Thomson Reuters (TRI) 6-K Current report (foreign)

Exhibit 99.2

Unaudited Consolidated Financial Statements

THOMSON REUTERS CORPORATION

CONSOLIDATED INCOME STATEMENT

(unaudited)

			Three months ended March 31,
(millions of U.S. dollars, except per share amounts)	Notes		2022		2021
CONTINUING OPERATIONS
Revenues		2		1,674		1,580
Operating expenses		5		(1,081)		(1,018)
Depreciation				(38)		(46)
Amortization of computer software				(114)		(115)
Amortization of other identifiable intangible assets				(26)		(31)
Other operating (losses) gains, net		6		(1)		17
Operating profit				414		387
Finance costs, net:
Net interest expense		7		(48)		(51)
Other finance income (costs)		7		94		(6)
Income before tax and equity method investments				460		330
Share of post-tax earnings in equity method investments		8		798		6,297
Tax expense		9		(240)		(1,594)
Earnings from continuing operations				1,018		5,033
(Loss) earnings from discontinued operations, net of tax				(11)		3
Net earnings				1,007		5,036
Earnings attributable to common shareholders				1,007		5,036
Earnings per share:		10
Basic earnings (loss) per share:
From continuing operations				$2.09		$10.15
From discontinued operations				(0.02)		-
Basic earnings per share				$2.07		$10.15
Diluted earnings (loss) per share:
From continuing operations				$2.09		$10.13
From discontinued operations				(0.03)		-
Diluted earnings per share				$2.06		$10.13

The related notes form an integral part of these consolidated financial statements.

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THOMSON REUTERS CORPORATION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(unaudited)

		Three months ended March 31,
(millions of U.S. dollars)	Notes	2022		2021
Net earnings			1,007		5,036
Other comprehensive income (loss):
Items that have been or may be subsequently reclassified to net earnings:
Cash flow hedges adjustments to net earnings	7		(13)		(15)
Cash flow hedges adjustments to equity			20		9
Foreign currency translation adjustments to equity			(26)		5
Share of other comprehensive loss in equity method investments	8		-		(98)
Related tax benefit on share of other comprehensive loss in equity method investments			-		23
			(19)		(76)
Items that will not be reclassified to net earnings:
Fair value adjustments on financial assets	12		(4)		(2)
Remeasurement on defined benefit pension plans			46		96
Related tax expense on remeasurement on defined benefit pension plans			(11)		(23)
			31		71
Other comprehensive income (loss)			12		(5)
Total comprehensive income			1,019		5,031
Comprehensive income for the period attributable to:
Common shareholders:
Continuing operations			1,030		5,028
Discontinued operations			(11)		3
Total comprehensive income			1,019		5,031

The related notes form an integral part of these consolidated financial statements.

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THOMSON REUTERS CORPORATION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(unaudited)

			March 31,		December 31,
(millions of U.S. dollars)	Notes		2022		2021(1)
Cash and cash equivalents		12		654		778
Trade and other receivables				982		1,057
Other financial assets		12		49		108
Prepaid expenses and other current assets				445		462
Current assets excluding assets held for sale				2,130		2,405
Assets held for sale		11		211		48
Current assets				2,341		2,453
Property and equipment, net				479		502
Computer software, net				826		822
Other identifiable intangible assets, net				3,302		3,331
Goodwill				5,882		5,940
Equity method investments		8		7,545		6,736
Other non-current assets		13		1,312		1,226
Deferred tax				1,142		1,139
Total assets				22,829		22,149
LIABILITIES AND EQUITY
Liabilities
Payables, accruals and provisions		14		1,050		1,326
Current tax liabilities				211		169
Deferred revenue				824		874
Other financial liabilities		12		78		175
Current liabilities excluding liabilities associated with assets held for sale				2,163		2,544
Liabilities associated with assets held for sale		11		158		37
Current liabilities				2,321		2,581
Long-term indebtedness		12		3,800		3,786
Provisions and other non-current liabilities		15		881		943
Deferred tax				1,202		1,005
Total liabilities				8,204		8,315
Equity
Capital		16		5,485		5,496
Retained earnings				9,974		9,149
Accumulated other comprehensive loss				(834)		(811)
Total equity				14,625		13,834
Total liabilities and equity				22,829		22,149

Contingencies (note 18)

(1) Amounts have been reclassified to reflect the current presentation.

The related notes form an integral part of these consolidated financial statements.

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THOMSON REUTERS CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOW

(unaudited)

			Three months ended March 31,
(millions of U.S. dollars)	Notes		2022		2021
Cash provided by (used in):
OPERATING ACTIVITIES
Earnings from continuing operations				1,018		5,033
Adjustments for:
Depreciation				38		46
Amortization of computer software				114		115
Amortization of other identifiable intangible assets				26		31
Share of post-tax earnings in equity method investments		8		(798)		(6,297)
Deferred tax				166		674
Other		17		(39)		30
Changes in working capital and other items		17		(191)		785
Operating cash flows from continuing operations				334		417
Operating cash flows from discontinued operations				(59)		(37)
Net cash provided by operating activities				275		380
INVESTING ACTIVITIES
Acquisitions, net of cash acquired				(8)		(3)
Proceeds from disposals of businesses and investments				-		5
Dividend from sale of LSEG shares		8		-		994
Capital expenditures				(171)		(120)
Other investing activities				-		1
Taxes paid on sale of Refinitiv and LSEG shares				-		(6)
Investing cash flows from continuing operations				(179)		871
Investing cash flows from discontinued operations				-		(42)
Net cash (used in) provided by investing activities				(179)		829
FINANCING ACTIVITIES
Payments of lease principal				(17)		(21)
Repurchases of common shares		16		-		(200)
Dividends paid on preference shares				(1)		(1)
Dividends paid on common shares		16		(209)		(194)
Other financing activities				7		5
Net cash used in financing activities				(220)		(411)
Translation adjustments				-		(1)
(Decrease) increase in cash and cash equivalents				(124)		797
Cash and cash equivalents at beginning of period				778		1,787
Cash and cash equivalents at end of period				654		2,584
Supplemental cash flow information is provided in note 17.
Interest paid, net of debt related hedges				(14)		(14)
Interest received				1		1
Income taxes paid		17		(35)		(86)

Interest received and interest paid are reflected as operating cash flows.

Income taxes paid are reflected as either operating or investing cash flows depending on the nature of the underlying transaction.

The related notes form an integral part of these consolidated financial statements.

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THOMSON REUTERS CORPORATION

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(unaudited)

(millions of U.S. dollars)	Stated share capital		Contributed surplus		Total capital		Retained earnings		Unrecognized gain on financial instruments		Foreign currency translation adjustments		Total accumulated other comprehensive loss (“AOCL”)		Total equity
Balance, December 31, 2021		3,813		1,683		5,496		9,149		25		(836)		(811)		13,834
Net earnings		-		-		-		1,007		-		-		-		1,007
Other comprehensive income (loss)		-		-		-		35		3		(26)		(23)		12
Total comprehensive income (loss)		-		-		-		1,042		3		(26)		(23)		1,019
Dividends declared on preference shares		-		-		-		(1)		-		-		-		(1)
Dividends declared on common shares		-		-		-		(216)		-		-		-		(216)
Shares issued under Dividend Reinvestment Plan (“DRIP”)		7		-		7		-		-		-		-		7
Stock compensation plans		85		(103)		(18)		-		-		-		-		(18)
Balance, March 31, 2022		3,905		1,580		5,485		9,974		28		(862)		(834)		14,625
(millions of U.S. dollars)	Stated share capital		Contributed surplus		Total capital		Retained earnings		Unrecognized (loss) gain on financial instruments		Foreign currency translation adjustments		AOCL		Total equity
Balance, December 31, 2020		3,719		1,739		5,458		5,211		(8)		(681)		(689)		9,980
Net earnings		-		-		-		5,036		-		-		-		5,036
Other comprehensive income(loss)		-		-		-		73		14		(92)		(78)		(5)
Total comprehensive income (loss)		-		-		-		5,109		14		(92)		(78)		5,031
Dividends declared on preference shares		-		-		-		(1)		-		-		-		(1)
Dividends declared on common shares		-		-		-		(200)		-		-		-		(200)
Shares issued under DRIP		6		-		6		-		-		-		-		6
Stock compensation plans		72		(71)		1		-		-		-		-		1
Balance, March 31, 2021		3,797		1,668		5,465		10,119		6		(773)		(767)		14,817

The related notes form an integral part of these consolidated financial statements.

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Thomson Reuters Corporation

Notes to Consolidated Financial Statements (unaudited)

(unless otherwise stated, all amounts are in millions of U.S. dollars)

Note 1: Business Description and Basis of Preparation

General business description

Thomson Reuters Corporation (the “Company” or “Thomson Reuters”) is an Ontario, Canada corporation with common shares listed on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”) and Series II preference shares listed on the TSX. The Company is a leading provider of business information services. The Company’s products include highly specialized information-enabled software and tools for legal, tax, accounting and compliance professionals combined with the world’s most global news service - Reuters.

These unaudited interim consolidated financial statements (“interim financial statements”) were approved by the Audit Committee of the Board of Directors of the Company on May 2, 2022.

Change Program

In February 2021, the Company announced a two-year Change Program to transition from a holding company to an operating company, and from a content provider into a content-driven technology company (see note 5).

Basis of preparation

The interim financial statements were prepared using the same accounting policies and methods as those used in the Company’s consolidated financial statements for the year ended December 31, 2021. The interim financial statements comply with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”). Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), have been omitted or condensed.

The preparation of financial statements in accordance with IAS 34 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company’s accounting policies. The areas involving more judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements have been disclosed in note 2 of the consolidated financial statements for the year ended December 31, 2021.

The global economy is experiencing substantial disruption due to the Russian military invasion of Ukraine on February 24, 2022 and the ongoing impacts from COVID-19. In response to the invasion, several countries have imposed economic sanctions that are affecting global financial markets and exacerbating economic challenges such as inflation and global supply-chain disruption. Due to the significant uncertainty created by these circumstances, some of management’s estimates and judgments may be more variable and may change materially in the future.

The accompanying interim financial statements include all adjustments, composed of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position and cash flows. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2021, which are included in the Company’s 2021 annual report.

References to “$” are to U.S. dollars and references to “C$” are to Canadian dollars.

Revision to Segment Results

In the first quarter of 2022, the Company made two changes to its segment reporting to reflect how it currently manages its businesses. The changes (i) reflect the transfer of certain revenues from its Corporates business to its Tax & Accounting Professionals business where they are better aligned; and (ii) record intercompany revenue in Reuters News for content-related services that it provides to Legal Professionals, Corporates and Tax & Accounting Professionals. Previously, these services had been reported as a transfer of expense from Reuters News to these businesses. These changes impact the financial results of the Company’s segments, but do not change the Company’s consolidated financial results. The table below summarizes the changes.

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	Three months ended March 31, 2021
	As Reported		Adjustments		As Revised
Revenues
Legal Professionals		668		-		668
Corporates		384		(2)		382
Tax & Accounting Professionals		225		2		227
Reuters News		160		5		165
Global Print		143		-		143
Eliminations/Rounding		-		(5)		(5)
Revenues		1,580		-		1,580
Adjusted EBITDA
Legal Professionals		279		-		279
Corporates		146		(1)		145
Tax & Accounting Professionals		98		1		99
Reuters News		28		-		28
Global Print		57		-		57
Total reportable segments adjusted EBITDA		608		-		608

Note 2: Revenues

Revenues by type and geography

The following tables disaggregate revenues by type and geography and reconciles them to reportable segments (see note 3).

Revenues by type	Legal Professionals				Corporates				Tax & Accounting Professionals				Reuters News				Global Print				Eliminations / Rounding				Total
Three months ended March 31,	2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
Recurring		653		621		316		293		182		162		155		149		-		-		(6)		(5)		1,300		1,220
Transactions		45		47		95		89		71		65		21		16		-		-		-		-		232		217
Global Print		-		-		-		-		-		-		-		-		142		143		-		-		142		143
Total		698		668		411		382		253		227		176		165		142		143		(6)		(5)		1,674		1,580
Revenues by geography (country of destination)	Legal Professionals				Corporates				Tax & Accounting Professionals				Reuters News				Global Print				Eliminations / Rounding				Total
Three months ended March 31,	2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
U.S.		557		526		345		322		206		190		30		54		103		101		(6)		(5)		1,235		1,188
Canada (country of domicile)		17		16		2		2		10		10		1		1		17		17		-		-		47		46
Other		8		5		14		11		30		20		2		2		4		4		-		-		58		42
Americas (North America, Latin America, South America)		582		547		361		335		246		220		33		57		124		122		(6)		(5)		1,340		1,276
U.K.		66		68		27		26		4		4		102		66		8		9		-		-		207		173
Other		16		17		14		12		-		-		27		27		3		4		-		-		60		60
EMEA (Europe, Middle East and Africa)		82		85		41		38		4		4		129		93		11		13		-		-		267		233
Asia Pacific		34		36		9		9		3		3		14		15		7		8		-		-		67		71
Total		698		668		411		382		253		227		176		165		142		143		(6)		(5)		1,674		1,580

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Note 3: Segment Information

The Company is organized as five reportable segments, reflecting how the businesses are managed. The accounting policies applied by the segments are the same as those applied by the Company. The segments offer products and services to target customers as described below.

Legal Professionals

The Legal Professionals segment serves law firms and governments with research and workflow products, focusing on intuitive legal research powered by emerging technologies and integrated legal workflow solutions that combine content, tools and analytics.

Corporates

The Corporates segment serves corporate customers from small businesses to multinational organizations, including the seven largest global accounting firms, with the Company’s full suite of content-enabled technology solutions for in-house legal, tax, regulatory, compliance and IT professionals.

Tax & Accounting Professionals

The Tax & Accounting Professionals segment serves tax, accounting and audit professionals in accounting firms (other than the seven largest, which are served by the Corporates segment) with research and workflow products, focusing on intuitive tax offerings and automating tax workflows.

Reuters News

The Reuters News segment supplies business, financial and global news to the world’s media organizations, professionals and news consumers through Reuters News Agency, Reuters.com, Reuters Events, Thomson Reuters products and the Refinitiv business of London Stock Exchange Group (“LSEG”).

Global Print

The Global Print segment provides legal and tax information primarily in print format to customers around the world.

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The Company also reports “Corporate costs”, which includes expenses for corporate functions and the Change Program which are centrally managed. Corporate costs does not qualify as a reportable segment.

	Three months ended March 31,
	2022		2021
Revenues
Legal Professionals		698		668
Corporates		411		382
Tax & Accounting Professionals		253		227
Reuters News		176		165
Global Print		142		143
Eliminations/Rounding		(6)		(5)
Revenues		1,674		1,580
Adjusted EBITDA
Legal Professionals		305		279
Corporates		157		145
Tax & Accounting Professionals		122		99
Reuters News		37		28
Global Print		53		57
Total reportable segments adjusted EBITDA		674		608
Corporate costs		(74)		(50)
Fair value adjustments (see note 5)		(7)		4
Depreciation		(38)		(46)
Amortization of computer software		(114)		(115)
Amortization of other identifiable intangible assets		(26)		(31)
Other operating (losses) gains, net		(1)		17
Operating profit		414		387
Net interest expense		(48)		(51)
Other finance income (costs)		94		(6)
Share of post-tax earnings in equity method investments		798		6,297
Tax expense		(240)		(1,594)
Earnings from continuing operations		1,018		5,033

During the first three months of 2022, Reuters News revenues included $6 million (2021 - $5 million), primarily from content-related services that it provided to the Legal Professionals, Corporates and Tax & Accounting Professionals segments.

In accordance with IFRS 8, Operating Segments, the Company discloses certain information about its reportable segments based upon measures used by management in assessing the performance of those reportable segments. These measures are defined below and may not be comparable to similar measures of other companies.

Segment Adjusted EBITDA

^●  Segment adjusted EBITDA represents earnings from continuing operations before tax expense or benefit, net interest expense, other finance costs or income, depreciation, amortization of software and other identifiable intangible assets, the Company’s share of post-tax earnings or losses in equity method investments, other operating gains and losses, certain asset impairment charges, fair value adjustments, and corporate related items.

^●  The Company does not consider these excluded items to be controllable operating activities for purposes of assessing the current performance of the reportable segments.

^●  Each segment includes an allocation of costs, based on usage or other applicable measures, for centralized support services such as technology, customer service, commercial policy, facilities management, and product and content development. Additionally, product costs are allocated when one segment sells products managed by another segment.

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Note 4: Seasonality

The Company’s revenues and operating profit on a consolidated basis do not tend to be significantly impacted by seasonality as it records a large portion of its revenues ratably over the contract term and its costs are generally incurred evenly throughout the year. However, the Company’s revenues from quarter to consecutive quarter can be impacted by the release of certain tax products, which tend to be concentrated in the fourth quarter and, to a lesser extent, in the first quarter of the year. The timing of costs related to the Change Program impacted the seasonality of the Company’s expenses and operating profit in 2022 and 2021.

Note 5: Operating Expenses

The components of operating expenses include the following:

	Three months ended March 31,
	2022		2021
Salaries, commissions and allowances		593		584
Share-based payments		21		18
Post-employment benefits		37		37
Total staff costs		651		639
Goods and services(1)		331		288
Content		67		71
Telecommunications		13		12
Facilities		12		12
Fair value adjustments(2)		7		(4)
Total operating expenses		1,081		1,018

(1) Goods and services include professional fees, consulting and outsourcing services, contractors, selling and marketing, and other general and administrative costs.

(2) Fair value adjustments primarily represent gains or losses due to changes in foreign currency exchange rates on intercompany balances that arise in the ordinary course of business.

Operating expenses in 2022 included $34 million (2021 - $11 million) related to the Change Program. The charges included severance as well as costs to drive technology and digital sales efficiencies.

Note 6: Other Operating (Losses) Gains, Net

Other operating losses, net, of $1 million for the three months ended March 31, 2022 were not significant. Other operating gains, net, of $17 million for the three months ended March 31, 2021 included a benefit from the revaluation of warrants that the Company held in Refinitiv prior to its sale to LSEG on January 29, 2021 and income from a license that allows LSEG’s Refinitiv business to use the “Reuters” mark.

Note 7: Finance Costs, Net

The components of finance costs, net, include interest expense (income) and other finance costs (income) as follows:

	Three months ended March 31,
	2022		2021
Interest expense:
Debt		40		40
Derivative financial instruments — hedging activities		(1)		(1)
Other, net		5		7
Fair value gains on cash flow hedges, transfer from equity		(13)		(15)
Net foreign exchange losses on debt		13		15
Net interest expense — debt and other		44		46
Net interest expense — leases		2		2
Net interest expense — pension and other post-employment benefit plans		3		4
Interest income		(1)		(1)
Net interest expense		48		51

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	Three months ended March 31,
	2022		2021
Net (gains) losses due to changes in foreign currency exchange rates		(16)		6
Net gains on derivative instruments		(78)		-
Other finance (income) costs		(94)		6

Net (gains) losses due to changes in foreign currency exchange rates

Net (gains) losses due to changes in foreign currency exchange rates were principally comprised of amounts related to certain intercompany funding arrangements.

Net gains on derivative instruments

Net gains on derivative instruments largely related to foreign exchange contracts, including gains on instruments that are intended to reduce foreign currency risk on a portion of the Company’s indirect investment in LSEG, which is denominated in British pounds sterling.

Note 8: Equity Method Investments

Equity method investments were primarily comprised of the Company’s indirect investment in LSEG shares, which it holds through its direct investment in York Parent Limited and its subsidiaries (“YPL”), formerly Refinitiv Holdings Ltd. (“RHL”). YPL is an entity jointly owned by the Company, Blackstone’s consortium (comprised of The Blackstone Group and its subsidiaries, and private equity funds affiliated with Blackstone), and certain current LSEG and former members of Refinitiv senior management. As of March 31, 2022 and December 31, 2021, YPL held a combination of LSEG ordinary shares and LSEG limited-voting ordinary shares (with the shares carrying in aggregate an approximate 30% economic interest and a 24% voting interest in LSEG). At the same dates, the Company owned 42.82% of YPL and indirectly owned approximately 72.4 million LSEG shares.

The investment in LSEG is subject to equity accounting because the LSEG shares are held through YPL, over which the Company has significant influence. As YPL owns only the financial investment in LSEG shares, which the parties intend to sell over time, and is not involved in operating LSEG or the Refinitiv business of LSEG, the investment in LSEG shares held by YPL is accounted for at fair value, based on the share price of LSEG. As the investment in LSEG is denominated in British pounds sterling, the Company has entered a series of foreign exchange contracts (see note 12) to mitigate currency risk on its investment.

The Company’s share of post-tax earnings in equity method investments as reported in the consolidated income statement is comprised of the following:

	Three months ended March 31,
	2022		2021
YPL		799		6,295
Other equity method investments		(1)		2
Total share of post-tax earnings in equity method investments		798		6,297

In the three months ended March 31, 2022, the Company’s share of post-tax earnings in equity method investments was primarily comprised of a $799 million increase in the value of the LSEG investment.

In the three months ended March 31, 2021, the Company’s share of post-tax earnings in equity method investments was primarily comprised of an $8,075 million gain from the sale of Refinitiv, in which the Company owned a 45% interest, to LSEG, which was partially offset by a $1,612 million decline in the value of the LSEG investment after the sale and $168 million of post-tax losses related to the Refinitiv operations prior to the sale. Additionally, as permitted under a lock-up exception, approximately 10.1 million of the Company’s LSEG shares were sold in March 2021 for pre-tax net proceeds of $994 million. The proceeds from the sale of the shares by YPL were distributed to the Company as a dividend that reduced the value of the investment. The proceeds were presented in “Net cash flows (used in) provided by investing activities” in the consolidated statement of cash flow.

The composition of equity method investments as reported in the consolidated statement of financial position is comprised of the following:

	March 31,		December 31,
	2022		2021
YPL		7,373		6,574
Other equity method investments		172		162
Total equity method investments		7,545		6,736

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Set forth below is summarized financial information for 100% of YPL at March 31, 2022 and 2021 (formerly RHL prior to its sale in January 2021).

	Three months ended March 31,
	2022		2021
Revenues		-		551
Gain related to the sale of Refinitiv to LSEG		-		18,645
Mark-to-market of LSEG shares		1,865		(3,574)
Refinitiv net loss prior to its sale to LSEG		-		(361)
Net earnings		1,865		14,710
Remove: Net earnings attributable to non-controlling interests		-		(11)
Net earnings attributable to YPL		1,865		14,699
Other comprehensive loss attributable to YPL		-		(214)
Total comprehensive income attributable to YPL		1,865		14,485

The following table reconciles the net assets attributable to YPL (formerly RHL) to the Company’s carrying value of its investment in YPL:

	March 31,		December 31,
	2022		2021
Assets
Current assets		6		6
Non-current assets		17,982		16,068
Total assets		17,988		16,074
Liabilities
Current liabilities		4		4
Non-current liabilities		238		189
Total liabilities		242		193
Net assets attributable to YPL		17,746		15,881
Net assets attributable to YPL - beginning period		15,881		2,487
Net earnings attributable to YPL		1,865		14,555
Other comprehensive loss attributable to YPL		-		(214)
Other adjustments(1)		-		253
Distribution to owners		-		(1,200)
Net assets attributable to YPL - ending period		17,746		15,881
Thomson Reuters % share		42.82%		42.82%
Thomson Reuters $ share		7,599		6,800
Historical excluded equity adjustment(2)		(226)		(226)
Thomson Reuters carrying amount		7,373		6,574

(1) Consists of equity transactions excluded from total comprehensive income attributable to YPL.

(2) Represents the cumulative impact of equity transactions excluded from the Company’s investment in YPL.

Note 9: Taxation

Tax expense was $240 million and $1,594 million for the three months ended March 31, 2022 and 2021, respectively. The three months ended March 31, 2021 included $1,538 million of tax expense related to the Company’s earnings in equity method investments, primarily from the gain on sale of Refinitiv to LSEG. Additionally, tax expense in each period reflected the mix of taxing jurisdictions in which pre-tax profits and losses were recognized. Because the geographical mix of pre-tax profits and losses in interim periods may be different from that for the full year, tax expense or benefit in interim periods is not necessarily indicative of tax expense for the full year.

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Note 10: Earnings Per Share

Basic earnings per share was calculated by dividing earnings attributable to common shareholders less dividends declared on preference shares by the sum of the weighted-average number of common shares outstanding and vested deferred share units (“DSUs”) outstanding during the period. DSUs represent common shares that certain employees have elected to receive in the future upon vesting of share-based compensation awards or in lieu of cash compensation.

Diluted earnings per share was calculated using the denominator of the basic calculation described above adjusted to include the potentially dilutive effect of outstanding stock options and time-based restricted share units (“TRSUs”).

Earnings used in determining consolidated earnings per share and earnings per share from continuing operations are as follows:

	Three months ended March 31,
	2022		2021
Earnings attributable to common shareholders		1,007		5,036
Less: Dividends declared on preference shares		(1)		(1)
Earnings used in consolidated earnings per share		1,006		5,035
Less: Loss (earnings) from discontinued operations, net of tax		11		(3)
Earnings used in earnings per share from continuing operations		1,017		5,032

The weighted-average number of common shares outstanding, as well as a reconciliation of the weighted-average number of common shares outstanding used in the basic earnings per share computation to the weighted-average number of common shares outstanding used in the diluted earnings per share computation, is presented below:

	Three months ended March 31,
	2022		2021
Weighted-average number of common shares outstanding		486,384,727		495,507,124
Weighted-average number of vested DSUs		324,031		432,846
Basic		486,708,758		495,939,970
Effect of stock options and TRSUs		804,458		998,348
Diluted		487,513,216		496,938,318

Note 11: Assets Held for Sale

Assets held for sale included several small businesses and products that the Company intends to sell. The assets and liabilities classified as held for sale in the consolidated statement of financial position are as follows:

	March 31,		December 31,
	2022		2021
Trade and other receivables		40		14
Other financial assets		86		-
Prepaid expenses and other current assets		3		1
Property and equipment, net		3		4
Computer software, net		9		5
Goodwill		60		14
Other assets		10		10
Total assets held for sale		211		48
Payables, accruals and provisions		11		8
Deferred revenue		58		26
Other financial liabilities		88		2
Other liabilities		1		1
Total liabilities associated with assets held for sale		158		37

Foreign currency translation gains of $22 million relating to these assets were recorded within accumulated other comprehensive loss in the consolidated statement of financial position at March 31, 2022 (December 31, 2021 – gains of $23 million).

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Note 12: Financial Instruments

Financial assets and liabilities

Financial assets and liabilities in the consolidated statement of financial position were as follows:

March 31, 2022	Assets/ (Liabilities) at Amortized Cost		Assets at Fair Value through Earnings		Assets at Fair Value through Other Comprehensive Income or Loss		Derivatives Used for Hedging		Total
Cash and cash equivalents		294		360		-		-		654
Trade and other receivables		982		-		-		-		982
Other financial assets - current		13		36		-		-		49
Other financial assets - non-current (see note 13)		26		298		64		120		508
Trade payables (see note 14)		(183)		-		-		-		(183)
Accruals (see note 14)		(720)		-		-		-		(720)
Other financial liabilities - current(1)		(78)		-		-		-		(78)
Long-term indebtedness		(3,800)		-		-		-		(3,800)
Other financial liabilities - non current (see note 15)(2)		(217)		-		-		-		(217)
Total		(3,683)		694		64		120		(2,805)

December 31, 2021	Assets/ (Liabilities) at Amortized Cost		Assets/ (Liabilities) at Fair Value through Earnings		Assets at Fair Value through Other Comprehensive Income or Loss		Derivatives Used for Hedging		Total
Cash and cash equivalents		389		389		-		-		778
Trade and other receivables		1,057		-		-		-		1,057
Other financial assets - current		108		-		-		-		108
Other financial assets - non-current (see note 13)		27		235		68		99		429
Trade payables (see note 14)		(227)		-		-		-		(227)
Accruals (see note 14)		(950)		-		-		-		(950)
Other financial liabilities - current(1)		(174)		(1)		-		-		(175)
Long-term indebtedness		(3,786)		-		-		-		(3,786)
Other financial liabilities - non current (see note 15)(2)		(215)		(19)		-		-		(234)
Total		(3,771)		604		68		99		(3,000)

(1) Includes lease liabilities of $62 million (2021 - $64 million).

(2) Includes lease liabilities of $199 million (2021 - $197 million).

Cash and cash equivalents

Of total cash and cash equivalents, $76 million and $70 million at March 31, 2022 and December 31, 2021, respectively, were held in subsidiaries which have regulatory restrictions, contractual restrictions or operate in countries where exchange controls and other legal restrictions apply and were therefore not available for general use by the Company.

Commercial paper program

The Company’s $1.8 billion commercial paper program provides cost effective and flexible short-term funding. There was no outstanding commercial paper at March 31, 2022 and December 31, 2021.

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Credit facility

The Company has a $1.8 billion syndicated credit facility agreement which matures in December 2024 and may be used to provide liquidity for general corporate purposes (including acquisitions or support for its commercial paper program). There were no outstanding borrowings under the credit facility at March 31, 2022 and December 31, 2021. Based on the Company’s current credit ratings, the cost of borrowing under the facility is priced at LIBOR/EURIBOR plus 112.5 basis points. The Company has the option to request an increase, subject to approval by applicable lenders, in the lenders’ commitments in an aggregate amount of $600 million for a maximum credit facility commitment of $2.4 billion.

The U.K. Financial Conduct Authority, which regulates LIBOR, phased out the majority of LIBOR rates globally at the end of 2021. The Company has no material agreements with third parties that use or reference LIBOR, except for the LIBOR-based benchmarks in the Company’s external credit facility, for which adequate LIBOR benchmarks will remain in effect until June 2023.

The Company guarantees borrowings by its subsidiaries under the credit facility. The Company must also maintain a ratio of net debt as defined in the credit agreement (total debt after swaps less cash and cash equivalents) as of the last day of each fiscal quarter to EBITDA as defined in the credit agreement (earnings before interest, income taxes, depreciation and amortization and other modifications described in the credit agreement) for the last four quarters ended of not more than 4.5:1. If the Company were to complete an acquisition with a purchase price of over $500 million, the ratio of net debt to EBITDA would temporarily increase to 5.0:1 for three quarters after completion, at which time the ratio would revert to 4.5:1. As of March 31, 2022, the Company was in compliance with this covenant as its ratio of net debt to EBITDA, as calculated under the terms of its syndicated credit facility, was 1.5:1.

Fair Value

The fair values of cash and cash equivalents, trade and other receivables, trade payables and accruals approximate their carrying amounts because of the short-term maturity of these instruments. The fair value of long-term debt and related derivative instruments is set forth below.

Debt and Related Derivative Instruments

Carrying Amounts

Amounts recorded in the consolidated statement of financial position are referred to as “carrying amounts”. The carrying amounts of primary debt are reflected in “Long-term indebtedness” and “Current indebtedness” and the carrying amounts of derivative instruments are included in “Other financial assets” and “Other financial liabilities”, both current and non-current, in the consolidated statement of financial position, as appropriate.

Fair Value

The fair value of debt is estimated based on either quoted market prices for similar issues or current rates offered to the Company for debt of the same maturity. The fair value of interest rate swaps is estimated based upon discounted cash flows using applicable current market rates and considering non-performance risk.

The following is a summary of debt and related derivative instruments that hedged the cash flows of debt:

	Carrying Amount				Fair Value
March 31, 2022	Primary Debt Instruments		Derivative Instruments (Asset)		Primary Debt Instruments		Derivative Instruments (Asset)
C$1,400, 2.239% Notes, due 2025		1,117		(120)		1,081		(120)
$600, 4.30% Notes, due 2023		599		-		612		-
$450, 3.85% Notes, due 2024(1)		241		-		246		-
$500, 3.35% Notes, due 2026		497		-		502		-
$350, 4.50% Notes, due 2043(1)		116		-		116		-
$350, 5.65% Notes, due 2043		342		-		418		-
$400, 5.50% Debentures, due 2035		396		-		455		-
$500, 5.85% Debentures, due 2040		492		-		607		-
Total		3,800		(120)		4,037		(120)
Long-term portion		3,800		(120)

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	Carrying Amount				Fair Value
December 31, 2021	Primary Debt Instruments		Derivative Instruments (Asset)		Primary Debt Instruments		Derivative Instruments (Asset)
C$1,400, 2.239% Notes, due 2025		1,103		(99)		1,119		(99)
$600, 4.30% Notes, due 2023		599		-		631		-
$450, 3.85% Notes, due 2024(1)		241		-		256		-
$500, 3.35% Notes, due 2026		497		-		531		-
$350, 4.50% Notes, due 2043(1)		116		-		128		-
$350, 5.65% Notes, due 2043		342		-		478		-
$400, 5.50% Debentures, due 2035		396		-		516		-
$500, 5.85% Debentures, due 2040		492		-		695		-
Total		3,786		(99)		4,354		(99)
Long-term portion		3,786		(99)

(1) Notes were partially redeemed in October 2018.

Fair value estimation

The following fair value measurement hierarchy is used for financial instruments that are measured in the consolidated statement of financial position at fair value:

^●  Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

^●  Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and

^●  Level 3 - inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The levels used to determine fair value measurements for those instruments carried at fair value in the consolidated statement of financial position are as follows:

March 31, 2022				Total
Assets	Level 1	Level 2	Level 3		Balance
Money market accounts	-	360	-		360
Other receivables(1)	-	-	275		275
Foreign exchange contracts(2)	-	59	-		59
Financial assets at fair value through earnings	-	419	275		694
Financial assets at fair value through other comprehensive income(3)	39	25	-		64
Derivatives used for hedging(4)	-	120	-		120
Total assets	39	564	275		878

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December 31, 2021				Total
Assets	Level 1	Level 2	Level 3		Balance
Money market accounts	-	389	-		389
Other receivables(1)	-	-	235		235
Financial assets at fair value through earnings	-	389	235		624
Financial assets at fair value through other comprehensive income(3)	46	22	-		68
Derivatives used for hedging(4)	-	99	-		99
Total assets	46	510	235		791
Liabilities
Contingent consideration(5)	-	-	(1)		(1)
Foreign exchange contracts(2)	-	(19)	-		(19)
Financial liabilities at fair value through earnings	-	(19)	(1)		(20)
Total liabilities	-	(19)	(1)		(20)

(1) Receivables under indemnification arrangement (see note 18).

(2) Relates to the management of foreign exchange risk on a portion of the Company’s indirect investment in LSEG.

(3) Investments in entities over which the Company does not have control, joint control or significant influence.

(4) Comprised of fixed-to-fixed cross-currency swaps on indebtedness.

(5) Obligations to pay additional consideration for prior acquisitions, based upon performance measures contractually agreed at the time of purchase.

The receivable from the indemnification arrangement is a level 3 in the fair value measurement hierarchy. The increase in the receivable between December 31, 2021 and March 31, 2022 primarily reflected additional payments that are expected to be recovered, net of fair value losses based on interest rates associated with the indemnifying party’s credit profile, which are included within earnings from discontinued operations, net of tax, in the consolidated income statement.

The Company recognizes transfers into and out of the fair value measurement hierarchy levels at the end of the reporting period in which the event or change in circumstances that caused the transfer occurred. There were no transfers between hierarchy levels for the three months ended March 31, 2022.

Valuation Techniques

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Specific valuation techniques used to value financial instruments include:

^●  Quoted market prices or dealer quotes for similar instruments;

^●  The fair value of cross-currency interest rate swaps and foreign exchange contracts are calculated as the present value of the estimated future cash flows based on observable yield curves;

^●  The fair value of other receivables considers estimated future cash flows, current market interest rates and non-performance risk; and

^●  The fair value of contingent consideration is calculated based on estimates of future revenue performance.

Note 13: Other Non-Current Assets

	March 31,		December 31,
	2022		2021
Net defined benefit plan surpluses		256		239
Cash surrender value of life insurance policies		341		346
Deferred commissions		111		127
Other financial assets (see note 12)		508		429
Other non-current assets(1)		96		85
Total other non-current assets		1,312		1,226

(1) Includes a tax receivable from HM Revenue & Customs (“HMRC”) of $86 million and $74 million at March 31, 2022 and December 31, 2021, respectively (see note 18).

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Note 14: Payables, Accruals and Provisions

	March 31,		December 31,
	2022		2021
Trade payables		183		227
Accruals		720		950
Provisions		108		107
Other current liabilities		39		42
Total payables, accruals and provisions		1,050		1,326

Note 15: Provisions and Other Non-Current Liabilities

	March 31,			December 31,
	2022			2021
Net defined benefit plan obligations		489			506
Other financial liabilities (see note 12)		217			234
Deferred compensation and employee incentives		90	��		99
Provisions		78			94
Other non-current liabilities		7			10
Total provisions and other non-current liabilities		881			943

Note 16: Capital

Share repurchases - Normal Course Issuer Bid (“NCIB”)

The Company buys back shares (and subsequently cancels them) from time to time as part of its capital strategy. In the three months ended March 31, 2021, the Company repurchased 2.5 million common shares totaling $200 million at an average price per share of $81.45 under an NCIB that expired on January 3, 2022. The Company’s expired NCIB enabled it to repurchase up to 20 million common shares at prevailing market prices in amounts and at times determined by the Company. The NCIB permitted the Company to purchase shares in open market transactions on the TSX, the NYSE and/or other exchanges and alternative trading systems, if eligible, or by such other means as were permitted by the TSX and/or NYSE or under applicable law, including private agreement purchases if the Company received an issuer bid exemption order from applicable securities regulatory authorities in Canada for such purchases. Common shares that the Company purchased under the NCIB were cancelled.

Decisions regarding any future repurchases will depend on factors, such as market conditions, share price, and other opportunities to invest capital for growth. When the Company has an effective NCIB, it may elect to suspend or discontinue its share repurchases at any time, in accordance with applicable laws. In addition, when the Company has an effective NCIB, it may from time to time when it does not possess material nonpublic information about itself or its securities, enter into a pre-defined plan with its broker to allow for the repurchase of shares at times when the Company ordinarily would not be active in the market due to its own internal trading blackout periods, insider trading rules or otherwise. Any such plans entered into with the Company’s broker will be adopted in accordance with applicable Canadian securities laws and the requirements of Rule 10b5-1 under the U.S. Securities Exchange Act of 1934, as amended.

Dividends

Dividends on common shares are declared in U.S. dollars. In the consolidated statement of cash flow, dividends paid on common shares are shown net of amounts reinvested in the Company under its dividend reinvestment plan. Details of dividends declared per common share and dividends paid on common shares are as follows:

	Three months ended March 31,
	2022		2021
Dividends declared per common share		$0.445		$0.405
Dividends declared		216		200
Dividends reinvested		(7)		(6)
Dividends paid		209		194

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Note 17: Supplemental Cash Flow Information

Details of “Other” in the consolidated statement of cash flow are as follows:

	Three months ended March 31,
	2022		2021
Non-cash employee benefit charges		42		39
Net (gains) losses on foreign exchange and derivative financial instruments		(92)		6
Revaluation of Refinitiv warrants (see note 6)		-		(9)
Fair value adjustments (see note 5)		7		(4)
Other		4		(2)
		(39)		30

Details of “Changes in working capital and other items” are as follows:

	Three months ended March 31,
	2022		2021
Trade and other receivables		43		94
Prepaid expenses and other current assets		25		(16)
Other financial assets		11		17
Payables, accruals and provisions		(274)		(129)
Deferred revenue		(9)		(32)
Other financial liabilities		(11)		(18)
Income taxes(1)		39		884
Other		(15)		(15)
		(191)		785

(1) The 2021 period reflects current tax liabilities that were recorded on the LSEG transaction and subsequent sale of LSEG shares (see note 8), for which the tax payments are included in investing activities.

Details of income taxes paid are as follows:

	Three months ended March 31,
	2022		2021
Operating activities - continuing operations		(35)		(36)
Operating activities - discontinued operations		-		(2)
Investing activities - continuing operations		-		(6)
Investing activities - discontinued operations(1)		-		(42)
Total income taxes paid		(35)		(86)

(1) Reflects payments made to HMRC (see note 18).

The Company paid $74 million and $87 million in the three months ended March 31, 2022 and 2021, respectively, related to notices of assessment under the Diverted Profit Tax regime. Of the amount paid in the three months ended March 31, 2022, $18 million (2021- $55 million) was paid directly to HMRC and $56 million (2021- $32 million) was paid to LSEG under an indemnity arrangement that related to businesses the Company sold to LSEG. The payments made directly to HMRC were included as income taxes paid in the consolidated statement of cash flow. The payments made to LSEG were presented in operating and investing activities from discontinued operations in the consolidated statement of cash flow and were not included as taxes paid. See note 18.

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Note 18: Contingencies

Lawsuits and legal claims

The Company is engaged in various legal proceedings, claims, audits and investigations that have arisen in the ordinary course of business. These matters include, but are not limited to, employment matters, commercial matters, defamation claims and intellectual property infringement claims. The outcome of all of the matters against the Company is subject to future resolution, including the uncertainties of litigation. Based on information currently known to the Company and after consultation with outside legal counsel, management believes that the ultimate resolution of any such matters, individually or in the aggregate, will not have a material adverse impact on the Company’s financial condition taken as a whole.

Uncertain tax positions

The Company is subject to taxation in numerous jurisdictions and is routinely under audit by many different taxing authorities in the ordinary course of business. There are many transactions and calculations during the course of business for which the ultimate tax determination is uncertain, as taxing authorities may challenge some of the Company’s positions and propose adjustments or changes to its tax filings.

As a result, the Company maintains provisions for uncertain tax positions that it believes appropriately reflect its risk. These provisions are made using the Company’s best estimates of the amount expected to be paid based on a qualitative assessment of all relevant factors. When appropriate, the Company performs an expected value calculation to determine its provisions. The Company reviews the adequacy of these provisions at the end of each reporting period and adjusts them based on changing facts and circumstances. Due to the uncertainty associated with tax audits, it is possible that at some future date, liabilities resulting from such audits or related litigation could vary significantly from the Company’s provisions. However, based on currently enacted legislation, information currently known by the Company and after consultation with outside tax advisors, management believes that the ultimate resolution of any such matters, individually or in the aggregate, will not have a material adverse impact on the Company’s financial condition taken as a whole.

Prior to 2022, the Company paid $379 million of tax as required under notices of assessment issued by the U.K. tax authority, HM Revenue & Customs (“HMRC”), under the Diverted Profits Tax (“DPT”) regime. In February 2022, HMRC issued DPT notices aggregating $74 million, which the Company paid in March 2022. These assessments collectively related to the 2015, 2016, 2017 and 2018 taxation years of certain of the Company’s current and former U.K. affiliates.

HMRC still has the statutory authority to amend the above assessments for the 2016, 2017 and 2018 taxation years by issuing a supplementary DPT notice for each year. Based on recent discussions with HMRC, management believes that HMRC may issue supplementary notices within the next 12 months that would be almost entirely related to businesses the Company has sold, which are subject to indemnity arrangements. If that occurs, the Company will be required to pay additional taxes to HMRC shortly thereafter that could be as much as $350 million in aggregate (largely related to the 2018 taxation year).

As the Company does not believe these current and former U.K. affiliates fall within the scope of the DPT regime, it will continue contesting these assessments (including any amended by HMRC) through all available administrative and judicial remedies and intends to vigorously defend its position. Payments made by the Company are not a reflection of its view on the merits of the case. As the assessments largely relate to businesses that the Company has sold, the majority are subject to indemnity arrangements under which the Company has been or will be required to pay additional taxes to HMRC or the indemnity counterparty.

Because the Company believes that its position is supported by the weight of law, it does not believe that the resolution of this matter will have a material adverse effect on its financial condition taken as a whole. As the Company expects to receive refunds of substantially all of the aggregate of amounts paid and potential future payments pursuant to these notices of assessment, it expects to continue recording substantially all of these payments as non-current receivables from HMRC or the indemnity counterparty on its financial statements. The Company expects that its existing sources of liquidity will be sufficient to fund any required additional payments if HMRC issues supplementary notices.

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Note 19: Related Party Transactions

As of March 31, 2022, the Company’s principal shareholder, The Woodbridge Company Limited, beneficially owned approximately 67% of the Company’s common shares.

Transactions with 3 Times Square Associates LLC. (“3XSQ Associates”)

The Company has an investment in 3XSQ Associates, an entity jointly owned by a subsidiary of the Company and Rudin Times Square Associates LLC (“Rudin”), that owns and operates the 3 Times Square property and building in New York, New York. During the first quarter of 2022, the Company’s investment increased by $10 million due to capital contributions, of which $4 million was unpaid at March 31, 2022. The Company also paid approximately $2 million of rent to 3XSQ Associates for office space in the building. The Company follows the equity method of accounting for its investment.

Except for the above transactions, there were no new significant related party transactions during the first three months of 2022. Refer to “Related party transactions” disclosed in note 31 of the Company’s consolidated financial statements for the year ended December 31, 2021, which are included in the Company’s 2021 annual report, for information regarding related party transactions.

Note 20: Subsequent Events

Acquisition

In April 2022, the Company acquired ThoughtTrace, a business that uses artificial intelligence and machine learning to read, organize and manage document workflows.

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