Commercial paper program. Our $2.0 billion commercial paper program provides efficient and flexible short-term funding. We had no short-term notes outstanding at September 30, 2013. Issuances of commercial paper reached a peak of $0.5 billion during the nine-month period of 2013. Additionally, we are establishing a commercial paper program in the U.S.

Credit facility. In May 2013, we increased the size of our syndicated credit facility from $2.0 billion to $2.5 billion and extended the maturity date of the facility from August 2016 to May 2018. The facility may be used to provide liquidity for general corporate purposes (including to support our commercial paper program). In the first quarter of 2013, we borrowed and repaid $440 million under the credit facility. There were no outstanding borrowings at September 30, 2013.

We may request an extension of the maturity date under certain circumstances for up to two additional one-year periods, which the applicable lenders may accept or decline in their sole discretion. We may also request an increase, subject to approval by applicable lenders, in the lenders’ commitments up to a maximum amount of $3.0 billion.

Based on our September 30, 2013 credit ratings, the cost of borrowing under the agreement is priced at LIBOR/EURIBOR plus 90bp. In October 2013, our long-term debt rating was downgraded by Moody’s and Standard & Poor’s, which is expected to increase our facility fee by 2.5bp and borrowing costs by 10bp, although availability would be unaffected. We monitor the lenders that are party to our facility and believe they continue to be able to lend to us.

We guarantee borrowings by our subsidiaries under the credit facility. We must also maintain a ratio of net debt as of the last day of each fiscal quarter to EBITDA as defined in the credit agreement (earnings before interest, income taxes, depreciation and amortization and other modifications described in the credit agreement) for the last four quarters ended of not more than 4.5:1. We were in compliance with this covenant at September 30, 2013.

Long-term debt. In May 2013, we filed a new debt shelf prospectus allowing us to issue up to $3.0 billion principal amount of debt securities through June 2015. In the second quarter of 2013, we issued $850 million principal amount of debt securities under the new prospectus. At this time, we may issue up to $2.15 billion principal amount of debt securities under the prospectus.

The following table provides information regarding notes that we issued and repaid in 2013:

Month/Year	Transaction	Principal Amount (in millions)
	Notes issued
May 2013	0.875% notes due 2016	US$500
May 2013	4.50% notes due 2043	US$350
	Notes repaid
July 2013	5.95% notes due 2013	US$750
August 2013	5.25% notes due 2013	US$250

The net proceeds of the May 2013 debt issuance were for general corporate purposes, including pension contributions and debt repayments. The notes that matured in July 2013 and August 2013 were repaid with cash on hand, which included the net proceeds of the May 2013 debt issuance.

In the second quarter of 2013, in anticipation of future debt issuances, we entered into a forward starting interest rate swap to manage variability in future interest payments on our debt due to changes in benchmark interest rates. Under the swap, we will receive a floating rate of U.S. dollar interest and will pay a fixed rate of U.S. dollar interest on a 10-year term with a notional principal amount of $150 million.

Credit ratings. Our access to financing depends on, among other things, suitable market conditions and the maintenance of suitable long-term credit ratings. Our credit ratings may be adversely affected by various factors, including increased debt levels, decreased earnings, declines in customer demand, increased competition, a further deterioration in general economic and business conditions and adverse publicity. In October 2013, our long-term debt and commercial paper credit ratings were downgraded, however, the downgrades are not expected to impede our access to the debt markets or result in significantly higher borrowing rates.

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

	Moody’s	Standard & Poor’s	DBRS Limited	Fitch
Long-term debt	Baa2	BBB+	BBB (high)	BBB+
Commercial paper	P-2	A-2	R-2 (high)	F2
Trend/Outlook	Stable	Stable	Stable	Stable

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

Dividends. In February 2013, our board of directors approved a $0.02 per share increase in the annualized dividend rate to $1.30 per common share.

We paid the following dividends on our shares in the periods presented:

	Three months ended September 30,						Nine months ended September 30,
(millions of U.S. dollars)	2013			2012			2013			2012
Dividends declared		268			264			807			795
Dividends reinvested		(9	)		(10	)		(29	)		(29	)
Dividends paid		259			254			778			766

Share repurchases. We may buy back shares (and subsequently cancel them) from time to time as part of our capital strategy. During the three and nine months ended September 30, 2013, we repurchased 2,938,900 of our common shares for approximately $100 million at an average price per share of $34.09. During the nine months ended September 30, 2012, we repurchased 5,948,600 of its common shares for approximately $168 million at an average price per share of $28.26.

In May 2013, we renewed our normal course issuer bid (NCIB) for an additional 12 months. Under the NCIB, we may repurchase up to 15 million common shares (representing less than 2% of our total outstanding shares) between May 22, 2013 and May 21, 2014 in open market transactions on the Toronto Stock Exchange (TSX), the New York Stock Exchange (NYSE) and/or other exchanges or alternative trading systems, if eligible, or by such other means as may be permitted by the TSX.

Decisions regarding any future repurchases will be based on market conditions, share price and other factors including opportunities to invest capital for growth. In October 2013, we announced that we plan to repurchase up to $1.0 billion of our common shares by the end of 2014.

Free cash flow and free cash flow from ongoing businesses.

	Three months ended September 30,						Nine months ended September 30,
(millions of U.S. dollars)	2013			2012			2013			2012
Net cash provided by operating activities		676			591			1,696			1,713
Capital expenditures, less proceeds from disposals		(213	)		(228	)		(751	)		(715	)
Other investing activities		12			14			33			34
Dividends paid on preference shares		-			-			(2	)		(2	)
Free cash flow		475			377			976			1,030
Remove: Other Businesses		(14	)		(36	)		(56	)		(149	)
Free cash flow from ongoing businesses		461			341			920			881

Free cash flow and free cash flow from ongoing businesses increased during the third quarter of 2013 primarily due to higher cash from operating activities. In the nine-month period of 2013, free cash flow decreased due to the elimination of operating cash flows from Other Businesses, which reflected the timing of divestitures, and higher capital spending. Free cash flow from ongoing businesses in the nine-month period increased driven by higher cash from ongoing operating activities which was partly offset by higher capital spending.

OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTRACTUAL OBLIGATIONS

For a summary of our other off-balance sheet arrangements, commitments and contractual obligations please see our 2012 annual management’s discussion and analysis. There were no material changes to these arrangements, commitments and contractual obligations outside the ordinary course of business during the nine months ended September 30, 2013.

CONTINGENCIES

Lawsuits and Legal Claims

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

Uncertain Tax Positions

We are subject to taxation in numerous jurisdictions. There are many transactions and calculations during the course of business for which the ultimate tax determination is uncertain. We maintain provisions for uncertain tax positions that we believe appropriately reflect our risk. These provisions are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. We review the adequacy of these provisions at the end of the reporting period. It is possible that at some future date, liabilities in excess of our provisions could result from audits by, or litigation with, relevant taxing authorities. Management believes that such additional liabilities would not have a material adverse impact on our financial condition taken as a whole.

OUTLOOK

The information in this section is forward-looking and should be read in conjunction with the section below entitled “Cautionary Note Concerning Factors That May Affect Future Results”.

In October 2013, we reaffirmed our business outlook for 2013 that was first communicated in February, excluding the impacts of the expected charge and the pension contribution discussed earlier in this management’s discussion and analysis. We expect to record the charge primarily in the fourth quarter of 2013 with a portion recorded in 2014. The precise amounts to be recorded during each year are not yet known. Therefore, we are unable to quantify the impact of the charge on our 2013 outlook below at this time.

The following table sets forth our current 2013 financial outlook, the material assumptions related to our financial outlook and the material risks that may cause actual performance to differ materially from our current expectations.

Our 2013 outlook for revenues, adjusted EBITDA and underlying operating profit excludes the impact of foreign currency and previously announced businesses that have been or are expected to be exited through sale or closure, as well as the expected charge and the pension plan contribution discussed above. In addition, our 2013 outlook should be reviewed in connection with Appendix C (“Supplemental Financial Information”), which contains our restated 2012 full year results, and reflects the retrospective application of the amendments to IAS 19, Employee Benefits, and the adoption of IFRS 11, Joint Arrangements.

2013 Outlook		Material assumptions		Material risks
Revenues expected to grow low single digits		— Improvement in net sales — Positive gross domestic product (GDP) growth in the countries where we operate, led by rapidly developing economies — Continued increase in the number of professionals around the world and their demand for high quality information and services — Continued operational improvement in the Financial & Risk business and the successful execution of ongoing product release programs, our globalization strategy and other growth initiatives		— Uneven economic growth or recession across the markets we serve may result in reduced spending levels by our customers — Demand for our products and services could be reduced by changes in customer buying patterns, competitive pressures or our inability to execute on key product or customer support initiatives — Implementation of regulatory reform, including Dodd-Frank legislation and similar financial services laws around the world, may limit business opportunities for our customers, lowering their demand for our products and services — Uncertainty regarding the European sovereign debt crisis and the Euro currency could impact demand from our customers as well as their ability to pay us — Pressure on our customers, in developed markets in particular, to constrain the number of professionals employed due to regulatory and economic uncertainty

2013 Outlook	Material assumptions	Material risks
Adjusted EBITDA margin expected to be between 26% and 27%	— Revenues expected to grow low single digits — Business mix continues to shift to higher-growth lower margin offerings — Realization of expected benefits from cost control and efficiency initiatives, specifically in our Financial & Risk business relative to reductions in workforce, platform consolidation and operational simplification	— Refer to the risks above related to the revenue outlook — Revenues from higher margin businesses may be lower than expected — The costs of required investments exceed expectations or actual returns are below expectations — Acquisition and disposal activity may dilute margins — Cost control initiatives may cost more than expected, be delayed or may not produce the expected level of savings
Underlying operating profit margin expected to be between 16.5% and 17.5%	— Adjusted EBITDA margin expected to be between 26% and 27% — Depreciation and amortization expense expected to represent approximately 9.5% of revenues — Capital expenditures expected to be approximately 8% of revenues	— Refer to the risks above related to adjusted EBITDA margin outlook — Capital expenditures may be higher than currently expected, resulting in higher in-period depreciation and amortization
Free cash flow is expected to be between $1.7 billion and $1.8 billion	— Revenues expected to grow low single digits — Adjusted EBITDA margin expected to be between 26% and 27% — Capital expenditures expected to be approximately 8% of revenues	— Refer to the risks above related to the revenue outlook and adjusted EBITDA margin outlook — A weaker macroeconomic environment and unanticipated disruptions from new order-to-cash applications could negatively impact working capital performance — Capital expenditures may be higher than currently expected resulting in higher cash outflows — The timing of completing disposals of businesses may vary from our expectations resulting in actual free cash flow performance below our expectations — The timing and amount of tax payments to governments may differ from our expectations

Additionally, in 2013, we expect interest expense to be $470 million to $490 million, assuming no significant change in our level of indebtedness and inclusive of non-cash pension related interest charges of $60 million to $70 million, relating to a new accounting pronouncement. We expect our 2013 effective tax rate (as a percentage of post-amortization adjusted earnings) will be between 11% to 13%, assuming no material changes in current tax laws or treaties to which we are subject.

RELATED PARTY TRANSACTIONS

As of October 28, 2013, Woodbridge beneficially owned approximately 55% of our shares.

TRANSACTIONS WITH WOODBRIDGE

From time to time, in the normal course of business, we enter into transactions with Woodbridge and certain of its affiliates. These transactions involve providing and receiving product and service offerings, are negotiated at arm’s length on standard terms, including price, and are not significant to our results of operations or financial condition either individually or in the aggregate.

In May 2012, as part of our efforts to expand our mutual fund data and strategic research capabilities, we acquired a Canadian mutual fund database, fund fact sheet business and mutual fund and equity data feed business for approximately C$9 million from The Globe and Mail (The Globe), which is majority owned by Woodbridge. We paid approximately C$8 million in cash and issued a C$1 million promissory note to The Globe that will be due in May 2016. In connection with the acquisition, we licensed the acquired database to The Globe over a four year term, valued at approximately C$250,000 per year. The Globe issued four promissory notes to us, each for the value of the annual license. Amounts due each year under the notes issued by The Globe will be offset against the note issued by us. Our board of directors’ Corporate Governance Committee approved the transaction.

In the normal course of business, certain of our subsidiaries charge a Woodbridge owned company fees for various administrative services. The total amount charged to Woodbridge for these services was approximately $112,000 for the year ended December 31, 2012.

We purchase property and casualty insurance from third party insurers and retain the first $500,000 of each and every claim under the programs via our captive insurance subsidiaries. Woodbridge is included in these programs and pays us a premium commensurate with its exposures. Premiums relating to 2012 were $40,000, which would approximate the premium charged by a third party insurer for such coverage.

We maintained an agreement with Woodbridge until April 17, 2008 (the closing date of the Reuters acquisition) under which Woodbridge agreed to indemnify up to $100 million of liabilities incurred either by our current and former directors and officers or by our company in providing indemnification to these individuals on substantially the same terms and conditions as would apply under an arm’s length, commercial arrangement. We were required to pay Woodbridge an annual fee of $750,000, which was less than the premium that would have been paid for commercial insurance. In 2008, we replaced this agreement with a conventional insurance agreement. We are entitled to seek indemnification from Woodbridge for any claims arising from events prior to April 17, 2008, so long as the claims are made before April 17, 2014.

TRANSACTIONS WITH ASSOCIATES AND JOINT VENTURES

From time to time, we enter into transactions with our investments in associates and joint ventures. These transactions typically involve providing or receiving services and are entered into in the normal course of business and on an arm’s length basis.

We and The Depository Trust & Clearing Corporation (DTCC) each have a 50% interest in Omgeo, a provider of trade management services. Omgeo pays us for use of a facility and technology and other services which were valued at approximately $7 million for the nine months ended September 30, 2013. See “Subsequent Events”.

We and Shin Nippon Hoki Shuppan K.K. each own 50% of Westlaw Japan K.K., a provider of legal information and solutions to the Japanese legal market. We provide the joint venture with technology and other services, which were valued at approximately $600,000 for the nine months ended September 30, 2013.

In connection with the 2008 acquisition of Reuters, we assumed a lease agreement with 3XSQ Associates, an entity owned by Thomson Reuters and Rudin Times Square Associates LLC that was formed to build and operate the 3 Times Square property and building in New York, New York that serves as our corporate headquarters. We follow the equity method of accounting for our investment in 3XSQ Associates. The lease provides us with over 690,000 square feet of office space until 2021 and includes provisions to terminate portions early and various renewal options. Our costs under this lease arrangement for rent, taxes and other expenses were approximately $29 million for the nine months ended September 30, 2013.

SUBSEQUENT EVENTS

Sale of 50% interest in Omgeo

In October 2013, we completed the sale of our 50% interest in Omgeo to DTCC. We expect to record a pre-tax gain on this transaction in the fourth quarter of 2013.

Charge

In October 2013, we announced that we expect to record a charge of approximately $350 million, which would be incurred primarily in the fourth quarter of 2013 with a portion to be recorded in 2014.

Share repurchases

In October 2013, we announced that we plan to repurchase up to $1.0 billion of our shares by the end of 2014.

Pension contribution

In October 2013, we announced that we plan to contribute $500 million to our pension plans in the fourth quarter of 2013 to pre-fund certain obligations.

CHANGES IN ACCOUNTING POLICIES

Please refer to the “Changes in Accounting Policies” section of our 2012 annual management’s discussion and analysis, which is contained in our 2012 annual report, as well as note 2 of our interim financial statements for the nine months ended September 30, 2013, for information regarding changes in accounting policies.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of financial statements requires management to make estimates and judgments about the future. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Please refer to the “Critical Accounting Estimates and Judgments” section of our 2012 annual management’s discussion and analysis, which is contained in our 2012 annual report, for additional information. In the third quarter of 2013, we performed an interim goodwill impairment test of our Financial & Risk cash generating unit (CGU). Refer to the following section for changes made to our critical accounting estimates related to this impairment test.

Interim goodwill impairment test

We performed an interim goodwill impairment test of our Financial & Risk CGU in the third quarter of 2013 in accordance with the policy described in note 1 of our consolidated financial statements for the year ended December 31, 2012. The estimated fair value less costs of disposal of the Financial & Risk CGU exceeded its carrying value. As a result, no goodwill impairment was recorded.

In the fourth quarter of 2012, we performed our annual test for goodwill impairment, which indicated that the fair value of the Financial & Risk CGU exceeded its carrying value by $980 million or 6%. In the third quarter of 2013, we determined that an interim goodwill impairment test was required due to the following combination of events and changes in circumstances that impacted the Financial & Risk CGU:

In the third quarter, we began formulating a plan to restructure our Financial & Risk business (see “Subsequent Events”); and

There was a significant rise in the long-term risk-free interest rate, which is a component of the discount rate used to determine the fair value of the Financial & Risk CGU.

We did not identify events or circumstances that indicated an interim goodwill impairment test of our other CGUs was required. The annual impairment test performed in the fourth quarter of 2012 indicated that all of the CGUs, except for Financial & Risk, had fair values that exceeded their carrying values by over 100%.

The valuation techniques, significant assumptions and sensitivities applied in the goodwill impairment test of the Financial & Risk CGU are described below. The selection and application of valuation techniques and the determination of significant assumptions requires judgment.

Valuation Techniques

As with previous impairment tests, the recoverable value of the Financial & Risk CGU was based on fair value less costs of disposal, using a weighted average of the income approach and market approach. IFRS 13, Fair Value Measurement, defines fair value as a market-based measurement rather than an entity-specific measurement. Therefore, the fair value of the CGU must be measured using the assumptions that market participants would use rather than those related specifically to us. In particular, the discount and tax rates used in the income approach reflect market participant assumptions. To calculate these market participant assumptions, publicly available data was gathered from companies operating in businesses similar to the Financial & Risk CGU, which includes some of its key competitors. As certain inputs to the valuation are not based on observable market data, the recoverable value of the Financial & Risk CGU is categorized in Level 3 of the fair value measurement hierarchy.

Income approach

The income approach is predicated upon the value of the future cash flows that a business will generate. We used the discounted cash flow (DCF) method, which involves projecting cash flows and converting them into a present value equivalent through discounting. The discounting process uses a rate of return that is commensurate with the risk associated with the business and the time value of money. This approach requires assumptions about revenue growth rates, operating margins, capital expenditures, tax rates and discount rates.

Market approach

The market approach assumes that companies operating in the same industry will share similar characteristics and that company values will correlate to those characteristics. Therefore, a comparison of a CGU to similar companies whose financial information is publicly available may provide a reasonable basis to estimate fair value. Under the market approach, fair value is calculated based on EBITDA multiples of benchmark companies comparable to the businesses in the Financial & Risk CGU. Data for the benchmark companies was obtained from publicly available information.

Significant Assumptions

Weighting of Valuation Techniques

We weighted the results of the two valuation techniques noted above as follows: 60% income approach/40% market approach. We believe that given volatility in capital markets, it is appropriate to apply a heavier weighting to the income approach.

Cash Flow Projections

Cash flow projections were based on our internal budget. We projected cash flows for a period of five years and applied a perpetual growth rate thereafter, as prescribed by IAS 36, Impairment of Assets. In order to project cash flows for the five year period, we considered growth in revenues and costs as well as capital expenditures. In preparing our projections, we considered past experience, economic trends such as GDP growth and inflation as well as industry and market trends. The projections also took into account the expected impact from efficiency initiatives and the anticipated restructuring plan, new product launches, customer retention, as well as the maturity of the markets in which Financial & Risk operates.

Discount Rate

We assumed a discount rate in order to calculate the present value of our projected cash flows. The discount rate represented a weighted average cost of capital (WACC) for comparable companies operating in similar industries as the Financial & Risk CGU, based on publicly available information. The WACC is an estimate of the overall required rate of return on an investment for both debt and equity owners and serves as the basis for developing an appropriate discount rate. Determination of the WACC requires separate analysis of the cost of equity and the cost of debt. The cost of equity reflects the long-term risk-free interest rate associated with U.S. Treasury bonds and considers a risk premium based on an assessment of risks related to the projected cash flows of the Financial & Risk CGU.

Tax Rate

The tax rate applied to the projections were based on effective tax rates of comparable companies operating in similar industries as the Financial & Risk CGU, based on publicly available information. Tax assumptions are sensitive to changes in tax laws and the jurisdictions in which profits are earned.

The key assumptions used in performing the September 30, 2013 goodwill impairment test for the Financial & Risk CGU are presented below:

	Perpetual				Discount				Tax
		growth rate⁽¹⁾				rate				rate
September 30, 2013			3.0	%			10.4	%			28.0	%

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

Results and Sensitivities

The fair value of the Financial & Risk CGU exceeded its carrying value by $2,218 million, which represented 14% of its carrying value. The carrying value included goodwill of $10,503 million. While the higher discount rate reduced the fair value of the Financial & Risk CGU, this reduction was more than offset by the impact of higher observable EBITDA multiples for benchmark companies in the market approach, higher cash flows from the benefits of the anticipated restructuring, and a decrease in the carrying value due to disposals of businesses and depreciation and amortization. The fair value of the Financial & Risk CGU exceeded its carrying value as computed under either the income or market approach. However, compared to the impairment analysis in 2012, the fair value computed under the market approach contributed a greater amount to the excess fair value due to a significant rise in observable EBIDTA multiples of benchmark companies. As a result, the sensitivity analysis demonstrates that no reasonably possible change in the perpetual growth, discount rate or income tax assumptions would cause the carrying amount of the Financial & Risk CGU to exceed its recoverable amount. Should EBITDA multiples of benchmark companies fall to a level below that of 2012, without a corresponding offset to other key assumptions, the excess fair value would be eliminated.

Discussion of Cash Flow Projections

The DCF valuation for the Financial & Risk CGU assumes that cash flow will grow at a compounded annual rate in the high single digits from 2013 to 2018, largely reflecting recently announced restructuring initiatives that are expected to result in improved operating margins and higher cash flows in future periods. We are undertaking various initiatives to reduce costs, primarily by reducing our workforce. The reduction in workforce will take place through restructuring initiatives to de-layer the organization, as well as through decommissioning legacy infrastructures as customers upgrade to new products and services, such as Thomson Reuters Eikon and Thomson Reuters Elektron, which are part of a unified technology platform. Over the next five years, our cash flow projections also assume that the Financial & Risk CGU will gradually return to positive revenue growth. After the specific five year projection period, we project perpetual cash flow growth of 3% based on the assumption that the Financial & Risk business will continue to expand globally and increase prices in line with global inflation.

In 2012, the year following our 2011 impairment charge, the actual 2012 cash flow performance for the Financial & Risk CGU achieved the 2012 projection included within the 2011 impairment testing analysis, after adjusting for market participant assumptions such as the tax rate.

The free cash flow growth projections and certain key assumptions underlying the fair value of the Financial & Risk CGU are subject to risks and uncertainties that could cause future results to differ materially from current expectations. Specifically, Financial & Risk could experience delays implementing its anticipated restructuring and efficiency initiatives or such initiatives could produce less benefit or cost more than originally expected. Financial & Risk could incur higher costs than expected if customers do not upgrade to new products or if the process to upgrade takes longer than anticipated. Our cash flow projections could be impacted by further deterioration in macroeconomic conditions, including potential impacts of regulation on customers, changes in customer buying patterns or competitive pressures. Such conditions could lead the Financial & Risk CGU to experience unexpected subscription cancellations, lower transaction volumes or the inability to sustain expected price increases. Our assumption of perpetual growth could be impacted by changes in long-term outlooks for global inflation. Additionally, the discount rate, tax rate, and EBITDA multiples are based on those for comparable companies and are driven by market conditions and prevailing tax laws. In the future, changes in these measures could cause the recoverable amount of assets for the Financial & Risk CGU to be less than their carrying value.

ADDITIONAL INFORMATION

DISCLOSURE CONTROLS AND PROCEDURES

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

INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. In the prior quarter, we migrated to an integrated global human resources platform that simplifies many of our employee management processes, provides global management tools and enhances financial reporting and analysis. We are in the process of implementing a multi-year phased implementation of order-to-cash (OTC) applications and related workflow processes. Key elements of the OTC solutions are order management, billing, cash management and collections functionality. We expect to reduce the number of applications and to streamline processes across our organization through this initiative. We are also in the process of automating manual processes and updating workflows associated with intercompany revenue and cost allocation. We continue to modify the design and documentation of the related internal control processes and procedures as the implementations of these initiatives progresses.

Except as described above, there was no change in our internal control over financial reporting during the last fiscal quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

SHARE CAPITAL

As of October 28, 2013, we had outstanding 827,635,260 common shares, 6,000,000 Series II preference shares, 10,843,026 stock options and a total of 8,062,466 time-based restricted share units and performance restricted share units. We have also issued a Thomson Reuters Founders Share which enables Thomson Reuters Founders Share Company to exercise extraordinary voting power to safeguard the Thomson Reuters Trust Principles.

PUBLIC SECURITIES FILINGS AND REGULATORY ANNOUNCEMENTS

You may access other information about our company, including our 2012 annual report (which contains information required in an annual information form) and our other disclosure documents, reports, statements or other information that we file with the Canadian securities regulatory authorities through SEDAR at www.sedar.com and in the United States with the SEC at www.sec.gov.

CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS

Certain statements in this management’s discussion and analysis, including, but not limited to statements regarding 2013 expectations in the ”Outlook” section, our expectations about net sales in the Financial & Risk segment in the fourth quarter, our expectations about desktop upgrades to Thomson Reuters Eikon, our expectations about future share repurchases and reduced acquisition spend, our expectations about improving free cash flow performance, our expectations that we will record future tax charges in connection with the further consolidation of our technology and content assets, our expectations about EBITDA margin in the Financial & Risk segment, our expectations that print revenues in the Legal segment will decline in the fourth quarter and regarding the potential dilutive impact of the PLC acquisition on the Legal segment’s 2013 margins, are forward-looking. Forward-looking statements also include expectations regarding the charge and pension contribution. The words “expect”, “target” and “will” and similar expressions identify forward-looking statements. These forward-looking statements are based on certain assumptions and reflect our company’s current expectations. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Certain factors that could cause actual results or events to differ materially from current expectations are discussed in the “Outlook“ section above. Additional factors are discussed in the “Risk Factors” section of our 2012 annual report and in materials that we from time to time file with, or furnish to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. There is no assurance that any forward-looking statement will materialize. Our outlook is provided for the purpose of providing information about current expectations for 2013. This information may not be appropriate for other purposes. You are cautioned not to place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this management’s discussion and analysis. Except as may be required by applicable law, we disclaim any obligation to update or revise any forward-looking statements.

APPENDIX A

NON-IFRS FINANCIAL MEASURES

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

Non-IFRS Financial Measure	How We Define It	Why We Use It and Why It Is Useful to Investors	Most Directly Comparable IFRS Measure/Reconciliation
Revenues from ongoing businesses	Revenues from reportable segments and Corporate & Other (which includes the Reuters News business), less eliminations.	Provides a measure of our ability to grow our ongoing businesses over the long term.	Revenues
Revenues at constant currency (before currency or revenues excluding the effects of foreign currency)	Revenues applying the same foreign currency exchange rates for the current and equivalent prior period. To calculate the foreign currency impact between periods, we convert the current and equivalent prior period’s local currency revenues using the same foreign currency exchange rate.	Provides a measure of underlying business trends, without distortion from the effect of foreign currency movements during the period. Our reporting currency is the U.S. dollar. However, we conduct a significant amount of our activities in currencies other than the U.S. dollar. We manage our operating segments on a constant currency basis, and we manage currency exchange risk at the corporate level.	Revenues
Underlying operating profit and underlying operating profit margin	Operating profit from reportable segments and Corporate & Other. The related margin is expressed as a percentage of revenues from ongoing businesses.	Provides a basis to evaluate operating profitability and performance trends, excluding the impact of items which distort the performance of our operations.	Operating profit
Adjusted EBITDA and adjusted EBITDA margin	Underlying operating profit excluding the related depreciation and amortization of computer software. The related margin is expressed as a percentage of revenues from ongoing businesses.	Provides a measure commonly reported and widely used by investors as an indicator of a company’s operating performance and ability to incur and service debt, and as a valuation metric.	Earnings from continuing operations
Adjusted EBITDA less capital expenditures and adjusted EBITDA less capital expenditures margin	Adjusted EBITDA less capital expenditures, less proceeds from disposals (excluding Other Businesses). The related margin is expressed as a percentage of revenues from ongoing businesses.	Provides a basis for evaluating the operating profitability and capital intensity of a business in a single measure. This measure captures investments regardless of whether they are expensed or capitalized.	Earnings from continuing operations

Non-IFRS Financial Measure	How We Define It	Why We Use It and Why It Is Useful to Investors	Most Directly Comparable IFRS Measure/Reconciliation
Net debt	Total indebtedness, including the associated fair value of hedging instruments on our debt, but excluding unamortized transaction costs and premiums or discounts associated with our debt, less cash and cash equivalents.	Provides a commonly used measure of a company’s leverage. Given that we hedge some of our debt to reduce risk, we include hedging instruments as we believe it provides a better measure of the total obligation associated with our outstanding debt. However, because we intend to hold our debt and related hedges to maturity, we do not consider certain components of the associated fair value of hedges in our measurements. We reduce gross indebtedness by cash and cash equivalents.	Total debt (current indebtedness plus long-term indebtedness)
Free cash flow	Net cash provided by operating activities and other investing activities, less capital expenditures and dividends paid on our preference shares.	Helps assess our ability, over the long term, to create value for our shareholders as it represents cash available to repay debt, pay common dividends and fund share repurchases and new acquisitions.	Net cash provided by operating activities
Free cash flow from ongoing businesses	Free cash flow excluding businesses that have been or are expected to be exited through sale or closure, which we refer to as “Other Businesses”.	Provides a supplemental measure of our ability, over the long term, to create value for our shareholders because it represents free cash flow generated by our operations excluding businesses that have been or are expected to be exited through sale or closure.	Net cash provided by operating activities

APPENDIX B

This appendix provides reconciliations that are not presented elsewhere in this management’s discussion and analysis for certain non-IFRS measures to the most directly comparable IFRS measure, for the three and nine months ended September 30, 2013 and 2012.

RECONCILIATION OF EARNINGS FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA AND ADJUSTED EBITDA LESS CAPITAL EXPENDITURES

	Three months ended September 30,									Nine months ended September 30,
(millions of U.S. dollars)	2013			2012			Change			2013			2012			Change
Earnings from continuing operations		283			451			(37	%)		522			1,675			(69	%)
Adjustments to remove:
Tax (benefit) expense		(33	)		(147	)					423			83
Other finance (income) costs		(38	)		(30	)					34			(44	)
Net interest expense		109			106						348			342
Amortization of other identifiable intangible assets		165			158						482			459
Amortization of computer software		195			172						571			509
Depreciation		102			103						310			320
EBITDA		783			813						2,690			3,344
Adjustments to remove:
Share of post tax earnings in equity method investments		(5	)		(8	)					(24	)		(23	)
Other operating losses (gains), net		6			18						(124	)		(802	)
Fair value adjustments		70			34						(21	)		21
EBITDA from Other Businesses⁽¹⁾		(9	)		(48	)					(61	)		(123	)
Adjusted EBITDA		845			809			4	%		2,460			2,417			2	%
Remove: Capital expenditures, less proceeds from disposals (excluding Other Businesses⁽¹⁾)		212			227						750			700
Adjusted EBITDA less capital expenditures		633			582			9	%		1,710			1,717			-
Adjusted EBITDA margin		27.5	%		26.5	%		100	bp		26.5	%		26.3	%		20	bp
Adjusted EBITDA less capital expenditures margin		20.6	%		19.1	%		150	bp		18.4	%		18.7	%		(30	)bp

RECONCILIATION OF UNDERLYING OPERATING PROFIT TO ADJUSTED EBITDA BY SEGMENT

	Three months ended September 30, 2013								Three months ended September 30, 2012
(millions of U.S. dollars)	Underlying Operating profit			Add: Depreciation and amortization of computer software **		Adjusted EBITDA			Underlying Operating profit			Add: Depreciation and amortization of computer software **		Adjusted EBITDA
Financial & Risk		275			158		433			250			153		403
Legal		248			72		320			256			72		328
Tax & Accounting		34			32		66			28			30		58
Intellectual Property & Science		61			19		80			55			17		72
Corporate & Other (includes Reuters News)⁽²⁾		(70	)		16		(54	)		(55	)		3		(52	)
Total		548			297		845			534			275		809

** excludes Other Businesses⁽¹⁾

RECONCILIATION OF UNDERLYING OPERATING PROFIT TO ADJUSTED EBITDA BY SEGMENT (CONTINUED)

	Nine months ended September 30, 2013								Nine months ended September 30, 2012
(millions of U.S. dollars)	Underlying Operating profit			Add: Depreciation and amortization of computer software **		Adjusted EBITDA			Underlying Operating profit			Add: Depreciation and amortization of computer software **		Adjusted EBITDA
Financial & Risk		735			478		1,213			793			454		1,247
Legal		704			218		922			708			209		917
Tax & Accounting		160			91		251			142			86		228
Intellectual Property & Science		171			58		229			169			50		219
Corporate & Other (includes Reuters News)⁽²⁾		(191	)		36		(155	)		(214	)		20		(194	)
Total		1,579			881		2,460			1,598			819		2,417

** excludes Other Businesses⁽¹⁾

(1)

Other Businesses are businesses that have been or are expected to be exited through sale or closure that did not qualify for discontinued operations classification. Significant businesses in this category include: Trade and Risk Management (trade and risk management solutions provider to financial institutions, sold in the first quarter of 2012); Healthcare (data analytics and performance benchmarking solutions provider, sold in the second quarter of 2012); Property Tax Consulting (property tax outsourcing and compliance services provider in the U.S., sold in the fourth quarter of 2012); and Corporate Services (provider of tools and solutions that help companies communicate with investors and media, sold in the second quarter of 2013).

	Three months ended September 30,				Nine months ended September 30,
(millions of U.S. dollars)	2013		2012		2013		2012
Revenues		13		129		146		570

Operating profit		9		48		61		113
Depreciation and amortization of computer software		-		-		-		10
EBITDA		9		48		61		123
Capital expenditures, less proceeds from disposals		1		1		1		15

(2)	Corporate & Other includes the Reuters News business and expenses for corporate functions and certain share-based compensation costs.

APPENDIX C

SUPPLEMENTAL FINANCIAL INFORMATION

Effective January 1, 2013, we adopted amendments to IAS 19, Employee Benefits, and IFRS 11, Joint Arrangements. Additionally, certain businesses, most notably our Corporate Services business, were reclassified from ongoing businesses to Other Businesses, and the Financial & Risk segment was realigned to classify certain products according to how they are currently managed. This appendix presents our restated consolidated income statement, segment information and reconciliations to non-IFRS measures for the years ended December 31, 2012 and 2011.

See note 2 of our interim financial statements for the three and nine months ended September 30, 2013 and note 3 of our 2012 annual financial statements for information regarding changes in accounting policies.

Consolidated Income Statement

(unaudited)

	Year ended December 31,
(millions of U.S. dollars, except per share amounts)	2012			2011
Revenues		13,132			13,650
Operating expenses		(9,710	)		(9,927	)
Depreciation		(425	)		(434	)
Amortization of computer software		(691	)		(649	)
Amortization of other identifiable intangible assets		(619	)		(612	)
Goodwill impairment		-			(3,010	)
Other operating gains, net		883			204
Operating profit (loss)		2,570			(778	)
Finance costs, net:
Net interest expense		(453	)		(448	)
Other finance income (costs)		40			(15	)
Income (loss) before tax and equity method investments		2,157			(1,241	)
Share of post-tax earnings and impairment in equity method investments		9			55
Tax expense		(126	)		(271	)
Earnings (loss) from continuing operations		2,040			(1,457	)
Earnings from discontinued operations, net of tax		2			4
Net earnings (loss)		2,042			(1,453	)
Earnings (loss) attributable to:
Common shareholders		1,989			(1,451	)
Non-controlling interests		53			(2	)

Earnings (loss) per share:
Basic earnings (loss) per share:
From continuing operations	$	2.40		$	(1.75	)
From discontinued operations		-			0.01
Basic earnings (loss) per share	$	2.40		$	(1.74	)

Diluted earnings (loss) per share
From continuing operations	$	2.39		$	(1.75	)
From discontinued operations		-			0.01
Diluted earnings (loss) per share	$	2.39		$	(1.74	)

Business segment information

	Year ended December 31,						Percentage change:
(millions of U.S. dollars)	2012			2011			Existing businesses			Acquired businesses			Constant currency			Foreign currency			Total
Revenues
Trading		2,645			2,784			(2	%)		-			(2	%)		(3	%)		(5	%)
Investors		2,168			2,211			(1	%)		-			(1	%)		(1	%)		(2	%)
Marketplaces		1,770			1,739			(2	%)		5	%		3	%		(1	%)		2	%
Governance, Risk & Compliance		219			154			17	%		26	%		43	%		(1	%)		42	%
Financial & Risk		6,802			6,888			(1	%)		2	%		1	%		(2	%)		(1	%)
Legal		3,266			3,195			1	%		2	%		3	%		(1	%)		2	%
Tax & Accounting		1,161			1,009			4	%		12	%		16	%		(1	%)		15	%
Intellectual Property & Science		894			852			3	%		3	%		6	%		(1	%)		5	%
Reportable segments		12,123			11,944			-			3	%		3	%		(2	%)		1	%
Corporate & Other (includes Reuters News)⁽²⁾		331			336			1	%		-			1	%		(2	%)		(1	%)
Eliminations		(11	)		(13	)		-			-			-			-			-
Revenues from ongoing businesses		12,443			12,267			-			3	%		3	%		(2	%)		1	%
Other Businesses⁽¹⁾		689			1,383			n/m			n/m			n/m			n/m			n/m
Consolidated revenues		13,132			13,650			n/m			n/m			n/m			n/m			(4	%)

Operating profit (loss)					Margin
Segment operating profit					2012			2011
Financial & Risk	1,082		1,245			15.9	%		18.1	%
Legal	967		945			29.6	%		29.6	%
Tax & Accounting	238		215			20.5	%		21.3	%
Intellectual Property & Science	235		237			26.3	%		27.8	%
Reportable segments	2,522		2,642			20.8	%		22.1	%
Corporate & Other (includes Reuters News)⁽²⁾	(317	)	(301	)		-			-
Underlying operating profit	2,205		2,341			17.7	%		19.1	%
Other Businesses⁽¹⁾	137		365
Integration programs expenses	-		(215	)
Fair value adjustments	(36	)	149
Amortization of other identifiable intangible assets	(619	)	(612	)
Goodwill impairment	-		(3,010	)
Other operating gains, net	883		204
Consolidated operating profit (loss)	2,570		(778	)

Reconciliation of operating profit (loss) to underlying operating profit and adjusted EBITDA

	Year ended December 31,
(millions of U.S. dollars)	2012			2011			Change
Operating profit (loss)		2,570			(778	)		n/m
Adjustments to remove:
Goodwill impairment		-			3,010
Amortization of other identifiable intangible assets		619			612
Integration programs expenses		-			215
Fair value adjustments		36			(149	)
Other operating gains, net		(883	)		(204	)
Operating profit from Other Businesses ⁽¹⁾		(137	)		(365	)
Underlying operating profit		2,205			2,341			(6	%)
Adjustments:
Add: Integration programs expenses		-			(215	)
Remove: Depreciation and amortization of computer software (excluding Other Businesses ⁽¹⁾)		1,105			1,023
Adjusted EBITDA		3,310			3,149			5	%

Underlying operating profit margin		17.7	%		19.1	%		(140	)bp
Adjusted EBITDA margin		26.6	%		25.7	%		90	bp

Reconciliation of earnings (loss) attributable to common shareholders to adjusted earnings

	Year ended December 31,
(millions of U.S. dollars, except per share amounts)	2012			2011			Change
Earnings (loss) attributable to common shareholders		1,989			(1,451	)		n/m
Adjustments to remove:
Goodwill impairment		-			3,010
Goodwill impairment attributable to non-controlling interests		-			(40	)
Operating profit from Other Businesses ⁽¹⁾		(137	)		(365	)
Fair value adjustments		36			(149	)
Other operating gains, net		(883	)		(204	)
Other finance (income) costs		(40	)		15
Share of post-tax earnings and impairment in equity method investments		(9	)		(55	)
Tax on above items		251			193
Discrete tax items		(254	)		(105	)
Amortization of other identifiable intangible assets		619			612
Discontinued operations		(2	)		(4	)
Dividends declared on preference shares		(3	)		(3	)
Adjusted earnings		1,567			1,454			8	%
Adjusted earnings per share	$	1.89		$	1.74			9	%
Diluted weighted-average common shares (millions)		829.6			835.8

Reconciliation of earnings (loss) from continuing operations to adjusted EBITDA

	Year ended December 31,
(millions of U.S. dollars)	2012			2011			Change
Earnings (loss) from continuing operations		2,040			(1,457	)		n/m
Adjustments to remove:
Tax expense		126			271
Other finance (income) costs		(40	)		15
Net interest expense		453			448
Amortization of other identifiable intangible assets		619			612
Amortization of computer software		691			649
Depreciation		425			434
EBITDA		4,314			972
Adjustments to remove:
Share of post-tax earnings and impairment in equity method investments		(9	)		(55	)
Other operating gains, net		(883	)		(204	)
Goodwill impairment		-			3,010
Fair value adjustments		36			(149	)
EBITDA from Other Businesses ⁽¹⁾		(148	)		(425	)
Adjusted EBITDA		3,310			3,149			5	%
Adjusted EBITDA margin		26.6	%		25.7	%		90	bp

Reconciliation of underlying operating profit to adjusted EBITDA by business segment

	Year ended December 31, 2012								Year ended December 31, 2011
(millions of U.S. dollars)	Underlying Operating profit			Add: Depreciation and amortization of computer software **		Adjusted EBITDA			Underlying Operating profit			Add: Depreciation and amortization of computer software **		Adjusted EBITDA
Financial & Risk		1,082			609		1,691			1,245			558		1,803
Legal		967			279		1,246			945			268		1,213
Tax & Accounting		238			114		352			215			95		310
Intellectual Property & Science		235			68		303			237			59		296
Corporate & Other (includes Reuters News) ⁽²⁾		(317	)		35		(282	)		(301	)		43		(258	)
Integration programs expenses	na			na		na			na			na			(215	)
Total		2,205			1,105		3,310			2,341			1,023		3,149

** excludes Other Businesses⁽¹⁾

(1)

Other Businesses are businesses that have been or are expected to be exited through sale or closure that did not qualify for discontinued operations classification. Significant businesses in this category include: BARBRI (legal education provider, sold in the second quarter of 2011); Trade and Risk Management (trade and risk management solutions provider to financial institutions, sold in the first quarter of 2012); Healthcare (data analytics and performance benchmarking solutions provider, sold in the second quarter of 2012); Property Tax Consulting (property tax outsourcing and compliance services provider in the U.S., sold in the fourth quarter of 2012); and Corporate Services (provider of tools and solutions that help companies communicate with investors and media, sold in the second quarter of 2013).

	Year ended December 31,
(millions of U.S. dollars)	2012		2011
Revenues		689		1,383

Operating profit		137		365
Depreciation and amortization of computer software		11		60
EBITDA		148		425

(2)	Corporate & Other includes the Reuters News business and expenses for corporate functions and certain share-based compensation costs.

APPENDIX D

QUARTERLY INFORMATION (UNAUDITED)

The following table presents a summary of our consolidated operating results for the eight most recent quarters.

	Quarter ended March 31,						Quarter ended June 30,						Quarter ended September 30,				Quarter ended December 31,
(millions of U.S. dollars, except per share amounts)	2013			2012			2013			2012			2013		2012⁽¹⁾		2012⁽¹⁾			2011⁽¹⁾
Revenues		3,175			3,315			3,163			3,272			3,086		3,181		3,364			3,539
Operating profit (loss)		390			364			597			1,297			316		372		537			(2,609	)
(Loss) earnings from continuing operations		(17	)		308			256			916			283		451		365			(2,619	)
(Loss) earnings from discontinued operations, net of tax		-			(2	)		6			(1	)		-		2		3			2
Net (loss) earnings		(17	)		306			262			915			283		453		368			(2,617	)
(Loss) earnings attributable to common shares		(31	)		294			248			902			271		441		352			(2,587	)

Dividends declared on preference shares		(1	)		(1	)		(1	)		(1	)		-		-		(1	)		(1	)

Basic (loss) earnings per share
From continuing operations	$	(0.04	)	$	0.35		$	0.29		$	1.09		$	0.33	$	0.53	$	0.41		$	(3.12	)
From discontinued operations		-			-			0.01			-			-		-		0.01			-
	$	(0.04	)	$	0.35		$	0.30		$	1.09		$	0.33	$	0.53	$	0.42		$	(3.12	)
Diluted (loss) earnings per share
From continuing operations	$	(0.04	)	$	0.35		$	0.29		$	1.08		$	0.33	$	0.53	$	0.41		$	(3.12	)
From discontinued operations		-			-			0.01			-			-		-		0.01			-
	$	(0.04	)	$	0.35		$	0.30		$	1.08		$	0.33	$	0.53	$	0.42		$	(3.12	)

(1)

Amounts restated to reflect retrospective application of amendments to IAS 19, Employee Benefits, and the adoption of IFRS 11, Joint Arrangements. See note 2 of our interim financial statements for the three and nine months ended September 30, 2013 and note 3 of our 2012 annual financial statements for information regarding changes in accounting policies.

Our revenues and operating profits on a consolidated basis do not tend to be significantly impacted by seasonality as we record a large portion of our revenues ratably over a contract term and our costs (other than expenses associated with the Reuters integration program that commenced in 2008 and was completed in 2011) are generally incurred evenly throughout the year. However, our non-recurring revenues can cause changes in our performance from quarter to consecutive quarter. Additionally, the release of certain print-based offerings can be seasonal as can certain product releases for the regulatory markets, which tend to be concentrated at the end of the year. As a consequence, the results of certain of our segments can be impacted by seasonality to a greater extent than our consolidated revenues and operating profits.

Revenues declined in each of the trailing four quarters compared to the respective prior-year periods, primarily reflecting the impact of divestitures. Revenue performance over these periods also reflected challenges in our Financial & Risk segment, including an overall difficult economic environment. This dynamic was partially offset by growth in our Legal, Tax & Accounting and Intellectual Property & Science segments. Acquisitions contributed to revenue changes. Foreign currency had a negative impact on revenues in the first, second and third quarters of 2013 and no impact in the fourth quarter of 2012. The decrease in net earnings in the third quarter of 2013 reflected lower income tax benefits, as the 2012 period included higher tax benefits from the reversal of uncertain tax provisions and changes in estimates identified during the preparation of prior year income tax returns. The second quarter of 2013 included a gain of approximately $140 million from the sale of our Corporate Services business, which was offset by tax expense of $161 million associated with the consolidation of the ownership and management of our technology and content assets. The net loss in the first quarter of 2013 was due to higher tax expense of $235 million associated with the consolidation of the ownership and management of our technology and content assets. Operating profit in the second quarter of 2012 included gains on sales of businesses of $789 million, primarily from the sale of our Healthcare business. Our results for the fourth quarter of 2011 included a $3.0 billion non-cash goodwill impairment charge related to our financial businesses. Results for 2011 reflected integration program expenses associated with our acquisition of Reuters in 2008. These initiatives were completed in the fourth quarter of 2011.

	Three months ended September 30,							Percentage change:
(millions of U.S. dollars)	2013			2012			Existing businesses	Acquired businesses	Constant currency	Foreign currency	Total
Trading		612			645		(5%)	-	(5%)	-	(5%)
Investors		534			543		(1%)	-	(1%)	(1%)	(2%)
Marketplaces		430			439		(3%)	3%	-	(2%)	(2%)
Governance, Risk & Compliance (GRC)		64			55		16%	5%	21%	(5%)	16%
Revenues		1,640			1,682		(3%)	2%	(1%)	(1%)	(2%)
EBITDA		433			403						7%
EBITDA margin		26.4	%		24.0	%					240bp
Segment operating profit		275			250						10%
Segment operating profit margin		16.8	%		14.9	%					190bp

	Nine months ended September 30,							Percentage change:
(millions of U.S. dollars)	2013			2012			Existing businesses	Acquired businesses	Constant currency	Foreign currency	Total
Trading		1,858			1,985		(6%)	-	(6%)	-	(6%)
Investors		1,602			1,630		(1%)	-	(1%)	(1%)	(2%)
Marketplaces		1,337			1,315		(2%)	6%	4%	(2%)	2%
Governance, Risk & Compliance (GRC)		178			158		11%	3%	14%	(1%)	13%
Revenues		4,975			5,088		(3%)	2%	(1%)	(1%)	(2%)
EBITDA		1,213			1,247						(3%)
EBITDA margin		24.4	%		24.5	%					(10)bp
Segment operating profit		735			793						(7%)
Segment operating profit margin		14.8	%		15.6	%					(80)bp

Business	Status	Former segment	Description
Corporate Services	Sold – Q2 2013	Financial & Risk	A provider of tools and solutions that help companies communicate with investors and media
Healthcare	Sold – Q2 2012	Healthcare & Science	A provider of data analytics and performance benchmarking solutions and services to companies, government agencies and healthcare professionals
Trade and Risk Management	Sold – Q1 2012	Financial & Risk	A provider of risk management solutions to financial institutions, including banks, broker-dealers and hedge funds
Portia	Sold – Q2 2012	Financial & Risk	A provider of portfolio accounting and reporting applications
Property Tax Consulting	Sold – Q4 2012	Tax & Accounting	A provider of property tax outsourcing and compliance services in the U.S.

	As at
(millions of U.S. dollars)	September 30, 2013			December 31, 2012
Current indebtedness		24			1,008
Long-term indebtedness		6,976			6,223
Total debt		7,000			7,231
Swaps		(175	)		(242	)
Total debt after swaps		6,825			6,989
Remove fair value adjustments for hedges		(32	)		(54	)
Total debt after hedging arrangements		6,793			6,935
Remove transaction costs and discounts included in the carrying value of debt		59			50
Less: cash and cash equivalents⁽²⁾		(607	)		(1,283	)
Net debt		6,245			5,702

(millions of U.S. dollars)
Balance at December 31, 2012	17,498
Net earnings	528
Share issuances	108
Share repurchases	(100	)
Effect of share-based compensation plans on contributed surplus	(16	)
Dividends declared on common shares	(807	)
Dividends declared on preference shares	(2	)
Change in unrecognized net gain on cash flow hedges	30
Change in foreign currency translation adjustment	(106	)
Net remeasurement gains on defined benefit pension plans, net of tax	173
Distributions to non-controlling interests	(29	)
Balance at September 30, 2013	17,277

(Expense) benefit	Three months ended September 30,						Nine months ended September 30,
(millions of U.S. dollars)	2013			2012			2013			2012
Discrete tax items:
Consolidation of technology and content assets⁽¹⁾		-			-			(396	)		-
Uncertain tax positions⁽²⁾		10			69			12			153
Adjustments related to the prior year⁽³⁾		-			42			-			42
Corporate tax rates⁽⁴⁾		4			2			5			16
Other⁽⁵⁾		6			2			27			13
Subtotal		20			115			(352	)		224

Tax related to:
Sale of businesses⁽⁶⁾		(3	)		5			(26	)		(179	)
Operating profit of Other Businesses		(2	)		(13	)		(15	)		(29	)
Fair value adjustments		24			11			1			5
Other items		(1	)		(10	)		-			(12	)
Subtotal		18			(7	)		(40	)		(215	)
Total		38			108			(392	)		9

Results by revenue type were as follows:		Third Quarter 2013 Revenues

	· Subscription revenues declined 2%, (3% from existing businesses), in the third quarter reflecting negative, but improving net sales. In the nine-month period, revenues declined 3%, all from existing businesses. Thomson Reuters Eikon billed desktops grew to approximately 76,000 by September 30, 2013, a 25% increase from June 30, 2013. The number of installed Thomson Reuters Eikon desktops increased to approximately 96,000 as of September 30, 2013, which included 20,000 customers who are using the product, but who have not yet cycled on to the billing system. These customers are expected to cycle on to the billing system in the October billing cycle. · Recoveries revenues (low-margin revenues that Financial & Risk collects and largely passes-through to a third party provider, such as stock exchange fees) decreased 4% in the three and nine-month periods due to declines in desktops as well as third party providers continuing to move to direct billing of customers. · Transaction revenues increased 5% and 15% for the three and nine-month periods, respectively, driven by the 2012 acquisition of FXall. Revenues from existing businesses declined 3% in the third quarter of 2013 due to lower fixed income and foreign exchange volumes which were driven by market related dynamics. In the nine-month period, revenues from existing businesses grew 1%. · Outright revenues, which are primarily discrete sales of software and services, represented a small portion of Financial & Risk’s revenues and increased 12% and 6% in the three and nine-month periods, respectively.

Results by revenue type were:		Third Quarter 2013 Revenues

	· Subscription revenues increased 8% in the three and nine-month periods, led by growth from the acquisition of Practical Law Company (PLC). Growth from existing businesses was 2% for the three and nine-month periods reflecting the mix of expanding sales in our newer lines of business offset by a challenging core legal research market; · Transaction revenues in the three-month period decreased 3% (4% from existing businesses), primarily due to lower book sales in Latin America resulting from tighter commercial polices. Revenues declined 2% (4% from existing businesses) for the nine-month period; and · U.S. print revenues declined 9% and 6% for the three and nine-month periods, respectively, as Legal customers continued to cut discretionary spending. Print revenues are often impacted by seasonal factors and publication schedules relating to content availability. We expect print revenues in the fourth quarter and in the full year to decrease mid-to-upper single digits.

Results by line of business were:		Third Quarter 2013 Legal Revenues 3% constant currency revenue growth (billions of U.S. dollars)

	· U.S. Law Firm Solutions revenues (52% of segment revenues) were essentially unchanged (1% decrease from existing businesses) in the three-month period. Revenues from the Business of Law sub-segment increased 6% led by FindLaw, while research-related revenues decreased 2%. Revenues for the nine-month period were essentially unchanged (1% decrease from existing businesses); · Corporate, Government & Academic revenues (24% of segment revenues) were essentially unchanged in the three-month period, reflecting an 11% increase in Corporate revenues and a 5% decline in Government revenues primarily related to print cancellations as governments contend with cost pressures. Revenues increased 1% for the nine-month period; and · Global revenues (24% of segment revenues) increased 15% (1% decrease from existing businesses) primarily from the acquisition of PLC, which more than offset a 5% decline in Latin America revenues (10% decline from existing businesses). The decline in Latin America was due to a modest slowdown in the macro-economic environment, as well as the implementation of new order to cash systems at the same time that we are strengthening our commercial policies. Revenues grew 18% for the nine-month period (2% from existing businesses).

Results by line of business were:		Third Quarter 2013 Revenues

	· Professional revenues from small, medium and large accounting firms increased 12% (all from existing businesses) and 10% (9% from existing businesses), during the three and nine-month periods, respectively; · Knowledge Solutions revenues increased 7% (5% from existing businesses) for the three-month period and 6% (4% from existing businesses) for the nine-month period primarily from growth in the U.S. Checkpoint business; · Corporate revenues increased 17% (8% from existing businesses) for the three-month period and 17% (9% from existing businesses) for the nine-month period primarily from ONESOURCE software and services and strong growth in solutions revenues in Latin America; and · Government, which only represents about 4% of Tax & Accounting revenues, declined 19% during the third quarter.

Results by line of business were:		Third Quarter 2013 Revenues

	· IP Solutions revenues increased 13% and 17% for the three and nine-month periods, respectively, due to the acquisition of MarkMonitor. Revenues from existing businesses increased 1% for the three-month period and were essentially unchanged for the nine-month period; · Scientific & Scholarly Research revenues increased 8% and 5% for the three and nine-month periods, respectively, all from existing businesses driven by higher Web of Science subscription revenues; and · Life Sciences revenues increased 8% and 3% for the three and nine-month periods, respectively, reflecting the impact of acquisitions.

Non-IFRS Financial

Measure

How We Define It

Why We Use It and Why It Is

Useful to Investors

Most Directly

Comparable IFRS

Measure/Reconciliation

Adjusted earnings and adjusted earnings per share

Earnings attributable to common shareholders and per share excluding:

· the pre-tax impacts of amortization of other identifiable intangible assets;

· the post-tax impacts of fair value adjustments, other operating gains and losses, certain impairment charges, the results of Other Businesses, other net finance costs or income, our share of post-tax earnings or losses in equity method investments, discontinued operations and other items affecting comparability. We also deduct dividends declared on preference shares; and

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

Earnings attributable to common shareholders and earnings per share attributable to common shareholders

· amortization of the tax charges associated with the consolidation of ownership and management of technology and content assets. For the non-IFRS measure, the majority of the charges are amortized over seven years, the period over which the tax is expected to be paid.

This measure is calculated using diluted weighted- average shares.

We believe this treatment more accurately reflects our tax position because the tax liability is associated with ongoing tax implications from the consolidation of these assets.

In interim periods, we also adjust our reported earnings and earnings per share to reflect a normalized effective tax rate. Specifically, the normalized effective rate is computed as the estimated full-year effective tax rate applied to adjusted pre-tax earnings of the interim period. The reported effective tax rate is based on separate annual effective income tax rates for each taxing jurisdiction that are applied to each interim period’s pre-tax income.

Because the geographical mix of pre-tax profits and losses in interim periods distorts the reported effective tax rate within an interim period, we believe that using the expected full-year effective tax rate provides more comparability among interim periods. The adjustment to normalize the effective tax rate reallocates estimated full-year income taxes between interim periods, but has no effect on full year tax expense or on cash taxes paid.