Change to definition of APM following SEC guidance

Thomson Reuters Corporation – Annual report – 31 December 2016

Industry: media

Management’s Discussion and Analysis (extract)

Use of Non-IFRS Financial Measures (extract)

As previously disclosed in our second quarter 2016 report, we redefined adjusted earnings and adjusted EPS in relation to certain tax computations to better align these definitions with current market practices and to reflect guidance issued in May 2016 by the U.S. Securities and Exchange Commission. These changes were effective for our third quarter reporting and reflected the following:

  • Tax effect of amortization of other identifiable intangible assets – we now remove the post-tax impact of amortization of other identifiable intangible assets. We previously removed the amortization of other identifiable intangible assets on a pre-tax basis.
  • Tax charge amortization – we no longer amortize the tax charge generated from our 2013 sale of technology and content assets to a related subsidiary over seven years.

To facilitate a comparison to our redefined adjusted earnings and adjusted EPS measures, we restated the prior-year computations for both of these measures in this management’s discussion and analysis. Under the redefined measures, our 2015 adjusted earnings and adjusted EPS are $18 million and $0.02 lower, respectively, for the fourth quarter and $77 million and $0.10 lower, respectively, for the full year. These changes had no impact on revenues, adjusted EBITDA, underlying operating profit or free cash flow.

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