||
Operating costs | (1,112 | ) | (232 | ) | (268 | ) | (119 | ) | (1,731 | ) | ||||||||||
Other operating income | 20 | 3 | 4 | 3 | 30 | |||||||||||||||
Operating profit | 154 | (6 | ) | 47 | 12 | 207 | ||||||||||||||
Finance income | 56 | |||||||||||||||||||
Finance costs | (63 | ) | ||||||||||||||||||
Profit on disposal of associates, joint ventures and available-for-sale financial assets | — | |||||||||||||||||||
Share of post-taxation losses from associates and joint ventures | (2 | ) | ||||||||||||||||||
Profit before taxation | 198 | |||||||||||||||||||
Taxation | (45 | ) | ||||||||||||||||||
Profit for the period from continuing operations | 153 | |||||||||||||||||||
* | Divisional operating profit is stated prior to any impact in respect of Thomson deal-related costs, which relate to Reuters as a whole and cannot be directly attributed or allocated to divisions on a reasonable basis. |
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Nine Months to 30 | Percentage Change | |||||||||||||||
September | Actual | Underlying | ||||||||||||||
2007 | 2006* | per cent. | per cent. | |||||||||||||
£m | £m | |||||||||||||||
Europe, Middle East & Africa | 1,056 | 1,035 | 2 | % | 6 | % | ||||||||||
Americas | 520 | 529 | (2 | )% | 7 | % | ||||||||||
Asia | 338 | 344 | (2 | )% | 8 | % | ||||||||||
Total Reuters revenue | 1,914 | 1,908 | — | 7 | % | |||||||||||
* | 2006 comparatives have been restated to combine UK and Ireland, EMEA West and EMEA East as one region to reflect the way Reuters was managed in 2007. |
9) | INCOME TAXES (UNAUDITED) |
10) | DISCONTINUED OPERATIONS (UNAUDITED) |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Discontinued operations | ||||||||
Profit on disposal of subsidiaries (net of taxation of £nil) | 9 | — | ||||||
Profit for the period from discontinued operations | 9 | — | ||||||
11) | EARNINGS PER SHARE (UNAUDITED) |
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Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
Weighted-average number in millions | ||||||||
Ordinary shares in issue | 1,476 | 1,451 | ||||||
Non-vested shares held by employee share ownership trusts | (28 | ) | (31 | ) | ||||
Shares repurchased | (210 | ) | (112 | ) | ||||
Basic earnings per share denominator | 1,238 | 1,308 | ||||||
Issuable under employee share schemes | 29 | 25 | ||||||
Diluted earnings per share denominator | 1,267 | 1,333 | ||||||
Earnings per share from continuing and discontinued operations | 2007 | 2006 | ||||||
Profit attributable to equity holders of the company (£m) | 151 | 153 | ||||||
Basic earnings per share | 12.2 | 11.7 | ||||||
Diluted earnings per share | 11.9 | 11.5 | ||||||
Earnings per share from continuing operations | 2007 | 2006 | ||||||
Profit attributable to equity holders of the company (£m) | 142 | 153 | ||||||
Basic earnings per share | 11.4 | 11.7 | ||||||
Diluted earnings per share | 11.2 | 11.5 | ||||||
12) | EMPLOYEE BENEFIT PLANS (UNAUDITED) |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Service Cost | 20 | 25 | ||||||
Interest Cost | 50 | 45 | ||||||
Expected Return on Assets | (59 | ) | (50 | ) | ||||
Past Service Cost | 5 | 6 | ||||||
Settlement/Curtailment | (6 | ) | — | |||||
Net defined benefit plan expense | 10 | 26 | ||||||
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13) | CONSOLIDATED RECONCILIATION OF CHANGES IN EQUITY (UNAUDITED) |
Nine Months to 30 | Year to | |||||||||||
September | 31 December | |||||||||||
2007 | 2006 | 2006 | ||||||||||
£m | £m | £m | ||||||||||
Balance at beginning of the period | 172 | 511 | 511 | |||||||||
Actuarial gains on defined benefit plans | 109 | 60 | 6 | |||||||||
Exchange adjustments taken directly to reserves | (6 | ) | (77 | ) | (95 | ) | ||||||
Fair value gains on available-for-sale financial assets | 11 | 7 | 6 | |||||||||
Fair value gains on available-for-sale financial assets taken to the income statement on disposal of assets | (18 | ) | — | — | ||||||||
Fair value gains on net investment hedges | 14 | 20 | 34 | |||||||||
Taxation on the items taken directly to or transferred from equity | (21 | ) | (14 | ) | (4 | ) | ||||||
Net income / (expense) recognised directly in equity | 89 | (4 | ) | (53 | ) | |||||||
Profit for the period | 151 | 153 | 305 | |||||||||
Total recognised income for the period | 240 | 149 | 252 | |||||||||
Employee share scheme credits | 24 | 22 | 30 | |||||||||
Taxation on employee share schemes | 4 | — | 1 | |||||||||
Repurchase of own shares | (90 | ) | (354 | ) | (467 | ) | ||||||
Shares to be repurchased | — | (21 | ) | (53 | ) | |||||||
Shares allotted during the year | 31 | 26 | 32 | |||||||||
Dividends: | ||||||||||||
— Prior year final paid | (86 | ) | (81 | ) | (81 | ) | ||||||
— Current year interim paid | (61 | ) | (53 | ) | (53 | ) | ||||||
Balance at the end of the period | 234 | 199 | 172 | |||||||||
14) | DIVIDENDS PER SHARE (UNAUDITED) |
Nine Months to 30 September | ||||||||
2007 | 2006 | |||||||
Pence | Pence | |||||||
Dividend per share | ||||||||
Prior year final paid | 6.9 | 6.15 | ||||||
Current year interim paid | 5.0 | 4.10 | ||||||
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15) | ACQUISITIONS (UNAUDITED) |
Book | Fair Value | Provisional | ||||||||||
Value | Adjustments | Fair Value | ||||||||||
£m | £m | £m | ||||||||||
Non-current assets: | ||||||||||||
Intangible assets | — | 8 | 8 | |||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 1 | — | 1 | |||||||||
Other current assets | 1 | — | 1 | |||||||||
Current liabilities | (3 | ) | (2 | ) | (5 | ) | ||||||
Net liabilities acquired | (1 | ) | 6 | 5 | ||||||||
Goodwill | 6 | |||||||||||
Total consideration | 11 | |||||||||||
Consideration satisfied by: | ||||||||||||
Cash | 11 | |||||||||||
£m | ||||
Cash consideration | 11 | |||
Cash acquired | (1 | ) | ||
Total outflow of cash and cash equivalents | 10 | |||
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 | ) | (4 | ) | ||||||
Net liabilities acquired | (1 | ) | 4 | 3 | ||||||||
Goodwill | 7 | |||||||||||
Total consideration | 10 | |||||||||||
Consideration satisfied by: | ||||||||||||
Cash | 10 | |||||||||||
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£m | ||||
Cash consideration | 10 | |||
Total outflow of cash and cash equivalents | 10 | |||
Book | Fair Value | Provisional | ||||||||||
Value | Adjustments | Fair Value | ||||||||||
£m | £m | £m | ||||||||||
Non-current assets: | ||||||||||||
Intangible assets | — | 1 | 1 | |||||||||
Net assets acquired | — | 1 | 1 | |||||||||
Goodwill | 1 | |||||||||||
Total consideration | 2 | |||||||||||
Consideration satisfied by: | ||||||||||||
Cash | 2 | |||||||||||
£m | ||||
Cash consideration | 2 | |||
Total outflow of cash and cash equivalents | 2 | |||
16) | DISPOSALS (UNAUDITED) |
Nine Months to September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
On disposal of subsidiary undertakings | 2 | 3 | ||||||
On disposal of associates, joint ventures and available-for-sale financial assets | 18 | — | ||||||
Recorded in the income statement | 20 | 3 | ||||||
17) | CONTINGENCIES (UNAUDITED) |
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18) | DEBT (UNAUDITED) |
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19) | NET CASH FLOWS FROM OPERATING ACTIVITIES FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2007 (UNAUDITED) |
Nine Months to 30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Net profit from continuing activities | 142 | 153 | ||||||
Adjustments for: | ||||||||
Depreciation | 72 | 71 | ||||||
Amortisation of intangibles | 45 | 32 | ||||||
Impairment of intangibles | 19 | — | ||||||
Profit on disposal of property, plant and equipment | (1 | ) | (2 | ) | ||||
Employee share scheme charges | 29 | 22 | ||||||
Foreign exchange losses/(gains) | 15 | (20 | ) | |||||
Fair value movements in derivatives | 14 | 8 | ||||||
Profits on disposals | (20 | ) | (3 | ) | ||||
Share of post-taxation losses of associates & joint ventures | 5 | 2 | ||||||
Investment income | (1 | ) | — | |||||
Finance income | (74 | ) | (56 | ) | ||||
Finance cost | 99 | 63 | ||||||
Taxation | 41 | 45 | ||||||
Movements in working capital: | ||||||||
Increase in inventories | — | — | ||||||
(Increase)/decrease in trade and other receivables | (46 | ) | 4 | |||||
(Decrease)/increase in trade and other payables | (12 | ) | 13 | |||||
Decrease in pensions deficit | (23 | ) | (178 | ) | ||||
Decrease in provisions | (20 | ) | (22 | ) | ||||
Cash generated from continuing operations | 284 | 132 | ||||||
Profit for the period from discontinued operations | 9 | — | ||||||
Profits on disposals | (9 | ) | — | |||||
Cash generated from discontinued operations | — | — | ||||||
Cash generated from operations | 284 | 132 | ||||||
20) | RELATED PARTY TRANSACTIONS (UNAUDITED) |
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1) | RECONCILIATION OF OPERATING PROFIT TO TRADING PROFIT, ADJUSTED PBT AND ADJUSTED EARNINGS (UNAUDITED) |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Operating profit from continuing operations | 195 | 207 | ||||||
Excluding: | ||||||||
Restructuring charges | — | 17 | ||||||
Thomson deal-related costs | 28 | — | ||||||
Impairments & amortisation of business combination intangibles | 35 | 18 | ||||||
Profit on disposal of subsidiaries | (2 | ) | (3 | ) | ||||
Investment Income | (1 | ) | — | |||||
Fair value movements in derivatives | 14 | 8 | ||||||
Trading profit* | 269 | 247 | ||||||
Restructuring | — | (17 | ) | |||||
Associates and joint ventures | (5 | ) | (2 | ) | ||||
Net Interest | (25 | ) | (7 | ) | ||||
Adjusted PBT | 239 | 221 | ||||||
Adjusted tax charge | (41 | ) | (51 | ) | ||||
Adjusted earnings | 198 | 170 | ||||||
* | Trading profit is defined as operating profit from continuing operations before acquisition-related restructuring charges, Thomson deal-related costs, impairments & amortisation of intangibles acquired via business combinations, investment income, profits from disposals of subsidiaries and fair value movements. |
2) | RECONCILIATION OF OPERATING MARGIN TO TRADING MARGIN (UNAUDITED) |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
Per cent. | Per cent. | |||||||
Operating margin from continuing operations | 10 | % | 11 | % | ||||
Excluding: | ||||||||
Restructuring charges | — | 1 | % | |||||
Thomson deal-related costs | 1 | % | — | |||||
Impairments & amortisation of business combination intangibles | 2 | % | 1 | % | ||||
Profit on disposal of subsidiaries | — | — | ||||||
Fair value movements | 1 | % | — | |||||
Trading margin* | 14 | % | 13 | % | ||||
* | Trading margin is defined as operating margin from continuing operations before acquisition-related restructuring charges, Thomson deal-related costs, impairments & amortisation of intangibles acquired via business combinations, investment income, profits from disposals of subsidiaries and fair value movements. |
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3) | REVENUE BY DIVISION BY TYPE — NINE MONTHS TO 30 SEPTEMBER 2007 (UNAUDITED) |
Nine Months to 30 September | Percentage Change | |||||||||||||||
2007 | 2006* | Actual | Underlying | |||||||||||||
£m | £m | |||||||||||||||
Recurring | 1,129 | 1,177 | (4 | )% | 2 | % | ||||||||||
Usage | 73 | 66 | 12 | % | 23 | % | ||||||||||
Outright | 2 | 3 | (24 | )% | (18 | )% | ||||||||||
Sales & trading | 1,204 | 1,246 | (3 | )% | 3 | % | ||||||||||
Recurring | 263 | 221 | 19 | % | 25 | % | ||||||||||
Usage | 2 | 2 | 9 | % | 18 | % | ||||||||||
Research & asset management | 265 | 223 | 19 | % | 25 | % | ||||||||||
Recurring | 282 | 274 | 3 | % | 10 | %. | ||||||||||
Outright | 37 | 37 | 1 | % | 1 | % | ||||||||||
Enterprise | 319 | 311 | 3 | % | 9 | % | ||||||||||
Recurring | 101 | 101 | — | 6 | % | |||||||||||
Usage | 25 | 27 | (7 | )% | (1 | )% | ||||||||||
Media | 126 | 128 | (2 | )% | 5 | % | ||||||||||
Recurring | 1,775 | 1,773 | — | 7 | % | |||||||||||
Usage | 100 | 95 | 6 | % | 16 | % | ||||||||||
Outright | 39 | 40 | (1 | )% | — | |||||||||||
Total Reuters revenue* | 1,914 | 1,908 | — | 7 | % | |||||||||||
* | As discussed in note 11 to Reuters Interim Press Release dated 27 July 2007, from 1 January 2007 Reuters made changes to the allocation of revenue among business divisions to reflect changes in the management of communications revenue. Comparatives for the nine months ended September 2006 have been restated to decrease recoveries revenue by £61 million and increase other product revenue by £38 million in Sales & Trading, to increase other product revenue by £5 million in Research & Asset Management and to increase other product revenue by £18 million in Enterprise. |
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4) | RECONCILIATION OF OPERATING COSTS TO TRADING COSTS BY DIVISION (UNAUDITED) |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Sales & trading | ||||||||
Operating costs* | 1,080 | 1,112 | ||||||
Restructuring charges | — | (16 | ) | |||||
Impairments & amortisation of business combination intangibles | (30 | ) | (11 | ) | ||||
Fair value movements | (10 | ) | (6 | ) | ||||
Other income | (13 | ) | (17 | ) | ||||
Trading costs | 1,027 | 1,062 | ||||||
Research & asset management | ||||||||
Operating costs* | 249 | 232 | ||||||
Impairments & amortisation of business combination intangibles | (3 | ) | (2 | ) | ||||
Fair value movements | (2 | ) | (1 | ) | ||||
Other income | (3 | ) | (3 | ) | ||||
Trading costs | 241 | 226 | ||||||
Enterprise Operating costs* | 269 | 268 | ||||||
Restructuring charges | — | (1 | ) | |||||
Impairments & amortisation of business combination intangibles | (2 | ) | (4 | ) | ||||
Fair value movements | (3 | ) | (1 | ) | ||||
Other income | (3 | ) | (4 | ) | ||||
Trading costs | 261 | 258 | ||||||
Media | ||||||||
Operating costs* | 119 | 119 | ||||||
Impairments & amortisation of business combination intangibles | — | (1 | ) | |||||
Fair value movements | (1 | ) | (1 | ) | ||||
Other income | (2 | ) | (2 | ) | ||||
Trading costs | 116 | 115 | ||||||
* | Operating costs also include £28 million of Thomson deal-related costs, which have not been analysed in the table above as these relate to Reuters as a whole and cannot be directly attributed or allocated to divisions on a reasonable basis. Total operating costs are £1,745 million. |
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5) | RECONCILIATION OF OPERATING PROFIT TO TRADING PROFIT BY DIVISION (UNAUDITED) |
Nine Months | ||||||||
Ended | ||||||||
30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Sales & trading | ||||||||
Operating profit* | 140 | 154 | ||||||
Exclude: | ||||||||
Restructuring charges | — | 16 | ||||||
Impairments & amortisation of business combination intangibles | 30 | 11 | ||||||
Profit on disposal of subsidiaries | (1 | ) | (2 | ) | ||||
Investment income | (1 | ) | — | |||||
Fair value movements | 9 | 5 | ||||||
Trading profit | 177 | 184 | ||||||
Research & asset management | ||||||||
Operating profit/(loss)* | 20 | (6 | ) | |||||
Exclude: | ||||||||
Impairments & amortisation of business combination intangibles | 3 | 2 | ||||||
Profit on disposal of subsidiaries | (1 | ) | — | |||||
Fair value movements | 2 | 1 | ||||||
Trading profit/(loss) | 24 | (3 | ) | |||||
Enterprise | ||||||||
Operating profit* | 54 | 47 | ||||||
Exclude: | ||||||||
Restructuring charges | — | 1 | ||||||
Impairments & amortisation of business combination intangibles | 2 | 4 | ||||||
Fair value movements | 2 | 1 | ||||||
Trading profit | 58 | 53 | ||||||
Media | ||||||||
Operating profit* | 9 | 12 | ||||||
Exclude: | ||||||||
Impairments & amortisation of business combination intangibles | — | 1 | ||||||
Profit on disposal of subsidiaries | — | (1 | ) | |||||
Fair value movements | 1 | 1 | ||||||
Trading profit | 10 | 13 | ||||||
* | Operating profit also includes £28 million of Thomson deal-related costs, which have not been analysed in the table above as these relate to Reuters as a whole and cannot be directly attributed or allocated to divisions on a reasonable basis. Total operating profit is £195 million. |
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6) | RECONCILIATION OF OPERATING MARGIN TO TRADING MARGIN BY DIVISION (UNAUDITED) |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
Per cent. | Per cent. | |||||||
Sales & Trading | ||||||||
Operating margin* | 12 | % | 12 | % | ||||
Exclude: | ||||||||
Restructuring charges | — | 1 | % | |||||
Impairments & amortisation of business combination intangibles | 2 | % | 1 | % | ||||
Fair value movements | 1 | % | 1 | % | ||||
Trading margin | 15 | % | 15 | % | ||||
Research & asset management | ||||||||
Operating margin* | 8 | % | (3 | )% | ||||
Exclude: | ||||||||
Impairments & amortisation of business combination intangibles | 1 | % | 1 | % | ||||
Fair value movements | — | 1 | % | |||||
Trading margin | 9 | % | (1 | )% | ||||
Enterprise | ||||||||
Operating margin* | 16 | % | 15 | % | ||||
Exclude: | ||||||||
Impairments & amortisation of business combination intangibles | 1 | % | 1 | %. | ||||
Fair value movements | 1 | % | 1 | % | ||||
Trading margin | 18 | % | 17 | % | ||||
Media | ||||||||
Operating margin* | 7 | % | 9 | % | ||||
Exclude: | ||||||||
Fair value movements | — | 1 | % | |||||
Trading margin | 7 | % | 10 | % | ||||
* | Operating margin also includes £28 million of Thomson deal-related costs, which have not been analysed in the table above as these relate to Reuters as a whole and cannot be directly attributed or allocated to divisions on a reasonable basis. Total operating margin is 10.2 per cent. |
7) | RECONCILIATION OF NON-GAAP BASIC EPS FROM CONTINUING OPERATIONS TO BASIC EPS (UNAUDITED) |
Nine Months Ended 30 | ||||||||
September | ||||||||
2007 | 2006 | |||||||
Pence | Pence | |||||||
Basic EPS from continuing operations | 11.4 | 11.7 | ||||||
Excluding: | ||||||||
Impairments & amortisation of business combination intangibles | 2.9 | 1.3 | ||||||
Profit on disposals | (1.6 | ) | (0.2 | ) | ||||
Fair value movements | 1.1 | 0.5 | ||||||
Investment Income | (0.1 | ) | — | |||||
Thomson deal-related costs | 2.2 | — | ||||||
Adjustment to tax charge for tax effects of excluded items and change in corporation tax rate | — | (0.4 | ) | |||||
Basic EPS from continuing operations before impairments and amortisation of business combination intangibles, investment income, profit on disposals, fair value movements, Thomson deal-related costs, related taxation effects and change in corporation tax rate | 15.9 | 12.9 | ||||||
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8) | RECONCILIATION OF NON-GAAP PROFIT BEFORE TAXATION TO PROFIT BEFORE TAXATION (UNAUDITED) |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Profit before taxation from continuing operations | 183 | 198 | ||||||
Exclude: | ||||||||
Impairments & amortisation of business combination intangibles | 35 | 18 | ||||||
Profit on disposals | (20 | ) | (3 | ) | ||||
Fair value movements | 14 | 8 | ||||||
Investment Income | (1 | ) | — | |||||
Thomson deal-related costs | 28 | — | ||||||
Profit before taxation from continuing operations before impairments & amortisation of business combination intangibles, investment income, profit on disposals, Thomson deal-related costs and fair value movements | 239 | 221 | ||||||
9) | RECONCILIATION OF ACTUAL PERCENTAGE CHANGE TO UNDERLYING CHANGE — REVENUE BY DIVISION AND TYPE — NINE MONTHS ENDED 30 SEPTEMBER 2007 (UNAUDITED) |
Per cent. Change Versus Nine Months Ended 30 September 2006 | ||||||||||||||||
Impact of | ||||||||||||||||
Underlying | Impact of | Acquisitions | Actual | |||||||||||||
Change | Currency | & Disposals | Change | |||||||||||||
Recurring | 2 | % | (6 | )% | — | (4 | )% | |||||||||
Usage | 23 | % | (11 | )% | — | 12 | % | |||||||||
Outright | (18 | )% | (6 | )% | — | (24 | )% | |||||||||
Sales & trading | 3 | % | (6 | )% | — | (3 | )% | |||||||||
Recurring | 25 | %. | (6 | )% | — | 19 | % | |||||||||
Usage | 18 | % | (9 | )% | — | 9 | % | |||||||||
Research & asset management | 25 | % | (6 | )% | — | 19 | % | |||||||||
Recurring | 10 | % | (7 | )% | — | 3 | %. | |||||||||
Outright | 1 | %. | (4 | )% | 4 | % | 1 | % | ||||||||
Enterprise | 9 | % | (7 | )% | 1 | % | 3 | % | ||||||||
Recurring | 6 | % | (6 | )% | — | — | ||||||||||
Usage | (1 | )% | (6 | )% | — | (7 | )% | |||||||||
Media | 5 | % | (7 | )% | — | (2 | )% | |||||||||
Recurring | 7 | % | (6 | )% | — | — | ||||||||||
Usage | 16 | % | (10 | )% | — | 6 | % | |||||||||
Outright | — | (4 | )% | 3 | % | (1 | )% | |||||||||
Total revenue | 7 | % | (7 | )% | — | — | ||||||||||
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10) | RECONCILIATION OF ACTUAL PERCENTAGE CHANGE TO UNDERLYING CHANGE — REVENUE BY DIVISION AND PRODUCT FAMILY — NINE MONTHS ENDED 30 SEPTEMBER 2007 (UNAUDITED) |
Per cent. Change Versus Nine Months Ended 30 September 2006 | ||||||||||||||||
Impact of | ||||||||||||||||
Underlying | Impact of | Acquisitions | Actual | |||||||||||||
Change | Currency | & Disposals | Change | |||||||||||||
Reuters Xtra | 10 | % | (7 | )% | — | 3 | %. | |||||||||
Reuters Trader | (20 | )% | (5 | )% | — | (25 | )% | |||||||||
Recoveries | 9 | % | (6 | )% | — | 3 | % | |||||||||
Sales & trading | 3 | % | (6 | )% | — | (3 | )% | |||||||||
IB and IM | 37 | %. | (6 | )% | — | 31 | %. | |||||||||
Reuters Wealth Manager | 9 | % | (8 | )% | 1 | % | 2 | % | ||||||||
Research & asset management | 25 | % | (6 | )% | — | 19 | % | |||||||||
Reuters Enterprise Information | 17 | % | (7 | )% | — | 10 | % | |||||||||
Reuters Information Management | (15 | )% | (5 | )% | 1 | % | (19 | )% | ||||||||
Reuters Trade and Risk | ||||||||||||||||
Management | 12 | % | (6 | )% | 1 | % | 7 | % | ||||||||
Enterprise | 9 | % | (7 | )% | 1 | % | 3 | % | ||||||||
Agency Services | 3 | % | (6 | )% | — | (3 | )% | |||||||||
Consumer Media | 15 | % | (10 | )% | — | 6 | % | |||||||||
Media | 5 | % | (7 | )% | — | (2 | )% | |||||||||
Recurring | 7 | % | (6 | )% | — | — | ||||||||||
Usage | 16 | % | (10 | )% | — | 6 | % | |||||||||
Outright | — | (4 | )% | 3 | % | (1 | )% | |||||||||
Total revenue | 7 | % | (7 | )% | — | — | ||||||||||
11) | RECONCILIATION OF ACTUAL PERCENTAGE CHANGE TO UNDERLYING CHANGE — REVENUE BY GEOGRAPHY — NINE MONTHS ENDED 30 SEPTEMBER 2007 (UNAUDITED) |
Per cent. Change Versus Nine Months Ended 30 September 2006 | ||||||||||||||||
Impact of | ||||||||||||||||
Underlying | Impact of | Acquisitions | Actual | |||||||||||||
Change | Currency | & Disposals | Change | |||||||||||||
Europe, Middle East & Africa | 6 | % | (4 | )% | — | 2 | % | |||||||||
Americas | 7 | % | (9 | )% | — | (2 | )% | |||||||||
Asia | 8 | % | (10 | )% | — | (2 | )% | |||||||||
Total trading costs | 7 | % | (7 | )% | — | — | ||||||||||
12) | RECONCILIATION OF ACTUAL PERCENTAGE CHANGE TO UNDERLYING CHANGE — TRADING COSTS BY DIVISION — NINE MONTHS ENDED 30 SEPTEMBER 2007 (UNAUDITED) |
Per cent. Change Versus Nine Months Ended 30 September 2006 | ||||||||||||||||
Impact of | ||||||||||||||||
Underlying | Impact of | Acquisitions | Actual | |||||||||||||
Change | Currency | & Disposals | Change | |||||||||||||
Sales & trading | 2 | % | (4 | )% | (1 | )% | (3 | )% | ||||||||
Research & asset | ||||||||||||||||
management | 14 | % | (6 | )% | (1 | )% | 7 | % | ||||||||
Enterprise | 8 | % | (5 | )% | (1 | )% | 2 | % | ||||||||
Media | 6 | % | (5 | )% | — | 1 | % | |||||||||
Total trading costs | 5 | % | (5 | )% | (1 | )% | (1 | )% | ||||||||
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13) | RECONCILIATION OF ACTUAL PERCENTAGE CHANGE TO UNDERLYING CHANGE — TRADING PROFIT BY DIVISION — NINE MONTHS ENDED 30 SEPTEMBER 2007 (UNAUDITED) |
Per cent. Change Versus Nine Months Ended 30 September 2006 | ||||||||||||||||
Impact of | ||||||||||||||||
Underlying | Impact of | Acquisitions | Actual | |||||||||||||
Change | Currency | & Disposals | Change | |||||||||||||
Sales & trading | 9 | % | (19 | )% | 6 | % | (4 | )% | ||||||||
Research & asset | ||||||||||||||||
management | — | — | — | — | ||||||||||||
Enterprise | 15 | % | (14 | )% | 9 | % | 10 | % | ||||||||
Media | (5 | )% | (22 | )% | 4 | % | (23 | )% | ||||||||
Total trading profit | 20 | % | (18 | )% | 7 | % | 9 | % | ||||||||
14) | COMPONENTS OF NET DEBT AT 30 SEPTEMBER 2007 (UNAUDITED) |
As at 30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Cash and cash equivalents | 124 | 308 | ||||||
Bank overdrafts | (12 | ) | (6 | ) | ||||
Total cash and cash equivalents | 112 | 302 | ||||||
Short-term deposits | 208 | 2 | ||||||
Borrowings (excluding bank overdrafts) | (867 | ) | (703 | ) | ||||
Net debt | (547 | ) | (399 | ) | ||||
15) | RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2007 (UNAUDITED) |
Nine Months Ended 30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Increase/(decrease) in cash and cash equivalents | 7 | (335 | ) | |||||
Cash outflow from movement in short-term deposits | 2 | 1 | ||||||
Cash inflow from movement in borrowings | (196 | ) | (322 | ) | ||||
Exchange (losses)/gains on short-term deposits and borrowings | (21 | ) | 5 | |||||
(208 | ) | (651 | ) | |||||
Fair value movements | 5 | 13 | ||||||
Other non-cash movements | (11 | ) | (14 | ) | ||||
Movement in net debt | (214 | ) | (652 | ) | ||||
Opening net (debt)/funds | (333 | ) | 253 | |||||
Closing net debt | (547 | ) | (399 | ) | ||||
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16) | RECONCILIATION OF CASH GENERATED FROM OPERATIONS TO FREE CASH FLOW AND TRADING CASH FLOW (UNAUDITED) |
Nine Months Ended | ||||||||
30 September | ||||||||
2007 | 2006 | |||||||
£m | £m | |||||||
Cash generated from operations | 284 | 132 | ||||||
Interest received | 29 | 23 | ||||||
Interest paid | (59 | ) | (34 | ) | ||||
Tax paid | (23 | ) | (26 | ) | ||||
Purchases of property, plant and equipment | (94 | ) | (79 | ) | ||||
Proceeds from sale of property, plant and equipment | 3 | 4 | ||||||
Purchases of intangible assets | (75 | ) | (79 | ) | ||||
Thomson deal-related costs | 16 | — | ||||||
Special pensions funding payment | 4 | 187 | ||||||
Dividends received | 2 | 2 | ||||||
Free cash flow | 87 | 130 | ||||||
Interest received | (29 | ) | (23 | ) | ||||
Interest paid | 59 | 34 | ||||||
Restructuring | 9 | 32 | ||||||
Tax | 23 | 26 | ||||||
Other | (11 | ) | 20 | |||||
Trading cash flow | 138 | 219 | ||||||
Cash conversion* | 51 | % | 89 | % | ||||
* | Cash conversion = trading cash flow / trading profit |
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4. | Unaudited reconciliations of Reuters Group PLC financial information to Canadian GAAP |
• | A reconciliation of net income for the nine months ended 30 September 2007 and for the years ended 31 December 2006, 2005 and 2004. |
• | A reconciliation of shareholders’ equity as at 30 September 2007 and 31 December 2006, 2005 and 2004. |
• | A full Income Statement for the nine months ended 30 September 2007 and the year ended 31 December 2006. |
• | A full balance sheet as at 30 September 2007. |
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For the Nine | For the | |||||||||||||||||||
Months Ended | Year Ended | |||||||||||||||||||
30 September | 31 December | |||||||||||||||||||
2007 | 2006 | 2005 | 2004 | |||||||||||||||||
£m | £m | £m | £m | |||||||||||||||||
Profit attributable to ordinary shareholders as previously reported by Reuters under IFRS | 151 | 305 | 456 | 364 | ||||||||||||||||
Differences in GAAP increasing / (decreasing) reported profit: | ||||||||||||||||||||
Business combinations | 1 | (3 | ) | (4 | ) | (4 | ) | 21 | ||||||||||||
Other intangibles | 2 | (1 | ) | (4 | ) | — | — | |||||||||||||
Employee benefits — pensions | 3 | (151 | ) | (29 | ) | (27 | ) | (4 | ) | |||||||||||
Stock-based compensation | 4 | 6 | (6 | ) | (1 | ) | (15 | ) | ||||||||||||
Derivative instruments and hedging activities | 5 | — | 14 | (42 | ) | 58 | ||||||||||||||
Investments | 6 | — | — | 42 | (19 | ) | ||||||||||||||
Sale and leaseback transactions | 7 | — | — | (1 | ) | (1 | ) | |||||||||||||
Property, plant and equipment | 8 | (8 | ) | (1 | ) | 8 | 8 | |||||||||||||
Joint ventures and associates | 9 | — | — | — | 6 | |||||||||||||||
Consolidation of subsidiary undertakings | 10 | — | — | — | (7 | ) | ||||||||||||||
Loss on disposal of subsidiary undertakings, joint ventures and associates | 11 | — | (5 | ) | (32 | ) | (53 | ) | ||||||||||||
Restructuring | 12 | 5 | 59 | (9 | ) | 105 | ||||||||||||||
Taxation | 14 | 29 | (21 | ) | 14 | (53 | ) | |||||||||||||
Minority interest in respect of the GAAP adjustments | — | — | (3 | ) | 7 | |||||||||||||||
Net earnings attributable to ordinary shareholders under Thomson Canadian GAAP accounting policies | 28 | 308 | 401 | 417 | ||||||||||||||||
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As at | As at | |||||||||||||||||||
30 September | 31 December | |||||||||||||||||||
2007 | 2006 | 2005 | 2004 | |||||||||||||||||
£m | £m | £m | £m | |||||||||||||||||
Shareholders’ equity attributable to ordinary shareholders as previously reported by Reuters under IFRS | 234 | 172 | 511 | 371 | ||||||||||||||||
Differences in GAAP increasing/(decreasing) reported shareholders’ equity: | ||||||||||||||||||||
Business combinations | 1 | 100 | 111 | 153 | 133 | |||||||||||||||
Other intangibles | 2 | (5 | ) | (4 | ) | — | — | |||||||||||||
Employee benefits — pensions | 3 | 144 | 512 | 543 | 524 | |||||||||||||||
Stock-based compensation | 4 | 11 | 7 | 11 | 9 | |||||||||||||||
Derivative instruments and hedging activities | 5 | (27 | ) | (13 | ) | 6 | (8 | ) | ||||||||||||
Investments | 6 | (1 | ) | (7 | ) | (1 | ) | 89 | ||||||||||||
Sale and leaseback transactions | 7 | (2 | ) | (2 | ) | (2 | ) | (1 | ) | |||||||||||
Property, plant and equipment | 8 | 8 | 16 | 17 | 8 | |||||||||||||||
Joint ventures and associates | 9 | 1 | 1 | 6 | (23 | ) | ||||||||||||||
Consolidation of subsidiary undertakings | 10 | — | — | — | (7 | ) | ||||||||||||||
Loss on disposal of subsidiary undertakings, joint ventures and associates | 11 | — | — | (25 | ) | (15 | ) | |||||||||||||
Restructuring | 12 | (7 | ) | (12 | ) | (71 | ) | (45 | ) | |||||||||||
Shares to be repurchased | 13 | — | 53 | 59 | — | |||||||||||||||
Taxation | 14 | (46 | ) | (151 | ) | (139 | ) | (126 | ) | |||||||||||
Minority interest in respect of GAAP adjustments | — | — | — | 1 | ||||||||||||||||
Shareholders’ equity attributable to ordinary shareholders under Thomson Canadian GAAP accounting policies | 410 | 683 | 1,068 | 910 | ||||||||||||||||
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For the Nine Months Ended | For the Year Ended | |||||||||||||||||||||||||||||||||||
30 September 2007 | 31 December 2006 | |||||||||||||||||||||||||||||||||||
Adj. | Canadian | Adj. | Canadian | |||||||||||||||||||||||||||||||||
Ref. | IFRS | Adjustments | GAAP | Ref. | IFRS | Adjustments | GAAP | |||||||||||||||||||||||||||||
£m | £m | £m | £m | £m | £m | |||||||||||||||||||||||||||||||
Revenues | 9 | 1,914 | 11 | 1,925 | 9 | 2,566 | 51 | 2,617 | ||||||||||||||||||||||||||||
Cost of sales, selling, marketing, general and administrative expenses | (1,576 | ) | (158 | ) | (1,734 | ) | (2,153 | ) | (24 | ) | (2,177 | ) | ||||||||||||||||||||||||
2 | (10 | ) | 2 | (8 | ) | |||||||||||||||||||||||||||||||
3 | (151 | ) | 3 | (29 | ) | |||||||||||||||||||||||||||||||
4 | 6 | 4 | (6 | ) | ||||||||||||||||||||||||||||||||
7 | 1 | 7 | 1 | |||||||||||||||||||||||||||||||||
8 | 6 | 8 | 12 | |||||||||||||||||||||||||||||||||
9 | (15 | ) | 9 | (53 | ) | |||||||||||||||||||||||||||||||
12 | 5 | 12 | 59 | |||||||||||||||||||||||||||||||||
Depreciation | (72 | ) | (26 | ) | (98 | ) | (95 | ) | (20 | ) | (115 | ) | ||||||||||||||||||||||||
2 | (11 | ) | 2 | (6 | ) | |||||||||||||||||||||||||||||||
7 | (1 | ) | 7 | (1 | ) | |||||||||||||||||||||||||||||||
8 | (14 | ) | 8 | (13 | ) | |||||||||||||||||||||||||||||||
Amortisation | (45 | ) | 17 | (28 | ) | (45 | ) | 6 | (39 | ) | ||||||||||||||||||||||||||
1 | (3 | ) | 1 | (4 | ) | |||||||||||||||||||||||||||||||
2 | 20 | 2 | 10 | |||||||||||||||||||||||||||||||||
Operating profit | 221 | (156 | ) | 65 | 273 | 13 | 286 | |||||||||||||||||||||||||||||
Net other (expense)/income | (13 | ) | (9 | ) | (22 | ) | 55 | 12 | 67 | |||||||||||||||||||||||||||
5 | (13 | ) | 5 | 12 | ||||||||||||||||||||||||||||||||
9 | 4 | 9 | 5 | |||||||||||||||||||||||||||||||||
11 | (5 | ) | ||||||||||||||||||||||||||||||||||
Net interest expense and other financing costs | 5 | (25 | ) | 13 | (12 | ) | 5 | (15 | ) | 2 | (13 | ) | ||||||||||||||||||||||||
Income taxes | (41 | ) | 29 | (12 | ) | (20 | ) | (24 | ) | (44 | ) | |||||||||||||||||||||||||
9 | — | 9 | (3 | ) | �� | |||||||||||||||||||||||||||||||
14 | 29 | 14 | (21 | ) | ||||||||||||||||||||||||||||||||
Earnings from continuing operations | 142 | (123 | ) | 19 | 293 | 3 | 296 | |||||||||||||||||||||||||||||
Earnings from discontinued operations, net of tax | 9 | — | 9 | 12 | — | 12 | ||||||||||||||||||||||||||||||
Net earnings | 151 | (123 | ) | 28 | 305 | 3 | 308 | |||||||||||||||||||||||||||||
373
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As Presented | ||||||||||||||
As Presented | in Reuters | |||||||||||||
in the | Published | |||||||||||||
Canadian GAAP Format | Table Above | Reclassifications | Report | IFRS Format | ||||||||||
£m | £m | £m | ||||||||||||
Revenues | 1,914 | — | 1,914 | Revenue | ||||||||||
Cost of sales, selling, marketing, general and administrative expenses | (1,576 | ) | (169 | ) | (1,745 | ) | Operating cost | |||||||
26 | 26 | Other operating income | ||||||||||||
Depreciation | (72 | ) | 72 | — | ||||||||||
Amortisation | (45 | ) | 45 | — | ||||||||||
Operating profit | 221 | (26 | ) | 195 | Operating profits | |||||||||
Net other income | (13 | ) | 26 | 13 | Profit on disposal/Share of losses of JVs and associates | |||||||||
Net interest expense and other financing costs | (25 | ) | 99 | 74 | Finance Income | |||||||||
(99 | ) | (99 | ) | Finance cost | ||||||||||
Income taxes | (41 | ) | — | (41 | ) | Taxation | ||||||||
Earnings from continuing operations | 142 | — | 142 | Profit for the period from continuing operation | ||||||||||
Earnings from discontinued operations, net of tax | 9 | — | 9 | Profit for the period from discontinued operations | ||||||||||
Net earnings | 151 | — | 151 | Profit for the period | ||||||||||
374
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As Presented | ||||||||||||||
As Presented | in Reuters | |||||||||||||
in the | Published | |||||||||||||
Canadian GAAP Format | Table Above | Reclassifications | Report | IFRS Format | ||||||||||
£m | £m | £m | ||||||||||||
Revenues | 2,566 | — | 2,566 | Revenue | ||||||||||
Cost of sales, selling, marketing, general and administrative expenses | (2,153 | ) | (198 | ) | (2,351 | ) | Operating cost | |||||||
41 | 41 | Other operating income | ||||||||||||
Depreciation | (95 | ) | 95 | — | ||||||||||
Amortisation | (45 | ) | 45 | — | ||||||||||
Operating profit | 273 | (17 | ) | 256 | Operating profit | |||||||||
Net other income | 55 | 17 | 72 | Profit on disposal/Share of losses of JVs and associates | ||||||||||
Net interest expense and other financing costs | (15 | ) | 87 | 72 | Finance Income | |||||||||
(87 | ) | (87 | ) | Finance cost | ||||||||||
Income taxes | (20 | ) | — | (20 | ) | Taxation | ||||||||
Earnings from continuing operations | 293 | — | 293 | Profit for the period operation from continuing | ||||||||||
Earnings from discontinued operations, net of tax | 12 | — | 12 | Profit for the period from discontinued operations | ||||||||||
Net earnings | 305 | — | 305 | Profit for the period | ||||||||||
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As at 30 September 2007 | ||||||||||||||||||
Adjustment | Canadian | |||||||||||||||||
Reference | IFRS | Adjustments | GAAP | |||||||||||||||
£m | £m | £m | ||||||||||||||||
Assets | ||||||||||||||||||
Cash and cash equivalents | 9 | 124 | 8 | 132 | ||||||||||||||
Accounts receivable, net of allowances | 9 | 142 | 12 | 154 | ||||||||||||||
Inventories | 1 | — | 1 | |||||||||||||||
Prepaid expenses and other current assets | 388 | — | 388 | |||||||||||||||
1 | 3 | |||||||||||||||||
9 | (3 | ) | ||||||||||||||||
Deferred income taxes | 14 | — | 116 | 116 | ||||||||||||||
Current assets | 655 | 136 | 791 | |||||||||||||||
Computer hardware and other property, net | 387 | 72 | 459 | |||||||||||||||
7 | 16 | |||||||||||||||||
8 | 8 | |||||||||||||||||
9 | 48 | |||||||||||||||||
Computer software, net | 2 | 96 | 96 | |||||||||||||||
Identifiable intangible assets | 278 | (149 | ) | 129 | ||||||||||||||
1 | 4 | |||||||||||||||||
2 | (160 | ) | ||||||||||||||||
9 | 7 | |||||||||||||||||
Goodwill | 1 | 301 | 97 | 398 | ||||||||||||||
Other non-current assets | 167 | 287 | 454 | |||||||||||||||
2 | 59 | |||||||||||||||||
3 | 249 | |||||||||||||||||
6 | (1 | ) | ||||||||||||||||
9 | (20 | ) | ||||||||||||||||
Deferred income taxes | 14 | 306 | (96 | ) | 210 | |||||||||||||
Total assets | 2,094 | 443 | 2,537 | |||||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||||||
Liabilities | ||||||||||||||||||
Short term indebtedness | (340 | ) | — | (340 | ) | |||||||||||||
Accounts payable and accruals | (686 | ) | 11 | (675 | ) | |||||||||||||
1 | (4 | ) | ||||||||||||||||
4 | 11 | |||||||||||||||||
5 | (22 | ) | ||||||||||||||||
9 | (7 | ) | ||||||||||||||||
12 | 10 | |||||||||||||||||
14 | 23 | |||||||||||||||||
Deferred revenue | (31 | ) | — | (31 | ) | |||||||||||||
Current liabilities | (1,057 | ) | 11 | (1,046 | ) | |||||||||||||
Long-term debt | (541 | ) | (65 | ) | (606 | ) | ||||||||||||
5 | (5 | ) | ||||||||||||||||
7 | (18 | ) | ||||||||||||||||
9 | (42 | ) | ||||||||||||||||
Other non-current liabilities | (102 | ) | (124 | ) | (226 | ) | ||||||||||||
3 | (105 | ) | ||||||||||||||||
9 | (2 | ) | ||||||||||||||||
12 | (17 | ) | ||||||||||||||||
Deferred income taxes | 14 | (160 | ) | (89 | ) | (249 | ) | |||||||||||
Total liabilities | (1,860 | ) | (267 | ) | (2,127 | ) | ||||||||||||
Net assets | 234 | 176 | 410 | |||||||||||||||
Shareholder’s equity | ||||||||||||||||||
Capital | 525 | — | 525 | |||||||||||||||
Accumulated other comprehensive income | (1,727 | ) | 36 | (1,691 | ) | |||||||||||||
Retained earnings | 1,436 | 140 | 1,576 | |||||||||||||||
Total equity | 234 | 176 | 410 | |||||||||||||||
376
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As Presented | ||||||||||||||
As Presented | in Reuters | |||||||||||||
in the | Published | |||||||||||||
Canadian GAAP Format | Table Above | Reclassifications | Report | IFRS Format | ||||||||||
£m | £m | £m | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | 124 | — | 124 | Cash and cash equivalents | ||||||||||
Accounts receivable, net of allowances | 142 | 151 | 293 | Trade and other receivables | ||||||||||
Inventories | 1 | — | 1 | Inventories | ||||||||||
Prepaid expenses and other current assets | 388 | (388 | ) | — | ||||||||||
220 | 220 | Other financial assets and derivatives | ||||||||||||
— | 17 | 17 | Current tax debtors | |||||||||||
Deferred income taxes | — | — | — | |||||||||||
Current assets | 655 | — | 655 | Current assets | ||||||||||
Computer hardware and other | Property, plant and | |||||||||||||
property, net | 387 | — | 387 | equipment | ||||||||||
Computer software, net | — | — | ||||||||||||
Identifiable intangible assets | 278 | 301 | 579 | Intangible assets | ||||||||||
Goodwill | 301 | (301 | ) | — | ||||||||||
42 | 42 | Investments | ||||||||||||
Other non-current assets | 167 | (95 | ) | 72 | Other financial assets and derivatives | |||||||||
Deferred income taxes | 306 | — | 306 | Deferred tax assets | ||||||||||
46 | 46 | Retirement benefit | ||||||||||||
obligations | ||||||||||||||
Non-current assets of discontinued operations | — | — | — | |||||||||||
Non-current assets | 1,439 | (7 | ) | 1,432 | Non-current assets | |||||||||
— | 7 | 7 | Non-current assets held | |||||||||||
— | — | — | for resale | |||||||||||
Total assets | 2,094 | — | 2,094 | Total assets | ||||||||||
Liabilities and shareholders’ equity | ||||||||||||||
Liabilities | ||||||||||||||
Short-term indebtedness | (340 | ) | (33 | ) | (373 | ) | Other financial liabilities and derivatives | |||||||
Accounts payable and accruals | (686 | ) | 256 | (430 | ) | Trade and other payables | ||||||||
Deferred revenue | (31 | ) | 31 | — | ||||||||||
(215 | ) | (215 | ) | Current tax liabilities | ||||||||||
(39 | ) | (39 | ) | Provisions for | ||||||||||
liabilities and charges | ||||||||||||||
Current liabilities | (1,057 | ) | — | (1,057 | ) | Current liabilities | ||||||||
Long-term debt | (541 | ) | — | (541 | ) | Other financial liabilities and derivatives | ||||||||
(102 | ) | (102 | ) | Provisions for liabilities and charges | ||||||||||
Other non-current liabilities | (102 | ) | 102 | — | ||||||||||
Deferred income taxes | (160 | ) | — | (160 | ) | Deferred tax liabilities | ||||||||
Non-current liabilities | (803 | ) | — | (803 | ) | Non-current liabilities | ||||||||
Total liabilities | (1,860 | ) | — | (1,860 | ) | Total liabilities | ||||||||
Net assets | 234 | 234 | Net assets | |||||||||||
377
Table of Contents
1. | Business combinations |
2. | Other Intangibles |
3. | Employee benefits — Pensions |
378
Table of Contents
4. | Stock-based compensation |
379
Table of Contents
5. | Derivative instruments and hedging activities |
380
Table of Contents
6. | Investments |
7. | Sale and leaseback transactions |
8. | Property, plant and equipment |
9. | Joint ventures and associates |
381
Table of Contents
10. | Consolidation of subsidiary undertakings |
11. | Profit or loss on disposal of subsidiary undertakings, joint ventures and associates |
12. | Restructuring |
382
Table of Contents
13. | Shares to be repurchased |
14. | Taxation |
383
Table of Contents
384
Table of Contents
5. | Report on the unaudited reconciliations of Reuters Group PLC financial information to Canadian GAAP |
385
Table of Contents
386
Table of Contents
6. | Capitalisation and indebtedness of Reuters Group PLC (Unaudited) |
As at 31 December 2007 | ||||
£m | ||||
Total current debt | ||||
— Guaranteed | — | |||
— Secured | — | |||
— Unguaranteed/Unsecured | (261 | ) | ||
Total non-current debt | — | |||
— Guaranteed | — | |||
— Secured | — | |||
— Unguaranteed/Unsecured | (370 | ) |
As at 31 December 2007 | ||||
£m | ||||
Shareholders’ equity(1) | ||||
Share capital | 539 | |||
Other reserves | (1,710 | ) |
As at 31 December 2007 | ||||
£m | ||||
Cash | 106 | |||
Cash equivalents | 145 | |||
Trading securities | 3 | |||
Liquidity | 254 | |||
Current Financial Receivable | ||||
Current bank debt | (9 | ) | ||
Current portion of non current debt | — | |||
Other current financial debt | (252 | ) | ||
Current financial debt | (261 | ) | ||
Net Current Financial Indebtedness | ||||
Non current bank loans | — | |||
Bonds issued | (364 | ) | ||
Other non current loans | (6 | ) | ||
Non current financial indebtedness | (370 | ) | ||
Net financial indebtedness | (377 | ) | ||
(1) | Shareholders’ equity does not include retained earnings. |
(2) | This statement of indebtedness has been prepared using policies which are consistent with those used in preparing Reuters Group PLC’s financial statements for the year ended 31 December 2006. |
(3) | The information is unaudited. |
(4) | As at 31 December 2007 Reuters Group PLC also had derivative financial instruments used for the purpose of hedging interest rate risk on the Group’s borrowings and foreign currency risk on assets not denominated in sterling. The derivatives had the following fair value at 31 December 2007: |
£m | ||||
Cross-currency interest rate swaps | 67 | |||
Forward foreign exchange | 1 |
387
Table of Contents
CESR38-50
1. | Reuters profit estimate |
1.1 | Profit estimate of Reuters |
1.2 | Basis of preparation |
US$/£1 | ||||
Year ended 31 December 2006 | 1.8434 | |||
Year ended 31 December 2007 | 2.0016 |
1.3 | Unaudited reconciliation of profit estimate to Canadian GAAP |
388
Table of Contents
£m | ||||
Trading profit of the Reuters Group (IFRS accounting policies) | 380 | |||
Canadian GAAP adjustments to trading profit: | ||||
Other intangibles | (2 | ) | ||
Employee benefits-pensions (past service costs) | (8 | ) | ||
Stock-based compensation | 3 | |||
Property, plant and equipment | (11 | ) | ||
Restructuring | 7 | |||
Sale and leaseback transactions | (4 | ) | ||
Trading profit of the Reuters Group (Thomson Canadian GAAP accounting policies) | 365 | |||
389
Table of Contents
1.4 | Letter from PwC UK in relation to the Reuters Group profit estimate for the year ended 31 December 2007 |
390
Table of Contents
391
Table of Contents
392
Table of Contents
1.5 | Letters from UBS and Blackstone |
The Directors |
The Reuters Building
South Colonnade
Canary Wharf
London E14 5EP
Thomson Reuters PLC
The Quadrangle
180 Wardour Street
London W1A 4YG
29 | February 2008 |
Dear Sirs |
393
Table of Contents
UBS Limited | The Blackstone Group International Limited | |||
Robin Budenberg | James Hartop | Jonathan Koplovitz | ||
Managing Director | Managing Director | Senior Managing Director |
394
Table of Contents
2. | Thomson profit forecast |
2.1 | Profit forecast of Thomson |
2.2 | Basis of preparation |
2.3 | Assumptions |
• | there will be no further change to existing prevailing worldwide macroeconomic conditions during the year ending 31 December 2008; and | |
• | there will be no material adverse events which will have a significant impact on Thomson’s financial results. |
• | a portion of Thomson’s anticipated 2008 revenue growth will come from tactical acquisitions made during the year ending 31 December 2008; and | |
• | Thomson’s operational management is incentivised to meet, plan and forecast financial metrics and will continue to focus on these metrics. |
395
Table of Contents
2.4 | Letter from PwC Canada in relation to the profit forecast |
Thomson Reuters PLC
The Quadrangle
180 Wardour Street
London W1A 4YG
United Kingdom
The Thomson Corporation
Metro Center
One Station Place
Stamford, Connecticut 06902
United States
Citigroup Centre
33 Canada Square
Canary Wharf
London E14 5LB
United Kingdom
383 Madison Avenue
New York, New York 10179
United States
20 Grafton Street
London W1S 4DZ
United Kingdom
396
Table of Contents
397
Table of Contents
2.5 | Letters from Perella Weinberg and Bear Stearns in relation to the profit forecast |
The Thomson Corporation
Metro Center
One Station Place
Stamford, CT 06902
USA
Thomson Reuters PLC
The Quadrangle
180 Wardour Street
London W1A 4YG
UK
Graham Davidson | John Fargis | |
Perella Weinberg Partners UK LLP | Bear, Stearns & Co. Inc. |
398
Table of Contents
1. | Form and status |
2. | Interest |
399
Table of Contents
3. | Repayment and redemption |
4. | Repayment on default |
• | any principal or interest payable on any of the Loan Notes held by that Noteholder is not paid in full within 30 days after the due date for payment; or | |
• | an effective resolution being passed or an order being made for thewinding-up or dissolution of Thomson Reuters PLC (other than (a) a voluntary winding up for the purposes of amalgamation or reconstruction or liquidation under which a successor or successors undertake(s) the obligations of Thomson Reuters PLC under the Loan Notes; or (b) a members’ voluntary winding up on terms previously approved by an extraordinary resolution of Noteholders); or | |
• | a security holder taking possession of, or a trustee, receiver, administrator or similar officer being appointed to, or an administration order being made in respect of, Thomson Reuters PLC or the whole or substantially the whole of the property or undertaking of Thomson Reuters PLC and such person not being paid out or discharged within thirty (30) days. |
400
Table of Contents
5. | Purchase and cancellation |
6. | Unsecured obligation |
7. | Registration |
8. | Modification |
9. | Transfer, death and bankruptcy |
10. | Listing and trading |
401
Table of Contents
11. | Surrender of Loan Notes on repayment and prescription |
12. | Payment |
13. | Substitution of principal debtor |
14. | Governing law |
402
Table of Contents
15. | Overseas Shareholders |
16. | Other provisions relating to the Loan Note Option |
403
Table of Contents
17. | Loan Note Valuation |
404
Table of Contents
PR Annex III, 1.2
1. | Responsibility |
2. | Explanation of the form of the responsibility statement |
3. | Directors |
3.1 | Reuters Directors |
Name | Position | |
Niall FitzGerald KBE | Chairman | |
Tom Glocer | Chief Executive Officer | |
David Grigson | Chief Financial Officer | |
Devin Wenig | Chief Operating Officer | |
Lawton Fitt | Non-executive Director | |
Penelope Hughes | Non-executive Director | |
Sir Deryck Maughan | Non-executive Director | |
Nandan Nilekani | Non-executive Director | |
Kenneth Olisa | Non-executive Director | |
Richard Olver | Non-executive Director | |
Ian Strachan | Non-executive Director |
405
Table of Contents
3.2 | Thomson Directors |
Name | Position | |
David Thomson | Non-executive Director and Chairman | |
W. Geoffrey Beattie | Non-executive Director and Deputy Chairman | |
Richard J. Harrington | President and Chief Executive Officer | |
Robert D. Daleo | Executive Vice-President and Chief Financial Officer | |
Peter J. Thomson | Non-executive Director | |
Richard M. Thomson | Non-executive Director | |
John A. Tory | Non-executive Director | |
Mary Cirillo | Non-executive Director | |
Roger L. Martin | Non-executive Director | |
Vance K. Opperman | Non-executive Director | |
Steven A. Denning | Non-executive Director | |
Michael J. Sabia | Non-executive Director | |
Ron D. Barbaro | Non-executive Director | |
V. Maureen Kempston Darkes | Non-executive Director | |
John M. Thompson | Non-executive Director |
22
4. | Summaries of material contracts (other than Transaction Documents) |
4.1 | Reuters |
4.2 | Thomson |
Sale of Thomson Learning Businesses |
Acquisition Facility |
406
Table of Contents
Credit Agreement |
4.3 | Sponsor’s Agreement |
5. | Summaries of Transaction Documents |
5.1 | Implementation Agreement |
407
Table of Contents
• | to co-operate and take or cause to be taken all such steps as are within their power and as may be necessary or desirable to implement the Transaction as soon as reasonably practicable; and | |
• | without prior consent of the parties, not to take a step which they believe could significantly frustrate Thomson Reuters from obtaining the benefits of the Transaction. |
• | the approval of all resolutions necessary for the completion of the Transaction by Reuters Shareholders; | |
• | the approval of all resolutions necessary for the completion of the Transaction by Thomson Shareholders; | |
• | the approval of the Scheme by the Court and the obtaining of the Interim Order and Final Order from the Ontario Court; | |
• | the admission of Thomson Reuters PLC Shares to listing on the Official List of the UKLA, and their admission to trading on the LSE’s main market for listed securities; and | |
• | that no material adverse change in the business, assets, position or profits of Reuters or Thomson has occurred, such condition being waivable by Reuters or Thomson in respect of a material adverse change of the other company. |
• | not to issue such number of Thomson Shares which would result in Woodbridge holding less than 662/3 per cent. of the then outstanding Thomson Shares; | |
• | not to take or omit to take any action which, if the Equalization and Governance Agreement were in force, would require an adjustment to the Equalization Ratio (which until the Effective Date is deemed to be 0.16 Thomson Shares to one Reuters Share), a Matching Action or a Class Rights Action; and | |
• | not to participate in substantive meetings or discussions with any regulatory authority in respect of the Antitrust Conditions or the other conditions without the prior consent of Reuters. |
• | at the request of Thomson, to agree to divest, hold separate or take any other action that limits its freedom of action with respect to, or its ability to retain, its businesses, services or assets, provided that any such action may be conditioned on the Transaction having been completed; | |
• | not to solicit an offer from any person wishing to undertake an offer in respect of a significant proportion of Reuters Shares, not to sell the whole of or a substantial part of its consolidated assets, and not to partake in any transaction inconsistent with the completion of the Transaction; | |
• | not to engage in any act or omission which would require the consent of Reuters Shareholders under applicable laws, other than as required to implement the Transaction, or pursuant to a pre-existing contractual obligation, without the prior consent of Thomson; |
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• | not to borrow any funds other than in the ordinary course of business or to meet its pre-existing obligations, or agree to any additional restrictions with its existing lenders on its ability to declare dividendsand/or transfer assets to Thomson or any affiliate of Thomson, without the prior consent of Thomson; | |
• | not to take or omit to take any action which, if the Equalization and Governance Agreement were in force, would require an adjustment to the Equalization Ratio (which until the Effective Date is deemed to be 0.16 Thomson Shares to one Reuters Share), a Matching Action or a Class Rights Action; and | |
• | not to participate in substantive meetings or discussions with any regulatory authority in respect of the Antitrust Conditions or the other conditions without the prior consent of Thomson. |
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• | Reuters Shareholders do not approve the Scheme; | |
• | Thomson fails to obtain the Interim Order or the Final Order; | |
• | the Court fails to sanction the Scheme; | |
• | the Transaction is not completed by 31 December 2008; or | |
• | any of the Antitrust Conditions or other conditions is (or becomes) incapable of satisfaction and, where such condition is capable of waiver, is not waived. |
5.2 | Equalization and Governance Agreement |
• | Thomson Reuters PLC, Thomson Reuters Corporation and their respective subsidiaries will operate as a unified group; | |
• | the boards of directors of Thomson Reuters PLC and Thomson Reuters Corporation will comprise the same individuals, as will the companies’ executive management; and |
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• | the directors of Thomson Reuters PLC and Thomson Reuters Corporation will, in addition to their duties to the company concerned, have regard to, and take into account in the exercise of their powers, the best interests of the other company, and of both the holders of Thomson Reuters Corporation Shares and the holders of Thomson Reuters PLC Shares. |
• | be entitled to receive from Thomson Reuters PLC distributions of capital or income equivalent to those of a holder of one Thomson Reuters Corporation Share; and | |
• | enjoy equivalent rights as to voting in relation to Joint Electorate Actions as those of a holder of one Thomson Reuters Corporation Share, |
• | Thomson Reuters PLC will undertake an action such that the economic and voting rights (in relation to Joint Electorate Actions) of a holder of a Thomson Reuters PLC Share determined by reference to a holder of a Thomson Reuters Corporation Share are maintained in proportion to the then prevailing Equalization Ratio (the“Matching Action”); or | |
• | an appropriate adjustment to the Equalization Ratio will be made in order to ensure that there is equitable treatment (having regard to the then prevailing Equalization Ratio) for a holder of one Thomson Reuters PLC Share relative to a holder of one Thomson Reuters Corporation Share. |
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• | the appointment, election, re-election or removal of any director of Thomson Reuters PLC or Thomson Reuters Corporation; | |
• | to the extent such receipt or adoption is required by applicable laws, the receipt or adoption of the financial statements or accounts of Thomson Reuters PLC or Thomson Reuters Corporation, or financial statements or accounts prepared on a combined basis, other than any financial statements or accounts in respect of the period(s) ended prior to the Effective Date; | |
• | a change of name of Thomson Reuters PLC or Thomson Reuters Corporation; and | |
• | the appointment or removal of the auditors of Thomson Reuters PLC or Thomson Reuters Corporation. |
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• | the voluntary liquidation of either company; | |
• | any adjustment to the Equalization Ratio other than in accordance with the Equalization and Governance Agreement; | |
• | any amendment to, or termination of, the Equalization and Governance Agreement, the Special Voting Share Agreements or the Cross-Guarantees, other than (i) any amendment which is formal or technical in nature and which is not materially prejudicial to the interests of Thomson Reuters PLC Shareholders or Thomson Reuters Corporation Shareholders or (ii) is necessary to correct any inconsistency or manifest error as may be agreed by the Thomson Reuters Board; | |
• | any amendment to, removal or alteration of the effect of (which will include the ratification of any breach of) any of the Thomson Reuters PLC Entrenched Provisions or the Thomson Reuters Corporation Entrenched Provisions; | |
• | a change in the corporate status of Thomson Reuters Corporation from a corporation existing under the OBCA with its primary listing on the TSX or the NYSE or of Thomson Reuters PLC from a public limited company incorporated in England and Wales with its primary listing on the Official List of the UKLA (unless such change occurs in connection with a termination of the Equalization and Governance Agreement in circumstances not requiring approval as a Class Rights Action); | |
• | any other action or matter the Thomson Reuters Board determines (either in a particular case or generally) should be approved as a Class Rights Action; and | |
• | any action to be approved as a Class Rights Action pursuant to the Equalization and Governance Agreement. |
• | that certain people be allowed to attend or be excluded from attending a meeting; | |
• | that discussion be closed and a question put to a vote (provided no amendments have been raised); | |
• | that a question under discussion not be put to a vote; | |
• | to proceed with matters in an order other than that set out in the notice of the meeting; | |
• | to adjourn a debate (for example, to a subsequent meeting); and | |
• | to adjourn a meeting. |
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• | either prior to or simultaneously with the Triggering Event, such person makes a Qualifying Takeover Bid (and, in the event that such Qualifying Takeover Bid was made prior to the Triggering Event, such Qualifying Takeover Bid has not been withdrawn, abandoned or terminated prior to or simultaneously with the Triggering Event); or | |
• | the Triggering Event was a Permitted Bid Acquisition. |
• | are made to all holders of Thomson Reuters PLC Shares and Thomson Reuters Corporation Shares; | |
• | are undertaken with respect to the Thomson Reuters PLC Shares and Thomson Reuters Corporation Shares at or about the same time; and | |
• | are equivalent (although not necessarily the same) in all material respects to the holders of Thomson Reuters PLC Shares and Thomson Reuters Corporation Shares, including with respect to: |
• | the consideration offered for such shares (taking into account exchange rates and the Equalization Ratio); | |
• | the information provided to such holders; | |
• | the time available to such holders to consider such offers; and | |
• | the conditions to which the offers are subject. |
• | beneficial ownership of 20 per cent. or more of the outstanding Thomson Reuters Corporation Shares; | |
• | an interest in 30 per cent. or more of the outstanding Thomson Reuters PLC Shares (taking into account Thomson Reuters PLC Shares in which persons acting in concert are interested); or | |
• | an interest in such number of outstanding Thomson Reuters PLC Sharesand/or Thomson Reuters Corporation Shares (taking into account Thomson Reuters Corporation Sharesand/or Thomson Reuters PLC Shares in which persons acting in concert are interested) to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast 30 per cent. or more of all votes entitled to be cast on a Joint Electorate Action by all |
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shareholders of Thomson Reuters PLC and Thomson Reuters Corporation (excluding the holder of the Thomson Reuters PLC Special Voting Share and the holder of the Thomson Reuters Corporation Special Voting Share), |
• | to offer irrevocably Thomson Reuters Corporation Shares to holders of Thomson Reuters PLC Shares pro rata to their holdings of Thomson Reuters PLC Shares in consideration for such Thomson Reuters PLC Shares; or | |
• | to make a payment to holders of Thomson Reuters PLC Shares, |
• | by mutual agreement of Thomson Reuters PLC and Thomson Reuters Corporation and upon approval as a Class Rights Action; or | |
• | after all insolvency obligations have been satisfied. |
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5.3 | Special Voting Share Agreements |
• | if such amendment does not materially and adversely affect the rights of any holder of Thomson Reuters Corporation Shares under the Thomson Reuters PLC Special Voting Share Trust Deed; | |
• | to cure any ambiguity or to correct or supplement any provision in the Thomson Reuters PLC Special Voting Share Trust Deed which may be defective or inconsistent with any other provision in such deed or the Thomson Reuters PLC Articles; | |
• | to add to the covenants, restrictions or obligations for the benefit of holders of Thomson Reuters Corporation Shares; |
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• | to comply with the requirements of the law governing the Thomson Reuters PLC Special Voting Share Trust Deed; | |
• | to comply with any requirements imposed by the U.S. Internal Revenue Code of 1986, as amended (the “U.S. Tax Code”) or to qualify the Thomson Reuters PLC Special Voting Share Trust as a “grantor trust” under the U.S. Tax Code; | |
• | to amend or waive the terms of the trustee limitation of liability provision of the Thomson Reuters PLC Special Voting Share Trust Deed in any manner which will not adversely affect the holders of Thomson Reuters Corporation Shares in any material respect; or | |
• | to evidence and provide for the acceptance of appointment under the Thomson Reuters PLC Special Voting Share Trust Deed by a successor trustee. |
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5.4 | Cross-Guarantees |
• | any contractual obligations owed to creditors of Thomson Reuters Corporation as of, or incurred after, the Effective Date; | |
• | any contractual obligations of certain other persons, referred to as principal debtors, which are guaranteed by Thomson Reuters Corporation as of, or incurred after, the Effective Date; and | |
• | any other obligations of Thomson Reuters Corporation or any principal debtor of any kind which may be agreed to in writing between Thomson Reuters PLC and Thomson Reuters Corporation, |
• | to the extent covered by the terms of any policy of insurance (or indemnity in the nature of insurance) of which Thomson Reuters Corporation (or the principal debtor) has the benefit and which is in full force and effect; | |
• | explicitly guaranteed in writing by Thomson Reuters PLC (otherwise than under the Thomson Reuters PLC Guarantee) or for which Thomson Reuters PLC has agreed in writing to act as co-obligor or co-issuer; | |
• | under an arrangement which explicitly provides that the obligation is not to be guaranteed by Thomson Reuters PLC; | |
• | owed to Thomson Reuters PLC, a subsidiary of Thomson Reuters PLC or to any of the subsidiaries of Thomson Reuters Corporation, save where such obligation is owed expressly to any subsidiary in its capacity as trustee for a registered occupational pension scheme; | |
• | under or in connection with any guarantee by Thomson Reuters Corporation of any obligation of Thomson Reuters PLC or any subsidiary of Thomson Reuters PLC; | |
• | excluded from the scope of the Thomson Reuters PLC Guarantee (see below); | |
• | consisting of an obligation to pay a creditor an amount to compensate for any deduction or withholding for or on account of tax from any payment to that creditor, where no such deduction or withholding would be required as a result of payment being made by Thomson Reuters PLC under the Thomson Reuters PLC Guarantee rather than by the relevant principal debtor under the guaranteed obligation; | |
• | under a guarantee to the extent that the guaranteed obligation is not a contractual obligation or is of a type excluded as referred to above; or | |
• | owed to holders of Thomson Reuters Corporation Shares, in their capacity or otherwise flowing from their status as holders of such shares. |
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• | the Equalization and Governance Agreement terminates or ceases to have effect; | |
• | the Thomson Reuters Corporation Guarantee terminates or ceases to have effect; or | |
• | a resolution is passed or an order is made for the liquidation of Thomson Reuters Corporation. |
• | any contractual obligations owed to creditors of Thomson Reuters PLC as of, or incurred after, the Effective Date; | |
• | any contractual obligations of certain other persons, referred to as principal debtors, which are guaranteed by Thomson Reuters PLC as of, or incurred after, the Effective Date; and | |
• | any other obligations of Thomson Reuters PLC or any principal debtor of any kind which may be agreed to in writing between Thomson Reuters Corporation and Thomson Reuters PLC, |
• | to the extent covered by the terms of any policy of insurance (or indemnity in the nature of insurance) of which Thomson Reuters PLC (or the principal debtor) has the benefit and which is in full force and effect; | |
• | explicitly guaranteed in writing by Thomson Reuters Corporation (otherwise than under the Thomson Reuters Corporation Guarantee) or for which Thomson Reuters Corporation has agreed in writing to act as co-obligor or co-issuer; |
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• | under an arrangement which explicitly provides that the obligation is not to be guaranteed by Thomson Reuters Corporation; | |
• | owed to Thomson Reuters Corporation, a subsidiary of Thomson Reuters Corporation or to any of the subsidiaries of Thomson Reuters PLC, save where such obligation is owed expressly to any subsidiary in its capacity as trustee for a registered occupational pension scheme; | |
• | under or in connection with any guarantee by Thomson Reuters PLC of any obligation of Thomson Reuters Corporation or any subsidiary of Thomson Reuters Corporation; | |
• | excluded from the scope of the Thomson Reuters Corporation Guarantee (see below); | |
• | consisting of an obligation to pay a creditor an amount to compensate for any deduction or withholding for or on account of tax from any payment to that creditor, where no such deduction or withholding would be required as a result of payment being made by Thomson Reuters Corporation under the Thomson Reuters Corporation Guarantee rather than by the relevant principal debtor under the guaranteed obligation; | |
• | under a guarantee to the extent that the guaranteed obligation is not a contractual obligation or is of a type excluded as referred to above; or | |
• | owed to holders of Thomson Reuters PLC Shares, in their capacity or otherwise flowing from their status as holders of such shares. |
• | the Equalization and Governance Agreement terminates or ceases to have effect; | |
• | the Thomson Reuters PLC Guarantee terminates or ceases to have effect; or | |
• | a resolution is passed or an order is made for the liquidation of Thomson Reuters PLC. |
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5.5 | Amended Deed of Mutual Covenant |
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18.3
5.6 | Reuters Trust Principles Support Agreement |
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• | Woodbridge will use its best efforts as a shareholder of Thomson Reuters Corporation and Thomson Reuters PLC to ensure that the Reuters Trust Principles are complied with in relation to Thomson Reuters. | |
• | Without the prior written consent of Reuters Founders Share Company, Woodbridge will not transfer its voting shares of Thomson Reuters Corporation or Thomson Reuters PLC to any person that is not an Approved Person, where the transferee would become an Acquiring Person under the Thomson Reuters PLC Articles or the Thomson Reuters Corporation Articles. | |
• | Without the prior written consent of Reuters Founders Share Company, Woodbridge will not purchase securities of any class of Thomson Reuters Corporation or Thomson Reuters PLC if, as a result of such transaction, securities of that company would cease to be eligible for listing on a stock exchange on which that company’s securities are then listed. | |
• | Upon the request of Reuters Founders Share Company, Woodbridge will promptly requisition the Thomson Reuters Board to call a meeting of shareholders of Thomson Reuters PLCand/or Thomson Reuters Corporation for such purpose as Reuters Founders Share Company, in its sole and absolute discretion, thinks fit. |
6. | Thomson Reuters PLC Memorandum and Articles of Association |
6.1 | Memorandum of Association |
PR Annex I,
21.2.1
• | to enter into, operate and carry into effect various agreements relating to the Transaction with Thomson Reuters Corporation; and | |
• | to carry on business as a general commercial company and to carry on any trade or business whatsoever. |
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6.2 | Articles of Association |
• | 399,950,000 ordinary shares of £10 each; | |
• | one Thomson Reuters PLC Special Voting Share of £500,000; and | |
• | one Thomson Reuters PLC Founders Share of £1. |
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• | in relation to a resolution of Thomson Reuters PLC to approve a Joint Electorate Action, the rights: |
• | to cast such number of votes in favour of such resolution as were cast in favour of the Equivalent Resolution by holders of Thomson Reuters Corporation Shares at the Parallel Shareholder Meeting; | |
• | to cast such number of votes against such resolution as were cast against the Equivalent Resolution by holders of Thomson Reuters Corporation Shares at the Parallel Shareholder Meeting; | |
• | to withhold such number of votes from such resolution as were withheld from the Equivalent Resolution by holders of Thomson Reuters Corporation Shares at the Parallel Shareholder Meeting; and | |
• | to abstain from voting such number of votes in respect of such resolution as were recorded as abstentions in respect of the Equivalent Resolution by holders of Thomson Reuters Corporation Shares at the Parallel Shareholder Meeting; |
• | in relation to a resolution of Thomson Reuters PLC to approve a Class Rights Action: |
• | if the Equivalent Resolution was approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-laws and applicable laws) of the holders of Thomson Reuters Corporation Shares at the Parallel Shareholder Meeting, no right to cast any vote; and | |
• | if the Equivalent Resolution was not approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-laws and applicable laws) of the holders of Thomson Reuters Corporation Shares at the Parallel Shareholder Meeting, the right to cast such number of votes against such resolution as would be sufficient to defeat it; |
• | in relation to any Procedural Resolution, no right to cast any vote; and | |
• | in relation to any resolution pertaining to any matter on which the holder of the Thomson Reuters PLC Special Voting Share is required by applicable laws to vote separately as a class, the right to cast one vote. |
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• | on presentation to the Thomson Reuters PLC board of directors of a notice or instrument of transfer purporting to require or demand registration or acknowledgement of the transfer of the Thomson Reuters PLC Special Voting Share by the Thomson Reuters PLC Special Voting Share Trustee out of the Thomson Reuters PLC Special Voting Share Trust to (or at the direction of) the Beneficiaries (as defined in the Thomson Reuters PLC Special Voting Share Trust Deed) of the Thomson Reuters PLC Special Voting Share Trust; or | |
• | on the Thomson Reuters PLC Special Voting Share Trust being terminated in respect of the Thomson Reuters PLC Special Voting Share or the Thomson Reuters PLC Special Voting Share becoming held by the Thomson Reuters PLC Special Voting Share Trustee on terms |
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other than as set out in the Thomson Reuters PLC Special Voting Share Trust Deed (as it may be amended from time to time in accordance with its terms). |
• | any special resolution the effect of which, if duly passed, would be to amend, remove or alter the effect of (which shall include the ratification of any breach of) any of the Reuters Founders Share Provisions (as defined in the Thomson Reuters PLC Articles); | |
• | any resolution to wind up Thomson Reuters PLC voluntarily or pursuant to paragraph (a) of section 122 of the Insolvency Act 1986; | |
• | any resolution for, or approving or sanctioning, any reconstruction of Thomson Reuters PLC (other than internal reorganisations involving Thomson Reuters PLC and its subsidiaries); | |
• | any resolution the effect of which, if duly passed, would be to attach or to authorise the attachment to any share (whether issued or unissued) of any voting rights which are not identical in all respects with those attached to the Thomson Reuters PLC Shares; and | |
• | any resolution to amend any such resolution as is described in any of the preceding sub-paragraphs of this paragraph. |
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• | in relation to a resolution of Thomson Reuters PLC to approve a Joint Electorate Action, the rights: |
• | to cast such number of votes in favour of and against such resolution, to withhold such number of votes from such resolution and to abstain from voting such number of votes in respect of such resolution as were cast in favour of and against such resolution, withheld therefrom or recorded as abstentions in respect thereof, respectively, by the holder of the Thomson Reuters PLC Special Voting Share; | |
• | to cast such number of votes in favour of such resolution as were cast in favour of such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | |
• | to cast such number of votes against such resolution as were cast against such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | |
• | to withhold such number of votes from such resolution as were withheld from such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; and | |
• | to abstain from voting such number of votes in respect of such resolution as were recorded as abstentions in respect of such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; |
• | in relation to a resolution of Thomson Reuters PLC to approve a Class Rights Action: |
• | if the Equivalent Resolution is approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-Laws and applicable laws) of the holders of Thomson Reuters Corporation Shares at the Parallel Shareholder Meeting, the rights: |
• | to cast such number of votes in favour of such resolution as were cast in favour of such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | |
• | to cast such number of votes against such resolution as were cast against such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | |
• | to withhold such number of votes from such resolution as were withheld from such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; and | |
• | to abstain from voting such number of votes in respect of such resolution as were recorded as abstentions in respect of such resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; |
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• | if the Equivalent Resolution is not approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-laws and applicable laws) of the holders of Thomson Reuters Corporation common shares at the Parallel Shareholder Meeting, no right to cast any vote; |
• | in relation to a Procedural Resolution, the rights: |
• | to cast such number of votes in favour of such Procedural Resolution as were cast in favour of such Procedural Resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | |
• | to cast such number of votes against such Procedural Resolution as were cast against such Procedural Resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; | |
• | to withhold such number of votes from such Procedural Resolution as were withheld from such Procedural Resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; and | |
• | to abstain from voting such number of votes in respect of such Procedural Resolution as were recorded as abstentions in respect of such Procedural Resolution by holders of voting shares of Thomson Reuters PLC other than any voting shares in which an Acquiring Person is interested; |
• | in respect of any resolution pertaining to any matter on which the holder of the Thomson Reuters PLC Founders Share is required by applicable laws or otherwise entitled to vote separately as a class, the right to cast one vote. |
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• | in relation to a resolution of Thomson Reuters PLC to approve a Joint Electorate Action, the rights: |
• | if, at the time such votes are cast, there are no Approved Persons or Approved Persons are interested in such number of outstanding Thomson Reuters PLC Sharesand/or Thomson Reuters Corporation Shares to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast not more than 35 per cent. of all votes entitled to be cast on that Joint Electorate Action by all shareholders of Thomson Reuters PLC and Thomson Reuters Corporation (excluding the holder of the Thomson Reuters PLC Special Voting Share and the holder of the Thomson Reuters Corporation Special Voting Share), to cast such number of votes as would be sufficient to approve or defeat such resolution; | |
• | if, at the time such votes are cast, Approved Persons are interested in such number of outstanding Thomson Reuters PLC Sharesand/or Thomson Reuters Corporation Shares to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast more than 35 per cent. but less than the requisite majority of all votes entitled to be cast on that Joint Electorate Action by all shareholders of Thomson Reuters PLC and Thomson Reuters Corporation (excluding the holder of the Thomson Reuters PLC Special Voting Share and the holder of the Thomson Reuters Corporation Special Voting Share), to cast the greater of: |
• | such number of votes as is equal to the sum of (x) the number of votes attached to all voting shares in which Acquiring Persons are interested and (y) one vote; and |
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• | such number of votes as will cause the votes attached to all voting shares in which Approved Persons are interested, and which are cast in accordance with the Relevant Terms of Approval, when combined with the votes entitled to be cast by the holder of the Thomson Reuters PLC Founders Share, to constitute the requisite majority of all votes entitled to be cast on such resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share); and |
• | if, at the time such votes are cast, Approved Persons are interested in, and cast in accordance with the Relevant Terms of Approval the votes attached to, such number of outstanding Thomson Reuters PLC Sharesand/or Thomson Reuters Corporation Shares to which are attached, in the aggregate (after giving effect to the Equalization Ratio), the right to cast at least the requisite majority of all votes entitled to be cast on that Joint Electorate Action by all shareholders of Thomson Reuters PLC and Thomson Reuters Corporation (excluding the holder of the Thomson Reuters PLC Special Voting Share and the holder of the Thomson Reuters Corporation Special Voting Share), no right to cast any vote; |
• | in relation to a resolution to approve a Class Rights Action: |
• | if the Equivalent Resolution is approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-laws and applicable laws) of the holders of Thomson Reuters Corporation Shares at the Parallel Shareholder Meeting, the rights: |
• | if, at the time such votes are cast, there are no Approved Persons or Approved Persons are interested in such number of outstanding Thomson Reuters PLC Shares to which are attached, in the aggregate, the right to cast not more than 35 per cent. of all votes entitled to be cast on such resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), to cast such number of votes as would be sufficient to approve or defeat such resolution; | |
• | if, at the time such votes are cast, Approved Persons are interested in such number of outstanding Thomson Reuters PLC Shares to which are attached, in the aggregate, the right to cast more than 35 per cent. but less than the requisite majority of all votes entitled to be cast on such resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), to cast the greater of: |
• | such number of votes as is equal to the sum of (x) the number of votes attached to all voting shares in which Acquiring Persons are interested and (y) one vote; and | |
• | such number of votes as will cause the votes attached to all voting shares in which Approved Persons are interested, and which are cast in accordance with the Relevant Terms of Approval, when combined with the votes entitled to be cast by the holder of the Thomson Reuters PLC Founders Share, to constitute the requisite majority of all votes entitled to be cast on such resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share); and |
• | if, at the time such votes are cast, Approved Persons are interested in, and cast in accordance with the Relevant Terms of Approval the votes attached to, such number of outstanding Thomson Reuters PLC ordinary shares to which are attached, in the aggregate, the right to cast at least the requisite majority of all votes entitled to be cast on such resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), no right to cast any vote; |
• | if the Equivalent Resolution is not approved by the requisite number (as determined in accordance with the Thomson Reuters Corporation Articles, the Thomson Reuters By-Laws and applicable laws) of the holders of Thomson Reuters Corporation common shares at the Parallel Shareholder Meeting, no right to cast any vote; |
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• | in relation to a Procedural Resolution, the rights: |
• | if, at the time such votes are cast, there are no Approved Persons or Approved Persons are interested in such number of outstanding Thomson Reuters PLC Shares to which are attached, in the aggregate, the right to cast not more than 35 per cent. of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), to cast such number of votes as would be sufficient to approve or defeat such Procedural Resolution; | |
• | if, at the time such votes are cast, Approved Persons are interested in such number of outstanding Thomson Reuters PLC Shares to which are attached, in the aggregate, the right to cast more than 35 per cent. but less than the requisite majority of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), to cast the greater of: |
• | such number of votes as is equal to the sum of (x) the number of votes attached to all voting shares in which Acquiring Persons are interested and (y) one vote; and | |
• | such number of votes as will cause the votes attached to all voting shares in which Approved Persons are interested, and which are cast in accordance with the Relevant Terms of Approval, when combined with the votes entitled to be cast by the holder of the Thomson Reuters PLC Founders Share, to constitute the requisite majority of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share); and |
• | if, at the time such votes are cast, Approved Persons are interested in, and cast in accordance with the Relevant Terms of Approval the votes attached to, such number of outstanding Thomson Reuters PLC Shares to which are attached, in the aggregate, the right to cast at least the requisite majority of all votes entitled to be cast on that Procedural Resolution by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special Voting Share), no right to cast any vote; and |
• | at any meeting of the holder of the Thomson Reuters PLC Founders Share at which the holder of the Thomson Reuters PLC Founders Share is entitled to vote separately as a class, the right to cast one vote. |
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21.2.4
4.8
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21.2.8
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• | consolidate and divide all or any of its capital (other than the Thomson Reuters PLC Founders Share) into shares of larger amounts than its existing shares; | |
• | cancel any shares (other than the Thomson Reuters PLC Founders Share) which, at the date of the passing of the resolution, have not been taken, or agreed to be taken, by any person and diminish the amount of its capital by the amount of the shares so cancelled; and | |
• | sub-divide its shares, or any of them (other than the Thomson Reuters PLC Founders Share), into shares of smaller amounts than is fixed by the Thomson Reuters PLC Memorandum (subject nevertheless to the provisions of the applicable laws), and so that the resolution whereby any share is sub-divided may determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may, as compared with the others, have any such preferred, deferred or other special rights, or be subject to any such restrictions, as Thomson Reuters PLC has power to attach to unissued or new shares. |
• | in connection with a rights issue; and | |
• | otherwise than in connection with a rights issue, up to an aggregate nominal amount equal to the section 89 amount; |
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21.2.7
• | in respect of the shares in relation to which the default occurred the shareholder shall not be entitled to attend or vote (either in person or by proxy) at a general meeting or at a separate general meeting of the holders of a class of shares or on a poll; | |
• | where the default shares represent at least 0.25 per cent. of the class of shares concerned (excluding any shares of that class held as treasury shares), then the direction notice may additionally direct that any of the following shall be effected: |
• | in respect of the default shares any dividend or other money which would otherwise be payable on such shares shall be retained by Thomson Reuters PLC without any liability to pay interest thereon when such money is finally paid to the shareholder and any shares issued in lieu of dividend be withheld by Thomson Reuters PLC; | |
• | no transfer of any default shares which are held in certificated form shall be registered unless the transfer is an approved transfer or: |
• | the shareholder is not himself in default as regards supplying the information requested; and | |
• | the transfer is of part only of the shareholder’s holding and when presented for registration is accompanied by a certificate from the shareholder in a form satisfactory to the Thomson Reuters PLC board of directors to the effect that after due and careful enquiry the shareholder is satisfied that no person in default as regards supplying such information is interested in any of the shares the subject of the transfer; and |
• | if the Thomson Reuters PLC board of directors so determines, Thomson Reuters PLC shall be entitled to require the holder of any such default shares which are held in uncertificated form, by notice in writing to the holder concerned, to change his holding of uncertificated default shares to certificated form within such period as may be specified in the notice and require such holder to continue to hold such default shares in certificated form for so long as the default subsists. The Thomson Reuters PLC board of directors may also appoint any person to take such other steps, by instruction by means of a Relevant System or otherwise, in the name of the holder of such default shares, to effect conversion of such shares to certificated form and such steps shall be as effective as if they had been taken by the registered holder of the uncertificated default shares. |
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• | in the case of an annual general meeting by all the shareholders entitled to attend and vote thereat which for this purpose shall include the holder of the Thomson Reuters PLC Founders Share; and | |
• | in the case of any other general meeting by a majority in number of the shareholders having a right to attend and vote thereat, being a majority together holding not less than 95 per cent. in nominal value of the shares giving that right, and by the holder of the Thomson Reuters PLC Founders Share. |
• | at any meeting the business of which includes the consideration of any resolution on which the holder of the Thomson Reuters PLC Special Voting Share is entitled to vote, a quorum shall not be present for any purpose unless the holder of the Thomson Reuters PLC Special Voting Share is present in person or by proxy or is represented by a duly authorised representative; and | |
• | at any meeting the business of which includes the consideration of any resolution on which the holder of the Thomson Reuters PLC Founders Share is entitled to vote, a quorum shall not be present for any purpose unless the holder of the Thomson Reuters PLC Founders Share is present in person or by proxy or is represented by a duly authorised representative. |
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21.2.2
• | if he shall become prohibited by law from acting as a Thomson Reuters PLC director; |
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• | if he shall resign by writing under his hand left at the Office (as defined in the Thomson Reuters PLC Articles) or if he shall in writing offer to resign and the Thomson Reuters PLC board of directors shall resolve to accept such offer; | |
• | if he shall have a receiving order made against him or shall compound with his creditors generally or shall apply to the court for an interim order under section 253 of the Insolvency Act 1986 in connection with a voluntary arrangement under that Act; and/or | |
• | if in England and Wales or elsewhere an order shall be made by any court claiming jurisdiction in that behalf on the ground (however formulated) of mental disorder for his detention or for the appointment of a guardian or for the appointment of a receiver or other person (by whatever name called) to exercise powers with respect to his property or affairs. |
• | where at such meeting it is expressly resolved not to fill such office or a resolution for the re-election of such Thomson Reuters PLC director is put to the meeting and lost; | |
• | where such Thomson Reuters PLC director has given notice in writing to Thomson Reuters PLC that he is unwilling to be re-elected; or | |
• | where the default is due to the moving of a resolution in contravention of the next following paragraph, |
• | Thomson Reuters PLC may by ordinary resolution appoint any person to be a Thomson Reuters PLC director either to fill a casual vacancy or as an additional Thomson Reuters PLC director; and | |
• | without prejudice to the above paragraph the Thomson Reuters PLC board of directors may at any time appoint any person to be a Thomson Reuters PLC director either to fill a casual vacancy or as an additional Thomson Reuters PLC director. |
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• | the giving of any guarantee, security or indemnity (including loans made in connection therewith) to him in respect of money lent or obligations incurred by him or any other person at the request of or for the benefit of Thomson Reuters PLC or any of its subsidiary undertakings; | |
• | the giving of any guarantee, security or indemnity to a third party in respect of a debt or obligation of Thomson Reuters PLC or any of its subsidiary undertakings for which he himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security; | |
• | any proposal concerning an offer of shares or debentures or other securities of or by Thomson Reuters PLC or any of its subsidiary undertakings for subscription or purchase in which offer he is or may be entitled to participate as a holder of securities or is to be interested as a participant in the underwriting or sub-underwriting thereof; | |
• | any proposal concerning any other company in which he is interested, directly or indirectly and whether as an officer or shareholder or otherwise howsoever, provided that he does not to his knowledge hold an interest in shares (as that term is used in sections 820 to 824 of the Companies Act 2006) representing 1 per cent. or more of the issued shares of any class of such company (excluding any shares of that class held as treasury shares) (or of any third company through which his interest is derived) or of the voting rights available to members of the relevant company (any such interest being deemed for the purpose of the Thomson Reuters PLC Articles to be a material interest in all circumstances); | |
• | any proposal concerning the adoption, modification or operation of any pension, superannuation or similar scheme or retirement, death or disability benefits scheme or employees’ share scheme which has been approved by HMRC or is conditional upon such approval or does not award him any privilege or benefit not awarded to the employees to whom such scheme relates; and/or | |
• | any proposal concerning any insurance which Thomson Reuters PLC is empowered to purchaseand/or maintain for or for the benefit of any Thomson Reuters PLC directors or for persons who include Thomson Reuters PLC directors. |
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• | during the period of twelve years prior to the date of the publication of the advertisements referred to below (or, if published on different dates, the first thereof) no communication has been received by Thomson Reuters PLC from the shareholder or the person entitled by transmission and no cheque or warrant sent by Thomson Reuters PLC through the post in a pre-paid letter addressed to the shareholder or to the person entitled by transmission to the shares at his postal address on the Register or otherwise the last known postal address given by the shareholder or the person entitled by transmission to which cheques and warrants are to be sent has been cashed or no payment made by Thomson Reuters PLC by any other means permitted by the Thomson Reuters PLC Articles has been claimed or accepted and at least three dividends in respect of the shares in question have become payable and no dividend in respect of those shares has been claimed; | |
• | Thomson Reuters PLC shall on expiry of the said period of twelve years have inserted advertisements in both a national daily newspaper and in a newspaper circulating in the area in which the last known postal address of the shareholder or the postal address at which service of notices may be effected in the manner authorised by the Thomson Reuters PLC Articles is located giving notice of its intention to sell the said shares; and | |
• | during the said period of twelve years and the period of three months following the publication of the said advertisements Thomson Reuters PLC shall have received no communication from such shareholder or person. |
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• | co-ordinate with the Thomson Reuters Corporation Board to agree to the amount of any Equivalent Distributions; | |
• | co-ordinate with the Thomson Reuters Corporation Board to agree to the basis of exchange rates on which the amounts of any Equivalent Distributions shall be calculated; | |
• | co-ordinate with the Thomson Reuters Corporation Board to ensure that the record dates for receipt of Equivalent Distributions are as close as is practicable to the record dates for cash distributions to the holders of Thomson Reuters Corporation Shares; and | |
• | generally co-ordinate with the Thomson Reuters Corporation Board regarding the timing of all other aspects of the payment or making of any Equivalent Distributions. |
• | Thomson Reuters PLC shall have an irrevocable authority to redeem the Thomson Reuters PLC Special Voting Share at a sum equal to the amount for the time being paid up on the Thomson Reuters PLC Special Voting Share together with all unpaid dividends on the Thomson Reuters PLC Special Voting Share, whether or not such dividends have been earned or declared, calculated down to the redemption date at any time specified by the Thomson Reuters PLC board of directors provided always that if Thomson Reuters PLC shall at any time be unable in compliance with applicable laws to redeem the Thomson Reuters PLC Special Voting Share on the date specified by the Thomson Reuters PLC board of directors, then Thomson Reuters PLC shall redeem the Thomson Reuters PLC Special Voting Share as soon as it is able to comply with such provisions of the applicable laws; | |
• | the Thomson Reuters PLC Entrenched Provisions and all references in the Thomson Reuters PLC Articles thereto shall be null and void and of no further force or effect; | |
• | only in the case of Thomson Reuters PLC becoming a wholly-owned subsidiary of Thomson Reuters Corporation and, for so long as Reuters Founders Share Company is the holder of the Thomson Reuters PLC Founders Share, so long as the effect thereof is, to the satisfaction of the Reuters Trustees, substantially to preserve and not to impair the legal rights of the holder of the Thomson Reuters Corporation Founders Share in relation to the Thomson Reuters Group, Thomson Reuters PLC shall have an irrevocable authority to redeem the Thomson Reuters PLC Founders Share at its nominal value at any time specified by the Thomson Reuters PLC board of directors provided always that if Thomson Reuters PLC shall at any time be unable in compliance with applicable laws to redeem the Thomson Reuters PLC Founders Share on the date specified by the Thomson Reuters PLC board of directors |
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• | only in the case of Thomson Reuters PLC becoming a wholly-owned subsidiary of Thomson Reuters Corporation and, for so long as Reuters Founders Share Company is the holder of the Thomson Reuters PLC Founders Share, so long as the effect thereof is, to the satisfaction of the Reuters Trustees, substantially to preserve and not to impair the legal rights of the holder of the Thomson Reuters Corporation Founders Share in relation to the Thomson Reuters Group, the Thomson Reuters PLC Founders Share Provisions and all references in the Thomson Reuters PLC Articles thereto shall be null and void and of no further force or effect; and | |
• | the Thomson Reuters PLC Articles shall be restated as amended with such incidental or consequential modifications as are necessary to give effect to the foregoing. |
6.3 | Amendment to Articles of Association effective 1 October 2008 |
7. | Shareholdings and dealings |
7.1 | Interests in Thomson Reuters PLC Shares |
17.2
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7.2 | Definitions for Sections 7.2 to 7.8 |
• | Thomson’s, Reuters or Thomson Reuters PLC’s parent, subsidiaries and fellow subsidiaries, and their associated companies, and companies of which such companies are associated companies (for this purpose ownership or control of 20 per cent. or more of the equity share capital of a company is regarded as the test of associated company status); | |
• | connected advisers and persons controlling, controlled by or under the same control as such connected advisers; | |
• | Thomson Directors, Reuters Directors and Thomson Reuters Proposed Directors and the directors of any company covered in the first bullet point above (together, in each case, with their close relatives and related trusts); | |
• | the pension funds of Thomson, Reuters, Thomson Reuters PLC or any company covered in the first bullet point above; | |
• | any investment company, unit trust or other person whose investments an associate manages on a discretionary basis, in respect of the relevant investment accounts; | |
• | any employee benefit trust of Thomson, Reuters, Thomson Reuters PLC or any company referred to in the first bullet point above; and | |
• | a company having a material trading arrangement with Thomson, Reuters or Thomson Reuters PLC; |
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Number of | ||
Name | Reuters Shares | |
David Thomson | 5,000 |
Number of | ||||
Name | Reuters Shares | |||
Niall FitzGerald | 80,000 | |||
Tom Glocer | 1,889,515 | |||
Devin Wenig | 217,219 | |||
David Grigson | 186,625 | |||
Lawton Fitt | 25,000 | |||
Penelope Hughes | 2,392 | |||
Sir Deryck Maughan | — | |||
Nandan Nilekani | — | |||
Kenneth Olisa | 2,550 | |||
Richard Olver | 10,000 | |||
Ian Strachan | 15,500 |
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No. of | Exercise | |||||||||||
Reuters | Price | Date of | Exercise Period | |||||||||
Shares | (pence) | Grant | From | To | ||||||||
Tom Glocer | ||||||||||||
DSOP | 719,473 | 419 | 11.03.2005 | 11.03.2008 | 10.03.2015 | |||||||
DSOP | 774,959 | 389 | 02.08.2005 | 02.08.2008 | 01.08.2015 | |||||||
DSOP | 625,000 | 393 | 15.03.2006 | 15.03.2009 | 14.03.2016 | |||||||
DSOP | 625,000 | 393 | 02.08.2006 | 02.08.2009 | 01.08.2016 | |||||||
DSOP | 625,000 | 442 | 13.03.2007 | 13.03.2010 | 12.03.2017 | |||||||
DSOP | 625,000 | 619 | 07.08.2007 | 07.08.2010 | 06.08.2017 | |||||||
SAYE | 569 | 333 | 14.04.2005 | 01.06.2008 | 30.11.2008 | |||||||
SAYE | 1,191 | 314 | 10.04.2006 | 01.06.2009 | 30.11.2009 | |||||||
SAYE | 1,070 | 353 | 03.04.2007 | 01.06.2010 | 30.11.2010 | |||||||
Devin Wenig | ||||||||||||
DSOP | 9,135 | 862 | 25.06.2001 | 25.06.2002 | 24.06.2011 | |||||||
DSOP | 25,936 | 528 | 20.02.2002 | 20.02.2003 | 19.02.2012 | |||||||
DSOP | 200,000 | 266 | 02.08.2002 | 02.08.2003 | 01.08.2012 | |||||||
DSOP | 200,000 | 135 | 24.02.2003 | 24.02.2006 | 23.02.2013 | |||||||
DSOP | 200,000 | 245 | 04.08.2003 | 04.08.2006 | 03.08.2013 | |||||||
DSOP | 122,950 | 407 | 23.02.2004 | 23.02.2007 | 22.02.2014 | |||||||
DSOP | 155,892 | 321 | 27.08.2004 | 27.08.2007 | 26.08.2014 | |||||||
DSOP | 281,886 | 419 | 11.03.2005 | 11.03.2008 | 10.03.2015 | |||||||
DSOP | 303,625 | 389 | 02.08.2005 | 02.08.2008 | 01.08.2015 | |||||||
DSOP | 325,000 | 393 | 15.03.2006 | 15.03.2009 | 14.03.2016 | |||||||
DSOP | 325,000 | 393 | 02.08.2006 | 02.08.2009 | 01.08.2016 | |||||||
DSOP | 375,000 | 442 | 13.03.2007 | 13.03.2010 | 12.03.2017 | |||||||
DSOP | 375,000 | 619 | 07.08.2007 | 07.08.2010 | 06.08.2017 | |||||||
SAYE Own (US ADSs) | 189 | 4,761 | (cents) | 14.04.2005 | 01.06.2008 | 30.11.2008 | ||||||
David Grigson | ||||||||||||
DSOP | 200,000 | 135 | 24.02.2003 | 24.02.2006 | 23.02.2013 | |||||||
DSOP | 200,000 | 245 | 04.08.2003 | 04.08.2006 | 03.08.2013 | |||||||
DSOP | 122,950 | 407 | 23.02.2004 | 23.02.2007 | 22.02.2014 | |||||||
DSOP | 155,892 | 321 | 27.08.2004 | 27.08.2007 | 26.08.2014 | |||||||
DSOP | 281,886 | 419 | 11.03.2005 | 11.03.2008 | 10.03.2015 | |||||||
DSOP | 303,625 | 389 | 02.08.2005 | 02.08.2008 | 01.08.2015 | |||||||
DSOP | 250,000 | 393 | 15.03.2006 | 15.03.2009 | 14.03.2016 | |||||||
DSOP | 250,000 | 393 | 02.08.2006 | 02.08.2009 | 01.08.2016 | |||||||
DSOP | 250,000 | 442 | 13.03.2007 | 13.03.2010 | 12.03.2017 | |||||||
DSOP | 250,000 | 619 | 07.08.2007 | 07.08.2010 | 06.08.2017 | |||||||
SAYE | 569 | 333 | 14.04.2005 | 01.06.2008 | 30.11.2008 | |||||||
SAYE | 1,070 | 353 | 03.04.2007 | 01.06.2010 | 30.11.2010 |
No. of | Exercise | End of | ||||||||||||||||||
Reuters | Price | Date of | Qualifying | |||||||||||||||||
Shares | (pence) | Award | Period | Expiry Date | ||||||||||||||||
Tom Glocer | ||||||||||||||||||||
LTIP | 500,000 | 0 | 15.03.2006 | 31.12.2008 | 01.01.2009 | |||||||||||||||
LTIP | 500,000 | 0 | 13.03.2007 | 31.12.2009 | 01.01.2010 | |||||||||||||||
Devin Wenig | ||||||||||||||||||||
LTIP | 250,000 | 0 | 15.03.2006 | 31.12.2008 | 01.01.2009 | |||||||||||||||
LTIP | 300,000 | 0 | 13.03.2007 | 31.12.2009 | 01.01.2010 | |||||||||||||||
David Grigson | ||||||||||||||||||||
LTIP | 200,000 | 0 | 15.03.2006 | 31.12.2008 | 01.01.2009 | |||||||||||||||
LTIP | 200,000 | 0 | 13.03.2007 | 31.12.2009 | 01.01.2010 |
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Number of | ||||||||
Reuters | Nature of | |||||||
Name | Shares | Interest | ||||||
Reuters Employee Share Ownership Trust I | 26,115,968 | Long | ||||||
Reuters Employee Share Ownership Trust II | 1,353,214 | Long |
Number of | Number of | |||||||||||
Reuters | Reuters | Nature of | ||||||||||
Name | Shares | ADSs | Interest | |||||||||
Citigroup Inc. | 166,073 | Long | ||||||||||
Morgan Stanley & Co. Inc | 1,001 | Long | ||||||||||
Morgan Stanley Securities Ltd | 37,717 | Long | ||||||||||
Morgan Stanley Securities Ltd | 983 | Long | ||||||||||
UBS Securities LLC | 331 | Long | ||||||||||
UBS Wealth Mgmt (US) | 7,829 | Long |
Number of | Number of | |||||||||||
Reuters | Reuters | Nature of | ||||||||||
Name | Shares | ADSs | Interest | |||||||||
Morgan Stanley & Co. Inc | 1,995 | Short | ||||||||||
Morgan Stanley Securities Ltd | 3,085,230 | Short |
Number of | Number of | |||||||||||
Reuters | Reuters | Nature of | ||||||||||
Name | Shares | ADSs | Interest | |||||||||
Bear, Stearns International Trading Limited | 340,347 | Long | ||||||||||
Bear, Stearns & Co. Inc. | 48,984 | Long |
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Number of | Number of | |||||||||||
Reuters | Reuters | Nature of | ||||||||||
Name | Shares | ADSs | Interest | |||||||||
Bear, Stearns International Trading Limited | 436,687 | Short |
Number of | ||||
Reuters | ||||
Name | Shares | |||
Bear, Stearns Securities Corp | 24,980 (Lent | ) |
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3.3
Number of | ||||||||||||
Reuters | ||||||||||||
Transaction Type | Shares | Date | Price | |||||||||
Repurchase | 560,000 | 08.05.2006 | £4.10 | |||||||||
500,000 | 09.05.2006 | £4.10 | ||||||||||
500,000 | 10.05.2006 | £4.08 | ||||||||||
500,000 | 12.05.2006 | £3.99 | ||||||||||
1,500,000 | 15.05.2006 | £3.89 | ||||||||||
125,000 | 16.05.2006 | £3.90 | ||||||||||
750,000 | 18.05.2006 | £3.81 | ||||||||||
750,000 | 19.05.2006 | £3.83 | ||||||||||
750,000 | 22.05.2006 | £3.74 | ||||||||||
500,000 | 23.05.2006 | £3.80 | ||||||||||
1,000,000 | 25.05.2006 | £3.78 | ||||||||||
1,000,000 | 30.05.2006 | £3.76 | ||||||||||
1,000,000 | 31.05.2006 | £3.77 | ||||||||||
600,000 | 01.06.2006 | £3.74 | ||||||||||
400,000 | 02.06.2006 | £3.83 | ||||||||||
500,000 | 05.06.2006 | £3.79 | ||||||||||
1,000,000 | 06.06.2006 | £3.73 | ||||||||||
500,000 | 07.06.2006 | £3.73 | ||||||||||
375,000 | 08.06.2006 | £3.66 | ||||||||||
1,125,000 | 09.06.2006 | £3.61 | ||||||||||
1,000,000 | 12.06.2006 | £3.61 | ||||||||||
1,000,000 | 13.06.2006 | £3.55 | ||||||||||
1,000,000 | 14.06.2006 | £3.55 | ||||||||||
650,000 | 15.06.2006 | £3.62 | ||||||||||
1,350,000 | 16.06.2006 | £3.65 | ||||||||||
1,000,000 | 19.06.2006 | £3.63 | ||||||||||
750,000 | 20.06.2006 | £3.65 | ||||||||||
750,000 | 21.06.2006 | £3.68 | ||||||||||
1,250,000 | 22.06.2006 | £3.70 | ||||||||||
1,250,000 | 23.06.2006 | £3.68 | ||||||||||
450,000 | 26.06.2006 | £3.72 | ||||||||||
750,000 | 27.06.2006 | £3.71 | ||||||||||
750,000 | 28.06.2006 | £3.69 | ||||||||||
550,000 | 29.06.2006 | £3.75 | ||||||||||
750,000 | 30.06.2006 | £3.83 | ||||||||||
650,000 | 05.07.2006 | £3.78 | ||||||||||
750,000 | 06.07.2006 | £3.77 | ||||||||||
375,000 | 10.07.2006 | £3.73 | ||||||||||
575,000 | 11.07.2006 | £3.72 | ||||||||||
200,000 | 12.07.2006 | £3.69 | ||||||||||
175,000 | 13.07.2006 | £3.61 | ||||||||||
175,000 | 14.07.2006 | £3.56 | ||||||||||
300,000 | 17.07.2006 | £3.50 | ||||||||||
300,000 | 18.07.2006 | £3.51 | ||||||||||
300,000 | 19.07.2006 | £3.55 | ||||||||||
300,000 | 20.07.2006 | £3.64 | ||||||||||
300,000 | 21.07.2006 | £3.64 | ||||||||||
350,000 | 24.07.2006 | £3.72 | ||||||||||
350,000 | 25.07.2006 | £3.77 | ||||||||||
420,000 | 27.07.2006 | £3.92 | ||||||||||
500,000 | 28.07.2006 | £3.95 | ||||||||||
750,000 | 31.07.2006 | £3.95 | ||||||||||
1,000,000 | 02.08.2006 | £3.86 |
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Number of | ||||||||||||
Reuters | ||||||||||||
Transaction Type | Shares | Date | Price | |||||||||
500,000 | 03.08.2006 | £3.86 | ||||||||||
750,000 | 04.08.2006 | £3.89 | ||||||||||
1,000,000 | 07.08.2006 | £3.81 | ||||||||||
500,000 | 08.08.2006 | £3.78 | ||||||||||
750,000 | 09.08.2006 | £3.76 | ||||||||||
750,000 | 10.08.2006 | £3.75 | ||||||||||
750,000 | 14.08.2006 | £3.76 | ||||||||||
500,000 | 16.08.2006 | £3.94 | ||||||||||
750,000 | 17.08.2006 | £3.96 | ||||||||||
1,000,000 | 18.08.2006 | £3.97 | ||||||||||
750,000 | 21.08.2006 | £3.94 | ||||||||||
900,000 | 22.08.2006 | £3.95 | ||||||||||
750,000 | 23.08.2006 | £3.94 | ||||||||||
600,000 | 24.08.2006 | £3.91 | ||||||||||
500,000 | 29.08.2006 | £3.94 | ||||||||||
500,000 | 30.08.2006 | £4.00 | ||||||||||
750,000 | 31.08.2006 | £4.04 | ||||||||||
750,000 | 01.09.2006 | £4.08 | ||||||||||
750,000 | 04.09.2006 | £4.13 | ||||||||||
750,000 | 05.09.2006 | £4.10 | ||||||||||
1,500,000 | 07.09.2006 | £4.00 | ||||||||||
500,000 | 11.09.2006 | £4.01 | ||||||||||
500,000 | 12.09.2006 | £4.03 | ||||||||||
1,000,000 | 13.09.2006 | £4.10 | ||||||||||
750,000 | 15.09.2006 | £4.10 | ||||||||||
750,000 | 18.09.2006 | £4.12 | ||||||||||
1,000,000 | 19.09.2006 | £4.09 | ||||||||||
200,000 | 25.09.2006 | £4.29 | ||||||||||
300,000 | 26.09.2006 | £4.32 | ||||||||||
500,000 | 28.09.2006 | £4.32 | ||||||||||
500,000 | 29.09.2006 | £4.34 | ||||||||||
300,000 | 02.10.2006 | £4.33 | ||||||||||
250,000 | 03.10.2006 | £4.30 | ||||||||||
250,000 | 04.10.2006 | £4.37 | ||||||||||
250,000 | 05.10.2006 | £4.40 | ||||||||||
450,000 | 06.10.2006 | £4.39 | ||||||||||
300,000 | 09.10.2006 | £4.38 | ||||||||||
300,000 | 10.10.2006 | £4.36 | ||||||||||
200,000 | 11.10.2006 | £4.38 | ||||||||||
300,000 | 12.10.2006 | £4.43 | ||||||||||
300,000 | 13.10.2006 | £4.46 | ||||||||||
425,000 | 16.10.2006 | £4.42 | ||||||||||
400,000 | 17.10.2006 | £4.39 | ||||||||||
1,000,000 | 18.10.2006 | £4.31 | ||||||||||
500,000 | 19.10.2006 | £4.35 | ||||||||||
500,000 | 20.10.2006 | £4.42 | ||||||||||
500,000 | 24.10.2006 | £4.49 | ||||||||||
750,000 | 25.10.2006 | £4.52 | ||||||||||
750,000 | 26.10.2006 | £4.60 | ||||||||||
500,000 | 27.10.2006 | £4.53 | ||||||||||
500,000 | 30.10.2006 | £4.47 | ||||||||||
750,000 | 01.11.2006 | £4.48 | ||||||||||
1,250,000 | 02.11.2006 | £4.43 | ||||||||||
1,000,000 | 08.11.2006 | £4.53 | ||||||||||
450,000 | 09.11.2006 | £4.55 | ||||||||||
800,000 | 14.11.2006 | £4.60 |
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Number of | ||||||||||||
Reuters | ||||||||||||
Transaction Type | Shares | Date | Price | |||||||||
700,000 | 15.11.2006 | £4.64 | ||||||||||
650,000 | 20.11.2006 | £4.71 | ||||||||||
650,000 | 21.11.2006 | £4.72 | ||||||||||
750,000 | 22.11.2006 | £4.67 | ||||||||||
450,000 | 23.11.2006 | £4.63 | ||||||||||
600,000 | 27.11.2006 | £4.56 | ||||||||||
500,000 | 28.11.2006 | £4.50 | ||||||||||
950,000 | 30.11.2006 | £4.56 | ||||||||||
950,000 | 01.12.2006 | £4.53 | ||||||||||
650,000 | 04.12.2006 | £4.49 | ||||||||||
500,000 | 05.12.2006 | £4.52 | ||||||||||
850,000 | 06.12.2006 | £4.55 | ||||||||||
900,000 | 08.12.2006 | £4.61 | ||||||||||
750,000 | 11.12.2006 | £4.62 | ||||||||||
800,000 | 12.12.2006 | £4.50 | ||||||||||
100,000 | 13.12.2006 | £4.50 | ||||||||||
93,998 | 14.12.2006 | £4.53 | ||||||||||
500,000 | 09.01.2007 | £4.39 | ||||||||||
500,000 | 10.01.2007 | £4.35 | ||||||||||
300,000 | 11.01.2007 | £4.48 | ||||||||||
200,000 | 12.01.2007 | £4.51 | ||||||||||
300,000 | 15.01.2007 | £4.54 | ||||||||||
750,000 | 17.01.2007 | £4.46 | ||||||||||
450,000 | 18.01.2007 | £4.48 | ||||||||||
400,000 | 23.01.2007 | £4.42 | ||||||||||
400,000 | 24.01.2007 | £4.46 | ||||||||||
400,000 | 25.01.2007 | £4.45 | ||||||||||
300,000 | 26.01.2007 | £4.44 | ||||||||||
400,000 | 30.01.2007 | £4.40 | ||||||||||
800,000 | 31.01.2007 | £4.32 | ||||||||||
300,000 | 01.02.2007 | £4.37 | ||||||||||
300,000 | 05.02.2007 | £4.39 | ||||||||||
300,000 | 06.02.2007 | £4.40 | ||||||||||
500,000 | 08.02.2007 | £4.43 | ||||||||||
400,000 | 09.02.2007 | £4.41 | ||||||||||
1,500,000 | 12.02.2007 | £4.28 | ||||||||||
500,000 | 20.02.2007 | £4.28 | ||||||||||
500,000 | 21.02.2007 | £4.28 | ||||||||||
500,000 | 22.02.2007 | £4.30 | ||||||||||
500,000 | 26.02.2007 | £4.26 | ||||||||||
500,000 | 27.02.2007 | £4.31 | ||||||||||
500,000 | 28.02.2007 | £4.32 | ||||||||||
500,000 | 01.03.2007 | £4.34 | ||||||||||
500,000 | 02.03.2007 | £4.34 | ||||||||||
1,500,000 | 05.03.2007 | £4.23 | ||||||||||
350,000 | 06.03.2007 | £4.32 | ||||||||||
200,000 | 07.03.2007 | £4.40 | ||||||||||
400,000 | 09.03.2007 | £4.43 | ||||||||||
500,000 | 13.03.2007 | £4.40 | ||||||||||
1,450,000 | 14.03.2007 | £4.28 | ||||||||||
700,000 | 15.03.2007 | £4.29 | ||||||||||
200,000 | 16.03.2007 | £4.29 | ||||||||||
500,000 | 19.03.2007 | £4.36 | ||||||||||
1,000,000 | 20.03.2007 | £4.38 | ||||||||||
500,000 | 21.03.2007 | £4.46 | ||||||||||
250,000 | 22.03.2007 | £4.54 |
455
Table of Contents
Number of | ||||||||||||
Reuters | ||||||||||||
Transaction Type | Shares | Date | Price | |||||||||
400,000 | 23.03.2007 | £4.64 | ||||||||||
500,000 | 26.03.2007 | £4.66 | ||||||||||
700,000 | 27.03.2007 | £4.62 | ||||||||||
1,200,000 | 28.03.2007 | £4.59 | ||||||||||
500,000 | 29.03.2007 | £4.59 | ||||||||||
375,000 | 02.04.2007 | £4.71 | ||||||||||
375,000 | 03.04.2007 | £4.78 | ||||||||||
375,000 | 04.04.2007 | £4.83 | ||||||||||
250,000 | 05.04.2007 | £4.88 | ||||||||||
350,000 | 10.04.2007 | £4.94 | ||||||||||
400,000 | 11.04.2007 | £4.91 | ||||||||||
300,000 | 12.04.2007 | £4.85 | ||||||||||
300,000 | 13.04.2007 | £4.92 | ||||||||||
375,000 | 16.04.2007 | £5.02 | ||||||||||
450,000 | 17.04.2007 | £4.95 | ||||||||||
450,000 | 18.04.2007 | £4.90 | ||||||||||
225,000 | 20.04.2007 | £4.90 | ||||||||||
350,000 | 23.04.2007 | £4.89 | ||||||||||
400,000 | 24.04.2007 | £4.84 | ||||||||||
2,000,000 | 25.04.2007 | £4.82 | ||||||||||
200,000 | 26.04.2007 | £4.78 | ||||||||||
500,000 | 27.04.2007 | £4.76 |
Number of | ||||||||
Reuters | ||||||||
Name | Transaction Type | Shares | Date | Price | ||||
Tom Glocer | Exercise of SAYE option granted in 2004 | 1,200 | 01.06.2007 | n/a | ||||
David Grigson | Exercise of SAYE option granted in 2004 | 1,200 | 01.06.2007 | n/a | ||||
Devin Wenig | Exercise of SAYE option granted in 2004 | 1,200 | 01.06.2007 | n/a | ||||
Tom Glocer | Grant of DSOP option | 625,000 | 07.08.2007 | Option price £6.19 | ||||
David Grigson | Grant of DSOP option | 250,000 | 07.08.2007 | Option price £6.19 | ||||
Devin Wenig | Grant of DSOP option | 375,000 | 07.08.2007 | Option price £6.19 | ||||
Tom Glocer | Exercise of DSOP option | Options in respect of 3,804,466 shares exercised of which 2,637,953 shares were sold and 1,166,513 shares were retained | 05.11.2007 | £6.52 |
456
Table of Contents
Number of | ||||||||
Transaction | Reuters | |||||||
Name | Type | Shares | Date | Price | ||||
Reuters Employee Share Ownership Trust I | Transfer of shares to satisfy option/award | 1,457 | 12.07.2007 | n/a | ||||
Transfer of shares to satisfy option/award | 16,478 | 02.08.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 11,754 | 02.08.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 81 | 17.08.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 36 | 17.08.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 72,114 | 29.08.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 63,484 | 29.08.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 359 | 29.08.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 1,448 | 01.10.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 4,140 | 01.10.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 519 | 31.10.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 1,058 | 31.10.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 109,100 | 28.11.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 68 | 30.11.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 257 | 30.11.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 3,548 | 03.12.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 5,071 | 03.12.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 282 | 18.12.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 460 | 18.12.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 86 | 24.12.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 159 | 24.12.2007 | n/a | |||||
Transfer of shares to satisfy option/award | 151 | 30.01.2008 | n/a | |||||
Transfer of shares to satisfy option/award | 103 | 30.01.2008 | n/a | |||||
Transfer of shares to satisfy option/award | 67 | 12.02.2008 | n/a | |||||
Transfer of shares to satisfy option/award | 875 | 12.02.2008 | n/a |
Number of | Number of | |||||||||
Transaction | Reuters | Reuters | ||||||||
Name | Type | Shares | ADSs | Date | Price | |||||
J.P. Morgan Securities Ltd | Sale | 80,449 | 08.05.2007 | £6.32 | ||||||
Morgan Stanley Securities Ltd | Purchase | 1,460,731 | 04.05.2007 to 03.06.2007 | £5.20 to £6.46 | ||||||
Morgan Stanley Securities Ltd | Sale | 1,731,778 | 04.05.2007 to 03.06.2007 | £5.00 to £6.40 | ||||||
Morgan Stanley Securities Ltd | Sale | 907 | 04.01.2008 to 03.02.2008 | £6.14 to £6.14 | ||||||
UBS Wealth Mgmt (US) | Sale | 380 | 08.10.2007 | US$79.92 | ||||||
UBS Wealth Mgmt (US) | Sale | 15 | 29.10.2007 | US$82.38 | ||||||
UBS Wealth Mgmt (US) | Sale | 46 | 29.10.2007 | US$82.41 | ||||||
UBS Wealth Mgmt (US) | Sale | 41 | 10.12.2007 | US$73.07 |
Number of | Number of | |||||||||
Transaction | Reuters | Reuters | ||||||||
Name | Type | Shares | ADSs | Date | Price | |||||
Bear, Stearns & Co. Inc. | Purchase | 7,370 | 04.05.2006 toW03.08.2006 | US$38.30 to US$44.67 | ||||||
Bear, Stearns & Co. Inc. | Sale | 26,221 | 04.05.2006 to 03.08.2006 | US$38.00 to US$45.73 |
457
Table of Contents
Number of | Number of | |||||||||
Transaction | Reuters | Reuters | ||||||||
Name | Type | Shares | ADSs | Date | Price | |||||
Bear, Stearns & Co. Inc. | Purchase | 8,980 | 04.08.2006 to 03.11.2006 | US$43.36 to US$51.22 | ||||||
Bear, Stearns & Co. Inc. | Sale | 11,066 | 04.08.2006 to 03.11.2006 | US$42.55 to US$51.76 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 432,896 | 04.11.2006 to 03.02.2007 | US$51.25 to US$53.95 | ||||||
Bear, Stearns & Co. Inc. | Sale | 53,371 | 04.11.2006 to 03.02.2007 | US$50.36 to US$54.08 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 59 | 04.02.2007 to 03.03.2007 | US$50.52 to US$50.87 | ||||||
Bear, Stearns & Co. Inc. | Sale | 1,113 | 04.02.2007 to 03.03.2007 | US$49.78 to US$52.00 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 292 | 04.03.2007 to 03.04.2007 | US$50.81 to US$57.38 | ||||||
Bear, Stearns & Co. Inc. | Sale | 2,118 | 04.03.2007 to 03.04.2007 | US$49.39 to US$57.22 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 9,494 | 04.04.2007 to 03.05.2007 | US$58.21 to US$59.70 | ||||||
Bear, Stearns & Co. Inc. | Sale | 2,110 | 04.04.2007 to 03.05.2007 | US$57.35 to US$59.54 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 137,188 | 04.05.2007 to 03.06.2007 | US$70.96 to US$80.26 | ||||||
Bear, Stearns & Co. Inc. | Sale | 105,367 | 04.05.2007 to 03.06.2007 | US$71.61 to US$79.24 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 36,803 | 04.06.2007 to 03.07.2007 | US$73.94 to US$76.04 | ||||||
Bear, Stearns & Co. Inc. | Sale | 26,113 | 04.06.2007 to 03.07.2007 | US$73.81 to US$76.61 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 61,563 | 04.07.2007 to 03.08.2007 | US$74.65 to US$79.40 | ||||||
Bear, Stearns & Co. Inc. | Sale | 30,874 | 04.07.2007 to 03.08.2007 | US$74.77 to US$79.43 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 97,033 | 04.08.2007 to 03.09.2007 | US$72.69 to US$77.62 | ||||||
Bear, Stearns & Co. Inc. | Sale | 1,133,054 | 04.08.2007 to 03.09.2007 | US$72.00 to US$77.50 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 6,732 | 04.09.2007 to 03.10.2007 | US$76.64 to US$80.06 | ||||||
Bear, Stearns & Co. Inc. | Sale | 52,435 | 04.09.2007 to 03.10.2007 | US$77.44 to US$79.75 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 4,866 | 04.10.2007 to 03.11.2007 | US$80.26 to US$82.82 | ||||||
Bear, Stearns & Co. Inc. | Sale | 16,272 | 04.10.2007 to 03.11.2007 | US$78.60 to US$78.60 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 123,126 | 04.11.2007 to 03.12.2007 | US$71.62 to US$83.29 | ||||||
Bear, Stearns & Co. Inc. | Sale | 11,331 | 04.11.2007 to 03.12.2007 | US$72.95 to US$82.93 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 17,475 | 04.12.2007 to 03.01.2008 | US$71.23 to US$76.50 | ||||||
Bear, Stearns & Co. Inc. | Sale | 18,737 | 04.12.2007 to 03.01.2008 | US$72.35 to US$76.58 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 45,645 | 04.01.2008 to 03.02.2008 | US$66.69 to US$75.07 | ||||||
Bear, Stearns & Co. Inc. | Sale | 55,779 | 04.01.2008 to 03.02.2008 | US$67.50 to US$75.09 | ||||||
Bear, Stearns & Co. Inc. | Purchase | 33,700 | 04.02.2008 to 20.02.2008 | US$70.19 to US$72.64 | ||||||
Bear, Stearns & Co. Inc. | Sale | 19,147 | 04.02.2008 to 20.02.2008 | US$70.00 to US$72.48 | ||||||
Bear, Stearns International Trading Limited | Purchase | 3,986,139 | 04.05.2006 to 03.08.2006 | £3.47 to £4.11 | ||||||
Bear, Stearns International Trading Limited | Sale | 3,755,488 | 04.05.2006 to 03.08.2006 | £3.47 to £4.11 | ||||||
Bear, Stearns International Trading Limited | Purchase | 17,654,331 | 04.08.2006 to 03.11.2006 | £3.71 to £4.59 | ||||||
Bear, Stearns International Trading Limited | Sale | 15,305,667 | 04.08.2006 to 03.11.2006 | £3.70 to £4.61 | ||||||
Bear, Stearns International Trading Limited | Purchase | 15,278,060 | 04.11.2006 to 03.02.2007 | £4.31 to £4.76 | ||||||
Bear, Stearns International Trading Limited | Sale | 10,882,327 | 04.11.2006 to 03.02.2007 | £4.22 to £4.78 | ||||||
Bear, Stearns International Trading Limited | Purchase | 2,371,970 | 04.02.2007 to 03.03.2007 | £4.22 to £4.46 | ||||||
Bear, Stearns International Trading Limited | Sale | 2,228,916 | 04.02.2007 to 03.03.2007 | £4.21 to £4.47 | ||||||
Bear, Stearns International Trading Limited | Purchase | 6,946,262 | 04.03.2007 to 03.04.2007 | £4.22 to £4.83 | ||||||
Bear, Stearns International Trading Limited | Sale | 5,425,758 | 04.03.2007 to 03.04.2007 | £4.21 to £4.81 | ||||||
Bear, Stearns International Trading Limited | Purchase | 11,994,387 | 04.04.2007 to 03.05.2007 | £4.36 to £5.02 | ||||||
Bear, Stearns International Trading Limited | Sale | 7,208,203 | 04.04.2007 to 03.05.2007 | £4.36 to £5.04 | ||||||
Bear, Stearns International Trading Limited | Purchase | 34,611,144 | 04.05.2007 to 03.06.2007 | £4.97 to £6.44 | ||||||
Bear, Stearns International Trading Limited | Sale | 27,415,043 | 04.05.2007 to 03.06.2007 | £4.97 to £6.43 | ||||||
Bear, Stearns International Trading Limited | Purchase | 3,463,762 | 04.06.2007 to 03.07.2007 | £6.18 to £6.44 | ||||||
Bear, Stearns International Trading Limited | Sale | 2,123,906 | 04.06.2007 to 03.07.2007 | £6.18 to £6.40 | ||||||
Bear, Stearns International Trading Limited | Purchase | 3,617,931 | 04.07.2007 to 03.08.2007 | £6.11 to £6.45 | ||||||
Bear, Stearns International Trading Limited | Sale | 1,374,278 | 04.07.2007 to 03.08.2007 | £6.08 to £6.45 | ||||||
Bear, Stearns International Trading Limited | Purchase | 9,817,653 | 04.08.2007 to 03.09.2007 | £6.06 to £6.42 | ||||||
Bear, Stearns International Trading Limited | Sale | 8,116,558 | 04.08.2007 to 03.09.2007 | £6.10 to £6.40 | ||||||
Bear, Stearns International Trading Limited | Purchase | 6,232,799 | 04.09.2007 to 03.10.2007 | £6.29 to £6.52 | ||||||
Bear, Stearns International Trading Limited | Sale | 1,821,250 | 04.09.2007 to 03.10.2007 | £6.26 to £6.51 | ||||||
Bear, Stearns International Trading Limited | Purchase | 2,731,025 | 04.10.2007 to 03.11.2007 | £6.39 to £6.61 | ||||||
Bear, Stearns International Trading Limited | Sale | 2,969,745 | 04.10.2007 to 03.11.2007 | £6.40 to £6.61 | ||||||
Bear, Stearns International Trading Limited | Purchase | 9,914,028 | 04.11.2007 to 03.12.2007 | £5.77 to £6.57 | ||||||
Bear, Stearns International Trading Limited | Sale | 5,627,868 | 04.11.2007 to 03.12.2007 | £5.79 to £6.57 | ||||||
Bear, Stearns International Trading Limited | Purchase | 563,062 | 04.12.2007 to 03.01.2008 | £5.84 to £6.13 | ||||||
Bear, Stearns International Trading Limited | Sale | 711,971 | 04.12.2007 to 03.01.2008 | £5.80 to £5.88 | ||||||
Bear, Stearns International Trading Limited | Purchase | 9,570,746 | 04.01.2008 to 03.02.2008 | £5.60 to £6.19 | ||||||
Bear Stearns International Trading Limited | Sale | 10,036,895 | 04.01.2008 to 03.02.2008 | £5.63 to £6.17 | ||||||
Bear Stearns International Trading Limited | Purchase | 14,851,569 | 04.02.2008 to 20.02.2008 | £5.97 to £6.15 | ||||||
Bear Stearns International Trading Limited | Sale | 16,690,994 | 04.02.2008 to 20.02.2008 | £5.97 to £6.15 |
458
Table of Contents
Number of | Number of | |||||||||
Transaction | Reuters | Reuters | ||||||||
Name | Type | Shares | ADSs | Date | Price | |||||
Bear, Stearns & Co. Inc. | Sale of Call Option at Exercise Price of US$80 with Maturity Date of May 2007 | 100 | 08.05.2007 | US$0.55 |
7.5 | Interests in Thomson Shares |
17.2
3.3
Number of | ||||
Thomson | ||||
Name | Shares | |||
David Thomson | 6,070 | |||
W. Geoffrey Beattie | 200,500 | |||
Richard J. Harrington | 15,100 | |||
Ron D. Barbaro | 25,000 | |||
Mary Cirillo | 0 | |||
Robert D. Daleo | 4,912 | |||
Steven A. Denning | 20,000 | |||
V. Maureen Kempston Darkes | 500 | |||
Roger L. Martin | 6,000 | |||
Vance K. Opperman | 50,000 | |||
Michael J. Sabia | 0 | |||
John M. Thompson | 2,500 | |||
Peter J. Thomson | 0 | |||
Richard M. Thomson | 31,700 | |||
John A. Tory | 501,670 | |||
James C. Smith | 2,000 | |||
Michael E. Wilens | 1,577 | |||
Deirdre Stanley | 5,479 | |||
Gustav Carlson | 0 | |||
459
Table of Contents
Number of | ||||||||
Thomson | Exercise | |||||||
Name | Date of Grant | Shares | Price | Term | ||||
W. Geoffrey Beattie | ||||||||
(held in name of Cannonbury Investments Limited) | ||||||||
Stock options | 18.05.2000 | 100,000 | C$51.60 | 18.05.2000-18.05.2010 | ||||
Stock options | 13.12.2001 | 50,000 | C$48.40 | 13.12.2001-13.12.2011 | ||||
Stock options | 11.12.2002 | 50,000 | C$40.69 | 11.12.2002-11.12.2012 | ||||
RSUs | 03.05.2005 | 15,000 | N/A | 03.05.2008 | ||||
RSUs | 22.02.2008 | 100,000 | N/A | 22.02.2011 | ||||
RSUs — dividend re-investment | Various | 982 | N/A | N/A | ||||
Richard J. Harrington | ||||||||
Stock options | 24.01.2000 | 340,000 | C$41.00 | 24.01.2000-24.01.2010 | ||||
Stock options | 19.12.2000 | 325,000 | C$57.40 | 19.12.2000-19.12.2010 | ||||
Stock options | 13.12.2001 | 375,000 | C$48.40 | 13.12.2001-13.12.2011 | ||||
Stock options | 11.12.2002 | 325,000 | US$26.06 | 11.12.2002-11.12.2012 | ||||
Stock options | 18.12.2003 | 325,000 | US$33.49 | 18.12.2003-18.12.2013 | ||||
Stock options | 17.12.2004 | 325,000 | US$33.76 | 17.12.2004-17.12.2014 | ||||
Stock options | 10.02.2006 | 265,000 | US$37.73 | 10.02.2006-10.02.2016 | ||||
Stock options | 22.02.2007 | 221,700 | US$42.96 | 22.02.2007-22.02.2017 | ||||
RSUs | 22.02.2006 | 50,000 | N/A | 22.02.2006-01.03.2009 | ||||
RSUs | 22.02.2007 | 35,500 | N/A | 22.02.2007-01.03.2010 | ||||
RSUs | 22.02.2007 | 24,100 | N/A | 22.02.2007-22.02.2009 | ||||
RSUs | 22.02.2008 | 144,000 | N/A | 22.02.2011 | ||||
RSU — dividend re-investment | Various | 3,152 | N/A | N/A | ||||
DSUs | Various | 486,940 | N/A | N/A | ||||
Robert D. Daleo | ||||||||
Stock options | 24.01.2000 | 50,000 | C$41.00 | 24.01.2000-24.01.2010 | ||||
Stock options | 19.12.2000 | 110,000 | C$57.40 | 19.12.2000-19.12.2010 | ||||
Stock options | 13.12.2001 | 133,000 | C$48.40 | 13.12.2001-13.12.2011 | ||||
Stock options | 11.12.2002 | 105,000 | US$26.06 | 11.12.2002-11.12.2012 | ||||
Stock options | 18.12.2003 | 105,000 | US$33.49 | 18.12.2003-18.12.2013 | ||||
Stock options | 17.12.2004 | 115,000 | US$33.76 | 17.12.2004-17.12.2014 | ||||
Stock options | 05.12.2005 | 125,000 | US$35.13 | 05.12.2005-05.12.2015 | ||||
Stock options | 22.02.2007 | 130,830 | US$42.96 | 22.02.2007-22.02.2017 | ||||
RSUs | 24.02.2006 | 27,500 | N/A | 24.02.2013 | ||||
RSUs | 24.02.2006 | 13,450 | N/A | 01.03.2009 | ||||
RSUs | 22.02.2007 | 20,930 | N/A | 01.03.2010 | ||||
RSUs | 22.02.2008 | 100,000 | N/A | 22.02.2011 | ||||
RSUs — dividend re-investment | Various | 2,071 | N/A | N/A | ||||
DSUs | Various | 67,368 | N/A | N/A |
460
Table of Contents
Number of | ||||||||
Thomson | Exercise | |||||||
Name | Date of Grant | Shares | Price | Term | ||||
James C. Smith | ||||||||
Stock options | 24.01.2000 | 18,000 | C$41.00 | 24.01.2000-24.01.2010 | ||||
Stock options | 19.12.2000 | 35,000 | C$57.40 | 19.12.2000-19.12.2010 | ||||
Stock options | 13.12.2001 | 85,000 | C$48.40 | 13.12.2001-13.12.2011 | ||||
Stock options | 11.12.2002 | 85,000 | US$26.06 | 11.12.2002-11.12.2012 | ||||
Stock options | 18.12.2003 | 85,000 | US$33.49 | 18.12.2003-18.12.2013 | ||||
Stock options | 17.12.2004 | 100,000 | US$33.76 | 17.12.2004-17.12.2014 | ||||
Stock options | 05.12.2005 | 100,000 | US$35.13 | 05.12.2005-05.12.2015 | ||||
Stock options | 22.02.2007 | 120,310 | US$42.96 | 22.02.2007-22.02.2017 | ||||
RSUs | 05.05.2005 | 10,000 | N/A | 05.05.2012 | ||||
RSUs | 28.12.2005 | 5,000 | N/A | 28.12.2012 | ||||
RSUs | 24.02.2006 | 27,500 | N/A | 24.02.2013 | ||||
RSUs | 24.02.2006 | 9,600 | N/A | 01.03.2009 | ||||
RSUs | 29.06.2006 | 400.00 | N/A | 01.03.2009 | ||||
RSUs | 22.02.2007 | 19,250 | N/A | 01.03.2010 | ||||
RSUs — dividend re-investment | Various | 722,038 | N/A | N/A | ||||
DSUs | Various | 45,093 | N/A | N/A | ||||
Michael E. Wilens | ||||||||
Stock options | 19.12.2000 | 80,500 | C$57.40 | 19.12.2000-19.12.2010 | ||||
Stock options | 13.12.2001 | 108,070 | C$48.40 | 13.12.2001-13.12.2011 | ||||
Stock options | 11.12.2002 | 54,035 | US$26.06 | 11.12.2002-11.12.2012 | ||||
Stock options | 18.12.2003 | 100,000 | US$33.49 | 18.12.2003-18.12.2013 | ||||
Stock options | 17.12.2004 | 100,000 | US$33.76 | 17.12.2004-17.12.2014 | ||||
Stock options | 05.12.2005 | 75,000 | US$35.13 | 05.12.2005-05.12.2015 | ||||
Stock options | 22.02.2007 | 120,310 | US$42.96 | 22.02.2007-22.02.2017 | ||||
RSUs | 24.02.2006 | 27,500 | N/A | 24.02.2013 | ||||
RSUs | 20.02.2006 | 19,350 | N/A | 01.03.2009 | ||||
RSUs | 22.02.2007 | 19,250 | N/A | 01.03.2010 | ||||
RSUs — dividend re-investment | Various | 2,285 | N/A | N/A | ||||
DSUs | Various | 50,333 | N/A | N/A | ||||
Deirdre Stanley | ||||||||
Stock options | 08.07.2002 | 100,000 | US$30.83 | 08.07.2002-08.07.2012 | ||||
Stock options | 18.12.2003 | 20,000 | US$33.49 | 18.12.2003-18.12.2013 | ||||
Stock options | 17.12.2004 | 25,000 | US$33.76 | 17.12.2004-17.12.2014 | ||||
Stock options | 05.12.2005 | 25,000 | US$35.13 | 05.12.2005-05.12.2015 | ||||
Stock options | 22.02.2007 | 33,090 | US$42.96 | 22.02.2007-22.02.2017 | ||||
RSUs | 24.02.2006 | 7,100 | N/A | 01.03.2009 | ||||
RSUs | 22.02.2007 | 5,300 | N/A | 01.03.2010 | ||||
RSUs — dividend re-investment | Various | 390 | N/A | N/A | ||||
DSUs | Various | 7,168 | N/A | N/A | ||||
Gustav Carlson | ||||||||
Stock options | 28.04.2006 | 30,000 | US$40.10 | 28.04.2006-28.04.2016 | ||||
Stock options | 22.02.2007 | 27,070 | US$42.96 | 22.02.2007-22.02.2017 | ||||
RSUs | 28.04.2006 | 5,700 | N/A | 01.03.2009 | ||||
RSUs | 22.02.2007 | 4,340 | N/A | 01.03.2010 | ||||
RSUs — dividend re-investment | Various | 313 | N/A | N/A |
461
Table of Contents
Name | DSUs | |
Richard M. Thomson | 22,502 | |
Ron D. Barbaro | 15,519 | |
V. Maureen Kempson Darkes | 18,079 | |
Vance K. Opperman | 22,068 | |
Roger L. Martin | 17,338 | |
Steven A. Denning | 16,339 | |
John M. Thompson | 12,536 | |
John A. Tory | 2,530 | |
Mary Cirillo | 6,449 | |
Peter J. Thomson | 1,366 | |
Michael J. Sabia | 2,890 |
Number of | ||
Thomson | ||
Name | Shares | |
Woodbridge | 449,278,894 | |
Bear, Stearns & Co. Inc. | 100,808 |
Number of | ||
Thomson | ||
Name | Shares | |
Bear, Stearns & Co. Inc. | 469,596 |
Number of | ||
Thomson | ||
Name | Shares | |
Bear, Stearns & Co. Inc. | 8,953,641 (Borrowed) |
Number of | ||||
Thomson | Nature of | |||
Name | Shares | Interest | ||
Citigroup Inc. | 15,132 | Long | ||
Morgan Stanley & Co. Inc. | 7,580 | Long | ||
UBS Securities LLC | 73 | Long | ||
UBS Wealth Mgmt (US) | 58 | Long |
462
Table of Contents
Number of | ||||
Thomson | Nature of | |||
Name | Shares | Interest | ||
Morgan Stanley & Co. Inc. | 117,200 | Short | ||
UBS Securities LLC | 193,587 | Short |
3.3
7.6 | Dealings in Thomson Shares |
Number of | ||||||||||||||||||||
Thomson | ||||||||||||||||||||
Transaction Type | Shares | Date | Avg. Price | Lowest Price | Highest Price | |||||||||||||||
Repurchase | 50,000 | 04.05.2006 | C$ | 45.18 | ||||||||||||||||
20,000 | 05.05.2006 | C$ | 45.20 | |||||||||||||||||
25,000 | 08.05.2006 | C$ | 44.93 | |||||||||||||||||
78,700 | 09.05.2006 | C$ | 44.69 | |||||||||||||||||
50,000 | 10.05.2006 | C$ | 44.18 | |||||||||||||||||
50,000 | 11.05.2006 | C$ | 43.75 | |||||||||||||||||
25,600 | 12.05.2006 | C$ | 43.29 | |||||||||||||||||
25,000 | 15.05.2006 | C$ | 43.81 | |||||||||||||||||
25,000 | 16.05.2006 | C$ | 44.30 | |||||||||||||||||
36,300 | 17.05.2006 | C$ | 44.13 | |||||||||||||||||
65,000 | 18.05.2006 | C$ | 44.12 | |||||||||||||||||
39,400 | 19.05.2006 | C$ | 43.99 | |||||||||||||||||
42,300 | 23.05.2006 | C$ | 43.56 | |||||||||||||||||
75,000 | 24.05.2006 | C$ | 43.45 | |||||||||||||||||
99,800 | 25.05.2006 | C$ | 43.50 | |||||||||||||||||
31,000 | 26.05.2006 | C$ | 43.98 | |||||||||||||||||
20,000 | 29.05.2006 | C$ | 44.40 | |||||||||||||||||
50,000 | 30.05.2006 | C$ | 45.04 | |||||||||||||||||
35,000 | 31.05.2006 | C$ | 45.68 | |||||||||||||||||
35,000 | 01.06.2006 | C$ | 45.72 | |||||||||||||||||
11,900 | 02.06.2006 | C$ | 46.06 | |||||||||||||||||
25,000 | 05.06.2006 | C$ | 46.25 | |||||||||||||||||
25,000 | 06.06.2006 | C$ | 45.79 | |||||||||||||||||
11,800 | 07.06.2006 | C$ | 45.48 | |||||||||||||||||
21,000 | 08.06.2006 | C$ | 45.56 | |||||||||||||||||
100,000 | 09.06.2006 | C$ | 45.73 | |||||||||||||||||
25,000 | 12.06.2006 | C$ | 45.95 | |||||||||||||||||
100,000 | 13.06.2006 | C$ | 45.67 | |||||||||||||||||
30,000 | 14.06.2006 | C$ | 45.04 | |||||||||||||||||
30,000 | 15.06.2006 | C$ | 44.23 | |||||||||||||||||
32,200 | 16.06.2006 | C$ | 44.06 | |||||||||||||||||
11,900 | 19.06.2006 | C$ | 43.75 | |||||||||||||||||
13,000 | 20.06.2006 | C$ | 43.95 | |||||||||||||||||
25,000 | 21.06.2006 | C$ | 44.00 | |||||||||||||||||
40,000 | 22.06.2006 | C$ | 43.98 | |||||||||||||||||
49,900 | 23.06.2006 | C$ | 43.89 | |||||||||||||||||
91,700 | 26.06.2006 | C$ | 43.77 | |||||||||||||||||
40,000 | 27.06.2006 | C$ | 43.44 |
463
Table of Contents
Number of | ||||||||||||||||||||
Thomson | ||||||||||||||||||||
Transaction Type | Shares | Date | Avg. Price | Lowest Price | Highest Price | |||||||||||||||
70,000 | 28.06.2006 | C$ | 43.23 | |||||||||||||||||
25,000 | 29.06.2006 | C$ | 42.70 | |||||||||||||||||
33,500 | 30.06.2006 | C$ | 43.22 | |||||||||||||||||
19,600 | 04.07.2006 | C$ | 42.89 | |||||||||||||||||
20,400 | 05.07.2006 | C$ | 42.60 | |||||||||||||||||
50,000 | 06.07.2006 | C$ | 42.97 | |||||||||||||||||
14,700 | 07.07.2006 | C$ | 43.05 | |||||||||||||||||
51,900 | 10.07.2006 | C$ | 43.69 | |||||||||||||||||
86,500 | 11.07.2006 | C$ | 44.16 | |||||||||||||||||
43,600 | 12.07.2006 | C$ | 43.97 | |||||||||||||||||
70,000 | 13.07.2006 | C$ | 43.30 | |||||||||||||||||
43,300 | 14.07.2006 | C$ | 43.68 | |||||||||||||||||
21,000 | 17.07.2006 | C$ | 43.85 | |||||||||||||||||
31,000 | 18.07.2006 | C$ | 43.77 | |||||||||||||||||
90,000 | 19.07.2006 | C$ | 43.49 | |||||||||||||||||
41,200 | 20.07.2006 | C$ | 43.02 | |||||||||||||||||
20,000 | 21.07.2006 | C$ | 43.45 | |||||||||||||||||
40,000 | 24.07.2006 | C$ | 43.43 | |||||||||||||||||
40,000 | 25.07.2006 | C$ | 43.50 | |||||||||||||||||
40,000 | 26.07.2006 | C$ | 43.87 | |||||||||||||||||
76,800 | 28.07.2006 | C$ | 44.62 | |||||||||||||||||
22,200 | 31.07.2006 | C$ | 44.73 | |||||||||||||||||
22,200 | 01.08.2006 | C$ | 44.79 | |||||||||||||||||
22,200 | 02.08.2006 | C$ | 45.17 | |||||||||||||||||
22,200 | 03.08.2006 | C$ | 45.22 | |||||||||||||||||
21,000 | 04.08.2006 | C$ | 45.20 | |||||||||||||||||
22,200 | 08.08.2006 | C$ | 45.25 | |||||||||||||||||
22,200 | 09.08.2006 | C$ | 45.42 | |||||||||||||||||
30,000 | 10.08.2006 | C$ | 44.50 | |||||||||||||||||
15,800 | 11.08.2006 | C$ | 44.20 | |||||||||||||||||
14,100 | 14.08.2006 | C$ | 44.41 | |||||||||||||||||
21,200 | 15.08.2006 | C$ | 44.48 | |||||||||||||||||
16,500 | 16.08.2006 | C$ | 44.75 | |||||||||||||||||
25,300 | 17.08.2006 | C$ | 44.84 | |||||||||||||||||
27,900 | 18.08.2006 | C$ | 44.56 | |||||||||||||||||
20,000 | 21.08.2006 | C$ | 45.10 | |||||||||||||||||
20,000 | 22.08.2006 | C$ | 45.37 | |||||||||||||||||
20,000 | 23.08.2006 | C$ | 45.02 | |||||||||||||||||
20,000 | 24.08.2006 | C$ | 44.89 | |||||||||||||||||
15,000 | 25.08.2006 | C$ | 44.61 | |||||||||||||||||
11,600 | 28.08.2006 | C$ | 44.84 | |||||||||||||||||
22,900 | 29.08.2006 | C$ | 44.56 | |||||||||||||||||
13,900 | 30.08.2006 | C$ | 44.58 | |||||||||||||||||
33,300 | 31.08.2006 | C$ | 44.49 | |||||||||||||||||
13,100 | 01.09.2006 | C$ | 44.93 | |||||||||||||||||
20,000 | 05.09.2006 | C$ | 44.11 | |||||||||||||||||
34,000 | 06.09.2006 | C$ | 43.71 | |||||||||||||||||
30,500 | 07.09.2006 | C$ | 43.38 | |||||||||||||||||
20,700 | 08.09.2006 | C$ | 43.38 | |||||||||||||||||
25,000 | 11.09.2006 | C$ | 43.18 | |||||||||||||||||
15,000 | 12.09.2006 | C$ | 43.29 | |||||||||||||||||
18,700 | 13.09.2006 | C$ | 43.19 | |||||||||||||||||
13,100 | 14.09.2006 | C$ | 43.09 | |||||||||||||||||
5,400 | 15.09.2006 | C$ | 43.44 | |||||||||||||||||
29,800 | 18.09.2006 | C$ | 43.43 | |||||||||||||||||
15,200 | 19.09.2006 | C$ | 43.32 |
464
Table of Contents
Number of | ||||||||||||||||||||
Thomson | ||||||||||||||||||||
Transaction Type | Shares | Date | Avg. Price | Lowest Price | Highest Price | |||||||||||||||
14,600 | 20.09.2006 | C$ | 44.10 | |||||||||||||||||
20,900 | 21.09.2006 | C$ | 44.65 | |||||||||||||||||
42,300 | 22.09.2006 | C$ | 45.14 | |||||||||||||||||
17,800 | 25.09.2006 | C$ | 45.26 | |||||||||||||||||
18,100 | 26.09.2006 | C$ | 45.60 | |||||||||||||||||
27,800 | 27.09.2006 | C$ | 45.18 | |||||||||||||||||
21,600 | 28.09.2006 | C$ | 45.24 | |||||||||||||||||
25,300 | 29.09.2006 | C$ | 45.02 | |||||||||||||||||
11,600 | 02.10.2006 | C$ | 45.16 | |||||||||||||||||
23,600 | 03.10.2006 | C$ | 45.18 | |||||||||||||||||
8,200 | 04.10.2006 | C$ | 45.54 | |||||||||||||||||
26,000 | 05.10.2006 | C$ | 45.73 | |||||||||||||||||
20,000 | 06.10.2006 | C$ | 44.80 | |||||||||||||||||
25,000 | 10.10.2006 | C$ | 44.36 | |||||||||||||||||
12,000 | 11.10.2006 | C$ | 43.93 | |||||||||||||||||
16,400 | 12.10.2006 | C$ | 44.12 | |||||||||||||||||
16,000 | 13.10.2006 | C$ | 44.42 | |||||||||||||||||
13,200 | 16.10.2006 | C$ | 44.43 | |||||||||||||||||
15,600 | 17.10.2006 | C$ | 44.45 | |||||||||||||||||
29,000 | 18.10.2006 | C$ | 44.67 | |||||||||||||||||
21,100 | 19.10.2006 | C$ | 44.65 | |||||||||||||||||
51,700 | 20.10.2006 | C$ | 45.81 | |||||||||||||||||
20,000 | 23.10.2006 | C$ | 45.98 | |||||||||||||||||
19,300 | 24.10.2006 | C$ | 45.54 | |||||||||||||||||
17,900 | 25.10.2006 | C$ | 47.10 | |||||||||||||||||
30,000 | 26.10.2006 | C$ | 47.03 | |||||||||||||||||
21,100 | 27.10.2006 | C$ | 46.18 | |||||||||||||||||
20,000 | 30.10.2006 | C$ | 46.05 | |||||||||||||||||
14,000 | 31.10.2006 | C$ | 46.45 | |||||||||||||||||
18,300 | 01.11.2006 | C$ | 46.23 | |||||||||||||||||
12,500 | 02.11.2006 | C$ | 46.26 | |||||||||||||||||
26,900 | 03.11.2006 | C$ | 46.48 | |||||||||||||||||
20,000 | 06.11.2006 | C$ | 46.51 | |||||||||||||||||
20,400 | 07.11.2006 | C$ | 46.39 | |||||||||||||||||
18,000 | 08.11.2006 | C$ | 46.34 | |||||||||||||||||
18,800 | 09.11.2006 | C$ | 46.42 | |||||||||||||||||
15,000 | 10.11.2006 | C$ | 46.36 | |||||||||||||||||
14,900 | 13.11.2006 | C$ | 46.68 | |||||||||||||||||
14,000 | 14.11.2006 | C$ | 47.11 | |||||||||||||||||
25,600 | 15.11.2006 | C$ | 47.52 | |||||||||||||||||
28,000 | 16.11.2006 | C$ | 47.60 | |||||||||||||||||
25,000 | 23.11.2006 | C$ | 48.46 | |||||||||||||||||
22,100 | 24.11.2006 | C$ | 48.41 | |||||||||||||||||
18,000 | 27.11.2006 | C$ | 48.09 | |||||||||||||||||
33,200 | 28.11.2006 | C$ | 48.27 | |||||||||||||||||
31,200 | 29.11.2006 | C$ | 48.70 | |||||||||||||||||
43,000 | 30.11.2006 | C$ | 48.84 | |||||||||||||||||
52,800 | 01.12.2006 | C$ | 48.65 | |||||||||||||||||
20,000 | 04.12.2006 | C$ | 49.11 | |||||||||||||||||
20,000 | 05.12.2006 | C$ | 49.28 | |||||||||||||||||
19,400 | 06.12.2006 | C$ | 48.99 | |||||||||||||||||
20,000 | 07.12.2006 | C$ | 49.01 | |||||||||||||||||
20,000 | 08.12.2006 | C$ | 49.18 | |||||||||||||||||
20,000 | 11.12.2006 | C$ | 48.63 | |||||||||||||||||
20,000 | 12.12.2006 | C$ | 48.64 | |||||||||||||||||
20,600 | 13.12.2006 | C$ | 48.73 |
465
Table of Contents
Number of | ||||||||||||||||||||
Thomson | ||||||||||||||||||||
Transaction Type | Shares | Date | Avg. Price | Lowest Price | Highest Price | |||||||||||||||
20,000 | 14.12.2006 | C$ | 48.89 | |||||||||||||||||
20,000 | 15.12.2006 | C$ | 48.57 | |||||||||||||||||
30,000 | 18.12.2006 | C$ | 48.49 | |||||||||||||||||
65,000 | 19.12.2006 | C$ | 47.65 | |||||||||||||||||
55,000 | 20.12.2006 | C$ | 48.14 | |||||||||||||||||
10,000 | 21.12.2006 | C$ | 47.88 | |||||||||||||||||
10,000 | 22.12.2006 | C$ | 47.76 | |||||||||||||||||
10,000 | 27.12.2006 | C$ | 47.86 | |||||||||||||||||
10,000 | 28.12.2006 | C$ | 48.01 | |||||||||||||||||
10,000 | 29.12.2006 | C$ | 48.53 | |||||||||||||||||
10,000 | 02.01.2007 | C$ | 48.67 | |||||||||||||||||
25,000 | 03.01.2007 | C$ | 49.01 | |||||||||||||||||
25,000 | 04.01.2007 | C$ | 48.63 | |||||||||||||||||
55,000 | 05.01.2007 | C$ | 47.50 | |||||||||||||||||
10,000 | 08.01.2007 | C$ | 47.67 | |||||||||||||||||
15,000 | 09.01.2007 | C$ | 47.43 | |||||||||||||||||
10,000 | 10.01.2007 | C$ | 47.64 | |||||||||||||||||
20,000 | 11.01.2007 | C$ | 47.77 | |||||||||||||||||
30,000 | 12.01.2007 | C$ | 47.96 | |||||||||||||||||
10,000 | 15.01.2007 | C$ | 47.90 | |||||||||||||||||
25,000 | 16.01.2007 | C$ | 47.95 | |||||||||||||||||
35,000 | 17.01.2007 | C$ | 47.53 | |||||||||||||||||
28,400 | 18.01.2007 | C$ | 47.77 | |||||||||||||||||
30,000 | 19.01.2007 | C$ | 47.91 | |||||||||||||||||
30,000 | 22.01.2007 | C$ | 48.02 | |||||||||||||||||
10,000 | 23.01.2007 | C$ | 48.16 | |||||||||||||||||
10,000 | 24.01.2007 | C$ | 49.27 | |||||||||||||||||
10,000 | 25.01.2007 | C$ | 49.36 | |||||||||||||||||
10,000 | 26.01.2007 | C$ | 49.43 | |||||||||||||||||
15,000 | 29.01.2007 | C$ | 49.55 | |||||||||||||||||
20,000 | 30.01.2007 | C$ | 49.34 | |||||||||||||||||
21,600 | 31.01.2007 | C$ | 49.53 | |||||||||||||||||
15,000 | 01.02.2007 | C$ | 49.93 | |||||||||||||||||
15,000 | 02.02.2007 | C$ | 50.53 | |||||||||||||||||
20,000 | 05.02.2007 | C$ | 50.84 | |||||||||||||||||
25,000 | 06.02.2007 | C$ | 51.13 | |||||||||||||||||
30,000 | 07.02.2007 | C$ | 50.58 | |||||||||||||||||
15,000 | 08.02.2007 | C$ | 50.78 | |||||||||||||||||
25,000 | 09.02.2007 | C$ | 51.29 | |||||||||||||||||
25,000 | 12.02.2007 | C$ | 50.01 | |||||||||||||||||
20,000 | 13.02.2007 | C$ | 50.05 | |||||||||||||||||
40,000 | 14.02.2007 | C$ | 50.34 | |||||||||||||||||
40,000 | 15.02.2007 | C$ | 50.30 | |||||||||||||||||
40,000 | 16.02.2007 | C$ | 50.64 | |||||||||||||||||
35,000 | 19.02.2007 | C$ | 50.94 | |||||||||||||||||
25,000 | 26.02.2007 | C$ | 48.63 | |||||||||||||||||
23,000 | 27.02.2007 | C$ | 47.78 | |||||||||||||||||
25,000 | 28.02.2007 | C$ | 47.22 | |||||||||||||||||
20,000 | 01.03.2007 | C$ | 47.14 | |||||||||||||||||
20,000 | 02.03.2007 | C$ | 47.28 | |||||||||||||||||
15,000 | 05.03.2007 | C$ | 47.37 | |||||||||||||||||
15,000 | 06.03.2007 | C$ | 48.02 | |||||||||||||||||
20,000 | 07.03.2007 | C$ | 47.66 | |||||||||||||||||
15,000 | 08.03.2007 | C$ | 48.06 | |||||||||||||||||
22,000 | 09.03.2007 | C$ | 48.17 | |||||||||||||||||
13,000 | 12.03.2007 | C$ | 47.94 |
466
Table of Contents
Number of | ||||||||||||||||||||
Thomson | ||||||||||||||||||||
Transaction Type | Shares | Date | Avg. Price | Lowest Price | Highest Price | |||||||||||||||
13,000 | 13.03.2007 | C$ | 47.94 | |||||||||||||||||
13,000 | 14.03.2007 | C$ | 48.00 | |||||||||||||||||
20,000 | 15.03.2007 | C$ | 48.33 | |||||||||||||||||
20,000 | 16.03.2007 | C$ | 48.71 | |||||||||||||||||
19,000 | 19.03.2007 | C$ | 48.92 | |||||||||||||||||
25,000 | 20.03.2007 | C$ | 49.00 | |||||||||||||||||
27,000 | 21.03.2007 | C$ | 49.12 | |||||||||||||||||
25,000 | 22.03.2007 | C$ | 49.35 | |||||||||||||||||
25,000 | 23.03.2007 | C$ | 49.32 | |||||||||||||||||
20,000 | 26.03.2007 | C$ | 48.93 | |||||||||||||||||
20,000 | 27.03.2007 | C$ | 48.93 | |||||||||||||||||
22,000 | 28.03.2007 | C$ | 48.62 | |||||||||||||||||
18,000 | 29.03.2007 | C$ | 48.67 | |||||||||||||||||
25,000 | 30.03.2007 | C$ | 48.10 | |||||||||||||||||
20,000 | 02.04.2007 | C$ | 47.85 | |||||||||||||||||
20,700 | 03.04.2007 | C$ | 47.74 | |||||||||||||||||
25,000 | 04.04.2007 | C$ | 47.63 | |||||||||||||||||
29,300 | 05.04.2007 | C$ | 47.50 | |||||||||||||||||
19,000 | 09.04.2007 | C$ | 47.40 | |||||||||||||||||
20,000 | 10.04.2007 | C$ | 47.86 | |||||||||||||||||
19,000 | 11.04.2007 | C$ | 48.06 | |||||||||||||||||
17,000 | 12.04.2007 | C$ | 48.30 | |||||||||||||||||
21,000 | 13.04.2007 | C$ | 48.40 | |||||||||||||||||
17,000 | 16.04.2007 | C$ | 48.30 | |||||||||||||||||
22,000 | 17.04.2007 | C$ | 48.18 | |||||||||||||||||
15,000 | 18.04.2007 | C$ | 48.31 | |||||||||||||||||
25,000 | 19.04.2007 | C$ | 48.21 | |||||||||||||||||
25,000 | 20.04.2007 | C$ | 48.07 | |||||||||||||||||
25,000 | 23.04.2007 | C$ | 47.60 | |||||||||||||||||
20,000 | 24.04.2007 | C$ | 48.12 | |||||||||||||||||
20,000 | 25.04.2007 | C$ | 48.22 | |||||||||||||||||
19,000 | 26.04.2007 | C$ | 49.56 | |||||||||||||||||
20,000 | 27.04.2007 | C$ | 49.11 | |||||||||||||||||
22,000 | 30.04.2007 | C$ | 48.92 | |||||||||||||||||
17,000 | 01.05.2007 | C$ | 48.97 | |||||||||||||||||
18,000 | 02.05.2007 | C$ | 48.57 | |||||||||||||||||
19,000 | 03.05.2007 | C$ | 48.45 | |||||||||||||||||
20,000 | 04.05.2007 | C$ | 48.23 | |||||||||||||||||
175,000 | 23.11.2007 | C$ | 38.91 | C$ | 38.03 | C$ | 39.45 | |||||||||||||
175,000 | 26.11.2007 | C$ | 38.69 | C$ | 38.47 | C$ | 39.13 | |||||||||||||
175,000 | 27.11.2007 | C$ | 38.12 | C$ | 37.86 | C$ | 38.65 | |||||||||||||
175,000 | 28.11.2007 | C$ | 39.38 | C$ | 39.14 | C$ | 39.65 | |||||||||||||
50,000 | 29.11.2007 | C$ | 38.93 | C$ | 38.51 | C$ | 39.36 | |||||||||||||
175,000 | 30.11.2007 | C$ | 38.81 | C$ | 38.50 | C$ | 39.45 | |||||||||||||
175,000 | 03.12.2007 | C$ | 38.72 | C$ | 38.50 | C$ | 39.06 | |||||||||||||
175,000 | 04.12.2007 | C$ | 37.99 | C$ | 37.63 | C$ | 38.60 | |||||||||||||
175,000 | 05.12.2007 | C$ | 37.95 | C$ | 37.59 | C$ | 38.28 | |||||||||||||
175,500 | 06.12.2007 | C$ | 38.19 | C$ | 38.00 | C$ | 38.50 | |||||||||||||
50,000 | 07.12.2007 | C$ | 38.12 | C$ | 37.81 | C$ | 38.43 | |||||||||||||
50,000 | 10.12.2007 | C$ | 38.18 | C$ | 37.92 | C$ | 38.45 | |||||||||||||
50,000 | 11.12.2007 | C$ | 38.76 | C$ | 37.97 | C$ | 39.38 | �� | ||||||||||||
50,000 | 12.12.2007 | C$ | 39.03 | C$ | 38.71 | C$ | 39.48 | |||||||||||||
50,000 | 13.12.2007 | C$ | 38.31 | C$ | 38.18 | C$ | 38.43 | |||||||||||||
50,000 | 14.12.2007 | C$ | 38.97 | C$ | 38.41 | C$ | 39.30 | |||||||||||||
50,000 | 17.12.2007 | C$ | 38.53 | C$ | 38.09 | C$ | 38.95 | |||||||||||||
50,000 | 18.12.2007 | C$ | 38.86 | C$ | 38.62 | C$ | 39.29 |
467
Table of Contents
Number of | ||||||||||||||||||||
Thomson | ||||||||||||||||||||
Transaction Type | Shares | Date | Avg. Price | Lowest Price | Highest Price | |||||||||||||||
50,000 | 19.12.2007 | C$ | 38.56 | C$ | 38.38 | C$ | 38.82 | |||||||||||||
50,000 | 20.12.2007 | C$ | 39.28 | C$ | 38.61 | C$ | 40.12 | |||||||||||||
50,000 | 21.12.2007 | C$ | 40.03 | C$ | 39.34 | C$ | 40.42 | |||||||||||||
50,000 | 24.12.2007 | C$ | 40.55 | C$ | 40.31 | C$ | 40.78 | |||||||||||||
50,000 | 27.12.2007 | C$ | 40.00 | C$ | 39.49 | C$ | 40.42 | |||||||||||||
50,000 | 28.12.2007 | C$ | 40.09 | C$ | 39.87 | C$ | 40.31 | |||||||||||||
50,000 | 31.12.2007 | C$ | 40.44 | C$ | 39.99 | C$ | 40.64 |
Type of | Number of | ||||||||||||||||||||
Transaction | Thomson | Thomson | |||||||||||||||||||
Name | Type | Security | Shares | Date | Price | Term | |||||||||||||||
W. Geoffrey Beattie (held in name of Cannonbury Investments Limited) | Dividend reinvestment | RSUs | 85 | 15.06.2006 | |||||||||||||||||
Dividend reinvestment | RSUs | 87 | 15.09.2006 | ||||||||||||||||||
Dividend reinvestment | RSUs | 344 | 15.12.2006 | ||||||||||||||||||
Dividend reinvestment | RSUs | 92 | 15.03.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 91 | 15.06.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 94 | 15.09.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 101 | 15.12.2007 | ||||||||||||||||||
Grant | RSUs | 100,000 | 22.02.2008 | ||||||||||||||||||
Richard J. Harrington | Grant | Options | 221,700 | 22.02.2007 | US$ | 42.96 | 22.02.2007- 22.02.2017 | ||||||||||||||
Dividend reinvestment | RSUs | 277.84 | 15.06.2006 | ||||||||||||||||||
Dividend reinvestment | RSUs | 284.71 | 15.09.2006 | ||||||||||||||||||
Dividend reinvestment | RSUs | 266.94 | 15.12.2006 | ||||||||||||||||||
Dividend reinvestment | RSUs | 302.26 | 15.03.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 296.01 | 15.06.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 307.46 | 17.09.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 329.56 | 17.12.2007 | ||||||||||||||||||
Grant | RSUs | 35,500 | 22.02.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 205.51 | 15.06.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 213.46 | 17.09.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 228.81 | 17.12.2007 | ||||||||||||||||||
Grant | RSUs | 24,100 | 22.02.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 139.52 | 15.06.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 144.91 | 17.09.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 155.33 | 17.12.2007 | ||||||||||||||||||
Dividend reinvestment | DSUs | 1,961.24 | 15.06.2006 | ||||||||||||||||||
Grant | DSUs | 55,797.50 | 01.08.2006 |
468
Table of Contents
Type of | Number of | ||||||||||||||||||||
Transaction | Thomson | Thomson | |||||||||||||||||||
Name | Type | Security | Shares | Date | Price | Term | |||||||||||||||
Dividend reinvestment | DSUs | 2,296.95 | 15.09.2006 | ||||||||||||||||||
Dividend reinvestment | DSUs | 2,153.63 | 15.12.2006 | ||||||||||||||||||
Dividend reinvestment | DSUs | 2,438.53 | 15.03.2007 | ||||||||||||||||||
Dividend reinvestment | DSUs | 2,388.11 | 15.06.2007 | ||||||||||||||||||
Grant | DSUs | 55,000.00 | 13.08.2007 | ||||||||||||||||||
Dividend reinvestment | DSUs | 2,779.40 | 17.09.2007 | ||||||||||||||||||
Dividend reinvestment | DSUs | 2,979.22 | 17.12.2007 | ||||||||||||||||||
Grant | RSUs | 144,000 | 22.02.2008 | ||||||||||||||||||
Ronald D. Barbaro | Grant | DSUs | 164 | 15.06.2006 | C$ | 45.12 | |||||||||||||||
Dividend reinvestment | DSUs | 76 | 15.06.2006 | C$ | 45.12 | ||||||||||||||||
Grant | DSUs | 172 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Dividend reinvestment | DSUs | 80 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Grant | DSUs | 158 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Dividend reinvestment | DSUs | 74 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Grant | DSUs | 163 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 87 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 160 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 89 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 160 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Dividend reinvestment | DSUs | 92 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 174 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 96 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Mary Cirillo | Grant | DSUs | 542 | 15.06.2006 | C$ | 45.12 | |||||||||||||||
Dividend reinvestment | DSUs | 15 | 15.06.2006 | C$ | 45.12 | ||||||||||||||||
Grant | DSUs | 621 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Dividend reinvestment | DSUs | 19 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Grant | DSUs | 545 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Dividend reinvestment | DSUs | 20 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Grant | DSUs | 587 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 27 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 600 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 31 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 529 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Dividend reinvestment | DSUs | 35 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 626 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 40 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Robert D. Daleo | Dividend reinvestment | RSUs | 288 | 15.06.2006 | |||||||||||||||||
Dividend reinvestment | RSUs | 75 | 15.06.2006 | ||||||||||||||||||
Dividend reinvestment | RSUs | 153 | 15.06.2006 | ||||||||||||||||||
Dividend reinvestment | RSUs | 76 | 15.09.2006 | ||||||||||||||||||
Dividend reinvestment | RSUs | 156 | 15.09.2006 |
469
Table of Contents
Type of | Number of | ||||||||||||||||||||
Transaction | Thomson | Thomson | |||||||||||||||||||
Name | Type | Security | Shares | Date | Price | Term | |||||||||||||||
Dividend reinvestment | RSUs | 295 | �� | 15.09.2006 | |||||||||||||||||
Dividend reinvestment | RSUs | 147 | 15.12.2006 | ||||||||||||||||||
Dividend reinvestment | RSUs | 275 | 15.12.2006 | ||||||||||||||||||
Dividend reinvestment | RSUs | 72 | 15.12.2006 | ||||||||||||||||||
Purchase | Common shares | 166 | 31.01.2007 | C$ | 34.64 | ||||||||||||||||
Grant | Options | 130,830 | 22.02.2007 | US$ | 42.96 | ||||||||||||||||
Grant | RSUs | 20,930 | 22.02.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 166 | 15.03.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 81 | 15.03.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 313 | 15.03.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 163 | 15.06.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 121 | 15.06.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 80 | 15.06.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 306 | 15.06.2007 | ||||||||||||||||||
Dividend reinvestment | ESPP | 5 | 15.06.2007 | C$ | 42.46 | ||||||||||||||||
Purchase | ESPP | 165 | 29.06.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 13,333 | 08.08.2007 | ||||||||||||||||||
Dividend reinvestment | ESPP | 6 | 15.09.2007 | C$ | 41.45 | ||||||||||||||||
Dividend reinvestment | RSUs | 169 | 17.09.2007 | ||||||||||||||||||
Dividend reinvestment | DSUs | 390 | 17.09.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 83 | 17.09.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 126 | 17.09.2007 | ||||||||||||||||||
Purchase | ESPP | 138 | 28.09.2007 | C$ | 35.64 | ||||||||||||||||
Purchase | Common shares | 100 | 27.11.2007 | C$ | 38.31 | ||||||||||||||||
Purchase | Common shares | 400 | 27.11.2007 | C$ | 38.32 | ||||||||||||||||
Purchase | Common shares | 100 | 27.11.2007 | C$ | 38.31 | ||||||||||||||||
Purchase | Common shares | 200 | 27.11.2007 | C$ | 38.33 | ||||||||||||||||
Purchase | Common shares | 200 | 27.11.2007 | C$ | 38.47 | ||||||||||||||||
Purchase | Common shares | 300 | 27.11.2007 | C$ | 38.44 | ||||||||||||||||
Purchase | Common shares | 300 | 27.11.2007 | C$ | 38.50 | ||||||||||||||||
Purchase | Common shares | 100 | 27.11.2007 | C$ | 38.46 | ||||||||||||||||
Purchase | Common shares | 200 | 27.11.2007 | C$ | 38.52 | ||||||||||||||||
Purchase | Common shares | 200 | 27.11.2007 | C$ | 38.46 | ||||||||||||||||
Purchase | Common shares | 300 | 27.11.2007 | C$ | 38.45 | ||||||||||||||||
Purchase | Common shares | 100 | 27.11.2007 | C$ | 38.52 | ||||||||||||||||
Dividend reinvestment | ESPP | 7 | 17.12.2007 | C$ | 38.46 | ||||||||||||||||
Dividend reinvestment | RSUs | 181 | 17.12.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 88 | 17.12.2007 | ||||||||||||||||||
Dividend reinvestment | RSUs | 134 | 17.12.2007 | ||||||||||||||||||
Dividend reinvestment | DSUs | 419 | 17.12.2007 | ||||||||||||||||||
Grant | RSUs | 100,000 | 22.02.2008 | ||||||||||||||||||
Steven A. Denning | Grant | DSUs | 598 | 15.06.2006 | C$ | 45.12 | |||||||||||||||
Dividend reinvestment | DSUs | 65 | 15.06.2006 | C$ | 45.12 | ||||||||||||||||
Grant | DSUs | 653 | 15.09.2006 | C$ | 43.15 |
470
Table of Contents
Type of | Number of | ||||||||||||||||||||
Transaction | Thomson | Thomson | |||||||||||||||||||
Name | Type | Security | Shares | Date | Price | Term | |||||||||||||||
Dividend reinvestment | DSUs | 71 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Grant | DSUs | 598 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Dividend reinvestment | DSUs | 68 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Grant | DSUs | 673 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 83 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 660 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 88 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 613 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Dividend reinvestment | DSUs | 93 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Purchase | Common shares | 20,000 | 11.11.2007 | C$ | 37.43 | ||||||||||||||||
Grant | DSUs | 691 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 101 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
V. Maureen Kempston-Darkes | Grant | DSUs | 567 | 15.06.2006 | C$ | 45.12 | |||||||||||||||
Dividend reinvestment | DSUs | 75 | 15.06.2006 | C$ | 45.12 | ||||||||||||||||
Grant | DSUs | 621 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Dividend reinvestment | DSUs | 82 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Grant | DSUs | 616 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Dividend reinvestment | DSUs | 78 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Grant | DSUs | 636 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 94 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 624 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 99 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 529 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Dividend reinvestment | DSUs | 104 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 678 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 112 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Roger L. Martin | Grant | DSUs | 641 | 15.06.2006 | C$ | 45.12 | |||||||||||||||
Dividend reinvestment | DSUs | 70 | 15.06.2006 | C$ | 45.12 | ||||||||||||||||
Grant | DSUs | 724 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Dividend reinvestment | DSUs | 77 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Grant | DSUs | 592 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Dividend reinvestment | DSUs | 73 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Grant | DSUs | 661 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 89 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 648 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 93 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 625 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Dividend reinvestment | DSUs | 99 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 756 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 107 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Vance K. Opperman | Grant | DSUs | 703 | 15.06.2006 | C$ | 45.12 | |||||||||||||||
Dividend reinvestment | DSUs | 92 | 15.06.2006 | C$ | 45.12 | ||||||||||||||||
Grant | DSUs | 789 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Dividend reinvestment | DSUs | 101 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Grant | DSUs | 652 | 15.12.2006 | C$ | 48.82 |
471
Table of Contents
Type of | Number of | ||||||||||||||||||||
Transaction | Thomson | Thomson | |||||||||||||||||||
Name | Type | Security | Shares | Date | Price | Term | |||||||||||||||
Dividend reinvestment | DSUs | �� | 95 | 15.12.2006 | C$ | 48.82 | |||||||||||||||
Grant | DSUs | 722 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 115 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 707 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 120 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 685 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Dividend reinvestment | DSUs | 127 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 822 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 137 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Michael J. Sabia | Grant | DSUs | 474 | 15.12.2006 | C$ | 48.82 | |||||||||||||||
Dividend reinvestment | DSUs | 2 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Grant | DSUs | 612 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 6 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 576 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 10 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 553 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Dividend reinvestment | DSUs | 13 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 626 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 18 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
John M. Thompson | Grant | DSUs | 672 | 15.06.2006 | C$ | 45.12 | |||||||||||||||
Dividend reinvestment | DSUs | 43 | 15.06.2006 | C$ | 45.12 | ||||||||||||||||
Grant | DSUs | 731 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Dividend reinvestment | DSUs | 49 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Grant | DSUs | 669 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Dividend reinvestment | DSUs | 48 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Grant | DSUs | 672 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 60 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 708 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 64 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 685 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Dividend reinvestment | DSUs | 70 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 796 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 77 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Peter J. Thomson | Grant | DSUs | 164 | 15.06.2006 | C$ | 45.12 | |||||||||||||||
Dividend reinvestment | DSUs | 2 | 15.06.2006 | C$ | 45.12 | ||||||||||||||||
Grant | DSUs | 172 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Dividend reinvestment | DSUs | 3 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Grant | DSUs | 158 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Dividend reinvestment | DSUs | 3 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Grant | DSUs | 163 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 5 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 160 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 6 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 160 | 15.09.2007 | C$ | 42.83 |
472
Table of Contents
Type of | Number of | ||||||||||||||||||||
Transaction | Thomson | Thomson | |||||||||||||||||||
Name | Type | Security | Shares | Date | Price | Term | |||||||||||||||
Dividend reinvestment | DSUs | 7 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 174 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 8 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Richard M. Thomson | Grant | DSUs | 666 | 15.06.2006 | C$ | 45.12 | |||||||||||||||
Dividend reinvestment | DSUs | 96 | 15.06.2006 | C$ | 45.12 | ||||||||||||||||
Grant | DSUs | 724 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Dividend reinvestment | DSUs | 104 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Grant | DSUs | 592 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Dividend reinvestment | DSUs | 98 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Grant | DSUs | 709 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 119 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 671 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 123 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 649 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Dividend reinvestment | DSUs | 130 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 783 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 140 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
John A. Tory | Grant | DSUs | 164 | 15.06.2006 | C$ | 45.12 | |||||||||||||||
Dividend reinvestment | DSUs | 8 | 15.06.2006 | C$ | 45.12 | ||||||||||||||||
Grant | DSUs | 172 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Dividend reinvestment | DSUs | 9 | 15.09.2006 | C$ | 43.15 | ||||||||||||||||
Grant | DSUs | 158 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Dividend reinvestment | DSUs | 9 | 15.12.2006 | C$ | 48.82 | ||||||||||||||||
Grant | DSUs | 163 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Dividend reinvestment | DSUs | 12 | 15.03.2007 | C$ | 48.05 | ||||||||||||||||
Grant | DSUs | 160 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Dividend reinvestment | DSUs | 13 | 15.06.2007 | C$ | 44.55 | ||||||||||||||||
Grant | DSUs | 160 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Dividend reinvestment | DSUs | 14 | 15.09.2007 | C$ | 42.83 | ||||||||||||||||
Grant | DSUs | 174 | 15.12.2007 | C$ | 38.86 | ||||||||||||||||
Dividend reinvestment | DSUs | 16 | 15.12.2007 | C$ | 38.86 |
Number of | ||||||||
Transaction | Thomson | |||||||
Name | Type | Shares | Date | Price | ||||
Woodbridge | Disposition | 15,086 | 31.05.2007 | C$45.35 | ||||
Purchase | 245,000 | 05.06.2007 | C$45.20 | |||||
Purchase | 5,000 | 05.06.2007 | C$45.19 | |||||
Disposition | 2 | 05.06.2007 | C$46.36 | |||||
Purchase | 150,000 | 06.06.2007 | C$44.74 | |||||
Purchase | 100,000 | 06.06.2007 | C$44.73 | |||||
Disposition | 11,385 | 11.06.2007 | C$44.83 | |||||
Dividend reinvestment | 77,807 | 15.06.2007 | C$47.17 | |||||
Disposition | 156,276 | 16.07.2007 | C$45.80 | |||||
Disposition | 1,625 | 25.07.2007 | C$45.28 | |||||
Disposition | 136,150 | 07.09.2007 | C$43.31 | |||||
Dividend reinvestment | 85,473 | 17.09.2007 | C$42.37 | |||||
Dividend reinvestment | 83,960 | 17.09.2007 | C$38.75 | |||||
Purchase | 400,000 | 23.11.2007 | C$38.93 | |||||
Purchase | 5,000 | 23.11.2007 | C$38.93 |
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Number of | ||||||||
Transaction | Thomson | |||||||
Name | Type | Shares | Date | Price | ||||
Purchase | 5,000 | 26.11.2007 | C$38.60 | |||||
Purchase | 60,000 | 30.11.2007 | C$38.70 | |||||
Purchase | 190,000 | 30.11.2007 | C$37.66 | |||||
Purchase | 25,000 | 04.12.2007 | C$37.65 | |||||
Purchase | 50,000 | 04.12.2007 | C$37.50 | |||||
Purchase | 15,000 | 04.12.2007 | C$37.58 | |||||
Purchase | 2,000 | 05.12.2007 | C$37.62 | |||||
Purchase | 20,800 | 05.12.2007 | C$37.62 | |||||
Purchase | 16,100 | 05.12.2007 | C$37.63 | |||||
Purchase | 25,400 | 05.12.2007 | C$37.67 | |||||
Purchase | 25,000 | 05.12.2007 | C$37.70 | |||||
Dividend reinvestment | 83,724 | 17.12.2007 | C$40.01 | |||||
Disposition | 25,900 | 17.12.2007 | C$38.61 | |||||
Purchase | 25,700 | 18.12.2007 | C$38.84 | |||||
Bear, Stearns & Co. Inc. | Purchase | 100,050 | 04.05.2006 to 03.08.2006 | C$42.40 to C$45.88 | ||||
Sale | 76,191 | 04.05.2006 to 03.08.2006 | C$42.66 to C$46.29 | |||||
Purchase | 136,319 | 04.08.2006 to 03.11.2006 | C$42.89 to C$47.12 | |||||
Sale | 35,641 | 04.08.2006 to 03.11.2006 | C$43.13 to C$47.69 | |||||
Purchase | 105,088 | 04.11.2006 to 03.02.2007 | C$46.02 to C$51.07 | |||||
Sale | 41,890 | 04.11.2006 to 03.02.2007 | C$46.20 to C$51.13 | |||||
Purchase | 44,850 | 04.02.2007 to 03.03.2007 | C$46.85 to C$51.70 | |||||
Sale | 54,130 | 04.02.2007 to 03.03.2007 | C$46.74 to C$51.70 | |||||
Purchase | 23,150 | 04.03.2007 to 03.04.2007 | C$47.51 to C$49.50 | |||||
Sale | 34,400 | 04.03.2007 to 03.04.2007 | C$47.20 to C$49.51 | |||||
Purchase | 73,133 | 04.04.2007 to 03.05.2007 | C$47.24 to C$49.82 | |||||
Sale | 30,015 | 04.04.2007 to 03.05.2007 | C$47.57 to C$50.02 | |||||
Purchase | 174,477 | 04.05.2007 to 03.06.2007 | C$44.16 to C$48.79 | |||||
Sale | 523,543 | 04.05.2007 to 03.06.2007 | C$44.98 to C$48.52 | |||||
Purchase | 60,461 | 04.06.2007 to 03.07.2007 | C$42.98 to C$45.72 | |||||
Sale | 128,648 | 04.06.2007 to 03.07.2007 | C$43.20 to C$45.70 | |||||
Purchase | 310,468 | 04.07.2007 to 03.08.2007 | C$42.45 to C$46.10 | |||||
Sale | 256,714 | 04.07.2007 to 03.08.2007 | C$43.40 to C$46.15 | |||||
Purchase | 189,842 | 04.08.2007 to 03.09.2007 | C$41.36 to C$44.68 | |||||
Sale | 300,282 | 04.08.2007 to 03.09.2007 | C$41.37 to C$44.72 | |||||
Purchase | 50,652 | 04.09.2007 to 03.10.2007 | C$41.54 to C$44.33 | |||||
Sale | 434,605 | 04.09.2007 to 03.10.2007 | C$41.90 to C$44.30 | |||||
Purchase | 121,996 | 04.10.2007 to 03.11.2007 | C$41.66 to C$44.26 | |||||
Sale | 77,215 | 04.10.2007 to 03.11.2007 | C$41.82 to C$44.49 | |||||
Purchase | 190,572 | 04.11.2007 to 03.12.2007 | C$36.61 to C$43.42 | |||||
Sale | 748,277 | 04.11.2007 to 03.12.2007 | C$36.60 to C$43.40 | |||||
Purchase | 460,717 | 04.12.2007 to 03.01.2008 | C$37.39 to C$40.52 | |||||
Sale | 488,447 | 04.12.2007 to 03.01.2008 | C$37.60 to C$40.83 | |||||
Purchase | 367,313 | 04.01.2008 to 03.02.2008 | C$33.58 to C$40.26 | |||||
Sale | 488,819 | 04.01.2008 to 03.02.2008 | C$33.55 to C$40.31 | |||||
Purchase | 478,941 | 04.02.2008 to 20.02.2008 | C$33.64 to C$36.38 | |||||
Sale | 170,350 | 04.02.2008 to 20.02.2008 | C$33.84 to C$36.59 |
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Number of | ||||||||
Transaction | Thomson | |||||||
Name | Type | Shares | Date | Price | ||||
Citigroup Global Markets Limited | Purchase | 3705 | 07.05.2007 | C$47.25 | ||||
Citigroup Global Markets Limited | Sale | 3705 | 07.05.2007 | C$47.23 | ||||
Citigroup Global Markets Limited | Purchase | 118 | 10.05.2007 | C$45.03 | ||||
Citigroup Global Markets Limited | Sale | 118 | 10.05.2007 | C$45.01 | ||||
UBS Securities LLC | Purchase | 66,022 | 04.05.2007 to 03.06.2007 | C$41.25 to C$48.13 | ||||
UBS Securities LLC | Sale | 411,856 | 04.05.2007 to 03.06.2007 | C$40.72 to C$48.13 | ||||
UBS Securities LLC | Purchase | 13,895 | 04.06.2007 to 03.07.2007 | C$40.71 to C$45.02 | ||||
UBS Securities LLC | Sale | 930,600 | 04.06.2007 to 03.07.2007 | C$40.77 to C$45.13 | ||||
UBS Securities LLC | Purchase | 59,837 | 04.07.2007 to 03.08.2007 | C$40.47 to C$44.48 | ||||
UBS Securities LLC | Sale | 289,015 | 04.07.2007 to 03.08.2007 | C$41.92 to C$45.84 | ||||
UBS Securities LLC | Purchase | 48,188 | 04.08.2007 to 03.09.2007 | C$38.96 to C$43.91 | ||||
UBS Securities LLC | Sale | 65,153 | 04.08.2007 to 03.09.2007 | C$39.77 to C$44.54 | ||||
UBS Securities LLC | Purchase | 38,734 | 04.09.2007 to 03.10.2007 | C$41.14 to C$43.47 | ||||
UBS Securities LLC | Sale | 17,118 | 04.09.2007 to 03.10.2007 | C$41.14 to C$43.72 | ||||
UBS Securities LLC | Purchase | 1,490 | 04.10.2007 to 03.11.2007 | C$41.93 to C$46.17 | ||||
UBS Securities LLC | Sale | 332,031 | 04.10.2007 to 03.11.2007 | C$41.89 to C$46.50 | ||||
UBS Securities LLC | Purchase | 22,076 | 04.11.2007 to 03.12.2007 | C$38.10 to C$46.85 | ||||
UBS Securities LLC | Sale | 8,155 | 04.11.2007 to 03.12.2007 | C$37.11 to C$44.81 | ||||
UBS Securities LLC | Purchase | 36,523 | 04.12.2007 to 03.01.2008 | C$37.09 to C$41.00 | ||||
UBS Securities LLC | Sale | 526,112 | 04.12.2007 to 03.01.2008 | C$37.41 to C$41.15 | ||||
UBS Securities LLC | Purchase | 544,894 | 04.01.2008 to 03.02.2008 | C$32.89 to C$40.57 | ||||
UBS Securities LLC | Sale | 615,890 | 04.01.2008 to 03.02.2008 | C$32.89 to C$40.57 | ||||
UBS Securities LLC | Purchase | 221,974 | 04.02.2008 to 20.02.2008 | C$33.45 to C$36.80 | ||||
UBS Securities LLC | Sale | 82,298 | 04.02.2008 to 20.02.2008 | C$33.47 to C$36.51 |
7.7 | Interests and Dealings — General |
• | neither Thomson nor Thomson Reuters PLC, nor any of the Thomson Directors or Thomson Reuters Proposed Directors, nor any person acting in concert with Thomson or Thomson Reuters PLC, nor any person with whom Thomson or Thomson Reuters PLC or any person acting in concert with Thomson or Thomson Reuters PLC has an arrangement, was interested, or held any short positions (whether conditional or absolute or in the money or otherwise, including any short positions under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery) in any relevant Reuters securities, relevant Thomson securities or relevant Thomson Reuters PLC securities nor has any such person dealt for value in any such relevant securities during the disclosure period; | |
• | neither Thomson nor Thomson Reuters PLC, nor any person acting in concert with Thomson or Thomson Reuters PLC, has borrowed or lent any relevant Reuters securities, relevant Thomson securities or relevant Thomson Reuters PLC securities during the disclosure period, save for any borrowed shares which have been either on-lent or sold. |
• | neither Reuters, nor any Reuters Directors, nor any companies which are associates of Reuters by virtue of Section 7.2 above nor any pension fund of Reuters or of any associate of Reuters by virtue of Section 7.2 above nor any employee benefit trust of Reuters or of any associate of Reuters, nor any connected adviser (including any person controlling, controlled by or under the same control as any connected adviser (except for an exempt principal trader or an exempt fund manager)) to Reuters, or to any company which is an |
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associate of Reuters by virtue of Section 7.2 above, nor any person with whom Reuters or any associate of Reuters has an arrangement, was interested, or held any short positions (whether conditional or absolute or in the money or otherwise, including any short positions under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery) in any relevant Reuters securities, relevant Thomson securities or relevant Thomson Reuters PLC securities, nor has any such person dealt for value in any such relevant securities during the offer period; |
• | neither Reuters, nor any person acting in concert with Reuters, has borrowed or lent any relevant Reuters securities or any relevant Thomson securities or any relevant Thomson Reuters PLC securities save for any borrowed shares which have been either on-lent or sold. |
7.8 | Persons acting in concert |
Relationship | ||||
with | ||||
Thomson/ | ||||
Registered | Thomson | |||
Name | Office | Reuters PLC | ||
Woodbridge | 65 Queen Street West Suite 2400 Toronto, Ontario M5H 2M8 Canada | Shareholder | ||
Bear Stearns | 383 Madison Avenue New York, NY 10179 United States | Financial Adviser | ||
Perella Weinberg | 20 Grafton Street, London W1S 4DZ United Kingdom | Financial Adviser |
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Relationship | ||||
Registered | with | |||
Name | Office | Reuters | ||
UBS | 1 Finsbury Avenue London EC2M 2PP United Kingdom | Financial Adviser | ||
Citi | Citigroup Centre 33 Canada Square London E14 5LB United Kingdom | Financial Adviser | ||
Blackstone | 40 Berkeley Square London W1J 5AL United Kingdom | Financial Adviser | ||
Morgan Stanley | 25 Cabot Square Canary Wharf London E14 4QA United Kingdom | Financial Adviser | ||
JPMorgan Cazenove | 20 Moorgate London EC2R 6DA United Kingdom | Financial Adviser |
23.2
PR Annex III,
10.4
PR Annex I,
5.1.1 to 5.1.5
PR Annex III,
4.2
8. | Incorporation, registered office and activity of Thomson Reuters PLC |
21.1.1
9. | Share capital of Thomson Reuters PLC |
21.1.1(a)
Authorised | Number | £ | ||||||
Thomson Reuters PLC Shares | 5,001 | 50,010 | ||||||
Total | 5,001 | 50,010 |
21.1.1(b)
Issued and Fully Paid | Number | £ | ||||||
Thomson Reuters PLC Shares | 5,001 | 50,010 | ||||||
Total | 5,001 | 50,010 |
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21.1.1, 21.1.7
4.6
• | by a resolution dated 21 December 2007, the authorised share capital was increased to £50,010 by the creation of an additional 49,910 ordinary shares of £1 each; and | |
• | by a resolution dated 21 December 2007, the authorised share capital of 50,010 ordinary shares of £1 each was consolidated into 3,334 ordinary shares of £15 each. |
• | On 21 December 2007, 50,009 ordinary shares of £1 each were issued to Thomson; | |
• | By a resolution dated 21 December 2007, the issued share capital of 50,010 ordinary shares of £1 each was consolidated into 3,334 ordinary shares of £15 each; and | |
• | On 21 December 2007, 1 ordinary share was transferred by Thomson to Thomson Canada Limited, a wholly-owned subsidiary of Thomson, to be held as nominee for and on behalf of Thomson. | |
• | On 22 February 2008, 1 ordinary share was transferred to Thomson Canada Limited to also be held as nominee for and on behalf of Thomson. | |
• | By resolutions dated 22 February 2008, all of the issued 3,334 ordinary shares in the company of £15 were consolidated to 1,667 ordinary shares of £30 each and then subdivided into 5,001 ordinary shares of £10 each. |
• | the authorised share capital be increased by the creation of an additional 399,944,999 ordinary shares of £10 each, ranking pari passu in all respects with the existing issued ordinary share capital of the company; | |
• | the authorised share capital be increased by the creation of the Thomson Reuters PLC Special Voting Share; | |
• | the authorised share capital be increased by the creation of the Thomson Reuters PLC Founders Share; | |
• | Thomson Reuters PLC’s share capital be reduced by reducing the nominal value of each issued and unissued Thomson Reuters PLC Share by 975 pence from 1000 pence to 25 pence; |
• | the directors be authorised in accordance with section 80 of the Act to allot securities up to a maximum aggregate value of: |
(a) | £2,030,000,000 pursuant to the Scheme; and |
(b) | £500,000 pursuant to the Special Voting Share; |
(c) | £1 pursuant to the proposed issue of the Thomson Reuters PLC Special Voting Share; and |
(d) | £17,000,000 if the Thomson Reuters PLC Reduction of Capital becomes effective and £680,000,000 if the Thomson Reuters Reduction of Capital does not become effective, in each case otherwise than pursuant to any share plans for employees of Thomson Reuters PLC or its subsidiaries or to any scrip dividend scheme or similar arrangements implemented under the Thomson Reuters PLC Articles; |
• | the directors be empowered to allot in aggregate equity securities for cash as though section 89 of the Act did not apply, up to a nominal amount of: |
(a) | £1 pursuant to the proposed issue of the Thomson Reuters PLC Founders Share; |
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(b) | £500,000 pursuant to the proposed issue of the Thomson Reuters PLC Special Voting Share; and |
(c) | £2,500,000 if the Thomson Reuters PLC Reduction of Capital becomes effective and £100,000,000 if the Thomson Reuters PLC Reduction of Capital does not become effective, |
• | the Thomson Reuters PLC Articles be adopted, with effect from and conditional upon Admission; | |
• | in accordance with Article 5.4 of the Thomson Reuters PLC Articles and the Act, Thomson Reuters PLC be authorized to make market purchases of Thomson Reuters PLC Shares subject to a maximum number of and the minimum and maximum price which may be paid for each Thomson Reuters PLC Share as stated in the resolution, such authority to expire at the conclusion of the annual general meeting of Thomson Reuters PLC held in 2009 or, if earlier, on 19 August 2009 and all previous authorities under section 166 of the Act shall cease to have effect; | |
• | with effect from 1 October 2008 and conditional upon Admission, a new regulation 32 of the Thomson Reuters PLC Articles will replace the then existing regulation 32 of the Thomson Reuters PLC Articles; and | |
• | the directors of Thomson Reuters PLC be empowered: (i) to exercise the power conferred upon them by article 44 of the articles of association of Thomson Reuters PLC (as from time to time varied) so that, to the extent and in the manner determined by the directors, the holders of Thomson Reuters PLC Shares be permitted to elect to receive new Thomson Reuters PLC Shares, credited as fully paid instead of all or part of any dividend (including interim dividends) payable up to the conclusion of the annual general meeting in 2012; (ii) to capitalise from time to time the appropriate nominal amount or amounts of new shares of Thomson Reuters PLC falling to be allotted pursuant to elections made under Thomson Reuters PLC’s scrip dividend scheme out of the amount or amounts standing to the credit of any reserve account or fund of Thomson Reuters PLC, as the directors may determine, to apply that sum in paying up in full the relevant number of such new shares and to allot such new shares pursuant to such elections; and (iii) generally to implement Thomson Reuters PLC’s scrip dividend scheme on such terms and conditions as the directors may from time to time determine and to take such other actions as the directors may deem necessary or desirable from time to time in respect of Thomson Reuters PLC’s scrip dividend scheme. |
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Authorised | Issued and Fully Paid | |||||||||||||||
Class | Number | Amount | Number | Amount | ||||||||||||
(£) | (£) | |||||||||||||||
Thomson Reuters PLC Shares | 399,950,000 | 3,999,500,000 | 202,388,692 | 2,023,886,920 | ||||||||||||
Thomson Reuters PLC Founders Share | 1 | 1 | 1 | 1 | ||||||||||||
Thomson Reuters PLC Special Voting Share | 1 | 500,000 | — | — |
4.1, 4.3
and 4.5
10. | Reuters Directors’ service contracts and emoluments |
16.1
and 16.2
Notice to be Given | Date of Service Contract | |||||
Tom Glocer | By Tom Glocer: | 23 July 2001 | ||||
90 days without cause | ||||||
30 days with cause | ||||||
By the company: | ||||||
30 days without cause | ||||||
Immediately with cause | ||||||
Devin Wenig | 12 months | 17 February 2003 | ||||
David Grigson | 12 months | 21 June 2001 |
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16.2
11. | Thomson Reuters Proposed Directors service contracts and letters of appointment |
481
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15.1
12. | Remuneration of Reuters Directors, Thomson Reuters Proposed Directors and Thomson Reuters Executive Officers |
2007 | |||||||||||||||
Salary/Fees | Bonus | Benefits1 | Allowance2 | Total | |||||||||||
£000 | £000 | £000 | £000 | £000 | |||||||||||
Directors | |||||||||||||||
Niall FitzGerald, KBE | 525 | — | 3 | — | 528 | ||||||||||
Lawton Fitt | 69 | — | — | 25 | 94 | ||||||||||
Penelope Hughes | 54 | — | — | 10 | 64 | ||||||||||
Sir Deryck Maughan | 54 | — | — | 20 | 74 | ||||||||||
Nandan Nilekani | 55 | — | — | 20 | 75 | ||||||||||
Kenneth Olisa | 55 | — | — | 10 | 65 | ||||||||||
Richard Olver | 67 | — | — | 10 | 77 | ||||||||||
Ian Strachan | 64 | — | — | 10 | 74 | ||||||||||
Tom Glocer | 888 | 1,267 | 348 | 0 | 2,503 | ||||||||||
David Grigson | 482 | 579 | 10 | 83 | 1,154 | ||||||||||
Devin Wenig | 448 | 532 | 37 | 10 | 1,027 |
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. |
Committee Chair | Thomson Board | Committee | ||||||||||||||||||
Name | Annual Retainer | retainer | Attendance Fees | attendance fees | Total | |||||||||||||||
David Thomson | US$ | 500,000 | — | — | — | US$ | 500,000 | |||||||||||||
W. Geoffrey Beattie | US$ | 250,000 | — | — | — | US$ | 250,000 | |||||||||||||
Mary Cirillo | US$ | 80,000 | — | US$ | 13,000 | US$ | 2,000 | US$ | 95,000 | |||||||||||
Steven A. Denning | US$ | 80,000 | US$ | 10,000 | US$ | 12,000 | US$ | 5,000 | US$ | 107,000 | ||||||||||
Roger L. Martin | US$ | 80,000 | — | US$ | 13,000 | US$ | 16,000 | US$ | 109,000 | |||||||||||
Vance K. Opperman | US$ | 80,000 | US$ | 10,000 | US$ | 13,000 | US$ | 16,000 | US$ | 119,000 | ||||||||||
John M. Thompson | US$ | 80,000 | US$ | 10,000 | US$ | 11,000 | US$ | 15,000 | US$ | 116,000 | ||||||||||
Peter J. Thomson | US$ | 80,000 | — | US$ | 13,000 | — | US$ | 93,000 | ||||||||||||
John A. Tory | US$ | 80,000 | — | US$ | 13,000 | US$ | 5,000 | US$ | 98,000 |
15.2
15.2
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13. | Thomson Directors emoluments |
4.9
14. | Mandatory takeover bids, squeeze-out and sell-out rules |
18.1
15. | Major shareholders |
Percentage of | ||||||||
Issued Share | ||||||||
Shareholders | Shareholding | Capital | ||||||
ValueAct Capital Management | 13,660,177 | 6.75 | ||||||
Legal & General Investment Management Ltd. | 9,677,980 | 4.78 | ||||||
Deutsche Bank AG | 7,940,604 | 3.92 | ||||||
Barclays PLC | 7,712,262 | 3.81 |
Percentage of | ||||||||
Issued Share | ||||||||
Shareholders | Shareholding | Capital | ||||||
Woodbridge | 449,278,894 | 70.32 |
18.3
Percentage of | ||||
Shareholders | Voting Rights | |||
Woodbridge | 53.40 | |||
ValueAct Capital Management | 1.62 | |||
Legal & General Investment Management Ltd. | 1.15 | |||
Deutsche Bank AG | 0.94 | |||
Barclays PLC | 0.92 |
18.2
18.4
3.1
PR Annex I,
18.4
LR 6.1.16
16. | Working capital |
17. | Material or Significant Change |
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Table of Contents
7.1-7.2
18. | Principal subsidiary undertakings |
25.1
PR Annex I,
5.2.1,
5.2.2 and
5.2.3
19. | Summary of principal investments |
20.8
20. | Legal and arbitration proceedings |
21. | Market quotations |
21.1 | Reuters |
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Table of Contents
Reuters Share | ||
Date | Price (pence) | |
1 May 2007 | 494.00 | |
3 May 2007 | 492.25 | |
1 June 2007 | 637.75 | |
2 July 2007 | 620.00 | |
1 August 2007 | 610.00 | |
3 September 2007 | 641.00 | |
1 October 2007 | 642.50 | |
1 November 2007 | 658.00 | |
3 December 2007 | 594.00 | |
2 January 2008 | 635.00 | |
1 February 2008 | 611.50 | |
22 February 2008 | 608.00 |
21.2 | Thomson |
Thomson Share | ||
Date | price (C$) | |
1 May 2007 | 48.88 | |
3 May 2007 | 48.46 | |
1 June 2007 | 45.50 | |
3 July 2007 | 43.49 | |
1 August 2007 | 43.50 | |
4 September 2007 | 43.98 | |
1 October 2007 | 42.45 | |
1 November 2007 | 43.79 | |
3 December 2007 | 38.60 | |
2 January 2008 | 40.14 | |
1 February 2008 | 36.60 | |
22 February 2008 | 35.20 |
22. | Disclosures relating to Thomson Reuters Proposed Directors and Thomson Reuters Executive Officers |
14.1
Name | Company/Partnership | Position still held (Y/N) | ||||
David Thomson | The Woodbridge Company Limited | Y | ||||
The Thomson Company, Inc. | Y | |||||
TTCI Holdings Inc. | Y | |||||
Thomson Investments Limited | Y | |||||
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Name | Company/Partnership | Position still held (Y/N) | ||||
W. Geoffrey Beattie | Thomson Investments Limited | Y | ||||
The Thomson Company Inc. | Y | |||||
TTCI Holdings Inc. | Y | |||||
The Woodbridge Company Limited | Y | |||||
Niall FitzGerald | Merck & Co. Inc. | N | ||||
Nijaco Limited | Y | |||||
Nijaco UK Limited | Y | |||||
Unilever PLC | N | |||||
Tom Glocer | Instinet Group Inc. | N | ||||
FXMarketspace Limited | Y | |||||
Merck & Co. Inc. | Y | |||||
Greater Pacific Capital, LP | Y | |||||
Apax Europe VII-1, LP | Y | |||||
Index Ventures IV | Y | |||||
Parallel Entrepreneur Fund, LP | Y | |||||
Dawntrader Fund I, LP | Y | |||||
SDK Investments, LLC | Y | |||||
Mary Cirillo | ACE Limited | Y | ||||
DealerTrack Holdings Inc. | Y | |||||
Health Care Property Investors Inc | Y | |||||
Quest Diagnostics, Inc. | N | |||||
Steven A. Denning | Eclipsys Corporation | Y | ||||
Hewitt Associates, Inc. | Y | |||||
IHS, Inc. | Y | |||||
Genpact Limited | Y | |||||
Liberata Limited | N | |||||
SRA International, Inc. | N | |||||
Manugistics Group, Inc. | N | |||||
Exult, Inc. | N | |||||
EXE Technologies, Inc. | N | |||||
iFormation Group | N | |||||
General Atlantic LLC | Y | |||||
Lawton Fitt | 7 Kensington Park Gardens Limited | Y | ||||
Burlington House Limited | N | |||||
CIENA Corporation | Y | |||||
Citizens Communications | Y | |||||
R.A. Enterprises Limited | N | |||||
RA (Arts) Limited | N | |||||
Overture Acquisitions Corp. | Y | |||||
Roger L. Martin | Celestra | N | ||||
Research in Motion | Y | |||||
Workbrain Corporation | N | |||||
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Name | Company/Partnership | Position still held (Y/N) | ||||
Sir Deryck Maughan | BlackRock Inc. | Y | ||||
Citibank N.A. | N | |||||
GlaxoSmithKline PLC | Y | |||||
Kenneth Olisa | Axellis Limited | Y | ||||
The BBA | Y | |||||
Biowisdom Limited | Y | |||||
CBHA | N | |||||
Case Estates Trading Limited | Y | |||||
Case Estates Investments Limited | Y | |||||
Eurasian Natural Resources Corporation PLC | Y | |||||
Independent Audit Limited | Y | |||||
Interregnum Wireless Holdings Limited | N | |||||
Interregnum Venture Marketing Limited | N | |||||
Metapraxis Limited | N | |||||
Natcat (UK) Limited | Y | |||||
Open Text Corporation | Y | |||||
Parkmead Energy Investment Managers Limited | N | |||||
Restoration Limited | Y | |||||
Restoration Partners Limited | Y | |||||
Retento Limited | Y | |||||
Udate.com Limited | N | |||||
Vivomedica (UK) Limited | N | |||||
The Parkmead Group PLC | N | |||||
Richard L. Olver | BAE Systems PLC | Y | ||||
BP PLC | N | |||||
BP Exploration Company Limited | N | |||||
BP Exploration Operating Company Limited | N | |||||
BP Pension Trustees Limited | N | |||||
Ingenious Films LLP | Y | |||||
TNK-BP Limited | N | |||||
Vance K. Opperman | Avenet LLC | Y | ||||
Blue Cross and Blue Shield of Minnesota | Y | |||||
DeCare Dental LLC | Y | |||||
Key Investment, Inc. | Y | |||||
John M. Thompson | Toronto-Dominion Bank | Y | ||||
Royal Philips Electronics N.V. | Y | |||||
Opus Capital LLP | Y | |||||
Blue Banjo Nautical, Inc. | Y | |||||
John M Thomson & Associates Inc. | Y | |||||
Hospital for Sick Children | Y | |||||
Peter J. Thomson | Thomson Investments Limited | Y | ||||
The Thomson Company, Inc. | Y | |||||
TTCI Holdings Inc. | Y | |||||
The Woodbridge Company Limited | Y | |||||
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Name | Company/Partnership | Position still held (Y/N) | ||||
John A. Tory | The Woodbridge Company Limited | Y | ||||
Thomson Investments Limited | N | |||||
Abitibi-Consolidated, Inc. | N | |||||
Rogers Communications, Inc. | Y | |||||
Devin Wenig | Instinet Group Inc. | N | ||||
FXMarketSpace Limited | Y | |||||
Nastech Pharmaceutical Company | Y | |||||
Michael E. Wilens | Blue Cross and Blue Shield of Minnesota | Y | ||||
Stephen Dando | BBC Pension Trustee Limited | N | ||||
Robert D. Daleo | Equifax Inc. | Y |
14.1
14.1
• | been convicted of a fraudulent offence; | |
• | been associated with any bankruptcy, receivership or liquidation while acting in the capacity of a member of the administrative, management or supervisory body, or of a senior manager, of any company; | |
• | been subject to any official public incriminationand/or sanction by statutory or regulatory authorities (including designated professional bodies); or | |
• | been disqualified by a court from acting as a member of the administrative, management or supervisory bodies, or from acting in the management or conduct of the affairs of, any issuer. | |
• | Richard Olver is Chairman of BAE Systems PLC. Peter Weinberg, a partner of Parella Weinberg, is also a non-executive director of BAE Systems PLC. On 20 February 2008, BAE Systems PLC announced that Peter Weinberg will retire from the board of BAE Systems PLC on 7 May 2008. |
14.2
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23. | The Thomson Reuters Share Plans |
23.1 | The Thomson Reuters Stock Incentive Plan |
• | Options. The holder of an option will be entitled to purchase a number of Thomson Reuters Corporation Shares or Thomson Reuters PLC Shares at a specified exercise price during a specified time period, all as determined by the Human Resources Committee. | |
• | Stock Appreciation Rights (SARs).The plan has two different types of SARs — Stand Alone SARs and Tandem SARs. Stand Alone SARs are stock appreciation rights that are not issued in connection with an option. Tandem SARs are stock appreciation rights that are granted in connection with an option. Tandem SARs may only be issued to participants in the plan who are not U.S. citizens or residents. A Stand Alone SAR is the right to receive such number of Thomson Reuters Corporation Shares or Thomson Reuters PLC Shares that has a fair market value at the date of exercise equal to the excess, if any, of (i) the fair market value of the shares underlying the exercised Stand Alone SARs as of the date of exercise over (ii) the fair market value of such shares as of the date that the applicable award was granted. Stand Alone SAR awards can only be settled in the relevant company’s shares. Tandem SARs may only be exercised at the same time, and to the same extent, that the underlying related option is exercisable. Upon the exercise of a Tandem SAR, a participant is entitled to receive an amount equal to the excess, if any, of (x) the fair market value of the option as of the date of exercise over (y) the exercise price of the option. | |
• | Restricted Share Units (RSUs). RSUs entitle the holder to receive Thomson Reuters Corporation Shares or Thomson Reuters PLC Shares at a future date or dates determined by the Human Resources Committee, provided that the holder has satisfied certain terms |
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and conditions, including, for example, continued full-time employment with Thomson Reuters on the vesting date(s). |
• | Other Awards. The Human Resources Committee may grant certain awards subject to specified performance objectives, including, without limitation, the performance of Thomson Reuters or a division or business unit generally, in the absolute or in relation to peers, or the performance of a particular participant. The Human Resources Committee may also grant awards of Thomson Reuters Corporation Shares or Thomson Reuters PLC Shares and other awards that are valued in whole or in part by reference to, or are otherwise based on, the fair market value of such shares at the date of the grant. These types of awards will be in the form and subject to terms and conditions determined by the Human Resources Committee at the date of the grant. |
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• | increases the maximum number of shares that can be issued under the stock incentive plan, including an increase to a fixed number of such shares or a change from a fixed number of such shares to a fixed maximum percentage; | |
• | increases the maximum number of shares which may be issued under the awards held by a participant; | |
• | reduces the exercise price of an award (including a cancellation and re-grant of an award, constituting a reduction of the exercise price of such award), except in connection with maintaining the value of an award in connection with a change in the number of outstanding Thomson Reuters Corporation Sharesand/or Thomson Reuters PLC Shares, by reason of a stock dividend or split, recapitalization, reorganization, merger, amalgamation, consolidation, combination or exchange of shares or other corporate change affecting such shares; |
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• | extends the term of an award beyond its original expiry date, except where the expiry date would have occurred in a blackout period; | |
• | changes the provisions relating to the transferability of an award, other than for a transfer by will or the laws of descent and distribution, a transfer by a grantee to an entity which is controlled by the grantee or a transfer to a former spouse or domestic partner in connection with a legal obligation or settlement; | |
• | changes the provisions relating to adjustments in the number or kind of shares or securities reserved for issuance or subject to outstanding awards or the exercise price, in the event of any change in the number of outstanding Thomson Reuters Corporation Sharesand/or Thomson Reuters PLC Shares, by reason of a stock dividend or split, recapitalization, reorganization, merger, amalgamation, consolidation, combination or exchange of shares or other corporate change affecting such shares; | |
• | extends eligibility to participate in the stock incentive plan to a non-employee director; | |
• | changes the rights attaching to the Thomson Reuters Corporation Sharesand/or Thomson Reuters PLC Shares; or | |
• | is required to be approved by shareholders under applicable laws, regulations or stock exchange rules. |
23.2 | The Thomson Reuters Phantom Stock Plan |
23.3 | The Thomson Reuters Deferred Compensation Plan |
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• | If a participant ceases employment at or after age 55, the vested portion of his or her plan account will be paid out according to the payment option elected. Payments begin as soon as practicable after the retirement date. | |
• | If a participant’s employment terminates for any reason other than retirement, disability or death, he or she will receive his or her entire plan account amounts as a lump sum payment as soon as practicable after the termination of employment. However, if a participant is involuntarily terminated without cause, and the vested value of the participant’s plan account is at least $100,000 when employment terminates, the retirement distribution election will govern the distribution of the plan account. | |
• | If a participant becomes disabled, he or she shall continue to be treated as an employee and shall be eligible to receive his or her benefits under the plan. However, the participant may be treated as a terminated employee, in which case, the vested account balance will be distributed in a lump sum as soon as practicable. | |
• | If a participant dies, his or her vested account balance will be paid to his or her designated beneficiary according to the payment option designated by the participant as soon as practicable. However, if the vested value of the participant’s plan account is less than $50,000 at the time of the participant’s death, the participant’s vested account balance may be distributed in a lump sum or in installments as soon as practicable. |
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• | increases the maximum number of shares that can be issued under the deferred compensation plan, including an increase to a fixed number of such shares or a change from a fixed number of such shares to a fixed maximum percentage; | |
• | increases the maximum number of shares which may be issued under DSUs credited to a participant; | |
• | results in the crediting of DSUs to a participant’s account at a price lower than the fair market value of a Thomson Reuters Corporation common share for the relevant date; | |
• | changes the provisions relating to adjustments in the number of DSUs (including matching DSUs) credited to a participant’s account in the event of any change in the number of outstanding Thomson Reuters Corporation Sharesand/or Thomson Reuters PLC Shares, by reason of a stock dividend or split, recapitalization, reorganization, merger, amalgamation, consolidation, combination or exchange of shares or other corporate change affecting such shares; | |
• | extends eligibility to participate in the deferred compensation plan to a non-employee; | |
• | changes the rights attaching to the Thomson Reuters Corporation Sharesand/or Thomson Reuters PLC Shares; or | |
• | is required to be approved by shareholders under applicable laws, regulations or stock exchange rules. |
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23.4 | The Thomson Reuters Employee Stock Purchase Plans |
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• | increases the maximum number of shares that can be issued under the ESPPs, including a change to a fixed number of such shares or a change from a fixed number of such shares to a fixed maximum percentage; | |
• | lowers the purchase price payable for any shares under the ESPPs; | |
• | changes the provisions relating to adjustments in the number and purchase price of shares that may be purchased under the ESPPs, in the event of any change in the number of outstanding Thomson Reuters Corporation Sharesand/or Thomson Reuters PLC Shares, by reason of a stock dividend or split, recapitalization, reorganization, merger, amalgamation, consolidation, combination or exchange of shares or other corporate change affecting such shares; | |
• | extends eligibility to participate in the ESPPs to non-employees; | |
• | changes the rights attaching to the Thomson Reuters Corporation Sharesand/or Thomson Reuters PLC Shares; or |
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• | is required to be approved by shareholders under applicable laws, regulations or stock exchange rules. |
23.5 | The Thomson Reuters Non-Employee Director Share Plan |
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24. | Auditors |
PR Annex I, 2.1
25. | Reporting accountants |
PR Annex III, 10.1
PR Annex III, 10.1
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26. | Sponsor |
27. | Registrar |
28. | Financial advisers |
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29. | General |
PR Annex I, 21.2.5
30. | Currency Exchange Rate Information |
Year Ended 31 December | |||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||
High | 2.1104 | 1.9794 | 1.9292 | 1.9482 | 1.7842 | ||||||||||
Low | 1.9235 | 1.7256 | 1.7138 | 1.7544 | 1.5500 | ||||||||||
Rate at end of period | 1.9843 | 1.9586 | 1.7188 | 1.916 | 1.7842 | ||||||||||
Average rate per period | 2.0016 | 1.8434 | 1.8204 | 1.8330 | 1.6347 |
Year Ended 31 December | |||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||
High | 1.1853 | 1.1726 | 1.2704 | 1.3968 | 1.5747 | ||||||||||
Low | 0.9170 | 1.0990 | 1.1507 | 1.1774 | 1.2924 | ||||||||||
Rate at end of period | 0.9881 | 1.1653 | 1.1659 | 1.2036 | 1.2924 | ||||||||||
Average rate per period | 1.0748 | 1.1341 | 1.2116 | 1.3015 | 1.4015 |
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31. | Accounting principles and reporting currencies |
32. | Source of the financial information |
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33. | Use of Non-GAAP financial measures |
34. | Cautionary note regarding forward-looking statements |
PR Annex I, 9.2.3
• | changes in the general economy; | |
• | actions of competitors; | |
• | changes to legislation and regulations; | |
• | increased accessibility to free or relatively inexpensive information sources; | |
• | failure to derive fully anticipated benefits from future or existing acquisitions, joint ventures, investments or dispositions; | |
• | failure to develop new products, services, applications and functionalities to meet customers’ needs, attract new customers or expand into new geographic markets; | |
• | failure of electronic delivery systems, network systems or the Internet; | |
• | detrimental reliance on third parties for information; | |
• | failure to meet the special challenges involved in the expansion of international operations; | |
• | failure to realise the anticipated cost savings and operating efficiencies from the THOMSONplusinitiative, the Reuters Core Plus Programme and other cost-saving initiatives; | |
• | failure to protect the reputation of Thomson Reuters; | |
• | impairment of goodwill and identifiable intangible assets; |
• | failure of significant investments in technology to increase revenues or decrease operating costs; | |
• | increased self-sufficiency of customers; | |
• | inadequate protection of intellectual property rights; | |
• | downgrading of credit ratings; |
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• | threat of legal actions and claims; | |
• | changes in foreign currency exchange and interest rates; | |
• | failure to recruit and retain high quality management and key employees; | |
• | funding obligations in respect of pension and post-retirement benefit arrangements; and | |
• | actions or potential actions that could be taken by Woodbridge. |
35. | Dealing disclosure requirements |
36. | Documents available for inspection |
• | this document; | |
• | Forms of Proxy, Form of Election, and Dealing Facility Instruction Form; | |
• | the Transaction Documents comprising the Implementation Agreement, the Equalization and Governance Agreement, the Special Voting Share Agreement, the Thomson Reuters PLC Special Voting Share Trust Deed, the Thomson Reuters Corporation Special Voting Share Trust Deed, the Thomson Reuters Corporation Guarantee and the Thomson Reuters |
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PLC Guarantee, the Thomson Reuters PLC Articles, the Thomson Reuters Corporation Articles, the Thomson Reuters Corporation By-laws, the Amended Deed of Mutual Covenant and the Reuters Trust Principles Support Agreement; |
• | the Reuters Guarantee; | |
• | the Thomson Circular; |
• | the Reuters Articles; | |
• | the articles of incorporation andby-laws of Thomson; |
• | a draft of the articles of association of Reuters as proposed to be amended at the EGM; |
PR Annex l, 24(c)
• | the Annual Report andForm 20-F of Reuters for the two financial years ended 31 December 2006 and the third quarter report of Reuters for the nine months ended 30 September 2007; |
PR Annex 1, 24(c)
• | the Annual Report and financial statements of Thomson for the two financial years ended 31 December 2006 and the interim results of Thomson for the nine months ended 30 September 2007; | |
• | the service agreements and letters of appointment of the Reuters Directors referred to in Section 11 above; | |
• | the irrevocable undertakings and consents referred to in Sections 8 and Section 9 of Part VI of this document; | |
• | a copy of the full list of dealings by Bear Stearns and Bear, Stearns International Trading Limited which is set out in aggregated form in Sections 7.4 (Dealings in Reuters Shares) and 7.6 (Dealings in Thomson Shares) above; | |
• | a copy of the full list of dealings by UBS Securities LLC which is set out in aggregated form in Section 7.6 (Dealings in Thomson Shares) above; | |
• | the written consents referred to in Sections 25 (Reporting Accountants), 26 (Sponsor) and 28 (Financial Advisers) above; | |
• | the material contracts referred to in Section 4 (Summaries of material contracts) above; | |
• | the Loan Note Deed and Loan Note Valuation letter from Perella Weinberg as of 22 February 2008; | |
• | the letters relating to the profit estimate of Reuters and the profit forecast of Thomson in each case as set out in Part XVI of this document; and |
PR Annex l, 24(b)
• | the rules of the Thomson Reuters Share Plans. |
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1. | General |
2. | US Securities Laws |
2.1 | Exemption from registration under the US Securities Act |
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2.2 | Certain US transfer restrictions |
2.3 | Listing of Thomson Reuters PLC ADSs |
2.4 | Information for holders of Reuters ADSs |
3. | Certain US federal income tax consequences |
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• | the excess of the sum of the fair market value of the Thomson Reuters PLC Shares and the amount of cash (and possibly the value, if any, of the various voting provisions necessary to implement the Transaction) received in the Transaction over the US Reuters Shareholder’s adjusted tax basis in the Reuters Shares exchanged therefore, or | |
• | the amount of cash (and possibly the value, if any, of the various voting provisions necessary to implement the Transaction) received by the US Reuters Shareholder in the Transaction. |
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COMPANIES COURT | No. 1350 of 2008 |
“Act” | the Companies Act 1985, as amended or re-enacted; | |
“A Shares” | the A ordinary shares of 12.5 pence each in the capital of Reuters created by the subdivision and reclassification referred to in clause 2 of this Scheme; | |
“B Shares” | the B ordinary shares of 12.5 pence each in the capital of Reuters created by the subdivision and reclassification referred to in clause 2 of this Scheme; | |
“Business Day” | a day on which the London Stock Exchange is open for the transaction of business; | |
“C Shares” | the C ordinary shares of 12.5 pence each in the capital of Reuters (if any) created by the subdivision and reclassification referred to in clause 2 of this Scheme; | |
“certificated” or “in certificated form” | a share or other security which is not in uncertificated form (that is, not in CREST); | |
“City Code” | The City Code on Takeovers and Mergers; | |
“Court” | the High Court of Justice in England and Wales; | |
“Court Meeting” | the meeting of holders of the Reuters Shares convened by direction of the Court pursuant to section 425 of the Act to consider and, if thought fit, approve this Scheme, including any adjournment thereof; | |
“CREST” | the Relevant System (as defined in the Regulations) in respect of which Euroclear UK & Ireland is the Operator (as defined in the Regulations); |
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“Effective Date” | the date on which this Scheme becomes effective in accordance with its terms; | |
“Election Return Date” | 14 April 2008 or such later date as may be announced by Reuters to a Regulatory Information Service, such announcement being made prior to a date that would, absent such an announcement, be the Election Return Date; | |
“Election Return Time” | 11.00 a.m. (London time) on the Election Return Date; | |
“Employee Benefit Trusts” | the Reuters Employee Share Ownership Trust No I, the Reuters Group PLC Employee Share Ownership Trust No II and the Reuters Group PLC 2004 Employee Trust; | |
“Euroclear UK & Ireland” | Euroclear UK & Ireland Limited, incorporated in England and Wales with registered number 02878738; | |
“Excluded Shares” | any Reuters Shares: (i) beneficially owned by Thomson Reuters PLC or any subsidiary undertaking of Thomson Reuters PLC; (ii) held by Reuters in treasury; or (iii) held by an Employee Benefit Trust except in respect of those Reuters Shares allocated prior to the Reorganisation Record Date by an Employee Benefit Trust to a participant of a Reuters Share Scheme; | |
“First Court Order” | the order of the Court sanctioning the Scheme under section 425 of the Act; | |
“First Court Order Date” | the date on which the First Court Order is made or, if later, the date on which the First Court Order is expressed to take effect; | |
“Form of Election” | the green form of election under which Reuters Shareholders can elect for Loan Notes under the Loan Note Option; | |
“Founders Share” | a share in the capital of Reuters, Thomson Reuters PLC or Thomson Reuters Corporation (as the context so requires) which carries special rights and as so defined under the constitutional documents of those companies; | |
“holder” | a registered holder and includes any person(s) entitled by transmission to be a registered holder; | |
“Loan Note Election” | a valid election under the Loan Note Option in accordance with clause 3.3 or 3.4 of the Scheme (as applicable); | |
“Loan Note Option” | the alternative whereby (subject to clause 3 of this Scheme) Reuters Shareholders may elect to receive Loan Notes in lieu of all or part of the cash consideration to which they would otherwise be entitled under the Scheme; | |
“Loan Notes” | the floating rate unsecured loan notes to be issued by Thomson Reuters PLC pursuant to the Loan Note Option; | |
“New Reuters Shares” | the new ordinary shares of 25 pence each in the capital of Reuters to be allotted and issued pursuant to clause 5 of this Scheme; | |
“Registrar of Companies” | the Registrar of Companies in England and Wales; | |
“Regulations” | the Uncertificated Securities Regulations 2001 (SI 2001/3755); | |
“Regulatory Information Service” | any of the regulatory information services set out in Appendix 3 to the Listing Rules; | |
“Relevant Holders” | holders of Scheme Shares whose names appear in the register of members of Reuters at the Reorganisation Record Time; | |
“Reorganisation Record Time” | 6.00 p.m. (London time) on the day before the Second Court Hearing; | |
“Reuters” | Reuters Group PLC, incorporated in England and Wales with registered number 03296375; |
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“Reuters Articles” | the memorandum and articles of association of Reuters, as amended, from time to time; | |
“Reuters Founders Share” | the Founders Share of £1 in the capital of Reuters in issue at the Reorganisation Record Time; | |
“Reuters Founders Share Company” | Reuters Founders Share Company Limited, incorporated in England and Wales with registered number 01812511; | |
“Reuters Reduction of Capital” | the proposed reduction of capital of the A Shares, B Shares and C Shares and the Reuters Founders Share under section 135 of the Act pursuant to the Scheme; | |
“Reuters Shares” | prior to the Reorganisation Record Time, issued ordinary shares of 25 pence each in the capital of Reuters and, after the Reorganisation Record Time, such ordinary shares and A Shares, B Shares and C Shares; | |
“Scheme” | this scheme of arrangement in its present form or with or subject to any modification, addition or condition approved or imposed by the Court; | |
“Scheme Record Time” | 6.00 p.m. on the Business Day before the Effective Date; | |
“Scheme Shareholder” | a holder of Scheme Shares; | |
“Scheme Shares” | Reuters Shares: | |
(i) in issue at the date of this Scheme; | ||
(ii) issued after the date of this Scheme but before the Scheme Voting Record Time; and | ||
(iii) issued at or after the Scheme Voting Record Time and before the Scheme Record Time in respect of which the original or any subsequent holders thereof are, or shall have agreed in writing to be, bound by the Scheme, | ||
in each case other than the Excluded Shares; | ||
“Scheme Voting Record Time” | 6.00 p.m. on 24 March 2008 or, if the Court Meeting is adjourned, 6.00 p.m. on the second day before the date of such adjourned meeting; | |
“Second Court Hearing” | the hearing by the Court of the claim form to confirm the Reuters Reduction of Capital under section 137 of the Act and to authorise the re-registration of Reuters as a private limited company under section 139 of the Act; | |
“Second Court Order” | the order of the Court confirming the Reuters Reduction of Capital under section 137 of the Act and authorising the re-registration of Reuters as a private company under section 139 of the Act; | |
“Second Court Order Date” | the date on which the Second Court Order is made or, if later, the date on which the Second Court Order is expressed to take effect; | |
“Thomson Reuters PLC” | Thomson Reuters PLC, incorporated in England and Wales with registered number 6141013; | |
“Thomson Reuters PLC Founders Share” | the new Founders Share of £1 in the capital of Thomson Reuters PLC to be allotted and issued to the holder of the Reuters Founders Share pursuant to clause 5.4 of this Scheme; | |
“Thomson Reuters PLC Shares” | ordinary shares of 1000 pence each in the capital of Thomson Reuters PLC; | |
“TR (2008)” | TR (2008) Limited, incorporated in England and Wales with registered number 6208235; |
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“TR (2008) Shares” | the ordinary shares of 1 penny each in the capital of TR (2008) to be allotted and issued to Thomson Reuters PLC pursuant to clause 5 of this Scheme; | |
“TR Investments” | TR Investments Limited, a company limited by guarantee without share capital, incorporated in England and Wales with registered number 6509549; | |
“TTE Instruction” | the transfer to escrow instruction to be given through CREST by uncertificated Scheme Shareholders in connection with a Loan Note Election; and | |
“uncertificated form” or “in uncertificated form” | a share or other security recorded on the relevant register as being held in uncertificated form in CREST, and title to which, by virtue of the Regulations, may be transferred by means of CREST. |
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3.3 | Each election under the Loan Note Option by Relevant Holders holding in certificated form shall be made by the completion of a Form of Election sent to Relevant Holders by or on behalf of Reuters which shall be signed as a deed by the Relevant Holder or his duly authorised agent (or, in the case of a body corporate, executed under seal, as a deed, in accordance with Section 36A or 36B of the Act or by an authorised representative) and, in the case of joint holders, in like manner by or on behalf of all such holders. The instructions, terms, authorities and provisions contained in or deemed to be incorporated in the Form of Election constitute part of the terms of this Scheme. To be effective the Form of Election must be completed and returned in accordance with the instructions printed thereon so as to arrive by not later than the Election Return Time at Equiniti Limited, 3rd Floor, Princess House, 1 Suffolk Lane, London EC4R 0AX , United Kingdom. Forms of Election so completed and lodged shall, unless otherwise agreed by Reuters and Thomson Reuters PLC, be irrevocable. |
3.4 | To be effective, each election under the Loan Note Option by Relevant Holders holding in uncertificated form (i.e. through CREST) must be made by submission of a TTE Instruction as set out in Section 5(b) of Part IV of the circular convening the Court Meeting. Submission of a TTE Instruction so made shall, unless otherwise agreed by Reuters and Thomson Reuters PLC, be irrevocable. |
3.5 | If a Form of Election or TTE Instruction is received after the Election Return Time or is received before such time but is not, or is deemed not to be, valid or complete in all respects at such time, then such election shall be void unless Reuters and Thomson Reuters PLC, in their absolute discretion, elect to treat as valid in whole or in part any such election. |
3.6 | If valid elections for the Loan Note Option would result in the issue of less than £20 million nominal value of Loan Notes in aggregate, Thomson Reuters PLC will not, unless it determines otherwise in its sole discretion, issue any Loan Notes. If no Loan Notes are issued as a result of this clause 3.6, Relevant Holders who have made a Loan Note Election shall be treated as if such election had not been made and shall receive the cash to which they would have been entitled under this Scheme had such Loan Note Election not been made. |
3.7 | If valid elections for the Loan Note Option would result in the issue of more than £250 million nominal value of Loan Notes in aggregate, the entitlement of each Scheme Shareholder who elected for the Loan Note Option will be scaled down rateably to the number of Scheme Shares in respect of which he has elected for the Loan Note Option, and each Loan Note Election will only be valid in respect of the number of Scheme Shares scaled down in this way. |
3.8 | The Loan Notes will be constituted by a deed substantially in the form already prepared and initialled for the purpose of identification by Slaughter and May, solicitors for Reuters, with such modifications or additions, if any, as may be agreed prior to the execution thereof between Thomson Reuters PLC and Reuters. |
3.9 | The provisions of this clause 3 shall be subject to any prohibition or condition imposed by law. Without prejudice to the generality of the foregoing, if, in respect of any holder of Scheme Shares with a registered address outside the United Kingdom or who is a citizen, resident or national of a jurisdiction outside the United Kingdom, Thomson Reuters PLC is advised that the issue of Loan Notes pursuant to this clause 3 would or may infringe the laws of any such jurisdiction, or would or may require Thomson Reuters PLC to observe any governmental or other consent to any registration, filing or other formality with which Thomson Reuters PLC is unable to comply or which Thomson Reuters PLC regards as unduly onerous, Thomson Reuters PLC may determine that the Loan Note Option shall not be available to such holder so that any Loan Note Form of Election completed and delivered or TTE Instruction submitted by such holder shall be invalid. |
3.10 | If a Scheme Shareholder has made a valid election under the Loan Note Option in respect of all of his Scheme Shares by either writing “X” in the appropriate box on the Form of Election in accordance with the instructions printed thereon or by submitting a TTE Instruction to that effect, then: |
(A) | the validity of the election shall not be affected by any alteration in the number of Scheme Shares held by the Scheme Shareholder at any time prior to the Scheme Record Time; and | |
(B) | the election will apply in respect of all of the Scheme Shares which the Scheme Shareholder holds at the Scheme Record Time. |
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3.11 | If a Scheme Shareholder has made a valid election under the Loan Note Option in respect of a specified number of his Scheme Shares and: |
(A) | at the Scheme Record Time the number of Scheme Shares held by the Scheme Shareholder is equal to or in excess of the number of Scheme Shares to which such election relates, then the validity of the election made by the Scheme Shareholder shall not be affected by any alteration in the number of Scheme Shares held by the Scheme Shareholder in the period prior to the Scheme Record Time; or | |
(B) | at the Scheme Record Time the number of Scheme Shares held by the Scheme Shareholder is less than the aggregate number of Scheme Shares to which such election relates, then the election made by the Scheme Shareholder shall be reduced so as to apply to the number of Scheme Shares held by the Scheme Shareholder at the Scheme Record Time. |
4. | Cancellation of Scheme Shares and Reuters Founders Share |
4.1 | The share capital of Reuters shall be reduced by cancelling and extinguishing the A Shares, the B Shares, the C Shares and the Reuters Founders Share. |
4.2 | Immediately before the reduction of share capital referred to in sub-clause 4.1 of this clause 4 taking effect, Reuters shall be re-registered as a private company pursuant to section 139(3) of the Act and Reuters memorandum of association and articles of association shall be amended accordingly. |
4.3 | Forthwith and contingently upon the Reuters Reduction of Capital referred to in sub-clause 4.1 of this clause 4 taking effect and the amendments to the Reuters Articles set out in sub-clause 4.4 of this clause 4 taking effect: |
(A) | the authorised share capital of Reuters shall be increased to its former amount by the creation of such number of New Reuters Shares as shall be equal to the number of Scheme Shares cancelled as aforesaid plus four additional New Reuters Shares; | |
(B) | Reuters shall apply the reserve arising as a result of the Reuters Reduction of Capital in paying up in full at par the number of New Reuters Shares equal to the number of Scheme Shares cancelled as aforesaid which were created pursuant to sub-clause 4.3(A) of this clause 4 which shall be allotted and issued credited as fully paid to TR (2008)and/or its nominee(s); and | |
(C) | Reuters shall apply the remainder of the reserve arising as a result of the Reuters Reduction of Capital in paying up in full at par four additional New Reuters Shares created pursuant to sub-clause 4.3(A) of this clause 4 which shall be allotted and issued credited as fully paid to Thomson Reuters PLCand/or its nominee(s). |
4.4 | With effect from the time at which the Reuters Reduction of Capital referred to in sub-clause 4.1 of this clause 4 takes effect the Reuters Articles shall be amended by the deletion of new article 3 referred to in clause 2.2 above and its replacement with the following article 3: |
(A) | Amount of capital |
(B) | Rights attaching to shares |
(1) | subject to any special rights which may be attached to any other class of shares and to the provision of the Statutes, the profits of the Company available for distribution and resolved to be distributed shall be distributed by way of dividend among the holders of the Ordinary Shares rateably according to the number of shares held by them respectively; and | |
(2) | on a return of assets on awinding-up, the assets of the Company available for distribution among the members shall be applied, subject to any provision of section 719 of the Act and any special rights which may be attached to any other class of shares, in repaying to the |
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holders of the Ordinary Shares rateably according to the number of shares held by them respectively the amounts paid up on such shares, and subject thereto shall belong and be distributed among the holders of the Ordinary Shares rateably according to the number of such shares held by them respectively.” |
4.5 | Forthwith and contingently upon the New Reuters Shares being issued as referred to in sub-clause 4.3(B) and 4.3(C) of this clause 4, TR (2008) shall, in consideration of the issue to it of New Reuters Shares as referred to in sub-clause 4.3(B), allot and issue such number of TR (2008) Shares as TR (2008) and Thomson Reuters PLC may agree to Thomson Reuters PLC, such shares to be credited as fully paid up. |
5. | Consideration for the cancellation of A Shares, B Shares and C Shares, Reuters Founders Share and issue of New Reuters Shares |
5.1 | In consideration of the cancellation of the A Shares pursuant to clause 4.1 and the issue of New Reuters Shares to TR (2008) pursuant to clause 4.3, TR (2008) will forthwith, and contingent upon the Reuters Reduction of Capital referred to in clause 4.1 and the issue of the New Reuters Shares referred to in clause 4.3 taking effect, pay to or for the account of each holder of A Shares 352.5 pence in cash for each A Share held by such holder immediately following the subdivision and reclassification of Reuters Shares under clause 2 of this Scheme. |
5.2 | In consideration for the issue of TR (2008) Shares to Thomson Reuters PLC pursuant to clause 4.5, Thomson Reuters PLC will forthwith and contingent upon the Reuters Reduction of Capital referred to in clause 4.1, the issue of the New Reuters Shares referred to in clause 4.3 and the issue of TR (2008) Shares to Thomson Reuters PLC pursuant to clause 4.5 taking effect and, subject to clause 5.7, allot and issue to the holders of B Shares 16 Thomson Reuters PLC Shares for every 100 B Shares held by such holder immediately following the subdivision and reclassification of Reuters Shares under clause 2.1 of this Scheme. |
5.3 | In consideration for the issue of TR (2008) Shares to Thomson Reuters PLC pursuant to clause 4.5, Thomson Reuters PLC will forthwith and contingent upon the Reuters Reduction of Capital referred to in clause 4.1, the issue of the New Reuters Shares referred to in clause 4.4 and the issue of TR (2008) Shares to Thomson Reuters PLC pursuant to clause 4.5 taking effect and subject to clauses 3.5 to 3.7, issue and deliver to or for the account of each holder of C Shares 352.50 pence in nominal amount of Loan Notes for each C Shares held by such holder immediately following the subdivision and reclassification of Reuters Shares under clause 2.1 of this Scheme. |
5.4 | In consideration for the cancellation of the Reuters Founders Share pursuant to clause 4.1 and the issue of New Reuters Shares to Thomson Reuters PLC pursuant to clause 4.3(C), Thomson Reuters PLC will forthwith and contingent upon the Reuters Reduction of Capital referred to in clause 4.3 and the issue of the New Reuters Shares referred to in clause 4.3 taking effect, allot and issue to the holder of the Reuters Founders Share the Thomson Reuters PLC Founders Share. |
5.5 | The Thomson Reuters PLC Shares issued pursuant to this clause 5 shall be issued credited as fully paid and free from all liens, charges, encumbrances and (subject to the Articles of Association of Thomson Reuters PLC) rights of pre-emption and other third party rights of any nature whatsoever and shall rankpari passuin all respects with all other Thomson Reuters PLC Shares in issue on the Effective Date including the right to receive all dividends, distributions and other entitlements made or paid or declared thereon by reference to a record date after the Effective Date. |
5.6 | The Thomson Reuters PLC Founders Share issued pursuant to clause 5.4 shall be issued credited as fully paid and free from all liens, charges, encumbrances and (subject to the Articles of Association of Thomson Reuters PLC) rights of pre-emption and other third party rights of any nature whatsoever. |
5.7 | Fractions of Thomson Reuters PLC Shares will not be allotted to Reuters Shareholders. All fractions of Thomson Reuters PLC Shares to which Reuters Shareholders are entitled will be aggregated and allotted and issued to a nominee appointed by Thomson Reuters PLC as nominee for such Reuters Shareholders on terms such that the nominee shall be authorised to procure that such Thomson Reuters PLC Shares are sold in the market on behalf of such Reuters Shareholders as soon as practicable after the Effective Date and the net proceeds of sale are paid to the Reuters Shareholders entitled thereto in accordance with their respective fractional entitlements. |
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6. | Settlement |
6.1 | Within 14 days of the Effective Date, Thomson Reuters PLC shall make all such allotments of and shall issue such Thomson Reuters PLC Shares and the Thomson Reuters PLC Founders Share as are required to be issued, TR (2008) shall pay the cash sums required to be paid and Thomson Reuters PLC shall issue the Loan Notes required to be issued, in each case to give effect to this Scheme, to the persons respectively entitled thereto, such consideration to be settled as set out in sub-clause 2, sub-clause 3 and sub-clause 7 and sub-clause 8, but subject to sub-clause 4, of this clause 6. |
6.2 | Settlement of the consideration to be satisfied by the issue of new Thomson Reuters PLC Shares shall be effected as follows: |
(A) | In respect of a holding of Scheme Shares in uncertificated form at the Reorganisation Record Time, the Thomson Reuters PLC Shares to which the Relevant Holder is entitled shall be issued in uncertificated form. Thomson Reuters PLC shall procure that Euroclear UK & Ireland is instructed to credit the appropriate stock account in CREST of the Relevant Holder with such Relevant Holder’s entitlement to Thomson Reuters PLC Shares. Thomson Reuters PLC reserves the right (if, for any reason, it wishes to do so) to settle all or any part of the consideration referred to in this sub-clause 6.2 for all or any Relevant Holders in the manner referred to in sub-clause 2(B) of this clause 6 if, for any reason, it wishes to do so. | |
(B) | In respect of a holding of Scheme Shares in certificated form at the Reorganisation Record Time, the Thomson Reuters PLC Shares to which the Relevant Holder is entitled shall be issued in certificated form and a share certificate for those shares shall be issued by the fourteenth day following the Effective Date. | |
(C) | Any cash which may be due in respect of fractional entitlements will be paid in accordance with clauses 6.7, 6.9 and 6.11 as appropriate. |
6.3 | The Thomson Reuters PLC Founders Shares to which the holder of the Reuters Founders Share as at the Reorganisation Record Time is entitled shall be issued in certificated form and a share certificate for that share shall be issued by the fourteenth day following the Effective Date. |
6.4 | The provisions of this clause 6 shall be subject to any prohibition or condition imposed by law. Without prejudice to the generality of the foregoing, if, in respect of any holder of Scheme Shares with a registered address in a jurisdiction outside the United Kingdom, Thomson Reuters PLC is advised that the allotmentand/or issue of Thomson Reuters PLC Shares pursuant to this clause 6 would or might infringe the laws of such jurisdiction or would or may require Thomson Reuters PLC to observe any governmental or other consent or any registration, filing or other formality, with which Thomson Reuters PLC is unable to comply or which Thomson Reuters PLC regards as unduly onerous to comply with, Thomson Reuters PLC may, in its sole discretion, either: |
(A) | determine that the Thomson Reuters PLC Shares shall not be allottedand/or issued to such holder under this clause 6 but shall instead be allotted and issued to a nominee appointed by Thomson Reuters PLC as nominee for such holder on terms that the nominee shall, as soon as practicable following the Effective Date, sell the Thomson Reuters PLC Shares so allotted and issued on behalf of such holder at the best price which can reasonably be obtained at the time of sale and account for the net proceeds of such sale (after the deduction of all expenses and commissions, including any amounts in respect of value-added tax payable thereon) by sending a cheque or creating an assured payment obligation in accordance with the provisions of sub-clause 7 of this clause 6. In the absence of bad faith or wilful default, none of Reuters, Thomson Reuters PLC, TR (2008) or the nominee shall have any liability for any loss or damage arising as a result of the timing or terms of such sale; or | |
(B) | determine that the Thomson Reuters PLC Shares shall be sold, in which event the Thomson Reuters PLC Shares shall be issued to such holder and Thomson Reuters PLC shall appoint a person to act pursuant to this sub-clause 6.4(B) and such person shall be authorised on behalf of such holder to procure that any shares in respect of which Thomson Reuters PLC has made such determination shall as soon as practicable following the Effective Date be sold at the best price which can reasonably be obtained at the time of sale and the net proceeds of such sale (after the deduction of all expenses and commissions, including any amounts in respect of VAT payable thereon) shall be paid to such holder by sending a cheque or creating an assured payment obligation in accordance with the provisions of |
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sub-clause 7 of this clause 6. To give effect to any such sale, the person so appointed shall be authorised on behalf of such holder to execute and deliver a form of transfer and to give such instructions and to do all other things which he may consider necessary or expedient in connection with such sale. In the absence of bad faith or wilful default, none of Reuters, Thomson Reuters PLC, TR (2008) or the person so appointed shall have any liability for any loss or damage arising as a result of the timing or terms of such sale. |
6.5 | In the case of Scheme Shares to be sold in accordance with sub-clause 4 of this clause 6 which are in uncertificated form at the Reorganisation Record Time, Thomson Reuters PLC shall on behalf of the nominee or person appointed pursuant to sub-clause 4 of this clause 6 make any cash payment pursuant to sub-clause 7 of this clause 6 by arranging for the creation of an assured payment obligation in favour of the payment bank of the Relevant Holders of such Scheme Shares in accordance with the CREST assured payment arrangements (as set out in the Euroclear UK & Ireland Manual) provided that Thomson Reuters PLC may (if, for any reason, it wishes to do so) determine that all or part of such consideration shall be paid by cheque in sterling drawn on a UK clearing bank despatched by post and in such case sub-clause 11 of this clause 6 shall apply, to the extent it is appropriate. |
6.6 | In the case of Scheme Shares to be sold in accordance with sub-clause 4 of this clause 6 which are in certificated form at the Reorganisation Record Time, Thomson Reuters PLC shall on behalf of the nominee or person appointed pursuant to sub-clause 4 of this clause 6 make any cash payment pursuant to sub-clause 7 of this clause 6 by delivering to the persons respectively entitled thereto, or as they may direct, cheques in sterling drawn on a UK clearing bank by post by the fourteenth day following the Effective Date. |
6.7 | Settlement of the cash consideration shall be effected as follows: |
(A) | where, immediately prior to the Reorganisation Record Time, a Relevant Holder holds Scheme Shares in certificated form, settlement of any cash consideration to which the Relevant Holder is entitled shall be settled by cheque drawn on a branch of a clearing bank in the United Kingdom. Cheques shall be despatched within 14 days of the Effective Date; and | |
(B) | where, immediately prior to the Reorganisation Record Time, a Relevant Holder holds Scheme Shares in uncertificated form, settlement of any cash consideration to which the Relevant Holder is entitled shall be paid by means of CREST by TR (2008) procuring a CREST payment obligation in favour of the Relevant Holder’s payment bank in respect of the cash consideration due within 14 days of the Effective Date, in accordance with the CREST payment arrangements. TR (2008) reserves the right to settle all or any part of the cash consideration payable pursuant to this clause (B) in the manner referred to in clause (A) above if, for reasons outside its reasonable control, it is not able to effect settlement in accordance with this clause (B). |
6.8 | Settlement of any Loan Note consideration to which a Relevant Holder is entitled shall be settled by despatching certificates in respect of such Loan Notes by first class post (or by such other method as may be approved by the Panel) addressed to the person entitled thereto to the address appearing in the register of members of Reuters or, in the case of joint holders, to the address of the holder whose name stands first in such register in respect of the joint holding concerned at such time. Certificates in respect of such Loan Notes shall be despatched within 14 days of the Effective Date. |
6.9 | All deliveries of notices, documents of title and cheques required to be made by this Scheme shall be effected by posting the same by first-class post in pre-paid envelopes addressed to the persons respectively entitled thereto at their respective addresses as appearing in the register of members (or, in the case of joint holders, to the address of that one of the joint holders whose name stands first in the said register of members in respect of the joint holding) at the Reorganisation Record Time. |
6.10 | Neither Reuters, Thomson Reuters PLC nor TR (2008) shall be responsible for any loss or delay in the transmission of the documents of title or cheques posted in accordance with sub-clauses 6, 7, 8 or 9 of this clause 6 which shall be posted at the risk of the addressee. |
6.11 | All cheques shall be in sterling drawn on a UK clearing bank and made payable to the holder, or in the case of joint holders, to the person to whom in accordance with the foregoing provisions of this clause 6 the envelope containing the same is addressed and the encashment of any such cheque |
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or the creation of any such assured payment obligation as is referred to in sub-clause 7 of this clause 6 shall be a complete discharge to Thomson Reuters PLC or TR (2008) as applicable for the monies represented thereby. |
6.12 | Prior to the issue of new share certificates in respect of Thomson Reuters PLC Shares to Relevant Holders pursuant to sub-clause 2 of this clause 6, transfers of the Thomson Reuters PLC Shares issued to them pursuant to this Scheme shall be certified against the register of members of Thomson Reuters PLC. Existing certificates for Scheme Shares shall, on and from the Effective Date, cease to have effect as documents of title to the Scheme Shares comprised therein. In respect of those Relevant Holders holding their Reuters Shares in uncertificated form, Euroclear UK & Ireland shall be instructed to cancel such Relevant Holders’ entitlement to Reuters Shares on and from the Effective Date. |
6.13 | Prior to the issue of the new share certificate in respect of the Thomson Reuters PLC Founders Share to the holder of the Reuters Founders Share whose name appears in the register of members of Reuters at the Reorganisation Record Time pursuant to sub-clause 3 of this clause 6, the transfer of the Thomson Reuters PLC Founders Share issued to it pursuant to this Scheme shall be certified against the register of members of Thomson Reuters PLC. The existing certificate for the Reuters Founders Share shall, on and from the Effective Date, cease to have effect as a document of title to the Reuters Founders Share comprised therein. |
7. | Mandated payments |
8. | Operation of this Scheme |
8.1 | This Scheme shall become effective as soon as an office copy of the First Court Order under section 425 of the Act shall have been duly delivered by Reuters to the Registrar of Companies for registration and shall be implemented as soon as an office copy of the First Court Order under section 425 shall have been duly delivered by Reuters to the Register of Companies for registration and the Second Court Order confirming under section 137 of the Act the Reuters Reduction of Capital provided for by this Scheme shall have been duly delivered by Reuters to the Register of Companies for registration and registered by him. |
8.2 | Unless this Scheme shall become effective on or before 31 December 2008, or such later date, if any, as Reuters, Thomson Reuters PLC and TR (2008) may agree and the Court may allow, this Scheme shall never become effective. |
8.3 | Reuters, Thomson Reuters PLC and TR (2008) may jointly consent on behalf of all persons concerned to any modification of or addition to this Scheme or to any condition which the Court may approve or impose. |
9. | Governing Law |
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5.1.1
1. | Conditions |
The Transaction is subject to the following conditions: | |
1.1 | the Scheme becoming unconditional and becoming effective, subject to the City Code, by not later than the Long Stop Date, or such later date (if any) as Thomson and Reuters may agree and (if required) the Court may allow. The Scheme will be conditional upon: |
• | approval of the Scheme by a majority in number, representing 75 per cent. or more in value, of the Reuters Shareholders (or the relevant class or classes thereof) present and voting, either in person or by proxy, at the Court Meeting or at any adjournment thereof; | |
• | all resolutions necessary to implement the Scheme as set out in the notice of the EGM as resolutions 1 to 5 being duly passed by the requisite majority at the EGM or at any adjournment thereof; and | |
• | the sanction (without modification or with modification as agreed by Thomson, Reuters, Thomson Reuters PLC and TR (2008)) of the Scheme and the confirmation of any reduction of capital involved therein by the Court, an office copy of the First Court Order and Second Court Order and the minute of such reduction attached thereto being delivered for registration to the Registrar of Companies in England and Wales and, in relation to the reduction of capital, being registered by him; and |
1.2 | Admission |
In addition, the Scheme will be subject to the following conditions being satisfied or waived prior to the necessary action being taken to make the Scheme effective: | |
1.3 | the passing at the Thomson Shareholders Meeting of the Thomson Arrangement Resolution in accordance with its terms; |
1.4 | the Canadian Interim Order and the Canadian Final Order having been obtained by Thomson; |
1.5 | no Relevant Authority having instituted any action, proceeding, suit, investigation, enquiry or reference or enacted or made and there not continuing to be outstanding any statute, regulation, order or decision (other than any statute, regulation, order or decision relating to taxes on the date hereof) that would or might be reasonably expected to: |
• | make the Transaction void, unenforceable or illegal or directly or indirectly prohibit or otherwise materially restrict, delay or interfere with the implementation of, or impose material additional conditions or obligations with respect to, or otherwise challenge, the Transaction; | |
• | require, prevent or materially delay the divestiture (or alter the terms of any proposed divestiture) by the Wider Thomson Group or the Wider Reuters Group of all or any substantial part of their respective businesses, assets or properties or impose any material limitation on their ability to conduct all or any part of their respective businesses and to own any of their respective assets or properties in each case to an extent which is material in the context of the Wider Combined Group; | |
• | require any member of the Wider Thomson Group or of the Wider Reuters Group to acquire or offer to acquire any shares or other securities (or the equivalent) in any member of the Wider Reuters Group or any member of the Wider Thomson Group, where such acquisition would be material in the context of the Wider Combined Group; or |
• | otherwise materially and adversely affect the business, assets, financial or trading position or profits of any member of the Wider Reuters Group or of the Wider Thomson Group to an extent which is material in the context of the Wider Combined Group; |
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1.6 | all necessary filings having been made and all relevant waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated, in each case in respect of the Transaction and all authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals (“Authorisations”) necessary in any jurisdiction for or in respect of the Transaction being obtained from appropriate Relevant Authorities or from any persons or bodies with whom any member of the Wider Thomson Group or the Wider Reuters Group has entered into contractual arrangements (in each case where the absence of such authorisation would have a material adverse effect on the Thomson Group or, as the case may be, the Reuters Group taken as a whole) and such Authorisations together with all Authorisations necessary or appropriate for any member of the Wider Reuters Group to carry on its business (where such business is material in the context of the Reuters Group taken as a whole or, as the case may be, the Thomson Group taken as a whole) remaining in full force and effect and there being no notice to revoke, suspend or not renew any of the same and all statutory or regulatory obligations in any jurisdiction having been complied with; |
1.7 | since 31 December 2006, except as disclosed in the Annual Report and Accounts of Reuters for the year then ended or as publicly announced to a Regulatory Information Service by or on behalf of Reuters before 15 May 2007 or as otherwise fairly disclosed prior to 15 May 2007 in writing to Thomson or its advisers by or on behalf of Reuters: |
• | no adverse change having occurred in the business, assets, financial or trading position or profits of any member of the Wider Reuters Group which is material in the context of the Reuters Group taken as a whole, provided that such change has not resulted from factors generally affecting the markets in which the affected entities operate or from external factors unrelated to their business and beyond their reasonable control (such as acts of war, terrorism or natural disasters); and | |
• | other than in connection with or arising out of the Transaction, no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Reuters Group or to which any member of the Wider Reuters Group is a party (whether as claimant or defendant or otherwise) and no investigation by any Relevant Authority or other investigative body against or in respect of any member of the Wider Reuters Group having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Reuters Group which would or might reasonably be expected to materially and adversely affect the Reuters Group taken as a whole; and |
1.8 | since 31 December 2006, except as disclosed in the Annual Report and Accounts of Thomson for the year then ended or as publicly announced to a Regulatory Information Service by or on behalf of Thomson before 15 May 2007 or as otherwise fairly disclosed prior to 15 May 2007 in writing to Reuters or its advisers by or on behalf of Thomson: |
• | no adverse change having occurred in the business, assets, financial or trading position or profits of any member of the Wider Thomson Group which is material in the context of the Thomson Group taken as a whole, provided that such change has not resulted from factors generally affecting the markets in which the affected entities operate or from external factors unrelated to their business and beyond their reasonable control (such as acts of war, terrorism or natural disasters); and | |
• | other than in connection with or arising out of the Transaction, no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Thomson Group or to which any member of the Wider Thomson Group is a party (whether as claimant or defendant or otherwise) and no investigation by any Relevant Authority or other investigative body against or in respect of any member of the Wider Thomson Group having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Thomson Group which would or might reasonably be expected to materially and adversely affect the Thomson Group taken as a whole. |
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2. | Definitions |
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“A Shares” | the A ordinary shares of 12.5 pence each in the capital of Reuters created by the subdivision and reclassification referred to in clause 2 of the Scheme; | |
“Acquiring Person” | has the meaning ascribed hereto under “Effect of the Transaction” in Part IX of this document; | |
“Acquisition Facility” | a credit facility provided by a syndicate of banks pursuant to an agreement between, among others, Thomson, as Canadian borrower and a non-Canadian borrower, certain of its subsidiaries as non-Canadian borrowers, the lenders party thereto, Barclays Bank PLC, as non-Canadian administrative agent, The Toronto-Dominion Bank, as Canadian administrative agent dated 24 May 2007 and amended 27 June 2007; | |
“Act” | the Companies Act 1985, as amended or re-enacted; | |
“Admission” | the admission of the Thomson Reuters PLC Shares to the Official List and to trading on the London Stock Exchange’s main market for listed securities; | |
“ADS Voting Instruction Card” | the white voting instruction card for use by Reuters ADS Holders in connection with the Court Meeting and the EGM; | |
“Alternative Proposal” | an offer or approach from any person wishing to undertake an offer or proposal in respect of a significant proportion of Reuters Shares (being in excess of 25 per cent., when aggregated with shares already held by the third party and anyone acting in concert with the third party) or the sale of the whole or a substantial part of its assets or any other transaction inconsistent with the completion of the Transaction; | |
“Amended Deed of Mutual Covenant” | the deed of mutual covenant to be entered into on or prior to the Effective Date among PA Group Limited, NPA Nominees Limited, Australian Associated Press Pty Limited, New Zealand Press Association Limited, Reuters Founders Share Company, Thomson Reuters PLC, Thomson Reuters Corporation and Reuters; | |
“Antitrust Conditions” | the conditions relating to the clearance of the Transaction by the European Commission under the EC Merger Regulation and by the US Department of Justice; | |
“Approved Person” | at any particular time, any person who has been designated as such by Reuters Founders Share Company, in its sole and absolute discretion, for the purposes of the Thomson Reuters PLC Articles or Thomson Reuters Corporation Articles, as the case may be; | |
“Audit Committee” | the audit committee of the Thomson Reuters Board, further details of which are set out in Section 3.3 of Part X of this document; | |
“B Shares” | the B ordinary shares of 12.5 pence each in the capital of Reuters created by the subdivision and reclassification referred to in clause 2 of the Scheme; | |
“Bear Stearns” | Bear, Stearns & Co. Inc. incorporated in Delaware with registered address at 383 Madison Avenue, New York, NY 10179; | |
“Blackstone” | The Blackstone Group International Limited, incorporated in England and Wales with registered number 03949032; |
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“Break Fee” | the fees payable by each of Reuters and Thomson to the other if certain events occur which result in the Transaction not being completed, as detailed in Section 5.1 of Part XVIII of this document; | |
“Business Day” | a day on which the London Stock Exchange is open for the transaction of business; | |
“C Shares” | the C ordinary shares of 12.5 pence each in the capital of Reuters (if any) created by the subdivision and reclassification referred to in clause 2 of the Scheme; | |
“Canada” | Canada, its territories and possessions and any state or politicalsub-division thereof; | |
“Canadian dollars”or “C$” | the lawful currency of Canada; | |
“Canadian GAAP” | Canadian generally accepted accounting principles; | |
“Cede & Co” | Cede and Company, a company incorporated under the laws of New York with registered address at 55 Water Street, Floor 49, New York,NY 10041-0004, USA; | |
“certificated”or “in certificated form” | a share or other security which is not in uncertificated form (that is, not in CREST); | |
“Certificated Share” | a share which is recorded in the Register as being held in certificated form; | |
“Chairman” | the chairman of the Thomson Reuters Board; | |
“Citi” | Citigroup Global Markets Limited, incorporated in England and Wales with registered number 01763297; | |
“City Code” | the City Code on Takeovers and Mergers; | |
“Class Rights Actions” | those matters which Thomson Reuters PLC Shareholders and Thomson Reuters Corporation Shareholders shall vote on separately, as more particularly described in the Thomson Reuters PLC Articles; | |
“Closing Prices” | the closing middle market quotation of Reuters Shares on the LSE and Thomson Shares on the TSX; | |
“Combined Code” | the Combined Code on Corporate Governance; | |
“Commissioner” | the Commissioner of Competition appointed under the Competition Act; | |
“Competition Act” | the Competition Act (Canada), as amended; | |
“Corporate Governance Committee” | the corporate governance committee of the Thomson Reuters Board, further details of which are set out in Section 3.3 of Part X of this document; | |
“Court” | the High Court of Justice in England and Wales; | |
“Court Meeting” | the meeting of the holders of the Reuters Shares convened by direction of the Court pursuant to section 425 of the Act to consider and, if thought fit, approve the Scheme, including any adjournment thereof; | |
“CRA” | the Canadian Revenue Agency; | |
“CREST” | the Relevant System (as defined in the Regulations) in respect of which Euroclear UK & Ireland is the Operator (as defined in the Regulations); | |
“CREST Proxy Instruction” | the proxy appointment or instruction made by Reuters Shareholders by means of CREST in accordance with Section 3 of Part IV of this document; | |
“Cross-Guarantees” | collectively, the Thomson Reuters PLC Guarantee and the Thomson Reuters Corporation Guarantee; |
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“DBRS” | DBRS Limited, incorporated in Ontario, Canada, whose registered office is DBRS Tower, 181 University Avenue, Suite 700, Toronto, Ontario, Canada MSH 3M7; | |
“Dealing Facility” | the dealing facility whereby Reuters Shareholders who (i) are registered holders of 2,500 or fewer Reuters Shares and Reuters ADS Holders who are registered holders of 416 or fewer Reuters ADSs at both 21 February 2008 and immediately prior to the Reorganisation Record Time and (ii) are not executive officers, directors or other affilliates of Reuters, Thomson Reuters PLC or Thomson may elect to sell all (but not less than all) of the Thomson Reuters PLC Shares (including those represented by Thomson Reuters PLC ADSs) which they receive pursuant to the Scheme without incurring any dealing or settlement charges; | |
“Dealing Facility Instruction Booklet” | the instruction booklet sent to potentially eligible Reuters Shareholders and Reuters ADS Holders in connection with the Dealing Facility; | |
“Dealing Facility Instruction Form” | the instruction form to be returned by eligible Reuters Shareholders or Reuters ADS Holders who wish to use the Dealing Facility; | |
“Deed of Mutual Covenant” | has the meaning ascribed thereto under “Reuters Trust Principles” in Part IX of this document; | |
“Deposit Agreement” | the deposit agreement dated 18 February 1998 entered into between Reuters, the Depositary and the holders of Reuters ADSs issued thereunder; | |
“Depositary” | the depositary under the Deposit Agreement, which is currently Deutsche Bank Trust Company Americas of 60 Wall Street, New York, NY 10005, USA; | |
“Disclosure and Transparency Rules” | the disclosure and transparency rules made by the UK Listing Authority under Part VI of FSMA, as amended; | |
“disclosure period” | the period commencing on 4 May 2006 (being the date twelve months prior to the announcement of a possible transaction) and ending on 22 February 2008 (being the latest practicable date prior to the publication of this document); | |
“DLC Documents” | collectively, the Equalization and Governance Agreement, the Special Voting Share Agreement, the Thomson Reuters PLC Special Voting Share Trust Deed, the Thomson Reuters Corporation Special Voting Share Trust Deed, the Cross-Guarantees, the Thomson Reuters PLC Articles, the Thomson Reuters PLC Memorandum, the Thomson Reuters Corporation Articles and the Thomson Reuters Corporation By-laws; | |
“DLC structure” | the dual listed company structure created by the DLC Documents under which Thomson Reuters PLC, Thomson Reuters Corporation and their respective consolidated subsidiaries will operate as a unified group; | |
“this document” | this document which constitutes, among other things, a prospectus for the purposes of the Prospectus Rules, an offer document for the purposes of the City Code, a circular for the purposes of the Listing Rules and a notice for the purposes of section 426 of the Act; | |
“DSOP” | the Reuters Discretionary Share Option Plan; | |
“DSU” | deferred share unit; | |
“EC Merger Regulation” | Council Regulation (EC) 139/2004, as amended; |
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“Economic Equivalence” | means that the economic returns made or otherwise available to a holder of Thomson Reuters PLC Shares relative to the economic returns available to a holder of Thomson Reuters Corporation Shares are in due proportion having regard to the Equalization Ratio; | |
“EEA States” | the member states of the European Economic Area; | |
“Effective Date” | the date on which the Scheme becomes effective in accordance with its terms and on which it is intended that Admission will occur and Thomson will file the Thomson Articles of Arrangement; | |
“EGM” or“Extraordinary General Meeting” | the extraordinary general meeting of Reuters convened by the notice set out at the end of this document, including any adjournment thereof; | |
“EGM Resolutions” | the resolutions to be considered by Reuters Shareholders at the EGM, being all the resolutions to be approved by Reuters Shareholders in connection with the Transaction, other than the resolutions to be approved at the Court Meeting; | |
“Election Return Date” | 14 April 2008 or such later date as may be announced by Reuters to a Regulatory Information Service, such announcement being made prior to a date that would, absent such an announcement, be the Election Return Date; | |
“Election Return Time” | 11.00 a.m. (London time) on the Election Return Date; | |
“Employee Benefit Trusts” | the Reuters Employee Share Ownership Trust No I, the Reuters Group PLC Employee Share Ownership Trust No II and the Reuters Group PLC 2004 Employee Trust; | |
“Equalization and Governance Agreement” | the equalization and governance agreement to be entered into on or prior to the Effective Date between Thomson Reuters PLC and Thomson Reuters Corporation; | |
“Equalization Ratio” | at any time, the ratio of (i) one to (ii) the number of Thomson Reuters PLC Shares that enjoy equivalent rights to distributions and voting rights in relation to Joint Electorate Actions as one Thomson Reuters Corporation Share at such time, as more particularly described in the Equalization and Governance Agreement Section 5.2 in Part XVIII of this document (and which shall initially be 1:1); | |
“Equalization Share” | the equalization share in the capital of Thomson Reuters Corporation; | |
“Equiniti Limited” | Equiniti Limited, incorporated in England and Wales with registered number 06226088; | |
“Equivalent Distribution” | if Thomson Reuters Corporation declares or otherwise becomes obligated or proposes to pay or pays a cash distribution, including a cash dividend, to holders of Thomson Reuters Corporation Shares, the cash distribution which Thomson Reuters PLC will declare or otherwise become obligated or propose to pay or pay to holders of Thomson Reuters PLC Shares that is a Matching Action; | |
“Equivalent Resolution” | in relation to a resolution of Thomson Reuters PLC, a resolution of Thomson Reuters Corporation that is certified by a duly authorised officer of Thomson Reuters Corporation as equivalent in nature and effect to such resolution of Thomson Reuters PLC; and in relation to a resolution of Thomson Reuters Corporation, a resolution of Thomson Reuters PLC that is certified by a duly authorised officer of Thomson Reuters PLC as equivalent in nature and effect to such resolution of Thomson Reuters Corporation; |
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“ERP” | enterprise resource planning; | |
“EU” | the European Union; | |
“Euroclear UK & Ireland” | Euroclear UK & Ireland Limited, incorporated in England and Wales with registered number 02878738; | |
“Euroclear UK & Ireland Manual” | the CREST manual issued by Euroclear UK & Ireland, as amended from time to time; | |
“Excluded Shares” | any Reuters Shares: (i) beneficially owned by Thomson Reuters PLC or any subsidiary undertaking of Thomson Reuters PLC; (ii) held by Reuters in treasury; or (iii) held by an Employee Benefit Trust except in respect of those Reuters Shares allocated prior to the Reorganisation Record Date by an Employee Benefit Trust to a participant of a Reuters Share Scheme; | |
“Explanatory Statement” | the explanatory statement (in compliance with section 426 of the Act) relating to the Scheme, as set out in this document; | |
“Final Order” | the final order of the Ontario Court approving the Thomson Arrangement, as that order may be amended by the Ontario Court (with the consent of Thomson) at any time prior to the Effective Date or, if appealed (unless such appeal is withdrawn or denied), as affirmed or amended on appeal; | |
“First Court Hearing” | the hearing by the Court of the claim form to sanction the Scheme; | |
“First Court Order” | the order of the Court sanctioning the Scheme under section 425 of the Act; | |
“First Court Order Date” | the date on which the First Court Order is made or, if later, the date on which the First Court Order is expressed to take effect; | |
“Form of Election” | the green form of election under which Reuters Shareholders can elect for Loan Notes under the Loan Note Option; | |
“Form of Proxy” | either or both of the yellow form of proxy for use at the EGM or the blue form of proxy for use at the Court Meeting which accompany this document, as the context requires; | |
“Founders Share” | a share in the capital of Reuters, Thomson Reuters PLC or Thomson Reuters Corporation (as the context so requires) which carries special rights and as so defined under the constitutional documents of those companies; | |
“FSA” | the Financial Services Authority; | |
“FSMA” | the Financial Services and Markets Act 2000, as amended; | |
“GAAP” | generally accepted accounting principles; | |
“HMRC” | HM Revenue and Customs; | |
“holder” | a registered holder and includes any person(s) entitled by transmission to be a registered holder; | |
“HSR Act” | the USHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; | |
“Human Resources Committee” | the human resources committee of the Thomson Reuters Board, further details of which are set out in Section 3.3 of Part X of this document; | |
“IFRS” | International Financial Reporting Standard(s), as adopted by the EU; | |
“Implementation Agreement” | the implementation agreement dated 15 May 2007 between Thomson, Reuters, Woodbridge and Thomson-Reuters Limited, as amended, further details of which are set out in Section 5.1 of Part XVIII of this document; |
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“Interim Order” | the interim order of the Ontario Court in respect of the Thomson Arrangement, as the same may be amended by the Ontario Court (with the consent of Thomson); | |
“Introduction” | the introduction of the Thomson Reuters PLC Shares and the admission to the Official List and trading on the London Stock Exchange; | |
“IRS” | the Internal Revenue Service of the United States Department of the Treasury; | |
“ISO” | incentive stock option; | |
“Joint Electorate Action” | any action put to shareholders of either Thomson Reuters PLC or Thomson Reuters Corporation, except for a Class Rights Action or a Procedural Resolution, as more particularly described in the Thomson Reuters PLC Articles; | |
“JPMorgan Cazenove” | JPMorgan Cazenove Limited, incorporated in England and Wales with registered number 04153386; | |
“Listing Rules” | the listing rules made by the UK Listing Authority; | |
“Loan Note Deed” | the loan note deed that will constitute the Loan Notes; | |
“Loan Note Election” | a valid election under the Loan Note Option; | |
“Loan Note Option” | the alternative whereby (subject to clause 3 of the Scheme) Reuters Shareholders may elect to receive Loan Notes in lieu of all or part of the cash consideration to which they would otherwise be entitled under the Scheme; | |
“Loan Notes” | the floating rate unsecured loan notes to be issued by Thomson Reuters PLC pursuant to the Loan Note Option; | |
“Loan Note Valuation” | the valuation of the Loan Notes made by Perella Weinberg; | |
“London Stock Exchange”or “LSE” | London Stock Exchange plc, incorporated in England and Wales with registered number 02075721, or any successor thereto; | |
“Long Stop Date” | 31 December 2008; | |
“LTIP” | the Reuters Long Term Incentive Plan; | |
“Matching Action” | an action undertaken such that the economic and voting rights (in relation to Joint Electorate Actions) of a holder of a Thomson Reuters PLC Share determined by reference to a holder of a Thomson Reuters Corporation Share are maintained in proportion to the then prevailing Equalization Ratio; | |
“Moody’s” | Moody’s Investor Services; | |
“Morgan Stanley” | Morgan Stanley & Co. Limited, a company incorporated in England and Wales with registered number 02164628; | |
“Nasdaq” | the National Association of Security Dealers, Inc. Automated Quotations System, or any successor thereto; | |
“North America” | the United States and Canada; | |
“NYSE” | the New York Stock Exchange Inc., or any successor thereto; | |
“OBCA” | the Business Corporations Act (Ontario), as it may be amended from time to time and any successor legislation thereto; | |
“Official List” | the list maintained by the UK Listing Authority; | |
“Ontario Court” | the Ontario Superior Court of Justice; | |
“Overseas Shareholder” | a Reuters Shareholder with a registered address outside of the United Kingdom; | |
“Panel” | The UK Panel on Takeovers and Mergers; |
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“Parallel Shareholder Meeting” | in relation to a meeting of the Thomson Reuters PLC Shareholders, any meeting of the Thomson Reuters Corporation Shareholders which is: | |
(i) nearest in time to, or is contemporaneous with, such meeting of the Thomson Reuters PLC Shareholders and at which some or all of the same resolutions or some or all Equivalent Resolutions are to be considered; or | ||
(ii) designated by the Thomson Reuters Corporation Board as the parallel meeting of Thomson Reuters Corporation Shareholders of such meeting of the Thomson Reuters PLC Shareholders; | ||
“Perella Weinberg” | Perella Weinberg Partners UK LLP, a limited liability partnership registered in England and Wales with its registered address at 20 Grafton Street, London W1S 4DZ; | |
“pounds” and “£” | the lawful currency of the United Kingdom; | |
“Press Associations” | PA Group Limited, NPA Nominees Limited, Australian Associated Press Pty Limited and New Zealand Press Association Limited; | |
“Procedural Resolution” | a resolution of a procedural or technical nature put to shareholders at any meeting of Thomson Reuters PLC or Thomson Reuters Corporation, whether annual, general or otherwise, as more particularly described in the Thomson Reuters PLC Articles; | |
“Prospectus” | this document which constitutes a prospectus relating to Thomson Reuters PLC for the purpose of the admission to the Official List of the Thomson Reuters PLC Shares; | |
“Prospectus Rules” | the prospectus rules made by the UKLA under Part VI of FSMA; | |
“PRSU” | performance restricted share unit; | |
“PwC Canada” | PricewaterhouseCoopers LLP, a limited liability partnership formed in Ontario whose registered address is Suite 3000, Box 82, Royal Trust Tower, TD Centre, Toronto, Ontario, M5K 1G8, Canada; | |
“PwC UK” | PricewaterhouseCoopers LLP, a limited liability partnership registered in England and Wales with registered number OC303525, whose registered office is 1 Embankment Place, London WC2N 6RH; | |
“Qualifying Takeover Bid” | has the meaning ascribed thereto under Section 5.2 of Part XVIII of this document; | |
“Register” | means, unless the context otherwise requires, the register of shareholders kept pursuant to section 352 of the Act and any register maintained by Thomson Reuters PLC of persons holding any renounceable right of allotment of a share; | |
“Registrar of Companies” | the Registrar of Companies in England and Wales; | |
“Registrars” | Equiniti Limited; | |
“Regulations” | the Uncertificated Securities Regulations 2001 (SI 2001/3755); | |
“Relevant Authority” | any government or governmental, quasi-governmental, supranational, statutory or regulatory body or association, institution or agency (including any trade agency) or any court, tribunal or other body (including any professional or environmental body) or person in any jurisdiction; | |
“Relevant Holders” | holders of Scheme Shares whose names appear in the register of members of Reuters at the Reorganisation Record Time; | |
“Relevant System” | means a relevant system, as defined in the Regulations; |
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“Relevant Terms of Approval” | in relation to an Approved Person, an agreement or undertaking, if any, entered into by that Approved Person with the holder of the Reuters Founders Share in connection with being designated as an Approved Person; | |
“Reorganisation Record Time” | 6.00 p.m. (London time) on the day before the Second Court Hearing; | |
“Reuters” | Reuters Group PLC, incorporated in England and Wales with registered number 03296375, and, where the context so requires, its subsidiaries; | |
“Reuters ADSs” | American depositary shares issued pursuant to the Deposit Agreement, each representing six Reuters Shares; | |
“Reuters ADS Holders” | holders of Reuters ADSs; | |
“Reuters Articles” | the memorandum and articles of association of Reuters, as amended, from time to time; | |
“Reuters Board” | the board of directors of Reuters; | |
“Reuters Core Plus Program” | a programme to drive revenue growth (through opportunities in electronic trading, high value content, a new approach to selling content and transactions services and new markets), service improvement and cost efficiency; | |
“Reuters Directors” | the persons whose names are set out in Section 3.1 of Part XVIII of this document or, where the context so requires, the directors of Reuters from time to time; | |
“Reuters Founders Share” | the Founders Share of £1 in the capital of Reuters in issue at the Reorganisation Record Time; | |
“Reuters Founders Share Company” | Reuters Founders Share Company Limited, incorporated in England and Wales with registered number 01812511; | |
“Reuters Group” | Reuters and its subsidiary and associated undertakings; | |
“Reuters Guarantee” | the deed of guarantee to be entered into on or prior to the Effective Date by Thomson Reuters PLC in favour of Reuters contractual creditors; | |
“Reuters Meetings” | the Court Meeting and the Extraordinary General Meeting; | |
“Reuters Ordinary Shares” | ordinary shares of 25 pence each in Reuters; | |
“Reuters Reduction of Capital” | the proposed reduction of capital of the A Shares, B Shares and C Shares and the Reuters Founders Share under section 135 of the Act pursuant to the Scheme; | |
“Reuters Shareholders” | the holders of Reuters Shares; | |
“Reuters Shares” | prior to the Reorganisation Record Time, issued ordinary shares of 25 pence each in the capital of Reuters and after the Reorganisation Record Time, such ordinary shares and A Shares, B Shares and C Shares; | |
“Reuters Share Schemes” | the DSOP, the LTIP, the SAYE, the RSP and the Reuters America Inc. Employee Stock Purchase Plan; | |
“Reuters Trustees” | the members and directors from time to time of Reuters Founders Share Company; | |
“Reuters Trust Principles” | the principles governing the operation of Reuters, which are set out in the Reuters Articles and summarised in Section 2 of Part IX of this document; | |
“Reuters Trust Principles Support Agreement” | the agreement to be entered into on or before the Effective Date between Woodbridge and Reuters Founders Share Company; | |
“ROIC” | return on invested capital; |
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“RSP” | the Reuters Restricted Share Plan for participants employed by UK Companies, the Reuters Restricted Share Plan for participants employed by Non-UK Companies and the Reuters Global Restricted Share Plan; | |
“RSU” | restricted share unit; | |
“SAR” | stock appreciation right; | |
“SAYE” | the Reuters International SAYE Share Option Plan 1997; | |
“Scheme”or “Scheme of Arrangement” | the proposed scheme of arrangement under section 425 of the Act between Reuters and holders of Scheme Shares, as set out in Part XX of this document, with or subject to any modification, addition or condition approved or imposed by the Court; | |
“Scheme Record Time” | 6.00 p.m. on the Business Day before the Effective Date; | |
“Scheme Shareholder” | a holder of Scheme Shares; | |
“Scheme Shares” | Reuters Shares: | |
(i) in issue at the date of the Scheme; | ||
(ii) issued after the date of the Scheme but before the Scheme Voting Record Time; and | ||
(iii) issued at or after the Scheme Voting Record Time and before the Scheme Record Time in respect of which the original or any subsequent holders thereof are, or shall have agreed in writing to be, bound by the Scheme | ||
in each case other than the Excluded Shares; | ||
“Scheme Voting Record Time” | 6.00 p.m. on 24 March 2008 or, if the Court Meeting is adjourned, 6.00 p.m. on the second day before the date of such adjourned meeting; | |
“SDRT” | United Kingdom stamp duty reserve tax; | |
“SEC” | the US Securities and Exchange Commission; | |
“Second Court Hearing” | the hearing by the Court of the claim form to confirm the Reuters Reduction of Capital under section 137 of the Act and to authorise the re-registration of Reuters as a private limited company under section 139 of the Act; | |
“Second Court Order” | the order of the Court confirming the Reuters Reduction of Capital under section 137 of the Act and authorising the re-registration of Reuters as a private limited company under section 139 of the Act; | |
“Second Court Order Date” | the date on which the Second Court Order is made or, if later, the date on which the Second Court Order is expressed to take effect; | |
“Senior Independent Director” | the senior independent director of the Thomson Reuters Board; | |
“Series II Preference Shares” | Thomson’s series of preference shares designated as Cumulative Redeemable Floating Rate Preference Shares, Series II; | |
“Special Voting Share” | in relation to Thomson Reuters PLC, the Thomson Reuters PLC Special Voting Share and, in relation to Thomson Reuters Corporation, the Thomson Reuters Corporation Special Voting Share; | |
“Special Voting Share Agreement” | the special voting share agreement to be entered into on or prior to the Effective Date among the Thomson Reuters Corporation Special Voting Share Trustee and the Thomson Reuters PLC Special Voting Share Trustee, Thomson Reuters Corporation and Thomson Reuters PLC; | |
“Sponsor” | Citi; |
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“Steering Committee” | the Thomson Reuters integration steering committee, further details of which are set out in Section 1.7 of Part X of this document; | |
“subsidiary undertaking” | has the meaning given in section 258 of the Act; | |
“Tax Act (Canada)” | the Income Tax Act (Canada), as amended; | |
“Thomson” | The Thomson Corporation (to be renamed Thomson Reuters Corporation), incorporated in Ontario, Canada, whose registered address is Suite 2706, Toronto Dominion Bank Tower, P.O. Box 24, Toronto-Dominion Centre, Toronto, Ontario, MSK IAI, and, where the context so requires, its subsidiaries; | |
“Thomson Arrangement” | the arrangement under section 182 of the OBCA under which Thomson will effect the Transaction; | |
“Thomson Arrangement Resolution” | the special resolution to approve the Thomson Arrangement and such other matters as may be necessary or desirable to implement the Transaction, to be set out in the Thomson Circular; | |
“Thomson Articles of Arrangement” | the articles of arrangement of Thomson in respect of the Thomson Arrangement, to be filed with a director (appointed pursuant to section 278 of the OBCA) after the Final Order is made; | |
“Thomson Board” | the board of directors of Thomson; | |
“Thomson Circular” | the Thomson circular sent to Thomson Shareholders on the same date as the date of this document; | |
“Thomson Directors” | the persons whose names are set out in Section 3.2 of Part XVIII of this document or, where the context so requires, the directors of Thomson from time to time; | |
“Thomson Group” | Thomson and its subsidiary and associated undertakings; | |
“Thomson New Credit Agreement” | the credit agreement entered into among Thomson, its subsidiary borrowers party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as general administrative agent, Royal Bank of Canada, as Canadian administrative agent, J.P. Morgan Europe Limited, as London agent, and J.P. Morgan Australia Limited, as Australian administrative agent dated 14 August 2007; | |
“Thomson Reuters” | collectively, Thomson Reuters Corporation, Thomson Reuters PLC and their respective consolidated subsidiaries operating as a unified group pursuant to the DLC structure; | |
“Thomson Reuters Board” | the board of directors of each of Thomson Reuters PLC and Thomson Reuters Corporation; | |
“Thomson Reuters business” | the business to be operated by Thomson Reuters; | |
“Thomson Reuters Corporation” | Thomson and, where the context so requires, its consolidated subsidiaries following the Transaction; | |
“Thomson Reuters Corporation Articles” | the amended and restated articles of Thomson to be filed in connection with the Transaction, as the same may be amended or varied pursuant to the terms of the Implementation Agreement; | |
“Thomson Reuters Corporation Board” | the board of directors of Thomson Reuters Corporation (or a duly authorised committee of the board of directors of Thomson Reuters Corporation) from time to time; | |
“Thomson Reuters Corporation By-laws” | the amended and restated by-laws to be adopted by Thomson in connection with the Transaction; |
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“Thomson Reuters Corporation Entrenched Provisions” | the “TR Corporation Entrenched DLC Provisions” as defined in the Thomson Reuters Corporation Articles; | |
“Thomson Reuters Corporation Founders Share” | the Founders Share in the capital of Thomson Reuters Corporation; | |
“Thomson Reuters Corporation Guarantee” | the deed of guarantee to be entered into on or prior to the Effective Date between Thomson Reuters PLC and Thomson Reuters Corporation; | |
“Thomson Reuters Corporation Share” | a common share in the capital of Thomson Reuters Corporation; | |
“Thomson Reuters Corporation Shareholders” | holders of Thomson Reuters Corporation Shares; | |
“Thomson Reuters Corporation Special Voting Share” | the special voting share in Thomson Reuters Corporation, as more particularly described in Section 5.3 of Part XVIII of this document; | |
“Thomson Reuters Corporation Special Voting Share Trust” | the trust created by the Thomson Reuters Corporation Special Voting Share Trust Deed; | |
“Thomson Reuters Corporation Special Voting Share Trust Deed” | the agreement to be entered into on or prior to the Effective Date between Thomson Reuters Corporation, as settlor, and the Thomson Reuters Corporation Special Voting Share Trustee; | |
“Thomson Reuters Corporation Special Voting Share Trustee” | Computershare Trust Company of Canada, as initial trustee of Thomson Reuters Corporation Special Voting Share Trust; | |
“Thomson Reuters Directors” | the directors of Thomson Reuters from time to time; | |
“Thomson Reuters Executive Officers” | the members of senior management of Thomson Reuters whose names are set out in Section 3.2 of Part X of this document; | |
“Thomson Reuters Group” | Thomson Reuters Corporation and Thomson Reuters PLC and their respective consolidated subsidiaries and associated undertakings operating as a unified group pursuant to the DLC structure; |
PR Annex I,
5.1.1 and 5.1.2
“Thomson Reuters PLC” | Thomson Reuters PLC, incorporated in England and Wales with registered number 6141013 and, where the context so requires, its consolidated subsidiaries following the Transaction; | |
“Thomson Reuters PLC ADS” | American depositary shares issued pursuant to the Deposit Agreement, each representing six Thomson Reuters PLC Shares; | |
“Thomson Reuters PLC Articles” | the articles of association of Thomson Reuters PLC, as adopted with effect from the Effective Date; | |
“Thomson Reuters PLC Entrenched Provisions” | the “TR PLC Entrenched DLC Provisions” as defined in the Thomson Reuters PLC Articles; | |
“Thomson Reuters PLC Founders Share” | the new Founders Share of £1 in the capital of Thomson Reuters PLC to be allotted and issued to the holder of the Reuters Founders Share pursuant to clause 5.4 of the Scheme; | |
“Thomson Reuters PLC Group” | Thomson Reuters PLC and its consolidated subsidiaries following the Transaction; | |
“Thomson Reuters PLC Guarantee” | the deed of guarantee to be entered into on or prior to the Effective Date between Thomson Reuters PLC and Thomson Reuters Corporation; | |
“Thomson Reuters PLC Memorandum“ | the memorandum of association of Thomson Reuters PLC, as amended with effect from the Effective Date; | |
“Thomson Reuters PLC Reduction of Capital” | the proposed reduction of share capital of Thomson Reuters PLC under section 135 of the Act; |
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PR Annex III,
4.1 and 4.4
“Thomson Reuters PLC Shares” | (i) prior to the Thomson Reuters PLC Reduction of Capital, the ordinary shares of 1000 pence (or such lower nominal value as the directors of Thomson Reuters PLC shall decide before the date on which the Court is asked to sanction the Scheme) each in Thomson Reuters PLC to be issued pursuant to the Scheme; and | |
(ii) following the Thomson Reuters PLC Reduction of Capital becoming effective, the ordinary shares of 25 pence each in Thomson Reuters PLC; | ||
“Thomson Reuters PLC Shareholders” | holders of Thomson Reuters PLC Shares; | |
“Thomson Reuters PLC Special Voting Share” | the special voting share in Thomson Reuters PLC, as more particularly described in the Thomson Reuters PLC Articles; | |
“Thomson Reuters PLC Special Voting Share Trust” | the trust created by the Thomson Reuters PLC Special Voting Share Trust Deed; | |
“Thomson Reuters PLC Special Voting Share Trust Deed” | the agreement to be entered into on or prior to the Effective Date between Thomson Reuters Corporation, as settlor, and the Thomson Reuters PLC Special Voting Share Trustee; | |
“Thomson Reuters PLC Special Voting Share Trustee” | Computershare Trust Company of Canada, as initial trustee of Thomson Reuters PLC Special Voting Share Trust; | |
“Thomson Reuters Proposed Directors” | the persons whose names are set out in Section 3.1 of Part X of this document; | |
“Thomson Reuters Share Plans” | the Thomson Reuters Stock Incentive Plan, the Thomson Reuters Phantom Stock Plan, the Thomson Reuters Deferred Compensation Plan, the Thomson Reuters Employee Stock Purchase Plans and the Thomson Reuters Non-Employee Director Share Plan; | |
“Thomson Reuters Shareholders” | holders of Thomson Reuters Corporation Shares and Thomson Reuters PLC Shares after the Effective Date; | |
“Thomson Shareholders” | holders of Thomson Shares; | |
“Thomson Shareholders Meeting” | the meeting of the shareholders of Thomson convened by the notice set out in the Thomson Circular, including any adjournment or postponement thereof; | |
“Thomson Shares” | the common shares in the capital of Thomson; | |
“Transaction” | the acquisition of Reuters by Thomson by implementing the DLC structure; | |
“Transaction Documents” | collectively, the DLC Documents, the Implementation Agreement, the Amended Deed of Mutual Covenant and the Reuters Trust Principles Support Agreement; | |
“TR (2008)” | TR (2008) Limited, incorporated in England and Wales with registered number 6208235; | |
“Triggering Event” | has the meaning ascribed thereto in Section 2.3 of Part VIII of this document; | |
“TSX” | the Toronto Stock Exchange, or any successor thereto; | |
“TTE Instruction” | the transfer to escrow instruction to be given through CREST by uncertificated Scheme Shareholders in connection with the Loan Note Election; | |
“UBS” | UBS Limited, registered in England and Wales with registered number 2035362; | |
“UK” or“United Kingdom” | the United Kingdom of Great Britain and Northern Ireland; | |
“UK GAAP” | UK generally accepted accounting principles; | |
“UKLA” or“UK Listing Authority” | the FSA as the competent authority for listing in the United Kingdom; |
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“uncertificated” or“in uncertificated form” | describes a share or other security recorded on the relevant register as being held in uncertificated form in CREST and title to which, by virtue of the Regulations, may be transferred by means of CREST; | |
“Uncertificated Share” | means a share title to which is recorded in the Register as being held in uncertificated form and title to which may, by virtue of the Regulations, be transferred by means of a Relevant System; | |
“US” or“United States” | the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia; | |
“US dollars”, “US$” or“$” | the lawful currency of the United States; | |
“US Exchange Act” | the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder; | |
“US GAAP” | United States generally accepted accounting principles; | |
“US Securities Act” | the US Securities Act of 1933, as amended, and rules and regulations promulgated thereunder; | |
“VAT” | UK value added tax; | |
“Waiver Resolution” | the resolution numbered “5” set out in the notice of Extraordinary General Meeting, which will be proposed as an ordinary resolution; and | |
“Woodbridge” | The Woodbridge Company Limited, incorporated in Ontario whose registered address is 65 Queen Street West, Suite 2400, Toronto, Ontario M5H 2M8, Canada and, unless the context requires otherwise, includes other companies affiliated with it. |
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IN THE HIGH COURT OF JUSTICE | No. 1350 of 2008 | |||
CHANCERY DIVISION | ||||
COMPANIES COURT |
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1. | For the purpose of giving effect to the scheme of arrangement of the Company dated 29 February 2008, in its original form or subject to such modification, addition or condition approved or imposed by the Court (the“Scheme”) and conditional on the passing of resolution number 5: |
(A) | at the Reorganisation Record Time (as defined in the Scheme) the Scheme Shares (as defined in the Scheme) be sub-divided and reclassified as follows: |
(1) | the number of A Shares which would otherwise result from the subdivision and reclassification set out above is reduced by the number of C Shares determined pursuant to sub-paragraph (3) below; | |
(2) | the number of B Shares is determined as provided above; | |
(3) | in addition to any A Shares (as reduced by the number of C Shares calculated in accordance with this sub-paragraph (3)) and B Shares into which such Scheme Shares are to be subdivided and reclassified, such Scheme Shares shall be sub-divided and reclassified into one C ordinary share of 12.5 pence each (the“C Shares”) for each 352.5 pence of cash entitlement for which such a valid Loan Note Election has been made (any fraction of a penny being rounded down), such C Shares having the rights set out in new article 3(B) to be adopted pursuant to sub-paragraph (B) of this resolution, |
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(B) | with effect from the subdivisions and reclassifications referred to in sub-paragraph (A) above, article 3 of the Articles of Association of the Company shall be replaced by the following new article 3: |
(A) | Amount of capital |
The authorised share capital of the Company is £525,000,001 divided into ordinary shares of 25 pence each (the“Ordinary Shares”), A ordinary shares of 12.5 pence each (the“A Shares”), B ordinary shares of 12.5 pence each (the“B Shares”), C ordinary shares of 12.5 pence each (the“C Shares”), and one Founders Share of £1. |
(B) | Rights attaching to shares |
The rights, as regards participation in the profits and assets of the Company, respectively attaching to the above-mentioned shares, shall be as follows: |
(1) | Subject to any special rights which may be attached to any other class of shares and to the provision of the Statutes, the profits of the Company available for distribution and resolved to be distributed shall be distributed by way of dividend among the holders of the Ordinary Shares, the A Shares, the B Shares and the C Shares rateably according to the number of shares held by them respectively; | |
(2) | On a return of assets on awinding-up, the assets of the Company available for distribution among the members shall be applied, subject to any provision of section 719 of the Act and any special rights which may be attached to any other class of shares, in repaying to the holders of the Founders Share, the Ordinary Shares, the A Shares, the B Shares and the C Shares rateably according to the number of shares held by them respectively (save that the Founders Share shall for this purpose count as four Ordinary Shares) the amounts paid up on such shares, and subject thereto shall belong to and be distributed among the holders of the Ordinary Shares, the A Shares, the B Shares and the C Shares rateably according to the number of such shares held by them respectively; |
(3) | The Founders Share shall carry no right to receive any of the profits of the Company available for distribution by way of dividend or otherwise; and | |
(4) | The A Shares, the B Shares and the C Shares shall rank equally with and have the same rights as those attaching to the Ordinary Shares, save that upon the scheme of arrangement dated 29 February 2008 between the Company and the Scheme Shareholders, as defined in such scheme of arrangement (in its form as at that date or with or subject to any modification, addition or condition approved or imposed by the Court) (the“2008 Scheme”) becoming effective, each A Share shall confer upon the holder thereof the right to receive 352.5 pence in cash, each B Share shall confer upon the holder thereof the right to receive 16 Thomson Reuters PLC Shares (as defined in the 2008 Scheme) for every 100 B Shares and each C Share shall confer on the holder thereof the right to receive 352.5 pence in nominal amount of Loan Notes (as defined in the 2008 Scheme), in each case in accordance with and subject to the terms of the 2008 Scheme.”; |
(C) | article F.9 of the Articles of Association of the Company shall be replaced by the following new article F.9: |
Subject to the provisions of the Act, the Company may by special resolution reduce its share capital, any capital redemption reserve, any share premium account or any other undistributable reserve in any way. For the avoidance of doubt, the share capital includes the Founders Share.”; |
(D) | following the subdivisions and reclassifications referred to in sub-paragraph (A) above taking effect, the capital of the Company be reduced by cancelling and extinguishing all the |
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(E) | forthwith and contingently upon the said reduction of capital referred to in sub-paragraph (C) taking effect and notwithstanding any other provision in the Company’s Articles of Association: |
(i) | the capital of the Company be increased to its former amount by the creation of such number of ordinary shares of 25 pence each in the capital of the Company as shall have an aggregate nominal value equal to the aggregate of the nominal values of the A Shares, B Shares, C Shares and the Reuters Founders Share cancelled pursuant to sub-paragraph (1)(C) above and such ordinary shares shall have the rights set out in the Company’s Articles of Association; | |
(ii) | the reserve arising in the books of the Company as a result of the said reduction of capital be applied in paying up in full at par the ordinary shares so created, such ordinary shares to be allotted and issued credited as fully paid to TR (2008) or its nominee(s) in accordance with the terms of the Scheme; and | |
(iii) | the directors of the Company be generally and unconditionally authorised for the purposes of section 80 of the Companies Act 1985 to allot the ordinary shares referred to in sub-paragraph (E)(i) above, provided that (1) the maximum aggregate nominal amount of shares which may be allotted hereunder is £316,224,519, (2) this authority shall expire on the fifth anniversary of this resolution and (3) this authority shall be in addition and without prejudice to any other authority under the said section 80 previously granted and in force on the date on which this resolution is passed, |
(i) | the subdivisions and reclassifications effected by sub-paragraph (A) above shall be reversed and all of the A Shares, the B Shares and the C Shares held by each holder shall be consolidated into one share and subdivided into ordinary shares of 25 pence each accordingly; and |
(ii) | with effect from the Reversal Time, article 3 of the Articles of Association of the Company shall be replaced by the following new article 3: |
“SHARE CAPITAL |
(A) Amount of capital |
(B) Rights attaching to shares |
(1) | Subject to any special rights which may be attached to any other class of shares and to the provision of the Statutes, the profits of the Company available for distribution and resolved to be distributed shall be distributed by way of dividend among the holders of the Ordinary Shares rateably according to the number of shares held by them respectively; | |
(2) | On return of assets on awinding-up, the assets of the Company available for distribution among the members shall be applied, subject to any provision of section 719 of the Act and any special rights which may be attached to any other class of shares, in repaying to the holders of the Founders Share and the Ordinary Shares rateably according to the number of shares held by them |
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(3) | The Founders Share shall carry no right to receive any of the profits of the Company available for distribution by way of dividend or otherwise”; and |
(F) | conditional on the Scheme becoming effective, the Company’s shares be delisted from the Official List of the UK Listing Authority; |
2. | subject to the Scheme becoming effective, the Thomson Reuters PLC Reduction of Capital (as described in Section 3 of Part VI of the circular to shareholders dated 29 February 2008), be and is hereby approved and the directors of Thomson Reuters PLC be and are hereby authorised to take all such action as they may consider necessary or appropriate for carrying such reduction of capital into effect; |
3. | with effect from the passing of this resolution, the Articles of Association of the Company be altered by the adoption and inclusion of the following new article 3(C): |
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4. | with effect from the Effective Date (as defined in the Scheme), article 3 of the Articles of Association of the Company shall be replaced by the following new article 3: |
(A) | Amount of capital |
(B) | Rights attaching to shares |
(1) | subject to any special rights which may be attached to any other class of shares and to the provision of the Statutes, the profits of the Company available for distribution and resolved to be distributed shall be distributed by way of dividend among the holders of the Ordinary Shares rateably according to the number of shares held by them respectively; and | |
(2) | on a return of assets on awinding-up, the assets of the Company available for distribution among the members shall be applied, subject to any provision of section 719 of the Act and any special rights which may be attached to any other class of shares, in repaying to the holders of the Ordinary Shares rateably according to the number of shares held by them respectively the amounts paid up on such shares, and subject thereto shall belong and be distributed among the holders of the Ordinary Shares rateably according to the number of such shares held by them respectively.” |
5. | the waiver granted by the Panel of the obligation which may otherwise arise, pursuant to Rule 9 of the Code, for The Woodbridge Company Limited and its affiliates to make a general offer to the shareholders of Thomson Reuters PLC for all the issued ordinary shares in the capital of Thomson Reuters PLC be and is hereby approved; |
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6. | subject to the Scheme becoming effective, the Thomson Reuters Stock Incentive Plan, the principal terms of which are summarised at Section 23.1 of Part XVIII of the circular to shareholders dated 9 February 2008, be approved; |
7. | subject to the Scheme becoming effective, the Thomson Reuters Phantom Stock Plan, the principal terms of which are summarised in Section 23.2 of Part XVIII of the circular to shareholders dated 9 February 2008, be approved; |
8. | subject to the Scheme becoming effective, the Thomson Reuters Deferred Compensation Plan, the principal terms of which are summarised at Section 23.3 of Part XVIII of the circular to shareholders dated 9 February 2008, be approved; |
9. | subject to the Scheme becoming effective, the Thomson Reuters Employee Stock Purchase Plans, the principal terms of which are summarised at Section 23.4 of Part XVIII of the circular to shareholders dated 9 February 2008, be approved; and |
10. | subject to the Scheme becoming effective, the Thomson Reuters Non-Employee Director Share Plan, the principal terms of which are summarised at Section 23.5 of Part XVIII of the circular to shareholders dated 9 February 2008, be approved. |
Rosemary Martin
Company Secretary
1. | Only holders of ordinary shares of 25 pence in the capital of Reuters are entitled to attend and vote at this meeting and may appoint a proxy to attend, speak and vote instead of them. A Reuters Shareholder may appoint more than one proxy in relation to the extraordinary general meeting provided that each proxy is entitled to exercise the rights attaching to a different share or shares held by that member. A proxy need not be a member of the Company. |
2. | A yellow form of proxy is enclosed for use at this meeting. To be valid, completed forms of proxy must be returned so as to arrive at the offices of the Company’s registrar, Equiniti Limited, Aspect House, Lancing, West Sussex BN99 6DA not later than 10.15 a.m. on 24 March 2008, or if the meeting is adjourned, at least 48 hours before the start of the adjourned meeting. Reuters Shareholders with Scheme Shares held through CREST may also appoint a proxy or proxies using CREST by following the instructions set out on Part IV of this document. Completion and return of a form of proxy, or the appointment of proxies through CREST will not preclude a holder of Reuters Shares from attending and voting in person at the meeting, or any adjournment thereof. |
3. | Completion and return of a form of proxy, or the appointment of proxies through CREST, will not preclude a shareholder from attending and voting in person. |
4. | Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, entitlement to attend and vote at the meeting and the number of votes which may be cast thereat will be determined by reference to the register of members of the Company at 6.00 p.m. on the day prior to the day immediately before the meeting. Changes to entries on the register of members after that time shall be disregarded in determining the rights of any person to attend and vote at the meeting. |
5. | In the case of joint holders of ordinary shares the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the other joint holder(s) and for this |
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purpose seniority will be determined by the order in which the names stand in the register of members of the Company in respect of the relevant joint holding. |
6. | The statement of rights of Reuters Shareholders in relation to the appointment of proxies described in these notes does not apply to nominated persons. Such rights can only be exercised by Reuters Shareholders. |
7. | Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a “nominated person”) may, under an agreement between him/her and the member by whomhe/she was nominated have a right to be appointed (or to have someone else appointed) as a proxy for the general. If a nominated person has no such proxy appointment right or does not wish to exercise it,he/she may, under any such agreement, have a right to give instructions to the member as to the exercise of voting rights. |
8. | In accordance with the requirements of the Takeover Panel, resolution 5 will be decided on a poll. |
9. | In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the meeting so that (i) if a corporate shareholder has appointed the chairman of the meeting as its corporate representative with instructions to vote on a poll in accordance with the directions of all of the other corporate representatives for that shareholder at the meeting, then on a poll those corporate representatives will give voting directions to the chairman and the chairman will vote (or withhold a vote) as corporate representative in accordance with those directions; and (ii) if more than one corporate representative for the same corporate shareholder attends the meeting but the corporate shareholder has not appointed the chairman of the meeting as its corporate representative, a designated corporate representative will be nominated, from those corporate representatives who attend, who will vote on a poll and the other corporate representatives will give voting directions to that designated corporate representative. Corporate shareholders are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on proxies and corporate representatives (www.icsa.org.uk) for further details of this procedure. The guidance includes a sample form of representation letter if the chairman is being appointed as described in (i) above. |
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