reuters group plc annual report and form 20f 2005
reuters group plc annual report 
and form 20f 2005
reuters 2005
and beyond
for more information visit
wwwaboutreuterscom 01 introduction
02 financial highlights
03 chairman’s statement
04 chief executive’s review
05 selected financial highlights
07 operating and financial review
31 directors’ report
32 directors and senior managers
34 corporate governance and statement 
of directors’ responsibilities
39 remuneration report
49 united kingdom opinion
49 united states opinion
50 consolidated income statement
50 consolidated statement of recognised 
income and expense
51 consolidated balance sheet
52 consolidated cash flow statement
52 group accounting policies
58 notes to the financial statements
104 summary of differences between ifrs 
as adopted by the eu and us gaap
107 notes on the summary of differences between 
ifrs and us gaap
109 eleven year consolidated financial summary
111 separate financial statements for reuters group plc
111 parent company audit opinion
112 reuters group plc – balance sheet
113 reuters group plc – accounting policies
115 reuters group plc – notes to the financial statements 
118 information for shareholders
128 crossreference guide to form 20f
130 glossary
131 financial diary for 2006
131 where to find us
contents 
designed and produced by salterbaxter
printed by ctd printers limited
picture on cover
9 november 2005 a protester waves an
orange flag in baku azerbaijan reuters
photographer david mdzinarishvili
©reuters 2006
all rights reserved
reuters the sphere logo and lipper are the
trade marks or registered trade marks of the
reuters group around the world
this report is printed on paper made from
100 recycled fibres sourced only from post
consumer waste reuters group plc annual report and form 20f 2005 01
introduction
contents
this report comprises the annual report of reuters group plc in
accordance with the requirements of the united kingdom and its annual
report on form 20f in accordance with the requirements of the united
states securities and exchange commission sec for 2005 a cross
reference guide setting out the information in this annual report that
corresponds to the form 20f items is provided on pages 128 to 129
definitions of company
as used in this annual report ‘the group’ and ‘reuters’ refer to reuters
group plc and its subsidiary undertakings including joint ventures and
associates ‘the company’ refers to reuters group plc where relevant
instinet group incorporated instinet group is treated as a
discontinued operation as it was sold in december 2005
international financial reporting standards and uk gaap
prior to 2005 the group prepared its audited annual financial
statements under uk generally accepted accounting principles uk
gaap for the year ended 31 december 2005 the group is required to
prepare its annual consolidated financial statements in accordance with
international financial reporting standards ifrs and international
financial reporting interpretations committee ifric interpretations 
as adopted by the european union eu and those parts of the uk
companies act 1985 applicable to companies reporting under ifrs
the 2004 comparatives have been restated as part of the firsttime
adoption requirements of ifrs as allowed by sec rules in relation to
firsttime adoption of ifrs only one year of comparatives is reported
in this annual report
ifrs differs in certain respects from accounting principles generally
accepted in the united states us gaap the material differences
between ifrs and us gaap relevant to the group are explained 
on pages 104 to 108
the accounts for the parent entity reuters group plc refer pages 
112 to 117 continue to be prepared in accordance with uk gaap 
presentational currency
the consolidated financial statements of the group included in this
annual report are presented in pounds sterling £ on 31 december
2005 the noon buying rate in new york city for cable transfers in
foreign currencies as announced for customs purposes by the federal
reserve bank of new york noon buying rate was 172  £1 on 
7 march 2006 the noon buying rate was 174  £1 additional
information on exchange rates between the pound sterling and the
us dollar is provided on page 122
forwardlooking statements
under us law all statements other than statements of historical fact
included in this annual report are or may be deemed to be forward
looking statements within the meaning of the us private securities
litigation reform act of 1995 certain important factors that could
cause actual results to differ materially from those discussed in such
forwardlooking statements are described under section 18 ‘risk
factors’ on pages 24 to 25 as well as elsewhere in this annual report 
all written and oral forwardlooking statements made on or after the
date of this annual report and attributable to the group are expressly
qualified in their entirety by such factors
trademarks
reuters the sphere logo and reuters product names referred to in 
the report are trade marks or registered trade marks of the group
around the world other trade marks of third parties are used in this
report for the purpose of identification only
  02 reuters group plc annual report and form 20f 2005
first year of revenue growth up 3 since 2001
our 2005 revenue was £2409 million a 3 increase over 2004 2005
was the first full year of revenue growth since 2001 mainly driven by
growth in recurring revenues as a result of acquisitions made during
the year
recurring revenue
2
of £2242 million up 4 was driven by the
acquisition of moneyline telerate telerate and price increases
usage revenue
2
of £97 million up 13 reflected a good performance
in transaction services and higher reuterscom advertising revenue
outright revenue
2
was £70 million down 22 with the fall principally
explained by our continued withdrawal from technology consulting
operating profit up £13 million trading profit
1
up £8 million
operating profit was £207 million in 2005 up £13 million on the
previous year principally explained by an increase in trading profit
trading profit of £334 million trading margin 14 was up £8 million
over 2004 a strong revenue performance combined with continuing
tight cost control was sufficient to fund our core plus transformation
and growth investments of £41 million and a £7 million charge relating
to an accounting change in the reuters pension fund rpf to a
defined benefit plan
within trading profit the three year fast forward restructuring
programme delivered additional savings of £126 million bringing 
the cumulative total from the programme to £360 million
profit for the year up £107 million
our 2005 profit was £482 million an increase of £107 million over 
the previous year principally explained by the increase in profit from
discontinued operations and profit on asset sales
profit from discontinued operations which is where instinet group 
is reported as the disposal of a major business line was £253 million
this largely represents profit realised from our disposal of instinet
group £191 million and profit from instinet group in the eleven
months prior to its sale £68 million
profit from other asset disposals totalled £38 million largely from
further sales of our remaining stake in tibco software inc tsi
eps up 66p to 326p and adjusted eps
1
up 20p to 138p
eps was 326p in 2005 up 66p from the previous year mainly due 
to the increase in profit for the year
adjusted eps was 138p in 2005 up 20p from the previous year
reflecting stronger trading profit and a reduction in the number 
of shares in circulation due to the share buyback programme
dividend of 10p per share
a final dividend of 615p is proposed which will bring the total
dividend to 10p per share the same level as the previous year
net assets stand at £570 million
net assets stand at £570 million the same level as at 31 december
2004 the profit for the year was offset by the return of equity to
shareholders and the removal of minority interest equity due to 
the sale of instinet group
net funds
1
were £253 million down £73 million from the previous year
during 2005 £363 million of cash was returned to shareholders via
dividend payments and as a result of the share buyback programme
to return £1 billion to shareholders by july 2007 
notes
1 a number of measures are ‘nongaap’ figures which are business performance measures
used to manage the business and which supplement the ifrsbased headline numbers
these include ‘trading profit’ ‘adjusted eps’ and ‘net debtnet funds’ the rationale for using
nongaap indicators and their reconciliation to the most directly comparable ifrs indicator is
provided in sections 19 and 20 on pages 25 to 30
2 see note 2 of the financial statements on page 59 for definitions of the terms ‘recurring’
‘usage’ and ‘outright’ revenue
financial highlights
1
revenue – £m
04
05
2339
2409
operating profit trading profit
1
and margins – £m and 
04
05
operating margin 9
operating margin 9
trading margin 14 
trading margin 14 
207 
194 
334
326
profit for the year – £m
04
05
375
482
eps and adjusted eps
1
– pence
04
05
adjusted eps 138p
adjusted eps 118p
eps 326p
eps 260p
net funds
1
and net assets – £m
04
05
net funds 253
net funds 326
net assets 570
net assets 570 reuters group plc annual report and form 20f 2005 03
chairman’s statement
in my first full year as chairman i have had the opportunity to travel
around the reuters world meeting many of our people and customers
i am greatly encouraged by what i have seen and heard – a business
regaining its confidence and that of its customers and well placed 
to enter a new phase of growth i am humbled by the courage and
conviction shown by our people particularly our journalists who
continue to operate in areas where the threat of violence and arbitrary
detention is the norm in 2005 we mourned the deaths of waleed
khaled who was shot and killed in iraq and rashid khaled who died
there too following a car crash in basra we remain intensely troubled
by the difficult circumstances of journalists in war zones and continue
to press for a better model of engagement between the media and
the military
i am privileged to lead a worldclass board which encompasses 
a broad range of backgrounds and experiences i am a passionate
believer in the power of diversity to enhance decision making the
unique outlook each board member brings is undoubtedly the board’ s
greatest asset as a board we have worked hard to develop a healthy
relationship with management characterised by constructive challenge
and support tom glocer is an exceptional chief executive
the board and management have worked together to define 
a coherent strategic framework the resulting strategy for growth
builds on our core strengths in content and transaction services and
addresses our customers’ critical needs we must also continue to
transform our core business by pursuing greater efficiency and
simplicity in everything we do
in a world where trust is scarce the reuters brand which has trust at
its heart resonates deeply it is our challenge to grow the company 
to fill the space occupied by the brand reuters is unique in that it is
governed by the reuters trust principles which commit us to act with
integrity independence and without bias these principles are not
restricted to the collection and dissemination of the news they inform
every decision we make whether it concerns our customers suppliers
staff or the communities in which we operate a responsible approach to
business is not optional without responsibility there is no sustainability
for over 150 years reuters has been relentless in the pursuit of truth
we have built one of the world’s great brands now i am confident
that we are on course to enjoy a new phase of growth
niall fitzgerald kbe
chairman
i am greatly encouraged by what 
i have seen and heard – a business
regaining its confidence and that 
of its customers and well placed 
to enter a new phase of growth 04 reuters group plc annual report and form 20f 2005
chief executive’s review
to see tom glocer reuters ceo answering some key questions 
visit wwwaboutreuterscominvestors
what was the highlight for you in 2005
the key thing for me is that we went from four years of losing revenue
to revenue growth – that’s really important for our shareholders and
for our employees as well
fast forward has just completed did it achieve its objectives
our fast forward transformation plan has achieved its objectives 
in full the £440 million in cost savings being delivered in 2006 has
turned reuters from lossmaking to profit and we have significantly
enhanced our product line putting out a slew of great products at
yearend we also improved customer service and built a solid
platform for growth
last july the company launched the core plus growth
initiatives which you said would strengthen the core business
and accelerate revenue growth it’s very early but is that
working as you had hoped
yes there are really good early signs of success in core plus 
there are four initiatives electronic trading highvalue content a 
new approach to enterprisewide sales and new markets and for 
each one we have an important milestone or set of milestones we 
can point to to show that we’re on track to deliver additional 
growth at reuters
how do you think our customers are responding to 
those changes
i judge the customer response in a number of ways
first is it coming through in revenues and in sales the answer is yes
– we’ve seen increases in these lines
second by how they tell reuters they are feeling – we have a formal
customer satisfaction survey that goes to about 12000 users and 
that’s shown steady improvement
and finally the thing i really like is i just go out and spend time with
customers i walk around the trading desks i talk to our customers
and they tell me they can see the difference at reuters
and what about the product offering at reuters
we seek to provide a sensible range of products we believe that
customers don’t just want a single box at a single price that said
reuters had gotten far too complex with 1300 products in the
product line in 2001 what we’ve done is rationalise it reduced the
number of products and platforms and then put fitforpurpose
products out to meet different customer needs
we’re returning cash to the market via a share buyback 
why was that method chosen above others 
it’s a taxefficient strategy and it also allows us to retire shares while
putting out cash thereby raising the earnings per share for everybody
who remains a shareholder the reuters board looked at a number 
of alternatives and we thought this was the best method reflecting
our capital needs the needs of our shareholders and the market value
of reuters shares
looking to 2006 what do you see lying ahead for the company
i’m very excited about 2006 the key drivers for us will be to deliver 
on our core plus investments to accelerate our revenue growth to
continue to really focus on customer service and to maintain the good
cost control that we’ve had throughout the last few years“
what are your ambitions for the media business
reuters has operated a successful wholesale media agency for over 150
years and we believe we can grow a directtoconsumer media business
alongside it our content and our brand form a compelling offer to
individuals in search of an independent unbiased view of world events
why are electronic trading systems so important to reuters
reuters pioneered electronic trading with the launch of our first reuters
monitor dealing system back in 1981 since then we have had a track
record of continuous innovation in this area right up to the launch 
in 2005 of reuters trading for fixed income and reuters trading for
foreign exchange we see trading moving increasingly to electronic
platforms so we are investing heavily in this area as part of our core
plus strategy
how is reuters culture changing
there are many wonderful aspects of the reuters culture that underpin
much of the company’s enduring value however during fast forward
it has been important to introduce a leaner more performancedriven
aspect to our culture corporate cultures do not change overnight
but i am pleased with the progress we have made to date and confident
we can continue to blend these two aspects of our culture
tom glocer
ceo
we’ve completed the ‘fix it’ stage of
our strategy putting our core business
back on track reuters is now more
competitive simpler more customer
focused and more efficient reuters group plc annual report and form 20f 2005 05
the selected financial information set out below is derived from the consolidated financial statements the selected financial data should be
read in conjunction with the financial statements and related notes pages 50 to 108 as well as the operating and financial review 
on pages 7 to 30
the consolidated financial statements are prepared in accordance with ifrs which differs in certain respects from us gaap  for a summary 
of the material differences between ifrs and us gaap and related information relevant to the group see pages 104 to 108
consolidated income statement data
for the year ended 31 december
£m except per share data notes 2005 2004
amounts in accordance with ifrs
continuing activities
revenue 2409 2339
operating profit 207 194
profit before taxation 238 396
profit after taxation 229 356
profit from discontinued activities 253 19
profit for the year 482 375
basic earnings per ordinary share 326p 260p
basic earnings per ordinary share – continuing 163p 254p
diluted earnings per ordinary share 317p 254p
diluted earnings per ordinary share – continuing 159p 248p
basic earnings per ads 1 1958p 1561p
basic earnings per ads – continuing 978p 1527p
diluted earnings per ads 1 1903p 1522p
diluted earnings per ads – continuing 954p 1488p
dividends declared per ordinary share 2 100p 100p
dividends declared per ads 2
expressed in uk currency 600p 600p
expressed in us currency 1114c 1058c
weighted average number of ordinary shares in millions 1396 1400
reclassified
 3
reclassified
 3
reclassified
 3
reclassified
 3
£m except per share data notes 2005 2004 2003 2002 2001
amounts in accordance with us gaap
continuing activities
revenue 2503 2370 2669 2955 3017
incomeloss before taxes on income 207 501 8 198 83
income after taxes on income 211 395 23 168 29
incomeloss after taxes including minority interest
from discontinued activities 185 44 51 273 95
net incomeloss 396 439 28 105 124
basic earningsloss per ordinary share 284p 314p 20p 75p 88p
basic earnings per ordinary share – continuing 151p 281p 16p 120p 21p
diluted earningsloss per ordinary share 276p 305p 20p 75p 86p
diluted earnings per ordinary share – continuing 147p 274p 16p 120p 20p
basic earningsloss per ads 1 1702p 1882p 120p 448p 526p
basic earnings per ads – continuing 908p 1685p 98p 721p 124p
diluted earningsloss per ads 1 1654p 1832p 120p 448p 516p
diluted earnings per ads – continuing 882p 1643p 97p 721p 121p
dividends declared per ordinary share 2 100p 100p 100p 111p 180p
dividends declared per ads 2
expressed in uk currency 600p 600p 600p 667p 1080p
expressed in us currency 1114c 1058c 1051c 996c 1553c
weighted average number of ordinary shares 
in millions 1396 1400 1396 1395 1404
selected financial highlights 06 reuters group plc annual report and form 20f 2005
consolidated balance sheet data
at 31 december
£m 2005 2004
amounts in accordance with ifrs
total assets 2137 2580
noncurrent liabilities excluding deferred tax 763 669
net assets 570 570
shareholders’ equity attributable to the parent 570 371
share capital 467 455
£m 2005 2004 2003 2002 2001
amounts in accordance with us gaap
total assets 2326 2743 3280 3789 4641
longterm liabilities excluding deferred tax 696 597 499 474 514
shareholders’ equity 705 568 514 804 1212
notes
1 each ads american depositary share represents six ordinary shares
2 dividends declared for 2001–2002 include uk tax credits dividends declared for 2003–2005 exclude uk tax credits amounts receivable could be higher for us shareholders who have elected to
retain benefits of the old usuk tax treaty for further information relating to dividends and the uk taxation of dividends see pages 122 to 123
3 with the sale of instinet group and bridge trading company the us gaap numbers have been reclassified to separate the operating results into continuing and discontinuing incomeloss for the year
selected financial highlights continued reuters group plc annual report and form 20f 2005 07
company information
01 overview
reuters is the world’s largest electronic publisher of news and financial
data operating in 128 countries daily almost 350000 financial
professionals across the globe use market data and indepth news 
on financial and commodities markets from reuters and one billion
consumers see and hear news from reuters in the world’s media 
our trusted information drives decisionmaking around the world
based on our reputation for speed accuracy and independence
we provide tools to enable traders to perform fast and accurate
analysis of financial data and to manage trading risk our electronic
trading services connect financial communities helping them to gain
access to the best prices and to trade efficiently and costeffectively
we offer systems to help our customers manage trade processing
financial content and internal business processes more effectively
throughout their organisations
until december 2005 we owned a 62 stake in instinet group a
global electronic agency securities broker which operated two major
businesses instinet an institutional broker and inet an electronic
marketplace on 8 december 2005 we disposed of our entire interest
when instinet group was acquired by the nasdaq stock market inc
nasdaq for cash as a result of this transaction we received cash
proceeds of 11 billion £630 million which includes the dividend
received from instinet group prior to disposal less disposal costs 
we intend to return the sale proceeds to shareholders as part of the
twoyear £1 billion share buyback programme announced in july 2005
02 the markets we serve
financial markets
more than 90 of our revenue comes from serving the wholesale
financial services industry which includes investment and commercial
banks brokerdealers asset and wealth managers and commodities
and energy traders
we and our customers are affected by global economic trends and 
by developments in the financial services markets in this section 
we provide a highlevel macroeconomic overview of 2005 as the
backdrop to our performance during the year and to highlight the
factors we have taken into account in the development of our strategy
the global economy in 2005
the global economy was robust in 2005 although soaring energy
prices and inflationary pressure contributed to a reduction in global
gross domestic product gdp growth from 51 in 2004 to an
estimated 43 in 2005
1
 the us and asia excluding japan remained
the major growth engines of the world economy with china growing
at an estimated 9
1
 japan continued its gradual but sustained
recovery in 2005 growing by an estimated 2 the euro zone
economy struggled to gain momentum in 2005 up an estimated 
12 compared to 2 in the previous year uk gdp growth fell to 
an estimated 19 in 2005 from 32 in 2004
financial services industry performance in 2005
overall the financial services industry performed well in 2005 in terms
of both revenue and profit growth with the morgan stanley capital
international world financials index gaining 155 over the period
2

trading was a major source of profit for investment banks in 2005
fixed income trading revenue remained strong despite increasing
interest rates and equity trading revenue continued on an upward
trend as benchmark european and asian stock indices surged 
foreign exchange fx trading volumes continued to grow driven 
by increasing buyside activity
prime brokerage revenue which includes securities lending margin
and other services provided by banks to the hedge fund industry
grew by an estimated 28 in 2005 mergers and acquisitions ma
advisory also generated strong results for banks with global ma
volume growing by 38 to reach 29 trillion of announced deals
3

derivatives and commodities markets continued to grow with the
notional amount outstanding of credit default swaps seeing a 48
increase in the first half of 2005
4

according to the securities industry association us securities industry
employment grew by 3 in 2005 and had recovered 59 of the jobs
lost in the 2001–2003 downturn by the end of the year
5
 headcount 
in the uk financial sector also grew by 3 in 2005 according to the
centre for economics and business research however much of this
growth has been in offtrading floor areas such as compliance and
some banks are reported to have reduced their equity trading staff 
as they shift a greater proportion of their execution services to direct
market access and algorithmic trading
2005 indices performance
nikkei 225
bse sensex
ftse100
sp 500
dow jones industrials
hang seng
150
140
130
120
110
100
90
dec
2005
nov
2005
oct
2005
sep
2005
aug
2005
jul
2005
jun
2005
may
2005
apr
2005
mar
2005
feb
2005
jan
2005
dec
2004
operating and financial review
notes
1 world economic outlook september 2005 international monetary fund 
2005 figures are projections
2 price return in local currency equivalent in us is 87
3 dealogic preliminary data
4 2005 midyear market survey international swaps and derivatives association
5 securities industry association sia november and december figures are preliminary
company information
sections 0109
• the markets we serve
• strategy brand people
• corporate responsibility reuters in the
community environmental impact and
government regulation
financial review
sections 1011
• group financial performance
• divisional performance
supporting financial information
sections 1220
• treasury policies and risk management
• critical accounting policies risk factors
• nongaap measures reconciliations our challenge at reuters is to ensure that we continue to respond 
to fundamental structural changes in our markets and the resulting
changing requirements of our customers by aligning our business to
customer needs we are better positioned to shift our focus towards
the highergrowth areas of the financial markets
structural change
the financial services industry continued to undergo rapid structural
change in 2005 particularly with the continued growth in electronic and
automated trading program trading computerdriven automatically
executed securities trades involving a basket of stocks accounted for an
average 58 of total trading volume on the new york stock exchange
nyse during the final quarter of 2005 compared to 53 over the same
period in 2004
6
 algorithmic trading trading systems that use advanced
mathematical models to make transaction decisions in the financial
markets is also being more widely used as both buyside and sellside
trading operations drive for greater efficiency and search for trading
patterns that they can exploit
on the regulatory front we saw initiatives aimed at improving
transparency and ensuring ‘best execution’ of client orders in europe
the financial services industry is preparing for the introduction of the
markets in financial instruments directive mifid which is due to be
implemented in all eu member states in 2007 the directive increases
the regulatory obligations of many market participants and is intended
to harmonise regulation across the eu
in the us the sec adopted the regulation national market system
reg nms in april 2005 the new regulation prompted several major
changes to the us exchange landscape with nasdaq acquiring
instinet group and the nyse acquiring the archipelago exchange and
announcing it would combine its physical trading floor and an
automated platform into a hybrid market in a response to the
increased consolidation among us exchanges a group of five banks
and a hedge fund acquired 45 of the philadelphia stock exchange
new markets and alternative asset classes
hedge funds continue to grow although at a slower rate the growth
rate of net capital inflow into the hedge fund industry has come down
from 19 in 2004 to 4 in 2005 at the end of 2005 we estimate the
size of the hedge fund industry to be approximately 11 trillion
we saw further interest in investing in emerging markets in 2005 
for example despite structural challenges and restrictions on foreign
investments major western banks acquired significant stakes in a
number of chinese banks
demand for alternative asset classes such as structured financial
products property derivatives and emission credits continued to
increase in 2005 with booming property markets in many parts of the
world institutional investors increased their exposure to the property
sector and property indices saw strong returns emission credits
received much attention as an emerging alternative asset class with
the launch of the eu’s emissions trading scheme on 1 january 2005
media markets
the news media industry continued to show a mixed performance 
in 2005 news media companies’ revenue and profit performance 
were strongly correlated to the annual national local and classified
advertising spend
in western media markets broadcasters and publishers saw modest
growth in advertising revenues for their traditional offerings however
the emerging digital offerings of these providers only approximately
5 of their total 2005 revenues experienced audience and advertising
revenue growth of over 15 in developing markets particularly china
and india traditional and digital media platforms achieved double digit
growth according to universal mccann
the news media industry has been in a slow transition for the past 
20 years newspaper subscriptions continue to decline and newspaper
audiences get older as younger audiences focus their attention on
mobile and online services increased proliferation of cable news has
caused a wider distribution of advertising revenues it has also created
new opportunities for audiences worldwide to obtain news the
proliferation of broadband at home has further accelerated the pace
in the past three years
online offerings have already established themselves as important
media for news delivery as users prefer them to traditional media for
their timeliness and their ability to go further indepth technology
advances are overcoming the portability advantages of printed
publications and are allowing increasingly for timeshifting and
television mobility
03 our strategy
reuters goal is to be the information company our customers value
most by offering indispensable content innovative trading services
and great customer service
there are three stages to achieving this goal
• first complete and realise the benefits of fast forward our 
business transformation programme designed to turn reuters 
into a more competitive simpler more customerfocused and 
more efficient organisation – fix it
• second continue to streamline and improve the efficiency of our
operations – strengthen it
• third grow our core business and pursue new opportunities in
adjacent markets – grow it
‘fix it’ through fast forward our three year business
transformation programme
the ‘fix it’ phase has been largely completed with the end of the 
fast forward transformation period with fast forward we have 
made reuters more competitive by strengthening and segmenting
our product line to provide a range of products at different price
points to meet the needs of a wide range of finance professionals 
we have also simplified our product line cutting the total number of
products being sold from over 1300 to 400 this includes a reduction
in the number of desktop financial information products to 110 on 
the way to our target of 50
in addition we have streamlined our portfolio over the last four years
the most significant disposal was the sale of our stake in instinet group
completed in 2005 which generated cash proceeds of £630 million
customer satisfaction has been improved by recruiting and training
new customer support staff and by investing in service resilience 
08 reuters group plc annual report and form 20f 2005
notes
6 based on average weekly percentages during the fourth quarter 2005 compared to the fourth quarter 2004
operating and financial review continued reuters group plc annual report and form 20f 2005 09
we use several tools including a regular customer satisfaction survey
of some 12000 customers to gather feedback the survey has shown
improvement yearonyear for the past three years
consistent with our goal of making reuters more efficient we are 
on track to meet our cost savings targets in 2005 we delivered
cumulative annualised savings of £360 million towards our goal of
£440 million in 2006
‘strengthen it’ – continue to streamline and improve the
efficiency of our operations
we plan to continue the improving trend in customer service by
reducing time to market for new products raising product quality 
and improving the resilience of our service delivery
in july 2005 we announced four new service improvement initiatives
rationalising our data centres from 250 to approximately 10 globally 
to reduce costs simplify data distribution and help us to improve
service quality
simplifying our product development process and concentrating our
development activities into fewer centres to improve product quality
and reduce time to market
streamlining our content management processes to improve the
accuracy timeliness and breadth of our data
modernising our customer administration systems to make reuters
easier to do business with and enable us to deploy products faster 
to customers
we will be investing £170 million over a fouryear period in our ‘strengthen
it’ service improvement and cost efficiency initiatives by 2010 we
expect these to deliver total annualised savings of at least £150 million
‘grow it’ – grow our core business and pursue ‘core plus’
growth opportunities in adjacent markets
throughout 2005 reuters served a £6 billion per annum market for
financial information and related services with an expected medium
term growth rate of 2–4
we are continuing to enhance our product line by introducing new
versions of our flagship products by broadening and deepening our
content and by extending our distribution capability for example our
acquisition of telerate in 2005 brought us market benchmark content
for the fixed income markets and increased our user accesses notably
in the us and asia as a result of this continued investment in our service
offerings we believe we can grow our business in line with the market
in addition we have identified four ‘core plus’ growth opportunities
which expand the market we are able to serve from £6 billion to 
£11 billion per annum they also target higher growth areas giving us
the potential to deliver additional revenue growth from 2006 onwards
• electronic trading
reuters has an established track record of providing electronic
transaction services for the financial markets for example our foreign
exchange matching service we believe that the electronic trading
trend is accelerating and as a result we are increasing our investment
in electronic trading services by building a multiasset trading platform
on which we have already launched reuters trading for foreign
exchange rtfx and reuters trading for fixed income rtfi in
march 2006 we announced our plans to launch reuters trading for
exchanges we are also building a posttrade notification service to
help customers streamline their trade confirmation operations
• highvalue content
we see increasing demand from customers especially from hedge
funds for content which gives them not just facts but insight we are
investing in the creation of this highvalue content by expanding our
specialist editorial and data teams and also through acquisition and
distribution agreements in 2005 we acquired ecowin a leading
provider of economic data we also signed an exclusive content
agreement with mastercard in february 2006 to distribute the 
earliest detailed monthly view of us retail sales data a key financial
markets indicator
• a new approach to selling content and transactions services 
to whole enterprises
our enterprise business helps trading businesses to manage the 
flow of information and transactions both internally and with their
institutional customers demand for structured information and data
management services is increasing driven by growth in program and
algorithmic trading the need for greater transparency in order to
satisfy regulatory compliance requirements is also a factor in the
growing demand for data we have a wide range of assets such as
highspeed streams of machinereadable trading data historical price
data and risk management and positionkeeping systems using these
tools we have built longterm partnerships with many of our largest
clients to help them develop their internal information and trading
infrastructures we are making our products more compelling to our
customers by offering targeted packages of components designed to
address specific customer activities such as algorithmic trading and
fund valuation
• new markets
we see three types of opportunity to develop new markets high
growth geographic markets such as india and china new asset
classes such as emissions and property and new types of customer
such as a consumer media audience we are scaling up our presence
as a leading provider of financial information and trading services in
rapidly developing financial markets starting with india china and
brazil we are already the market leader in providing information
electronic trading and risk management products to the indian
financial markets and we are continuing to build up our product offer
to enable us to capitalise on market growth in early 2006 we launched
times now a tv news channel in partnership with the times of
india group to support our consumer media growth plans
we are continuing to build our presence in the chinese financial and
media markets in 2005 we brought greater transparency to china’s
developing bond market by launching a range of market standard
reference rates we are taking a significant role in the development of
china’s foreign exchange market – our electronic trading system is the
platform on which the china foreign exchange trade system cfets
launched an fx portal for trading in eight foreign currency pairs in
july we launched our chinese language website wwwreuterscomcn
and began providing branded english language inserts for china
central television
we plan to launch rtfi in brazil and mexico in 2006 and to expand
our fixed income products to other latin american countries we
created a new sales channel in brazil’s growing market by entering 
into agreements with american express and universal online a major
regional internet service provider for them to promote reuters trader
for latin america to their corporate accounts
in the second half of 2005 we invested £15 million in core plus
revenue growth initiatives we expect trading profit net of new
revenue generated to be reduced by approximately £50 million 
in 2006 and £20 million in 2007 we anticipate that together these four new initiatives will generate 
one percentage point of revenue growth in 2006 in addition to revenue
growth in the existing business which we expect to grow in line with the
market we expect additional revenue growth from new initiatives to
deliver three percentage points of additional revenues in 2008
04 brand
our brand is a powerful asset ranked as a top 100 global brand by
interbrand in a cluttered marketplace strong brands attract customers
and drive financial performance as an organisation and a brand we
are aligned to deliver consistently on the reuters trust principles of
independence integrity and freedom from bias throughout the
company these principles guide us in everything we do see page 119
for more information on the trust principles
reuters news and information reaches more than one billion people
daily and trust in the reuters brand remains key to our future success
our reputation as a trusted source neutral electronic trading platform
and provider of essential enterprisewide services for the financial
sector will enable us to expand our business into new markets
in 2005 we relaunched our visual brand identity creating a distinctive
look which makes extensive use of reuters awardwinning photography
the move of our headquarters to canary wharf london’s new financial
district also helped us to establish a strong brand presence among
many of our largest customers they are able to see europe’s largest
price ticker wrapped around our building together with a giant screen
displaying reuters real time multimedia news
05 people
the quality and commitment of our people have played a major 
role in our business transformation this has been demonstrated in
many ways including improvements in customer satisfaction the
reinvigoration of our product line and the high standards we apply in
order to uphold our trust principles our employees have also shown
flexibility in adapting to changing business requirements and
implementing new ways of working
employees adapted to change
with our business markets and customers changing rapidly we seek
to employ people who are highly talented knowledgeable about the
markets we serve customer focused adaptable and committed to
learning and development we are also keen to ensure our employee
base is diverse to reflect the different cultures and markets we operate
in and to bring a range of perspectives that allow us to develop fresh
and innovative ways to serve our diverse customers
change has been a constant theme throughout 2005 as we have
continued to rebalance our employee base to support our ‘strengthen
it’ and ‘grow it’ strategic objectives our bangalore content centre and
bangkok development centre have expanded as we renew our focus
on content and strengthen our product line recruiting highly skilled
employees in asia has allowed us to extend the service we offer to our
customers enabling us for example to cover a wider range of news
while containing costs and continuing to locate employees close to
our customers with 28 of employees now based in asia we are also
well placed to support our growth strategies in the region
we are bringing in fresh markets media content and technology
expertise both through targeted hiring and through acquisition
during the year we welcomed new employees to the group through
a series of acquisitions including telerate ecowin and action images
reflecting our drive to recruit new talent over 50 of our employees
have joined us in the last five years
employee communications
we use a variety of methods including our intranet to communicate
with our geographically diverse workforce about the company’s
strategy and priorities our ‘daily briefing’ edited by a reuters
journalist delivers an online multimedia information service seen 
by 75 of employees each day it covers news and events about the
company and about employees the ceo hosts regular webcasts
teleconference briefings and question and answer sessions for
employees in addition to meeting informally with groups of reuters
employees around the world at the end of the year the ceo’s overall
mission for the coming year is explained through the performance
management process objectives in support of that mission are set for
everyone regular meetings are also held between management
employees’ union representatives and other groups of employees so
that the views of employees can be taken into account in making
decisions which may affect their interests reuters european employee
forum operates as a paneuropean works council and the ceo and
other executive directors meet with the forum regularly
employee survey
we carry out annual employee surveys to identify issues that need 
to be addressed and areas upon which to build the findings are
communicated to employees overall the results of our most recent
survey november 2005 showed improvements across all the groupings
that make up our employee engagement index leadership customer
orientation performance employee commitment and career
development we have very strong scores on items related to the
company brand and values – two of the highestscoring statements
were “i fully support the values for which reuters stands” and “reuters
provides a working environment that is accepting of ethnic differences”
highlighting areas for improvement employees reinforced the need for
further organisation simplification and improved customer service the
group management committee gmc has put in place a range of
initiatives to continue to address these issues in 2006
talent and performance management
we have remained committed to retaining and developing our talent
despite the pressures of our fast forward transformation programme
over the last few years our companywide talent review process
involves management teams openly reviewing their people this
enables us to identify our highest performers and strongest talent and
to create tailored plans to develop them these processes covered
more than 4000 people worldwide in 2005 we report regularly to the
board on these activities and the board also reviews our succession
plans for our most critical roles ensuring that we have sufficient depth
and breadth in our most senior talent pools employee turnover for
our highest performers remains below the 35 threshold we have set
employees’ performance is aligned to company goals through an
annual performance review process that is carried out with all
employees reviews focus both on the objectives that were set and
how they were achieved drawing on input from a range of people to
ensure a rounded view of performance the achievement of objectives
is reinforced through our compensation plans
employee development
our learning strategy is to increase the provision of flexible learning
solutions to support employee development this allows us to support
the business by providing a wide range of learning opportunities as
and where they are needed certification programmes ensure that the
product and market knowledge of our customerfacing employees is
kept uptodate and tested on a regular basis we have continued to
develop managers through our middle manager programme with the
university of michigan and through a recently updated first level
manager programme
10 reuters group plc annual report and form 20f 2005
operating and financial review continued reuters group plc annual report and form 20f 2005 11
employee safety
the board recognises the courage and professionalism shown by 
our employees operating in conflict zones we regularly review our
policies training and procedures for employees particularly for those
working in dangerous places we have reaffirmed the standing
instructions to our employees to avoid risks wherever possible and we
provide hostile environment training protective equipment and post
trauma training programmes to all employees who may need them
we were deeply saddened by the deaths of two reuters employees 
in iraq in 2005 photographer rashid khaled died following a car crash
in basra southern iraq in february and tv soundman waleed khaled
was shot and killed in western baghdad four reuters journalists were
held in us military custody in iraq three of them for several months
during 2005 all were released without charge
equal opportunities and diversity
we have extensive fair employment practices in place and with the
support of our global diversity advisory council established in 2004
we are working to make reuters an increasingly inclusive company
the council is chaired by the ceo and serves as an advisory board 
to the gmc on issues related to diversity
our policy is that the selection of employees including for recruitment
training development and promotion should be determined solely on
their skills abilities and other requirements which are relevant to the
job and in accordance with the laws in the country concerned our
equal opportunities policy is designed among other things to ensure
that people with disabilities and other underrepresented groups are
given the same consideration as others and enjoy the same training
development and prospects as other employees in the uk as well as
being a member of the employers forum for disability we have made
use of the services of both abilitynet which supplies technology for
disabled users and employment opportunities a uk charity helping
people with disabilities to find and retain work we have successfully
retained staff who have become disabled as well as integrating those
who are disabled when they join the company this has been achieved
by using technological solutions and redesigning the way jobs are
handled enabling individuals to contribute actively to meeting the
needs of our business
our commitment to ethics and compliance
since reuters was founded in 1851 we have run our business with
independence freedom from bias and integrity we endeavour to 
do the right thing in all that we do adhering to the values set out in
the trust principles our code of conduct and the company’s policies
while we comply with the different laws and rules that apply to us in
the countries where we operate as part of this commitment our
efforts to maintain an environment at reuters that promotes and
protects these values is overseen by a global ethics and compliance
steering group chaired by the general counsel and company
secretary which reports to the audit committee and periodically
briefs senior management and the board
as part of this global programme we train our employees on key
ethics and compliance areas provide an anonymous and confidential
system for staff to report concerns without the threat of retaliation
investigate and take appropriate measures when compliance issues
are raised and periodically assess the efficacy of the programme as 
a whole on an individual level ethics and compliance aspects are
incorporated into our performance management system as we
understand that each of us at reuters must uphold the values and
principles that have served reuters well for so long and are at the 
very core of what defines reuters as a business
employee profile
at 31 december 2005 we had 15300 employees 31 december 2004
14465 of 115 nationalities in 89 countries 490 employees joined
reuters through acquisitions
remuneration
detailed information on our remuneration policies can be found in the
remuneration report on pages 39 to 48
06 corporate responsibility
corporate responsibility within reuters is established as the way we carry
out our business practices and conduct ourselves responsibly throughout
our daytoday activities as determined by the trust principles
we steer our corporate responsibility strategy through our corporate
responsibility advisory board established in 2003 which comprises
customer supplier investor and employee representatives the
advisory board considers workplace marketplace environment and
community issues of relevance to our business and our employees
and it is chaired by the general counsel and company secretary 
who represents it on the gmc and to the board for 2006 we have
set ourselves the objectives of developing a code for our suppliers to
adhere to when working with us rolling out a programme of mentoring
of senior managers by employees on diversity issues raising employee
participation in our community events week to 15 in 45 locations
and creating a system for recording reuters impact on the environment
reuters is included in the dow jones sustainability index the
ftse4good index the ethibel sustainability indices and the ethibel
pioneer investment register
for information about our employees see ‘people’ on page 10 to 11
for information about creditor payment terms see the directors’
report on page 31 for information about charitable donations see
the directors’ report on page 31
we also make extensive information available through our website
wwwaboutreuterscomcsr
07 reuters in the community
we support a variety of community initiatives and charitable causes
through the work of reuters foundation and the volunteering efforts
of our employees around the world
reuters foundation wwwfoundationreuterscom continues to 
focus on areas where reuters expertise in information gathering 
and communications can be put to use in ways which will benefit 
the communities in which we operate across the world
during the year the foundation offered training opportunities to
journalists from all over the world providing short courses for 391
journalists from 86 countries amongst the courses was a workshop 
in new york on hivaids reporting in february 2006 to build on our
work in this area reuters became a member of the global business
coalition on hivaids an organisation which aims to increase the
range and quality of business sector aids programmes in the
workplace and in the community
the reuters institute for the study of journalism was launched in
january 2006 at the university of oxford with reuters foundation
providing £175 million of funding over five years the institute builds
on the reuters foundation fellowship programme at green college
oxford and its reputation for engaging first class international
journalists from across the world in serious research it will focus on
analysing the practice of journalism worldwide and examining the basis
for reliable and accurate reporting in the digital age alertnet wwwalertnetorg established by reuters foundation in
1997 enables relief agencies and the public to share information
about emergencies and associated relief efforts in addition to
carrying breaking news on emergencies the site also helps to ensure
that ‘forgotten emergencies’ those disasters long forgotten by the
mainstream media are kept in the headlines we have seen traffic
double over the past twelve months to an average 215000 page 
views per day in december as we add new content sources and as
media recognition increases the innovative tsunami aidwatch
wwwalertnetorgthefactsaidtracker set up by alertnet to measure
how much of the money pledged after the disaster was turned into
actual funding for relief and reconstruction in the area has helped
position the service as an authority on humanitarian media issues
reuters digital vision program rdvp wwwrdvporg is a fellowship
programme at stanford university california which develops innovative
applications of information and communication technologies to address
the needs of underserved communities its projects focus on three
areas advancing financial services knowledge  empowerment 
and networked health  welfare in 2005 reuters invested in the
development of project market light a project initiated by a 2004–2005
rdvp fellow its goal is to help indian farmers to price their produce
more accurately thereby enhancing their incomes by delivering
affordable relevant and uptodate commodities information to them 
by sms over mobile phone
in response to the asian tsunami disaster we pledged a donation 
of 1 million to fund relief efforts in affected countries to date just
over 435000 £235809 has been awarded in grants to thai and
indian charities working with victims this figure includes a donation 
to the surin islands national park as recognition for the support and
assistance offered by surin residents to employees from reuters
software thailand ltd rstl when they were caught on the island
during the tsunami employees at rstl have also volunteered their
time to help restore the villagers’ livelihood the remainder of the
donation has been allocated to support house building programmes
with 64 reuters volunteers travelling to hikkaduwa in sri lanka to
participate in rebuilding projects with habitat for humanity in 2005
and additional housebuilding team visits planned for 2006 and 2007
building on the enthusiasm shown by employees for housebuilding
projects we are looking at offering employees further opportunities 
to build in areas of new orleans affected by hurricane katrina and
kwazulu natal south africa as part of a programme to provide
housing to families devastated by aids
all employees may take one day of company time each year to
engage in community activities we focus on these activities during
our annual community events week programme in 2005 1856
employees from 42 countries 12 of employees 2004 12
participated in the scheme undertaking a range of challenges 
we encourage employees to use this opportunity to share their skills
on projects ranging from hosted school visits children’s events and
fundraising to conservation work we recognise that employees
benefit from practising their professional and personal skills whilst
teambuilding with their colleagues and providing valuable support 
to our communities
in addition we operate programmes in the us and uk which match
donations and fundraising efforts of our employees under these
schemes we matched gifts of time and money amounting to £26581
in the uk and just over 175000 in the year 2006 will see the launch 
of a similar scheme for employees across asia
further information on reuters volunteering programmes can be
found at wwwaboutreuterscomcsr
08 environmental impact
the ethical investment research service classifies our business
activities as having a low environmental impact and electronic
publishing creates scope to reduce paperbased distribution of
information however we recognise that our employees and facilities
have an impact both at work and at home we therefore held our first
reuters green week exhibition in london in november during which
we set out to provide information to employees around the world on
the subjects of reuse reduce and recycle with a variety of online
materials webbased debates and informal presentations we were
able to increase the awareness of our employees as to how their
behaviours can impact the environment during 2006 we intend to run
additional green week exhibitions focusing on other major office
locations around the world
relocation to our new corporate headquarters in london’s canary
wharf created an opportunity to introduce facilities which have a
positive environmental impact these include the use of fewer waste
bins and plastic liners movement sensitive lighting default double
sided photocopying and piloting the use of recycled paper our entire
uk property portfolio is now supplied with cclexempt green energy
practices designed to reduce our environmental impact are also being
rolled out in other centres in 2006
we also have a role to play in the effective communication of
environmental issues reuters has 80 journalists providing environment
news and we are expanding our coverage of environmental markets
such as the carbon emissions markets through the reuters foundation
in 2005 we delivered six training workshops to over 100 nonreuters
journalists in mexico germany america kenya and morocco in
conjunction with funding partners
09 government regulation
we are regulated by several bodies in the various jurisdictions in
which we operate
under the provisions of the financial services and markets act 2000
reuters limited is regulated and authorised as a service company by
the uk financial services authority fsa
reuters transaction services limited rtsl through which we offer
dealing 3000 equities order routing and our new suite of next
generation transaction products such as rtfi is also subject to
regulation by the fsa since 1 april 2004 rtsl has been classified by
the fsa as an alternative trading system ats in accordance with
the passporting provisions of the eu investment services directive
rtsl provides its services through the european economic area
eea rtsl is also subject to regulatory approval in singapore hong
kong and australia where it is approved by the monetary authority of
singapore the hong kong monetary authority and by the australian
securities and investments commission respectively since late 2005
rtsl has also become subject to regulatory oversight by the hong
kong securities and futures commission
rtsl’s sister company in the united states reuters transaction
services llc rts llc is responsible for an equity order routing and
indications of interest network rts llc is subject to regulation by the
national association of securities dealers inc nasd rts llc has
been seeking additional approvals in the us to allow for the trading 
of other financial instruments such as derivatives
12 reuters group plc annual report and form 20f 2005
operating and financial review continued reuters group plc annual report and form 20f 2005 13
in order to comply with antimoney laundering regulations and to
reduce the opportunity for reuters transactions products to be used
as a conduit for money laundering operations all our regulated
subsidiaries have put in place appropriate ‘know your customer’
systems and controls
financial review
nongaap measures
a number of measures used in the following commentary are ‘non
gaap’ figures which are business performance measures used to
manage the business which supplement the ifrs based headline
numbers these include ‘underlying change’ ‘trading costs’ ‘trading
profit’ ‘adjusted eps’ ‘free cash flow’ and ‘net debtnet funds’ brief
descriptions of these terms are provided below a more detailed
discussion of these nongaap measures including the rationale for
using them and reconciliations to the most directly comparable ifrs
indicator is provided in sections 19 and 20 on pages 25 to 30
underlying change is calculated by excluding the impact of currency
fluctuations and the results of acquisitions and disposals
trading costs are calculated by excluding the following from
operating costs from continuing operations restructuring charges
associated with fast forward and acquisitions impairments and
amortisation of intangibles acquired via business combinations and
fair value movements included in operating costs and adding back
foreign currency gains and other income both of which are included
in other operating income
trading profit is calculated by excluding the following from operating
profit from continuing operations restructuring charges associated
with fast forward and acquisitions impairments and amortisation of
intangibles acquired via business combinations investment income
profits from disposals of subsidiaries and fair value movements
adjusted eps is calculated as basic eps from continuing operations
before impairments and amortisation of intangibles acquired via
business combinations investment income fair value movements
disposal profitslosses and related tax effects
free cash flow measures cash flows from continuing operations other
than those which are both discretionary in nature and unrelated to
ongoing recurring operating activities such as the purchase of shares
by the employee share ownership trusts esots loans with
associates and joint ventures and dividends paid out by reuters
net debtnet funds represents cash cash equivalents and 
shortterm investments net of bank overdrafts and other borrowings
10 group performance
summary profit results 2005 2004 actual
year to 31 december £m £m change
continuing operations
revenue 2409 2339 3
operating costs 2251 2187 3
other operating income 49 42 16
operating profit 207 194 7
net finance costs 12 12
profit on disposal of associates and 
availableforsale financial assets 38 203
share of posttaxation profit from 
associates and joint ventures 5 11
profit before taxation 238 396 40
taxation 9 40
profit for the year from 
continuing operations 229 356 36
discontinued operations
profit for the year from 
discontinued operations 253 19
profit for the year 482 375 28
basic eps 326p 260p 25
adjusted eps 138p 118p 17
revenue costs and profit 2005 2004 actual underlying
year to 31 december £m £m change change
recurring 2242 2164 4 1
usage 97 86 13 12
outright 70 89 22 23
total revenue 2409 2339 3 0
operating costs 2251 2187 3 0
operating profit 207 194 ––
operating margin 9 8 – –
trading costs 2075 2013 3 0
trading profit 334 326 – –
trading margin 14 14 ––
revenue
reuters full year revenue grew 3 to £2409 million 2004 £2339
million this was our first full year of revenue growth since 2001 
on an underlying basis adjusting for exchange rate movements and
the impact of acquisitions and disposals revenue was approximately
the same as in 2004 acquisitions particularly of telerate accounted
for most of the difference between actual and underlying increases
with the remainder due to currency movements in the newly
integrated telerate business sales focus on revenue retention post
acquisition drove better than expected revenue performance
recurring revenue which represented 93 of our revenue in 2005 
was £2242 million 2004 £2164 million this represented an increase
of 4 on an actual basis 1 underlying compared to 2004 and was
the first time underlying recurring revenue had grown since 2001
usage revenues 4 of our revenue in 2005 grew by 13 to £97
million 2004 £86 million this was driven by strong performance 
from reuters transaction services as well as higher advertising revenue
from reuterscom outright revenue 3 of our revenue in 2005 totalled £70 million
2004 £89 million a decline of 22 compared to 2004 this decline
was mainly due to our continued withdrawal from technology
consulting as part of the fast forward programme a process which 
is nearing completion
desktop accesses totalled 346000 at the end of 2005 up 18000 from
the end of 2004 this increase was driven by our acquisition of telerate
average revenue per access arpa for the fourth quarter of 2005 was
up 2 to £309 compared to the same period in 2004 driven by price
increases and a shift in the product mix to higher value accesses
operating costs and trading costs
total operating costs were £2251 million an increase of 3 from 
2004 the drivers of the increase are largely explained in the context
of the movement in trading costs as defined above additionally fast
forward restructuring costs of £94 million were £26 million lower than
the previous year bringing to an end this important transformation
programme we also incurred £18 million of acquisition related
integration costs principally relating to telerate
trading costs totalled £2075 million in 2005 2004 £2013 million up
3 on an actual basis flat on an underlying basis demonstrating our
continued cost discipline the differences between the underlying and
actual increases are mostly related to acquisitions principally telerate
with the remainder due to currency movements
a change to the accounting treatment of the rpf which is now
recognised as a defined benefit plan rather than a defined
contribution plan resulted in an additional 2005 charge of £7 million
at the 2005 year end a deficit of £223 million in the rpf was recorded
on reuters balance sheet further details on pension charges can be
found in note 25 in the financial statements on page 84
we invested £41 million in the second half of 2005 in core plus
transformation projects and growth initiatives these included
investment in new electronic trading products and rationalising 
data centres and product development units
the fast forward business transformation programme is now complete
and we remain on track to achieve annualised cost savings of £440
million from the programme by the end of 2006 contributing to a total
reduction from all transformation programmes of £900 million since 2001
in 2005 we delivered a further £126 million of annualised savings taking
the total to £360 million under fast forward these resulted largely from
outsourcing our communications network to btradianz in april 2005
for more information on btradianz please refer to page 16 from
further headcount reductions and from expanding our content and
development facilities in bangalore and bangkok
operating profit and trading profit
our operating profit totalled £207 million in 2005 2004 £194 million
reflecting improved trading performance
trading profit was £334 million in 2005 2004 £326 million trading
margin was 14 2004 14 after expenditure on investments in the
core plus programme the net effect of currency movements on trading
profit was neutral with the small positive effect on revenue offset by a
small negative effect in the cost base please refer to ‘foreign exchange’
on page 22
profit for the year from continuing operations
profit for the year from continuing operations was £229 million 2004
£356 million the yearonyear decline was almost entirely driven by a
reduction in profits from asset disposals in 2004 continuing operations
contained the profits from the sale of a 39 stake in tsi and our holding
in gl trade whereas the £38 million of disposal profits in 2005 came
largely from further sales of our smaller remaining stake in tsi
net finance costs of £12 million were comparable to 2004 due 
to a broadly similar net debt position throughout the year prior to
completion of the instinet group disposal income from our associates
and joint ventures in 2005 generated a net profit of £5 million
compared to £11 million in 2004 tsi and gl trade account for 
£5 million of this reduction as they contributed a net profit in 2004
prior to disposal
the tax charge for the year was £9 million compared to £40 million 
in 2004 the reduction was mainly due to the benefit of settling prior
year taxation matters a reconciliation of the actual taxation charge to
the taxation charge expected by applying the standard 30 uk rate 
of corporation tax to the reported profits is provided in note 6 of the
financial statements on pages 61 to 62
profit for the year from discontinued operations
profit from discontinued operations was £253 million 2004 £19 million
this was largely made up of the posttaxation profit of £191 million on
the disposal of instinet group and £68 million profit after taxation from
instinet group’s business operations prior to its sale in december 2005
this was partly offset by losses on sale of radianz limited radianz to
bt group plc bt and on the partial disposal of the group’s interest
in the bridge trading company btc to instinet group
20012002 business transformation
20032006 fast forward
transformation savings – £m
05
06
04
03
02
01
234
440
360
445
445
445
75
235
65
445
trends in accesses and average revenue per access
0
100
200
300
400
dec 2005 sept 2005 june 2005 mar 2005 dec 2004
328
£304
108
68
32
8
112
327
£298
112
61
33
9
112
354
£300
116
57
33
9
112
353
£304
117
27
27
55
34
10
110
346
£309
120
26
49
34
11
106
telerate
arpa 
xtra family
legacy trader knowledge
wealth manager
’000 accesses
14 reuters group plc annual report and form 20f 2005
operating and financial review continued reuters group plc annual report and form 20f 2005 15
earnings per share
profit for the year was £482 million 2004 £375 million resulting in
basic eps of 326p up 66p from the previous year adjusted eps 
was 138p in 2005 up 2p from the previous year reflecting a stronger
trading profit and a reduction in the number of shares in circulation
due to the share buyback programme
summarised cash flow and reuters free cash flow
reconciliation of net cash flow from
continuing operating activities to free cash flow 2005 2004
year to 31 december £m £m
cash flow from continuing operations 268 307
net interest paid 7 19
tax paid 11 34
capital expenditure 178 117
proceeds from sale of property plant and equipment 3 49
dividends received 5 4
interim funding repayment from telerate 18 18
repayment of funds to btc 26 –
free cash flow 88 208
note refer to section 20 on page 30 for reconciliation to group cash flows
summarised group cash flow 2005 2004
year to 31 december £m £m
net cash inflow from operating activities 253 226
acquisitions and disposals 206 384
purchases of property plant and equipment 
and intangibles 185 136
proceeds from sale of property plant and equipment 3 66
dividends received 5 5
proceeds from issue of shares 10 6
share buyback 223 –
equity dividends paid to shareholders 140 140
equity dividends paid to minority interests 23 –
other movements 21 8
movement in net debtfunds 73 403
opening net fundsdebt 326 77
closing net funds 253 326
note refer to section 20 on page 30 for reconciliation to statutory cash flow
cash generated from continuing operations was £268 million free
cash flow was £88 million in 2005 2004 £208 million the yearonyear
decline was driven by increases both in capital investment and
restructuring charges higher capital investment resulted from our
move to our new london headquarters at canary wharf steppedup
investment in data centres and the capitalisation of product development
and software costs 2005 cash restructuring costs were £147 million
2004 £100 million of which £132 million represented the peak year
for fast forward cash charges and the remainder related mainly to 
the integration of telerate cash flow in 2004 also benefited from 
£49 million of proceeds from the sale of property plant and
equipment disposals which did not recur in 2005
net funds were £253 million 2004 £326 million the 2004 amount included
£507 million of net funds at instinet group reduced by £181 million of net
debt in reuters excluding instinet group the yearonyear improvement 
in net debt to net funds is largely due to cash flow from operations of £268
million and net cash proceeds from disposalsacquisitions largely instinet
group of £710 million these inflows were partly offset by net purchases 
of assets of £182 million dividend payments to reuters shareholders of
£140 million and payments made as part of the share buyback programme
of £223 million
dividends
dividends paid in 2005 totalled £140 million the final dividend
proposed for 2005 is 615p per share in line with the prior year
balance sheet
the net assets of the group at £570 million are unchanged from 2004
summarised group balance sheet 2005 2004
year to 31 december £m £m
noncurrent assets 1179 1025
current assets 957 1410
noncurrent assets classified as held for sale 1 145
total assets 2137 2580
current liabilities 738 1249
noncurrent liabilities 829 714
liabilities associated with assets 
classified as held for sale – 47
total liabilities 1567 2010
net assets 570 570
shareholders’ equity 570 371
minority interest – 199
total equity 570 570
the main movements in the group balance sheet are
• the disposal of instinet group – reducing both total assets and liabilities
upon sale and reducing the minority interest in instinet group to zero
• an increase in noncurrent liabilities principally reflecting an
increase in net pension obligations from £256 million to £310 million
largely as a result of changes to key assumptions underpinning the
net liability valuation both the rate of return and discount rate have
decreased which results in a larger present value liability
our largest acquisition during the year was that of telerate for 
£122 million which completed in june 2005 other smaller
acquisitions included action images september 2005 and ecowin
november 2005
disposal activity for the year included our 62 stake in instinet group
to nasdaq for gross proceeds of £612 million we realised a gain on
sale of £191 million along with the dividend received from instinet
group in july 2005 of £37 million following the sale of its lynch jones
 ryan ljr subsidiary to the bank of new york for £96 million the
net proceeds from these transactions including our march 2005 sale
of btc to instinet group totalled approximately £630 million
other disposals included our sale of 16 million shares in tsi for 
£63 million realising a profit of £33 million and the sale of radianz to
bt in april 2005 for £115 million cash resulting in a loss of £4 million
2006 outlook
in 2006 we expect to accelerate revenue growth through our core
plus investment programme against a backdrop of favourable market
conditions we are targeting total revenue growth of around 5 this
includes 2005 acquisitions and a percentage point of growth from
core plus and excludes currency effects
within operating profit and trading profit we expect 2006 to benefit
from the final £80 million of fast forward savings taking the total to
£440 million of annualised savings which we committed to in february
2003 in line with our guidance in july 2005 operating profit and
trading profit in 2006 are expected to reduce by £120 million due 
to investments to drive core plus growth and transformation 16 reuters group plc annual report and form 20f 2005
operating and financial review continued
in cash flow we expect to spend £220 million on capital investment 
in 2006 up from £178 million in 2005 as we continue to invest in new
data centres and step up the level of product development under
core plus as well as continuing enhancements to our core services
and infrastructure as part of the £220 million we expect to capitalise
around £80 million of software and development expenditure this
increase will be more than offset by an expected £90 million fall in
restructuring spend relating to fast forward and telerate integration
11 divisional performance
overview
we operate through four business divisions which are responsible for
defining building and managing products they are closely aligned
with the user communities they serve
the business divisions have profit and loss responsibility revenues
and trading profit for the two years to 31 december 2005 are analysed
by business division in the following sections
we have equipped our managers to take on greater accountability for
divisional performance by introducing profitability insight an activity
based costing abc tool which enables us to allocate and monitor
costs by business division by product by region and by major customer
see critical accounting policies on page 22 further information on
revenue by division and by geography is included in note 1 of the
financial statements on pages 58 to 59
the software development teams who build and support our products
and delivery platforms were integrated into the business divisions in
2005 they work closely with the product management teams and
market experts responsible for identifying opportunities and defining
product strategy shared infrastructure design is provided by an
infrastructure team tasked with providing technical coherence scale
efficiencies and compliance with standards
we face competition in all the market sectors and geographical areas
in which we operate we monitor the competitive landscape actively
in order to be able to respond to market developments
global sales and service operations gsso
the business divisions serve customers through our gsso which is
split into geographic regions the americas asia and europe middle
east and africa in addition we run our focus group accounts team
as a global sales and support channel for our largest customers
locally members of our sales and service teams work with customers
to build relationships and to identify the correct reuters products 
to meet customer needs and to feed back customer needs to the
business divisions through regular training visits our customer
training specialists work with endusers to ensure they get full value
from our products in addition we provide product content and
technical support by telephone and email from three regional hubs
one based in each principal time zone we also offer proactive
telephone support and remote learning to help users of our premium
products get the most out of their service to increase awareness of
the latest developments in our product range we have a ‘brightspot’
travelling showcase for reuters products visited by over 7000
customers in 35 cities around the world in 2005
content
the content group brings together all of reuters news and data
within the content group the role of editorial is to cover and edit the
news to the highest standards of accuracy insight and timeliness our
2300 journalists and photographers in 189 bureaux file more than two
andahalf million news items a year to customers in the form of text
pictures tv  video and graphics and we publish news in 19 languages
our data group is responsible for collecting producing packaging 
and delivering an extensive range of financial information from an 
array of sources such as exchanges overthecounter markets research
services and other contributors such as energy and fixed income data
providers as well as from our own news research and data operations
our coverage includes data from over 300 exchanges more than 12
million bonds 250000 foreign exchange and money market instruments
and awardwinning commodities and energy content this is further
complemented by data from around 4000 financial services contributors
in addition our fundamentals and estimates data is recognised as 
a leading source of high quality financial information covering over
43000 companies worldwide our acquisition of telerate brought us
additional key content for the fixed income money foreign exchange
and overthecounter derivatives markets
we have content operations in the uk and the us and in 2004 we
opened a content operation in bangalore india this now has almost
1200 employees most in highly skilled jobs and continues to grow
enabling us to expand our content coverage to meet growing customer
needs as well as achieving operating efficiencies
communications networks
our hightier financial and media products are mainly delivered to
customers over secure highspeed communications networks with
internet delivery options for lower tier products and for consumer
services during 2005 we sold our network servicesfinancial extranet
subsidiary radianz a former joint venture with equant nv  to bt at the
same time we entered into an eight and a half year outsourcing deal
with bt as a result of which bt will provide the majority of our networks
this outsourcing deal will result in the migration of all products to ip
based services it will enable us to deliver greater resilience capability
and flexibility through the use of industry standards
we have major technical centres in the asian european and american
time zones supported by many smaller local data centres the data
centres are linked by communications services provided principally by
btradianz see above and savvis inc savvis
the services agreements with btradianz and with savvis are
important to our ability to deliver products and services to customers
summaries of these network services agreements and the radianz
purchase and sale agreements are given on pages 123 and 125
our products
products are grouped into ‘families’ each of which is managed
primarily by one of the business divisions
111 sales  trading division
overview
the sales  trading division focuses on salespeople and traders who
deal in the fx fixed income equities commodities and energy and
related markets
the sales  trading division is responsible for the reuters xtra and
reuters trader families of products reuters group plc annual report and form 20f 2005 17
reuters xtra family is targeted at the most sophisticated endusers
within the sales trading and portfolio management functions it
includes crossasset class crossgeography information advanced
integrated analytics and electronic trading capabilities we have now
installed more than 100000 accesses of our reuters 3000 xtra product
our customers have access to a trading community of around 18000
foreign exchange and money market traders globally they can also
use reuters large equities order routing network to gain electronic
access to over 200 brokers and exchanges including their proprietary
trading algorithms
reuters trader family is targeted at salespeople and traders who do
not need the sophistication and full integration capability offered by
the reuters xtra family of products including those who focus on
domestic and regional financial instruments we are working to
complete the migration of our customers from older products such 
as the 2000 and 3000 series to new reuters trader products many 
of which are browserbased
reuters enterprise connectivity family offers electronic trading and
order routing tools to enable customers to connect their systems to
electronic markets it also includes reuters messaging to enable end
users to interact with their peers in the financial community
our sales  trading information products compete with bloomberg
thomson financial a division of the thomson corporation sungard
telekurs idc and factset as well as stock exchanges plus a number
of smaller local and regional competitors which offer information
products for the financial markets
in the electronic trading business we compete with among others
stock exchanges particularly in the energy and commodity markets
direct market access providers such as lava liquidnet and sonic now
owned by banks order management system providers which are
increasingly adding information and trading capabilities single bank
portals and multi bank portals such as fx all and other electronic
execution venues such as market axess thomson tradeweb ebs
bloomberg and icap 
financial performance
sales  trading division summary operating
and trading results 2005 2004
year to 31 december £m £m
revenue 1595 1542
operating costs 1475 1385
operating profit 157 175
operating margin 10 11
trading costs 1354 1289
trading profit 241 253
trading margin 15 16
reconciliations between the gaap and nongaap measures are provided in section 20 on page 27
revenue from sales  trading 66 of our total revenue for the year
was £1595 million 2004 £1542 million up 3 on an actual basis 
and down 1 on an underlying basis the incorporation of telerate
revenue accounts for most of the difference between the underlying
and actual results
reuters xtra family revenue in sales  trading grew by 11 compared
to 2004 reuters 3000 xtra revenue growth of 18 in 2005 came from
a mixture of new business including the displacement of competing
desktops at some of our largest customers and the migration of
customers from legacy products
trading capabilities played an important part in the performance of
the reuters xtra family in 2005 in particular usage revenue from fx
trading over reuters dealing was up 10 as trading between banks
and their customers continued to move from phone to screen reuters
electronic trading added 30 new customers in 2005 and saw volumes
increase six fold our newest transactions products rtfi and rtfx
continued to build momentum with significant increases in active
traders and trading volumes reuters messaging is proving increasingly
popular in the credit and fixed income communities and now has
around 60000 regular users
in the reuters trader family reductions in legacy positions continue to be
the main drag on recurring revenue although cancellations were mostly
of lower value accesses migration to reuters 3000 xtra and continued
growth in new reuters trader positions over 8200 now installed ensured
that overall revenue retention within reuters remained high
operating costs totalled £1475 million up 6 within this trading 
costs totalled £1354 million up 5 on an actual basis but flat on an
underlying basis compared to 2004 with the incorporation of telerate
costs accounting for the majority of the difference fast forward savings
from reduced communications costs under the btradianz agreement
were offset by investment in our core plus initiatives notably electronic
trading and development and data centre restructuring as well as
service resilience
looking forward to 2006 the major revenue drivers in sales  trading
are expected to be new trading services continued growth from
reuters 3000 xtra telerate revenue retention and the deployment of
reuters trader to reduce attrition and attract new customers there will
be three sources of revenue from electronic trading transactionsbased
revenues recurring revenue from new desktop sales and per message
fees from trades processed through the reuters trade notification
service increased core plus investment in electronic trading and
development transformation will affect sales  trading profitability
112 research  asset management division
overview
the research  asset management division focuses on supporting
portfolio managers wealth managers brokers investment bankers
and research analysts who make complex financial decisions outside
the core sales and trading environment
research  asset management division is responsible for the reuters
knowledge and reuters wealth manager product families
reuters knowledge family is targeted at the research and advisory
business including investment bankers and analysts portfolio
managers and others focused on company and industryspecific
research reuters knowledge offers an integrated package of public
and proprietary fundamental information about companies plus
economic data as well as markets information news and other content
it can be integrated with reuters flagship real time information desktop
product reuters 3000 xtra
reuters wealth manager family is targeted at wealth managers and
retail brokers who require products that can be integrated closely into
their workflow helping users manage their clients’ portfolios better
and allowing more time to concentrate on building deeper client
relationships the reuters wealth manager family includes information
on a wide range of managed funds provided by our lipper subsidiary
research  asset management division also receives a share of revenue
from reuters 3000 xtra and the reuters 20003000 range of products 18 reuters group plc annual report and form 20f 2005
operating and financial review continued
in the research  asset management arena we compete with
thomson financial factset and standard and poor’s as well as smaller
niche players our lipper funds information business competes with
morningstar and the micropal unit of standard  poor’s and a number
of local domestic players
financial performance
research  asset management division summary 
operating and trading results 2005 2004
year to 31 december £m £m
revenue 268 262
operating costs 305 295
operating profit 37 16
operating margin 14 6
trading costs 288 269
trading profit 20 7
trading margin 7 3
reconciliations between the gaap and nongaap measures are provided in section 20 on page 27
revenue from the research  asset management division 11 of our
total revenue for the year was £268 million up 2
revenue from the reuters xtra and reuters trader families included 
in the research  asset management division grew 5 to £76 million
our success in making reuters knowledge available through reuters
3000 xtra and reuters trader was the key driver of this growth
in the reuters knowledge family revenue of £57 million was down
12 at actual rates but up 9 on an underlying basis excluding
disposals underlying growth was driven by new sales of reuters
knowledge and feeds of fundamentals and estimates data reuters
knowledge accesses grew by 3000 over the course of 2005 to 11000
in the reuters wealth manager family revenue of £135 million was 
up 8 at actual rates and 1 on an underlying basis growth in areas
such as lipper our fund information subsidiary and reuters plus our
us retail equities product was partly offset by a revenue decline from
products such as reuters markets monitor where we decided to
withdraw from unprofitable business
operating costs totalled £305 million up 3 within this trading costs
totalled £288 million a 7 increase compared to 2004 this increase
resulted from investment in core plus particularly development
transformation investment to enhance the performance of reuters
wealth manager and targeted sales campaigns to drive the growth 
of reuters knowledge and wealth management products this
investment was partially offset by fast forward savings generated 
by the move of certain content activities to bangalore
looking forward to 2006 revenue growth in research  asset
management is expected to be driven by three factors sales of reuters
knowledge both standalone and embedded in reuters 3000 xtra
improved lipper content and demand for new high value content such
as the new mastercard data and ecowin macroeconomic data this
will be more than offset by investment in high value content and
product functionality as part of core plus
113 enterprise division
overview
the enterprise division provides solutions to the institution as
opposed to the individual user including datafeeds highspeed
feeds of trading data in machinereadable formats trading room
systems and risk management systems
the enterprise division delivers data in a range of formats for use
throughout our clients’ organisations
reuters information management family provides the enterprise 
with a range of applications tools and infrastructure components to
manage financial content in real time across the customer trading
environment with a high degree of scalability and resilience our flagship
product in this product family is reuters market data system rmds
reuters enterprise information family includes real time datafeeds
which companies use to power systems such as algorithmic trading
and portfolio management and reference data often used for
compliance and portfolio pricing purposes including endofday 
and intraday instrument prices corporate actions price histories 
and terms and conditions
reuters trade and risk management family consists of products to
help manage trading positions and credit extension make trading
decisions keep track of pls and control risk
several stock exchanges compete with our real time datafeed
business by providing lowlatency real time feeds of their data direct
to banks and financial institutions in addition feedhandlers and
applicationprogrammable interface developers such as wombat
infodyne and hyperfeed compete with reuters in the market data
delivery arena our end of day enterprise information offerings
compete primarily with bloomberg telekurs and idc competitors 
in the supply of risk products and market data systems or related
components include algorithmics murex summit systems sungard
data systems misys ibm tsi gl trade and a large number of
smaller firms
financial performance
enterprise division summary operating 
and trading results 2005 2004
year to 31 december £m £m
revenue 393 391
operating costs 325 365
operating profit 76 31
operating margin 20 8
trading costs 298 328
trading profit 95 63
trading margin 24 16
reconciliations between the gaap and nongaap measures are provided in section 20 on page 27
revenue from the enterprise division 16 of our total revenue was
£393 million up 1 for the year this was driven by strong growth in
reuters enterprise information partly offset by declines in outright
revenue from reuters information management
reuters enterprise information which accounts for 52 of the
enterprise division’s revenue saw revenue rise by 11 to £203 million
real time datafeed revenue grew 4 and reuters datascope revenue
grew 36 driven by increased demand for machinereadable real time
and historical data to power an increasingly wide range of customer
applications looking ahead to 2006 we expect increased customer
demand for machinereadable content in standardised formats
revenue in reuters information management 28 of divisional
revenue was down 14 to £108 million growth in recurring revenue
from rmds primarily maintenance was more than offset by a fall in
outright revenue this fall was driven by our continued withdrawal
from technology consulting as part of the fast forward programme
the impact of moving to desktopbased solutions at smaller sites and
the fact that the majority of customers have already migrated from reuters group plc annual report and form 20f 2005 19
legacy platforms onto rmds with the rmds upgrade programme
drawing to a successful close and a standard platform now largely in
place the focus in 2006 will shift to marketing new products such as
reuters wireless delivery service to support trader mobility and
reuters tick capture engine which collects trading history to support
increasing regulatory requirements and complex trading analytics we
will also expand our third party developers programme to encourage
development of applications on rmds
reuters trade and risk management 20 of divisional revenue saw
revenues rise by 1 to £82 million helped by price increases during
the year and steady growth in asia including significant new sales with
leading banks in china total outright revenue in 2005 of £36 million
represented a 4 decrease over 2004 partly driven by the longer 
salestorevenue cycle associated with larger client deals after a 
strong fourth quarter in 2005 prospects for 2006 in trade and risk
management are encouraging
operating costs totalled £325 million down 11 within this trading
costs totalled £298 million a drop of 9 compared to 2004 fast
forward savings from scaling back dedicated technology consulting
groups following the decision to exit this business were partially
offset by investment in core plus growth initiatives including the 
10 year reuters tick history database
during 2006 we will continue to market the new enterprise approach
launched as part of core plus it groups enterprise products together
to create workflow solutions for customers and will focus initially on
portfolio valuation and algorithmic trading
114 media division
overview
the media division focuses on creating and delivering news to the
world’s newspapers television and cable networks radio stations and
websites it is also developing directtoconsumer services principally
through the reuterscom family of websites
reuters text and visuals products provide newspapers and
magazines news and information websites and tv channels with
comprehensive accurate and immediate text and broadcast news
video and photographic coverage in 2005 we acquired action
images a specialist sports photography agency to enable us to
expand our global pictures business
reuters consumer products target business professionals and
individual investors with fast accurate news and financial data
enabling them to stay informed about world events manage their
financial portfolios and perform better professionally
factiva our 50 owned joint venture with dow jones provides a
broad range of global news and a deep historical archive of business
information which client organisations can integrate into their business
applications and intranet portals around 70 of factiva’s revenue is
derived from sources outside the financial services sector
our main competitors in the supply of news to the media are
associated press agence france presse dow jones and bloomberg
news in the directtoconsumer market reuters competes with a
variety of local and global providers including the bbc’s websites and
yahoo finance
financial performance
media division summary operating and trading results 2005 2004
year to 31 december £m £m
revenue 153 144
operating costs 146 142
operating profit 11 4
operating margin 7 3
trading costs 135 127
trading profit 18 17
trading margin 12 12
reconciliations between the gaap and nongaap measures are provided in section 20 on page 27
revenue from the media division 7 of our total revenue totalled
£153 million up 7 yearonyear
agency revenues grew 6 to £133 million driven by a good
performance from tv including the successful launch of a middle 
east service continued strength in our pictures business and new
contractual arrangements with factiva
consumer services revenues grew 12 to £20 million reflecting a
successful move away from syndication of news to other websites 
and towards promotion of direct to consumer platforms such as
reuterscom advertising revenues from online and signage platforms
continued to grow rapidly attracting high quality brands as diverse 
as diet coke ge and fidelity
in january 2006 our 24 hour tv news channel for india in collaboration
with the times of india times now went live it represents an
attractive investment in its own right and a strong branding opportunity
from which to launch services to india’s growing urban affluent audience
operating costs totalled £146 million up 3 within this trading costs
totalled £135 million a 7 increase compared to 2004 key cost
drivers included expansion of news coverage to new regions and core
plus investment in consumer services these were partially offset by a
reduction in data content costs with the move of activities to
bangalore as part of fast forward
in 2006 the media division is looking forward to continued strong
revenue performance we expect opportunities to grow our video
news products and expand our pictures business on the back of our
recent acquisition of action images sports photography the consumer
services business expects strong growth in online advertising from its
us uk and japanese markets profitability will be influenced by higher
levels of investment in consumer editorial and marketing teams and 
in developing online mobile and iptv distribution capabilities
115 instinet group
instinet group review
data for 2005 is based on information for the three quarters to september 2005
nasdaqlisted and exchangelisted average daily 
trading volume – shares in billions
04
05
178
179
222
207
nasdaqlisted exchangelisted 20 reuters group plc annual report and form 20f 2005
operating and financial review continued
data for 2005 is based on information for the three quarters to september 2005
a key driver of instinet group’s business was average daily trading
volume in the us securities markets which increased in 2005 over
2004 levels
a significant portion of securities traded in instinet group’s business
were nasdaqlisted securities average daily trading volume in
nasdaqlisted stocks which decreased slightly by 08 for the 
three quarters to september 2005 compared to the full year 2004
average daily trading volume in us exchangelisted stocks has
increased over the same time period by 71 continuing the trend 
of the past five years
overall market share for inet the electronic marketplace had increased
slightly to 135 of total us market share volume by september 2005
from 134 in 2004 overall market share for instinet group the
institutional broker decreased to 26 of total us equity trading
volume to 30 september 2005 compared to 27 in 2004
the volatility in market share reflected the intense competitive
environment within the brokerage business which has resulted in
price reductions since 2001 in september 2001 inet reduced
average prices by 11 with a new pricing schedule for us broker
dealer customers in march 2002 inet began offering brokerdealer
rebates in october 2003 it reduced pricing for routing orders in
nasdaqlisted stocks to other trading venues through its automated
smart orderrouting system by 37 and introduced tiered pricing
offering lower prices to customers based on volume levels in october
2004 inet introduced a new pricing schedule for transactions in us
exchangelisted stocks in january 2005 inet announced that it would
share up to 50 of its market data revenue for certain american stock 
exchange transactions
instinet also operated in a highly competitive environment traditional
brokerages were also severely impacted by tighter spreads smaller
commissions the decrease of nasdaq market making and diminished
investment banking fee revenues which compelled them to spend
more time looking for additional profitgenerating opportunities 
this led traditional brokerage firms to increase their focus on offering
algorithmic trading program trading and direct market access to
institutional customers and resulting in their directly competing with
instinet in price and technology to provide these services to customers
as a result customers had become more demanding and cost conscious
instinet pricing for us equities measured in cents per share declined
210 to 30 september in 2005 and 26 in 2004 and pricing for non
us equities measured as a percentage of the total consideration of the
trade declined 125 to 30 september 2005 and 54 in 2004
supporting financial information
12 management of risks
the board has adopted a process for identifying evaluating and
managing significant risks faced by the group it has reviewed its
effectiveness and in doing so has taken note of the guidance on
internal control the turnbull guidance contained in the combined
code as updated by the version published by the financial reporting
council on 13 october 2005 the control system includes
• objective setting risk assessment and monitoring of performance 
at both strategic and business unit levels though a process known
within the group as ‘mission analysis’
• the use of ‘balanced scorecards’ to track performance against
targets relating to the financial business people and customer
aspects of the group’s business
• written policies and control procedures
• monthly reporting to the board and senior management which
amongst other things tracks performance against the annual budget 
• systems to communicate rapidly to appropriate managers incidents
requiring immediate attention and
• regular review meetings by the ceo and cfo with each gmc
member which cover the performance risks and controls for which
the gmc member is responsible
two committees the audit committee and the disclosure committee
are involved in the risk management process together with a programme
of internal audits internal auditors independently review the controls in
place to manage significant risks and report to the audit committee twice
a year the audit committee reviews the assurance procedures annually
including compliance controls and reports its findings to the board
the process and the component parts of the risk management
framework are more fully described in ‘risk management internal
controls and disclosure controls and procedures’ on page 37
further information on financial risks is contained in the financial
statements within note 17 on page 73 to 81
13 pending transactions
there are no material pending transactions
14 treasury policies
reuters treasury function is a cost rather than profit centre all treasury
activity takes place within a formal control framework under policies
approved by the board as such all transactions which are undertaken
are designed to mitigate risk within the business or to secure committed
funding at no time are speculative transactions or transactions without
an underlying commercial rationale undertaken
the key objectives of the treasury function are to ensure sufficient
liquidity exists to meet funding needs and to manage the interest rate
and currency risks arising from the group’s operations and its sources
of finance
financing
we finance our operations by a mixture of cash flows from operations
shortterm borrowings from banks and commercial paper markets
backed up as required by committed bank facilities and finance from
capital markets we manage our net fund position and interest costs
to support our continued access to the full range of debt capital
instinet group quarterly us market share volume – 
total us exchange listed nasdaq
40
30
20
10
0
q1 q2 q3
2004 2005
q4 q1 q2 q3 reuters group plc annual report and form 20f 2005 21
markets we expect to be able to finance our current business plans
from ongoing operations and our external facilities
net cash flows are applied to reduce debt placed in shortterm
investments with financial institutions holding strong credit ratings or
used to repurchase the company’s own shares as part of an announced
programme to enhance shareholder returns the latter is subject to
our intention to maintain an investment grade credit rating in the
longer term during 2005 £223 million was applied to market
purchases of the company’s own shares for information about the
company’s share repurchases see page 31 as at 31 december 2005 
the group held net funds of £253 million
reuters is rated by the three principal rating agencies as at 31
december 2005 our long and shortterm ratings were fitch af1
moody’s a3p2 and standard and poor’s aa2
we borrow in various currencies at both fixed and floating rates and
use derivative contracts to create the desired currency and interest
rate basis the conversion of net investments in foreign operations
into the group’s reporting currency of sterling creates translation
exposure to mitigate this effect to the extent that the group has
core debt it will be held in currencies approximately proportionate 
to the currency profile of the group’s net assets
in broad terms using the average net funds position a 1 increase in
global interest rates would have reduced profit before tax in the year by
approximately £2 million 2004 £2 million before the impact of hedging
syndicated credit facility
in april 2003 we entered into a committed syndicated credit facility for
£1 billion subsequently £520 million of the facility has expired or been
voluntarily cancelled at 31 december 2005 we had available £480
million under the facility the facility was undrawn during 2005 the
commitment expires and any final repayment is due in april 2008
the facility is on customary terms and conditions drawings under the
facility may be made in sterling euros or other currencies agreed at the
time and bear interest at libor plus a margin variable according to
the longterm credit rating of the company the facility crossdefaults
upon default by reuters in payment or acceleration of any other
borrowings in excess of £20 million the facility contains two financial
covenants as calculated in accordance with uk gaap that reuters
operating profit before interest tax and amortisation subject to certain
adjustments should be greater than 275 times net finance charges
and that reuters net borrowings should not be greater than 350 times
reuters operating profit before depreciation and amortisation subject
to certain adjustments as at 31 december 2005 we complied with
these covenants
bilateral loan facilities
at the same time as the syndicated credit facility was arranged
committed bilateral facilities of £90 million were put in place on similar
terms subsequently £66 million of the amount available has expired
or been voluntarily cancelled at 31 december 2005 we had available
£24 million no loans were outstanding under this facility during 2005
euro commercial paper programme
a £15 billion euro commercial paper programme is available in respect
of which reuters had no outstanding obligations at 31 december 2005
the minimum outstanding during 2005 was nil and the maximum was
£259 million
the programme is on customary terms and conditions including a
condition that the company should not be in default on any other
debt or similar obligation issues are only made to the extent that
funds can be repaid from committed financing facilities or available
group cash the programme has no final maturity date contains no
financial covenants and there is no requirement to update the
programme documentation debt is issued at market rates agreed
between the issuer and the dealer
euro medium term note programme
we also have available a £1 billion medium t erm note programme at 
31 december 2005 we had outstanding obligations of £369 million 
under the programme repayable at various dates up to november 2010
including a 500 million £344 million public bond issued in november
2003 and maturing in november 2010 the minimum outstanding during
2005 was £369 million and the maximum was £428 million
the programme is on customary terms and conditions the
programme has no final maturity date but the prospectus containing
financial information is updated each year to allow issuance to
continue debt is issued at market rates agreed between the issuer
and the dealer the programme documentation contains no financial
covenants and notes in issue have no crossdefault provision
shortterm uncommitted facilities
in addition we have shortterm uncommitted bank borrowing facilities
denominated in various currencies the sterling equivalent of which
was approximately £164 million at 31 december 2005 £25 million of
the facilities were utilised in the form of bank overdrafts
contractual financial obligations
the following table summarises the group’s principal contractual
financial obligations at 31 december 2005 certain of which are
described in the consolidated financial statements and notes the
group expects to be able to fund such obligations from ongoing
operations and its external facilities additionally while not contractual
commitments we announced in july 2005 our core plus strategy which
will impact future cash flows these included ‘strengthen it’ initiatives
totalling £170 million to 2008 £26 million was incurred in 2005 ‘grow
it’ initiatives with a net impact on profit of £85 million to 2007 £15 million
impacted in 2005 and capital expenditure plans in 2006 of £220 million
payments due by period
less than 13 35 after 5
contractual obligations total 1 year years years years
at 31 december 2005 £m £m £m £m £m
finance lease payables 2 11 – –
debt obligations
including future
interest payments 653 92 105 456 –
pension obligations  317 47 50 47 173
other longterm liabilities  53 –3412 7
operating leases 673 79 137 105 352
purchase obligations 1394 132 231 441 590
total contractual 
obligations 3092 351 558 1061 1122
 pension obligations are recorded on the balance sheet at £317 million as there is some
discretion under the various schemes as to the amounts the group will contribute to
settlement of the net pension obligation the amounts provided are estimates
 noncurrent provisions excluding net pension obligations recorded on the balance sheet total
£75 million of this £53 million are financial liabilities that require settlement in cash additionally
the balance sheet contains a deferred tax liability of £66 million no estimate has been
provided for deferred tax in the table above as it is not a contractually obligated financial liability
the most significant purchase obligation entered into during the year
related to btradianz becoming our supplier of network services over
the next eight and a half years 22 reuters group plc annual report and form 20f 2005
operating and financial review continued
foreign exchange
almost 90 of group revenue is denominated in nonsterling
currencies the group also has significant costs denominated in foreign
currencies with a somewhat different mix from revenue in some cases
product pricing is denominated in a currency which is not the functional
currency of the provider of services or the reuters customer which 
gives rise to embedded derivatives for which movements in value are
recognised within the other income line as part of operating profit
group profits are therefore exposed to currency fluctuations the
approximate proportions of operating profit excluding profits on
disposals received in each key currency group were as follows
group operating profit excluding profits 
on disposals by currency 2005 2004
year to 31 december  
euro 171 173
us dollar 10 13
japanese yen 39 36
sterling 98 134
other 2 38
total 100 100
sterling costs exceeded sterling revenue due to the level of restructuring
costs and ukbased marketing development operational and central
services costs
in broad terms using the 2005 mix of profits the impact of an additional
unilateral 1 strengthening of sterling would have been a reduction of
approximately £4 million in operating profits 2004 £5 million
exchange rate movements in 2005 had a £1 million net positive impact
on operating profit
operating operating
revenue cost profit
currency impact £m £m £m
impact of
weaker dollar 7 7 –
stronger euro 5 2 3
other currencies – 1 1
exchange rate movements 2 4 2
change in currency mix 6 7 1
total currency movements 4 3 1
the annual average rates for the dollar and the euro were 183 and
146 respectively 2004 182 and 147 respectively
no unremitted profits are hedged with foreign exchange contracts as
we judge it inappropriate to hedge noncash flow translation exposure
with cashbased instruments
forward foreign exchange contracts currency options and foreign
exchange swaps are used to manage where appropriate the effects
of transaction exposure and certain intercompany transactions which
impact group profits transaction exposure occurs when as a result 
of trading activities an entity receives or expends cash in a currency
different to its functional currency
15 critical accounting policies
group accounting policies comply with ifrs these policies and
associated estimation techniques and judgements have been reviewed
by management and discussed with the audit committee who have
confirmed they are the most appropriate for the preparation of the
2005 financial statements
adoption of international financial reporting standards
prior to 2005 the group prepared its audited annual financial
statements under uk gaap  for the year ended 31 december 2005
the group is required to prepare its annual consolidated financial
statements in accordance with ifrs and ifric interpretations as
adopted by the eu and those parts of the companies act 1985
applicable to companies reporting under ifrs the financial
statements take account of the requirements and options in ifrs 1
‘firsttime adoption of international financial reporting standards’ 
as they relate to the 2004 comparatives included herein
ifrs 1 sets out the transition rules which must be applied when ifrs is
adopted for the first time as a result certain of the requirements and
options in ifrs 1 may result in a different application of accounting
policies in the 2004 restated information from that which would apply
if the 2004 financial statements were prepared using full retrospective
adoption of ifrs the standard sets out certain mandatory exceptions
to retrospective application and certain optional exemptions
detailed disclosure on the mandatory exceptions applicable to the
group and the optional exemptions taken are provided within the
financial statements on page 52 and pages 101 to 103
previously the financial statements were prepared in accordance with
uk gaap  to provide an indication of the impact of ifrs from the
previously reported uk gaap  reconciliations of the net profit and
equity for 2004 are shown in note 40 on pages 101 to 103
accounting policies involving management judgement
in preparing these financial statements management has made its
best estimates and judgements of certain amounts included in the
financial statements the areas discussed below are considered to be
the most critical the group accounting policies underpinning the
financial statements are outlined on pages 52 to 57 which also include
reference to the areas of judgement within the accounting policies
the impairment of property plant and equipment noncurrent assets
held for sale and intangible assets including goodwill
under ifrs impairment is measured by comparing the carrying 
value of an asset or cash generating unit to its recoverable amount
recoverable amount is defined as the higher of its fair value less costs
to sell and its ‘value in use’ these comparisons require subjective
judgements and estimates to be made by management with regard 
to projected future cash flows of incomegenerating units or the
amounts that could be obtained from the sale of investments
note 13 of the financial statements on pages 67 to 68 outlines the key
assumptions management has determined that no impairments are
required for 2005 2004 £18 million
intangible assets
expenditure related to the development of new products or
capabilities that is incurred between establishing technical feasibility
and the asset becoming incomegenerating is capitalised where it
meets the criteria outlined in ias 38 ‘intangible assets’ such assets
are then systematically amortised over their useful economic life
normally between three and five years additionally the costs of
acquiring software licences and costs incurred in bringing software
into use are capitalised and amortised over the expected life of the
licence normally five years
there is judgement involved in determining an appropriate framework
to consider which expenditure requires capitalisation and which
should be expensed amounts capitalised in 2005 for development
and software total £40 million 2004 £26 million reuters group plc annual report and form 20f 2005 23
defined benefit pension plans
the group operates a number of defined benefit plans some of
which also include postretirement medical benefits for material
schemes their valuation is determined by independent actuaries
these valuations require assumptions to be made in respect of future
income levels expected mortality inflation the longterm rate of
return on the scheme assets rate of increase in social security costs
and medical cost trends expected mortality along with the discount
rate used to convert the future cash flows into a present value these
assumptions are reviewed annually
the amounts recorded in the annual charge service cost and interest
cost offset by the expected return on assets are sensitive to changes
in these assumptions actuarial gains and losses are recognised fully 
in the statement of recognised income and expense
note 25 on pages 84 to 87 provides further details of the annual
charges £30 million and the net outstanding pension obligation £310
million quantification of the underlying assumptions and an estimate
of the impact on the financial statements to changes in the most 
critical assumptions
sharebased payments and longterm incentive plans ltip
ifrs 2 sharebased payments which we have elected to apply only
to share awards granted after 7 november 2002 which have not vested
by 1 january 2005 recognises that options represent an element of
remuneration for services provided by employees and should be
reflected as a charge against profit the charge which is spread over
the vesting period of the award is the fair value of the award at grant
date and is calculated using an option pricing model
a combination of black scholes and monte carlo simulation models
has been used to calculate the fair values of awards the use of these
models requires management to make a number of assumptions
including expected life of the options expected dividends for the life
of the option and historic volatility of reuters shares management has
considered historical data and made use of best practices in making
these assumptions
the total cost of share schemes in 2005 was £30 million 2004 £22
million for additional information concerning the longterm incentive
plan ltip see ‘equity incentive plans – ltip’ on page 41 and note 33
on page 93
provisions
the recognition of provisions both in terms of timing and quantum
requires the exercise of judgement based on the relevant circumstances
which can be subject to change over time
the largest provisions relate to 2005 fast forward restructuring
charges which cover primarily severances and leasehold properties
for severance provisions the provision is only recognised where
employees have a valid expectation or have already been told of their
redundancy a number of leasehold properties have been identified 
as surplus to requirements although efforts are being made to sublet
this vacant space management recognises that this may not be
possible immediately estimates have been made to cover the cost of
vacant possession together with any shortfall arising from subleased
rental income being lower than lease costs being borne by reuters 
a judgement has also been made in respect of the discount factor
based on a riskfree rate which is applied to the rent shortfalls
additionally the group is subject to certain legal claims and actions
refer to note 35 on page 97 provision for specific claims or actions
are only made when the outcome is considered ‘probable’ that there
will be a future outflow of funds andor providing for any associated
legal costs the level of any provision is inevitably an area of
management judgement given that the outcome of litigation is
difficult to predict
other provisions are held where the recoverability of amounts is
uncertain where the actual outcome may differ from the resulting
estimates
segment reporting
the group’s primary segmental reporting is by business division 
the group operates through four business divisions sales  trading
research  asset management enterprise and media in order to
report segmental results it is necessary to determine a methodology
to allocate revenues costs assets and liabilities to those segments
each division is responsible for specific products’ revenues except 
for the reuters 20003000 range of products and reuters 3000 xtra
revenues for these shared products are attributed to either the sales
 trading division or the research  asset management division by
reference to the nature of the customer taking the product this is
determined on a clientbyclient basis
where costs relate to a specific division they are mapped directly to
that division where costs are shared abc techniques are used to 
split these costs between divisions the reuters abc tool known as
profitability insight allocates shared costs to business activities which 
in turn are attributed to products and therefore divisions using different
drivers of cost these cost drivers eg the number of helpdesk calls
received or the number of installed accesses are derived from a 
variety of underlying source systems judgement has been applied in
determining these cost drivers and the resulting allocation of costs
assets and liabilities are attributed to business divisions using
methodologies consistent with those applied to revenue and costs
assets and liabilities are segmented to the extent that they relate to
the operating activities of the divisions assets and liabilities related 
to financing activities including cash balances are not segmented
divisional results could alter with the application of other allocation
approaches and as improvements to the profitability insight model 
are made
taxation
the group is subject to taxation in numerous jurisdictions significant
judgement is required in determining the worldwide provision for
taxation there are many transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course of
business the group recognises liabilities for anticipated tax audit
issues based on estimates of whether additional taxes will be due
where the final tax outcome of these matters is different from the
amounts that were originally recorded such differences will affect the
tax provisions in the period in which such determination is made
under ifrs and us accounting standards in assessing which deferred
tax assets to record on the balance sheet management has made
subjective judgements over the projected future profitability of certain
legal entities
16 us gaap
a reconciliation of net income under ifrs and us gaap is set out 
on page 107 a discussion of the relevant us accounting policies
which differ materially from ifrs is given on pages 104 to 108 in the
‘summary of differences between ifrs as adopted by the eu and us
gaap’ details of recent us gaap accounting pronouncements are
given on page 108 17 offbalance sheet arrangements
the group does not have any offbalance sheet arrangements as
defined by the sec that have or are reasonably likely to have a
current or future effect on the group’s financial position or results 
of operations material to investors
18 risk factors
forwardlooking statements
this document contains certain forwardlooking statements within 
the meaning of the united states private securities litigation reform 
act of 1995 with respect to the group’s financial condition results 
of operations and business and management’s strategy plans and
objectives for the group in particular all statements that express
forecasts expectations and projections with respect to certain
matters including trends in results of operations margins growth
rates overall financial market trends anticipated cost savings and
synergies and the successful completion of restructuring programmes
strategy plans acquisitions and disposals are all forwardlooking
statements these statements involve risk and uncertainty because
they relate to events and depend on circumstances that may occur 
in the future there are a number of factors that could cause actual
results and developments to differ materially from those expressed or
implied by these forwardlooking statements these factors include
but are not limited to the risk factors discussed below any forward
looking statements made by the group or on its behalf speak only as
of the date they are made the group does not undertake to update
any forwardlooking statements
reuters may not be able to realise the anticipated benefits of the
transformation initiatives undertaken through the fast forward
programme and the core plus growth strategy
the fast forward programme included streamlining the way
information is delivered offering a simpler and segmented product
line rationalising the noncore elements of the business reshaping
the cost base and reinvigorating the company culture the core plus
growth strategy includes investing in new revenue initiatives product
development rationalisation and data centre rationalisation there can
be no assurance of achievement of these objectives or of the exact
timing or extent to which the anticipated benefits of the fast forward
programme or core plus growth strategy will be realised
unfavourable conditions in financial markets may have a significant
adverse effect on the group’s business
the group’s business is dependent upon the health of the financial
markets and the participants in those markets the group’ s trading
products are dependent on the level of activity in those markets if
these conditions were to worsen or in the event of significant trading
market disruptions or suspensions there could be adverse effects on the
group’s business in addition the group’s business could be adversely
affected by further consolidations among clients and competitors
currency fluctuations and interest rate fluctuations may have a
significant impact on the group’s reported revenue and earnings
the group reports results in pounds sterling but receives revenue and
incurs expenses in more than 70 currencies and is thereby exposed 
to the impact of fluctuations in currency rates currency movements
resulted in a small positive impact on the group operating profit in
2005 a strengthening of sterling from current levels especially in
relation to other currencies in which the group derives significant
revenues or holds significant assets such as the euro or the us dollar
could adversely affect results in future periods to the extent that
these currency exposures are not hedged exchange rate movements
may cause fluctuations in the group’s consolidated financial statements
in addition an increase in interest rates from current levels could
adversely affect the group’s results in future periods
the group may experience difficulties or delays in developing or
responding to new customer demands or launching new products
the group’s business environment is characterised by rapid
technological change changing and increasingly sophisticated
customer demands and evolving industry standards if the group is
unable to anticipate and respond to the demand for new services
products and technologies on a timely and costeffective basis and 
to respond and adapt to technological advancements and changing
standards its business may be adversely affected
in addition the group may delay or halt the launch of new products
and services its existing products and services may cease to be
attractive to customers and new products and services that the group
may develop and introduce may not achieve market acceptance in
the event any of the foregoing occurs the group’s financial results
could be adversely affected
the group is dependent on third parties for the provision of certain
network and other services
the group has outsourced the daytoday operation of most of its
networks to btradianz which also provides network services to
companies in addition to the group in connection with the 2001
acquisition of certain businesses and assets of bridge information
services bridge reuters entered into a network services agreement
with savvis which was the primary provider of network services to
bridge in addition savvis had a network services agreement with
telerate which reuters acquired in its acquisition of telerate failure 
or inability of any third party that provides significant services to the
group such as btradianz or savvis to perform its obligations could
adversely affect the group’s financial results
the group’s business may be adversely affected if its networks or
systems experience any significant failures or interruptions or cannot
accommodate increased traffic
the group’s business is dependent on the ability to rapidly handle
substantial quantities of data and transactions on its computerbased
networks and systems and those of btradianz savvis and others
any significant failure or interruption of such systems including
terrorist activities could have a material adverse effect on its business
and results of its operations the continuing increase in the update
rates of market data may impact product and network performance
from time to time factors that have significantly increased the market
data update rates include the emergence of proprietary data feeds
from other markets high market volatility decimalisation 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 listings of options and other securities while the
group has implemented a number of capacity management initiatives
there can be no assurance that the group and its network providers will
be able to accommodate accelerated growth of peak traffic volumes or
avoid other failures or interruptions
the group is exposed to a decline in the valuation of companies in
which it has invested
the group has entered into joint ventures with and made strategic
investments in a number of companies and intends to continue to do
so the value of reuters interests in these companies is dependent
on among other things the performance of these companies generally
whether such performance meets investors’ expectations and external
market and economic conditions the group has limited ability to
influence the management or performance of these companies
24 reuters group plc annual report and form 20f 2005
operating and financial review continued reuters group plc annual report and form 20f 2005 25
significant competition or structural changes in the financial
information and trading industries could adversely affect the 
group’s business
the group faces significant competition in the financial information
and trading industries the availability of public internet technology
reduces barriers to entry and increases the availability of trading
venues resulting in more commoditised data and less valuable data
less effective control over intellectual property and reduced revenues
many of the financial markets which the group serves are undergoing
or may undergo structural changes as a result of competition
regulation or otherwise if the group is unable to cope effectively with
increased competitive pressure or structural changes arising from the
above or any other factors its financial results could be adversely affected
the group may be exposed to adverse governmental action in
countries where reuters conducts reporting activities
as the world’s largest news and information company the group 
may suffer discriminatory tariffs or other forms of adverse government
intervention due to the nature of its editorial and other reporting activities
the group may not be able to realise the anticipated benefits of
existing or future acquisitions or disposals
to achieve its strategic objectives the group has acquired invested 
in andor disposed of and in the future may seek to acquire invest 
in andor dispose of various companies and businesses no assurance
can be given that the group will realise when anticipated or at all the
benefits it expects as a result of any acquisition investment or disposal
achieving the benefits of acquisitions and investments will depend on
many factors including the successful and timely integration and in
some cases the consolidation of products technology operations and
administrative functions of companies that have previously operated
separately considering the technical and complex nature of the group’s
products and services these integration efforts may be difficult and time
consuming achieving benefits of disposals will likewise depend on many
factors including realisation of appropriate value successful separation
of the businesses and operations and management of related costs and
achievement of any benefits sought in connection with the transaction
the group may identify issues with controls over financial reporting
including as a result of the implementation project to achieve
compliance with the sarbanes oxley act section 404
reuters will be required to comply with section 404 of the us
sarbanesoxley act of 2002 the sarbanesoxley act next year 
this requires that companies evaluate and report on their systems 
of internal control over financial reporting in addition the group’s
independent auditors must report on management’s evaluation of
those controls the group began working on necessary activities in
2003 and is in the process of documenting and testing its systems of
internal controls over financial reporting to provide the basis for its
certification during this process the group may identify deficiencies
in its system of internal controls over financial reporting that may
require remediation at this stage due to the ongoing evaluation and
testing of the group’s internal controls there can be no assurance that
any such deficiencies identified may not be significant deficiencies or
material weaknesses that would require remediation the group
complies with other elements of the act that are already in force
the group operates in an increasingly litigious environment
the group’s business involves a number of areas of technology
including certain business methods this combined with the recent
proliferation of socalled ‘business method patents’ issuing from the us
patent office and the increasingly litigious environment that surrounds
patents in general increases the possibility that a member of the group
could be sued for patent infringement if such an infringement suit were
successful it is possible that the infringing product would be enjoined
by court order and removed from the market in addition to the legal
fees that would be incurred defending such a claim any settlement of
such a claim could also involve a significant sum
19 definition of key financial performance measures
the group measures its financial performance by reference to revenue
and profit operating margin eps cash flow and net funds
to supplement ifrs measures the group undertakes further analysis
to break these measures out into their component parts which results
in the creation of certain measures which differ from the ifrs headline
indicators ‘nongaap measures’ the rationale for this analysis is
outlined below and reconciliations of the nongaap measures to ifrs
measures are included within the review of results these measures
are used by management to assess the performance of the business
and should be seen as complementary to rather than replacements
for reported statutory results
underlying results
periodonperiod change in reuters is measured in overall terms 
ie actual reported results under ifrs and sometimes in underlying
terms underlying change is calculated by excluding the impact of
currency fluctuations and the results of acquisitions and disposals as
these are factors that are not on a likeforlike basis between periods
this enables comparison of reuters operating results on a likeforlike
basis between periods
• variations in currency exchange rates impact the results because
reuters generates revenues and incurs costs in currencies other 
than its reporting currency yearonyear currency exchange rate
movements will influence reported numbers to a greater or lesser
extent and therefore they are discussed separately from underlying
results to make clear their impact on the overall growth or decline in
operations underlying results are calculated by restating the prior
periods’ results using the current period’s exchange rates this also
reflects the variables over which management has control as
business units do not manage currency exposure and business
division operating performance is managed against targets set on a
constant currency basis currency exposure is described in section
14 ‘treasury policies’ on pages 20 to 21
• underlying results are calculated excluding the results of entities
acquired or disposed of during the current or prior periods from the
results of each period under review underlying results reflect the
operating results of the ongoing elements of each business division
and measure the performance of management against variables
over which they have control without the yearonyear impact of a
step change in revenue and costs that can result from acquisition or
disposal activity
exclusion of restructuring charges
reuters results are reviewed before and after the costs of reuters
business transformation plan which includes the fast forward
programme and acquisition integration charges
under the fast forward programme reuters incurred restructuring
charges relating primarily to headcount reduction and rationalisation
of the group’s property portfolio fast forward is a three year
programme implemented to accelerate and expand on reuters five
year business transformation plan which was launched in 2001 the
programme completed in 2005 as originally envisaged refer to 
page 8 for discussion of the programme the fast forward programme was centrally managed and its
performance against targets was evaluated separately from the
ongoing reuters business fast forward restructuring charges are
therefore excluded from certain profit and margin measures
acquisition integration costs are oneoff charges associated with
transaction activity which do not recur as described above the
charges in respect of acquisition activity are excluded to enable 
better likeforlike comparison between periods
because of their timelimited and defined nature reuters believes
that presenting these measures both including and excluding
restructuring charges gives investors a more detailed insight into the
performance of management and the business in addition reuters
management uses both measures to assess the performance of
management and the business
exclusion of amortisation and impairment of intangibles
acquired in a business combination investment income
profitlosses from disposals and fair value movements
for certain cost profit margin and eps measures reuters analyses 
its results both before and after the impact of restructuring charges
amortisation and impairments of intangibles acquired in a business
combination investment income profits and losses from disposals and
fair value movements the adjusted measures are referred to as ‘trading
profit’ ‘trading costs’ and ‘trading margin’ the rationale for isolating
restructuring charges is explained above
amortisation and impairment of intangibles acquired in a
business combination investment income and profitlosses
from disposals
reuters isolates the impact of income and charges in respect of 
its investments income and charges from investments relate to
impairments of goodwill subsidiaries associates and joint ventures
impairments and amortisation of other intangibles acquired in a
business combination income from investments and pretaxation
profits and losses on disposal of subsidiaries joint ventures associates
and other investments
such charges and income may arise from corporate acquisition and
disposal activity rather than the ongoing operations of the business
divisions with a reasonable allocation being determined for segmental
reporting these are analysed and reviewed separately from ongoing
operations as this is consistent with the manner in which reuters sets
internal targets evaluates its business units and issues guidance to the
investor community
amortisation and impairment charges in respect of software and
development intangibles are included within operating costs
fair value movements
reuters also isolates the impact of movements in the fair value of
financial assets held at fair value through profit or loss embedded
derivatives and derivatives used for hedging purposes where those
changes are reflected in the income statement
financial assets held at fair value through profit or loss included
reuters investment in savvis convertible shares this investment was
sold as part of the acquisition consideration for telerate fair value
movements for this investment have been analysed separately from
the ongoing operations of the business units during 2005
embedded derivatives are foreign exchange contracts implicitly
contained in some of reuters revenue and purchase commitments
changes in the fair value of embedded derivatives arise as a result 
of movements in foreign currency forward rates the unpredictable
nature of forward rates the uncertainty over whether the gains or
losses they anticipate will actually arise and the volatility they bring to
the income statement lead reuters to consider that it is appropriate
to analyse their effects separately from the ongoing operations of 
the business this enables reuters to undertake more meaningful 
periodonperiod comparisons of its results as well as to isolate and
understand better the effect of future currency movements on revenue
and purchase commitments this separate analysis is also consistent
with the manner in which reuters sets its internal targets evaluates its
business divisions and issues guidance to the investor community
the impact of fair value movements on derivatives relating to treasury
hedging activity is also excluded unless there is an equivalent offset in
operating results all derivatives undertaken provide effective economic
hedges but some may not qualify for hedge accounting and in these
situations the reported impact of the underlying item and the hedge
may not offset the impact of treasury derivatives is mainly due to
currency or interest rate movements and as for the other items noted
above business division operating performance is managed against
targets which exclude these factors
tax and adjusted eps
to ensure consistency the nongaap eps measure also eliminates the
earnings impact of taxation charges and credits related to excluded
items
adjusted eps is defined as basic eps from continuing operations
before impairments and amortisation of intangibles acquired via
business combinations fair value movements disposal profitslosses
and related tax effects
dividend policy
presenting earnings before the impact of restructuring charges
amortisation and impairment of intangibles acquired in a business
combination investment income disposals and fair value movements
also helps investors to measure performance in relation to reuters
dividend policy in 2001 the group defined the longterm goal of its
dividend policy to be a dividend cover of at least two times based 
on reuters uk gaap earnings before amortisation of goodwill and
other intangibles impairments and disposals reuters dividend policy
remains unaltered with the adoption of ifrs the equivalent earnings
measure is reuters earnings after interest and taxation before
amortisation and impairments of intangibles acquired in a business
combination fair value movements and profitslosses on disposals
free cash flow
reuters free cash flow is used as a performance measure to assess
reuters ability to pay its dividend from cash flow free cash flow is
intended to measure all reuters cash movements other than those
which are both discretionary in nature and unrelated to ongoing
recurring operating activities such as purchase of shares by the
employee share ownership trusts esots loans with associates and
joint ventures and dividends paid out by reuters whilst reuters
believes that free cash flow is an important performance measure in
respect of its cash flows it is not used in isolation but rather in
conjunction with other cash flow measures as presented in the
financial statements
net fundsdebt
net fundsdebt represents cash cash equivalents and shortterm
investments net of bank overdrafts and borrowings this measure
aggregates certain components of financial assets and liabilities and 
is used in conjunction with total financial assets and liabilities to
manage reuters overall financing position
26 reuters group plc annual report and form 20f 2005
operating and financial review continued reuters group plc annual report and form 20f 2005 27
20 reconciliations of nongaap measures to ifrs
reconciliation of operating profit to reuters trading profit and margin measures
2005 2005 2004 2004
year to 31 december £m  £m 
operating profit from continuing activitiesmargin 207 9 194 8
excluding
restructuring charges 112 4 120 5
impairments and amortisation of business combination intangibles 22 1 16 1
investment income 1 – – –
profit on disposal of subsidiaries 4 – 4 –
fair value movements 2 – ––
reuters trading profitmargin 334 14 326 14
reconciliation of profit before taxation from continuing activities to reuters nongaap profit before taxation
2005 2005 2004 2004
year to 31 december £m  £m 
profit before taxmargin from continuing operations 238 10 396 17
excluding
impairments and amortisation of business combination intangibles 22 1 16 1
investment income 1 – – –
profit on disposal of subsidiaries associates and joint ventures 42 2 207 9
fair value movements 2 – – –
reuters profit from continuing operations before impairments 
and amortisation of business combination intangibles 
investment income profit on disposals and fair value movements 215 9 205 9
reconciliation of basic eps to reuters adjusted eps
2005 2005 2004 2004
year to 31 december £m eps pence £m eps pence
profitbasic eps from continuing activities 229 163 356 254
excluding
impairments and amortisation of business combination intangibles 22 16 16 11
investment income 1 01 – –
profit on disposal of subsidiaries associates and joint ventures 42 29 207 147
fair value movements 2 02 ––
adjustments to tax charge for tax effect of excluded items 13 09 – –
reuters profitbasic eps from continuing operations before impairments
and amortisation of business combination intangibles investment income 
profit on disposals fair value movements and related taxation effects 193 138 165 118 28 reuters group plc annual report and form 20f 2005
operating and financial review continued
reconciliation of actual percentage change to underlying change – revenue by division by type
impact of
underlying impact of acquisitions actual
 change versus year ended 31 december 2004 change currency  disposals change
recurring 1 – 4 3
outright 40 5 – 35
usage 10 – – 10
sales  trading 1 – 4 3
recurring 4 – 1 3
outright 36 3 – 33
usage 41 – – 41
research  asset management 3 – 1 2
recurring 4 1 1 6
outright 21 1 – 20
enterprise 1 1 1 1
recurring 3 – – 3
outright 34 1 7 40
media 6 – 1 7
recurring 1 – 3 4
outright 23 1 – 22
usage 12 – 1 13
total reuters revenue – – 3 3
reconciliation of actual percentage change to underlying change – reuters revenue by division by product family
impact of
underlying impact of acquisitions actual
 change versus year ended 31 december 2004 change currency  disposals change
reuters xtra 11 – – 11
reuters trader 23 1 10 12
recoveries – 1 5 6
sales  trading 1 – 4 3
reuters xtra 6 1 – 7
reuters trader 15 2 1 12
reuters knowledge 9 1 22 12
reuters wealth manager 1 – 7 8
research  asset management 3 – 1 2
enterprise 1 1 1 1
media 6 – 1 7
total reuters revenue – – 3 3 reuters group plc annual report and form 20f 2005 29
reconciliation of divisional operating costs to trading costs
2005
sales  trading ram enterprise media group
year to 31 december £m £m £m £m £m
operating costs 1475 305 325 146 2251
restructuring charges 76 11 17 8 112
impairments and amortisation of business combination intangibles 13 3 5 1 22
fair value movements in expenses 16 – – – 16
foreign currency translation 2 – 1 – 3
other income 14 3 4 2 23
trading costs 1354 288 298 135 2075
2004
sales  trading ram enterprise media group
year to 31 december £m £m £m £m £m
operating costs 1385 295 365 142 2187
restructuring charges 63 18 27 12 120
impairments and amortisation of business combination intangibles 10 3 3 – 16
foreign currency translation 1 – – – 1
other income 22 5 7 3 37
trading costs 1289 269 328 127 2013
reconciliation of divisional operating profit to trading profit
2005
sales  trading ram enterprise media group
year to 31 december £m £m £m £m £m
operating profit 157 37 76 11 207
restructuring charges 76 11 17 8 112
impairments and amortisation of business combination intangibles 13 3 5 1 22
investment income 1 ––– 1
profitloss on disposal of subsidiaries 7 5 1 1 4
fair value movements 3 2 2 1 2
trading profit 241 20 95 18 334
2004
sales  trading ram enterprise media group
year to 31 december £m £m £m £m £m
operating profit 175 16 31 4 194
restructuring charges 63 18 27 12 120
impairments and amortisation of business combination intangibles 10 3 3 – 16
foreign currency translation 5 12 2 1 4
trading profit 253 7 63 17 326 reconciliation of cash generated from reuters operations to reuters free cash flow
2005 2004
continuing discontinued reuters continuing discontinued reuters
operations operations group operations operations group
year to 31 december £m £m £m £m £m £m
cash generated from operations 268 3 271 307 27 280
interest received 42 13 55 10 9 19
interest paid 49 – 49 29 1 30
taxation paid 11 13 24 34 9 43
cash flow from operating activities 250 3 253 254 28 226
purchases of property plant and equipment 138 7 145 90 19 109
proceeds from sale of property plant and equipment 3 – 3 49 17 66
purchases of intangible assets 40 – 40 27 – 27
interim funding payment from telerate 18 – 18 18 – 18
dividends received 5 – 5 4 1 5
repayment of funds tofrom btc 26 26 – – – –
free cash flow 88 30 58 208 29 179
components of net funds
2005 2004
as at 31 december £m £m
cash and cash equivalents 662 578
bank overdrafts 25 17
637 561
shortterm investments 1 258
borrowings excluding bank overdrafts 385 493
net funds 253 326
30 reuters group plc annual report and form 20f 2005
operating and financial review continued reuters group plc annual report and form 20f 2005 31
the directors submit their annual report and audited financial
statements for the year ended 31 december 2005
01 activities
the group’s business a review of its activities during 2005 and likely
future developments are described on pages 7 to 20 details of the
group’s research and development activity and expenditure is given 
on page 60
02 share capital and dividends
details of the changes in the authorised and called up share capital
are set out in note 27 on page 89 details of significant shareholdings
are given on page 119
an interim dividend of 385 pence per ordinary share was paid on 
31 august 2005 the directors recommend a final dividend of 615
pence per ordinary share giving a total of 10 pence per ordinary share
for the year 2004 10 pence subject to shareholders’ approval at the
annual general meeting agm to be held on 27 april 2006 the final
dividend will be paid on 4 may 2006 to members on the register
holding ordinary shares at the close of business on 17 march 2006 
it will be paid on 11 may 2006 to ads holders on the register at the
close of business on 17 march 2006
03 employees
information about reuters employment policies and practices can 
be found in ‘people’ on pages 10 and 11
04 charitable contributions
in 2005 reuters continued to support community initiatives and
charitable causes mainly through the work of the reuters foundation
charitable trust a report on the activities of the foundation and
reuters wider corporate responsibility programme can be found on
page 11 and at wwwaboutreuterscomcsr reuters donated cash
totalling £17 million during 2005 2004 £24 million in addition to this
cash contribution employees are encouraged to give their time and
skills to a variety of causes and reuters provides equipment and
information services free of charge
it is the group’s policy not to make political contributions and none
was made in 2005
05 creditor payment terms
it is our normal procedure to agree terms of transactions including
payment terms with suppliers in advance payment terms vary
reflecting local practice throughout the world in the uk reuters has
signed up to the better payment practice code reuters policy is to
make payments on time provided suppliers perform in accordance
with the agreed terms group trade creditors at 31 december 2005
were equivalent to 13 days’ purchases during the year 2004 19 days
06 acquisition of own shares
at the agm held on 21 april 2005 shareholders renewed the company’s
authority under section 166 of the companies act 1985 to make
purchases of up to 143540000 ordinary shares at a price of not more
than 5 above their average middle market quotation in the london
stock exchange daily official list for the five business days prior to
the date of purchase
on 26 july 2005 reuters announced its intention to return £1 billion
to shareholders including the proceeds of around 1 billion from the
instinet group sale and initiated an onmarket buyback programme
which is expected to run up to july 2007 between 26 july and 31
december 2005 57400000 shares with a nominal value of £14350000
were repurchased at a cost of approximately £224 million this
represents 4 of called up share capital
07 substantial shareholdings
details of substantial shareholdings can be found on page 119
08 related party transactions
details of related party transactions are given on page 123
09 financial instruments
details of the financial risk management objectives and policies of the
company and the exposure of the company to financial risk is given on
page 20 and note 17 on pages 73 to 81
10 post balance sheet events
details of post balance sheet events are given on page 100
11 directors
the names and biographical details of current directors are given 
on pages 32 and 33
the following board changes occurred during 2005 and early 2006
8 february 2005 ian strachan stood down from the audit committee
20 july 2005 charles sinclair stepped down as chairman of
remuneration committee but remained on the committee until 
6 december 2005
19 september 2005 ian strachan appointed as chairman of
remuneration committee
23 september 2005 sir deryck maughan appointed to the board
6 december 2005 charles sinclair retired from the board
24 january 2006 ian strachan appointed to the nominations
committee
details of directors’ interests in the company’s shares the remuneration
of the nonexecutive and executive directors and information on the
service contracts of the executive directors are set out on pages 39 to
48 a nonexecutive director is not required to hold ordinary shares in
order to qualify as a director
12 risk management internal controls and disclosure controls 
and procedures
disclosures can be found in ‘corporate governance and statement of
directors’ responsibilities’ on page 37
13 auditors
the auditors pricewaterhousecoopers llp  have indicated their
willingness to continue in office and a resolution that they be
reappointed will be proposed at the agm
by order of the board
rosemary martin 
general counsel and company secretary 
10 march 2006
directors’ report directors
niall fitzgerald kbe chairman chairman of the nominations
committee he is a member of the world economic forum’s foundation
board a fellow of the royal society for the encouragement of arts
manufactures  commerce and the association of corporate treasurers
and a nonexecutive director of the nelson mandela legacy trust uk
he is also a member of various advisory bodies including the president
of south africa’s international investment advisory council and the
shanghai mayor’s international business leaders council former
chairman and chief executive officer of unilever plc 1996–2004
former nonexecutive director of merck ericsson bank of ireland and
prudential plc former president of the advertising association former
cochairman of the transatlantic business dialogue and former
chairman of the conference board inc age 60
thomas tom glocer ceo previously ceo of reuters information
2000 and president and senior company officer reuters america
1998–2000 appointed ceo reuters latin america in 1997 after
serving in reuters legal department from 1993 formerly practised law
in new york paris and tokyo with davis polk  wardwell member of
the corporate council of the whitney museum the madison council
of the library of congress the leadership champions group education
of business in the community the advisory board of the judge
institute of cambridge university and the corporate advisory board
of the tate nonexecutive director of instinet group until instinet
group was acquired in 2005 by nasdaq age 46
david grigson cfo joined reuters in august 2000 from emap plc
where he was group finance director and chairman of emap digital
he is a qualified chartered accountant formerly held senior finance
roles in the uk and us at saatchi and saatchi plc 1984–1989 held 
a number of financial positions at esso uk 1980–1984 former non
executive director of instinet group chairman of radianz until radianz
was acquired in 2005 by bt age 51
devin wenig executive director and president of business divisions
previously president investment banking  brokerage services
2001–2003 joined reuters in 1993 as corporate counsel reuters
america and held a number of senior management positions before
being appointed president investment banking  brokerage services in
january 2001 also a nonexecutive director of nastech pharmaceutical
company and a former nonexecutive director of instinet group age 39
lawton fitt nonexecutive director member of the audit 
committee nonexecutive director of ciena corporation and 
citizen communications director and trustee of reuters foundation
previously a partner and managing director of goldman sachs 
group inc trustee of several notforprofit organisations including
contemporary arts centres in new york and berlin former secretary
chief executive of the royal academy of arts age 52
penelope penny hughes nonexecutive director member of the
remuneration committee director of the gap inc vodafone plc
skandinaviska enskilda banken molton brown limited and a member
of the advisory board of bridgepoint capital former president coca
cola great britain and ireland former director of bodyshop international
plc 1994–2000 enodis plc 1996–2001 sc johnson 2002–2004
webangel 2000–2003 and trinity mirror plc 1999–2005 age 46
edward ed kozel nonexecutive director member of the
remuneration committee chief executive of cright also a director
of yahoo formerly a nonexecutive director of cisco systems inc
2000–2001 where he worked from 1989–2000 in a number of roles
including chief technology officer and senior vice president for
business development also a former nonexecutive director of tibco
software inc 2000–2001 and narus inc 1999–2003 prior to 1989 he
worked with sri international in california age 50
32 reuters group plc annual report and form 20f 2005
the directors and senior managers of reuters group at 7 march 2006 are
name position position held since
directors
niall fitzgerald kbe chairman director
1
2004 2003
thomas glocer ceo director 2001 2000
david grigson cfo director 2000
devin wenig president of business divisions director 2003
lawton fitt director
1
2004
penelope hughes director
1
2004
edward kozel director
1
2000
sir deryck maughan director
1
2005
kenneth olisa director
1
2004
richard olver director
1
1997
ian strachan director
1
2000
senior managers
anne bowerman interim group hr director 2005
christopher hagman managing director global sales  service operations 2003
geert linnebank editorinchief and global head of content 2000
rosemary martin general counsel and company secretary 2003 1999
susan taylormartin global head of corporate strategy 2004
simon walker director of corporate marketing  communications 2003
note
1 nonexecutive director
directors and senior managers reuters group plc annual report and form 20f 2005 33
sir deryck maughan nonexecutive director director of
glaxosmithkline plc managing director of kkr chairman of kkr
asia trustee of carnegie hall lincoln center inc and nyu medical
center he serves on advisory councils at stanford and harvard
universities former chairman and ceo of citigroup international
former vicechairman of the new york stock exchange and former
chairman and ceo of salomon brothers 1992–1997 age 58
kenneth ken olisa nonexecutive director member of the audit
committee nonexecutive director of biowisdom and open text
corporation he is a liveryman of the worshipful company of
information technologists a freeman of the city of london chairman
of homelessness charity thames reach bondway a governor of the
peabody trust and a director and trustee of reuters foundation
former chairman 2000–2006 and ceo of interregnum plc which he
founded in 1992 former senior vice president and general manager
of wang europe africa and the middle east 1981–1992 and his
career began at ibm 1974–1981 former director of udatecom
metapraxis adaptive inc and yospace technologies ltd and former
postal services commissioner age 54
richard dick olver nonexecutive director chairman of the audit
committee member of the nominations committee and senior
independent director chairman of bae systems plc since july 
2004 he worked for bp plc and was deputy group chief executive
2003–2004 and ceo of bp exploration  production division
1998–2002 a fellow of the royal academy of engineering 
a guardian of new hall school age 59
ian strachan nonexecutive director chairman of the remuneration
committee member of the nominations committee nonexecutive
director of transocean inc johnson matthey plc xstrata plc and rolls
royce group plc former chairman of instinet group former non
executive director of harsco corporation deputy chairman of invensys
plc 1999–2000 and chief executive officer of btr plc 1996–1999
former deputy chief executive officer 1991–1995 and chief financial
officer of rio tinto plc 1987–1991 also a former nonexecutive
director of commercial union plc 1991–1995 age 62
charles sinclair retired from the board on 6 december 2005
senior managers
anne bowerman interim group hr director anne joined reuters in
1995 she held a variety of hr roles within reuters including head of
learning  development prior to being appointed to her current role
in july 2005 before joining reuters anne was hr director for an
information technology company age 50
christopher hagman managing director global sales  service
operations christopher joined reuters in 1987 based in sweden and
has held various senior sales and general business management positions
in sweden the netherlands and the uk before being appointed to his
current post in april 2001 christopher was appointed as a member 
of the executive board of the community of european management
schools and internal companies in december 2005 age 47
geert linnebank editorinchief and global head of content geert
became editorinchief in 2000 having held various editorial roles 
he was appointed chairman of reuters foundation in march 2004 and
president and director of reuters foundation inc in september 2005
before joining reuters in 1983 he was a correspondent ec and
belgium for apdow jones – brussels age 49
rosemary martin general counsel and company secretary rosemary
joined reuters in 1997 as deputy company secretary and became
company secretary in 1999 appointed general counsel in 2003
rosemary has been the director of reuters foundation since 2000
former partner at mayer brown rowe  maw for nine years non
executive director of hsbc bank plc member of financial services
authority listing authority advisory committee age 45
susan taylormartin global head of corporate strategy susan 
joined reuters in 1993 during which time she has held a number of
management roles including running the global news product group
and the global equities business susan was appointed to her current
role in 2004 prior to joining reuters susan worked in corporate
finance specialising in mergers and acquisitions age 41
simon walker director of corporate marketing  communications
simon joined reuters in 2003 prior to joining reuters simon was
communications secretary at buckingham palace and director of
communications at british airways plc simon is a trustee of the
charity uknz link foundation and a director of communicor public
relations and awaroa partners age 52
michael sayers resigned from the gmc on 21 september 2005 and
left reuters on 31 december 2005 christian verougstraete resigned
from the gmc and reuters on 2 october 2005 alex hungate stepped
down from the gmc on 30 june 2005 to take up his role as managing
director for asia stephen dando will be joining reuters as group hr
director and a member of the gmc in april 2006 roy lowrance has
been appointed chief technology officer of the group and will join
the gmc in march 2006 01 statement on corporate governance compliance
corporate governance – the system by which the group is directed
and controlled – is important for reuters the strength of the group’s
corporate values its reputation and its ability to deliver its business
objectives depend amongst other things on the effectiveness of its
corporate governance system
external influences on the group’ s approach to corporate governance are
• the laws to which it is subject
• the rules which apply as a company listed on the london stock
exchange and on nasdaq in the us
• the regulations applied by financial services regulators around the
world and
• the guidance given by investors and others interested in seeing
good governance applied in practice
reuters monitors and responds to these particularly in the uk and 
us which are where most of the company’s shareholders are located
continuously improving the group’s internal governance systems
throughout 2005 the group has complied with the combined 
code on corporate governance published in july 2003 save that 
no individual member of the audit committee has been identified by
the board as having ‘recent and relevant financial experience’ code
principle c31 however in common with all the nonexecutive
directors the members of the audit committee are experienced and
influential individuals having the skills described in their biographies
in ‘directors and senior managers’ see pages 32 and 33 and the
board considers that collectively the members have the attributes
required to discharge properly the committee’s responsibilities
the group also complies with all sec and nasdaq governance
requirements with the exception of two provisions of the nasdaq
governance rules the company has received waivers from nasdaq 
to both exceptions on the basis that compliance with the rules would
be contrary to standard uk business practice since 1988 reuters has
operated under a waiver of nasdaq’s requirement that all shareholder
meetings require a quorum of at least onethird of outstanding 
voting shares instead the company’s memorandum and articles of
association articles provide as is typical for english public companies
that a quorum shall consist of any two shareholders in 2004 the
company also received a waiver from nasdaq’s provisions requiring
shareholder approval of employee sharebased incentive schemes
reuters seeks and has received shareholder approval of its employee
sharebased incentive schemes to the extent required by uk regulation
including the ukla listing rules
02 reuters trust principles
the group’s internal system of governance begins with reuters trust
principles see ‘information for shareholders – memorandum and
articles of association – the reuters trust principles and the founders
share company’ on pages 119 to 120 which are designed to protect
reuters integrity and independence and represent the core values 
at the heart of reuters business they are set out in the company’s
constitutional documents and in the code of conduct which applies to
every reuters employee the trust principles are a fundamental part
of the reuters brand
the directors are required by the articles to have due regard to the
trust principles insofar as they are capable of being observed in
accordance with their other duties as directors thus the trust principles
are integral to the board’s approach to the company’s business
03 the board
board composition and directors’ independence
niall fitzgerald chairs the company’s board he met the independence
criteria set out in the combined code when he was appointed his
significant commitments other than reuters are being a member of
the world economic forum’s foundation board and chairman of the
nelson mandela legacy trust uk
reuters has three executive directors ceo tom glocer chief
financial officer cfo david grigson and president of business
divisions devin wenig
in addition to the chairman there are seven nonexecutive directors
on the board dick olver who is the senior independent non
executive director is available to shareholders if they have concerns
no meetings with dick olver were requested by shareholders during
2005 the quality of the individual directors the balance of the board’s
composition and the dynamics of the board as a group ensure both
the board’s effectiveness and the inability of an individual or small
group to dominate the board’s decision making the board has
determined that each of the nonexecutive directors is independent 
in character and judgement by reason of his or her personal qualities
and that each of the nonexecutive directors is ‘independent’ as that
term is defined in nasdaq and sec governance requirements
each executive director receives a service contract on appointment
see the remuneration report for further information and each non
executive director receives a letter setting out the terms of the
appointment copies of the service contracts and nonexecutive
directors’ letters of appointment are available to shareholders from
the company secretary on request the nonexecutive directors’
appointment letters specify that the appointment is for a term of six
years subject to review after three years dick olver continued to hold
office beyond the initial sixyear term at the request of the board 
on 1 december 2006 dick olver will have served on the reuters
board for nine years in view of this his continuing role as a director 
of the company and as the senior independent nonexecutive director
has been discussed by the chairman with representatives of the major
shareholders of the company during the discussions the chairman
explained the value of continuing to have available to the board 
dick olver’s skills experience and detailed knowledge of reuters
particularly in view of the fact that over half of the nonexecutive
directors have less than two years’ experience on the reuters board
the major shareholders’ representatives support dick olver’s
continuation as a director
the articles provide that at each agm any director appointed since
the last agm shall stand for election by the shareholders and one
third of the directors shall retire from office by rotation and be eligible
for reelection by the shareholders however to recognise that some
shareholders prefer all the directors to stand for reelection each year
once again at the 2006 agm each of the directors will retire from
office and offer himself or herself for reelection
role of the board and its committees
the board is responsible for the success of the group within a
framework of controls which enables risk to be assessed and managed
its aim is for the group to achieve profitable growth within an acceptable
risk profile it seeks to achieve this by
• agreeing the strategic framework and keeping it under rigorous review
• monitoring the implementation of strategy through the operational plans
• focusing on longterm sustainable value creation
34 reuters group plc annual report and form 20f 2005
corporate governance and statement of directors’ responsibilities • safeguarding the longerterm values of the company including its
brand and corporate reputation
• overseeing the quality of management and how it is maintained at
worldclass levels and
• maintaining a governance framework that facilitates substance and
not merely form
a schedule of matters reserved for the board’s decision identifies 
those matters that the board does not delegate to management 
it includes the approval of corporate objectives strategy and the
budget significant transactions and matters relating to share capital
during 2005 the board focused particular attention on the development
of reuters growth strategy the acquisition of telerate and the disposals
of instinet group and radianz brand management succession
planning performance management and the control environment
the board is assisted by its committees through the audit committee
it satisfies itself on the integrity of financial information and that the
financial operational and compliance controls and systems of risk
management are robust through the remuneration committee 
the board determines appropriate levels of remuneration of executive
directors and other senior managers the nominations committee is
the forum through which the board discharges its role in nominating
new directors and succession planning these committees are
described in more detail below
there is a clear division of responsibilities between the running of 
the board which is the chairman’s responsibility and the running 
of reuters business which is the ceo’s responsibility with the board
having oversight the division of responsibilities is set out in a
document approved by the board
directors’ induction training and information
during 2005 ken olisa lawton fitt and penny hughes who joined
the board in 2004 continued their induction in addition to these
directors continuing to expand their knowledge of reuters business
generally ken olisa visited reuters operations in thailand and 
india and penny hughes visited reuters operations in sweden and
germany furthermore ken olisa joined the advisory board which
oversees reuters innovation initiatives ken olisa and lawton fitt
became trustees of reuters charitable arm reuters foundation 
to help promote diversity within reuters lawton fitt penny hughes
and the chairman met with groups of women employees in london
and new york two board meetings were held outside the uk in 2005
one in geneva and one in new york enabling the directors to meet
customers and to see aspects of reuters business in those locations
sir deryck maughan who joined reuters board on 23 september 2005
received a directors’ manual which provides information about reuters
and the operation of the board and its committees he also received a
series of induction briefings in new york and london to gain insights
into the group sir deryck like the other directors has been supplied
with reuters products
ongoing training for directors is available as appropriate the group’s
legal advisers and auditors provide briefings to the directors from time
to time in 2005 the directors participated in a workshop on ethical
decisionmaking based on training which reuters editorial staff
receive guest speakers are occasionally invited to join board dinners
to discuss topics of interest with the directors and opportunities are
provided for nonexecutive directors to meet with shareholders
customers and others involved in reuters business
monthly financial information is provided to the directors regular and
ad hoc reports and presentations are prepared and circulated to the
directors in advance of board meetings together with minutes and
papers relating to the board’s committees to ensure the directors are
supplied in a timely fashion with the information they need they 
also have access to the company secretary who is responsible for
advising the board through the chairman on all governance matters
the company secretary is appointed by and can only be removed by 
the board the directors may take independent professional advice 
at the company’s expense none of the directors sought such advice
during 2005 although the remuneration committee has appointed an
independent adviser t owers perrin which gave advice to the committee
frequency of meetings
the board met eight times in 2005 and in addition held a twoday
strategy review meeting in june building on a series of strategy
discussions at board meetings during the year the directors attended 
all the board meetings in 2005 save that by prior arrangement penny
hughes and ed kozel were absent from two meetings and ken olisa
charles sinclair and ian strachan were each absent from one meeting
board effectiveness
in 2005 the chairman held one meeting with the nonexecutive
directors without the executive directors present it is intended to
increase the number of these meetings in 2006
a comprehensive board review was undertaken in 2005 in which
• the chairman reviewed the performance of the ceo and each
individual director
• the ceo reviewed the performance of the cfo and the president 
of business divisions
• dick olver the senior independent nonexecutive director led a
review of the performance of the chairman
• dr annie mckee of the teleos leadership institute facilitated a
board effectiveness review in which the performance of the board 
as a whole and each of the directors was considered
• dr mckee also facilitated reviews of the effectiveness of the audit
committee and the remuneration committee and
• the board discussed and agreed the nominations committee’s
approach to identifying and recruiting potential future board members
the format of the reviews was interviews with the directors and others
involved in the work of the board and its committees the output from
which was thematically analysed and discussed with the person or
group being reviewed as well as with the chairman actions were
agreed to address matters identified in the reviews and implementation
of these actions will be monitored
board committees
the board delegates specific responsibilities to certain committees
each committee has its own terms of reference set by the board
these are available on request from the company secretary or at
wwwaboutreuterscomcsrcorporategovernance
each year the audit committee reviews and as appropriate actively
engages in the processes for financial reporting internal control risk
assessment audit and compliance assurance the independence of
the company’s internal and external auditors and the effectiveness of
the company’s system of accounting its internal financial controls and
the internal and external audit functions
reuters group plc annual report and form 20f 2005 35 members of the committee during 2005 were dick olver chairman
lawton fitt ken olisa and ian strachan until his retirement from the
committee on 8 february 2005 each member of the committee is
considered by the board to be independent under the combined
code and according to the sec and nasdaq definitions
the board has determined that the audit committee does not at
present include a member who is a ‘financial expert’ as defined in 
the sarbanesoxley act and related sec rules because the board
considers that none of the members clearly meets all the criteria set
out in the relevant definitions nor has the board identified a member
of the committee as having recent and relevant financial experience
however the board considers that collectively the members have the
requisite skills and attributes to enable the committee properly to
discharge its responsibilities the company secretary is secretary to
the committee
the audit committee’s remit which is set out in its terms of reference
includes responsibility for
• the oversight responsibilities described in the above paragraph and
for reviewing compliance with laws regulations the company’s code
of conduct and policies
• approving related party transactions to the extent required under
nasdaq rules
• monitoring the integrity of the company’s financial statements and
any announcements relating to the company’s financial performance
and reviewing significant financial reporting judgements contained 
in them
• monitoring and reviewing the effectiveness of the company’s internal
audit function
• making recommendations to the board for it to put to the
shareholders for their approval regarding the appointment re
appointment and removal of the external auditor and approving the
remuneration and terms of engagement of the external auditor
• reviewing and monitoring the external auditor’s independence 
and the effectiveness of the audit process and developing and
implementing policy on the engagement of the external auditor to
supply nonaudit services and
• overseeing the receipt review and treatment of complaints received
regarding accounting internal accounting controls auditing and
compliance matters whether through the company’s ‘whistleblower’
confidential helpline or otherwise
the committee met five times in 2005 with the ceo the cfo other
officers and the auditors attending as required the auditors have
unrestricted access to the audit committee and in accordance with
usual practice met twice during the year privately with the committee
as did the head of internal audit
the chairman of the audit committee meets with the head of internal
audit and with the external auditors before each audit committee
meeting all members of the audit committee attended every
committee meeting during the year
the committee reports its activities and makes recommendations to
the board during 2005 the committee discharged the responsibilities
described above its activities included
• formally reviewing the draft annual report and interim statement
respectively and associated announcements focusing on the main
areas of judgement and critical accounting policies
• reviewing the findings of the external auditors and the report of the
head of internal audit on internal audit activities
• reviewing the effectiveness of internal control systems the risk
management process and the compliance programme including
the whistleblower programme paying particular attention to the
work being undertaken in connection with section 404 of the
sarbanesoxley act
• receiving the report of the ceo and the cfo on the processes
followed prior to certification being given by them in connection
with section 302 of the sarbanesoxley act
• reviewing the external audit strategy and the external auditors’ report
to the committee in respect of the annual report and interim statement
• keeping under review the proportion of nonaudit fees to audit fees
paid to the auditors and giving preapproval to nonaudit work
undertaken by the auditors
• reviewing the effectiveness of the internal and external auditors and
• reviewing a report on the company’s corporate responsibility activities
the board adopted a code of ethics for the company’s ceo and
senior financial officers in 2003 in addition to the company’s general
code of conduct in 2005 the code of ethics was expanded to include
personnel involved in reports and documents that the company files
with government agencies and other public communications no other
material amendments to or waivers in respect of either code were
made during 2005 copies of the codes are available on request from
the company secretary and can be viewed at wwwaboutreuterscom
the committee monitors adherence to the company’s auditor
independence policy which prohibits group entities from engaging
the auditors in activities prohibited by the sec or the us public
company accounting oversight board the policy was revised and
approved by the audit committee in september 2005 the policy
permits the auditors to be engaged for other services provided the
engagement is specifically approved in advance by the committee or
is approved by the cfo and meets the detailed criteria of specific
preapproved activities and is notified to the committee however 
any services where the expected level of fees is greater than £150000
or the expected term is longer than one year must be approved in
advance by the committee
for details regarding fees paid to the group’s auditors see note 3 
to the financial statements on page 60
the committee may engage at the company’s expense independent
counsel and other advisers as it deems necessary to carry out its duties
none was engaged during the year
the remuneration committee has oversight of executive remuneration
policy information concerning the remuneration committee is set out
in the remuneration report on page 39
the nominations committee makes recommendations to the board
about future appointments of nonexecutive directors the chairman
and the ceo and considers recommendations from the ceo to the
board about the future appointment of executive directors the
committee gives due consideration to the combined code’s provisions
relating to directors when making appointments to the board
36 reuters group plc annual report and form 20f 2005
corporate governance and statement of directors’ responsibilities continued reuters group plc annual report and form 20f 2005 37
in 2005 the composition of the committee was niall fitzgerald
dick olver and charles sinclair charles sinclair stepped down from
the committee when he resigned as a director on 6 december 2005
on 24 january 2006 ian strachan was appointed as a member of the
committee the committee is chaired by niall fitzgerald the board
has determined that these directors are independent under the
combined code and according to the nasdaq and sec definitions
a director may not attend or be involved in any decision concerning
him or his successor the committee has appointed an external
adviser to assist it in its work in identifying potential candidates for
nonexecutive directorships the committee met twice in 2005 and
during the year having identified the skills experience and attributes
which are desirable for reuters nonexecutive directors the committee
recommended to the board the appointment of sir deryck maughan
04 executive committees
the group management committee gmc which is chaired by the
ceo manages the group it comprises the three executive directors and
the senior executives listed on page 32 it met twentytwo times in 2005
a disclosure committee chaired by the ceo was set up in 2002 its
members comprise the ceo the cfo the global head of corporate
communications the general counsel and company secretary the
head of internal audit the global head of finance the head of
external reporting the general counsel for the americas and the
head of investor relations the committee meets formally at least five
times a year to review the group’s trading statements and financial
results and to consider the effectiveness of the group’s disclosure
controls and procedures a subcommittee meets on an ad hoc basis
to address disclosure matters arising between reporting periods
05 relations with shareholders
the executive directors meet regularly with institutional shareholders
and analysts nonexecutive directors are offered the opportunity to
attend meetings with major shareholders and from time to time 
some attend the presentations of the annual results to analysts niall
fitzgerald met with various investors during the year and dick olver 
in his capacity as senior independent director responded to emails
sent to him by shareholders no shareholders asked to meet him in
person in 2005
an investor relations department is dedicated to facilitating
communications between the company and its shareholders it
provides a regular report on investor relations as part of the routine
board report materials
the company’s agm is used as an opportunity to communicate with
private investors the chairmen of each of the board committees 
are available to answer questions at the agm and all directors are
expected to attend the agm at the agm the level of proxies lodged
on each resolution and the balance for and against the resolution and
the number of votes withheld are announced after the resolution has
been voted on at the 2005 agm voting using a poll for all resolutions
was introduced to replace voting by a show of hands as the board
considers poll voting gives a better representation of shareholders’
views the results of voting at the agm in 2006 will be available at
wwwaboutreuterscom
06 financial reporting
the directors are required by uk company law to prepare financial
statements for each financial year which give a true and fair view of
the state of affairs of the company and the group as at the end of the
financial year and of the profit and cash flows of the group for the
period the group is also required to prepare financial statements in
accordance with the requirements of the sec
reuters has complied with both uk and us disclosure requirements in
this report in order to present a true and fair view to all shareholders
in preparing the financial statements the directors have ensured that
applicable accounting standards have been followed suitable accounting
policies have been used and applied consistently and reasonable and
prudent judgements and estimates have been made where appropriate
the directors confirm that the financial statements comply with ifrs
as adopted by the eu
the directors have reviewed the budget and cash flow forecasts for
reuters for the year to 31 december 2006 on the basis of this review
the directors are satisfied that the group is a going concern and 
have continued to adopt the going concern basis in preparing the
financial statements
07 risk management internal controls and
disclosure controls and procedures
the directors acknowledge their responsibility for the group’s system
of internal control and confirm they have reviewed its effectiveness 
in doing so the board has taken note of the guidance on internal
control the turnbull guidance contained in the combined code 
as updated by the version published by the financial reporting council
on 13 october 2005
the board confirms that it has a process for identifying evaluating
and managing significant risks faced by the group this process
which accords with the turnbull guidance has been in place for the
full financial year and is ongoing the control system includes
• objective setting risk assessment and monitoring of performance 
at both strategic and business unit levels though a process known
within the company as ‘mission analysis’
• the use of ‘balanced scorecards’ to track performance against
targets relating to the financial business people and customer
aspects of the company’s business
• written policies and control procedures
• monthly reporting to the board and senior management which
amongst other things tracks performance against the annual budget
• systems to communicate rapidly to appropriate managers incidents
requiring immediate attention and
• regular review meetings by the ceo and cfo with each gmc
member which cover the performance risks and controls for which
the gmc member is responsible
in a group of the size complexity and geographical diversity of
reuters it should be expected that breakdowns in established control
procedures might occur there are supporting policies and procedures
for reporting and management of control breakdowns the board
considers that the control system is appropriately designed to manage
rather than eliminate the risk of failure to achieve business objectives
and can only provide reasonable and not absolute assurance against
material misstatement or loss the concept of reasonable assurance
recognises that the cost of a control procedure should not exceed the
expected benefits
using a common risk management framework throughout reuters
each of the principal business and functional units summarises the
risks that could impede the achievement of its objectives for each
significant risk line managers document an overview of the risk how 
it is managed and any improvement actions required a document
called a ‘risk radar’ is created which sets out the main strategic and operational risks that have been identified this document is reviewed
by the gmc and the board
at the year end before producing the above statement on internal
control in the annual report and form 20f the ceo and cfo meet
with members of the gmc and others to consider formally the
operation and effectiveness of the company’s risk management and
financial operational and compliance internal control systems this
review includes consideration of selfassessment reports from line
management and covers each of the most significant risks the company
faces and how well these are controlled and managed the ceo and
the cfo report on the results of this review to the audit committee
and to the board the disclosure committee described on page 37
supports the process by reviewing disclosure controls and procedures
whilst instinet group was part of the group it had its own systems 
of risk management and internal controls on which it reported to its
shareholders reuters executive directors were members of the
instinet group board and reuters cfo was a member of instinet’s
audit committee until its disposal on 8 december 2005 the board 
of factiva which includes reuters representatives has responsibility for
adopting processes for identifying evaluating and managing
significant risks in its business the board of radianz which included
reuters representatives until its disposal on 29 april 2005 also had
responsibility while radianz was part of the group for adopting 
such processes 
in addition to the selfassessment and management review procedures
the group monitors its internal financial control system through a
programme of internal audits internal auditors independently review
the controls in place to manage significant risks and report to the
audit committee twice a year the audit committee reviews the
assurance procedures annually including compliance controls and
reports its findings to the board
the group’s external auditors pricewaterhousecoopers llp  have
audited the financial statements and have reviewed the work of
internal auditors and the internal control systems to the extent they
consider necessary to support their audit report the audit committee
has met the internal auditors and pricewaterhousecoopers llp to
discuss the results of their work
during 2005 reuters management the audit committee and the
group’s external auditors considered the accounting treatment of 
the rpf
the rpf is a hybrid pension scheme which has been in existence 
since 1893 it has been accounted for as a defined contribution plan
since at least 1984 when the group went public under both uk gaap
and us gaap  under the rpf’s rules the group is not able to access
any surplus in the rpf although reuters and employees make
defined contributions to the fund the rpf does not provide for
contributions to be made to individual participant accounts in 2005
management determined that the accounting for the rpf had been
incorrect under us gaap 
there was no impact on the group’s previously reported uk gaap
profit and loss account and balance sheet as disclosed in the group’s
form 20fa dated 21 february 2006 amending the group’s 2004
annual report and form 20f  following the change in accounting 
for the rpf certain us gaap financial information was restated 
the impact of the restatement on prior year us gaap results was to
increase both reported net income before taxes and net equity in four
of the five years 20002004 management therefore determined that
there was a material weakness in the group’s internal control over
financial reporting with respect to us gaap accounting as at 
31 december 2004
the group has taken a range of steps to remediate this material
weakness the remedial actions aimed at strengthening controls over
us gaap  which are continuing include
• more comprehensive us gaap training of head office finance staff
supported by external advisors
• operating a more tightly controlled process for the group’s us
gaap reconciliation which has involved moving away from the
previous offline spreadsheet reconciliation methodology to a more
comprehensive systemsbased methodology
• reconciliation of the material differences between uk gaap  us
gaap and ifrs highlighting in particular differences between ifrs
and us gaap as at 31 december 2004 and 31 december 2005 and 
• improving documentation of us gaap adjustments as at 31
december 2004 and 31 december 2005 as part of our preparation
for sarbanesoxley section 404 compliance
at the end of 2005 reuters management carried out an evaluation 
of the effectiveness of the design and operation of the group’s
disclosure controls and procedures these are designed to ensure 
that information required to be disclosed in reports filed under the
securities exchange act of 1934 is recorded summarised and reported
within specific time periods based on this evaluation the ceo and the
cfo concluded that taking into account the matter noted above the
design and operation of these disclosure controls and procedures were
effective as at 31 december 2005 to a reasonable assurance level
within the meaning of the us federal securities laws
with the exception of the steps noted above no significant changes
were made in the group’s internal controls over financial reporting
during the period covered by this report that materially affected or
are reasonably likely to affect materially the group’s internal control
over financial reporting
reuters annual report and form 20f for 2006 is also expected to
contain an internal control report so reuters management have taken
during 2005 and will be taking throughout 2006 steps in preparation
for the sarbanesoxley act section 404 reporting and attestation
requirements that are scheduled to be met in respect of the financial
year ending 31 december 2006
by order of the board
rosemary martin
general counsel  company secretary
10 march 2006
38 reuters group plc annual report and form 20f 2005
corporate governance and statement of directors’ responsibilities continued reuters group plc annual report and form 20f 2005 39
this report sets out reuters executive remuneration policy structure
and details of the remuneration received by directors and senior
managers for the year ended 31 december 2005 shareholders will 
be invited to approve this report at the agm on 27 april 2006
01 consideration of remuneration matters 
– general
the board has overall responsibility for determining the framework of
executive remuneration and its cost and is required to take account
of any recommendations made by the remuneration committee
through formal terms of reference the board has delegated to
the remuneration committee oversight of the specific remuneration
packages for the executive directors and consideration of executive
remuneration issues generally including the use of equity incentive
plans specifically it is tasked with setting remuneration for the
executive directors it also reviews the ceo’s proposals for the
remuneration of the gmc members and other designated
senior executives
the remuneration committee consists solely of nonexecutive
directors all members of the remuneration committee have been
determined by the board to be independent as defined by nasdaq
its current members are ed kozel penny hughes and ian strachan 
on 20 july 2005 charles sinclair resigned as chairman of the
remuneration committee with ian strachan succeeding him charles
sinclair remained as a member of the committee until his resignation
from the board on 6 december 2005 the company secretary is
secretary to the remuneration committee the remuneration
committee met seven times in 2005 all members were present at
each meeting except that ed kozel penny hughes and ian strachan
were each absent once
the ceo and the chairman may attend meetings of the remuneration
committee neither is present at any discussion concerning his own
remuneration during 2005 internal advice was provided by the global
head of human resources the global head of performance  reward
tom glocer and david grigson the terms of reference permit the
remuneration committee to obtain its own external independent
advice on any matter at the company’s expense towers perrin were
appointed as independent advisers to the remuneration committee
on 20 july 2005 towers perrin has provided salary data to reuters 
this is routine information and independent of the advice provided to
the remuneration committee
02 chairman and nonexecutive directors
the chairman’s remuneration is determined by the board in reaching
future decisions on appropriate fee levels the board will continue to
have regard to the remuneration arrangements of chairmen of other
uk listed companies of a similar size and complexity
as chairman niall fitzgerald receives an annual fee of £500000 
this fee is fixed until 1 october 2007 the company does not provide
a pension contribution to him
details of nonexecutive director appointments are contained on 
page 31 niall fitzgerald and the nonexecutive directors have letters
of engagement rather than service contracts and are not eligible to
participate in executive share plans no letter of engagement contains
any provision for compensation in the event of termination outside of
the periods referred to on page 34
the dates on which each nonexecutive director joined the board are
detailed below
nonexecutive director board joining date
charles sinclair january 1994
ed kozel february 2000
ian strachan april 2000
niall fitzgerald january 2003
ken olisa april 2004
dick olver september 1997
penny hughes july 2004
lawton fitt july 2004
sir deryck maughan september 2005
reuters shareholders determine the remuneration paid to the non
executive directors from 1 january 2005 this has been set at £50000
per annumthe board determines the additional fees payable to each
nonexecutive director who chairs a board committee for 2005 these
were £15000 per annum £10000 per annum and £5000 per annum 
for chairing the audit remuneration and nominations committees
respectively dick olver the senior independent nonexecutive director
receives an additional £5000 per annum for this role niall fitzgerald is
chairman of the nominations committee and he has waived receipt of
any committee chairmanship fees in addition nonexecutive directors
who are resident outside europe are eligible to receive a travel
allowance of £5000 for each board meeting attended in the uk
03 executive directors
the remuneration committee’s policy is that remuneration and
incentive arrangements are marketcompetitive consistent with best
practice and support the interests of shareholders
in practical terms this means that the reward structure for executive
directors should attract motivate and retain highcalibre individuals
capable of successful leadership to achieve this in a global business
environment reuters executive remuneration must reflect the
competitive practices of its principal competitors and the other 
multinational businesses with which it competes for talent market
determined executive compensation with a heavy emphasis on the
variable remuneration elements is the best way to ensure that reuters
has the highperforming executive directors necessary to achieve its
immediate and longerterm strategic objectives the remuneration
committee ensures that the quantum of remuneration received by 
the executive directors is aligned with returns to shareholders
reuters continues to ensure that a substantial proportion of executive
reward is variable and dependent upon performance with both
corporate and personal performance affecting total executive
remuneration basic pay represents a quarter or less of the target
earnings potential the executive directors are eligible for a cash bonus
in 2005 excluding pension contributions the targeted composition of
each executive director’s remuneration was as follows
fixed variable
longterm
base pay bonus incentives total
   
tom glocer 188 282 53 100
david grigson 25 25 50 100
devin wenig 225 225 55 100
executive directors are required to build and maintain a personal
equity stake in the company this personal shareholding policy
remuneration report requires each executive director to accumulate a personal holding
worth twice his basic salary within five years if the policy requirements
are not met then the remuneration committee may recommend that
it is inappropriate to grant further awards to that individual
04 remuneration framework
it is reuters general policy to construct executive remuneration
packages that are businessdriven performancesensitive and
marketcompetitive the remuneration committee reviews awards 
to executive directors and other senior managers to ensure that
remuneration remains aligned to this policy this policy is described in
more detail below the remuneration committee has monitored the
transition to ifrs to ensure that performance is measured consistently
to safeguard reuters ability to recruit and retain the best senior
executives the remuneration committee maintains the freedom to
negotiate terms of employment on an individual basis taking account
of the circumstances of each individual
basic salary and benefits
in formulating and reviewing pay packages for the executive directors
the remuneration committee receives comparator group information
and assistance from independent remuneration consultants in 2005
the remuneration committee reviewed the comparator group and
reaffirmed its relevance currently the comparator group comprises
the ftse 100 companies minus the top and bottom five companies as
the main uk reference point these companies were selected to ensure
both stability in the comparator group as well as relevance to the
company’ s position in the market
reuters maintains a salary structure with salary ranges based upon 
the midmarket of a comparator group of companies individual
salaries are positioned at an appropriate point within the salary range
the remuneration committee reviews salaries and other rewards on 
a regular basis to ensure that the structure is maintained
noncash benefits are provided to executive directors and the
chairman in line with normal market practice and detailed on page
44 all executive directors receive a company car or an allowance and
private healthcare benefits death and disability benefits are also
provided to each executive director niall fitzgerald does not receive
any death disability or other benefits under the terms of t om
glocer’s relocation agreement reuters provides accommodation in
the uk and pays home leave expenses for him and his family tom
glocer’s salary has been unchanged since his appointment in 2001
pensions
all executive directors participate in defined contribution arrangements
since april 1999 it has been reuters policy that all new uk employees
including executive directors are offered participation in a defined
contribution pension plan in the case of uk executive directors in
lieu of pension provisions above the statutory earnings cap where
applicable an additional taxable cash allowance is granted the
remuneration committee may substitute certain benefits following
changes to uk pensions legislation however there is no intention 
to provide any additional compensation as a consequence of such
changes in the us all employees are offered participation in a
defined contribution 401k plan in lieu of a contribution on salary
above the tax qualified limit an additional contribution is granted 
to a supplemental employee executive retirement plan serp 
the serp is unfunded
annual performancerelated bonus
the remuneration committee determines performance targets annually
bonus payments are nonpensionable in 2005 the executive directors
were eligible for an annual cash bonus with a maximum level of 100 
of base salary for all but tom glocer whose maximum level was 150 
of salary in february 2006 the remuneration committee considered
2005 performance relative to the specified targets and determined that
the executive directors had earned bonuses of 72 of bonus potential
2005 was the final year of the fast forward programme during 2005
recognising the importance of revenue and cost targets during this
period of significant transformation the remuneration committee
increased the focus on achieving the financial results associated with
the fast forward programme as such 80 of the maximum bonus
potential was measured against target trading profit budgeted
revenue and free cash flow targets the remainder was determined 
by customer satisfaction results for 2006 the bonus will continue to
focus on financial performance and customer satisfaction measures in
the same proportion as in 2005 the bonus potential for tom glocer
will remain at 150 of salary the bonus potential for david grigson
and devin wenig will be 125 of salary
there is a profit threshold based on target trading profit below
which no bonuses will be paid the remuneration committee reviews
the business plan and establishes this threshold each year
equity incentive plans
in 2004 the remuneration committee introduced an annual bonus
profit sharing plan and a restricted share plan as discussed below
executive directors do not normally participate in these plans and they
have not done so since their introduction
the executive directors participate in a discretionary stock option plan
dsop and a longterm incentive plan ltip designed to reward
longerterm performance details of all share incentive awards
outstanding for each executive director serving during 2005 are set
out on pages 46 and 47
equity awards for executive directors are subject to the performance
conditions applicable to the relevant plan towers perrin provides
data to the remuneration committee that models the expected
values for equity awards the remuneration committee has
completed a review of remuneration arrangements including the
structure of equity plans to ensure that they remain in line with best
practice and are also in alignment with the strategic business plan
this review included consultation with a number of the company’s major
shareholders as well as the main representative bodies the association
of british industry abi and the research recommendations and
electronic voting services rrev a joint venture between the national
association of pension funds napf and institutional shareholder
services iss it was decided to continue to operate the ltip and the
dsop but to increase the proportion of performance shares and to
reduce the number of share options awarded effectively rebalancing
the quantum of share options and performance shares placing more
emphasis on performance shares the remuneration committee also
plans to maintain the overall expected value of the equity incentive
plans at a comparable level to the 2005 level these are described in
more detail below
it is also the remuneration committee’s intention to fix at least for
2006 and 2007 the number of shares over which options will be
granted under the dsop and the number of conditional shares which
will be awarded under the ltip  this will bring greater transparency
shareholder certainty and consistency to the equity element of
remuneration details of the number of shares awarded under each
plan are included in the relevant section below
40 reuters group plc annual report and form 20f 2005 reuters group plc annual report and form 20f 2005 41
in 2001 the remuneration committee obtained shareholder approval
to disapply ‘inner’ dilution limits the remuneration committee
conducts regular reviews to ensure that the dilutive impact of equity
plans remains within appropriate levels the projected dilution rate for
the 2006 awards is below 1 of issued share capital
ltip since 1993 reuters has operated a longterm incentive plan that
seeks to encourage and reward longterm growth in shareholder
value it is reuters practice to make an annual award of contingent
share rights to executive directors and to those senior managers most
able to influence corporate performance from 2003 awards have
been based on the fair market value per share using option pricing
methodology the fair market value ascribed to each share for ltip
purposes in 2005 was 438 of current market value the ltip’s
performance is assessed by reference to the company’s relative total
shareholder return tsr measured against the ftse 100 over the
performance period
as a matter of good practice tsr performance is measured
independently prior to review by the remuneration committee
the remuneration committee considers that relative tsr remains 
an appropriate measurement criterion for the ltip  whilst endorsing
relative tsr as a measure the remuneration committee recognises
that reuters does not fall naturally into any one of the existing ftse
industrial sectors accordingly following a review the remuneration
committee continues to believe that the ftse 100 rather than 
one individual sector or a bespoke peer group eg media and
photography remains the most appropriate peer group for
comparison purposes for awards made in 2006 and subsequently
this criterion will apply to determine the vesting for 50 of the initial
award the remaining proportion of the award will be determined by
reuters achievement of preset profit before tax pbt growth achieved
over the three year performance period the performance range will
be calibrated by the remuneration committee at the commencement
of each performance period
for both the preset pbt growth element and the tsr element one
third of the full award will vest for threshold performance this is the
median of the ftse 100 for the tsr element and growth equivalent to
at least 8 a year for the pbt element
for awards made in or prior to 2003 that do not vest or only partially
vest after three years the plan permits the measurement period to 
be extended by up to two years under a retesting provision awards
granted in 2000 and 2001 did not meet the performance condition
required for vesting and accordingly these awards lapsed at the 
2004 agm and for grants from 2004 shareholders approved the
removal of the retesting provision
for 2005 awards reuters relative tsr ranking determines the extent 
to which plan awards will vest reuters must achieve median tsr
performance for a proportion of the award to vest full vesting only
occurs for top quartile performance awards that do not meet at least
the median performance condition on completion of the performance
period will lapse as noted above future awards of shares subject to the
tsr test will continue to vest in full for top quartile performance with
onethird of the initial award vesting for median performance and with
proportionate vesting for incremental performance between these points
details of the awards for 2005 are set out in the table on page 46
the preset vesting criteria for awards which vested during 2005 or
which have not yet vested are shown in the following table together
with the actual ranking at 31 december 2005 or on vesting if earlier
awards granted prior to 2004 that vest under the plan are not
released until at least five years from the date of grant
preset vesting criteria
date measurement rankings for rankings for ranking at
period commenced 100 vesting zero vesting 31 december 2005
1 january 2001 1 to 25 51 to 100 86
1 january 2002 1 to 25 51 to 100 93
1 january 2003 1 to 25 51 to 100 71
1 january 2004 1 to 25 51 to 100 6
1 january 2005 1 to 25 51 to 100 70
in order to smooth the opening and closing points of measurement
the average of the daily closing prices for the immediately preceding
twelve months together with any dividends paid is used to calculate
the tsr shares awarded under the plan will continue to be met from
existing shares held by reuters employee share ownership trusts
esots the costs are charged to the profit and loss account over the
vesting periods
for 2006 a fixed award will be granted to each executive director as
noted above these will be 500000 shares for tom glocer 200000
shares for david grigson and 250000 shares for devin wenig
dsop a global discretionary stock option plan was adopted by the
remuneration committee in october 2000 and approved by
shareholders in april 2001 it aims to reward growth in earnings and 
in the share price with effect from 2004 to reduce the dilutive impact
dsops have on shareholders’ interests and to allow the introduction
of a plan better targeted at the general employee population the
number of participants was reduced significantly participation will
normally be confined to executive directors and members of the
gmc other employees may be eligible to participate in the
restricted share plan see below
specific performance conditions apply to each option grant to
executive directors
for awards granted from 2001 to 2004 the remuneration committee
could approve the retesting of performance up to twice in the event
the performance condition was not met by extending the performance
period by up to two years with an increase of 3 in the hurdle rate of
earnings per share eps growth as calculated under uk gaap for
each year added to the performance period if the target rate was not
met by the end of the fifth year the options would lapse
these performance conditions were established in 2001 to retain
management focus on earnings in a particularly challenging market
the performance conditions have been measured for the 2001 2002
and 2003 grants the performance conditions were not met for the 
2001 and 2002 grants the 2001 grant will lapse and under the legacy
retesting provisions the 2002 grant will be subject to a final retest
against basic eps performance for 2006 the 2003 award did meet 
the performance conditions and accordingly the 2003 dsop award
has vested
for awards granted from 2004 the retesting provisions have been
removed and new awards will not permit any extension of the
measurement period if the awards do not meet the eps performance
condition upon completion of the initial performance period they 
will lapse
options granted to executive directors in 2004 and 2005 can vest 
only if the percentage growth in eps exceeds the percentage 
growth in the retail price index by more than 9 over the three year
performance period the executive directors are contractually entitled to participate in 
the dsop  2005 awards are detailed in the table set out on page 40 
it is the remuneration committee’s practice to divide participants’
annual entitlements into two awards normally made following the
announcement of preliminary annual and halfyearly results
for 2006 and 2007 awards the remuneration committee has
introduced a more demanding target to determine the extent to which
options will be exercisable introduced sliding scale vesting provisions
and extended the period over which shares can be released from the
plan a minimum level of 6 a year growth in eps will be required 
for half the options to vest 9 a year will be required for all options 
to vest for rates of growth between 6 and 9 options will vest on 
a proportionate basis furthermore whereas all options may be
exercised at present three years after grant provided that the
performance test is met executive directors will only be permitted to
exercise 50 of the vested options after the initial three year period
the remaining options will only be exercisable in two equal tranches
one and two years later
it is proposed that a fixed number of share options be established 
for granting to each executive director and that these are granted 
in equal measure over the next two years for 2006 tom glocer will
receive 1250000 options david grigson and devin wenig will each
receive 500000 options and 650000 options respectively
since 2001 in addition to the requirements applicable under the 
plan rules share options granted under the dsop have been granted
on terms that require recipients who are subject to the uk national
insurance regime to pay that proportion of national insurance
contributions normally attributable to the employer in addition to 
the proportion normally payable by the employee the quantum 
of options awarded was not increased to reflect the transfer of this
liability from reuters to the recipient
at the time of its introduction it was envisaged that the above
approach would become standard market practice however market
practice has not evolved in this way and accordingly the approach
operated by reuters is inconsistent with market norms in light of this
and other factors including a desire to optimise the effect of incentive
plans and to operate plans in a consistent manner across geographical
borders the remuneration committee having taken independent
advice decided that any future share options would not be granted
on the above basis and that the employer’s national insurance liability
would be borne by reuters it was considered that such action would
result in the dsop being a more effective incentive this approach 
has the additional benefit of all executive directors being treated 
on a more equitable basis
saye plan an allemployee international savingsrelated share option
plan is offered in which the executive directors are eligible to
participate participants save a fixed monthly amount of up to £250
subject to a maximum established annually for each offer for three
years and are then able to use their savings to buy shares at a price
set at a 20 discount to the market value at the start of the savings
period in line with market practice no performance conditions are
attached to options granted under this plan for the 2005 offer the
fixed monthly savings amount was established at a maximum of £100
per month with a three year savings period
annual bonus profit sharing plan abpsp on 18 december 2003
reuters announced its intention to introduce a new profitsharing 
plan across the allemployee population this plan was introduced 
to focus employees on reward for profit growth executive directors
and members of the gmc did not participate in this plan in 2005 
a decision is taken on an annual basis to operate the plan for the
forthcoming year reuters has determined that this plan will operate
for 2006 payments under the plan were typically made in the form of
shares which were normally subject to a 12 month vesting period with
automatic release thereafter to simplify the operation of the plan
payments in the future including under the 2005 plan will be made 
in cash for 2005 participating employees will receive an award
equivalent to 1 of an employee’s eligible salary
restricted share plan rsp on 17 april 2004 at the agm the
shareholders approved the introduction in 2004 of the rsp  currently
restricted shares will not normally be granted for longterm incentive
purposes to executive directors or members of the gmc it is
intended that other than for executive directors and gmc members
employees will be eligible to participate in this plan instead of the
dsop  this plan enables reuters to provide market competitive
remuneration whilst reducing the dilution impact to shareholders
other than in 2004 the year of introduction employees would
generally not be eligible to participate in the dsop and the rsp in
the same year the rsp is normally granted with a fouryear vesting
period shares vesting 25 each year
legacy plans the following four plans are legacy plans under which
tom glocer and devin wenig received awards prior to becoming
executive directors it is not intended that executive directors should
receive any further awards under these plans
performance related share plan prsp this plan operated from 1995
to 2001 and targeted senior executives not participating in the ltip 
tom glocer and devin wenig hold awards granted before they
became executive directors all outstanding awards have now lapsed
the performance condition was the same as for the ltip  although
vested shares could be released three years after grant
deferred bonus share plan dbsp restricted share awards were made
in 2000 as a special retention bonus to a total of around 100 senior
managers excluding the executive directors in office at that time 
as a retention tool and in line with the then market practice they
were made conditional only on remaining in employment until the
shares vested these awards vested in february 2002 and february
2003 tom glocer retained all of the shares that vested meeting the
statutory deductions and taxes from his own resources
executive stock option plan esop tom glocer participated in an
executive stock option plan operated in 1993 and 1994 prior to being
appointed to the board options under the plan carry no performance
conditions and vested automatically on the third anniversary of grant
all options awarded to tom glocer under this plan have lapsed
plan 2000 a oneoff allemployee option grant was made in 1998 
in order to support the retention of employees over the millennium
period in common with such allemployee plans there is no
performance condition to be satisfied all employees including the
executive directors were given the opportunity to apply for an option
to acquire 2000 shares at an exercise price of £550 per share 
these options became exercisable in september 2001 and lapsed 
in september 2005 a small supplementary grant was made to new
employees in march 1999 at an option price of £814 and these will
normally expire in march 2006
05 performance graph
reuters tsr for the five years to 31 december 2005 compared with the
return achieved by the ftse 100 index of companies is shown below
this index is used as the comparator group for the performance
conditions attached to the ltip and prsp referred to above 
42 reuters group plc annual report and form 20f 2005
remuneration report continued reuters group plc annual report and form 20f 2005 43
the calculations assume the reinvestment of dividends performance in
respect of individual awards is shown on pages 41 and 42
06 subsidiary undertaking share plans
reuters divested its interest in instinet group on 8 december 2005
and consequently no subsidiary undertaking share plans are significant
07 service contracts
it is reuters policy that new executive directors be offered notice
periods of not more than one year reuters recognises however that 
in the case of appointments from outside the company a longer notice
period may initially be necessary reducing to one year subsequently 
in light of this the remuneration committee will consider termination
provisions to ensure that appropriate provisions are in place in the
event of the termination of any executive director’s service contract
tom glocer has a service contract with an effective date of 23 july
2001 normally terminable by him on 90 days’ notice or where due to
the company’s fault on 30 days’ notice the company may terminate
without cause on 30 days’ notice in the event of termination by 
tom glocer due to the company’s fault or by the company without
cause or in the event of a change of control t om glocer’ s compensation
will be limited to a maximum of 12 months’ accrued benefits being
annualsalary annual bonus and pension contributions
in the event of a nonfault termination tom glocer retains the benefit
of any outstanding share plan awards as if his employment had not
ceased in addition tom glocer and his family retain the life assurance
and private healthcare benefits provided by reuters for one year
following termination
david grigson’s and devin wenig’s contracts have effective dates 
of 21 june 2001 and 17 february 2003 respectively and can be
terminated on one year’s notice any termination payment will not
exceed an amount equal to the sum of annual salary bonus and 
12 months’ pension contributions paid by reuters
on a change of control of the company all the executive directors 
are entitled to terminate their contracts on one month’s notice unless
the acquiring party has within three months of the change of control
agreed to adopt and uphold the reuters trust principles see page
119 termination payments of a maximum of 12 months’ salary annual
bonus and 12 months’ pension contributions are payable to david
grigson and devin wenig and to tom glocer as previously detailed
in such circumstances
all executive directors have contractual terms that limit the ability of
an executive director to work for a defined list of competitor
companies for a period of time these provisions are in place to
protect intellectual property and commercially sensitive information
08 policy on external appointments
reuters recognises that executive directors may be invited to become
nonexecutive directors of other companies or to become involved in
charitable or public service organisations as the board believes that
this can broaden the knowledge and experience of directors to its
benefit it is reuters policy to approve such appointments provided
there is no conflict of interest and the commitment required is not
excessive board approval is required and directors are permitted to
retain cashonly fees paid for such appointments no executive
directors retained any fees for external directorships during 2005
except for devin wenig who received fees of 17625 and 3000 shares
of restricted stock in his capacity as director of nastech
pharmaceutical company
index of reuters group plc tsr performance 2001–2005
reuters ftse100
0
20
40
60
80
100
120
jan
01
jan
02
jan
03
jan
04
jan
05
dec
05 09 directors’ remuneration for 2005
the disclosures required by part 3 of schedule 7a to the companies act 1985 ‘the auditable part’ are contained within this section
2005 2004
compensation
salary expense for loss
fees bonus benefits
1
allowances
2
of office total total
£000 £000 £000 £000 £000 £000 £000
chairman
niall fitzgerald kbe 500 – 23 – – 523 163
nonexecutive directors
lawton fitt
3
50 – – 25 – 75 25
penny hughes 50–– – – 50 25
ed kozel
3
50–– 30 – 80 65
sir deryck maughan 14 – – – – 14 na
ken olisa
4
50–– 1 – 51 35
dick olver 70–– – – 70 69
charles sinclair 55–– – – 55 60
ian strachan
5
246 – – – – 246 243
executive directors
tom glocer
6
816 881 269 – – 1966 2322
david grigson
7
436 324 5 74 – 839 872
devin wenig
8
346 266 16 11 – 639 686
total emoluments of directors
9
2683 1471 313 141 – 4608 4894
other senior managers as a group
6 persons 2004 9 persons
10
2187 1194 174 182 879 4616 5026
notes for disclosure purposes all amounts have been rounded up to the nearest thousand the following conversion rates were used 183 £1 and chf226 £1
1 items included under benefits are those provided as goods and services received during the year
2 items included under expense allowances are contractual benefits which are paid in cash rather than as goods and services during the year
3 the £25000 to lawton fitt and £30000 allowance to ed kozel represent travel allowances to attend uk board meetings
4 ken olisa’s nonexecutive director fee was paid directly to interregnum plc ken olisa received an expense allowance of £700
5 fees paid to ian strachan include 350000 in respect of his position as a nonexecutive director chairman of instinet group £50000 in respect of his position as nonexecutive director and £4489
as chairman of the remuneration committee from 20 july 2005
6 noncash benefits received by tom glocer included accommodation costs of £228309 company car and healthcare benefits totalling £28745 and longterm disability insurance of £1992
7 noncash benefits received by david grigson included healthcare benefits of £1935 and longterm disability insurance of £1620 allowances consist of a car allowance of £7420 and a retirement
allowance of £66560
8 devin wenig’s benefits consist of healthcare allowances consist of a car allowance of £10492 devin wenig’s salary is paid in us dollars and the total amount reflected in the table is contractually
split between his role as executive director and president of business divisions
9 the total aggregate emoluments for the directors for the period 1 january 2005 to 31 december 2005 which excludes termination payments were £4608 million the total equivalent emoluments for
2004 was £49 million which excludes termination payments
10 other senior managers as a group were 8 persons at 1 january 2005 and were 6 persons at 31 december 2005 following the resignations from the gmc of alex hungate on 30 june 2005 mike
sayers on 21 september 2005 and chris verougstraete on 2 october 2005 and the interim appointment of anne bowerman to the gmc on 7 july 2005
44 reuters group plc annual report and form 20f 2005
remuneration report continued reuters group plc annual report and form 20f 2005 45
directors’ pensions
tom glocer david grigson and devin wenig participate in defined
contribution pension arrangements
tom glocer participates in reuters us pension arrangements and is
entitled to a pension allowance of 25 of his base salary during 2005
and 2006 he is entitled to a lump sum deathinservice benefit whilst
in service of fourtimes basic salary
david grigson is a member of the reuters retirement plan in the uk
and is entitled to a contribution in respect of pension benefits equal to
20 of the uk earnings cap with effect from 1 june 2005 the 
company introduced a salary sacrifice scheme for all pension plan
members under which the company increased pension contributions
by 4 in return for a reduction in the contractual base salary of the
same percentage this increased the company contribution from 20
to 24 from that date he is entitled to a lump sum deathinservice
benefit whilst in service of fourtimes basic salary
devin wenig participates in reuters us pension arrangements and is
entitled to a pension allowance of 6 of his base salary he is entitled
to a lump sum deathinservice benefit of 1 million
contributions and allocations including the cost of life cover in respect of these directors in 2005 were
company contribution
age in respect of period £000
tom glocer 46 207
david grigson 51 28
devin wenig 39 20
the information shown complies with requirements under both the uk listing authority and the directors’ remuneration report regulations 2002
the total amount of contributions or accruals made in 2005 to provide pension and similar benefits for the directors was £307310 2004 £693315
and for the executive directors and the other senior managers as a group was £847251 2004 £1622626
these aggregate figures also include an accrual of £52000 and £60000 respectively for the investment returns within the us executive pension
arrangements these investment returns are calculated based on each individual’s notional fund choices made by reference to actual investment
funds and the actual investment returns achieved on these funds directors’ interests in longterm incentive plans
5
market value
number at per share number at
1 january at grant 31 december
2005 number for awards number number number 2005 date
or later granted made vested exercised lapsed or earlier end of from which
date of date of during during during during during date of qualifying rights are expiry
plan
1
award appointment period period period
2
period period departure period exercisable date
tom glocer
5
prsp
3
15 mar 00
4
33518 – – – – 33518 – 31 dec 04 1 jan 05 31 dec 06
ltip
3
25 jun 01 174451 – – – – – 174451 31 dec 05 1 jan 06 31 dec 07
20 feb 02 234974 – – – – – 234974 31 dec 06 1 jan 07 31 dec 08
24 feb 03 1731277 – – – – – 1731277 31 dec 06 1 jan 07 31 dec 09
23 feb 04 544094 – – – – – 544094 31 dec 06 1 jan 07 31 dec 10
11 mar 05 – 417228 419p – – – 417228 31 dec 07 1 jan 08 31 dec 11
dbsp 24 mar 00
4
75000 – – – 75000 – – 15 feb 02 6 apr 05 na
30 may 00
4
60000 – – – 60000 – – 15 feb 03 6 apr 05 na
total 2853314 417228 – – 135000 33518 3102024
david grigson
5
ltip
3
5 dec 00 42579 – – – – 42579 – 31 dec 04 1 jan 05 31 dec 06
25 jun 01 26294 – – – – – 26294 31 dec 05 1 jan 06 31 dec 07
20 feb 02 37205 – – – – – 37205 31 dec 06 1 jan 07 31 dec 08
24 feb 03 200000 – – – – – 200000 31 dec 06 1 jan 07 31 dec 09
23 feb 04 200000 – – – – – 200000 31 dec 06 1 jan 07 31 dec 10
11 mar 05 – 163468 419p – – – 163468 31 dec 07 1 jan 08 31 dec 11
total 506078 163468 – – – 42579 626967
devin wenig
5
prsp
3
1 apr 99
4
15489 – – – 15489 – – 31 dec 01 1 jan 02 31 dec 05
15 mar 00
4
18166 – – – – 18166 – 31 dec 04 1 jan 05 31 dec 06
29 mar 01
4
20704 – – – – – 20704 31 dec 05 1 jan 06 31 dec 07
ltip
3
25 jun 01
4
2295 – – – – – 2295 31 dec 05 1 jan 06 31 dec 07
20 feb 02
4
22047 – – – – – 22047 31 dec 06 1 jan 06 31 dec 08
24 feb 03 200000 – – – – – 200000 31 dec 06 1 jan 07 31 dec 09
23 feb 04 200000 – – – – – 200000 31 dec 06 1 jan 07 31 dec 10
11 mar 05 – 163468 419p – – – 163468 31 dec 07 1 jan 08 31 dec 11
total 478701 163468 – – 15489 18166 608514
other senior
managers as a
group 6 persons
2004 9 persons
6
prsp
3
1 apr 99 22110 – – – 22110 – – 31 dec 01 1 jan 02 31 dec 05
15 mar 00 71314 – – – – 71314 – 31 dec 04 1 jan 05 31 dec 06
29 mar 01 52910 – – – – – 52910 31 dec 05 1 jan 06 31 dec 07
ltip
3
25 jun 01 5279 – – – – – 5279 31 dec 05 1 jan 06 31 dec 07
20 feb 02 64328 – – – – – 64328 31 dec 06 1 jan 07 31 dec 08
24 feb 03 546343 – – – – – 546343 31 dec 06 1 jan 07 31 dec 09
4 aug 03 208333 – – – – – 208333 31 dec 06 1 jan 07 31 dec 09
23 feb 04 432988 – – – – 5562 427426 31 dec 06 1 jan 07 31 dec 10
11 mar 05 7266 354417 419p – – 24606 337077 31 dec 06 1 jan 07 31 dec 11
rsp 27 aug 04
2
4096 – – 1024 1024 – 3072 27 aug 05 27 aug 05 27 aug 08
11 mar 05 7352 41968 419p – – – 49320 11 mar 06 11 mar 06 11 mar 09
abpsp 11 mar 05 417 – 419p – – – 417 11 mar 06 11 mar 06 11 mar 06
total 1422736 396385 – 1024 23134 101482 1694505
notes
1 see performance conditions attached to prsp  ltip  dbsp awards as described in section 04 above
2 the first 25 of the rsp 27 august 2004 award vested on 27 august 2005 and the shares were released on 30 august 2005
3 prsp awards are available for exercise immediately on vesting the qualifying period may be extended by up to two years where vesting does not occur or is only partial after the initial threeyear
period ltip awards to executive directors prior to 2004 are subject to a retention period of two years from vesting save that this is reduced to one year where the performance period has been
extended to five years
ltip 2000 and prsp 2000 did not meet performance conditions and therefore lapsed
4 the indicated awards were made prior to the appointment of the relevant individual as an executive director
5 2006 awards are described on pages 40 and 41
6 other senior managers as a group were 8 persons at 1 january 2005 and were 6 persons at 31 december 2005 following the resignations from the gmc of alex hungate on 30 june 2005 mike
sayers on 21 september 2005 and chris verougstraete on 2 october 2005 and the interim appointment of anne bowerman to the gmc on 7 july 2005 the numbers include awards granted to anne
bowerman under the annual bonus profit sharing scheme and restricted share plan prior to her appointment to the gmc
46 reuters group plc annual report and form 20f 2005
remuneration report continued reuters group plc annual report and form 20f 2005 47
directors’ share options
number at number at
1 january 31 december
2005 number number number number 2005
exercise or later granted vested exercised lapsed or earlier earliest
date of price date of during during during during date of exercise expiry
plan grant pence appointment period period
5
period
5
period departure date date
tom glocer
6
dsop
3
25 jun 01 862 565113 – – – – 565113 25 jun 06 25 jun 11
20 feb 02 528 461295 – – – – 461295 20 feb 07 20 feb 12
2 aug 02 266 915654 – – – – 915654 2 aug 07 2 aug 12
24 feb 03 135 1307514 – – – – 1307514 24 feb 06 24 feb 13
4 aug 03 245 706594 – – – – 706594 4 aug 06 4 aug 13
23 feb 04 407 789430 – – – – 789430 23 feb 07 23 feb 14
27 aug 04 321 1000928 – – – – 1000928 27 aug 07 27 aug 14
11 mar 05 419 – 719473 – – – 719473 11 mar 08 11 mar 15
2 aug 05 389 – 774959 – – – 774959 2 aug 08 2 aug 15
esop
3
9 feb 94
12
728 13716 – – – 13716 – 9 feb 97 9 feb 05
saye
3
16 apr 03 90 4200 – – – – 4200 1 jun 06 1 dec 06
7 apr 04 314 1200 – – – – 1200 1 jun 07 1 dec 07
14 apr 05 333 – 569 – – – 569 1 jun 08 1 dec 08
plan 2000
3
24 sep 98 550 2000 – – – 2000 – 24 sep 01
2
24 sep 05
total 5767644 1495001 – – 15716 7246929
david grigson
6
dsop
3
25 jun 01 862 92807 – – – – 92807 25 jun 06 25 jun 11
20 feb 02 528 75757 – – – – 75757 20 feb 07 20 feb 12
2 aug 02 266 150375 – – – – 150375 2 aug 07 2 aug 12
24 feb 03 135 200000 – – – – 200000 24 feb 06 24 feb 13
4 aug 03 245 200000 – – – – 200000 4 aug 06 4 aug 13
23 feb 04 407 122950 – – – – 122950 23 feb 07 23 feb 14
27 aug 04 321 155892 – – – – 155892 27 aug 07 27 aug 14
11 mar 05 419 – 281886 – – – 281886 11 mar 08 11 mar 15
2 aug 05 389 – 303625 – – – 303625 2 aug 08 2 aug 15
saye
3
16 apr 03 90 4200 – – – – 4200 1 jun 06 1 dec 06
7 apr 04 314 1200 – – – – 1200 1 jun 07 1 dec 07
14 apr 05 333 – 569 – – – 569 1 jun 08 1 dec 08
total 1003181 586080 – – – 1589261
devin wenig
6
dsop
3
27 dec 00
23
1139 6913 – – – – 6913 27 dec 01 27 dec 07
25 jun 01
23
862 9135 – 2284 – – 9135 25 jun 02 25 jun 11
20 feb 02
23
528 25936 – 6484 – – 25936 20 feb 03 20 feb 12
2 aug 02
2
266 200000 – 50000 – – 200000 2 aug 03 2 aug 12
24 feb 03 135 200000 – – – – 200000 24 feb 06 20 feb 13
4 aug 03 245 200000 – – – – 200000 4 aug 06 4 aug 13
23 feb 04 407 122950 – – – – 122950 23 feb 07 23 feb 14
27 aug 04 321 155892 – – – – 155892 27 aug 07 27 aug 14
11 mar 05 419 – 281886 – – – 281886 11 mar 08 11 mar 15
2 aug 05 389 – 303625 – – – 303625 2 aug 08 2 aug 15
saye
3
7 apr 04
1
727 1200 – – – – 1200 1 jun 07 1 dec 07
14 apr 05
1
793 – 1138 – – – 1138 1 jun 08 1 dec 08
plan 2000
3
24 sep 98
2
550 2000 – – – 2000 – 24 sep 01 24 sep 05
total 924026 586649 58768 – 2000 1508675
other senior
managers as a
group 6 persons
2004 9 persons
7
dsop
3
27 dec 00 1139 28904 – – – – 28904 27 dec 01 27 dec 07
25 jun 01 862 5800 – 1450 – – 5800 25 jun 02 25 jun 06
25 jun 01 862 35757 – 15140 – – 35757 25 jun 02 25 jun 11
21 dec 01 692 2025 – 507 – – 2025 21 dec 02 21 dec 11
20 feb 02 528 5697 – 1424 – – 5697 20 feb 03 20 feb 07
20 feb 02 528 78242 – 31955 – – 78242 20 feb 03 20 feb 12
2 aug 02 266 150000 – 37500 – – 150000 2 aug 03 2 aug 07
2 aug 02 266 570246 – 255061 – – 570246 2 aug 03 2 aug 12
24 feb 03 135 460737 – 182954 31829 3125 425783 24 feb 04 24 feb 13
1 apr 03 108 350208 – 306432 – 43776 306432 1 apr 04 1 apr 13
4 aug 03 245 675050 – 266364 17538 29821 627691 4 aug 04 4 aug 13
23 feb 04 407 391075 – 146252 – 36735 354340 23 feb 05 23 feb 14 directors’ share options continued
27 aug 04 321 487676 – 165384 – 64586 423090 27 aug 05 27 aug 14
11 mar 05 419 – 276904 19596 – 32660 244244 11 mar 06 11 mar 15
2 aug 05 389 – 241968 – – – 241968 2 aug 06 2 aug 15
plan 2000
3
24 sep 98 550 14000 – – – 14000 – 24 sep 01 24 sep 05
saye
3
11 apr 02 448 2120 – – – 2120 – 1 jun 05 1 dec 05
16 apr 03 90 21000 – 3500 – 700 20300 1 jun 06 1 dec 06
7 apr 04 314 7800 – 1200 – 1200 6600 1 jun 07 1 dec 07
14 apr 05 333 1138 3129 316 – 822 3445 1 jun 08 1 dec 08
total 3287475 522001 1435035 49367 229545 3530564
notes
1 the options indicated are over american depositary shares adss each ads represents six ordinary shares is denominated is us dollars and trades on nasdaq for the purposes of this
disclosure adss have been converted into the equivalent number of ordinary shares and an equivalent option price
2 the indicated awards were made prior to the appointment of the relevant individual as an executive director the dsop options granted prior to the appointment as an executive director have no
performance condition
3 options granted under the saye plan plan 2000 and the esop have no performance conditions save as disclosed in note 2 above exercise of each dsop award is conditional on the performance
criteria described in section 04 and no performance conditions were varied during 2005
4 at 31 december 2005 the market price of our shares was 431 pence per share and 4425 per ads the highest prices during the year were 431 pence per share and 4935 per ads and the lowest
were 35175 pence per share and 3733 per ads
5 there were gains of £823125 on the exercise of share options in 2005 2004 £306526 the market price of the shares at the date of exercise on 9 june 2005 was £3705 there were hypothetical
gains of £2141667 made on the vesting of shares at the market value share price on the date of vesting
6 2006 awards are described on pages 40 and 41
7 other senior managers as a group were 8 persons at 1 january 2005 and were 6 persons at 31 december 2005 following the resignations from the gmc of alex hungate on 30 june 2005 mike sayers
on 21 september 2005 and chris verougstraete on 2 october 2005 and the appointment of anne bowerman to the gmc on 7 july 2005
10 directors’ interests in ordinary shares
the total interests of the current directors and other senior management in issued share capital and in shares underlying options and incentive
plans are shown below as at 7 march 2006 no director or senior manager beneficially owns 1 or more of reuters issued share capital interests
in ordinary shares excluding options and interests in longterm incentive plans disclosed above held at 1 january 2005 and 31 december 2005
are also shown for directors in office at 31 december 2004 directors were the beneficial owners of all shares except for 16875 shares held by
david grigson’s family members and 52451 shares held by a trust of which tom glocer and his family are beneficiaries
interests at interests at
interests at 7 march 2006
1 january 2005 31 december 2005 longterm
shares shares
1
shares incentives options
directors
niall fitzgerald kbe 30000 50000 55000 – –
tom glocer 217113 372145 372145 3102024 7246929
david grigson 48430 63430 63430 626967 1589261
devin wenig 78354 105843 105843 608514 1508675
lawton fitt – 25000 25000 – –
penny hughes – – 2392 – –
ed kozel 7500 7500 7500 – –
sir deryck maughan na – –––
ken olisa – 2550 2550 – –
dick olver 10000 10000 10000 – –
charles sinclair 35000 35000 na ––
ian strachan 15500 15500 15500 – –
other senior managers as a group 6 persons
2
162124 198599 139150 1662676 3530564
none of the directors has notified the company of an interest in any other shares or other transactions or arrangements which require disclosure there have been no movements in the interests of the
directors in the share capital of the group companies since 31 december 2005 other than a purchase of 5000 shares by niall fitzgerald and 2392 by penny hughes
notes
1 or as at the date of retirement if earlier
2 other senior managers as a group were 8 persons at 1 january 2005 and were 6 persons at 31 december 2005 following the resignations from the gmc of alex hungate on 30 june 2005 mike sayers
on 21 september 2005 and chris verougstraete on 2 october 2005 and the interim appointment of anne bowerman to the gmc on 7 july 2005
on behalf of the board
niall fitzgerald kbe
chairman 10 march 2006
48 reuters group plc annual report and form 20f 2005
remuneration report continued united kingdom opinion
reuters group plc annual report and form 20f 2005 49
independent auditors’ report to the members 
of reuters group plc
we have audited the group financial statements of reuters group plc for 
the year ended 31 december 2005 which comprise the consolidated income
statement the consolidated balance sheet the consolidated cash flow statement
the consolidated statement of recognised income and expense and the related
notes these group financial statements have been prepared under the accounting
policies set out therein
we have reported separately on the parent company financial statements of
reuters group plc for the year ended and on the information in the directors’
remuneration report that is described as having been audited
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report and the group
financial statements in accordance with applicable law and international
financial reporting standards ifrss as adopted by the european union eu
are set out in the statement of directors’ responsibilities
our responsibility is to audit the group financial statements in accordance with
relevant legal and regulatory requirements and international standards on
auditing uk and ireland this report including the opinion has been prepared
for and only for the company’s members as a body in accordance with section
235 of the companies act 1985 and for no other purpose we do not in giving
this opinion accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing
we report to you our opinion as to whether the group financial statements 
give a true and fair view and whether the group financial statements have been
properly prepared in accordance with the companies act 1985 and article 4 
of the ias regulation we also report to you if in our opinion the directors’
report is not consistent with the group financial statements if we have not
received all the information and explanations we require for our audit or if
information specified by law regarding directors’ remuneration and other
transactions is not disclosed
we review whether the corporate governance statement reflects the company’s
compliance with the nine provisions of the 2003 frc combined code specified
for our review by the listing rules of the financial services authority and we
report if it does not we are not required to consider whether the board’s
statements on internal control cover all risks and controls or form an opinion on
the effectiveness of the group’s corporate governance procedures or its risk and
control procedures
the united kingdom opinion set out above is included for the purposes of reuters annual report
and financial statements only and does not form part of reuters form 20f for 2005
we read other information contained in the annual report and consider
whether it is consistent with the audited group financial statements the other
information comprises only those set out in the table of contents including the
chairman’s statement the directors’ report the report on corporate governance
the unaudited part of the remuneration report the statement of the directors’
responsibilities and the operating and financial review we consider the
implications for our report if we become aware of any apparent misstatements
or material inconsistencies with the group financial statements our responsibilities
do not extend to any other information
basis of audit opinion
we conducted our audit in accordance with international standards on auditing
uk and ireland issued by the auditing practices board an audit includes
examination on a test basis of evidence relevant to the amounts and disclosures
in the group financial statements it also includes an assessment of the significant
estimates and judgements made by the directors in the preparation of the
group financial statements and of whether the accounting policies are appropriate
to the group’s circumstances consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the group financial
statements are free from material misstatement whether caused by fraud or
other irregularity or error in forming our opinion we also evaluated the overall
adequacy of the presentation of information in the group financial statements
opinion
in our opinion
• the group financial statements give a true and fair view in accordance with
ifrss as adopted by the eu of the state of the group’s affairs as at 
31 december 2005 and of its profit and cash flows for the year then ended and
• the group financial statements have been properly prepared in accordance
with the companies act 1985 and article 4 of the ias regulation
pricewaterhousecoopers llp
chartered accountants and registered auditors
london 10 march 2006
united states opinion
report of independent registered public
accounting firm
in our opinion the accompanying consolidated balance sheet and the related
consolidated income statement consolidated cash flow statement and
consolidated statement of recognised income and expense present fairly in 
all material respects the financial position of the reuters group plc and its
subsidiaries at 31 december 2005 and 2004 and the results of their operations
and their cash flows for each of the two years in the period ended 31 december
2005 in conformity with ifrss as adopted by the eu these financial statements
are the responsibility of the group’s management our responsibility is to express
an opinion on these financial statements based on our audits we conducted 
our audits of these statements in accordance with the standards of the public
company accounting oversight board united states those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement an audit
includes 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 we believe that our audits provide a reasonable
basis for our opinion
as discussed in the accounting policies the group adopted international
accounting standards ias 32 ‘financial instruments disclosure and
presentation’ ias 39 ‘financial instruments recognition and measurement’ 
and ifrs 5 ‘noncurrent assets held for sale and discontinued operations’ 
in accordance with ifrs as adopted by the eu the change has been accounted
for prospectively from 1 january 2005 except for the disclosure requirements of
ifrs 5 which were also applied to the comparative information
ifrss as adopted by the eu vary in certain significant respects from accounting
principles generally accepted in the united states of america information
relating to the nature and effect of such differences is presented in the summary
of differences between ifrs and us generally accepted accounting principles
us gaap in the consolidated financial statements
pricewaterhousecoopers llp
london 10 march 2006 50 reuters group plc annual report and form 20f 2005
for the year ended 31 december
2005 2004
notes £m £m
revenue 01 02 2409 2339
operating costs 03 2251 2187
other operating income 04 49 42
operating profit 207 194
finance income 05 41 15
finance costs 05 53 27
profit on disposal of associates and availableforsale financial assets 38 203
share of posttaxation profits from associates and joint ventures 15 5 11
profit before taxation 238 396
taxation 06 9 40
profit for the year from continuing operations 229 356
discontinued operations
profit for the year from discontinued operations 07 253 19
profit for the year 482 375
attributable to
equity holders of the parent 11 456 364
minority interest 11 26 11
earnings per share
from continuing and discontinued operations
basic earnings per ordinary share 08 326p 260p
diluted earnings per ordinary share 08 317p 254p
from continuing operations
basic earnings per ordinary share 08 163p 254p
diluted earnings per ordinary share 08 159p 248p
 share of posttaxation profits from associates and joint ventures includes a taxation charge of £1 million 2004 £2 million
dividends paid and proposed during the year were £140 million 2004 £140 million paid and proposed please see note 32 on page 92
for the year ended 31 december
2005 2004
notes £m £m
profit for the year 482 375
actuarial losses on defined benefit plans 11 25 48 205
exchange adjustments offset in reserves 11 118 48
translation differences taken to the income statement on disposal of assets 11 28 2 6
fair value losses on availableforsale financial assets 11 15 –
fair value gains on availableforsale financial assets taken to the income statement on disposal of assets 11 73 –
fair value losses on net investment hedges 11 28 39 –
fair value gains taken to the income statement on disposal of net investment hedges 11 28 14 –
taxation on the items taken directly to or transferred from equity 11 14 35
net losses not recognised in income statement 11 59 212
total recognised income for the year 423 163
attributable to
equity holders of the parent 374 166
minority interest 49 3
fair value gains and losses arise as a result of application of ias 39 by the group with effect from 1 january 2005 the adoption of ias 39 resulted in an increase in
equity at 1 january 2005 of £129 million of which £2 million was attributable to the minority interest
the consolidated reconciliation of changes in equity is set out in note 11 on page 65
consolidated statement of recognised income and expense 
consolidated income statement at 31 december
2005 2004
notes £m £m
assets
noncurrent assets
intangible assets 13 487 316
property plant and equipment 14 358 354
investments accounted for using the equity method
investments in joint ventures 15 32 29
investments in associates 15 4 6
deferred tax assets 26 276 292
other financial assets and derivatives 16 22 28
1179 1025
current assets
inventories 18 1 3
trade and other receivables 19 270 535
other financial assets and derivatives 16 18 287
current tax debtor 6 7
cash and cash equivalents 20 662 578
957 1410
noncurrent assets classified as held for sale 21 1 145
total assets 2137 2580
liabilities
current liabilities
trade and other payables 22 397 721
current tax liability 23 228 260
provisions for liabilities and charges 24 64 87
other financial liabilities and derivatives 16 49 181
738 1249
noncurrent liabilities
provisions for liabilities and charges 24 392 340
other financial liabilities and derivatives 16 371 329
deferred tax liabilities 26 66 45
829 714
liabilities directly associated with noncurrent assets classified as held for sale 21 – 47
total liabilities 1567 2010
net assets 570 570
shareholders’ equity
share capital 27 467 455
other reserves 28 1692 1755
retained earnings 11 1795 1671
total parent shareholders’ equity 570 371
minority interest in equity – 199
total equity 570 570
the balance sheet of reuters group plc is shown on page 112
the financial statements on pages 50–103 and the summary of differences between ifrs and us gaap on pages 104–108 were approved by the board of directors 
on 10 march 2006
tom glocer david grigson
ceo cfo
consolidated balance sheet
reuters group plc annual report and form 20f 2005 51 52 reuters group plc annual report and form 20f 2005
the principal accounting policies adopted in the preparation of these financial
statements are set out below these policies have been consistently applied to
2005 and 2004 unless otherwise stated
basis of accounting
the financial statements have been prepared under the historical cost convention
unless otherwise stated below and in accordance with the companies act 1985
and applicable accounting standards
the preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain judgements
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reported period the reported amount of assets and liabilities
and disclosure of contingent assets and liabilities at the balance sheet dates
although these estimates are based on management’s best knowledge of the
amount event or actions actual results ultimately may differ from those estimates
further details regarding areas requiring significant assumptions and estimates
are provided in the relevant notes to the financial statements
there are certain areas of complexity which require a higher degree of judgement
these areas include impairment of assets accounting for employee share plans
and defined benefit pension funds provisions allowances for doubtful accounts
deferred taxation and accounting for derivative assets and liabilities
adoption of international financial 
reporting standards ifrs
prior to 2005 the group prepared its audited annual financial statements under
uk gaap  for the year ended 31 december 2005 the group is required to
prepare its annual consolidated financial statements in accordance with ifrs
and international financial reporting interpretations committee ifric
interpretations as adopted by the eu and those parts of the companies act
1985 applicable to companies reporting under ifrs the financial statements
take account of the requirements and options in ifrs 1 ‘firsttime adoption of
international financial reporting standards’ as they relate to the 2004
comparatives included herein
the group’s transition date to ifrs was 1 january 2004 all adjustments on first
time adoption were recorded in shareholders’ equity on the date of transition
except for adjustments relating to ias 32 ‘financial instruments disclosure and
presentation’ and ias 39 ‘financial instruments recognition and measurement’
which were recorded in shareholders’ equity at 1 january 2005
ifrs 1 sets out the transition rules which must be applied when ifrs is adopted
for the first time as a result some of the requirements and options in ifrs 1
may result in a different application of accounting policies in the 2004 financial
information presented for the first time under ifrs from that which would
apply if the 2004 financial statements were prepared using full retrospective
adoption of ifrs the standard sets out the mandatory exceptions to retrospective
application and certain optional exemptions the optional exemptions taken by
the group are
for the year ended 31 december
2005 2004
notes £m £m
cash flows from operating activities
cash generated from operations 29 271 280
interest received 55 19
interest paid 49 30
tax paid 24 43
net cash flow from operating activities 253 226
cash flows from investing activities
acquisitions net of cash acquired 30 124 78
disposals net of cash disposed 30 246 438
purchases of property plant and equipment 145 109
proceeds from sale of property plant and equipment 3 66
purchases of intangible assets 40 27
purchases of availableforsale financial assets 1 1
proceeds from sale of availableforsale financial assets 85 25
dividends received 5 5
net cash flow from investing activities 29 319
cash flows from financing activities
proceeds from issue of shares 10 6
share buyback 223 –
decreaseincrease in shortterm investments 248 105
decrease in borrowings 144 225
equity dividends paid to shareholders 140 140
equity dividends paid to minority interests 23 –
net cash flow from financing activities 272 464
exchange gainslosses on cash and cash equivalents 66 33
net increase in cash and cash equivalents 76 48
cash and cash equivalents at the beginning of the year 561 513
cash and cash equivalents at the end of the year 31 637 561
group accounting policies
consolidated cash flow statement a business combinations
b employee benefits
c cumulative translation differences
d sharebased payment transactions and
e financial instruments
the mandatory exceptions outlined in ifrs 1 relevant to the financial
statements of the group with which the group has complied relate to
f estimates and
g assets classified as held for sale and discontinued operations
for more details regarding the group’s transition to ifrs and detailed
explanation of the above please refer to note 40 on page 101
the following accounting policies have been consistently applied to 2005 
and 2004 except those noted in e and g above where the comparative
information is determined under the previous accounting policies in 
accordance with uk gaap 
basis of consolidation
the consolidated financial statements include the financial statements of
reuters group plc and its subsidiaries and the group’s share of the post
acquisition results of associates and joint ventures
subsidiaries
subsidiaries are all entities over which the group has the power to govern the
financial and operating policies generally accompanying a shareholding of
more than one half of the voting rights subsidiaries are consolidated from the
date on which control is transferred to the group and are deconsolidated from
the date on which control ceases
the purchase method of accounting is used to account for the acquisition of
subsidiaries by the group the excess of the cost of an acquisition over the fair
value of the group’s share of the identifiable net assets acquired is recorded as
goodwill if the cost of acquisition is less than the fair value of the net assets of the
subsidiary acquired the difference is recognised directly in the income statement
all intragroup transactions are eliminated as part of the consolidation process
in preparing the group financial statements accounting policies of subsidiaries
have been adjusted where necessary to ensure consistency with the accounting
policies adopted by the group
associates and joint ventures
associates are all entities over which the group has significant influence but 
not control generally accompanying a shareholding of between 20 and 50
of the voting rights joint ventures are all entities over which the group has
joint control with one or more other entities outside the group investments 
in associates and joint ventures are accounted for by the equity method of
accounting and are initially recognised at cost the group’s investment in
associates and joint ventures includes goodwill identified on acquisition plus
the group’s share of postacquisition reserves
the group’s share of postacquisition profits or losses is recognised in the
income statement and its share of postacquisition movements in reserves is
recognised in reserves when the group’s share of losses of an associate or
joint venture equals or exceeds its interest in the associate or joint venture 
the group does not recognise further losses unless it has incurred obligations
or made payments on behalf of the associate or joint venture
unrealised gains on transactions between the group and its associates and
joint ventures are eliminated to the extent of the group’s interest for group
reporting purposes the results of associates and joint ventures have been
adjusted where necessary to ensure consistency with the accounting policies
adopted by the group
foreign currency translation
amounts included in the financial statements of each of the group’s entities are
measured using the currency of the primary economic environment in which the
entity operates the functional currency the consolidated financial statements
are presented in pounds sterling reuters group plc’s functional and
presentation currency
transactions in foreign currencies are translated into the functional currency using
the exchange rate prevailing at the date of the transaction foreign exchange gains
and losses resulting from settlement of such transactions and from the translation
at year end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the income statement except when deferred
in equity as qualifying cash flow and net investment hedges
translation differences on nonmonetary items such as availableforsale
financial assets are included in the fair value reserve in equity
the results and financial position of all group companies that have a functional
currency other than sterling are translated as follows
• income and expenses are translated at average exchange rates unless this
average is not a reasonable approximation of the cumulative effect of the
rate prevailing on the transaction date in which case income and expenses
are translated at the date of the transaction
• assets and liabilities are translated at the closing exchange rate at the date 
of the balance sheet and
• all resulting differences are recognised as a separate component of equity
on consolidation exchange differences arising from the translation of the net
investment in foreign entities and from borrowings and other currency
instruments designated as hedges of such investments are taken to equity
when a foreign operation is sold such exchange differences are recognised 
in the income statement as part of the gain or loss on sale
goodwill and fair value adjustments on the acquisition of a foreign entity are
treated as assets and liabilities of the foreign entity and translated at the 
closing exchange rate
revenue recognition
revenue represents the turnover net of discounts derived from services
provided to subscribers and sales of products applicable to the year
revenue from sales of subscriptionbased realtime and historical information
services is recognised rateably over the term of the subscription
revenue from contracts for the outright sale of systemsbased product solutions
which include the sale of fully developed software licences is recognised at the
time of client acceptance at which time the group has no further obligation
longterm contracts are accounted for in accordance with the contractual terms
either on a percentage of completion basis or on a time and materials as
incurred basis
revenue from associated maintenance and support services is recognised
rateably over the term of the maintenance contract where contracts allow the
group to recharge costs from communications suppliers and exchanges onwards
to subscribers this income is recognised as revenue
transaction products usage revenue is accounted for on a trade date basis
interest income is accrued on a time basis by reference to the amount
outstanding and at the effective interest rate applicable which is the rate that
exactly discounts estimated future cash receipts through the expected life of
the financial asset to that asset’s net carrying value
securities transactions between instinet group counterparties which pass
through instinet group in its role as agency broker are recorded on a settlement
date basis and therefore are only reflected in the balance sheet if there is a
failure to settle revenues and related expenses arising from such securities
transactions are accrued from the date of the transaction
pensions and similar obligations
ias 19 ‘employee benefits’ was amended on 16 december 2004 with effect
from 1 january 2006 the amendment provides the option to recognise all
actuarial gains and losses in the statement of recognised income and expense
the group has elected to adopt this treatment early and has applied this
accounting from the date of transition to ifrs
reuters group plc annual report and form 20f 2005 53 54 reuters group plc annual report and form 20f 2005
group accounting policies continued
the group operates defined contribution and defined benefit pension plans
and provides postretirement medical benefits
payments to defined contribution pension plans are charged as an expense 
to the income statement as incurred when the related employee service is
rendered the group has no further legal or constructive payment obligations
once the contributions have been made
for defined benefit pension plans the cost of providing benefits is determined
using the projected unit credit method and is charged to the income statement
so as to spread the service cost over the service lives of the employees an interest
cost representing the unwinding of the discount rate on the scheme liabilities
net of the expected return on scheme assets is charged to the income
statement the liability recognised in the balance sheet in respect of defined
benefit pension plans is the present value of the defined benefit obligation at
the balance sheet date less the fair value of the plan assets the defined benefit
obligation is calculated annually by independent actuaries the present value 
of the defined benefit obligation is determined by discounting the estimated
future cash outflows using interest rates of highquality corporate bonds that 
are denominated in a currency in which the benefits will be paid and that have 
terms of maturity approximating to the terms of the relevant pension liability
all actuarial gains and losses which arise in calculating the present value of the
defined benefit obligation and the fair value of plan assets are recognised
immediately in the statement of recognised income and expense
postretirement medical benefits are provided to employees of some group
companies the expected costs are determined using an accounting
methodology similar to that for defined benefit pension plans
sharebased payments
the group makes equitysettled and cashsettled sharebased payments to its
employees equitysettled sharebased awards granted after 7 november 2002
but not vested by 1 january 2005 are measured at fair value at the date of grant
and expensed on a straightline basis over the vesting period of the award 
at each balance sheet date the group revises its estimate of the number of
options that are expected to become exercisable
cashsettled sharebased payments are accrued over the vesting period of the
award based on the current fair market value at each balance sheet date
when share options are exercised the proceeds received net of any transaction
costs are credited to share capital nominal value and share premium
intangible assets
goodwill
goodwill represents the excess of the cost of an acquisition over the fair value
of the group’s share of the identifiable net assets including intangible assets 
of the acquired subsidiary associate or joint venture at the date of acquisition
goodwill on acquisition of subsidiaries is included in intangible assets goodwill
on acquisition of associates and joint ventures is included in the carrying value
of the investment goodwill is tested annually for impairment and carried 
at cost less accumulated impairment losses gains and losses on disposal of 
an entity include the carrying amount of goodwill relating to the entity or
investment sold goodwill which was previously directly written off to reserves
under uk gaap is not included in the gain or loss on disposal of an entity
internally generated intangible assets – product development
expenditure related to the development of new products or capabilities that is
incurred between establishing technical feasibility and the asset becoming
incomegenerating is capitalised as an intangible asset and amortised over the
useful economic life capitalisation commences from the point at which the
technical feasibility and commercial viability of the product can be demonstrated
and the group is satisfied that it is probable that future economic benefits will
result from the product once completed capitalisation ceases when the
product is ready for launch
expenditure on research activities and on development activities that does not
meet the above criteria is charged to the income statement as incurred
internally developed intangible assets are systematically amortised over their
useful economic lives which range from three to five years on a straight line basis
other intangibles
costs which are directly associated with the production of software for internal
use in the business are capitalised as an intangible asset software which forms
an integral part of the related hardware is capitalised with that hardware and
included within property plant and equipment software assets are amortised
on a straight line basis over their expected useful economic lives
acquired intangible assets include computer software licences customer
relationships trade names and trademarks these assets are capitalised on
acquisition and amortised over their expected useful economic lives
other intangible assets are systematically amortised on a straight line basis over
their useful economic lives which are as follows
computer software 3 to 5 years
other acquired intangibles 5 to 15 years
impairment of assets
assets which have an indefinite useful life are not subject to amortisation and
are tested annually for impairment assets which are subject to amortisation are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable an impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount the recoverable amount is the higher of an asset’s fair
value less cost to sell and value in use
for the purposes of assessing impairment assets are grouped at the lowest level
for which there are separately identifiable cash flows cash generating units
‘cgus’ where assets do not generate independent cash flows and their carrying
value cannot be attributed to a particular cgu cgus are grouped together at
the level at which these assets reside and the carrying amount of this group of
cgus is compared to the recoverable amount of that particular group
property plant and equipment
all property plant and equipment is stated at historical cost less depreciation
and includes expenditure directly attributable to the acquisition of the items
subsequent costs are included in the asset’s carrying amount or recognised as 
a separate asset as appropriate only when it is probable that future economic
benefit will flow to the group and the cost of the item can be measured reliably
depreciation is calculated on a straight line basis so as to write down the assets
to their residual values over their expected useful lives
freehold land not depreciated
freehold buildings normally 50 years
leasehold property over the term of the lease
computer systems equipment office equipment 
and motor vehicles 2 to 5 years
the assets’ residual values and useful lives are reviewed and adjusted if
appropriate at each balance sheet date
noncurrent assets held for sale 
effective 1 january 2005
noncurrent assets and disposal groups are classified as held for sale if their
carrying amount will be recovered principally through a sale transaction rather
than through continuing use this condition is regarded as met only when the
sale is highly probable and the asset is available for immediate sale in its
present condition
noncurrent assets and disposal groups classified as held for sale are measured
at the lower of carrying amount and fair value less selling costs
for 2004 comparatives the group has applied the disclosure requirements for
assets held for sale as at 31 december 2004 balance sheet values have not
been restated in accordance with ifrs 5 ‘noncurrent assets held for sale and
discontinued operations’ investments effective 1 january 2005
the group classifies its investments in the following categories
• financial assets at fair value through profit and loss
• loans and receivables
• heldtomaturity investments and
• availableforsale financial assets
the classification depends on the purpose for which the assets were acquired
management determines the classification of its investments at initial recognition
and reevaluates this designation at every reporting date
financial assets at fair value through profit and loss
this category includes financial assets held for trading and those designated 
at fair value through profit and loss at inception a financial asset is classified in
this category if acquired principally for the purpose of selling in the shortterm
or if so designated by management derivatives are also classified as held for
trading unless they are designated as hedges assets in this category are
initially recognised at fair value and subsequently remeasured at fair value
realised and unrealised gains and losses are included in the income statement
in the period in which they arise
loans and receivables
loans and receivables are nonderivative financial assets with fixed or determinable
payments that are not quoted in an active market they are included in trade and
other receivables in the balance sheet assets in this category are initially recognised
at fair value and subsequently measured at amortised cost
heldtomaturity investments
heldtomaturity investments are nonderivative financial assets with fixed or
determinable payments and fixed maturities that the group’s management has
the positive intention and ability to hold to maturity assets in this category are
initially recognised at fair value and subsequently measured at amortised cost
availableforsale financial assets
the group has classified all of its marketable securities as availableforsale
assets in this category are initially recognised at fair value and subsequently
remeasured at fair value unrealised gains and losses arising from changes in
fair value are recognised in the statement of recognised income and expense
the group assesses at each balance sheet date whether there is objective
evidence that a financial asset or group of financial assets is impaired on
disposal or impairment of the asset gains or losses in equity are recycled
through the income statement
cash and cash equivalents
cash and cash equivalents include cash in hand bank deposits repayable 
on demand other highly liquid investments with original maturities of three
months or less and bank overdrafts
inventories and contract work in progress
inventories and contract work in progress are valued at the lower of cost and net
realisable value less progress payments received and receivable from the client
cost is calculated on a firstinfirstout basis by reference to the invoice value
of supplies and attributable costs of bringing inventories to their present
location and condition
net realisable value is the estimated market value less selling costs
trade receivables
trade receivables do not carry interest and are stated at their nominal value 
as reduced by appropriate allowances for estimated irrecoverable amounts 
a provision for impairment of trade receivables is established when there is
evidence that the group will not be able to collect all amounts due according
to the original terms of these receivables the amount of the provision is the
difference between the carrying value and the present value of estimated 
future cash flows discounted at the effective interest rate the amount of the
provision is recognised in the income statement
provisions
provisions other than in respect of pension and postretirement healthcare benefits
are recognised when the group has a present legal or constructive obligation as 
a result of past events it is more likely than not that an outflow of resources will 
be required to settle the obligation and the amount can be reliably estimated
restructuring provisions comprise lease termination liabilities employee termination
payments and other liabilities incurred as part of restructuring programmes
provisions are not recognised for future operating losses
leasing
assets held under finance leases are recognised as assets of the group at their
fair value or if lower at the present value of the minimum lease payments each
determined at the inception of the lease the corresponding liability to the
lessor is included in the balance sheet as a finance lease obligation lease
payments are apportioned between finance charges and reduction of the lease
obligation so as to achieve a constant rate of interest on the remaining balance
of the liability
operating lease rentals are charged against profit on a straight line basis over
the period of the lease operating lease incentives received are initially deferred
and then recognised over the full period of the lease
borrowings
borrowings are recognised initially at fair value net of transaction costs incurred
borrowings are subsequently stated at amortised cost any difference between
the proceeds net of transaction costs and the redemption value is recognised
in the income statement over the period of the borrowings using the effective
interest method
borrowings are classified as current liabilities unless the group has an
unconditional right to defer settlement of the liability for at least twelve months
after the balance sheet date
borrowing costs on qualifying assets are expensed as incurred and not capitalised
as part of the cost of the asset
purchases and sales of financial assets
purchases and sales of financial assets are recognised on the settlement date
which is the date that the asset is delivered to or by the group this includes
securities transactions between instinet group counterparties that pass through
instinet group in its role as agency broker and therefore are only reflected in the
balance sheet if there is a failure to settle revenues and related expenses arising
from such securities transactions are accrued from the date of the transaction
derivative financial instruments and hedging
effective 1 january 2005
derivatives are initially recognised at fair value on the date a derivative contract
is entered into and are subsequently remeasured at their fair value the method
of recognising the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument and if so the nature of the item being
hedged the group designates certain derivatives as either
• hedges of the fair value of recognised assets or liabilities or a firm commitment
fair value hedges
• hedges of highly probable forecast transactions cash flow hedges or
• hedges of net investments in foreign operations net investment hedges
fair value hedges
changes in the fair value of derivatives that are designated and qualify as fair
value hedges are recorded in the income statement together with any changes
in the fair value of the hedged asset or liability that are attributable to the
hedged risk
cash flow hedges
the effective portion of changes in the fair value of derivatives that are designated
and qualify as a cash flow hedge is recognised in equity the gain or loss relating
to the ineffective portion is recognised immediately in the income statement
amounts accumulated in equity are recycled to the income statement in the
period when the hedged item will affect profit and loss for instance when the
forecast sale that is hedged takes place however when the forecast transaction
reuters group plc annual report and form 20f 2005 55 56 reuters group plc annual report and form 20f 2005
group accounting policies continued
that is hedged results in the recognition of a nonfinancial asset for example
project costs or a major business investment or a liability the gains and losses
previously deferred in equity are transferred from equity and included in the
initial measurement of the cost of the asset or liability
when a hedging instrument expires or is sold or when a hedge no longer
meets the criteria for hedge accounting any cumulative gain or loss existing 
in equity at that time remains in equity and is recognised when the forecast
transaction is ultimately recognised in the income statement when a forecast
transaction is no longer expected to occur the cumulative gain or loss that was
reported in equity is immediately transferred to the income statement
net investment hedges
derivatives and foreign currency borrowings are used as hedges for net
investments in foreign operations any gain or loss on a derivative hedging
instrument relating to the effective portion of the hedge is recognised in equity
the gain or loss relating to the ineffective portion of the hedge is recognised
immediately in the income statement any gain or loss on foreign currency
borrowings used as a hedge is recognised in equity
gains and losses accumulated in equity are included in the income statement
on disposal or impairment of the foreign operation
derivatives that do not qualify for hedge accounting
certain derivative instruments while providing effective economic hedges
under the group’s policies are not designated as hedges changes in the fair
value of any derivative instruments that do not qualify for hedge accounting are
recognised immediately in the income statement the group does not hold or
issue derivative financial instruments for speculative purposes
fair value estimation effective 1 january 2005
the fair value of financial instruments traded in active markets such as
availableforsale securities is based on quoted market prices at the balance
sheet date the fair value of foreign exchange contracts is determined using
forward exchange market rates at the balance sheet date other financial
instruments are valued using standard pricing models based on quoted forward
market rates interpolated between dates where appropriate and discounted
cash flow techniques
interest in shares of reuters group plc
shares held by the employee share ownership trusts and repurchased shares are
recorded in the balance sheet as a deduction from shareholders’ equity at cost
dividend distribution
dividend distributions are recognised as a liability in the period in which the
dividends are approved by the company’s shareholders interim dividends are
recognised when they are paid final dividends when authorised in general
meeting by shareholders
taxation
the tax expense for the year comprises current and deferred tax tax is
recognised in the income statement except to the extent that it relates to 
items recognised directly in equity in which case it is recognised in equity
the current tax expense is based on the results for the year as adjusted for items
that are not taxable or not deductible current tax is calculated using tax rates and
laws that have been enacted or substantively enacted at the balance sheet date
deferred tax is accounted for using the balance sheet liability method and 
is the tax expected to be payable or recoverable on temporary differences
between the carrying amount of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of taxable profit
deferred tax is calculated based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities using tax rates that
are expected to apply to the year of realisation or settlement based on tax rates
and laws enacted or substantively enacted at the balance sheet date
deferred tax liabilities are generally recognised for all taxable temporary
differences deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries associates and joint ventures
except where the reversal of the temporary difference can be controlled and 
it is probable that the difference will not reverse in the foreseeable future
deferred tax assets are recognised to the extent it is probable that taxable profits
will be available against which the deductible temporary differences can be
utilised the carrying amount of deferred tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be recovered
deferred tax assets and liabilities are not recognised if the temporary differences
arise from goodwill not deductible for tax purposes or from the initial recognition
other than in a business combination of other assets and liabilities in a transaction
that affects neither the taxable profit nor the accounting profit
segment reporting
a business segment is a group of assets and operations engaged in providing
products and services that are subject to risks and returns which are different
from those in other business segments a geographical segment is a different
economic environment in which an entity operates
business segmentation is the primary reporting dimension for the group 
with geographical segmentation being the secondary reporting dimension
accordingly the four business divisions sales  trading research  asset
management enterprise and media and instinet group in 2004 are the
primary reporting segments for the group
note 1 on page 58 outlines in detail the allocation approach in respect of
revenues costs assets and liabilities
standards interpretations and amendments to
published standards that are not yet effective
certain new standards amendments and interpretations to existing standards
have been published that are mandatory for accounting periods beginning on
or after 1 january 2006 or later periods but which the group has chosen not 
to early adopt the new standards which are expected to be relevant to the
group’s operations are as follows
ias 39 amendment ‘cash flow hedge accounting of forecast intragroup
transactions’ effective from 1 january 2006
the amendment allows the foreign currency risk of a highly probable forecast
intragroup transaction to qualify as a hedged item in the consolidated financial
statements provided that a the transaction is denominated in a currency
other than the functional currency of the entity entering into that transaction
and b the foreign currency risk will affect consolidated profit or loss the
group has no current plans to take advantage of this amendment
ias 39 amendment ‘the fair value option’ effective from 1 january 2006
this amendment changes the definition of financial instruments classified at 
fair value through profit or loss and restricts the ability to designate financial
instruments as part of this category the group believes that this amendment
should not have a significant impact on the classification of financial instruments
as the group should be able to comply with the amended criteria for the
designation of financial instruments at fair value through profit and loss the
group will apply this amendment from annual periods beginning 1 january 2006
ias 39 and ifrs 4 amendments ‘financial guarantee contracts’ 
effective from 1 january 2006
this amendment requires issued financial guarantees other than those previously
asserted by the entity to be insurance contracts to be initially recognised at
their fair value and subsequently measured at the higher of a the unamortised
balance of the related fees received and deferred and b the expenditure
required to settle the commitment at the balance sheet date
ifrs 7 ‘financial instruments disclosures’ and ias 1 amendment
‘presentation of financial statements – capital disclosures’ effective from 
1 january 2007
ifrs 7 introduces new disclosures to improve the information about financial
instruments it requires the disclosure of qualitative and quantitative information
about exposure to risks arising from financial instruments including specified
minimum disclosures about credit risk liquidity risk and market risk including
sensitivity analysis to market risk it replaces ias 30 ‘disclosures in the financial
statements of banks and similar financial institutions’ and disclosure
requirements in ias 32 ‘financial instruments disclosure and presentation’ 
it is applicable to all entities that report under ifrs the amendment to ias 1
introduces disclosures about the level of an entity’s capital and how it manages
capital the group assessed the impact of ifrs 7 and the amendment to ias 1 and concluded that the main additional disclosures will be the sensitivity
analysis to market risk and the capital disclosures required by the amendment
of ias 1 the group will apply ifrs 7 and the amendment to ias 1 from annual
periods beginning 1 january 2007
ifric 4 ‘determining whether an arrangement contains a lease’ effective
from 1 january 2006
ifric 4 requires the determination of whether an arrangement is or contains 
a lease to be based on the substance of the arrangement it requires an
assessment of whether a fulfilment of the arrangement is dependent on the
use of a specific asset or assets the asset and b the arrangement conveys 
a right to use the asset
ias 21 amendment ‘net investment in a foreign operation’
this amendment relaxes the requirement for a monetary item that forms part 
of a reporting entity’s net investment in a foreign operation to be denominated
in the functional currency of either the reporting entity or the foreign operation 
it also clarifies the treatment of socalled ‘sister company loans’
ifric 7 ‘applying the restatement approach under ias 29’
ifric 7 deals with the accounting when an entity identifies the existence of
hyperinflation in the economy of its functional currency and how deferred tax
items in the opening balance sheet should be restated the group has assessed
the impact of the interpretation and concluded that it is not likely to have a
significant effect on the group’s operations
ifric 8 ‘scope of ifrs 2’
ifric 8 clarifies that transactions within the scope of ifrs 2 ‘sharebased
payment’ include those in which the entity cannot specifically identify some 
or all of the goods or services received if the identifiable consideration given
appears to be less than the fair value of the equity instruments granted or
liability incurred this situation typically indicates that other consideration has
been or will be received
ifric 9 ‘reassessment of embedded derivatives’
ifric 9 ‘reassessment of embedded derivatives’ clarifies that an entity should
assess whether an embedded derivative is required to be separated from the
host contract and accounted for as a derivative when the entity first becomes 
a party to the contract subsequent reassessment is prohibited unless there 
is a change in the contract’s terms in which case it is required the group has
assessed the impact of the interpretation and concluded that will not have a
significant effect on the group’s operations
applicable accounting policies for 2004 comparatives
ias 32 and ias 39 have been adopted by the group at 1 january 2005 the
comparative information in 2004 for financial instruments within the scope of
ias 39 is determined under the previous accounting policies in accordance
with uk gaap  those policies include
investments
government securities are stated in the balance sheet at the lower of cost plus
accrued capital appreciation and market value income from these securities
and any adjustment for changes in their market value during the year is reported
as part of profit
debt issuance
mediumterm notes and commercial paper are stated at the amount of the net
proceeds plus accrued interest or any discount or premium discounts or premiums
to the nominal value are amortised over the term of the issue costs associated
with debt issuance are charged against profit over the life of the instrument
foreign currency swap agreements and forward contracts are used to convert
nonsterling debt into sterling interest rate swaps swaptions and forward rate
agreements are used to manage interest rate exposures amounts payable or
receivable in respect of these derivatives are recognised as adjustments to
interest expense over the period of the contract
treasury
the group receives revenue and incurs expenses in more than 70 currencies
and uses financial instruments to hedge a portion of its net cash flow and
operating profit
the derivative contracts are treated from inception as an economic hedge 
of the underlying financial instrument with matching accounting treatment 
and cash flows the derivative contracts have high correlation with the 
specific underlying risks being hedged both at inception and throughout the
hedge period
the group uses financial instruments to hedge a portion of its interest exposure
profits and losses on financial instruments are reported as part of profit for the
period to which they relate
financial instruments hedging the risk on foreign currency assets are revalued
at the balance sheet date and the resulting gain or loss offset against that
arising from the translation of the underlying asset into sterling
the group does not hold or issue derivative financial instruments for
speculative purposes
reuters group plc annual report and form 20f 2005 57 58 reuters group plc annual report and form 20f 2005
notes to the financial statements
2005
research
 asset
sales  manage
trading ment enterprise media total
£m £m £m £m £m
revenue 1595 268 393 153 2409
operating costs 1475 305 325 146 2251
other operating income 37 – 8 4 49
operating profit 157 37 76 11 207
finance income 41
finance costs 53
profit on disposal of associates and availableforsale financial assets 38
share of posttaxation profits from associates and joint ventures 5
profit before taxation 238
taxation 9
profit for the year from continuing operations 229
2004
research
 asset
sales  manage
trading ment enterprise media total
£m £m £m £m £m
revenue 1542 262 391 144 2339
operating costs 1385 295 365 142 2187
other operating income 18 17 5 2 42
operating profit 175 16 31 4 194
finance income 15
finance costs 27
profit on disposal of associates and availableforsale financial assets 203
share of posttaxation profits from associates and joint ventures 11
profit before taxation 396
taxation 40
profit for the year from continuing operations 356
divisional revenue comprises sales to external customers only divisional revenue from transactions with other segments is £nil 2004 £nil
01 segmental analysis – income statement
primary reportable segments – business divisions
the group operates through four business divisions sales  trading research 
 asset management enterprise and media excluding instinet group in 2004
therefore the group’s primary segmental reporting is by business division 
in order to report segmental results it is necessary to determine a methodology
to allocate revenues costs assets and liabilities to those segments
each division is responsible for specific product revenues with the exception of
reuters 3000 xtra and the 20003000 range of products revenues for these
shared products are attributed to either the sales  trading division or the
research  asset management division by reference to the nature of the
customer purchasing the product this is determined on a customerby
customer basis
the tables below show a segmental analysis of results for reuters continuing
operations for information relating to discontinued operations please see note
7 on page 62
where costs relate to a specific division they are mapped directly to that division
where costs are shared an activity based costing abc technique is used to split
these costs between divisions the reuters abc model known as profitability
insight allocates shared costs to business activities which in turn are attributed 
to products and therefore divisions using cost drivers these cost drivers such as
the number of helpdesk calls received or the number of installed accesses are
derived from a variety of underlying source systems judgement has been applied
in determining these cost drivers and the resulting allocation of costs
divisional results could alter with the application of other allocation approaches
and as continuous improvements are made to the profitability insight model
revenue and costs are allocated on a consistent basis yearonyear reuters group plc annual report and form 20f 2005 59
the following table shows the aggregate of each business division’s share of results of associates and joint ventures
2005 2004
£m £m
sales  trading 2 2
research  asset management – –
enterprise – 3
media 3 6
share of posttaxation profits from associates and joint ventures 5 11
the following table provides information relating to depreciation amortisation impairments and other significant noncash expenditures excluding impairments
included in the divisional operating costs above
2005 2004
other noncash other noncash
depreciation expenses depreciation expenses
and excluding and excluding
amortisation impairments impairments amortisation impairments impairments
£m £m £m £m £m £m
sales  trading 88 1 39 83 22 13
research  asset management 19– 4 168 3
enterprise 2112 35 5 5
media 411 6– 1
total 132 3 46 140 35 22
impairments for 2004 exclude the £17 million impairment of goodwill in respect of btc which has been reported in discontinued operations in 2005 
please see note 7 on page 62
please see note 13 on page 67 for more details relating to impairments
secondary reportable segments – geographical
revenue is normally invoiced in the same geographical area in which the customer is located revenue earned therefore generally represents revenue both by
origin and by destination
the following table represents revenue from external customers by geographical area based on the geographical location of the customers
2005  2004
revenue £m change £m
uk and ireland 379 1 374
emea west 375 5 393
emea east 576 – 577
americas 651 7 609
asia 428 11 386
total revenue 2409 3 2339
02 revenue by type
an analysis of the group’s revenue from sale of goods and services by type is set out below
2005  2004
£m change £m
recurring 2242 4 2164
usage 97 13 86
outright 70 22 89
total revenue 2409 3 2339
customers generally pay for reuters products and services in three ways recurring revenue is generated through subscription fees to cover access of terminals and
maintenance fees for software usage revenue is principally derived from matching and trading transactions and other newer electronic trading products such as
rtfi and rtfx outright revenue comprises onceoff sales including information and risk management solutions 60 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
03 operating costs
2005  2004
costs by nature £m change £m
salaries commission and allowances 761 3 782
social security costs 677 63
share based payments see note 33 30 38 22
pension costs see note 25 55 92 28
total staff costs 913 2 895
services 455 15 394
depreciation 99 11 112
data 281 14 247
communications 289 4 301
space 162 8 175
amortisation of intangibles 33 15 28
impairments 3 90 35
fair value movements on other financial assets 16– –
total operating costs 2251 3 2187
operating costs include
research and development expenditure 92 13 105
operating lease expenditure
hire of equipment 6 22 7
other principally property 67 4 70
loss on disposal of property plant and equipment –– 1
advertising 17 14 20
 services include equipment hire and boughtin services including consultancy and contractors advertising and publicity professional fees and staffrelated expenses
an analysis of the fees paid for professional services to the group’s auditors is set out below
2005  2004
£m change £m
audit services
statutory audit 30 6 32
auditrelated services
regulatory reporting 02 – 02
further assurance services 21 24 17
tax services
compliance services 15 50 10
advisory services 11 15 13
total fees paid 79 7 74
united kingdom 38 36 28
overseas 41 11 46
the statutory audit fee includes £10000 in respect of the parent company audit 2004 £10000
further assurance services include advice on preparation for sarbanesoxley act s404 compliance including the attest work in relation to instinet group’s 2004
reporting requirements under the act review of conversion to ifrs reporting advice in respect of accounting for the rpf and due diligence activities related to
acquisitions and disposals tax compliance services include assistance with corporation and other tax returns tax advisory services relate to tax planning and 
employeerelated issues
the directors consider it important that the company has access to a broad range of external advice including from pricewaterhousecoopers where appropriate
work is put out to competitive tender the audit committee monitors the relationship with pricewaterhousecoopers including the level of nonaudit fees reuters group plc annual report and form 20f 2005 61
04 other operating income
2005  2004
£m change £m
profit on disposal of subsidiaries 45 4
fair value movements on derivatives 18– –
investment income 1– –
foreign exchange gains 3– 1
other income 23 39 37
total other operating income 49 16 42
other income comprises amounts received in respect of service provided by reuters to joint ventures and other parties
05 finance income and finance costs
2005 2004
£m £m
interest receivable
listed investments 1 –
unlisted investments 18 15
swap contracts 18 –
fair value gains on financial instruments 1 –
foreign exchange gains on borrowings 3 –
total finance income 41 15
interest payable
bank loans and overdrafts 4 2
other borrowings 23 24
swap contracts 22 –
fair value losses on financial instruments 2 –
unwinding of discounts 2 1
total finance costs 53 27
following the adoption of ias 39 ‘financial instruments recognition and measurement’ on 1 january 2005 derivatives are recognised separately from the
underlying borrowings to which they relate in 2005 therefore interest on derivatives has been recognised separately from interest on the underlying borrowings
this treatment is different from the 2004 treatment where interest on derivatives was netted against interest on the underlying borrowings
06 taxation
analysis of charge for the period
2005 2004
£m £m
current taxation
continuing operations 10 17
discontinued operations 50 21
40 38
deferred taxation see note 26
continuing operations 19 23
discontinued operations 13 1
32 24
continuing operations 9 40
discontinued operations 63 22
total taxation 72 62
tax on items charged to equity
2005 2004
continuing discontinued continuing discontinued
£m £m £m £m
current tax charge on unrealised exchange movements – – 10 –
deferred tax credit on actuarial losses on defined benefit plans 10 – 45 –
deferred tax credit on stock options 10 1 8 1
current tax credit on revaluations and fair value movements 4 – –– 62 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
factors affecting tax charge for the period
the tax assessed for the period is lower than the standard rate of corporation tax in the uk 30 the differences are explained below
2005 2004
£m £m
profit before taxation 238 396
profit before taxation multiplied by standard rate of corporation tax in the uk of 30 2004 30 71 119
effects of
nontax deductible amortisation and impairment of intangibles 4 11
expenses not deductible for tax purposes 4 11
nontaxable investment disposals and impairments 13 66
adjustments in respect of prior years 23 26
recognition of tax losses that arose in prior years 33 –
other differences 1 9
total taxation for continuing operations 9 40
the tax charge for the year includes a credit of £16 million in respect of uk taxation
07 discontinued operations
the group adopted ifrs 5 ‘noncurrent assets held for sale and discontinued operations’ from 1 january 2005 in accordance with the standard’s provisions 
the adoption of ifrs 5 has resulted in the presentation of instinet group including btc and radianz as discontinued operations for the year ended 31 december
2005 there is no impact on the prior year financial statements other than a change in the presentation of the results and cash flows of discontinued operations 
the prior period balance sheets are not restated
the ‘profit for the year from discontinued operations’ line within the income statement comprises the posttaxation profit or loss of discontinued operations and
the posttaxation profit or loss recognised on the disposal of the assets or disposal groups
2005 2004
£m £m
profits after taxation of subsidiaries acquired with a view to resale – 1
profits after taxation of subsidiaries net of taxation £20 million 2004 £22 million 69 39
profitloss on disposal of subsidiaries net of taxation £43 million 2004 £nil 184 1
impairment of subsidiaries net of taxation £nil 2004 £nil – 20
profit for the year from discontinued operations 253 19
basic earnings per ordinary share for discontinued operations 163p 06p
diluted earnings per ordinary share for discontinued operations 158p 06p
basic and diluted earnings per share are calculated using the weighted average number of ordinary shares as disclosed in note 8 on page 63
subsidiaries acquired with a view to resale radianz
on 21 october 2004 reuters entered into exclusive discussions with bt to secure
a longterm agreement for the provision of network services including the sale of
radianz to bt as a prerequisite to this agreement reuters acquired equant’s 49
voting interest in radianz with a view to selling the 100 interest to bt
on 29 april 2005 reuters completed the sale of its 100 voting interest in
radianz to bt for gross proceeds of £115 million
subsidiaries acquired with a view to resale are by definition discontinued
operations under ifrs 5 however ifrs 5 was only applicable from 1 january
2005 whereas reuters acquired the remaining 49 of the voting shares in
radianz in november 2004 radianz was a subsidiary from this date and was
therefore consolidated under ias 27 ‘consolidated and separate financial
statements’ for presentation purposes the results for the year and the balance
sheet position at 31 december 2004 have been presented using the income
statement and balance sheet headings detailed in ifrs 5 the 2004 ‘profits after
taxation of subsidiaries acquired with a view to resale’ of £1 million include a
£9 million gain in respect of reuters share of the disposal by radianz of its voice
services business offset by operating losses of radianz for the year impairment
of subsidiaries includes £3 million in respect of impairment of radianz’s net
assets to fair value less costs to sell
the disposal of radianz resulted in a loss on disposal of £4 million which 
is presented within the ‘profitloss on disposal of subsidiaries’ within
discontinued operations
disposal of subsidiaries instinet group including btc
reuters held approximately 62 of the shares in instinet group a us based
company which was previously accounted for as a subsidiary of reuters group
plc on a 100 consolidated basis with offsetting minority interest
on 31 march 2005 reuters sold btc a soft dollar execution broker to instinet
group for approximately 38 million shares of instinet group stock valued at
approximately £12 million in 2004 an impairment loss of £17 million was
recognised for btc within ‘profit for the year from discontinued operations’
the sale to instinet group has been accounted for as a partial disposal of the
group’s interest in btc which resulted in a loss of £3 million btc made profits
after tax of £1 million in the period prior to sale
on 22 april 2005 instinet group entered into a definitive agreement pursuant
to which nasdaq would acquire all outstanding shares of instinet group
at the same time instinet group also agreed to sell its subsidiary lynch 
jones  ryan inc ljr to the bank of new york for £96 million in cash 
which closed on 1 july 2005
in addition to these transactions instinet group’ s board approved the declaration
of a dividend to all stockholders of an amount not to exceed the net proceeds
of the ljr transaction the dividend was declared in july for approximately 
£60 million in cash reuters share being approximately £37 million reuters group plc annual report and form 20f 2005 63
following regulatory approval the nasdaq transaction closed on 8 december 2005 the gross proceeds received by the group on completion of the sale 
were £612 million
reuters has recorded a net gain on sale of £191 million
instinet group’s results up until sale a profit after taxation of £68 million before minority interest are also included in the group results as part of 
discontinued operations
2005 2004
results of instinet and btc £m £m
revenue 466 551
operating costs 402 517
operating profit 64 34
finance income 13 7
profit on disposal of availableforsale financial assets 12 20
profit before taxation 89 61
taxation 20 22
profit for the period 69 39
the net cash flow attributable to discontinued operations is as follows
2005 2004
£m £m
cash generated from discontinued operations see note 29 3 27
tax paid 13 9
interest received 13 9
interest paid – 1
net cash flow from operating activities 3 28
net cash flow from investing activities 474 28
net cash flow from financing activities 85 129
exchange gainslosses on cash and cash equivalents 57 30
decreaseincrease in cash and cash equivalents from discontinued operations 499 99
 in 2005 includes £582 million relating to cash held by subsidiaries at the date of disposal
08 earnings per ordinary share
basic earnings per ordinary share is based on the results attributable to equity shareholders and on the weighted average number of ordinary shares in issue during
the year excluding ordinary shares purchased by employee share ownership trusts and shares purchased as part of the share buyback and held as own shares
diluted earnings per share is calculated adjusting the weighted average number of ordinary shares used in the basic earnings per share calculation to assume
conversion of all dilutive potential ordinary shares resulting from outstanding share options
weighted average number in millions 2005 2004
ordinary shares in issue 1438 1434
nonvested shares held by employee share ownership trusts 32 34
shares repurchased 10 –
basic earnings per share denominator 1396 1400
issuable under employee share schemes 41 36
diluted earnings per share denominator 1437 1436
earnings per share from continuing and discontinued operations 2005 2004
profit attributable to equity holders of the company £m 456 364
basic earnings per share 326p 260p
diluted earnings per share 317p 254p
earnings per share from continuing operations 2005 2004
profit attributable to equity holders of the company £m 229 356
basic earnings per share 163p 254p
diluted earnings per share 159p 248p 64 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
09 remuneration of directors
section 9 of the remuneration report includes details of directors’ emoluments pension arrangements longterm incentive plans and stock option plans details 
of which form part of these financial statements
details of senior management remuneration are given in note 34 on page 95
10 employee information
the average number of employees during the year was as follows
2005 2004
business division
sales  trading 491 305
research  asset management 658 699
enterprise 925 296
media 109 64
shared divisional resources 1974 2181
total divisions 4157 3545
global sales  service organisation 5438 5944
content 3841 3546
corporate services 1582 1780
total continuing operations 15018 14815
discontinued operations 846 1165
total average number of employees 15864 15980
by location
uk and ireland 3332 3429
emea east 2266 2493
emea west 1364 1522
americas 4292 4550
asia 3764 2821
total continuing operations 15018 14815
discontinued operations 846 1165
total average number of employees 15864 15980
by function
production and communications 8498 8315
selling and marketing 4179 3878
support services and administration 2341 2622
total continuing operations 15018 14815
discontinued operations 846 1165
total average number of employees 15864 15980
the above include
development staff 2332 2282
the average number of employees during 2005 included 181 temporary staff 2004 181 reuters group plc annual report and form 20f 2005 65
11 consolidated reconciliation of changes in equity
attributable to equity minority total
holders of parent interest equity
share other retained
capital reserves earnings
note £m £m £m £m £m
1 january 2004 449 1717 1569 193 494
actuarial losses on defined benefit plans 25 – – 205 – 205
exchange adjustments offset in reserves – 34 – 14 48
translation differences taken to the income statement on disposal of assets – 6 – – 6
taxation on the items taken directly to or transferred from equity – 10 45 – 35
net expense recognised directly in equity – 38 160 14 212
profit for the year – – 364 11 375
total recognised expenseincome for 2004 – 38 204 3 163
employee share schemes –– 28 4 32
taxation on employee share schemes –– 9– 9
proceeds from shares issued to ordinary shareholders 27 6 – – – 6
proceeds from shares issued to minority shareholders of instinet – – – 4 4
dividends 32
interim dividend for 2004 – – 54 – 54
final dividend for 2003 – – 86 – 86
other movements in equity – –1 1 2
31 december 2004 455 1755 1671 199 570
transitional adjustment on firsttime adoption of ias 39 – 108 19 2 129
1 january 2005 455 1647 1690 201 699
actuarial losses on defined benefit plans 25 – – 48 – 48
exchange adjustments offset in reserves – 97 –21 118
translation differences taken to the income statement on disposal of assets – 2 – – 2
fair value losses on availableforsale financial assets 16 – 22 – 7 15
fair value gains on availableforsale financial assets 
taken to the income statement on disposal of assets 16 – 68 – 5 73
fair value losses on net investment hedges 17 – 39 – – 39
fair value gains taken to the income statement on disposal of net investment hedges 17 – 14 – – 14
taxation on the items taken directly to or transferred from equity – 4 10 – 14
net expense recognised directly in equity – 44 38 23 59
profit for the year – – 456 26 482
total recognised expenseincome for 2005 – 44 418 49 423
employee share schemes –– 40 7 47
taxation on employee share schemes –– 11– 11
purchase of own shares – – 224 – 224
proceeds from shares issued to ordinary shareholders 27 12 – – – 12
proceeds of shares issued to minority shareholders of instinet – – – 3 3
dividends 32
interim dividend for 2005 – – 54 – 54
final dividend for 2004 – – 86 – 86
share of instinet’s dividend paid to minority shareholders – – – 23 23
other movements in equity – 1 – – 1
minority interest in subsidiary disposed in the year – – – 237 237
31 december 2005 467 1692 1795 – 570
 the transitional adjustment on the balance sheet at 1 january 2005 primarily comprises recognition of the fair value of the group’s investments in savvis £45 million gain and tibco software inc tsi
£86 million gain offset by initial recognition of embedded derivatives £14 million loss plus £3 million taxation credit note 17 on page 73 includes further details
 purchase of own shares represents the cost of 57 million shares in reuters group plc purchased in the market as a part of the ongoing buyback programme
please refer to note 27 on page 89 and note 28 on page 90 for more information on the nature of and movements in share capital and other reserves respectively
retained earnings is stated after deducting £206 million 2004 £213 million in respect of shares held by reuters employee share option trusts esots to satisfy
certain options under the group’s share option plans see note 33 on page 93 66 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
12 segmental analysis – balance sheet
primary reportable segments
the tables below show assets liabilities and other information by business division the assets and liabilities are attributed to business divisions using
methodologies consistent with those applied to revenues and costs see note 1
shared assets by business division consist principally of taxation hedging derivatives shortterm investments cash and borrowings as these are not managed
separately by the division
31 december 2005
research
sales   asset
trading management enterprise media shared total
£m £m £m £m £m £m
assets excluding investment in associates and joint ventures 661 253 183 43 961 2101
investment in associates and joint ventures 11 5 3 17 – 36
total assets 672 258 186 60 961 2137
total liabilities 506 128 146 70 717 1567
capital expenditure 197 53 82 14 – 346
31 december 2004
research 
sales   asset
trading management enterprise media instinet shared total
£m £m £m £m £m £m £m
assets excluding investment in associates and joint ventures 629 184 182 34 919 597 2545
investment in associates and joint ventures 9 5 318 – –35
total assets 638 189 185 52 919 597 2580
total liabilities 511 120 151 66 397 765 2010
capital expenditure 71 20 28 6 19 – 144
secondary reportable segments
31 december 2005 31 december 2004
total capital total capital 
assets expenditure assets expenditure
by geographical location £m £m £m £m
uk and ireland 314 127 476 57
emea west 67 18 140 2
emea east 208 46 147 14
americas 520 99 1102 56
asia 143 56 133 15
central 885 – 582 –
total 2137 346 2580 144
central assets by geography consist principally of investments in associates and joint ventures taxation hedging derivatives and centrally managed cash and 
shortterm investments reuters group plc annual report and form 20f 2005 67
13 intangible assets
internally
trade customer technology generated purchased
goodwill names relationships knowhow software software total
£m £m £m £m £m £m £m
cost
1 january 2004 243 30 – 153 21 53 500
exchange differences 14 2 – 9 – 2 27
additions
acquisition of subsidiaries 5 1 1 – – – 7
other additions –– –– 23 3 26
disposals 19 – – – – – 19
adjustments 6 – – – – – 6
31 december 2004 209 29 1 144 44 54 481
exchange differences 24 3 4 6 1 2 40
additions
acquisition of subsidiaries 103 4 59 4 – – 170
other additions –– –– 29 11 40
reclassifications 9 3 – 65 – 3 80
31 december 2005 327 33 64 89 74 64 651
amortisation and impairment
1 january 2004 – 9 – 50 2 19 80
exchange differences – –– 4– 1 5
charged in the year
amortisation – 2 – 20 2 11 35
impairment 18 – – – 34 3 55
31 december 2004 18 11 – 66 38 32 165
exchange differences – 2 – 3 – 2 7
charged in the year
amortisation – 3 4 15 3 10 35
impairment –– –– 1 – 1
reclassifications – 3 –38 – 3 44
31 december 2005 18 13 4 46 42 41 164
carrying amount
31 december 2004 191 18 1 78 6 22 316
31 december 2005 309 20 60 43 32 23 487
 adjustments of £6 million to goodwill in 2004 relate to the finalisation of earn out agreements in relation to the acquisition of avt technologies limited and capital access international llc and also
to the finalisation of fair value adjustments in respect of the acquisition of multex fair value adjustments are based on an independent valuation performed by professionallyqualified valuers
 reclassifications relate to instinet group which was classified as a discontinued operation prior to its disposal during the year
carrying amount of intangibles other than goodwill internallygenerated software and purchased software includes the following balances which are considered
to be material to the group’s financial statements
arising on acquisition of nature included in category date of acquisition carrying amount £m remaining amortisation period
telerate customer relationships june 2005 52 9 years 5 months
bridge trade names october 2001 16 5 years 9 months
bridge technology knowhow october 2001 15 5 years 9 months 68 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
impairment tests of goodwill during 2005
no impairment losses in respect of goodwill have been recognised in 2005
for the purpose of performing impairment reviews reuters has identified eight cash generating units cgus annual impairment reviews are performed as at 
1 july for all cgus which include allocated intangible assets with indefinite useful lives no intangible assets other than goodwill have indefinite useful lives 
these reviews compare the carrying value of each cgu with the present value of future cash flows arising from the use of the assets of the unit value in use 
if the value in use is less than the carrying value of the cgu an impairment loss is recognised immediately in the income statement
goodwill has been allocated directly to cgus with the exception of goodwill arising from the acquisition of telerate this goodwill has been allocated £48 million
to the sales  trading division and £24 million to the enterprise division excluding risk on the basis of the anticipated performance of telerate’s products in each
of the markets in which they operate
carrying amount of goodwill at
31 december 2005 31 december 2004
business division cash generating unit £m £m
sales  trading sales  trading 132 74
bridge trading company – 8
research  asset management investment banking  investment management 103 74
wealth management – –
lipper 31 22
enterprise enterprise excluding risk 29 4
risk 9 9
media media 5 –
total 309 191
key assumptions used in the value in use calculations are as follows
cash flow projections are derived from financial plans approved by the board
and cover a five year period they reflect management’s expectations of
revenue growth operating cost and margin for each cgu based on past
experience projections exclude the expected revenue and cost synergy
benefits arising from the various core plus growth strategies cash flows
beyond the five year period have been extrapolated using estimated terminal
growth rates
a pretax discount rate of 9 2004 9 reflecting the risks relating to the cgus
has been applied to cash flow projections for accounting purposes impairment
testing has been performed using perpetuity growth rates ranging from 0 to
3 2004 0 to 3 the rates used have been determined with regard to
projected growth for the specific markets in which the cgus participate these
rates are below the longterm average growth rate for the businesses in which
reuters operates
the forecasts are most sensitive to changes in projected revenue growth 
rates in the first five years of the forecast period however there is significant
headroom and forecast revenues would have to be more than 7 lower than
currently projected before a possible impairment charge would be indicated
impairment of goodwill and intangibles during
2004
impairment losses in respect of goodwill in 2004 totalled £18 million £17 million
of which related to btc the soft dollar execution broker business
in march 2005 reuters agreed to sell btc to instinet group in exchange for 
38 million shares of instinet group as a result reuters recognised a £17 million
impairment loss on goodwill relating to btc which formed its own cash
generating unit business had declined since the original purchase and future
business could be further impacted by changes in the external marketplace
the loss was calculated on the basis of fair value less selling costs as the value
of the business could be ascertained by the existence in 2004 of an armslength
sale and purchase agreement although instinet group was a group subsidiary
at the time of the sale reuters had already announced an intention to sell the
instinet group subject to regulatory approval the negotiations for the sale of
btc were therefore conducted on an armslength basis the impairment loss
was reported within the sales  trading division and reclassified to discontinued
operations in 2005
reuters also recorded a £37 million impairment on internally generated and
purchased software of which £30 million relates to the impairment of a new
order entry and billing system during 2004 management revised the architectural
solution to be simpler and more consistent with industry standards leading to
impairment of all of the previously capitalised expenditure management
considers this decision will lead to a more cost effective and easier to execute
solution in the longer term the impairment loss has been allocated to the
sales  trading 70 research  asset management 12 and enterprise
18 business divisions the balance relates to an impairment recorded in
respect of development costs capitalised in our internal effort to build reuters
knowledge for investment banking which was rationalised in favour of the
newly acquired multex platform and a write down in the value of capitalised
software for instinet group which has been reclassified to discontinued
operations in 2005 reuters group plc annual report and form 20f 2005 69
14 property plant and equipment
office
computer equipment
freehold leasehold systems and motor
property property equipment vehicles total
£m £m £m £m £m
cost
1 january 2004 241 214 1038 247 1740
exchange differences 6 12 34 10 62
additions 1 32 69 9 111
disposals 83 47 215 53 398
31 december 2004 153 187 858 193 1391
exchange differences 18 364 49
additions 5 41 80 11 137
acquisitions –– 1 1 2
disposals – 8 91 15 114
reclassifications 1 62 41 36 140
31 december 2005 158 166 843 158 1325
depreciation
1 january 2004 95 112 853 203 1263
exchange differences 63 325 46
charged in the year 8 11 95 16 130
disposals 27 27 208 48 310
31 december 2004 70 93 708 166 1037
exchange differences 1 3 29 3 36
charged in the year 4 13 73 13 103
disposals – 8 89 14 111
reclassifications –313334 98
31 december 2005 75 70 688 134 967
carrying amount
31 december 2004 83 94 150 27 354
31 december 2005 83 96 155 24 358
 reclassifications relate to instinet group’s property plant and equipment which was classified as discontinued operation prior to disposal during the year other assets held for sale at the balance
sheet date and depreciation capitalised as intangible assets
2005 2004
carrying amount of leasehold property £m £m
longterm leaseholds 33 32
shortterm leaseholds 63 62
total leasehold property 96 94
the carrying amount of computer systems equipment includes an amount of £2 million in respect of subscriber equipment being sourced and managed by ibm on
behalf of reuters this equipment has been classified as an asset held under finance lease 2004 £nil the agreement for provision of equipment and services by
ibm includes a renewal clause and an option to purchase the equipment at fair market value  70 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
15 investments accounted for using the equity method
interests
in joint interests in
ventures associates total
£m £m £m
net assetscost
1 january 2004 72 207 279
reclassifications 47 31 78
exchange differences 1 – 1
arising in year – share of
operating profits 58 13
taxation – 2 2
dividends received 3 1 4
loans repaid to joint ventures 5– 5
disposals – 176 176
shareholder taxes 2 – 2
31 december 2004 29 5 34
exchange differences 2– 2
arising in year – share of
operating profits 5– 5
interest receivable 1– 1
taxation 1 – 1
additions 1– 1
dividends received 4 – 4
disposals 1 – 1
impairments – 2 2
31 december 2005 32 3 35
goodwill
1 january 2004 –1 1
31 december 2004 – 1 1
31 december 2005 –11
carrying amount
net assetscost 29 5 34
goodwill –1 1
31 december 2004 29 6 35
net assetscost 32 3 35
goodwill – 1 1
31 december 2005 32 4 36
 reclassifications relate to the group’s investment in radianz which was classified as discontinued operation in 2004 and sold during 2005
the group holds 50 of the voting stock in factiva which is a joint venture between reuters and dow jones that provides a deep historical archive of reuters news
dow jones news and around 8000 additional publications
the group holds a 51 interest in afe solutions limited a 39 holding in 3 times square associates llc and a 40 holding in independent research network
llc being other jointly controlled entities accounted for under the equity method of accounting reuters group plc annual report and form 20f 2005 71
summarised financial information in respect of the group’s interests in joint ventures at 31 december is as follows
2005 2004
£m £m
income 83 80
expenses 78 75
profit 5 5
noncurrent assets 76 66
current assets 37 37
current liabilities 20 19
noncurrent liabilities 61 55
carrying value 32 29
summarised financial information in respect of the group’s interests in its principal associates at 31 december is as follows
2005 2004
£m £m
revenues 21 43
profit – 6
assets 19 17
liabilities 15 11
carrying value 4 6
16 other financial assets and liabilities
other financial assets and derivatives are stated at fair value in 2005 and comparatives have been presented under uk gaap as noted in the accounting policies
they include the following
2005 2004
£m £m
availableforsale financial assets
equity securities 13 47
other availableforsale financial assets 5 10
shortterm investments 1 258
derivative financial instruments see note 17 21 –
total 40 315
less noncurrent portion 22 28
current portion 18 287
movements in the carrying value of availableforsale financial assets are analysed as follows
2005 2004
£m £m
opening balance 57 54
adjustment on adoption of ias 39 on 1 january 2005 101 –
opening balance as adjusted 158 54
foreign exchange – 1
additions 1 –
fair value adjustments transferred to equity 50 –
reclassifications 23 31
disposals 68 27
closing balance 18 57
 reclassifications in 2005 include balances transferred to assets held for sale and liabilities associated with assets held for sale reclassifications in 2004 include balances transferred from investments
in associates following reuters partdisposal of its stake in tsi 72 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
fair value movements on other financial assets and liabilities recognised during 2005 include the following
fair value
gainloss fair value 
in income gainloss
statement in equity
£m £m
availableforsale financial assets – 50
financial assets held at fair value through profit or loss 16 –
embedded derivatives in revenue contracts 21 –
embedded derivatives in supplier contracts 2 –
hedging instruments
crosscurrency interest rate swaps – fair value hedges 1 –
crosscurrency interest rate swaps – net investment hedges 1 39
total 1 89
other financial liabilities include the following
2005 2004
£m £m
borrowings
bank overdrafts 25 17
bank loans – 37
term notes and commercial paper 383 456
finance lease payables 2 –
total borrowings 410 510
derivative financial instruments see note 17 10 –
total 420 510
less noncurrent portion 371 329
current portion 49 181
the term notes principally relate to a public bond of £356 million which is repayable in november 2010 and incurs interest at a fixed rate of 46
the maturity profile of finance lease payables is as below
minimum lease payments present value of minimum lease payments
2005 2004 2005 2004
£m £m £m £m
within one year 1 – 1 –
one to five years 1 – 1 –
greater than five years – – – –
2 – 2 –
the fair value of the group’s lease obligations approximates to their carrying amounts reuters group plc annual report and form 20f 2005 73
17 derivatives and other financial instruments
ias 32 ‘financial instruments presentation and disclosure’ and ias 39 ‘financial
instruments recognition and measurement’ were adopted by the group with
effect from 1 january 2005 financial information was prepared under uk gaap
for the financial period ended 31 december 2004 comparative information for
2004 is therefore shown separately after the 2005 information below
management of financial risk
the group’s activities expose it to a variety of financial risks market risk
including currency risk fair value interest rate risk and price risk credit risk
liquidity risk and cash flow interest rate risk the group’s overall risk management
programme focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the group’s financial performance
the main risks managed by the group under policies approved by the board
are foreign currency risk interest rate risk liquidity and refinancing risk and
counterparty credit risk the board periodically reviews reuters treasury
activities policies and procedures all treasury activity takes place within a
formal control framework
market risk
currency risk
foreign exchange risk arises from cash flows relating to commercial transactions
recognised assets and liabilities and net investments in foreign operations
transaction exposure occurs when as a result of trading activities an entity
receives or pays cash in a currency different from its functional currency 
a substantial portion of reuters revenue is receivable in foreign currencies 
with terms of payments up to three months in advance reuters is exposed 
to currency risk from committed revenue for periods of up to two years
the group has certain investments in foreign operations whose net assets 
and related goodwill are exposed to foreign currency translation risk the main
currencies to which the group is exposed are the us dollar the swiss franc 
and the euro group policy is for currency exposure to be managed primarily
through maintaining debt in currencies approximately proportionate to the
foreign currency net assets the currency of the debt may be altered by the 
use of currency swaps
price risk
movements in equity security prices change the carrying value of availablefor
sale financial assets with changes being recorded in equity on adoption of ias
39 on 1 january 2005 reuters designated its investment in savvis convertible
preference shares as being held at fair value through profit or loss with movements
in the fair value being recognised within the income statement the shares were
pledged as part of the consideration for the telerate acquisition see note 36 in
june 2005 and no further fair value movements were recorded in the income
statement after this point
the group does not have a material exposure to commodity price risk
credit risk
the group is exposed to concentrations of credit risk trade debtors are
concentrated in the financial community the group estimates that approximately
72 of its subscribers are financial institutions 14 are corporations in other
sectors of the business community 9 are from the news media and 5 are
government institutions and individuals worldwide 2004 72 17 4 and 7
the maximum exposure to credit risk at 31 december 2005 was as follows 
trade receivables £120 million amounts owed by associates and joint ventures
£4 million accrued income £38 million shortterm investments £1 million cash
and equivalents £662 million and derivatives £21 million 2004 £131 million 
£3 million £38 million £258 million £578 million £64 million
the group invests with high credit quality financial institutions the group has
policies that limit the amount of credit exposure to any one financial institution
all derivative instruments are unsecured but the amount of this credit risk is
generally restricted to any fair value gain and not the principal amount hedged
however reuters does not anticipate nonperformance by the counterparties
who are all banks with recognised longterm credit ratings of ‘a3a’ or higher
liquidity risk
prudent liquidity risk management implies maintaining sufficient cash and
marketable securities the availability of funding through an adequate amount of
committed credit facilities and the ability to close out market positions reuters
manages its net debt position and interest costs to support its continued access
to the full range of debt capital markets
in april 2003 reuters entered into a committed syndicated credit facility for 
£10 billion in 2004 £520 million of the facility either expired or was voluntarily
cancelled at 31 december 2005 reuters had £480 million available under the
facility the facility was undrawn during 2005 the commitment expires and final
repayment is due in april 2008
at the same time as the syndicated facility was arranged committed bilateral
facilities of £90 million were also put in place on similar terms during 2004 
£66 million of the facilities either expired or were voluntarily cancelled at 31
december 2005 reuters had £24 million available all of which was undrawn 
no loans were outstanding under this facility during 2005
in march 1998 reuters established a euro commercial paper programme 
this provides access to £15 billion of uncommitted shortterm finance of 
which £15 billion was unused at 31 december 2005 £14 billion was unused 
at 31 december 2004 in december 1998 reuters established a £10 billion 
euro mediumterm note programme of which £631 million was unused at 
31 december 2005 £613 million was unused at 31 december 2004
in addition at 31 december 2005 the group had unused shortterm uncommitted
bank borrowing facilities denominated in various currencies the sterling
equivalent of which was approximately £139 million at money market rates
cash flow and fair value interest rate risk
the group’s interest rate risk arises from interestbearing assets and from
borrowings
investments and borrowings subject to variable rates expose the group to 
cash flow interest rate risk which is the risk that future cash flows will fluctuate
because of changes in market interest rates investments and borrowings subject
to fixed rates expose the group to fair value interest rate risk as the fair value of
the financial instrument fluctuates because of changes in market interest rates
the group has no specific requirements on the exact proportion of interest that
should be fixed or floating the position is reviewed periodically on a currency
by currency basis various factors are considered in the review including existing
debt covenant restrictions forecast core debt levels and prevailing market
conditions based on this review the group manages its cash flow interest rate
risk by using interest rate swaps under interest rate swaps the group agrees
with other parties to exchange at specified intervals mainly quarterly the
difference between fixed contract rates and floatingrate interest amounts
calculated by reference to the agreed notional principal amounts  74 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
financial assets and liabilities
carrying and fair values of group financial assets and liabilities at 31 december were
2005
carrying value fair value
£m £m
derivative instruments
crosscurrency interest rate swaps – fair value hedges  1 year 22
crosscurrency interest rate swaps – fair value hedges  1 year 12 12
embedded derivatives in revenue contracts 66
embedded derivatives in supplier contracts 1 1
crosscurrency interest rate swaps – net investment hedges 8 8
financial assets
availableforsale assets see note 16 18 18
trade receivables less provision for impairment see note 19 120 120
amounts owed by associates and joint ventures see note 19 44
other receivables see note 19 68 68
accrued income 38 38
shortterm investments see note 16 11
cash and cash equivalents see note 20 662 662
financial liabilities
borrowings see note 16 410 410
trade payables see note 22 14 14
accruals 262 262
amounts owed to associates and joint ventures see note 22 11 11
other payables 36 36
other provisions and liabilities for charges 113 113
total 76 76
 prepayments and accrued income in note 19 £78 million include £40 million of prepayments that are not financial assets
 accruals in note 22 £264 million include £2 million of nonfinancial liabilities
 other payables in note 22 £48 million include £3 million of progress payments on contracts and £9 million of subscriptions in advance which are nonfinancial liabilities
 other provisions and liabilities for charges in note 24 £139 million includes £26 million of nonfinancial liabilities
the fair value of foreign exchange contracts is determined using forward exchange market rates at the balance sheet date other financial instruments are valued
using standard pricing models based on quoted forward market rates interpolated between dates where appropriate and discounted cash flow techniques
embedded derivatives arise in revenue and supplier contracts where the currency of the contract is different from the functional currencies of the parties involved
the derivatives are separated from the host contracts and valued using quoted forward market rates
borrowings are recorded initially at fair value and subsequently recorded at amortised cost adjusted for fair value movements in respect of related fair value hedges
derivative instruments
derivative instruments held at 31 december 2005 were
gross
contract
amounts assets liabilities
£m £m £m
maturing in less than one year
crosscurrency interest rate swaps – fair value hedges 19 2 –
forward foreign exchange contracts – held for trading 131 – –
embedded derivatives in revenue contracts 440 6 –
embedded derivatives in supplier contracts 26 – 1
616 8 1
maturing in greater than one year
cross currency interest rate swaps – net investment hedges 304 1 9
cross currency interest rate swaps – fair value hedges 337 12 –
interest rate swaps – fair value hedges 10 – –
651 13 9
total 1267 21 10
gross contract amounts are calculated at historical exchange rates
during 2005 certain derivatives were transacted for the purpose of providing an economic hedge for an underlying risk but were not formally documented as
hedges and consequently are classified above as forward foreign exchange contracts – held for trading reuters group plc annual report and form 20f 2005 75
reuters designated its investment in savvis convertible preference shares as being held at fair value through profit or loss at 1 january 2005 the investment was
pledged as part of the consideration on the telerate acquisition in june 2005 see note 36 movements in the fair value of the investment between the start of the
year and the date of disposal have been recognised within the income statement
the following table provides an analysis by currency of interest rate swaps held for risk management purposes at 31 december 2005
gross contract
amount
received paid £m
euro fixed sterling floating 351
euro fixed euro floating 10
japanese yen fixed sterling floating 5
sterling floating us dollar floating 280
sterling floating swiss franc floating 24
total 670
interest is receivable under swap contracts at rates between 01 and 53 and is payable at rates between 15 and 53 interest rate swaps are due to mature at
various dates between january 2006 and november 2010
the following table provides an analysis by currency of forward exchange contracts held for risk management purposes at 31 december 2005
gross contract
amount
£m
sales
us dollar 22
euro 14
japanese yen 12
australian dollar 8
hong kong dollar 8
canadian dollar 7
purchases
singapore dollar 24
south africa rand 23
swiss franc 9
other 4
total 131
foreign exchange forward contracts are due to mature in january 2006
hedges of net investment in foreign entity
the group’s longterm borrowing undertaken in november 2003 was swapped
into us dollars and swiss francs by transacting crosscurrency interest rate
swaps and designated as a hedge of the net investment in the group’s foreign
subsidiaries the resulting debt of 470 million was designated against the us
dollar foreign investment in instinet group until the time of its disposal and
subsequently restructured and redesignated as a hedge of 498 million against
the foreign investment in reuters america llc and goodwill arising on various
acquisitions the resulting swiss franc liability of 55 million swiss francs is
designated as a hedge of the foreign investment in reuters sa the foreign
exchange risk arising on retranslation of a €485 million quasiequity loan from
reuters finance ci limited to reuters group plc was hedged into sterling by
designating a crosscurrency interest rate swap as a hedge
hedges of fair values
the fair value interest rate risk of the €500 million fixed rate bond issued by
reuters finance plc was hedged by being swapped into floating rate interest
the foreign exchange risk arising from retranslation and interest rate risk arising
from the impact of changes in interest rates on the fair values of foreign
currency mediumterm notes amounting to £27 million and maturing in 2006
and 2008 were also swapped into floating rate sterling interest rates the above
hedges were executed in the form of crosscurrency interest rate swaps
the weighted average variable rate payable on the interest rate swaps used to
alter the currency and interest rate profile of debt issued at 31 december 2005
was 5 the weighted average variable rate is based on the rate implied in the
yield curve at the balance sheet date
financial instrument sensitivity analysis
the analysis below summarises the sensitivity of the fair value of the group’s
financial instruments to hypothetical changes in market rates fair values are the
present value of future cash flows based on market rates at the valuation date
the estimated adverse changes in the fair value of financial instruments are
based on an instantaneous
• 1 increase in the specific rate of interest from the levels effective at 31
december 2005 with all other variables remaining constant and
• 10 weakening in the value of sterling against all other currencies from 
the levels applicable at 31 december 2005 with all other variables remaining
constant 76 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
fair value changes arising from
10 weakening
in other
1 increase in currencies
fair value interest rates against £
£m £m £m
financial assets
availableforsale assets see note 16 18 – 2
trade receivables less provision for impairment see note 19 120 – 12
amounts owed by associates and joint ventures see note 19 4 – –
other receivables see note 19 68 – 4
accrued income 38 – 3
shortterm investments see note 16 1– –
cash and cash equivalents see note 20 662 – –
financial liabilities
borrowings see note 16 410 22 38
trade payables see note 22 14 – 1
accruals 262 – 16
amounts owed to associates and joint ventures see note 22 11 – –
other payables 36 – 2
other provisions and liabilities for charges 113 – 9
derivatives
currency and interest rate swaps 6 22 4
forward contracts – – 1
embedded derivatives in revenue contracts 6 – 44
embedded derivatives in supplier contracts 1 – 3
total 76 – 7
 prepayments and accrued income in note 19 £78 million include £40 million of prepayments that are not financial assets
 accruals in note 22 £264 million include £2 million of nonfinancial liabilities
 other payables in note 22 £48 million include £3 million of progress payments on contracts and £9 million of subscriptions in advance which are nonfinancial liabilities
 other provisions and liabilities for charges in note 24 £139 million includes £26 million of nonfinancial liabilities
monetary assets and liabilities
monetary assets and liabilities by currency excluding the functional currency of each operation at 31 december 2005 were
net foreign currency monetary assetsliabilities
hong
us swiss japanese kong
sterling dollar euro franc yen dollar other total
£m £m £m £m £m £m £m £m
functional currency of operation
sterling – 20 15 8 11 8 55 49
us dollar 13 – 4 4 – 1 4 26
euro 2 3–– –– 7 8
swiss franc 2 12 11 – – – – 21
hong kong dollar 2 1 – – – – – 3
other 3 13 – – – – –10
total 18 9 22 12 11 7 52 33
exchange differences that arise as a consequence of trading transactions and the translation of monetary assets and liabilities are taken to the income statement
see more detailed disclosure above reuters group plc annual report and form 20f 2005 77
the currency and interest rate profile of the group’s financial assets and liabilities that are subject to interest rate risk at 31 december 2005 was
classes of financial assets and liabilities
term weighted
cash and notes and finance average
shortterm cash bank commercial lease interest
investments equivalents overdrafts paper creditors total rate
£m £m £m £m £m £m 
by currency
sterling
floating – 580 24 – – 556 4
us dollar
floating –19 – – –19 4
fixed – – – – 2 2 6
euro
floating –8 – – – 82
fixed – – – 378 – 378 4
other
floating 1 55 1 – – 55 3
fixed – – – 5 – 5 1
total 1 662 25 383 2 253
by maturity
within one year 1 662 25 22 1 615
between one and two years – – – – 1 1
between two and three years – – – 5 – 5
between three and four years – – – – – –
between four and five years – – – 356 – 356
over five years –– –– ––
total 1 662 25 383 2 253
total financial liabilities at 31 december 2005 are repayable as follows
other financial
borrowings liabilities
£m £m
within one year 48 379
between one and two years 130
between two and three years 5 8
between three and four years – 8
between four and five years 356 4
over five years –7
total 410 436
the exposure of the group’s borrowings to interest rate changes and the contractual repricing dates are as follows
6 months
or less 6–12 months 1–5 years over 5 years total
£m £m £m £m £m
bank overdrafts 25 – – – 25
term notes and commercial paper 22 – 361 – 383
finance lease creditors 1 – 1 – 2
effect of interest rate swaps 361 – 361 – –
total 409 – 1 – 410 78 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
derivatives and other financial instruments 2004
uk gaap comparatives
the accounting policies relevant to this note in 2004 under uk gaap are given
on page 57
the following disclosure for derivatives and other financial instruments was
made at 31 december 2004 in the annual report prepared under uk gaap 
a substantial portion of the group’s revenue is receivable in foreign currencies
with terms of payment up to three months in advance as such the group 
is subject to currency exposure from committed revenue and additionally to
interest rate risk from borrowing and the investment of cash balances the group
seeks to limit these risks by entering into a mix of derivative financial instruments
if the derivative financial instruments were considered separately from the
underlying future revenue and interest the group would be subject to market
risk on these financial instruments from fluctuations in currency and interest rates
the group only enters into such derivative financial instruments to hedge or
reduce the underlying exposure described above there is therefore no net
market risk on such derivative financial instruments and only a credit risk from the
potential nonperformance by counterparties the amount of this credit risk is
generally restricted to any hedging gain and not the principal amount hedged
derivative instruments held at 31 december 2004 were
2004
gross contract
amounts carrying value fair value
£m £m £m
foreign exchange forward contracts
contracts in profit 124 1 1
contracts in loss 271 1 1
foreign currency options
contracts in profit –––
contracts in loss –––
currency and interest rate swaps
contracts in profit 373 54 64
contracts in loss 5 – –
total 773 54 64
the fair values of foreign currency and interest rate management instruments are estimated on the basis of market quotes discounted to current value using
marketquoted interest rates
an analysis by currency of derivative contracts held for currency hedging purposes at 31 december 2004 is set out below
2004
swaps forwards

euro 828
japanese yen 3 2
swiss franc 19 15
us dollar 70 37
other –18
total 100 100
foreign exchange forward contracts mature at dates up to february 2005 currency swaps and interest rate swaps both mature at various dates through to
november 2010
the results of currency and interest rate hedging activities for the year to december 2004 are as summarised below
2004
recognised gains £m
currency hedging 29
interest rate hedging 10
recognised currency hedging gains in 2004 were favourable mainly due to the effect of the weaker us dollar on hedges of the net investment in overseas subsidiaries reuters group plc annual report and form 20f 2005 79
gains and losses on instruments used for hedging are not recognised until the exposure that is being hedged is itself recognised unrecognised gains and losses
on instruments used for hedging and the movements are set out below
2004
gain losses net
hedging £m £m £m
unrecognised at 1 january 2004 541
arising in previous years
recognised in 2004 4 2 2
not recognised in 2004 1 2 1
arising in 2004
not recognised in 2004 11 – 11
unrecognised at 31 december 2004 12 2 10
of which
expected to be recognised in 2005 1 1 –
expected to be recognised in 2006 or later 11 1 10
net unrecognised gains on derivatives used for hedging were £10 million at 31 december 2004
the weighted average variable rate payable on the interest rate swaps used to alter the currency and interest rate profile of debt issued at 31 december 2004 was 3
the weighted average variable rate is based on the rate implied in the yield curve at the balance sheet date
all derivative instruments are unsecured however reuters does not anticipate nonperformance by the counterparties who are all banks with recognised longterm
credit ratings of ‘a3a’ or higher
carrying and fair values of group financial assets and liabilities at 31 december were
2004
carrying value fair value
£m £m
derivative instruments 54 64
other financial assets
fixed asset investments 28 34
longterm debtors 20 20
investments held for resale 108 194
other shortterm investments and cash 836 836
other financial liabilities
shortterm borrowings 181 181
longterm borrowings 329 329
other financial liabilities 97 97
the fair value of fixed asset investments and investments held for sale is the carrying value unless the investment has a readily determinable market value which is higher
the fair value of listed shortterm investments was based on quoted market prices for those investments the carrying amount of the other shortterm deposits and
investments approximated to their fair values due to the short maturity of the instruments held
the fair value of shortterm borrowings approximated to the carrying value due to the short maturity of the investments
shortterm debtors and creditors have been excluded from the above analysis and all other disclosures in this note other than the currency risk disclosures
financial instrument sensitivity analysis
the analysis below summarises the sensitivity of the fair value of the group’s financial instruments to hypothetical changes in market rates fair values are the
present value of future cash flows based on market rates at the valuation date
the estimated adverse changes in the fair value of financial instruments are based on an instantaneous
• 1 increase in the specific rate of interest from the levels effective at 31 december 2004 with all other variables remaining constant and
• 10 weakening in the value of sterling against all other currencies from the levels applicable at 31 december 2004 with all other variables remaining constant
fair value changes arising from
10 weakening
1 increase in in £ against
interest rates other currencies
fair value adverse adverse
£m £m £m
current and interest rate swaps 64 27 10
forward contracts – – 16
total 64 27 26 80 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
monetary assets and liabilities by currency after cross currency swaps excluding the functional currency of each operation at 31 december 2004 were
net foreign currency monetary assetsliabilities
sterling us dollar euro swiss franc japanese yen hong kong dollar other total 
£m £m £m £m £m £m £m £m
functional currency of operation
sterling – 71 42 6 1 – 22 12
us dollar 15 – 21 16 – – 2 54
euro – 4 – – – – 1 3
swiss franc 23 2 3 – 1 – – 19
japanese yen 1 – – – – – – 1
hong kong dollar 1 18 – – 5 – – 24
other – 4 1 – – – – 3
total 36 51 23 22 5 – 21 60
exchange differences that arise as a consequence of trading transactions and the translation of monetary assets and liabilities are taken to the income statement 
in accordance with the group’s accounting policy exchange differences attributable to longterm foreign currency borrowings used to finance the group’s foreign
currency investments are taken directly to reserves consequently longterm foreign currency borrowings have been excluded from the above table
the currency and interest rate profile of the group’s financial assets at 31 december 2004 was
cash and shortterm investments fixed rate investments
weighted weighted
average interest average time
noninterest floating rate fixed rate rate at for which rate
total bearing assets investments investments 31 december is fixed
£m £m £m £m  years
sterling 416 80 336 – – –
us dollar 469 58 411 – – –
euro 33 7 26 –––
other 74 11 585 –3
31 december 2004 992 156 831 5 – 3
interest on floating rate investments is earned at rates based on local money market rates floating rate investments include £370 million of money market deposits
which mature within three months of the balance sheet date
fixed rate investments are those investments which have an interest rate fixed for a period of greater than one year
the currency and interest rate profile of the group’s financial liabilities after allowing for interest rate and crosscurrency swaps at 31 december 2004 was
borrowings
other floating
financial rate
total liabilities borrowings
£m £m £m
sterling 280 60 220
us dollar 271 21 250
euro 25 13 12
swiss francs 27 2 25
other 413
31 december 2004 607 97 510
the floating rate borrowings comprise bank loans and overdrafts bearing interest at rates based on local money market rates commercial paper and mediumterm
notes the weighted average effective interest rate on borrowings at 31 december 2004 was 4 the above analysis excludes creditors falling due within one year
which are of a nonfinancial nature reuters group plc annual report and form 20f 2005 81
total financial liabilities at 31 december 2004 are repayable as follows
other financial
borrowings liabilities
£m £m
within one year 181 32
between one and two years 19 19
between two and five years 518
over five years 305 28
total 510 97
in april 2003 reuters entered into a committed syndicated credit facility for £10 billion £520 million of the facility either expired or was voluntarily cancelled in
2004 at 31 december 2004 reuters had £480 million available under the facility the facility was undrawn during 2004 the commitment expires and final
repayment is due in april 2008
at the same time as the syndicated credit facility was arranged committed bilateral facilities of £90 million were also put in place on similar terms during 2004 
£66 million of the facilities either expired or were voluntarily cancelled at 31 december 2004 reuters had £24 million available all of which was undrawn 
no loans were outstanding under this facility during 2004
in addition at 31 december 2004 the group had unused shortterm uncommitted bank borrowing facilities denominated in various currencies the sterling
equivalent of which was approximately £200 million at money market rates varying between 2 and 6 depending on the currency
18 inventories
2005 2004
£m £m
work in progress on contracts 1 3
19 trade and other receivables
2005 2004
£m £m
trade receivables 138 162
less provision for impairment 18 31
120 131
instinet counterparty debtors – 216
amounts owed by joint ventures and associates 4 3
other receivables 68 111
prepayments and accrued income 78 74
total trade and other receivables 270 535
less noncurrent portion 18 19
current portion 252 516
the carrying value of trade and other receivables approximates to their fair value based on discounted cash flows using the group’s weighted average cost of capital
the recognition of provisions both in terms of timing and quantum requires the exercise of judgement based on the relevant circumstances which can be subject
to change over time if the final outcome on the judgement areas were to differ by 10 from management’s estimates the group would need to book an
adjustment of £2 million to operating costs and to trade receivables
concentration of credit risk faced by the group and other relevant risk factors are detailed in note 17 on page 73 82 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
20 cash and cash equivalents
2005 2004
£m £m
cash
cash in hand and at bank 98 83
listed cash equivalents
government securities – overseas – 8
unlisted cash equivalents
term deposits – uk 12 84
term deposits – overseas 3 31
other investments – uk 546 –
other investments – overseas 3 372
cash and cash equivalents 662 578
21 noncurrent assets and liabilities held for sale
the following are assets and liabilities classified as held for sale at 31 december
2005 2004
£m £m
noncurrent assets classified as held for sale
property plant and equipment 1 –
assets of subsidiary held exclusively for resale – 145
total assets classified as held for sale 1 145
liabilities directly associated with noncurrent assets classified as held for sale
liabilities of subsidiary held exclusively for resale – 47
total net assets classified as held for sale 1 98
 2004 figures have been measured in accordance with ias 27 ‘consolidated and separate financial statements’ and not in accordance with ifrs 5 ‘noncurrent assets held for sale and 
discontinued operations’
in 2005 a property with a net book value of £1 million has been classified as a noncurrent asset held for sale the sale of this property is due to be completed in 2006
on 22 april 2005 reuters group plc classified the net assets of instinet group as a disposal group held for sale following regulatory approval the transaction
closed on 8 december 2005 instinet group is therefore shown within discontinued operations in note 7 on page 62
in 2004 radianz was classified as a subsidiary held exclusively for resale radianz’s net assets of £98 million were shown as held for sale radianz is reported within
the sales  trading division the acquisition and subsequent disposal of radianz is detailed in note 7 on page 62
22 trade and other payables
2005 2004
£m £m
trade payables 14 71
accruals 264 346
instinet counterparty creditors – 197
deferred income 25 21
amounts owed to joint ventures and associates 11 12
other payables 48 39
other taxation and social security 35 35
total trade and other payables 397 721
less noncurrent portion 17 19
current portion 380 702
the carrying value of trade and other payables approximates to their fair value based on discounted cash flows using the group’s weighted average cost of capital reuters group plc annual report and form 20f 2005 83
23 current tax liability
2005 2004
£m £m
current tax liabilities 228 260
the group is subject to taxation in numerous jurisdictions significant judgement is required in determining the worldwide provision for taxation there are many
transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business the group recognises liabilities for
anticipated tax audit issues based on estimates of whether additional taxes will be due where the final tax outcome of these 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
the current tax liability carried forward at the balance sheet date does not take account of any benefit of potential uk tax deductions associated with the
acquisition of shares in prior periods in order to satisfy employee share awards it is reasonably possible that based on existing knowledge outcomes within the
next financial year could require a material adjustment to the carrying amount of the current tax liability in order to recognise this benefit
24 provisions for liabilities and charges
2005 2004
£m £m
provisions for postemployment benefits see note 25 317 263
other provisions for liabilities and charges 139 164
total provisions 456 427
less noncurrent portion 392 340
current portion 64 87
the movement in other provisions during 2005 was as follows
legal other
rationalisation compliance property other total
£m £m £m £m £m
1 january 2005 151 4 2 7 164
exchange differences 2 – – 1 3
charged in the year 147 5 – 14 166
utilised in the year 169 1 2 1 173
released 7 1 – 4 12
provisions acquired through business combinations – – 5 – 5
reclassifications 15 – – – 15
unwinding of discount 1 – – – 1
31 december 2005 110 7 5 17 139
 reclassifications relate to instinet group’s provisions which were reclassified to discontinuing operations prior to disposal during the year
the recognition of provisions both in terms of timing and quantum requires
the exercise of judgement based on the relevant circumstances which can be
subject to change over time
the largest provisions relate to the 2005 restructuring charges which cover
primarily leasehold properties and severances a number of leasehold
properties have been identified as surplus to requirements although efforts 
are being made to sublet this vacant space management recognises that this
may not be possible immediately estimates have been made to cover the cost
of vacant possession together with any shortfall arising from subleased rental
income being lower than lease costs being borne by us a judgement has also
been made in respect of the discount factor based on a riskfree rate 4 to
5 which is applied to the rent shortfalls for severance provisions the
provision is only recognised where employees have a valid expectation or have
already been told of their redundancy other provisions are held where the
recoverability of amounts is uncertain where the actual outcome may differ from
the resulting estimates
additionally the group is subject to certain legal claims and actions please see
note 35 on page 97 provision for specific claims or actions are only made when
the outcome is considered ‘probable’ that there will be a future outflow of funds
andor providing for any associated legal costs the level of any provision is
inevitably an area of management judgement given the outcome of litigation is
difficult to predict there can be no assurance that there will not be an increase
in the scope of these legal matters or that any future lawsuits claims
preceedings or investigations will not be material
the legalcompliance provision represents the expected cost of settling
disputes arising from contractual arrangements with thirdparty suppliers and
individuals and the expected cost of fulfilling indemnities given on the disposal
of subsidiaries
included within the rationalisation provision at the end of 2005 are obligations
related to the fast forward programme which was first announced in 2003 and
the telerate integration programme which began in june 2005 both programmes
included headcount reduction and property rationalisation severance related
provisions will be utilised during 2006 and propertyrelated provisions will be
substantially utilised over the remaining lease periods
other property provisions reflect reuters contractual liability at the balance sheet
date to make good dilapidations under ongoing rental agreements outside the
rationalisation programmes and will be utilised over the remaining lease periods 84 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
25 retirement benefits
the group has established various pension arrangements covering the majority of its employees in all plans except those which are internally funded the assets
are held separately from those of the group and are independently administered
defined contribution plans
reuters group operates 38 defined contribution plans covering approximately 55 of its employees of which the largest plans are the reuters retirement plan and
the reuters 401k pension plans the percentage of employees covered and the company contribution to these plans were
company contribution
 of employees  of basic salary
reuters retirement plan 151 110
reuters 401k pension plans 239 60
the group contributed £25 million to defined contribution plans in 2005 2004 £19 million and expects to contribute £24 million in 2006
defined benefit plans
the group also operates 30 defined benefit plans and post retirement medical
plans covering approximately 22 of employees all significant plans are valued
under ias 19 by independently qualified actuaries using the projected unit
credit method
the defined benefit plans include the rpf which has been accounted for as a
defined benefit plan under ifrs the rpf is the largest defined benefit plan
operated by reuters the total defined benefit obligation at 31 december 
2005 was £1346 million of which £985 million related to the rpf the rpf is 
a complex hybrid pension fund with both defined company and employee 
contributions and defined employee benefits the rpf has been in existence
since 1893 and has historically been treated as a defined contribution plan
under the rules of the pension fund the group is not able to access any surplus
in the rpf although the group and employees make defined contributions to
the fund the rpf does not provide for contributions to be made to individual
plan participant accounts and there are circumstances where the group may be
required to make additional contributions under ias 19 the rpf is treated as a
defined benefit plan from the date of transition to ifrs at transition the net
plan liabilities are £nil at 31 december 2004 a net liability of £178 million has
been recognised together with a related deferred tax asset of £39 million
movement on pension provisions and similar obligations
2005 2004
£m £m
opening balance 263 77
income statement see note 3
defined benefit plans 27 11
postretirement medical benefits 3 2
actuarial gains and losses taken directly to reserves
defined benefit plans 46 206
postretirement medical benefits 2 1
341 291
utilised in the year 24 28
closing balance 317 263
made up of
defined benefit plans 302 252
postretirement medical benefits 8 4
other 7 7
closing balance 317 263
 the figures for defined benefit plans include a number of immaterial schemes which have not been valued under ias 19 the following disclosures refer only to material schemes valued under ias 19 reuters group plc annual report and form 20f 2005 85
amounts recognised in respect of defined benefit obligations
defined benefit obligations recognised in the balance sheet
post retirement 
uk plans overseas plans medical benefits total
2005 2004 2005 2004 2005 2004 2005 2004
£m £m £m £m £m £m £m £m
present value of funded obligations 1148 977 167 151 – – 1315 1128
fair value of plan assets 902 781 139 124 – – 1041 905
246 196 28 27 – – 274 223
present value of unfunded obligations 19 18 4 9 8 3 31 30
265 214 32 36 8 3 305 253
plan asset not recognised in the balance sheet – – 3 – – – 3 –
net liability recognised in the balance sheet 265 214 35 36 8 3 308 253
fair value of reimbursement rights not recognised as plan assets – – 4 3 – – 4 3
the assets and obligations reported under uk plans include the rpf a smaller uk scheme with 32 active members and a number of smaller unfunded early
retirement ill health and retirement benefit schemes
the reimbursement rights reported relate to insurance policies held by reuters in respect of an unfunded plan in germany
amounts recognised in the income statement
post retirement
uk plans overseas plans medical benefits total
2005 2004 2005 2004 2005 2004 2005 2004
£m £m £m £m £m £m £m £m
current service cost 19 20 11 10 – – 30 30
interest cost 52 41 5 6 – – 57 47
expected gain on plan assets 51 52 7 6 – – 58 58
past service cost 1 – – – 2 – 3 –
gains on curtailments 2 3 3 – – – 5 3
gains on settlements 1 – – – – – 1 –
total included in operating costs 18 6 6 10 2 – 26 16
actual return on plan assets 146 76 18 5 – – 164 81
further amounts recognised in the statement of recognised income and expense
post retirement
uk plans overseas plans medical benefits total
2005 2004 2005 2004 2005 2004 2005 2004
£m £m £m £m £m £m £m £m
actuarial lossesgains 46 195 3 10 2 – 45 205
effect of asset ceiling – – 3 – – – 3 –
46 195 – 10 2 – 48 205
deferred taxation impact of actuarial gains and losses recognised 
in the statement of recognised income and expense 10 43 – 2 – – 10 45
total recognised in the statement of recognised income 
and expense 36 152 – 8 2 – 38 160
cumulative amounts recognised in the statement of recognised income and expense
post retirement
uk plans overseas plans medical benefits total
2005 2004 2005 2004 2005 2004 2005 2004
£m £m £m £m £m £m £m £m
balance of actuarial losses at 1 january 195 – 10 – – – 205 –
net actuarial lossesgains recognised in year 46 195 3 10 2 – 45 205
balance of actuarial losses at 31 december 241 195 7 10 2 – 250 205
balance of asset limit effects at 1 january – – – – – – – –
effects of the asset ceiling in the year – – 3 – – – 3 –
balance of asset limit effects at 31 december – – 3 – –– 3– 86 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
changes in the present value of the defined benefit obligation
post retirement
uk plans overseas plans medical benefits total
2005 2004 2005 2004 2005 2004 2005 2004
£m £m £m £m £m £m £m £m
opening defined benefit obligation 995 743 160 141 3 4 1158 888
current service cost 19 20 11 10 – – 30 30
past service cost 1 – – – 2 – 3 –
interest cost 52 41 5 6 – – 57 47
gains on curtailments 2 3 3 – – – 5 3
liabilities extinguished on settlements 8 – – – – – 8 –
actuarial losses 141 219 8 9 2 – 151 228
contributions by employees 3 6 4 5 – – 7 11
benefits paid 34 31 14 9 – 1 48 41
exchange differences on overseas plans – – – 2 1 – 1 2
closing defined benefit obligation 1167 995 171 160 8 3 1346 1158
changes in the fair value of plan assets
post retirement
uk plans overseas plans medical benefits total
2005 2004 2005 2004 2005 2004 2005 2004
£m £m £m £m £m £m £m £m
opening fair value of plan assets 781 716 124 116 – – 905 832
expected return 51 52 7 6 – – 58 58
assets transferred on settlements 7 – – – – – 7 –
actuarial gainslosses 95 24 11 1 – – 106 23
contributions by employer 13 14 6 9 – 1 19 24
contributions by employees 3 6 4 5 – – 7 11
benefits paid 34 31 14 9 – 1 48 41
exchange differences on overseas plans – – 1 2 – – 1 2
closing fair value of plan assets 902 781 139 124 – – 1041 905
the group expects to contribute around £47 million to its material defined benefit plans in 2006 furthermore the company is currently in discussion with the
trustees of the rpf regarding a proposed plan to fund the deficit at 31 december 2005 the rpf deficit was £223 million £174 million after adjustment for 
deferred taxation
major categories of plan assets as a percentage of total plan assets
post retirement
uk plans overseas plans medical benefits total
2005 2004 2005 2004 2005 2004 2005 2004
       
equities 55 55 46 49 – – 54 54
bonds 36 37 45 38 – – 37 37
property 7 7 – – – – 6 6
cash 2 1 5 4 – – 2 2
other – – 4 9 – – 1 1 reuters group plc annual report and form 20f 2005 87
principal actuarial assumptions at the balance sheet date expressed as a weighted average
post retirement
uk plans overseas plans medical benefits
2005 2004 2005 2004 2005 2004
     
discount rate 475 525 329 355 550 575
inflation assumption 275 275 147 144 – –
rate of increase in salaries 400 400 239 253 – –
rate of increase in pensions in payment 275 275 138 142 – –
medical cost trend – – – – 550 550
expected rate of return on reimbursement rights – – 425 – – –
expected rate of return on assets 636 670 493 517 – –
the expected return on plan assets reflects the investments currently held to provide for the pension benefit obligations as at the balance sheet date plan assets
primarily consist of equity instruments and fixed income investments the expected rate of return on equities was based on expected market conditions in each of
the territories in which plans operate the expected return on assets is stated net of investment expenses the expected return on assets for the uk plans at 
31 december 2005 is stated gross of the expected 2006 levy to the uk pension protection fund
the mortality assumptions used to assess the defined benefit obligation for the rpf  the largest plan at 31 december 2005 and 31 december 2004 are based on the 92
series short cohort tables issued by the continuous mortality investigation bureau with allowance for projected longevity improvements to calendar year 2025
assumed healthcare cost trend rates do not have a significant effect on the amounts recognised in the income statement a one percentage point change in
assumed healthcare cost trend rates would have the following effects
one percentage one percentage
point decrease point increase
£m £m
increase in the aggregate of interest cost and service cost ––
increase in the defined benefit obligation 1 1
history of experience gains and losses
2005 2004
post post 
retirement retirement 
uk overseas medical uk overseas medical
plans plans benefits total plans plans benefits total
£m £m £m £m £m £m £m £m
defined benefit obligation 1167 171 8 1346 995 160 3 1158
plan assets 902 139 – 1041 781 124 – 905
deficit 265 32 8 305 214 36 3 253
experience adjustments on plan liabilities 16 6 1 11 100 5 1 94
experience adjustments on plan assets 95 11 – 106 24 1 – 23 88 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
26 deferred taxation
the movement on the deferred tax account is as shown below
2005 2004
£m £m
1 january 247 219
disposals 46 –
income statement charge 19 23
deferred taxation credit on pension revaluations recognised in equity 10 45
deferred taxation on stock options recognised in equity 10 8
exchange differences 8 2
31 december 210 247
deferred tax assets have been recognised in respect of tax losses and other temporary differences giving rise to deferred tax assets only to the extent that it is
probable that sufficient taxable profits will be available to allow the asset to be recovered accordingly no deferred tax asset has been recognised in respect of
unused tax losses of £113 million carried forward at the balance sheet date the deferred tax asset not recognised in respect of these losses is £46 million
deferred tax assets of £195 million have been recognised in respect of tax losses and other deductible temporary differences arising in certain jurisdictions where
losses were incurred in the current or preceding period recognition of these assets is based on all relevant factors including their expected recovery measured
using group profit forecasts
no deferred tax is recognised on the unremitted earnings of overseas subsidiaries and joint ventures as the group is able to control the timing of the reversal of the
temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future if the earnings were remitted tax of £847 million
would be payable
the movements of deferred tax assets and liabilities are shown below
deferred tax liabilities
property
plant and
equipment other total
£m £m £m
1 january 2005 12 33 45
disposal – 6 6
charged to income statement – 27 27
31 december 2005 12 54 66
deferred tax assets
property
plant and stock
equipment losses options other total
£m £m £m £m £m
1 january 2005 57 45 13 177 292
disposal 7 29 2 14 52
chargedcredited to income statement 10 71 1 54 8
credited in equity – – 10 10 20
exchange differences – 1 – 7 8
31 december 2005 40 88 22 126 276
the deferred tax asset expected to be recovered after more than one year is £135 million 2004 £186 million reuters group plc annual report and form 20f 2005 89
27 share capital
movements in share capital during the year ended 31 december were as below
called up
share share share
capital premium capital
£m £m £m
1 january 2004 358 91 449
shares allotted during the year 15 6
31 december 2004 359 96 455
shares allotted during the year 111 12
31 december 2005 360 107 467
an analysis of called up share capital is set out below
2005 2004
£m £m
authorised
one founders share of £1 – –
2100 million ordinary shares of 25p each 525 525
525 525
allotted called up and fully paid
one founders share of £1 – –
ordinary shares of 25p each 360 359
360 359
number of ordinary shares of 25p each millions 14411 14355
shares allotted during the year in millions
5554900 shares in reuters group plc were issued under employee share schemes at prices 
ranging from £nil to 333p per share transaction costs incurred on issue of shares amounted to £nil 2004 £nil 56 30
called up share capital includes £1 million for shares granted to employees on exercise of share options in respect of which no cash had been received at the
balance sheet date 2004 £1 million
the rights attaching to the founders share are set out on page 120
at 31 december 2005 the balance in the treasury stock reserve of £430 million 2004 £213 million included £206 million 2004 £213 million held by reuters esots
this represents the cost of 32 million shares 2004 33 million in reuters group plc purchased in the market and held by reuters esots to satisfy certain options under
the group’s share option plans a further £224 million relates to the cost of 57 million shares in reuters group plc purchased in the market as a part of the ongoing
buyback programme announced in july 2005
the following table provides a summary of the shares bought under the buyback programme since its announcement in july 2005
total number approximate
of shares value of shares
purchased as that may yet
part of publicly average price be purchased
announced paid per under the
month programme share £ programme £m
july 1500000 389 994
august 8500000 370 963
september 7150000 373 936
october 2800000 353 926
november 22800000 389 838
december 14650000 408 778
the current buyback programme was announced on 26 july 2005 and the total buyback is expected to be £1 billion the programme is due to run for up to 
two years no programme has expired during the period covered by the table reuters has not determined to terminate any programme prior to expiration 90 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
28 reserves
an analysis of the movement in other reserves is set out below
capital available total
redemption other forsale hedging translation other
reserve reserve reserve reserve reserve reserves
£m £m £m £m £m £m
1 january 2004 1 1718 – – – 1717
translation differences taken directly to reserves – – – – 34 34
translation differences taken to the income statement on disposal of assets – – – – 6 6
taxation on items taken directly to or transferred from reserves – – – – 10 10
31 december 2004 1 1718 – – 38 1755
transitional adjustments on adoption of ias 39 – – 94 30 16 108
1 january 2005 1 1718 94 30 54 1647
translation differences taken directly to reserves – – – – 97 97
translation differences taken to the income statement on disposal of assets – – – – 2 2
fair value losses on availableforsale financial assets – – 22 – – 22
fair value gains on availableforsale financial assets taken to the income statement 
on disposal of assets – – 68 – – 68
fair value losses on net investment hedges – – – 39 – 39
fair value losses taken to the income statement on disposal of net investment hedges – – – 14 – 14
other movements – 1 – – – 1
taxation on items taken directly to or transferred from reserves – – – 16 12 4
31 december 2005 1 1719 4 7 29 1692
 the transitional adjustment on the balance sheet at 1 january 2005 primarily comprises recognition of the fair value of the group’s investment in tsi £86 million gain
in 1998 a court approved capital reorganisation took place in exchange for every
15 ordinary shares in reuters holdings plc shareholders received prorata 13
ordinary shares in reuters group plc plus £1360 in cash the difference
between the proforma nominal value of shares in issue of reuters group plc
immediately prior to the reorganisation and the previously reported capital and
reserves of reuters holdings plc excluding retained earnings represents the
merger difference which has since been recorded in the other reserve
the availableforsale reserve is used to record the cumulative fair value gains
and losses on availableforsale financial assets the cumulative gains and losses
are recycled to the income statement on disposal of the assets
the hedging reserve is used to record the cumulative gains and losses on
hedges of the group’s net investment in foreign operations providing that they
were effective the gains and losses are recognised in the income statement on
disposal of the foreign operation
the translation reserve is used to record cumulative translation differences 
on the assets and liabilities of foreign operations the cumulative translation
differences are recycled to the income statement on disposal of the foreign
operation reuters group plc annual report and form 20f 2005 91
29 net cash flows from operating activities
net profit is reconciled to net cash inflow from operating activities as follows
2005 2004
£m £m
profit for the year from continuing operations 229 356
adjustments for
depreciation 99 112
impairment of associates and joint ventures 2 –
impairment of intangibles 1 35
amortisation of intangibles 33 28
loss on disposal of property plant and equipment – 1
employee share scheme charges 30 22
foreign exchange gainslosses 8 9
fair value movements on derivatives 18 –
fair value movements on other financial assets 16 –
profits on disposals 42 207
income from investments 1 –
share of posttaxation profits of associates and joint ventures 5 11
finance income 41 15
finance costs 53 27
taxation 9 40
movements in working capital
decreaseincrease in inventories 2 1
decrease in trade and other receivables 3 2
decrease in trade and other payables 52 98
increasedecrease in pensions deficit 9 17
decreaseincrease in provisions 27 16
decreaseincrease in amounts payable to discontinued operations 24 8
cash generated from continuing operations 268 307
profit for the year from discontinued operations 253 19
adjustments for
profits after taxation of subsidiaries acquired with a view to resale – 1
depreciation 4 18
impairment of intangibles – 23
amortisation of intangibles 2 7
loss on disposal of property plant and equipment 4 2
employee share scheme charges 18 11
profits on disposals 278 19
income from investments – 1
finance income 13 7
taxation 20 22
movements in working capital
increasedecrease in trade and other receivables 28 146
decrease in trade and other payables 17 212
decrease in pensions deficit – 2
increasedecrease in provisions 14 25
decreaseincrease in amounts receivable from continuing operations 24 8
cash generated from discontinued operations 3 27
cash generated from operations 271 280 92 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
30 cash flow from acquisitions and disposals
2005 2004
£m £m
acquisitions including joint ventures and associates
subsidiary undertakings see note 36 135 66
joint ventures and associates 1 –
loans repaid tofrom joint ventures and associates – 5
deferred payments for acquisitions in prior years 8 8
144 79
less cash acquired 20 1
acquisitions net of cash acquired 124 78
disposals including joint ventures and associates
subsidiary undertakings 824 70
joint ventures and associates 1 379
instinet deemed disposal 3 5
828 454
add cash disposed 582 16
disposals net of cash disposed 246 438
31 reconciliation of cash and cash equivalents
cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts
2005 2004
£m £m
cash and cash equivalents see note 20 662 578
bank overdrafts 25 17
total cash and cash equivalents 637 561
32 dividends
2005 2004
£m £m
prior year final paid 86 86
current year interim paid 54 54
140 140
per ordinary share pence pence
prior year final paid 615 615
current year interim paid 385 385
a final dividend in respect of 2005 of 615p per ordinary share amounting to a total dividend of £83 million is to be proposed at the agm on 27 april 2006 
these financial statements do not reflect this proposed dividend payable
at 31 december 2005 316 million shares representing 2 of the group’s share capital were held by the esot in respect of which dividend rights have been 
waived until the group receives written confirmation of cancellation from computershare trustees ci limited reuters group plc annual report and form 20f 2005 93
33 employee share plans
the group operates a number of share plans for the benefit of employees 
the nature of each plan including general terms and conditions and the methods
of settlement is set out below
ltip since 1993 reuters has operated a longterm incentive plan that seeks 
to encourage and reward longterm growth in shareholder value it is reuters
practice to make an annual award of contingent share rights to executive
directors and to those senior managers most able to influence corporate
performance from 2003 awards have been based on the fair market value per
share using option pricing methodology the fair market value ascribed to each
share for ltip purposes in 2005 was 438 of current market value the ltip’s
performance is assessed by reference to the company’s relative total shareholder
return tsr measured against the ftse 100 over the performance period and
awards vest after 3 years subject to the performance conditions attached for
awards made prior to 2004 that do not vest or only partially vest after three years
the plan permits the measurement period to be extended by up to two years
under a retesting provision for awards made from 2004 onwards the retesting
provision does not apply
discretionary share option plan dsop the global dsop was adopted by 
the remuneration committee in october 2000 and approved by shareholders 
in april 2001 it aims to reward growth in earnings and in the share price the
options were normally granted with a four year vesting period shares vesting
25 each year
with effect from 2004 to reduce the dilutive impact dsops have on shareholders’
interests and to allow the introduction of a plan better targeted at the general
employee population the number of participants was reduced significantly
participation will normally be confined to executive directors and members of the
gmc other employees may be eligible to participate in the restricted share plan
see below
performance conditions apply to each option grant for awards granted from
2001 to 2004 the remuneration committee could approve the retesting of
performance up to twice in the event the performance condition was not met 
by extending the performance period by up to two years with an increase of 
3 in the hurdle rate of eps growth as calculated under uk gaap for each year
added to the performance period if the target rate was not met by the end of
the fifth year the options would lapse
for awards granted from 2004 the retesting provisions have been removed 
and accordingly new awards will not permit any extension of the measurement
period if the awards do not meet the eps performance condition upon
completion of the initial performance period they will lapse
options granted to executive directors in 2004 and 2005 can vest only if the
percentage growth in eps exceeds the percentage growth in the retail price
index by more than 9 over the three year performance period
save as you earn saye plan an allemployee international savings related
share option plan is offered in which the executive directors are eligible to
participate participants save a fixed monthly amount of up to £250 subject to a
maximum established annually for each offer for three years and are then able
to use their savings to buy shares at a price set at a 20 discount to the market
value at the start of the savings period in line with market practice no
performance conditions are attached to options granted under this plan
annual bonus profit sharing plan in december 2003 reuters announced 
its intention to introduce a new profitsharing plan across the allemployee
population this plan was introduced to focus employees on reward for profit
growth executive directors and members of the gmc did not participate in this
plan in 2005 a decision is taken on an annual basis to operate the plan for the
forthcoming year payments under the plan were typically made in the form of
shares which were normally subject to a 12 month vesting period with automatic
release thereafter reuters has determined that this plan will operate for 2006 as
a cashonly plan and no shares will be issued to employees
restricted share plan rsp in april 2004 at the agm the shareholders
approved the introduction of the rsp  currently restricted shares will not normally
be granted for longterm incentive purposes to executive directors or members
of the gmc it is intended that other than for executive directors and gmc
members employees will be eligible to participate in this plan instead of the
dsop  other than in 2004 the year of introduction employees would generally
not be eligible to participate in the dsop and the rsp in the same year the rsp
is normally granted with a four year vesting period shares vesting 25 each year
legacy plans the following plans are legacy plans under which tom glocer 
and devin wenig received awards prior to becoming executive directors it is
not intended that executive directors should receive any further awards under
these plans
performance related share plan prsp this plan operated from 1995 to 2001
and targeted senior executives not participating in the ltip  tom glocer and
devin wenig hold awards granted before they became executive directors all
outstanding awards have now lapsed the performance condition was the same
as for the ltip  although vested shares could be released three years after grant
plan 2000 a oneoff allemployee option grant was made in 1998 in order to
support the retention of employees over the millennium period in common with
such allemployee plans there is no performance condition to be satisfied all
employees including the executive directors were given the opportunity to apply
for an option to acquire 2000 shares at an exercise price of £550 per share these
options became exercisable in september 2001 and lapsed in september 2005 
a small supplementary grant was made to new employees in march 1999 at an
option price of £814 and these will normally expire in march 2006 94 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
activity relating to share options for the year ended 31 december 2004 and 31 december 2005 was as follows
discretionary longterm weighted
employee  incentive average
executive plans exercise
plans annual and price for
saveas including bonus performance option
youearn plan restricted profit related plans
plans 2000 share plans share plans share plan total £
ordinary shares under option in millions including adss
1 january 2004 302 141 564 – 135 1142 286
granted 46 – 103 – 26 175 245
forfeited 03 03 08 – 02 16 342
exercised 05 – 25 – 09 39 162
expired or lapsed 41 24 42 – 04 111 427
31 december 2004 299 114 592 – 146 1151 271
granted 34 – 75 23 22 154 207
forfeited 25 04 25 01 04 59 460
exercised 12 – 48 01 07 68 166
expired or lapsed 14 103 40 – 44 201 388
31 december 2005 282 07 554 21 113 977 270
number of participants at 31 december 2005 7663 349 6437 12120 200
expense included in the income statement for year ended £m £m £m £m £m £m
31 december 2004 4 –9 54 22
31 december 2005 5 –18 2 530
options were exercised on a regular basis throughout the year and the average share price was £392 2004 £354
the following table summarises information relating to the number of shares under option and those which were exercisable at 31 december 2005
exercisable
weighted options options weighted
average exercisable at exercisable at average exercise
total shares remaining 31 december 31 december price for options
under option contractual life 2005 2004 exercisable at
range of exercise prices million months million million 31 december 2005
ordinary shares
£000 – £200 448 8 25 25 £132
£201 – £500 364 17 120 92 £273
£501 – £700 70 2 51 142 £567
£701 – £900 53 6 46 37 £855
£901 – £1100 04 – 04 03 £971
adss
1001 – 3000 31 5 01 – 1139
3001 – 5000 07 21 – 299 –
977
 one ads is equivalent to six ordinary shares
the fair values of options granted during the period were determined using options pricing models reuters group plc annual report and form 20f 2005 95
the following tables summarise the models and key assumptions used
year ended 31 december 2005
discretionary allemployee longterm
saveasyou employee  bonus profit restricted incentive 
earn plans executive plans sharing plan share plans plans
weighted average fair value £ 161 130 395 381 242
options pricing model used black scholes black scholes black scholes black scholes monte carlo
options options options options simulation based
pricing model pricing model pricing model pricing model customised options
pricing model
key assumptions used
weighted average share price £ 412 397 405 404 405
range of exercise prices £ 333 389–405 nil nil nil
range of expected volatility  47 28–54 37 28–54 48
range of riskfree rates  5 4–5 5 4–5 5
range of expected option term life 3 years 4 to 7 years 2 years 1 to 4 years 3 years
expected dividends per year 10p 10p 10p 10p 10p
year ended 31 december 2004
discretionary longterm
saveasyou employee  restricted incentive 
earn plans executive plans share plans plans
weighted average fair value £ 165 150 298 273
options pricing model used monte carlo
black scholes black scholes black scholes simulation based
options pricing options pricing options pricing customised options
model model model pricing model
key assumptions used
weighted average share price £ 391 388 321 363
range of exercise prices £ 314 321–407 nil nil
range of expected volatility  54 41–58 41–56 53
range of riskfree rates  5 4–5 5 5
range of expected option term life 3 years 4 to 7 years 1 to 4 years 3 years
expected dividends per year 10p 10p 10p 10p
assumptions on expected volatility and expected option term have been made on the basis of historical data wherever available for the period corresponding
with the vesting period of the option best estimates have been used where historical data is not available in this respect
marketrelated performance conditions which are used to determine the vesting pattern on the ltip options are built into the monte carlo simulation based
options pricing model used to determine fair value of these options
the group reported a provision for national insurance and other social security taxes of £11 million 2004 £9 million in respect of liabilities arising from the above
sharebased payment transactions
34 related party transactions
the parent company of the group is reuters group plc incorporated in the united kingdom reuters group plc owns 4 of its own shares relating to the share
buyback programme see note 27 on page 89 2 of reuters group plc is owned by the group esots see note 27 on page 89
the esots were established by reuters in august 1990 january 1994 and august 2004 the esots established in august 1990 and january 1994 are funded by
reuters limited the esot established in august 2004 is funded by reuters sa the trustee of the esots is an offshore independent professional trustee shares
purchased by the trusts which are deducted from shareholders’ equity on the consolidated balance sheet will be used either to meet obligations under the
group’s restricted share plans to satisfy the exercise of options granted or to be granted under other employee share option plans 96 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
no amounts were provided for or written off in the income statement in respect
of amounts receivable from related parties
the above amounts relate to the rendering or receiving of services between
both parties including agency agreements and licence agreements detailed
summaries of key transactions in respect of the group’s related parties are set
out below except as noted below these services are ongoing and continued at
historical levels to the date of this report
during 2005 reuters paid £47 million 2004 £42 million to the group’s 
pension funds
factiva
factiva and reuters each provide a variety of services to the other factiva hosts
and maintains reuters pictures archiving service under a rolling oneyear
contract under a threeyear agreement which commenced on 1 january 2003
and has been renewed for a further threeyear period from 1 january 2006
factiva permits reuters to incorporate factiva content in certain reuters
products under a separate licence factiva also permits reuters staff to access
factiva content the total cost of the services provided by factiva to reuters in
2005 was £4 million 2004 £9 million
reuters provides factiva with technical and administrative support services
including use of reuters premises facilities finance and payroll services subject to
termination by factiva on six months’ written notice or reuters on twelve months’
written notice reuters also provides content primarily its newswires to factiva for
incorporation in certain factiva services for a fixed fee and royalty payment this
agreement was renewed for a further four year period from 1 january 2004 in
2004 reuters granted factiva an additional trademark licence permitting factiva
to use reuters name for an annual fee based on a percentage increasing in the
next calendar year of factiva’s gross revenues the licence continues until breach
insolvency dissolution of the joint venture or reuters owning less than 50 of
factiva the total cost of the services provided by reuters to factiva in 2005 was
£39 million 2004 £23 million under the terms of the agreement with dow jones
 co relating to the formation of the factiva joint venture reuters has agreed
that it will only supply its content in accordance with its written policy regarding
distribution of content to third parties and that in the event that it makes its
proprietary content available to any service that competes or would reasonably 
be deemed to compete with factiva then any revenue from such sale shall be paid 
to factiva such terms also apply to dow jones
in addition to the above amounts reuters held a loan payable to factiva of £11
million at the start of 2005 on which interest was payable at libor this was repaid
during 2005 a further loan of £10 million repayable to factiva on which interest is
payable at libor was made by factiva to reuters during 2005 and remained
payable at 31 december 2005
3 times square associates llc ‘3xsq associates’
reuters is party to a lease entered into in 1998 with 3xsq associates an entity
owned by reuters and rudin times square associates llc formed to acquire
develop and operate the 3 times square property and building pursuant to the
lease which has been amended from time to time reuters leases approximately
692000 square feet for a term of approximately 20 years expiring in 2021 with an
option to terminate 10 years early as to 77000 square feet and three successive
tenyear renewal options as to the entirety of the space reuters made payments
of 33 million £18 million to 3xsq associates during 2004 and 2005 in respect of
rent operating expenses taxes insurance and other obligations the lease is
supported by a 120 million letter of credit provided by reuters
key management personnel compensation including the group’s directors is shown in the table below
2005 2004
£m £m
salaries and shortterm employee benefits 8 10
postemployment benefits 1 2
other longterm benefits – –
termination benefits 1 –
sharebased payments 6 4
total 16 16
more details of directors’ remuneration and senior management compensation are given in section 9 of the remuneration report
during the year the group carried out a number of transactions with related parties mainly being relationships where the group holds investments in associates
and joint ventures these transactions involved supply of services and were entered into in the normal course of business and on an arm’s length basis
details of these transactions are shown below
31 december amounts amounts 31 december
2004 invoiced collected 2005
£m £m £m £m
amounts receivable
joint ventures
factiva 3 39 38 4
other joint ventures – 1 1 –
associates – 3 3 –
total amounts receivable 3 43 42 4
amounts payable
joint ventures
factiva 1 4 4 1
associates
3 times square associates – 18 18 –
other associates – 2 2 –
total amounts payable 1 24 24 1 35 contingencies and commitments
contingent liabilities and contingent assets
except as described below neither the group nor any of its directors members
of senior management or affiliates is subject to any legal or arbitration
proceedings which may have or have had in the recent past significant effects on
the group’s financial performance or profitability a description of certain legal
proceedings relating to instinet group was included in the 2004 annual report
and form 20f but is not included in this annual report in light of instinet group’s
sale to nasdaq in december 2005 the group has no contingent assets
douglas gilstrap and myron tataryn v radianz ltd radianz
americas inc reuters limited blaxmill six limited reuters c
llc reuters america llc and british telecommunications plc
on 12 september 2005 radianz’s former ceo douglas gilstrap filed a class
action lawsuit purportedly on behalf of radianz option holders against radianz
radianz americas inc reuters limited blaxmill six limited reuters c llc
reuters america llc and bt in the united states district court southern
district of new york relating to the cash cancellation of radianz options in
conjunction with reuters sale of radianz to bt the complaint does not specify
the amount of damages sought under the claims and indemnification provision
of the radianz sale agreement between bt and reuters reuters elected to
take control of the defence of this litigation as to all defendants on 15
december 2005 a first amended complaint was filed which among other
things added myron tataryn a former radianz employee based in the uk as an
additional named plaintiff and purported class representative on 30 january 
2006 the defendants filed a motion to dismiss the case in its entirety on forum
non conveniens grounds the court has stayed the initiation of any discovery or
the filing of any other dispositive motions until the motion to dismiss for forum
non conveniens is decided oral arguments on the motion to dismiss for forum
non conveniens are now scheduled for 12 may 2006 the group believes the
claims are without merit and intends to defend them vigorously
ariel uk limited v reuters group plc reuters c llc reuters
transactions services limited instinet group incorporated the
nasdaq stock market inc and silver lake partners lp
on 16 november 2005 ariel uk limited brought an action in the united states
district court southern district of new york against reuters group plc reuters
c llc reuters transactions services limited instinet group nasdaq and
silver lake partners lp  seeking a declaration that a 1975 agreement between
ariel and instinet permits ariel to license reuters current patent portfolio to
others the complaint as amended on 28 february 2006 also claims breach of
contract copyright infringement and requests for declaratory relief ariel seeks
50 million compensatory damages from reuters and instinet group the
defendants have until 31 march 2006 to respond by answering or moving to
dismiss the amended complaint reuters intends to do both the court has
stayed discovery until the anticipated motions to dismiss the amended
complaint are decided the group believes the claims are without merit and
intends to defend them vigorously
reuters group plc annual report and form 20f 2005 97
capital commitments
capital expenditure contracted for at the balance sheet date but not yet incurred is as follows
2005 2004
£m £m
property plant and equipment 16 37
intangible assets 13 –
total capital commitments 29 37
group’s share of contingent liabilities and commitments in respect of associates and joint ventures
the group’s share in contingent liabilities and commitments in relation to its interest in associates and joint ventures was £nil 2004 £nil
warranties and indemnities
during 2005 the group has disposed of a number of its investments and provided standard warranties and indemnities as part of the sale and purchase
agreements the likelihood of the group incurring any liability in relation to these is considered remote therefore no provisions have been recorded and no
disclosure is presented in the financial statements
operating lease payables
minimum payments for noncancellable operating leases for terms in excess of one year from 31 december are as follows
2005 2004
year ended 31 december £m £m
2005 – 103
2006 79 81
2007 74 74
2008 63 67
2009 54 61
2010 51 55
thereafter 352 252
total operating lease payables 673 693
at 31 december 2005 future minimum sublease payments expected to be received under noncancellable subleases were £114 million 2004 £24 million
the group leases various facilities under noncancellable operating lease agreements the leases have various terms escalation clauses and renewal rights 
the group also leases equipment under noncancellable operating lease agreements 98 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
36 acquisitions
acquisition of telerate
on 3 june 2005 reuters purchased the trade and assets of telerate and 100 of the share capital of three of telerate’s subsidiaries in exchange for cash and 
the group’s 14 holding in savvis convertible preference shares in addition on 6 june 2005 reuters carried out a merger with quick telerate the distributor of
telerate’s products in japan all of these purchases have been accounted for as acquisitions as a result of this acquisition reuters disposed of its 485 holding 
in quick corporation the parent of quick telerate the profit on disposal is detailed within note 37
book fair value provisional
value adjustments fair value
£m £m £m
noncurrent assets
intangible assets 74956
property plant and equipment 312
current assets
cash and cash equivalents 16 – 16
other current assets 19 – 19
current liabilities 31 1 30
noncurrent liabilities 3 2 5
net assets acquired 11 47 58
goodwill 72
total consideration 130
consideration satisfied by
cash including £8 million of transaction fees 99
fair value of investment in savvis convertible preference shares 31
total consideration 130
the fair value adjustments in respect of intangible assets are due to the recognition of £2 million in respect of trademarks and £53 million in respect of customer
relationships which have been independently valued partly offset by the writeoff of £6 million of intangibles that were recorded on telerate’s balance sheet prior
to the acquisition goodwill represents the value of synergies arising from the acquisition and the acquiree’s assembled work force the adjustments to property
plant and equipment current assets current liabilities and noncurrent liabilities relate to valuation adjustments and are provisional based on management’s best
estimates the fair value adjustments relating to the telerate acquisition will be finalised in the 2006 financial statements
the outflow of cash and cash equivalents on the acquisition can be calculated as follows
£m
cash consideration 99
cash acquired 16
total outflow of cash and cash equivalents 83
from the date of acquisition to 31 december 2005 the acquisition contributed £74 million to turnover £5 million loss before interest and amortisation of intangibles
and £5 million loss before amortisation but after interest
if the acquisitions had been made at the beginning of the financial year telerate would have contributed £133 million to revenue and incurred a £21 million loss 
this information takes into account the amortisation of acquired intangible assets together with related income tax effects and should not be viewed as indicative
of the results of operations that would have occurred if the acquisitions had been made at the beginning of the year reuters group plc annual report and form 20f 2005 99
other acquisitions
during 2005 reuters acquired the trade and assets of tremont capital management’s hedge fund database business march 2005 and the trade and assets of the
hedgeworld group in march 2005 reuters also purchased the share capital of image group limited trading as action images in september 2005 and ecowin ab
in november 2005
book fair value provisional
value adjustments fair value
£m £m £m
noncurrent assets
intangible assets 11011
current assets
cash and cash equivalents 4– 4
other current assets 2– 2
current liabilities 6 – 6
noncurrent liabilities – 1 1
net assets acquired 19 10
goodwill 31
total consideration 41
consideration satisfied by
cash 36
other 5
total consideration 41
 other consideration principally comprises the issue of £3 million of loan notes relating to the acquisition of image group limited
the fair value adjustments in respect of intangible assets are due to the recognition of £3 million in respect of trademarks £2 million in respect of acquired technology and
£5 million in respect of customer relationships which have been independently valued goodwill represents the value of synergies arising from the acquisition and the
acquiree’ s assembled work force the adjustments to current assets and noncurrent liabilities relate to valuation adjustments and are provisional based on management’ s
best estimates the fair value adjustments relating to these acquisitions will be finalised in the 2006 financial statements
the outflow of cash and cash equivalents on the acquisition can be calculated as follows
£m
cash consideration 36
cash acquired 4
total outflow of cash and cash equivalents 32
from the date of acquisition to 31 december 2005 the acquisitions contributed £4 million to turnover £1 million to profit before interest and amortisation of
intangibles and £nil to profit before amortisation but after interest if reuters had acquired the assets at the beginning of the financial year the acquisitions would
have contributed £13 million to revenue and £3 million to profit
37 disposals
gains on the disposal of associates and availableforsale financial assets include £4 million arising from the disposal of reuters holding in quick corporation and £33
million in respect of the partdisposal of shares in tsi gains on disposal of subsidiary undertakings mainly comprise an £8 million gain on disposal of a number of uk
entities partly offset by a £6 million loss on disposal of the reuters portfolio management system rpms business
realised net gains all of which were recorded in the income statement within continuing operations were
£m
on disposal of subsidiary undertakings 4
on disposal of associates and availableforsale financial assets 38
recorded in the income statement 42
during 2005 reuters disposed of a number of wholly owned subsidiary undertakings including radianz and instinet group these subsidiaries were treated as
discontinued operations in accordance with ifrs 5 and are therefore disclosed separately in note 7
during 2004 the group made net disposal gains of £235 million principally relating to the reduction of its stake in tsi from 484 to 88 £149 million and the
disposal of its 342 stake in gl trade £47 million 100 reuters group plc annual report and form 20f 2005
notes to the financial statements continued
38 post balance sheet events
during the period 1 january 2006 to 7 march 2006 the group purchased 33 million shares representing total consideration of £137 million as a part of its
continuing share buyback programme announced in july 2005
the following table provides a summary of the shares bought back during this period
total number approximate
of shares value of shares
purchased as that may yet
part of publicly average price be purchased
announced paid per under the
month programme share £ programme £m
january 10500000 432 733
february 18450000 406 658
march 4500000 382 640
the group expects to contribute around £47 million to its material defined benefit plans in 2006 furthermore the company is currently in discussion with the
trustees of the rpf regarding a proposed plan to fund the deficit at 31 december 2005 the rpf deficit was £223 million £174 million after adjustment for deferred
taxation
39 significant subsidiaries and joint ventures
the principal subsidiary undertakings and joint ventures at 31 december 2005 all of which are included in the consolidated financial statements are shown below
subsidiary undertakings country of incorporation principal area of operation percentage of equity shares held
reuters ag germany germany 100
reuters america holdings inc usa worldwide 100
reuters america llc usa usa 100
reuters australia pty limited australia australia 100
reuters bv netherlands netherlands 100
reuters canada limited canada canadausa 100
reuters europe sa switzerland spainportugal 100
reuters finance plc uk uk 100
reuters group overseas holdings ltd uk worldwide 100
reuters holdings limited uk uk 100
reuters hong kong limited cook islands hong kong 100
reuters international holdings sarl switzerland worldwide 100
reuters investments limited uk uk 100
reuters investments 2002 limited uk uk 100
reuters italia spa italy italy 100
reuters japan kabushiki kaisha japan japan 100
reuters limited uk worldwide 100
reuters middle east limited cook islands middle east 100
reuters nederland bv netherlands netherlands 100
reuters research inc usa usa 100
reuters sa switzerland worldwide 100
reuters services sa france france 100
reuters singapore limited singapore singapore 100
reuters telerate inc usa usa 100
reuters transaction services limited uk worldwide 100
joint ventures country of incorporation principal area of operation percentage of equity shares held
factiva llc usa worldwide 50
3 times square associates llc usa usa 50
 denotes investment companies all other entities are operating companies
the financial years for all of the above undertakings end on 31 december
factiva is a 50 joint venture with dow jones providing a broad range of global news and a deep historical archive of business information which client
organisations can integrate into their business applications and intranet portals
3 times square associates llc is a 50 joint venture with rudins times square associates llc formed to acquire develop and operate the 3 times square
property and building reuters group plc annual report and form 20f 2005 101
40 firsttime adoption of ifrs
an explanation of how the transition from uk gaap to ifrs has affected the group’s income statement financial position and cash flows is given in the
reconciliations and explanatory notes below
reconciliation of the consolidated income statement for the year ended 31 december 2004
explanatory notes are given below the tables
discontinued 
uk gaap ifrs impact operations ifrs
note £m £m £m £m
revenue 2885 – 546 2339
development and software licences b 21
employee benefits – sharebased payments c 7
employee benefits – others including pensions d 7
goodwill amortisation and impairment e 40
ifrs adjustments to discontinued operations g 10
operating costs 2732 9 536 2187
profitloss on disposal of subsidiaries h 6
other operating income 50 6 2 42
operating profit 203 3 12 194
net finance costs f 4 1 7 12
profit on disposal of associates and fixed asset investments h 225 2 20 203
share of profitslosses from associates and joint ventures f 4 – 7 11
share of joint ventures disposal of investment 9 – 9 –
share of profitslosses from associates and joint ventures 13 – 2 11
profitloss before taxation 437 – 41 396
taxation i 73 11 22 40
profitloss from continuing operations 364 11 19 356
discontinued operations
profit after tax from discontinued operations l – – 19 19
profit from discontinued operations – – 19 19
profit for the period 364 11 – 375
attributable to
equity holders of the parent 351 11 2 364
minority interest 13 – 2 11
basic eps 251p 08p 01p 260p
basic eps from continuing operations 260p 08p 14p 254p 102 reuters group plc annual report and form 20f 2005
this reconciliation has been updated since the 2005 interim press release
primarily due to the reclassification of the rpf to a defined benefit plan under
ifrs the rpf is a complex hybrid pension fund with both defined company
and employee contributions and defined employee benefits the rpf has
been in existence since 1893 and has historically been treated as a defined
contribution plan
under the rules of the pension fund the group is not able to access any surplus
in the rpf although the group and employees make defined contributions to
the fund the rpf does not provide for contributions to be made to individual
plan participant accounts under ias 19 the rpf is treated as a defined benefit
plan from the date of transition to ifrs at transition the net plan liabilities are
£nil at 31 december 2004 a net liability of £178 million has been recognised
together with a related deferred tax asset of £39 million
explanatory notes to the uk gaap to ifrs
reconciliations
a transition date and firsttime adoption of ifrs the group’s transition date to
ifrs was 1 january 2004 all adjustments on firsttime adoption were recorded
in shareholders’ equity on the date of transition except for adjustments
relating to ias 32 ‘financial instruments disclosure and presentation’ and 
ias 39 ‘financial instruments recognition and measurement’ which were
recorded in shareholders’ equity at 1 january 2005
ifrs 1 sets out the transition rules which must be applied when ifrs is
adopted for the firsttime as a result certain of the requirements and options
in ifrs 1 may result in a different application of accounting policies in the
2004 restated financial information from that which would apply if the 2004
financial statements were prepared using full retrospective adoption of 
ifrs the standard sets out certain mandatory exceptions to retrospective
application and certain optional exemptions the optional exemptions taken
by the group are
1 business combinations the group has elected not to apply ifrs 3
‘business combinations’ retrospectively to business combinations that
took place prior to the transition date to ifrs consequently goodwill
arising on business combinations before the transition date remains at its 
previous uk gaap carrying value at the date of transition from the uk
gaap financial statements the functional currency of certain subsidiary
goodwill and intangible balances has been changed to reflect the
functional currency of the subsidiary to which the goodwill relates which
resulted in £13 million additional translation losses being recorded in
opening equity at the date of transition
2 employee benefits the group has elected to recognise all cumulative
actuarial gains and losses relating to employee benefit schemes in full 
in the statement of recognised income and expense the impact is to
recognise a net liability at 1 january 2004 of £17 million
3 cumulative translation differences under ias 21 ‘the effects of changes
in foreign exchange rates’ cumulative translation differences within
reserves are recycled from equity to the income statement on disposal 
of a foreign operation in order to eliminate the need to apply this
requirement retrospectively the group took the exemption to set
cumulative translation differences to zero at the date of transition
resetting to zero has no impact on net equity
4 sharebased payment transactions the group adopted the exemption in
ifrs 1 which allows a firsttime adopter to apply the new standard ifrs 2
‘sharebased payment’ only to share options and equity instruments
granted after 7 november 2002 that have not vested by 1 january 2005
this will result in a number of existing schemes not being considered
under ifrs and charges in 2004 and 2005 are likely to be lower than in
2006 when the full impact of ifrs 2 will be seen
5 financial instruments the group took the exemption in ifrs 1 to apply
ias 32 and ias 39 from 1 january 2005 the comparative information in
2004 for financial instruments within the scope of ias 39 is based on 
the underlying uk gaap numbers the main differences relate to the 
fair value of certain financial assets and recognition of all derivatives
including embedded derivatives at fair value the adjustment to increase
opening equity as at 1 january 2005 for the adoption of ias 32 and ias 39
is £129 million
reconciliation of shareholders’ equity
31 december 1 january 
2004 2004
note £m £m
reported under uk gaap 612 407
firsttime adoption of ifrs a
development and software licences b4949
employee benefits d 14 14
goodwill amortisation e66
taxation i 21 21
post balance sheet events – dividends j8686
financial assets and derivatives k––
acquired intangible assets a 14 14
other 5 5
87 87
ongoing ifrs adjustments
development and software licences b 21 –
employee benefits d 200 –
goodwill amortisation and impairments e29 –
taxation i63 –
post balance sheet events – dividends j––
financial assets and derivatives k––
acquired intangible assets a 1 –
other 1 –
129 –
total 42 87
shareholders’ equity under ifrs 570 494
 date of transition to ifrs for the group
notes to the financial statements continued the mandatory exceptions outlined in ifrs 1 relevant to the financial
statements with which reuters has complied relate to
6 estimates estimates under ifrs at the date of transition are required to be
consistent with estimates made for the same date under previous gaap 
7 assets classified as held for sale and discontinued operations an entity
with a transition date to ifrs before 1 january 2005 shall apply the
transitional provisions of ifrs 5 which require prospective application 
of ifrs 5 earlier application is permissible so long as the necessary
valuation information was available at the time the classification criteria
would originally have needed to be met the group has applied ifrs 5
from 1 january 2005 but has used the relevant statement headings in its
2004 comparative numbers
b development and software licences under uk gaap  both internally
developed and acquired software licence costs were expensed through 
the income statement in the year that they were incurred under ifrs the
group capitalises expenditure on development of new or substantially
improved products that is incurred between establishing technical feasibility
and the asset becoming income generating provided it satisfies the
conditions set out in ias 38
c employee benefits sharebased payments under uk gaap  charges were
based on the intrinsic value of awarded shares at grant date with no charge
required for certain saye and dsop  under ifrs the income statement cost
is based on the fair value of all sharebased awards at grant date if equity
settled or at the balance sheet date if cashsettled the cost is calculated
using option pricing models and for equitysettled awards applies to all
options granted after 7 november 2002 that have not vested by 1 january
2005 and amortised over the vesting period of the options
d employee benefits pension costs under uk gaap  the expected costs 
of defined benefit pension plans and postretirement medical benefits were
charged against the income statement over the expected service lives of
employees the group has elected to adopt the december 2004 amendments
to ias 19 ‘employee benefits’ hence differences between actual and
expected return on assets changes in the retirement benefit obligation due 
to experience and changes in actuarial assumptions are included in the
statement of recognised income and expense the amount reflected on the
balance sheet is therefore the present value of the defined benefit obligation
less the fair value of defined benefit plan assets the service cost of post
retirement benefits accruing the unwinding of the discount rate on the
scheme liabilities and the expected return on scheme assets are accounted 
for as operating costs under ias 19 the group reassessed the classification 
of its pension schemes resulting in the reclassification of the rpf as a defined
benefit scheme from the date of transition the restated opening ifrs balance
sheet reflects the present value of the defined benefit obligations less the fair
value of the plan assets of the group’s defined benefit schemes
e goodwill amortisation and impairments under uk gaap  goodwill was
amortised through the income statement on a straight line basis and
impairment reviews were carried out periodically or when a specific event
occurred under ifrs 3 goodwill is not amortised through the income
statement but instead is subject to an annual test for impairment resulting 
in adjustments in the income statement and the balance sheet
f share of profitslosses from joint ventures and associates this is reported
net of interest and taxation under ifrs whereas under uk gaap  interest
and taxation were reported separately in the respective headings in 2004
the group acquired the 49 voting interest in radianz that it did not already
own under uk gaap equity accounting continued for the original 51
interest and the 49 interest was held on the balance sheet as an asset held
for sale under ifrs from the date of acquisition of the remaining 49 it
was necessary to consolidate 100 of radianz ifrs 5 presentation was used
and hence the results of radianz prior to 16 november 2004 were presented
within discontinued operations on the income statement
g ifrs adjustments to discontinued operations these adjustments relate to
employee benefit costs as described in c and d above and deferred
taxation as set out in i below
h profitloss on disposals under uk gaap  the profit or loss on disposals
represented the difference between the balance sheet carrying value and
the net disposal proceeds under ifrs any currency translation differences
previously taken to reserves are now included in the profit on disposal
calculation also the carrying value will be higher under ifrs as subsidiary
goodwill is no longer amortised
i taxation under ifrs deferred tax is recognised on the basis of temporary
differences between the carrying value of assets and liabilities in the balance
sheet and their tax bases deferred tax has been recognised on the ifrs
adjustments to the extent that they result in a temporary difference the
principal items that result in adjustments to deferred tax between uk gaap
and ifrs are fair values of employee benefits development and software
licences acquired intangible assets and share based payments the £6
million change in the carrying value of goodwill at 1 january 2004 represents
the creation of a deferred tax liability on intangibles acquired in past
business combinations
j postbalance sheet event dividends under uk gaap  dividends are
provided for in the year in respect of which they are declared or proposed
by the directors under ifrs dividends declared after the balance sheet
date are not recognised as an adjusting postbalance sheet event dividends
are only provided for when they are declared the final 2003 dividend is
derecognised on transition to ifrs and has been disclosed as a movement
in reserves during 2004 alongside the 2004 interim dividend
k financial assets and derivatives under ifrs the group adopted ias 32
‘financial instruments disclosure and presentation’ and ias 39 ‘financial
instruments recognition and measurement’ at the effective date of 
1 january 2005 ias 39 covers the recognition measurement and
derecognition of financial instruments the group decided to take the
exemption granted in ifrs 1 which removed the requirement to produce
2004 comparatives financial assets and liabilities recognised at 
31 december 2004 have therefore been valued in accordance with 
the requirements of uk gaap 
l profit after taxation from discontinued operations the adoption of ifrs 5
has resulted in presentation of certain group subsidiaries as discontinued
operations for more details on discontinued operations please refer to note 7
explanation of principal differences between the cash flow
statement presented under uk gaap and the cash flow
statement presented under ifrs unaudited
the cash flow statement has been prepared in conformity with ias 7 
‘cash flow statements’ the principal differences between the 2004 cash flow
statement presented in accordance with uk gaap and the cash flow statement
presented in accordance with ifrs for the same period were 
as follows
1 under uk gaap  net cash flow from operating activities was determined
before considering cash outflows from a returns on investments and servicing
of finance b dividends received from associates and c taxes paid under
ifrs net cash flow from operating activities is determined after these items
2 under uk gaap  capital expenditure financial investments and acquisitions
were classified separately while under ifrs they are classified as investing
activities
3 under uk gaap  dividends paid were classified separately while under ifrs
dividends paid are classified as financing activities
4 under uk gaap  movements in shortterm investments were not included in
cash but classified as management of liquid resources under ifrs short
term investments with a maturity of three months or less at the date of
acquisition are included in cash and cash equivalents
reuters group plc annual report and form 20f 2005 103 104 reuters group plc annual report and form 20f 2005
summary of differences between ifrs as adopted by the eu and us gaap
accounting principles
these consolidated financial statements have been prepared in accordance
with ifrs as adopted by the eu which differ in certain significant respects from
us gaap 
material differences between ifrs as adopted by
the eu and published ifrs
for the group there are no material differences between the application of
ifrs as issued by the international accounting standards board and ifrs as
adopted by the eu
material differences between ifrs as adopted by
the eu and us gaap
a description of the relevant accounting principles which differ materially is
given below
a goodwill and other intangibles
goodwill
prior to the adoption of ifrs on 1 january 2004 goodwill arising on acquisitions
before 1998 and accounted for under the purchase method was eliminated
against equity goodwill arising on acquisitions from 1998 to 31 december 2003
was capitalised and amortised over its useful life
under ifrs from 1 january 2004 goodwill arising on acquisitions is no 
longer amortised and is allocated to cash generating units and assessed for
impairment at least annually the group has elected not to apply ifrs 3
‘business combinations’ retrospectively to business combinations that took
place prior to the group’s 1 january 2004 transition date to ifrs and
amortisation arising prior to transition has not been reversed goodwill arising
on acquisitions before 1 january 2004 remains at its previous carrying value at
the date of transition to ifrs
under us gaap  prior to 1 july 2001 goodwill was amortised over its estimated
useful life in 2002 reuters adopted the provisions of fas 142 ‘goodwill and
other intangible assets’ and as a result goodwill arising on acquisitions completed
after 30 june 2001 was not amortised from 1 january 2002 goodwill was no longer
subject to amortisation under us gaap  goodwill is assessed for impairment at
least annually as a result of differences in the carrying value of goodwill under us
gaap  impairment charges may differ from those recorded under ifrs
in addition to differences arising from the previous gaap requirement to amortise
goodwill as described above goodwill balances at the date of ifrs adoption
may differ from us gaap balances because of differences in the measurement
of the fair value ascribed to quoted securities issued to effect a business
combination differences in the treatment of contingent purchase consideration
and differences in the definition of separately identifiable intangible assets of
the acquiree to which purchase consideration should be allocated
other intangibles
prior to the adoption of ifrs on 1 january 2004 identifiable intangibles
acquired in a business combination were required to be recognised separately
on the balance sheet and amortised over their useful life
under us gaap  a different definition of intangible assets is applied therefore
additional intangible assets were identified under us gaap giving rise to
additional amortisation
b joint ventures and associates
under us gaap  the group’ s share of the results of joint ventures and associates
is adjusted to reflect the nonamortisation of goodwill since 1 january 2002
under ifrs the group has elected not to apply ifrs 3 ‘business combinations’
retrospectively to business combinations that took place prior to the transition
date to ifrs and this also applies to past acquisitions of investments in associates
and of interests in joint ventures goodwill arising on the acquisition of associates
and joint ventures before the transition date remains at its previous carrying value
at the transition date to ifrs of 1 january 2004
c deferred gain on assets contributed to joint ventures
prior to the adoption of ifrs on 1 january 2004 where the fair value of assets
contributed to joint ventures and associates is greater than the book value the
difference is recognised in reserves under us gaap  the difference is released
to the income statement over the anticipated life of the long lived assets
contributed to the venture
d gains and losses on disposal of subsidiary and associated
undertakings
on the disposal of subsidiaries and associate undertakings a different gain or
loss on sale may arise as a result of the following
goodwill
prior to the transition to ifrs goodwill arising on business combinations was
amortised on a systematic basis or prior to 1998 written off directly to
reserves under us gaap  goodwill is not amortised but tested for impairment
on an annual basis under us gaap  therefore the carrying value of goodwill 
is different and results in different gains or losses on disposal
investment hedge on foreign subsidiaries
under ifrs gains and losses on the fair value of instruments designated as
hedges against the carrying value of group undertakings are recognised in a
hedging reserve within equity to the extent that the hedge is effective on
disposal of such undertakings cumulative gains and losses that had previously
been recognised in the hedging reserve are transferred and recognised in 
the income statement under us gaap  reuters has not designated any of 
its derivative instruments as qualifying hedge instruments under fas 133
accordingly no cumulative gains and losses from hedging are transferred to 
the income statement on disposal of group undertakings under us gaap 
recycling of foreign currency translation differences
under ifrs gains and losses on the retranslation of assets and liabilities of
foreign operations that have been recorded in equity since the ifrs transition
date of 1 january 2004 are transferred to the income statement and recognised
as part of the gain or loss on disposal of those operations
under us gaap  amounts attributable to foreign operations that have been
accumulated in the translation adjustment component of equity from the date
of acquisition are removed from the separate component of equity and are
reported as part of the gain or loss on disposal of those operations
differences in the amounts recognised on disposals under us gaap and ifrs
arise as the currency translation reserve under ifrs was set to zero on adoption
of ifrs as at 1 january 2004 and also due to underlying gaap differences in
the carrying values under ifrs and us gaap of the underlying foreign currency
assets and liabilities being retranslated
in 2005 there was a us gaap adjustment of £25 million to reduce the radianz
loss on sale and an adjustment of £57 million to reduce the instinet gain on
sale only instinet qualifies as a discontinued operation under us gaap 
e investments
under ifrs prior to the adoption of ias 32 ‘financial instruments disclosure and
presentation’ and ias 39 ‘financial instruments recognition and measurement’
on 1 january 2005 fixed asset investments were held in the balance sheet at cost
net of permanent diminution in value as assessed by the directors
under ifrs following the adoption of ias 32 and ias 39 availableforsale
assets and financial assets held for trading are initially recognised at fair value in
the translation reserve and subsequently remeasured at fair value the group
has classified all of its marketable securities as availableforsale with the
exception of its investment in savvis which was classified as a financial asset at
fair value through profit or loss before being disposed of in 2005 realised and
unrealised gains and losses on financial assets held for trading are included in
the income statement in the period in which they arise unrealised gains and
losses arising from changes in fair value of availableforsale assets are
recognised in the statement of recognised income and expense
under us gaap  traded investments are stated at fair value with unrealised
gains or losses included in the income statement investments which have a
readily determinable fair value and are classified as availableforsale are stated
at fair value with unrealised gains or losses included in other comprehensive
income investments in availableforsale assets which do not have a readily
determinable fair value are carried at historic cost
f stock options
employee share awards
under ifrs compensation charges relating to equitysettled employee share
awards made after 7 november 2002 but not vested at 1 january 2005 are
based on the fair value of the awards at the date of grant expensed on a
straightline basis over the vesting period of the award at each balance sheet reuters group plc annual report and form 20f 2005 105
date the group revises its estimate of the number of options that are expected
to become exercisable cashsettled sharebased payments are accrued over
the vesting period of the award based on the current fair market value at each
balance sheet date
under us gaap  the group applies the measurement provisions of apb 25
‘accounting for stock issued to employees’ and recognises the intrinsic value 
of options granted as determined on the measurement date over the vesting
period under us gaap  additional compensation cost is recognised when the
vesting of an option has been accelerated and those options would otherwise
have been forfeited unvested additional compensation cost is also recognised
where a new measurement date is established following the amendment of a
stock option plan where the exercise price is less than the market value of the
underlying shares on the new measurement date
under reuters saveasyouearn saye plans shares are granted to employees
at a 20 discount under us gaap  the discount is treated as employee
compensation and is accrued over the vesting period of the grants under 
us gaap  if an saye scheme is offered at a lower price than those offered
previously and participants are able to transfer out of an existing scheme into
the new scheme variable plan accounting rules apply under these rules a
compensation charge is recorded on issue of the option for the intrinsic value
of the award at the grant date any subsequent movement in the share value
results in a remeasuring of the compensation charge which continues until the
option is exercised variable plan accounting applies to all options in existing
higher priced schemes and also to options in lower priced schemes to the
extent that those options have been transferred from a higher priced scheme
national insurance on stock options
under ifrs the liability for national insurance on stock options is accrued
based on the fair value of the options on the date of grant and adjusted for
subsequent changes in the market value of the underlying shares under us
gaap  this expense is recorded upon exercise of the stock options
options granted to nonemployees
under ifrs the transfer of employees that held unvested stock option awards
to a joint venture prior to 7 january 2002 does not give rise to a charge against
profit under us gaap  the stock awards are considered to be held by non
employees and accordingly a stock option expense relating to the fair value of
the unvested awards is included in ‘share of operating profitloss in joint
ventures’ over the remaining vesting period
g pensions
under ifrs pension assets defined benefit pension liabilities and pension
expense are determined using the projected unit credit method in a similar
manner to us gaap  however under ifrs all actuarial gains and losses which
arise in calculating the present value of the defined benefit obligation and the
fair value of plan assets are recognised immediately in the statement of
recognised income and expense
under us gaap  actuarial gains and losses in excess of the corridor are
recogised over the average remaining service life of the employees also under
us gaap an additional minimum liability is recorded when the accumulated
benefit obligation exceeds the fair value of the plan assets by an amount
greater than the liability recognised in the balance sheet in addition there is 
a transition asset or obligation recognised upon the adoption of fas 87
‘employers’ accounting for pensions’ which is then released to the income
statement over the average remaining service lives of the employees
h restructuring
under ifrs reuters recognises provisions for restructuring charges other than
termination benefits once the group has a present obligation legal or
constructive to incur the costs as a result of a past event it is probable that an
economic outflow will be required and a reliable estimate can be made 
a constructive obligation is considered to exist when a detailed formal plan 
is in place and a valid expectation has been raised in those affected t ermination
benefits are recognised when the group is demonstrably committed to a plan 
of termination when and only when the group has a detailed formal plan with
specified minimum contents for the termination and there is no realistic
possibility of withdrawal provisions for costs associated with the exit of a
property are recognised once the intention to exit has been announced
under us gaap  employee severance costs that are not onetime termination
charges are recognised when it is probable that these costs will be incurred and
the amount is capable of being estimated charges for costs associated with
the exit of properties are recognised upon vacating the property or legal
termination of the lease contract
under ifrs liabilities for terminating or reducing the activities of an acquired
company are only recognised as part of allocating the cost of a combination 
if they exist at the date of acquisition and meet certain recognition criteria
provisions for future losses or other costs expected to be incurred as a result 
of a business combination are not recognised
under us gaap  the group applies the provisions of eitf 953 ‘recognition 
of liabilities in connection with a purchase combination’ which requires
recognition of certain costs incurred in respect of exit activities and integration
if specified conditions are met as part of purchase accounting
i derivative instruments
in 2004 the group applied hedge accounting and was not required to record its
derivative instruments or any of its embedded derivative instruments on the
balance sheet at fair value compound derivative instruments having multiple
underlyings could be designated as net investment hedges and where this
treatment was applied foreign currency translation gains and losses arising on the
instruments were recorded in the statement of total recognised gains and losses
from 1 january 2005 reuters adopted ias 32 ‘financial instruments 
disclosure and presentation’ and ias 39 ‘financial instruments recognition 
and measurement’ these standards require all standalone and embedded
derivative instruments to be recognised on the balance sheet at fair value the
method of recognising subsequent changes in fair value depends on whether
the derivative is designated as a hedging instrument and if so the nature of
the item being hedged
under ifrs the group has designated certain derivatives as hedges of foreign
net investments and fair value hedges of borrowings for net investment hedges
fair value movements arising from these derivatives are recognised in a hedging
reserve until transferred to the income statement on disposal or impairment of
the underlying item for fair value hedges fair value movements are adjusted in
the carrying value of borrowings movements in the fair value of fair value hedges
are recognised in the income statement together with movements in the fair
value of the item being hedged to the extent that hedges are ineffective gains
and losses are recognised in the income statement
under us gaap  the group adopted fas 133 ‘accounting for derivative
instruments and hedging activities’ as amended by fas 138 on 1 january
2001 fas 133 introduced new rules in respect of hedge accounting and the
recognition of movements in fair value through the income statement as a
result of the adoption all derivatives and embedded derivative instruments
whether designated in hedging relationships or not are carried on the 
balance sheet at fair value the group has not designated any of its derivative
instruments as qualifying hedge instruments under fas 133 accordingly
changes in the fair value of derivative and embedded derivative instruments
have been included within the income statement under us gaap 
under ifrs ias 39 grants an exemption from the requirement to recognise
embedded foreign currency derivatives where the currency is commonly used 
in the economic environment of the host contract fas133 does not grant such
an exemption therefore the group identifies and separately accounts for more
embedded derivatives under us gaap than it does under ifrs
j consolidation of subsidiary undertakings
on 16 november 2004 reuters purchased the 49 voting stake of radianz that
it did not already own from equant thereby increasing its shareholding from
51 to 100 of the voting shares under ifrs from the date of acquisition of
the remaining 49 radianz was fully consolidated ifrs 5 ‘noncurrent assets
held for sale and discontinued operations’ was applied for presentation
purposes and hence radianz was classified as a subsidiary acquired with a view
to resale and included in the balance sheet as a noncurrent asset held for sale
liabilities directly associated with the noncurrent assets held for sale were also
shown separately the results of radianz prior to 16 november 2004 were
presented within discontinued operations in the income statement 106 reuters group plc annual report and form 20f 2005
summary of differences between ifrs as adopted by the eu and us gaap continued
under us gaap  radianz was treated as a joint venture of the group for the
period 1 january 2004 to 16 november 2004 the acquisition of the additional
49 stake in radianz was accounted for as a step acquisition at which time
radianz was fully consolidated as a subsidiary until its disposal during 2005 it is
the opinion of the directors that radianz met the criteria set forth in fas 144
‘accounting for the impairment and disposal of long lived assets’ as a disposal
group and was therefore classified as an asset heldforsale until its disposal
although reuters has no significant continuing involvement in the operations of
radianz following disposal the classification of radianz as a discontinued
operation is not considered appropriate given a significant level of continuing
cash outflows under us gaap  radianz had a higher carrying value resulting in a
greater write down to fair value less costs to sell at the end of 2004
k sale and leaseback transactions
under ifrs where gains and losses arise from transactions qualifying as sale and
operating leaseback such gains and losses on the sale of the properties and rental
expenses associated with subsequent leasebacks are recognised in the income
statement
under us gaap  where a portion of the leased property is sublet and that sub
lease is not minor the sale and leaseback is accounted for as financing the
asset is retained on the balance sheet at its written down value and depreciated
over the term of the lease the proceeds received from the sale of the property
are deferred on the balance sheet as a financing liability whilst lease rental
payments are offset against the liability as they are made the differences
between the initial proceeds received and subsequent rental payments are
recorded as financing costs over the term of the lease
l property plant and equipment
under ifrs the group does not capitalise interest on selfconstructed assets
under us gaap  interest incurred as part of the cost of constructing a fixed
asset is capitalised and amortised over the life of the asset
m taxation
under ifrs deferred taxes are accounted for in accordance with ias 12
‘income taxes’ which requires deferred tax to be accounted for on temporary
differences deferred tax assets are recognised to the extent that it is probable
that taxable profits will be available against which the deductible temporary
difference can be utilised assets not recognised are disclosed in note 26
under us gaap  deferred taxes are accounted for in accordance with fas 109
‘accounting for income taxes’ on all temporary differences and a valuation
allowance is established in respect of those deferred tax assets where it is more
likely than not that some portion will remain unrealised
deferred tax adjustments in the ifrs to us gaap reconciliation are primarily
the result of the deferred tax impact of the other us gaap adjustments made
in the reconciliation however tax adjustments also arise in respect of the
timing of recognition of deferred tax on share options and current tax benefits
n reclassification of minority interest
ifrs requires the presentation of minority interest within equity on the face of
the balance sheet under us gaap  minority interest is presented as a separate
item on the face of the balance sheet outside of equity
cash flows
the cash flow statement set out on page 52 has been prepared in accordance
with ias 7 ‘cash flow statements’ if the cash flow statement had been
prepared in accordance with fas 95 ‘statement of cash flows’ the net increase
in cash and cash equivalents would have been £84 million 2004 £36 million
this is because under ifrs the cash outflow in bank overdrafts of £8 million
2004 inflow of £12 million is classified as a movement in cash and cash
equivalents while under us gaap  the cash flow in bank overdrafts is classified
as a financing activity reuters group plc annual report and form 20f 2005 107
01 adjustments to net income
2005 2004
note £m £m
profitloss attributable to ordinary shareholders in accordance with ifrs 456 364
us gaap adjustments
intangible amortisation and impairment a 4 21
amortisation of gain on assets contributed to joint ventures c – 6
lossgain on disposal of subsidiaries d 32 18
lossgain on disposal of associated undertaking d – 35
gainloss on disposal of fixed asset investments availableforsale assets and 
financial assets held for trading e 42 18
stock options f 1 18
pensions g 28 1
restructuring h 9 105
derivative instruments i 42 58
consolidation of subsidiary undertakings j – 7
sale and leaseback k 1 1
taxation m 18 62
minority interest in respect of us gaap adjustments 3 7
net incomeloss attributable to ordinary shareholders in accordance with us gaap 396 439
2005 2004
pence pence
earnings and dividends
basic earnings per ads in accordance with us gaap 1702 1882
diluted earnings per ads in accordance with us gaap 1654 1832
dividend paid per ads 600 600
weighted average number of shares used in basic eps calculation millions 1396 1400
dilutive shares 41 36
used in diluted eps calculation 1437 1436
02 adjustments to shareholders’ equity
2005 2004
note £m £m
capital employed before minority interest in accordance with ifrs 570 371
us gaap adjustments
goodwill and other intangibles a 128 119
joint ventures and associates b 6 8
deferred gain on assets contributed to joint ventures c – 31
lossgain on disposal of fixed asset investments availableforsale assets and 
financial assets held for trading e 2 89
stock options f 57 33
pensions g 177 143
restructuring h 71 45
derivative instruments i 6 8
consolidation of subsidiary undertakings j – 7
sale and leaseback k 2 1
property plant and equipment l 1 1
taxation m 51 39
minority interest in respect of us gaap adjustments – 1
shareholders’ equity in accordance with us gaap 705 568
notes on the summary of differences between ifrs and us gaap 108 reuters group plc annual report and form 20f 2005
03 discontinued operations
under ifrs operations are classified as discontinued if they have been either
disposed of or are classified as held for sale and represent a major line of
business or geographical area of operation the disposal is part of a single
coordinated plan or if the operations constitute a subsidiary acquired
exclusively with a view to resale as discussed in note 7 on page 62 radianz
instinet and btc have been classified as discontinued operations under ifrs
under us gaap  operations are classed as discontinuing operations if the
operations and cash flows of the component will be eliminated from the ongoing
operations as a result of the disposal transaction and the group will not have any
significant continuing involvement in the operations after the disposal the
group has determined that it has not eliminated significant cash flows related to
radianz and therefore radianz does not meet the criteria for classification as a
discontinued operation accordingly the results of radianz for us gaap
purposes have been reported within continuing operations instinet and btc do
meet the criteria and have been classified within discontinued operations
under us gaap the key data for the operations classed as discontinuing
operations are analysed below
2005 2004
discontinued operations under us gaap £m £m
operating income 96 66
income tax charge 15 18
gain on disposal 133 –
minority interest 29 4
net income 185 44
basic profit per ads 794p 197p
diluted profit per ads 772p 189p
04 additional disclosures required by 
us gaap
derivative instruments
the current year loss on derivative instruments is £41 million 2004 £58 million
gain at 31 december 2005 the balance sheet includes a derivative asset of 
£15 million and a derivative liability of £11 million the current year loss includes
a gain of £17 million 2004 £21 million gain relating to currency forward
contracts embedded within customer and supplier contracts
recent accounting pronouncements
fasb statement no 123 revised 2004 ‘share–based
payment’ fas 123 r
in december 2004 the fasb issued fas 123 r the statement is a revision of
fasb statement no 123 ‘accounting for stockbased compensation’ and
supersedes apb opinion no 25 ‘accounting for stock issued to employees’ 
and its related implementation guidance fas 123 r establishes standards for
accounting for transactions in which an entity exchanges its equity instruments for
goods and services primarily employee services the statement requires a public
entity to measure the cost of employee services received in exchange for an
award of equity instruments to be based on the grant date fair value of the award
as determined using an option pricing model which considers the unique
characteristics of those instruments the cost should be recognised over the
period during which an employee is required to provide service in exchange for
the award fas 123 r is applicable to the group from the start of the first annual
reporting period beginning after 15 june 2005 the implementation of fas 123 r
will require the group to establish the grant date fair value for all its employee
share option plans the group is in the process of assessing these fair values and
the resulting impact on the group’s financial position
fasb statement no 153 ‘exchanges of nonmonetary assets’
fas 153
in december 2004 the fasb issued fas 153 as an amendment to apb opinion
no 29 ‘accounting for nonmonetary transactions’ the guidance in apb
opinion no 29 is based on the principle that exchanges on nonmonetary
assets should be measured based on the fair value of the assets exchanged
with certain exceptions to that principle fas 153 amends apb opinion no 29
to eliminate the exception for nonmonetary exchanges of similar productive
assets and replaces it with a general exception for exchanges on nonmonetary
assets that do not have commercial substance a nonmonetary exchange has
commercial substance if future cash flows of the entity are expected to change
significantly as a result of the exchange
fas 153 is effective for nonmonetary exchanges occurring in fiscal periods
beginning after 15 june 2005 this accounting pronouncement is not expected
to have a significant impact on the group’s financial position or the results of its
operations
fasb statement no154 ‘accounting changes 
and error corrections’ fas 154
in may 2005 the fasb issued fas 154 a replacement of apb opinion no 20
and fasb statement no 3 fas 154 provides guidance on the accounting for
and reporting of accounting changes and error corrections fas 154 is effective
for accounting changes and corrections of errors made in fiscal years beginning
after 15 december 2005
notes on the summary of differences between ifrs and us gaap continued reuters group plc annual report and form 20f 2005 109
for the year ended 31 december
two year consolidated financial summary ifrs
ifrs ifrs
2005 2004
£m £m
results
revenue
1
2409 2339
net finance costs 12 12
profit before tax 238 396
taxation 9 40
profit attributable to equity holders of the parent 456 364
net assets
noncurrent assets 1179 1025
current assets 957 1410
current liabilities 738 1249
noncurrent liabilities 829 714
noncurrent assets classified as held for sale 1 145
liabilities directly associated with noncurrent assets classified as held for sale – 47
570 570
property plant and equipment
additions 137 111
depreciation 103 130
2005 2004
ratios
basic earnings per ordinary share from continuing operations 163p 254p
dividends per ordinary share 100p 100p
book value per ordinary share
2
421p 265p
profit before taxation as a percentage of revenue  99 169
return on property plant and equipment
3
 642 857
return on equity
4
 969 1085
uk corporation tax rate  30 30
infrastructure
shares issued millions 1441 1436
employees 15300 14465
user accesses 346000 328000
notes
1 2004 and 2005 exclude revenue for instinet group which was classified as a discontinued operation and subsequently sold in 2005
ratios
2 book value per ordinary share represents total parent shareholders’ equity divided by the number of shares in issue after deducting shares held by employee share ownership trusts and repurchased
shares
3 return on property plant and equipment represents profit after taxation from continuing operations as a percentage of average property plant and equipment the average is calculated by adding
property plant and equipment at the start and the end of each year and dividing by two
4 return on equity represents profit attributable to equity holders of the parent divided by the average total parent shareholders’ equity the average is calculated by adding total parent shareholders’
equity at the start and the end of each year and dividing by two
eleven year consolidated financial summary 110 reuters group plc annual report and form 20f 2005
for the year ended 31 december
nine year consolidated financial summary uk gaap
uk gaap uk gaap uk gaap uk gaap uk gaap uk gaap uk gaap uk gaap uk gaap
2003 2002 2001 2000 1999 1998 1997 1996 1995
for the year ended 31 december £m £m £m £m £m £m £m £m £m
results
revenue 3235 3593 3885 3592 3125 3032 2882 2914 2703
net interest payablereceivable 29 20 9 3 4 2 80 61 60
profitloss before tax 56 344 158 657 632 580 626 652 558
taxation 22 23 107 136 196 196 236 210 185
profitloss attributable to ordinary shareholders 50 255 46 521 436 384 390 442 373
net assets
fixed assets 1192 1448 1963 1868 1205 1098 1046 1026 999
net current liabilitiesassets 89 190 134 293 170 577 790 525 387
longterm creditors 425 354 344 310 284 16 37 41 135
provisions 271 245 212 112 88 116 120 51 39
407 659 1273 1153 663 389 1679 1459 1212
tangible fixed assets
additions 130 154 276 282 244 296 361 372 304
depreciation 193 227 246 276 310 331 312 283 250
development expenditure 171 200 294 323 197 200 235 202 191
2003 2002 2001 2000 1999 1998 1997 1996 1995
ratios
earningsloss per ordinary share 36p 183p 33p 371p 309p 267p 240p 273p 232p
dividends per ordinary share 100p 100p 100p 160p 1465p 144p 130p 1175p 98p
book value per ordinary share
1
152p 307p 682p 737p 405p 233p 999p 883p 737p
profitloss before tax as a percentage of revenue  17 96 41 183 202 191 217 224 206
return on tangible fixed assets
2
 63 568 78 783 591 482 490 600 552
return on equity
3
 157 368 46 650 922 785 256 337 348
uk corporation tax rate  30 30 30 30 30 31 32 33 33
infrastructure
shares issued millions 1433 1433 1431 1429 1423 1422 1694 1689 1677
employees 16744 17414 19429 18082 16546 16938 16119 15478 14348
user accesses 338000 388000 592000 558000 520858 482380 429000 362000 327100
notes
information provided prior to 2004 year end was reported under uk gaap which may differ materially from ifrs the main differences impacting the group’s financial statements are on account of
sharebased payments employee benefits intangible assets and financial instruments
2003 and 2002 have been restated following adoption of uitf17 and uitf38 and the reclassification of transactionrelated regulatory fees following recently issued sec guidance
2003 and 2002 user accesses have been revised to reflect the exclusion of mobile and other lowcost accesses 1997 and 1998 have been restated to reflect changes to reporting user accesses in 1999
1999 and 2000 have been restated following adoption of frs 19
1995 and 1996 have been restated to reflect the effect of frs 10 issued in 1997 which required purchased goodwill and intangible assets to be capitalised and amortised through the profit and loss account
ratios
1 book value per ordinary share represents adjusted shareholders’ equity divided by the number of shares in issue after deducting shares held by employee share ownership trusts in 1995 to 1997
shares in reuters holding plc held by group companies are also deducted from shares in issue adjusted shareholders’ equity is calculated after deducting the carrying value of interests in shares of
reuters holdings plc 1995 to 1997
2 return on tangible fixed assets represents profit after taxation as a percentage of average tangible fixed assets the average is calculated by adding tangible fixed assets at the start and the end of
each year and dividing by two
3 return on equity represents profit attributable to ordinary shareholders divided by the average adjusted shareholders’ equity the average is calculated by adding adjusted shareholders’ equity at
the start and the end of each year and dividing by two in 1998 a weighted average has been used to reflect the capital reorganisation
eleven year consolidated financial summary reuters group plc annual report and form 20f 2005 111
parent company audit opinion
for the year ended 31 december
separate financial statements for reuters group plc
independent auditors’ report to the members of
reuters group plc
we have audited the parent company financial statements of reuters group
plc for the year ended 31 december 2005 which comprise the balance sheet
and the related notes these parent company financial statements have been
prepared under the accounting policies set out therein we have also audited
the disclosures required by part 3 of schedule 7a to the companies act 1985
contained in section 9 of the remuneration report ‘the auditable part’
we have reported separately on the group financial statements of reuters
group plc for the year ended 31 december 2005
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report the directors’
remuneration report and the parent company financial statements in
accordance with applicable law and united kingdom accounting standards
united kingdom generally accepted accounting practice are set out in the
statement of directors’ responsibilities
our responsibility is to audit the parent company financial statements and the
part of the directors’ remuneration report to be audited in accordance with
relevant legal and regulatory requirements and international standards on
auditing uk and ireland
this report including the opinion has been prepared for and only for the
company’s members as a body in accordance with section 235 of the
companies act 1985 and for no other purpose we do not in giving this
opinion accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing
we report to you our opinion as to whether the parent company financial
statements give a true and fair view and whether the parent company financial
statements and the part of the directors’ remuneration report to be audited
have been properly prepared in accordance with the companies act 1985 we
also report to you if in our opinion the directors’ report is not consistent with
the parent company financial statements if the company has not kept proper
accounting records if we have not received all the information and explanations
we require for our audit or if information specified by law regarding directors’
remuneration and other transactions is not disclosed
we read other information contained in the annual report and form 20f and
consider whether it is consistent with the audited parent company financial
statements the other information comprises only those set out in the table 
of contents including the chairman’s statement the directors’ report and 
the report on corporate governance the unaudited part of the remuneration
report the statement of the directors’ responsibilities and the operating and
financial review we consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the
parent company financial statements our responsibilities do not extend to 
any other information
the opinion set out above is included for the purposes of reuters annual report and financial
statements only and does not form part of reuters form 20f for 2005
basis of audit opinion
we conducted our audit in accordance with international standards on 
auditing uk and ireland issued by the auditing practices board an audit
includes examination on a test basis of evidence relevant to the amounts 
and disclosures in the parent company financial statements and the part of the
directors’ remuneration report to be audited it also includes an assessment 
of the significant estimates and judgments made by the directors in the
preparation of the parent company financial statements and of whether the
accounting policies are appropriate to the company’s circumstances
consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information 
and explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the parent company
financial statements and the part of the directors’ remuneration report to 
be audited are free from material misstatement whether caused by fraud or
other irregularity or error in forming our opinion we also evaluated the overall
adequacy of the presentation of information in the parent company financial
statements and the part of the directors’ remuneration report to be audited
opinion
in our opinion
• the parent company financial statements give a true and fair view in
accordance with united kingdom generally accepted accounting practice 
of the state of the company’s affairs as at 31 december 2005 and
• the parent company financial statements and the part of the directors’
remuneration report to be audited have been properly prepared in
accordance with the companies act 1985
pricewaterhousecoopers llp
chartered accountants and registered auditors
london
10 march 2006 112 reuters group plc annual report and form 20f 2005
restated
2005 2004
notes £m £m
fixed asset investments 01 5273 5260
current assets
derivative financial instruments 15 –
availableforsale financial assets 02 2 –
debtors including £5 million 2004 £53 million due after more than one year 03 865 770
cash at bank and in hand 1 –
883 770
creditors amounts falling due within one year 04 4100 3863
net current liabilities 3217 3093
total assets less current liabilities 2056 2167
creditors amounts falling due after more than one year 05 14 25
net assets 2042 2142
capital and reserves 07
called up share capital 08 360 359
capital redemption reserve 1 1
share premium account 107 96
other reserves 722 706
reserve for own shares 224 –
profit and loss account 1076 980
capital employed 2042 2142
the notes on pages 113 to 117 form part of these financial statements
the financial statements on pages 112 to 117 were approved by the board of directors on 10 march 2006
tom glocer david grigson
ceo cfo
at 31 december
reuters group plc – balance sheet reuters group plc annual report and form 20f 2005 113
accounting basis
the financial statements are prepared on a going concern basis under the
historical cost convention unless otherwise stated below and in accordance
with the companies act 1985 and applicable accounting standards uk gaap
as permitted by section 2303 of the companies act 1985 the company’s
profit and loss account and statement of total recognised gains and losses have
not been presented
the reuters group plc consolidated financial statements for the year ended 31
december 2005 contain a consolidated statement of cash flows consequently
the company has taken advantage of the exemption in frs 1 revised 1996
‘cash flow statements’ not to present its own cash flow statement
the company has taken advantage of the exemption in frs 8 ‘related party
disclosures’ not to disclose transactions with other members of the reuters group
the reuters group plc consolidated financial statements for the year ended 31
december 2005 contain financial instrument disclosures which comply with frs
25 consequently the company has taken advantage of the exemption in frs
25 not to present separate financial instrument disclosures for the company
changes in accounting policies
the company has adopted frs 20 ‘sharebased payment’ frs 21 ‘events after
the balance sheet date’ frs 23 ‘the effects of changes in foreign exchange
rates’ frs 25 ‘financial instruments disclosure and presentation’ frs 26
‘financial instruments measurement’ and frs 28 ‘comparative amounts’ in
these financial statements the adoption of these standards represents a
change in accounting policy and the comparative figures have been restated
accordingly except where the exemption to restate comparatives has been
taken details of the effects of prior year adjustments are given in note 7
foreign currency translation 
effective 1 january 2005
transactions in foreign currencies are translated into the company’s functional
currency using the exchange rate prevailing at the date of the transaction
foreign exchange gains and losses resulting from settlement of such transactions
and from the translation at year end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the profit and loss
account except when deferred in reserves as qualifying cash flow hedges
translation differences on nonmonetary items such as availableforsale
financial assets are included in the fair value reserve
sharebased payments
the company does not incur a charge for sharebased payments however 
the issuance by the company of share options to employees of its subsidiaries
represents additional capital contributions by the company to its subsidiaries 
an addition to the company’s investment in subsidiaries is reported with a
corresponding increase in shareholders’ funds the additional capital contribution
is determined on the basis of the fair value of options granted at the date of
grant and is gradually increased over the vesting period of the award
investments effective 1 january 2005
the company classifies its investments in the following categories
• fixed asset investments
• financial assets at fair value through profit and loss
• loans and receivables
• heldtomaturity investments and
• availableforsale financial assets
the classification depends on the purpose for which the assets were acquired
management determines the classification of its investments at initial
recognition and reevaluates this designation at every reporting date
fixed asset investments
fixed asset investments are held at cost net of permanent diminution in value
as assessed by the directors
financial assets at fair value through profit and loss
this category includes financial assets held for trading and those designated 
at fair value through profit and loss at inception a financial asset is classified in
this category if acquired principally for the purpose of selling in the shortterm
or if so designated by management derivatives are also classified as held for
trading unless they are designated as hedges assets in this category are
initially recognised at fair value and subsequently measured at fair value
realised and unrealised gains and losses are included in the profit and loss
account in the period in which they arise
loans and receivables
loans and receivables are nonderivative financial assets with fixed or
determinable payments that are not quoted in an active market they are
included in debtors in the balance sheet assets in this category are initially
recognised at fair value and subsequently measured at amortised cost
heldtomaturity investments
heldtomaturity investments are nonderivative financial assets with fixed 
or determinable payments and fixed maturities that the company’s
management has the positive intention and ability to hold to maturity 
assets in this category are initially recognised at fair value and subsequently 
measured at amortised cost
availableforsale financial assets
the company has classified all of its marketable securities as availableforsale
assets in this category are initially recognised at fair value and subsequently
measured at fair value unrealised gains and losses arising from changes in fair
value are recognised directly in reserves
the company assesses at each balance sheet date whether there is objective
evidence that a financial asset or group of financial assets is impaired on
disposal or impairment of the asset gains or losses in reserves are recycled
through the profit and loss account
cash
cash includes cash in hand bank deposits repayable on demand and bank
overdrafts
borrowings effective 1 january 2005
borrowings are recognised initially at fair value net of transaction costs
incurred borrowings are subsequently stated at amortised cost any difference
between the proceeds net of transaction costs and the redemption value is
recognised in the profit and loss account over the period of the borrowings
using the effective interest method
borrowings are classified as current liabilities unless the company has an
unconditional right to defer settlement of the liability for at least twelve months
after the balance sheet date
borrowing costs on qualifying assets are expensed as incurred and not
capitalised as cost of the asset
purchases and sales of financial assets
purchases and sales of financial assets are recognised on the settlement date
which is the date that the asset is delivered to or by the company
derivative financial instruments and hedging
effective 1 january 2005
derivatives are initially recognised at fair value on the date a derivative contract
is entered into and are subsequently remeasured at their fair value the method
of recognising the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument and if so the nature of the item being
hedged the company designates certain derivatives as hedges of the fair value
of recognised assets or liabilities or a firm commitment fair value hedges
reuters group plc – accounting policies 114 reuters group plc annual report and form 20f 2005
fair value hedges
changes in the fair value of derivatives that are designated and qualify as fair
value hedges are recorded in the profit and loss account together with any
changes in the fair value of the hedged asset or liability that are attributable 
to the hedged risk
derivatives that do not qualify for hedge accounting
certain derivative instruments while providing effective economic hedges
under the company’s policies are not designated as hedges changes in the
fair value of any derivative instruments that do not qualify for hedge accounting
are recognised immediately in the profit and loss account the company does
not hold or issue derivative financial instruments for speculative purposes
fair value estimation effective 1 january 2005
the fair value of financial instruments traded in active markets such as
availableforsale securities is based on quoted market prices at the balance
sheet date the fair value of foreign exchange contracts is determined using
forward exchange market rates at the balance sheet date other financial
instruments are valued using standard pricing models based on quoted forward
market rates interpolated between dates where appropriate and discounted
cash flow techniques
interest in shares of reuters group plc
repurchased shares are recorded in the balance sheet as a deduction from
shareholders’ funds at cost
dividend distribution
dividend distributions are recognised as a liability in the period in which the
dividends are approved by the company’s shareholders interim dividends are
recognised when they are paid final dividends when authorised in general
meeting by shareholders
taxation
tax deferred or accelerated by the effect of timing differences is accounted for
to the extent that a transaction or an event that has occurred at the balance
sheet date gives rise to an obligation to pay more tax in the future or a right to
pay less tax in the future
however deferred tax assets are only recognised to the extent that based on
all available evidence it is more likely than not that suitable taxable profits will
arise from which the reversal of the asset can be deducted
deferred taxation is recognised on an undiscounted basis
applicable accounting policies for 2004
comparatives
the company has adopted frs 23 ‘the effects of changes in foreign exchange
rates’ frs 25 ‘financial instruments disclosure and presentation’ and frs 26
‘financial instruments measurement’ in these financial statements but has
taken advantage of the exemption not to restate comparative amounts the
following accounting policies apply for 2004 comparatives
foreign currency translation
exchange differences that arise as a consequence of trading transactions and
the translation of monetary assets and liabilities are taken to the profit and loss
account foreign currency investments including subsidiary undertakings joint
ventures and associates are translated at the 31 december rate and the
associated exchange differences are taken directly to reserves
treasury
the derivative contracts are treated from inception as an economic hedge of the
underlying financial instrument with matching accounting treatment and cash
flows the derivative contracts have high correlation with the specific underlying
risks being hedged both at inception and throughout the hedge period
reuters uses financial instruments to hedge a portion of its interest exposure
profits and losses on financial instruments are reported as part of profit for the
period to which they relate
shortterm investments
government securities are stated in the balance sheet at the lower of cost plus
accrued capital appreciation and market value income from these securities
and any adjustment for changes in their market value during the year is
reported as part of profit
debt issuance
mediumterm notes and commercial paper are stated at the amount of the 
net proceeds plus accrued interest or any discount or premium discounts 
or premiums to the nominal value are amortised over the term of the issue 
costs associated with debt issuance are charged against profit over the life 
of the instrument
foreign currency swap agreements and forward contracts are used to convert
nonsterling debt into sterling interest rate swaps swaptions and forward rate
agreements are used to manage interest rate exposures amounts payable or
receivable in respect of these derivatives are recognised as adjustments to
interest expense over the period of the contract
fixed and current asset investments
fixed asset investments are held at cost net of permanent diminution in value
as assessed by the directors where it is the company’s intention to dispose of
an investment in the shortterm the investment is treated as a current asset
and valued at the lower of cost and net realisable value
reuters group plc – accounting policies continued reuters group plc annual report and form 20f 2005 115
reuters group plc – notes to the financial statements 
01 fixed asset investments
2005 2004
£m £m
cost
opening balance as previously stated 18896 18882
prior year adjustment – frs 20 see note 7 – 3
capital contributions in respect of share options 13 11
closing balance 18909 18896
less amounts written off 13636 13636
net book value 5273 5260
the majority of the net book value at 31 december 2005 represents the company’s shareholding of reuters holdings limited the principal subsidiaries of the
group are listed in note 39 to the reuters group plc consolidated financial statements
02 availableforsale financial assets
2005 2004
£m £m
opening balance – –
transitional adjustment on adoption of frs 26 see note 7 3 –
fair value adjustments taken directly to reserves 1 –
closing balance 2 –
the market value of listed availableforsale financial assets is £2 million 2004 £3 million and are held at a carrying value of £2 million 2004 £nil
03 debtors
2005 2004
£m £m
amounts falling due within one year
amounts owed by group undertakings 859 716
prepayments and accrued income 1 1
860 717
amounts falling due after more than one year
prepayments and accrued income – 2
deferred taxation see note 6 5 3
other debtors – 48
5 53
total debtors 865 770
04 creditors amounts falling due within one year
restated
2005 2004
£m £m
amounts due to group undertakings 4074 3736
term notes and commercial paper 22 127
current uk corporation taxation 3 –
accruals and deferred income 1 –
total creditors amounts falling due within one year 4100 3863
amounts due to group undertakings are unsecured and repayable on demand interest on these amounts is charged at a commercial rate 116 reuters group plc annual report and form 20f 2005
reuters group plc – notes to the financial statements continued
05 creditors amounts falling due after more than one year
2005 2004
£m £m
term notes and commercial paper 5 25
derivative financial instruments 9 –
total creditors amounts falling due after more than one year 14 25
06 deferred taxation assets
2005 2004
£m £m
opening balance 3 –
profit and loss account 2 3
closing balance 5 3
the closing balance relates to losses carried forward
07 capital and reserves
called up capital share reserve profit and
share redemption premium other for own loss
capital reserve account reserves shares account total
£m £m £m £m £m £m £m
31 december 2004 as previously stated 359 1 96 706 – 880 2042
prior year adjustment – frs 20 – – – – – 14 14
prior year adjustment – frs 21 – – – – – 86 86
31 december 2004 as restated 359 1 96 706 – 980 2142
transitional adjustment on adoption of frs 26 – – –3 – 12 15
1 january 2005 359 1 96 709 – 992 2157
amounts receivable in respect of unissued shares – –– 14–– 14
fair value losses on availableforsale financial assets – – – 1 – – 1
shares allotted during the year 1 – 11 – – – 12
capital contributions in respect of share options – – – –– 13 13
retained profit for the financial year – – – –– 71 71
purchase of treasury shares – – – – 224 – 224
31 december 2005 360 1 107 722 224 1076 2042
the prior year adjustments relate to the adoption of frs 20 ‘sharebased payment’ and frs 21 ‘events after the balance sheet date’ the company has taken
advantage of the exemption not to restate comparative amounts for the adoption of frs 23 ‘the effects of changes in foreign exchange rates’ frs 25 ‘financial
instruments disclosure and presentation’ and frs 26 ‘financial instruments measurement’
the adoption of frs 20 has resulted in an increase shareholders’ funds of £14 million at 31 december 2004 and £27 million at 31 december 2005 due to the
recognition of additional capital contributions by the company in its subsidiaries arising from the issuance of share options to employees of its subsidiaries
the adoption of frs 21 has resulted in an increase in shareholders’ funds of £86 million at 31 december 2004 and £86 million at 31 december 2005 due to the write
back of the proposed final dividend at 31 december 2004
the adoption of frs 23 frs 25 and frs 28 did not have an impact on shareholders’ funds at 31 december 2005
the adoption of frs 26 has resulted in a transitional adjustment of £15 million on 1 january 2005 relating to the application of fair value accounting for financial
instruments the adoption of frs 26 has resulted in an increase in shareholders’ funds of £4 million at 31 december 2005 and an increase in profit for the financial
year ended 31 december 2005 of £2 million
the company’s profit for the financial year was £211 million 2004 loss of £125 million this profit for the financial year mainly represents interest and revaluation on
intercompany borrowings fair value gains and losses on financial assets at fair value through profit and loss and dividends received from reuters holdings limited
during 2005 the company paid equity dividends to shareholders of £140 million 2004 £140 million reuters group plc annual report and form 20f 2005 117
08 share capital
2005 2004
£m £m
authorised
one founders share of £1 – –
2100 million ordinary shares of 25p each 525 525
525 525
allotted calledup and fully paid
one founders share of £1 – –
ordinary shares of 25p each 360 359
360 359
number of ordinary shares of 25p each millions 14411 14355
shares allotted during the year in millions
5554900 shares in reuters group plc were issued under employee share schemes at prices ranging from 
£nil to 333p per share transaction costs incurred on issue of shares amounted to £nil 2004 £nil 56 30
following the approval of a high court scheme of arrangement the majority of the issued share capital of reuters holdings plc was acquired by reuters group
plc in february 1998
the rights attaching to the founders share are set out on page 120
the following table provides a summary of the shares bought under the buyback programme since its announcement in july 2005
total number approximate
of shares value of shares
purchased as that may yet
part of publicly average price be purchased
announced paid per under the
month programme share £ programme £m
july 1500000 389 994
august 8500000 370 963
september 7150000 373 936
october 2800000 353 926
november 22800000 389 838
december 14650000 408 778
the current £1 billion buyback programme was announced on 26 july 2005 and the total buyback is expected to be £1 billion the programme is due to run for up
to two years no programme has expired during the period covered by the table reuters has not determined to terminate any programme prior to expiration 118 reuters group plc annual report and form 20f 2005
information for shareholders
01 ordinary shares
as of 7 march 2006 there were 1351605175 ordinary shares outstanding
excluding 31553221 ordinary shares owned by certain employee share
ownership trusts and 90850000 held in treasury see note 27 on page 89
02 major shareholders
the company had received notice under section 198 of the uk companies 
act 1985 as at 7 march 2006 that the following parties held notifiable 
interests in its shares
number number
of shares of shares
held on percentage held on
7 march of issued 2 march
2006 share capital 2005
fidelity investments 150753687 1114 130364252
legal  general investment 
management 55230590 408 58006887
merrill lynch investment managers 48978642 362 48978642
the capital group of companies inc 42135514 311 –
barclays plc na na 53902608
the company’s major shareholders do not have any different voting rights from
the other ordinary shareholders there were no significant changes in the
holdings of the company’s major shareholders other than barclays plc reduced
its shareholding below the 3 threshold in april 2005 and the capital group 
of companies inc became a notifiable holding in january 2006
the founders share
independence integrity and freedom from bias in the gathering and
dissemination of news and information are fundamental to reuters reuters
founders share company limited the founders share company was
established to safeguard those qualities and holds a single founders share
this share may be used to outvote all ordinary shares if other safeguards fail
and there is an attempt to effect a change in control of the company ‘control’
for this purpose means 30 of the ordinary shares the directors of the founders
share company have a duty to ensure as far as they are able by the proper
exercise of the powers vested in them that the reuters trust principles are
observed see pages 119 to 120
the founders share company’s directors are nominated by a nomination
committee which includes certain serving directors of the founders share
company one person nominated by each of four news associations two
people appointed by the chairman of reuters group plc and two people
appointed after consultation with the european court of human rights 
a director of the founders share company may not be a director or 
employee of reuters group
the current directors of the founders share company are as follows
trustee
since
the honourable mrs anson gbm cbe jp 2002
leonard berkowitz 1998
sir michael checkland 1994
bertrand collomb 2004
jiri dienstbier 2005
uffe ellemannjensen mp 2001
john fairfax am 2005
dr frene ginwala 2004
pehr gyllenhammar chairman 1997
joseph lelyveld 2004
sir christopher mallaby gcmg gcvo 1998
john mcarthur 2001
mammen mathew 2002
the right hon the baroness noakes dbe 1998
sir william purves cbe dso 1998
jaakko rauramo 1999
dr mark wössner 2001
toyoo gyohten retired as a trustee in october 2005
trustees are appointed for an initial term of five years and must resign at the
agm on or after the fifth anniversary following appointment or reappointment
trustees are eligible for reappointment for a further term of five years subject
to a maximum term of 15 years and maximum age limit of 75
except as described above to the best of the group’s knowledge 
the company is not directly or indirectly owned or controlled by another
corporation by any foreign government or by any other natural or legal person
severally or jointly and currently there are no arrangements that may at a
subsequent date result in a change in control of the company
03 corporate structure
the group conducts its business through a portfolio of companies including
wholly and partlyowned subsidiary undertakings joint ventures and associates
information concerning the most significant companies is contained in 
note 39 to the consolidated financial statements on page 100
04 trading markets
the company’s ordinary shares are traded on the london stock exchange
american depositary shares adss each representing six ordinary shares are
traded on the nasdaq stock market the adss are evidenced by american
depositary receipts adrs issued by deutsche bank trust company americas
as depositary under a deposit agreement dated 18 february 1998 and
supplemented 16 december 2005 the deposit agreement among the
company the depositary and adr holders
the table below sets out for the periods indicated i the reported high and 
low sales prices for the ordinary shares based on the daily official list of the
london stock exchange and ii the reported high and low sales prices of the
adss on nasdaq
the london
stock exchange nasdaq
pounds per share us dollars per ads
high low high low
annual market prices
2001 1158 526 10344 4600
2002 747 161 6436 1512
2003 268 096 2709 959
2004 429 241 4915 2572
2005 431 352 4935 3733
quarterly market prices
2004
first quarter 429 241 4915 2572
second quarter 415 333 4501 3538
third quarter 356 289 3940 3175
fourth quarter 409 323 4530 3492
quarterly market prices
2005
first quarter 428 364 4935 4083
second quarter 426 375 4865 4148
third quarter 412 359 4345 3903
fourth quarter 431 352 4440 3733
monthly market prices
2005
august 393 359 4180 3903
september 383 360 4225 3924
october 382 352 4054 3733
november 405 363 4160 3841
december 431 402 4440 4178
monthly market prices
2006
january 443 417 4701 4412
february 461 380 4844 3993
march to 7 march 387 380 4089 3967 reuters group plc annual report and form 20f 2005 119
all of the outstanding ordinary shares are fully paid accordingly no further
contribution of capital may be required from the holders of such shares by reuters
in this description the term ‘holder’ refers to the person registered in the
register of members as the holder of the relevant share and the term ‘beneficial
owner’ refers to a person other than the holder who has a beneficial interest in
the relevant share deutsche bank which acts as depositary under the deposit
agreement relating to the american depositary shares or adss is the holder
of the ordinary shares represented by the outstanding adss
general
reuters group plc is incorporated under that name and is registered in
england and wales with registered number 3296375 its objects are set out in
the fourth clause of its memorandum of association and cover a wide range of
activities including the following
• collecting information and supplying news and information services and
products
• acquiring and operating wireless installations satellites and other means of
communication
• utilising the group’s communications capabilities to provide various financial
and securities markets services and
• carrying on any other business supplemental to the foregoing or capable of
enhancing the group’s profitability or capitalising on the group’s expertise
the memorandum of association provides a broad range of corporate powers
to effect these objectives
the reuters trust principles and the founders share company
the articles contain two sets of restrictions relating to the ownership of reuters
shares these restrictions are intended to ensure continued compliance with the
following principles the reuters trust principles set out in the article f114
• ‘that 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 reuters shall at all
times be fully preserved
• that 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 reuters has or
may have contracts
• that reuters shall pay due regard to the many interests which it serves in
addition to those of the media and
• that no effort shall be spared to expand develop and adapt the news and
other services and products of reuters so as to maintain its leading position
in the international news and information business’
for the purposes of the reuters trust principles the articles define the term
reuters to mean reuters group plc and every subsidiary of it from time to time
supplying news services
the first set of restrictions contained in the articles applies to persons that
become ‘interested’ in 15 or more of the ordinary shares outstanding at 
any time excluding any shares held by reuters as treasury shares the term
‘interested’ is defined in the articles by reference to provisions of the
companies act which require persons to disclose to public companies interests
in voting shares in excess of a prescribed percentage subject to certain
exceptions all shares held by a person who reaches the 15 limit will be
disenfranchised and the shares exceeding the 15 limit must be disposed of
this set of restrictions is more fully described below under ‘rights and
restrictions attaching to reuters shares – restrictions on ownership –
disenfranchisement and disposal of excess interests’
second the company’s share capital includes the founders share which is held
by the founders share company a company limited by guarantee consisting of
individuals referred to as the reuters trustees who constitute both its members
and directors the founders share empowers the founders share company to
analysis of shareholders
as of 7 march 2006 there were 1351605175 reuters ordinary shares in issue
including the shares referred to below but excluding ordinary shares held by
employee share ownership trusts there were 27567 shareholders on the
ordinary share register analysed in the chart below
as of the same date 874117 ordinary shares and 18282496 adss
representing 109694976 ordinary shares were held on the record in the us
these ordinary shares and adss were held by 588 record holders and 2176
record holders respectively and represented 0065 or evidenced adss
respectively representing 812 respectively of the total number of ordinary
shares outstanding since certain of these ordinary shares and adss were held
by brokers or other nominees the number of record holders in the us may 
not be representative of the number of beneficial holders or of where the
beneficial holders are resident
note includes all holdings below 100000 shares except for private investors whose holdings are
analysed below this level
dividends
the table below sets forth the amounts of interim final and total dividends
excluding any associated uk tax credit discussed on pages 122 to 123 paid in
respect of each fiscal year indicated pound sterling amounts per share have
been translated into us cents per ads each representing six ordinary shares 
at the actual rates of exchange used for each of the respective payments of
interim and final dividends
pence per share cents per ads
interim final total interim final total
2001 385 615 1000 3329 5356 8685
2002 385 615 1000 3605 5846 9451
2003 385 615 1000 3608 6488 10096
2004 385 615 1000 4094 7024 11118
2005 385 615 1000 4118 – –
the final dividend in respect of 2005 is payable on 4 may 2006 to holders of ordinary shares on
the register at 17 march 2006 and on 11 may 2006 to holders of adss on the record at 17 march
2006 and will be converted into us dollars from sterling at the rate prevailing on 11 may 2006
see page 26 for a discussion of the group’s dividend policy
05 history and development
the ultimate holding company for the group reuters group plc was
incorporated in england and wales on 24 december 1996 though its
predecessor was formed in england in 1851 reuters group plc’s registered
office and corporate headquarters are located at the reuters building south
colonnade canary wharf london e14 5ep  uk
06 memorandum and articles of association
the following description summarises certain material rights of holders of 
the company’s ordinary shares of 25 pence each and material provisions of 
the company’s memorandum and articles of association the articles the
memorandum and articles of association of reuters founders share company
limited the founders share company and english law the following description
is a summary only and is qualified in its entirety by reference to the articles which
have been filed with the sec and companies house and the companies act
analysis of shareholders
investment trusts unit trusts
pension funds 24
otherbelow analysis threshold 19
ads 8
insurance companies 5
private investors 2
nonprofit organisations 1
foreign governments 1
investment trusts unit trusts 
and mutual funds 40 120 reuters group plc annual report and form 20f 2005
cast such number of votes as will pass any resolution supported by and defeat
any resolution opposed by the founders share company if it believes that any
person or persons have obtained or are seeking to obtain control of the group
control for these purposes is defined as the ability to control the exercise of 30
or more of the votes that may be cast on a poll at general meetings under the
articles the special rights attaching to the founders share may not be varied 
or abrogated in any respect without the prior written consent of the founders
share company the rights attaching to the founders share are described in
more detail below under ‘rights and restrictions attaching shares – voting rights
– rights conferred by founders share’
the restrictions on interests in ordinary shares and the extraordinary voting
rights of the founders share may be characterised as antitakeover provisions to
the extent they may have the effect of preventing a bid for control of the group
tender offers or other nonmarket acquisitions of shares are usually made at
prices above the prevailing market price of a company’s shares acquisitions of
shares by persons attempting to acquire control through market purchases may
support the price of shares at market levels higher than otherwise would be the
case the restrictions and extraordinary voting rights summarised in this section
may be expected to preclude such offers
directors
the company’s articles provide for a board of directors consisting of not fewer
than five nor more than 15 directors the articles require that in performing
their duties the directors have due regard for the reuters trust principles
insofar as by the proper exercise of their powers and in accordance with their
other duties as directors the directors may do so
the articles contain provisions that require the board of directors to include at least
five nonexecutive directors before a new executive director can be appointed
under the articles a director may not vote in respect of any contract
arrangement or proposal in which the director or any person connected with the
director has any material interest other than by virtue of the director’s interests in
securities of or otherwise in or through the company this is subject to certain
exceptions relating to proposals a giving the director any guarantee security or
indemnity in respect of obligations incurred at the request of or for the benefit of
the group b giving any guarantee security or indemnity to a third party in
respect of obligations of the group for which the director has assumed
responsibility under an indemnity or guarantee c relating to an offer of securities
of the group in which the director may be entitled to participate or will be
interested as an underwriter d concerning any other company in which the
director is beneficially interested in less than 1 of the issued shares of any class
of the company or the voting rights available to its shareholders e relating to
the adoption modification or operation of any employee benefits plan which will
provide the director with the same benefits as other employees and f relating to
any liability insurance that reuters is empowered to purchase for its directors or
employees in respect of actions undertaken as directors or officers of the group
the directors are empowered to exercise all the powers of the group to borrow
money subject to the limitation that the aggregate principal amount outstanding
in respect of monies borrowed by the group shall not exceed a sum equal to two
and a half times the company’s share capital and aggregate reserves calculated
in the manner described in the articles and £5000 million unless sanctioned by
an ordinary resolution of the company’s shareholders
at each agm of reuters shareholders at least onethird of the directors or if
their number is not a multiple of three the number nearest to but not greater
than onethird shall retire from office by rotation the directors to retire by
rotation at the agm include any director who is due to retire at the meeting by
reason of age as prescribed in section 293 of the companies act namely 70 years
old a retiring director shall be eligible for reelection subject to the requirements
of the combined code since the 2005 agm the board has asked all directors to
stand for reelection on an annual basis for additional information see the
directors’ report and corporate governance which appear on pages 31 and 34
directors are not required to hold shares in order to qualify as a director 
a director not holding any shares may nevertheless attend and speak at general
meetings of the company
rights and restrictions attaching to shares
dividends
holders of ordinary shares are entitled to participate in the payment of
dividends pro rata to their holdings the founders share is not entitled to
participate in the payment of dividends nor will any dividend be paid on any
shares held by reuters in treasury the board may propose and pay interim
dividends and recommend a final dividend in respect of any accounting period
out of the profits available for distribution under english law
a final dividend may be declared by the shareholders in general meeting by
ordinary resolution but no dividend may be declared in excess of the amount
recommended by the board
the company may allot ordinary shares in lieu of cash dividends subject to
shareholder approval at the time the relevant dividend is declared in addition
the company may declare and pay equivalent dividends to shareholders
outside the united kingdom in local currencies and pay such dividends to 
the depositary for value on the payment date
voting rights
rights conferred by ordinary shares voting at a general meeting of shareholders
is by show of hands unless before or on making known the result a poll is
demanded in accordance with the articles if voting is by show of hands each
holder of ordinary shares who is present in person has one vote on a poll every
holder of ordinary shares who is present in person or by proxy has one vote for
every ordinary share held voting on all resolutions is carried out by way of a poll
holders of a substantial number of ordinary shares may be disenfranchised
under the circumstances described under ‘restrictions on ownership’ below
rights conferred by the founders share the founders share confers upon the
founders share company the right to cast such number of votes as are
necessary to defeat any resolution which would vary or abrogate the rights of
the founders share the articles provide that the alteration of specified articles
relating to the founders share and the reuters trust principles are deemed to
constitute a variation of the rights of the founders share in addition any
resolution proposing the winding up of the group voluntarily by the court or
any reconstruction of the group or any resolution which would attach to any
share voting rights not identical in all respects with those of the ordinary shares
is deemed to be a variation of the rights of the founders share
additionally if there are in the opinion of the founders share company
reasonable grounds for believing that any person and his associates have
obtained or are attempting to obtain directly or indirectly control of reuters
group the founders share company is entitled in its absolute discretion to
serve reuters with a written notice a founders share control notice to that
effect control is defined for these purposes as the ability to control the
exercise of 30 or more of the votes which may be cast on a poll at a general
meeting at all times after the service of a founders share control notice and
pending its rescission the founders share confers upon the founders share
company the right to cast on a poll such number of votes as are necessary to
ensure the effective passing of any resolution in favour of which it votes and to
ensure the defeat of any resolution against which it votes the articles provide
that the opinion of the founders share company in respect of the service or
rescission of a founders share control notice shall be final and binding and
may not be challenged on any grounds whatsoever
the founders share company is entitled at any time to serve reuters with a written
request for an extraordinary general meeting and the directors are obliged to
comply with such request if they do not comply the founders share company is
entitled to convene an extraordinary general meeting if a founders share control
notice has been served however the founders share company can convene an
extraordinary general meeting without first requesting that the directors do so
four reuters trustees present at the relevant trustees’ meeting can bind all the
founders share company directors to exercise the voting rights attaching to 
the founders share so as to defeat a resolution that would be deemed to be a
variation of the rights attached to the founders share however the vote of a
majority of the reuters trustees the chairman of the founders share company
having a casting vote in the event of equality of votes is required to determine
whether a founders share control notice should be served and if so the manner
in which the voting rights attaching to the founders share shall be exercised
excluding the vote of any reuters trustee who is associated with or materially
financially interested in the person attempting to obtain control of reuters
restrictions on ownership
ordinary shares under the articles a person is ‘interested’ in shares if among
other things he is interested directly or through his family or one or more
companies or through an interest in association with others pursuant to an
agreement or understanding or through a trust or if he controls the voting 
information for shareholders continued reuters group plc annual report and form 20f 2005 121
rights of others the definition of ‘interest in shares’ in the articles is made by
reference with specified variations to certain provisions of the companies act
disclosure of interests in ordinary shares the articles provide for the disclosure
of interests in reuters ordinary shares by reference to the companies act
provisions mentioned above with specified variations under these provisions
as currently in force if a person acquires an ‘interest’ in voting shares of a public
company amounting to 10 or more of the voting shares of any class or if he
increases or reduces such holding by at least 1 or if he ceases to have such
holding he is obliged to notify the company within two days of the day on
which he acquired 10 or any such change in his interest took place further if
his interest is a ‘material interest’ the 10 referred to above is reduced to 3
the articles provide for disenfranchisement of shares which are the subject of 
a notice under section 212 of the companies act which allows a company to
require disclosure of certain details concerning ownership of its shares if the
person served with the notice is in default in answering it the articles also
provide for the imposition of restrictions on transferability of the shares
concerned and on the right to receive dividends if such shares represent at
least 025 of the class concerned such restrictions cannot however be
imposed until the expiry of 14 days after the date of the section 212 notice any
such restrictions cease if the shares concerned are sold pursuant to a takeover
offer or to an unconnected third party or through the london stock exchange
the restrictions on transferability only apply to certificated shares where a
holder of uncertificated shares is in default in answering a section 212 notice
the articles provide that the founders share company may require the group’s
directors to apply to the court for such order as may be appropriate
disenfranchisement and disposals of excess interests subject to certain
exceptions described below certain restrictions apply to persons that become
‘interested’ as defined in the articles in 15 or more of the ordinary shares 
if any person becomes interested in 15 or more of the outstanding shares
excluding any shares held by reuters as treasury shares the ‘relevant shares’
the directors are required to serve a restriction notice on that person on any
other person known to the directors to have an interest in the relevant shares
and if different on the registered holder of the relevant shares while a
restriction notice in respect of relevant shares is in force a registered holder of
the relevant shares is not entitled to attend or vote either in person or by proxy
at any general meeting or at any meeting of the holders of any class of reuters
shares in addition a restriction notice will require such person to dispose of
any relevant shares exceeding the 15 limit and supply evidence to the
company that such disposal has occurred within 21 days or such longer period 
as the directors consider reasonable if such disposition is not made within the
specified period the directors must as far as they are able dispose of any shares
exceeding the 15 limit under the articles any belief resolution decision or
action of the directors held made or taken pursuant to any of the provisions
concerning restrictions on ownership shall be conclusive final and binding on all
persons concerned and may not be challenged on any grounds whatsoever
the restrictions are subject to certain modifications where a person becomes
interested in 15 or more of the issued shares of any class by reason of a rights
issue or an underwriting in the ordinary course of its business
the founders share ownership of the founders share is restricted to the
founders share company under its memorandum of association the
founders share company is not permitted directly or indirectly to dispose of
the founders share or of any interest therein or to grant any rights in respect 
of the founders share or any interest therein
treasury shares reuters may acquire and thereafter hold up to 10 of its issued
listed share capital in treasury any such acquisition must be financed from the
distributable profits of reuters subject to certain limited exceptions the rights
attaching to shares while held in treasury will be suspended treasury shares 
may only be subsequently disposed of by reuters by way of cash sale transfer
for the purposes of or pursuant to an employees’ share scheme or cancellation
preemptive rights new issues of shares sale of treasury
shares and repurchase of shares
holders of ordinary shares have no preemptive rights under the articles
however the ability of the directors to cause the company to issue shares
securities convertible into shares or rights to shares or to sell treasury shares
otherwise than pursuant to an employee share scheme is restricted
under the companies act the directors are with certain exceptions unable 
to allot any equity securities without express authorisation which may be
contained in the articles or given by its shareholders in general meeting but
which in either event cannot last for more than five years the companies 
act imposes further restrictions on the issue of equity securities for cash or 
sale of treasury shares for cash other than by offering them first to existing
shareholders unless the statutory requirement is displaced or modified by the
shareholders in general meeting or under the company’s articles
at reuters agm to be held on 27 april 2006 a resolution will be proposed to
authorise the directors to allot relevant securities as defined in the companies
act including any equity securities up to an aggregate nominal amount of
£114 million until the earlier to occur of the agm in 2007 or 27 july 2007 
a resolution will also be proposed to authorise equity securities as defined 
in the companies act to be issued within this limit by way of a rights offer or
otherwise pro rata to existing shareholders but other issues of equity securities
except for shares issued pursuant to employee share schemes will be limited to
an aggregate of £17 million in nominal value
subject to applicable provisions of english law the company may purchase 
its ordinary shares currently it has general authority to repurchase up to
143540000 ordinary shares at the reuters agm on 27 april 2006 a resolution
will be proposed to increase this authority to 207 million ordinary shares at
prices ranging from 25 pence and not more than the higher of 5 above the
average market value of the ordinary shares for the five business days prior 
to the day the purchase is made or the price stipulated by article 51 of the
buyback and stabilisation regulation namely the higher of the price of the last
independent trade and the highest current independent bid on trading venues
where the purchase is carried out
rights in a winding up
if reuters group plc is wound up the liquidator may with the authority of an
extraordinary resolution divide among the holders of ordinary shares and the
founders share pro rata to their holdings reuters assets after satisfaction of
liabilities to creditors provided however that the founders share company
may receive up to £1 and no more
variation of rights and alteration of share capital
if at any time the company’s share capital is divided into different classes of
shares the rights attached to any class may be varied subject to the provisions
of the companies act with the consent in writing of holders of threequarters 
in value of the shares of that class or upon the adoption of an extraordinary
resolution passed at a separate meeting of the holders of the shares of the class
at every such separate meeting all of the provisions of the articles relating to
proceedings at a general meeting apply except that the quorum is to be the
number of persons which must be two or more who hold or represent by proxy
not less than onethird in nominal value of the issued shares of the class
the company can increase its share capital by ordinary resolution in conformity
with the provisions of the companies act however new shares cannot have
voting rights which are not identical to those of ordinary shares without the
prior written consent of the founders share company furthermore the
company may issue shares with preferred and other special rights or
restrictions provided that the prior written consent of the founders share
company has been sought for issuing any shares with rights not identical to
those of ordinary shares the company can consolidate divide and cancel any
of its shares other than the founders share by extraordinary resolution and
can reduce its share capital other than the founders share
agms and extraordinary general meetings egms
agms must be convened upon advance written notice of 21 days an
extraordinary general meeting must be convened upon advance written notice
of 21 days for the passing of a special resolution and 14 days for any other
resolution depending on the nature of the business to be transacted the
notice must specify the nature of the business to be transacted if it is other than
routine business or if an extraordinary or a special resolution is proposed the
notice may also specify a time not more than 48 hours prior to the time fixed
for the meeting by which a person must be entered on the company’s register
in order to have the right to attend and vote at the meeting
limitations on voting and shareholding
there are no limitations imposed by english law or the company’s articles on
the right of nonresidents or foreign persons to hold or vote ordinary shares or
adss other than the limitations that would generally apply to all of reuters
shareholders 122 reuters group plc annual report and form 20f 2005
07 exchange control
under english law and the articles persons who are neither residents nor
nationals of the uk may freely hold vote and transfer their ordinary shares in
the same manner as uk residents or nationals
there are currently no uk foreign exchange control restrictions on remittances
of dividends to nonresident holders of ordinary shares or on the conduct of
reuters operations
08 exchange rates
the following table sets out for the periods indicated the average or the high
and low noon buying rates for pounds sterling in us dollars per £1
fiscal year ended
31 december average month high low
2001 144 august 2005 181 177
2002 151 september 2005 184 176
2003 164 october 2005 178 174
2004 184 november 2005 178 171
2005 183 december 2005 177 171
2006 to 7 march 175 january 2006 179 174
february 2006 178 173
 the average exchange rates have been calculated using the noon buying rates on the last
trading day of each calendar month during the period
on 7 march 2006 the noon buying rate was 174 per £1
fluctuations in the exchange rate between the pound sterling and the us dollar
will affect the us dollar amounts received by holders of the adss upon conversion
by the depositary of cash dividends paid in pounds sterling on the ordinary shares
and represented by the adss also fluctuations in the exchange rate may affect
the relative market prices of the adss in the us and the ordinary shares in the uk
for the effect on the group’s results of operations of fluctuations in the
exchange rates between the pound sterling and the other major currencies
including the us dollar in which revenues are received and expenses are
incurred us see operating and financial review on page 22
09 taxation information for us shareholders
the following discussion of taxation is intended only as a descriptive summary
and does not purport to be a complete technical analysis or listing of all
potential tax effects relevant to a decision to acquire the company’s ordinary
shares or adss this is a summary of the material us federal income tax and uk
tax consequences of the ownership of ordinary shares or adss by a us holder
who holds the ordinary shares or adss as capital assets the summary does not
take into account the specific circumstances of any particular investors some of
which may be subject to special rules such as dealers in securities us holders
who hold directly or indirectly 10 or more of the voting stock or us holders
who elected to apply the provisions of the former income tax convention
between the united states and the united kingdom in addition the summary
is based in part upon the representations of the depositary and the assumption
that each obligation in the deposit agreement and any related agreement will
be performed in accordance with its terms the summaries of us and uk tax
laws are based on the internal revenue code of 1986 as amended its
legislative history existing and proposed regulations published rulings and
court decisions current tax laws current uk inland revenue published practice
and the terms of the ukus double tax treaty which came into effect on 31
march 2003 the treaty as appropriate all of which are subject to change at
any time possibly with retrospective effect
for the purposes of this discussion a ‘us holder’ is any beneficial owner of
ordinary shares or adss that is i a citizen or resident for tax purposes of the
us ii a corporation organised under the laws of the us or any us state iii an
estate the income of which is subject to us federal income tax without regard
to its source or iv a trust if a court within the us is able to exercise primary
supervision over the administration of the trust and one or more us persons
have the authority to control all substantial decisions of the trust
taxation of dividends
uk taxation
under current uk taxation legislation no withholding tax will be deducted from
dividends paid by the company a shareholder that is a company resident for uk
tax purposes in the uk will not generally be taxable on any dividend it receives
from the company a shareholder who is an individual resident for tax purposes
in the uk is entitled to a tax credit on cash dividends paid by the company on
ordinary shares or adss equal to oneninth of the cash dividend or 10 of the
dividend plus the tax credit such shareholders will be taxable on the total of the
dividend and the related tax credit which will be regarded as the top slice of 
the shareholder’s income the tax credit may be set off against a uk resident
individual shareholder’s total income tax liability but no cash refund will be
available a us holder as defined above will not be entitled to any tax credit
from the uk inland revenue in respect of a dividend from the company although
there will be no further uk tax to pay in respect of that dividend
us federal income taxation
the gross amount of any dividend paid by the company to a us holder will
generally be subject to us federal income taxation such a dividend will not be
eligible for the dividendsreceived deduction generally allowed to us corporations
with respect to dividends from other us corporations the amount of the dividend
to be included in income will be the us dollar value of the pound sterling
payments made determined at the spot pound sterlingus dollar rate on the 
date of the dividend distribution regardless of whether the payment is in fact
converted into us dollars
qualified dividend income
an individual us holder’s ‘qualified dividend income’ is subject to tax at a
reduced rate of tax of 15 provided that the shares or adss are held for at
least 61 days of the 121 day period beginning on the date which is 60 days
before the exdividend date and the holder meets other holding period
requirements dividends will not however qualify for the reduced rate if such
corporation is treated for the tax year in which dividends are paid or for the
prior year as a ‘foreign investment company’ a ‘foreign personal holding
company’ or a ‘passive foreign investment company’ a pfic for us federal
income tax purposes recently enacted legislation repealed the foreign
investment company and foreign personal holding company provisions for tax
years of the corporation beginning after 31 december 2004 the company
does not believe that it would be treated as a foreign investment company or 
a foreign personal holding company for 2004 the company does not believe 
it was a pfic or were a pfic for 2005 accordingly the company considers that
dividends paid with respect to the shares or adss will be ‘qualified dividend
income’ and subject to the us holder’s satisfaction of the holding period
requirements described above should be eligible for the reduced 15 us
federal income tax rate the company dividends generally will be foreign
source passive income for us foreign tax credit purposes
taxation of capital gains
uk taxation
upon a sale or other disposal by a holder of ordinary shares or adss a gain or
loss may be recognised for uk capital gains tax purposes equal broadly to the
difference between the sterling value of the disposal proceeds and the holder’s
tax basis in the relevant ordinary shares or adss and subject to the availability
of any applicable exemptions under the treaty capital gains on disposals of
ordinary shares or adss will generally be subject to tax only in the jurisdiction
of residence of the relevant holder as determined for the purposes of the
treaty unless the ordinary shares or adss are held as part of the business
property of a permanent establishment of that holder in the uk in which case
such capital gains may be subject to tax in both jurisdictions the treaty also
contains an antiavoidance rule which will be relevant to individuals who are
residents of either the uk or the us and who have been resident of the other
jurisdiction the us or the uk as the case may be at any time during the six
years immediately preceding the relevant disposal of shares or adss the
treaty provides that in such circumstances capital gains arising from the
disposal may be subject to tax not only in the jurisdiction of which the holder 
is resident at the time of the disposal but also in that other jurisdiction
us federal income taxation
upon a sale or other disposal by a us holder of ordinary shares or adss a gain
or loss may be recognised for us federal income tax purposes equal broadly to
the difference between the us dollar value of the disposal proceeds and the us
holder’s tax basis determined in us dollars in the relevant ordinary shares or
adss generally such gain or loss will be regarded as a capital gain or loss and
as a longterm capital gain or loss if the us holder’s holding period for such
ordinary shares or adss exceeds one year longterm capital gains of a non
corporate us holder are generally subject to a maximum tax rate of 15
any such gain or loss will generally be income or loss from sources within the 
us for foreign tax credit limitation purposes the deductibility of a capital loss 
is subject to limitations if the adss or ordinary shares are publicly traded a
information for shareholders continued reuters group plc annual report and form 20f 2005 123
disposal of such adss or ordinary shares will be considered to occur on the
‘trade date’ regardless of the us holder’s method of accounting a us holder
that uses the cash method of accounting calculates the us dollar value of the
disposal proceeds as of the date that the sale settles however a us holder that
uses the accrual method of accounting is required to calculate the value of the
disposal proceeds as of the ‘trade date’ and therefore may realise a foreign
currency gain or loss unless such us holder has elected to use the settlement
date to determine its disposal proceeds in addition a us holder that receives
foreign currency upon the sale or exchange of the adss or ordinary shares and
subsequently converts the foreign currency into us dollars will have a foreign
exchange gain or loss based on any appreciation or depreciation in the value 
of the foreign currency against the us dollar foreign exchange gain or loss will
generally be us source ordinary income or loss deposits and withdrawals of
ordinary shares by us holders in exchange for adss will not result in the
realisation of a gain or loss for us federal income tax purposes
additional tax considerations
uk inheritance tax
an individual who is domiciled in the us for the purposes of the ukus estate
and gift tax convention the convention and who is not a national of the uk
for the purposes of the convention will not generally be subject to uk
inheritance tax in respect of ordinary shares or adss on the individual’s death
or on a transfer of ordinary shares or adss during the individual’s lifetime
provided that any applicable us federal gift or estate tax is paid however such
an individual will be subject to uk inheritance tax if the ordinary shares or adss
are part of the business property of a permanent establishment of the individual
in the uk or pertain to a fixed base in the uk of an individual who performs
independent personal services special rules apply to ordinary shares or adss
held in trust in the exceptional case where the disposition is subject both to
uk inheritance tax and to us federal gift or estate tax the convention generally
provides for any tax paid in the uk to be credited against tax liable to be paid
in the us or for tax paid in the us to be credited against the tax payable in the
uk based on priority rules set out in the convention
uk stamp duty and stamp duty reserve tax
no uk stamp duty or stamp duty reserve tax sdrt will be payable on the transfer
of an ads or agreement to transfer an ads provided that the instrument of
transfer  or written agreement is executed and retained outside the uk and does
not relate to any matter or thing done or to be done in the uk
uk stamp duty will generally be payable on conveyances or transfers of ordinary
shares at the rate of 05 of the amount or value of the consideration if any for
the transfer rounded up to the next multiple of £5 sdrt will be imposed at 
the rate of 05 of the amount or value of the consideration for the transfer if an
agreement is made for the transfer of ordinary shares unless an instrument of
transfer of the ordinary shares in favour of the purchaser or its nominee is
executed and duly stamped within six years of the day that the agreement is
made or in a case where the agreement is conditional the day that the condition
is satisfied in which case any sdrt paid will be repaid together with interest
where the sdrt is not less than £25 on a claim for repayment or to the extent
not paid the charge to sdrt will be cancelled sdrt is in general payable by 
the purchaser of ordinary shares but there are regulations which provide for
collection from other persons in certain circumstances including from crest
where the relevant ordinary shares are held in crest uk stamp duty or sdrt 
will generally be imposed on any instrument transferring ordinary shares to a
person or to a nominee or agent for such a person whose business is or includes
issuing depositary receipts such as the adss for relevant securities in these
circumstances stamp duty or sdrt will be charged at the rate of approximately
15 of the amount or value of the consideration for the conveyance or transfer
on sale or otherwise 15 of the value of the security transferred at the date the
instrument is executed
a transfer into crest will not be subject to this charge a transfer of ordinary
shares from a depositary or its agent or nominee to a transferee which results
in the cancellation of the ads which cancellation is liable to stamp duty as a
‘conveyance or transfer on sale’ because it completes a sale of such ordinary
shares will be liable to ad valorem stamp duty at the rate of 05 of the
amount or value of the consideration if any for the transfer a transfer of
ordinary shares from a depositary or its agent or nominee to the ads holder
which results in cancellation of the ads but where there is no transfer of
beneficial ownership is not liable to duty as a ‘conveyance or transfer on sale’
but will be liable to a fixed stamp duty of £5
us pfic status
if a foreign company is a pfic based on either an income test or an asset test
then certain distributions and gains can be allocated rateably over a us
shareholder’s holding period with the effect that the amount allocated to the
current taxable year and any taxable year before the company became a pfic
would be taxable as ordinary income in the current year and the amount
allocated to other taxable years would be taxed at the highest rate in effect for
that year on ordinary income the tax is also subject to an interest charge to
recover the deemed benefit from the deferred payment of the tax attributable
to each such year as referred to under the heading ‘taxation of capital gains –
us federal income taxation’ the company reasonably believes that it was not a
pfic in 2005 and does not anticipate becoming a pfic however the tests for
determining pfic status are applied annually and it is difficult to make accurate
predictions of future income and assets which are relevant to this determination
accordingly we cannot assure us holders that the irs would agree with our
belief nor can the company assure us holders that it will not become a pfic 
us holders are urged to consult their own tax advisors about the pfic rules
including the consequences to them of making a marktomarket election with
respect to our ordinary shares and adss in the event that we qualify as a pfic
us information reporting and backup withholding
a us holder is generally subject to information reporting requirements with
respect to dividends paid in the us on ordinary shares or adss and disposal
proceeds realised from the sale exchange redemption or other disposal of
ordinary shares or adss in addition a us holder is subject to backup withholding
currently at a rate of 28 on dividends paid in the us on ordinary shares or
adss and disposal proceeds realised from the sale exchange redemption or
other disposal of ordinary shares or adss unless the us holder is a corporation
provides an irs form w9 or otherwise establishes a basis for exemption backup
withholding is not an additional tax the amount of any backup withholding will
be allowed as a credit against a us holder’s us federal income tax liability and
may be refunded provided that certain information is furnished to the irs
10 related party transaction and material contracts
related party transactions – general
reuters has entered into arrangements with its joint ventures and associates
and has in addition provided financial information services to and purchased
services from many of the companies with which it shares a common director
except as otherwise indicated all of these transactions are in the normal course
of business on commercial terms related party transactions during 2005 2004
and 2003 were principally with radianz factiva tsi and instinet group each as
described below
only in the case of the transactions with radianz factiva 3xsq associates 
tsi and instinet group were any of the amounts involved material to either
party except as noted below these services are ongoing and continued at
historical levels to the date of this report tsi ceased to be a related party in
2004 and radianz and instinet group ceased to be related parties in 2005
radianzbt
from 1 january through 29 april 2005 the date on which radianz was sold to
bt see ‘network services agreement with and sale of radianz to bt’ below
and in accordance with intercompany agreements including those described
below radianz provided the group with network services totalling £65 million
2004 £277 million 2003 £304 million during this same period in 2005 reuters
group provided radianz with certain technical field engineering it systems
property and human resource services for a total cost of £15 million 2004 £66
million 2003 £82 million
network services agreement to secure the longterm availability of the
radianz network for the group reuters entered into a network services
agreement the radianz nsa with radianz in may 2000 in connection with the
formation of radianz reuters generally agreed to continue to use radianz for
its network services in support of global and strategic products during the term
of the agreement detailed provisions in respect of rates and charges were
agreed between radianz and reuters radianz agreed that it would provide 
the network services to reuters on terms which were no less favourable than
reasonably comparable services offered to any other customer of radianz and
reuters agreed to spend an agreed amount with radianz annually the radianz
nsa was terminated and superseded by the network services agreement with
bt described below
purchase of equant stake on 21 october 2004 reuters entered into an
agreement to purchase equant’s entire stake in radianz for £60 million  124 reuters group plc annual report and form 20f 2005
110 million in cash together with the release of future funding obligations
the transaction completed on 16 november 2004 the purchase agreement
included standard corporate representations and warranties by each of equant
and reuters as to itself and was otherwise generally on customary terms and
conditions for a transaction of this nature
network services agreement with and sale of radianz to bt reuters entered
into a contract with bt effective 29 april 2005 under which bt became supplier
of network services to reuters under this network services agreement bt will
provide and manage secure data networks for reuters products and services
world wide and reuters is currently expected to spend in the region of 3
billion through 2013 the agreement sets out the responsibilities of the parties
to achieve the migration of all existing connections to bt’s new ip network 
and contemplates completion around may 2008 the agreement sets out a
mechanism where liquidated damages will be payable on a sliding scale if a
party fails to achieve its migration responsibilities the agreement contains
minimum spend commitments for each year following the third year of the
agreement based on a declining percentage of the charges in the previous
year and obliges bt to meet certain quality of service levels reuters is entitled
to service credits and in the event of a material breach of such quality of
service levels reuters is entitled to terminate the agreement in addition the
agreement gives bt the opportunity to tender for any future telecommunication
services also on 29 april 2005 reuters sold radianz to bt for cash
consideration of 175 million £95 million plus any cash remaining on the
balance sheet net of working capital adjustments at the date of completion
the purchase agreement included standard warranties and indemnities from
reuters and was otherwise generally on customary terms and conditions for a
transaction of this nature as a result of the sale of radianz to bt future funding
obligations from reuters to radianz of 44 million were novated to bt
factiva
for information regarding transactions with factiva see note 34 on pages 95 to 96
tsi
on 3 february 2004 reuters reduced its stake in tsi from 484 to 88 and
has since further reduced it to less than 1 during 2004 reuters purchased
£13 million of services from tsi 2003 £16 million
licences reuters owns the underlying intellectual property and technology that
was in existence at 31 december 1996 and that is incorporated into many of
tsi’s products reuters licenses this technology to tsi tsi owns all technology
and related intellectual property rights independently developed by tsi since 
1 january 1997 including enhancements and improvements to the licensed
technology which tsi itself licenses to reuters
through the third quarter of 2003 reuters had a licence distribution and
maintenance agreement with tsi pursuant to which reuters was required to 
pay tsi certain minimum distribution fees related to sales of tsi’s products to
financial services market customers under this agreement reuters obligations
with respect to the minimum distribution fees were to expire at the end of 2003
and tsi was restricted until may 2004 from selling its products and providing
consulting services directly to companies in the financial services market except
in limited circumstances if reuters continued to pay the minimum distribution
fees until that date in october 2003 reuters entered into a revised commercial
agreement with tsi pursuant to the revised agreement tsi has the right to
market and sell its products to customers in the financial services market except
that tsi will not be able to market or sell risk management applications or
market data systems for financial services companies or to sell to financial
services customers through four specified resellers until may 2008 reuters 
will continue to have the right to use tsi technology internally and embedded
within its products and tsi will provide certain feebased support services to
reuters the agreement provided that reuters and tsi would work together 
to migrate reuters existing customers’ maintenance contracts to tsi and that
reuters rights to resell ended in october 2003 subject to completion of a
limited number of then in progress opportunities from october 2003 until
march 2005 reuters made quarterly payments of 5 million to tsi subject 
to reduction based on tsi’s direct revenues from products and support sold 
to financial services customers
on 27 february 2005 reuters and tsi entered into an amendment to the
commercial agreement under which tsi granted reuters new rights to resell 
a defined set of tsi software products solely in conjunction with the sale by
reuters of its market data delivery solutions in return for reuters paying tsi
licence fees in minimum annual amount of 11 million the reseller rights had
an initial term of one year which reuters was entitled to elect to extend 
for two further oneyear terms reuters did not extend the reseller rights and
so no longer has any minimum payment obligations to tsi the amendment
also extended the time during which reuters has the right to use tsi technology
internally and embedded within its products by one year to 31 december 2012
repurchase by tsi at the same time as the licence agreement revision in
october 2003 reuters and tsi entered into an agreement pursuant to which
tsi agreed to register sales by reuters of its tsi shares under us securities laws
and to repurchase up to 115 million of its shares from reuters upon reuters
completing a single public offering of at least 100 million of tsi shares 
in february 2004 reuters completed a registered public offering of 69 million
tsi shares for 473 million £261 million and tsi repurchased an additional 
17 million shares for 115 million resulting in aggregate net proceeds to
reuters after underwriting and transaction fees of approximately 563 million
£310 million
instinet group
sale of btc on 31 march 2005 reuters entered into an agreement to sell btc
to instinet group for 22 million in instinet group stock subject to adjustment
for working capital and net capital the transaction completed 31 march 
2005 and reuters received 3751527 shares of instinet common stock plus 
a subsequent 74258 shares in respect of a postclosing purchase price
adjustment in each case valued based on the average daily closing prices over
the ten trading days ending on the second trading day prior to the date of
determination for the payment pursuant to the agreement until 31 december
2005 btc continued to have exclusive rights to allow its existing clients to pay
for reuters station through ‘soft dollar’ credits generated by trading activity in
addition reuters agreed for a period of one year not to operate a us broker
dealer which allows its customers to pay for reuters station on a soft dollar
basis and not to solicit btc employees in each case subject to certain
exceptions the agreement otherwise included representations and warranties
covenants and other terms customary for a transaction of this nature following
the sale reuters continued to provide certain transitional services to btc
including a lease arrangement for space currently occupied by btc various
administrative technology and other support services and a royaltyfree licence
to the btc trademark other than the licence such arrangements include fees
generally based on allocated or attributable costs
sale of instinet group to nasdaq on 22 april 2005 instinet group and
nasdaq entered into a definitive agreement for nasdaq to acquire instinet
group for approximately 188 billion in cash in connection with the transaction
reuters entered into an agreement with nasdaq agreeing to vote its 62
interest in instinet group in favour of the acquisition subject to certain
conditions and exceptions the acquisition was completed on 8 december
2005 and reuters received approximately 113 billion including the dividend
from the sale of ljr described below
sale of instinet institutional brokerage to silver lake partners at the same time
as it agreed to acquire instinet group nasdaq agreed to subsequently sell
instinet the institutional brokerage business to silver lake partners as a
condition to nasdaq agreeing to acquire instinet group reuters agreed to
consent to the assignment of certain of its agreements relating to the instinet
brokerage business and waive its termination rights under certain of its
agreements relating to the instinet business which resulted from the sale of
instinet group while certain other agreements were agreed to be terminated
or extended in addition subject to certain conditions reuters agreed to
provide certain transition services to the instinet brokerage business reuters
also agreed to indemnify the instinet brokerage business against certain uk
pension liabilities that may arise in connection with instinet employees’
participation in one of reuters uk pension funds
sale of ljr to the bank of new y ork at the same time as it entered into the
agreement to be acquired by nasdaq instinet group also agreed to sell its ljr
subsidiary to the bank of new york the sale was completed on 30 june 2005 
and the net proceeds of the transaction were distributed as a dividend to instinet
group’ s stockholders and deducted from the nasdaq purchase price as a
condition to the transactions reuters agreed to assume indemnity obligations of
instinet group in the sale agreement for certain preclosing liabilities breaches of
representations and warranties and certain taxes effective only upon completion of
the sale of instinet group and subject to certain limitations instinet group agreed
to obtain and has obtained an insurance policy in respect of certain of these
liabilities of which reuters is a beneficiary
information for shareholders continued reuters group plc annual report and form 20f 2005 125
intercompany agreements during the time that reuters owned a majority 
stake in instinet group reuters and instinet group were party to numerous
agreements and arrangements including those described above and below
under which they provided each other with various products services licences
and other transactions
reuters order routing under agreements between reuters and instinet group
instinet group customers gained the ability to submit orders to instinet group
and to receive indications of interest from instinet group over the reuters
order routing network without charge to instinet group
newport
sm
under an agreement with instinet group reuters had the exclusive
right to provide the realtime market data for instinet group’s newport
sm
patent pending program trading application
market data reuters had been entitled to redistribute certain proprietary equity
securities data from instinet group under two data distribution agreements
under a data distribution agreement entered into at the time of the instinet
initial public offering ipo in may 2001 reuters had the limited right to be the
exclusive data vendor distributing some of instinet group’s proprietary equity
securities data however this agreement terminated on 17 may 2004 under a
separate agreement originally entered into with island ecn which was
acquired by instinet group in september 2002 reuters has the right to
redistribute a broader set of proprietary equity securities data from instinet
group this agreement continued in effect notwithstanding the termination of
the exclusive arrangement described above and reuters was not required to
make payments in connection with any such redistribution
customer agreement instinet group received certain reuters information
services and related hardware software and support on terms similar to those
given to reuters independent thirdparty customers and had the right to
redistribute certain reuters information both internally and to its customers
preferred softdollar arrangement this agreement established a preferred
commercial and softdollar arrangement for certain instinet group customers
that purchase reuters products and services it provided that reuters would
compensate instinet group’s sales personnel for new sales of reuters products
and services and instinet group would pay reuters an annual fee for various
administrative and marketing services related to training of instinet group’s
personnel
commission sharing agreement before the purchase of btc by instinet group
instinet group had agreed to open accounts for some institutional clients that
btc introduced to instinet group and to rebate btc portions of the
commissions these customers paid at a commercially reasonable rate
triad reuters gave instinet group the ability to deliver indications of interest
and advertised trades to its customers and potential customers through reuters
triad network instinet group paid standard commercial rates for indications of
interest and advertised trades it delivered through triad
data center hosting agreement reuters provided certain data centre hosting
services to instinet global services limited at two sites in london docklands
and great sutton street
3 times square sublease instinet group is subject to an agreement with
reuters to sublease office space at 3 times square in new york city in
connection with the purchase of instinet group by nasdaq the sublease was
assigned to instinet the institutional brokerage business sold by nasdaq to
silver lake partners with instinet group also remaining obligated under the
sublease and the space sublet was reduced from 360392 rentable square feet
to 284537 rentable square feet in addition instinet group agreed to terminate
the rights to utilize and receive 50 of the revenues from the building’s
signage in connection with these and related changes to the sublease instinet
group paid reuters 35 million the remaining sublease term is until 2021 with
a onetime right of termination in 2011 as to 68264 rentable square feet of the
space instinet group is required to post a letter of credit for 49 million based
on its pro rata portion of the 3 times square space leased by reuters to secure
its obligations under the sublease
3xsq associates
for information regarding transactions with 3xsq associates see note 34 on
page 95 to 96
other material contracts
savvis network services agreement in connection with the bridge acquisition
in 2001 reuters entered into a fiveyear network services agreement with
savvis bridge’s network service provider under which savvis agreed to provide
internet protocol network services internet access and colocation services
necessary to continue network services for the bridge business and customers
reuters was acquiring the agreement contained minimum spend
commitments for each year and obliged savvis to meet certain quality of
service levels the agreement was amended on a number of occasions to
reflect the on going business relationship between the parties culminating in 
a termination of the original agreement and the execution of new agreement
between the parties on 19 may 2005 the new agreement which has a three
year term contains no minimum revenue commitments but continues to oblige
savvis to meet newly defined quality of service levels which are designed to
more accurately reflect the services which are and will be provided by savvis
reuters is entitled to service credits and in the event of a material breach of
such quality of service levels reuters is entitled to terminate the agreement
in addition on 3 june 2005 in connection with the acquisition of the telerate
business reuters acquired telerate’s agreement with savvis for the provision of
internet protocol network services internet access and colocation services to
support the acquired telerate business this agreement which expires 1 october
2009 and is an exclusive arrangement for the telerate business so long as savvis
remains in material compliance with its obligations contains minimum annual
spend commitments ending 1 november 2006 including a 20 million spend
commitment by reuters for the oneyear period ending 1 november 2006 
if savvis does not meet certain quality of service levels reuters is entitled to
service credits and in the event of a material breach of such levels to terminate
the agreement
telerate acquisition agreement on 20 december 2004 reuters entered into
an agreement to acquire substantially all of the business of telerate the total
purchase price for telerate was 145 million £79 million in cash and reuters
14 holding in savvis the cash purchase price comprised a 100 million initial
purchase price a 21 million working capital adjustment and a 24 million
increase for preclose actions by telerate which reduced reuters anticipated
restructuring costs at the signing of the agreement reuters provided an
interim funding payment of 34 million £18 million in funding to telerate
which together with interest was repaid on the closing date of 3 june 2005 in
addition at the closing reuters received a payment of 22 million £12 million
in satisfaction of all outstanding invoicing and payment disputes under a
transitional services agreement tsa between the parties under which each
had provided the other certain software andor services for a transitional period
following their respective acquisitions of the interconnected bridge and
telerate businesses out of bankruptcy in late 2001 the payment consisted of
10 million £5 million paid by telerate and 12 million £7 million released
from an escrow which had been established for payments of disputed amounts
by the parties during the term of the tsa
the telerate acquisition agreement was generally on customary terms
including representations warranties covenants conditions and indemnities by
each of the parties a portion of the purchase price consisting of 30 million
cash and 15 million worth of savvis stock valued at the closing was put into
escrow for two years to serve in general as the sole source of funding for any
postclosing claims by reuters
financing arrangement for a discussion of other material contracts see
‘treasury policies’ on pages 20 to 22
11 capital investments expenditure and divestments
during the last three years reuters has made a number of acquisitions and
invested in new businesses reuters also completed its divestment of radianz and
instinet group during 2005 the principal acquisitions investments and disposals
none of which exceeded £50 million save where otherwise stated were 126 reuters group plc annual report and form 20f 2005
acquisitions
2005
telerate a leading financial information provider in the fixed income sector 
in june 2005 for £79 million in cash plus reuters’ investment in savvis
convertible preference shares valued at £31 million
quick telerate corp a distributor of telerate’s products in japan 
in june 2005
image group limited trading as action images a media company in the
sports pictures market in september 2005
ecowin ab a data provider specialising in global and macroeconomic data in
november 2005
tremont capital management’s tass research hedge fund database and the
hedgeworld group in march 2005
in april 2005 reuters announced that it would launch a new indian tv news
channel times now in association with the times of india it was agreed 
that reuters would take a 26 interest in the new company the times global
broadcasting company limited subject to receiving regulatory approval 
during 2006
in june 2005 reuters and nasdaq announced the formation of a new joint
venture independent research network inc the new company will provide and
distribute equity research to the analyst community reuters invested £1 million
in the joint venture during 2005
total capital expenditure including transaction fees for acquisitions of subsidiaries
and investments in joint ventures and associates was £145 million during 2005
2004
fitzrovia international plc a leading investment fund research company was
acquired in october 2004 by lipper limited a wholly owned subsidiary of
reuters
radianz in which reuters acquired the 49 voting interest it did not already
own was acquired from equant in november 2004 for £60 million
total capital expenditure for acquisitions investments in joint ventures and
associates and other investments during 2004 was £80 million
2003
multexcom inc a leading provider of investment research was acquired in
march 2003 for £158 million
divestments
2005
reuters disposed or closed a total of five units for consideration of £910 million
net of transaction fees the principal disposals or closures were
instinet group in which reuters had a stake of 62 for £612 million in december
2005 prior to the sale instinet acquired reuters 100 stake in btc a soft dollar
execution broker for approximately 38 million shares of instinet group stock
valued at £12m instinet also disposed of its whollyowned subsidiary ljr in july
2005 for total consideration of £96 million and its 2 interest in archipelago
holdings llc in may 2005
radianz in which reuters had a 100 stake was sold to bt for total
consideration of £115 million in april 2005
tsi in which reuters reduced its stake from 88 to below 1 by 31 december
2005 for total consideration of £63 million
deutsche gesellschaft für adhocpublizitat gmbh dgap a media company
in which reuters held a 33 stake was sold in november 2005
2004
reuters disposed of or closed a total of 12 units in 2004 for consideration
totalling £474 million the principal disposals or closures in 2004 were
tsi in which reuters reduced its stake from 484 to 88 in february 2004
through completion of a public offering of 69 million tsi shares and sale of an
additional 17 million shares back to tsi for aggregate net proceeds of
approximately £310 million
gl trade a financial software company in which reuters held a 342
shareholding was divested in june 2004 for a consideration of £59 million
ort sas a whollyowned credit rating subsidiary of reuters was sold in june
2004 for a total consideration of £29 million
towergroup a financial services research company in which reuters held a 98
holding was sold in february 2004
yankee a whollyowned telecommunications research company was sold in
may 2004
riskmetrics a company specialising in portfolio credit risk evaluation in which
reuters held a 24 stake was divested in january and june 2004
reuters remaining greenhouse fund investment portfolio was sold in june 2004
to a company established by rvc the independent fund management
company created by former reuters employees in 2001 to manage the
greenhouse fund
2003
reuters disposed of or closed a total of 17 units in 2003 for consideration
totalling £41 million the principal disposals in 2003 were
synetix solutions limited a joint venture focusing on data management
solutions sold in january 2003
wall street on demand a whollyowned subsidiary providing research acquired
as part of the acquisition of bridge sold in march 2003
informa sa a provider of online credit and financial information in which
reuters held a 40 shareholding sold in september 2003
datamonitor plc a research company specialising in industry analysis in which
reuters held a 205 ordinary shareholding sold on a piecemeal basis between
july 2003 and november 2003
the thai apex services business a domestic equities information service in
thailand sold into a new joint venture formed by reuters and systex
corporation in december 2003
agence de presse médicale international sas a health information provider in
france a whollyowned subsidiary sold in december 2003
12 property plant and equipment
the computer equipment that reuters uses to create manage and deliver 
its products to customers across the world forms the bulk of its tangible 
fixed assets this equipment is distributed across global sites with greater
concentration at the major global and regional technical centres as reuters
extends its use of hosting services and browser delivery for its products the
quantity of equipment located at customer sites is being reduced
the group’ s principal facilities were relocated to a newly refurbished building
located at the reuters building south colonnade in the canary wharf area of
london during mid2005 in september 2003 reuters announced arrangements
to consolidate its londonbased operations to canary wharf during 2005 under
the agreement signed with the ownership of canary wharf reuters entered into
a 281000 sq ft office lease and transferred approximately 340000 sq ft of
redundant offices including 85 fleet street to canary wharf group for cash
consideration of approximately £30 million reuters other significant sites include
• the us headquarters at 3 times square in new york city 692000 rentable sq
ft of which 288000 rentable sq ft are sublet
• the technical centres in london 324000 sq ft hazelwood missouri 109000
sq ft geneva 144000 sq ft which also includes the regional office for
emea singapore 180000 sq ft which also includes the regional office for
asia and hauppauge new york 50000 sq ft and
information for shareholders continued reuters group plc annual report and form 20f 2005 127
• the four corporate office buildings located in st louis county missouri
aggregate of 211000 sq ft
reuters owns the land on which its london and hauppauge technical centres
are situated whereas its buildings in geneva and singapore were built on
leased land the leases including periods covered by options to extend
expires in 2095 and 2050 respectively
the reuters building at 3 times square is owned and was developed by 3xsq
associates which is owned by reuters and rudins times square associates llc 
in may 2001 reuters commenced its lease of 692000 sq ft from the venture of
which 288000 sq ft is subleased to instinet group which in turn has subleased
approximately 180000 sq ft to third parties the principal part of reuters lease will
expire in 2021 see ‘3xsq associates’ sublease on page 96 for further information
in 2003 the major technical centre building in hazelwood missouri was
acquired from savvis for a total consideration of £24 million reuters
subsequently entered into a sale and leaseback for the facility receiving 
£23 million under a 20 year arrangement
during 2004 reuters extended its facilities in bangkok to 100000 sq ft
reuters has two office buildings in bangalore which are leased and provide a
total of approximately 138000 sq ft the leases on these facilities including
periods covered by options to extend expire in 2009 in january 2006 reuters
signed a lease for an additional facility in bangalore providing 59000 sq ft and
an option to expand by a further 15000 sq ft which expects to occupy in april
2006 the lease on this facility expires in 2011
reuters facilities in bangkok which are leased provide a total of 120500 sq ft
the lease for this property including the period covered by an option to
extend expires in 2010
13 legal proceedings
except as described above in note 35 on page 97 neither the group nor any
of its directors members of senior management or affiliates is subject to any
legal or arbitration proceedings which may have or have had in the recent past
significant effects on the group’s financial performance or profitability a
description of certain legal proceedings relating to instinet group was included
in the 2004 annual report and form 20f but is not included in this annual
report in light of instinet group’s acquisition by nasdaq in december 2005 128 reuters group plc annual report and form 20f 2005
crossreference guide to form 20f
item description page
1 identity of directors senior management and advisers na
2 offer statistics and expected timetable na
3 key information
selected financial data 56
exchange rates 122
capitalisation and indebtedness na
reasons for offer and use of proceeds na
risk factors 2425
4 information on the company
history and development of the company 713 119 125126 130
business overview 712 1620 5859 66
organisational structure 1620 100
property plant and equipment 126127
4a unresolved staff comments na
5 operating and financial review and prospects
operating results 730
liquidity and capital resources 2022
research and development patents and licenses etc 60
trend information 2 1320
offbalance sheet arrangements 24
tabular disclosure of contracted obligations 21
6 directors senior management and employees
directors and senior management 3233
compensation 3948
board practices 31 3437 39 43
employees 1011 64
share ownership 4042 4648 9395
7 major shareholders and related party transactions
major shareholders 118119
related party transactions 9596 123125
interests of experts and counsel na
8 financial information
consolidated accounts and other financial information see item 17
litigation 97 127
dividend policy 26 119
significant changes 100
9 the offer and listing
offer and listing details – price history of shares 118
plan of distribution na
markets 118
selling shareholders na
dilution na
expenses of the issue na
10 additional information
share capital na
memorandum and articles of association 3940 119121
material contracts 123125
exchange controls 122
taxation 122123
dividends and paying agents na
statement by experts na
documents on display 130
subsidiary information na
11 quantitative and qualitative disclosures about market risk 20 22 7381
12 description of securities other than equity securities na
13 defaults dividend arrearages and delinquencies na
14 material modifications to the rights of security holders and use of proceeds na
15 controls and procedures 3738 reuters group plc annual report and form 20f 2005 129
item description page
16a audit committee financial expert 36
16b code of ethics 36
16c principal accountant fees and services 36 60
16d exemptions from the listing standards for audit committees na
16e purchases of equity securities by the issuer and affiliated purchasers 89
17 financial statements
report of the auditors 49
consolidated income statement for each of the two years in the period ended 31 december 2005 50
consolidated statement of recognised income and expense for the two years in the period ended 31 december 2005 50
consolidated balance sheet at 31 december 2005 and 2004 51
consolidated cash flow statement for each of the two years in the period ended 31 december 2005 52
accounting policies 5257
notes to the financial statements 58103
summary of differences between ifrs as adopted by the eu and us gaap and related notes 104108
18 financial statements na 130 reuters group plc annual report and form 20f 2005
glossary
term used in annual report us equivalent or brief description
allotted issued
associates affiliates accounted for under the equity method
business segment industry segment
called up share capital ordinary shares issued and fully paid
capital allowances tax term equivalent to us tax depreciation allowances
combined code a set of corporate governance principles and detailed codes of practice
destination of revenue the geographical area from which goods or services are supplied
finance income interest income
freehold ownership with absolute rights in perpetuity
origin of revenue the geographical area from which goods or services are supplied to a third party 
or another geographical area
profit income
profit for the year attributable to the equity holders of the parent net income
share capital ordinary shares capital stock or common stock issued and fully paid
shares in issue shares outstanding
share premium additional paidin capital or paidin surplus not distributable
trade payables accounts payable
trade receivables accounts receivable reuters group plc annual report and form 20f 2005 131
wednesday 26 april
first quarter trading statement issued
thursday 27 april
annual general meeting
time 1130 am
venue the reuters building 
south colonnade canary wharf 
london e14 5ep
thursday 4 may
final dividend for 2005 payable to
ordinary shareholders on the register
as at 17 march 2006
thursday 11 may
final dividend payable to ads holders
on the record as at 17 march 2006
wednesday 26 july
interim 2006 results announced
wednesday 2 august
ordinary shares go exdividend
wednesday 2 august
adss go exdividend
wednesday 30 august
interim dividend for 2006 payable to
ordinary shareholders on the register
as at 4 august 2006
wednesday 6 september
interim dividend payable to ads holders 
on the record as at 4 august 2006
thursday 18 october
third quarter trading statement issued
financial diary for 2006
corporate headquarters
the reuters building
south colonnade
canary wharf
london e14 5ep
tel 44 020 7250 1122
wwwaboutreuterscom
registered in england
no 3296375
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email miriammckay

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media queries
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email simonwalker

reuterscom
registrardepositary
for dividend queries duplicate mailings 
and change of address
ordinary shares
lloyds tsb registrar
the causeway
worthing
west sussex bn99 6da
uk
tel 44 0870 600 3970
for callers within the uk
tel 44 121 415 7047
for callers outside the uk
fax 44 01903 833 482
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deutsche bank adr service center
co mellon investor services
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tel 1 866 282 4011
website wwwadrdbcom
electronic copies
the annual report and form 20f and the
annual review are available on the internet 
at wwwaboutreuterscomar2005
listings
london stock exchange rtrl 
and nasdaq rtrsyo
options on ordinary shares are traded on
euronext liffe futures contracts on ordinary
share are traded on the euronext liffe
universal stock futures market the american
stock exchange in new york lists options on
american depositary shares of reuters
options on american depositary shares are
traded on arcaex
corporate brokers
citigroup and jpmorgan cazenove limited
financial pr
brunswick group limited
where to find us 132 reuters group plc annual report and form 20f 2005
notes 01 introduction
02 financial highlights
03 chairman’s statement
04 chief executive’s review
05 selected financial highlights
07 operating and financial review
31 directors’ report
32 directors and senior managers
34 corporate governance and statement 
of directors’ responsibilities
39 remuneration report
49 united kingdom opinion
49 united states opinion
50 consolidated income statement
50 consolidated statement of recognised 
income and expense
51 consolidated balance sheet
52 consolidated cash flow statement
52 group accounting policies
58 notes to the financial statements
104 summary of differences between ifrs 
as adopted by the eu and us gaap
107 notes on the summary of differences between 
ifrs and us gaap
109 eleven year consolidated financial summary
111 separate financial statements for reuters group plc
111 parent company audit opinion
112 reuters group plc – balance sheet
113 reuters group plc – accounting policies
115 reuters group plc – notes to the financial statements 
118 information for shareholders
128 crossreference guide to form 20f
130 glossary
131 financial diary for 2006
131 where to find us
contents 
designed and produced by salterbaxter
printed by ctd printers limited
picture on cover
9 november 2005 a protester waves an
orange flag in baku azerbaijan reuters
photographer david mdzinarishvili
©reuters 2006
all rights reserved
reuters the sphere logo and lipper are the
trade marks or registered trade marks of the
reuters group around the world
this report is printed on paper made from
100 recycled fibres sourced only from post
consumer waste reuters group plc annual report and form 20f 2005
reuters group plc annual report 
and form 20f 2005
reuters 2005
and beyond
for more information visit
wwwaboutreuterscom reuters group plc  annual review 2005
reuters group plc annual review 2005
reuters 2005
and beyond reuters now the markets are 
changing rapidly and we are seizing
the opportunity to differentiate 
ourselvesfromourcompetitorsand
leadtheindustryinanewdirection
as an organisation we are also
ready for the challenges of delivering
faster growth today… and beyond
contents
01 what we do
01 how we performed in 2005
02 chairman’s statement 
reuters 2005
04 chief executive’s review
and beyond
08 sales  trading
10 research  asset management
12 enterprise
14 media
16 new markets
18 corporate responsibility review
21 business review
23 summary operating and
financial review
25 directors and senior managers 
27 summary remuneration report
32 summary financial statement
35 information for shareholders 
35 forwardlooking statements
36 financial diary for 2006
36 where to find us
this review has been claritychecked
and awarded the clear english standard
by plain language commission
wwwclearestcouk which promotes
clear and concise communication in
documents and on websites this is the
first time a ftse 100 company has won
the accolade for an annual review reuters group plc annual review 2005 01
how we performed in 2005
what we do
reuters goal is to be the information company our 
customers value most we seek to offer indispensable 
content innovative trading services and great customer 
service our heritage as an independent news provider 
is unparalleled
we operate in 89 countries around the world serving 
the financial markets and providing multimedia news 
coverage of global and regional events
04
05
2339
2409
04
05
14
14
04
05
260p
326p
04
05
10p
10p
reuters group basic
earnings per ordinary 
share pence
reuters group dividend 
per ordinary share pence
£482m
reuters group profit for the year
£253m
reuters group net funds
revenue £m trading profit margin  02 reuters group plc annual review 2005
chairman’s statement
i am greatly encouraged by
what i have seen and heard –
a business regaining its
confidence and that of 
its customers and well
placed to enter a new
phase of growth
in my first full year as chairman i have had the
opportunity to travel around the reuters world
meeting many of our people and customers 
i am greatly encouraged by what i have 
seen and heard – a business regaining its
confidence and that of its customers and well
placed to enter a new phase of growth i am
humbled by the courage and conviction shown
by our people particularly our journalists who
continue to operate in areas where the threat
of violence and arbitrary detention is the norm
in 2005 we mourned the deaths of waleed
khaled who was shot and killed in iraq and
rashid khaled who died there too following 
a car crash in basra we remain intensely
troubled by the difficult circumstances of
journalists in war zones and continue to press
for a better model of engagement between
the media and the military
i am privileged to lead a worldclass board
which encompasses a broad range of
backgrounds and experiences i am a
passionate believer in the power of diversity to
enhance decision making the unique outlook
each board member brings is undoubtedly the
board’s greatest asset as a board we have
worked hard to develop a healthy relationship
with management characterised by
constructive challenge and support tom
glocer is an exceptional chief executive
the board and management have worked
together to define a coherent strategic
framework the resulting strategy for growth
builds on our core strengths in content 
and transaction services and addresses our
customers’ critical needs we must also
continue to transform our core business by
pursuing greater efficiency and simplicity in
everything we do
in a world where trust is scarce the reuters
brand which has trust at its heart resonates
deeply it is our challenge to grow the
company to fill the space occupied by the
brand reuters is unique in that it is governed
by the trust principles which commit us to 
act with integrity independence and without
bias these principles are not restricted to 
the collection and dissemination of the 
news they inform every decision we make
whether it concerns our customers suppliers
staff or the communities in which we operate 
a responsible approach to business is 
not optional without responsibility there is 
no sustainability
for over 150 years reuters has been relentless
in the pursuit of truth we have built one of
the world’s great brands now i am confident
that we are on course to enjoy a new phase 
of growth
niall fitzgerald kbe chairman
the reuters trust principles
state that the integrity
independence and freedom
from bias of reuters shall at 
all times be fully preserved reuters group plc annual review 2005 03
reuters
2005
• revenues growing again for the first time in four years
recurring revenues which account for 93 of total 
revenues grew 4
• on target to deliver cost savings of £440 million by 
the end of 2006 the threeyear fast forward business
transformation programme was completed according to plan
• instinet stake sold we raised £630 million through the sale 
of our stake in instinet
• plan to return £1 billion to shareholders over two years 
we are doing this by buying back our shares on the 
open market 04 reuters group plc annual review 2005
chief executive’s review
we’ve completed the ‘fix it’
stage of our strategy putting
our core business back on
track reuters is now more
competitive simpler more
customerfocused and 
more efficient
what was the highlight for you in 2005
the key thing for me is that we went from four years of losing revenue
to revenue growth – that’s really important for our shareholders and
for our employees as well
fast forward has just completed did it achieve its objectives
our fast forward transformation plan has achieved its objectives 
in full the £440 million in cost savings being delivered in 2006 has
turned reuters from lossmaking to profit and we have significantly
enhanced our product line putting out a slew of great products at
yearend we also improved customer service and built a solid
platform for growth
last july the company launched the core plus growth initiatives
which you said would strengthen the core business and accelerate
revenue growth it’s very early but is that working as you 
had hoped
yes there are really good early signs of success in core plus 
there are four initiatives electronic trading highvalue content a 
new approach to enterprisewide sales and new markets and for 
each one we have an important milestone or set of milestones we 
can point to to show that we’re on track to deliver additional 
growth at reuters
how do you think our customers are responding to those changes
i judge the customer response in a number of ways
first is it coming through in revenues and in sales the answer is yes
– we’ve seen increases in these lines
second by how they tell reuters they are feeling – we have a formal
customer satisfaction survey that goes to about 12000 users and that’s
shown steady improvement
and finally the thing i really like is i just go out and spend time with
customers i walk around the trading desks i talk to our customers
and they tell me they can see the difference at reuters
and what about the product offering at reuters
we seek to provide a sensible range of products we believe that
customers don’t just want a single box at a single price that said
reuters had gotten far too complex with 1300 products in the
product line in 2001 what we’ve done is rationalise it reduced the
number of products and platforms and then put fitforpurpose
products out to meet different customer needs
we’re returning cash to the market via a share buyback 
why was that method chosen above others 
it’s a taxefficient strategy and it also allows us to retire shares while
putting out cash thereby raising the earnings per share for everybody
who remains a shareholder the reuters board looked at a number 
of alternatives and we thought this was the best method reflecting
our capital needs the needs of our shareholders and the market value
of reuters shares
looking to 2006 what do you see lying ahead for the company
i’m very excited about 2006 the key drivers for us will be to deliver 
on our core plus investments to accelerate our revenue growth to
continue to really focus on customer service and to maintain the good
cost control that we’ve had throughout the last few years reuters group plc annual review 2005 05
what are your ambitions for the media business
reuters has operated a successful wholesale media agency for over
150 years and we believe we can grow a directtoconsumer media
business alongside it our content and our brand form a compelling
offer to individuals in search of an independent unbiased view of
world events
why are electronic trading systems so important to reuters
reuters pioneered electronic trading with the launch of our first
reuters monitor dealing system back in 1981 since then we have
had a track record of continuous innovation in this area right up to
the launch in 2005 of reuters trading for fixed income and reuters
trading for foreign exchange we see trading moving increasingly to
electronic platforms so we are investing heavily in this area as part of
our core plus strategy 
how is reuters culture changing
there are many wonderful aspects of the reuters culture that underpin
much of the company’s enduring value however during fast forward
it has been important to introduce a leaner more performancedriven
aspect to our culture corporate cultures do not change overnight
but i am pleased with the progress we have made to date and
confident we can continue to blend these two aspects of our culture
tom glocer ceo
 to see tom glocer reuters ceo 
answering some key questions visit
wwwaboutreuterscominvestors 1 fix it
status complete
we have completed the fast
forward programme which
aimed to transform our core
business we have made 
reuters more competitive 
simpler more customer
focused and more efficient
status ongoing
we have to keep ahead of 
the competition by constantly
improving what we offer our
customers we are continuing 
to make our operations 
more efficient
status started
our relentless focus on the 
basics means that we can now 
also begin to look ahead where
will our future growth come 
from we are identifying and
investing in new opportunities 
for revenue growth and 
building on our strong brand
what we said we would do
• make our information 
indispensable
• simplify and segment our 
product line
• reduce and reshape our 
cost base
• streamline our group portfolio
what we said we would do
• improve our product delivery 
• streamline our product 
delivery infrastructure
• continue to invest in 
new content 
• make reuters simpler to do
business with
what we said we would do
• continue to grow our healthy 
core financial markets and 
media businesses 
• look for new highgrowth
opportunities adjacent to the 
core which we call core plus 
chief executive’s review continued
2 strengthen it
3 grow it
what we have done
• expanded our data coverage while moving much of our data
production to our bangalore content centre
• reduced our 1300 products to 400 as we head towards 
50 desktop financial information products
• made savings of £360 million by the end of 2005 putting us
on track to deliver £440 million in 2006
• simplified our business by divesting or closing portfolio
holdings generating total cash proceeds of £13 billion
our strategy 
is straightforward
what we are doing
• simplifying our product development process and concentrating
development into fewer centres to improve product quality 
• rationalising our data centres from 250 to around 10 globally
to reduce costs simplify our product delivery and improve
service quality
• streamlining our content management processes to improve
the accuracy timeliness and breadth of our data
• modernising our customer administration systems to make it
easier for customers to buy from us 
what we are doing
• launching improved versions of key products such as reuters
3000 xtra reuters trader and reuters knowledge and upgrading
our family of reuterscom websites
• introducing four new core plus revenue growth initiatives 
to enable us to compete in markets with a combined value 
of £11 billion almost double the market opportunity that we
currently serve
– extending our range of electronic trading services
– offering highvalue content that attracts a premium for
providing not just information but insight
– packaging our content and software to provide onestop
toolkits for market activities such as automated trading
– creating services for rapidly developing geographic
markets new asset classes and new audiences
06 reuters group plc annual review 2005 reuters group plc annual review 2005 07
and
beyond
• scope to grow our core business in line with the market 
our core financial markets have an expected mediumterm
growth rate of 2–4
• four new core plus growth initiatives to generate new
revenues of 3 in 2008 we are expecting to deliver 1 
of new revenue from these initiatives in 2006
• new service improvement initiatives to save £150 million 
a year from 2010 to achieve this we will invest a total of 
£170 million by 2008 08 reuters group plc annual review 2005
sales  trading
sales  trading is our largest business division
contributing 66 of our revenue in 2005 
it provides real time prices news and trading 
systems for banks brokers and fund managers 
who are active in the treasury fixedincome 
equities and commodities markets
1 5
the market for electronic
trading applications is growing
at 15 a year
our products
• reuters 3000 xtra a premium service
combining news data charts analysis tools
and trading services for traders who are
active in international markets
• reuters trader a browserbased news and
information service for market participants
including those in regional markets
• reuters dealing 3000 an electronic 
trading service used by banks to buy and
sell currencies
during 2005 we introduced wellreceived
new versions of reuters 3000 xtra and 
reuters trader our fixed income products
were enriched by our acquisition of telerate
this brought us essential content for the fixed
income and treasury markets and helped us
increase our customer base
our equities order routing service links 
a growing global community of over 200
brokers enabling them to find the best
counterparties for their trades
electronic trading
as a rapidly growing proportion of trades
moves onto electronic trading platforms
reuters is ready to exploit the trend
electronic trading is one of the four core 
plus growth initiatives we launched in 2005
we have built on the longestablished
expertise we gained through our highly
successful dealing 3000 service to launch 
new electronic trading systems for the fixed
income and foreign exchange markets 
in 2006 we will also be introducing services
for exchangetraded equities and 
derivative products
reuters trading for fixed income has gained
strong momentum in europe with support
from 13 major price contributors and 80 client
institutions steadily increasing the volume of
trades on the system we will be deploying
the system worldwide in 2006
reuters trading for foreign exchange
connects banks with their customers in financial
institutions and corporate treasuries enabling
both sides to reduce trading costs through
automated deal processing and settlement 
in 2006 we will roll out the service to a wider
range of organisations including investment
and hedge funds
our new reuters trade notification service
also allows us to generate revenues from deal
processing it links banks and brokers to a
central hub so that they can exchange trade
confirmations and related information
 investor looks up at quotation board
at dubai stock exchange
photographer tamara abdul hadi  electronic
trading
transformed unrivalled
insight research  asset 
management
research  asset management serves the needs of 
fund managers wealth managers investment bankers
and research analysts who make complex financial
decisions outside the sales and trading environment 
it contributed 11 of our revenue in 2005
34
reuters knowledge accesses 
increased by 34 in 2005
but our customers are not only looking for
comprehensive data as automated trading
gathers momentum traders and investment
managers are seeking to improve their
performance by adding new perspectives to
investment decisions the second of our core
plus growth initiatives is to offer highvalue
content that enables users to find those insights
our journalists organise regular summits
where industry specialists contribute an
informed view of the trends shaping various
market sectors these events have generated
a steady stream of exclusive thought
provoking insights for our news services
adding new angles to our customers’ research
our global customer base makes us an
attractive distribution partner for owners of
proprietary highvalue content in february
2006 we signed an exclusive agreement to
carry retail sales data from mastercard 
which is proven to be an accurate predictor of
consumer spending an indicator watched
closely by the markets innovations like these
give our customers a competitive advantage
our products
• reuters knowledge suite an indepth
company research service which can be
combined with 3000 xtra
• reuters wealth manager a flexible 
broad financial information service 
during 2005 we renewed our emphasis on
more and better content we broadened 
our economic coverage by acquiring ecowin 
a provider of specialist macroeconomic data
and expanding our content production 
centre in bangalore we added information
on 36 more countries and extended our
company content to include new mergers 
and acquisitions data and information on
small and midsized us companies
reuters group plc annual review 2005 11
 a child watches from a shelter after being
evacuated in playa del carmen mexico during
hurricane emily photographer henry romero 12 reuters group plc annual review 2005
36
revenues from our datascope
products grew 36 in 2005
enterprise 
reuters aggregates information to give a single view 
of the financial markets and the events that move them
our enterprise division products provide access to those
markets in formats that computers can use to support
the financial systems our customers run the division 
also provides some of those systems itself enterprise
contributed 16 of our revenue in 2005
systemtosystem processing the result is
that what we sell is heavily embedded into 
our customers’ businesses as we capitalise on
this trend the third of the core plus growth
initiatives we announced in 2005 is to combine
our content and our enterprise products to
provide complete packages that enable our
customers to address specific activities such 
as electronic trading and portfolio valuation
in 2005 we launched a set of ultra highspeed
price feeds reuters datafeed direct rdfd
they deliver large volumes of data from 12
major stock exchanges directly to our customers
who use them mainly to drive their automated
pricing and trade execution systems we will
be adding many more european and asian
exchanges to rdfd in 2006
banks and financial institutions are having
to comply with increasingly strict regulations
our fastgrowing reuters datascope pricing
 reference data product line helps them
achieve this by delivering accurate pricing for 
a broad range of financial instruments
our products
• realtime datafeeds streams of machine
readable price data delivered over our
networks at high speed for use in customers’
inhouse information and trading services
• reuters market data system a content
distribution network that enables banks to
pump data into a wide variety of inhouse
financial systems
• risk management systems to help banks
monitor their exposure to trading risk 
• reuters messaging a secure online
messaging service that connects financial
professionals across existing communities 
of interest
• reuters datascope provides the historical
and reference data that reuters clients need
as our largest customers turn increasingly
towards computerdriven trading and
automation they are building on our software
and information to differentiate themselves
from their competitors they have a growing
need for machinereadable data and
 the millau viaduct crosses the valley of the
river tarn in millau france photographer
jeanphilippe arles thewhole
deal for the
whole
enterprise media
our media division serves our publishing and 
broadcasting customers in the wholesale media 
market as well as our growing affluent online 
audience contributing 7 of our revenues in 2005
of awards in 2005 we received over 60 prizes
including the coveted world press photo of
the year for arko datta’s picture left of a
tsunami survivor mourning the death of her
relative our acquisition of action images 
a specialist sports photography agency was 
a significant step in expanding our global
pictures business
reaching more tv news outlets than any
other service reuters growing television
business gained momentum in 2005 
the rollout of world news express saw us
expanding our digital ondemand news
delivery and we extended our video news
coverage and features services from the
middle east and africa
we continue to broaden our appeal to
consumer audiences around the world
we introduced digital services on multiple
platforms including a multimedia news
 money service in japan for mobile phones
and an interactive tv channel in the uk
this enables users to choose the news
that matters most to them wherever and
whenever it is breaking revenues from our
advertising sales are increasing steadily
as we attract a growing number of global
brands including diet coke ge and fidelity
1billion
reuters news reaches more than
one billion people around the
world each day
our media services
• text and broadcast news video and
photographic coverage for publishers 
and broadcasters
• news and financial information delivered
online and via mobile devices and interactive
tv to individual consumers enabling them
to stay informed about world events and
manage their financial portfolios
reuters is the world’s largest multimedia 
news agency our news is characterised by 
its unrivalled breadth and depth and by our
commitment to speed independence and
accuracy 2005 saw us breaking many of the
year’s biggest stories ahead of our competitors
we were first to report the results of iraq’s
historic elections we were also first to break
the biggest financial story of the year china’s
revaluation of the yuan hiking over landslides
in the wake of the kashmir quake reuters
journalists reported the earliest stories from
devastated towns providing insight into the
unfolding human tragedy 
reuters photographs continue to capture
many of the world’s most iconic images and
the quality of our photojournalism was
recognised with an unprecedented number 
30
growth in usage of our
reuterscom websites in 2005
 an indian woman mourns the death 
of her relative who was killed in the 
tsunami in cuddalore india 
photographer arko datta
14 reuters group plc annual review 2005 trusted
source pushing
the
boundaries new markets
the fourth of our growth initiatives is to expand our
presence in new markets adjacent to our core financial
businesses we see opportunities in three areas
35
spending on financial applications
is set to grow by 35 a year in
india over the next three years
new markets and audiences
• highgrowth financial markets in regions
such as india china and brazil
• emerging asset classes including freight
emissions weather and property
• new consumer audiences with an interest 
in finance such as private investors
building on strong foundations in india
strong economic growth combined with
steady deregulation is fuelling the expansion
of india’s financial markets we are already 
the market leader in providing information
electronic trading and risk management
products for these markets we are building
up our product offer to enable us to capitalise
on this market growth in january 2006 we
launched times now a tv news channel in
partnership with the times of india to support
our plans for growth in consumer media
developing markets in china
in 2005 we brought greater transparency to
china’s developing bond market launching
a range of marketstandard reference rates
we are also taking a significant role in
developing china’s foreign exchange fx
market our electronic trading technology
is the platform on which the china foreign
exchange trade system launched an fx portal
for trading in eight foreign currency pairs 
in july we launched our chinese language
website wwwreuterscomcn and began
providing branded englishlanguage inserts
for china central television
new products and sales channels 
in latin america
we plan to launch reuters trading for 
fixed income in brazil and mexico in 2006
and to expand our fixed income products to
argentina chile and colombia we created 
a new sales channel in brazil’s growing market
by entering into agreements with american
express and universal online a major
regional internet service provider for them
to promote reuters trader for latin america
to their corporate accounts
 boats make their way through the 
ice floes in the gulf of st lawrence
photographer paul darrow
reuters group plc annual review 2005 17 18 reuters group plc annual review 2005
corporate responsibility review
corporate responsibility is
the way we carry out our
business practices throughout
our daytoday activities 
with independence integrity
and freedom from bias
we steer our corporate responsibility strategy
through our corporate responsibility advisory
board comprising customer supplier investor
and employee representatives it is chaired by
our general counsel and company secretary
who represents corporate responsibility on the
group management committee gmc and to
the board
we make extensive information available
through our website wwwaboutreuterscomcsr
employees
with our business and markets changing
rapidly we seek to employ people who are
highly talented customer focused adaptable
and committed to learning and developing
we are also keen to ensure that our employee
base is diverse this will enable us to reflect
the different cultures and markets we operate
in and to blend a range of perspectives that
will help us develop innovative ways of serving
our diverse markets we are bringing in fresh
markets media content and technology
expertise to ensure that our customerfacing
employees keep their product and market
knowledge up to date they undergo regular
certification programmes
we continued to rebalance our employee
base in 2005 to support our ‘strengthen it’ and
‘grow it’ strategic objectives our bangalore
content centre and bangkok development
centre have expanded as we renew our focus
 ceo tom glocer at the official opening 
of the reuters building in bangalore
 reuters staff at the brightspot customer
roadshow in hong kong
 reuters staff help with housebuilding projects
in sri lanka
reuters is included in the dow jones
sustainability index the ftse4good index
the ethibel sustainability indices and the
ethibel pioneer investment register
our 2006 objectives
• develop a code for our 
suppliers to adhere to when
working with us
• roll out a programme of
mentoring by employees 
of senior managers on 
diversity issues
• raise employee participation
in community events week
2006 to 15 in 45 locations
• create a system for recording
reuters impact on the
environment reuters group plc annual review 2005 19
on content and strengthen our product line
reflecting our drive to recruit new talent over
50 of our employees have joined us in the
last five years
employees’ performance is aligned to
company goals through an annual
performance review process reviews focus
both on the objectives that were set and 
how they were achieved drawing on input
from a range of people to ensure a rounded
view of performance
we have extensive fairemployment practices
in place and with the support of our global
diversity advisory council established in 2004
we are working to make reuters an increasingly
inclusive company the council is chaired by
the ceo and serves as an advisory board to
the gmc on diversity issues
our annual survey of employee engagement
in 2005 showed improvements across all 
the areas we address leadership customer
orientation performance employee
commitment and career development the
results also showed us scoring more highly
than other companies currently undergoing
similar levels of change two of the highest
scoring statements were “i fully support the
values for which reuters stands” and “reuters
provides a working environment that is
accepting of ethnic differences” highlighting 
areas for improvement employees reinforced
the need for more simplification of the
organisation and improvements in customer
service the gmc has put in place a range of
initiatives to continue to address these issues
in 2006
marketplace
we have improved customer satisfaction by
recruiting and training new service employees
and upgrading our product delivery networks
we use several tools including a regular
customer satisfaction survey of 12000
customers to gather feedback on our products
and service the survey has shown improvement
yearonyear for the past three years
to increase awareness among our end users of
the latest developments in our product range
we have a ‘brightspot’ travelling showcase for
reuters products in 2005 it was visited by over
7000 customers in 35 cities around the world
during 2005 our transaction processing and
accounting services worldwide moved to a
single global service centre enabling us to
reduce our payment terms to an average of
22 days from date of receipt of invoice
we continue to provide information to our
investors through meetings presentations
and briefings and through our investor
website at wwwaboutreuterscominvestors
170
additional customer service 
specialists hired in 2005
15 300
employees of 115 nationalities in 
89 countries including some 2300
editorial staff in 189 bureaux
£1  75m
pledged over five years to fund the
reuters institute for the study of
journalism at the university of oxford 20 reuters group plc annual review 2005
corporate responsibility review continued
kept in the headlines we have seen traffic
double over the past 12 months to an average
215000 page views per day in december as
we add new content sources and media
recognition increases
the innovative tsunami aidwatch
wwwalertnetorgthefactsaidtracker was 
set up by alertnet to measure how much 
of the money pledged after the disaster 
was turned into actual funding for relief and
reconstruction in the area this has helped 
to position the service as an authority on
humanitarian media issues
in response to the asian tsunami we gave 
1 million to fund relief efforts in affected
countries to date just over 435000
£235809 has been awarded in grants to 
thai and indian charities working with victims
the rest of the donation has been allocated
to support housebuilding programmes with
64 reuters volunteers travelling to hikkaduwa
in sri lanka to participate in rebuilding work
with habitat for humanity the rest of the
money will go to support more housebuilding
teams in 2006 and 2007
all employees may take one day of company
time each year to engage with community
groups schools and local organisations
focusing on these activities during our annual
community events week in 2005 1856
employees from 42 countries 12 of
employees 2004 12 participated in the
programme we recognise that employees
benefit from practising their professional and
personal skills while teambuilding with their
colleagues and giving valuable support to 
the community
there is more information on 
reuters volunteering programmes at
wwwaboutreuterscomcsr
environment
the ethical investment research service
classifies our business activities as having 
a low environmental impact however we
recognise that our employees and facilities
have an impact both at work and at home
we therefore held a reuters green week
exhibition in london in which we gave
information to employees around the world
on the topics of reuse reduce and recycle
the exhibition will be rolled out to other
office locations around the world during 2006
relocation to our new corporate
headquarters in london’s canary wharf
created an opportunity to introduce facilities
that have a positive environmental impact
these include the use of fewer waste bins and
plastic liners movementsensitive lighting
default doublesided photocopying and
piloting the use of recycled paper our entire
uk property portfolio is now supplied with
climate change levyexempt green 
energy practices designed to reduce our
environmental impact are being rolled out 
in other centres in 2006
we also have a role to play through reuters
foundation in developing the effective
communication of environmental issues we
delivered six training workshops to over 100
nonreuters journalists in mexico germany
america kenya and morocco in conjunction
with funding partners
 the emaciated fingers of a oneyearold child
pressed against his mother’s face at an emergency
feeding station in niger winner of the 2006
world press photo of the year photographer
finbarr o’reilly
 the reuters institute for the study of journalism
will be based at the university of oxford
106
nonreuters journalists attended 
workshops on communicating
environmental issues
1 856
employees in 42 countries spent 
a day of company time working 
on community projects
community
reuters supports various community initiatives
and charitable causes through the work of
reuters foundation and the volunteering
efforts of our employees around the world
reuters foundation continues to focus on
areas where reuters expertise in information
gathering and communications can be put to
use in ways that will benefit the communities
in which we operate such as providing
training opportunities to journalists from 
all over the world
we announced in january 2006 that reuters
foundation is the primary sponsor in forming
the reuters institute for the study of
journalism at the university of oxford
providing £175 million of funding over five
years the reuters institute builds on the
reuters foundation fellowship programme at
green college oxford and its reputation for
engaging firstclass journalists from across 
the world in serious research it will focus on
analysing the practice of journalism worldwide
and examining the basis for reliable and
accurate reporting in the digital age
there is more detailed information on 
the work of the foundation at
wwwfoundationreuterscom
alertnet wwwalertnetorg established by
reuters foundation in 1997 enables relief
agencies and the public to share information
about emergencies and associated relief
efforts in addition to carrying breaking news
on emergencies the site helps to ensure that
“forgotten emergencies” those disasters
long forgotten by the mainstream media are reuters group plc annual review 2005 21
business review
at the end of 2005 we 
had more than 100000
accesses of reuters
3000 xtra installed 
at client sites
our operations
we operate through our four business
divisions which are responsible for defining
building and managing products the business
divisions serve customers through our global
sales and service operations teams who
work with customers to build relationships and
to identify the correct reuters products to meet
their needs through regular training visits
our customer training specialists work with
users to ensure they get full value from our
products we also provide product content
and technical support by telephone and email
from three regional hubs one based in each
main time zone 
our content group brings together all of
reuters news and data editorial’s role is to
cover and edit news to the highest standards 
of accuracy insight and timeliness our 2300
journalists and photographers in 189 bureaux
file more than twoandahalf million news
items a year in the form of text pictures 
tv video and graphics and we publish news
in 19 languages our data group collects
produces packages and delivers an extensive
range of financial information
sales  trading
sales  trading revenue rose by 3 to £1595
million 2004 £1542 million with revenue
from acquisitions made in 2005 principally
telerate accounting for the increase reuters
3000 xtra revenue climbed 18 with over
100000 product accesses installed by the end
of 2005 this growth came from a combination
of new business including displacement of
competing products and upgrades of existing
users as we continued to move them across
from our older 2000 and 3000 series products
we also saw an increase in reuters trader
positions with over 8200 now installed usage
revenue from our trading products mainly
reuters dealing rose 10
trading costs increased by 5 to reach £1354
million this was mainly due to the inclusion
of telerate costs
looking forward to 2006 we think the key
revenue drivers for sales  trading will include
our new trading services continued growth
from reuters 3000 xtra telerate revenue
retention and growth in reuters trader sales
as we continue to upgrade users from older
products and attract new customers
research  asset management 
revenue from the research  asset
management division was £268 million up
2 reuters knowledge accesses reached
11000 by the end of 2005 an increase of
3000 revenue from reuters 3000 xtra and
reuters trader included in the research 
asset management division grew 5 to £76
million reuters wealth manager products
rose 8 to reach £135 million however
growth from lipper our investment funds
• recurring revenue subscription
fees for information products
and maintenance fees for
software
• usage revenue fees charged
on a per transaction basis
mainly from our electronic
trading products such as
dealing matching
• outright revenue fees from
onceoff sales of information
and risk management solutions 22 reuters group plc annual review 2005
business review continued
information subsidiary was partly offset by 
a fall in revenue from older products such as
reuters markets monitor where we withdrew
from unprofitable business 
trading costs totalled £288 million this 7
increase resulted from investing in core plus
and reuters wealth manager performance
improvements and targeted sales campaigns
to promote reuters knowledge and reuters
wealth manager products the investment 
was partially offset by the fast forward savings
that arose from moving some of our content
production to our bangalore content centre
looking forward to 2006 we expect revenue
growth in research  asset management to
be driven by three factors sales of reuters
knowledge better lipper funds analysis
content and demand for new high value
content such as the mastercard data and
ecowin macroeconomic data however 
this will be more than offset by investment 
in additional high value content and 
product enhancements
enterprise
revenue from the enterprise division was
£393 million up 1 for the year revenues
from real time datafeeds and reuters
datascope grew by 4 and 36 respectively
as we saw increased demand for machine
readable real time and historical data to be
used in a wide range of customer software
applications revenue from reuters market
data systems fell 14 to £108 million growth
in maintenance revenue was more than offset
by a fall in outright onceoff revenue caused
mainly by our continuing withdrawal from
technology consulting and the almost
completed switch of customers from older
systems to rmds revenue from our risk
management products rose by 1 to £82
million helped by price increases during the
year and steady growth in asia including new
sales to leading banks in china
trading costs totalled £298 million a drop of
9 compared to 2004 fast forward savings
from scaling back our technology consulting
groups after our decision to exit this
business were partly offset by investment in
core plus growth initiatives including the 
10year reuters tick history database
in 2006 the focus will shift to marketing new
products such as the portfolio valuation and
electronic trading product packages reuters
wireless delivery service and also reuters tick
capture engine this collects trading history
to support increasing regulatory requirements
and complex trading analysis tools
media
revenue from the media division 7 of our
total revenue totalled £153 million up 7
agency revenues grew 6 to £133 million
with a good performance from our pictures
and tv businesses consumer services
revenues grew 12 to £20 million reflecting
our successful shift from syndication of our
news to other websites as we retained more
of our content for exclusive use by our own
family of reuterscom websites
trading costs totalled £135 million 7 up on 
2004 key drivers included expansion of news
coverage to new regions and core plus
investment in consumer services these were
partially offset by low content costs with the
move of activities to bangalore
in 2006 the media division is looking forward
to continued strong revenue performance
we expect to grow our video news products
and to expand our pictures business on the
back of our recent acquisition of action
images the consumer services business
expects strong growth in online advertising
from its us uk and japanese markets
revenue by business division – £m
sales  trading 1595 66
research  asset management 268 11
enterprise 393 16
media 153 7 reuters group plc annual review 2005 23
summary operating and financial review
forwardlooking statements
under us law all statements in this annual review except those of historical 
fact are or may be deemed to be forwardlooking statements within the
meaning of the us private securities litigation reform act of 1995 certain
important factors that could cause actual results to differ materially from those
discussed in such forwardlooking statements are described under forward
looking statements on page 35 as well as elsewhere in this review all written
and oral forwardlooking statements made on or after the date of this annual
review and attributable to the group are expressly qualified in their entirety 
by such factors
nongaap
1
measures
a number of measures used in the following commentary are ‘nongaap’
figures this means they are business performance measures used to manage
the business and they supplement the ifrsbased headline numbers these
measures include ‘underlying change’ ‘trading costs’ ‘trading profit’ ‘adjusted
earnings per share eps’ ‘free cash flow’ and ‘net debtnet funds’ additional
explanation of the nature and impact of these measures is included in the 2005
annual report and 20f
reuters group performance
summary profit results
2005 2004 actual
year to 31 december £m £m change
continuing operations
revenue 2409 2339 3
operating costs 2251 2187 3
other operating income 49 42 16
operating profit 207 194 7
net finance costs 12 12
profit on disposal of associates and 
availableforsale financial assets 38 203
share of posttaxation profit from associates 
and joint ventures 5 11
profit before taxation 238 396 40
taxation 9 40
profit for the year from continuing operations 229 356 36
discontinued operations
profit for the year from discontinued operations 253 19
profit for the year 482 375 28
basic eps 326p 260p 25
reuters adjusted eps 138p 118p 17
revenue costs and profit measures
2005 2004 actual underlying
year to 31 december £m £m change change
recurring 2242 2164 4 1
usage 97 86 13 12
outright 70 89 22 23
total revenue 2409 2339 3 0
operating costs 2251 2187 3 0
operating profit 207 194
operating margin 9 8
trading costs 2075 2013 3 0
trading profit 334 326
trading margin 14 14
1 generally accepted accounting principles
revenue
reuters full year revenue grew 3 to £2409 million 2004 £2339 million 
this was our first full year of revenue growth since 2001 on an underlying basis
adjusting for exchange rate movements and the impact of acquisitions and
disposals revenue was approximately the same as in 2004 acquisitions
particularly of telerate accounted for most of the difference between actual
and underlying increases with the rest due to currency movements in the
newly integrated telerate business sales focus on retaining revenue after the
acquisition drove better than expected revenue performance
recurring revenue which represented 93 of our revenue in 2005 was £2242
million 2004 £2164 million this represented an increase of 4 on an actual
basis 1 underlying compared to 2004 and was the first time underlying
recurring revenue had grown since 2001
usage revenues 4 of our revenue in 2005 grew by 13 to £97 million 2004
£86 million this was driven by strong performance from reuters transaction
services as well as higher advertising revenue from reuterscom
outright revenue 3 of our revenue in 2005 totalled £70 million 2004 £89
million a decline of 22 compared to 2004 this decline was mainly due to our
continued withdrawal from technology consulting a process which is nearing
completion as part of the fast forward business transformation programme
accesses and average revenues per access
desktop product access numbers totalled 346000 at the end of 2005up 18000
from the end of 2004 this increase was driven by our acquisition of telerate
average revenue per access arpa for the fourth quarter of 2005 was up 2
compared to the same period in 2004 driven by price increases and a shift in
the product mix to higher value accesses
operating costs and trading costs
total operating costs were £2251 million an increase of 3 from 2004 the rise
is largely driven by movement in trading costs
trading costs totalled £2075 million in 2005 2004 £2013 million up 3
on an actual basis flat on an underlying basis demonstrating our continued
cost discipline
a change to the accounting treatment of the reuters pension fund rpf which
is now recognised as a defined benefit plan rather than a defined contribution
plan resulted in an additional 2005 charge of £7 million at the 2005 year end 
a deficit of £223 million in the rpf was recorded on reuters balance sheet
we invested £41 million in the second half of 2005 in core plus transformation
projects and growth initiatives these included investment in new electronic
trading products and rationalising data centres and product development units
fast forward is now complete and we remain on track to achieve annualised
cost savings of £440 million from the programme by the end of 2006
contributing to a total reduction from all transformation programmes of about
£900 million since 2001 in 2005 we delivered a further £126 million of annualised
savings taking the total to £360 million under fast forward these resulted
largely from outsourcing our network to btradianz in april 2005 from further
headcount reductions and from expanding our content and development
facilities in bangalore and bangkok
fast forward restructuring costs of £94 million were £26 million lower than 
in the previous year as the programme came to an end we also incurred 
£18 million of acquisitionrelated integration costs relating to telerate 24 reuters group plc annual review 2005
summary operating and financial review continued
operating profit and trading profit
our operating profit totalled £207 million in 2005 2004 £194 million reflecting
improved trading performance trading profit was £334 million in 2005 2004
£326 million trading margin was 14 2004 14 after expenditure on core
plus the net effect of currency movements on trading profit was neutral the
small positive effect on revenue being offset by a small negative effect in the 
cost base
profit for the year
profit for the year from continuing operations was £229 million 2004 £356
million the yearonyear decline was almost entirely driven by a reduction in
profits from asset disposals in 2004 continuing operations contained the
profits from the sale of a 39 stake in tibco software inc tsi and our holding
in gl trade whereas the £38 million of disposal profits in 2005 came largely
from further sales of our smaller remaining stake in tsi
net finance costs of £12 million were comparable to 2004 due to a broadly
similar net debt position throughout the year before completing the instinet
group disposal income from our associates and joint ventures in 2005
generated a net profit after tax of £5 million compared to £11 million in 2004
tsi and gl trade account for £5 million of this reduction as they contributed 
a net profit in 2004 before disposal
the tax charge for the year was £9 million compared to £40 million in 2004 the
reduction was mainly due to the benefit of settling prior year taxation matters
profit for the year from discontinued operations
profit from discontinued operations was £253 million 2004 £19 million this
was largely made up of the posttaxation profit of £191 million on the disposal
of instinet group and £68 million profit after taxation from instinet group’s
business operations before its sale in december 2005 this was partly offset 
by losses on sale of radianz limited radianz to bt group plc bt and on 
the partial disposal of our interest in the bridge trading company btc to 
instinet group
earnings per share eps
profit for the year was £482 million 2004 £375 million resulting in basic 
eps of 326p in 2005 up 66p from the previous year adjusted eps was 
138p in 2005 up 2p from the previous year reflecting a stronger trading 
profit and a reduction in the number of shares in circulation due to the share 
buyback programme
summarised cash flow and reuters free cash flow
cash generated from continuing operations was £268 million free cash flow
was £88 million in 2005 2004 £208 million the yearonyear decline was driven
by increases both in capital investment and restructuring charges higher
capital investment resulted from our move to new london headquarters at
canary wharf steppedup investment in data centres and the capitalisation 
of product development and software costs 2005 cash restructuring costs 
were £147 million 2004 £100 million of which £132 million represented the
peak year for fast forward cash charges while the rest related mainly to the
integration of telerate cash flow in 2004 also benefited from £49 million of
proceeds from the sale of property plant and equipment disposals which did
not recur in 2005
net funds were £253 million 2004 £326 million the 2004 amount included
£507 million of net funds at instinet group reduced by £181 million of net 
debt in reuters excluding instinet group the yearonyear improvement in 
net debt to net funds is largely due to cash flow from operations of £268 million
and net cash proceeds from disposalsacquisitions largely instinet group 
of £710 million these inflows were partly offset by net purchases of assets
dividend payments to reuters shareholders and payments made as part of 
the share buyback programme
dividends
dividends paid in 2005 totalled £140 million the final dividend proposed for
2005 is 615p in line with the previous year
balance sheet
the net assets of the group at £570 million are unchanged from 2004 
the main movements in the group balance sheet are
• the disposal of instinet group – reducing both total assets and liabilities
upon sale and reducing the minority interest in instinet group to zero
• an increase in noncurrent liabilities mainly reflecting an increase in net
pension obligations from £256 million to £310 million largely as a result of
changes to key assumptions underpinning the net liability valuation both 
the rate of return and discount rate have decreased which results in a larger
present value liability
our largest acquisition during the year was of telerate for £122 million completed
in june 2005 other acquisitions included action images september 2005 and
ecowin november 2005
disposal activity for the year included our 62 stake in instinet group to nasdaq
for gross proceeds of £612 million we realised a gain on sale of £191 million
along with the dividend received from instinet group in july 2005 of £37 million
after the sale of its lynch jones  ryan subsidiary to the bank of new york for
£96 million the net proceeds from these transactions including our march
2005 sale of btc to instinet group totalled approximately £630 million
other disposals included our sale of 16 million shares in tsi for £63 million
realising a profit of £33 million and the sale of radianz to bt in april 2005 for
£115 million cash resulting in a loss of £4 million
2006 outlook
in 2006 we expect to accelerate revenue growth through core plus against 
a backdrop of favourable market conditions we are targeting total revenue
growth of around 5 this includes 2005 acquisitions and a percentage point 
of growth from core plus but excludes currency effects
within operating profit and trading profit we expect 2006 to benefit from the 
final £80 million of fast forward savings taking the total to £440 million of
annualised savings that we committed to in february 2003 in line with our
guidance in july 2005 operating profit and trading profit in 2006 is expected 
to reduce by £120 million due to investments to drive core plus growth 
and transformation
in cash flow we expect to spend £220 million on capital investment in 2006 up
from £178 million in 2005 as we continue to invest in new data centres and step
up the level of product development under core plus as well as continuing 
to enhance our core services and infrastructure as part of the £220 million we
expect to capitalise around £80 million of software and development spending
this increase will be more than offset by an expected £90 million fall in
restructuring costs for fast forward and telerate integration reuters group plc annual review 2005 25
directors and senior managers
directors
niall fitzgerald kbe chairman chairman of the nominations committee 
he is a member of the world economic forum’s foundation board a fellow 
of the royal society for the encouragement of arts manufactures  commerce
and the association of corporate treasurers and a nonexecutive director of
the nelson mandela legacy trust uk he is also a member of various advisory
bodies including the president of south africa’s international investment
advisory council and the shanghai mayor’s international business leaders
council former chairman and chief executive officer of unilever plc
1996–2004 former nonexecutive director of merck ericsson bank of ireland
and prudential plc former president of the advertising association former
cochairman of the transatlantic business dialogue and former chairman of
the conference board inc age 60
thomas tom glocer ceo previously ceo of reuters information 2000 and
president and senior company officer reuters america 1998–2000 appointed
ceo reuters latin america in 1997 after serving in reuters legal department
from 1993 formerly practised law in new york paris and tokyo with davis polk
 wardwell member of the corporate council of the whitney museum the
madison council of the library of congress the leadership champions group
education of business in the community the advisory board of the judge
institute of cambridge university and the corporate advisory board of the
tate nonexecutive director of instinet group until instinet group was acquired
in 2005 by nasdaq age 46
david grigson cfo joined reuters in august 2000 from emap plc where he
was group finance director and chairman of emap digital he is a qualified
chartered accountant formerly held senior finance roles in the uk and us at
saatchi and saatchi plc 1984–1989 held a number of financial positions at
esso uk 1980–1984 former nonexecutive director of instinet group
chairman of radianz until radianz was acquired in 2005 by bt age 51
devin wenig executive director and president of business divisions previously
president investment banking  brokerage services 2001–2003 joined
reuters in 1993 as corporate counsel reuters america and held a number of
senior management positions before being appointed president investment
banking  brokerage services in january 2001 also a nonexecutive director 
of nastech pharmaceutical company and a former nonexecutive director of
instinet group age 39
lawton fitt nonexecutive director member of the audit committee non
executive director of ciena corporation and citizen communications director
and trustee of reuters foundation previously a partner and managing director
of goldman sachs group inc trustee of several notforprofit organisations
including contemporary arts centres in new york and berlin former secretary
chief executive of the royal academy of arts age 52
penelope penny hughes nonexecutive director member of the
remuneration committee director of the gap inc vodafone plc
skandinaviska enskilda banken molton brown limited and a member of the
advisory board of bridgepoint capital former president coca cola great
britain and ireland former director of bodyshop international plc 1994–2000
enodis plc 1996–2001 sc johnson 2002–2004 webangel 2000–2003 and
trinity mirror plc 1999–2005 age 46
edward ed kozel nonexecutive director member of the remuneration
committee chief executive of cright also a director of yahoo formerly a
nonexecutive director of cisco systems inc 2000–2001 where he worked
from 1989–2000 in a number of roles including chief technology officer and
senior vice president for business development also a former nonexecutive
director of tibco software inc 2000–2001 and narus inc 1999–2003 prior 
to 1989 he worked with sri international in california age 50
sir deryck maughan nonexecutive director director of glaxosmithkline plc
managing director of kkr chairman of kkr asia trustee of carnegie hall
lincoln center inc and nyu medical center he serves on advisory councils 
at stanford and harvard universities former chairman and ceo of citigroup
international former vicechairman of the new york stock exchange and
former chairman and ceo of salomon brothers 1992–1997 age 58
kenneth ken olisa nonexecutive director member of the audit committee
nonexecutive director of biowisdom and open text corporation he is a
liveryman of the worshipful company of information technologists a freeman
of the city of london chairman of homelessness charity thames reach
bondway a governor of the peabody trust and a director and trustee of
reuters foundation former chairman 2000–2006 and ceo of interregnum plc
which he founded in 1992 former senior vice president and general manager
of wang europe africa and the middle east 1981–1992 and his career began
at ibm 1974–1981 former director of udatecom metapraxis adaptive inc and
yospace technologies ltd and former postal services commissioner age 54
richard dick olver nonexecutive director chairman of the audit committee
member of the nominations committee and senior independent director
chairman of bae systems plc since july 2004 he worked for bp plc and was
deputy group chief executive 2003–2004 and ceo of bp exploration 
production division 1998–2002 a fellow of the royal academy of
engineering a guardian of new hall school age 59
ian strachan nonexecutive director chairman of the remuneration committee
member of the nominations committee nonexecutive director of transocean
inc johnson matthey plc xstrata plc and rolls royce group plc former
chairman of instinet group former nonexecutive director of harsco corporation
deputy chairman of invensys plc 1999–2000 and chief executive officer of
btr plc 1996–1999 former deputy chief executive officer 1991–1995 
and chief financial officer of rio tinto plc 1987–1991 also a former 
nonexecutive director of commercial union plc 1991–1995 age 62
charles sinclair retired from the board on 6 december 2005
the following board changes occurred during 2005 and early 2006
7 february 2005 ian strachan stood down from the audit committee
20 july 2005 charles sinclair stepped down as chairman of the remuneration
committee but remained on the committee until 6 december 2005
19 september 2005 ian strachan was appointed as chairman of the
remuneration committee
23 september 2005 sir deryck maughan was appointed to the board
24 january 2006 ian strachan was appointed to the nominations committee 26 reuters group plc annual review 2005
senior managers
anne bowerman interim group hr director anne joined reuters in 1995 
she held a variety of hr roles within reuters including head of learning 
development prior to being appointed to her current role in july 2005 
before joining reuters anne was hr director for an information technology
company age 50
christopher hagman managing director global sales  service operations
christopher joined reuters in 1987 based in sweden and has held various
senior sales and general business management positions in sweden the
netherlands and the uk before being appointed to his current post in april
2001 christopher was appointed as a member of the executive board of the
community of european management schools and internal companies in
december 2005 age 47
geert linnebank editorinchief and global head of content geert became
editorinchief in 2000 having held various editorial roles he was appointed
chairman of reuters foundation in march 2004 and president and director of
reuters foundation inc in september 2005 before joining reuters in 1983 he
was a correspondent ec and belgium for apdow jones – brussels age 49
rosemary martin general counsel and company secretary rosemary joined
reuters in 1997 as deputy company secretary and became company secretary
in 1999 appointed general counsel in 2003 rosemary has been the director
of reuters foundation since 2000 former partner at mayer brown rowe  maw
for nine years nonexecutive director of hsbc bank plc member of financial
services authority listing authority advisory committee age 45
susan taylormartin global head of corporate strategy susan joined reuters in
1993 during which time she has held a number of management roles including
running the global news product group and the global equities business susan
was appointed to her current role on 1 january 2004 prior to joining reuters
susan worked in corporate finance specialising in mergers and acquisitions
age 41
simon walker director of corporate marketing  communications simon joined
reuters in 2003 prior to joining reuters simon was communications secretary
at buckingham palace and director of communications at british airways plc
simon is a trustee of the charity uknz link foundation and a director of
communicor public relations and awaroa partners age 52
michael sayers and christian verougstraete resigned from the gmc and the
company on 21 september and 2 october 2005 respectively alex hungate
stepped down from the gmc on 30 june 2005 to take up his role as managing
director for asia stephen dando will be joining reuters as group hr director
and a member of the gmc in march 2006 roy lowrance has been appointed
chief technology officer and will join the gmc in march 2006
directors and senior managers continued reuters group plc annual review 2005 27
summary remuneration report
remuneration policy
the board has overall responsibility for deciding the framework of executive
remuneration and its cost in doing so it must take account of any
recommendations from the remuneration committee through formal terms 
of reference the board has delegated to the remuneration committee
• oversight of the specific remuneration packages for the executive directors and
• consideration of executive remuneration issues generally including the use 
of equity incentive plans
the remuneration committee consists solely of nonexecutive directors the
board has decided that all of them are independent as defined by nasdaq
chairman and nonexecutive directors
the chairman’s remuneration is set by the board in reaching future decisions
on appropriate fee levels the board will continue to have regard to the
remuneration arrangements of chairmen of other uk listed companies of 
a similar size and complexity
as chairman niall fitzgerald receives an annual fee of £500000 this fee 
is fixed until 1 october 2007 the company does not provide a pension
contribution to him
reuters shareholders set the remuneration of nonexecutive directors which
from 1 january 2005 has been set at £50000 a year the board decides the
extra fees payable to each nonexecutive director who chairs a board
committee for 2005 these were £15000 a year £10000 a year and £5000 
a year for chairing the audit remuneration and nominations committees
respectively dick olver the senior independent nonexecutive director 
receives an additional £5000 a year for this role niall fitzgerald is chairman 
of the nominations committee and he has waived receipt of any committee
chairmanship fees in addition nonexecutive directors who are resident outside
europe are eligible to receive a travel allowance of £5000 for each board
meeting attended in the uk
because some shareholders prefer all of the directors to stand for reelection
each year as at the 2005 agm they will all retire and offer themselves for 
reelection in 2006
executive directors
the remuneration committee’s policy is that remuneration and incentive
arrangements are marketcompetitive consistent with best practice and
support the interests of shareholders
in practical terms this means that the reward structure for executive directors
should attract motivate and retain highcalibre individuals capable of successful
leadership to achieve this in a global business environment reuters executive
remuneration must reflect the competitive practices of its main competitors and
the other multinational businesses with which it competes for talent market
determined executive compensation with a heavy emphasis on the variable
remuneration elements is the best way to ensure that reuters has the high
performing executive directors necessary to achieve its immediate and 
longerterm strategic objectives the remuneration committee ensures that 
the remuneration received by executive directors is aligned with returns 
to shareholders
in 2005 excluding pension contributions the targeted composition of each
executive director’s remuneration was as follows
fixed variable
longterm
base pay bonus incentives total
   
tom glocer 188 282 53 100
david grigson 25 25 50 100
devin wenig 225 225 55 100
executive directors are required to build and maintain a personal equity stake 
in the company this personal shareholding policy requires each executive
director to accumulate a personal holding worth twice his or her basic salary
within five years if the requirement is not met then the remuneration
committee may recommend that further awards should not be made to 
that person
remuneration framework
basic salary and benefits
in formulating and reviewing pay packages for executive directors the
remuneration committee receives comparator group information and
assistance from independent remuneration consultants in 2005 the remuneration
committee reviewed the comparator group and reaffirmed its relevance
currently the comparator group comprises the ftse 100 companies minus the
top and bottom five companies as the main uk reference point these companies
were chosen to ensure both stability in the comparator group and relevance to
reuters position in the market
reuters maintains a salary structure with salary ranges based upon the mid
market of a comparator group of companies individual salaries are positioned
at an appropriate point within the salary range the remuneration committee
reviews salaries and other rewards on a regular basis to ensure that the
structure is maintained
noncash benefits are provided to executive directors and the chairman in line
with normal market practice
pensions
all executive directors participate in defined contribution arrangements since
april 1999 it has been reuters policy that all new uk employees including
executive directors are offered participation in a defined contribution pension
plan in the case of uk executive directors instead of pension provisions above
the statutory earnings cap where applicable an additional taxable cash allowance
is granted the remuneration committee may substitute certain benefits after
the recent changes to uk pensions legislation however there is no intention to
provide any additional compensation as a consequence of such changes in the
us all employees are offered participation in a defined contribution 401k plan
instead of a contribution on salary above the tax qualified limit an additional
contribution is paid to a supplemental employee executive retirement plan
serp the serp is unfunded 
annual performancerelated bonus
the remuneration committee sets performance targets annually bonus
payments are nonpensionable in 2005 the executive directors were eligible
for an annual cash bonus with a maximum level of 100 of base salary for all
but tom glocer whose maximum level was 150 of salary in february 2006 the
remuneration committee considered 2005 performance relative to the specified
targets and decided that the executive directors had earned bonuses of 72 
of bonus potential
2005 was the final year of the fast forward programme during 2005 recognising
the importance of revenue and cost targets during this period of significant
transformation the remuneration committee focused more on achieving the
financial results associated with the fast forward programme therefore 80 
of the maximum bonus potential was measured against target trading profit
budgeted revenue and free cash flow targets the rest was determined by
customer satisfaction results for 2006 the bonus will continue to focus on
financial performance and customer satisfaction measures in the same proportion
as in 2005 the bonus potential for tom glocer will remain at 150 of salary 
the bonus potential for david grigson and devin wenig will be 125 of salary
there is a profit threshold based on target trading profit below which no
bonuses will be paid the remuneration committee reviews the business plan
and establishes this threshold each year 28 reuters group plc annual review 2005
equity incentive plans
in 2004 the remuneration committee introduced an annual bonus profit
sharing plan and a restricted share plan as discussed below executive directors
do not normally participate in these plans and they have not done so since 
their introduction
the executive directors participate in a discretionary stock option plan dsop and
a longterm incentive plan ltip designed to reward longerterm performance
equity awards for executive directors are subject to the performance conditions
applicable to the relevant plan the remuneration committee has completed 
a review of remuneration arrangements including the structure of equity plans 
to ensure they were aligned with best practice and are also aligned with the
strategic business plan
this review included consultation with a number of the company’s major
shareholders as well as the main representative bodies the association of british
industry abi and the research recommendations and electronic voting services
rrev a joint venture between the national association of pension funds
napf and institutional shareholder services iss it was decided to continue to
operate the ltip and the dsop but to increase the proportion of performance
shares and to reduce the number of share options awarded effectively rebalancing
the amount of share options and performance shares placing more emphasis on
performance shares the remuneration committee also plans to maintain the
overall expected value of the equity incentive plans at a comparable level to that
of 2005 these are described in more detail below
the remuneration committee also intends to fix at least for 2006 and 2007 the
number of shares over which options will be granted under the dsop and the
number of conditional shares which will be awarded under the ltip  this will
bring greater transparency shareholder certainty and consistency to the equity
element of remuneration details of the number of shares awarded under each
plan are included in the relevant section below
ltip since 1993 reuters has operated a longterm incentive plan that seeks 
to encourage and reward longterm growth in shareholder value it is reuters
practice to make an annual award of contingent share rights to executive directors
and to those senior managers most able to influence corporate performance 
the remuneration committee considers that relative total shareholder return
tsr remains an appropriate measurement criterion for the ltip  as a matter of
good practice tsr performance is measured independently prior to review by
the remuneration committee while endorsing relative tsr as a measure the
remuneration committee recognises that reuters does not fall naturally into
any one of the existing ftse industrial sectors accordingly after a review the
remuneration committee continues to believe that the ftse 100 rather than
one individual sector or a bespoke peer group eg media and photography
remains the most appropriate peer group for comparison for awards in 2006
and afterwards this criterion will apply to determine the vesting for 50 of the
initial award the rest of the award will be determined by reuters achievement
of preset profit before tax pbt growth achieved over the threeyear
performance period the performance range will be calibrated by the
remuneration committee at the start of each performance period
for the preset pbt growth element and the tsr element one third of the full
award will vest for threshold performance this is the median of the ftse 100 for
the tsr element and growth equivalent to at least 8 a year for the pbt element
for 2005 awards reuters relative tsr ranking determines the extent to which
plan awards will vest reuters must achieve median tsr performance for a
proportion of the award to vest full vesting only occurs for top quartile
performance at the 2004 agm and from 2004 shareholders approved the 
removal of the retesting provision awards will lapse if they do not meet at
least the median performance condition on completion of the performance
period as noted above future awards of shares subject to the tsr test will
continue to vest in full for top quartile performance with onethird of the initial
award vesting for median performance and with proportionate vesting for
performance at levels between these points
in 2005 tom glocer was awarded 417228 shares and david grigson and 
devin wenig each received 163468 shares
dsop a global discretionary stock option plan was adopted by the
remuneration committee in october 2000 and approved by shareholders in
april 2001 it aims to reward growth in earnings and in the share price with
effect from 2004 to reduce the dilutive impact of dsops on shareholders’
interests and to allow the introduction of a plan better targeted at the general
employee population the number of participants was reduced significantly
participation will normally be confined to executive directors and members of
the gmc other employees may be eligible to participate in the restricted
share plan see below
performance conditions apply to each option grant
for awards granted from 2001 to 2004 the remuneration committee could
approve the retesting of performance up to twice in the event the performance
condition was not met it would do so by extending the performance period by
up to two years with an increase of 3 in the hurdle rate of eps growth for each
year added to the performance period if the target rate was not met by the
end of the fifth year the options would lapse
these performance conditions were established in 2001 to retain management
focus on earnings in a particularly challenging market
performance has been measured for the 2001 2002 and 2003 grants which 
were the first grants to executive directors with these performance conditions
the performance conditions were not met for the 2001 and 2002 grants
accordingly the 2001 grant will lapse and under the legacy retesting
provisions the 2002 grant will be subject to a final retest against basic eps
performance for 2006 the 2003 award did meet the performance conditions
and accordingly the 2003 dsop award has vested
for awards granted from 2004 the retesting provisions have been removed
accordingly new awards will not permit any extension of the measurement
period the awards will lapse if they have not met the eps performance
condition by the end of the initial performance period
options granted to executive directors in 2004 and 2005 can vest only if the
percentage growth in eps exceeds the percentage growth in the retail price
index by more than 9 over the threeyear performance period
executive directors are contractually entitled to participate in the dsop  
in 2005 tom glocer was awarded 1494432 options and david grigson and
devin wenig were each awarded 585511 options it is the remuneration
committee’s practice to divide participants’ annual entitlements into two
awards normally made after the preliminary annual and halfyearly results 
are announced
since 2001 in addition to the requirements of the plan rules share options
granted under the reuters dsop have been granted on terms that require
recipients who are subject to the uk national insurance regime to pay the
share of national insurance contributions normally payable by the employer 
and the employee the amount of options awarded was not increased to 
reflect the transfer of this liability from reuters to the recipient
summary remuneration report continued reuters group plc annual review 2005 29
when reuters introduced the above approach it seemed likely that it would
become standard market practice however this has not happened so the
approach is inconsistent with market norms for this and other reasons
including a desire to optimise the effect of incentive plans and to operate plans
consistently across geographical borders the remuneration committee took
independent advice and decided that any future share options would not be
granted on the above basis and that the employer’s national insurance liability
would be borne by reuters this approach has the additional benefit of all
executive directors being treated on an equitable basis
annual bonus profit sharing plan on 18 december 2003 reuters said it
intended to introduce a new profitsharing plan for all employees aiming to
encourage them to focus on reward for profit growth executive directors and
members of the gmc did not participate in this plan in 2005 a decision is
taken annually to operate the plan for the forthcoming year reuters has
determined that this plan will operate for 2006 payments under the plan were
typically made in the form of shares that were normally subject to a 12 month
vesting period with automatic release thereafter to simplify the operation of
the plan payments in the future including under the 2005 plan they will be
made in cash for 2005 participating employees will receive an award
equivalent to 1 of their salary
restricted share plan rsp on 17 april 2004 at the agm the shareholders
approved the introduction in 2004 of the rsp  currently restricted shares will not
normally be granted for longterm incentive purposes to executive directors or
members of the gmc reuters intends that except for executive directors and
gmc members employees will be eligible to participate in the rsp instead of
the dsop  the rsp enables reuters to provide market competitive remuneration
while reducing the dilutive impact on shareholders except in 2004 the year of
introduction employees would generally not be eligible to participate in the
dsop and the rsp in the same year the rsp is normally granted with a four
year vesting period shares vesting 25 each year
other plans in common with other employees the executive directors are
entitled to participate in an international savingsrelated share option plan
there are also several legacy plans under which executive directors received
awards before joining the board it is not intended that they should receive
further awards under these plans
performance graph
reuters tsr for the five years to 31 december 2005 compared with the return
achieved by the ftse 100 index of companies is shown below
service contracts
reuters policy is that new executive directors be offered notice periods 
of not more than one year reuters recognises however that in the case 
of appointments from outside the company a longer notice period may 
initially be necessary reducing to one year afterwards in light of this the
remuneration committee will consider termination provisions to ensure that
they are appropriate if any executive director’s service contract terminates
tom glocer has a service contract with an effective date of 23 july 2001 that
he can normally terminate on 90 days’ notice or where due to the company’s
fault on 30 days’ notice the company may terminate without cause on 30 days’
notice in the event of termination by tom glocer due to the company’s fault 
or by the company without cause or in the event of a change of control 
tom glocer’s compensation will be limited to a maximum of 12 months’ accrued
benefits being annual salary annual bonus and pension contributions
in the event of a non fault termination tom glocer retains the benefit of any
outstanding share plan awards as if his employment had not ceased in
addition tom glocer and his family retain the life assurance and private
healthcare benefits provided by reuters for one year following termination
david grigson’s and devin wenig’s contracts have effective dates of 21 june
2001 and 17 february 2003 respectively and can be terminated on one year’s
notice any termination payment will not exceed an amount equal to the sum
of annual salary bonus and 12 months’ pension contributions paid by reuters
on a change of control of the company all the executive directors are entitled
to terminate their contracts on one month’s notice unless the acquiring party
has within three months of the change of control agreed to adopt and uphold
the reuters trust principles termination payments of a maximum of 12 months’
salary annual bonus and 12 months’ pension contributions are payable to 
david grigson and devin wenig and to tom glocer as previously detailed 
in such circumstances
all executive directors have contractual terms that limit the ability of an
executive director to work for a defined list of competitor companies for a
period of time these provisions are in place to protect intellectual property
and commercially sensitive information
policy on external appointments
reuters recognises that executive directors may be invited to become non
executive directors of other companies or to become involved in charitable 
or public service organisations as the board believes that this can broaden the
knowledge and experience of directors to its benefit reuters policy is to approve
such appointments if there is no conflict of interest and the commitment
required is not excessive board approval is required and directors are permitted
to retain cashonly fees paid for such appointments no executive directors
retained any fees for external directorships during 2005 except for devin wenig
who received fees of 17625 and 3000 shares of restricted stock in his capacity
as director of nastech pharmaceutical company
index of reuters group plc tsr performance 2001–2005
reuters ftse100
0
20
40
60
80
100
120
jan
01
jan
02
jan
03
jan
04
jan
05
dec
05 30 reuters group plc annual review 2005
summary remuneration report continued
directors’ remuneration for 2005
the disclosures required by part 3 of schedule 7a to the companies act 1985 ‘the auditable part’ are contained within this section
2005 2004
compensation
salary expense for loss
fees bonus benefits
1
allowances
2
of office total total
£000 £000 £000 £000 £000 £000 £000
chairman
niall fitzgerald kbe 500 – 23 – – 523 163
nonexecutive directors
lawton fitt
3
50–– 25 – 75 25
penny hughes 50–––– 50 25
ed kozel
3
50–– 30 – 80 65
sir deryck maughan 14–––– 14 na
ken olisa
4
50–– 1– 51 35
dick olver 70–––– 70 69
charles sinclair 55–––– 55 60
ian strachan
5
246–––– 246 243
executive directors
tom glocer
6
816 881 269 – – 1966 2322
david grigson
7
436 324 5 74 – 839 872
devin wenig
8
346 266 16 11 – 639 686
total emoluments of directors
9
2683 1471 313 141 – 4608 4894
other senior managers as a group 6 persons
2004 9 persons
10
2187 1194 174 182 879 4616 5026
notes for disclosure purposes all amounts have been rounded up to the nearest thousand the following conversion rates were used 183 £1 and chf226 £1
1 items included under benefits are those provided as goods and services received during the year
2 items included under expense allowances are contractual benefits which are paid in cash rather than as goods and services during the year
3 the £25000 to lawton fitt and £30000 allowance to ed kozel represent travel allowances to attend uk board meetings
4 ken olisa’s nonexecutive director fee was paid directly to interregnum plc ken olisa received an expense allowance of £700
5 fees paid to ian strachan include 350000 in respect of his position as a nonexecutive director chairman of instinet group £50000 in respect of his position as nonexecutive director and 
£4489 as chairman of the remuneration committee from 20 july 2005
6 noncash benefits received by tom glocer included accommodation costs of £228309 and company car and healthcare benefits totalling £28745 and longterm disability insurance of £1992
7 david grigson received healthcare benefits of £1935 and longterm disability insurance of £1620 allowances consist of a car allowance of £7420 and a retirement allowance of £66560
8 devin wenig’s benefits consist of healthcare allowances consist of a car allowance of £10492 devin wenig’s salary is paid in us dollars and the total amount reflected in the table is contractually
split between his role as executive director and president of business divisions
9 the total aggregate emoluments for the directors for the period 1 january 2005 to 31 december 2005 excluding termination payments were £46 million the total equivalent emoluments for 2004
were £49 million excluding termination payments
10 other senior managers as a group were 8 persons at 1 january 2005 and were 6 persons at 31 december 2005 following the resignations from the gmc of alex hungate on 30 june 2005 
mike sayers on 21 september 2005 and chris verougstraete on 2 october 2005 and the interim appointment of anne bowerman to the gmc on 7 july 2005 reuters group plc annual review 2005 31
directors’ interests in ordinary shares
the total interests of the current directors and other senior management in issued share capital and in shares underlying options and incentive plans are shown
below as at 7 march 2006 no director or senior manager beneficially owns 1 or more of the company’s issued share capital interests in ordinary shares excluding
options and interests in longterm incentive plans disclosed above held at 1 january 2005 and 31 december 2005 are also shown for directors in office at 
31 december 2004 directors were the beneficial owners of all shares except for 16875 shares held by david grigson’s family members and 52451 shares held 
by a trust of which tom glocer and his family are beneficiaries
interests at 7 march 2006
interests at interests at
1 january 2005 31 december 2005 longterm
shares shares
1
shares incentives options
directors
niall fitzgerald kbe 30000 50000 55000 – –
tom glocer 217113 372145 372145 3102024 7246929 
david grigson 48430 63430 63430 626967 1589261 
devin wenig 78354 105843 105843 608514 1508675
lawton fitt – 25000 25000 – –
penny hughes –– 2392 – –
ed kozel 7500 7500 7500 – –
sir deryck maughan na – ––– 
ken olisa – 2550 2550 – –
dick olver 10000 10000 10000 – –
charles sinclair 35000 35000 na – –
ian strachan 15500 15500 15500 – –
other senior managers as a group 6 persons
2
162124 198599 139150 1662676 3530564
none of the directors has notified the company of an interest in any other shares or other transactions or arrangements which require disclosure there have 
been no movements in the interests of the directors in the share capital of the group companies since 31 december 2005 except a purchase of 5000 shares by
niall fitzgerald and 2392 by penny hughes
notes
1 or as at the date of retirement if earlier
2 other senior managers as a group were 8 persons at 1 january 2005 and were 6 persons at 31 december 2005 following the resignations from the gmc of alex hungate on 30 june 2005 
mike sayers on 21 september 2005 and chris verougstraete on 2 october 2005 and the interim appointment of anne bowerman to the gmc on 7 july 2005
directors’ pensions
tom glocer david grigson and devin wenig participate in defined contribution pension arrangements
tom glocer participates in reuters us pension arrangements and is entitled to a pension allowance of 25 of his base salary during 2005 and 2006 he is entitled
to a lump sum deathinservice benefit whilst in service of fourtimes basic salary
david grigson is a member of the reuters retirement plan in the uk and is entitled to a contribution in respect of pension benefits equal to 20 of the uk
earnings cap with effect from 1 june 2005 the company introduced a salary sacrifice scheme for all pension plan members under which the company increased
pension contributions by 4 in return for a reduction in the contractual base salary of the same percentage this increased the company contribution from 20 
to 24 from that date he is entitled to a lump sum deathinservice benefit whilst in service of fourtimes basic salary
devin wenig participates in reuters us pension arrangements and is entitled to a pension allowance of 6 of his base salary he is entitled to a lump sum deathin
service benefit of 1 million
contributions and allocations including the cost of life cover in respect of these directors in 2005 were
company contribution
age in respect of period £000
tom glocer 46 207
david grigson 51 28
devin wenig 39 20
the information shown complies with requirements under both the uk listing authority and the directors’ remuneration report regulations 2002
the total amount of contributions or accruals made in 2005 to provide pension and similar benefits for the directors was £307310 2004 £693315 
and for the executive directors and the other senior managers as a group was £847251 2004 £1622626
these aggregate figures also include an accrual of £52000 and £60000 respectively for the investment returns within the us executive pension arrangements
these investment returns are calculated based on each individual’s notional fund choices made by reference to actual investment funds and the actual investment
returns achieved on these funds 32 reuters group plc annual review 2005
summary financial statement continued
summary financial statement
this summary financial statement including the summary operating and financial review and summary remuneration report was approved by the directors on 
10 march 2006 and signed on their behalf by tom glocer and david grigson it does not contain enough information to give as full an understanding of the results
and state of affairs of the group as that contained in the 2005 annual report and form 20f if you have not received the full annual report and form 20f but
wish to do so you can get a copy free of charge from the investor relations department or through the internet at wwwaboutreuterscomar2005 you may also
elect to receive the full annual report and form 20f for all future years the auditors have issued an unqualified report on the financial statements and audited
part of the directors’ remuneration report their report contained no statement under sections 2372 or 2373 of the companies act 1985
consolidated income statement
for the year ended 31 december
2005 2004
£m £m
revenue 2409 2339
operating costs 2251 2187
other operating income 49 42
operating profit 207 194
finance income 41 15
finance costs 53 27
profit on disposals of associates and availableforsale financial assets 38 203
share of posttaxation profits from associates and joint ventures 5 11
profit before taxation 238 396
taxation 9 40
profit for the year from continuing operations 229 356
discontinued operations
profit for the year from discontinued operations 253 19
profit for the year 482 375
attributable to
equity holders of the parent 456 364
minority interest 26 11
earnings per share
from continuing and discontinued operations
basic earnings per ordinary share 326p 260p
diluted earnings per ordinary share 317p 254p
from continuing operations
basic earnings per ordinary share 163p 254p
diluted earnings per ordinary share 159p 248p
 shares of posttaxation profits from associates and joint ventures includes a taxation charge of £1 million 2004 £2 million
dividends paid and proposed during the year were £140 million 2004 £140 million paid and proposed  reuters group plc annual review 2005 33
consolidated statement of recognised income and expense 
for the year ended 31 december
2005 2004
£m £m
profit for the year 482 375
actuarial losses on defined benefit plans 48 205
exchange adjustments offset in reserves 118 48
translation differences taken to the income statement on disposal of assets 2 6
fair value losses on availableforsale financial assets 15 –
fair value gains on availableforsale financial assets taken to the income statement on disposal of assets 73 –
fair value losses on net investment hedges 39 –
fair value gains taken to the income statement on disposal of net investment hedges 14 –
taxation on items taken directly to or transferred from equity 14 35
net losses not recognised in income statement 59 212
total recognised income for the year 423 163
attributable to
equity holders of the parent 374 166
minority interest 49 3
fair value gains and losses arise as a result of the application of ias 39 by the group with effect from 1 january 2005 the adoption of ias 39 resulted in an increase in equity at 1 january 2005 of 
£129 million of which £2 million was attributable to the minority interest
summary consolidated balance sheet 
at 31 december
2005 2004
assets £m £m
noncurrent assets 1179 1025
current assets 957 1410
noncurrent assets classified as held for sale 1 145
total assets 2137 2580
liabilities
current liabilities 738 1249
noncurrent liabilities 829 714
liabilities directly associated with noncurrent assets classified as held for sale – 47
total liabilities 1567 2010
net assets 570 570
shareholders’ equity
share capital 467 455
other reserves 1692 1755
retained earnings 1795 1671
total parent shareholders’ equity 570 371
minority interest in equity – 199
total equity 570 570 34 reuters group plc annual review 2005
independent auditors’ report to the shareholders
of reuters group plc
we have examined the summary financial statement which includes the
summary remuneration report of reuters group plc 
respective responsibilities of directors and auditors
the directors are responsible for preparing the annual review and summary
financial statement in accordance with applicable law our responsibility is to
report to you our opinion on the consistency of the summary financial statement
within the annual review with the full annual financial statements the directors’
report and the remuneration report and its compliance with the relevant
requirements of section 251 of the united kingdom companies act 1985 and
the regulations made thereunder we also read the other information contained
in the annual review and consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the
summary financial statement this statement including the opinion has been
prepared for and only for the company’s shareholders as a body in accordance
with section 251 of the companies act 1985 and for no other purpose we do
not in giving this opinion accept or assume responsibility for any other purpose
or to any other person to whom this statement is shown or into whose hands it
may come save where expressly agreed by our prior consent in writing
basis of opinion
we conducted our work in accordance with bulletin 19996 ‘the auditors’
statement on the summary financial statement’ issued by the auditing 
practices board for use in the united kingdom
audit opinion
in our opinion the summary financial statement is consistent with the annual
financial statements the directors’ report and the remuneration report of
reuters group plc for the year ended 31 december 2005 and complies with
the applicable requirements of section 251 of the companies act 1985 and 
the regulations made thereunder
pricewaterhousecoopers llp
chartered accountants and registered auditors
london
10 march 2006
summary consolidated cash flow statement 
for the year ended 31 december
2005 2004
£m £m
cash generated from operations 271 280
net interest receivedpaid 6 11
tax paid 24 43
net cash flow from operating activities 253 226
net acquisitions and disposals including availableforsale financial assets 206 384
net purchases of property plant and equipment and intangible assets 182 70
dividends received 5 5
net cash flow from investing activities 29 319
proceeds from issue of shares 10 6
share buyback 223 –
decreaseincrease in shortterm investments 248 105
decrease in borrowings 144 225
equity dividends paid to shareholders 140 140
equity dividends paid to minority interests 23 –
net cash flow from financing activities 272 464
exchange gainslosses on cash and cash equivalents 66 33
net increase in cash and cash equivalents 76 48
cash and cash equivalents at the beginning of the year 561 513
cash and cash equivalents at the end of the year 637 561
the auditors’ report is not covered by the clear english
standard as it is not a reuters document reuters group plc annual review 2005 35
information for shareholders
forwardlooking statements
ordinary shares
registrar lloyds tsb registrars provides a free online service for reuters group
shareholders which gives direct access to a range of information and practical
help visit their website wwwshareviewcouk for further information
low cost share dealing service please contact jpmorgan cazenove limited
postal dealing department 20 moorgate london ec2r 6da tel 020 7155
5155 for further information
dividends
ordinary shareholders have received the following dividends in respect of each
financial year
pence per share
interim final total
2001 385 615 1000
2002 385 615 1000
2003 385 615 1000
2004 385 615 1000
2005
1
385 615 1000
note
1 proposed the final dividend in respect of 2005 is payable on 4 may 2006 to holders of
ordinary shares on the register at 17 march 2006
american depositary shares
each american depositary share ads represents six ordinary shares
ads dividends
ads holders are eligible for all stock dividends or other entitlements accruing
on the underlying reuters group plc shares and receive cash dividends in us
dollars dollar amounts paid to ads holders depend on the sterlingdollar
exchange rate at the time of payment dividends are normally paid twice a year
dividend cheques are mailed directly to the ads holder on the payment date 
if the adss are registered directly with reuters us depositary dividends on
adss that are registered with brokers are sent to the brokers who forward them
to ads holders reuters us depositary is deutsche bank
pence per share cents per ads
interim final total interim final total
dividends
2001 385 615 1000 3329 5356 8685
2002 385 615 1000 3605 5846 9451
2003 385 615 1000 3608 6488 10096 
2004 385 615 1000 4094 7024 11118
2005
1
385 615 1000 4118 – –
note
1 the final dividend in respect of 2005 is payable on 4 may 2006 to holders of ordinary shares 
on the register at 17 march 2006 and on 11 may 2006 to holders of adss on the record at 
17 march 2006 and will be converted into us dollars from sterling at the rate prevailing on 
11 may 2006
form 20f
reuters group plc is subject to the information requirement of the us
securities laws applicable to foreign companies and in accordance files an
annual report on form 20f which corresponds to the form 10k filed by us
based companies and other information with the us securities and exchange
commission sec copies of the annual report and form 20f are available
from the investor relations department reuters group plc electronic copies
can be accessed through the internet on wwwaboutreuterscomar2005 or
from the sec’s edgar database via the sec’s home page wwwsecgov
forwardlooking statements
this annual review contains certain forwardlooking statements within the
meaning of the united states private securities litigation reform act of 1995
with respect to reuters group’s financial condition results of operations and
business and management’s strategy plans and objectives for the group 
in particular all statements that express forecasts expectations and projections
with respect to certain matters including trends in results of operations
margins growth rates overall financial market trends product releases the
impact of interest rates or exchange rates anticipated cost savings and
synergies and the successful completion of strategic transactions or restructuring
programmes are all forwardlooking statements these statements involve risk
and uncertainty because they relate to events and depend on circumstances
that may occur in the future there are a number of factors that could cause
actual results and developments to differ materially from those expressed or
implied by these forwardlooking statements these factors include but are 
not limited to
• the group’s ability to realise the anticipated benefits of its fast forward
transformation programme
• unfavourable conditions in financial markets
• the impact of currency and interest rate fluctuations on the group’s reported
revenue and earnings
• difficulties or delays that the group may experience in developing 
or responding to new customer demands or launching new products
• the dependency of the group on third parties for the provision of 
certain network and other services
• any significant failures or interruptions experienced by the networks or systems
of the group and such networks’ ability to accommodate increased traffic
• the group’s exposure to a decline in the valuation of companies in which it
has invested and its lack of management control over all such companies
• changes in the regulatory or competitive environment
• adverse governmental action in countries where reuters conducts 
reporting activities
• the ability of the group to realise the benefits of acquisitions and disposals
• changes in applicable accounting standards and requirements with respect 
to controls over financial reporting and
• the increasingly litigious environment in which the group operates
for additional information please see ‘risk factors’ in the reuters group plc
annual report and form 20f for the year ended 31 december 2005 
copies of the annual report and form 20f are available on request from 
the investor relations department reuters group plc the reuters building
south colonnade canary wharf london e14 5ep or through the internet at
wwwaboutreuterscomar2005 any forwardlooking statements made by or 
on behalf of reuters group speak only as of the date they are made reuters
group does not undertake to update any forwardlooking statements 36 reuters group plc annual review 2005
financial diary for 2006
where to find us
wednesday 26 april
first quarter trading statement issued
thursday 27 april
annual general meeting
time 1130 am
venue the reuters building south colonnade
canary wharf london e14 5ep
thursday 4 may
final dividend for 2005 payable to
ordinary shareholders on the register
as at 17 march 2006
thursday 11 may
final dividend payable to ads holders
on the record as at 17 march 2006
wednesday 26 july
interim 2006 results announced
wednesday 2 august
ordinary shares go exdividend
wednesday 2 august
adss go exdividend
wednesday 30 august
interim dividend for 2006 payable to
ordinary shareholders on the register
as at 4 august 2006
wednesday 6 september
interim dividend payable to ads holders 
on the record as at 4 august 2006
thursday 18 october
third quarter trading statement issued
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Summary:
 02 reuters group plc annual report and form 20f 2005
first year of revenue growth up 3 since 2001
our 2005 revenue was £2409 million a 3 increase over 2004 2005
was the first full year of revenue growth since 2001 mainly driven by
growth in recurring revenues as a result of acquisitions made during
the year
recurring revenue
2
of £2242 million up 4 was driven by the
acquisition of moneyline telerate telerate and price increases
usage revenue
2
of £97 million up 13 reflected a good performance
in transaction services and higher reuterscom advertising revenue
outright revenue
2
was £70 million down 22 with the fall principally
explained by our continued withdrawal from technology consulting
operating profit up £13 million trading profit
1
up £8 million
operating profit was £207 million in 2005 up £13 million on the
previous year principally explained by an increase in trading profit
trading profit of £334 million trading margin 14 was up £8 million
over 2004 a strong revenue performance combined with continuing
tight cost control was sufficient to fund our core plus transformation
and growth investments of £41 million and a £7 million charge relating
to an accounting change in the reuters pension fund rpf to a
defined benefit plan
within trading profit the three year fast forward restructuring
programme delivered additional savings of £126 million bringing 
the cumulative total from the programme to £360 million
profit for the year up £107 million
our 2005 profit was £482 million an increase of £107 million over 
the previous year principally explained by the increase in profit from
discontinued operations and profit on asset sales
profit from discontinued operations which is where instinet group 
is reported as the disposal of a major business line was £253 million
this largely represents profit realised from our disposal of instinet
group £191 million and profit from instinet group in the eleven
months prior to its sale £68 million
profit from other asset disposals totalled £38 million largely from
further sales of our remaining stake in tibco software inc tsi
eps up 66p to 326p and adjusted eps
1
up 20p to 138p
eps was 326p in 2005 up 66p from the previous year mainly due 
to the increase in profit for the year
adjusted eps was 138p in 2005 up 20p from the previous year
reflecting stronger trading profit and a reduction in the number 
of shares in circulation due to the share buyback programme
dividend of 10p per share
a final dividend of 615p is proposed which will bring the total
dividend to 10p per share the same level as the previous year
net assets stand at £570 million
net assets stand at £570 million the same level as at 31 december
2004 the profit for the year was offset by the return of equity to
shareholders and the removal of minority interest equity due to 
the sale of instinet group
net funds
1
were £253 million down £73 million from the previous year
during 2005 £363 million of cash was returned to shareholders via
dividend payments and as a result of the share buyback programme
to return £1 billion to shareholders by july 2007 
notes
1 a number of measures are ‘nongaap’ figures which are business performance measures
used to manage the business and which supplement the ifrsbased headline numbers
these include ‘trading profit’ ‘adjusted eps’ and ‘net debtnet funds’ the rationale for using
nongaap indicators and their reconciliation to the most directly comparable ifrs indicator is
provided in sections 19 and 20 on pages 25 to 30
2 see note 2 of the financial statements on page 59 for definitions of the terms ‘recurring’
‘usage’ and ‘outright’ revenue
financial highlights
1
revenue – £m
04
05
2339
2409
operating profit trading profit
1
and margins – £m and 
04
05
operating margin 9
operating margin 9
trading margin 14 
trading margin 14 
207 
194 
334
326
profit for the year – £m
04
05
375
482
eps and adjusted eps
1
– pence
04
05
adjusted eps 138p
adjusted eps 118p
eps 326p
eps 260p
net funds
1
and net assets – £m
04
05
net funds 253
net funds 326
net assets 570
net assets 570