Annual Report 2014

MARCH 13, 2015

Thomson Reuters Annual Report 2014

OUR VALUES SHAPE OUR CULTURE
We are trusted for the decisions that matter most, empowering customers to act with confidence in a complex world.
TRUST: We act with integrity and independence by holding ourselves and each other to be ethical and reliable in all we do.
PARTNERSHIP: We work together, with each other, with our customers and with industry partners to deliver superior results andexperiences.
INNOVATION: We innovate to serve our customers, drive our growth and win in dynamic business environments.
PERFORMANCE: We deliver results, excelling at work that positively impacts the world.
Information in this annual report is provided as of March 4, 2015, unless otherwise indicated.
Certain statements in this annual report are forward-looking. These forward-looking statements are based on certain assumptions andreflect our current expectations. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause
actual results or events to differ materially from current expectations. Some of the factors that could cause actual results to differ materiallyfrom current expectations are discussed in the “Risk Factors” section of this annual report as well as in materials that we from time to time
file with, or furnish to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. There is no
assurance that any forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking
statements, which reflect expectations only as of the date of this annual report. Except as may be required by applicable law, we disclaim any
intention or obligation to update or revise any forward-looking statements.
The following terms in this annual report have the following meanings, unless otherwise indicated:ŠŠŠ“Thomson Reuters,” “we,” “us” and “our” each refers to Thomson Reuters Corporation and its consolidated subsidiaries, unless thecontext otherwise requires;“Woodbridge” refers to The Woodbridge Company Limited and other companies affiliated with it; and“$,” “US$” or “dollars” are to U.S. dollars.

Non-International Financial Reporting Standards (IFRS) financial measures are defined and reconciled to the most directly comparable IFRS
measures in the “Management’s Discussion and Analysis” section of this annual report.
For information regarding our disclosure requirements under applicable Canadian and U.S. laws and regulations, please see the “Cross
Reference Tables” section of this annual report.
Information contained on our website or any other websites identified in this annual report is not part of this annual report. All website
addresses listed in this annual report are intended to be inactive, textual references only. The Thomson Reuters logo and our othertrademarks, trade names and service names mentioned in this annual report are the property of Thomson Reuters.

Table of ContentsŠBusiness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ŠRisk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

ŠManagement’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

ŠConsolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Š

Executive Officers and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138

ŠAdditional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

ŠCross Reference Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .160

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Thomson Reuters Annual Report 2014

Business
OVERVIEW
We are the leading source of intelligent information for the world’s businesses and professionals, providing customers with competitive
advantage. Intelligent information is a unique synthesis of human intelligence, industry expertise and innovative technology that provides
decision-makers with the knowledge to act, enabling them to make better decisions faster. We deliver this must-have insight to the financial
and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world’s most trusted news
organization. Thomson Reuters shares are listed on the Toronto Stock Exchange and New York Stock Exchange (symbol: TRI). Our website iswww.thomsonreuters.com.
We are organized in four business units:
Financial & Risk, a leading provider of critical news, information and analytics, enabling transactions and bringing
together financial communities. Financial & Risk also provides leading regulatory and operational risk management
solutions.
Legal, a leading provider of critical online and print information, decision tools, software and services that support legal,
investigation, business and government professionals around the world.

Tax & Accounting, a leading provider of integrated tax compliance and accounting information, software and services for
professionals in accounting firms, corporations, law firms and government.

Intellectual Property & Science, a leading provider of comprehensive intellectual property and scientific information,
decision support tools and services that enable the lifecycle of innovation for governments, academia, publishers,
corporations and law firms to discover, protect and commercialize new ideas and brands.

We also have a Global Growth & Operations organization which works across our business units to combine our global capabilities and to
expand our local presence and development in countries and regions where we believe the greatest growth opportunities exist.
We also operate Reuters, which is a leading provider of real-time, high-impact, multimedia news and information services to newspapers,
television and cable networks, radio stations and websites around the globe.

Business Model and Key Operating Characteristics
We derive the majority of our revenues from selling electronic content and services to professionals, primarily on a subscription basis. Our
businesses provide solutions, software and workflow tools which integrate our core data and information.
The table below describes some of our key operating characteristics.
Industry leader

ŠŠŠBalanced and diversified

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Attractive business modelŠŠŠPage 2#1 or #2 in most of the market segments that we serve
Deep and broad industry knowledge
Products and services tailored for professionals
Four distinct core customer groups – our 2014 revenues were: 52% Financial & Risk; 27% Legal; 11% Tax &Accounting; 8% Intellectual Property & Science; and 2% Reuters News
Geographical diversity – our 2014 revenues were 60% from the Americas, 30% from Europe, the Middle East andAfrica (EMEA) and 10% from Asia PacificNo single customer accounted for more than 1.5% of our 2014 revenues
Technology and operating platforms are built to address the global marketplace
87% of our 2014 revenues were recurring
92% of our 2014 revenues were from information delivered electronically, software and services
Strong and consistent cash generation capabilities

Thomson Reuters Annual Report 2014

In late 2013, we began our ongoing transformation from a portfolio of individual operating companies into an integrated enterprise. Throughyears of acquisitions and divestitures, we believe that we have assembled an unrivaled asset base that provides us with an opportunity toengage more of our customers with a full enterprise offering. However, completing nearly 300 acquisitions between 2003 and 2013 also
contributed to a somewhat complex and fragmented infrastructure. The transformation program that we announced in the fall of 2013 wasarticulated around the following objectives:ŠŠŠIncrease the company’s revenue growth organically rather than through acquisitions;Capture economies of scale by simplifying the organization; andDeliver strong and consistent cash flow growth, investing in key growth areas.

We believe that better leveraging of the solid foundation of assets that we have built and acquired will help us better serve our customers,
drive organic growth and innovation and result in greater efficiencies from our scale.

2014 Performance Highlights
We met our 2014 Outlook, despite what continued to be a challenging environment in our two largest market segments – legal and financial.
This was the third consecutive year that we met or exceeded our financial outlook.
NON-IFRS FINANCIAL MEASURE

2014 OUTLOOK (PROVIDED IN FEBRUARY 2014)

Revenues from ongoing businesses

Comparable to 2013 (before currency)

1% increase✓

Adjusted EBITDA margin

Between 26.0% and 27.0%

26.3%

✓

Underlying operating profit margin

Between 17.0% and 18.0%

17.0%

✓

Between $1.3 billion and $1.5 billion$ 1.4 billion✓

Free cash flow

2014 PERFORMANCE

Below are non-IFRS financial highlights from our full year 2014 results. A detailed discussion of our 2014 financial results is provided in the“Management’s Discussion and Analysis” section of this annual report.
(millions of U.S. dollars, except per share amounts)

2014

2013

CHANGE

Revenues from ongoing businesses$12,605$12,543–$3,313$3,0708%

Adjusted EBITDA margin

26.3%

24.5%

180bp

Underlying operating profit$2,138$1,881

14%

Underlying operating profit margin

17.0%

15.0%

200bp

Adjusted earnings per share (EPS)

$1.85

$1.54

20%

Free cash flow

$1,445$1,163

24%

Revenue growth before currency
Adjusted EBITDA

1%2014 was a year of solid progress across the company.
Š

Š

Š

Š

Our Financial & Risk business recorded its first positive net sales since 2008. Financial & Risk has reported year-over-year net sales
improvement in eight of the last nine quarters.
Our Legal, Tax & Accounting and Intellectual Property & Science businesses continue to build from a solid foundation while targeting
faster-growing opportunities, which resulted in 4% revenue growth, 3% of which was organic.
Underpinning the improving net sales and revenue growth trends are our simplification and transformation programs. We achieved our
run-rate savings target of $300 million from the simplification program, which primarily involved headcount reductions in our Financial &Risk business. Our transformation program, which is designed to improve the company’s organic revenue growth, capture economies ofscale and simplify the organization, continues to make steady progress towards its goal of achieving savings of $400 million by 2017.
We also returned over $2 billion to shareholders last year in the form of dividends and share buybacks. As we target gradualimprovements in revenue growth and free cash flow, we believe that we should be able to provide attractive returns to our shareholders
without compromising either our growth strategy or our target of maintaining a solid investment grade rating.

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Thomson Reuters Annual Report 2014

Based on our 2014 results, we expect to return to organic revenue growth in 2015 and we are forecasting positive net sales for our Financial &Risk business for 2015. We are also expecting another strong year in 2015 from our Legal, Tax & Accounting and Intellectual Property &Science businesses.

Three-Year Overview
The table below provides a three-year overview of our business.
THREE-YEAR OVERVIEW
2012

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2013

Š
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2014

Š

Š

Š

Š

Š

Š

Š
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Page 42012 was a year of change for our company. Jim Smith became our new CEO and Stephane Bello became our new CFO. We
also collapsed our divisional structure (which previously consisted of Markets and Professional) into a group of strategic
business units with a single corporate center to support them.
We completed 29 acquisitions to support higher growing market segments and adjacent market. segments. We sold our
Healthcare business, two Financial & Risk businesses and a Tax & Accounting business.
We made further improvements in product quality, customer service and execution capabilities in our Financial & Risk
business.
Financial & Risk continued its turnaround, with improvements in its execution capabilities.
We launched a new transformation program designed to increase innovation, simplify our company and increase efficiencies.
We refinanced debt, increased share repurchases and made special contributions to our key pension plans.
We were focused on operating more as an enterprise rather than a set of distinct portfolio businesses. 2014 marked the
beginning of a far more collaborative approach across our enterprise.
We appointed new presidents at the beginning of the year for our Legal and Intellectual Property & Science businesses andour Global Growth & Operations unit.
We began developing an integrated approach for some of our largest customers to expand our footprint and drive growth.
We consolidated platforms and real estate to drive efficiency and effectiveness. We also increased our innovation initiatives
with dedicated funding to invest behind ideas, many of which can be leveraged across the business. In 2014, we spent $167
million on acquisitions, a substantial decrease from prior years.
Despite Financial & Risk’s revenue decline of 2% for the year, net sales were positive for the fourth quarter and for the fullyear.
In Legal, performance also improved, with revenues up 2% with organic growth rate of 1%, tempered somewhat by a
7% decline in U.S. print. Excluding U.S. print, full-year revenues increased 3% with organic growth of 2%.
Our Tax & Accounting business continues to execute well and had another very strong year, with revenues up 12%, of which
9% was organic, improving on last year’s organic growth rate of 5%. This business continues to benefit from increased
market demand for its global tax solutions and from new product launches and strong execution.
Intellectual Property & Science revenues grew 3%, with recurring revenues up 5% organically.
Our Global Growth & Operations businesses grew 9%, of which 5% was organic.

Thomson Reuters Annual Report 2014

FINANCIAL & RISK
Financial & Risk provides critical news, information and analytics, enables transactions and brings together communities that connect
trading, investing, financial and corporate professionals. It also provides leading regulatory and operational risk management solutions.
We believe that Financial & Risk’s products and services help our customers discover profitable insights and opportunities, access liquidity
and transact, drive efficiencies in business and operations, anticipate risk and ensure compliance.
87% of Financial & Risk’s 2014 revenues were from recurring sources, with the remainder primarily from transactions. Financial & Risk
customers access our information, analytics and trading communities through our desktop solutions, data feeds and mobile applications
across a wide range of devices. Approximately 42% of Financial & Risk’s 2014 revenues were derived from desktop products, with theremainder from sales of data feeds, transactions and other software.

Financial
The Financial business provides a broad and robust range of offerings to financial markets professionals. It delivers unique global content
sets – including fundamentals, estimates, primary and secondary research and much more – along with the tools, platforms and services toenable fast, intelligent decision-making.
Our flagship financial markets desktop is Thomson Reuters Eikon. In 2014, we made significant advances and investments in Eikon, including
enhancing user experience, sentiment analysis and data visualization and adding a wide range of new specialist content and asset
management tools. We also expanded the footprint of Eikon Messenger, a free instant messaging tool that helps enable industry-compliant
communications for a community of over 210,000 financial professionals.
Thomson Reuters Elektron is a suite of data and trading solutions that offer the real-time and non-real-time data, analytics, platform andtransactional connectivity to power the enterprise and connect global markets. It offers low-latency feeds that cover thousands of exchanges
and over-the-counter (OTC) markets. All of these capabilities can be deployed at a customer location or delivered as a fully-managed service
from any one of our co-location and proximity hosting sites around the world. During 2014, we announced a significant expansion of
Elektron’s footprint with additional data centers and more real-time points of presence in established and developing financial centers
globally.
Our foreign exchange (FX) business operates electronic trading venues which provide access to liquidity in OTC markets, trade execution andconnections for market participants and communities of financial professionals worldwide. It also provides post-trade services globally,
enabling banks, brokers and electronic marketplaces to seamlessly connect with their counterparties. In 2014, our FX business further
strengthened its ability to support the buy-side and the interbank wholesale FX options community. Our FX business launched a new Rule
Book for spot trades as well as a new suite of risk controls for users of Thomson Reuters Matching, which includes the ability to net trades
and optimize credit.
In 2014, the Financial business also made significant investments in the solutions we offer to our buy-side and off-trading floor customers.
These solutions enable effective decision-making, drive performance and operational effectiveness, and help meet regulatory requirementsfor our customers in investment management and advisory, wealth management, hedge funds and corporate treasury. Some notable
proprietary sources of content for these segments include I/B/E/S, Datastream, Lipper, StarMine, First Call, IFR and Reuters News.
The following table provides information about Financial’s major brands.
MAJOR BRANDS AND
PRODUCT CATEGORIESTYPE OF PRODUCT/SERVICETARGET CUSTOMERSThomson Reuters Eikon

Flagship desktop product providing pre-trade decisionmaking tools, news, real-time pricing, charting, analytics,
portfolio tools, trading connectivity and collaboration tools

Investment professionals, portfolio managers, wealthmanagers, research analysts, economists, strategists,
investment bankers, professional services and private
equity professionals, salespeople, traders, brokers,
corporate treasurers, corporate strategy and researchprofessionals and financial analysts

Thomson ONE

Integrated access to information, analytics and tools
delivered within workspaces designed specifically for eachtarget customer’s workflow

Wealth management firms, professional services andprivate equity professionals

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Corporate customers, including strategy and researchprofessionals, treasurers and finance professionals

Thomson Reuters Annual Report 2014

MAJOR BRANDS AND
PRODUCT CATEGORIESTYPE OF PRODUCT/SERVICETARGET CUSTOMERSThomson Reuters
BETA

A complete suite of integrated, intelligent solutions tomanage retail brokerage operations, including workflow
and productivity tools, transaction processing, reporting
and archiving, data delivery and more

Wealth management firms

Thomson Reuters Elektron

Flexible, high performance, cross asset data and trading
infrastructure that includes low latency real-time data
feeds, non real-time data, analytics and transactional
connectivity. Services can be offered in a range of
deployment models

Investment banks, asset managers, custodians, liquidity
centers and depositories, hedge funds, prime brokers,
proprietary traders, inter-dealer brokers, multilateral
trading facilities (MTFs), central banks and fundadministrators

Thomson ReutersEnterprise Platform

Scalable and robust technology platforms that enablefinancial institutions to control real-time information flows

Financial institutions

Š Thomson Reuters Dealing

Peer-to-peer conversational trading product primarily
related to FX and money markets

FX and money market traders, sales desks, hedge funds
and voice brokers

Š Thomson Reuters Matching

Anonymous electronic FX trade matching system, providing
trading in spot and forwards FX and prime brokeragecapabilities

FX traders, sales desks and hedge funds

Š FXallGlobal electronic platform for institutional FX trading witha broad suite of flexible execution tools, end-to-end
workflow management and straight-through processing

Active traders, asset managers, corporate treasurers,
banks, broker/dealers and prime brokers

Tradeweb

Global electronic multi-dealer-to-customer marketplace fortrading fixed income, derivatives and money market
products which connects major investment banks withinstitutional customers

Institutional traders

FX Trading Solutions

Competition
Our Financial business competes with a wide range of large and specialist providers which primarily include Bloomberg, FactSet, S&P(including its Capital IQ business), SunGard Data Systems, Interactive Data, Telekurs, Dow Jones and large IT vendors, such as IBM. The FX
business primarily competes with large inter-dealer brokers, such as ICAP’s EBS platform and other electronic communication networks(ECNs) such as Bloomberg. Tradeweb’s principal competitors include MarketAxess and Bloomberg. The Financial business also competes
with single-dealer and multi-dealer portals.

Risk
Our Risk business provides a comprehensive suite of solutions designed to help our customers address pricing and valuation, third party risk(customer, supplier and partner), regulatory compliance, corporate governance and operational risk controls.
Thomson Reuters Risk Management Solutions combine powerful technology with trusted regulatory and risk intelligence to deliverintegrated offerings to financial services and multinational institutions for global regulatory intelligence, financial crime prevention, antibribery, anti-money laundering and anti-corruption, know-your-customer (KYC) and other due diligence, compliance management, internal
audit, e-learning, risk management and board of director services.
In March 2014, Risk launched Thomson Reuters Org ID for financial services institutions required to comply with KYC regulations. Org ID isan end-to-end client identity service that collects, verifies, screens and helps determine ultimate beneficial owners and monitors a legal
entity for change. The managed service is used by financial services institutions to simplify their client on-boarding process and enhance andupdate existing client information to a global standard.
The Risk business also provides independent, accurate and timely pricing information on fixed income derivatives, instruments and loans.
The following table provides information about Risk’s major product categories.
MAJOR BRANDS AND
PRODUCT CATEGORIESTYPE OF PRODUCT/SERVICETARGET CUSTOMERS

Third Party Risk

Information, software products and services which include
Org ID (KYC managed service), World-Check data,
screening software and due diligence reports

Corporate compliance, risk management professionals,
money laundering reporting officers, business leadersand law firms

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Thomson Reuters Annual Report 2014

MAJOR BRANDS AND
PRODUCT CATEGORIESTYPE OF PRODUCT/SERVICETARGET CUSTOMERSRegulatory Intelligence andCompliance Management

Information and software products which include global
coverage of over 550 regulatory bodies and over 950
rulebooks with exclusive news and analysis from our global
team of regulatory experts and journalists

Corporate compliance, risk management professionals,
corporate and company secretaries, general counsels,
business leaders, boards of directors and law firms

eLearning

Training programs which assist in changing behavior andsupporting a culture of integrity and complianceCorporate compliance, risk management professionals,
money laundering reporting officers, corporate and company
secretaries, general counsels, human resources, businessleaders, boards of directors and law firms

Internal Audit and Controls

Internal auditing and internal controls testing including risk
assessment, global issue tracking and administration

Audit management professionals, business leaders andboards of directors

Enterprise Risk
Management

Captures risk intelligence such as loss events, key risk
indicators, assessment responses and scenario analysis
data

Risk management professionals, business leaders, boardsof directors and law firms

Thomson Reuters
DataScope

Data delivery platform for non-streaming cross-asset classcontent globally; supports the management of financial
risk

Custodians, banks, insurance companies, fundadministrators, pension firms, mutual funds, hedge funds,
sovereign funds, underwriters, market makers, accounting
firms and government institutions

Competition
Risk’s products and services compete with a wide variety of global, regional and niche competitors. Risk’s compliance, audit and risk
products primarily compete with Wolters Kluwer Compliance Resource Network, CCH Team Mate, Protiviti, BWise and MetricStream. In thefinancial crime market segment key competitors include Dow Jones, LexisNexis and Actimize, while our corporate governance products
primarily compete with Diligent and BoardVantage. Risk’s pricing and reference services business primarily competes with Interactive Data,
Bloomberg, McGraw-Hill Financial and a number of smaller asset pricing and reference data providers.

LEGAL
Legal is a leading provider of critical online and print information, decision tools, software and services that support legal, investigation,business and government professionals around the world. Legal’s broad range of products utilize our electronic databases of legal,
regulatory, news, public records and business information. In recent years, Legal has focused increasingly on a solutions orientation, creating
connected workflow tools for its customers. Legal’s products, services and solutions include legal research solutions; know-how solutions;software-based workflow solutions; compliance solutions; marketing, finance and operations software; litigation support tools; and businessdevelopment and legal process outsourcing services.
We currently report results for our Legal business between:ŠŠŠ

Solutions businesses;
U.S. online legal information; andU.S. print.

WestlawNext is Legal’s primary online legal research delivery platform in the United States. WestlawNext offers authoritative content,
powerful search functionality and research organization, team collaboration features, and navigation tools that enable customers to find andshare specific points of law, build tables of authorities and search for analytical commentary. This content and functionality helps legal
professionals work more efficiently and provide better service to their clients. WestlawNext also is available through an iPad application and amobile site.
We provide localized versions of online legal research services in Argentina, Australia, Brazil, Canada, Chile, China, France, Hong Kong,
India, Ireland, Japan, Malaysia, New Zealand, South Korea, Spain, the United Kingdom and other countries. Through Westlaw International,
we offer our online products and services to customers in markets where we may not have yet developed a fully customized Westlaw service.
Practical Law provides legal know-how, current awareness and workflow tools to law firms and legal departments. Practical Law also has
been integrated into key Thomson Reuters workflow-based products. Practical Law’s unique resources, such as its practice notes, standard
documents, checklists and What’s Market tools, cover a wide variety of practice areas such as commercial, corporate labor and employment,
intellectual property, finance and litigation. Along with its offerings in the United Kingdom and United States, Legal recently introduced
country-specific versions of Practical Law in China and Canada.

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Thomson Reuters Annual Report 2014

Our Legal business also offers enterprise solutions that support the client development and back office business functions of a law practice.
These include online marketing and client development solutions for law firms, as well as integrated software applications to help corporate
legal departments and professional service organizations with their financial and practice management, matter management, analytics,
accounting and billing.
Through our managed services offerings, Legal provides a complete suite of litigation software, services, solutions and legal research toolsthat help lawyers work more efficiently and effectively during all phases of litigation, including case evaluation, document review,
depositions, motion practice, expert witness selection and trial preparation.
For courts, Legal provides a software suite to automate court processes through case management, document management, e-filing andcollaboration tools. For customers in law enforcement, law firms and legal departments, as well as other investigative professionals, Legal
offers a suite of research tools used to find information on people, assets and entities, drawing from publicly available information. This
information can be integrated into customer and third party applications to provide more efficient solutions for solving customers’ challenges
in areas such as fraud prevention and revenue recovery.
The following table provides information about Legal’s major brands.
MAJOR BRANDSTYPE OF PRODUCT/SERVICETARGET CUSTOMERSWestlawNext (U.S.)
Sweet & Maxwell (U.K.)
Carswell (Canada)
Aranzadi (Spain)
La Ley (Argentina)
Revista dos Tribunais (Brazil)

Legal, regulatory and compliance information-based
products and services

Lawyers, law students, law librarians, corporate
legal professionals, government agencies andtrademark professionals

Practical Law

Legal know-how information and tools with embedded
guidance from expert practitioners

Lawyers, corporate legal professionals andgovernment agencies

Serengeti

Online matter management, e-billing and legal
analytics services

Corporate legal and law firm professionals

Pangea3

Legal process outsourcing services

Corporate legal and law firm professionals

Elite 3E
ProLaw

Suite of integrated software applications that assist
with business management functions, including
financial and practice management, mattermanagement, document and email management,
accounting and billing, timekeeping and records
management

Professional services organizations, lawyers, lawfirm finance and technology professionals

FindLaw

Online legal directory, website creation and hosting
services; law firm marketing solutions; peer rating
services

Lawyers, legal professionals and consumers

Case Logistix
Case Notebook
Drafting AssistantOnline research tools, case analysis software anddeposition technology, as well as expert witness,document review and document retrieval services anddrafting tools to support each stage of the litigation
workflow

Lawyers, paralegals and courts

C-Track Court Management Solutions

Software suite to support e-filing, case management,
and public access solutions for courts which can be
integrated with other court applications

Judges, lawyers, court and law firm staff and generalpublicThomson Reuters ProView

Professional grade e-reader platform

Lawyers and legal professionals globally

CLEAR
PeopleMap

Public and proprietary records about individuals andcompanies with tools for immediately usable results

Fraud prevention and investigative professionals ingovernment, law enforcement, law firms andbusinesses

Competition
Legal’s primary global competitors are Reed Elsevier (which operates LexisNexis) and Wolters Kluwer. Legal also competes with othercompanies that provide legal and regulatory information, including Bloomberg BNA, as well as practice and matter management software,client development and other services to support legal professionals.

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Thomson Reuters Annual Report 2014

TAX & ACCOUNTING
Tax & Accounting is a leading global provider of integrated tax compliance and accounting information, software and services for
professionals in accounting firms, corporations, law firms and government.
Tax & Accounting’s businesses are:
Š

Š

Š

Š

Corporate, which provides a comprehensive suite of global and local tax compliance, workflow and data management software andservices to corporations around the world;
Knowledge Solutions, which provides information, research and certified professional education tools for tax and accounting
professionals;
Professional, which provides a suite of tax, accounting, audit, payroll, document management, client portals and practice management
software and services to accounting firms; andGovernment, which provides integrated property tax management and land registry solutions to national, state and local government
agencies.

In 2014, Tax & Accounting continued its growth and global expansion through new product introductions, product line extensions and therelease of productivity-enhancing mobile tools. Tax & Accounting released a new global integration framework for its leading ONESOURCE
Indirect Tax solution called “Global Next”. In 2014, Tax & Accounting also launched Checkpoint Catalyst, our next generation of online tax
research, with practical guidance for resolving complex tax questions that arise with business-related transactions. Checkpoint Catalyst’s
unique workflow brings together practical step-by-step expertise, multi-jurisdictional analysis, embedded tools, new developments and theweight of authority that are designed to help users spot potential risks and achieve outcomes faster. Checkpoint Learning Tax Research
Certificate Program was also introduced, which includes a foundational knowledge base and skill set for entry-level tax professionals andthose re-entering the workforce after an extended leave.
The following table provides information about Tax & Accounting’s major brands.
MAJOR BRANDSTYPE OF PRODUCT/SERVICETARGET CUSTOMERSONESOURCE

Comprehensive global tax compliance solution with local,
country-specific, focus to manage a company’s entire tax
lifecycle. ONESOURCE software and services, which can besold separately or as a suite, include solutions for tax
planning, tax provision, tax compliance, transfer pricing,trade and customs, tax information reporting, trust,property, and overall tax workflow management and data
management

Tax departments of multinational and domestic
corporations, accounting firms, financial institutions andtax authorities

Checkpoint

Integrated information solution delivering research, expert
guidance, applications and workflow tools as well as
primary sources and third party content providers

Accounting firms, corporate tax, finance and accounting
departments, international trade professionals, law firms
and governments

CS Professional Suite

Integrated suite of software applications, including leading
products such as UltraTax CS, Accounting CS and PracticeCS, that encompass every aspect of a professional
accounting firm’s operations – from collecting customer
data and posting finished tax returns to the overallmanagement of the accounting practice. For large
accounting firms, we offer leading solutions for tax
preparation, engagement, practice management,
document management, and workflow management,
including GoSystemTax RS and GoFileRoom

Accounting firms

DigitaU.K. tax compliance and accounting software and services

Accounting firms, corporate tax, finance and accounting
departments, law firms and governments

Aumentum

Software and services that empower governments tomanage revenue through automated land and property tax
administration

National, state and local governments responsible forproperty registration, valuation, tax generation andcollection

Competition
Tax & Accounting’s primary competitor across all customer segments is Wolters Kluwer (which includes CCH). Other major competitors
include Intuit in the professional software and services market segment and CORPTAX (owned by Corporation Services Company) in the

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corporate software and services market segment and Bloomberg BNA in the tax research market segment. Tax & Accounting also competes
with other providers of software and services, including accounting firms and ERP vendors.

INTELLECTUAL PROPERTY & SCIENCEOur Intellectual Property (IP) & Science business provides comprehensive solutions that enable the lifecycle of innovation for governments,
academia, publishers, corporations and law firms to discover, protect and commercialize new ideas and brands.
Intellectual Property & Science is currently organized in three businesses:ŠŠŠIntellectual Property Assets, which provides patent, trademark and brand content and services that help corporate and legal IP
professionals drive new growth opportunities, manage and protect IP assets and create maximum value from their IP portfolio;Life Sciences, which helps accelerate pharmaceutical research and development by providing decision support information and analytics
and professional services to pharmaceutical and biotechnology companies; andGovernment & Academia, which fosters collaboration and enables scientific search and discovery by providing access to the world’s
critical citation data, as well as benchmarking and analytics designed to maximize returns on research funding and tools to facilitate thepeer-review and publishing process.

Intellectual Property & Science recently underwent transformational changes to more closely align its three businesses with customers’
needs and enable richer cross collaboration.
The following table provides information about Intellectual Property & Science’s major brands.
MAJOR BRANDSTYPE OF PRODUCT/SERVICETARGET CUSTOMERSThomson IP Manager

Enterprise-level, configurable intellectual asset
management solution for patents, trademarks, licensing
agreements, invention disclosures and IP matters

Business executives, IP portfolio managers, docketing
administrators, IP counsel, lawyers, paralegals andlicensing executives

Thomson Innovation

Leading patent intelligence and collaboration platform
with comprehensive content, powerful analysis andvisualization tools and market insight

IP counsel, lawyers, information professionals, heads ofresearch and development, licensing executives,
business strategists, business intelligence analysts and
M&A executives

MarkMonitor

Online brand protection solutions: domain namemanagement, anti-piracy, anti-fraud, anti-counterfeiting,and abating online brand abuse

Business executives, IP counsel, licensing executives,
strategists, business developers and marketing
executives

SERION

Suite of trademark research solutions within a web-based
workflow environment for screening, searching andprotecting brands globally

Trademark lawyers, paralegals, IP executives, marketing
executives, name generators and competitive
intelligence analysts in corporations and law firms

Web of Science

Trusted platform of scientific, technical and scholarly
literature with leading science citation index

Scientists, researchers, scholars and librarians atgovernment agencies, research institutions anduniversities

Thomson Reuters Cortellis

Integrated platform containing authoritative R&D drug
pipeline information, patents, deals, company information,
breaking industry news, conference coverage and global
regulatory intelligence

Business development, licensing, investment andregulatory professionals at pharmaceutical andbiotechnology companies

Competition
Primary competitors of the Intellectual Property Assets business include Wolters Kluwer’s Corsearch, CPA Global, LexisNexis, CSC Global,
Google Patents, Innography and patent office sites. Primary competitors of the Life Sciences business are Reed Elsevier, Wolters Kluwer,
Informa and IMS. Primary competitors of the Government & Academia business are Reed Elsevier, Google Scholar, RefWorks, ProQuest,
EBSCO and Aries.

GLOBAL GROWTH & OPERATIONSOur Global Growth & Operations (GGO) organization works with our Financial & Risk, Legal, Tax & Accounting and Intellectual Property &Science businesses to combine our global capabilities and to expand our local presence and development in countries and regions where webelieve the greatest growth opportunities exist. We report financial results for GGO in our Financial & Risk, Legal, Tax & Accounting andIntellectual Property & Science businesses results. Geographic areas that GGO is focused on include Latin America, China, India, the Middle
East, Africa, the Association of Southeast Asian Nations/North Asia, Russia and countries comprising the Commonwealth of Independent
States (CIS) and Turkey. GGO also manages our nine global operations centers that provide services across Thomson Reuters.

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REUTERS
Founded over 160 years ago and powered by nearly 2,500 journalists around the world, our news has a reputation for speed, impartiality andinsight. Reuters is dedicated to upholding the Thomson Reuters Trust Principles and preserving independence, integrity and freedom frombias in the gathering and dissemination of information and news. For more information on the Thomson Reuters Trust Principles, please see
the “Additional Information – Trust Principles and Founders Share Company” section of this annual report.
We provide breaking news, in-depth coverage and agenda setting commentary and analysis via text, TV, photos and graphics. In 2014, wedelivered over two million unique news stories, over one million news alerts, nearly 600,000 pictures/images and 100,000 video stories.
Primary competitors include the Associated Press, Agence France-Presse, Bloomberg and Dow Jones.

Other Businesses
From time to time, we sell businesses that are no longer aligned with our strategic focus. We provide information on the performance of
these “Other Businesses” separately from our reportable segments.

Corporate Headquarters
Our corporate headquarters seeks to foster a group-wide approach to management while allowing our business units sufficient operational
flexibility to serve their customers effectively. The corporate headquarters’ primary areas of focus are strategy, capital allocation, technology
infrastructure and talent management. The corporate headquarters is also responsible for overall direction on communications, investor
relations, tax, accounting, finance, treasury and legal, and administers certain human resources services, such as employee compensation,
benefits administration, share plans and training and development.
Our corporate headquarters are located in New York, New York with key corporate operations around the world, including in London, United
Kingdom; Bangalore, India; Eagan, Minnesota; and Stamford, Connecticut.

Technology
We believe that changes in how people access, consume and analyze data – along with the sheer volume of “big data” – place us in a great
position to meet our customers’ needs effectively. We believe that we can make information more relevant and deliver it faster to ourcustomers through the smart use of technology. By harnessing the power of big data, using shared platforms and working across ourbusiness units, we are making our data more accessible and valuable for our customers. We are continually transforming our content,
products, services and company to better meet our customers’ needs.
In 2014, technology-related capital expenditures constituted over 90% of our total capital expenditures for the year. We developed a new
infrastructure to help us more effectively gather, aggregate, connect and disseminate our content and link with customer, partner and openInternet content. We also launched our Data Innovation Lab, which allows us to partner with businesses, customers, start-ups and academic
institutions on data-driven innovations and research. We continued to improve our information security risk posture and infrastructure tosafeguard our assets and those of our customers.

Intellectual Property
Many of our products and services are comprised of information delivered through a variety of media, including online, software-based
applications, smartphones, tablets, books, journals and dedicated transmission lines. Our principal IP assets include patents, trademarks,
trade secrets, databases and copyrights in our content. We believe that our IP is sufficient to permit us to carry on our business as presently
conducted. We also rely on confidentiality agreements to protect our rights. We continue to apply for and receive patents for our innovativetechnologies. Additionally, we continue to acquire patents through the acquisition of companies. We also obtain significant content and data
through third party licensing arrangements with content providers. We have registered a number of website domain names in connection
with our online operations.

Research and Development
Innovation is essential to our success and is one of our primary bases of competition.
We believe we are in a unique position to help shape how professionals find, evaluate, interact with, consume and act upon information. Our
Research & Development (R&D) team performs leading computer science research and develops capabilities to help the business innovateand build smarter products. Current focus areas of our R&D team include search technologies, big data and analytics, machine learning,social computing and natural language technologies.

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Thomson Reuters Annual Report 2014

Sales and Marketing
We primarily sell our products and services directly to our customers. In addition, we have been successful in selling some of our products
and services online directly to customers. Focusing some of our marketing and sales efforts online has allowed us to broaden our range ofcustomers and reduce sales and marketing costs. Some of our products and services are sold through partners.

Corporate Responsibility & Inclusion
Corporate Responsibility & Inclusion (CR&I) is an integral part of the way we do business. In 2014, we transformed our approach in the areasof corporate responsibility, diversity and inclusion and sustainability, drawing these together into one strategic team and approach. This
move supports the ongoing work that has taken place in these areas and their importance for us as a responsible business. With this change
and new approach, we are seeking to empower sustainable growth for our people, our markets and our world. We continue to report on our
progress in our annual global CR&I report, which we post on www.thomsonreuters.com.
Our People
To serve our customers and communities, we want to attract and retain the most talented individuals and create an environment where all
our people can develop to their full potential. Valuing and promoting diversity and inclusion is key to this objective. Our business resourcegroups also provide a network of support for other employees and work with the business to enhance professional development, recruitment
and retention. In 2014, we also launched a “Your Wellbeing” initiative, a global program which looks to foster a healthy workplace andempowers our employees to take charge of their health.
Our Markets
Our business is founded on integrity, independence and freedom from bias which is codified through the Thomson Reuters Trust Principles
and complemented by our Code of Business Conduct and Ethics alongside our anti-bribery and anti-corruption policy. Our employees are
required to acknowledge our Code of Business Conduct and Ethics, which reflects our values as a company and our approach to doing
business. We have a Supply Chain Ethical Code that is designed to ensure that our suppliers and vendors meet a specified set of standards.
The code reflects anti-bribery and anti-corruption legislation and additional suppliers have agreed to comply with the code in operating theirbusinesses and providing services to us.
We also seek opportunities to enhance client relationships by leveraging our sustainability products and services, and by creating strategic
partnerships which empower our customers to transform lives and encourage sustainable growth, including through ourwww.sustainability.thomsonreuters.com website.
Our World
In 2014, our employees continued to invest in their local communities with approximately 95,000 hours of volunteering time, made possible
with the support of our employee-led global volunteer networks.
We recognize and reward employee community service efforts through our Community Champion Awards program and with company
donations to match personal charitable initiatives across the globe.
We have also made progress in the environmental space, as we continue to identify ways for us to monitor and manage our carbon footprint.
The Thomson Reuters Foundation stands for free independent journalism, human rights, women’s empowerment and the rule of law.
Leveraging the skills, values and expertise of our company, the Foundation plays a leading role in the global fight against human trafficking
and runs a number of program and initiatives that trigger change and empower people globally: free legal assistance, media development,
and in-depth coverage of the world’s underreported stories. Additional information on the Foundation can be found at www.trust.org.

Acquisitions and Dispositions
As part of our focus on organic growth, we significantly reduced the level of our acquisitions and dispositions in 2014 compared to 2013 and2012. During the last three years, we made a number of tactical acquisitions which complemented our existing businesses. For many of theseacquisitions, we purchased information or a service that we integrated into our operations to broaden the range of our offerings. We havealso directed our acquisition spending in the last three years to broadening our product and service offerings in higher growth market
segments and executing our global growth strategy, particularly in rapidly developing economies. As part of our continued focus on organic
growth, we expect our acquisition activity in 2015 to be similar to 2014 and more modest than in prior years.
In addition, as part of our continuing strategy to optimize our portfolio of businesses and ensure that we are investing in parts of our business thatoffer the greatest opportunities to achieve growth and returns, we also sold a number of businesses during the last three years.
For more information on acquisitions and dispositions that we made in the last two years, please see the “Management’s Discussion andAnalysis” section of this annual report.

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Employees
The following table sets forth information about our employees as of December 31, 2014.
By Region
Americas
Europe, Middle East and Africa
Asia
By Unit

25,40011,500
16,100Financial & Risk
LegalIntellectual Property & Science
Tax & Accounting
Global Growth & Operations
Reuters
Corporate

16,50010,800
3,200
5,100
7,300
2,800
7,300*

Thomson Reuters*

53,000Includes approximately 6,200 employees in centralized services functions that are shared across the company, notably our Technology and Business Operations Services
groups.

We believe that we generally have good relations with our employees, unions and work councils, although we have had disputes from time totime with the various unions that represent some of our employees. Our senior management team is committed to maintaining good
relations with our employees, unions and works councils.

Properties and Facilities
We own and lease office space and facilities around the world to support our businesses. We believe that our properties are in good condition
and are adequate and suitable for our present purposes. The following table provides summary information about our principal properties asof December 31, 2014.
FACILITYAPPROX. SQ. FT.

OWNED/LEASEDPRINCIPAL USE

610 Opperman Drive,
Eagan, Minnesota

2,792,000

Owned

Legal headquarters and operating facilities

3 Times Square,
New York, New York558,500

Owned/Leased2

Thomson Reuters headquarters and Financial & Risk
operating facilities

Technopolis
Bangalore, India

455,500

LeasedFinancial & Risk operating facilities

2395 Midway Road,
Carrollton, Texas

409,150

Owned

Tax & Accounting headquarters and operating
facilities

195 Broadway,
New York, New York292,900

LeasedFinancial & Risk and Tax & Accounting offices

Geneva, Switzerland

291,160

Owned

Financial & Risk operating facilities

Canary Wharf,
London, United Kingdom

282,700

LeasedFinancial & Risk operating facilities

Blackwall Yard, London,
United Kingdom

240,000

Owned

Financial & Risk Dockland’s Technical Center

Boston, Massachusetts1

229,770

LeasedFinancial & Risk operating facilities

1

Consists of three addresses.

2

We lease this facility from 3XSQ Associates, an entity owned by one of our subsidiaries and Rudin Times Square Associates LLC. 3XSQ Associates was formed to build andoperate the 3 Times Square property and building in New York, New York that serves as our corporate headquarters. 558,500 sq. ft. represents the net amount of office spacethat we currently physically occupy. The main lease covers a total of 688,000 sq. ft., with an additional 30,500 sq. ft. that we occupy under sub-lease. Under the main lease,approx 160,000 sq. ft. has been sub-leased.

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Risk Factors
The risks and uncertainties below represent the risks that our management believes are material. If any of the events or developments discussed
below actually occurs, our business, financial condition or results of operations could be adversely affected. Other factors not presently known to
us or that we presently believe are not material could also affect our future business and operations.
We may be adversely affected by uncertainty and future downturns in the markets that we serve, in particular in the financial services andlegal industries.
Our performance depends on the financial health and strength of our customers, which in turn is dependent on the general economies inNorth America, Europe, Asia Pacific and Latin America. In 2014, we derived 79% of our ongoing business revenues from our financial andlegal businesses.
In 2014, the momentum and pace of growth was unequal around the world, as advances in some regions were offset by weaknesses inothers. In addition, the economic environment in 2014 for our businesses continued to be challenging.
ŠŠ

In 2014, uncertainty in global economic and market conditions continued to cause disruptions and volatility worldwide, particularly in thefinancial services industry. While we believe the health of the financial services industry is now stronger than in the past five years, theindustry remains challenged with heightened regulatory scrutiny, increasing capital requirements, lower transaction volumes in certain
markets and asset classes, consolidation among firms and relatively low overall anticipated market growth. Certain parts of the financial
services industry are also experiencing declines. In 2014, the combination of these factors continued to put intense pressure on financial
institutions’ profitability and returns, forcing many of them to reduce their staff, although headcount began to stabilize somewhat for anumber of firms in the second half of the year. Continued global economic uncertainty and future downturns in the financial services
industry in one or more of the countries in which we operate or significant trading market disruptions could adversely affect ourFinancial & Risk business.
Uncertain and changing economic conditions also continue to impact the legal industry, which experienced relatively flat growth in 2014.
Larger law firms in particular have been challenged in their efforts to increase revenue growth as corporate counsels continue to limit
increases in billing rates and hours and keep more work in-house. This has caused a number of law firms to increase their focus on
reducing costs and increasing efficiency.

Cost-cutting, reduced spending or reduced activity by any of our customer segments may decrease demand for, and usage of, some of our
products and services. This could adversely affect our financial results by reducing our revenues, which could in turn reduce the profitability ofsome of our products and services. Cost-cutting by customers has also caused us to further simplify our organization and take additional steps
beyond those we might otherwise take to optimize our own cost structure as a means to maintain or improve profitability.
We operate in highly competitive markets and may be adversely affected by this competition.
The markets for our information, software, services and news are highly competitive and are subject to rapid technological changes andevolving customer demands and needs.
ŠŠŠMany of our principal competitors are established companies that have substantial financial resources, recognized brands, technologicalexpertise and market experience and these competitors sometimes have more established positions in certain product segments andgeographic regions than we do.
We also compete with smaller and sometimes newer companies, some of which are specialized with a narrower focus than our company.
As a result, they may be able to adopt new or emerging technologies or address customer requirements more quickly than we can.
We may also face increased competition from Internet service companies and search providers that could pose a threat to some of ourbusinesses by providing more in-depth offerings, adapting their products and services to meet the demands of their customers or
combining with one of their traditional competitors to enhance their products and services.

To better serve the needs of their existing customers and to attract new customers, our competitors continue to:ŠŠŠŠenhance and improve their products and services (such as by adding new content and functionalities);
develop new products and services;
invest in technology; andacquire additional businesses in key sectors that will allow them to offer a broader array of products and services.

Some of our competitors are also aggressively marketing their products as a lower cost alternative and offering price incentives to acquire
new business, although we believe that many of our customers continue to see the value reflected in our offerings that sometimes

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results in a higher price. As some of our competitors are able to offer products and services that may be viewed as more cost effective thanours or which may be seen as having greater functionality or performance than ours, the relative value of some of our products or services
could be diminished.
Competition may require us to reduce the price of some of our products and services or make additional capital investments that would
adversely affect profit margins. If we are unable or unwilling to do so, we may lose market share and our financial results may be adversely
affected. Some of our current or future products or services could also be rendered obsolete as a result of competitive offerings.
In addition, some of our customers have in the past and may decide again to develop independently certain products and services that theyobtain from us, including through the formation of consortia. To the extent that customers become more self-sufficient, demand for our
products and services may be reduced. If we fail to compete effectively, our financial condition and results of operations could be adversely
affected.
If we are unable to develop new products, services, applications and functionalities to meet our customers’ needs, attract new customers, expand
into new geographic markets and identify areas of higher growth, our ability to generate revenues may be adversely affected.
Our growth strategy involves developing new products, services, applications and functionalities to meet our customers’ needs andmaintaining a strong position in the sectors that we serve.
Over the last few years, we made significant investments in the development, promotion and improvement of our products, such as Thomson
Reuters Eikon, Thomson Reuters Elektron, WestlawNext and Practical Law. We are also focused on investing in areas that we believe will
provide us with the highest levels of growth over the long term. As the information and news services industries continue to undergo rapid
evolution, we must be able to anticipate and respond in a timely and cost effective manner to our customers’ needs, industry trends andtechnological changes in order to maintain and improve our competitiveness.
Š

Š

Š

Š

While we believe that we continued to make significant progress in 2014 improving the performance, stability and functionality ofThomson Reuters Eikon to address challenges related to its initial launch and development, if our Financial & Risk customers’ adoption
rates for Eikon and other new products and services targeted to financial services professionals are lower than our expectations, ourresults of operations may be adversely affected.
Within our Legal business, the law firm industry (particularly in the U.S.) continues to be challenging as law firms remain under pressure
by their clients to control costs, including spending on legal research. As a result, we have experienced a slight decline in U.S. legal
research revenues in the last three years although adoption rates for WestlawNext have been strong and we believe that lawyers
recognize the product’s value. We have also experienced a decline in U.S. Legal’s print revenues as customers increasingly migrate to ouronline offerings and as law firms reduce library space for print materials. While we have been allocating greater amounts of capital to oursolutions offerings within the Legal business that we believe present the highest growth opportunities, a further decline in our legal
research and print revenues could adversely affect our results of operations.
Some of our businesses, in particular Legal and Intellectual Property & Science, continue to evolve towards becoming greater providers ofsolutions to our customers as part of an ongoing transformation from focusing primarily on providing data and information. These
solutions often are designed to integrate our core information with software and workflow tools. While we believe that transitioning agreater part of our business to solutions will help us increase customer value, create growth, diversify business mix and differentiate us
from competitors, operating a business with a greater percentage of solutions may result in lower profit margins.
In addition, through our Global Growth & Operations unit, we plan to grow by attracting new customers and continuing to expand into
Asia, Latin America and the Middle East. With our current focus on organic growth (and reduced acquisition activity), it may take us alonger period of time and we may need to incur greater costs to develop new products, services, applications and functionalities to meetneeds of customers, attract new customers or expand into these markets. If we are unable to do so, our ability to increase our revenues
may be adversely affected.

Historically, our customers accessed our web-based products and services primarily through desktop computers and laptops. Over the last
few years, Internet use through smartphones, tablets and other mobile devices has increased significantly. Applications or “apps” have also
experienced significant growth and popularity. As a result of this shift, we have been focused on developing, supporting and maintaining
various products and services on different platforms and devices (some of which complement traditional forms of delivery). If our competitors
are able to release alternative device products, services or apps more quickly than we are able to, or if our customers do not adopt ourofferings in this area, our revenues and retention rates could be adversely affected.

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We rely heavily on our telecommunications, network systems and the Internet and any failures or disruptions may adversely affect ourability to serve our customers.
Most of our products and services are delivered electronically and our customers depend on our ability to receive, store, process, transmit andotherwise rapidly handle very substantial quantities of data and transactions on computer-based networks. Our customers also depend on
the continued capacity, reliability and security of our telecommunications, networks and other electronic delivery systems, including websites
and the Internet. Our employees also depend on these systems for our internal use. Any significant failure, compromise, cyber-breach orinterruption of our systems, including operational services, loss of service from third parties, sabotage, break-ins, war, terrorist activities,
human error, natural disaster, power or coding loss and computer viruses, could cause our systems to operate slowly or could interrupt
service for periods of time. While we have disaster recovery and business continuity plans that include back-up facilities for our primary data
centers, our systems are not always fully redundant and our disaster recovery and business continuity plans may not always be sufficient oreffective. To the extent that our telecommunications, information technology systems or other networks are managed or hosted by third
parties, we would need to coordinate with these third parties to resolve any issues. In the past when we have experienced slow operation of
our systems or service interruptions, some of our products, services or websites have been unavailable for a limited period of time, but noneof these occurrences have been material to our business.
Our ability to effectively use the Internet may also be impaired due to infrastructure failures, service outages at third party Internet providers
or increased government regulation. In addition, we are facing significant increases in our use of power and data storage. We may experienceshortage of capacity and increased costs associated with such usage. These events may affect our ability to store, process and transmit dataand services to our customers.
From time to time, update rates of market data have increased. This can sometimes impact product and network performance. Factors thathave significantly increased the market data update rates include the emergence of proprietary data feeds from other markets, high market
volatility, decimalization, reductions in trade sizes resulting in more transactions, new derivative instruments, increased automaticallygenerated algorithmic and program trading, market fragmentation resulting in an increased number of trading venues, and multiple listingsof options and other securities. Changes in legislation and regulation pertaining to market structure and dissemination of market information
may also increase update rates. While we continue to implement a number of capacity management initiatives, there can be no assurance
that our company and our network providers will be able to accommodate accelerated growth of peak traffic volumes or avoid other failures
or interruptions.
Fraudulent or unpermitted data access or other cyber-security or privacy breaches may cause some of our customers to lose confidence inour security measures and could result in increased costs for our company.
Similar to other global multinational companies that provide services online and also due to the prominence of our news business, we
experience cyber-threats, cyber-attacks and security breaches, which can include unauthorized attempts to access, disable or degrade ourinformation, systems and networks, the introduction of computer viruses and other malicious codes and fraudulent “phishing” e-mails that
seek to misappropriate data and information or install malware onto users’ computers. Cyber-threats in particular vary in technique andsources, are persistent, frequently change and increasingly are more sophisticated, targeted and difficult to detect and prevent against. Noneof these threats and related incidents to date have been material to our business.
While we have dedicated resources at our company who are responsible for maintaining appropriate levels of cyber-security and we utilize
third party technology to help protect our company’s information technology systems and infrastructure against security breaches and cyberincidents, our measures may not be adequate or effective to prevent, identify or mitigate attacks by hackers or breaches caused by employee
error, malfeasance or other disruptions. While we maintain what we believe is sufficient insurance coverage that may (subject to certain
policy terms and conditions including self-insured deductibles) cover certain aspects of third party security and cyber-risks and businessinterruption, our insurance coverage may not always cover all costs or losses.
We are also dependent on security measures that some of our third party suppliers are taking to protect their own systems andinfrastructure. For example, our outsourcing of certain functions requires us to sometimes grant network access to third party suppliers. If
our third party suppliers do not maintain adequate security measures or do not perform as anticipated and in accordance with contractual
requirements, we may experience operational difficulties and increased costs.
We receive, store and transmit sensitive data, including public records, intellectual property, our proprietary business information andpersonally identifiable information of our employees on our networks. A number of our customers and suppliers also entrust us with storingand securing their own confidential data and information. Any fraudulent, malicious or accidental breach of data security could also result inunintentional disclosure of, or unauthorized access to, customer, vendor, employee or other confidential or sensitive data or information,
which could potentially result in additional costs to our company to enhance security or to respond to occurrences, lost sales, violations ofprivacy or other laws, penalties or litigation.

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Misappropriation, destruction, corruption or unavailability of data and information due to cyber-attacks or other security breaches could
damage our brand and reputation and customers could lose confidence in our security measures and reliability, which would harm our ability
to retain customers and gain new ones. We could also face litigation or other claims from impacted individuals as well as substantial
regulatory sanctions or fines. If any of these were to occur, it could have a material adverse effect on our business and results of operations.
Increased accessibility to free or relatively inexpensive information sources may reduce demand for our products and services.
In recent years, more public sources of free or relatively inexpensive information have become available, particularly through the Internet,
and this trend is expected to continue. For example:ŠŠŠSome governmental and regulatory agencies have increased the amount of information they make publicly available at no cost;
Several companies and organizations have made certain legal and financial information publicly available at no cost; and“Open source” software that is available for free may also provide some functionality similar to that in some of our products.

Public sources of free or relatively inexpensive information may reduce demand for our products and services. Demand could also be reduced
as a result of cost-cutting initiatives at certain companies and organizations. Although we believe our information is more valuable andenhanced through analysis, tools and applications that are embedded into customers’ workflows, our financial results may be adversely
affected if our customers choose to use these public sources as a substitute for our products or services.
We generate a significant percentage of our revenues from recurring subscription-based arrangements, and our ability to maintainexisting revenues and to generate higher revenues is dependent in part on maintaining a high renewal rate.
In 2014, 87% of our revenues were derived from subscriptions or similar contractual arrangements, which result in recurring revenues. Ourrevenues are supported by a relatively fixed cost base that is generally not impacted by fluctuations in revenues. The majority of our
subscription arrangements have a term of one year and the remaining portion is largely for two or three year terms. These arrangements
typically have renewal provisions. Renewal dates are spread over the course of the year. In order to maintain existing revenues and to
generate higher revenues, we are dependent on a significant number of our customers to renew their arrangements with us. In our Legal,Intellectual Property & Science and Tax & Accounting business units, our customers have increasingly been seeking products and services
delivered electronically and continue to migrate away from higher margin print products. In 2014, our Legal U.S. print-related revenues
declined 7%. Our revenues could also be lower if a significant number of our customers renewed their arrangements with us, but reduced theamount of their spending.
We are dependent on third parties for data, information and other services.
We obtain significant data and information through licensing arrangements with content providers, some of which may be viewed ascompetitors. Some providers may seek to increase fees for providing their proprietary content or services and others may not offer ourcompany an opportunity to renew existing agreements.
In addition, we rely on third party service providers for telecommunications and other services that we have outsourced, such as certain
human resources administrative functions, facilities management and IT services.
If we are unable to maintain or renegotiate commercially acceptable arrangements with these content or service providers or find substitutes
or alternative sources of equivalent content or service, our business could be adversely affected. Our revenues and margins could also be
reduced if some of our competitors obtained exclusive rights to provide or distribute certain types of data or information that was viewed as
critical by our customers.
We may be adversely affected by changes in legislation and regulation.
Legislative and regulatory changes that impact our customers’ industries (in particular, customers of our Financial & Risk business) may
impact how we provide products and services to our customers. In 2010, the Dodd-Frank Act was adopted in the United States and similarlaws and regulations may be adopted in the future in other countries. The implementation of the European Market Infrastructure Regulation(EMIR) and the revision of the Markets in Financial Instruments Directive (MiFID II) may also impact how we provide products and services to
our Financial & Risk customers. Laws relating to e-commerce, electronic and mobile communications, privacy and data protection, antimoney laundering, direct marketing and digital advertising and the use of public records have also become more prevalent in recent years. It
is difficult to predict in what form laws and regulations will be adopted or how they will be construed by the relevant courts, or the extent towhich any changes might adversely affect us.

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Existing and proposed legislation and regulations, including changes in the manner in which such legislation and regulations are interpretedby courts, may:ŠŠŠ

Impose limits on our collection and use of certain kinds of information and our ability to communicate such information effectively to ourcustomers.
Increase our cost of doing business or require us to change some of our existing business practices.
Conflict on a global basis (such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws).

Although we have implemented policies and procedures that are designed to ensure compliance with applicable laws, rules and regulations,
we could be subject to penalties as well as reputation harm for any violations.
Tax matters, including changes to tax laws, regulations and treaties, could impact our effective tax rate and our results of operations.
We operate in many countries worldwide and our earnings are subject to taxation in many different jurisdictions and at different rates. We
seek to organize our affairs in a tax efficient manner, taking account of the jurisdictions in which we operate. In 2014, our effective tax rate
was lower than the Canadian corporate income tax rate due significantly to lower tax rates and differing tax rules applicable to certain of ouroperating and financing subsidiaries outside Canada. Our effective tax rate has fluctuated in the past and is likely to fluctuate in the future,reflecting the mix of taxing jurisdictions in which pre-tax profits and losses are recognized. Our effective tax rate and our cash tax cost in the
future will depend on the laws of numerous countries and the provisions of multiple income tax treaties between various countries in which
we operate. Changes in tax laws and regulations, international treaties and tax accounting standards and/or uncertainty over theirapplication and interpretation as well as changes in the geographic mix of our profits may adversely affect our results (notably our income
tax expense) and our effective tax rate. Tax-related changes or tax rulings may also require adjustments to our previously filed tax returns,
which if unfavorable, may adversely affect our results. Tax laws and regulations that apply to our company may also be amended by therelevant authorities due to changes in fiscal circumstances or priorities. These types of amendments, or their application to our company,
may adversely affect our results.
Many governments in jurisdictions where we operate are facing budget deficits and challenges and as a result, are looking to increase theirtax revenues through increased audit activity and tax reform. Various tax-related legislative initiatives have been proposed or are being
discussed that if enacted, could adversely affect our tax positions and/or our tax liabilities. In 2013, the Organization for Economic Cooperation and Development (OECD), which is comprised of member countries that encompass many of the jurisdictions where we operate,issued an action plan calling for a coordinated, multi-jurisdictional approach to address issues in existing tax systems that the OECD believes
may lead to tax avoidance by global companies, which the OECD refers to as “base erosion and profit shifting” (BEPS). The OECD has not yet
finalized its recommendations pursuant to the BEPS action plan. While we are not able to predict what changes will be enacted, if somejurisdictions where we have significant operations adopt tax-related changes as a consequence of the BEPS initiative, such changes could
increase our worldwide tax liabilities and the related income tax expense.
Currency and interest rate fluctuations and either the reintroduction of individual currencies within the Eurozone or the dissolution of theEuro may have a significant impact on our reported revenues and earnings.
Our financial statements are expressed in U.S. dollars and are, therefore, subject to movements in exchange rates on the translation of thefinancial information of businesses whose operational currencies are not U.S. dollars. We receive revenues and incur expenses in many
currencies and are thereby exposed to the impact of fluctuations in various currency rates.
ŠŠTo the extent that our currency exposures are not hedged, exchange rate movements may cause fluctuations in our consolidated financial
statements. As our operations outside of the U.S. continue to expand, we expect this trend to continue. In particular, we have exposure to
the British pound sterling and the Euro. We mitigate this exposure to our operating cash flow by entering into exchange contracts topurchase or sell certain currencies in the future at fixed amounts. However, because these instruments have not been designated ashedges for accounting purposes, changes in the fair value of these contracts are recognized through the income statement with nooffsetting impact, and therefore our income statement will reflect volatility from exchange rate movements.
In addition, if the foreign currency hedging markets are negatively affected by clearing and trade execution regulations, the cost ofhedging our foreign exchange exposure could increase.

We monitor the financial stability of the foreign countries in which we operate. Global markets continued to experience uncertainty in 2014,
and continuing volatility in Europe and Latin America could adversely affect our results. In particular, we continue to closely watch conditions
in Europe relative to sovereign debt concerns. While our exposure to higher risk countries, such as Greece, is proportionately small relative to
our European operations as a whole, currency and economic disruption stemming from other Eurozone countries could have a moresignificant impact on the economic environment. If economic conditions in Europe worsen, we expect there would be an adverse impact on
our results as well as on our ability to collect trade receivables from our customers in the region. To mitigate risk ofPage 18

Thomson Reuters Annual Report 2014

loss, we monitor the creditworthiness of our customers and have policies and procedures for trade receivables collection and global cash
management to ensure adequate liquidity is available to us.
Substantially all of our non-U.S. dollar-denominated debt is in Canadian dollars and has been hedged into U.S. dollars. In addition, an
increase in interest rates from current levels could adversely affect our results in future periods.
If we are unable to successfully adapt to organizational changes and effectively implement strategic initiatives, our reputation and resultsof operations could be impacted.
We have experienced significant organizational changes over the last few years.
ŠŠŠIn January 2014, we had several senior leadership changes, including the appointment of new presidents for our Legal and Intellectual
Property & Science businesses and our Global Growth & Operations unit.
Throughout 2013 and 2014, we continued to realign the salesforce for our Financial & Risk business to be closer to its customers, products
and market segments.
As part of our simplification and transformation initiatives, we have reduced staff, consolidated various technology platforms and content
assets, standardized internal processes such as order-to-cash, outsourced various activities, and consolidated various offices/real estatearound the world.

Our ability to successfully manage organizational changes is important for our future business success. In particular, our reputation andresults of operations could be harmed if employee morale, engagement or productivity decline as a result of organizational or simplification
changes.
Furthermore, we may not realize cost savings and synergies that we expect to achieve from our current strategic initiatives due to a variety ofrisks, including, but not limited to, operational challenges across impacted business units, difficulties in integrating shared services with ourbusiness, higher than expected employee severance or retention costs, higher than expected overhead expenses, delays in the anticipatedtiming of activities related to our initiatives and other unexpected costs associated with operating our business. If we are unable to achieve
the cost savings or synergies that we expect to achieve from our strategic initiatives, it could adversely affect our profitability and related
margins.
If we do not continue to recruit, motivate and retain high quality management and key employees, we may not be able to execute ourstrategies.
The completion and execution of our strategies depends on our ability to continue to recruit, motivate and retain high quality management
and employees across all of our businesses. We compete with many businesses that are seeking skilled individuals, particularly those withexperience in technology and data science. Competition for professionals in our financial services and legal businesses in particular can also
be intense as other companies seek to enhance their positions in our market segments. In addition, any organizational changes could cause
our employee attrition rate to increase. We may not be able to continue to identify or be successful in recruiting, motivating or retaining theappropriate qualified personnel for our businesses (particularly in emerging markets) and this may adversely affect our ability to execute ourstrategies.
Operating globally involves challenges that we may not be able to meet and that may adversely affect our ability to grow.
In 2014, approximately 40% of our revenues were derived outside of North America and we expect this percentage to increase in the future.
As of December 31, 2014, approximately 60% of our employees were located outside of North America.
We believe that there are advantages to operating globally, including a proportionately reduced exposure to the market developments of asingle country or region. However, there are certain risks inherent in doing business globally which may adversely affect our business andability to grow. These risks include:
Š
Š
Š
Š
Š
Š
Š
Š
Š
Š

Difficulties in penetrating new markets due to established and entrenched competitors;
Difficulties in developing products and services that are tailored to the needs of local customers;
Lack of local acceptance or knowledge of our products and services;
Lack of recognition of our brands;
Economic slowdowns, instability and volatility in local markets and political instability of governments;
Unavailability of joint venture partners or local companies for acquisition;
Exposure to possibly adverse government actions in countries where we operate or conduct business;
Higher inflation rates in the countries in which we do business;
Changes in laws and policies affecting trade and investment in other jurisdictions; andExposure to varying and sometimes conflicting legal standards.

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Thomson Reuters Annual Report 2014

Adverse developments in any of these areas could cause our actual results to differ materially from expected results. Challenges associatedwith operating globally may increase for our company as we continue to expand into geographic areas that we believe present the highest
growth opportunities.
We may be unable to derive fully the anticipated benefits from our existing or future acquisitions, joint ventures, investments or
dispositions.
Acquisitions have historically been an important part of our growth strategy to expand and enhance our products, services and customer
base and to enter new geographic areas. While we expect acquisition and disposition activity to continue in the future, we expect our activity
to be modest in 2015 (similar to 2014). In the future, we may not be able to successfully identify attractive acquisition opportunities or makeacquisitions on terms that are satisfactory to our company from a commercial perspective. In addition, competition for acquisitions in theindustries in which we operate during recent years has escalated, and may increase costs of acquisitions or cause us to refrain from making
certain acquisitions. We may also be subject to increasing regulatory scrutiny from competition and antitrust authorities in connection withacquisitions. Achieving the expected returns and synergies from existing and future acquisitions will depend in part upon our ability tointegrate the products and services, technology, administrative functions and personnel of these businesses into our segments in an efficientand effective manner. We cannot assure you that we will be able to do so, or that our acquired businesses will perform at anticipated levels
or that we will be able to obtain these synergies. Management resources may also be diverted from operating our existing businesses tocertain acquisition integration challenges. If we are unable to successfully integrate acquired businesses, our anticipated revenues andprofits may be lower. Our profit margins may also be lower, or diluted, following the acquisition of companies whose profit margins are lessthan those of our existing businesses. Acquisition spending may also reduce our earnings per share in certain periods.
We have also historically decided from time to time to dispose of assets or businesses that are no longer aligned with strategic objectives or
our current business portfolio. We expend costs and management resources to complete divestitures. Any failures or delays in completing
divestitures could have an adverse effect on our financial results and on our ability to execute our strategy.
Our brands and reputation are important company assets and are key to our ability to remain a trusted source of information and news.
The integrity of our brands and reputation is key to our ability to remain a trusted source of information and news and to attract and retain
customers. Negative publicity regarding our company or actual, alleged or perceived issues regarding one of our products or services could
harm our relationship with customers. Failure to protect our brands or a failure by our company to uphold the Thomson Reuters Trust
Principles may adversely impact our credibility as a trusted supplier of content and may have a negative impact on our information and news
business.
We may be required to take future impairment charges that would reduce our reported assets and earnings.
Goodwill and other identifiable intangible assets comprise a substantial portion of our total assets. We are required under IFRS to test our
goodwill and identifiable intangible assets with indefinite lives for impairment on an annual basis. We also are required by IFRS to perform
an interim or periodic review of our goodwill and all identifiable intangible assets if events or changes in circumstances indicate that
impairment may have occurred. Impairment testing requires our company to make significant estimates about our future performance andcash flows, as well as other assumptions. Economic, legal, regulatory, competitive, contractual and other factors as well as changes in ourcompany’s share price and market capitalization may affect these assumptions. If our testing indicates that impairment has occurred relative
to current fair values, we may be required to record a non-cash impairment charge in the period the determination is made. Recognition of
an impairment would reduce our reported assets and earnings.
Our intellectual property rights may not be adequately protected, which may adversely affect our financial results.
Many of our products and services are based on information delivered through a variety of media, including online, software-based
applications, smartphones, tablets, books, journals and dedicated transmission lines. We rely on agreements with our customers andemployees and patent, trademark, copyright and other intellectual property laws to establish and protect our proprietary rights in our
products and services. Third parties may be able to copy, infringe or otherwise profit from our proprietary rights without authorization andthe Internet may facilitate these activities. We also conduct business in some countries where the extent of effective legal protection for
intellectual property rights is uncertain. We cannot assure you that we have adequate protection of our intellectual property rights. If we are
not able to protect our intellectual property rights, our financial results may be adversely affected.
The intellectual property of an acquired business may also be an important component of the value that we agree to pay for such a business.
However, such acquisitions are subject to the risks that the acquired business may not own the intellectual property that we believe we are
acquiring, that the intellectual property is dependent upon licenses from third parties, that the acquired business infringes upon theintellectual property rights of others or that the technology does not have the acceptance in the marketplace that we anticipated. If we are notable to successfully integrate acquired businesses’ intellectual property rights, our financial results may be adversely affected.

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Thomson Reuters Annual Report 2014

Some of our competitors may also be able to develop new products or services that are similar to ours without infringing our intellectual
property rights, which could adversely affect our financial condition and results of operations.
We operate in a litigious environment which may adversely affect our financial results.
We may become involved in legal actions and claims arising in the ordinary course of business, including litigation alleging infringement ofintellectual property rights, employment matters, breach of contract and other commercial matters. Due to the inherent uncertainty in thelitigation process, the resolution of any particular legal proceeding could result in changes to our products and business practices and could
have a material adverse effect on our financial position and results of operations.
From time to time, we have been sued by other companies for allegedly violating their patents. We are significantly dependent on technology
and the rights related to it, including rights in respect of business methods. This, combined with the recent proliferation of “business method
patents” issued by the U.S. Patent Office, and the litigious environment that surrounds patents in general, has increased patent infringement
litigation over the last few years. Increasingly, our company (as well as other companies) have experienced more alleged claims from third
parties whose sole or primary business is to monetize patents. If an infringement suit against our company is successful, we may be required
to compensate the third party bringing the suit either by paying a lump sum or ongoing license fees to be able to continue selling a particular
product or service. This type of compensation could be significant, in addition to legal fees and other costs that we would incur defending
such a claim. We might also be prevented or enjoined by a court from continuing to provide the affected product or service. We may also be
required to defend or indemnify any customers who have been sued for allegedly infringing a third party’s patent in connection with using
one of our products or services. Responding to intellectual property claims, regardless of the validity, can be time consuming for our
technology personnel and management.
Antitrust/competition-related claims or investigations could result in changes to how we do business and could be costly.
We are subject to applicable antitrust and competition laws and regulations in the countries where we have operations. These laws andregulations seek to prevent and prohibit anti-competitive activity. From time to time, we may be subject to antitrust/competition-related
claims and investigations. Following such a claim or investigation, we may be required to change the way that we offer a particular productor service and if we are found to have violated antitrust or competition laws or regulations, we may be subject to fines or penalties. Any
antitrust or competition-related claim or investigation could be costly for our company in terms of time and expense and could have an
adverse effect on our financial condition and results of operations.
Our credit ratings may be downgraded, which may impede our access to the debt markets or raise our borrowing rates.
Our access to financing depends on, among other things, suitable market conditions and the maintenance of suitable long-term credit
ratings. Our credit ratings may be adversely affected by various factors, including increased debt levels, decreased earnings, declines incustomer demands, increased competition, a further deterioration in general economic and business conditions and adverse publicity. In late2013, following our announcement of a new capital strategy, our long-term debt rating was downgraded by Moody’s and Standard & Poor’s,
which increased our credit facility fee and borrowing costs. Any further downgrades in our credit ratings may impede our access to the debt
markets or raise our borrowing rates.
We have significant funding obligations for pension and post-retirement benefit arrangements that are affected by factors outside of ourcontrol.
We have significant funding obligations for various pension and other post-retirement benefit arrangements that are affected by factors
outside of our control, including market factors and changes in legislation. In the past, we have contributed to our pension plans to pre-fundcertain obligations.
The valuations of obligations for material plans are determined by independent actuaries and require assumptions in respect of futurecompensation levels, expected mortality, inflation and medical cost trends, along with the discount rate to measure obligations. Theseassumptions are reviewed annually. While we believe that these assumptions are appropriate given current economic conditions, significant
differences in actual experience or significant changes in assumptions may materially affect our valuations of pension and other postretirement benefit obligations and related future expenses. In addition, the performance of equity and fixed income markets, which may be
influenced by general economic conditions, including interest rates, inflation and currency exchange rates, may impact the funding level ofour funded plans and required contributions.

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Thomson Reuters Annual Report 2014

Woodbridge controls our company and is in a position to affect our governance and operations.
Woodbridge beneficially owned approximately 57% of our shares as of March 4, 2015. For so long as Woodbridge maintains its controllinginterest in our company, it will generally be able to approve matters submitted to a majority vote of our shareholders without the consent ofother shareholders, including, among other things, the election of our board. In addition, Woodbridge may be able to exercise a controllinginfluence over our business and affairs, the selection of our senior management, the acquisition or disposition of our assets, our access tocapital markets, the payment of dividends and any change of control of our company, such as a merger or take-over. The effect of this control
may be to limit the price that investors are willing to pay for our shares. In addition, a sale of shares by Woodbridge or the perception of themarket that a sale may occur may adversely affect the market price of our shares.
Changes in the tax residence of our company could cause us adverse tax consequences.
We expect our company will remain resident only in Canada for tax purposes. However, if our company were to cease to be resident solely in
Canada for tax purposes (including as a result of changes in applicable laws or in Canadian regulatory practice), this could cause us adverse
tax consequences.
Thomson Reuters Founders Share Company holds a Thomson Reuters Founders Share in our company and may be in a position to affectour governance and management.
Thomson Reuters Founders Share Company was established to safeguard the Thomson Reuters Trust Principles, including theindependence, integrity and freedom from bias in the gathering and dissemination of information and news. The Founders Share Company
holds a Thomson Reuters Founders Share in our company. The interest of the Founders Share Company in safeguarding the Trust Principles
may conflict with our other business objectives, impose additional costs or burdens on us or otherwise affect the management andgovernance. In addition, the Founders Share enables the Founders Share Company to exercise extraordinary voting power to safeguard theTrust Principles and to thwart those whose holdings of voting shares of Thomson Reuters threaten the Trust Principles. As a result, theFounders Share Company may prevent a change of control (including by way of a take-over bid or similar transaction) of our company in the
future. The effect of these rights of the Founders Share Company may be to limit the price that investors are willing to pay for our shares.

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Thomson Reuters Annual Report 2014

Management’s Discussion and Analysis
This management’s discussion and analysis is designed to provide you with a narrative explanation through the eyes of our management of our
financial condition and results of operations. We recommend that you read this in conjunction with our 2014 annual consolidated financial
statements. This management’s discussion and analysis is dated as of March 4, 2015. This management’s discussion and analysis contains
forward-looking statements, which are subject to risks and uncertainties that could cause our actual results to differ materially from the forwardlooking statements. Forward-looking statements include, but are not limited to, our 2015 outlook and our expectations related to general
economic conditions and market trends and their anticipated effects on our business segments. For additional information related to forwardlooking statements and material risks associated with them, please see the “Cautionary Note Concerning Factors That May Affect Future Results”
section of this management’s discussion and analysis.
We have organized our management’s discussion and analysis in the following key sections:Š

Overview – a brief discussion of our business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

ŠResults of Operations – a comparison of our current and prior-year period results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

ŠLiquidity and Capital Resources – a discussion of our cash flow and debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

ŠOutlook – our current financial outlook for 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

ŠRelated Party Transactions – a discussion of transactions with our principal and controlling shareholder, . . . . . . . . . . . . . . . . . . . .
The Woodbridge Company Limited (Woodbridge), and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60

ŠSubsequent Events – a discussion of material events occurring after December 31, 2014 and through the date of thismanagement’s discussion and analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

ŠChanges in Accounting Policies – a discussion of changes in our accounting policies and recent accounting pronouncements . . . . 61

Š

Critical Accounting Estimates and Judgments – a discussion of critical estimates and judgments made by our management
in applying accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

ŠAdditional Information – other required disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

ŠAppendix – supplemental information and discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

We prepare our consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by theInternational Accounting Standards Board (IASB). This management’s discussion and analysis also includes certain non-IFRS financial
measures which we use as supplemental indicators of our operating performance and financial position, as well as for internal planningpurposes.
References in this discussion to “$” and “US$” are to U.S. dollars and references to “C$” are to Canadian dollars. In addition, “bp” means“basis points” and “na” and “n/m” refer to “not applicable” and “not meaningful”, respectively. Unless otherwise indicated or the context
otherwise requires, references in this discussion to “we,” “our,” “us” and “Thomson Reuters” are to Thomson Reuters Corporation and our
subsidiaries. When we refer to “net sales,” we are referring to new sales less cancellations.

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Thomson Reuters Annual Report 2014

OVERVIEWOur Company
We are the leading source of intelligent information for businesses and professionals. We combine industry expertise with innovativetechnology to deliver critical information to enable our customers to operate in a dynamic business environment. The exponential growth in
the volume of data, the impact of technology, and an increasingly complex legal and regulatory environment create challenges for ourcustomers as well as opportunities for our businesses. The breadth and depth of our offerings, our global footprint, and the trust andcredibility built by the world’s most trusted news organization uniquely position our company at the confluence of content and technology.
We bring in-depth understanding of our customers’ needs, flexible technology platforms, proprietary content and scale. We believe ourability to embed our solutions into customers’ workflows is a significant competitive advantage as it leads to strong customer retention.
We derive the majority of our revenues from selling solutions to our customers, primarily electronically and on a subscription basis. Over theyears, this has proven to be capital efficient and cash flow generative, and it has enabled us to maintain leading and scalable positions in ourchosen markets.
We are organized in four business units:
Financial & Risk, a leading provider of critical news, information and analytics, enabling transactions and bringing
together financial communities. Financial & Risk also provides leading regulatory and operational risk management
solutions.
Legal, a leading provider of critical online and print information, decision tools, software and services that support legal,
investigation, business and government professionals around the world.

Tax & Accounting, a leading provider of integrated tax compliance and accounting information, software and services for
professionals in accounting firms, corporations, law firms and government.

Intellectual Property & Science, a leading provider of comprehensive intellectual property and scientific information,
decision support tools and services that enable the lifecycle of innovation for governments, academia, publishers,
corporations and law firms to discover, protect and commercialize new ideas and brands.

2014 Results
In 2014, we achieved or exceeded each key performance metric in our 2014 Outlook, despite what continued to be a challenging environment
in our two largest market segments – legal and financial. This was the third consecutive year that we met or exceeded our financial outlook.
NON-IFRS FINANCIAL MEASURES(1)2014 OUTLOOK

Revenues from ongoing businesses

Comparable to 2013 (before currency)

1% increase✓

Adjusted EBITDA margin

Between 26.0% and 27.0%

26.3%

✓

Underlying operating profit margin

Between 17.0% and 18.0%

17.0%

✓

Between $1.3 billion and $1.5 billion$ 1.4 billion✓

Free cash flow

2014 PERFORMANCE

2014 marked the beginning of a far more unified approach to managing our company. We no longer think of ourselves as a portfolio of
individual operating companies, but rather as an integrated enterprise. We believe the steps that we are taking will deliver the strong andconsistent cash flow that will allow us to continue providing an attractive return to our shareholders while still investing in initiatives to drive
future growth.

(1)

Refer to Appendix A for additional information on non-IFRS financial measures.

Page 24

Thomson Reuters Annual Report 20142014 was a year of solid progress across the company.
Our Financial & Risk business recorded its first positive net sales since 2008. Financial & Risk has reported year-over-year net sales
improvement in eight of the last nine quarters.
Our Legal, Tax & Accounting and Intellectual Property & Science businesses continue to build from a solid foundation while targeting
faster-growing opportunities, which resulted in 4% revenue growth, 3% of which was organic.
Underpinning the improving net sales and revenue growth trends are our simplification and transformation programs. Our goal is toleverage our content and capabilities on behalf of our customers and to establish a scalable platform for sustainable growth. Our key
areas of focus include the consolidation of our technology platforms and content assets; the standardization of internal processes such asorder-to-cash; the outsourcing of non-core activities; and a reduction in the number of real estate sites and subsidiaries through which wecurrently operate. We achieved our run-rate savings target of $300 million from the simplification program, which primarily involved
headcount reductions in our Financial & Risk business. Our transformation program, which is designed to improve the company’s organic
revenue growth, capture economies of scale and simplify the organization, continues to make steady progress towards its goal ofachieving savings of $400 million by 2017.
We continue to approach our capital strategy and balance sheet strength in a consistent and disciplined manner. Our capital strategy is a
critical part of our overall strategy and a key element in supporting and growing our businesses. As part of our capital strategy, we seek tobalance investing in our business and returning capital to shareholders. In 2014, we returned over $2 billion to shareholders in the form of
dividends and share buybacks. As we target gradual improvements in revenue growth and free cash flow, we believe that we should be
able to provide attractive returns to our shareholders without compromising either our growth strategy or our target of maintaining asolid investment grade rating.
We significantly reduced our acquisition spending compared to prior years in order to focus on organic growth.

Š

Š

Š

Š

Š

Based on our 2014 results, we expect to return to organic revenue growth in 2015 and we are forecasting positive net sales for our Financial &Risk business for 2015. We are also expecting another strong year in 2015 from our Legal, Tax & Accounting and Intellectual Property &Science businesses.
Below are some additional summary financial highlights of our full year 2014 results. You can find a more detailed discussion of our 2014
performance in the “Results of Operations” section of this management’s discussion and analysis.

(millions of U.S. dollars, except per share amounts)
Non-IFRS Financial Measures (1)Revenues from ongoing businesses

EXCLUDING CHARGES*
2014

2013

12,605

12,543

Revenue growth before currency

CHANGE

2014

2013

-

12,605

12,543

1%

CHANGE
1%

Adjusted EBITDA

3,313

3,070

8%

3,448

3,427

1%

Adjusted EBITDA margin

26.3%

24.5%

180bp

27.4%

27.3%

10bp

Underlying operating profit

2,138

1,881

14%

2,273

2,253

1%

Underlying operating profit margin

17.0%

15.0%

200bp

18.0%

18.0%

-

Adjusted earnings per share (adjusted EPS)

$1.85

$1.54

20%

$2.00

$1.93

4%

*

The charges incurred were associated with our simplification program initiatives.

The increase in revenues from ongoing businesses before currency reflected 4% combined growth from our Legal, Tax & Accounting andIntellectual Property & Science businesses, partly offset by a 2% decline in our Financial & Risk business. The increase was due tocontributions from acquisitions as revenues from existing businesses were essentially unchanged.
(1)

Refer to Appendix A for additional information on non-IFRS financial measures.

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Thomson Reuters Annual Report 20142014 REVENUES FROM ONGOING BUSINESSESŠŠFinancial & Risk’s net sales were positive in 2014, but its revenues from existing
businesses declined 3% primarily due to the lag effect of negative net sales from 2013. In
2014, Financial & Risk continued to expand margins by executing on its operational
priorities and simplification initiatives. We believe that increased customer focus andsimplifying the business has helped with Financial & Risk’s recent positive trajectory.
Legal’s revenues increased 2% with equal contributions from acquisitions and existing
businesses. The increase in revenues from existing businesses was driven by 6% growth in
our Legal Solutions businesses, which was partly offset by a 7% decline in U.S. print and a
1% decline in U.S. online legal information. Our Legal Solutions businesses, which we arebuilding around our core legal information business, comprised almost half of ourrevenues in the Legal segment.

Š

Tax & Accounting’s revenues grew 12%, of which 9% was from existing businesses. Our
Tax & Accounting business continued to benefit from increased market demand for its
global tax solutions and from new product launches.

ŠIntellectual Property & Science revenues increased 3% driven by 2% growth from existing
businesses. The growth in revenues from existing businesses reflected recurring revenue
growth of 5%, partly offset by a decline in transaction revenues.

2%
8%
11%
52%
27%

Financial & Risk
Legal
Tax & AccountingIntellectual Property & Science
Reuters News

Our Global Growth & Operations (GGO) unit, which works across our businesses to combine our global capabilities, increased revenues 9%,of which 5% was from existing businesses. GGO results are included in each of our four segments.
The increases in our profitability, the related margins and adjusted earnings per share reflected lower charges associated with oursimplification program initiatives. Excluding the charges from both periods, our adjusted EBITDA margin increased slightly as cost savings
from our simplification initiatives offset the impact of lower revenues from existing businesses in our Financial & Risk segment, as well as ourinvestments within our Legal, Tax & Accounting and Intellectual Property & Science segments. Our underlying operating profit margin was
unchanged from the prior year, excluding charges from both periods.

2015 Outlook and Key Objectives
In February 2015, we issued a business outlook for 2015. We expect:ŠŠŠŠ

positive revenue growth from existing businesses (organic);
adjusted EBITDA margin to range between 27.5% and 28.5%;
underlying operating profit margin to range between 18.5% and 19.5%; andfree cash flow to range between $1.55 billion and $1.75 billion.

Our 2015 outlook assumes constant currency rates relative to 2014 and is based on the expected performance of our existing businesses anddoes not factor in the impact of any acquisitions or divestitures that may occur during the year. In light of increased volatility recently
experienced in the foreign exchange markets, we believe that currency is likely to have a higher than usual impact on our results in 2015.
Additional information is provided in the “Outlook” and “Segment Results” sections of this management’s discussion and analysis.
In 2015, we plan to capitalize on our position to help our customers navigate the information age. Specifically, we will focus on further
improving execution across our company by:ŠŠŠinvesting in sales and marketing expertise, as well as customer service capabilities;
implementing our remaining key product and platform migrations in our Financial & Risk business, which we believe will improve service
levels to our customers and drive substantial cost savings; anddelivering strong and consistent cash flow to reinvest in our growth businesses while returning capital to our shareholders throughdividends and share repurchases.

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Thomson Reuters Annual Report 2014

Revenue Dynamics and Related Trends
We derive revenues from a diverse customer base. No single customer accounted for more than 1.5% of our revenues from ongoing
businesses. Below, we provide information regarding our 2014 revenues from ongoing businesses by media, type and geographic area.
By media. In 2014, 92% (2013 – 91%) of our revenues were derived from information delivered electronically, software and services, with theremaining 8% derived from print (which is primarily in our Legal segment). We deliver information electronically through the Internet,
dedicated high-speed transmission lines to desktops and mobile devices, such as smartphones and tablets. Electronic delivery improves ourability to rapidly provide additional products and services to our existing customers and to access new customers around the world. In
addition, our offerings often combine software and services as integrated solutions to better serve the workflow needs of our customers. We
expect that most of our customers will continue to prefer electronic delivery and increasingly migrate from print, particularly as the numberof professional knowledge workers increases and as rapidly developing economies increasingly incorporate technology into their workflows.
The business mix of our products impacts our operating profit margins. Specifically, products delivered electronically typically have lower
margins than our print products. While our solutions-based software and services also have high margins, they are traditionally lower thanthe margins of our print products and electronically delivered information.
By type. We derived 87% of our 2014 and 2013 revenues from subscription or similar contractual arrangements, which most customers renew
from year to year. Because a high proportion of our revenues are recurring, we believe that our revenue patterns are generally more stablecompared to other business models that primarily involve the sale of products in discrete or one-off arrangements. However, this also meansthat there is often a lag in realizing the impact of current sales or cancellations in our reported revenues, as we recognize revenues over theterm of the arrangement. Because of this lag effect, our revenues are typically slower to decline when economic conditions worsen, but arealso often slower to return to growth when economic activity improves, as compared to other businesses that are not subscription-based. The
majority of our subscription arrangements have a term of one year and the remaining portion is largely for two or three year terms. Thesearrangements typically have renewal provisions. Renewal dates are spread over the course of the year. In the case of some of our subscription
arrangements, we realize additional fees based upon usage. Recurring revenues for our financial services business include recoveries, which
are low margin revenues we collect from customers and pass through to a third party provider, such as stock exchange fees.
Non-recurring revenues are principally comprised of transaction revenues from our Financial & Risk segment’s trading platforms and discretesales, including sales of software, across all of our businesses. These revenues can fluctuate significantly from period to period and can also
impact the comparability of operating profit margins.
By geography. In 2014, our revenues were 60% (2013 – 60%) from the Americas, 30% (2013 – 29%) from Europe, Middle East and Africa(EMEA) and 10% (2013 – 11%) from Asia Pacific. Our GGO organization works with our strategic business units to focus on our global
capabilities in countries and regions where we believe the greatest growth opportunities exist, including Latin America, China, India, theMiddle East, Africa, the Association of Southeast Asian Nations/North Asia, Russia and countries comprising the Commonwealth of
Independent States, and Turkey. Revenues from these geographic areas represented approximately 10% of our revenues in 2014 (2013- 9%).
We expect our revenues from these GGO regions will increase at higher rates compared to more developed economies, as the GGO regions
are expected to grow gross domestic product, the number of professionals, the rate of urbanization and the middle class at a comparably
faster pace. As part of our globalization, we have brought our global portfolio of products to local markets as well as modified existingproducts and services for local markets at relatively low incremental cost. However, some products and services need specific development
for local markets or industry segments. While this may require higher incremental costs and result in initially lower margins, we try to
maximize our global and regional scale and shared technology assets to improve margins over time.

Expenses
A majority of our operating expenses are fixed. As a result, when our revenues increase, we become more profitable and our margins
increase, and when our revenues decline, we become less profitable and our margins decrease. We invest some of the profits from ourincremental revenues in our business, so the full impact of incremental revenues are not always reflected in our profitability. Our mostsignificant operating expense is staff costs, which represented 54% of our total 2014 expenses (2013 – 56%) and is comprised of salaries,
bonuses, commissions, benefits, severance, payroll taxes and equity-based compensation awards. In 2014, our staff costs decreased slightly
as a percentage of our total revenues compared to 2013 reflecting lower severance charges associated with our simplification program,headcount reductions within our Financial & Risk business and the outsourcing of certain functions.

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Thomson Reuters Annual Report 2014

Seasonality
Our revenues and operating profit on a consolidated basis do not tend to be significantly impacted by seasonality as we record a large
portion of our revenues ratably over a contract term and our costs are generally incurred evenly throughout the year. However, our nonrecurring revenues can cause changes in our performance from quarter to consecutive quarter. Additionally, the release of certain printbased offerings can be seasonal as can certain product releases for the regulatory markets, which tend to be concentrated at the end of theyear. As a consequence, the results of certain of our segments can be impacted by seasonality to a greater extent than our consolidated
revenues and operating profit.

Acquisitions
In 2014, we reduced acquisition spending compared to the last few years and focused more on achieving growth from existing businesses.
We completed five acquisitions in 2014 for a total cost of approximately $0.2 billion, compared to 28 acquisitions in 2013 for a total cost of
approximately $1.2 billion. In 2014, the majority of our acquisition spending was in Latin America. Tactical acquisitions tend to strengthen our
positions in key growth segments and expanded our presence in rapidly developing economies.
When integrating acquired businesses, we focus on eliminating cost redundancies and combining the acquired products and services with
our existing offerings and capabilities to achieve revenue growth. Generally, the businesses that we acquire initially have lower margins thanour existing businesses, largely reflecting the costs of integration.
In 2015, we plan to continue to make tactical acquisitions that we believe will strengthen our positions in key growth segments.

Dispositions
As part of our continuing strategy to optimize our portfolio of businesses and to ensure that we are investing in the parts of our business thatoffer the greatest opportunities to achieve higher growth and returns, we sell businesses from time to time that are not fundamental to ourstrategy. We did not divest of any significant businesses in 2014. In 2013, our divestitures included Financial & Risk’s Corporate Services
business and our 50% interest in the Omgeo joint venture.

Use of Non-IFRS Financial Measures
In addition to our results reported in accordance with IFRS, we use certain non-IFRS financial measures as supplemental indicators of ouroperating performance and financial position, as well as for internal planning purposes. These non-IFRS financial measures include:
Š
Š
Š
Š
Š
Š
Š
Š
Š
Š

Revenues from ongoing businesses;
Revenues at constant currency (before currency or revenues excluding the effects of foreign currency);
Underlying operating profit and the related margin;
Adjusted EBITDA and the related margin;
Adjusted EBITDA less capital expenditures and the related margin;
Adjusted earnings and adjusted earnings per share;
Net debt;
Free cash flow;
Free cash flow from ongoing businesses; andReturn on invested capital.

We report non-IFRS financial measures as we believe their use provides more insight into and understanding of our performance. See
Appendix A of this management’s discussion and analysis for a description of our non-IFRS financial measures, including an explanation of
why we believe they are useful measures of our performance, including our ability to generate cash flow. Refer to the sections of thismanagement’s discussion and analysis entitled “Results of Operations”, “Liquidity and Capital Resources” and Appendices B and C forreconciliations of these non-IFRS financial measures to the most directly comparable IFRS financial measures.

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Thomson Reuters Annual Report 2014

RESULTS OF OPERATIONSBasis of Presentation
In this management’s discussion and analysis, we discuss our results of operations on both an IFRS and non-IFRS basis. Both bases exclude
discontinued operations and include the performance of acquired businesses from the date of purchase.
Consolidated results
We discuss our consolidated results from continuing operations on an IFRS basis, as reported in our consolidated income statement.
Additionally, we discuss our consolidated results on a non-IFRS basis using the measures described in the “Use of Non-IFRS Financial
Measures” section of this management’s discussion and analysis. Among other adjustments, our non-IFRS revenue and profitability
measures as well as free cash flow from ongoing businesses exclude Other Businesses, which is an aggregation of businesses that have beenor are expected to be exited through sale or closure that did not qualify for discontinued operations classification.
Segment results
We discuss the results of our four reportable segments as presented in our 2014 annual consolidated financial statements: Financial & Risk,
Legal, Tax & Accounting and Intellectual Property & Science.
We also provide information on “Corporate & Other” and “Other Businesses”. These categories neither qualify as a component of anotherreportable segment nor as a separate reportable segment.
ŠŠ

Corporate & Other includes expenses for corporate functions, certain share-based compensation costs and the Reuters News business,
which is comprised of the Reuters News Agency and consumer publishing; andOther Businesses is an aggregation of businesses that have been or are expected to be exited through sale or closure that did not qualify
for discontinued operations classification. The results of Other Businesses are not comparable from period to period as the composition ofbusinesses changes due to the timing of completed divestitures.

See note 4 of our 2014 annual consolidated financial statements which includes a reconciliation of results from our reportable segments toconsolidated results as reported in our consolidated income statement.
In analyzing our revenues from ongoing businesses, at both the consolidated and segment levels, we identify the impact of foreign currencychanges. Additionally, we separately measure revenue growth from existing businesses and from acquired businesses, on a constantcurrency basis.

Consolidated Results
YEAR ENDED DECEMBER 31,
2014

2013

CHANGEIFRS Financial Measures
Revenues
Operating profit
Diluted earnings per share

12,6072,545$2.35

12,702
1,516
$0.16

(1%)
68%
n/m

Non-IFRS Financial Measures
Revenues from ongoing businesses
Adjusted EBITDA
Adjusted EBITDA margin
Adjusted EBITDA less capital expenditures
Adjusted EBITDA less capital expenditures margin
Underlying operating profit
Underlying operating profit margin
Adjusted earnings per share

12,605
3,313
26.3%
2,345
18.6%
2,138
17.0%
$1.85

12,543
3,070
24.5%
2,067
16.5%
1,881
15.0%
$1.54

8%
180bp
13%
210bp
14%
200bp
20%

(millions of U.S. dollars, except per share amounts)

Foreign currency effects. With respect to the average foreign exchange rates that we use to report our results, the U.S. dollar strengthened
against the Japanese yen and the Canadian dollar, weakened against the British pound sterling, and was essentially unchanged against theEuro in 2014 compared to 2013. Given our currency mix of revenues and expenses around the world, these fluctuations had a negative impact
on our revenues in U.S. dollars, but had no impact on our adjusted EBITDA and underlying operating profit margins.

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Thomson Reuters Annual Report 2014

Revenues
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)
Revenues from ongoing businesses
Other Businesses
Revenues

PERCENTAGE CHANGE:

2014

2013

Existing
businesses

Acquiredbusinesses

Constant
currency

Foreigncurrency

12,605

12,543

-

1%

1%

(1%)

-

2

159

n/m

n/m

n/m

n/m

n/m

12,607

12,702

n/m

n/m

n/m

n/m

(1%)

Total

Revenues from ongoing businesses increased on a constant currency basis, as combined growth of 4% in our Legal, Tax & Accounting andIntellectual Property & Science segments was partially offset by a 2% decline in our Financial & Risk segment. Acquisitions contributed torevenue growth across all segments. Revenues from existing businesses were essentially unchanged, as combined growth of 3% in our Legal,
Tax & Accounting and Intellectual Property & Science segments offset a 3% decline in our Financial & Risk segment. The decline in
Financial & Risk was primarily due to the lag effect of negative net sales from 2013 on our current period revenue, reflecting our largely
subscription-based model, and a decline in market-driven transaction revenues.
In 2014, our GGO organization comprised approximately 10% of our revenues and grew 9% on a constant currency basis (5% from existing
businesses).
Operating profit, underlying operating profit, adjusted EBITDA and adjusted EBITDA less capital expenditures
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

CHANGE

Operating profit

2,545

1,516

68%

Adjustments to remove:
Amortization of other identifiable intangible assets
Fair value adjustments
Other operating gains, net
Operating loss (profit) from Other Businesses
Underlying operating profit
Remove: depreciation and amortization of computer software (excluding Other Businesses)
Adjusted EBITDA(1)Remove: capital expenditures, less proceeds from disposals (excluding Other Businesses)

647

641

(91)

(14)

(969)

(198)

6

(64)

2,138

1,881

1,175

1,189

3,313

3,070

968

1,003

14%
8%

Adjusted EBITDA less capital expenditures(1)

2,345

2,067

13%

Underlying operating profit margin

17.0%

15.0%

200bp

Adjusted EBITDA margin

26.3%

24.5%

180bp

Adjusted EBITDA less capital expenditures margin

18.6%

16.5%

210bp

(1)

See Appendix B for a reconciliation of earnings from continuing operations to adjusted EBITDA and adjusted EBITDA less capital expenditures.

Operating profit increased in 2014 primarily due to a $931 million gain related to the release of accumulated foreign currency translation
adjustments from shareholders’ equity. The gain was triggered by the loss of control of a subsidiary, which involved the settlement of anintercompany loan that was considered permanent. This transaction was part of our plan to reduce the number of subsidiaries in our legalorganizational structure, which is one of our simplification program initiatives. The operating profit increase also reflected lower charges,
primarily severance, associated with our simplification program initiatives.
Adjusted EBITDA, underlying operating profit and the related margins increased due to lower charges, primarily severance, associated with
our simplification program initiatives. The increase in underlying operating profit further reflected lower depreciation and amortization.
Foreign currency had no impact on adjusted EBITDA and underlying operating profit margins.
Adjusted EBITDA less capital expenditures and the related margin increased primarily due to higher adjusted EBITDA as well as lower
capital expenditures, which reflected 2013 payments related to a large multi-year software contract.
Throughout 2014, we continued to incur charges for simplification program initiatives and we continued to reduce our costs as a result of
earlier initiatives. We believe that our adjusted EBITDA and underlying operating profit margins excluding these charges provide a bettermeasurement of our performance.

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Thomson Reuters Annual Report 2014

Excluding charges of $135 million and $357 million from 2014 and 2013, respectively, our adjusted EBITDA margin increased 10bp, as
most of the benefits from our simplification program initiatives were offset by the impact of lower revenues from existing businesses in
our Financial & Risk segment, and investments in our Legal, Tax & Accounting and Intellectual Property & Science segments.
Excluding charges of $135 million and $372 million from 2014 and 2013, respectively, underlying operating profit margin was unchanged
due to the same factors that impacted adjusted EBITDA margin.

ŠŠ

Operating expenses
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

CHANGE

Operating expenses

9,209

9,554

(4%)

Adjustments to remove:
Fair value adjustments(1)91

14Other Businesses

(8)

(95)

9,292

9,473

Operating expenses, excluding fair value adjustments and Other Businesses
(1)

(2%)

Fair value adjustments primarily represent non-cash accounting adjustments from the revaluation of embedded foreign exchange derivatives within certain customer contracts
due to fluctuations in foreign exchange rates and mark-to-market adjustments from certain share-based awards.

Operating expenses, excluding fair value adjustments and Other Businesses, decreased primarily due to lower charges from oursimplification program initiatives, and lower expenses due to a reduction in our cost structure associated with these initiatives. These
declines were partly offset by higher expenses associated with newly acquired businesses and investments in our Legal, Tax & Accounting
and Intellectual Property & Science segments. The charges associated with our simplification program initiatives were $135 million and $357
million in 2014 and 2013, respectively.
Depreciation and amortization
YEAR ENDED DECEMBER 31,

ŠŠ(millions of U.S. dollars)

2014

2013

CHANGE

Depreciation

397

416

(5%)

Amortization of computer software

778

773

1%

Subtotal

1,175

1,189

(1%)

Amortization of other identifiable intangible assets

647

641

1%

Depreciation and amortization of computer software on a combined basis decreased due to the completion of depreciation of fixed assets
acquired in previous years, partly offset by an increase in amortization of computer software. Amortization of computer software
increased slightly as investments in products, such as Thomson Reuters Eikon, and the amortization of assets from recently acquired
businesses, was mostly offset by the completion of amortization of software assets acquired in previous years.
Amortization of other identifiable intangible assets increased due to amortization from newly-acquired assets, which more than offset
decreases from the completion of amortization for certain identifiable intangible assets acquired in previous years.

Other operating gains, net
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

Other operating gains, net

969

198

In 2014, other operating gains, net, were primarily comprised of a $931 million gain related to the release of accumulated foreign currencytranslation adjustments from shareholders’ equity. The gain was triggered by the loss of control of a subsidiary, which involved thesettlement of an intercompany loan that was considered permanent. This transaction was part of our plan to reduce the number ofsubsidiaries in our legal organizational structure, which is one of our simplification program initiatives. Additionally, we recorded a $36
million gain from the sale of a Canadian wholly owned subsidiary to a company affiliated with our principal shareholder, Woodbridge.

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Thomson Reuters Annual Report 2014

In 2013, other operating gains, net, were primarily comprised of a $136 million gain from the sale of our Corporate Services business, a$44 million gain from the sale of our 50% joint venture interest in Omgeo, and a $29 million gain from the sale of a Canadian wholly owned
subsidiary to a company affiliated with Woodbridge. These gains were partially offset by $21 million of acquisition-related costs.
Additional information about the Woodbridge transactions and the sale of our joint venture interest in Omgeo is provided in the “Related
Party Transactions” section of this management’s discussion and analysis.
Net interest expense
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

CHANGENet interest expense

442

460

(4%)

The decrease in net interest expense primarily reflected lower interest costs on our net pension obligations following a $500 million
contribution we made to our pension plans in the fourth quarter of 2013. That contribution reduced our net obligations, as well as ourongoing interest cost associated with the net obligations. Net interest expense also benefited from lower interest on our debt obligations dueto the refinancing activities discussed further within the “Liquidity and Capital Resources – Cash Flow” section of this management’s
discussion and analysis. These decreases were partially offset by higher interest on certain tax liabilities. As over 95% of our long-term debt
obligations paid interest at fixed rates (after swaps), the net interest expense on the balance of our debt was essentially unchanged.
Other finance costs
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)
Other finance costs

2014

2013

85

53

Other finance costs included losses of $47 million and $35 million in 2014 and 2013, respectively, for the early redemption of debt securities.
The 2014 losses included $35 million (2013 – $35 million) in debt premiums and $12 million (2013 – nil) related to the termination of theassociated hedging instruments. See the “Liquidity and Capital Resources – Cash Flow” section of this management’s discussion andanalysis for additional information regarding our financing activities. Both years also included gains or losses realized from changes inforeign currency exchange rates on certain intercompany funding arrangements and gains or losses related to foreign exchange contracts.
Share of post-tax earnings in equity method investments
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)
Share of post-tax earnings in equity method investments

2014

2013

3

20

In 2013, our share of post-tax earnings in equity method investments included our former joint venture in Omgeo, a provider of trade
management services, which was sold in the fourth quarter of 2013. Our share of the post-tax earnings of Omgeo and other investees waspartly offset by an impairment of $5 million with respect to one equity method investee due to weaker than expected performance.
Tax expense
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

Tax expense

(62)

(848)

Our effective income tax rate on earnings from continuing operations was 3.1% and 82.9% in 2014 and 2013, respectively. The comparabilityof our tax expense was impacted by various transactions and accounting adjustments during each period. Additionally, the tax expense ineach period reflected the mix of taxing jurisdictions in which pre-tax profits and losses were recognized.

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Thomson Reuters Annual Report 2014

In 2013, we recorded tax charges of $836 million in connection with intercompany sales of certain technology and content assets between
our wholly owned subsidiaries. These transactions were part of the consolidation of the ownership and management of our technology andcontent assets and were a component of our simplification program initiatives. The intercompany gains that arose from these transactions
were eliminated in consolidation.
The following table sets forth significant components within income tax expense that impact comparability from period to period, including
tax expense associated with items that are removed from adjusted earnings:(EXPENSE) BENEFITYEAR ENDED DECEMBER 31,
2014

2013

Consolidation of technology and content assets(1)

-

(836)

Uncertain tax positions(2)1623Corporate tax rates(3)1015Other deferred tax adjustments (4)

(16)

25

10

(773)

Sale of businesses(5)

-

(55)

Operating profit of Other Businesses

1

(16)

(16)

5

(millions of U.S. dollars)
Tax items impacting comparability:

Subtotal
Tax related to:Fair value adjustments
Other items

3

2

Subtotal

(12)

(64)

(2)

(837)

Total
(1)

Relates to the consolidation of the ownership and management of our technology and content assets.

(2) Relates to the reversal of tax reserves in connection with favorable developments regarding tax disputes.
(3) Relates to the net reduction of deferred tax liabilities due to changes in corporate tax rates that were substantively enacted in certain jurisdictions.
(4) Relates to changes in the recognition of deferred tax assets in various jurisdictions due to acquisitions, assumptions regarding future profitability, and adjustments for indefinitelived assets and liabilities that are not expected to reverse.
(5) Primarily relates to the sale of the Corporate Services business and our 50% joint venture interest in Omgeo.

Because the items described above impact the comparability of our tax expense for each year, we remove them from our calculation ofadjusted earnings, along with the pre-tax items to which they relate. Accordingly, in our calculation of adjusted earnings for 2013, weremoved the impact of the tax charges associated with the consolidation of technology and content assets. Within our tax provision on
adjusted earnings, we amortize a portion of the taxes associated with the intercompany sales on a straight-line basis over seven years (seenote 1 below). Our 2014 effective tax rate on adjusted earnings was 13.9% (2013 – 11.2%). For purposes of computing our effective tax rate on
adjusted earnings, we deduct amortization of other identifiable intangible assets from adjusted earnings.
The computation of our adjusted tax expense is set forth below:(EXPENSE) BENEFITYEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

Tax expense

(62)

(848)

2

837

Remove: Items from above impacting comparability
Other adjustments:
Tax charge amortization(1)Total tax expense on adjusted earnings
(1)

(86)

(76)

(146)

(87)

Of the $836 million in tax charges we recorded for the year ended December 31, 2013 associated with the consolidation of the ownership and management of our technology andcontent assets, we recorded $604 million as deferred tax charges. Within our tax expense on adjusted earnings, we amortize these deferred charges on a straight-line basis overseven years. We believe this treatment more appropriately reflects our tax position because these charges are expected to be paid over seven years from the date of the originaltransaction, in varying annual amounts, in conjunction with the repayments of interest-bearing notes that were issued as consideration in the original transactions.

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Thomson Reuters Annual Report 2014

On an IFRS basis (excluding the tax charge of $836 million in 2013) and on an adjusted earnings basis, our effective income tax rates in both
years were lower than the Canadian corporate income tax rate of 26.4%, due significantly to the lower tax rates and differing tax rules
applicable to certain of our operating and financing subsidiaries outside Canada. As a global company, our income taxes depend on the lawsof numerous countries where we operate and the provisions of multiple income tax conventions between various countries in which we
operate.
Because of the requirements of income tax accounting under IAS 12, Income Taxes, income tax expense can differ significantly from taxes
paid in any reporting period. We paid income taxes from continuing operations on our worldwide business as follows:
Taxes paid

YEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

Taxes paid on operations

271

236

Taxes (received) paid on sales of businesses

(14)

100

Total taxes paid

257

336

In 2014 and 2013, the tax that we paid on our operations was higher than our tax expense on our adjusted earnings. However, in 2013, the tax
that we paid on our operations was lower than the tax expense that we reported in our IFRS consolidated income statement, due to the tax
charges associated with the consolidation of technology and content assets. As the majority of the taxes associated with those charges will
be paid over seven years from the date of the transaction, in varying annual installments, we will amortize such tax in our adjusted earnings
over that period. Typically, the tax that we pay on our operations is higher than either the tax expense that we report in our consolidated
income statement or the tax expense that we compute on our adjusted earnings. This difference arises principally because of accounting
rules regarding the taxes related to non-deductible other identifiable intangible assets acquired through share acquisitions. Such taxes are
not recorded in our consolidated income statement, as accounting rules require them to be recorded as a liability with an offset to goodwill.
Our effective tax rate and our cash tax cost in the future will depend on the laws of numerous countries and the provisions of multiple income
tax conventions between various countries in which we operate. Our ability to maintain our effective tax rate will be dependent upon suchlaws and conventions remaining unchanged or favorable, as well as the geographic mix of our profits. See the “Contingencies” section of thismanagement’s discussion and analysis for further discussion of income tax liabilities.
Net earnings and earnings per share
YEAR ENDED DECEMBER 31,(millions of U.S. dollars, except per share amounts)

2014

2013

Net earnings

1,959

185

Diluted earnings per share

$2.35

$0.16

Net earnings and the related per share amount increased in 2014 principally due to higher operating profit and lower income tax expense.

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Thomson Reuters Annual Report 2014

Adjusted earnings and adjusted earnings per share
YEAR ENDED DECEMBER 31,(millions of U.S. dollars, except per share amounts and share data)

2014

2013

CHANGE

Earnings attributable to common shareholders

1,909

137

n/m

Adjustments to remove:
Operating loss (profit) from Other Businesses
Fair value adjustments
Other operating gains, net

6

(64)

(91)

(14)

(969)

(198)

Other finance costs

85

53

Share of post-tax earnings in equity method investments

(3)

(20)

Tax on above items(1)1264Tax items impacting comparability(1)

(10)

773

Amortization of other identifiable intangible assets

647

641

Discontinued operations

-

(10)

Tax charge amortization(1)

(86)

(76)

Dividends declared on preference shares

(3)

(3)

Adjusted earnings

1,497

1,283

17%

Adjusted earnings per share (adjusted EPS)

$1.85

$1.54

20%

Diluted weighted-average common shares (millions)

810.9

831.0

(1)

See the “Tax expense” section above for additional information.

Adjusted earnings and the related per share amounts increased primarily due to higher underlying operating profit. Additionally, adjusted
earnings per share were impacted by lower diluted weighted–average common shares primarily due to share repurchases (see the “Liquidity
and Capital Resources – Share Repurchases” section of this management’s discussion and analysis for additional information). Foreign
currency negatively impacted adjusted earnings per share by $0.02 compared to the prior year.

Segment Results
A discussion of the operating results of our Financial & Risk, Legal, Tax & Accounting and Intellectual Property & Science reportablesegments follows.
ŠŠ

Results from the Reuters News business are included in “Corporate & Other”. These results as well as Other Businesses are both excluded
from our reportable segments as neither of them qualify as a component of our four reportable segments, nor as a separate reportablesegment.
We use segment operating profit to measure the operating performance of our reportable segments.
— The costs of centralized support services such as technology, editorial, real estate, accounting, procurement, legal and humanresources are allocated to each segment based on usage or other applicable measures. However, certain technology and real estate
assets associated with these allocations are not included within the reportable segments, but remain in Corporate & Other.
— We define segment operating profit as operating profit before (i) amortization of other identifiable intangible assets; (ii) otheroperating gains and losses; (iii) certain asset impairment charges; (iv) corporate-related items; and (v) fair value adjustments. We use
this measure because we do not consider these excluded items to be controllable operating activities for purposes of assessing thecurrent performance of our reportable segments.
— We also use segment operating profit margin, which we define as segment operating profit as a percentage of revenues.
— Our definition of segment operating profit may not be comparable to that of other companies.

Š

As a supplemental measure of segment operating performance, we add back depreciation and amortization of computer software tosegment operating profit to arrive at each segment’s EBITDA and the related margin as a percentage of revenues. See Appendix B of thismanagement’s discussion and analysis for additional information.

Page 35

Thomson Reuters Annual Report 2014

Financial & Risk
YEAR ENDED DECEMBER 31,

PERCENTAGE CHANGE:(millions of U.S. dollars)

2014

2013

Existing
businesses

Acquiredbusinesses

Constant
currency

Foreigncurrency

Total

Revenues

6,538

6,648

(3%)

1%

(2%)

-

(2%)

EBITDA

1,591

1,457

9%

EBITDA margin

24.3%

21.9%

240bp

Segment operating profit
Segment operating profit margin

951

816

17%

14.5%

12.3%

220bp

Revenues decreased on a constant currency basis as growth from acquired businesses was more than offset by a decline in revenues fromexisting businesses. The decline in revenues from existing businesses was primarily due to the lag effect of negative 2013 net sales on
Financial & Risk’s 2014 revenues, reflecting our largely subscription-based model, as well as from a continued decline in market-driven
transaction revenues. The decline in transaction revenues reflected significantly lower market volatility, which resulted in lower trading
volumes across global markets including fixed income and foreign exchange.
Financial & Risk’s net sales were positive for the full year 2014 for the first time since 2008. Net sales were positive in the fourth quarter of2014 and they have improved year-over-year in eight of the last nine quarters ended December 31, 2014.
By geographic area, Financial & Risk’s revenues in the Americas were essentially unchanged (2% decrease from existing businesses),revenues in Europe, Middle East and Africa (EMEA) decreased 3% (all from existing businesses) and revenues in Asia Pacific were essentiallyunchanged (1% decrease from existing businesses).
Financial & Risk continues to make significant operational progress, including the transformation of its product development teams andregional sales organizations, the introduction of new products and the simplification of its technology and service platforms.
ŠŠŠTo simplify the business, Financial & Risk has reduced the number of products it sells from 850 in 2012 to about 400. In 2014, Financial &Risk launched a new TRFXT foreign exchange product, Eikon 4.0, Eikon for the Buyside, and Accelus ORG ID, a “Know Your Customer”
product in our Risk business. Each of these products is powered by our Elektron platform. We discontinued our legacy Reuters 3000Xtra
product with over 120,000 customers upgraded to Eikon. The progress in these areas has led to increased retention rates and improved
net sales performance.
Our simplification program resulted in a reduction of Financial & Risk’s cost structure and the business has reduced its headcount byapproximately 20% since 2012.
To ease complexity from a commercial point of view, we introduced a new customer master agreement.

In 2014, we no longer reported revenue information for four lines of businesses in our Financial & Risk segment, as the business was not
managed under that structure. Financial & Risk has built a unified technology platform, which is enabling us to leverage the scale of a single
Financial & Risk business, and also provides a vehicle for innovation and the creation of industry solutions. The unified technology platform
strategy has enabled us to simplify our structure, remove costs and focus investment spending on areas that we believe provide the greatest
growth and scale opportunities.

Page 36

Thomson Reuters Annual Report 20142014 REVENUES BY TYPE

Results by type were:ŠŠŠSubscription revenues decreased 2% (3% from existing businesses) reflecting the impact
of negative net sales, primarily from 2013;
Transactions revenues were essentially unchanged (5% decrease from existing
businesses). The decline in revenues from existing businesses was driven by lower
volatility in the fixed income and foreign exchange markets which depressed transaction
volumes; andRecoveries revenues (low-margin revenues that we collect and largely pass-through to athird party provider, such as stock exchange fees) increased 1%, all from existing
businesses.

11%
13%

76%

Subscription
Transactions
Recoveries

EBITDA, segment operating profit and the related margins increased due to lower charges, primarily severance, associated with oursimplification program initiatives. In 2014, EBITDA and segment operating profit included $130 million (2013 – $245 million) and$130 million (2013 – $251 million), respectively, of simplification charges. We believe that Financial & Risk’s EBITDA and segment operating
profit margins excluding the simplification charges from each period provide a better measurement of Financial & Risk’s performance.
ŠŠ

Excluding charges from both periods, Financial & Risk’s EBITDA margin increased 70bp to 26.3% as cost savings resulting from oursimplification program initiatives more than offset the margin impact of the decline in revenues from existing businesses. Foreignexchange decreased EBITDA margins by approximately 30bp compared to the prior-year period.
Excluding charges from both periods, Financial & Risk’s segment operating profit margin increased 50bp to 16.5% largely due to thesame factors that impacted EBITDA margin.

2015 Outlook
While we believe that the health of the financial services sector is stronger than in previous years, challenges remain. Regulators continue toscrutinize the operating activities of banks and other market participants in the financial services industry. Banks continue to be underpressure from increasing regulation that limits their activities. At the same time, currency and fixed income markets experienced lower
volatility throughout most of 2014, leading to lower transaction revenues, and we are unable to predict future market conditions.
In 2015, we will continue to build upon our 2014 achievements. We will again strive for higher customer retention rates through productinvestment and better service. We will also focus on operational simplification to reduce costs. One of our key priorities is the migration ofseveral products and platforms, which we expect will drive lower costs and improved service levels to our customers. These migrations maylead to lower price realization from certain customers, and could dampen the positive revenue growth impact that we expect from acontinued improvement in net sales trends. However, we anticipate that the improving trends in net sales, price increases and greater pricediscipline will help to mitigate this impact and will contribute to improved revenue performance in 2015. Reflecting these initiatives, we havetargeted an EBITDA margin nearing 30% in 2015 for our Financial & Risk business.
Legal
YEAR ENDED DECEMBER 31,

PERCENTAGE CHANGE:(millions of U.S. dollars)

2014

2013

Existing
businesses

Revenues

3,379

3,351

1%

EBITDA

1,238

1,194

4%

EBITDA margin

36.6%

35.6%

100bp

958

903

6%

28.4%

26.9%

150bp

Segment operating profit
Segment operating profit margin

Page 37

Acquiredbusinesses

Constant
currency

Foreigncurrency

1%

2%

(1%)

Total
1%

Thomson Reuters Annual Report 2014

Revenues increased on a constant currency basis reflecting contributions from existing and acquired businesses. Subscription revenues,
which represent approximately 75% of Legal’s business, increased 4% (3% from existing businesses). Transaction revenues were essentiallyunchanged (1% decline from existing businesses) and U.S. print revenues decreased 7% (all from existing businesses). Excluding U.S. print,
Legal’s revenues increased 3% (2% from existing businesses).
Results by line of business were:ŠŠŠSolutions businesses revenues include non-U.S. legal information and global softwareand services businesses. Our Solutions businesses revenues increased 7% (6% fromexisting businesses) driven by our U.K. Practical Law, Pangea3 and Elite businesses;
U.S. online legal information revenues are primarily comprised of Westlaw anddecreased 1% (all from existing businesses). However, there was sequential improvement
in revenues throughout 2014 reflecting improvement in the underlying market demand
for legal services; andU.S. print revenues decreased 7% (all from existing businesses).

2014 REVENUES BY LINE OF BUSINESS

16%

46%
38%

Solutions businesses
U.S. online legal information
U.S. print

The increase in EBITDA, segment operating profit, and the related margins reflected 2013 charges, primarily severance, associated with oursimplification program initiatives. Excluding the 2013 charges, Legal’s EBITDA margin declined 30bp as a challenging business mix andreinvestments in its growth businesses, more than offset the cost savings from our simplification program. Excluding the 2013 charges,
segment operating profit increased 10bp, which also reflected lower depreciation and amortization. Foreign exchange benefited EBITDA andsegment operating margins by 30bp, each, compared to the prior-year period.
2015 Outlook
Demand in the overall legal services market remains relatively unchanged. However, we continue to see opportunities beyond traditional
legal research due to growing legal complexity, the application of technology and new legal services models. Historically, law firms focused
primarily on practicing law. Now, they must increasingly focus on managing their organizations profitably and growing their practices aspressure to reduce costs from their customers, primarily corporate counsels, continue to limit increases in billing rates and hours, as
corporate counsels keep more work in-house. Corporate counsels continue to seek lower cost, but efficient alternatives, such as legal process
outsourcers, as part of their in-house business models. The evolving needs of our customers to leverage technology and software solutions
have created opportunities for our non-research oriented legal solutions businesses, such as Practical Law and Pangea3. We believe we are
well positioned to exploit these trends with our solutions which integrate our research offerings with practical know-how and practicemanagement tools.
Today, our core legal research business represents slightly more than half of our Legal business. However, we expect that the “Solutions”
business that we have built to respond to opportunities beyond traditional legal research will continue to grow and will become the majority
of Legal’s revenue base over the next few years. We believe the decline in U.S. print revenues is structural and we expect that business tocontinue to decline in the foreseeable future. However, the impact of the decline on our Legal segment results is expected to diminish overtime as U.S. print should represent an increasingly smaller portion of our Legal business. In 2015, we will continue to focus on migrating
more of our global print offerings to more sustainable digital platforms.
In 2015, our Legal segment intends to continue to develop solutions that integrate our research, know-how and practice management
offerings. We are focused on growing our legal solutions businesses as well as improving customer retention in our online legal information
business. Our Legal business will continue to carefully manage its costs.

Page 38

Thomson Reuters Annual Report 2014

Tax & Accounting
YEAR ENDED DECEMBER 31,

PERCENTAGE CHANGE:(millions of U.S. dollars)

2014

2013

Existing
businesses

Acquiredbusinesses

Constant
currency

Foreigncurrency

Revenues

1,370

1,243

9%

3%

12%

(2%)

EBITDA

417

378

30.4%

30.4%

-

295

257

15%

21.5%

20.7%

80bp

EBITDA margin
Segment operating profit
Segment operating profit margin

Total
10%
10%

Revenues increased on a constant currency basis reflecting contributions from existing and acquired businesses. Tax & Accounting achieved
strong growth across each line of business as it continues to benefit from increased market demand for its global tax solutions and from new
products. Recurring revenues, which comprised over 80% of our Tax & Accounting business increased 12% (8% from existing businesses) andtransaction revenues increased 15% (13% from existing businesses).
Results by line of business were:
Š

Š

Š

Š

Professional revenues from accounting firms increased 9%, all from existing businesses,
primarily from our CS Professional Suite and Enterprise Suite accounting software
solutions;
Knowledge Solutions revenues increased 3% (2% from existing businesses), primarily
from growth in the U.S. Checkpoint business;
Corporate revenues increased 21% (12% from existing businesses), primarily fromONESOURCE software and services and strong growth in solutions revenues in Latin
America; andGovernment revenues increased 31% over a relatively small revenue base.

2014 REVENUES BY LINE OF BUSINESS

4%

27%
40%

29%

Professional
Corporate

Knowledge Solutions
Government

EBITDA and segment operating profit and the related margins reflected the impact of 2013 charges, primarily severance, associated with oursimplification program initiatives. Excluding the prior year charges, EBITDA margins declined 110bp as the favorable impact from higher
revenues was more than offset by investments in growth businesses. Excluding the charges, segment operating profit margin declined 30bp.
Foreign exchange benefited EBITDA and segment operating margins by 40bp, each, compared to the prior-year period.
2015 Outlook
Taxation continues to be complex for corporations, professional firms and governments. Rapidly changing tax codes around the world create
compliance challenges for taxpayers and tax collectors. Global supply chains introduce complexity to tax and trade compliance andplanning. Governments are using tax and trade policies to attract investments and spur domestic growth, while at the same time introducing
rigorous compliance and collection mechanisms. This complexity drives the need to automate tax and accounting and trade complianceworkflows and to access tax research and education solutions. We believe the compliance challenges for taxpayers and tax collectors will
create heightened demand for technology solutions in corporate tax departments and government agencies, which we expect will lead to asteady demand for our Tax & Accounting segment’s information, software and workflow solutions.
In response to these trends, Tax & Accounting’s key priorities in 2015 include continued investments in key products and customer service inthe U.S., expanding our global business footprint, and entering adjacent markets. We expect to leverage our SaaS (software as a service)platforms to accelerate our delivery of new and enhanced tax compliance solutions enabling us to exploit domestic and global growth
opportunities.

Page 39

Thomson Reuters Annual Report 2014

Intellectual Property & Science
YEAR ENDED DECEMBER 31,
2013

Existing
businesses

Acquiredbusinesses

Constant
currency

Foreigncurrency

1,011

982

2%

1%

3%

-

328

304

8%

32.4%

31.0%

140bp

239

225

6%

23.6%

22.9%

70bp

(millions of U.S. dollars)

2014

Revenues
EBITDAEBITDA margin
Segment operating profit
Segment operating profit margin

PERCENTAGE CHANGE:
Total
3%

Revenues increased on a constant currency basis, reflecting contributions from existing businesses and acquired businesses. Recurring
revenues, which comprised over 75% of Intellectual Property & Science’s business, increased 7% (5% from existing businesses), andtransaction revenues decreased 6% (8% decrease from existing businesses).
Results by line of business were:ŠŠŠIP Solutions revenues increased 3% (all from existing businesses) primarily due torecurring revenue growth from MarkMonitor partly offset by softness in AssetManagement transactional revenues;
Scientific & Scholarly Research solutions revenues increased 5% (3% from existing
businesses) driven by higher subscriptions for Web of Science products; andLife Sciences revenues increased 4%. Revenues from existing businesses increased 1 %due to higher subscriptions within the Discovery of Science business.

2014 REVENUES BY LINE OF BUSINESS

16%

51%
33%

IP Solutions
Scientific & Scholarly ResearchLife Sciences

The increases in EBITDA and segment operating profit and the related margins reflected the impact of 2013 charges, primarily severance,
associated with our simplification program initiatives. Excluding the prior year charges, EBITDA margins declined 150bp primarily due toinvestments to shift the Intellectual Property & Science business to an enterprise model. Excluding the charges, segment operating profit
margin declined 230bp, which was higher than the EBITDA margin decline due to higher depreciation and amortization expense. Foreignexchange had no impact on EBITDA margin, however, it had a 10bp negative impact on segment operating profit margin compared to theprior-year period.
2015 Outlook
We believe that continued growth in global innovation driven by research and development investment, intellectual property rights andincreasing global collaboration will drive the need for our solutions and services across our Intellectual Property & Science businesses. As
regulators become more proactive, the rise in spending on regulatory compliance has increased. Our integrated research solutions improve
productivity and simplify complex decision-making for our customers, helping them mitigate risk and manage compliance. We faceintensifying competition from our traditional competitors as well as from disruptive competitors offering new technology solutions and niche
content and an increased number of free offerings. We believe that the high quality of our content as well as improved usability andinteroperability of our products will create opportunities for further penetration of our solutions into our customers’ workflows.
In 2015, the Intellectual Property & Science segment plans to continue to focus on product innovation, aligning sales resources against highpotential market opportunities, enhancing customer service to drive retention, and increasing the interoperability of our products byleveraging technology platforms and content across the business.

Page 40

Thomson Reuters Annual Report 2014

Corporate & OtherYEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

Revenues – Reuters News

319

331

3

(17)

Reuters News
Core corporate expenses

(308)

(303)

Total

(305)

(320)

Revenues from our Reuters News business declined primarily due to unfavorable foreign currency.
Reuters News and core corporate expenses included $14 million and $21 million, respectively, of 2013 charges associated with oursimplification initiatives, primarily severance-related. Excluding the charges, core corporate expenses were higher primarily due to consulting
costs associated with transforming our business.
Other Businesses“Other Businesses” is an aggregation of businesses that have been or are expected to be exited through sale or closure that did not qualify
for discontinued operations classification. The results of Other Businesses are not comparable from period to period, as the composition ofbusinesses changes as businesses are identified for sale or closure. Further fluctuations are caused by the timing of the sales or closures. In
2013, the most significant business in Other Businesses was Corporate Services, a provider of tools and solutions that help companies
communicate with investors and media formerly in the Financial & Risk segment. Corporate Services was sold in the second quarter of 2013.
YEAR ENDED DECEMBER 31,
2014

2013

Revenues

2

159

Operating (loss) profit

(6)

64

(millions of U.S. dollars)

Review of Fourth Quarter Results
Consolidated Results
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars, except per share amounts)

2014

2013

CHANGE

3,211

3,278

(2%)

IFRS Financial Measures
Revenues
Operating profit

1,339

213

529%

Diluted earnings (loss) per share$1.43($0.43)

n/m

3,211

3,265

(2%)

Non-IFRS Financial Measures
Revenues from ongoing businesses
Adjusted EBITDA
Adjusted EBITDA margin
Adjusted EBITDA less capital expenditures
Adjusted EBITDA less capital expenditures margin

794

610

30%

24.7%

18.7%

600bp

530

357

48%

16.5%

10.9%

560bp

499

302

65%

Underlying operating profit margin

15.5%

9.2%

630bp

Adjusted earnings per share

$0.43

$0.21

105%

Underlying operating profit

Foreign currency effects. With respect to the average foreign exchange rates that we use to report our results, the U.S. dollar strengthened
against the Euro, the British pound sterling, the Japanese yen and the Canadian dollar in 2014 compared to 2013. Given our currency mix ofrevenues and expenses around the world, these fluctuations negatively impacted our revenues in U.S. dollars, as well as our adjusted
EBITDA and underlying operating profit margins.

Page 41

Thomson Reuters Annual Report 2014

Revenues
THREE MONTHS ENDEDDECEMBER 31,

PERCENTAGE CHANGE:(millions of U.S. dollars)

2014

2013

Existing
businesses

Acquiredbusinesses

Constant
currency

Foreigncurrency

Total

Financial & Risk

1,597

1,673

(2%)

1%

(1%)

(4%)

(5%)

Legal

872

868

2%

-

2%

(2%)

-

Tax & Accounting

397

368

7%

3%

10%

(2%)

8%

Intellectual Property & Science

269

275

(1%)

-

(1%)

(1%)

(2%)
(8%)

Corporate & Other (includes Reuters News)

79

86

-

-

-

(8%)

Eliminations

(3)

(5)

n/m

n/m

n/m

n/m

n/m

3,211

3,265

1%

-

1%

(3%)

(2%)

-

13

n/m

n/m

n/m

n/m

n/m

3,211

3,278

n/m

n/m

n/m

n/m

(2%)

Revenues from ongoing businesses
Other Businesses
Revenues

Revenues from ongoing businesses increased in the fourth quarter of 2014 on a constant currency basis, entirely from existing businesses.
Combined growth of 3% in our Legal, Tax & Accounting and Intellectual Property & Science segments was partially offset by a 2% decline in
our Financial & Risk segment.
Segment Results
Financial & Risk
Revenues decreased on a constant currency basis as growth from acquired businesses was more than offset by a decline in revenues fromexisting businesses. Results by type were as follows:ŠŠŠ

Subscription revenues decreased 2% (3% from existing businesses) primarily reflecting the initial impact of the lower price realization
resulting from the recent migration of certain customers from legacy foreign exchange and buy-side products to our unified platform;
Transaction revenues were essentially unchanged, but declined 3% from existing businesses as a decline in fixed income transaction
revenues were partly offset by an increase in foreign exchange transaction revenues; andRecoveries revenues, which represent 11% of total Financial & Risk revenues, increased 5%.

Legal
Revenues increased on a constant currency basis, all from existing businesses. Results by line of business were as follows:ŠŠŠSolutions businesses increased 8% (7% from existing businesses) due to strong growth in Elite, U.K. Practical Law and Pangea3;
U.S. online legal information revenues (all from existing businesses) were essentially unchanged, however, the fourth quarter 2014
revenue performance was an improvement over the quarterly revenue declines reported earlier this year; andU.S. print decreased 6% (all from existing businesses).

Excluding U.S. print, Legal’s revenues increased 4% (all from existing businesses).
Tax & Accounting
Revenues increased on a constant currency basis reflecting contributions from existing and acquired businesses driven by recurring revenue
growth of 11% (8% from existing businesses) and transaction revenue growth of 7% (all from existing businesses). Revenues from theProfessional business increased 10% (all from existing businesses), Knowledge Solutions increased 3% (all from existing businesses), andCorporate increased 21% (12% from existing businesses). Government decreased 12% (all from existing businesses).
Intellectual Property & Science
Revenues decreased on a constant currency basis from existing businesses as a 6% increase (all from existing businesses) in recurring
revenues was more than offset by a 17% decrease (18% decrease from existing businesses) in transaction revenues. Revenues fromIP Solutions increased 3% (all from existing businesses), Scientific & Scholarly Research decreased 5% (6% decrease from existing
businesses), and Life Sciences decreased 1% (all from existing businesses).

Page 42

Thomson Reuters Annual Report 2014

Segment operating profit, EBITDA and related margins
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)

2014

2013

ChangeFinancial & Risk
358

244

47%

22.4%

14.6%

780bp

Segment operating profit

193

81

138%

Segment operating profit
margin

12.1%

4.8%

730bp

299

272

10%

EBITDAEBITDA margin

Legal
EBITDA

34.3%

31.3%

300bp

Segment operating profit

228

199

15%

Segment operating profit
margin

26.1%

22.9%

320bp

132

127

4%

EBITDA margin

Tax & Accounting
EBITDA

33.2%

34.5%

(130)bp

Segment operating profit

103

97

6%

Segment operating profit
margin

25.9%

26.4%

(50)bp

EBITDA margin

Intellectual Property &Science
EBITDA

95

75

27%

35.3%

27.3%

800bp

Segment operating profit

72

54

33%

Segment operating profit
margin

26.8%

19.6%

720bp

EBITDA margin

Page 43

Commentary
EBITDA, segment operating profit and the related margins increased due
to lower charges, primarily severance, associated with our simplification
program initiatives. In 2014, EBITDA and segment operating profit
included $70 million (2013-$172 million) and $70 million (2013-$178
million), respectively, of charges.
Š Excluding charges from both periods, EBITDA margin increased
190bp as the cost benefits from our simplification initiatives morethan offset the margin impact of the decline in revenues fromexisting businesses and unfavorable foreign exchange. Foreignexchange decreased EBITDA margins by 60bp compared to theprior-year period.
Š Excluding charges from both periods, segment operating profit
margin increased 100bp due to the same factors that impacted
EBITDA margin.
EBITDA, segment operating profit, and the related margins increased due
to 2013 charges, primarily severance, associated with our simplification
program initiatives.
Š Excluding the charges, EBITDA margin decreased 130bp as achallenging revenue mix and reinvestments in our growthbusinesses, more than offset cost savings from our simplification
program.
Š Excluding the charges, segment operating profit margindecreased 110bp due to the same factors that impacted EBITDA
margin.
Š Foreign exchange benefited EBITDA and segment operating
profit margins by 20bp, each, compared to the prior-year period.
EBITDA, segment operating profit and the related margins reflected theimpact of 2013 charges, primarily severance, associated with oursimplification program initiatives.
Š Excluding 2013 charges, EBITDA margin declined 380bp
primarily due to reinvestments in growth businesses partly offset
by the impact of higher revenues.
Š Excluding charges, segment operating profit margin declined
290bp, which is slightly lower than the EBITDA margin decline
due to lower amortization expense.
Š Foreign exchange benefited EBITDA and segment operating
profit margins by 40bp and 50bp, respectively, compared to theprior-year period.
EBITDA, segment operating profit and the related margins increased due
to lower charges, primarily severance, associated with our simplification
program initiatives.
Š Excluding 2013 charges, EBITDA margin declined 30bp primarily
due to unfavorable revenue mix, reflecting lower transaction
revenue compared to the prior-year period.
Š Excluding charges, segment operating profit margin declined
120bp, which was higher than the EBITDA margin decline due tohigher depreciation and amortization expense.
Š Foreign exchange benefited EBITDA and segment operating
profit margins by 60bp and 40bp, respectively, compared to theprior-year period.

Thomson Reuters Annual Report 2014

Corporate & Other
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)

2014

2013

Revenues – Reuters News

79

86

Reuters News

2

(9)Core corporate expenses

(99)

(120)

Total

(97)

(129)

Revenues from our Reuters News business decreased due to unfavorable foreign currency.
Reuters News and core corporate expenses included $11 million and $17 million, respectively, of 2013 charges associated with oursimplification initiatives.
Other Businesses
The results of “Other Businesses” are summarized below:
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)
Revenues
Operating (loss) profit

2014

2013

-

13

(4)

3

Operating profit, underlying operating profit, adjusted EBITDA and adjusted EBITDA less capital expenditures
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)

2014

2013

CHANGE

Operating profit

1,339

213

529%

159

159

Adjustments to remove:
Amortization of other identifiable intangible assets
Fair value adjustments

(38)

7

Other operating gains, net

(965)

(74)

Operating loss (profit) from Other Businesses
Underlying operating profit
Remove: depreciation and amortization of computer software (excluding Other Businesses)
Adjusted EBITDA(1)Remove: capital expenditures, less proceeds from disposals (excluding Other Businesses)
Adjusted EBITDA less capital expenditures(1)

4

(3)

499

302

295

308

794

610

264

253

530

357

65%
30%
48%

Underlying operating profit margin

15.5%

9.2%

630bp

Adjusted EBITDA margin

24.7%

18.7%

600bp

Adjusted EBITDA less capital expenditures margin

16.5%

10.9%

560bp

(1)

See Appendix B for a reconciliation of earnings from continuing operations to adjusted EBITDA and adjusted EBITDA less capital expenditures.

Operating profit increased in the fourth-quarter of 2014 primarily due to the $931 million gain related to the release of accumulated foreign
currency translation adjustments from shareholders’ equity. The gain was triggered by the loss of control of a subsidiary, which involved thesettlement of an intercompany loan that was considered permanent. This transaction was part of our plan to reduce the number ofsubsidiaries in our legal organizational structure, which is one of our simplification program initiatives. The operating profit increase also
reflected lower charges, primarily severance, associated with our simplification program initiatives.

Page 44

Thomson Reuters Annual Report 2014

Adjusted EBITDA, underlying operating profit and the related margins increased due to lower charges, primarily severance, associated with
our simplification program initiatives. The increase in underlying operating profit further reflected lower depreciation and amortization.
Foreign currency decreased adjusted EBITDA and underlying operating profit margins by 20bp and 30bp, respectively.
Adjusted EBITDA less capital expenditures and the related margin increased primarily due to higher adjusted EBITDA offset by slightly
higher capital expenditures.
In the fourth quarter of 2014, we continued to incur charges for simplification program initiatives and we continued to reduce our costs as aresult of earlier initiatives. We believe that our adjusted EBITDA and underlying operating profit margins excluding these charges provide a
better measurement of our performance.
Excluding charges of $77 million and $260 million from 2014 and 2013, respectively, our adjusted EBITDA margin increased 50bp, as
benefits from our simplification program initiatives more than offset the impact of lower revenues from existing businesses in our
Financial & Risk segment and investments in our Legal and Tax & Accounting segments.
Excluding charges of $77 million and $275 million from 2014 and 2013, respectively, underlying operating profit margin increased 20bp
due to the same factors that impacted adjusted EBITDA margin.

ŠŠ

Operating expenses
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)

2014

2013

CHANGE

Operating expenses

2,383

2,672

(11%)

Adjustments to remove:
Fair value adjustments(1)

38

(7)

Other Businesses

(4)

(10)

2,417

2,655

Operating expenses, excluding fair value adjustments and Other Businesses
(1)

(9%)

Fair value adjustments primarily represent non-cash accounting adjustments from the revaluation of embedded foreign exchange derivatives within certain customer contracts
due to fluctuations in foreign exchange rates and mark-to-market adjustments from certain share-based awards.

Operating expenses, excluding fair value adjustments and Other Businesses, decreased primarily due to lower charges from oursimplification program initiatives, lower expenses due to a reduction in our cost structure associated with these initiatives, and a favorable
impact of foreign exchange. These declines were partly offset by higher expenses associated with newly acquired businesses and investments
in our Legal and Tax & Accounting segments. The charges associated with our simplification program initiatives were $77 million and $260
million in 2014 and 2013, respectively.
Depreciation and amortization
THREE MONTHS ENDEDDECEMBER 31,

ŠŠ(millions of U.S. dollars)

2014

Depreciation

103

106

(3%)

Amortization of computer software

192

202

(5%)

Subtotal

295

308

(4%)

Amortization of other identifiable intangible assets

159

159

-

2013

CHANGE

Depreciation and amortization of computer software on a combined basis decreased, due to the completion of depreciation of fixed assets
and the amortization of software assets acquired in previous years, which more than offset increases resulting from 2014 capital
investments.
Amortization of other identifiable intangible assets was unchanged as increases due to amortization from newly-acquired assets wereoffset by decreases from the completion of amortization for certain identifiable intangible assets acquired in previous years.

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Thomson Reuters Annual Report 2014

Other operating gains, net
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)

2014

2013

Other operating gains, net

965

74

In the fourth quarter of 2014, other operating gains, net, were primarily comprised of the $931 million gain related to the release ofaccumulated foreign currency translation adjustments from shareholders’ equity. The gain was triggered by the loss of control of a
subsidiary, which involved the settlement of an intercompany loan that was considered permanent. This transaction was part of our plan toreduce the number of subsidiaries in our legal organizational structure, which is one of our simplification program initiatives. Additionally, werecorded a $36 million gain from the sale of a Canadian wholly owned subsidiary to a company affiliated with Woodbridge.
In the fourth quarter of 2013, other operating gains, net, were primarily comprised of gains from the sale of our 50% joint venture interest in
Omgeo, and a gain from the sale of a Canadian wholly owned subsidiary to a company affiliated with Woodbridge.
Additional information about the Woodbridge transactions and the sale of our joint venture interest in Omgeo is provided in the “Related
Party Transactions” section of this management’s discussion and analysis.
Net interest expense
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)

2014

2013

CHANGENet interest expense

113

112

1%

Net interest expense increased slightly due to higher interest costs on our debt obligations and interest on certain tax liabilities, which morethan offset lower interest costs on our net pension obligations. The increase in interest expense on our debt obligations reflected therefinancing activities discussed further within the “Liquidity and Capital Resources – Cash Flow” section of this management’s discussion
and analysis.
Other finance costs
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)
Other finance costs

2014

2013

60

19

Other financing costs included losses of $47 million and $35 million in 2014 and 2013, respectively, for the early redemption of debt
securities. The 2014 losses included $35 million (2013 – $35 million) in debt premiums and $12 million (2013 – nil) related to the terminationof the associated hedging instruments. See the “Liquidity and Capital Resources – Cash Flow” section of this management’s discussion andanalysis for additional information regarding our financing activities. Both periods also included gains or losses realized from changes inforeign currency exchange rates on certain intercompany funding arrangements and gains or losses related to foreign exchange contracts.
Share of post-tax losses in equity method investments
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)
Share of post-tax losses in equity method investments

2014

2013

-

(4)

The fourth quarter of 2013 included an impairment of $5 million with respect to one equity method investee due to weaker than expected
performance.

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Thomson Reuters Annual Report 2014

Tax expense
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)Tax expense

2014

2013

(9)

(425)

The comparability of our tax expense was impacted by various transactions and accounting adjustments during each period. Additionally, thetax expense in each period reflected the mix of taxing jurisdictions in which pre-tax profits and losses were recognized. Because thegeographical 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. Tax expense for the fourth quarter of 2014 and 2013 included thefollowing:(EXPENSE) BENEFIT

THREE MONTHS ENDEDDECEMBER 31,
2014

2013

Consolidation of technology and content assets(1)

-

(425)

Uncertain tax positions(2)1211Corporate tax rates(3)710(millions of U.S. dollars)
Tax items impacting comparability:

Other deferred tax adjustments (4)

(19)

(2)

-

(406)

Sale of businesses(5)

-

(29)

Operating profit of Other Businesses

-

(1)

(6)

4

Subtotal
Tax related to:Fair value adjustments
Other items

42

Subtotal

(2)

(24)

(2)

(430)

Total
(1)
(2)
(3)
(4)

Relates to the consolidation of the ownership and management of our technology and content assets.
Relates to the reversal of tax reserves in connection with favorable developments regarding tax disputes.
Relates to the net reduction of deferred tax liabilities due to changes in corporate tax rates that were substantively enacted in certain jurisdictions.
Relates to changes in the recognition of deferred tax assets in various jurisdictions due to acquisitions, assumptions regarding future profitability, and adjustments for indefinitelived assets and liabilities that are not expected to reverse.
(5) Primarily relates to the sale of our 50% joint venture interest in Omgeo.

The computation of our adjusted tax expense is set forth below:(EXPENSE) BENEFIT(millions of U.S. dollars)Tax expense
Remove: Items from above impacting comparability

THREE MONTHS ENDEDDECEMBER 31,
2014

2013

(9)

(425)

2

430

Other adjustments:
Interim period effective tax rate normalization
Tax charge amortization(1)Total tax expense on adjusted earnings
(1)

-

(3)

(21)

(13)

(28)

(11)

Relates to tax charges associated with the consolidation of the ownership and management of our technology and content assets which are amortized on a straight-line basis
over seven years from the date of the transaction.

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Thomson Reuters Annual Report 2014

Net (loss) earnings and per share amounts
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars, except per share amounts)

2014

2013

Net earnings (loss)

1,157

(343)

Diluted earnings (loss) per share$1.43($0.43)Net earnings and the related per share amount increased in 2014 principally due to higher operating profit and lower income tax expense.
Adjusted earnings and adjusted earnings per share
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars, except per share amounts)

2014

2013

CHANGE

Earnings (loss) attributable to common shareholders

1,147

(351)

n/m

4

(3)

Adjustments to remove:
Operating loss (profit) from Other Businesses
Fair value adjustments

(38)

7

Other operating gains, net

(965)

(74)

60

19

Other finance costs
Share of post-tax losses in equity method investments-

4

Tax on above items(1)224

Tax items impacting comparability(1)Amortization of other identifiable intangible assets
Discontinued operations
Interim period effective tax rate normalization(1)

-

406

159

159

-

(4)

-

(3)

Tax charge amortization(1)

(21)

(13)

Dividends declared on preference shares

(1)

(1)

Adjusted earnings

347

170

104%

Adjusted earnings per share (adjusted EPS)

$0.43

$0.21

105%

Diluted weighted-average common shares (millions)(2)

803.2

828.6

(1) See the “Tax expense” section above for additional information.
(2) See Appendix B for reconciliation of diluted weighted average common shares for the three months ended December 31, 2013.

Adjusted earnings and the related per share amounts increased primarily due to higher underlying operating profit. Additionally, adjusted
earnings per share were impacted by lower diluted weighted-average common shares primarily due to share repurchases (see the “Liquidity
and Capital Resources – Share Repurchases” section of this management’s discussion and analysis for additional information). Foreign
currency negatively impacted adjusted earnings per share by $0.02 compared to the prior-year period.

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Thomson Reuters Annual Report 2014

Cash flow
THREE MONTHS ENDEDDECEMBER 31,(millions of U.S. dollars)

2014

2013

ChangeNet cash provided by operating activities

792

407

385

Increase reflected a 2013 pension contribution of$500 million. Excluding the pension contribution, net
cash provided by operating activities declined $115
million due to higher severance payments associatedwith our simplification program initiatives, andunfavorable movements in working capital.

Net cash used in investing activities

(223)

(282)

59

Decrease reflected lower acquisition spending, partly
offset by 2013 net proceeds from sale of Omgeo.

Net cash (used in) provided by financing activities(1,209)590(1,799)Change primarily reflected lower net proceeds fromdebt issuances. See the “Liquidity and Capital
Resources – Cash Flow” section of this management’s
discussion and analysis.

Decrease (increase) in cash and bank overdrafts

(640)

715

(1,355)

Translation adjustments

(8)

(1)

(7)

Cash and bank overdrafts at beginning of period

1,663

598

1,065

Cash and bank overdrafts at end of period

1,015

1,312

(297)

1,018

1,316

(298)

(3)

(4)

1

Commentary

Cash and bank overdrafts at end of period comprised of:Cash and cash equivalents
Bank overdrafts

LIQUIDITY AND CAPITAL RESOURCES
Our capital strategy is aligned with our business strategy to drive revenue growth from existing businesses, achieve savings from oursimplification program initiatives, and to reinvest in our growth businesses.
Our disciplined capital management strategy remains focused on:ŠŠGrowing free cash flow and balancing cash generated between reinvestment in the business and returns to shareholders; andMaintaining a strong balance sheet, solid credit ratings and ample financial flexibility to support the execution of our business strategy.

In 2014, the highlights of our capital strategy execution were as follows:ŠŠŠ

We repaid $1.1 billion of debt that was scheduled to mature in December 2014 and March 2016. We issued $1.5 billion of new debt,
maintaining the average maturity of our debt portfolio at approximately nine years and reducing our average interest rate below 5%. At
December 31, 2014, our leverage ratio of net debt to EBITDA(1) was 2.2:1, which was below our 2.5:1 target.
We completed an initial $1.0 billion share buyback program and then began buying back shares under an additional $1.0 billion
repurchase program which we expect to complete in 2015. In 2014, we returned $2.1 billion to shareholders in the form of dividends andshare buybacks.
Our acquisition activity was modest compared to prior years. In 2014, acquisition spending was $167 million compared to $1.2 billion in
2013. We plan to continue pursuing tactical acquisitions, but on a selective basis. Our acquisition activity is expected to be concentrated in
our highest growth areas, as well as on assets that we believe can be integrated quickly and easily.

Our principal sources of liquidity are cash on hand, cash provided by our operations, our $2.0 billion commercial paper programs and our$2.5 billion credit facility. From time to time, we also issue debt securities. Our principal uses of cash are for debt repayments, debt servicing
costs, dividend payments, capital expenditures, share repurchases and acquisitions. We believe that our existing sources of liquidity will be
sufficient to fund our expected 2015 cash requirements in the normal course of business.
(1)

For purposes of this calculation, EBITDA is defined as adjusted EBITDA including the results of Other Businesses.

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Thomson Reuters Annual Report 2014

We believe that our free cash flow performance over the past few years demonstrates the resiliency and stability of our business model.
Additionally, we believe that our operational efforts to drive revenue and margin growth, as well as plans to reduce spending to acquire new
businesses, will continue to result in strong free cash flow generation.

Cash Flow
Summary of Consolidated Statement of Cash Flow
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

$ Change263

Net cash provided by operating activities

2,366

2,103

Net cash used in investing activities(1,071)(1,622)551

Net cash used in financing activities(1,570)(432)(1,138)

(275)

49

(324)
(9)

(Decrease) increase in cash and bank overdrafts
Translation adjustments

(22)

(13)

Cash and bank overdrafts at beginning of period

1,312

1,276

36

Cash and bank overdrafts at end of period

1,015

1,312

(297)

1,018

1,316

(298)

(3)

(4)

1

Cash and bank overdrafts at end of period comprised of:Cash and cash equivalents
Bank overdrafts

Operating activities. Net cash provided by operating activities increased due to a $500 million contribution in 2013 to pre-fund our U.S. andU.K pension plans. Excluding the 2013 pension contribution, net cash provided by operating activities declined by $237 million due to higher
severance payments associated with our simplification program initiatives, the loss of operating cash flows from Other Businesses, andunfavorable working capital movements.
Investing activities. The decrease in net cash used in investing activities was primarily due to significantly lower acquisition spending andlower capital expenditures, which were partly offset by 2013 proceeds from disposals of businesses. The decrease in capital expenditures wasprimarily due to 2013 payments related to a large multi-year software contract.
ŠŠŠAcquisitions. In 2014, we spent $167 million on acquisitions, which included Dominio Sistemas, a Brazilian provider of accounting andsoftware solutions primarily to accounting firms within our Tax & Accounting segment. In 2013, we spent $1.2 billion on acquisitions,which included Practical Law, a provider of practical legal know-how, current awareness and workflow solutions within the Legal
segment, T.Global, a Brazilian provider of global trade management software and solutions within our Tax & Accounting segment, andBondDesk, a provider of trading and wealth management solutions within our Financial & Risk segment.
Divestitures. In 2014, we received $14 million of net proceeds from divestitures. In 2013, we received $550 million of net proceeds
principally from the sales of Financial & Risk’s Corporate Services business and our 50% interest in the Omgeo joint venture.
Capital expenditures. We spent $968 million on capital expenditures in 2014, slightly lower than 2013. In both years, we spent more thanhalf of our capital expenditures on product development and the remainder on infrastructure. Product development initiatives included
development of new products as well as extensions, upgrades and expansions of existing product offerings and platforms, such asThomson Reuters Eikon, Thomson Reuters Elektron and our new TRFXT foreign exchange product. Our investments in infrastructure wereprimarily technology related and are essential to providing information solutions to our customers. Our technology expenditures also
included spending on computer hardware for data center infrastructure and management information systems software.

Financing activities. In both periods, cash used in financing activities primarily included dividends paid to shareholders and repurchases ofshares. We returned $2.1 billion and $1.4 billion to our shareholders through dividends and share purchases in 2014 and 2013, respectively.
These outflows were partly offset by inflows from net increases in our debt obligations. In 2014, net proceeds from debt issuances were$1.5 billion, and debt principal repayments were $1.1 billion. In 2013, net proceeds from debt issuances were $2.8 billion, and debt principal
repayments were $1.8 billion. Additional information about our debt, dividends and share repurchases is as follows:ŠŠCommercial paper programs. Our $2.0 billion commercial paper programs provide cost-effective and flexible short-term funding tobalance the timing of dividend payments, debt repayments, share repurchases, and completed acquisitions. We had no short-term notes
outstanding at December 31, 2014. Issuances of commercial paper reached a peak of $0.2 billion in 2014.
Credit facility. We have a $2.5 billion syndicated credit facility agreement which matures in May 2018. The facility may be utilized toprovide liquidity for general corporate purposes (including support for our commercial paper programs). There were no borrowings under
the credit facility in 2014. In 2013, we borrowed and repaid $440 million under the credit facility. The amount borrowed and repaid is
included in “Proceeds from debt” and “Repayments of debt”, respectively, within the consolidated statement of cash flow.

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Thomson Reuters Annual Report 2014

We may request an increase, subject to approval by applicable lenders, in the lenders’ commitments up to a maximum amount of$3.0 billion.
Based on our current credit ratings, the cost of borrowing under the agreement is priced at LIBOR/EURIBOR plus 100 basis points. If ourlong-term debt rating were downgraded by Moody’s or Standard & Poor’s, our facility fee and borrowing costs may increase, althoughavailability would be unaffected. Conversely, an upgrade in our ratings may reduce our facility fee and borrowing costs. We monitor thelenders that are party to our facility and believe they continue to be able to lend to us.
We guarantee borrowings by our subsidiaries under the credit facility. We must also maintain a ratio of net debt as of the last day of eachfiscal quarter to EBITDA as defined in the credit agreement (earnings before interest, income taxes, depreciation and amortization andother modifications described in the credit agreement) for the last four quarters ended of not more than 4.5:1. We were in compliance withthis covenant at December 31, 2014.
Š

Debt shelf prospectus. We have a debt shelf prospectus under which we may issue up to $3.0 billion principal amount of debt securities
from time to time through April 2016. As of December 31, 2014, we have issued $1.5 billion principal amount of debt securities under theprospectus.

ŠLong-term debt. The following table provides information regarding notes that we issued and repaid in 2014 and 2013:
MONTH/YEAR

TRANSACTION

PRINCIPAL AMOUNT (IN MILLIONS)

Notes issued
September 2014

1.65% Notes due 2017

US$550

September 2014

3.85% Notes due 2024

US$450November 2014

3.309% Notes due 2021

C$550(1)

May 2013

0.875% Notes due 2016

US$500

May 2013

4.50% Notes due 2043

US$350November 2013

1.30% Notes due 2017

US$550November 2013

4.30% Notes due 2023

US$600November 2013

5.65% Notes due 2043

US$350November 2013

3.369% Notes due 2019

C$500(2)Notes repaid
December 2014

5.20% Notes due 2014

C$600

December 2014

6.00% Notes due 2016

C$750

July 2013

5.95% Notes due 2013

US$750August 2013

5.25% Notes due 2013

US$250December 2013

5.70% Notes due 2014

US$800(1)

Converted to US$483 million principal amount at an interest rate of 3.28% after cross currency swap agreements that were designated as cash flow hedges.

(2) Converted to US$478 million principal amount at an interest rate of 2.85% after cross currency swap agreements that were designated as cash flow hedges.

In 2014 and 2013, proceeds from debt issuances were used for general corporate purposes, including funding early redemptions of notes, therepayment of notes upon maturity and share repurchases. In 2013, proceeds from debt were also used to fund pension contributions.
Š

Credit ratings. Our access to financing depends on, among other things, suitable market conditions and the maintenance of suitablelong-term credit ratings. Our credit ratings may be adversely affected by various factors, including increased debt levels, decreased
earnings, declines in customer demand, increased competition, a further deterioration in general economic and business conditions andadverse publicity. Any downgrades in our credit ratings may impede our access to the debt markets or result in significantly higher
borrowing rates.

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The following table sets forth the credit ratings that we have received from rating agencies in respect of our outstanding securities as ofthe date of this management’s discussion and analysis:
MOODY’S

STANDARD & POOR’SDBRS LIMITEDFITCH

Long-term debt

Baa2

BBB+

BBB (high)BBB+

Commercial paper

P-2

A-2

R-2 (high)F2

Trend/Outlook

StableStableStableStableThese credit ratings are not recommendations to purchase, hold, or sell securities and do not address the market price or suitability of a
specific security for a particular investor. Credit ratings may not reflect the potential impact of all risks on the value of securities. We
cannot assure you that our credit ratings will not be lowered in the future or that rating agencies will not issue adverse commentaries
regarding our securities.
Š

Dividends. Dividends paid on our common shares during the last two years were as follows:
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

Dividends declared

1,066

1,077

Dividends reinvested

(33)

(39)

Dividends paid

1,033

1,038

In 2014 and 2013, we paid an annualized dividend per common share of $1.32 and $1.30, respectively. Our annualized dividend rate for2015 has been increased to $1.34 per common share. Refer to the “Subsequent Events” section of this management’s discussion andanalysis for additional information.
Dividend reinvestment plan (DRIP). Registered holders of common shares may participate in our DRIP, under which cash dividends areautomatically reinvested in new common shares. Common shares are valued at the weighted-average price at which the shares traded on
the Toronto Stock Exchange (TSX) during the five trading days immediately preceding the record date for the dividend.
Š

Share repurchases. We may buy back shares (and subsequently cancel them) from time to time as part of our capital strategy. In October
2013, we announced plans to repurchase up to $1.0 billion of our shares by the end of 2014. We completed these repurchases in the third
quarter of 2014. In July 2014, we announced a new plan to repurchase up to an additional $1.0 billion of our common shares by the end of
2015. Between October 2013 and December 31, 2014, we repurchased 36.2 million common shares for $1.3 billion.
We currently repurchase shares under a normal course issuer bid (NCIB), which we renewed in May 2014 for an additional 12 months.
Under the NCIB, we may repurchase up to 30 million common shares between May 28, 2014 and May 27, 2015 in open market
transactions on the TSX or the New York Stock Exchange (NYSE) and/or other exchanges and alternative trading systems, if eligible, or bysuch other means as may be permitted by the TSX.
In 2014, we repurchased 28.6 million common shares for a cost of $1.0 billion, of which $11 million was payable to the broker at
December 31, 2014. The average price per share that we repurchased in 2014 was $36.21. In 2013, we repurchased 10.9 million commonshares for a cost of $400 million at an average price per share of $36.79.
Decisions regarding any future repurchases will be based on market conditions, share price and other factors including opportunities toinvest capital for growth. We may elect to suspend or discontinue our share repurchases at any time, in accordance with applicable laws.
From time to time when we do not possess material nonpublic information about ourselves or our securities, we may enter into a predefined plan with our broker to allow for the repurchase of shares at times when we ordinarily would not be active in the market due toour own internal trading blackout periods, insider trading rules or otherwise. Any such plans entered into with our 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 of1934, as amended. We entered into such plans with our broker on December 31, 2014 and on December 31, 2013. As a result, we recorded
a liability of $115 million in “Other financial liabilities” within current liabilities at December 31, 2014 ($100 million at December 31, 2013)
with a corresponding amount recorded in equity in the consolidated statement of financial position in both periods. The liability recordedon December 31, 2013 was settled in the first quarter of 2014.

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Thomson Reuters Annual Report 2014

Free cash flow and free cash flow from ongoing businesses
YEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

Net cash provided by operating activities

2,366

2,103

Capital expenditures, less proceeds from disposals(968)(1,004)

50

67

Other investing activities
Dividends paid on preference shares
Free cash flow
Remove: Other Businesses
Free cash flow from ongoing businesses

(3)

(3)

1,445

1,163

2

(65)

1,447

1,098

Free cash flow from ongoing businesses increased primarily due to our $500 million pension contribution in 2013. Excluding the 2013
pension contribution, free cash flow from ongoing businesses decreased due to higher payments, primarily severance, associated with oursimplification program initiatives and unfavorable working capital movements, partly offset by lower capital expenditures.
Return on Invested Capital
We measure our return on invested capital, or ROIC, to assess, over the long term, our ability to create value for our shareholders. Our goal is
to increase this return over the long term by using our capital to invest in areas with high returns and realizing operating efficiencies tofurther enhance our profitability. ROIC has been one of the metrics used to measure performance under our long-term management
incentive program. Despite the difficult economic cycle, we continue to invest in our business to enhance existing products and to bring new
solutions to our customers. We also strengthened our business through foundational acquisitions meant to broaden the range of offerings tocustomers, enter higher growth market segments adjacent to existing segments of our business and expand our global presence. We expect
to increasingly leverage our assets further through the evolution of our business strategy to drive revenue and margin growth from existing
businesses.
In 2014, our ROIC increased to 5.8% from 5.3% in 2013 due to higher post-tax adjusted operating profit and a slight decrease in average
invested capital. Refer to Appendix C for our calculation of ROIC.

Financial Position
Our total assets were $30.6 billion at December 31, 2014, a decrease of $1.8 billion compared to December 31, 2013. The decrease wasprimarily due to depreciation of fixed assets, amortization of computer software and other identifiable intangible assets, as well as changes
in foreign currency, which were partially offset by capital expenditures. See “Cash Flow” above for additional information.
As at December 31, 2014, the carrying amounts of our total current liabilities exceeded the carrying amounts of our total current assets
principally because current liabilities include deferred revenue from the sale of information and services delivered electronically on a
subscription basis, for which many customers pay in advance. The cash received from these advance payments is used to currently fund theoperating, investing and financing activities of our business. However, for accounting purposes, these advance payments must be deferred
and recognized over the term of the subscription. As such, we typically reflect a negative working capital position in our balance sheet. In theordinary course of business, deferred revenue does not represent a cash obligation, but rather an obligation to perform services or deliverproducts. Therefore, we believe that our negative working capital position as at December 31, 2014 was not indicative of a liquidity issue, butrather an outcome of the required accounting for our business model.

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Thomson Reuters Annual Report 2014

Net Debt(1)DECEMBER 31,
2014(millions of U.S. dollars)

2013

Current indebtedness

534

596

Long-term indebtedness

7,576

7,470

Total debt

8,110

8,066

Swaps

207

(86)

Total debt after swaps

8,317

7,980

Remove fair value adjustments for hedges (2)Total debt after currency hedging arrangements
Remove transaction costs and discounts included in the carrying value of debt

6

(27)

8,323

7,953

78

78

Less: cash and cash equivalents(3)(1,018)(1,316)

Net debt

7,383

6,715

(1)

Net debt is a non-IFRS financial measure, which we define in Appendix A.

(2) Represents the interest-related fair value component of hedging instruments that are removed to reflect net cash outflow upon maturity.
(3) Both periods include $105 million of cash and cash equivalents held in subsidiaries, which have regulatory restrictions, contractual restrictions or operate in countries where
exchange controls and other legal restrictions apply and are therefore not available for general use by our company.

The maturity dates for our debt are well balanced with no significant concentration in any one year. Our next scheduled debt maturity occurs
in July 2015. At December 31, 2014, the average maturity of our long-term debt was approximately nine years at an average interest rate
(after swaps) of less than 5%.
The following table illustrates our expected debt maturities.
($ MILLIONS) SCHEDULE OF DEBT MATURITIES (AFTER SWAPS)(1) AT DECEMBER 31, 2014

$2,000Current Debt

$1,600Long-term Debt

$1,500$1,100$1,000$1,000

$978
$731

$593
$500

$833
$600

$500

$450

$0
2015
(1)

2016

2017

2018

2019

2020

2021

2023

2024

2035+

Excludes $12 million of bank and other borrowings primarily used for short-term cash management.

Financial Risk Management
Our operations are diverse and global in nature. Accordingly, we are exposed to a variety of financial risks, which include market risk
(primarily currency risk and interest rate risk), credit risk and liquidity risk. Our risk management approach is to minimize the potential
adverse effects from these risks on our financial performance. Financial risk management is carried out by our centralized corporate treasurygroup under strict guidelines and process controls. Our corporate treasury group identifies, evaluates and hedges financial risks. Relative tofinancial risks within the businesses, our corporate treasury group designs a risk management approach in close cooperation with each of ouroperating segments. The overall approach is under the oversight of our Chief Financial Officer. The section entitled “Financial Risk
Management” in note 18 of our 2014 annual consolidated financial statements provides a detailed discussion of the material financial risks
that we believe we are exposed to and our approach to mitigating the potential adverse effects on our financial performance.

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Thomson Reuters Annual Report 2014

Our global operations expose us to foreign exchange risk related to cash flows in currencies other than the U.S. dollar. As our operations
outside the U.S. continue to expand, we expect this trend to continue. In particular, we have exposure to the British pound sterling and theEuro. We mitigate this exposure by entering into exchange contracts to purchase or sell certain currencies in the future at fixed amounts.
Because these instruments have not been designated as hedges for accounting purposes, changes in the fair value of these contracts arerecognized through the consolidated income statement with no offsetting impact. These impacts are eliminated from our adjusted earnings
measures. However, the related cash settlements are included in cash from operating activities within our consolidated statement of cash
flow, and therefore they are included in our free cash flow measure. The fair value of outstanding contracts at December 31, 2014 was a net
asset of $41 million, which we reported within “Other financial assets”-current and “Other financial liabilities”-current in our consolidated
statement of financial position. We may enter into additional derivative financial instruments in the future in order to mitigate our foreignexchange risk. Refer to note 18 of our 2014 annual consolidated financial statements for additional information.
We monitor the financial stability of the foreign countries in which we operate. To mitigate risk of loss, we monitor the creditworthiness of ourcustomers and have policies and procedures for trade receivables collection and global cash management to ensure adequate liquidity isavailable to us.
Approximately 60% of our cash and cash equivalents at December 31, 2014 were held by subsidiaries outside the U.S. We have historicallyaccessed such funds in a tax efficient manner to meet our liquidity requirements. We expect to continue to have access to such funds in a tax
efficient manner.
We also monitor the financial strength of financial institutions with which we have banking and other commercial relationships, including
those that hold our cash and cash equivalents, as well as those which are counterparties to derivative financial instruments and otherarrangements.
The following charts outline the currency profile of our revenues and expenses for 2014:
REVENUES(1)

3%
3%

10%

U.S. dollar
British pound sterling
Euro
Japanese yen
Canadian dollar
Other

15%

2%
2%

11%

6%

10%

(1)

EXPENSES(1)

63%

14%
61%

Revenues from ongoing businesses. Expenses associated with underlying operating profit. Based on average rates of U.S. dollar / British pound sterling = 1.648 and U.S. dollar /Euro = 1.329.

While our currency profile is well balanced overall, our Euro revenues exceed our Euro expenses by approximately $800 million annually.
Directionally, a 1% movement in the Euro/U.S. dollar exchange rate would impact our underlying operating profit by approximately $8
million and impact our adjusted earnings per share by $0.01. The following table presents the impact that a 1% weakening in our key foreignexchange rates would have on our revenues and operating profit:
1% DETERIORATION IN FOREIGN CURRENCY VS. U.S. DOLLAR (FULL YEAR IMPACT - (DECREASE) INCREASE)(millions of U.S. dollars)Euro

British pound

Japanese yen

Canadian dollar

Revenues from ongoing businesses
Underlying operating profit

(14)
(8)

(13)
2

(4)
(2)

(3)
(1)

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Thomson Reuters Annual Report 2014

Off-Balance Sheet Arrangements, Commitments and Contractual Obligations
The following table summarizes our long-term debt and off-balance sheet contractual obligations:(millions of U.S. dollars)

2015

2016

2017

2018

2019

Long-term debt(1)THEREAFTER

TOTAL

514

500

1,100

1,000

927

4,110

8,151

Interest payable(1)

328

308

298

263

213

2,039

3,449

Debt-related hedges outflows(2)

672

58

58

58

528

1,266

2,640

Debt-related hedges inflows(2)(2,399)

(589)

(58)

(58)

(58)

(476)

(1,160)Operating lease payments

275

227

184

153

139

343

1,321

Unconditional purchase obligations

688

336

239

189

114

26

1,592

Defined benefit obligations(3)

100

-

-

-

-

-

100

1,988

1,371

1,821

1,605

1,445

6,624

14,854

Total(1)

Represents our contractual principal and interest payments. Future cash flows have been calculated using forward foreign exchange rates.

(2) Future cash flows have been calculated using forward foreign exchange rates.
(3) Represents expected contributions to fund our material defined benefit obligations consisting of funded pension plans and expected claims under unfunded pension plans andretiree medical plans. These amounts do not include voluntary contributions we may elect to make from time to time to our funded plans. We cannot reasonably estimate
contributions beyond 2015 because they depend on future economic conditions and plan performance, and may be affected by future government legislation.

We provide further information about our obligations below:
Š

Š

Š

Š

Operating leases – We enter into operating leases in the ordinary course of business, primarily for real property and equipment. Lease
payments represent scheduled, contractual obligations as per each agreement. With certain leases, we guarantee the restoration of theleased property to a specified condition after completion of the lease period. The liability associated with these restorations is recorded
within “Provisions and other non-current liabilities” in our consolidated statement of financial position.
Subsidiary guarantees – For certain real property leases, banking arrangements and commercial contracts, we guarantee the obligationsof some of our subsidiaries. We also guarantee borrowings by our subsidiaries under our credit agreement.
Unconditional purchase obligations – We have various obligations for materials, supplies, outsourcing and other services contracted in
the ordinary course of business. In the table above, certain commitments have been estimated over the contractual period.
Defined benefit obligations – We sponsor defined benefit plans that provide pension and other post-employment benefits to covered
employees. As of December 31, 2014, the fair value of plan assets for our material funded pension plans was 93% of the plan obligations.
In 2014, we contributed $96 million to our material defined benefit plans. In 2013, we contributed $604 million to our material defined
benefit plans, including $500 million to pre-fund certain U.S. ($460 million) and U.K. ($40 million) pension obligations. The contribution
to the U.S. pension plan represented the first large contribution into the plan in 10 years. In 2015, we expect to contribute approximately$100 million to our material defined benefit plans, including $70 million in accordance with the normal funding policy of funded plans
and $30 million for claims expected to arise under unfunded and retiree medical plans.
From time to time, we may elect to make voluntary contributions in order to improve the funded status of the plans. For certain plans, thetrustees have the right to call for special valuations, which could subsequently result in our company having to make an unexpected
contribution. Market-related factors may also affect the timing and amount of contributions. The amount and timing of any future
required contributions to pension plans could differ significantly from our estimates at December 31, 2014.

Š

Acquisition and disposition contingencies – We have obligations to pay additional consideration for prior acquisitions, based upon
performance measures contractually agreed at the time of purchase. In certain disposition agreements, we guarantee indemnification
obligations of our subsidiary that sold the business or assets. We believe that based upon current facts and circumstances, additional
payments in connection with these transactions would not have a material impact on our consolidated financial statements.

Other than as described above, we do not engage in off-balance sheet financing arrangements. In particular, we do not have any interests inunconsolidated special-purpose or structured finance entities.

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Thomson Reuters Annual Report 2014

Contingencies
Lawsuits and Legal Claims
We are 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, intellectual property infringement claims, employment matters and commercial matters. The
outcome of all of the matters against us is subject to future resolution, including the uncertainties of litigation. Based on information
currently known to us and after consultation with outside legal counsel, management believes that the ultimate resolution of any suchmatters, individually or in the aggregate, will not have a material adverse impact on our financial condition taken as a whole.
Uncertain Tax Positions
We are subject to taxation in numerous jurisdictions and we are 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 our positions and propose adjustments or changes to our tax filings. As a result, we
maintain provisions for uncertain tax positions that we believe appropriately reflect our risk. These provisions are made using our best
estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. We review the adequacy of theseprovisions at the end of each reporting period and adjust 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 varysignificantly from our provisions. However, based on currently enacted legislation, information currently known to us and after consultation
with outside tax advisors, management believes that the ultimate resolution of any such matters, individually or in the aggregate, will nothave a material adverse impact on our financial condition taken as a whole.
For additional information, please see the “Risk Factors” section of this annual report, which contains further information on risks related to
tax matters.

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Thomson Reuters Annual Report 2014

OUTLOOK
The information in this section is forward-looking and should be read in conjunction with the section below entitled “Cautionary Note Concerning
Factors That May Affect Future Results”.
The following table summarizes our 2015 outlook. Our outlook assumes constant currency rates relative to 2014 with no further acquisitions
or divestitures.
NON-IFRS FINANCIAL MEASURES(1)2014 ACTUAL

2015 OUTLOOK

Revenues from ongoing businesses$12.6 billion

Positive organic growth(2)Adjusted EBITDA margin

26.3%

27.5% – 28.5%

Underlying operating profit margin

17.0%

18.5% – 19.5%

Free cash flow

$1,445 million$1,550 million – $1,750 million(1) Refer to Appendix A for additional information on non-IFRS financial measures.
(2) Revenues from existing businesses.

In light of recent increased volatility in the foreign exchange markets, currency is likely to have a higher than usual impact on our results in2015. Consistent with prior years, our guidance is provided before currency. The following table sets forth our current 2015 financial outlook,
the material assumptions related to our financial outlook and the material risks that may cause actual performance to differ materially fromour current expectations.
REVENUE GROWTH FROM EXISTING BUSINESSES (ORGANIC) EXPECTED TO BE POSITIVE
Material assumptions
Š Gross domestic product (GDP) growth in most of the countries where
we operateŠ Continued increase in the number of professionals around the world
and their demand for high quality information and services
Š The successful execution of sales initiatives, ongoing product releaseprograms and our globalization strategy
Š Positive net sales performance in our Financial & Risk segment
Š Lower price realization from the migration of legacy Financial & Risk
customers to its unified technology platformŠ A continued decline in our U.S. print revenues

Material risks
Š Uneven economic growth, recession or volatile currency
movements across the markets we serve may result in reduced
spending levels by our customers
Š Demand for our products and services could be reduced by changes
in customer buying patterns, competitive pressures or our inability
to execute on key product or customer support initiatives
Š Implementation of regulatory reform around the world, including
financial services laws, may limit business opportunities for ourcustomers, lowering their demand for our products and services
Š Pressure on our customers, in developed markets in particular, toconstrain the number of professionals employed due to regulatory
and economic uncertainty
Š Competitive pricing actions could impact our revenues
Š Lower price realization from the migration of legacy Financial &Risk customers to its unified technology platform could be more
severe or last longer than expectedŠ Global market conditions could depress transaction volumes in our
Financial & Risk business

ADJUSTED EBITDA MARGIN EXPECTED TO BE BETWEEN 27.5% AND 28.5%
Material assumptions
Š Revenue growth from existing businesses (organic) expected to bepositiveŠ Business mix continues to shift to higher-growth, but lower margin
offerings
Š Execution of continued efficiency initiatives
Š Migration of key products and platforms in Financial & Risk

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Material risks
Š Refer to the risks above related to the revenue outlook
Š Revenues from higher margin businesses may be lower than
expected; conversely, revenues from low-margin businesses could
be higher than expectedŠ The costs of required investments exceed expectations or actual
returns are below expectations
Š Acquisition and disposal activity may dilute margins
Š Customer migrations to upgraded platforms are delayed or do notprovide the expected savings
Š Efficiency initiatives may cost more than expected, be delayed or
may not produce the expected level of savings
Š Investments in growth markets could be higher than expected

Thomson Reuters Annual Report 2014

UNDERLYING OPERATING PROFIT MARGIN EXPECTED TO BE BETWEEN 18.5% AND 19.5%
Material assumptions
Š Adjusted EBITDA margin expected to be between 27.5% and 28.5%
Š Depreciation and software amortization expense expected to beapproximately 9% of revenuesŠ Capital expenditures expected to be approximately 8% of revenues

Material risks
Š Refer to the risks above related to adjusted EBITDA margin outlook
Š Capital expenditures may be higher than currently expected,
resulting in higher in-period depreciation and amortization
Š Obsolescence of technology may require accelerated amortization
or impairment of certain assets

FREE CASH FLOW IS EXPECTED TO BE BETWEEN $1,550 MILLION AND $1,750 MILLION
Material assumptions
Š Revenues growth from existing businesses (organic) expected to bepositiveŠ Adjusted EBITDA margin expected to be between 27.5% and 28.5%
Š Capital expenditures expected to be approximately 8% of revenues

Material risks
Š Refer to the risks above related to the revenue outlook andadjusted EBITDA margin outlook
Š A weaker macroeconomic environment and unanticipateddisruptions from new order-to-cash applications could negatively
impact working capital performanceŠ Capital expenditures may be higher than currently expected
resulting in higher cash outflows
Š The timing and amount of tax payments to governments may differ
from our expectations

Additionally, in 2015, we expect interest expense to be between $435 million and $465 million. We expect our 2015 effective tax rate (as apercentage of post-amortization adjusted earnings) to be between 14.5% and 16.5%, assuming no material changes in current tax laws ortreaties to which we are subject.

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RELATED PARTY TRANSACTIONSAs of March 4, 2015, Woodbridge beneficially owned approximately 57% of our shares.

Transactions with Woodbridge
From time to time, in the normal course of business, we enter into transactions with Woodbridge and certain of its affiliates. Thesetransactions involve providing and receiving product and service offerings, are negotiated at arm’s length on standard terms, including price,
and are not significant to our results of operations or financial condition either individually or in the aggregate.
In December 2014, we sold a Canadian wholly owned subsidiary to a company affiliated with Woodbridge for $36 million. In December 2013,
we completed a similar transaction for $29 million. The subsidiaries’ assets consisted of accumulated losses that management did not
expect to utilize against future taxable income prior to their expiry. As such, no tax benefit for the losses had been recognized in ourconsolidated financial statements. Under Canadian law, certain losses may only be transferred to related companies, such as those affiliatedwith Woodbridge. We recorded a gain of $36 million and $29 million in 2014 and 2013, respectively, within “Other operating gains, net”
within the consolidated income statement. For each of these transactions, our board of directors’ Corporate Governance Committee obtained
an independent fairness opinion. We utilized each independent fairness opinion to determine that the negotiated price between us and thepurchaser was reasonable. After receiving recommendations of the Corporate Governance Committee, the board of directors approved thesetransactions. Directors who were not considered independent because of their positions with Woodbridge refrained from deliberating andvoting on the matters at both the committee and board meetings.
In May 2012, as part of our efforts to expand our mutual fund data and strategic research capabilities, we acquired a Canadian mutual funddatabase, fund fact sheet business and mutual fund and equity data feed business for C$9 million from The Globe and Mail (The Globe),
which is majority owned by Woodbridge. We paid C$8 million in cash and issued a C$1 million promissory note to The Globe that will be duein May 2016. In connection with the acquisition, we licensed the acquired database to The Globe, valued at C$250,000 per year, over a four
year term that expires in May 2016. The Globe issued four promissory notes to us, each for the value of the annual license. Amounts due eachyear under the notes issued by The Globe are offset against the note issued by us. Our board of directors’ Corporate Governance Committee
approved the transaction.
In the normal course of business, certain of our subsidiaries charge a Woodbridge-owned company fees for various administrative services. In
2014, the total amount charged to Woodbridge for these services was $117,000 (2013 – $105,000).
We purchase property and casualty insurance from third party insurers and retain the first $500,000 of each and every claim under the
programs via our captive insurance subsidiaries. Woodbridge is included in these programs and pays us a premium commensurate with its
exposures. Premiums relating to 2014 were $81,000 (2013 – $44,000), which would approximate the premium charged by a third party
insurer for such coverage.
At December 31, 2014 and 2013, the amounts receivable from Woodbridge in respect of the above transactions were negligible.
We maintained an agreement with Woodbridge until April 17, 2008 (the closing date of the Reuters acquisition) under which Woodbridge
agreed to indemnify up to $100 million of liabilities incurred either by our current and former directors and officers or by our company inproviding indemnification to these individuals on substantially the same terms and conditions as would apply under an arm’s length,commercial arrangement. We were required to pay Woodbridge an annual fee of $750,000, which was less than the premium that would
have been paid for commercial insurance. In 2008, we replaced this agreement with a conventional insurance agreement. We were entitled
to seek indemnification from Woodbridge for any claims arising from events prior to April 17, 2008, so long as the claims were made before
April 17, 2014. As there were no claims against the indemnity by current or former directors and officers, we did not seek indemnification from
Woodbridge under this agreement.

Transactions with Associates and Joint Ventures
From time to time, we enter into transactions with our investments in associates and joint ventures. These transactions typically involve
providing or receiving services and are entered into in the normal course of business and on an arm’s length basis.
In connection with the 2008 acquisition of Reuters, we assumed a lease agreement with 3XSQ Associates, an entity owned by a subsidiary ofThomson Reuters and Rudin Times Square Associates LLC that was formed to build and operate the 3 Times Square property and building in
New York, New York that serves as our corporate headquarters. We follow the equity method of accounting for our investment in 3XSQ
Associates. The lease provides us with over 690,000 square feet of office space until 2021 and includes provisions to terminate portions earlyand various renewal options. In 2014, our costs under this lease arrangement for rent, taxes and other expenses were $39 million (2013 – $38
million). At December 31, 2014 and 2013, the amounts payable to 3XSQ Associates were negligible.

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Thomson Reuters Annual Report 2014

Prior to the fourth quarter of 2013, we and The Depository Trust & Clearing Corporation (DTCC) each had a 50% interest in Omgeo, a providerof trade management services. In the fourth quarter of 2013, we sold our 50% interest in Omgeo to DTCC. Prior to the sale, Omgeo paid us
for use of a facility and technology and other services which were valued at $7 million in 2013.

SUBSEQUENT EVENTS
2015 Dividends
In February 2015, our board of directors approved a $0.02 per share increase in the annualized dividend to $1.34 per common share. A
quarterly dividend of $0.335 per share will be paid on March 16, 2015 to shareholders of record as of February 23, 2015.

Share Repurchases
From January 1, 2015 through March 4, 2015, we repurchased 4.9 million of our common shares for $193 million at an average price per shareof $39.41.

CHANGES IN ACCOUNTING POLICIESThe following pronouncements and related amendments were adopted on January 1, 2014 and did not have a material impact on ourconsolidated financial statements as of December 31, 2014 and 2013 or for the years then ended.
IAS 32Financial Instruments:
Presentation

IAS 32 has been amended to clarify certain requirements for offsetting financial assets and liabilities. The
amendment addresses the meaning and application of the concepts of legally enforceable right of set-off andsimultaneous realization and settlement.

IAS 36

Impairment of Assets

IAS 36 has been amended to require disclosure of the recoverable amount of an asset (including goodwill) or acash generating unit when an impairment loss has been recognized or reversed in the period. When therecoverable amount is based on fair value less costs of disposal, the valuation techniques and key assumptions
must also be disclosed.

IAS 39Financial Instruments:
Recognition andMeasurement

IAS 39 has been amended to allow hedge accounting to continue when, as a result of laws or regulations, thecounterparty to a derivative designated as a hedging instrument is replaced by a central clearing counterparty.

International
LeviesFinancial
ReportingInterpretations
Committee(IFRIC) 21

IFRIC 21 addresses the recognition requirements for a liability to pay a levy imposed by a government, otherthan an income tax. The interpretation requires the recognition of a liability when the event, identified by thelegislation, triggering the obligation to pay the levy occurs.

Recent Accounting Pronouncements
Certain pronouncements were issued by the IASB or IFRIC that are effective for accounting periods beginning on or after January 1, 2015.
Many of these updates are not applicable or consequential to us and have been excluded from the discussion below.
Pronouncements and related amendments effective for annual accounting periods beginning January 1, 2015 or later:
IAS 19

Employee Benefits

IAS 19 amendment, Defined Benefit Plans: Employee Contributions, clarifies the accounting for contributions
from employees. Employee contributions, which are often a fixed percentage of salary, may be recognized as a
reduction in the service cost component of pension expense in the same period the employee provides services.
However, if the employee contribution rate varies based on years of service, the reduction in expense must be
allocated over future service periods, mirroring the service cost recognition pattern. The amendment is effective
January 1, 2015 and is not anticipated to have a material impact on our consolidated financial statements.

IFRS 15

Revenue from Contracts
with Customers

IFRS 15 is the culmination of a joint project between the IASB and the Financial Accounting Standards Board,
the accounting standard setter in the U.S., to create a single revenue standard. The core principle of IFRS 15 isthat an entity recognizes revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods orservices. The new standard moves away from a revenue recognition model based on an earnings process to an
approach that is based on transfer of control of a good or service to a customer. Additionally, the new standard
requires disclosures as to the nature, amount, timing and uncertainty of revenues and cash flows arising fromcontracts with customers. IFRS 15 is effective on January 1, 2017, and shall be applied retrospectively to eachperiod presented or retrospectively as a cumulative-effect adjustment as of the date of adoption. We areassessing the impact of the new standard on our consolidated financial statements.

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IFRS 9Financial Instruments

IFRS 9 replaces IAS 39 - Financial Instruments: Recognition and Measurement. The new standard addresses
classification and measurement, impairment and hedge accounting.
Classification and measurement
The new standard requires the classification of financial assets based on business model and cash flow
characteristics measured at either (a) amortized cost; (b) fair value through profit or loss; or (c) fair value
through other comprehensive income. For financial liabilities, the standard retains most of the IAS 39
requirements, but where the fair value option is taken, the part of a fair value change due to an entity’s own
credit risk is recorded in other comprehensive income rather than the income statement.
Impairment
Under the forward looking impairment model, expected credit losses are recognized as soon as a financial asset
is originated or purchased, rather than waiting for a trigger event to record a loss.
Hedge accounting
The new standard more closely aligns hedge accounting with an entity’s risk management activities.
Specifically, the new standard (a) no longer requires the use of a specific quantitative threshold to determine if
the hedging relationship is highly effective in order to qualify for hedge accounting; (b) removes restrictions thatprevented some economically rational hedging strategies from qualifying for hedge accounting; and (c) allows
purchased options, forwards and non-derivative financial instruments to be hedging instruments in applicable
circumstances.
IFRS 9 is effective on January 1, 2018 and shall be applied retrospectively to each period presented, subject tothe various transition provisions within IFRS 9. We are assessing the impact of the new standard on ourconsolidated financial statements.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of financial statements requires management to make estimates and judgments about the future. Estimates and judgments
are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed
to be reasonable under the circumstances. Refer to Appendix D of this management’s discussion and analysis for additional information on
our critical accounting estimates and judgments.

ADDITIONAL INFORMATION
Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (asdefined in applicable U.S. and Canadian securities law) as of the end of the period covered by this management’s discussion and analysis,
have concluded that our disclosure controls and procedures were effective to ensure that all information that we are required to disclose inreports that we file or furnish under the U.S. Securities Exchange Act and applicable Canadian securities law is (i) recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the SEC and Canadian securities regulatory authoritiesand (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow
timely decisions regarding required disclosure.

Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
IFRS. A multi-year phased implementation of order-to-cash (OTC) applications and related workflow processes is in progress. Key elementsof the OTC solutions are order management, billing, cash management and collections functionality. We expect to reduce the number ofapplications and to streamline processes across our organization through this initiative. We are also in the process of automating manual
processes and updating workflows associated with intercompany revenue and cost allocation. In 2014, we outsourced the support for
selected financial applications and general accounting processes as part of our simplification program. Therefore, the internal control
activities associated with the outsourced functions are being performed by the third-party providers. However, our management remains
responsible for the end-to-end control environment. We continue to modify the design and documentation of the related internal control
processes and procedures as the implementations of these initiatives progresses.
Except as described above, there was no change in our internal control over financial reporting during 2014 that materially affected, or isreasonably likely to materially affect, our internal control over financial reporting.

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Thomson Reuters Annual Report 2014

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
IFRS. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2014, and based on thatassessment determined that our internal control over financial reporting was effective. Refer to our 2014 annual consolidated financial
statements for our management’s report on internal control over financial reporting.

Share Capital
As of March 4, 2015, we had outstanding 791,777,694 common shares, 6,000,000 Series II preference shares, 11,426,849 stock options and a
total of 8,989,687 time-based restricted share units and performance restricted share units. We have also issued a Thomson Reuters
Founders Share which enables Thomson Reuters Founders Share Company to exercise extraordinary voting power to safeguard the Thomson
Reuters Trust Principles.

Public Securities Filings and Regulatory Announcements
You may access other information about our company, including our 2014 annual report (which contains information required in an annual
information form) and our other disclosure documents, reports, statements or other information that we file with the Canadian securities
regulatory authorities through SEDAR at www.sedar.com and in the United States with the SEC at www.sec.gov.

Cautionary Note Concerning Factors That May Affect Future Results
Certain statements in this management’s discussion and analysis are forward-looking, including, but not limited to, statements about 2015
expectations in the “Overview” and “Outlook” sections and our discussion of outlook in the “Results of Operations” section, future share
repurchases, reduced acquisition spend and 2015 opportunities and challenges for our business segments (notably, Financial & Risk’s net sales,
EBITDA margin, product and platform migrations, and pricing and Legal’s Solutions businesses). The words “expect”, “target” and “will” andsimilar expressions identify forward-looking statements. These forward-looking statements are based on certain assumptions and reflect ourcompany’s current expectations. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause
actual results or events to differ materially from current expectations. Certain factors that could cause actual results or events to differ materiallyfrom current expectations are discussed in the “Outlook” section above. Additional factors are discussed in the “Risk Factors” section of thisannual report and in materials that we from time to time file with, or furnish to, the Canadian securities regulatory authorities and the U.S.
Securities and Exchange Commission. There is no assurance that any forward-looking statement will materialize. Our outlook is provided for the
purpose of providing information about current expectations for 2015. This information may not be appropriate for other purposes. You are
cautioned not to place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this management’s
discussion and analysis. Except as may be required by applicable law, we disclaim any obligation to update or revise any forward-looking
statements.

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APPENDIX A
Non-IFRS Financial Measures
We use non-IFRS financial measures as supplemental indicators of our operating performance and financial position. Additionally, we use
non-IFRS measures as performance metrics as the basis for management incentive programs. These measures do not have any standardized
meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies.
The following table sets forth our non-IFRS financial measures, including an explanation of why we believe they are useful measures of ourperformance. Reconciliations for the most directly comparable IFRS measure are reflected in our management’s discussion and analysis.
HOW WE DEFINE IT

WHY WE USE IT AND WHY IT IS USEFULTO INVESTORS

MOST DIRECTLY COMPARABLEIFRS MEASURE/
RECONCILIATION

Provides a measure of our ability to grow ourongoing businesses over the long term.

Revenues

Revenues from ongoing businesses
Revenues from reportable segments and Corporate &Other (which includes the Reuters News business),
less eliminations.

Revenues at constant currency (before currency or revenues excluding the effects of foreign currency)
Revenues applying the same foreign currency
exchange rates for the current and equivalent priorperiod. To calculate the foreign currency impact
between periods, we convert the current andequivalent prior period’s local currency revenues
using the same foreign currency exchange rate.

Provides a measure of underlying business trends,
without distortion from the effect of foreign currency
movements during the period.

Revenues

Our reporting currency is the U.S. dollar. However,
we conduct a significant amount of our activities incurrencies other than the U.S. dollar. We manage ouroperating segments on a constant currency basis,
and we manage currency exchange risk at thecorporate level.

Underlying operating profit and underlying operating profit margin
Operating profit from reportable segments andCorporate & Other. The related margin is expressed
as a percentage of revenues from ongoing
businesses.

Provides a basis to evaluate operating profitability
and performance trends, excluding the impact ofitems which distort the performance of ouroperations.

Operating profit

Provides a measure commonly reported and widelyused by investors as an indicator of a company’s
operating performance and ability to incur andservice debt, and as a valuation metric.

Earnings (loss) from continuing
operations

Adjusted EBITDA and adjusted EBITDA margin
Underlying operating profit excluding the related
depreciation and amortization of computer software.
The related margin is expressed as a percentage ofrevenues from ongoing businesses.

Adjusted EBITDA less capital expenditures and adjusted EBITDA less capital expenditures margin
Adjusted EBITDA less capital expenditures, lessproceeds from disposals (excluding Other
Businesses). The related margin is expressed as apercentage of revenues from ongoing businesses.

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Provides a basis for evaluating the operating
profitability and capital intensity of a business in asingle measure. This measure captures investments
regardless of whether they are expensed orcapitalized.

Earnings (loss) from continuing
operations

Thomson Reuters Annual Report 2014

HOW WE DEFINE IT

WHY WE USE IT AND WHY IT IS USEFUL TOINVESTORSMOST DIRECTLY COMPARABLEIFRS MEASURE/
RECONCILIATION

Provides a more comparable basis to analyze
earnings and is also a measure commonly used byshareholders to measure our performance.

Earnings (loss) attributable tocommon shareholders andearnings (loss) per share
attributable to commonshareholders

Adjusted earnings and adjusted earnings per share
Earnings (loss) attributable to common shareholders
and per share:Š excluding the pre-tax impacts of amortization ofother identifiable intangible assets; andŠ the post-tax impacts of fair value adjustments,
other operating gains and losses, certain
impairment charges, the results of Other
Businesses, other net finance costs or income, ourshare of post-tax earnings or losses in equity
method investments, discontinued operations
and other items affecting comparability.
Š We also deduct dividends declared on preference
shares; andamortization of the tax charges associated withthe consolidation of ownership and managementof technology and content assets. For the nonIFRS measure, the majority of the charges areamortized over seven years, the period over which
the tax is expected to be paid.

We believe this treatment more accurately reflects
our tax position because the tax liability is associatedwith ongoing tax implications from the consolidationof these assets.

This measure is calculated using diluted weightedaverage shares.
In interim periods, we also adjust our reported
earnings and earnings per share to reflect anormalized effective tax rate. Specifically, thenormalized effective rate is computed as theestimated full-year effective tax rate applied toadjusted pre-tax earnings of the interim period. The
reported effective tax rate is based on separate
annual effective income tax rates for each taxing
jurisdiction that are applied to each interim period’s
pre-tax income.

Page 65

Because the geographical mix of pre-tax profits andlosses in interim periods may be different from thatfor the full-year, we believe that using the expectedfull-year effective tax rate provides morecomparability among interim periods. The
adjustment to normalize the effective tax rate
reallocates estimated full-year income taxes
between interim periods, but has no effect on fullyear tax expense or on cash taxes paid.

Thomson Reuters Annual Report 2014

HOW WE DEFINE IT

WHY WE USE IT AND WHY IT IS USEFULTO INVESTORS

MOST DIRECTLY COMPARABLEIFRS MEASURE/
RECONCILIATION

Provides a commonly used measure of a company’s
leverage.

Total debt (current indebtedness
plus long-term indebtedness)

Net debt
Total indebtedness, including the associated fairvalue of hedging instruments, but excluding theassociated unamortized transaction costs andpremiums or discounts and the interest-related fairvalue component of hedging instruments, less cash
and cash equivalents.

Given that we hedge some of our debt to reduce risk,
we include hedging instruments as we believe it
provides a better measure of the total obligation
associated with our outstanding debt. However,
because we intend to hold our debt and related
hedges to maturity, we do not consider the interest
components of the associated fair value of hedges inour measurements. We reduce gross indebtedness
by cash and cash equivalents.

Free cash flow
Net cash provided by operating activities, and otherinvesting activities, less capital expenditures anddividends paid on our preference shares.

Helps assess our ability, over the long term, to create
value for our shareholders as it represents cash
available to repay debt, pay common dividends andfund share repurchases and new acquisitions.

Net cash provided by operating
activities

Provides a supplemental measure of our ability, overthe long term, to create value for our shareholders
because it represents free cash flow generated by ouroperations excluding businesses that have been orare expected to be exited through sale or closure.

Net cash provided by operating
activities

Provides a measure of how efficiently we allocate
resources to profitable activities and is indicative of
our ability to create value for our shareholders.

IFRS does not require a measurecomparable to ROIC. Refer to our
calculation of ROIC in Appendix C
for a reconciliation of thecomponents in the calculation to
the most directly comparable IFRS
measure.

Free cash flow from ongoing businesses
Free cash flow excluding businesses that have beenor are expected to be exited through sale or closure,which we refer to as “Other Businesses”.

Return on invested capital (ROIC)
Adjusted operating profit after net taxes paid
expressed as a percentage of the average adjusted
invested capital during the period.

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Thomson Reuters Annual Report 2014

APPENDIX B
This appendix provides reconciliations that are not presented elsewhere in this management’s discussion and analysis for certain non-IFRS
measures to the most directly comparable IFRS measure.

Reconciliation of Earnings (Loss) From Continuing Operations to Adjusted EBITDA and Adjusted EBITDA Less Capital
Expenditures
THREE MONTHS ENDED DECEMBER 31,

YEAR ENDED DECEMBER 31,(millions of U.S. dollars)

2014

2013

Change2014

2013

ChangeEarnings (loss) from continuing operations

1,157

(347)

n/m

1,959

175

n/m

Tax expense

9

425

62

848

Other finance costs

60

19

85

53

Adjustments to remove:

Net interest expense

113

112

442

460

Amortization of other identifiable intangible assets

159

159

647

641

Amortization of computer software

192

202

778

773

Depreciation

103

106

397

416

1,793

676

4,370

3,366

-

4

(3)

(20)

Other operating gains, net

(965)

(74)

(969)

(198)

Fair value adjustments

(38)

7

(91)

(14)

4

(3)

6

(64)

794

610

3,313

3,070

264

253

968

1,003

530

357

48%

2,345

2,067

13%

EBITDA
Adjustments to remove:
Share of post-tax losses (earnings) in equity method investments

EBITDA from Other Businesses(1)Adjusted EBITDA
Remove: capital expenditures, less proceeds from disposals(excluding Other Businesses(1))
Adjusted EBITDA less capital expenditures

30%

8%

Adjusted EBITDA margin

24.7%

18.7%

600bp

26.3%

24.5%

180bp

Adjusted EBITDA less capital expenditures margin

16.5%

10.9%

560bp

18.6%

16.5%

210bp

Reconciliation of Underlying Operating Profit to Adjusted EBITDA by Segment
THREE MONTHS ENDED DECEMBER 31, 2014

THREE MONTHS ENDED DECEMBER 31, 2013

Underlying
OperatingprofitAdd:
Depreciation andamortization ofcomputersoftware **Adjusted
EBITDA

Underlying
OperatingprofitAdd:
Depreciation andamortization ofcomputersoftware **Adjusted
EBITDA

Financial & Risk

193

165

358

81

163

244

Legal

228

71

299

199

73

272

Tax & Accounting

103

29

132

97

30

127

Intellectual Property & Science

72

23

95

54

21

75

Corporate & Other (includes Reuters News)

(97)

7

(90)

(129)

21

(108)

Total

499

295

794

302

308

610

(millions of U.S. dollars)**

Excludes Other Businesses(1)Page 67

Thomson Reuters Annual Report 2014

Reconciliation of Underlying Operating Profit to Adjusted EBITDA by Segment (continued)
YEAR ENDED DECEMBER 31, 2014

YEAR ENDED DECEMBER 31, 2013

Underlying
OperatingprofitAdd:
Depreciation andamortization ofcomputersoftware **Underlying
OperatingprofitAdd:
Depreciation andamortization ofcomputersoftware **Adjusted
EBITDA

Financial & Risk

951

640

1,591

816

641

1,457

Legal

958

280

1,238

903

291

1,194

Tax & Accounting

295

122

417

257

121

378

Intellectual Property & Science

239

89

328

225

79

304

Corporate & Other (includes Reuters News)

(305)

44

(261)

(320)

57

(263)

Total

2,138

1,175

3,313

1,881

1,189

3,070

(millions of U.S. dollars)

Adjusted
EBITDA**

Excludes Other Businesses(1)(1)

Other Businesses are businesses that have been or are expected to be exited through sale or closure that did not qualify for discontinued operations classification. The results of
Other Businesses were as follows:

THREE MONTHS ENDED DECEMBER 31,(millions of U.S. dollars)

YEAR ENDED DECEMBER 31,

2014

2013

2014

2013

-

13

2

159

(4)

3

(6)

64

Revenues
Operating (loss) profit
Depreciation and amortization of computer software
EBITDA
Capital expenditures, less proceeds from disposals

-

-

-

-

(4)

3

(6)

64

-

-

-

1

Reconciliation of Weighted-Average Diluted Shares used in Adjusted EPS
Because we reported a net loss from continuing operations under IFRS for the three months ended December 31, 2013, the weighted-average
number of common shares used for basic and diluted loss per share is the same, as the effect of stock options and other equity incentive
awards would reduce the loss per share, and therefore be anti-dilutive. Since our non-IFRS measure “adjusted earnings” is a profit, potential
common shares are included, as they lower adjusted EPS and are therefore dilutive.
The following table reconciles IFRS and non-IFRS common share information:(weighted average common shares)

THREE MONTHS ENDED DECEMBER 31, 2013

IFRS: Basic and Diluted

825,270,499

Effect of stock options and other equity incentive awards

3,355,232

Non-IFRS Diluted

828,625,731

Adjusted EBITDA, Underlying Operating Profit (with related margins) and Adjusted Earnings Per Share, Including andExcluding Charges
YEAR ENDED DECEMBER 31, 2014

YEAR ENDED DECEMBER 31, 2013

(millions of U.S. dollars, except per share amounts and margins)

2014
ActualRemoveCharges

2014
ExcludingCharges

2013
ActualRemoveCharges

2013
ExcludingCharges

Revenues from ongoing businesses

12,605-

12,605

12,543-

12,543Adjusted EBITDA

3,313

135

3,448

3,070

357

3,427

Adjusted EBITDA margin

26.3%

-

27.4%

24.5%

-

27.3%

Underlying operating profit

2,138

135

2,273

1,881

372

2,253

Underlying operating profit margin

17.0%

-

18.0%

15.0%

-

18.0%

Adjusted earnings per share (EPS)

$1.85

$0.15

$2.00

$1.54

$0.39

$1.93

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Thomson Reuters Annual Report 2014

APPENDIX C
Calculation of Return on Invested Capital (ROIC)We calculate ROIC as adjusted operating profit after net taxes paid expressed as a percentage of the average invested capital during theperiod. Invested capital represents our net operating assets that contribute to or arise from our post-tax adjusted operating profits.
The following table provides the calculation of our ROIC for 2014 and 2013.
(millions of U.S. dollars)

2014

2013

2,545

1,516

Calculation of adjusted operating profit after taxes
Operating profit
Adjustments to remove:
Amortization of other identifiable intangible assets

647

641

Fair value adjustments

(91)

(14)

(969)

(198)

Adjusted operating profit(1)

2,132

1,945

Net cash taxes paid on operations(2)

(271)

(236)

Post-tax adjusted operating profit

1,861

1,709

Trade and other receivables

1,810

1,751

Prepaid expenses and other current assets

657

650

Other operating gains, net

Calculation of invested capitalComputer hardware and other property, net

1,182

1,291

Computer software, net

1,529

1,622

Other identifiable intangible assets (excludes accumulated amortization)

12,52812,818Goodwill(3)16,566

17,130

Payables, accruals and provisions(2,443)(2,624)

Deferred revenue(1,355)(1,348)

1,111

1,254

Present value of operating leases(4)Total invested capital(5)31,58532,544

Average invested capital

32,06532,448Return on invested capital

5.8%

5.3%

(1)

Adjusted operating profit includes operating profit or losses from Other Businesses.

(2) Excludes cash taxes paid on the disposal of businesses and investments.
(3) Goodwill has not been reduced, for the accumulated impairment of $2.8 billion and $3.0 billion in 2014 and 2013, respectively. Goodwill excludes amounts associated withdeferred taxes of $2.6 billion and $2.7 billion in 2014 and 2013, respectively, arising from acquisition accounting.
(4) Present value of operating leases primarily for real property and equipment contracted in the ordinary course of business.
(5) Invested capital excludes: financial assets and liabilities, including cash and debt; other non-current assets; deferred taxes; and provisions and other non-current liabilities,
which are largely comprised of defined benefit plan obligations.

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Thomson Reuters Annual Report 2014

APPENDIX D
Critical Accounting Estimates and Judgments
The preparation of financial statements requires management to make estimates and judgments about the future. Estimates and judgments
are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed
to be reasonable under the circumstances. Accounting estimates will, by definition, seldom equal the actual results. The following discussion
sets forth management’s:ŠŠ

most critical estimates and assumptions in determining the value of assets and liabilities; andmost critical judgments in applying accounting policies.

Critical accounting estimates and assumptions
Allowance for doubtful accounts and sales adjustments
We must make an assessment of whether accounts receivable are collectible from customers. Accordingly, we establish an allowance for
estimated losses arising from non-payment and other sales adjustments, taking into consideration customer creditworthiness, current
economic trends and past experience. If future collections differ from estimates, future earnings would be affected. At December 31, 2014,
the combined allowances were $118 million, or 6%, of the gross trade accounts receivable balance of $1.9 billion. An increase to the reservebased on 1% of accounts receivable would have decreased pre-tax earnings by approximately $19 million for the year ended December 31,
2014.
Computer software
Computer software represented $1.5 billion of total assets in the consolidated statement of financial position at December 31, 2014. A
significant portion of ongoing expenditures relate to software that is developed as part of electronic databases, delivery systems and internal
infrastructures, and, to a lesser extent, software sold directly to customers. As part of the software development process, we must estimate
the expected period of benefit over which capitalized costs should be amortized. The basis of these estimates includes the timing oftechnological obsolescence, competitive pressures, historical experience and internal business plans for the use of the software. Due torapidly changing technology and the uncertainty of the software development process itself, future results could be affected if our current
assessment of our software projects differs from actual performance.
Other identifiable intangible assets and goodwill
Other identifiable intangible assets and goodwill represented $7.1 billion and $16.4 billion, respectively, of total assets in the consolidated
statement of financial position at December 31, 2014. Other identifiable intangible assets and goodwill arise out of business combinations.
Business combinations are accounted for under the acquisition method of accounting, which requires us to identify and attribute values andestimated lives to the intangible assets acquired based on their estimated fair value. These determinations involve significant estimates andassumptions regarding cash flow projections, economic risk and weighted average cost of capital. The excess of acquisition cost over the fairvalue of identifiable net assets acquired is recorded as goodwill.
Subsequent to acquisition, we test identifiable intangible assets and goodwill for impairment as required. The outcome of these tests ishighly dependent on our latest estimates and assumptions regarding cash flow projections, economic risk and weighted-average cost ofcapital.
If future events or results differ adversely from the estimates and assumptions made at acquisition or as part of subsequent impairment
tests, we could record increased amortization or impairment charges in the future.
Valuation Techniques
An impairment of goodwill occurs when the recoverable amount of a cash generating unit (CGU) is below the carrying value of the CGU. The
recoverable amount is the higher of a CGU’s fair value less costs of disposal or its value in use. As with previous impairment tests, therecoverable value of each CGU was based on fair value less costs of disposal, using a weighted average of the income approach and market
approach. IFRS 13, Fair Value Measurement, defines fair value as a market-based measurement rather than an entity-specific measurement.
Therefore, the fair value of the CGU must be measured using the assumptions that market participants would use rather than those related
specifically to us. In particular, the discount and tax rates used in the income approach reflect market participant assumptions. To calculatethese market participant assumptions, publicly available data was gathered from companies operating in businesses similar to each CGU,
which includes key competitors. As certain inputs to the valuation are not based on observable market data, the recoverable value of each
CGU is categorized in Level 3 of the fair value measurement hierarchy.

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Thomson Reuters Annual Report 2014

The valuation techniques, significant assumptions and sensitivities applied in the 2014 goodwill impairment test are described below. The
selection and application of valuation techniques and the determination of significant assumptions requires judgment.
Income approach
The income approach is predicated upon the value of the future cash flows that a business will generate. We used the discounted cash flow(DCF) method, which involves projecting cash flows and converting them into a present value equivalent through discounting. The
discounting process uses a rate of return that is commensurate with the risk associated with the business and the time value of money. Thisapproach requires assumptions about revenue growth rates, operating margins, capital expenditures, tax rates and discount rates.
Market approach
The market approach assumes that companies operating in the same industry will share similar characteristics and that company values willcorrelate to those characteristics. Therefore, a comparison of a CGU to similar companies whose financial information is publicly available
may provide a reasonable basis to estimate fair value. Under the market approach, fair value is calculated based on EBITDA multiples ofbenchmark companies comparable to the businesses in each CGU. Data for the benchmark companies was obtained from publicly available
information.
Significant Assumptions
Weighting of Valuation Techniques
We weighted the results of the two valuation techniques noted above, consistently applied to each CGU, as follows: 60% income approach/
40% market approach. We believe that given volatility in capital markets, it is appropriate to apply a heavier weighting to the income
approach.
Cash Flow Projections
Cash flow projections were based on our internal budget. We projected cash flows for a period of three years and applied a perpetual growthrate thereafter, as prescribed by IAS 36, Impairment of Assets. In order to project cash flows for the three year period, we considered growth inrevenues and costs as well as capital expenditures. In preparing our projections, we considered past experience, economic trends such as
GDP growth and inflation as well as industry and market trends. The projections also took into account the expected impact from efficiency
and restructuring initiatives, new product launches, customer retention, as well as the maturity of the markets in which each business
operates.
Discount Rate
We assumed a discount rate in order to calculate the present value of our projected cash flows. The discount rate represented a weighted
average cost of capital (WACC) for comparable companies operating in similar industries as the applicable CGU, based on publicly available
information. The WACC is an estimate of the overall required rate of return on an investment for both debt and equity owners and serves as
the basis for developing an appropriate discount rate. Determination of the WACC requires separate analysis of the cost of equity and thecost of debt. The cost of equity reflects the long-term risk-free interest rate associated with U.S. Treasury bonds and considers a risk
premium based on an assessment of risks related to the projected cash flows of each CGU.
Lower discount rates were applied to CGUs whose cash flows are expected to be less volatile due to factors such as the maturity of themarket they serve and their market position. Higher discount rates were applied to CGUs whose cash flows are expected to be more volatile
due to competition, or participation in less stable geographic markets.
Tax Rate
The tax rates applied to the projections were based on effective tax rates of comparable companies operating in similar industries as theapplicable CGU, based on publicly available information, or statutory tax rates. Tax assumptions are sensitive to changes in tax laws and thejurisdictions in which profits are earned.
The key assumptions used in performing the impairment test, by CGU, are presented below:
CASH-GENERATING UNIT
Financial & Risk
Legal
Tax & AccountingIntellectual Property & Science(1)

The perpetual growth rate is applied to the final year of cash flow projections.

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PERPETUAL GROWTH RATE(1)DISCOUNT RATETAX RATE

3.0%
2.5%
3.0%
3.0%

9.3%
7.5%
9.2%
8.4%

28.0%
36.5%
37.8%
37.4%

Thomson Reuters Annual Report 2014

Results and Sensitivities
The fair value for each CGU was in excess of its carrying value. The excess was 19% (approximately $3.0 billion) for Financial & Risk and over
100% for each of the other three CGUs.
For all four CGUs, the sensitivity analysis demonstrates that no reasonably possible change in the perpetual growth, discount rate or income
tax assumptions would cause the carrying amounts of any CGU to exceed its recoverable amount. For Financial & Risk, the fair value
computed under the market approach continues to contribute a significant portion of the excess fair value. A combination of reasonably
possible events, such as the EBITDA multiples of benchmark companies decreasing by 20% and a moderate rise of 100 basis points in the
discount rate, could cause Financial & Risk’s carrying amount to exceed its recoverable amount. Additionally, should we lower the compound
annual growth rate for its cash flow projections from the range described below, without a corresponding offset to other key assumptions,the excess fair value would be eliminated (see “Discussion of Cash Flow Projections” below).
Discussion of Cash Flow Projections
The DCF valuation for the Financial & Risk CGU assumes that cash flow will grow at a compounded annual rate of mid-to-high single digits
from 2014 to 2017, reflecting the expected impact of restructuring initiatives and projected revenue growth. In 2014, the operating margins ofFinancial & Risk improved because of restructuring initiatives. In future periods, their operating margins are expected to continue to improvefrom further initiatives, resulting in higher cash flows. Specifically, we continue to reduce costs through initiatives to de-layer theorganization and decommission legacy platforms and products as customers upgrade to Thomson Reuters Eikon and Thomson Reuters
Elektron. The business expects a gradual return to positive revenue growth over the next three years, also resulting in higher cash flows.
After the specific three year projection period, we project perpetual cash flow growth of 3% based on the assumption that the Financial &Risk business will continue to expand globally, increase prices generally in line with global inflation, and expand operating margins.
The actual 2014 cash flow performance for the Financial & Risk CGU achieved the 2014 projection included within the 2013 impairment
testing analysis, after reflecting the required market participant assumptions such as the tax rate. Similarly, in 2013, the actual 2013 cash
flow performance for the Financial & Risk CGU achieved the 2013 projection included within the 2012 impairment testing analysis, afterreflecting the required market participant assumptions such as the tax rate.
The free cash flow growth projections and certain key assumptions underlying the fair value of the Financial & Risk CGU are subject to risks anduncertainties that could cause future results to differ materially from current expectations. Specifically, Financial & Risk could experience
delays implementing its efficiency initiatives or such initiatives could produce less benefit or cost more than originally expected. As Financial &Risk retires platforms and certain products, while at the same time migrating customers to new products, there is likely to be some short termloss of revenue, which could be more severe or could extend for a longer period than we expect. Our cash flow projections could be impacted
by further deterioration in macroeconomic conditions, including potential impacts of regulation on customers, changes in customer buying
patterns or competitive pressures. Such conditions could lead the Financial & Risk CGU to experience unexpected subscription cancellations,lower transaction volumes or the inability to sustain expected price increases. Our assumption of perpetual growth could be impacted bychanges in long-term outlooks for global inflation. Additionally, the discount rate, tax rate and EBITDA multiples are based on those forcomparable companies and are driven by market conditions and prevailing tax laws. In the future, changes in these measures could cause therecoverable amount of assets for the Financial & Risk CGU to be less than their carrying value.
Employee future benefits
We sponsor defined benefit plans providing pension and other post-employment benefits to covered employees. The determination of
benefit expense associated with employee future benefits requires assumptions such as the discount rate, which is used to measure service
cost, benefit plan obligations and the net interest income (expense) on the net benefit plan assets (obligations). Other significant
assumptions include expected mortality, the expected rate of increase with respect to future compensation and pension payments as well as
the expected healthcare cost trend rate. Because the determination of the cost and obligations associated with employee future benefits
requires the use of various assumptions, there is measurement uncertainty inherent in the actuarial valuation process. Actual results will
differ from results which are estimated based on assumptions.
Discount rate
The discount rate was based on current market interest rates of high-quality, fixed-rate debt securities adjusted to reflect the duration of
expected future cash outflows for pension benefit payments. To estimate the discount rate, our actuary constructed a hypothetical yield curvethat represented yields on high quality zero-coupon bonds with durations that mirrored the expected payment stream of the benefit
obligation. For the Thomson Reuters Group Pension Plan (TRGP), Reuters Pension Fund (RPF), Supplementary Pension Scheme (SPS) and
The Thomson Corporation PLC Pension Scheme (TTC) combined, a 0.25% increase or decrease in the discount rate would have decreased orincreased the defined benefit obligation by approximately $275 million as of December 31, 2014.

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Thomson Reuters Annual Report 2014

Rates of inflation, increase in salaries and pension payments
The rate of inflation, which impacts increases in eligible U.K. pension payments, was determined by reference to consumer and retail priceindices as well as other benchmarks. The assumption on salary growth is for the long term over the life of benefit plans. For the TRGP, RPF,
SPS, and TTC combined, a 0.25% increase or decrease in the rate of increase in inflation and salary assumptions would have increased or
decreased the defined benefit obligation by approximately $100 million and $25 million, respectively, as of December 31, 2014.
Medical cost trend
The medical cost trend is based on our actuarial medical claims experience and future projections of medical costs. The average medical costtrend rate used was 6.5% for 2014, which is reduced ratably to 5% in 2018. A 1% increase or decrease in the trend rate would have resulted in
an increase or decrease in the benefit obligation for post-retirement benefits of approximately $20 million at December 31, 2014.
Mortality assumptions
The mortality assumptions used to assess the defined benefit obligation as of December 31, 2014 are based on the following:ŠŠ

TRGP: RP-2014 with MP-2014 Generational Table; andRPF/SPS/TTC: SAPS Light Tables with allowances for plan demographic specifics and longevity improvements.

For the TRGP, RPF, SPS and TTC combined, an increase in life expectancy of one year across all age groups would have increased thedefined benefit obligation by approximately $150 million as of December 31, 2014.
Income taxes
We compute an income tax provision in each of the jurisdictions in which we operate. These income tax provisions include amounts that are
based upon our estimates and assumptions regarding prices and values used to record intercompany transactions. Actual amounts ofincome tax expense only become final upon filing and acceptance of the tax return by the relevant authorities, which occurs subsequent to
the issuance of the financial statements. Additionally, estimation of income taxes includes evaluating the recoverability of deferred tax assets
based on an assessment of the ability to use the underlying future tax deductions before they expire against future taxable income. The
assessment is based upon existing tax laws and estimates of future taxable income. To the extent estimates differ from the final tax return,earnings would be affected in a subsequent period.
In interim periods, the income tax provision is based on estimates of full-year earnings by jurisdiction. The average annual effective income
tax rates are re-estimated at each interim reporting date. To the extent that forecasts differ from actual results, adjustments are recorded insubsequent periods.
Our 2014 effective income tax rate on earnings from continuing operations was 3.1%. A 1% increase in the effective income tax rate would
have increased 2014 income tax expense and decreased net earnings by approximately $20 million.
Critical judgments in applying accounting policies
Revenue recognition
We assess the criteria for the recognition of revenue related to arrangements that have multiple components. These assessments requirethat we make judgments to determine if there are separately identifiable components as well as how to allocate the total price among thecomponents. Deliverables are accounted for as separately identifiable components if they can be understood without reference to the seriesof transactions as a whole. In concluding whether components are separately identifiable, we consider the transaction from the customer’s
perspective. Among other factors, we assess whether the service or good is sold separately by us in the normal course of business or whether
the customer could purchase the service or good separately. With respect to the allocation of price among components, we use our judgment
to assign a fair value to each component. As evidence of fair value, we look to such items as the price for the component when soldseparately, renewal rates for specific components and prices for a similar product sold separately.
Uncertain tax positions
We are subject to taxation in numerous jurisdictions and we are 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 our positions and propose adjustments or changes to our tax filings. As a result, we
maintain provisions for uncertain tax positions that we believe appropriately reflect our risk. These provisions are made using our best
estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. We review the adequacy of theseprovisions at the end of each reporting period and adjust 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 varysignificantly from our provisions. Where the final outcome of these tax-related matters is different from the amounts that were initially
recorded, such differences will affect the tax provisions in the period in which such determination is made.

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Thomson Reuters Annual Report 2014

APPENDIX E
Selected Annual Information
The following table summarizes selected annual information for 2014, 2013 and 2012.
2013 compared to 2012
The declines in operating profit, net earnings and the associated per share amounts were due primarily to significantly higher prior year gains
related to divestitures, which were $829 million in 2012 versus $195 million in 2013. Divestitures in 2012 included the Healthcare businessand divestitures in 2013 included the Corporate Services business. Additionally, as part of our simplification initiatives, we recorded $836
million of tax charges in 2013 related to the consolidation of our technology and content assets.
Revenues from ongoing businesses increased despite challenging market conditions in our two largest markets, legal and financial. Before
currency, revenues from ongoing businesses grew 2%, driven by 3% growth from acquired businesses, offset by a 1% decline in revenues fromexisting businesses. The decline in existing businesses related primarily to our Financial & Risk segment, reflecting the lag effect of
cumulative negative net sales. The decreases in adjusted EBITDA, underlying operating profit and the related margins reflected charges,
primarily severance, associated with our simplification initiatives. We generated $1.2 billion of free cash flow in 2013 despite a $500 million
pension contribution.
2014 compared to 2013
The increases in operating profit, net earnings and the associated per share amounts were primarily due to a $931 million gain in 2014 for the
release of accumulated foreign currency translation adjustments from shareholders’ equity. The increase in net earnings also reflected $836
million of tax charges in 2013 related to the consolidation of our technology and content assets. Both of these items were related to oursimplification program initiatives.
Revenues from ongoing businesses were slightly higher than 2013. Before currency, revenues from ongoing businesses grew 1% due toacquired businesses. Revenues from existing businesses were essentially unchanged as growth in our Legal, Tax & Accounting andIntellectual Property & Sciences businesses offset a decline in Financial & Risk, reflecting the lag effect of cumulative negative net sales from2013. Net sales for Financial & Risk were positive in 2014 and were also positive in the fourth quarter of 2014, reflecting an improving trend in
net sales performance. The increases in adjusted EBITDA, underlying operating profit and the related margins reflected lower charges
associated with our simplification initiatives.
Refer to “Results of Operations” section of this management’s discussion and analysis for a full discussion of our performance in 2014
compared to 2013.
FOR THE YEARS ENDED AND AS AT DECEMBER 31,(millions of U.S. dollars, except per share amounts)
IFRS Consolidated Income Statement Data:
Revenues
Operating profit
Earnings from continuing operations
Net earnings
Basic earnings per share from continuing operations
Basic earnings per share
Diluted earnings per share from continuing operations
Diluted earnings per share
IFRS Consolidated Statement of Financial Position Data:
Total assets
Total long-term financial liabilities(1)Dividend Data:
Dividends per Thomson Reuters Corporation common share (US$)
Dividends per Thomson Reuters Corporation Series II preference share (C$)
Non-IFRS Data (unaudited)(2):
Revenues from ongoing businesses
Adjusted EBITDA
Adjusted EBITDA margin
Adjusted EBITDA less capital expenditures
Adjusted EBITDA less capital expenditures margin
Underlying operating profit
Underlying operating profit margin
Adjusted earnings
Adjusted earnings per share
Net debt
Free cash flow
Free cash flow from ongoing businesses
(1)

2014

2013

2012

12,607
2,545
1,959
1,959
$2.36
$2.36
$2.35
$2.35

12,702
1,516
175
185
$0.15
$0.16
$0.15
$0.16

13,132
2,570
2,040
2,042
$2.40
$2.40
$2.39
$2.39

30,597
7,737

32,4397,572

32,5376,260$1.32
C$0.53$1.30
C$0.53$1.28
C$0.53

12,605
3,313
26.3%
2,345
18.6%
2,138
17.0%
1,497
$1.85
7,383
1,445
1,447

12,543
3,070
24.5%
2,067
16.5%
1,881
15.0%
1,283
$1.54
6,715
1,163
1,098

12,443
3,310
26.6%
2,364
19.0%
2,205
17.7%
1,567
$1.89
5,702
1,737
1,516

Comprised of “Long-term indebtedness” and “Other financial liabilities” classified as non-current on our consolidated statement of financial position.

(2) Non-IFRS financial measures are defined in Appendix A of this management’s discussion and analysis.

Page 74

Thomson Reuters Annual Report 2014

APPENDIX F
Quarterly Information (unaudited)
The following table presents a summary of our consolidated operating results for the eight most recent quarters.
QUARTER ENDED
MARCH 31,

QUARTER ENDED
JUNE 30,

QUARTER ENDEDSEPTEMBER 30,

QUARTER ENDEDDECEMBER 31,

2014
3,130

2013
3,175

2014
3,159

2014
3,107

2013
3,086

2014
3,211

Operating profit

359

390

381

597

466

316

1,339

213

Earnings (loss) from continuing operations

292

(17)

260

256

250

283

1,157

(347)

–

–

–

6

–

–

–

4

(millions of U.S. dollars, except per share amounts)
Revenues

Earnings from discontinued operations, net of tax

2013
3,163

2013
3,278

Net earnings (loss)

292

(17)

260

262

250

283

1,157

(343)

Earnings (loss) attributable to common shareholders

282

(31)

249

248

231

271

1,147

(351)

Dividends declared on preference shares

(1)

(1)

–

(1)

(1)

–

(1)

(1)

$0.34

($0.04)

$0.31

$0.29

$0.29

$0.33

$1.43

($0.43)

–

–

–

0.01

–

–

–

–

$0.34

($0.04)

$0.31

$0.30

$0.29

$0.33

$1.43

($0.43)$0.34($0.04)

$0.31

$0.29

$0.28

$0.33

$1.43

($0.43)

–

–

–

0.01

–

–

–

–

$0.34

($0.04)

$0.31

$0.30

$0.28

$0.33

$1.43

($0.43)

Basic earnings (loss) per share
From continuing operations
From discontinued operations
Diluted earnings (loss) per share
From continuing operations
From discontinued operations

Our revenues and operating profit on a consolidated basis do not tend to be significantly impacted by seasonality as we record a large
portion of our revenues ratably over a contract term and our costs are generally incurred evenly throughout the year. However, our nonrecurring revenues can cause changes in our performance from quarter to consecutive quarter. Additionally, the release of certain printbased offerings can be seasonal as can certain product releases for the regulatory markets, which tend to be concentrated at the end of theyear. As a consequence, the results of certain of our segments can be impacted by seasonality to a greater extent than our consolidated
revenues and operating profit.
Revenues – Revenues declined in the first and second quarters of 2014 due to the impact of divestitures, primarily our Corporate Services
business, which was sold in the second quarter of 2013. Revenue performance over all periods reflected challenges in our Financial & Risk
segment, including an overall difficult economic environment. This dynamic was partially offset by growth in our Legal, Tax & Accounting
and Intellectual Property & Science segments. Acquisitions contributed to revenue growth during the first three quarters, but did not have an
impact in the fourth quarter as we increasingly focus on growing revenues from existing businesses. Foreign currency caused the decline inrevenues in the fourth quarter of 2014, but did not significantly impact revenue movements in the other periods.
Operating profit – Operating profit increased in the fourth quarter of 2014 compared to the prior-year period primarily due to the $931
million gain from the release of accumulated foreign currency translation adjustments from shareholders’ equity (see “Results ofOperations” section of this management’s discussion and analysis), and lower charges associated with our simplification program initiatives.
The increase in operating profit in the third quarter of 2014 compared to the prior-year period was primarily due to favorable fair value
adjustments. Operating profit decreased in the first and second quarters of 2014 compared to the respective prior-year periods as 2013
included operating profit from Other Businesses, which were sold later in the year, and the current year periods included unfavorable fairvalue adjustments. The second quarter of 2013 also included a gain on sale of our Corporate Services business.
Net earnings (loss) – Net earnings in the fourth quarter of 2014 compared to a net loss in the fourth quarter of 2013. The increase was due tohigher operating profit, and a 2013 income tax charge of $425 million associated with the consolidation of the ownership and managementof our technology and content assets, an initiative which is part of our simplification program. Net earnings in the third quarter of 2014 werelower than the third quarter of 2013 as higher operating profit was more than offset by higher financing costs and income tax expense. Net
earnings in the second quarter of 2014 were comparable to the prior-year period as lower operating profit was offset by lower tax expense,
which reflected a 2013 income tax charge of $161 million associated with the consolidation of the ownership and management of ourtechnology and content assets. The net loss in the first quarter of 2013 was primarily due to $235 million of income tax charges also in
connection with our consolidation of technology and content assets.

Page 75

Thomson Reuters Annual Report 2014

Consolidated Financial Statements
MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS
The management of Thomson Reuters Corporation (the “Company”) is responsible for the accompanying consolidated financial statements
and other information included in this annual report. The financial statements have been prepared in conformity with International Financial
Reporting Standards, as issued by the International Accounting Standards Board, using the best estimates and judgments of management,
where appropriate. Information presented elsewhere in this annual report is consistent with that in the financial statements.
The Company’s board of directors is responsible for ensuring that management fulfills its responsibilities in respect of financial reporting andinternal control. The Audit Committee of the board of directors meets periodically with management and the Company’s independent
auditor to discuss auditing matters and financial reporting issues. In addition, the Audit Committee approves the interim consolidated
financial statements and recommends to the board of directors the approval of the annual consolidated financial statements and the annual
appointment of the independent auditor. The board of directors has approved the information contained in the accompanying consolidated
financial statements.

James C. Smith
President and Chief Executive Officer

Stephane Bello
Executive Vice President and Chief Financial Officer

March 13, 2015

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is a process that was designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards(“IFRS”), as issued by the International Accounting Standards Board. Internal control over financial reporting includes those policies andprocedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of Thomson Reuters Corporation (the “Company”); (ii) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company arebeing made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material
effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, orthat the degree of compliance with the policies and procedures may deteriorate.
Management conducted an evaluation of the effectiveness of its system of internal control over financial reporting based on the frameworkand criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of theTreadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was
effective as of December 31, 2014.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2014 has been audited byPricewaterhouseCoopers LLP, independent registered public accounting firm, as stated in its report which appears herein.

James C. Smith
President and Chief Executive Officer
March 13, 2015

Page 76

Stephane Bello
Executive Vice President and Chief Financial Officer

Thomson Reuters Annual Report 2014

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of Thomson Reuters Corporation:
In our opinion, the accompanying consolidated statement of financial position and the related consolidated statements of income,comprehensive income, changes in equity and cash flow present fairly, in all material respects, the financial position of Thomson Reuters
Corporation and its subsidiaries at December 31, 2014 and December 31, 2013, and the results of their operations and their cash flows foreach of the two years in the period ended December 31, 2014 in conformity with International Financial Reporting Standards as issued by theInternational Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework (2013) issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for thesefinancial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our
responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on
our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (UnitedStates) and Canadian generally accepted auditing standards. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control overfinancial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial
reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis forour opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance ofrecords that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, orthat the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP
New York, New YorkMarch 13, 2015

Page 77

Thomson Reuters Annual Report 2014

THOMSON REUTERS CORPORATIONCONSOLIDATED INCOME STATEMENT(millions of U.S. dollars, except per share amounts)

Revenues
Operating expenses
Depreciation
Amortization of computer software
Amortization of other identifiable intangible assets
Other operating gains, net
Operating profit
Finance costs, net:
Net interest expense
Other finance costs
Income before tax and equity method investments
Share of post-tax earnings in equity method investments
Tax expense
Earnings from continuing operations
Earnings from discontinued operations, net of tax
Net earnings
Earnings attributable to:Common shareholders
Non-controlling interests
Earnings per share:
Basic earnings per share:
From continuing operations
From discontinued operations
Basic earnings per share
Diluted earnings per share:
From continuing operations
From discontinued operations
Diluted earnings per share
The related notes form an integral part of these consolidated financial statements.

Page 78

NOTES

5

6

7
7
8
9

YEAR ENDED DECEMBER 31,
2014
2013

12,607(9,209)
(397)
(778)
(647)
969
2,545

12,702(9,554)
(416)
(773)
(641)
198
1,516

(442)
(85)
2,018
3
(62)
1,959
1,959

(460)
(53)
1,003
20
(848)
175
10
185

1,909
50

137
48

$2.36
$2.36

$0.15
0.01
$0.16

$2.35
$2.35

$0.15
0.01
$0.16

10

Thomson Reuters Annual Report 2014

THOMSON REUTERS CORPORATIONCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(millions of U.S. dollars)

Net earnings
Other comprehensive (loss) income:Cash flow hedges adjustments to earnings
Foreign currency translation adjustments to earnings
Items that may be subsequently reclassified to net earnings:
Cash flow hedges adjustments to equity
Foreign currency translation adjustments to equity
Item that will not be reclassified to net earnings:
Net remeasurement (losses) gains on defined benefit pension plans, net of tax(1)Other comprehensive (loss) income
Total comprehensive income

NOTES

1,959

185

18
6

236
(941)

160
(4)

18

(201)
(627)
(828)

(121)
(112)
(233)

26

(333)
(1,866)
93

279
202
387

43
50

339
48

Comprehensive income for the period attributable to:Common shareholders
Non-controlling interests(1)

The related tax benefit (expense) was $175 million and $(142) million for the years ended December 31, 2014 and 2013, respectively.

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

Page 79

YEAR ENDED DECEMBER 31,
2014
2013

Thomson Reuters Annual Report 2014

THOMSON REUTERS CORPORATIONCONSOLIDATED STATEMENT OF FINANCIAL POSITION(millions of U.S. dollars)

NOTES

ASSETSCash and cash equivalents
Trade and other receivables
Other financial assets
Prepaid expenses and other current assets
Current assets
Computer hardware and other property, net
Computer software, net
Other identifiable intangible assets, net
Goodwill
Other financial assets
Other non-current assets
Deferred tax
Total assets

11
12
18
13
14
15
16
17
18
19
22

LIABILITIES AND EQUITY
Liabilities
Current indebtedness
Payables, accruals and provisions
Deferred revenue
Other financial liabilities
Current liabilities
Long-term indebtedness
Provisions and other non-current liabilities
Other financial liabilities
Deferred tax
Total liabilities

18
20
18
18
21
18
22

EquityCapitalRetained earnings
Accumulated other comprehensive loss
Total shareholders’ equity
Non-controlling interests
Total equity
Total liabilities and equity

23

Contingencies (note 29)
The related notes form an integral part of these consolidated financial statements.
These consolidated financial statements were approved by the Company’s board of directors on March 4, 2015.

David Thomson
Director

Page 80

James C. Smith
Director

DECEMBER 31,
2014
2013

1,018
1,810
161
657
3,646
1,182
1,529
7,124
16,403127536
50
30,597

1,316
1,751
183
650
3,900
1,291
1,622
7,890
16,871
192
583
90
32,439

534
2,443
1,355
265
4,597
7,576
2,171
161
1,433
15,938

596
2,624
1,348
193
4,761
7,470
1,759
102
1,917
16,00910,157
7,168(3,147)
14,178481
14,65930,597

10,347
7,303(1,614)
16,036394
16,43032,439

Thomson Reuters Annual Report 2014

THOMSON REUTERS CORPORATIONCONSOLIDATED STATEMENT OF CASH FLOW

(millions of U.S. dollars)

Cash provided by (used in):
OPERATING ACTIVITIESNet earnings
Adjustments for:
Depreciation
Amortization of computer software
Amortization of other identifiable intangible assets
Net gains on disposals of businesses and investments
Release of accumulated foreign currency translation adjustments
Deferred tax
Other
Pension contributions
Changes in working capital and other items
Net cash provided by operating activities
INVESTING ACTIVITIESAcquisitions, net of cash acquired
Proceeds from disposals of businesses and investments, net of taxes paid
Capital expenditures, less proceeds from disposals
Other investing activities
Investing cash flows from continuing operations
Investing cash flows from discontinued operations
Net cash used in investing activities
FINANCING ACTIVITIES
Proceeds from debt
Repayments of debt
Repurchases of common shares
Dividends paid on preference shares
Dividends paid on common shares
Other financing activities
Net cash used in financing activities(Decrease) increase in cash and bank overdrafts
Translation adjustments
Cash and bank overdrafts at beginning of period
Cash and bank overdrafts at end of period
Cash and bank overdrafts at end of period comprised of:Cash and cash equivalents
Bank overdrafts
Supplemental cash flow information is provided in note 27.
Interest paid
Interest received
Income taxes (paid) received:
Within operating activities
Within investing activities
Total income taxes paid

NOTES

YEAR ENDED DECEMBER 31,
2014
2013

1,959

185

397
778
647
(9)
(931)
(273)
230
(432)
2,366

416
773
641
(195)
434
289
(500)
60
2,103

28

(167)
14
(968)
50
(1,071)(1,071)(1,241)550(1,004)67(1,628)
6(1,622)

18
18
23

1,480
(1,120)(1,023)(3)(1,033)129(1,570)
(275)
(22)
1,312
1,015

3,268
(2,240)(400)(3)(1,038)
(19)
(432)
49
(13)
1,276
1,312

1,018
(3)
1,015

1,316
(4)
1,312

(389)
3

(414)
9

(271)
14
(257)

(236)
(98)
(334)

6
22
27
26
27

23
24

11

Interest paid is reflected as an operating cash flow and is net of debt-related hedges. Interest received is reflected as either an operating or investing cash flow
depending on the nature of the underlying transaction.
Income taxes paid and received are reflected as either an operating or investing cash flow depending on the nature of the underlying transaction.
The related notes form an integral part of these consolidated financial statements.

Page 81

Thomson Reuters Annual Report 2014

THOMSON REUTERS CORPORATIONCONSOLIDATED STATEMENT OF CHANGES IN EQUITY

UnrecognizedForeign(loss) gain on
currency
cash flowtranslation
hedgesadjustments

Total
accumulated
othercomprehensive
loss (“AOCL”)

Noncontrollinginterests

Total(millions of U.S. dollars)Statedshare
capitalContributed Total
surpluscapitalBalance, December 31, 2013

10,170177

10,347

7,303

(17)

(1,597)(1,614)394

16,430Comprehensive income (loss)(1)

-

-

-

1,576

35

(1,568)(1,533)50

93

Change in ownership interest of
subsidiary(2)

-

-

-

51

-

-

-

85

136

Distributions to non-controllinginterests

-

-

-

-

-

-

(48)

(48)

Dividends declared on preference
shares

-

-

-

(3)

-

-

-

-

(3)

Dividends declared on commonshares---(1,066)

-

-

-

-

(1,066)

Retainedearnings-

Shares issued under Dividend
Reinvestment Plan (“DRIP”)

33

-

33

-

-

-

-

-

33

Repurchases of common shares(3)

(356)

-

(356)

(693)

-

-

-

-

(1,049)Stock compensation plans

129

4

133

-

-

-

-

-

Balance, December 31, 2014

9,976

181

10,157

7,168

18(3,165)(3,147)481(millions of U.S. dollars)Statedshare
capitalContributed
surplusTotal
capitalRetainedearnings

Unrecognized(loss) gain on
cash flow
hedgesForeigncurrencytranslation
adjustments

Balance, December 31, 2012

10,201

170

10,371

8,311

(56)

(1,481)

Comprehensive income (loss)(1)

-

-

-

416

39

Change in ownership interest of
subsidiary(2)

-

-

-

(10)

Distributions to non-controllinginterests

-

-

-

-

Dividends declared on preference
shares---Dividends declared on commonshares---Shares issued under DRIP
Repurchases of common shares(3)133
14,659Noncontrollinginterests

Total(1,537)353

17,498

(116)

(77)

48

387

-

-

-

34

24

-

-

-

(41)

(41)

(3)

-

-

-

-

(3)

(1,077)

-

-

-

-

(1,077)

AOCL

39

-

39

-

-

-

-

-

39

(166)

-

(166)

(334)

-

-

-

-

(500)

Stock compensation plans

96

7

103

-

-

-

-

-

103

Balance, December 31, 2013

10,170177

10,347

7,303

(17)

(1,597)(1,614)394

16,430(1)

Retained earnings for the year ended December 31, 2014 includes net remeasurement losses on defined benefit pension plans of $333 million, net of tax (2013 – gains of $279
million, net of tax).

(2) Includes cash contribution of $120 million for the year ended December 31, 2014 (2013 – $24 million) by the non-controlling interests. See note 24.
(3) Includes stated share capital of $35 million and retained earnings of $80 million for the year ended December 31, 2014 related to the Company’s pre-defined share repurchaseplan (2013 – stated share capital of $32 million and retained earnings of $68 million). See note 23.

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

Page 82

Thomson Reuters Annual Report 2014

THOMSON REUTERS CORPORATION
Notes to Consolidated Financial Statements(unless otherwise stated, all amounts are in millions of U.S. dollars)Note 1: Summary of business and significant accounting policies
General business description
Thomson Reuters Corporation (the “Company” or “Thomson Reuters”) is an Ontario, Canada corporation with common shares listed on theToronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”) and Series II preference shares listed on the TSX. The Company
provides intelligent information to businesses and professionals. Its offerings combine industry expertise with innovative technology todeliver critical information to decision makers.
These consolidated financial statements were approved by the Company’s board of directors on March 4, 2015.
Basis of preparation
These consolidated financial statements were prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued
by the International Accounting Standards Board (“IASB”), on a going concern basis, under the historical cost convention, as modified by therevaluation of financial assets and financial liabilities (including derivative instruments) at fair value.
The preparation of financial statements in accordance with IFRS 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 a higher degree of judgment orcomplexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 2.
References to “$” are to U.S. dollars, references to “C$” are to Canadian dollars, references to “£” are to British pounds sterling andreferences to “€” are to Euros.
Changes in accounting policies
The following pronouncements and related amendments were adopted on January 1, 2014 and did not have a material impact on the
consolidated financial statements as of December 31, 2014 and 2013 or for the years then ended.
IAS 32Financial Instruments:
Presentation

IAS 36

Impairment of Assets

IAS 39Financial Instruments:
Recognition andMeasurement
LeviesInternational Financial
ReportingInterpretations
Committee (“IFRIC”) 21

IAS 32 has been amended to clarify certain requirements for offsetting financial
assets and liabilities. The amendment addresses the meaning and application of
the concepts of legally enforceable right of set-off and simultaneous realizationand settlement.
IAS 36 has been amended to require disclosure of the recoverable amount of anasset (including goodwill) or a cash generating unit when an impairment loss has
been recognized or reversed in the period. When the recoverable amount is basedon fair value less costs of disposal, the valuation techniques and key assumptions
must also be disclosed.
IAS 39 has been amended to allow hedge accounting to continue when, as aresult of laws or regulations, the counterparty to a derivative designated asa hedging instrument is replaced by a central clearing counterparty.
IFRIC 21 addresses the recognition requirements for a liability to pay a levy
imposed by a government, other than an income tax. The interpretation requires
the recognition of a liability when the event, identified by the legislation,
triggering the obligation to pay the levy occurs.

Principles of consolidation
The consolidated financial statements of the Company include the accounts of all of its subsidiaries.
Subsidiaries
Subsidiaries are entities over which the Company has control, where control is defined as the power to govern financial and operating
policies. Generally, the Company has a shareholding of more than 50% of the voting rights in its subsidiaries. The effect of potential voting
rights that are currently exercisable are considered when assessing whether control exists. Subsidiaries are fully consolidated from the date
control is transferred to the Company, and are de-consolidated from the date control ceases.

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The acquisition method of accounting is used to account for the acquisition of subsidiaries as follows:
Š

Š
Š
Š

Š

Š

acquisition cost is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the dateof exchange, excluding transaction costs which are expensed as incurred;
identifiable assets acquired and liabilities assumed are measured at their fair values at the acquisition date;the excess of acquisition cost over the fair value of the identifiable net assets acquired is recorded as goodwill;
if the acquisition cost is less than the fair value of the net assets acquired, the fair value of the net assets is re-assessed and any remaining
difference is recognized directly in the consolidated income statement;
contingent consideration is measured at fair value on the acquisition date, with subsequent changes in the fair value recorded through theconsolidated income statement when the contingent consideration is a financial liability. Contingent consideration is not re-measured
when it is an equity instrument; andupon gaining control in a step acquisition, the existing ownership interest is re-measured to fair value through the consolidated income
statement.

Intercompany transactions between subsidiaries are eliminated in consolidation.
Non-controlling interests represent third party shareholdings in a subsidiary controlled by the Company. Non-controlling interests aremeasured at fair value on the date acquired plus their proportionate share of subsequent changes in equity. Transactions with third party
shareholders, including purchases and sales of ownership interests, that do not result in a change of control in a subsidiary are recorded
directly in equity. Sales of ownership interests that result in a loss of control of the subsidiary are recorded in earnings.
Equity method investees
Equity method investees are entities over which the Company has significant influence, but not control. Generally, the Company has ashareholding of between 20% and 50% of the voting rights in its equity method investees. Investments in equity method investees areaccounted for using the equity method as follows:
Š
Š
Š

Š

Š

investments are initially recognized at cost;equity method investees include goodwill identified on acquisition, net of any accumulated impairment loss;
the Company’s share of post-acquisition profits or losses is recognized in the consolidated income statement and is adjusted against thecarrying amount of the investments;
when the Company’s share of losses equals or exceeds its interest in the investee, including unsecured receivables, the Company does notrecognize further losses, unless it has incurred obligations or made payments on behalf of the investee; andgains on transactions between the Company and its equity method investees are eliminated to the extent of the Company’s interest inthese entities, and losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Joint ventures
Joint ventures are entities over which the Company has joint control with one or more unaffiliated entities. Joint ventures are accounted forusing the equity method as described under equity method investees.
The accounting policies of subsidiaries, equity method investees and joint ventures were changed where necessary to ensure consistency withthe policies adopted by the Company.
Operating segments
The Company’s operating segments are organized around the markets it serves and are reported in a manner consistent with the internalreporting provided to the chief operating decision-maker (“CODM”). The Chief Executive Officer has authority for resource allocation andassessment of the Company’s performance and is therefore the CODM.
Foreign currency
The consolidated financial statements are presented in U.S. dollars, which is the Company’s presentation currency.
The financial statements of each of the Company’s subsidiaries are measured using the currency of the primary economic environment inwhich the subsidiary operates (the “functional currency”). Foreign currency transactions are translated into the functional currency using theexchange rates prevailing at the dates of the transaction. Foreign exchange gains and losses resulting from the settlement of suchtransactions as well as from the translation of monetary assets and liabilities not denominated in the functional currency of the subsidiary,
are recognized in the consolidated income statement, except for qualifying cash flow hedges which are deferred in accumulated othercomprehensive loss in shareholders’ equity.

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Foreign exchange gains and losses arising from the following are presented in the consolidated income statement within “Finance costs, net”:ŠŠŠborrowings and related hedging instruments;
cash and cash equivalents; andintercompany loans that are not permanent in nature.

Assets and liabilities of entities with functional currencies other than U.S. dollars are translated to U.S. dollars at the period end rates of
exchange, and the results of their operations are translated at average rates of exchange for the period. The resulting translation
adjustments are included in accumulated other comprehensive loss in shareholders’ equity. Additionally, foreign exchange gains and losses
related to certain intercompany loans that are permanent in nature are included in accumulated other comprehensive loss.
Upon loss of control, significant influence or joint control of the applicable entity, accumulated foreign exchange gains and losses, including
those arising from settlement of intercompany loans previously considered permanent in nature, are recycled from accumulated othercomprehensive loss to “Other operating gains, net” within the consolidated income statement.
All other foreign exchange gains and losses are presented in the consolidated income statement within “Operating expenses.”
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, net of estimated returns, discounts, value-added and othersales taxes, and after eliminating intercompany sales. The Company bases its estimates on historical results, taking into consideration thetype of customer, the type of transaction and the specifics of each arrangement.
Revenue from the rendering of services is recognized when the following criteria are met:ŠŠŠŠ

the amount of revenue can be measured reliably;
the stage of completion can be measured reliably;
the receipt of economic benefits is probable; andcosts incurred and to be incurred can be measured reliably.

Revenue from the sale of goods is recognized when the following criteria are met:ŠŠŠŠ

the risks and rewards of ownership, including managerial involvement, have transferred to the buyer;
the amount of revenue can be measured reliably;
the receipt of economic benefits is probable; andcosts incurred or to be incurred can be measured reliably.

In addition to the above general principles, the Company applies the following specific revenue recognition policies:
Subscription-based products, including software term licenses
Subscription revenues from sales of products and services that are delivered under a contract over a period of time are recognized on astraight-line basis over the term of the subscription. Where applicable, usage fees above a base period fee are recognized as services aredelivered. Subscription revenue received or receivable in advance of the delivery of services or publications is included in deferred revenue.
Multiple component arrangements
When a single sales transaction requires the delivery of more than one product or service (multiple components), the revenue recognition
criteria are applied to the separately identifiable components. A component is considered to be separately identifiable if the product orservice delivered has stand-alone value to that customer and the fair value associated with the product or service can be measured reliably.
The amount recognized as revenue for each component is the fair value of the element in relation to the fair value of the arrangement as awhole.
Installation or implementation services
Certain arrangements include installation or implementation services. Consulting revenues from these arrangements are accounted forseparately from software or subscription revenue if the services have stand-alone value to that customer and the amount attributed to theservices can be measured reliably. If the services do not qualify for separate accounting, they are recognized together with the related
software or subscription revenue.
Sales involving third parties
Revenue from sales of third party vendor products or services is recorded net of costs when the Company is acting as an agent between thecustomer and vendor and recorded gross when the Company is a principal to the transaction.

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Other service contracts
For service or consulting arrangements, revenues are recognized as services are performed, generally based on hours incurred relative tototal hours expected to be incurred.
Employee future benefits
For defined benefit pension plans and other post-employment benefits, the net periodic pension expense is actuarially determined on anannual basis by independent actuaries using the projected unit credit method. The determination of benefit expense requires assumptions
such as the discount rate, which is used to measure service cost, benefit plan obligations and the net interest income (expense) on the net
benefit plan assets (obligations). Other significant assumptions include expected mortality, the expected rate of increase with respect tofuture compensation and pension payments as well as the expected healthcare cost trend rate. Actual results will differ from results which
are estimated based on assumptions. Past service cost arising from plan amendments is recognized immediately in the consolidated income
statement.
The asset or liability recognized in the consolidated statement of financial position is the present value of the defined benefit obligation at
the end of the reporting period less the fair value of plan assets. The present value of the defined benefit obligation is determined bydiscounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency inwhich the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability. All actuarial gains
and losses that arise in calculating the present value of the defined benefit obligation and the fair value of plan assets are recognized
immediately in retained earnings and included in the consolidated statement of comprehensive income. For funded plans, surpluses arerecognized only to the extent that the surplus is considered recoverable. Recoverability is primarily based on the extent to which theCompany can unilaterally reduce future contributions to the plan.
Payments to defined contribution plans are expensed as incurred, which is as the related employee service is rendered.
Share-based compensation plans
The Company operates a number of equity-settled and cash-settled share-based compensation plans under which it receives services from
employees as consideration for equity instruments of the Company or cash payments based on the value of equity instruments of theCompany.
For equity-settled share-based compensation, expense is based on the grant date fair value of the awards expected to vest over the vesting
period. For cash-settled share-based compensation, the expense is determined based on the fair value of the liability at the end of thereporting period until the award is settled. The expense is recognized over the vesting period, which is the period over which all of thespecified vesting conditions are satisfied. For awards with graded vesting, the fair value of each tranche is recognized over its respective
vesting period. At the end of each reporting period, the Company re-assesses its estimates of the number of awards that are expected to vest
and recognizes the impact of the revisions in the consolidated income statement.
Termination benefits
Termination benefits are generally payable when an employee is terminated before the normal retirement date or accepts voluntary
redundancy. The associated charges are recognized when the Company can no longer withdraw the offer of termination benefits as follows:ŠŠ

Voluntary redundancy – recognized the earlier of when the employee accepts the offer and when the Company is restricted fromwithdrawing the offer; orInvoluntary termination – recognized when the Company has communicated to the affected employees a termination plan that is unlikely
to change describing (a) the type and amount of benefits, (b) the number, job classifications or functions and locations of employees to beterminated and (c) the plan’s expected completion date.

Profit sharing and bonus plans
Liabilities for profit sharing and bonuses are recognized based on a formula that takes into consideration various financial metrics after
certain adjustments. The Company recognizes an accrual where contractually obliged or where there is a past practice that has created aconstructive obligation to make such compensation payments.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and investments with an original maturity at the date of purchase of
three months or less.

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Trade receivables
Trade receivables are amounts due from customers from providing services or the sale of goods in the ordinary course of business. Trade
receivables are classified as current assets if payment is due within one year or less. Trade receivables are recognized initially at fair value
and subsequently measured at amortized cost, less impairment.
The Company maintains an allowance for doubtful accounts and sales adjustments to provide for impairment of trade receivables. The
expense relating to doubtful accounts is included within “Operating expenses” in the consolidated income statement. Revenues are recorded
net of sales adjustments.
Computer hardware and other property
Computer hardware and other property are recorded at cost and depreciated on a straight-line basis over their estimated useful lives asfollows:
Computer hardware

3-5 years

Buildings and building improvements

5-40 years

Furniture, fixtures and equipment

3-10 years

Residual values and useful lives are reviewed at the end of each reporting period and adjusted if appropriate.
Intangible assets
Computer software
Certain costs incurred in connection with the development of software to be used internally or for providing services to customers arecapitalized once a project has progressed beyond a conceptual, preliminary stage to that of application development. Development costs
that are directly attributable to the design and testing of identifiable and unique software products controlled by the Company arerecognized as intangible assets when the following criteria are met:
Š
Š
Š
Š
Š
Š

it is technically feasible to complete the software product so that it will be available for use;management intends to complete the software product and use or sell it;
there is an ability to use or sell the software product;
it can be demonstrated how the software product will generate probable future economic benefits;adequate technical, financial and other resources to complete the development and to use or sell the software product are available; andthe expenditure attributable to the software product during its development can be reliably measured.

Costs that qualify for capitalization include both internal and external costs, but are limited to those that are directly related to the specificproject. The capitalized amounts, net of accumulated amortization, are included in “Computer software, net” in the consolidated statementof financial position. These costs are amortized over their expected useful lives, which range from three to five years. Amortization expense isincluded in “Amortization of computer software” in the consolidated income statement. Residual values and useful lives are reviewed at theend of each reporting period and adjusted if appropriate.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the identifiable net assets of theacquired subsidiary or equity method investee at the date of acquisition. Goodwill is tested annually for impairment and carried at cost lessaccumulated impairment losses. Gains and losses on the disposal of an entity include an allocation of goodwill.
Other identifiable intangible assets
Upon acquisition, identifiable intangible assets are recorded at fair value and are carried at cost less accumulated amortization.
Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives as follows:
Trade names

2-27 years

Customer relationships

2-30 years

Databases and content

2-30 years

Other

2-30 years

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Residual values and useful lives are reviewed at the end of each reporting period and adjusted if appropriate.
Impairment
Impairments are recorded when the recoverable amount of assets is less than their carrying amount. The recoverable amount is the higher ofan asset’s fair value less costs of disposal or its value in use. Impairment losses, other than those relating to goodwill, are evaluated forpotential reversals when events or changes in circumstances warrant such consideration.
Intangible assets
The carrying values of all intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that theircarrying amounts may not be recoverable. Additionally, the carrying values of identifiable intangible assets with indefinite lives and goodwill
are tested annually for impairment. Specifically, for purposes of impairment testing:ŠŠ

the fair value of trade names is determined using an income approach, specifically the relief from royalties method; andgoodwill is allocated to cash-generating units (“CGUs”) or groups of CGUs based on the level at which management monitors it, which is
not higher than an operating segment. Goodwill is allocated to those CGUs or groups of CGUs that are expected to benefit from thebusiness combination in which the goodwill arose.

Non-financial assets
The carrying value of a non-financial asset with a finite life, such as computer hardware or software, is assessed for impairment whenever
events or changes in circumstances indicate that its carrying value may not be recoverable. In addition, a long-lived asset that is notamortized, such as an equity investment, is subject to annual or more frequent impairment assessments. An asset is assessed for impairment
at the lowest level that the asset generates cash inflows that are largely independent of cash inflows from other assets. The lowest level may
be an individual asset or a group of assets that form a CGU.
Disposal of long-lived assets and discontinued operations
Long-lived assets are classified as held for sale if the carrying amount will be recovered principally through a sale transaction rather than throughcontinued use and such sale is considered highly probable. The criteria for classification as held for sale include a firm decision by management or
the board of directors to dispose of a business or a group of selected assets, an active marketing plan, and the expectation that such disposal will
be completed within a 12 month period. Assets held for sale are measured at the lower of their carrying amounts or their fair value less costs ofdisposal and are no longer depreciated. Assets held for sale are classified as discontinued operations if the operations and cash flows can beclearly distinguished, operationally and for financial reporting purposes from the rest of the Company and they:ŠŠŠ

represent a separate major line of business or geographical area of operations;are part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; orare a subsidiary acquired exclusively with a view to resale.

Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Trade payables arerecognized initially at fair value and subsequently measured at amortized cost, and are classified as current liabilities if payment is due
within one year or less.
Provisions
Provisions represent liabilities of the Company for which the amount or timing is uncertain. Provisions are recognized when the Company has
a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle theobligation, and the amount can be reliably estimated. Provisions are not recognized for future operating losses. Provisions are measured at
the present value of the expected expenditures to settle the obligation using a discount rate that reflects current market assessments of thetime value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest
expense.
Indebtedness
Debt is recognized initially at fair value, net of transaction costs incurred. Debt is subsequently stated at amortized cost with any difference
between the proceeds (net of transactions costs) and the redemption value recognized in the consolidated income statement over the term of
the debt using the effective interest method. Where a debt instrument is in a fair value hedging relationship, a fair value adjustment is madeto its carrying value to reflect hedged risk. Interest on indebtedness is expensed as incurred unless capitalized for qualifying assets inaccordance with IAS 23, Borrowing Costs.

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Debt is classified as a current liability unless the Company has an unconditional right to defer settlement for at least 12 months after the endof the reporting period.
LeasesLeases are classified as either operating or finance, based on the substance of the transaction at inception of the lease. Classification is reassessed if the terms of the lease are changed.
Operating lease
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Payments under an operating lease (net of any incentives received from the lessor) are recognized in the consolidated income statement on astraight-line basis over the period of the lease.
Finance lease
Leases in which substantially all the risks and rewards of ownership are transferred to the Company are classified as finance leases. Assets
meeting finance lease criteria are capitalized at the lower of the present value of the related lease payments or the fair value of the leased asset atthe inception of the lease. Minimum lease payments are apportioned between the finance charge and the liability. The finance charge is allocatedto each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Financial assets
Purchases and sales of financial assets are recognized on the settlement date, which is the date on which the asset is delivered to or by theCompany. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or were transferred andthe Company has transferred substantially all risks and rewards of ownership. Financial assets are classified in the following categories at
the time of initial recognition based on the purpose for which the financial assets were acquired:
Financial assets at fair value through the consolidated income statement
ŠClassification
Financial assets are classified at fair value through the consolidated income statement if acquired principally for the purpose of selling inthe short-term, such as financial assets held for trading, or if so designated by management. Assets in this category principally include
embedded derivatives.

Š

Recognition and measurement
Financial assets carried at fair value through the consolidated income statement are initially recognized, and subsequently carried, at fairvalue, with changes recognized in the consolidated income statement. Transaction costs are expensed.

Loans and receivables
ŠClassification
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
They are included in current assets, except for those with maturities greater than 12 months after the end of the reporting period, which
are classified as non-current assets. Assets in this category include “Trade and other receivables” and “Cash and cash equivalents” andare classified as current assets in the consolidated statement of financial position.

Š

Recognition and measurement
Loans and receivables are initially recognized at fair value plus transaction costs and subsequently carried at amortized cost using theeffective interest method.

Available-for-sale financial assets
ŠClassification
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the othercategories. They are included in other non-current financial assets unless management intends to dispose of the investment within 12
months of the end of the reporting period. Included within this category are investments in entities over which the Company does not havecontrol, joint control or significant influence.

Š

Recognition and measurement
Investments are initially recognized at fair value plus transaction costs and are subsequently carried at fair value with changes recognizedin other comprehensive income. Upon sale or impairment, the accumulated fair value adjustments are recycled from accumulated othercomprehensive loss to “Other operating gains, net” within the consolidated income statement.

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Offsetting financial instruments
Financial assets and liabilities are offset and reported net in the consolidated statement of financial position when there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or to simultaneously realize the asset andsettle the liability.
Impairment of financial assets
At the end of each reporting period, the Company assesses whether there is objective evidence that a financial asset is impaired.
Impairments are measured as the excess of the carrying amount over the fair value and are recognized in the consolidated income
statement.
Derivative financial instruments and hedging
Derivatives are initially recognized at fair value on the date a contract is entered into and are subsequently re-measured at their fair value.
The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and thenature of the item being hedged.
The Company documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its
risk management objectives and strategy for undertaking various hedging transactions. The Company also documents its assessment, bothat hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsettingchanges in fair values or cash flows of hedged items.
Non-performance risk, including the Company’s own credit risk, is considered when determining the fair value of financial instruments.
The Company designates certain derivatives as either:Š

Fair value hedges
These are hedges of the fair value of recognized assets, liabilities or a firm commitment. Changes in the fair value of derivatives that aredesignated as fair value hedges are recorded in the consolidated income statement together with any changes in the fair value of thehedged asset or liability that are attributable to the hedged risk.

Š

Cash flow hedges
These are hedges of highly probable forecast transactions. The effective portion of changes in the fair value of derivatives that aredesignated as a cash flow hedge is recognized in other comprehensive income. The gain or loss relating to the ineffective portion isrecognized immediately in the consolidated income statement. Additionally:— amounts accumulated in other comprehensive income are recycled to the consolidated income statement in the period when thehedged item will affect earnings;— when a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gainor loss in other comprehensive income remains in other comprehensive income and is recognized when the forecast transaction is
ultimately recognized in the consolidated income statement; and— when a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in other comprehensive
income is immediately recognized in the consolidated income statement.

Derivatives that do not qualify for hedge accounting
Certain derivative instruments, while providing effective economic hedges, are not designated as hedges for accounting purposes. Changes
in the fair value of any derivatives that are not designated as hedges for accounting purposes are recognized within “Other finance (costs)
income” or “Operating expenses” in the consolidated income statement consistent with the underlying nature and purpose of the derivative
instruments. Settlements from these instruments are classified within “Net cash provided by operating activities” in the consolidated
statement of cash flow.
Embedded derivatives
An embedded derivative is a feature within a contract where the cash flows associated with that feature behave in a similar fashion to a
stand-alone derivative. The Company has embedded foreign currency derivatives in certain revenue and purchase contracts where thecurrency of the contract is different from the functional or local currencies of the parties involved. These derivatives are accounted for as
separate instruments and are measured at fair value at the end of the reporting period using forward exchange market rates. Changes intheir fair values are recognized within “Operating expenses” in the consolidated income statement.

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Taxation
Tax expense comprises current and deferred income tax. Tax is recognized in the consolidated income statement except to the extent it
relates to items recognized in other comprehensive income or directly in equity.
Current tax
Current tax expense is based on the results for the period as adjusted for items that are currently not taxable or not deductible. Current tax is
calculated using tax rates and laws that were enacted or substantively enacted at the end of the reporting period. Management periodicallyevaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. Provisions
are established where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax
Deferred tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities andtheir carrying amounts in the consolidated statement of financial position. Deferred tax is calculated using tax rates and laws that have beenenacted or substantively enacted at the end of the reporting period, and which are expected to apply when the related deferred income tax
asset is realized or the deferred income tax liability is settled.
Deferred tax liabilities:ŠŠŠare generally recognized for all taxable temporary differences;
are recognized for taxable temporary differences arising on investments in subsidiaries, associates and joint ventures, except where thereversal of the temporary difference can be controlled and it is probable that the difference will not reverse in the foreseeable future or
create a tax liability; andare not recognized on temporary differences that arise from goodwill that is not deductible for tax purposes.

Deferred tax assets:ŠŠare recognized to the extent it is probable that taxable profits will be available against which the deductible temporary differences can beutilized; andare reviewed at the end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will beavailable to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are not recognized in respect of temporary differences that arise on initial recognition of assets andliabilities acquired other than in a business combination.
Note 2: Critical accounting estimates and judgments
The preparation of financial statements requires management to make estimates and judgments about the future. Estimates and judgments
are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed
to be reasonable under the circumstances. Accounting estimates will, by definition, seldom equal the actual results. The following discussion
sets forth management’s:ŠŠ

most critical estimates and assumptions in determining the value of assets and liabilities; andmost critical judgments in applying accounting policies.

Critical accounting estimates and assumptions
Allowance for doubtful accounts and sales adjustments
The Company must make an assessment of whether accounts receivable are collectible from customers. Accordingly, management
establishes an allowance for estimated losses arising from non-payment and other sales adjustments, taking into consideration customer
creditworthiness, current economic trends and past experience. If future collections differ from estimates, future earnings would be affected.
At December 31, 2014, the combined allowances were $118 million, or 6%, of the gross trade accounts receivable balance of $1.9 billion. An
increase to the reserve based on 1% of accounts receivable would have decreased pre-tax earnings by approximately $19 million for the year
ended December 31, 2014.
Computer software
Computer software represented $1.5 billion of total assets in the consolidated statement of financial position at December 31, 2014. A
significant portion of ongoing expenditures relate to software that is developed as part of electronic databases, delivery systems and internal
infrastructures, and, to a lesser extent, software sold directly to customers. As part of the software development process, management must
estimate the expected period of benefit over which capitalized costs should be amortized. The basis of these estimates includes the timing oftechnological obsolescence, competitive pressures, historical experience and internal business plans for the use of the software. Due torapidly changing technology and the uncertainty of the software development process itself, future results could be affected if
management’s current assessment of its software projects differs from actual performance.

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Other identifiable intangible assets and goodwill
Other identifiable intangible assets and goodwill represented $7.1 billion and $16.4 billion, respectively, of total assets in the consolidated
statement of financial position at December 31, 2014. Other identifiable intangible assets and goodwill arise out of business combinations.
Business combinations are accounted for under the acquisition method of accounting, which requires the Company to identify and attributevalues and estimated lives to the intangible assets acquired based on their estimated fair value. These determinations involve significant
estimates and assumptions regarding cash flow projections, economic risk and weighted-average cost of capital. The excess of acquisition
cost over the fair value of identifiable net assets acquired is recorded as goodwill.
Subsequent to acquisition, the Company tests other identifiable intangible assets and goodwill for impairment as required. The outcome ofthese tests is highly dependent on management’s latest estimates and assumptions regarding cash flow projections, economic risk andweighted-average cost of capital.
If future events or results differ adversely from the estimates and assumptions made at acquisition or as part of subsequent impairment
tests, the Company could record increased amortization or impairment charges in the future.
See note 17 for discussion of the annual impairment testing of goodwill.
Employee future benefits
The Company sponsors defined benefit plans providing pension and other post-employment benefits to covered employees. The
determination of benefit expense associated with employee future benefits requires assumptions such as the discount rate, which is used tomeasure service cost, benefit plan obligations and the net interest income (expense) on the net benefit plan assets (obligations). Othersignificant assumptions include expected mortality, the expected rate of increase with respect to future compensation and pension payments
as well as the expected healthcare cost trend rate. Because the determination of the cost and obligations associated with employee future
benefits requires the use of various assumptions, there is measurement uncertainty inherent in the actuarial valuation process. Actual results
will differ from results which are estimated based on assumptions. See note 26 for further details including an estimate of the impact on the
consolidated financial statements from changes in the most critical assumptions.
Income taxes
The Company computes an income tax provision in each of the jurisdictions in which it operates. These income tax provisions include
amounts that are based upon the Company’s estimates and assumptions regarding prices and values used to record intercompany
transactions. Actual amounts of income tax expense only become final upon filing and acceptance of the tax return by the relevant
authorities, which occurs subsequent to the issuance of the financial statements. Additionally, estimation of income taxes includes
evaluating the recoverability of deferred tax assets based on an assessment of the ability to use the underlying future tax deductions before
they expire against future taxable income. The assessment is based upon existing tax laws and estimates of future taxable income. To theextent estimates differ from the final tax return, earnings would be affected in a subsequent period.
In interim periods, the income tax provision is based on estimates of full-year earnings by jurisdiction. The average annual effective income
tax rates are re-estimated at each interim reporting date. To the extent that forecasts differ from actual results, adjustments are recorded insubsequent periods. See note 9 for further details on income taxes including a discussion on sensitivity.
Critical judgments in applying accounting policies
Revenue recognition
As described in note 1, the Company assesses the criteria for the recognition of revenue related to arrangements that have multiple
components. These assessments require judgment by management to determine if there are separately identifiable components as well as
how to allocate the total price among the components. Deliverables are accounted for as separately identifiable components if they can beunderstood without reference to the series of transactions as a whole. In concluding whether components are separately identifiable,
management considers the transaction from the customer’s perspective. Among other factors, management assesses whether the service orgood is sold separately by the Company in the normal course of business or whether the customer could purchase the service or good
separately. With respect to the allocation of price among components, management uses its judgment to assign a fair value to eachcomponent. As evidence of fair value, management looks to such items as the price for the component when sold separately, renewal rates
for specific components and prices for a similar product sold separately.

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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 aresult, the Company maintains provisions for uncertain tax positions that it believes appropriately reflect its risk. These provisions are madeusing the Company’s best estimates of the amount expected to be paid based on a qualitative assessment of all relevant factors. 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. Where the final outcome of these tax-related matters is different from theamounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made.
Note 3: Recent accounting pronouncements
Certain pronouncements were issued by the IASB or IFRIC that are effective for accounting periods beginning on or after January 1, 2015.
Many of these updates are not applicable or consequential to the Company and have been excluded from the discussion below.
Pronouncements and related amendments effective for annual accounting periods beginning January 1, 2015 or later:
IAS 19

Employee Benefits

IAS 19 amendment, Defined Benefit Plans: Employee Contributions, clarifies the accounting forcontributions from employees. Employee contributions, which are often a fixed percentage ofsalary, may be recognized as a reduction in the service cost component of pension expense in thesame period the employee provides services. However, if the employee contribution rate varies
based on years of service, the reduction in expense must be allocated over future service periods,
mirroring the service cost recognition pattern. The amendment is effective January 1, 2015 and is
not anticipated to have a material impact on the consolidated financial statements.

IFRS 15

Revenue fromContracts with
Customers

IFRS 15 is the culmination of a joint project between the IASB and the Financial AccountingStandards Board, the accounting standard setter in the U.S., to create a single revenue standard.
The core principle of IFRS 15 is that an entity recognizes revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The new standard moves awayfrom a revenue recognition model based on an earnings process to an approach that is based ontransfer of control of a good or service to a customer. Additionally, the new standard requires
disclosures as to the nature, amount, timing and uncertainty of revenues and cash flows arisingfrom contracts with customers. IFRS 15 is effective on January 1, 2017, and shall be applied
retrospectively to each period presented or retrospectively as a cumulative-effect adjustment as ofthe date of adoption. The Company is assessing the impact of the new standard on its
consolidated financial statements.

IFRS 9Financial Instruments

IFRS 9 replaces IAS 39 – Financial Instruments: Recognition and Measurement. The new standard
addresses classification and measurement, impairment and hedge accounting.
Classification and measurement
The new standard requires the classification of financial assets based on business model and cash
flow characteristics measured at either (a) amortized cost; (b) fair value through profit or loss; or(c) fair value through other comprehensive income. For financial liabilities, the standard retains
most of the IAS 39 requirements, but where the fair value option is taken, the part of a fair valuechange due to an entity’s own credit risk is recorded in other comprehensive income rather than
the income statement.
Impairment
Under the forward looking impairment model, expected credit losses are recognized as soon as afinancial asset is originated or purchased, rather than waiting for a trigger event to record a loss.
Hedge accounting
The new standard more closely aligns hedge accounting with an entity’s risk management
activities. Specifically, the new standard (a) no longer requires the use of a specific quantitative
threshold to determine if the hedging relationship is highly effective in order to qualify for hedge
accounting; (b) removes restrictions that prevented some economically rational hedging
strategies from qualifying for hedge accounting; and (c) allows purchased options, forwards andnon-derivative financial instruments to be hedging instruments in applicable circumstances.
IFRS 9 is effective on January 1, 2018 and shall be applied retrospectively to each period
presented, subject to the various transition provisions within IFRS 9. The Company is assessing
the impact of the new standard on its consolidated financial statements.

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Thomson Reuters Annual Report 2014

Note 4: Segment information
The Company is organized as four reportable segments reflecting how the businesses are managed: Financial & Risk, Legal, Tax &Accounting and Intellectual Property & Science. The accounting policies applied by the segments are the same as those applied by theCompany. The reportable segments offer products and services to target markets as described below.
Financial & Risk
The Financial & Risk segment is a provider of critical news, information and analytics, enabling transactions and bringing together financial
communities. Financial & Risk also provides regulatory and operational risk management solutions.
Legal
The Legal segment is a provider of critical online and print information, decision tools, software and services that support legal,
investigation, business and government professionals around the world.
Tax & Accounting
The Tax & Accounting segment is a provider of integrated tax compliance and accounting information, software and services for
professionals in accounting firms, corporations, law firms and government.
Intellectual Property & Science
The Intellectual Property & Science segment is a provider of comprehensive intellectual property and scientific information, decision support
tools and services that enable the lifecycle of innovation for governments, academia, publishers, corporations and law firms to discover,protect and commercialize new ideas and brands.
The Company also reports “Corporate & Other” and “Other Businesses”. These categories neither qualify as a component of anotherreportable segment nor as a separate reportable segment.
ŠŠ

Corporate & Other includes expenses for corporate functions, certain share-based compensation costs and the Reuters News business,
which is comprised of the Reuters News Agency and consumer publishing; andOther Businesses is an aggregation of businesses that have been or are expected to be exited through sale or closure that did not qualify
for discontinued operations classification. See note 6.
YEAR ENDED DECEMBER 31,
2014
2013

Revenues
Financial & Risk
Legal
Tax & AccountingIntellectual Property & Science
Corporate & Other (includes Reuters News)
Eliminations

6,538
3,379
1,370
1,011
319
(12)

6,648
3,351
1,243
982
331
(12)

Revenues from ongoing businesses
Other Businesses(1)12,605
2

12,543
159

Consolidated revenues

12,607

12,702

Operating profit
Segment operating profit
Financial & Risk
Legal
Tax & AccountingIntellectual Property & Science
Corporate & Other (includes Reuters News)

951
958
295
239
(305)

816
903
257
225
(320)

Underlying operating profit
Other Businesses(1)Fair value adjustments (see note 5)
Amortization of other identifiable intangible assets
Other operating gains, net

2,138
(6)
91
(647)
969

1,881
64
14
(641)
198

Consolidated operating profit

2,545

1,516

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Thomson Reuters Annual Report 2014

DEPRECIATION AND AMORTIZATION ADDITIONS TO CAPITAL ASSETS(2)OF COMPUTER SOFTWAREAND GOODWILL

Financial & Risk
Legal
Tax & AccountingIntellectual Property & Science
Reportable segments
Corporate & Other (includes
Reuters News)
Other Businesses(1)Total

YEAR ENDED DECEMBER 31,
2014
2013
640
641
280
291
122
121
89
79
1,131
1,132
44
1,175

57
1,189

YEAR ENDED DECEMBER 31,
2014
2013
349
636
172
1,024
224
167
58
144
803
1,971
377
1,180

396
2
2,369

TOTAL ASSETSDECEMBER 31,
2014
2013
16,67817,669
6,507
6,754
2,207
2,194
1,767
1,796
27,15928,4133,438
30,5974,010
1632,439Geographic Information
NON-CURRENT ASSETS(3)REVENUES(by country of origin)
U.S.

YEAR ENDED DECEMBER 31,
2014
2013
6,869
6,891

DECEMBER 31,
2014
2013
14,347
14,717

345

372

1,283

1,358

Other
Americas (North America, Latin America, South America)

320
7,534

311
7,574

450
16,080428
16,503

U.K.

1,955

1,786

3,884

4,207

Other
EMEA (Europe, Middle East and Africa)

1,822
3,777

1,950
3,736

4,828
8,712

5,371
9,578

Asia Pacific
Total

1,296
12,607

1,392
12,702

1,680
26,472

1,837
27,918Canada (country of domicile)(1)

The 2013 period includes Investor Relations, Public Relations and Multimedia Solutions business (“Corporate Services”), a provider of tools and solutions that help companies
communicate with investors and media, which was sold in the second quarter of 2013.

(2) Capital assets include computer hardware and other property, computer software and other identifiable intangible assets.
(3) Non-current assets are primarily comprised of computer hardware and other property, computer software, other identifiable intangible assets, goodwill and investments inequity method investees.

In accordance with IFRS 8, Operating Segments, the Company discloses information about its reportable segments based upon the measuresused by management in assessing the performance of those reportable segments.
ŠŠ

Results from the Reuters News business and Other Businesses are excluded from reportable segments as they do not qualify as acomponent of the Company’s four reportable segments, nor as a separate reportable segment.
The Company uses segment operating profit to measure the operating performance of its reportable segments.
— The costs of centralized support services such as technology, editorial, real estate, accounting, procurement, legal, and humanresources are allocated to each segment based on usage or other applicable measures. However, certain technology and real estate
assets associated with these allocations are not included within the reportable segments, but remain in Corporate & Other.
— Segment operating profit is defined as operating profit before (i) amortization of other identifiable intangible assets; (ii) otheroperating gains and losses; (iii) certain asset impairment charges; (iv) corporate-related items; and (v) fair value adjustments.
Management uses this measure because the Company does not consider these excluded items to be controllable operating activities
for purposes of assessing the current performance of the reportable segments.
— While in accordance with IFRS, the Company’s definition of segment operating profit may not be comparable to that of other companies.

Š

Š
Š
Š

Management also uses revenues from ongoing businesses and underlying operating profit to measure its consolidated performance,
which includes Reuters News. Revenues from ongoing businesses are revenues from reportable segments and Corporate & Other, lesseliminations.
Underlying operating profit is comprised of operating profit from reportable segments and Corporate & Other.
Other Businesses are excluded from both measures as they are not fundamental to the Company’s strategy.
Revenues from ongoing businesses and underlying operating profit do not have standardized meaning under IFRS, and therefore may not
be comparable to similar measures of other companies.

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Thomson Reuters Annual Report 2014

Revenue by Classes of Similar Products or Services
The following table sets forth revenues by major type:
YEAR ENDED DECEMBER 31,
2014
2013
Electronic, software & services
Print

11,624983

11,627
1,075

Total

12,607

12,702

Note 5: Operating expenses
The components of operating expenses include the following:
YEAR ENDED DECEMBER 31,
2014
2013
Salaries, commissions and allowances(1)Share-based payments
Post-employment benefits

4,651
73
257

5,034
51
290

Total staff costs
Goods and services(2)Data
Telecommunications
Real estate
Fair value adjustments(3)

4,981
2,268
1,009
569
473
(91)

5,375
2,128
997
582
486
(14)

Total operating expenses

9,209

9,554

(1) Salaries, commissions and allowances include severance costs associated with the Company’s simplification program initiatives.
(2) Goods and services include professional fees, consulting and outsourcing services, contractors, selling and marketing, and other general and administrative costs.
(3) Fair value adjustments primarily represent mark-to-market impacts on embedded derivatives and certain share-based awards.

Operating expenses include costs incurred in the ordinary course of business. Operating expenses included charges associated with theCompany’s simplification program initiatives of $135 million and $357 million in 2014 and 2013, respectively. The charges were largely
comprised of severance, and recorded primarily within Financial & Risk. Of these charges, $87 million and $134 million in 2014 and 2013,
respectively, were classified as restructuring charges in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets, (seenote 21).
Note 6: Other operating gains, net
In 2014, other operating gains, net, of $969 million were primarily comprised of a $931 million gain related to the release of accumulated
foreign currency translation adjustments from shareholders’ equity. The gain was triggered by the loss of control of a subsidiary, which
involved the settlement of an intercompany loan that was considered permanent. This transaction was part of the Company’s plan to reduce
the number of subsidiaries in its legal organizational structure, which is one of its simplification program initiatives. Additionally, theCompany recorded a $36 million gain from the sale of a Canadian wholly owned subsidiary to a company affiliated with The Woodbridge
Company Limited (“Woodbridge”) (see note 30).
In 2013, other operating gains, net, of $198 million, were primarily comprised of a $136 million gain from the sale of the Corporate Services
business, a $44 million gain from the sale of the Company’s 50% joint venture interest in Omgeo (see note 30), and a $29 million gain fromthe sale of a Canadian wholly owned subsidiary to a company affiliated with Woodbridge (see note 30), which were partially offset by $21
million of acquisition-related costs.

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Thomson Reuters Annual Report 2014

Note 7: Finance costs, net
The components of finance costs, net, include interest expense (income) and other finance costs (income) as follows:
YEAR ENDED DECEMBER 31,
2014
2013
Interest expense:
Debt
Derivative financial instruments - hedging activities
Other
Fair value (gains) losses on financial instruments:
Debt
Cash flow hedges, transfer from equity (see note 18)
Fair value hedges (see note 18)
Net foreign exchange gains on debt

389
(4)
21

402
(12)
12

(5)
225
13
(233)

(5)
168
15
(178)

Net interest expense - debt and other
Net interest expense - pension and other post-employment benefit plans
Interest income

406
39
(3)

402
62
(4)

Net interest expense

442

460

YEAR ENDED DECEMBER 31,
2014
2013
Net losses due to changes in foreign currency exchange rates
Net gains on derivative instruments
Losses from redemption of debt securities
Other

92
(54)
47
-

36
(16)
35
(2)

Other finance costs

85

53

Net losses due to changes in foreign currency exchange rates
Net 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 were principally comprised of amounts relating to foreign exchange contracts (see note 18).
Losses from redemption of debt securities
Losses from redemption of debt securities represent costs incurred for early extinguishment of debt securities. The 2014 losses included $35
million (2013 – $35 million) in debt premiums and $12 million (2013 – nil) related to the termination of the associated hedging instruments(see note 18).
Note 8: Share of post-tax earnings in equity method investments
The components of share of post-tax earnings in equity method investments are as follows:
YEAR ENDED DECEMBER 31,
2014
2013
Share of post-tax earnings in equity method investees
Impairment in equity method investee
Share of post-tax (losses) earnings in joint ventures

4
(1)

10
(5)
15

Share of post-tax earnings in equity method investments

3

20Page 97

Thomson Reuters Annual Report 2014

An impairment of $5 million was recorded in 2013 with respect to one equity method investee due to weaker than expected performance. In
2013, the Company’s share of post-tax earnings in equity method investments included its former joint venture in Omgeo, a provider of trade
management services, which was sold in the fourth quarter of 2013.
Note 9: Taxation
The components of tax expense for 2014 and 2013 are as follows:
YEAR ENDED DECEMBER 31,
2014
2013
Current tax expense (benefit):
Continuing operations
Discontinued operations

335
-

414
(3)

Deferred tax expense (benefit):
Continuing operations
Discontinued operations

(273)
-

434
-

62
-

848
(3)

Total tax expense (benefit):
Continuing operations
Discontinued operations

Taxes on items recognized in “Other comprehensive (loss) income” or directly in equity in 2014 and 2013 are as follows:
YEAR ENDED DECEMBER 31,
2014
2013
Deferred tax (benefit) expense on actuarial (losses) gains on defined benefit plans
Deferred tax benefit on share-based payments
Current tax benefit on share-based payments

(175)
(5)
(3)

142
(12)
(3)

Factors affecting tax expense for 2014 and 2013
In 2013, the Company recorded tax charges of $836 million in connection with intercompany sales of certain technology and content assets
between wholly owned subsidiaries. These transactions were part of the Company’s consolidation of the ownership and management of its
technology and content assets and were a component of its simplification program initiatives. The intercompany gains that arose from thesetransactions were eliminated in consolidation. The Company recorded $604 million of these tax charges with an offsetting deferred tax
liability, as the majority of the tax associated with these transactions is expected to be paid over seven years from the date of thetransactions, in varying annual amounts, in conjunction with the repayment of interest-bearing notes that were issued as consideration in thetransactions. The Company was not able to recognize deferred tax assets in the acquiring subsidiaries, principally because the tax basis is notdeductible in those subsidiaries. Approximately $232 million of the tax charges were immediately payable, and therefore no deferred tax
liability was established.
Additionally, in 2013, the Company recorded tax charges of $55 million in connection with the sales of its Corporate Services business, its
50% interest in Omgeo, and other smaller businesses (see note 6). In 2014, the Company recorded tax charges of $39 million to write-off
deferred tax assets in certain foreign subsidiaries that are not expected to generate sufficient taxable profits to realize the deferred tax
assets.

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Thomson Reuters Annual Report 2014

Below is a reconciliation of income taxes calculated at the Canadian corporate tax rate of 26.4% to the tax expense for 2014 and 2013:
YEAR ENDED DECEMBER 31,
2014
2013
Income before tax
Income before tax multiplied by the standard rate of Canadian corporate tax of 26.4%
Effects of:Income taxes recorded at rates different from the Canadian tax rate
Tax losses for which no benefit is recognized
Consolidation of certain technology and content assets
Net non-taxable gains on disposal of businesses and impairments of investments
Net non-taxable foreign exchange and other gains(1)Withholding taxes
Impact of non-controlling interests
Other adjustments related to prior years
Impact of tax law changes
Provision for uncertain tax positions
Derecognition of tax assets that arose in prior years
Other differences
Total tax expense on continuing operations
(1)

2,021
534

1,023
270

(414)
238
(12)
(357)
36
(13)
(11)
(10)
23
39
9

(365)
204
836
(8)
(104)
28
(13)
(31)
(15)
36
10

62

848

In 2014, includes the impact of the $931 million non-taxable gain related to the release of accumulated foreign currency translation adjustments from shareholders’ equity (seenote 6).

The Company’s effective income tax rate on earnings from continuing operations was 3.1% in 2014 (2013 – 82.9%). A 1% increase in theeffective income tax rate would have increased 2014 income tax expense and decreased net earnings by approximately $20 million. The
effective income tax rate in both years (excluding the tax charge of $836 million in 2013) was lower than the Canadian corporate income tax
rate due significantly to the lower tax rates and differing tax rules applicable to certain of the Company’s operating and financing
subsidiaries outside Canada. The Company’s effective tax rate depends on the laws of numerous countries and the provisions of multiple
income tax conventions between various countries in which the Company operates. Because of the requirements of income tax accounting
under IAS 12, Income Taxes, income tax expense can differ significantly from taxes paid in any reporting period. The Company paid income
taxes from continuing operations on its world-wide business of $257 million in 2014 (2013 – $336 million).
At December 31, 2014, the consolidated statement of financial position included current taxes receivable of $81 million (2013 – $154 million)
within “Prepaid expenses and other current assets” and current taxes payable of $60 million (2013 – $90 million) within “Payables, accruals
and provisions”.
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 shares outstanding during the period plus vested deferred share units (“DSUs”). DSUs
represent common shares that certain employees have elected to receive in the future upon vesting of share-based compensation awards orin lieu of cash compensation.
Diluted earnings per share was calculated using the denominator of the basic calculation described above adjusted to include the potentiallydilutive effect of outstanding stock options and time-based restricted share units (“TRSUs”). The denominator is: (1) increased by the total
number of additional common shares that would have been issued by the Company assuming exercise of all stock options with exercise
prices below the average market price for the period; and (2) decreased by the number of shares that the Company could have repurchased if
it had used the assumed proceeds from the exercise of stock options to repurchase them on the open market at the average share price forthe year.

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Thomson Reuters Annual Report 2014

Earnings used in determining consolidated earnings per share and earnings per share from continuing operations are as follows:
YEAR ENDED DECEMBER 31,
2014
2013

Net earnings
Less: Earnings attributable to non-controlling interests
Dividends declared on preference shares
Earnings used in consolidated earnings per share
Less: Earnings from discontinued operations, net of tax
Earnings used in earnings per share from continuing operations

1,959
(50)
(3)
1,906
1,906

185
(48)
(3)
134
(10)
124

Earnings used in determining earnings per share from discontinued operations are the earnings from discontinued operations as reported
within the consolidated income statement.
The weighted-average number of shares outstanding, as well as a reconciliation of the weighted-average number of shares outstanding usedin the basic earnings per share computation to the weighted-average number of shares outstanding used in the diluted earnings per sharecomputation, is presented below:
YEAR ENDED DECEMBER 31,
2014
2013

Weighted-average number of shares outstanding
Vested DSUs
Basic
Effect of stock options and TRSUs
Diluted807,307,267 827,662,582
589,800
573,349
807,897,067 828,235,931
3,033,031
2,748,746
810,930,098 830,984,677

There were 2,810,205 and 5,463,033 share-based compensation awards outstanding at December 31, 2014 and 2013, respectively, where theexercise price was greater than the average market price. Accordingly, these awards were anti-dilutive, and therefore excluded from thediluted earnings per share computation.
Note 11: Cash and cash equivalents
DECEMBER 31,
2014
2013

Cash
Cash at bank and on hand
Cash equivalents
Short-term deposits
Money market accounts
Commercial paper investments
Cash and cash equivalents

633

428

19
365
1
1,018

191
644
53
1,316

At each of December 31, 2014 and 2013, $105 million of total cash and cash equivalents was held in subsidiaries which have regulatory
restrictions, contractual restrictions or operate in countries where exchange controls and other legal restrictions apply and are therefore notavailable for general use by the Company.
Note 12: Trade and other receivables
DECEMBER 31,
2014
2013

Trade receivables
Less: allowance for doubtful accounts
Less: allowance for sales adjustments
Net trade receivables
Other receivables
Trade and other receivables

Page 100

1,910
(61)
(57)
1,792
18
1,810

1,850
(61)
(56)
1,733
18
1,751

Thomson Reuters Annual Report 2014

The aging of gross trade receivables at each reporting date was as follows:
DECEMBER 31,
2014
2013

Current
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due >91 days
Balance at December 31

1,104
320
122
154
210
1,910

1,129
267
105
138
211
1,850

Allowance for doubtful accounts
The change in the allowance for doubtful accounts was as follows:
DECEMBER 31,
2014
2013

Balance at beginning of year
Charges
Write-offs
Acquisitions
Translation and other, net
Balance at end of year

61
49
(48)
1
(2)
61

63
57
(61)
2
61

The Company is exposed to normal credit risk with respect to its accounts receivable and maintains provisions for credit losses. The potential
for such losses is mitigated because there is no significant exposure to any single customer and because customer creditworthiness isevaluated before credit is extended.
Note 13: Prepaid expenses and other current assets
DECEMBER 31,
2014
2013

Inventory
Prepaid expenses
Other current assets
Prepaid expenses and other current assets
Other current assets were principally comprised of receivables for current income taxes and value added taxes.

Page 101

37
407
213
657

46
390
214
650

Thomson Reuters Annual Report 2014

Note 14: Computer hardware and other property
Computer hardware and other property consist of the following:Land, buildings
and building
improvements

Furniture,
fixtures andequipment

2,266

1,266

567

4,099

222
5
(9)
(450)
(1)
(23)
2,010

31
2
(1)
(15)
55
1,338

49
1
(2)
(25)
(1)
(41)
548

302
8
(12)
(490)
(2)
(9)
3,896

238
(5)
(24)
(1)
(60)
2,158

34
(1)
(10)
(38)
1,323

55
2
(2)
(4)
(17)
582

327
2
(8)
(38)
(1)
(115)
4,063

(1,810)
(260)
8
450
1
6
(1,605)
(249)
4
24
1
48
(1,777)

(509)
(102)
1
15
(47)
(642)
(92)
1
10
16
(707)

(364)
(54)
2
25
33
(358)
(56)
1
4
12
(397)

(2,683)
(416)
11
490
1
(8)
(2,605)
(397)
6
38
1
76
(2,881)

405
381

696
616

190
185

1,291
1,182

Computerhardware
Cost:
December 31, 2012
Additions:
Capital expenditures
Acquisitions
Disposals
Removed from service
Transfer to assets held for saleTranslation and other, net
December 31, 2013
Additions:
Capital expenditures
Acquisitions
Disposals
Removed from service
Transfer to assets held for saleTranslation and other, net
December 31, 2014
Accumulated depreciation:
December 31, 2012
Current year depreciation
Disposals
Removed from service
Transfer to assets held for saleTranslation and other, net
December 31, 2013
Current year depreciation
Disposals
Removed from service
Transfer to assets held for saleTranslation and other, net
December 31, 2014
Carrying amount:December 31, 2013
December 31, 2014

Total

Fully depreciated assets are retained in cost and accumulated depreciation accounts until such assets are removed from service. Proceedsfrom disposals are netted against the related assets and the accumulated depreciation and included within “Operating profit” in the
consolidated income statement.

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Thomson Reuters Annual Report 2014

Note 15: Computer software
Computer software consists of the following:
Cost:
Balance at January 1,
Additions:Internally developed
Purchased
Acquisitions
Removed from service
Transfer to assets held for saleTranslation and other, net
Balance at December 31,
Accumulated amortization:
Balance at January 1,
Current year amortization
Removed from service
Transfer to assets held for saleTranslation and other, net
Balance at December 31,
Carrying amount at December 31:

2014

2013

5,403

4,750

623
58
16
(7)
(13)
(53)
6,027

581
92
70
(69)
(1)
(20)
5,403

(3,781)
(778)
7
9
45
(4,498)(3,091)
(773)
69
1
13
(3,781)

1,529

1,622

Fully amortized assets are retained in cost and accumulated amortization accounts until such assets are removed from service. Proceedsfrom disposals are netted against the related assets and the accumulated amortization and included within “Operating profit” in the
consolidated income statement.

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Thomson Reuters Annual Report 2014

Note 16: Other identifiable intangible assets
INDEFINITEUSEFUL LIFEFINITE USEFUL LIFE

Trade
names

Trade
names

Customer
relationships

Databases
andcontent

Other

Total

Cost:
December 31, 2012
Acquisitions
Transfer to assets held for saleTranslation and other, net

2,646
-

336
31
(3)
2

6,678
335
(14)
(44)

862
76
(4)

1,923
5
(11)

12,445
447
(17)
(57)

December 31, 2013

2,646

366

6,955

934

1,917

12,818

-

2
(6)

46
(11)
(256)

8
(1)
(22)

1
(51)

57
(12)
(335)

2,646

362

6,734

919

1,867

12,528

Accumulated amortization:
December 31, 2012
Current year amortization
Transfer to assets held for saleTranslation and other, net

-

(197)
(41)
3
(1)

(2,360)
(465)
5
19

(468)
(68)
3

(1,286)(67)(5)(4,311)(641)
8
16December 31, 2013

-

(236)

(2,801)(533)(1,358)(4,928)Current year amortization
Transfer to assets held for saleTranslation and other, net

-

(42)
6

(470)
8
107

(70)
1
13

(65)
36

(647)
9
162

December 31, 2014

-

(272)

(3,156)(589)(1,387)(5,404)

Carrying amount:December 31, 2013
December 31, 2014

2,646
2,646

130
90

4,154
3,578

401
330

559
480

7,890
7,124

Acquisitions
Transfer to assets held for saleTranslation and other, net
December 31, 2014

The carrying amount of other identifiable intangible assets at December 31, 2014 includes the following:ŠŠ$1,939 million of indefinite-lived trade names and $2,208 million of customer relationships, which have a remaining amortization periodof seven to nine years, each arising from the Reuters acquisition; and$707 million of indefinite-lived trade names associated with West.

The following table shows the carrying amount of indefinite-lived identifiable intangible assets by cash-generating unit:
DECEMBER 31,
CASH-GENERATING UNIT

2014

2013

Financial & Risk
West(1)

1,939
707

1,939
707

Total indefinite-lived intangible assets

2,646

2,646

(1)

A CGU within the Legal segment which uses the West brand name.

Based on the strength, long history and expected future use of these trade names, they have been assigned indefinite lives.

Page 104

Thomson Reuters Annual Report 2014

The Company performed its annual test for impairment of indefinite-lived intangible assets in the fourth quarter of 2014. The key
assumptions used in performing the impairment test were as follows:
CASH-GENERATING UNITPERPETUALGROWTH RATE(1)Financial & Risk
West
(1)

3.0%
2.0%

DISCOUNT
PRE-TAXRATE ROYALTY RATE
9.3%
7.5%

3.5%
5.0%

The perpetual growth rate is applied to the final year of cash flow projections.

The estimated fair value less costs of disposal of the trade names exceeded their carrying values by more than 65% for each of the trade
names. As a result, no impairment was recorded. Based on sensitivity analysis, no reasonably possible change in assumptions would cause
the carrying amount of any trade name to exceed its recoverable amount.
Note 17: Goodwill
The following table presents goodwill for the years ended December 31, 2014 and 2013:
2014

2013

Cost:
Balance at January 1,
Acquisitions
Transfer to assets held for saleTranslation and other, net

19,842
97
(2)
(694)

19,241
869
(123)
(145)

Balance at December 31,

19,243

19,842

Accumulated impairment:
Balance at January 1,
Translation(2,971)131(2,990)19

Balance at December 31,(2,840)(2,971)

Carrying amount at December 31:

16,403

16,871

Impairment test of goodwill
The Company performed its annual goodwill impairment test in the fourth quarter of 2014. The estimated fair value less costs of disposal of
all CGUs exceeded their carrying values. As a result, no goodwill impairment was recorded.
The Company has four CGUs to which goodwill is allocated and monitored by management. The following table shows the carrying amountof goodwill by CGU:
CASH-GENERATING UNIT

DECEMBER 31,
2014
2013

Financial & Risk
Legal
Tax & AccountingIntellectual Property & Science

10,181
3,730
1,420
1,072

10,614
3,787
1,376
1,094

Total goodwill

16,403

16,871Page 105

Thomson Reuters Annual Report 2014

The valuation techniques, significant assumptions and sensitivities applied in the goodwill impairment test are described below. The
selection and application of valuation techniques and the determination of significant assumptions requires judgment.
Valuation Techniques
As with previous impairment tests, the recoverable value of each CGU was based on fair value less costs of disposal, using a weightedaverage of the income approach and market approach. IFRS 13, Fair Value Measurement, defines fair value as a market-based measurement
rather than an entity-specific measurement. Therefore, the fair value of the CGU must be measured using the assumptions that market
participants would use rather than those related specifically to the Company. In particular, the discount and tax rates used in the income
approach reflect market participant assumptions. To calculate these market participant assumptions, publicly available data was gatheredfrom companies operating in businesses similar to each CGU, which includes key competitors. As certain inputs to the valuation are notbased on observable market data, the recoverable value of each CGU is categorized in Level 3 of the fair value measurement hierarchy.
Income approach
The income approach is predicated upon the value of the future cash flows that a business will generate. The Company used the discounted
cash flow (“DCF”) method, which involves projecting cash flows and converting them into a present value equivalent through discounting.
The discounting process uses a rate of return that is commensurate with the risk associated with the business and the time value of money.
This approach requires assumptions about revenue growth rates, operating margins, capital expenditures, tax rates and discount rates.
Market approach
The market approach assumes that companies operating in the same industry will share similar characteristics and that company values willcorrelate to those characteristics. Therefore, a comparison of a CGU to similar companies whose financial information is publicly available
may provide a reasonable basis to estimate fair value. Under the market approach, fair value is calculated based on EBITDA multiples ofbenchmark companies comparable to the businesses in each CGU. Data for the benchmark companies was obtained from publicly available
information.
Significant Assumptions
Weighting of Valuation Techniques
The Company weighted the results of the two valuation techniques noted above, consistently applied to each CGU, as follows: 60% income
approach/40% market approach. The Company believes that given volatility in capital markets, it is appropriate to apply a heavier weighting
to the income approach.
Cash Flow Projections
Cash flow projections were based on the Company’s internal budget. The Company projected cash flows for a period of three years andapplied a perpetual growth rate thereafter, as prescribed by IAS 36, Impairment of Assets. In order to project cash flows for the three year
period, the Company considered growth in revenues and costs as well as capital expenditures. In preparing its projections, the Company
considered past experience, economic trends such as GDP growth and inflation as well as industry and market trends. The projections also
took into account the expected impact from efficiency and restructuring initiatives, new product launches, customer retention, as well as thematurity of the markets in which each business operates.
Discount Rate
The Company assumed a discount rate in order to calculate the present value of its projected cash flows. The discount rate represented aweighted-average cost of capital (“WACC”) for comparable companies operating in similar industries as the applicable CGU, based on
publicly available information. The WACC is an estimate of the overall required rate of return on an investment for both debt and equity
owners and serves as the basis for developing an appropriate discount rate. Determination of the WACC requires separate analysis of thecost of equity and the cost of debt. The cost of equity reflects the long-term risk-free interest rate associated with U.S. Treasury bonds andconsiders a risk premium based on an assessment of risks related to the projected cash flows of each CGU.
Lower discount rates were applied to CGUs whose cash flows are expected to be less volatile due to factors such as the maturity of themarket they serve and their market position. Higher discount rates were applied to CGUs whose cash flows are expected to be more volatile
due to competition, or participation in less stable geographic markets.
Tax Rate
The tax rates applied to the projections were based on effective tax rates of comparable companies operating in similar industries as theapplicable CGU, based on publicly available information, or statutory tax rates. Tax assumptions are sensitive to changes in tax laws and thejurisdictions in which profits are earned.

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Thomson Reuters Annual Report 2014

The key assumptions used in performing the impairment test, by CGU, are presented below:
CASH-GENERATING UNIT
Financial & Risk
Legal
Tax & AccountingIntellectual Property & Science(1)

PERPETUALGROWTH RATE(1)DISCOUNT
RATE

TAX
RATE

3.0%
2.5%
3.0%
3.0%

9.3%
7.5%
9.2%
8.4%

28.0%
36.5%
37.8%
37.4%

The perpetual growth rate is applied to the final year of cash flow projections.

Results and Sensitivities
The fair value for each CGU was in excess of its carrying value. The excess was 19% (approximately $3.0 billion) for Financial & Risk and over
100% for each of the other three CGUs.
For all four CGUs, the sensitivity analysis demonstrates that no reasonably possible change in the perpetual growth, discount rate or income
tax assumptions would cause the carrying amounts of any CGU to exceed its recoverable amount. For Financial & Risk, the fair value
computed under the market approach continues to contribute a significant portion of the excess fair value. A combination of reasonably
possible events, such as the EBITDA multiples of benchmark companies decreasing by 20% and a moderate rise of 100 basis points in the
discount rate, could cause Financial & Risk’s carrying amount to exceed its recoverable amount. Additionally, should the Company lower thecompound annual growth rate for its cash flow projections from the range described below, without a corresponding offset to other key
assumptions, the excess fair value would be eliminated (see “Discussion of Cash Flow Projections” below).
Discussion of Cash Flow Projections
The DCF valuation for the Financial & Risk CGU assumes that cash flow will grow at a compounded annual rate of mid-to-high single digits
from 2014 to 2017, reflecting the expected impact of restructuring initiatives and projected revenue growth. In 2014, the operating margins ofFinancial & Risk improved because of restructuring initiatives. In future periods, their operating margins are expected to continue to improvefrom further initiatives, resulting in higher cash flows. Specifically, the Company continues to reduce costs through initiatives to de-layer theorganization and decommission legacy platforms and products as customers upgrade to Thomson Reuters Eikon and Thomson Reuters
Elektron. The business expects a gradual return to positive revenue growth over the next three years, also resulting in higher cash flows.
After the specific three year projection period, the Company projects perpetual cash flow growth of 3% based on the assumption that the
Financial & Risk business will continue to expand globally, increase prices generally in line with global inflation, and expand operating
margins.
The actual 2014 cash flow performance for the Financial & Risk CGU achieved the 2014 projection included within the 2013 impairment
testing analysis, after reflecting the required market participant assumptions such as the tax rate. Similarly, in 2013, the actual 2013 cash
flow performance for the Financial & Risk CGU achieved the 2013 projection included within the 2012 impairment testing analysis, afterreflecting the required market participant assumptions such as the tax rate.
The free cash flow growth projections and certain key assumptions underlying the fair value of the Financial & Risk CGU are subject to risks
and uncertainties that could cause future results to differ materially from current expectations. Specifically, Financial & Risk could experience
delays implementing its efficiency initiatives or such initiatives could produce less benefit or cost more than originally expected. As
Financial & Risk retires platforms and certain products, while at the same time migrating customers to new products, there is likely to besome short term loss of revenue, which could be more severe or could extend for a longer period than expected. The Company’s cash flow
projections could be impacted by further deterioration in macroeconomic conditions, including potential impacts of regulation on customers,changes in customer buying patterns or competitive pressures. Such conditions could lead the Financial & Risk CGU to experience
unexpected subscription cancellations, lower transaction volumes or the inability to sustain expected price increases. The Company’s
assumption of perpetual growth could be impacted by changes in long-term outlooks for global inflation. Additionally, the discount rate, tax
rate and EBITDA multiples are based on those for comparable companies and are driven by market conditions and prevailing tax laws. In the
future, changes in these measures could cause the recoverable amount of assets for the Financial & Risk CGU to be less than their carrying
value.

Page 107

Thomson Reuters Annual Report 2014

Note 18: Financial instruments
Financial assets and liabilities
Financial assets and liabilities in the consolidated statement of financial position were as follows:

December 31, 2014

Assets/(liabilities) at
Cash,
Derivatives
fair value
Other
trade andused for Available for financial
throughotherhedging(1)earnings
liabilities
receivables
sale

Total

Cash and cash equivalents
Trade and other receivables
Other financial assets - current
Other financial assets - non-current
Current indebtedness
Trade payables (see note 20)
Accruals (see note 20)
Other financial liabilities - current(2)Long term indebtedness
Other financial liabilities - non-current

1,018
1,810
44
55
-

117
45
(24)
(34)

1
(85)
(122)

26
-

1,018
1,810
161
127
(534)
(534)
(411)
(411)
(1,578) (1,578)
(156)
(265)
(7,576) (7,576)
(5)
(161)

Total

2,927

104

(206)

26

(10,260) (7,409)

Derivatives
used forhedging(1)Available forsale

December 31, 2013

Assets/(liabilities) at
Cash,fair value
trade andthroughotherearnings
receivables

Other
financialliabilities

Total

Cash and cash equivalents
Trade and other receivables
Other financial assets - current
Other financial assets - non-current
Current indebtedness
Trade payables (see note 20)
Accruals (see note 20)
Other financial liabilities - current(2)Long term indebtedness
Other financial liabilities - non-current

1,316
1,751
38
59
-

66
27
(48)
(29)

79
80
(73)

26
-

1,316
1,751
183
192
(596) (596)(406) (406)(1,626) (1,626)
(145)
(193)
(7,470) (7,470)
(102)

Total

3,164

16

86

26

(10,243) (6,951)(1)

Derivatives are entered into with specific objectives for each transaction, and are linked to specific assets, liabilities, firm commitments or highly probable forecasted
transactions.

(2) Includes $115 million (2013 – $100 million) related to the Company’s pre-defined plan with its broker for the repurchase of up to $115 million (2013 – $100 million) of theCompany’s shares during its internal trading blackout period. See note 23.

Fair Value
The fair values of cash, trade and other receivables, trade payables and accruals approximate their carrying amounts because of the shortterm maturity of these instruments. The fair value of long term debt and related derivative instruments is set forth in the section below
entitled “Debt and Related Derivative Instruments”.

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Thomson Reuters Annual Report 2014

Fair value gains and losses from derivative financial instruments
Fair value gains and losses from derivative financial instruments recognized in the consolidated income statement and consolidated
statement of changes in equity were as follows:
YEAR ENDED DECEMBER 31,
2014
2013

Embedded derivatives
Foreign exchange contracts
Hedging instruments:
Cross currency interest rate swaps fair value hedges
Cross currency interest rate swaps cash flow hedges
Forward interest rate swaps cash flow hedges

Fair value
gain (loss)
throughearnings

Fair value gain
(loss) throughequityFair value
gain (loss)
throughearnings

Fair value gain
(loss) throughequity

88
54

-

38
8

-

(13)

-

(15)

-

(225)

35

(168)

29

1

-

8

10

(95)

35

(129)

39

The ineffective portion recognized through earnings from fair value hedges and cash flow hedges was nil for the year ended December 31,
2014 (2013 - $2 million gain).
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 primarydebt 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 values of interest rate swaps and forward contracts are estimated based upon discounted cash flows using
applicable current market rates and taking into account non-performance risk.

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Thomson Reuters Annual Report 2014

The following is a summary of debt and related derivative instruments that hedge the cash flows or fair value of the debt:
CARRYING AMOUNTFAIR VALUE

Primary debt
instruments

Derivative
instruments
liability

Primary debt
instruments

Derivative
instruments
liability

Bank and other
C$600, 5.70% Notes, due 2015
C$500, 3.369% Notes due 2019
C$750, 4.35% Notes due 2020
C$550, 3.309% Notes due 2021
$500, 0.875% Notes, due 2016
$550, 1.30% Notes, due 2017
$550, 1.65% Notes, due 2017
$1,000, 6.50% Notes, due 2018
$500, 4.70% Notes due 2019
$350, 3.95% Notes due 2021
$600, 4.30% Notes due 2023
$450, 3.85% Notes due 2024
$350, 4.50% Notes due 2043
$350, 5.65% Notes due 2043
$400, 5.50% Debentures, due 2035
$500, 5.85% Debentures, due 2040

14
518
430
644
472
498
547
547
995
498
347
594
445
340
340
393
488

85
39
76
7
-

16
529
447
699
482
497
547
547
1,134
541
367
638
455
347
405
450
584

85
39
76
7
-

Total

8,110

207

8,685

207

Current portionLong-term portion

534
7,576

85
122

As of December 31, 2014

CARRYING AMOUNTFAIR VALUE

Primary debt
instruments

Derivative
instruments(asset) liability

Primary debt
instruments

Derivative
instruments(asset) liability

24
569
564
704
469
701
497
546
994
497
347
593
340
340
393
488

(79)
45
(80)
6
22
-

28
583
597
764
470
731
501
530
1,159
540
347
595
295
352
387
503

(79)
45
(80)
6
22
-

Total

8,066

(86)

8,382

(86)

Current portionLong-term portion

596
7,470

(79)
(7)

As of December 31, 2013
Bank and other
C$600, 5.20% Notes, due 2014
C$600, 5.70% Notes, due 2015
C$750, 6.00% Notes due 2016
C$500, 3.369% Notes due 2019
C$750, 4.35% Notes due 2020
$500, 0.875% Notes, due 2016
$550, 1.30% Notes, due 2017
$1,000, 6.50% Notes, due 2018
$500, 4.70% Notes due 2019
$350, 3.95% Notes due 2021
$600, 4.30% Notes due 2023
$350, 4.50% Notes due 2043
$350, 5.65% Notes due 2043
$400, 5.50% Debentures, due 2035
$500, 5.85% Debentures, due 2040

Page 110

Thomson Reuters Annual Report 2014

The Company enters into derivative instruments to hedge its currency and interest rate risk exposures on indebtedness as follows:
Fair Value Hedges:
In December 2014, the Company terminated its only fair value hedging instrument upon maturity. The instrument was a fixed-to-floating
cross-currency interest rate swap, which swapped Canadian dollar principal and interest payments into U.S. dollars and changed interest
payments from a fixed to floating rate. At December 31, 2013, the instrument was recorded in the consolidated statement of financial
position at its fair value, which was a net asset position of $24 million.
Cash flow hedges:
Cross-currency interest rate swaps
To hedge currency risk exposures, the Company enters into fixed-to-fixed cross-currency interest rate swaps, which swap Canadian dollar
principal and interest payments into U.S. dollars. These instruments were designated as cash flow hedges and were recorded in the
consolidated statement of financial position at their fair value which was a net liability position of $207 million at December 31, 2014 (2013 –net asset position of $62 million). The details of these instruments are set forth below:
RECEIVED
2014 cash flow hedges
Canadian dollar fixed
Canadian dollar fixed
Canadian dollar fixed
Canadian dollar fixed2013 cash flow hedges
Canadian dollar fixed
Canadian dollar fixed
Canadian dollar fixed
Canadian dollar fixed
Canadian dollar fixed

PAID

HEDGED RISKYEAR OF
MATURITY

PRINCIPALAMOUNT

U.S. dollar fixed
U.S. dollar fixed
U.S. dollar fixed
U.S. dollar fixedForeign exchange
Foreign exchange
Foreign exchange
Foreign exchange

2015
2019
2020
2021

593
478
731
483

U.S. dollar fixed
U.S. dollar fixed
U.S. dollar fixed
U.S. dollar fixed
U.S. dollar fixedForeign exchange
Foreign exchange
Foreign exchange
Foreign exchange
Foreign exchange

2014
2015
2016
2019
2020

369
593
610
478
731

Forward starting interest rate swaps
To hedge variability in future interest payments on anticipated debt issuances due to changes in benchmark interest rates, the Company may
enter into fixed-to-floating forward starting interest rate swaps from time to time. These instruments are designated as cash flow hedges
and recorded in the consolidated statement of financial position at their fair value, which was not material at December 31, 2014. The detailsof these instruments are set forth below:

RECEIVED
2014 cash flow hedges
U.S dollar-floating

PAID

HEDGED RISKNOTIONAL PRINCIPALYEAR OF
MATURITYAMOUNT

U.S. dollar fixed

Forward interest rate

2025

150

There were no forward starting interest rate swaps at December 31, 2013.
Currency Risk Exposures
At each reporting date presented, substantially all indebtedness was denominated in U.S. dollars or had been swapped into U.S. dollar
obligations.
The carrying amount of debt, all of which is unsecured, was denominated in the following currencies:
BEFORE CURRENCY HEDGINGARRANGEMENTS
Canadian dollar
U.S. dollar
Euro
Other currencies

2014

2013

2014

2013

2,064
6,032
13
1

3,007
5,035
14
10

8,309
13
1

7,929
14
10

8,110

8,066

8,323

7,953

(1) Excludes fair value adjustments of $6 million and $(27) million at December 31, 2014 and 2013, respectively.

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AFTER CURRENCY HEDGINGARRANGEMENTS(1)Thomson Reuters Annual Report 2014

Interest Rate Risk Exposures
As of December 31, 2014, the Company held no fixed-to-floating cross-currency interest rate swaps (2013 – one). After taking account ofhedging arrangements, the fixed and floating rate mix of debt was as follows:

Total fixed
Total floating(1)

2014(1)AVERAGEINTEREST RATE% SHARE

2013(1)AVERAGEINTEREST RATE% SHARE

8,320
3

4.1%
3.5%

100%
0%

7,826
127

4.7%
0.9%

98%
2%

8,323

4.1%

100%

7,953

4.6%

100%

Excludes fair value adjustments of $6 million and $(27) million at December 31, 2014 and 2013, respectively.

Floating rate debt at December 31, 2014 was comprised of short-term borrowings. Floating rate debt at December 31, 2013 was primarily
comprised of long-term borrowings (after swaps) based on the London Interbank Offered Rate (“LIBOR”) and, consequently, interest rates
reset periodically.
Long-term Debt Activity
The following table provides information regarding notes that the Company issued and repaid in 2014 and 2013:
MONTH/YEAR

TRANSACTION

PRINCIPAL AMOUNT (IN MILLIONS)

Notes issued
September 2014
September 2014
November 2014
May 2013
May 2013
November 2013
November 2013
November 2013
November 2013

1.65% Notes due 20173.85% Notes due 2024
3.309% Notes due 2021
0.875% Notes due 2016
4.50% Notes due 2043
1.30% Notes due 20174.30% Notes due 2023
5.65% Notes due 2043
3.369% Notes due 2019

US$550
US$450
C$550(1)US$500
US$350
US$550
US$600
US$350
C$500(2)Notes repaid
December 2014
December 2014
July 2013
August 2013
December 2013(1)

5.20% Notes due 2014
6.00% Notes due 2016
5.95% Notes due 2013
5.25% Notes due 2013
5.70% Notes due 2014

C$600
C$750
US$750
US$250
US$800Converted to US$483 million principal amount at an interest rate of 3.28% after cross currency swap agreements that were designated as cash flow hedges.

(2) Converted to US$478 million principal amount at an interest rate of 2.85% after cross currency swap agreements that were designated as cash flow hedges.

In 2014 and 2013, proceeds from debt issuances were used for general corporate purposes, including funding early redemptions of notes, therepayment of notes upon maturity and share repurchases. In 2013, proceeds from debt were also used to fund pension contributions.
Credit Facility
The Company has a $2.5 billion syndicated credit facility agreement which matures in May 2018. The facility may be utilized to provide
liquidity for general corporate purposes (including to support its commercial paper programs). There were no borrowings under the credit
facility in 2014. In 2013, the Company borrowed and repaid $440 million under the credit facility.
The Company may request an increase, subject to approval by applicable lenders, in the lenders’ commitments up to a maximum amount of$3.0 billion.
Based on the Company’s credit ratings, the cost of borrowing under the agreement is priced at LIBOR/EURIBOR plus 100 basis points. If theCompany’s long-term debt rating was downgraded by Moody’s or Standard & Poor’s, the facility fee and borrowing costs may increase,although availability would be unaffected. Conversely, an upgrade in the Company’s ratings may reduce the facility fee and borrowing costs.

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Thomson Reuters Annual Report 2014

The Company guarantees borrowings by its subsidiaries under the credit facility. The Company must also maintain a ratio of net debt as ofthe last day of each fiscal quarter to EBITDA as defined in the credit agreement (earnings before interest, income taxes, depreciation andamortization and other modifications described in the credit agreement) for the last four quarters ended of not more than 4.5:1. The
Company was in compliance with this covenant at December 31, 2014.
Foreign Exchange Contracts
The Company uses foreign exchange contracts to manage foreign exchange risk on cash flows excluding indebtedness. Specifically, theCompany mitigates such exposure by entering into a series of exchange contracts to purchase or sell certain currencies in the future at fixedamounts. The cumulative U.S. dollar notional amounts of contracts outstanding at December 31, 2014 and 2013 were as follows:

SELL (BUY)

DECEMBER 31,
2014
2013

Euros
British pounds sterlingJapanese yen

575
(311)
124

495
(269)
114

The 2014 arrangements settle at various dates primarily over the next 12 months. The fair value of contracts outstanding at December 31,
2014 was a net asset of $41 million (2013 – net asset of $8 million).
Embedded Derivatives
The majority of embedded derivatives arise as a result of U.S. dollar pricing of vendor or customer agreements by foreign subsidiaries. At
December 31, 2014, the fair value of embedded derivatives represented a net receivable of $93 million (2013 – net receivable of $8 million).
Available for Sale Investments
At December 31, 2014 and 2013, available for sale investments were not material and are reported within “Other financial assets” – longterm in the consolidated statement of financial position.
Financial Risk Management
The Company’s operations are diverse and global in nature and, therefore expose it to a variety of financial risks, which include market risk
(primarily currency risk and interest rate risk), credit risk and liquidity risk. The Company’s risk management approach is to minimize thepotential adverse effects from these risks on its financial performance. Financial risk management is carried out by a centralized corporate
treasury group under strict guidelines and process controls. The corporate treasury group identifies, evaluates and hedges financial risks.
Relative to financial risks within the businesses, the corporate treasury group designs a risk management approach in close cooperation witheach of the operating segments. The overall approach is under the oversight of the Chief Financial Officer.
Market Risk
Currency Risk
The Company’s consolidated financial statements are expressed in U.S. dollars but a portion of its business is conducted in other currencies.
Changes in the exchange rates for such currencies into U.S. dollars can increase or decrease revenues, operating profit, earnings and thecarrying values of assets and liabilities.
Š
Š

Š

Š

changes in exchange rates between 2013 and 2014 decreased consolidated revenues by approximately 1%;
the translation effects of changes in exchange rates in the consolidated statement of financial position were net translation losses of $627
million in 2014 (2013 – net translation losses of $112 million) and recorded within accumulated other comprehensive loss in shareholders’equity;in 2014, net accumulated foreign currency translation gains of $941 million (2013 – $4 million) were recycled from equity to theconsolidated income statement (See note 6); andthe Company only uses derivative instruments to reduce foreign currency and interest rate exposures. In particular, borrowings incurrencies other than the U.S. dollar are generally converted to U.S. dollar obligations through the use of currency swap arrangements. At
each reporting date presented, substantially all indebtedness was denominated in U.S. dollars or had been swapped into U.S. dollar
obligations. Additionally, the Company enters into forward contracts to mitigate foreign exchange risk related to operating cash flows
other than the U.S. dollar.

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The table below shows the impact that a hypothetical change in foreign currency exchange rates would have on earnings as a result ofchanges in fair values of financial instruments as of December 31, 2014.

(Decrease) increase to earnings

10% WEAKENING IN FOREIGN CURRENCY VS. US$(IN MILLIONS)
Other
£
€
currencies
Total

Impact on earnings from financial assets and liabilities(1)Impact on earnings from non-permanent intercompany loans

(1)
98

(18)
(9)

1
(6)

(18)
83

Total impact on earnings

97

(27)

(5)

65

(1)

Excludes debt which has been swapped into U.S. dollar obligations.

Interest Rate Risk
The Company is exposed to fluctuations in interest rates with respect to cash and cash equivalents and long-term borrowings.
As of December 31, 2014, the majority of $1,018 million in cash and cash equivalents (2013 – $1,316 million) was comprised of interest-bearing
assets. Based on amounts as of December 31, 2014, a 100 basis point increase in interest rates would increase annual interest income byapproximately $7 million (2013 – $12 million).
Other than $3 million of short-term borrowings, the Company had no variable rate debt as of December 31, 2014.
If the U.S. dollar interest rates were to increase by 100 basis points, the gain taken to equity in relation to cash flow hedges would be $97
million (2013 – $114 million). The equivalent increase in Canadian dollar interest rates would result in a loss taken to equity in relation to cash
flow hedges of $89 million (2013 – $98 million). A corresponding decrease in respective interest rates would have an approximately equaland opposite effect.
As of December 31, 2014, the Company held no derivative financial instruments that were classified as fair value hedges.
Price Risk
The Company has no significant exposure to price risk from equity securities or commodities.
Credit Risk
Credit risk arises from cash and cash equivalents and derivative financial instruments, as well as credit exposure to customers including
outstanding receivables. The Company attempts to minimize credit exposure to various instruments as follows:ŠŠŠ

cash investments are placed with high-quality financial institutions with limited exposure to any one institution. At December 31, 2014,
approximately 98% of cash and cash equivalents were held by institutions that were rated at “A-” or higher by at least one of the major
credit rating agencies;
counterparties to derivative contracts are major investment-grade international financial institutions and exposure to any single
counterparty is monitored and limited; andthe Company assesses the creditworthiness of its customers.

No allowance for credit losses on financial assets was required as of December 31, 2014, other than the allowance for doubtful accounts (seenote 12). Further, no financial or other assets have been pledged.
The Company’s maximum exposure with respect to credit, assuming no mitigating factors, would be the aggregate of its cash and cash
equivalents $1,018 million (2013 – $1,316 million), derivative exposure $1 million (2013 – $159 million), trade and other receivables $1,810
million (2013 – $1,751 million) and other financial assets $261 million (2013 – $190 million).
Liquidity Risk
A centralized treasury function ensures that the Company maintains funding flexibility by assessing future cash flow expectations and by
maintaining sufficient capacity under its committed borrowing facilities. Cash flow estimates are based on rolling forecasts of operating,investing and financing flows. Such forecasting also takes into account borrowing limits, cash restrictions and compliance with debt
covenants.
Cash which is surplus to working capital requirements is managed by the centralized treasury function which invests it in money market
funds or bank money market deposits, choosing maturities which are aligned with expected cash needs based on the rolling forecast process.
In addition, the Company maintains commercial paper programs, which provides efficient short-term funding as it pursues acquisitions andrefinances long-term debt.

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The table below sets forth non-derivative and derivative financial liabilities by maturity based on the remaining period from December 31,
2014 and 2013, respectively, to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.
DECEMBER 31, 2014

2015

2016

2017

2018

2019

THEREAFTERTOTALLong-term debt(1)Interest payable(1)Debt-related hedges outflows(2)Debt-related hedges inflows(2)Trade payables
Accruals
Other financial liabilities

514
328
672
(589)
411
1,578
194

500
308
58
(58)
39

1,100
298
58
(58)
-

1,000
263
58
(58)
-

927
213
528
(476)
-

4,110
2,039
1,266
(1,160)
-

8,151
3,449
2,640
(2,399)
411
1,578
233

Total

3,108

847

1,398

1,263

1,192

6,255

14,063

DECEMBER 31, 2013

2014

2015

2016

2017

2018

THEREAFTERTOTALLong-term debt(1)Interest payable(1)Debt-related hedges outflows(2)Debt-related hedges inflows(2)Trade payables
Accruals
Other financial liabilities

560
373
630
(707)
406
1,626
217

557
333
698
(663)
29

1,194
280
663
(750)
-

550
261
42
(45)
-

1,000
227
42
(45)
-

4,188
2,090
1,265
(1,184)
-

8,049
3,564
3,340
(3,394)
406
1,626
246

Total

3,105

954

1,387

808

1,224

6,359

13,837(1)

Represents contractual principal and interest payments. Future cash flows have been calculated using forward foreign exchange rates.

(2) Future cash flows have been calculated using forward foreign exchange rates.

Capital Management
The Company follows a disciplined capital management strategy that remains focused on:ŠŠGrowing free cash flow and balancing the cash generated between reinvestment in the business and returns to shareholders; andMaintaining a strong balance sheet, solid credit ratings and ample financial flexibility to support the execution of the Company’s businessstrategy.

As at December 31, 2014, total capital was comprised of equity with a fair value of $32.1 billion and debt of $8.1 billion. As at December 31,
2014, cash and cash equivalents were $1.0 billion.
The Company generates sufficient cash flow to meet its current obligations as well as allowing for: (i) re-investment in the business; (ii) debt
service; and (iii) returns to shareholders in the form of dividends and share buybacks. The Company’s investment grade credit provides added
financial flexibility and the ability to borrow to support the operations and growth strategies of the business.
As of December 31, 2014, the Company’s credit ratings were as follows:

Long-term debt
Commercial paper
Trend/Outlook

MOODY’S

STANDARD & POOR’SDBRS LIMITED

FITCH

Baa2
P-2
StableBBB+
A-2
StableBBB (high)R-2 (high)StableBBB+
F2StableThe Company also monitors its capital on the basis of “net debt”. Net debt is defined as total indebtedness, including the associated fairvalue of hedging instruments, but excluding the associated unamortized transaction costs and premiums or discounts and the interestrelated fair value component of hedging instruments, less cash and cash equivalents. As the Company hedges some of its debt to reducerisk, the hedging instruments are included in the measurement of the total obligation associated with its outstanding debt. However,
because the Company generally intends to hold the debt and related hedges to maturity, it does not consider the associated fair value of theinterest-related component of hedging instrument in the measurements.

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Thomson Reuters Annual Report 2014

The following table presents the calculation of net debt:
DECEMBER 31,
2014

2013

Current indebtedness
Long-term indebtedness

534
7,576

596
7,470

Total debt
Swaps

8,110
207

8,066
(86)

Total debt after swaps
Remove fair value adjustments for hedges(1)

8,317
6

7,980
(27)

Total debt after currency hedging arrangements
Remove transaction costs and discounts included in the carrying value of debt
Less: cash and cash equivalents(2)

8,323
78
(1,018)

7,953
78(1,316)

Net debt

7,383

6,715

(1)

Represents the interest related fair value component of hedging instruments that are removed to reflect net cash outflow upon maturity.

(2) At each of December 31, 2014 and 2013, $105 million of total cash and cash equivalents was held in subsidiaries which have regulatory restrictions, contractual restrictions oroperate in countries where exchange controls and other legal restrictions apply and are therefore not available for general use by the Company.

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

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); andLevel 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:
DECEMBER 31, 2014

TOTAL
LEVEL 1LEVEL 2LEVEL 3BALANCE

-

104
58

-

104
58

-

162

-

162

-

1

-

1

Derivatives used for hedging

-

1

-

1

Available for sale investments(4)

8

18

-

26

Total assets

8

181

-

189

Liabilities
Embedded derivatives(1)Foreign exchange contracts(2)Contingent consideration(5)

-

(11)
(17)
-

(30)

(11)
(17)
(30)

Financial liabilities at fair value through earnings

-

(28)

(30)

(58)

-

(207)

-

(207)

Derivatives used for hedging

-

(207)

-

(207)

Total liabilities

-

(235)

(30)

(265)

AssetsEmbedded derivatives(1)Foreign exchange contracts(2)Financial assets at fair value through earnings
Cash flow hedges(3)Cash flow hedges(3)Page 116

Thomson Reuters Annual Report 2014

DECEMBER 31, 2013
LEVEL 1LEVEL 2LEVEL 3TOTAL
BALANCE

-

66
27

-

66
27

-

93

-

93

-

24
135

-

24
135

Derivatives used for hedging

-

159

-

159

Available for sale investments(4)

17

9

-

26

Total assets

17

261

-

278

Liabilities
Embedded derivatives(1)Foreign exchange contracts(2)

-

(58)
(19)

-

(58)
(19)

Financial liabilities at fair value through earnings

-

(77)

-

(77)

-

(73)

-

(73)

Derivatives used for hedging

-

(73)

-

(73)

Total liabilities

-

(150)

-

(150)

AssetsEmbedded derivatives(1)Foreign exchange contracts(2)Financial assets at fair value through earnings
Fair value hedges(6)Cash flow hedges(3)Cash flow hedges(3)(1)

Largely related to U.S. dollar pricing of vendor or customer agreements by foreign subsidiaries.

(2) Used to manage foreign exchange risk on cash flows excluding indebtedness.
(3) Comprised of fixed-to-fixed cross-currency swaps on indebtedness and forward starting interest rate swaps.
(4) Investments in entities over which the Company does not have control, joint control or significant influence.
(5) Related to prior acquisitions (see note 29).
(6) Comprised of fixed-to-floating cross-currency interest rate swaps on indebtedness.

The Company recognizes transfers into and transfers out of the fair value measurement hierarchy levels as of the date of the event or achange in circumstances that caused the transfer. There were no transfers between hierarchy levels for the years ending December 31, 2014
and 2013.
Valuation Techniques
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined byusing valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little aspossible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included inlevel 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:ŠŠŠ

quoted market prices or dealer quotes for similar instruments;
the fair value of currency and interest rate swaps and forward foreign exchange contracts is calculated as the present value of theestimated future cash flows based on observable yield curves; andthe fair value of contingent consideration is calculated based on estimates of future revenue performance.

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Thomson Reuters Annual Report 2014

Offsetting Financial Assets and Financial Liabilities
The Company is subject to master netting arrangements with certain counterparties. Certain of these arrangements allow for the netting ofassets and liabilities in the ordinary course of business, and are reflected on a net basis on the consolidated statement of financial position.
In other circumstances, netting is permitted only in the event of bankruptcy or default of either party to the agreement, and such amounts are
not netted in the consolidated statement of financial position. This information is summarized in the table below.

Financial assets

Gross financial
assetsNet financial
Gross financial
assets in theliabilities
consolidated
netted against
statement ofassets financial position

Relatedfinancialliabilities notnettedNet amount

Derivative financial assets
Cash and cash equivalents

58
142

(130)

58 (1)
12 (2)

(21)
-

37
12

December 31, 2014

200

(130)

70

(21)

49

Derivative financial assets
Cash and cash equivalents

186
193

(180)

186 (1)
13 (2)

(54)
-

132
13

December 31, 2013

379

(180)

199

(54)

145

Relatedfinancialassets notnettedNet amount

(21)
-

201
-

Financial liabilities

Gross financial
liabilities

Net financial
Gross financial
liabilities in theassetsconsolidated
netted against
statement ofliabilities financial position

Derivative financial liabilities
Bank indebtedness

222
130

(130)

222 (3)

December 31, 2014

352

(130)

222

(21)

201

Derivative financial liabilities
Bank indebtedness

92
180

(180)

92 (3)
- (2)

(54)
-

38
-

December 31, 2013

272

(180)

92

(54)

38

(1)

- (2)

Included within “Other financial assets”- current and “Other financial assets”- non-current in the consolidated statement of financial position.

(2) Included within “Cash and cash equivalents” in the consolidated statement of financial position.
(3) Included within “Other financial liabilities” – current and “Other financial liabilities” – non-current in the consolidated statement of financial position.

Note 19: Other non-current assets
DECEMBER 31,
2014
2013
Net defined benefit plan surpluses (see note 26)
Cash surrender value of life insurance policies
Equity method investments:
Joint ventures
Other
Other non-current assets

20
281

52
273

174
61

19
178
61

Total other non-current assets

536

583

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Thomson Reuters Annual Report 2014

Note 20: Payables, accruals and provisions
DECEMBER 31,
2014

2013

Trade payables
Accruals
Provisions (see note 21)
Other current liabilities

411
1,578
210
244

406
1,626
372
220

Total payables, accruals and provisions

2,443

2,624

Note 21: Provisions and other non-current liabilities
DECEMBER 31,
2014
2013
Net defined benefit plan obligations (see note 26)
Deferred compensation and employee incentives
Provisions
Unfavorable contract liability
Uncertain tax positions
Other non-current liabilities

1,366
225
169
7
309
95

875
230
183
48
282
141

Total provisions and other non-current liabilities

2,171

1,759

OTHER

TOTAL

The following table presents the movement in provisions for the years ended December 31, 2014 and 2013:
RESTRUCTURINGEMPLOYEERELATED

Balance at December 31, 2012
Charges
Utilization
Translation and other, net

34
134
(28)
-

75
233
(172)
-

247
23
(23)
32

356
390
(223)
32

Balance at December 31, 2013
Less: short-term provisions

140
117

136
136

279
119

555
372

Long-term provisions

23

-

160

183

Balance at December 31, 2013
Charges
Utilization
Translation and other, net

140
87
(192)
(6)

136
32
(86)
(7)

279
6
(17)
7

555
125
(295)
(6)

Balance at December 31, 2014
Less: short-term provisions

29
15

75
75

275
120

379
210

Long-term provisions

14

-

155

169

Restructuring
The Company incurred $87 and $134 million in 2014 and 2013, respectively, of charges related to simplification program initiatives within the
Financial & Risk segment. The charges primarily consisted of severance costs associated with reductions in workforce to de-layer theorganization and to decommission legacy platforms and products as customers are upgraded to Thomson Reuters Eikon and Thomson
Reuters Elektron. The long-term restructuring provisions remaining at December 31, 2014 are expected to be paid over the next three years.
Employee-related
Employee-related provisions represent severance associated with various efficiency-related plans implemented across the Company’sbusinesses. The employee-related provisions remaining at December 31, 2014 are expected to be paid in 2015.

Page 119Thomson Reuters Annual Report 2014

Other
Other provisions include lease retirement obligations, which arise when the Company agrees to restore a leased property to a specified
condition at the completion of the lease period. Lease retirement provisions relate primarily to leases which expire over the next seven years.
Note 22: Deferred tax
The movements of deferred tax assets and liabilities are shown below:
Goodwill andotheridentifiableintangible
assetsComputersoftware,computerhardware andother property

December 31, 2012
Acquisitions(Benefit) expense to income statement
Translation and other, net

2,130
63
(210)
(53)

130
3
(115)
(13)

274
507
7

2,534
66
182
(59)

December 31, 2013

1,930

5

788

2,723

Acquisitions
Benefit to income statement
Translation and other, net

14
(103)
(54)

2
(53)
(2)

(171)
22

16
(327)
(34)

December 31, 2014

1,787

(48)

639

2,378

Deferred tax liabilities (assets)

Deferred tax assets

Tax losses

Employeebenefits

Deferred andshare-based
compensation

Other(1)

Other

Total

Total

December 31, 2012
Acquisitions(Expense) benefit to income statement(Expense) benefit to equity
Translation and other, net

282
9
(105)
(15)

596
(153)
(142)
(1)

128
12
-

273
2
6
4

1,279
11
(252)
(130)
(12)

December 31, 2013

171

300

140

285

896

(Expense) benefit to income statement
Benefit to equity
Translation and other, net

(76)
(7)

18
175
(8)

9
5
-

(5)
(12)

(54)
180
(27)

December 31, 2014

88

485

154

268

995

Net deferred liability at December 31, 2013
Net deferred liability at December 31, 2014(1)

(1,827)(1,383)

Includes $427 million (2013 – $566 million) related to intercompany sales of certain technology and content assets as part of the Company’s consolidation of the ownership andmanagement of these assets.

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Thomson Reuters Annual Report 2014

The estimated recovery period for the deferred tax balances is shown below:
DECEMBER 31,
2014
2013
Deferred tax liabilities
Deferred tax liabilities to be recovered after more than 12 months
Deferred tax liabilities to be recovered within 12 months

2,345
33

2,683
40

Total deferred tax liabilities

2,378

2,723

Deferred tax assets
Deferred tax assets to be recovered after more than 12 months
Deferred tax assets to be recovered within 12 months

833
162

680
216

Total deferred tax assets

995

896

Net deferred tax liability

1,383

1,827

At December 31, 2014, the Company had Canadian tax losses carried forward of $1,883 million, tax losses carried forward in otherjurisdictions of $1,688 million, and U.S. state tax losses carried forward which, at current U.S. state rates, have an estimated value of$11 million. If not utilized, the majority of the Canadian tax losses and U.S. state tax losses carried forward will expire between 2015 and2034. The majority of the tax losses carried forward in other jurisdictions may be carried forward indefinitely.
Deferred tax assets are recognized for tax loss carry-forwards to the extent that the realization of the related tax benefit through futuretaxable profits is probable. The ability to realize the tax benefits of these losses is dependent upon a number of factors, including the future
profitability of operations in the jurisdictions in which the tax losses arose. At December 31, 2014, the Company did not recognize deferred tax
assets of $938 million related to $3,488 million of tax losses carried forward.
At December 31, 2014, the Company had $662 million of capital losses carried forward which may only be used to offset future capital gains.
The deferred tax asset not recognized in respect of these losses was $98 million.
No deferred tax is recognized on the temporary differences associated with investments in subsidiaries and joint ventures to the extent that
the Company is able to control the timing and reversal of such differences, or the reversal would not create a tax liability. These temporary
differences are primarily attributable to the undistributed earnings of non-Canadian subsidiaries, which were $14.1 billion at December 31,
2014 (2013 – $17.9 billion).
Note 23: Capital
The change in capital, which includes stated capital and contributed surplus, was as follows:

Number ofcommonsharesStated capital

Series II,
cumulative
redeemablepreference
share capital

Balance, December 31, 2012

826,902,058

10,091110

170

10,371

Shares issued under DRIP
Stock compensation plans
Repurchases of common shares(1)1,150,328
2,982,330(10,878,884)

39
96
(166)

-

7
-

39
103
(166)

Balance, December 31, 2013

820,155,832

10,060110

177

10,347

Shares issued under DRIP
Stock compensation plans
Repurchases of common shares(1)893,2223,522,777(28,555,617)

33
129
(356)

-

4
-

33
133
(356)

Balance, December 31, 2014

796,016,214

9,866

110

181

10,157(1)

Contributed
surplus

Total capitalStated capital includes $(35) million and $(32) million in 2014 and 2013, respectively, related to the Company’s pre-defined share repurchase plan. See share repurchases below.

Common shares of the Company have no par value and the authorized common share capital is an unlimited number of shares.

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Thomson Reuters Annual Report 2014

Dividends
Dividends on common shares are declared in U.S. dollars. Details of dividends declared per share are as follows:
YEAR ENDED DECEMBER 31,
Dividends declared per common share

2014

2013

$1.32

$1.30

In the consolidated statement of cash flow, dividends paid on common shares are shown net of amounts reinvested in the Company’s DRIP.
Details of dividend reinvestment are as follows:
YEAR ENDED DECEMBER 31,
Dividend reinvestment

2014

2013

33

39

Registered holders of common shares may participate in the DRIP, under which cash dividends are automatically reinvested in new commonshares. Common shares are valued at the weighted-average price at which the shares traded on the TSX during the five trading days
immediately preceding the record date for the dividend.
Share Repurchases
The Company may buy back shares (and subsequently cancel them) from time to time as part of its capital strategy. In May 2014, theCompany renewed its current normal course issuer bid (“NCIB”) for an additional 12 months. Under the NCIB, the Company may repurchase
up to 30 million common shares between May 28, 2014 and May 27, 2015 in open market transactions on the TSX, the NYSE and/or otherexchanges and alternative trading systems, if eligible, or by such other means as may be permitted by the TSX.
In 2014, the Company repurchased 28.6 million of its common shares for a cost of $1.0 billion, of which $11 million was payable to the broker
at December 31, 2014. The average price per share that the Company repurchased in 2014 was $36.21. In 2013, the Company repurchased
10.9 million of its common shares for a cost of $400 million at an average price per share of $36.79. Decisions regarding any future
repurchases will be based on market conditions, share price and other factors including opportunities to invest capital for growth.
The Company may elect to suspend or discontinue its share repurchases at any time, in accordance with applicable laws. From time to time
when the Company does not possess material nonpublic information about itself or its securities, it may 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 inaccordance with applicable Canadian securities laws and the requirements of Rule 10b5-1 under the U.S. Securities Exchange Act of 1934, as
amended. The Company entered into such plans with its broker on December 31, 2014 and on December 31, 2013. As a result, the Company
recorded a liability of $115 million in “Other financial liabilities” within current liabilities at December 31, 2014 ($100 million at December 31,2013) with a corresponding amount recorded in equity in the consolidated statement of financial position in both periods. The liability
recorded on December 31, 2013 was settled in the first quarter of 2014.
Series II, Cumulative Redeemable Preference Shares
The authorized preference share capital of the Company is an unlimited number of preference shares without par value. The directors areauthorized to issue preference shares without par value in one or more series, and to determine the number of shares in, and terms attaching
to, each such series. As of December 31, 2014 and 2013, 6,000,000 Series II, cumulative redeemable preference shares were authorized,
issued and outstanding. The Series II preference shares are non-voting and are redeemable at the option of the Company for C$25.00 per
share, together with accrued dividends. Dividends are payable quarterly at an annual rate of 70% of the Canadian bank prime rate applied tothe stated capital of such shares.
Note 24: Non-controlling interests
In 2014, the non-controlling interests of Tradeweb contributed $120 million in exchange for additional shares. After this transaction, theCompany’s ownership interest in Tradeweb was 55.6% (2013 – 58.7%). The carrying amount of the non-controlling interests was increased
by $81 million to reflect the change in their relative ownership interest. The change in the Company’s ownership interest of $39 million did
not result in a change in control, and was therefore accounted for as an equity transaction within retained earnings.
The contribution from the non-controlling interests is included in “Other financing activities” in the consolidated statement of cash flow.

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Thomson Reuters Annual Report 2014

Note 25: Share-based compensation
The Company operates a number of equity-settled and cash-settled share-based compensation plans under which it receives services from
employees as consideration for equity instruments of the Company or cash payments. Each plan is described below:
Stock Incentive Plan
Under its stock incentive plan, the Company may grant stock options, TRSUs, performance restricted share units (“PRSUs”) and otherawards to certain employees for a maximum of up to 50 million common shares. As of December 31, 2014, there were 9,955,842 awards
available for grant (2013 – 11,737,734).
The following table summarizes the methods used to measure fair value for each type of award and the related vesting period over which
compensation expense is recognized:
EQUITY-SETTLED

CASH-SETTLED (1)

VESTING PERIODFAIR VALUE
MEASURE

Stock options

Up to four years

Black-Scholes
optionpricing model

Fair value on business
day prior to grantdate

Not applicable

TRSUs

Up to seven years
Closing commonshare price

Fair value on business
day prior to grant
dateFair value at reporting
date

Closing commonshare price

Fair value on business
day prior to grant
dateFair value at reporting
date

TYPE OF AWARD

PRSUs

(1)

Three year
performance period

COMPENSATION EXPENSE BASED ON:

Cash-settled awards represent the portion of certain share-based compensation related to withholding tax, which the Company funds from its own cash.

Additional information on each type of award is as follows:
Stock Options
The maximum term of an option is 10 years from the date of grant. Under the plan, options may be granted by reference to the Company’scommon share price on the NYSE or TSX.
The weighted-average fair value of options granted for the years ended December 31, 2014 and 2013 and principal assumptions used inapplying the Black-Scholes option pricing model were as follows:

Weighted average fair value ($)
Weighted average of key assumptions:Share price ($)
Exercise price ($)
Risk-free interest rate
Dividend yield
Volatility factor
Expected life (in years)

2014

2013

4.50

4.42

34.15
34.15
1.9%
3.8%
22%
6

31.15
31.15
1.1%
3.8%
24%
6

The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions. The model
requires the use of subjective assumptions, including expected stock-price volatility. Historical data has been considered in setting theassumptions.

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Thomson Reuters Annual Report 2014

Time-Based Restricted Share Units (TRSUs)
TRSUs give the holder the right to receive one common share for each unit that vests on the vesting date. The holders of TRSUs have no
voting rights and accumulate additional units based on notional dividends paid by the Company on its common shares on each dividend
payment date, which are reinvested as additional TRSUs. The weighted-average fair value of TRSUs granted was $34.94 and $31.50 for theyears ended December 31, 2014 and 2013, respectively.
Performance Restricted Share Units (PRSUs)
PRSUs give the holder the right to receive one common share for each unit that vests on the vesting date. The holders of PRSUs have no
voting rights and accumulate additional units based on notional dividends paid by the Company on its common shares on each dividend
payment date, which are reinvested as additional PRSUs. The percentage of PRSUs initially granted that vests depends upon the Company’s
performance, typically over a three-year period, against pre-established performance goals. Between 0% and 200% of the initial amounts
may vest for grants made from 2012 through 2014.
The weighted-average fair value of PRSUs granted was $34.04 and $30.92 for the years ended December 31, 2014 and 2013, respectively.
Employee Stock Purchase Plan (ESPP)The Company maintains an ESPP whereby eligible employees can purchase common shares at a 15% discount to the closing share price on
the NYSE on the last business day of each quarter. Each quarter, employees may elect to authorize payroll deductions from their eligible
compensation, up to a maximum of $21,250 per year (or a comparable amount in foreign currency for the global ESPP). The discount isexpensed as incurred. A maximum of 21 million common shares can be purchased through the ESPP. The maximum number of shares
currently issuable for the U.S. ESPP is 15 million and for the global ESPP is 6 million.
Share Appreciation Rights (SARs)
The Company has a phantom stock plan that provides for the granting of stock appreciation rights (“SARs”) and other cash-based awards tocertain employees. SARs provide the opportunity to receive a cash payment equal to the fair market value of the Company’s common sharesless the grant price. SARs vest over a four year period and expire four to ten years after the grant date. Compensation expense is recognizedbased on the fair value of the awards that are expected to vest and remain outstanding at the end of the reporting period using a BlackScholes option pricing model. There were no SAR grants in 2014 and 2013.
The movement in the number of awards outstanding and their related weighted-average exercise prices are as follows:

Stock
Options

TRSUs

PRSUs

SAYE(1)

SARs

Total

Weightedaverage
exercise
price ($)(2)Awards outstanding in thousands:
Outstanding at December 31, 2012
GrantedExercised
Forfeited
Expired10,473
1,372(1,429)
(85)
(208)

3,154
1,844
(473)
(286)
-

4,186
2,091
(2,097)
(356)
-

56
(13)
(43)

106
(3)
(19)

17,975
5,307(4,012)
(730)
(270)

33.14
31.15
28.71
33.77
36.15

Outstanding at December 31, 2013
Exercisable at December 31, 201310,123
6,405

4,239
-

3,824
-

-

84
84

18,270
6,489

33.38
34.67

GrantedExercised
Forfeited
Expired

1,743(1,714)
(450)
(343)

872
(468)
(542)
-

1,416
(814)
(896)
-

-

(15)
(12)

4,031
(3,011)(1,888)
(355)

34.15
31.06
30.76
38.56

Outstanding at December 31, 2014

9,359

4,101

3,530

-

57

17,047

33.85

Exercisable at December 31, 2014

5,596

-

-

-

57

5,653

34.90

(1)

The Company replaced a “Save-as-you-earn” (“SAYE”) plan in the U.K. with the ESPP in 2010.

(2) Represents the weighted-average exercise price for stock options, SAYE and SARs. TRSUs and PRSUs are excluded as they entitle holders to receive common shares upon
vesting without an associated exercise price.

The weighted-average share price at the time of exercise for all of the awards described above was $36.43 per share (2013 – $32.40).

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Thomson Reuters Annual Report 2014

Share-based compensation expense included in the consolidated income statement for years ended December 31, 2014 and 2013 was asfollows:
STOCK OPTIONS

TRSUs

PRSUs

OTHERS(2)TOTAL

December 31, 2014(1)

7

31

37

6

81

December 31, 2013(1)

18

33

19

9

79

(1)

Includes expense of $8 million at December 31, 2014 (2013 – expense of $28 million) relating to the revaluation of withholding taxes on share-based compensation awards,
which is included within fair value adjustments in the presentation of “Operating expenses” in note 5.

(2) Principally comprised of expense related to ESPP, SAYE and SARs.

The Company recorded a liability for cash-settled share incentive awards of $90 million at December 31, 2014 (2013 – $67 million). The
intrinsic value of the liability for vested awards was $17 million (2013 – $11 million).
The following table summarizes additional information relating to stock options and SARs outstanding at December 31, 2014:

Numberoutstanding(in thousands)

Weightedaverageremaining
contractual life
(years)

Weightedaverage
exercise pricefor awards
outstanding

Numberexercisable(in thousands)

Weightedaverage
exercise pricefor awards
exercisable

0.00 – 30.00
30.01 – 35.00
35.01 – 40.00
40.01 – 45.00

2,233
2,794
3,668
721

6.50
8.78
4.57
2.13

$ 27.17$32.92$36.86$42.82

1,285
258
3,389
721

$26.30$30.98$ 36.76$42.82

Total

9,416

Range of exercise prices(1)

(1)

5,653

TRSUs and PRSUs are excluded as they entitle holders to receive common shares upon vesting without an associated exercise price.

Note 26: Employee benefit plans
Retirement Benefits
The Company sponsors both defined benefit and defined contribution employee future benefit plans covering substantially all employees.
Costs for all future employee benefits are accrued over the periods in which employees earn the benefits. Defined benefit plans provide
pension and other post-employment benefits (“OPEB”) to covered employees. Significant plans are valued under IAS 19, Employee Benefits,
by independent qualified actuaries using the projected unit credit method.
The most significant funded defined benefit plans are the Thomson Reuters Group Pension Plan (“TRGP”), covering U.S. employees, and theReuters Pension Fund (“RPF”), Supplementary Pension Scheme (“SPS”) and The Thomson Corporation PLC Pension Scheme (“TTC”),
covering U.K. employees, collectively the “Large U.K. plans”. The Company also has unfunded obligations consisting of supplemental
executive retirement plans (“SERPs”) and OPEB consisting largely of retiree medical benefits, both primarily in the U.S. Defined benefit
obligations in the rest of the world are less significant.
Defined benefit plan design and governance
Benefits payable are generally based on salary and years of service, although each plan has a unique benefits formula. Employees in the
Large U.K. plans (and in some smaller global plans) may also make voluntary contributions to augment future benefits. The normal
retirement age is typically in the range of 60 to 65 years and benefits are generally payable in annuity or lump sum upon retirement. Most
plans include provisions for early retirement, death, survivor and disability benefits. Vested benefits of former employees who are not yet of
retirement age are held in deferment in the Large U.K. plans and the TRGP. Effective January 1, 2015, the TRGP added an option for plan
participants to receive benefits as a lump sum following termination or retirement from the Company. Existing TRGP pensions in payment
are not affected by this change. See “Net defined benefit plan obligations” below for additional information. Eligible benefits under theLarge U.K. plans also increase based on inflation, whereas TRGP benefits are not indexed to inflation. In some countries, the Company
operates cash balance plans (accounted for as defined benefit obligations) where the accumulated balance on the pension account is basedon employee and employer allocations and a promised annual crediting rate.
Except where required by law, virtually all defined benefit plans are closed to new employees. However, most new employees are eligible toparticipate in defined contribution plans.

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Thomson Reuters Annual Report 2014

The TRGP is a qualified pension plan in the U.S. and is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). In its
role as plan fiduciary, the Company has a policy to contribute at least the minimum required amount under ERISA.
Similar to the TRGP, the Company bears the cost of the Large U.K. plans (less employee contributions). However, the responsibility for the
management and governance of each of the Large U.K. plans lies with an independent trustee board (the “Trustees”). The Trustees are
responsible for carrying out triennial valuations (unless circumstances require an earlier review) and securing funding for benefit payments.
In order to develop funding valuations and investment policies, the Trustees consult with the plan’s actuary (who is independent of theCompany’s actuary), the plan’s investment advisors (also independent of the Company’s investment advisors) and the Company. The
Trustees and the Company are required to agree on a schedule of contributions in support of funding objectives. The Company has separate
funding agreements with the respective Large U.K. plan’s Trustees that provide for ongoing contributions to fund current service accruals
and scheduled deficit recovery contributions to remedy prior funding deficits over a period of several years. These arrangements are updated
in conjunction with the triennial valuations. The amount of RPF and SPS plan assets that can be recognized on the Company’s consolidated
statement of financial position is limited by plan restrictions that ensure any expected surplus assets at plan termination belong to the plan(and therefore its participants). This limitation is known as the asset ceiling restriction.
Other international locations operate various pension plans in accordance with local regulations and practices.
Net defined benefit plan obligations
The movement on net defined benefit plan obligations was as follows:
PENSION PLANS (1)OPEB (1)201420132014 2013
As of January 1
Plan expense recognized in income statement
Actuarial (losses) gains
Exchange differences
Contributions paid
Other

(621)
(128)
(485)
15
90
5

Net plan obligations as of December 31(1,124)

Net plan surpluses recognized in non-current assets
Net plan obligations recognized in non-current liabilities(1)(1,454) (202)
(165)
(12)
402
(23)
(2)
3
596
11
2
1

(219)
(14)
19
1
10
1

TOTAL (1)2014
2013(823) (1,673)
(140)
(179)
(508)
421
18
(1)
101
606
6
3

(621) (222) (202) (1,346)

(823)

20
(1,366)52(875)

Includes amounts for immaterial defined benefit and OPEB plans that are not included in the detailed analysis below.

Changes to retirement benefits:
The TRGP was amended, effective January 1, 2015, to offer future retiring or terminating employees and current terminated vested
participants the following:ŠŠ

A permanent, ongoing option to receive benefits as a lump sum; andUpdated optional form factors used to convert single life annuity to other annuity types (to reflect improvements to life expectancy).

These changes resulted in a $3 million past service cost charge in 2014 that is reported within “Other operating gains, net” on the
consolidated income statement. As a result of the amendment, the timing of TRGP benefit payments is expected to initially accelerate byapproximately $80 million in 2015 versus 2014, but normalize thereafter. The lump sum option is intended to mitigate volatility in the
TRGP’s funded status, as certain obligations may settle earlier.
The Company made no material changes to its retirement benefits in 2013.

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Thomson Reuters Annual Report 2014

Analysis of material defined benefit plans
The net defined benefit surpluses (obligations) of the material defined benefit plans recognized in the consolidated statement of financial
position were as follows:
UNFUNDED (1)FUNDED

OPEB

TOTAL

2014

2013

2014

2013

2014

2013

2014

2013

Present value of plan obligations
Fair value of plan assets(6,958)6,470(6,048)
5,788

(339)
-

(303)
-

(203)
-

(181)
-

(7,500)6,470(6,532)
5,788

Unrecognized plan assets (2)

(488)
(288)

(260)
(48)

(339)
-

(303)
-

(203)
-

(181)
-

(1,030)
(288)

(744)
(48)

Net plan obligations

(776)

(308)

(339)

(303)

(203)

(181)

(1,318)(792)

Net plan surpluses
Net plan obligations

14
(790)

49
(357)

(339)

(303)

(203)

(181)

14
(1,332)49(841)

As of December 31,(1)

Unfunded pension plans consist of SERPs for eligible employees.

(2) Unrecognized plan assets are not included in the consolidated statement of financial position because they are not considered recoverable, as the Company cannot unilaterally
reduce future contributions in order to utilize the surplus. The Company considered the related plans’ funded status, expected future service accruals and employer contributioncommitments in determining the plan assets that are subject to this asset ceiling restriction.

Defined benefit obligation
The following summarizes activity in the defined benefit obligation:
Present Value of Defined Benefit Obligation
FUNDEDUNFUNDED

OPEB

TOTAL

2014

2013

2014

2013

2014

2013

2014

2013

Opening defined benefit obligation
Current service cost
Past service cost
Administration fees
Interest cost
Actuarial (losses) gains from changes in financial
assumptions(1)Actuarial losses from changes in demographic
assumptions(2)Experience (losses) gains
Contributions by employees
Benefits paid
Administration fees disbursements
Curtailment gain
Exchange differences
Other(6,048)
(79)
(3)
(16)
(269)

(6,157)
(101)
(16)
(244)

(303)
(3)
(1)
(14)

(340)
(5)
(13)

(181)
(2)
(8)

(201)
(3)
(7)

(6,532)
(84)
(4)
(16)
(291)

(6,698)
(109)
(16)
(264)

(827)

306

(26)

29

(9)

17

(862)

352

(189)
(21)
(15)
218
15
4
258
14

(19)
29
(13)
202
16
14
(75)
10

(14)
(1)
20
2
1

7
19
-

(11)
(2)
(2)
10
1
1

3
10
-

(214)
(24)
(17)
248
15
5
260
16

(19)
39
(13)
231
16
14
(75)
10

Closing defined benefit obligation(6,958)(6,048)

(339)

(303)

(203)

(181)

(7,500)(6,532)(1)

Losses primarily associated with a decrease in discount rates at the December 31 measurement date 2014 versus 2013.

(2) Losses primarily associated with longevity improvements in the Large U.K. plans and new mortality tables issued by the Society of Actuaries in the United States. See the section
below entitled “Mortality assumptions”.

The total closing defined benefit obligation can be further analyzed by participant group and by geography.
2014

2013

Active employees
Deferred
Retirees

27%
35%
38%

30%
33%
37%

Closing defined benefit obligation

100%

100%

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U.S.
U.K.
Rest of world

2014

2013

40%
52%
8%

37%
54%
9%

100%

100%

Thomson Reuters Annual Report 2014

The weighted-average duration of plan obligations were as follows:
YEARS

2014

2013

TRGP
RPF
SPS
TTC

18
20
15
19

16
19
13
18

Plan assets
The following summarizes activity in plan assets:
FAIR VALUE OF PLAN ASSETSFUNDEDUNFUNDED

OPEB

TOTAL

2014

2013

2014

2013

2014

2013

2014

2013

Opening fair value of plan assets
Interest income(1)Return on plan assets excluding amounts included ininterest income (expense)(2)Contributions by employer
Contributions by employees
Benefits paid
Administration fees disbursements
Exchange differences
Other

5,788
259

5,173
207

-

-

-

-

5,788
259

5,173
207

838
68
15
(218)
(15)
(256)
(9)

(30)
575
13
(202)
(16)
75
(7)

20
(20)
-

19
(19)
-

8
2
(10)
-

10
(10)
-

838
96
17
(248)
(15)
(256)
(9)

(30)
604
13
(231)
(16)
75
(7)

Closing fair value of plan assets

6,470

5,788

-

-

-

-

6,470

5,788

(1)

Interest income is calculated using the discount rate for the period.

(2) Return on plan assets represents the difference between the actual return on plan assets and the interest income computed using the discount rate (which also considers
limitations from unrecognized plan assets).

Investment policy of funded plans
Plan assets are invested to adequately secure benefits and to minimize the Company’s long-term contributions to the plans. However,specific investment allocations will vary across plans. The Company funds unfunded and OPEB plans as claims are made.
Plan fiduciaries, comprised of the Company or plan trustees, set investment policies and strategies for each funded plan and oversee
investment allocation, which includes selecting investment managers, commissioning periodic asset-liability studies and setting long-term
strategic targets. Investment allocation takes into consideration a number of factors, including the funded status of the plan, a balance
between risk and return, the plan’s liquidity needs, current and expected economic and market conditions, specific asset class risk as well as
the risk profile and maturity pattern of the respective plan.
Target investment allocation ranges are guidelines, not limitations. Funded plans may have broadly diversified portfolios with investments inequities, fixed income, real estate, insurance contracts, derivatives and other asset classes through direct ownership or through other
instruments such as mutual funds, commingled funds and hedge funds. Derivatives may be used to achieve investment objectives or as acomponent of risk management such as for interest rate and currency management strategies.

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Thomson Reuters Annual Report 2014

In aggregate, the major categories of plan assets for funded plans were as follows:
QUOTED(1)Equities(2)
U.S.
U.K.
All other
Bonds(3)Corporate
U.S.
U.K.
All otherGovernment
U.S.
U.K.
All other
Other fixed income
Multi-asset(4)U.K.
All other
Property
Insurance
Derivatives
Cash and cash equivalents
Other
Total
(1)

UNQUOTED

TOTAL

2014

2013

2014

2013

2014

2013

146
13
210

139
17
207

133
3
939

119
10
1,072

279
16
1,149

258
27
1,279

332
9

297
9

512
1,092
84

359
668
91

844
1,092
93

656
668
100

178

185

306
1,097
3
177

250
838
8
141

306
1,097
3
355

250
838
8
326

4
24
96
3

4
24
352
4

101
253
137
144
199
267
8

39
255
144
135
310
104
7

101
257
161
144
199
363
11

39
259
168
135
310
456
11

1,015

1,238

5,455

4,550

6,470

5,788

Asset valuation based on Level 1 evidence under the fair value hierarchy: quoted prices (unadjusted) in active markets for identical assets or liabilities.

(2) Equities include direct shareholdings and funds focused on equity strategies.
(3) Bonds include direct credit holdings and funds focused on fixed income strategies. Within this grouping, Government includes debt issued by national, state and local
government agencies and Other fixed income includes blended Corporate/Government credit strategies.
(4) Multi-asset includes funds that invest in a range of asset classes.

As of December 31, 2014 and 2013, there were no Thomson Reuters securities held in the Company’s pension plans’ assets.
Contributions
In 2014, the Company contributed $96 million to its material defined benefit plans. In 2013, the Company contributed $604 million to its
material defined benefit plans, including $500 million to the TRGP ($460 million) and TTC ($40 million) to pre-fund pension obligations. The
contribution to the TRGP represented the first large contribution into the plan in 10 years.
In 2015, the Company expects to contribute approximately $100 million to its material defined benefit plans, including $70 million inaccordance with the normal funding policy of funded plans and $30 million for claims expected to arise under unfunded and OPEB plans.
From time to time, the Company may elect to make voluntary contributions in order to improve the funded status of the plans. For certain
plans, the trustees have the right to call for special valuations, which could subsequently result in the Company having to make an
unexpected contribution. Market-related factors may also affect the timing and amount of contributions. The amount and timing of any
future required contributions to pension plans could differ significantly from the Company’s estimates at December 31, 2014.

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Actuarial assumptions
The weighted-average actuarial assumptions were as follows:

As of December 31,

FUNDED2014
2013

UNFUNDED
2014
2013

2014

2013

Discount rate
Inflation assumption
Rate of increase in salaries
Rate of increase in pension payments
Medical cost trend

3.67%
3.02%
3.71%
2.85%
-

3.98%
2.55%
3.53%
2.95%
-

3.75%
3.50%
6.50%

4.40%
3.50%
7.00%

4.46%
3.20%
3.84%
3.14%
-

OPEB

4.78%
2.62%
3.55%
3.25%
-

Discount rate
The discount rate was based on current market interest rates of high-quality, fixed-rate debt securities adjusted to reflect the duration of
expected future cash outflows for pension benefit payments. To estimate the discount rate, the Company’s actuary constructed ahypothetical yield curve that represented yields on high quality zero-coupon bonds with durations that mirrored the expected payment
stream of the benefit obligation. For the TRGP and the other Large U.K. plans combined, a 0.25% increase or decrease in the discount ratewould have decreased or increased the defined benefit obligation by approximately $275 million as of December 31, 2014.
Rates of inflation, increase in salaries and pension payments
The rate of inflation, which impacts increases in eligible U.K. pension payments, was determined by reference to consumer and retail price indicesas well as other benchmarks. The assumption on salary growth is for the long term over the life of benefit plans. For the TRGP and the other Large
U.K. plans combined, a 0.25% increase or decrease in the rate of increase in inflation and salary assumptions would have increased or decreased
the defined benefit obligation by approximately $100 million and $25 million, respectively, as of December 31, 2014.
Medical cost trend
The medical cost trend is based on the Company’s actuarial medical claims experience and future projections of medical costs. The average
medical cost trend rate used was 6.5% for 2014, which is reduced ratably to 5% in 2018. A 1% increase or decrease in the trend rate would
have resulted in an increase or decrease in the benefit obligation for post-retirement benefits of approximately $20 million at December 31,
2014.
Mortality assumptions
The mortality assumptions used to assess the defined benefit obligation as of December 31, 2014 are based on the following:ŠŠ

TRGP: RP-2014 with MP-2014 Generational Table; andLarge U.K. plans: SAPS Light Tables with allowances for plan demographic specifics and longevity improvements.

The following table illustrates the life expectation in years of an average plan participant retiring at age 65 as of December 31, 2014 and 2013 and aplan participant at age 40 as of December 31, 2014 and 2013 retiring 25 years later at age 65 under the mortality assumptions used.
DECEMBER 31, 2014
Employee retiring as of December 31, 2014 at age 65
Employee age 40 as of December 31, 2014 retiring at age 65
DECEMBER 31, 2013

LIFE EXPECTATION IN YEARS
MaleFemale

23
25

25
27

LIFE EXPECTATION IN YEARS
MaleFemaleEmployee retiring as of December 31, 2013 at age 65

21

23

Employee age 40 as of December 31, 2013 retiring at age 65

23

25

For the TRGP and the other Large U.K. plans combined, an increase in life expectancy of one year across all age groups would have increased
the defined benefit obligation by approximately $150 million as of December 31, 2014.
The sensitivity analyses are based on a change in one assumption while holding all other assumptions constant, so that interdependencies
between assumptions are excluded. The measurement methodology (i.e. present value of the obligation calculated using the projected unit
credit method) applied in the sensitivity analyses is also consistent to that used to determine the defined benefit obligation in the
consolidated statement of financial position.

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Risks and uncertainties
The material risks and uncertainties the Company is exposed to in relation to defined benefit pension plans are:
Š

Š

Š

Š

Š

Š

Investment risk: There is a risk that returns on plan assets may not be sufficient to fund plan obligations. Plan fiduciaries are required byplan rules or by law to maintain and review investment policies and investment allocations on a periodic basis to ensure such policies andallocations adequately support funding objectives. Periodic reviews of fund manager performance against benchmarks on specificinvestment mandates are also conducted to mitigate investment risk.
Interest rate risk: A fall in interest rates will increase the value of fixed income-related investments and plan obligations. Although asignificant amount of plan assets are allocated to fixed income investments, the Company’s funded benefit plans do not strictly follow a
liability matching investment strategy. This may result in plan liabilities increasing faster than assets in a declining interest rateenvironment, creating a deficit that may require additional Company contributions to remedy. This risk is mitigated as diversified asset
allocations create prudent opportunities to outperform increases in liabilities and at an appropriate time, those excess returns may be
reinvested in liability matching assets, reducing the need for Company contributions.
Inflation risk: Although allowances for expected salary and pension increases are included in all plan obligation valuations, actual salary
increases and automatic pension increases linked to inflation in the U.K. may exceed expectations and result in higher than anticipatedplan obligations. A portion of plan assets are invested in hedging assets including derivatives and inflation-linked bonds to mitigate thisrisk.
Currency risk: A portion of plan assets may be in overseas investments. Derivatives may be used to hedge the currency mismatch arising
between these investments and local currency denominated obligations in some plans.
Liquidity risk: Insufficient cash on hand within a plan to fund benefit payments could result in unexpected changes in asset allocation andadditional Company contributions. In the near term, this risk is mitigated as pension payments are reasonably known and plans may holdshort-term debt securities.
Mortality risk: Improvements to life expectancy are assumed in valuing plan obligations. If life expectancy improves at a faster rate than
expected, this could result in higher plan obligations. Life expectancy assumptions are reviewed in connection with periodic valuations to
mitigate risk of underestimating plan obligations and the related funding requirements.

The material risks associated with the defined benefit retiree medical plans are mortality risk, as described above, and costs being greaterthan assumed, either due to inflation of future medical costs or the frequency of participants’ claims.
Analysis of income and expense
The following summarizes amounts recognized in the consolidated income statement for material defined benefit plans:
INCOME STATEMENT(1)FUNDEDUNFUNDED

OPEB

TOTAL

2014

2013

2014

2013

2014

2013

2014

2013

Current service cost
Past service cost
Net interest cost
Administration fees
Curtailment gain

79
3
17
16
(4)

101
42
16
(14)

3
1
14
-

5
13
-

2
8
(1)

3
7
-

84
4
39
16
(5)

109
62
16
(14)

Defined benefit plan expense

111

145

18

18

9

10

138

173

Year ended December 31,(1)

The curtailment gain of $5 million in 2014 (2013 – $14 million) arose from headcount reductions associated with the Company’s simplification program initiatives (see note 5)
and was reported within “Other operating gains, net” in the consolidated income statement. The past service cost of $4 million in 2014 was also reported within “Other
operating gains, net”. Current service cost and administration fees are included in the “Post-employment benefits” component of “Operating expenses” as set out in note 5. Net
interest cost is reported in “Finance costs, net” as set out in note 7.

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Thomson Reuters Annual Report 2014

Analysis of other comprehensive income
The following summarizes amounts recognized in other comprehensive income for material defined benefit plans:
OTHER COMPREHENSIVE INCOME
Year ended December 31,
Remeasurement (gain) loss on defined benefit obligation:
Due to financial assumption changes
Due to demographic assumption changes
Due to experience
Return on plan assets (greater) less than discount rate
Change in irrecoverable surplus other than interest

827
189
21
(838)
244

(306)
19
(29)
30
(79)

26
14
1
-

(29)
(7)
-

9
11
2
-

(17)
(3)
-

862
214
24
(838)
244

(352)
19
(39)
30
(79)

Total recognized in othercomprehensive loss (income) before taxation

443

(365)

41

(36)

22

(20)

506

(421)

ACCUMULATED COMPREHENSIVE LOSSES (INCOME)

FUNDED2014 2013

UNFUNDED
2014 2013

UNFUNDED
2014 2013
32
68
41
(36)

OPEB
2014 2013

OPEB
2014 2013(14)
622 (20)TOTAL
2014 2013

Balance of actuarial losses (gains) at January 1
Net actuarial losses (gains) recognized in the year

FUNDED2014 2013
969 1,255
199 (286)

TOTAL
2014 2013
987 1,329
262 (342)

Balance of actuarial losses (gains) at December 31

1,168

969

73

32

8

(14)

1,249

987

Balance of asset ceiling at January 1
Interest cost on irrecoverable surplus
Effects of the asset ceiling in the year

(27)
7
244

47
5
(79)

-

-

-

-

(27)
7
244

47
5
(79)

Balance of asset ceiling at December 31

224

(27)

-

-

-

-

224

(27)

Total accumulated comprehensive losses (income) at December 31

1,392

942

73

32

8

(14)

1,473

960

Defined contribution plans
The Company sponsors various defined contribution savings plans that provide for Company-matching contributions. Total expense related
to defined contribution plans was $147 million in 2014 (2013 – $153 million), which approximates the cash outlays related to the plans.
Note 27: Supplemental cash flow information
Details of “Other” in the consolidated statement of cash flow are as follows:
YEAR ENDED DECEMBER 31,
2014
2013
Non-cash employee benefit charges
Fair value adjustments
Net losses on foreign exchange and derivative financial instruments
Losses from redemption of debt securities
Other(1)(1)

Includes $16 million and $23 million of non-cash reversals for uncertain tax positions in 2014 and 2013, respectively.

Page 132

241
(91)
32
47
1

273
(14)
19
35
(24)

230

289

Thomson Reuters Annual Report 2014

Details of “Changes in working capital and other items” are as follows:
YEAR ENDED DECEMBER 31,
2014
2013
Trade and other receivables
Prepaid expenses and other current assets
Other financial assets
Payables, accruals and provisions
Deferred revenue
Other financial liabilities
Income taxes
Other(1)

(1)

(115)
(88)
44
(153)
66
(22)
31
(195)

47
(10)
2
(4)
77
(1)
121
(172)

(432)

60

Includes $(101) million (2013 – $(106) million) related to employee benefit plans and $(48) million (2013 – $(41) million) related to distributions to non-controlling interests,
respectively.

Note 28: Acquisitions
Acquisitions primarily comprise the purchase of businesses that are integrated into existing operations to broaden the Company’s range ofofferings to customers as well as its presence in global markets.
Acquisition activity
The number of acquisitions completed, and the related cash consideration, during 2014 and 2013 were as follows:
YEAR ENDED DECEMBER 31,
2014
2013
Number oftransactions

Cashconsideration

Number oftransactions

Cashconsideration

Businesses and identifiable intangible assets acquired
Less: cash acquired

5

147
(2)

28

1,269
(43)

Businesses and identifiable intangible assets acquired, net of cash
Contingent consideration payments
Investments in businesses

5
1

145
15
7

28
1

1,226
10
5

6

167

29

1,241

The following provides a brief description of certain acquisitions completed during 2014 and 2013(1):DATE

COMPANYACQUIRING SEGMENTDESCRIPTION

April 2014

Dominio Sistemas

Tax & Accounting

A Brazilian provider of accounting and software solutions
primarily to accounting firms

November 2013

BondDesk

Financial & Risk

A provider of trading and wealth management solutions forinvestors

April 2013

T.GlobalTax & Accounting

A Brazilian provider of global trade management software andsolutions to professionals across Latin America

February 2013

Practical Law
Company

Legal

A provider of practical legal know-how, current awareness andworkflow solutions to law firms and corporate law departments(1)

The 2014 acquisition listed above represented approximately 74% of cash consideration for acquired businesses and identifiable intangible assets (2013 – 81%).

Purchase price allocation
Each business combination has been accounted for using the acquisition method and the results of acquired businesses are included in the
consolidated financial statements from the dates of acquisition. Purchase price allocations related to certain acquisitions may be subject toadjustment pending completion of final valuations.

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Thomson Reuters Annual Report 2014

The details of net assets acquired were as follows:
2014

2013

Cash and cash equivalents
Trade and other receivables(1)Prepaid expenses and other current assets

2
3
-

43
46
12

Current assets
Computer hardware and other property, net
Computer software, net
Other identifiable intangible assets
Other financial assets
Other non-current assets
Deferred tax

5
2
16
57
1
-

101
8
70
447
1
11

Total assets

81

638

Current indebtedness
Payables, accruals and provisions
Deferred revenue

(5)
(5)

(1)
(41)
(76)

Current liabilities
Provisions and other non-current liabilities
Other financial liabilities
Deferred tax

(10)
(1)
(4)
(16)

(118)
(54)
(66)

Total liabilities

(31)

(238)

Net assets acquired

50

400

Goodwill

97

869

Total

147

1,269

(1)

In 2014, the gross contractual amount of trade and other receivables was $4 million, of which $1 million was expected to be uncollectible (2013 – trade and other receivables
were $48 million, of which $2 million was expected to be uncollectible).

The excess of the purchase price over the net tangible and identifiable intangible assets acquired and assumed liabilities was recorded as
goodwill and reflects synergies and the value of the acquired workforce. The majority of goodwill for acquisitions completed in 2014 and 2013
is not expected to be deductible for tax purposes.
Acquisition transactions were completed by acquiring all equity interests or the net assets of the acquired business.
Other
The revenues and operating profit of acquired businesses since the date of acquisition were not material to the Company’s results ofoperations.
In 2014, $8 million (2013 – $21 million) of directly attributable acquisition-related transaction costs were expensed within the consolidated
income statement as part of “Other operating gains, net”.
Note 29: Contingencies, commitments and guarantees
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 intellectual property infringement claims, employment matters and commercial matters. 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.

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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 aresult, the Company maintains provisions for uncertain tax positions that it believes appropriately reflect its risk. These provisions are madeusing the Company’s best estimates of the amount expected to be paid based on a qualitative assessment of all relevant factors. 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.
LeasesThe Company enters into operating leases in the ordinary course of business, primarily for real property and equipment. Payments for theseleases are contractual obligations as scheduled per each agreement. Operating lease payments in 2014 were $323 million (2013 – $374
million). The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
DECEMBER 31,
2014
2015
2016
2017
2018
2019
2020 and thereafter

275
227
184
153
139
343
1,321

With certain leases, the Company guarantees the restoration of the leased property to a specified condition after completion of the lease
period. The liability associated with these restorations is recorded within “Provisions and other non-current liabilities” in the consolidated
statement of financial position.
The total of future minimum sublease payments to be received under non-cancellable subleases was $34 million at December 31, 2014.
Sublease payments received in 2014 were $9 million (2013 – $18 million).
Acquisitions and dispositions
The Company has obligations to pay additional consideration for prior acquisitions, based upon revenue performance contractually agreed at
the time of purchase. The Company does not believe that additional payments in connection with these transactions would have a material
impact on the consolidated financial statements.
In certain disposition agreements, the Company guarantees to the purchaser the recoverability of certain assets or limits on certain liabilities.
The Company does not believe based upon current facts and circumstances, that additional payments in connection with these transactions
would have a material impact on the consolidated financial statements.
Unconditional purchase obligations
The Company has various obligations for materials, supplies, outsourcing and other services contracted in the ordinary course of business.
The future unconditional purchase obligations are as follows:
DECEMBER 31,
2014
2015
2016
2017
2018
2019
2020 and thereafter

688
336
239
189
114
26
1,592

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Thomson Reuters Annual Report 2014

Note 30: Related party transactions
As of December 31, 2014, Woodbridge beneficially owned approximately 57% of the Company’s shares.
Transactions with Woodbridge
From time to time, in the normal course of business, the Company enters into transactions with Woodbridge and certain of its affiliates.
These transactions involve providing and receiving product and service offerings, are negotiated at arm’s length on standard terms, including
price, and are not significant to the Company’s results of operations or financial condition either individually or in the aggregate.
In December 2014, the Company sold a Canadian wholly owned subsidiary to a company affiliated with Woodbridge for $36 million. In
December 2013, the Company completed a similar transaction for $29 million. The subsidiaries’ assets consisted of accumulated losses thatmanagement did not expect to utilize against future taxable income prior to their expiry. As such, no tax benefit for the losses had beenrecognized in the consolidated financial statements. Under Canadian law, certain losses may only be transferred to related companies, suchas those affiliated with Woodbridge. A gain of $36 million and $29 million in 2014 and 2013, respectively, was recorded within “Other
operating gains, net” within the consolidated income statement. For each of these transactions, the board of directors’ Corporate
Governance Committee obtained an independent fairness opinion. The Company utilized each independent fairness opinion to determinethat the negotiated price between the Company and the purchaser was reasonable. After receiving recommendations of the Corporate
Governance Committee, the board of directors approved these transactions. Directors who were not considered independent because of theirpositions with Woodbridge refrained from deliberating and voting on the matters at both the committee and board meetings.
In May 2012, as part of its efforts to expand its mutual fund data and strategic research capabilities, the Company acquired a Canadianmutual fund database, fund fact sheet business and mutual fund and equity data feed business for C$9 million from The Globe and Mail(“The Globe”), which is majority owned by Woodbridge. The Company paid C$8 million in cash and issued a C$1 million promissory note to
The Globe that will be due in May 2016. In connection with the acquisition, the Company licensed the acquired database to The Globe, valued
at C$250,000 per year, over a four year term that expires in May 2016. The Globe issued four promissory notes to the Company, each for thevalue of the annual license. Amounts due each year under the notes issued by The Globe are offset against the note issued by the Company.
The board of directors’ Corporate Governance Committee approved the transaction.
In the normal course of business, certain of the Company’s subsidiaries charge a Woodbridge-owned company fees for various administrative
services. In 2014, the total amount charged to Woodbridge for these services was $117,000 (2013 – $105,000).
The Company purchases property and casualty insurance from third party insurers and retains the first $500,000 of each and every claim
under the programs via the Company’s captive insurance subsidiaries. Woodbridge is included in these programs and pays the Company apremium commensurate with its exposures. Premiums relating to 2014 were $81,000 (2013 – $44,000), which would approximate thepremium charged by a third party insurer for such coverage.
At December 31, 2014 and 2013, the amounts receivable from Woodbridge in respect of the above transactions were negligible.
The Company maintained an agreement with Woodbridge until April 17, 2008 (the closing date of the Reuters acquisition) under which
Woodbridge agreed to indemnify up to $100 million of liabilities incurred either by the Company’s current and former directors and officers orby the Company in providing indemnification to these individuals on substantially the same terms and conditions as would apply under anarm’s length, commercial arrangement. The Company was required to pay Woodbridge an annual fee of $750,000, which was less than thepremium that would have been paid for commercial insurance. In 2008, the Company replaced this agreement with a conventional insurance
agreement. The Company was entitled to seek indemnification from Woodbridge for any claims arising from events prior to April 17, 2008, solong as the claims were made before April 17, 2014. As there were no claims against the indemnity by current or former directors and officers,
the Company did not seek indemnification from Woodbridge under this arrangement.
Transactions with associates and joint ventures
From time to time, the Company enters into transactions with its investments in associates and joint ventures. These transactions typicallyinvolve providing or receiving services and are entered into in the normal course of business and on an arm’s length basis.
In connection with the 2008 acquisition of Reuters, the Company assumed a lease agreement with 3XSQ Associates, an entity owned by a
subsidiary of the Company and Rudin Times Square Associates LLC that was formed to build and operate the 3 Times Square property andbuilding in New York, New York that serves as the Company’s corporate headquarters. The Company follows the equity method of accounting
for its investment in 3XSQ Associates. The lease provides the Company with over 690,000 square feet of office space until 2021 and includes
provisions to terminate portions early and various renewal options. In 2014, the Company’s costs under this lease arrangement for rent, taxes
and other expenses were $39 million (2013 – $38 million). At December 31, 2014 and 2013, the amounts payable to 3XSQ Associates were
negligible.

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Thomson Reuters Annual Report 2014

Prior to the fourth quarter of 2013, the Company and The Depository Trust & Clearing Corporation (“DTCC”) each had a 50% interest in
Omgeo, a provider of trade management services. In the fourth quarter of 2013, the Company sold its 50% interest in Omgeo to DTCC. Seenote 6. Prior to the sale, Omgeo paid the Company for use of a facility and technology and other services which were valued at $7 million in
2013.
Compensation of key management personnel
Key management personnel compensation, including directors, is as follows:
YEAR ENDED DECEMBER 31,
2014
2013
Salaries and other benefits
Share-based payments(1)

23
12

32
14

Total compensation

35

46

(1)

Share-based payments exclude mark-to-market fair value adjustments.

Key management personnel are comprised of the Company’s directors and executive officers.
Note 31: Subsequent events
2015 dividends
In February 2015, the Company’s board of directors approved a $0.02 per share increase in the annualized dividend to $1.34 per commonshare. A quarterly dividend of $0.335 per share will be paid on March 16, 2015 to shareholders of record as of February 23, 2015.
Share repurchases
From January 1, 2015 through March 4, 2015, the Company has repurchased 4.9 million of its common shares for $193 million at an average
price per share of $39.41.

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Executive Officers and Directors
EXECUTIVE OFFICERS
The following individuals are our executive officers as of March 4, 2015 and are members of our Executive Committee.
NAME

AGE

TITLE

James C. Smith

55

President & Chief Executive Officer

Stephane Bello

54

Executive Vice President & Chief Financial Officer

Deirdre Stanley

50

Executive Vice President, General Counsel & Secretary

Peter Warwick

63

Executive Vice President & Chief People Officer

Andrew Rashbass

49

Chief Executive, ReutersDavid W. Craig

45

President, Financial & Risk

Susan Taylor Martin

51

President, Legal

Basil Moftah

39

President, Intellectual Property & Science

Brian Peccarelli

53

President, Tax & Accounting

OTHER EXECUTIVE COMMITTEE MEMBERS
The following individuals are also members of our Executive Committee as of March 4, 2015, but are not considered executive officers:
NAME

AGE

TITLE

Gus Carlson

56

Executive Vice President & Chief Communications Officer

Rick King

58

Executive Vice President & Chief Operating Officer, Technology

Gonzalo Lissarrague

44

President, Global Growth & Operations

Neil Masterson

46

Executive Vice President & Chief Transformation Officer

James Powell53

Executive Vice President & Chief Technology Officer

Brian Scanlon

42

Executive Vice President & Chief Strategy Officer

Mark Schlageter

48

Chief Customer Officer

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Thomson Reuters Annual Report 2014

Jim Smith has been President & Chief Executive Officer and a director of our company since January 2012.
Mr. Smith was Chief Operating Officer of Thomson Reuters from September 2011 to December 2011 and Chief
Executive Officer of Thomson Reuters Professional division from April 2008 to September 2011. Prior to theacquisition of Reuters by Thomson in April 2008, he served as Chief Operating Officer of Thomson and as
President and Chief Executive Officer of Thomson Learning’s Academic and Reference Group. Mr. Smithjoined the Thomson Newspaper Group in 1987. He held several staff and operating positions, culminating in
his role as head of operations for Thomson Newspapers in the U.S. With the sale of the Thomson NewspaperGroup in 2000, he joined Thomson in 2001 as Executive Vice President. He began his career as a journalist
and held several editorial and general management positions prior to joining Thomson. He is also a directorof Pfizer, Inc. Mr. Smith resides in Stamford, Connecticut, United States.
Stephane Bello has been Executive Vice President & Chief Financial Officer since January 2012. Mr. Bello was
Chief Financial Officer of Thomson Reuters Professional division from April 2008 to December 2011. Mr. Bellojoined Thomson in 2001 and was Senior Vice President and Treasurer until April 2008. Prior to joining
Thomson, Mr. Bello held several positions at General Motors in its treasury division, including regional
Treasurer of General Motors Europe and Assistant Treasurer of General Motors in New York. Mr. Bello resides
in Darien, Connecticut, United States.

Deirdre Stanley has been Executive Vice President & General Counsel since April 2008 and Secretary since
January 2013. Prior to Thomson’s acquisition of Reuters in April 2008, Ms. Stanley was Senior Vice President
and General Counsel of Thomson. Prior to joining Thomson in July 2002, Ms. Stanley served in various senior
executive positions, including Deputy General Counsel at USA Networks, Inc. and its successor companies.
From 1997 through 1999, Ms. Stanley served as Associate General Counsel for GTE Corporation, where sheheaded the mergers and acquisitions practice group. Before GTE Corporation, Ms. Stanley practiced law at
Cravath, Swaine & Moore in New York. Ms. Stanley resides in New York, New York, United States.

Peter Warwick has been Executive Vice President & Chief People Officer since January 2012. Mr. Warwick
was Chief Operating Officer of Thomson Reuters Professional division from April 2011 to December 2011.
Mr. Warwick joined Thomson in 1998 and has held a number of key leadership positions within theorganization, including President and CEO of Thomson Reuters Legal, President and CEO of Thomson Tax &Accounting and CEO of Thomson Legal & Regulatory Asia Pacific. Prior to joining Thomson, Mr. Warwick was
managing director of Pitman Publishing, deputy chief executive of the Longman Group and chief executive ofPearson Professional in London. Mr. Warwick is a director of Scholastic Corp. Mr. Warwick resides in
New York, New York, United States.

Andrew Rashbass has been Chief Executive, Reuters, responsible for leading our news and media business,since July 2013. Prior to joining Thomson Reuters, Mr. Rashbass was chief executive of The Economist Group,
where he previously served in roles as the publisher of The Economist and managing director of
Economist.com. Before joining The Economist Group in 1997, Mr. Rashbass worked at AssociatedNewspapers. Mr. Rashbass started his career at Andersen Consulting, now called Accenture. Mr. Rashbass
resides in London, United Kingdom.

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Thomson Reuters Annual Report 2014

David Craig has been President, Financial & Risk since January 2012. Mr. Craig was President of Thomson
Reuters Governance, Risk & Compliance business from September 2010 through December 2011. Prior tothat, Mr. Craig was Chief Strategy Officer of Thomson Reuters from April 2008 to August 2010. He joined
Reuters in April 2007 as Head of Strategy. Prior to April 2007, Mr. Craig was a Partner at McKinsey &Company and a Senior Principal and Partner at American Management Systems. Mr. Craig resides in London,
United Kingdom.

Susan Taylor Martin has been President, Legal since January 2014. Prior to January 2014, Ms. Taylor Martin
held a number of other key leadership positions within the organization, including Managing Director of theLegal business in the U.K. and Ireland, President of Media and Global Head of Corporate Strategy for Reuters.
Ms. Taylor Martin joined Reuters in 1993. Ms. Taylor Martin is a non-executive director of Whitbread PLC. Ms.
Taylor Martin resides in New York, New York, United States as part of an expatriate assignment.

Basil Moftah has been President, Intellectual Property & Science since January 2014. Mr. Moftah joined
Reuters in Egypt in 1997 and has held a number of other key leadership positions within the organization,
including the Managing Director for Middle East, Africa & Russia, Head of Rapidly Developing Economies forfinancial clients, Investment Associate for the Reuters Venture Capital Group and Head of Business Direct in
EMEA. Mr. Moftah has worked in a number of countries for Thomson Reuters, including United ArabEmirates, the U.S., the U.K., Italy and Switzerland. Mr. Moftah resides in London, United Kingdom as part ofan expatriate assignment.

Brian Peccarelli has been President, Tax & Accounting since February 2011. Prior to February 2011,
Mr. Peccarelli was President of Workflow & Service Solutions within the Tax & Accounting business for sevenyears. Mr. Peccarelli joined Thomson in 1984 and has held a number of other key leadership positions within
the organization, including Vice President of the Corporate Services Market and General Manager for RIA
Compliance. He is also a certified public accountant and a lawyer. Mr. Peccarelli resides in Plano, Texas,
United States.

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Thomson Reuters Annual Report 2014

Other Executive Committee Members
Gus Carlson has been Executive Vice President & Chief Communications Officer of Thomson Reuters since
December 2013. From February 2011 to November 2013, Mr. Carlson ran his own communications
consultancy. Prior to February 2011, Mr. Carlson held a number of executive roles at Thomson Reuters,
including Executive Vice President & Chief Marketing Officer and prior to April 2008, Mr. Carlson was SeniorVice President and Chief Marketing & Communications Officer for Thomson. 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 also a former business news editor for The New York Times and The
Miami Herald. Mr. Carlson resides in Bedford, New York, United States.

Rick King has been Executive Vice President & Chief Operating Officer, Technology since January 2014.
Mr. King has held a number of executive roles at the company since 2000, including Chief Technology Officerof the former Professional division and Chief Technology Officer of the Legal segment. Prior to joining thecompany, he held executive positions at Ceridian Employer Services, Jostens Learning and WICAT Systems.
Mr. King is a director of TCF Financial Corporation. Mr. King resides in Eden Prairie, Minnesota, United States.

Gonzalo Lissarrague has been President, Global Growth & Operations since January 2014. Mr. Lissarraguejoined La Ley, an Argentine legal content company, in 1991, and held a number of positions in editorial,
marketing, sales and strategy. Mr. Lissarrague played a key role during Thomson’s acquisition of La Ley in2000 and was appointed Managing Director, Argentina, for the Legal and Tax & Accounting businesses in
2004. After the formation of Global Growth & Operations in 2012, Mr. Lissarrague was Managing Director of
Latin America through the end of 2013. Mr. Lissarrague resides in Buenos Aires, Argentina.

Neil Masterson has been Executive Vice President & Chief Transformation Officer since October 2013.
Mr. Masterson joined Thomson in 2002 and has held a number of key leadership positions within theorganization, including Managing Director of the Investor segment of Financial & Risk and Vice President,
Treasury and Corporate Planning for Thomson Reuters. Prior to joining Thomson, Mr. Masterson spent two
years at Reuters as Senior Vice President of Business. Mr. Masterson resides in New York, New York,
United States.

James Powell has been Executive Vice President & Chief Technology Officer since July 2008. Previously, Mr.
Powell was Chief Technology Officer of Thomson Reuters Markets division from April 2008 to July 2008. Prior
to Thomson’s acquisition of Reuters, he was Chief Technology Officer of Reuters Enterprise division from July
2007 to April 2008. At Reuters, Mr. Powell held a number of other senior leadership positions, including
Global Head of Product Development. He has also held senior leadership positions at Solace Systems, Citadel
Investment Group and TIBCO Finance Technology. Mr. Powell resides in Bronxville, New York, United States.

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Thomson Reuters Annual Report 2014

Brian Scanlon has been Executive Vice President & Chief Strategy Officer since January 2014. Mr. Scanlon
previously spent 14 years at McKinsey & Co., where he held a number of senior leadership positions, including
partner in the Corporate Finance & Strategy practice in Stamford, Connecticut; Chief Financial Officer for thenortheast offices; and Managing Partner of McKinsey’s South East Asian Private Equity practice in Singapore.
Prior to joining McKinsey, Mr. Scanlon was a senior accountant and consultant at Andersen Consulting, now
called Accenture. Mr. Scanlon resides in New Canaan, Connecticut, United States.

Mark Schlageter has been Chief Customer Officer since February 2015. Mr. Schlageter has held a number of
executive roles at Thomson Reuters since joining the company in 1997, including most recently Managing
Director of the Americas for Financial & Risk. Mr. Schlageter has also held a number of key customer facing
senior leadership positions in the Legal, Financial & Risk and Tax & Accounting businesses and has lived innumerous countries. Mr. Schlageter resides in Wilton, Connecticut, United States.

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Thomson Reuters Annual Report 2014

DIRECTORSThe names, municipalities and countries of residence, offices and principal occupations of our directors as of March 4, 2015 are shown below.
Each director has been a director since the year indicated below. All of our directors have been engaged for more than five years in theirpresent principal occupations or in other capacities within Thomson Reuters, except where noted below. Each director will continue to holdoffice until the next annual meeting of our shareholders or until the director resigns or a successor is elected or appointed.
COMMITTEE MEMBERSHIPS
NAME

AGE

David Thomson, Chairman
James C. Smith
Sheila C. Bair
Manvinder S. Banga
David W. Binet, Deputy Chairman
Mary Cirillo
Michael E. Daniels
Steven A. Denning
P. Thomas Jenkins
Ken Olisa, OBE
Vance K. Opperman, Lead Independent Director
Peter J. Thomson
Wulf von Schimmelmann

57
55
60
60
57
67
59
67
55
63
72
49
68

Page 143

AUDITCORPORATEGOVERNANCEHUMAN
RESOURCES

‰
‰
‰
‰
‰
‰
Chair
‰

Chair

‰
‰
Chair
‰
‰

DIRECTOR
SINCE

1988
2012
2014
2009
2013
2005
2014
2000
2014
2008
1996
1995
2011

Thomson Reuters Annual Report 2014

David Thomson is Chairman of Thomson Reuters. He is also a Chairman of Woodbridge, the Thomson family
investment company, and Chairman of The Globe and Mail Inc., a Canadian media company. Mr. Thomson isan active private investor with a focus on real estate and serves on the boards of several private companies.
Mr. Thomson has a MA from Cambridge University. Mr. Thomson resides in Toronto, Ontario, Canada.

Jim Smith is President and Chief Executive Officer of Thomson Reuters. Prior to becoming CEO in January
2012, he held a number of key leadership positions over his 25 year career with Thomson Reuters, including
Chief Operating Officer of Thomson Reuters, Chief Executive Officer of Thomson Reuters Professional division
and Executive Vice President and Chief Operating Officer of Thomson. He is also a director of Pfizer, Inc. Mr.
Smith received a BA degree from Marshall University. Mr. Smith resides in Stamford, Connecticut, UnitedStates.

Sheila C. Bair is a Senior Advisor to the Pew Charitable Trusts, an independent non-profit and nongovernmental global research and public policy organization. She is also Senior Advisor to DLA Piper, aninternational law firm. Prior to August 2011, she was the Chair of the Federal Deposit Insurance Corporation,
where she served in that capacity from June 2006 to July 2011. Prior to that, she has also served as the Dean’sProfessor of Financial Regulatory Policy for the Isenberg School of Management at the University of
Massachusetts-Amherst, Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury,
Senior Vice President for Government Relations of the New York Stock Exchange and Commissioner of theCommodity Futures Trading Commission. Ms. Bair is also a director of Host Hotels & Resorts, Inc. and Banco
Santander, SA. Ms. Bair has a bachelor’s degree and law degree from the University of Kansas. Ms. Bairresides in Washington, D.C., United States.
Manvinder (Vindi) S. Banga joined Clayton, Dubilier & Rice, LLC, a private equity investment firm, as an
Operating Partner based in London in June 2010. Prior to that, he held a number of senior executive positions
over his 33 year career with Unilever, including President, Global Food, Home & Personal Care of Unilever
PLC, Business Group President of Unilever’s Home and Personal Care business in Asia and Chairman andManaging Director of Hindustan Unilever Ltd. He is also Chairman of Mauser GMBH; as well as a nonexecutive director of Marks and Spencer Group plc. Mr. Banga was a member of the Prime Minister of India’s
Council on Trade & Industry from 2004 to 2014. He is a graduate of the Indian Institute of Technology (IIT),
Delhi, where he completed his Bachelor of Technology in mechanical engineering and the IIM Ahmedabad
where he obtained a post graduate degree in management. Mr. Banga resides in London, United Kingdom.
David W. Binet is Deputy Chairman of Thomson Reuters. He is also President and a director of Woodbridge,
the Thomson family investment company. Prior to January 2013, he held a number of senior positions at
Woodbridge between 1999 and 2012, including Chief Operating Officer. Mr. Binet is a director of The Globe
and Mail Inc., a Canadian media company and of a number of other companies in which Woodbridge isinvested. Mr. Binet is also Chairman of the Thomson Reuters Foundation. Prior to joining Woodbridge in 1999,
he was a partner at a major law firm. Mr. Binet has a law degree from McGill University, a BA from Queen’s
University and a graduate degree in Journalism from Northwestern University. Mr. Binet resides in Toronto,
Ontario, Canada.

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Mary Cirillo is a corporate director. Ms. Cirillo was Chair and Chief Executive Officer of Opcenter, LLC, anInternet consulting firm, from 2000 to 2003. Prior to that, she was a senior banking executive at Bankers
Trust and Citibank for over 20 years. Ms. Cirillo is a member of the Advisory Board of Hudson VenturePartners, L.P., a venture capital firm, and serves on the boards of several cultural and educationalorganizations. She is also a director of ACE Ltd. She has a BA from Hunter College. Ms. Cirillo resides in New
York, New York, United States.

Michael E. Daniels is a corporate director. In March 2013, Mr. Daniels retired as Senior Vice President andGroup Executive IBM Services after 36 years with the company where he directed IBM’s consulting, systems
integration, application management, cloud computing and outsourcing services around the globe.
Mr. Daniels also held a number of senior leadership positions in his career at IBM, including General Manager
of Sales and Distribution Operations of the Americas as well as leading Global Services in the Asia Pacificregion. He is also a director of SS&C Technologies Holdings, Inc. and Tyco International Ltd. Mr. Daniels has abachelor’s degree in political science from Holy Cross College and is also a trustee of Holy Cross. Mr. Daniels
resides in Hilton Head, South Carolina, United States.

Steven A. Denning is Chairman and a Managing Director of General Atlantic LLC, a global growth private
equity firm. Mr. Denning has been with General Atlantic (or its predecessor) since 1980. He serves on theboard of Engility Holdings, Inc. and on the boards of several cultural and educational organizations. He has a
BS degree from the Georgia Institute of Technology and an MBA from the Graduate School of Business,
Stanford University. Mr. Denning resides in Greenwich, Connecticut, United States.

Paul Thomas Jenkins is Chairman of OpenText Corporation, a multinational enterprise software firm. He hasserved as a director of OpenText since 1994 and as its Chairman since 1998. From 1994 to 2005, Mr. Jenkins
was President and Chief Executive Officer, and then from 2005 to 2013, Executive Chairman and Chief
Strategy Officer of OpenText. Prior to that, Mr. Jenkins was employed in technical and managerial capacities
at a variety of technology companies dating back to the late 1970s. He is also a director of OpenText
Corporation, TransAlta Corporation and Manulife Financial Corporation. Mr. Jenkins has an MBA from
Schulich School of Business at York University, an M.A.Sc. in electrical engineering from the University ofToronto and a B.Eng. & Mgt. in Engineering Physics and Commerce from McMaster University. Mr. Jenkins
resides in Canmore, Alberta, Canada.
Ken Olisa, OBE, is Founder and Chairman of Restoration Partners, a boutique technology merchant bankadvising and investing in IT companies. He joined the board of Reuters in 2004. From 1992 to 2006, Mr. Olisa
was Chair and CEO of Interregnum PLC, a public technology merchant bank. Prior to that, and following acareer at IBM, he was a senior executive for over 10 years at Wang Labs. From 1998 to 2008, Mr. Olisa wasalso a director of Open Text Corporation and of Eurasian Natural Resources Corporation from 2007 until 2011.
He is Chairman of London-listed Outsourcery plc and serves on the boards of several U.K. not-for-profit
organizations. He has a MA from Fitzwilliam College, Cambridge. Mr. Olisa resides in Kingston, United
Kingdom.

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Vance K. Opperman is President and Chief Executive Officer of Key Investment, Inc., a private investmentcompany involved in publishing and other activities, and Lead Independent Director of Thomson Reuters.
Previously, Mr. Opperman was President of West Publishing Company, an information provider of legal andbusiness research which is now owned by Thomson Reuters. He serves as Lead Independent Director of TCF
Financial Corporation. He also serves on the board of several educational and not-for-profit organizations. He
has a law degree from the University of Minnesota and practiced law for many years. Mr. Opperman resides in
Minneapolis, Minnesota, United States.

Peter J. Thomson is a Chairman of Woodbridge, the Thomson family investment company. Mr. Thomson is anactive private equity investor and serves on the boards of several private companies. He has a BA from the
University of Western Ontario. Mr. Thomson resides in Toronto, Ontario, Canada.

Wulf von Schimmelmann is a corporate director. He joined the board of Thomson Reuters in July 2011.
Mr. von Schimmelmann was Chief Executive Officer of Deutsche Postbank AG from 1999 to 2007, where hetransformed the organization from a check processing division of Deutsche Post to one of Germany’s leading
retail banks. Since 2008, he has served as Chairman of the Supervisory Board of Deutsche Post DHL AG, aninternational leader in mail and logistics services. He also serves as a member of the Supervisory Board ofMaxingvest AG and Allianz Deutschland AG and as a director of Accenture Ltd. Prior to his lengthy career inbanking, he was a partner at McKinsey & Co., working in Switzerland, the U.S. and Germany. Mr. vonSchimmelmann was also previously a member of the Supervisory Board of Deutsche Teleknow, a director ofWestern Union and Chair of BAWAG P.S.K. Mr. von Schimmelmann received a degree in economic sciences
and his Ph.D. in economics from the University of Zurich. Mr. von Schimmelmann resides in Munich, Germany.

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AUDIT COMMITTEE
The Audit Committee comprises Vance K. Opperman (Chair), Sheila Bair, P. Thomas Jenkins, Ken Olisa and Wulf von Schimmelmann. All
members of the Audit Committee are financially literate in accordance with applicable Canadian and U.S. securities rules. Mr. Jenkins
qualifies as an “audit committee financial expert” (within the meaning of applicable SEC rules) and meets applicable tests for accounting or
related financial management expertise within the meaning of NYSE listing standards. Biographies for each member of our Audit Committee
are included earlier in this section of the annual report.
The following is a brief summary of the education and experience of each member of the Audit Committee that is relevant to theperformance of his or her responsibilities, including any education or experience that has provided the member with an understanding of theaccounting principles we use to prepare our financial statements.
AUDIT COMMITTEE MEMBEREDUCATION/EXPERIENCE

Vance K. Opperman (Chair)

Š
Š
Š
Š
Š

Sheila Bair

Š
Š
Š
Š
Š
Š

P. Thomas Jenkins

ŠŠŠKen OlisaŠŠŠ

Wulf von SchimmelmannŠŠŠFormer President and COO of West Publishing Company
President and CEO of Key Investment, Inc.
Chair of Audit Committee of Thomson Reuters for over 10 years
Member of private company audit committees and TCF Financial Corporation audit committee
Represented financial institutions in securities and financial regulations matters as a practicing attorney
Former Chair of the Federal Deposit Insurance Corporation
Former Dean’s Professor of Financial Regulatory Policy for the Isenberg School of Management at the Universityof Massachusetts-Amherst
Former Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury
Former Senior Vice President for Government Relations of the New York Stock Exchange
Former Commissioner of the Commodity Futures Trading Commission
Member of Host Hotels audit committee
Former President and CEO of OpenText Corporation
Chairman of OpenText Corporation
Former member of the Audit Committee of BMC Corporation
Former Interregnum PLC Chair and CEO
Member of private company audit committees and former member of a public company audit committee
U.K. Financial Services Authority approved person
Former CEO of Deutsche Postbank AG
Degree in economic sciences and Ph.D in economics from University of Zurich
Member of Maxingvest AG audit committee

PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth fees related to services rendered by PricewaterhouseCoopers LLP and its affiliates in 2014 and 2013.
2014(in millions of U.S. dollars)

Audit fees
Audit-related fees
Tax fees
All other fees
Total
*

$

$

21.4
1.8
3.9
0.9
28.0

2013*

$

$

25.7
1.7
6.6
0.7
34.7

2013 fee amounts have been updated from the amounts disclosed in last year’s annual report to reflect approximately $2.9 million of additional approved audit fees and$266,000 of additional approved audit-related fees identified by PricewaterhouseCoopers which related to the year ended December 31, 2013.

The following are descriptions of fees for services rendered by PricewaterhouseCoopers LLP in 2014 and 2013.

Audit Fees
These audit fees were for professional services rendered for the audits of consolidated financial statements, reviews of interim financial
statements included in periodic reports, audits related to internal control over financial reporting, statutory audits and services that generally
only the independent auditor can reasonably provide, such as comfort letters and consents. These services included French translations of
our financial statements, MD&A and financial information included in our interim and annual filings and prospectuses and other offering
documents.

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Thomson Reuters Annual Report 2014

Audit-related Fees
These audit-related fees were for assurance and related services that are reasonably related to the performance of the audit or review of thefinancial statements and are not reported under the “audit fees” category above. These services included subsidiary carve-out audits,transaction due diligence, SSAE 16 engagements, licensing of technical research material, audits of various employee benefit plans, agreedupon procedures principally related to executive compensation reporting in the management proxy circular.

Tax Fees
Tax fees were for tax compliance, tax advice and tax planning. These services included the preparation and review of corporate andexpatriate tax returns, assistance with tax audits and transfer pricing matters, advisory services relating to federal, state, provincial andinternational tax compliance, and restructurings, mergers and acquisitions.

All Other Fees
Fees disclosed in the tables above under the item “all other fees” were for services other than the audit fees, audit-related fees and tax fees
described above. These services include independent benchmarking services and IT information security assessments.
Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy regarding its pre-approval of all audit and permissible non-audit services provided to ourcompany by the independent auditors.
Š

Š

Š

Š

Š

The policy gives detailed guidance to management as to the specific types of services that have been pre-approved by the Audit
Committee.
The policy requires the Audit Committee’s specific pre-approval of all other permitted types of services that have not already been preapproved.
Senior management periodically provides the Audit Committee with a summary of services provided by the independent auditors inaccordance with the pre-approval policy.
The Audit Committee’s charter delegates to its Chair the authority to evaluate and approve engagements in the event that the need arises
for approval between Audit Committee meetings. If the Chair approves any such engagements, he must report his approval decisions to
the full Audit Committee at its next meeting.
For the year ended December 31, 2014, none of the fees of Thomson Reuters described above made use of the de minimis exception topre-approval provisions as provided for by Rule 2-01(c)(7)(i)(C) of SEC Regulation S-X and Section 2.4 of the Canadian Securities
Administrators’ Multilateral Instrument 52-110 (Audit Committees).

CONTROLLED COMPANY
Our company is a “controlled company” as a result of Woodbridge’s ownership.
The NYSE corporate governance listing standards require a listed company to have, among other things, solely independent directors on its
compensation committee and nominating/corporate governance committee. A “controlled company” (as defined by the NYSE) is a companyof which more than 50% of the voting power is held by an individual, group or another company and is exempt from these requirements.
Supplemental guidelines issued by the Canadian Coalition for Good Governance (CCGG) address controlled companies. A “controlled
company” (as defined by CCGG) includes corporations with a controlling shareholder who controls a sufficient number of shares to be able toelect the board of directors or to direct the management or policies of the corporation.
While a majority of members of each of the Corporate Governance Committee and the HR Committee of our company are independent, theboard believes it is appropriate for Mr. Binet to serve on these committees and has approved our reliance on the NYSE’s controlled company
exemption to do so. CCGG has stated that it believes it is appropriate for directors who are related to the controlling shareholder to sit onthese committees to bring the knowledge and perspective of the controlling shareholder to executive compensation, appointments andboard nominations.
No directors affiliated with Woodbridge serve on our Audit Committee, which is required to have solely independent directors.

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Thomson Reuters Annual Report 2014

INDEPENDENT DIRECTORS
A majority of the board is independent. Under the corporate governance guidelines adopted by the board, a director is not considered
independent unless the board affirmatively determines that the director has no “material relationship” with Thomson Reuters. In
determining the independence of directors, the board considers all relevant facts and circumstances. In March 2015, the board conducted its
annual assessment of the independence of each of its current members and determined that nine of the 13 directors (69%) serving on theboard are independent. In determining independence, the board examined and relied on the applicable definitions of “independent” in the
NYSE listing standards and Canadian Securities Administrators’ National Instrument 58-101. The board also reviewed the results ofquestionnaires completed by directors.
DIRECTOR INDEPENDENCE
NAME OF DIRECTORMANAGEMENTINDEPENDENTDavid Thomson
James C. Smith✓

Sheila C. Bair✓

Manvinder S. Banga✓

David W. Binet
Mary Cirillo✓

Michaels E. Daniels✓

Steven A. Denning✓

P. Thomas Jenkins✓

Ken Olisa, OBE✓

Vance K. Opperman✓Peter J. Thomson

REASON FOR NON-INDEPENDENCE✓

A Chairman of Woodbridge, the principal
shareholder of Thomson Reuters✓

President & Chief Executive Officer ofThomson Reuters✓

President of Woodbridge, the principal
shareholder of Thomson Reuters✓

A Chairman of Woodbridge, the principal
shareholder of Thomson Reuters✓

Wulf von Schimmelmann
Total

NOT INDEPENDENT

1

9

4

None of Messrs. D. Thomson, Binet or P. Thomson is a member of Thomson Reuters executive management team. With its substantial equity
investment in Thomson Reuters, Woodbridge considers that its interests as a shareholder are aligned with those of all other shareholders.
In determining the independence of directors, the board also considers that in the normal course of business, we provide services to, andreceive services from, companies with which some of the independent directors are affiliated. Based on the specific facts and circumstances,the board determined in March 2015 that these relationships were immaterial.

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Thomson Reuters Annual Report 2014PRESIDING DIRECTORS AT MEETINGS OF NON-MANAGEMENT AND INDEPENDENT DIRECTORS
Our board begins each in-person meeting with an “in-camera” session with the CEO, but no other members of management. This is intended
to give the CEO an opportunity to discuss his objectives for the day’s meeting, and for directors to express preliminary observations based on
their prior review of meeting materials. This permits a more effective use of time in the board meeting. A similar session is typically held with
the CEO at the end of the meeting, followed by a meeting of the board without the CEO or other members of management present. Board
committees also utilize “in-camera” meetings for discussions without the CEO or members of management present.
At least once each year, the board meets without the CEO and without the directors affiliated with Woodbridge. These meetings of the
independent directors, which follow a regularly scheduled board meeting, are chaired by the Lead Independent Director. The Lead
Independent Director develops the agenda for these meetings, although discussion has not been limited to it. The agenda generally
addresses any issues that might be specific to a public corporation with a controlling shareholder. The Lead Independent Director reports to
the Chairman, Deputy Chairman and the CEO on the substance of these meetings to the extent that action is appropriate or required and has
been available for consultation with the other independent directors as required. One such meeting of the independent directors took placein March 2014 and was presided over by Mr. Opperman.

CODE OF BUSINESS CONDUCT AND ETHICS
Our Code of Business Conduct and Ethics (Code) applies to our employees, directors and officers, including our CEO, CFO and Controller. Our
employees, directors and officers are required to submit an acknowledgment that they have received and read a copy of the Code andunderstand their obligations to comply with the principles and policies outlined in it. In an effort to promote further a culture of ethicalbusiness conduct throughout Thomson Reuters, we have instituted a mandatory online training course related to the Code. The Corporate
Governance Committee receives an annual report regarding the Code from the General Counsel. We updated our Code in 2014 to reflect
internal policy and guideline changes.
In 2014 and through the date of this annual report, no material violations by our directors or executive officers were reported for the Code.
Also, no waivers under the Code were sought by or granted to any of our directors or executive officers.

ADDITIONAL DISCLOSURES
Additional information regarding the members of our board of directors, including our corporate governance and compensation practices,
will be provided in our management proxy circular, which is being prepared in connection with our upcoming annual meeting of shareholders
to be held on May 6, 2015. Each board committee has a written charter which is publicly available at www.thomsonreuters.com. The Audit
Committee’s charter has been filed on SEDAR and EDGAR and is incorporated by reference in, and forms a part of, this annual report.
As of March 4, 2015, our executive officers and directors as a group beneficially owned, directly or indirectly, or exercised control or direction
over, less than 1% of our outstanding common shares, based on the issued and outstanding shares of our company as of that date.
David Thomson and Peter J. Thomson are the Chairmen, and David W. Binet is the President, of Woodbridge, our controlling shareholder. As
of March 4, 2015, Woodbridge beneficially owned approximately 57% of our common shares.
Since 1992, Mr. Olisa has been chairman of two boutique merchant banks that provide advisory services to technology companies, some ofwhich are or have been early stage. Mr. Olisa serves on the board of directors of a number of these companies. He was previously a director of
Axellis Limited which was dissolved after liquidation proceedings in the U.K. in 2012.

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Thomson Reuters Annual Report 2014

Additional Information
Thomson Reuters Corporation was incorporated under the Business Corporations Act (Ontario) by articles of incorporation dated
December 28, 1977. Our company amalgamated with one of its wholly owned subsidiaries on March 10, 2010. Our registered office is located at
333 Bay Street, Suite 400, Toronto, Ontario M5H 2R2, Canada and our principal executive office is located at 3 Times Square, New York, NewYork 10036, United States. Prior to April 17, 2008, Thomson Reuters Corporation was known as The Thomson Corporation.

DESCRIPTION OF CAPITAL STRUCTURE
As of March 4, 2015:ŠŠ

our authorized share capital consisted of an unlimited number of common shares, an unlimited number of preference shares, issuable inseries, and a Thomson Reuters Founders Share; andwe had outstanding 791,777,694 common shares, 6,000,000 Series II preference shares and one Thomson Reuters Founders Share.

Common Shares
Each common share entitles its holder to receive notice of, to attend and to vote at all meetings of our shareholders (except for meetings ofholders of a particular class or series of shares other than the common shares required by applicable laws to be held as a separate class orseries meeting). Each common share also entitles its holder to receive dividends when declared by our board of directors, subject to the rights
of holders of the preference shares. All dividends declared by our board of directors are paid equally on all common shares. Holders ofcommon shares will participate equally in any distribution of our assets upon liquidation, dissolution or winding-up, subject to the rights of theholders of the preference shares. There are no preemptive, redemption, purchase or conversion rights attaching to our common shares.
We have also issued Depositary Interests (DIs) as an alternative way to hold our common shares. DIs are designed to facilitate the transfer
and settlement of our shares in the U.K. when they are traded in the secondary market. Each DI represents one common share. The holder ofDIs has beneficial ownership of the underlying common shares. The administrator of our DI program holds legal title to the common sharesand holds the shares on behalf of and for the benefit of the DI holder. Holders of DIs have the same voting rights and receive the same
dividends as other common shareholders.

Preference Shares
Our preference shares may be issued in one or more series as determined by our board of directors. Our board of directors is authorized to fix
the number, the consideration per share and the rights and restrictions of the preference shares of each series. The preference shares of eachseries are to rank on a parity with the preference shares of each other series with respect to the payments of dividends and the return ofcapital on our liquidation, dissolution or winding-up. The preference shares are entitled to preference over the common shares and any othershares ranking junior to the preference shares with respect to the payment of dividends and the return of capital. The special rights andrestrictions attaching to the preference shares as a class may not be amended without approval of at least two-thirds of the votes cast at a
meeting of the holders of preference shares. The holders of preference shares are not entitled to any voting rights except as provided by ourboard of directors when authorizing a series or as provided by law. Our Series II preference shares are non-voting and are redeemable at our
option for C$25.00 per share, together with accrued dividends. Dividends are payable quarterly at an annual rate of 70% of the Canadianbank prime rate applied to the stated capital of the shares.

Thomson Reuters Founders Share
Our company has issued a Thomson Reuters Founders Share to the Thomson Reuters Founders Share Company, which enables the Thomson
Reuters Founders Share Company to exercise extraordinary voting power to safeguard the Thomson Reuters Trust Principles and to thwart
those whose holdings of Thomson Reuters voting shares threaten the Thomson Reuters Trust Principles. The Founders Share entitles theThomson Reuters Founders Share Company to vote in circumstances where an acquiring person, other than an approved person or an entity
within Thomson Reuters, has become or becomes “interested” in, or the beneficial owner of, 15% or more of the outstanding voting shares ofThomson Reuters or has obtained or is attempting to obtain the ability to control the exercise of, or beneficial ownership of, 30% or more of
the outstanding voting shares of Thomson Reuters. In general, votes cast by the Thomson Reuters Founders Share Company, alone or in
combination with votes cast by approved persons, will be sufficient either to negate the voting power of the acquiring person or to constitutethe requisite majority voting power. The rights attaching to the Founders Shares may not be varied or abrogated in any respect without theprior written consent of the Thomson Reuters Founders Share Company. In addition, without the prior written consent of the Thomson
Reuters Founders Share Company, we may not take certain fundamental corporate actions, including certain changes to our share capital, or
remove or amend provisions in our organizational documents relating to the Thomson Reuters Founders Share Company and the Founders

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Thomson Reuters Annual Report 2014

Share. For a discussion of the Thomson Reuters Trust Principles and the Thomson Reuters Founders Share Company, see the “Material
Contracts” section below.

MARKET FOR SECURITIES
Listings and Index Participation
Our common shares are listed in Canadian dollars on the TSX and in U.S. dollars on the NYSE under the symbol “TRI” and our Series II
preference shares are listed in Canadian dollars on the TSX under the symbol “TRI.PR.B”. Our company is included in the S&P/TSX series ofindices.

Share Prices
The following table provides information regarding the price history of our common shares and Series II preference shares for the periods
indicated.
COMMON SHARES (C$)
High

Low

Closing

COMMON SHARES (US$)

SERIES II PREFERENCE SHARES (C$)

Trading
volumeHigh

Low

Closing

Trading
volumeHigh

Low

Closing

Trading
volume42.10 39.65
40.55 37.04
38.62 36.86
40.03 37.10
40.00 37.59
38.94 37.24
41.87 38.42
41.75 40.40
41.92 39.91
42.35 39.45
45.76 41.77
47.94 44.37

40.18 16,332,490
38.00 25,844,924
37.79 18,778,336
39.67 15,078,831
37.59 13,068,087
38.85 10,839,140
41.19
13,761,738
41.20 11,747,020
40.80 14,715,506
41.93 18,210,865
45.60 11,344,730
46.87 18,321,556

38.34
36.81
34.58
36.55
36.44
36.45
38.44
38.34
38.31
37.82
39.69
41.44

35.66
33.60
33.21
33.84
34.63
34.07
36.06
36.83
35.90
34.98
36.81
38.49

36.06
34.34
34.20
36.18
34.69
36.36
37.81
37.90
36.41
37.22
39.60
40.34

13,541,632
19,748,620
16,144,510
17,143,282
15,257,480
18,482,566
15,398,626
15,031,882
11,552,972
22,193,540
13,218,183
15,224,426

18.70
18.42
18.09
17.47
18.20
18.05
18.02
18.67
18.50
18.40
18.63
18.09

17.76
17.75
17.23
17.09
17.25
17.75
17.75
17.79
18.25
17.95
17.75
16.69

17.94
17.91
17.25
17.47
18.05
17.85
17.91
18.41
18.35
18.40
18.05
17.45

105,066
21,083539,971
115,051
199,922
132,948
148,146
608,917
68,29064,619120,605
90,053

49.89
50.62

48.76
49.06

40.44 38.03
40.36 37.95

38.40 17,040,047
39.27 18,944,155

17.97
17.20

15.48
16.05

16.00
16.57

37,98947,862

2014

January
February
March
April
May
June
July
AugustSeptember
OctoberNovember
December
2015
January
February

45.29
47.95

15,646,885
16,355,713

DIVIDENDS
Our company (and our predecessor companies) have paid dividends for over 30 years and we view dividends as a critical component ofshareholder return.
Any dividends that we declare on our shares take into account all factors that our board considers relevant, including our available cash flow,
financial condition and capital requirements. Our target dividend payout ratio is 40% to 50% of annual free cash flow over the long term.
Our board reviews our dividend policy in the first quarter of each fiscal year. In February 2015, our board approved an increase in ourannualized dividend rate to $1.34 per share (or $0.335 per share on a quarterly basis), effective with our dividend payable on March 16, 2015
to holders of record as of February 23, 2015. This was the 22nd consecutive annual dividend increase for our company. The declaration ofdividends by our board and the amount of those dividends is at the discretion of the board.

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Thomson Reuters Annual Report 2014

The following table provides information regarding the default currencies for our dividend payments, as well as other currency options thatwere available to our shareholders as of March 4, 2015.
DIVIDEND CURRENCY (DEFAULT)DIVIDEND CURRENCY (FOR ELECTING HOLDERS)

Common shares

U.S. dollars

Canadian dollars
British pounds sterlingDIs (representing common shares)

British pounds sterling

U.S. dollars
Canadian dollars

Series II preference shares

Canadian dollars

N/A

We also have a dividend reinvestment plan which allows eligible holders of our common shares to elect to have their cash dividends
reinvested in additional shares.
Additional information regarding currency elections for our dividends as well as our dividend reinvestment plan is provided in the Investor
Relations section of our website under “Dividends”.
We pay dividends on our Series II preference shares quarterly at an annual rate of 70% of the Canadian bank prime rate applied to the statedcapital of these shares.
The table below sets forth the dividends declared on our common shares and Series II preference shares in the last three years and the firstquarter of 2015.
COMMON SHARES (US$)

SERIES II PREFERENCE SHARES (C$)

2012

Q1
Q2
Q3
Q4
2013
Q1
Q2
Q3
Q4
2014
Q1
Q2
Q3
Q4
2015
Q1
*

$
$
$
$

0.320000
0.320000
0.320000
0.320000

C$
C$
C$
C$

0.130533
0.130533
0.131967
0.131967$$$$

0.325000
0.325000
0.325000
0.325000

C$
C$
C$
C$

0.129452
0.13089
0.132329
0.132329$$$$

0.330000
0.330000
0.330000
0.330000

C$
C$
C$
C$

0.129452
0.130890
0.132329
0.132329$

0.335000

C$*

The first quarter 2015 dividend on our Series II preference shares had not yet been declared by our company as of the date of this annual report.

Woodbridge
As of March 4, 2015, Woodbridge beneficially owned approximately 57% of our common shares and is the principal and controllingshareholder of Thomson Reuters.
Woodbridge, a private company, is the primary investment vehicle for members of the family of the late Roy H. Thomson, the first Lord
Thomson of Fleet. Woodbridge is a professionally managed company that, in addition to its controlling interest in Thomson Reuters, hasother substantial investments.

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Prior to his passing in 2006, Kenneth R. Thomson controlled our company through Woodbridge. He did so by holding shares of a holding
company of Woodbridge, Thomson Investments Limited. Under his estate arrangements, the 2003 TIL Settlement, a trust of which the trust
company subsidiary of a Canadian chartered bank is trustee and members of the family of the late first Lord Thomson of Fleet are
beneficiaries, holds those holding company shares. Kenneth R. Thomson established these arrangements to provide for long-term stability ofthe business of Woodbridge. The equity of Woodbridge continues to be owned by members of successive generations of the family of the first
Lord Thomson of Fleet.
Under the estate arrangements of Kenneth R. Thomson, the directors and officers of Woodbridge are responsible for its business andoperations. In certain limited circumstances, including very substantial dispositions of Thomson Reuters Corporation common shares by
Woodbridge, the estate arrangements provide for approval of the trustee to be obtained. Woodbridge’s primary investment is its holding of
our shares. It actively monitors our company as a controlling shareholder. In its involvement with our company, Woodbridge focuses on thesematters:ŠŠŠŠ

corporate governance, including the effectiveness of our 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; andcapital strategy.

With its substantial equity investment in our company, Woodbridge considers that its interests as a Thomson Reuters shareholder arealigned with those of all other shareholders.
The Corporate Governance Committee of our board considers any transactions that may take place between our company and Woodbridge,
with any committee members related to Woodbridge abstaining from voting. In addition, any transactions between Woodbridge and ourcompany are subject to public disclosure and other requirements under applicable Canadian securities laws.

TRANSFER AGENTS AND REGISTRARSTYPE OF SHARESCOUNTRY

TRANSFER AGENT/REGISTRARLOCATION OF TRANSFER FACILITIESCommon shares

CanadaComputershare Trust Company ofCanadaToronto; Montreal; Calgary; and Vancouver

United States

Computershare Trust Company N.A.

Canton, Massachusetts; Jersey City,
New Jersey; and College Station, Texas

United Kingdom

Computershare Investor Services PLC

Bristol, England

Depositary interests

United Kingdom

Computershare Investor Services PLC

Bristol, England

Series II preference shares

CanadaComputershare Trust Company of Canada

TorontoRATINGS OF DEBT SECURITIESOur access to financing depends on, among other things, suitable market conditions and the maintenance of suitable long-term credit
ratings. Our credit ratings may be adversely affected by various factors, including increased debt levels, decreased earnings, declines incustomer demands, increased competition, a further deterioration in general economic and business conditions and adverse publicity. Any
downgrades in our credit ratings may impede our access to the debt markets or raise our borrowing rates.
Our long-term unsecured debt securities are rated Baa2 (stable) by Moody’s, BBB+ (stable) by S&P, BBB (high) (stable) by DBRS and BBB+
(stable) by Fitch. These credit ratings are not recommendations to purchase, hold or sell securities and do not address the market price orsuitability of a specific security for a particular investor. Credit ratings may not reflect the potential impact of all risks on the value of
securities. In addition, real or anticipated changes in the rating assigned to a security will generally affect the market value of that security.
Shareholders cannot be assured that a rating will remain in effect for any given period of time or that a rating will not be revised orwithdrawn entirely by a rating agency in the future.

Moody’s Investors Services (Moody’s)
Moody’s long-term credit ratings are on a rating scale that ranges from Aaa to C, which represents the range from highest to lowest qualityof such securities rated. Moody’s “Baa” rating assigned to our long-term debt instruments is the fourth highest rating of nine rating
categories. Obligations rated “Baa” are subject to moderate credit risk. They are considered medium-grade and as such may possess certain
speculative characteristics. Moody’s appends numerical modifiers from 1 to 3 to its long-term debt ratings, which indicate where theobligation ranks within its generic rating category, with 1 being the highest. Outlooks represent Moody’s assessment regarding the likely
direction of the rating over the medium-term.

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Thomson Reuters Annual Report 2014

Standard & Poor’s (S&P)
S&P’s long-term credit ratings are on a rating scale that ranges from AAA to D, which represents the range from highest to lowest quality ofsuch securities rated. S&P’s “BBB” rating assigned to our long-term debt instruments is the fourth highest rating of 10 major rating
categories. A “BBB” rating indicates that the obligor has adequate capacity to meet its financial commitments. However, adverse economic
conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment. S&P
uses “+” or “-” designations to indicate the relative standing of securities within a particular rating category. Outlooks represent S&P’s
assessment regarding the potential direction of the rating over the immediate term (typically six months to two years).

DBRS Limited (DBRS)
DBRS’ credit ratings are on a long-term debt rating scale that ranges from AAA to D, which represents the range from highest to lowest
quality of such securities rated. DBRS’s “BBB” rating assigned to our long-term debt is the fourth highest of the 10 rating categories for longterm debt. Debt securities rated “BBB” are of adequate credit quality, and while the capacity for the payment of financial obligations is
considered acceptable, it may be vulnerable to future events. A reference to “high” or “low” reflects the relative strength within the rating
category. Rating Trends represent DBRS’s opinion regarding the outlook for the ratings, should present tendencies continue.

Fitch Ratings (Fitch)
Fitch’s long-term credit ratings are on a rating scale that ranges from AAA to D, which represents the range from highest to lowest quality ofsuch securities rated. Fitch’s “BBB” rating assigned to our long-term debt instruments is the fourth highest rating of 10 rating categories. A“BBB” rating indicates a low expectation of default, and that while the capacity for payment of financial commitments is consideredadequate, adverse business or economic conditions are more likely to impair this capacity. Fitch uses “+” or “-” designations to indicate therelative standing of securities within a particular rating category. Outlooks represents Fitch’s assessment regarding the direction a rating islikely to move over a one to two-year period.

MATERIAL CONTRACTS
Credit Agreement
We have a $2.5 billion syndicated credit facility agreement which matures in May 2018. The facility may be used to provide liquidity for
general corporate purposes (including to support our commercial paper program).
We may also request an increase, subject to approval by applicable lenders, in the lenders’ commitments up to a maximum amount of$3.0 billion.
Based on our current credit ratings, the cost of borrowing under the agreement is priced at LIBOR/EURIBOR plus 100 basis points. If ourlong-term debt rating was downgraded by Moody’s or Standard & Poor’s, our facility fee and borrowing costs may increase, althoughavailability would be unaffected. Conversely, an upgrade in our ratings may reduce our facility fees and borrowing costs. We monitor thelenders that are party to our facility and believe they continue to be able to lend to us.
We guarantee borrowings by our subsidiaries under the credit facility. We must also maintain a ratio of net debt as of the last day of eachfiscal quarter to EBITDA as defined in the credit agreement (earnings before interest, income taxes, depreciation and amortization and othermodifications described in the credit agreement) for the last four quarters ended of not more than 4.5:1. We were in compliance with thiscovenant at December 31, 2014.

Trust Principles and Founders Share Company
Our company is dedicated to upholding the Thomson Reuters Trust Principles and to preserving its independence, integrity and freedom
from bias in the gathering and dissemination of information and news.
The Thomson Reuters Trust Principles are:
Š
Š
Š

Š
Š

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; andThat no effort shall be spared to expand, develop and adapt the news and other services and products of Thomson Reuters so as tomaintain its leading position in the international news and information business.

Thomson Reuters Founders Share Company was established in 1984 when Reuters became a public company. The directors of the Thomson
Reuters Founders Share Company have a duty to ensure, to the extent possible, that the Thomson Reuters Trust Principles are compliedwith.

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Thomson Reuters Annual Report 2014

The directors of the Thomson Reuters Founders Share Company are experienced and eminent people from the world of politics, diplomacy,
journalism, public service and business. They generally have all held high offices in their respective sectors. The directors are selected by anomination committee and proposed to the board of the Thomson Reuters Founders Share Company for appointment. The nominationcommittee also has unique features. Two of its members are judges from the European Court of Human Rights and assist in scrutinizing
candidates’ suitability. Our board currently has two representatives on the nomination committee and the Thomson Reuters Founders Share
Company’s board has five representatives, including its chairman. Other members are representatives of the press associations from theUnited Kingdom, Australia and New Zealand.
The directors have a minimum of two meetings per year. Directors receive reports on our activities in the different fields in which we operate
and the directors meet with both our board and representatives of senior management. Through the Thomson Reuters Founders Share
Company’s chairman, regular contact is maintained with our company. The relationship is one of trust and confidence.
The current directors, with their countries of residence and the year of initial appointment are:NAME

COUNTRY

DIRECTOR SINCE

Dame Helen Alexander
Uffe Ellemann-Jensen (Chairman)
John Fairfax
Lawton Fitt
Lord Jay of Ewelme
Yuko Kawamoto
Pascal Lamy
Nicholas Lemann
Pedro MalanJohn H. McArthur
Vikram Singh Mehta
Dr. Michael Naumann
Beverly LW Sunn
Steven Turnbull

U.K.
Denmark
Australia
U.S.A.
U.K.
Japan
FranceU.S.A.
BrazilU.S.A.
India
Germany
Hong Kong
U.K.

2011
2001
2005
2014
2013
2011
2009
2014
2011
2001
2013
2010
2012
2013

Prior to May 1, 2014, directors were appointed for an initial term of five years that ends on December 31 following the fifth anniversary of
appointment. Those directors are eligible for re-appointment for an additional term of five years, subject to a maximum term of 15 years.
Directors appointed on or after May 1, 2014 serve an initial term of three years and must retire on December 31 following the third anniversaryof appointment. Those directors are eligible for re-appointment for an additional term of three years, subject to a maximum term of nine years.
Our company is a party to an Amended Deed of Mutual Covenant, under which Thomson Reuters and the Founders Share Company havecovenanted with United Kingdom, Australian and New Zealand press associations to use their best endeavors to ensure that the Trust
Principles are complied with in relation to Thomson Reuters.
Under a Thomson Reuters Trust Principles Support Agreement, Woodbridge has agreed to support the Trust Principles and to exercise its
voting rights to give effect to this support and the Founders Share Company has irrevocably designated Woodbridge as an approved person
for so long as Woodbridge is controlled by members of the Thomson family, companies controlled by them and trusts for their benefit.

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Thomson Reuters Annual Report 2014

PRINCIPAL SUBSIDIARIESThe following provides information about our principal subsidiaries as of December 31, 2014. As of that date, we beneficially owned, directly
or indirectly, 100% of the voting securities and non-voting securities of each of these subsidiaries. Certain subsidiaries, each of which
represents not more than 10% of the consolidated assets and not more than 10% of the consolidated revenues of our company, and all ofwhich, in the aggregate, represent not more than 20% of the total consolidated assets and the total consolidated revenues of our company
as of December 31, 2014, have been omitted.
SUBSIDIARYJURISDICTION OF INCORPORATION/FORMATION

3276838 Nova Scotia Limited
FX Alliance, LLC
International Thomson Reuters B.V.
LiveNote Technologies Limited
LN Holdings Limited
Manatron Holdings, Inc.
Manatron, Inc.
Manatron Intermediate Holdings, Inc.
MarkMonitor Inc.
Reuters (Canvas) Holdings 1 Limited
Reuters Holdings Limited
Reuters International Holdings SARL
Reuters Limited
Reuters Transaction Services Limited
The Thomson Organisation (No. 10)
The Thomson Organisation Limited
Thomson Holdings Limited
Thomson Information & Publishing Holdings Limited
Thomson Information & Solutions (Holdings) Limited
Thomson Information & Solutions Limited
Thomson Publishing Group Limited
Thomson Reuters (GRC) Inc.
Thomson Reuters (Legal) Inc.
Thomson Reuters (Markets) Deutschland GmbHThomson Reuters (Markets) LLC
Thomson Reuters (Markets) SA
Thomson Reuters (Professional) UK Ltd.
Thomson Reuters (Scientific) LLC
Thomson Reuters (Tax & Accounting) Inc.
Thomson Reuters (TRI) Inc.
Thomson Reuters America Corporation
Thomson Reuters Canada Limited
Thomson Reuters Corporation Pte Limited
Thomson Reuters Deutschland GmbHThomson Reuters Finance S.A.
Thomson Reuters FranceThomson Reuters Global Resources
Thomson Reuters Group Limited
Thomson Reuters Holdings A.G.
Thomson Reuters Holdings B.V.
Thomson Reuters Holdings Inc.
Thomson Reuters Holdings S.A.

Nova Scotia, Canada
Delaware, U.S.A.
The Netherlands
England
BermudaDelaware, U.S.A.
Michigan, U.S.A.
Delaware, U.S.A.
Delaware, U.S.A.
BermudaEngland
Switzerland
EnglandEnglandEnglandEnglandEnglandEnglandEnglandEnglandEngland
Delaware, U.S.A.
Minnesota, U.S.A.
Germany
Delaware, U.S.A.
Switzerland
England
Delaware, U.S.A.
Texas, U.S.A.
Delaware, U.S.A.
Delaware, U.S.A.
Ontario, Canada
Singapore
Germany
Luxembourg
FranceIrelandEngland
Switzerland
The Netherlands
Delaware, U.S.A.
Luxembourg

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Thomson Reuters Annual Report 2014SUBSIDIARYJURISDICTION OF INCORPORATION/FORMATION

Thomson Reuters Holdings SARL
Thomson Reuters Hong Kong Limited
Thomson Reuters India Holdings B.V.
Thomson Reuters Investment Holdings Limited
Thomson Reuters Markets KK
Thomson Reuters Netherlands Holdings BVThomson Reuters No. 4 Inc.
Thomson Reuters No. 5 LLC
Thomson Reuters No. 8 LLC
Thomson Reuters Professional KK
Thomson Reuters U.S. LLC
Thomson UK Limited
TR (2008) Limited
TR Holdings Limited
TR Netherlands Holdings Coöperatief U.A.
TR Organisation Limited
TR Professional Holdings Limited
TR U.S. Inc.
TTC (1994) Limited
TTC Holdings LimitedWest Publishing Corporation
Worldscope/Disclosure L.L.C.

FranceThe Netherlands
The Netherlands
EnglandJapanThe Netherlands
Delaware, U.S.A.
Delaware, U.S.A.
Delaware, U.S.A.
Japan
Delaware, U.S.A.
EnglandEngland
BermudaThe Netherlands
EnglandEngland
Delaware, U.S.A.
EnglandEnglandMinnesota, U.S.A.
Delaware, U.S.A.

INTERESTS OF EXPERTS
Our independent registered public accounting firm is PricewaterhouseCoopers LLP, who has issued an independent registered public
accounting firm’s report dated March 13, 2015 in respect of our consolidated financial statements as at December 31, 2014 and December 31,
2013, and for each of the years ended December 31, 2014 and December 31, 2013 and our internal control over financial reporting as at
December 31, 2014. PricewaterhouseCoopers LLP has advised that it is independent with respect to our company within the meaning of theRules of Professional Conduct of the Institute of Chartered Accountants of Ontario, and the rules of the U.S. Securities and Exchange
Commission and the requirements of the Public Company Accounting Oversight Board (United States).

IRAN THREAT REDUCTION AND SYRIA HUMAN RIGHTS ACT DISCLOSURE
The Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRA) requires us to disclose information in our annual report if we or any of
our affiliates knowingly engaged in certain transactions or dealings related to Iran in 2014. Disclosure is generally required, even if thetransactions or dealings were conducted in compliance with applicable law and regulations.
During 2014, certain of our non-U.S. subsidiaries sold Reuters text newswires and video broadcast services products to one customer coveredby the ITRA. These sales were exempt from applicable U.S. economic sanctions laws and regulations as exports of information andinformational materials and authorized under the applicable U.K. and E.U. sanctions against Iran. These sales represented approximately
0.0023% of our company’s 2014 consolidated revenues. The aggregate gross revenues attributable to these sales in 2014 wereapproximately $286,000. We estimate that the 2014 net profit attributable to these sales was approximately $22,300. Our Reuters businessdoes not plan to renew its existing customer contract or enter into new sales contracts with customers covered by the ITRA, subject to certain
limited exceptions where continued sales are permissible under applicable export control and economic sanctions laws and regulations.
Additionally, in 2014, our Intellectual Property & Science business sold products to two customers covered by the ITRA. The products soldwere exempt from applicable economic sanctions laws and regulations as exports of information and informational materials. Thesetransactions and dealings by our Intellectual Property & Science business represented approximately 0.000003% of our 2014 consolidated
revenues. The aggregate gross revenues attributable to these sales in 2014 were approximately $384. We estimate that the 2014 net profit
attributable to these sales was approximately $62. Our Intellectual Property & Science business does not plan to enter into sales contracts
with customers covered by the ITRA, subject to certain limited exceptions where sales are permissible under applicable export control andeconomic sanctions laws and regulations.

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Thomson Reuters Annual Report 2014

FURTHER INFORMATION
For more information about Thomson Reuters, please see our various filings and notifications posted on our website,
www.thomsonreuters.com, the Canadian Securities Administrators’ SEDAR website, www.sedar.com, and in the EDGAR section of the
Securities and Exchange Commission’s (SEC) website at www.sec.gov. In addition, you may review a copy of our filings at the SEC’s Public
Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information.
Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of our shares and securities
authorized for issuance under our equity compensation plans, will be contained in our management proxy circular, which is being prepared inconnection with our upcoming annual meeting of shareholders to be held on May 6, 2015. Copies of our management proxy circular will beavailable upon request in writing to: Investor Relations Department, Thomson Reuters, 3 Times Square, New York, New York 10036, UnitedStates. Requests may also be sent by e-mail to: investor.relations@thomsonreuters.com.
Information required to be provided pursuant to Canadian Securities Administrators Multilateral Instrument Form 52-110F1 (Audit
Committees) for our company is included in the “Executive Officers and Directors” section of this annual report.
Under NYSE listing standards, we are required to disclose any significant ways in which our corporate governance practices differ from thoserequired to be followed by U.S. domestic companies under NYSE listing standards. There is only one significant difference between our
corporate governance practices and those required of domestic companies under NYSE listing standards. NYSE listing standards require
shareholder approval of all “equity compensation plans” and material revisions to these types of plans (with limited exceptions). TSX rules
require shareholder approval of security based compensation arrangements only for plans which involve newly issued shares or specified
amendments to the plans. Similar to a number of other Canadian issuers, our company follows the TSX rules.
Our Code of Business Conduct and Ethics, corporate governance guidelines and board committee charters are available on
www.thomsonreuters.com as well as in print or electronically (without charge) to any shareholder who requests a copy in writing or by e-mailto our Investor Relations Department. Shareholders and other interested parties may contact the board or its non-management or
independent directors as a group, or the directors who preside over their meetings, by writing to them c/o Secretary to the Board, Thomson
Reuters, 3 Times Square, New York, New York 10036, United States.
Any statement in this annual report about any of our contracts or other documents is not necessarily complete. If the contract or document isfiled as an exhibit to our annual report with the SEC or as a material contract with the Canadian securities regulatory authorities, then thecontract or document is deemed to modify the description contained in this annual report. You should review the contracts or documents
themselves for a complete description.
We are required to file reports and other information with the SEC under the U.S. Securities Exchange Act of 1934, as amended (U.S.
Securities Exchange Act) and regulations under that act. As a foreign private issuer, we are exempt from the rules under the U.S. Securities
Exchange Act prescribing the form and content of proxy statements and our officers, directors and principal shareholders are exempt fromthe reporting and short swing profit recovery provisions contained in Section 16 of the U.S. Securities Exchange Act.
Front cover photo credit: REUTERS/Valentin Flauraud, January 26, 2013.

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Thomson Reuters Annual Report 2014

Cross Reference Tables
For the convenience of our shareholders, we have prepared one annual report for the year ended December 31, 2014 that addresses ourdisclosure requirements under applicable Canadian and U.S. laws and regulations.
The following pages include cross reference tables that reflect where we have disclosed information required to be contained in an annual
information form prepared in accordance with Canadian laws and regulations and an annual report on Form 40-F prepared in accordancewith SEC requirements.

ANNUAL INFORMATION FORM (FORM 51-102F2) CROSS REFERENCE TABLE
Page/Document

Item 1.

Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cover

Item 2.

Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Item 3.

Corporate Structure
3.1 Name, Address And Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2 Intercorporate Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

151
157-158

General Development of the Business
4.1 Three Year History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2 Significant Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

412, 28Describe the Business
5.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2 Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3 Companies With Asset-Backed Securities Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.4 Companies With Mineral Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.5 Companies With Oil And Gas Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2-13
14-22
N/A
N/A
N/A

Item 6.

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

152-153

Item 7.

Description of Capital Structure
7.1 General Description Of Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.2 Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.3 Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

151-152
N/A
154-155

Market for Securities
8.1 Trading Price And Volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.2 Prior Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

152
N/A

Item 9.

Escrowed Securities and Securities Subject to Contractual Restriction on Transfer . . . . . . . . . . . . . . . . . . . . .

N/AItem 10.

Directors and Officers
10.1 Name, Occupation And Security Holding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.2 Cease Trade Orders, Bankruptcies, Penalties Or Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.3 Conflicts Of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

138-150150
N/A

Item 11.

Promoters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

N/AItem 12.

Legal Proceedings and Regulatory Actions
12.1 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.2 Regulatory Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57
57

Item 13.

Interest of Management and Others in Material Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60-61

Item 14.

Transfer Agents and Registrars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

154

Item 15.

Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

155-156

Item 16.

Interest of Experts
16.1 Names Of Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.2 Interests Of Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

158
158

Item 17.

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

159

Item 18.

Additional Disclosure for Companies Not Sending Information Circulars . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

N/AItem 4.

Item 5.

Item 8.

Page 160

Thomson Reuters Annual Report 2014

FORM 40-F CROSS REFERENCE TABLE
Page/Document

Annual Information Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . See AIF Table
Audited Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76-137
Management’s Discussion And Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23-75
Disclosure Controls And Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Internal Control Over Financial Reportinga. Changes In Internal Controls Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
b. Management’s Report On Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . 76
c. Independent Auditor’s Report On Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . 77
Notice Pursuant To Regulation BTR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
Audit Committee Financial Expert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147, 149
Code Of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Principal Accountant Fees And Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147-148
Off-Balance Sheet Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Tabular Disclosure Of Contractual Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Identification Of The Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

Page 161

Thomson Reuters Annual Report 2014

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