Exhibit 99.1

Annual Report 2019

March 10, 2020

Thomson Reuters Annual Report 2019

Information in this annual report is provided as of March 4, 2020, unless otherwise indicated.

Certain statements in this annual report are forward-looking. These forward-looking statements are based on certain assumptions and reflect our current expectations. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Some of the factors that could cause actual results to differ materially from current expectations are discussed in the “Risk Factors” section of this annual report as well as in materials that we from time to time file with, or furnish to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. There is no assurance that any forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking statements, which reflect expectations only as of the date of this annual report. Except as may be required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements.

The following terms in this annual report have the following meanings, unless otherwise indicated:

^· “Thomson Reuters,” “we,” “us” and “our” each refers to Thomson Reuters Corporation and its consolidated subsidiaries, unless the context otherwise requires;

^· “Woodbridge” refers to The Woodbridge Company Limited and other companies affiliated with it; and

^· “$,” “US$” or “dollars” are to U.S. dollars.

When we refer to our performance before the impact of foreign currency (or at “constant currency”), we mean that we apply the same foreign currency exchange rates to the financial results of the current and equivalent prior period. We believe this provides the best basis to measure the performance of our business as it allows better comparability of our business trends from period to period.

Non-International Financial Reporting Standards (IFRS) financial measures are defined and reconciled to the most directly comparable IFRS measures in the “Management’s Discussion and Analysis” section of this annual report.

For information regarding our disclosure requirements under applicable Canadian and U.S. laws and regulations, please see the “Cross Reference Tables” section of this annual report.

Information contained on our website or any other websites identified in this annual report is not part of this annual report. All website addresses listed in this annual report are intended to be inactive, textual references only. The Thomson Reuters logo and our other trademarks, trade names and service names mentioned in this annual report are the property of Thomson Reuters.

Thomson Reuters Annual Report 2019

Table of Contents

Business	2
Overview	2
Customer Segments	6
Legal Professionals	6
Corporates	6
Tax & Accounting Professionals	7
Reuters News	7
Global Print	7
Key Brands	8
Additional Business Information	9
Risk Factors	14
Management’s Discussion and Analysis	28
Consolidated Financial Statements	92
Executive Officers and Directors	176
Executive Officers	176
Directors	179
Audit Committee	183
Principal Accountant Fees and Services	184
Controlled Company	185
Independent Directors	185
Presiding Directors at Meetings of Non-Management and Independent Directors	186
Code of Business Conduct and Ethics	187
Additional Disclosures	187
Additional Information	188
Description of Capital Structure	188
Market for Securities	189
Dividends	190
Woodbridge	191
Transfer Agents and Registrars	192
Ratings of Debt Securities	192
Material Contracts	193
Principal Subsidiaries	199
Interests of Experts	200
Further Information and Disclosures	200
Cross Reference Tables	202
Annual Information Form (Form 51-102F2) Cross Reference Table	202
Form 40-F Cross Reference Table	203

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Thomson Reuters Annual Report 2019

Business

Overview

Thomson Reuters is a leading provider of business information services. Our products include highly specialized information-enabled software and tools for legal, tax, accounting and compliance professionals combined with the world’s most global news service – Reuters. Thomson Reuters shares are listed on the Toronto Stock Exchange and New York Stock Exchange (symbol: TRI). Our website is www.thomsonreuters.com.

We are organized in five reportable segments supported by a corporate center:

	Legal Professionals Serves law firms and governments with research and workflow products, focusing on intuitive legal research powered by emerging technologies and integrated legal workflow solutions that combine content, tools and analytics.
	Corporates Serves corporate customers, including the seven largest global accounting firms, with our full suite of offerings across legal, tax, regulatory and compliance functions.
	Tax & Accounting Professionals Serves tax, accounting and audit professionals in accounting firms (other than the seven largest, which are served by our Corporates segment) with research and workflow products, focusing on intuitive tax offerings and automating tax workflows.
	Reuters News Supplies business, financial, national and international news to professionals via desktop terminals, including through Refinitiv, the world’s media organizations, industry events and directly to consumers.
	Global Print Provides legal and tax information primarily in print format to customers around the world.

Our corporate center centrally manages commercial and technology operations, including those around our sales capabilities, digital customer experience and product and content development. Our corporate center also centrally manages functions such as finance, legal and human resources.

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Thomson Reuters Annual Report 2019

Our Business Model and Key Operating Characteristics

We derive most of our revenues from selling information and software solutions, primarily electronically and on a recurring subscription basis. Our solutions blend deep domain knowledge with software and automation tools. We believe our workflow solutions make our customers more productive by streamlining how they operate, enabling them to focus on higher value activities. Many of our customers use our solutions as part of their workflows, which has led to strong customer retention. We believe that our customers trust us because of our history and dependability and our deep understanding of their businesses and industries, and they rely on our services for navigating a rapidly changing and increasingly complex digital world.

Over the years, our business model has proven to be capital efficient and cash flow generative, and it has enabled us to maintain leading and scalable positions in our chosen market segments. Some of our key business and operating characteristics are:

Attractive Industries   ^·    Professional content market segment (estimated $13 billion growing 1%)   ^·    Software market segment (estimated $21 billion growing 8%) Balanced and Diversified Leadership   ^·    A leader in key Legal Professionals, Corporates and Tax & Accounting Professionals market segments   ^·    Products and services tailored for professionals   ^·    Deep broad industry knowledge   ^·    Distinct core customer group revenues   ^·    Geographical diversity   ^·    Largest customer, excluding Refinitiv, is approximately 2% of revenues Attractive Business Model   ^·    78% of revenues are recurring   ^·    88% of revenues are delivered electronically, including cloud-based offerings   ^·   Strong consistent cash generation capabilities Strong Competitive Positioning   ^·    Proprietary databases and deeply embedded workflow tools and analytics   ^·    Technology and operating platforms built to address the global marketplace Disciplined Financial Policies   ^·    Focused on free cash flow growth   ^·    Balance investing in business and returning capital to shareholders   ^·    Disciplined capital structure – target maximum leverage ratio of 2.5x net debt to adjusted EBITDA   ^·    Commitment to maintaining investment grade credit rating

All revenue information reflected above is based on our 2019 full-year results.

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Thomson Reuters Annual Report 2019

2019 Performance Highlights

2019 was our first full year of operations since selling a majority interest in our former Financial & Risk business (F&R, which is now known as Refinitiv) and restructuring our company into customer-focused segments. Below are financial highlights of our results for the year ended December 31, 2019. Please see the management’s discussion and analysis section of this annual report for additional information about our recent performance.

	Year ended December 31,
				Change
(millions of U.S. dollars, except per share amounts and margins)		2019	2018	Total	Constant Currency
IFRS Financial Measures
Revenues		5,906	5,501	7%
Operating profit		1,199	780	54%
Diluted EPS (includes discontinued operations)		$3.11	$5.88	(47%)
Cash flow from operations (includes discontinued operations)		702	2,062	(66%)
Non-IFRS Financial Measures(1)
Revenues		5,906	5,501	7%	8%
Organic revenue growth					4%
Adjusted EBITDA		1,493	1,365	9%	8%
Adjusted EBITDA margin		25.3%	24.8%	50bp	(10)bp
Adjusted EPS		$1.29	$0.75	72%	65%
Free cash flow (includes discontinued operations)		159	1,107	(86%)

2019 was the eighth consecutive year that we met or exceeded the performance metrics in our external financial outlook, which was originally communicated in February and raised in August with respect to certain performance measures. The table below compares our actual performance to the updated outlook:

Non-IFRS Financial Measures(1)	2019 Outlook (Before currency and excluding the impact of future acquisitions/dispositions)	2019 Actual Performance (Before currency)(2)
Revenue Growth	7% – 8.5% 3.5% – 4.0% organic(3)	8.5% 3.7%
Adjusted EBITDA	$1.45 billion – $1.5 billion	$1.48 billion
Total Corporate costs   Core Corporate costs   Stranded costs   One-Time costs	Approximately $570 million Approximately $140 million Approximately $100 million Approximately $330 million	$575 million(4) $131 million $100 million $344 million
Free cash flow	$0 – $300 million	$159 million
Capital expenditures, as percentage of revenues	Approximately 9%	8.6%
Depreciation and amortization of computer software	$600 million – $625 million	$608 million
Interest expense	$150 million – $175 million	$163 million
Effective tax rate on adjusted earnings	16% – 19%	11%

(1)  Refer to Appendices A and B of the management’s discussion and analysis section of this annual report for additional information and reconciliations of our non-IFRS financial measures to the most directly comparable IFRS financial measurements.

(2) Our 2019 performance (before currency) was measured in constant currency rates relative to 2018, except for the 2019 free cash flow performance which was reflected at actual rates.

(3) For purposes of the organic growth calculation, the initial contract value of the company’s 30-year agreement with Refinitiv that was signed on October 1, 2018 was treated as an acquisition until October 1, 2019.

(4) Includes $71 million of capital expenditures that were associated with our program to reposition our company after the separation from F&R.

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Thomson Reuters Annual Report 2019

2020 Key Priorities – Our Strategy

We plan to continue Thomson Reuters’ evolution into a platforms-based business information software and services leader by leveraging our core capabilities in content and technology, bringing our solutions together for our customers, and building an open ecosystem where legal, tax and accounting professionals collaborate and transact. We are focusing on the following key priorities in 2020:

^· Deliver higher organic revenue growth by adding new customers, using better analytics, increasing cross-selling and upselling and improving retention;

^· Deploy the remaining portion of our reinvestment fund (approximately $800 million) to target acquisitions that strengthen our value proposition, advance our platform strategy and extend to highly adjacent market segments;

^· Continue to embed artificial intelligence and machine learning technology in our solutions;

^· Invest in our platforms by building cloud-based, integrated and open solutions;

^· Further improve sales performance and productivity through better tools to add new customers and commercial models that reflect our customers’ needs; and

^· Build end-to-end digital capabilities to  simplify the buying, renewal and upgrade experience for our products.

Three-Year History

^· 2017 – As part of our growing investment in Canadian talent and innovation, our Chief Executive Officer and Chief Financial Officer relocated to Toronto. We also continued to focus on our transformation program, including closing additional data centers, while pursuing numerous initiatives to transform customer experience. During the latter part of 2017, we began looking at potential strategic alternatives for the F&R business.

^· 2018 – In January, we signed a definitive agreement to sell a 55% interest in our F&R business (now known as Refinitiv) to private equity funds affiliated with Blackstone for approximately $17 billion. The F&R transaction closed in October 2018 and we subsequently returned $10 billion of the proceeds to our shareholders. We set aside approximately $2 billion of the proceeds of the F&R transaction to fund strategic, targeted acquisitions to bolster our positions in key growth segments of our Legal Professionals, Corporates and Tax & Accounting Professionals businesses or for share repurchases. During 2018, we also transitioned from a product-focused structure to a customer-focused structure and remapped our business units into the new segments.

^· 2019 – Last year was our first full year of operations since completing the F&R transaction and restructuring our company into customer-focused segments. To date, we have spent over half of the $2 billion investment fund on acquisitions, including Integration Point, Confirmation, HighQ and FC Business Intelligence (now rebranded Reuters Events). On August 1, 2019, we and private equity funds affiliated with Blackstone agreed to sell Refinitiv to London Stock Exchange Group plc for a total enterprise value of approximately $27 billion (at the time of announcement). For more information about the transaction, please see the “Executive Summary – Proposed London Stock Exchange Group/Refinitiv Transaction” section of the management’s discussion and analysis section of this annual report.

As discussed in the “Executive Officers and Directors” section of this annual report, we announced the appointment of a new Chief Executive Officer and Chief Financial Officer effective on March 15, 2020.

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Thomson Reuters Annual Report 2019

Customer Segments

Our business is a customer-focused structure organized into five reportable customer segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News and Global Print. This structure allows us to focus on the customer and partner with them to solve challenges that they face in their businesses. For additional information about the results of operations of our customer segments, please see the management’s discussion and analysis section of this annual report.

Legal Professionals

Our Legal Professionals segment serves law firms and governments with research and workflow products, focusing on intuitive legal research powered by emerging technologies and integrated legal workflow solutions that combine content, tools and analytics. The following provides a summary of Legal Professionals’ 2019 revenues by type of customer.

Legal Professionals’ primary global competitors are LexisNexis (which is owned by RELX Group) and Wolters Kluwer. Legal Professionals also competes with Bloomberg Industry Group and other companies that provide legal and regulatory information, as well as Aderant and other companies that provide practice and matter management software. Legal Professionals also competes with client development providers and other service providers and start-ups that support legal professionals.

Corporates

Our Corporates segment serves our corporate customers, including the seven largest global accounting firms, with our full suite of offerings across legal, tax and regulatory and compliance functions. The following provides a summary of Corporates’ 2019 revenues by type of customer.

Corporates’ primary global competitors are Wolters Kluwer, Bloomberg and LexisNexis. Corporates also competes with focused software providers such as Avalara and MitraTech, and at times with large technology companies such as SAP, as well as the largest global accounting firms.

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Thomson Reuters Annual Report 2019

Tax & Accounting Professionals

Our Tax & Accounting Professionals segment serves tax, accounting and audit professionals (other than professionals in the largest seven accounting firms, which are served by our Corporates segment) with software, content and services that help firms master their practices and provide better customer service in the areas of accounting and auditing, tax, payroll, firm management, marketing and staff training. The following provides a summary of Tax & Accounting Professionals’ 2019 revenues by type of customer.

Tax & Accounting Professionals’ primary competitor is the CCH business of Wolters Kluwer. Other competitors include Bloomberg Industry Group in tax research, and Intuit, Drake Software, CaseWare and Sage in professional software and services. Tax & Accounting Professionals also competes with software start-ups that serve tax, accounting and audit professionals.

Reuters News

Reuters is the world’s largest international multimedia news provider, reaching billions of people every day. It provides trusted business, financial, national and international news and intelligence to professionals through desktop terminals, the world’s media organizations, industry events and directly to consumers. In 2019, Reuters delivered approximately 2 million unique news stories, 1.5 million news alerts, 814,000 pictures and images and 129,000 video stories. Reuters also provides industry conferences through a recently acquired business, which is now known as Reuters Events.

Founded in 1851 and powered by nearly 2,500 journalists around the world, Reuters News has a reputation for speed, impartiality and insight. It is dedicated to upholding the Thomson Reuters Trust Principles and preserving independence, integrity and freedom from bias in the gathering and dissemination of news. For more information on the Thomson Reuters Trust Principles, please see the “Additional Information – Material Contracts – Thomson Reuters Trust Principles and Thomson Reuters Founders Share Company” section of this annual report.

Reuters’ primary competitors include the Associated Press, Agence France-Presse, Getty and Bloomberg.

Global Print

Global Print is a leading provider of information, primarily in print format, to legal and tax professionals, government (including federal, state, and local government lawyers and judges), law schools and corporations. The business serves customers in the United States, Canada, the United Kingdom, Europe, Australia, Asia and Latin America, as well as some emerging markets. Global Print’s primary global competitors are LexisNexis and Wolters Kluwer.

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Thomson Reuters Annual Report 2019

Key Brands

Our customer-focused structure enables us to have broader conversations with our customers, with a more cohesive go-to-market approach. We believe that this focus will create opportunities to cross sell more of our products and services across their organizations, increase sales to existing customers, improve retention, and attract new customers. The following table provides information about our key brands and the target customer for each brand.

Brand	Type of Product/Service	Legal Professionals	Corporates	Tax & Accounting Professionals
Westlaw Westlaw Edge (U.S.) Sweet & Maxwell (UK) Aranzadi (Spain) La Ley (Argentina)	Legal, regulatory and compliance information-based products and services. Westlaw is our primary online legal research delivery platform. Westlaw offers authoritative content, powerful search functionality and research organization, team collaboration features, and navigation tools to find and share specific points of law and search for analytical commentary. Localized versions of online legal research services are provided in Argentina, Australia, Brazil, Canada, Chile, China, France, Hong Kong, India, Ireland, Japan, Malaysia, New Zealand, Paraguay, Peru, Singapore, South Korea, Spain, the United Kingdom, Uruguay and other countries. Through Westlaw International, we offer our online products and services to customers in markets where we do not offer a fully localized Westlaw service.
Practical Law Practical Law Connect	Legal know-how, current awareness and workflow tools with embedded guidance from expert practitioners. Practice notes, standard documents, checklists and What’s Market tools cover a wide variety of practice areas such as commercial, corporate, labor and employment, intellectual property, finance and litigation. Practical Law currently has offerings in the United Kingdom, United States, Canada, Australia and China.
CLEAR CLEAR Risk Inform PeopleMap	Public and proprietary records about individuals and companies with tools for immediately usable results.
HighQ	Cloud-based collaboration platform for the legal and regulatory market segment.
Checkpoint Checkpoint Edge (US & Canada)	Integrated tax and accounting information solution that addresses market disruption through integrated research, editorial insight, workflow productivity tools, online learning and news updates, along with intelligent links to related content and software.
FindLaw	Online legal directory, website creation and hosting services, law firm marketing solutions and peer rating services.
Elite 3E ProLaw Legal One Firm Central	Suites of integrated software applications that assist with business management functions, including financial and practice management, matter management, document and email management, accounting and billing, timekeeping and records management.

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Thomson Reuters Annual Report 2019

Brand	Type of Product/Service	Legal Professionals	Corporates	Tax & Accounting Professionals
Legal Tracker	Online spend and matter management, e-billing, legal analytics services, and document storage, search, retrieval.
eDiscovery Point	Electronic discovery software solution.
Regulatory Intelligence	Information and software products that provide a single source for regulatory news, analysis, rules and developments, with global coverage of more than 400 regulators and exchanges.
Compliance Learning	Training programs that assist in changing behavior and supporting a culture of integrity and compliance.
ONESOURCE   ONESOURCE Global Trade	Comprehensive global tax solution with local and country content focused on managing a company’s entire tax lifecycle, including direct and indirect tax compliance, indirect determination, tax accounting, transfer pricing documentation and calculations, trade and customs supporting global supply chain, trust taxation, tax information reporting, property tax, tax planning, and overall workflow and process management.
Confirmation	Cloud-based platform to automate the workflow of the confirmations process of an audit. Used by a global network of audit firms, banks and law firms to increase efficiency and reduce risk.
CS Professional Suite	Scalable, integrated suite of desktop and online software applications that encompass key aspects of a professional accounting firm’s operations, from collecting customer data and posting finished tax returns to the overall management of the accounting practice.
Onvio	International suite of cloud-based products that bring aspects of accounting firm operations into a single, accessible online platform, including for document management, file sharing and collaboration, time and billing, workpaper management and project management.

Additional Business Information

Corporate

Our corporate center seeks to foster a group-wide approach to management while allowing our business segments sufficient operational flexibility to serve their customers effectively. The corporate center’s primary areas of focus are strategy, capital allocation, technology operations and infrastructure and talent management. The corporate center is also responsible for overall direction on communications, investor relations, tax, accounting, finance, treasury and legal, and administers human resources services, such as employee compensation, benefits administration, share plans and training and development.

Our Operations & Enablement group unifies more than 10 core functions (most notably, our technology functions, commercial sales operations, real estate, and product and content development) into a single enterprise team. We believe that Operations & Enablement continues to provide us with a greater opportunity to accelerate our progress on scale and growth initiatives and allows us to sharpen our focus on allocating resources to our growth priorities.

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Thomson Reuters Annual Report 2019

Technology

We believe we can make information more relevant, more personal and deliver it faster to our customers through the smart use of technology. By using shared platforms and working across our businesses, we are making our data more accessible and valuable for our customers, no matter how they access it. We are increasingly shifting more of our software from being on-premise installations to software-as-a-service (SaaS) or cloud-based offerings that provide customers with access through the Internet.

We believe that we are continually transforming our content, products, services and company to better meet our customers’ needs. We also continue to focus on securing our customer data and global systems as we implement and enhance our security programs.

Our Technology group is a unified enterprise made up of all our development, operations, content platforms, research and innovation teams.

We operate a Technology Centre in Toronto which is dedicated to developing the next generation of products and capabilities for our global customers. We also continue to operate Thomson Reuters Labs facilities to provide us with greater proximity to our customers and partners and to collaborate on data-driven innovation and research. Our Thomson Reuters Lab in Switzerland includes an Incubator program that offers start-up companies a physical base and access to our solutions while providing us with greater insight into emerging technologies.

Research and Development

Innovation is essential to our success and is one of our primary bases of competition. Research & Development (R&D), part of Thomson Reuters Labs, performs computer science research and practical development in areas of cognitive computing, including machine learning and artificial intelligence (AI). This group leads our Centre for AI and Cognitive Computing in Toronto.

Our teams are at the driving edge of how emerging technologies like machine learning, big data, cloud and blockchain can be applied to the distinct challenges of the industries and customers that we serve. We believe that we are uniquely positioned to combine these technologies with the intelligence and human expertise that our customers need to find trusted answers.

Digital Transformation

We have been a pioneer of digital product development for decades. As part of our customer experience transformation, we are creating a more holistic online experience, making it easier for our customers to find, buy and get the most out of our products and interact with Thomson Reuters digitally. In 2019, we improved upon the digital capabilities for some customer renewals and on our MyTR service. We plan to continue investing in further improvements to our digital platforms in 2020.

Intellectual Property

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

Sales and Marketing

We primarily sell our products and services directly to our customers. In addition, we sell some of our products and services online directly to customers. Focusing more of our marketing and sales efforts on digital platforms and propositions has allowed us to broaden our range of customers and reduce sales and marketing costs. Some of our products and services are also sold through partners and authorized resellers.

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Thomson Reuters Annual Report 2019

Social Impact

We post a social impact report on our website, www.thomsonreuters.com, which highlights our progress and performance related to responsible business practices.

At Thomson Reuters, access to justice and transparency are at the heart of everything we do. We help create the backbone of legal and tax systems, providing information that supports objective and fair outcomes. We seek to inform and empower people around the world, sharing our skills and knowledge to support journalism’s sustainable future. We partner with our employees, customers and partners to create opportunities for innovation, community investment, volunteer impact and sustainable corporate citizenship.

In 2019, we implemented various innovative programs for our employees, our Foundation and partners. We examined the legal sector’s capacities and duties in promoting peace, justice and strong institutions while bringing our customers and partners to the table with the United Nations Global Compact and the Thomson Reuters Foundation TrustLaw group. We brought media literacy and press freedom front and center through partnerships with the National Association for Media Literacy Educators and the Reporter’s Committee for Freedom of the Press. And, on Earth Day, we announced our commitment to becoming fully carbon neutral, a goal that we achieved in 2019. We did this while maintaining our strong base of employee engagement and volunteerism. We plan to strengthen and build on our social impact programs through continued partnership with our employees, customers and partners.

Our strategic approach, guided by the Thomson Reuters Trust Principles and underpinned by our Code of Business Conduct and Ethics, is at the core of our purpose and values. We are dedicated to upholding the Thomson Reuters Trust Principles and to preserving our independence, integrity and freedom from bias in the gathering and dissemination of information and news. You can read more about the Trust Principles later in this annual report.

In 2019, our aligned impact strategy was honored at the United Nations General Assembly with the UN Global Compact SDG Pioneer Award for Business Accountability and Transparency. We are members of the United Nations Global Compact and this commitment makes us accountable to the Ten Principles and informs our support of the Sustainable Development Goals (SDGs).

We foster an inclusive workplace

Diversity drives innovation and connects us to our customers and communities. We sustained our focus on three strategic pillars – inclusive workplace, diverse talent and customers and brand. In 2019, we encouraged our employees worldwide to self-identify in our HR system to better inform our action plans and programs for underrepresented groups and to help us advance inclusion in the workplace. Last year, we also heightened our efforts to develop, mentor and advance women for leadership positions. Women represented 34% of our senior leadership positions in 2019, just below our goal of 40% by the end of 2020.

We continue to collaborate with sales and marketing teams to enable a deeper connection with our customers through our diversity and inclusion thought leadership and best practices. In 2019, we received various awards and recognitions including 100% scores on both the Human Rights Campaign Foundation’s Corporate Equality Index and Disability Equality Index by Disability:IN; a third place ranking in the Top 50 Inclusive Companies in the UK and a fifth place ranking for Top Employers for LGBT+ Inclusion in Hong Kong by the Hong Kong LGBT+ Inclusion Index.

We are committed to sustainable goals

We are committed to ongoing measurement and management of our own emissions and environmental impacts and continue to identify ways to further assess, monitor and improve our carbon footprint. In 2019, we committed to three ambitious sustainability goals: carbon neutrality in 2019; moving to 100% renewable energy integration in 2020; and developing science-based targets in line with global international standards. We are proud to have achieved full carbon neutrality in 2019, while engaging thousands of our employees through discussions and innovation competitions to drive sustainability conversations throughout the business in 2020 and beyond.

We make a difference in our communities

In 2019, our employees continued to make a social impact by investing over 116,000 volunteer hours in their communities. In addition, our global volunteer networks offered employees Hour Power events and multiple volunteer opportunities in support of the UN Sustainable Development Goals (SDGs). Employees continued to utilize our matching gifts program to double the impact of their charitable donations and submitted volunteer grants to obtain charitable grants for their volunteer time. Group volunteering efforts were also recognized by our Community Champion Grants program.

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Thomson Reuters Annual Report 2019

Our Thomson Reuters Foundation

The Thomson Reuters Foundation works to advance media freedom, raise awareness of human rights issues, and foster more inclusive economies. Through news, media development, free legal assistance and convening initiatives, the Foundation combines its unique services to drive systemic change. Its mission is to inspire collective leadership, empowering people to shape free, fair and informed societies. Additional information on the Foundation can be found at www.trust.org.

Acquisitions and Dispositions

Acquisitions - In 2018, we set aside approximately $2 billion from the proceeds of the F&R transaction for future acquisitions and we have approximately $800 million remaining in that reinvestment fund. Acquired businesses can strengthen our offerings and enable us to extend our platform with new capabilities that we believe will provide opportunities to expand our positions, better serve our customers and supplement our organic growth. Generally, the businesses that we acquire initially have lower margins than our existing businesses, largely reflecting the costs of integration.

In July 2019, we acquired Confirmation, a provider of digital audit confirmation services to accounting firms, banks and law firms, and HighQ, a provider of collaboration tools to the legal and regulatory market segments. In October 2019, we acquired FC Business Intelligence, a global business-to-business events specialist that was rebranded as Reuters Events.

Dispositions - As part of our continuing strategy to optimize our portfolio of businesses and ensure that we are investing in parts of our business that offer the greatest opportunities to achieve growth and returns, we have sold a number of businesses during the last several years. In 2018, we sold 55% of our former F&R business to private equity funds affiliated with Blackstone for approximately $17 billion and retained a 45% interest in the new company, which is now known as Refinitiv. In August 2019, we and private equity funds affiliated with Blackstone agreed to sell Refinitiv to LSEG in an all share transaction for a total enterprise value of approximately $27 billion (at the time of announcement). For more information about the transaction, please see the “Executive Summary – Proposed London Stock Exchange Group/Refinitiv Transaction” section of the management’s discussion and analysis section of this annual report. In 2019, we also sold several small businesses which were not compatible with our strategy.

For more information on acquisitions and dispositions that we made in the last two years, please see the management’s discussion and analysis section of this annual report.

Employees

The following table sets forth information about our employees as of December 31, 2019.

By Region
Americas	15,800
Asia Pacific	5,100
Europe, Middle East and Africa (EMEA)	3,500
By Unit
Legal Professionals	3,100
Corporates	1,500
Tax & Accounting Professionals	1,300
Global Print	600
Reuters News	2,700
Product & Editorial	3,000
Operations & Enablement	7,000
Corporate Center (Enabling Functions)	2,200
Other(1)	3,000
Thomson Reuters	24,400

(1) Reflects employees in our Latin America, Asia and Emerging Markets and Government businesses.

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Thomson Reuters Annual Report 2019

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

Properties and Facilities

We own and lease office space and facilities around the world to support our businesses. We believe that our properties are in good condition and are adequate and suitable for our present purposes. The following table provides summary information about our principal properties as of December 31, 2019.

Facility	Approx. Sq. Ft.	Owned/Leased	Principal Use
610 Opperman Drive, Eagan, Minnesota, United States	2,792,000	Owned	Legal Professionals headquarters and operating facilities
2395 Midway Road, Carrollton, Texas, United States	409,150	Owned	Tax & Accounting Professionals and Corporates headquarters and operating facilities
6300 Interfirst Drive, Ann Arbor, Michigan, United States	247,250	Owned	Tax & Accounting Professionals operating facility
3 Times Square, New York, New York, United States	142,200	Owned/subleased(1)	Corporates and Reuters News operating facility
5 Canada Square, London, United Kingdom	165,000	Subleased(2)	Legal Professionals, Tax & Accounting Professionals and Reuters News operating facility
333 Bay Street, Toronto, Ontario, Canada	59,250(3)	Leased	Thomson Reuters headquarters and Legal Professionals operating facilities
Landis & Gyr 3, Zug, Switzerland	50,250	Leased	Enterprise Centre

(1) The landlord (3XSQ Associates) is an entity owned by one of our subsidiaries and Rudin Times Square Associates LLC. 3XSQ Associates was formed to build and operate the 3 Times Square property. Our ownership interest in this property was retained in connection with the F&R transaction and the primary lease (which covers approximately 690,000 sq. ft.) was transferred to Refinitiv. We are utilizing approximately 124,000 sq. ft. from Refinitiv.

(2) The primary lease (which covers approximately 353,000 sq. ft.) is held by Refinitiv. We are utilizing approximately 164,712 sq. ft. from Refinitiv.

(3) Represents our net occupied area. Our main lease is for 86,250 sq. ft. and we subleased 22,000 sq. ft. to Refinitiv and 5,000 sq. ft. to a third party.

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Risk Factors

The risks and uncertainties below represent the risks that our management believes are material. If any of the events or developments discussed below actually occurs, our business, financial condition or results of operations could be adversely affected. Other factors not presently known to us or that we presently believe are not material could also affect our future business and operations.

We may be adversely affected by uncertainty, downturns and changes in the markets that we serve, in particular in the legal, tax and accounting industries.

We operate in a dynamic external environment that is rapidly shifting due to innovation in technology, evolving and increasing global regulation, information proliferation and a generation of new users. While we believe that we operate in attractive market segments, our performance depends on the financial health and strength of our customers, which in turn is primarily dependent on the general economy in the United States (79% of our 2019 revenues) and secondarily on the general economies in Europe, Asia Pacific, Canada and Latin America. Economic uncertainty, downturns and changes could result in cost-cutting, reduced spending or reduced activity by our customers.

Because a high proportion of our revenues are recurring (78% of our 2019 revenues), we believe that our revenue patterns are generally more stable compared to other business models that primarily involve the sale of products in discrete or one-off arrangements. However, this also means that there is often a lag in realizing the impact of current sales or cancellations in our reported revenues, as we recognize revenues over the term of the arrangement. Because of this lag effect, our revenues are typically slower to decline when economic conditions worsen, but are also often slower to return to growth when economic activity improves, as compared to other businesses that are not subscription-based. Our transactions revenues (10% of our 2019 revenues), which include professional fees from service and consulting arrangements, are more likely to fluctuate in a particular period when economic conditions worsen.

Uncertainty, downturns and changes that impact our business can also arise as a result of conditions in global financial markets, changes in laws and regulations, political conditions and election outcomes, terrorist acts, natural disasters and public health crises (such as epidemics and pandemics). At this time, we are monitoring the potential impact of the coronavirus and we currently do not believe that it will have a material impact on our business in the near term. We also do not believe that the U.K.’s recent exit from the European Union (Brexit) will have a material impact on our business.

In 2019, we derived 78% of our revenues from our Legal Professionals, Corporates and Tax & Accounting Professionals businesses, which primarily serve professionals in the legal, tax and accounting industries. Global uncertainty and changing economic conditions can impact these industries. Power continues to shift from law firms to their corporate customers. Larger law firms in particular continue to be challenged in their efforts to increase revenue growth as corporate counsels limit increases in billing rates and hours, keep more work in-house in an effort to deliver greater business value and insights internally, and insist on increased transparency and efficiency from law firms. This has caused a number of law firms to increase their focus on increasing efficiency, transition away from high cost working practices and provide more transparency to clients as they continue to shift away from time-based billing. Accounting firms are experiencing commoditization in audit and tax compliance and are looking to expand into more profitable advisory services.

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Technology is also changing how legal, tax and accounting professionals work, including by automating a greater number of tasks and empowering more efficient service delivery. The evolving regulatory landscape is also enabling new types of services, which can benefit our Legal Professionals, Corporates and Tax & Accounting Professionals segments. However, some types of legal or regulatory changes could also result in reduced demand for certain products or services. While we have been allocating greater amounts of capital to our solutions offerings across the Legal Professionals, Corporates and Tax & Accounting Professionals segments that we believe present the highest growth opportunities, a future decline in U.S. online revenues associated with these segments could adversely affect our profitability and cash flows.

Cost-cutting, reduced spending or reduced activity by any of our customer segments may decrease demand for, and usage of, some of our products and services. This could adversely affect our financial results by reducing our revenues, which could in turn reduce the profitability of some of our products and services. Cost-cutting by customers has also caused us to further simplify our organization and take additional steps beyond those we might otherwise take to optimize our own cost structure as a means to maintain or improve profitability.

As expected, Global Print (12% of our 2019 revenues) experienced a 3% revenue decline (in constant currency) in 2019, as customers continued to migrate from traditional print formats to digital solutions. An accelerated decline in Global Print revenues could adversely affect our profitability (as Global Print has higher margins than our overall business) as well as our cash flows.

Relative to our Reuters News business, the media sector continues to transform, with the traditional news agency business declining. While demand in the financial professional segment is growing, Reuters News is limited in its ability to participate in a number of sectors due to its exclusive agreement with Refinitiv.

We operate in highly competitive markets and may be adversely affected by this competition.

The markets for our information, software, services and news are highly competitive and are subject to rapid technological changes and evolving customer demands and needs. As the competitive landscape changes, our customers increasingly look to us to help them conduct research more efficiently, automate repeatable professional tasks and manage their businesses more efficiently by combining information, technology and human expertise to provide trusted answers.

^· Many of our principal competitors are established companies and firms that have substantial financial resources, recognized brands, technological expertise and market experience and these competitors sometimes have more established positions in certain product segments and geographic regions than we do. Some firms which compete with us have traditionally been our customers as well as go-to-market partners. Some larger companies that compete with us, such as enterprise resource planning (ERPs) companies, have large installed customer bases.

^· We also compete with smaller and sometimes newer companies, some of which seek to differentiate themselves from the breadth of our offerings by being specialized, with a narrower focus than our company. As a result, they may be able to adopt new or emerging technologies, including AI and analytic capabilities, or address customer requirements more quickly than we can. New and emerging technologies can also have the impact of allowing start-up companies to enter the market more quickly than they would have been able to in the past.

^· In recent years, more public sources of free or relatively inexpensive information have become available (particularly online) and this trend is expected to continue. Some governmental and regulatory agencies have increased the amount of information they make publicly available at no cost. Several companies and organizations have made certain legal and tax information publicly available at no cost. “Open source” software that is available for free may also provide some functionality similar to that in some of our products.

^· We may also face increased competition from search providers that could pose a threat to some of our businesses by providing more in-depth offerings, adapting their products and services to meet the demands of their customers or combining with one of their traditional competitors to enhance their products and services.

To better serve the needs of their existing customers and to attract new customers, our competitors continue to:

^· enhance and improve their products and services (such as by adding new content, analytics and software);

^· develop new products and services;

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^· invest in technology, including more software-as-a-service (SaaS) or cloud-based offerings; and

^· acquire additional businesses and partner with other businesses in key sectors that will allow them to offer a broader array of products and services.

Some of our competitors are also aggressively marketing their products as a lower cost alternative and offering price incentives to acquire new business, although we believe that many of our customers continue to see the value and enhancements reflected in our content, software, services and other offerings that sometimes results in a higher price. As some of our competitors are able to offer products and services that may be viewed as more cost effective than ours or which may be seen as having greater functionality or performance than ours, the relative value of some of our products or services could be diminished. Public sources of free or relatively inexpensive information may reduce demand for our products and services if certain customers choose to use these public sources as a substitute for our products or services.

Competition may require us to reduce the price of some of our products and services (which may result in lower revenues) or make additional capital investments (which might result in lower profit margins). If we are unable or unwilling to reduce prices or make additional investments for some of our products and services in the future, we may lose customers and our financial results may be adversely affected. Some of our current or future products or services could also be rendered obsolete as a result of competitive offerings and new technologies.

In addition, some of our customers have in the past and may decide again to develop independently certain products and services that they obtain from us, including through the formation of partnerships or consortia. If more of our customers become self-sufficient, demand for our products and services may be reduced. If we fail to compete effectively, our revenues, profitability and cash flows could be adversely affected.

Fraudulent or unpermitted data access or other cyber-security or privacy breaches may cause some of our customers and the public to lose confidence in our security measures and could result in decreased sales and increased costs for our company.

Similar to other global multinational companies that provide online software and solutions and also due to the prominence of our Reuters News business, we experience cyber-threats and cyber-attacks that could negatively impact our systems. Cyber-threats vary in technique and sources, are persistent, frequently change and are increasingly more sophisticated, targeted and difficult to detect and prevent. We are also dependent on security measures that some of our third-party suppliers and customers are taking to protect their own systems, infrastructures and cloud-based applications and services.

We have a dedicated team who is continually evaluating our security posture and mitigating risks as part of our information security program. While we have dedicated resources at our company who are responsible for maintaining appropriate levels of cyber-security and protecting our customers’ data and our internal data, our services and underlying infrastructure may in the future be compromised or breached, including by:

^· third party “phishing” attempts to induce employees or suppliers into disclosing sensitive information or other information to gain access to sensitive data;

^· cyber-attacks on our internally built infrastructure on which many of our service offerings function;

^· vulnerabilities existing in our products, new technologies or newly acquired or integrated businesses (which may arise in software that we have developed or licensed/acquired from third parties), some of which may be undetected and only discovered after an extended period of time and after installation or integration by our company or our customers;

^· actions by individuals or groups of hackers and sophisticated organizations, including state-sponsored organizations or nation-states;

^· attacks on, or vulnerabilities in underlying networks and services that power the Internet, most of which are not under our control or the control of our vendors, partners or customers; and

^· human errors by employees, contractors or customers or intentional acts that compromise our security solutions.

None of these threats and related incidents to date have resulted in a material adverse impact for our business. We seek to mitigate these risks through our ability to escalate and respond to known and potential risks through our Enterprise Security Incident Management processes. While we maintain what we believe is sufficient insurance coverage that may (subject to certain

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policy terms and conditions including self-insured deductibles) cover certain aspects of third party security and cyber-risks and business interruption, our insurance coverage may not always cover all costs or losses and it does not extend to any reputational damage or costs incurred to improve systems as a result of these types of incidents.

Many of our third-party suppliers, including certain hosted software applications that we use for confidential data storage, employ cloud computing technology for storage and service delivery. These providers’ cloud computing systems may be susceptible to cyber-incidents, such as intentional cyber-attacks to access or obtain sensitive data or inadvertent cyber-security compromises which are outside of our control. Additionally, our outsourcing of certain functions requires us to sometimes grant network access to third party suppliers. If our third party suppliers do not maintain adequate security measures, do not require their sub-contractors to maintain adequate security measures or do not perform as anticipated and in accordance with contractual requirements, personal data of customers, employees or other individuals could be compromised and we may experience operational difficulties, loss of intellectual property rights or other sensitive data, loss of customer trust and increased costs, all of which could adversely impact our brand and reputation and materially impact our business and results of operations. In addition, if a customer experiences a data security breach that results in the misappropriation of some of our proprietary business information, our company’s reputation could be harmed, even if we were not responsible for the breach.

We collect, store, use and transmit sensitive data, including public records, intellectual property, our proprietary business information and personal data of our customers, employees, business partners and other individuals on our networks. A number of our customers and suppliers also entrust us with storing and securing their own confidential data and information. Our businesses include certain subscription-based screening products which we sell to institutional customers and governments to enable them to satisfy various regulatory obligations. Any fraudulent, malicious or accidental breach of our data security could result in unintentional disclosure of, or unauthorized access to, third party, customer, vendor, employee or other confidential or sensitive data or information, which could potentially result in additional costs to our company to enhance security or to respond to occurrences, lost sales, violations of privacy or other laws, penalties, fines, regulatory action or litigation. In addition, media or other reports of perceived security vulnerabilities to our systems or those of our third-party suppliers, even if no breach has been attempted or occurred, could adversely impact our brand and reputation and materially impact our business and results of operations.

Misappropriation, improper modification, destruction, corruption or unavailability of data and information, or ransom demands due to cyber-attacks or other security breaches, could damage our brand and reputation. Customers and the public could lose confidence in our security measures and reliability, which would harm our ability to retain customers and gain new ones. We could also face litigation or other claims from impacted individuals as well as substantial regulatory sanctions or fines. If any of these were to occur, it could have a material adverse effect on our business and results of operations.

We rely heavily on our own and third party data centers, network systems, telecommunications and the Internet and any failures or disruptions may adversely affect our ability to serve our customers and could negatively impact our revenues and reputation.

Most of our products and services are delivered electronically and our customers depend on our ability to receive, store, process, transmit and otherwise rapidly handle very substantial quantities of data and transactions on computer-based networks. Our customers also depend on the continued capacity, reliability and security of our data centers, networks, telecommunications and other electronic delivery systems, including websites and the Internet. Our employees also depend on these systems for our internal use. We are increasingly shifting more of our software from being on-premise installations to software-as-a-service (SaaS) or cloud-based offerings that provide customers with access through the Internet.

Upon the closing of the F&R transaction, most of our company’s data centers and many of our network systems transferred to Refinitiv. Under a transition services agreement, Refinitiv agreed to provide Thomson Reuters with data center services through September 30, 2020 and various network services through September 30, 2021 (and we agreed to provide certain data center and network services to Refinitiv through those dates). As a result, many of our businesses are largely dependent on Refinitiv for continued reliable and secure services in these areas. We are seeking to efficiently exit these data center and network arrangements prior to that time. Refinitiv is not obligated to continue providing data center or network services following the termination of the transition services agreement on commercially reasonable terms, or at all, and it is possible that we will not be able to switch our operations to other providers in a timely and cost effective manner if the need arises. If we are unable to maintain or renegotiate commercially acceptable arrangements with Refinitiv to provide data center or network services or find

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substitutes or alternative sources, our business could be adversely affected. As part of our company’s plans to completely separate from Refinitiv, we are deploying a new global network and continue to implement various new enterprise systems during 2020. These changes could result in unforeseen network or system failures or breaches.

Any significant failure, compromise, cyber-breach or interruption of our systems, including operational services, loss of service from third parties, sabotage, break-ins, war, terrorist activities, human error, natural disaster, power or coding loss and computer viruses, could cause our systems to operate slowly or could interrupt service for periods of time. While we have (and Refinitiv has) disaster recovery and business continuity plans that utilize industry standards and best practices, including back-up facilities for primary data centers, a testing program and staff training, the systems are not always fully redundant and disaster recovery and business continuity plans may not always be sufficient or effective. To the extent that our telecommunications, information technology systems, cloud-based service providers or other networks are managed or hosted by third parties, we would need to coordinate with these third parties to resolve any issues. In the past when we have experienced slow operation of our systems or service interruptions, some of our products, services or websites have been unavailable for a limited period of time, but none of these occurrences have been material to our business.

Our ability to effectively use the Internet may also be impaired due to infrastructure failures, service outages at third party Internet providers or increased government regulation. In addition, we are facing significant increases in our use of power and data storage. We may experience shortage of capacity and increased costs associated with such usage. These events may affect our ability to store, process and transmit data and services to our customers.

If we are unable to develop new products, services, applications and functionalities to meet our customers’ needs, attract new customers and retain existing ones, expand into new geographic markets and identify areas of higher growth, our ability to generate revenues or achieve higher levels of revenue growth in the future may be adversely affected.

Our growth strategy involves developing new products, services, applications and functionalities in a timely and cost effective manner to meet our customers’ needs, anticipating and responding to industry trends and technological changes, and maintaining a strong position in the sectors that we serve. We are currently prioritizing investments to fund our push to platforms, drive organic investments to expand in software, and selectively use acquisitions that we expect to contribute to the accelerated execution of our strategy. We are also seeking to further improve customer and digital experiences and our sales and marketing expertise, and continue to simplify the organization.

^· We continue to allocate more resources and increasing investments in opportunities in our portfolio of businesses that we believe have the highest potential for strategic growth. While we are confident that this focus will lead to increased revenues, there is no assurance that we will be successful in increasing our company’s overall revenue growth in the future.

^· Disruptive and new technologies such as AI, machine automation, data synthesis, blockchain and user-generated capabilities are creating a need to adapt rapidly to the shifting landscape. Customers are also seeking more cloud-based solutions. While we are focused on these changes to the technological landscape, if we fail to adapt, or do not adapt quickly enough, our financial condition and results of operations could be adversely impacted.

^· Growth in today’s business environment has required us to explore different business models than we have in the past. We have been increasing our focus on driving growth through more collaboration and stronger relationships with both established and emerging companies and incubators. Some of these initiatives combine another company’s technology, data or other capabilities with our products and services. All of these initiatives involve a number of risks, including the risk that the expected synergies will not be realized, that the expected results will not be achieved, that a new initiative may conflict or detract from our existing businesses or that security measures may not be adequate. While we believe these initiatives will be attractive to our customers, allow us to innovate more quickly and build sales channels in segments that we could not have reached as quickly on our own, we are unable to provide any assurances that these initiatives will increase our revenue growth.

Over the last few years, we have made significant investments designed to improve and enhance the functionality and performance of a number of our key products, such as Westlaw Edge, Checkpoint Edge, Elite 3E, Practical Law, Onvio and ONESOURCE. We have also successfully migrated customers from legacy offerings to our current propositions and continued to enhance the reliability and resiliency of the technology infrastructure that we use to deliver products and services. However, if our customers’ adoption rates for existing and new products and services are lower than our expectations, our revenues may be lower and our results of operations may be adversely affected.

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Some of our businesses, in particular Legal Professionals, Corporates and Tax & Accounting Professionals, continue to evolve towards becoming greater providers of software and solutions to our customers as part of an ongoing transformation from focusing primarily on providing content, data and information. Solutions often are designed to integrate our core content, data and information with software and workflow tools. While we believe that transitioning a greater part of our business to software and solutions will help us increase customer value, create growth, diversify business mix and differentiate us from competitors, operating a business with a greater percentage of software and solutions may result in lower profit margins.

As we focus on organic revenue growth, it may take us a longer period of time and we may need to incur greater costs to develop new products, services, applications and functionalities to meet needs of customers, attract new customers or expand into these markets. If we are unable to do so, our ability to increase our revenues may be adversely affected.

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

We may be adversely affected by changes in legislation and regulation related to privacy, data security, data protection and other areas, which may impact how we provide products and services and how we collect and use information.

Legislative and regulatory changes that impact our customers’ industries also impact how we provide products and services to our customers.

Laws relating to privacy, data security, data protection, anti-money laundering, electronic and mobile communications, e-commerce, direct marketing and digital advertising and the use of public records have become more prevalent and developed in recent years.

In the ordinary course of business, we collect, store, use and transmit certain types of information that are subject to an increasing number of different laws and regulations. In particular, data security, data protection and privacy laws and regulations that we are subject to often vary by jurisdiction and include, without limitation, the General Data Protection Regulation (GDPR) and various U.S. state and federal laws and regulations. These laws and regulations are continuously evolving and complying with applicable laws and regulations involves significant costs and time.

^· In 2018, the GDPR introduced new data protection requirements and related compliance obligations in the E.U. and significantly increased fines for breaches. Serious breaches of the GDPR can result in administrative fines of up to 4% of annual worldwide revenues and fines up to 2% of annual worldwide revenues can be imposed for other types of violations.

^· In January 2020, the California Consumer Privacy Act (CCPA) came into effect, resulting in new requirements for the handling of personal data and providing consumers with new data privacy rights. Violations of the CCPA can result in civil penalties and provides consumers with a private right of action for data breaches, which may increase data breach litigation. Other U.S. state and federal legislative and regulatory bodies have implemented or are considering similar legislation, which, if passed, could create more risks, compliance complexity and potential costs for us.

^· In the European Union, proposed legislation known as the Regulation on Privacy and Electronic Communications, or ePrivacy Regulation, would replace an EU regulation known as the ePrivacy Directive. The ePrivacy Regulation is focused on privacy regarding electronic communications services and data processed by electronic communications services. The ePrivacy Regulation is still under development and in draft form and the timeline for adoption and effectiveness is unclear. The ePrivacy Regulation may require us to further modify some of our data practices and compliance could result in additional costs for our company.

Some of these laws and regulations include a “right to be forgotten”, a right for individuals to opt out or object to having their data shared with third parties and a right to be informed about what data about them is being shared. The viability and perceived value of some of our screening products could be adversely impacted through the exercise of these rights.

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We are also subject to data localization laws in certain countries, which require us to store and process certain types of data within a particular country. The regulatory landscape in various countries where we operate continues to evolve and sometimes includes strict local rules regarding the use (or restrictions on use) of encryption technologies as well as broad governmental rights related to Internet monitoring and regulation of Internet transmissions.

Existing, new and proposed legislation and regulations, including changes in the manner in which such legislation and regulations are interpreted by courts, may:

^· Impose limits on our collection and use of certain kinds of information and our ability to communicate such information effectively to our customers;

^· Increase our cost of doing business or require us to change some of our existing business practices; and

^· Conflict on a global basis (such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws).

Governmental action can also create some legal uncertainties and it is difficult to predict in what form laws and regulations will be adopted, changed or repealed, how they will be construed by the relevant courts, or the extent to which any changes might adversely affect us.

Although we have implemented policies and procedures that are designed to ensure compliance with applicable laws, rules and regulations, we could be subject to penalties as well as reputational harm for any violations.

If we are unable to successfully adapt to organizational changes and effectively implement strategic initiatives, our reputation and results of operations could be impacted.

We have experienced, and are in the midst of experiencing, significant organizational changes.

^· In October 2018, we completed the sale of a 55% interest in our F&R business (now Refinitiv). When the transaction closed, we split our workforce between Thomson Reuters and the Refinitiv partnership.

^· 2019 was our first full year of operations since completing the Refinitiv transaction and restructuring our company into customer-focused segments. During 2019, we promoted and hired several new leaders and members of senior management.

^· In February 2020, we announced the appointments of a new Chief Executive Officer and Chief Financial Officer effective on March 15, 2020. For additional information, please see the “Executive Officers and Directors” section of this annual report.

^· As part of our simplification and transformation initiatives, we have reduced staff, consolidated various technology platforms and content assets, standardized internal processes, outsourced various activities, and consolidated various offices/real estate around the world. In 2019, we also created a flatter organization by reducing our management layers.

Our ability to successfully manage organizational changes is important for our future business success. In particular, our reputation and results of operations could be harmed if employee morale, engagement or productivity decline as a result of organizational or simplification changes.

Furthermore, we may not realize cost savings and synergies that we expect to achieve from our strategic initiatives due to a variety of risks, including, but not limited to, operational challenges across impacted business segments, difficulties in integrating shared services with our business, higher than expected employee severance or retention costs, higher than expected overhead expenses, delays in the anticipated timing of activities related to our initiatives and other unexpected costs associated with operating our business. If we are unable to achieve the cost savings or synergies that we expect to achieve from our strategic initiatives, it could adversely affect our profitability and related margins.

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If we do not continue to attract, motivate and retain high quality management and key employees, we may not be able to execute our strategies.

The completion and execution of our strategies depends on our ability to continue to attract, motivate and retain high quality management and employees across all of our businesses. We compete with many businesses that are seeking skilled individuals, particularly those with experience in technology, data science, digital marketing, cognitive computing and AI. Competition for professionals in our Legal Professionals, Corporates and Tax & Accounting Professionals segments in particular can also be intense as other companies seek to enhance their positions in our market segments. Future organizational changes could also cause our employee attrition rate to increase. If we are unable to continue to identify or be successful in attracting, motivating and retaining the appropriate qualified personnel for our businesses, it could adversely affect our ability to execute our strategies.

We may be unable to derive fully the anticipated benefits from our existing or future acquisitions, joint ventures, investments or dispositions.

While we are focused on growing our businesses organically, acquisitions remain an important part of our growth strategy to expand and enhance our products, services and customer base and to enter new geographic areas. We set aside approximately $2 billion of the F&R transaction proceeds for future acquisitions and approximately $800 million is remaining in that reinvestment fund. Over the last 18 months, we acquired Integration Point, Confirmation, HighQ and FC Business Intelligence. Integration Point is helping build workflow platforms in our Global Trade Management offerings. Confirmation is doing the same for our Tax & Accounting Professionals solutions and HighQ is anticipated to be a cornerstone upon which we build software platforms for our Legal Professionals and Corporates business. FC Business Intelligence, which is now known as Reuters Events, provides us with a greater presence in the specialized professional events space.

In the future, we may not be able to successfully identify attractive acquisition opportunities or make acquisitions on terms that are satisfactory to our company from a commercial perspective. In addition, competition for acquisitions in the industries in which we operate during recent years has escalated, and may increase costs of acquisitions or cause us to refrain from making certain acquisitions. We may also be subject to increasing regulatory scrutiny from competition and antitrust authorities in connection with acquisitions. Achieving the expected returns and synergies from existing and future acquisitions will depend in part upon our ability to integrate the products and services, technology, administrative functions and personnel of these businesses into our segments in an efficient and effective manner. We cannot assure you that we will be able to do so, or that our acquired businesses will perform at anticipated levels or that we will be able to obtain these synergies. Management resources may also be diverted from operating our existing businesses to certain acquisition integration challenges. If we are unable to successfully integrate acquired businesses, our anticipated revenues and profits may be lower. Our profit margins may also be lower, or diluted, following the acquisition of companies whose profit margins are less than those of our existing businesses. Certain acquisitions may initially incur losses which would reduce our earnings per share in certain periods.

We have also historically decided from time to time to dispose of assets or businesses that are no longer aligned with strategic objectives or our current business portfolio. These transactions may involve challenges and risks. There can be no assurance that future divestitures will occur, or if a transaction does occur, there can be no assurance as to the potential value created by the transaction. The process of exploring strategic alternatives or selling a business could also negatively impact customer decision-making and cause uncertainty and negatively impact our ability to attract, retain and motivate key employees. Any failures or delays in completing divestitures could have an adverse effect on our financial results and on our ability to execute our strategy. Although we have established procedures and processes to mitigate these risks, there is no assurance that these transactions will be successful. In addition, we expend costs and management resources to complete divestitures and manage post-closing arrangements. Completed divestitures may also result in continued financial involvement in the divested business, such as through guarantees, indemnifications, transition services arrangements or other financial arrangements, following the transaction.

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Operating globally involves challenges that we may not be able to meet and that may adversely affect our ability to grow.

In 2019, we earned 79% of our revenues in the U.S. However, as part of our globalization efforts, we operate regional teams, particularly in emerging markets, that work across our segments to combine local expertise with global capabilities to address specific customer needs. We sometimes modify existing products and services for local markets, but we also develop specifically for local markets. As of December 31, 2019, approximately 53% of our employees were located outside of the United States.

We believe that there are advantages to operating globally, including a proportionately reduced exposure to the market developments of a single country or region. However, there are certain risks inherent in doing business globally which may adversely affect our business and ability to grow. These risks include:

^· Difficulties in penetrating new markets due to established and entrenched competitors;

^· Difficulties in developing products and services that are tailored to the needs of local customers;

^· Lack of local acceptance or knowledge of our products and services;

^· Lack of recognition of our brands;

^· Economic slowdowns, instability and volatility in local markets and political instability of governments;

^· Unavailability of local companies for acquisition or joint venture partners;

^· Exposure to possibly adverse governmental or regulatory actions in countries where we operate or conduct business;

^· Higher inflation rates in the countries in which we do business;

^· The impact of foreign currency fluctuations on prices charged to local customers, notably when there is strengthening of the U.S. dollar;

^· Changes in laws and policies affecting trade and investment in other jurisdictions; and

^· Managing compliance with varying and sometimes conflicting laws and regulations across the countries in which we do business.

Adverse developments in any of these areas could cause our actual results to differ materially from expected results. Challenges associated with operating globally may increase for our company as we continue to expand into geographic areas that we believe present the highest growth opportunities.

We generate a significant percentage of our revenues from recurring, subscription-based arrangements, and our ability to maintain existing revenues and generate higher revenues is dependent in part on maintaining a high renewal rate.

In 2019, 78% of our revenues were derived from subscriptions or similar contractual arrangements, which result in recurring revenues. Our revenues are supported by a relatively fixed cost base that is generally not impacted by fluctuations in revenues. These products are generally provided under subscription arrangements that have terms ranging from one to five years, which most customers renew at the end of each term. Renewal dates are spread over the course of the year. Many of our customer agreements have automatic renewal provisions, but customers are often able to terminate these types of agreements prior to automatic renewal of a new term by providing appropriate notice to us within a specified time period. In order to maintain existing revenues and to generate higher revenues, we are dependent on a significant number of our customers to renew their arrangements with us. Our revenues could be lower if a significant number of our customers renewed their arrangements with us, but reduced the amount of their spending.

We are dependent on third parties for data, information and other services.

We obtain significant data and information through licensing arrangements with content providers, some of which may be viewed as competitors. Some providers may seek to increase fees for providing their proprietary content or services and others may not offer our company an opportunity to renew existing agreements. We also depend on public sources for certain data and information.

In addition, we rely on third party service providers for telecommunications and other services that we have outsourced, such as certain human resources administrative functions, facilities management and IT services.

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If we are unable to maintain or renegotiate commercially acceptable arrangements with these content or service providers or find substitutes or alternative sources of equivalent content or service, our business could be adversely affected. Our revenues and margins could also be reduced if some of our competitors obtained exclusive rights to provide or distribute certain types of data or information that was viewed as critical by our customers.

Our intellectual property rights are valuable and may not be adequately protected, which may adversely affect our financial results.

Many of our products and services are based on information delivered through a variety of media, including online, software-based applications, smartphones, tablets, books, journals and dedicated transmission lines. We rely on agreements with our customers, employees, consultants, advisors and other third parties to protect our confidential proprietary information, know-how and technology. We also rely on patent, trademark, copyright and other intellectual property laws to establish and protect our proprietary rights in our products and services. Third parties may be able to copy, infringe or otherwise profit from our proprietary rights without authorization and the Internet may facilitate these activities. We also seek to maintain certain intellectual property rights, and third parties or our employees could intentionally or accidentally compromise the intellectual property rights that we maintain. We also conduct business in some countries where the extent of legal protection for intellectual property rights is uncertain or may be ineffective. Although we have taken measures to protect our intellectual property, we cannot assure you that we have adequate protection of our rights. If we are not able to protect our intellectual property rights, our financial results may be adversely affected.

The intellectual property of an acquired business may also be an important component of the value that we agree to pay for such a business. However, such acquisitions are subject to the risks that the acquired business may not own the intellectual property that we believe we are acquiring, that the intellectual property is dependent upon licenses from third parties, that the acquired business infringes upon the intellectual property rights of others or that the technology does not have the acceptance in the marketplace that we anticipated. If we are not able to successfully integrate acquired businesses’ intellectual property rights, our financial results may be adversely affected.

Some of our competitors may also be able to develop new products or services that are similar to ours without infringing our intellectual property rights, which could adversely affect our financial condition and results of operations.

Tax matters, including changes to tax laws, regulations and treaties, could impact our effective tax rate and our results of operations.

We operate in many countries worldwide and our earnings are subject to taxation in many different jurisdictions and at different rates. We seek to organize our affairs in a tax efficient manner, taking account of the jurisdictions in which we operate. In 2019, our effective tax rate was lower than the Canadian corporate income tax rate due significantly to lower tax rates and differing tax rules applicable to certain of our operating and financing subsidiaries outside Canada. Our effective tax rate has fluctuated in the past and is likely to fluctuate in the future, reflecting the mix of taxing jurisdictions in which pre-tax profits and losses are recognized. Our effective tax rate and our cash tax cost in the future will depend on the laws of numerous countries and the provisions of multiple income tax treaties between various countries in which we operate. Changes in tax laws and regulations, international treaties and tax accounting standards and/or uncertainty over their application and interpretation as well as changes in the geographic mix of our profits may adversely affect our results (notably our income tax expense) and our effective tax rate. Tax-related changes or tax rulings may also require adjustments to our previously filed tax returns, which if unfavorable, may adversely affect our results. Tax laws and regulations that apply to our company may also be amended by the relevant authorities due to changes in fiscal circumstances or priorities. These types of amendments, or their application to our company, may adversely affect our results. In addition, we are subject to regular audits and reviews by tax authorities in Canada and other jurisdictions during the ordinary course of business. While we believe the positions that we take on our tax filings are sustainable, certain positions taken may be challenged by the applicable tax authorities. If any such challenge results in an adverse outcome, this could negatively affect our financial results and operations for the period at issue and on an ongoing basis.

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Many governments in jurisdictions where we operate are facing budget deficits and challenges and as a result, may look to increase their tax revenues through increased audit activity and tax reform. Various tax-related legislative initiatives have been proposed or are being discussed that if enacted, could adversely affect our tax positions and/or our tax liabilities. The Organization for Economic Co-operation and Development (OECD), which is comprised of member countries that encompass many of the jurisdictions where we operate, has been working on a coordinated, multi-jurisdictional approach to address issues in existing tax systems associated with “base erosion and profit shifting” (BEPS) and the digitalization of the economy that the OECD believes may lead to tax avoidance by global companies. The member states of the European Union adopted an anti-tax avoidance directive which is intended to provide uniform implementation of BEPS measures across all of the member states, which were required to transpose the directive into national legislation by the start of 2020.

Various countries have enacted or are considering digital service taxes, which could result in multinational companies such as Thomson Reuters being subject to tax in additional jurisdictions or subject to increased taxes in jurisdictions in which they already have a taxable presence.

In 2017, the U.S. enacted the Tax Cuts and Jobs Act (Tax Act), which significantly alters how the U.S. taxes corporations. Accounting for the income tax effects of the Tax Act requires complex computations and significant judgments and estimates not previously required under U.S. law. The Tax Act includes a number of provisions that may offset future benefits associated with the reduced tax rate. These provisions include (but are not limited to) further limitations on deductions for interest expense and the introduction of a minimum tax under which certain payments to foreign affiliates are non-deductible. The U.S. Treasury Department, the Internal Revenue Service and other standard-setting bodies may issue further regulations or guidance on how the provisions of the Tax Act will be applied or otherwise administered that is different from our interpretations. As we conduct additional analyses and collect additional information, and as any further regulatory guidance is issued, we may need to make adjustments to our financial statements that could materially affect our U.S. federal income tax position and our financial condition and results of operations in the period in which the adjustments are made.

Currency and interest rate fluctuations and volatility in global markets may have a significant impact on our reported revenues and earnings.

Our financial statements are expressed in U.S. dollars and are, therefore, subject to movements in exchange rates on the translation of the financial information of businesses whose functional currencies are not U.S. dollars. We receive revenues and incur expenses in many currencies and are thereby exposed to the impact of fluctuations in various currency rates. We monitor the financial stability of the foreign countries in which we operate. Volatility and uncertainty in global markets in the future could adversely affect our results.

Exchange rate movements in our foreign currency exposures may cause fluctuations in our consolidated financial statements. If our operations outside of the U.S. expand, we would expect this exposure to grow. We monitor foreign currency exposures on a regular basis and some of our largest foreign currency exposures are currently the British pound sterling, the Canadian dollar, the Euro, the Brazilian real, the Argentine peso and the Indian rupee. We have historically, and may in the future, hedge some of our foreign currency exposure if we believe that it may be material to our financial results.

Following the redemption of a Canadian dollar-denominated bond in January 2020, we currently do not have any non-U.S. dollar-denominated debt. We may continue to issue non-U.S. dollar-denominated debt in the future and would expect to hedge it into U.S. dollars, as has been our practice. In addition, an increase in interest rates from current levels could adversely affect our results in future periods.

Our brands and reputation are important company assets and are key to our ability to remain a trusted source of information and news.

The integrity of our brands and reputation is key to our ability to remain a trusted source of information and news and to attract and retain customers. Negative publicity regarding our company or actual, alleged or perceived issues regarding one of our products or services could harm our relationship with customers.

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We granted Refinitiv a license to permit it to brand its products/services and company name with the “Reuters” mark, subject to applicable limitations and restrictions in the trademark license agreement intended to protect the “Reuters” mark. While we understand that Refinitiv does not plan to brand its products/services or company name with the “Reuters” mark as part of its longer-term strategy, any actions taken by Refinitiv under the Reuters name could potentially have a negative impact on our company’s reputation, despite the protective provisions of the license agreement. The license would continue to remain in effect following the contemplated sale of Refinitiv to London Stock Exchange Group plc (LSEG).

Failure to protect our brands or a failure by our company to uphold the Thomson Reuters Trust Principles may also adversely impact our credibility as a trusted supplier of content and may have a negative impact on our information and news business.

We operate in a litigious environment which may adversely affect our financial results.

We may become involved in legal actions and claims arising in the ordinary course of business, including employment matters, commercial matters, libel/defamation/privacy claims and intellectual property infringement claims. Regardless of the merit of legal actions and claims, such matters can be expensive, time consuming, or harmful to our reputation and in recognition of these considerations, we may engage in arrangements to settle litigation. While we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as caps on amounts recoverable. Due to the inherent uncertainty in the litigation process, the resolution of any particular legal proceeding could result in changes to our products and business practices and could have a material adverse effect on our financial position and results of operations.

We are significantly dependent on technology and the rights related to it. From time to time, we have been sued by other companies for allegedly violating their patents. Our company and other companies have experienced alleged claims from third parties whose sole or primary business is to monetize patents. If an infringement suit against our company is successful, we may be required to compensate the third party bringing the suit either by paying a lump sum or ongoing license fees to be able to continue selling a particular product or service. This type of compensation could be significant, in addition to legal fees and other costs that we would incur defending such a claim.

We might also be prevented or enjoined by a court from continuing to provide the affected product or service. We may also be required to defend or indemnify any customers who have been sued for allegedly infringing a third party’s patent in connection with using one of our products or services. Responding to intellectual property claims, regardless of the validity, can be time consuming for our technology personnel and management.

Our credit ratings may be downgraded, which may impede our access to the debt markets or raise our borrowing rates.

Our access to financing depends on, among other things, suitable market conditions and the maintenance of suitable long-term credit ratings. Our credit ratings may be adversely affected by various factors, including increased debt levels, decreased earnings, declines in customer demands, increased competition, a further deterioration in general economic and business conditions and adverse publicity. Any future downgrades in our credit ratings may impede our access to the debt markets or raise our borrowing rates. For additional information on our current credit ratings, please see the “Management’s Discussion and Analysis” and “Additional Information – Ratings of Debt Securities” sections of this annual report.

Completing the separation of Refinitiv from Thomson Reuters may be more difficult, costly or time consuming than expected, which may adversely affect our company.

Our company and Refinitiv separated our respective operations in 2018 in connection with the closing of the transaction. However, Refinitiv and our company entered into multi-year transition services agreements for a wide range of certain services, notably in technology. We are relying on Refinitiv to meet its obligations under the transition services agreements. If Refinitiv is unable to satisfy those obligations, we could incur additional costs, operational difficulties or losses. Conversely, Refinitiv is relying on us to satisfy our obligations under the transition services agreements. We could be liable to Refinitiv if we breach our obligations as a service provider under the transition services agreements. In addition, during the transition services period, our management and employees may be required to divert some of their attention away from our business in order to provide services to Refinitiv, which could adversely affect our business and operations. Any transition services agreements in effect when the proposed sale of Refinitiv to LSEG closes will remain in effect and will be obligations of LSEG.

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The process to completely separate Refintiv from our company has been a complex, costly and time-consuming process. There are other significant challenges to successfully implementing the separation, many of which may be beyond the control of our company, including, without limitation:

^· unanticipated issues, costs or delays in separating technology, operations, systems, procedures and policies into two standalone businesses; and

^· managing increased costs or inefficiencies following the separation of the two organizations’ operations.

Issues related to completely separating the two organizations may also adversely affect our relationships with employees, suppliers, customers, distributors, licensors and others with whom we have business or other dealings.

We may not be able to complete the proposed sale of Refinitiv to LSEG within the timeframe that we anticipate or at all, which could have an adverse impact on Refinitiv’s business, operations or results.

As previously mentioned, in October 2018, we closed the sale of a 55% interest in our F&R business (now Refinitiv) to private equity funds affiliated with Blackstone. We currently own a 45% equity stake in Refinitiv. In August 2019, our company and private equity funds affiliated with Blackstone agreed to sell Refinitiv to LSEG and we expect that transaction to close in the second half of 2020. Closing of the transaction is subject to specified regulatory approvals and customary closing conditions. It is possible that factors outside our control could delay the completion of the transaction, or prevent it from being completed at all. If the transaction is not completed within the expected timeframe or at all, it could negatively impact Refinitiv’s customer retention and decision-making, which could impact Refinitiv’s revenues in particular.

If, prior to the closing of the LSEG transaction, events or changes in circumstances indicate that the carrying value of our investment in Refinitiv is above its current fair value, we may be required to record an impairment charge in the period that the determination is made, which would reduce our reported assets and earnings. In addition, market views in the future regarding the value of our investment in Refinitiv (and, following the closing, the value of LSEG shares owned by our company) may increase volatility to the price of our shares.

In connection with the closing of the F&R transaction, Reuters News agreed to supply news and editorial content to Refinitiv for a 30-year term which expires in 2048. This agreement is contemplated to continue in effect following the sale of Refinitiv to LSEG. For the year ended December 31, 2019, we recorded revenues under this agreement of $336 million, which constituted approximately 53% of Reuters News’ 2019 revenues.

We have significant funding obligations for pension arrangements that are affected by factors outside of our control.

We have significant funding obligations for various pension arrangements that are affected by factors outside of our control, including market factors and changes in legislation. In the past, we also have contributed to our pension plans to pre-fund certain obligations. In 2017, we contributed $500 million to our U.S. defined benefit pension plan to improve the funded status of that plan. In 2019, we contributed approximately $203 million to our material defined benefit plans, including a special contribution of $167 million to our principal UK plan that we made in February 2019. We may be required or we may agree to make additional contributions to some pension plans in the future and the amounts of any such contributions may be material.

The valuations of obligations for material plans are determined by independent actuaries and require assumptions in respect of future compensation levels, expected mortality, inflation and medical cost trends, along with the discount rate to measure obligations. These assumptions are reviewed annually. While we believe that these assumptions are appropriate given current economic conditions, significant differences in actual experience or significant changes in assumptions may materially affect our valuations of pension obligations and related future expenses. In addition, the performance of equity and fixed income markets, which may be influenced by general economic conditions, including interest rates, inflation and currency exchange rates, may impact the funding level of our funded plans and required contributions.

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Antitrust/competition-related claims or investigations could result in changes to how we do business and could be costly.

We are subject to applicable antitrust and competition laws and regulations in the countries where we have operations. These laws and regulations seek to prevent and prohibit anti-competitive activity. From time to time, we may be subject to antitrust/competition-related claims and investigations. Following such a claim or investigation, we may be required to change the way that we offer a particular product or service and if we are found to have violated antitrust or competition laws or regulations, we may be subject to fines or penalties. Any antitrust or competition-related claim or investigation could be costly for our company in terms of time and expense and could have an adverse effect on our financial condition and results of operations.

Woodbridge controls our company and is in a position to affect our governance and operations.

Woodbridge beneficially owned approximately 66% of our shares as of March 4, 2020. For so long as Woodbridge maintains its controlling interest in our company, it will generally be able to approve matters submitted to a majority vote of our shareholders without the consent of other shareholders, including, among other things, the election of our board. In addition, Woodbridge may be able to exercise a controlling influence over our business and affairs, the selection of our senior management, the acquisition or disposition of our assets, our access to capital markets, the payment of dividends and any change of control of our company, such as a merger or take-over. The effect of this control may be to limit the price that investors are willing to pay for our shares. In addition, a sale of shares by Woodbridge or the perception of the market that a sale may occur may adversely affect the market price of our shares. For additional information, please see the “Additional Information – Woodbridge” section of this annual report.

Changes in the tax residence of our company could cause us adverse tax consequences.

We expect our company will remain resident only in Canada for tax purposes. However, if our company were to cease to be resident solely in Canada for tax purposes (including as a result of changes in applicable laws or in Canadian regulatory practice), this could cause us adverse tax consequences.

We may be required to take future impairment charges that would reduce our reported assets and earnings.

Goodwill and other identifiable intangible assets comprise a substantial portion of our total assets. We are required under IFRS to test our goodwill and identifiable intangible assets with indefinite lives for impairment on an annual basis. We also are required by IFRS to perform an interim or periodic review of our goodwill and all identifiable intangible assets if events or changes in circumstances indicate that impairment may have occurred. Impairment testing requires our company to make significant estimates about our future performance and cash flows, as well as other assumptions. Economic, legal, regulatory, competitive, contractual and other factors as well as changes in our company’s share price and market capitalization may affect these assumptions. If our testing indicates that impairment has occurred relative to current fair values, we may be required to record an impairment charge in the period the determination is made. Recognition of an impairment would reduce our reported assets and earnings.

Thomson Reuters Founders Share Company holds a Thomson Reuters Founders Share in our company and may be in a position to affect our governance and management.

Thomson Reuters Founders Share Company was established to safeguard the Thomson Reuters Trust Principles, including the independence, integrity and freedom from bias in the gathering and dissemination of information and news. The Thomson Reuters Founders Share Company holds a Thomson Reuters Founders Share in our company. The interest of the Thomson Reuters Founders Share Company in safeguarding the Trust Principles may conflict with our other business objectives, impose additional costs or burdens on us or otherwise affect our management and governance. In addition, the Founders Share enables the Thomson Reuters Founders Share Company to exercise extraordinary voting power to safeguard the Trust Principles and to thwart those whose holdings of voting shares of Thomson Reuters threaten the Trust Principles. As a result, the Thomson Reuters Founders Share Company may prevent a change of control (including by way of a take-over bid or similar transaction) of our company in the future. We have agreed not to effect a sale (or similar transactions) of Reuters News to an unrelated third party or to effect or permit material acquisitions by, or material dispositions from, Reuters News unless we have received Thomson Reuters Founders Share Company’s prior written consent. The effect of the rights of the Thomson Reuters Founders Share Company may be to limit the price that investors are willing to pay for our shares. For additional information, please see the “Additional Information – Material Contracts” section of this annual report.

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Management’s Discussion and Analysis

This management’s discussion and analysis is designed to provide you with a narrative explanation through the eyes of our management of how we performed in the last two years, as well as information about our financial condition and future prospects. As the management’s discussion and analysis is intended to supplement and complement our financial statements, we recommend that you read this in conjunction with our 2019 and 2018 annual consolidated financial statements. This management’s discussion and analysis contains forward-looking statements, which are subject to risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements. Forward-looking statements include, but are not limited to, our 2020 outlook, our expectations related to general economic conditions and market trends and their anticipated effects on our business segments and expectations related to the proposed London Stock Exchange Group plc/Refinitiv transaction. For additional information related to forward-looking statements, material assumptions and material risks associated with them, please see the “Outlook” and “Additional Information - Cautionary Note Concerning Factors That May Affect Future Results” sections of this management’s discussion and analysis. This management’s discussion and analysis is dated as of March 4, 2020.

We have organized our management’s discussion and analysis in the following key sections:
Executive Summary – a brief overview of our business and key financial highlights	31
Results of Operations – a comparison of our current and prior-year period results	38
Liquidity and Capital Resources – a discussion of our cash flow and debt	51
Outlook – trends, priorities and our current financial outlook	59
Related Party Transactions – a discussion of transactions with our principal and controlling shareholder, The Woodbridge Company Limited (Woodbridge), and our Refinitiv partnership	62
Subsequent Events – a discussion of material events occurring after December  31, 2019 and through the date of this management’s discussion and analysis	63
Changes in Accounting Policies – a discussion of changes in our accounting policies	64
Critical Accounting Estimates and Judgments – a discussion of critical estimates and judgments made by our management in applying accounting policies	66
Additional Information – other required disclosures	66
Appendix – supplemental information, including regarding Refinitiv’s performance	69

Unless otherwise indicated or the context otherwise requires, references in this discussion to “we,” “our,” “us” and “Thomson Reuters” are to Thomson Reuters Corporation and our subsidiaries.

Basis of Presentation

We prepare our consolidated financial statements in U.S. dollars and in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).

In this management’s discussion and analysis, we discuss our results from continuing operations on both an IFRS and non-IFRS basis. Our IFRS and non-IFRS results include the results of acquired businesses from the date of purchase.

On October 1, 2018, we sold 55% of our former Financial & Risk (F&R) business, which is now known as Refinitiv. We reported F&R as a discontinued operation through October 1, 2018, the closing date of the transaction. After that date, we reported our 45% share of the Refinitiv partnership’s results in a single line on our consolidated income statement titled “Share of post-tax losses in equity method investments”. Except for diluted earnings per share and cash flow, the discussion of our IFRS and non-IFRS results exclude the results of our former F&R business in all periods.

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Other than EPS, we report our results in millions of U.S. dollars, but we compute percentage changes and margins using whole dollars to be more precise. As a result, percentages and margins calculated from reported amounts may differ from those presented, and growth components may not total due to rounding.

Revision of prior-period financial statements

Prior-period amounts throughout this management’s discussion and analysis have been adjusted to correct certain immaterial misstatements and to reflect a change in accounting policy for the presentation of uncertain tax treatments, reflecting a September 2019 International Financial Reporting Interpretations Committee (“IFRIC”) agenda decision. Refer to the “Changes in Accounting Policies” section of this management’s discussion and analysis and note 3 of our 2019 annual consolidated financial statements for further information about the change in accounting policy. The company revised its previously issued financial statements for the nine months ended September 30, 2018, the year ended December 31, 2018, the three months ended March 31, 2019 and the six months ended June 30, 2019.

Further information about the immaterial misstatements is provided below:

Revision to Correct Certain Immaterial Misstatements

Since October 1, 2018, we have included our share of post-tax losses from our 45% interest in Refinitiv, an equity method investment, in our net earnings. In the third quarter of 2019, a misstatement was identified that understated our share of Refinitiv’s post-tax losses since the fourth quarter of 2018. The misstatement related to an accounting principle difference for preferred stock issued by Refinitiv to the Blackstone consortium between U.S. GAAP, the basis on which Refinitiv prepares its financial statements, and IFRS, the basis on which Thomson Reuters prepares its financial statements. This misstatement did not impact our revenues, operating profit, segment measures, adjusted EBITDA, adjusted EPS, cash generated from operating activities or free cash flow.

We concluded that the misstatement was immaterial to our previously issued financial statements. However, as the impact of correcting the cumulative misstatement in the third quarter of 2019 would have been material to net earnings in the quarter, we have revised our previously issued financial statements to correct the misstatement. Additionally, in conjunction with this revision, we corrected other unrelated misstatements in the applicable prior periods, which were also not material to any of our previously issued financial statements. These unrelated misstatements included the reclassification of certain revenues and expenses, which pertained to the accounting for foreign currency in hyperinflationary economies between the third and fourth quarters of 2018, but had no impact on our full-year 2018 audited financial statements.

Use of Non-IFRS Financial Measures

We use non-IFRS financial measures as supplemental indicators of our operating performance and financial position as well as for internal planning purposes and our business outlook. We believe non-IFRS financial measures provide more insight into our performance. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS.

Our non-IFRS financial measures include:

^· Adjusted EBITDA and the related margin;

^· Adjusted EBITDA less capital expenditures and the related margin;

^· Adjusted earnings and adjusted earnings per share (EPS);

^· Net debt;

^· Free cash flow; and

^· Return on invested capital (ROIC).

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We also report changes in our revenues, operating expenses, adjusted EBITDA and the related margin, and adjusted EPS before the impact of foreign currency or at “constant currency”. These measures remove the impacts from changes in foreign currency exchange rates to provide better comparability of our business trends from period to period. To provide greater insight into the revenue growth of our existing businesses on a constant currency basis, we report organic revenue growth (as defined in the glossary below).

See Appendix A of this management’s discussion and analysis for a description of our non-IFRS financial measures, including an explanation of why we believe they are useful measures of our performance, including our ability to generate cash flow. Refer to the “Liquidity and Capital Resources” section of this management’s discussion and analysis and Appendices B and E for reconciliations of our non-IFRS financial measures to the most directly comparable IFRS measures.

Glossary of Key Terms

We use the following terms in this management’s discussion and analysis.

Term	Definition
Blackstone	The Blackstone Group and its subsidiaries.
bp	Basis points – one basis point is equal to 1/100th of 1%, “100bp” is equivalent to 1%
constant currency	A non-IFRS measure derived by applying the same foreign currency exchange rates to the financial results of the current and equivalent prior-year period.
EPS	Earnings per share
F&R	Our former Financial & Risk business, now known as Refinitiv.
F&R sale or F&R transaction	Our sale of a 55% interest in F&R to private equity funds affiliated with Blackstone, which closed on October 1, 2018.
IFRS 16	IFRS 16, Leases, a new accounting standard adopted on January 1, 2019. Refer to “Changes in Accounting Policies” section of this management’s discussion and analysis for additional information.
LSEG	London Stock Exchange Group plc
n/a	Not applicable
n/m	Not meaningful
organic or organically	A non-IFRS measure that represents changes in revenues of our existing businesses at constant currency. The metric excludes the distortive impacts of acquisitions and dispositions from not owning the business in both comparable periods. Additionally, it excludes the initial contract value of the 30-year Reuters News agreement signed on October 1, 2018, which was treated as an acquisition until October 1, 2019.
Proposed LSEG/Refinitiv transaction	Our agreement with private equity funds affiliated with Blackstone to sell Refinitiv to LSEG.
Refinitiv	The name of our former F&R business as of the closing of the F&R transaction. We have owned 45% of Refinitiv since October 1, 2018.
$ and US$	U.S. dollars

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Executive Summary

Our Company

Thomson Reuters is a leading provider of business information services. Our products include highly specialized information-enabled software and tools for legal, tax, accounting and compliance professionals combined with the world’s most global news service – Reuters.

We are organized in five reportable segments supported by a corporate center:

	Legal Professionals Serves law firms and governments with research and workflow products, focusing on intuitive legal research powered by emerging technologies and integrated legal workflow solutions that combine content, tools and analytics.
	Corporates Serves corporate customers, including the seven largest global accounting firms, with our full suite of offerings across legal, tax, regulatory and compliance functions.
	Tax & Accounting Professionals Serves tax, accounting and audit professionals in accounting firms (other than the seven largest, which are served by our Corporates segment) with research and workflow products, focusing on intuitive tax offerings and automating tax workflows.
	Reuters News Supplies business, financial, national and international news to professionals via desktop terminals, including through Refinitiv, the world’s media organizations, industry events and directly to consumers.
	Global Print Provides legal and tax information primarily in print format to customers around the world.

Our corporate center centrally manages commercial and technology operations, including those around our sales capabilities, digital customer experience and product and content development. Our corporate center also centrally manages functions such as finance, legal and human resources.

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Our Business Model and Key Operating Characteristics

We derive most of our revenues from selling information and software solutions, primarily electronically and on a recurring subscription basis. Our solutions blend deep domain knowledge with software and automation tools. We believe our workflow solutions make our customers more productive by streamlining how they operate, enabling them to focus on higher value activities. Many of our customers use our solutions as part of their workflows, which has led to strong customer retention. We believe that our customers trust us because of our history and dependability and our deep understanding of their businesses and industries, and they rely on our services for navigating a rapidly changing and increasingly complex digital world.

Over the years, our business model has proven to be capital efficient and cash flow generative, and it has enabled us to maintain leading and scalable positions in our chosen market segments. Some of our key business and operating characteristics are:

Attractive Industries   ^·   Professional content market segment (estimated $13 billion growing 1%)   ^·   Software market segment (estimated $21 billion growing 8%) Balanced and Diversified Leadership   ^·   A leader in key Legal Professionals, Corporates and Tax & Accounting Professionals market segments   ^·   Products and services tailored for professionals   ^·   Deep broad industry knowledge   ^·   Distinct core customer group revenues   ^·   Geographical diversity   ^·   Largest customer, excluding Refinitiv, is approximately 2% of revenues Attractive Business Model   ^·   78% of revenues are recurring   ^·   88% of revenues are delivered electronically, including cloud-based offerings   ^·   Strong consistent cash generation capabilities Strong Competitive Positioning   ^·   Proprietary databases and deeply embedded workflow tools and analytics   ^·   Technology and operating platforms built to address the global marketplace Disciplined Financial Policies   ^·   Focused on free cash flow growth   ^·   Balance investing in business and returning capital to shareholders   ^·   Disciplined capital structure – target maximum leverage ratio of 2.5x net debt to adjusted EBITDA   ^·   Commitment to maintaining investment grade credit rating

All revenue information reflected above is based on our 2019 full-year results.

Revenues by type

  Recurring revenues primarily consist of fees to access products or services delivered electronically over time, such as Westlaw and Checkpoint. These products are generally provided under subscription arrangements that have terms ranging from one to five years, which most customers renew at the end of each term. Because most of our revenues are recurring, we believe that our revenue patterns are generally more stable compared to other businesses that primarily sell products in discrete or one-off arrangements. However, as we generally recognize recurring revenues ratably over the contract term, there is a lag in realizing the impact of current sales or cancellations in our reported revenues. As a result, our revenues are typically slower to decline when economic conditions worsen, but slower to return to growth when economic activity improves, compared to other businesses that are not subscription-based.   Transactions revenues include volume-based fees related to online searches, fees from software licenses and professional fees from service and consulting arrangements. Transaction revenues are recognized primarily at a point in time and based on their type, and can fluctuate significantly from period to period.

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	Global Print revenues consist of fees for content that is delivered primarily in traditional paper format. While revenues from our print business are meaningful, we expect them to continue to decline each year, as more customers increasingly prefer cloud-based solutions. Print revenues are generally recognized at the point of shipment.
	Revenues by geography In 2019, we earned 79% of our revenues in the U.S. However, as part of our globalization efforts, we operate regional teams, particularly in emerging markets, that work across our segments to combine local expertise with global capabilities to address specific customer needs. We sometimes modify existing products and services for local markets, but we also develop specifically for local markets. Changes in foreign currency exchange rates relative to our business outside the U.S. may cause variation in our revenue performance from period to period. In 2019, changes in foreign exchange rates decreased our revenues by 1% compared to the prior year.
	Expenses Most of our operating expenses are fixed. As a result, when our revenues increase, we become more profitable and our adjusted EBITDA margin increases. Likewise, when our revenues decline, we become less profitable and our adjusted EBITDA margin decreases. However, the full impact of incremental revenues is not always reflected in our profitability as we reinvest in our business. In 2019, staff costs, which are comprised of salaries, bonuses, commissions, benefits, severance, payroll taxes, and equity-based compensation awards, comprised 59% of our total expenses. Approximately 70% of our 2019 operating expenses were denominated in U.S. dollars with the balance denominated in currencies other than the U.S. dollar. In 2019, changes in foreign exchange rates decreased our expenses by 2% compared to the prior year.
	Following the closing of the F&R transaction, we spent significant amounts to reposition and scale our business. In 2019, our corporate costs within adjusted EBITDA included $270 million related to these efforts (2018- $239 million). We completed our program in 2019 and do not expect to incur additional costs in 2020.

Seasonality

Our revenues and operating profit on a consolidated basis do not tend to be significantly impacted by seasonality as we record a large portion of our revenues ratably over a contract term and our costs are generally incurred evenly throughout the year. However, our revenues from quarter to consecutive quarter can be impacted by the release of certain tax products, which tend to be concentrated in the fourth quarter and, to a lesser extent, in the first quarter of the year. In 2019 and 2018, the seasonality of our operating profit was further impacted by the timing of significant corporate costs that we incurred to reposition our business following the sale of F&R. We do not expect this impact to continue as we have now completed our program.

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Thomson Reuters Annual Report 2019

Acquisitions and Dispositions

Acquisitions. We have been focused on driving organic growth. However, we make tactical acquisitions from time to time that we believe will strengthen our positions in key growth segments. In 2018, we set aside $2 billion from the proceeds of the F&R transaction as an investment fund, of which we have spent over half on acquisitions to date. These businesses strengthen our offerings and enable us to extend our platform with new capabilities that we believe will provide opportunities to expand our positions, better serve our customers and supplement our organic growth. Generally, the businesses that we acquire initially have lower margins than our existing businesses, largely reflecting the costs of integration.

The following describes certain acquisitions completed during 2018 and 2019:

Date	Company	Acquiring Segments	Description
November 2018	Integration Point	Corporates	A provider of global trade management solutions to trade and compliance professionals
July 2019	Confirmation	Tax & Accounting Professionals/Corporates	A provider of digital audit confirmation services to accounting firms, banks and law firms
July 2019	HighQ	Legal Professionals/Corporates	A provider of collaboration tools to the legal and regulatory market segments
October 2019	FC Business Intelligence	Reuters News	A global business-to-business events specialist that was rebranded as Reuters Events

Dispositions. As part of our continuing strategy to optimize our portfolio of businesses and ensure that we are investing in parts of our business that offer the greatest opportunities to achieve growth and returns, we have sold a number of businesses during the last several years. Most notably, in 2018, we sold 55% of our former F&R business to private equity funds affiliated with Blackstone for approximately $17 billion and retained a 45% interest in the new company, which is now known as Refinitiv. In August 2019, we and private equity funds affiliated with Blackstone agreed to sell Refinitiv to LSEG in an all share transaction for a total enterprise value of approximately $27 billion (as of the announcement date). See the “Executive Summary – Proposed LSEG/ Refinitiv Transaction” section of this management’s discussion and analysis for more information. In 2019, we sold several small businesses that were not compatible with our strategy for proceeds of $74 million, net of taxes paid.

2019 Financial Highlights and Key Accomplishments

In 2019, we completed our first full year re-positioned into our customer-focused segments, after completing the F&R transaction in 2018. We met or exceeded our guidance on all our key financial metrics. Most notably, we achieved 4% organic revenue growth due to demand for our artificial intelligence powered solutions, more market opportunities generated from our new customer facing organizational structure, and greater price realization reflecting our premium offerings and continuously enhanced solutions.

To date, we have spent over half of the $2 billion investment fund that we set aside from the proceeds of the F&R transaction in 2018 on acquisitions. Our 2019 acquisitions, which included Confirmation and HighQ, were primarily for cloud-based software businesses that help our customers work more effectively with their customers. We also acquired FC Business Intelligence, a global events specialist that delivers high-end conferences and exhibitions to businesses in diverse sectors.

On August 1, 2019, we and private equity funds affiliated with Blackstone agreed to sell Refinitiv to LSEG for a total enterprise value of approximately $27 billion (as of the announcement date). The proposed transaction is anticipated to create a global financial markets infrastructure leader of the future. As a potential future shareholder of LSEG, we believe the transaction provides a balance for our company between the ability to benefit from additional long-term value creation and the ability to monetize our investment over time. The proposed transaction is subject to regulatory clearances and other customary closing conditions and is expected to close in the second half of 2020. Please see the “Executive Summary – Proposed LSEG/Refinitiv Transaction” section below for additional information.

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Below are financial highlights of our results for the year ended December 31, 2019, which are on a continuing operations basis, except where otherwise noted.

	Year ended December 31,
					Change
(millions of U.S. dollars, except per share amounts and margins)	2019		2018		Total		Constant Currency
IFRS Financial Measures
Revenues		5,906		5,501		7%
Operating profit		1,199		780		54%
Diluted EPS (includes discontinued operations)		$3.11		$5.88		(47%)
Cash flow from operations (includes discontinued operations)		702		2,062		(66%)
Non-IFRS Financial Measures(1)
Revenues		5,906		5,501		7%		8%
Organic revenue growth								4%
Adjusted EBITDA		1,493		1,365		9%		8%
Adjusted EBITDA margin		25.3%		24.8%		50bp		(10)bp
Adjusted EPS		$1.29		$0.75		72%		65%
Free cash flow (includes discontinued operations)		159		1,107		(86%)

(1) Refer to Appendices A and B of this management’s discussion and analysis for additional information and reconciliations of our non-IFRS financial measures to the most directly comparable IFRS financial measures.

Revenues increased 7% in total and 8% in constant currency due to growth in recurring revenues and new revenues in our Reuters News business for providing news and editorial content to Refinitiv under the 30-year agreement signed in October 2018. Global Print and transactions revenues declined, with the latter reflecting the sales of several small businesses.

On an organic basis, revenues increased 4%, as 5% growth in recurring revenues more than offset a decline in Global Print revenues.

Operating profit increased significantly due to a benefit from the revaluation of warrants that we hold in Refinitiv relating to the proposed sale of Refinitiv to LSEG. Adjusted EBITDA, which excludes that benefit among other items, increased 9% and the related margin increased 50bp as higher revenues more than offset higher expenses, which included higher costs and investments to reposition our company following the separation from F&R.

Diluted EPS was $3.11, reflecting a $1.2 billion non-cash deferred tax benefit associated with the reorganization of certain foreign operations. Diluted EPS of $5.88 in the prior year included a $3.4 billion gain on the sale of a 55% interest in our F&R business. Adjusted EPS, which excludes the above items and reflects other adjustments, increased to $1.29 per share from $0.75 per share in the prior year primarily reflecting higher adjusted EBITDA and a benefit from fewer common shares outstanding.

Cash flow from operations decreased, primarily reflecting the loss of cash flows from our former F&R business, which were included in the prior year through September 30, 2018, higher investments to reposition our company following the separation from F&R and a pension plan contribution. The decrease in free cash flow reflected the same factors.

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Thomson Reuters Annual Report 2019

We met or exceeded each of the performance metrics in our updated 2019 full-year business outlook, communicated on August 1, 2019. Our outlook for 2019:

^· Assumed constant currency rates relative to 2018; and

^· Included the impact of closed acquisitions and dispositions.

The table below compares our actual performance (before currency) to the outlook:

Non-IFRS Financial Measures(1)	2019 Outlook (Before currency, and excluding the impact of future acquisitions/dispositions)	2019 Actual Performance (Before currency)(2)
Revenue Growth	7% – 8.5% 3.5% – 4.0% Organic(3)	8.5% 3.7%
Adjusted EBITDA	$1.45 billion – $1.5 billion	$1.48 billion
Total Corporate costs	Approximately $570 million	$575 million(4)
Core Corporate costs	Approximately $140 million	$131 million
Stranded costs	Approximately $100 million	$100 million
One-Time costs	Approximately $330 million	$344 million
Free cash flow	$0 – $300 million	$159 million
Capital expenditures, as a percentage of revenues	Approximately 9%	8.6%
Depreciation and amortization of computer software	$600 million – $625 million	$608 million
Interest expense	$150 million – $175 million	$163 million
Effective tax rate on adjusted earnings	16% – 19%	11%

(1) Refer to Appendices A and B of this management’s discussion and analysis for additional information and reconciliations of our non-IFRS financial measures to the most directly comparable IFRS financial measures.

(2) Our 2019 performance (before currency) was measured in constant currency rates relative to 2018, except for the 2019 free cash flow performance which was reflected at actual rates.

(3) For purposes of the organic growth calculation, the initial contract value of the company’s 30-year agreement with Refinitiv that was signed on October 1, 2018 was treated as an acquisition until October 1, 2019.

(4) Includes $71 million of capital expenditures that were associated with our program to reposition our company after the separation from F&R.

Total Corporate costs include our core corporate costs, as well as the following:

^· Stranded costs, which we define as costs that were not eliminated with the sale of the 55% interest in F&R, as well as costs due to dis-synergies from losing certain benefits of scale from the transaction; and

^· Costs and investments to reposition the ongoing Thomson Reuters business following the separation of F&R from the rest of the company, of which a portion was capital expenditure that did not impact adjusted EBITDA.

The outlook above included the impact of IFRS 16, which was effective in 2019. IFRS 16 increased both adjusted EBITDA and depreciation and amortization of computer software by $42 million and $40 million, respectively, in 2019. The new accounting standard had no impact on free cash flow.

2020 Outlook

Please see the “Outlook” section of this management’s discussion and analysis for our 2020 full-year business outlook.

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Proposed LSEG/Refinitiv Transaction

On August 1, 2019, we and private equity funds affiliated with Blackstone agreed to sell Refinitiv to LSEG in an all share transactionfor a total enterprise value of approximately $27 billion (as of the announcement date). Refinitiv is currently owned 55% by Blackstone and 45% by Thomson Reuters. We expect that the transaction will result in Blackstone and Thomson Reuters ultimately holding a combined 37% economic interest in LSEG (approximately 15% of which would be attributed to Thomson Reuters) and a combined voting interest in LSEG of less than 30%. Thomson Reuters’ interest in LSEG shares will be held in an entity jointly owned by Blackstone and Thomson Reuters (the “Blackstone/Thomson Reuters Entity”). Upon the closing of this transaction, Thomson Reuters is projected to indirectly own approximately 82.5 million LSEG shares, which would have a market value of approximately $8.5 billion based on LSEG’s closing share price on March 4, 2020. Our estimated ownership interest above reflects our expected acquisition of an additional interest in Refinitiv pursuant to a warrant agreement entered into with Blackstone, which will be exercised in connection with the transaction closing. The proposed transaction is subject to regulatory clearances and other customary closing conditions and is expected to close in the second half of 2020.

Ownership interests

When the proposed transaction was signed on August 1, 2019, it was originally envisaged that the consideration for the transaction would comprise, in addition to LSEG ordinary shares, exchangeable shares issued by an LSEG subsidiary (and, to the extent that any exchange of those shares into LSEG ordinary shares exceeded 29% of the total voting rights in LSEG, non-voting ordinary shares). In connection with certain revisions to the closing steps that the parties agreed to implement, and in order to simplify LSEG’s capital structure, the parties instead agreed that the consideration for the transaction will comprise a combination of LSEG ordinary shares and LSEG limited-voting ordinary shares (with the consideration shares carrying, in aggregate, less than 30% of the total voting rights in LSEG). There was no change to the economic terms of the transaction as a consequence of the change from exchangeable shares to LSEG limited-voting ordinary shares. Blackstone’s consortium will separately receive additional LSEG securities in respect of their Refinitiv preferred stock.

Transaction rationale

The transaction will bring together two highly complementary businesses to create a leading, UK headquartered, global financial markets infrastructure provider with a leading data and analytics business, significant capital markets capabilities across multiple asset classes, and a broad post-trade offering, well positioned for future growth in a fast-evolving landscape. The combined business will be well positioned in all key geographies and will offer significant customer benefits across the full range of LSEG’s businesses by extending its trading capabilities across asset classes; expanding its data content, management and distribution capabilities; increasing its global footprint and range of customer offerings; and enabling LSEG, Refinitiv and their customers to benefit from future data and technology-enabled innovation and growth opportunities. Together, LSEG and Refinitiv generated combined annual revenues of over £6 billion in 2018, which would have made the combined business the largest listed global financial markets infrastructure provider by revenue last year.

Governance

The Blackstone/Thomson Reuters Entity will be entitled to nominate three non-executive LSEG directors for as long as it holds at least 25% of LSEG, two LSEG directors for as long as it holds at least 17.5% but less than 25% of LSEG and one LSEG director for as long as it holds at least 10% but less than 17.5% of LSEG (with all percentages calculated based on the assumed exchange of the exchangeable shares). For so long as the Blackstone/Thomson Reuters Entity is entitled to nominate three directors, one nominee will be a Thomson Reuters representative.

Subject to certain exceptions, the Blackstone/Thomson Reuters Entity has agreed to be subject to a lock-up for their LSEG shares for the first two years following closing of the transaction. In each of years three and four following closing, the Blackstone/Thomson Reuters Entity will become entitled to sell in aggregate one-third of the LSEG shares issued to them. The lock-up arrangement will terminate on the fourth anniversary of closing. Once the Blackstone/Thomson Reuters Entity is released from the lock-up, any disposals of LSEG shares will be subject to orderly marketing restrictions. A standstill restriction will also apply to the Blackstone/Thomson Reuters Entity under which it (and the underlying investors) will agree not to, among other matters, acquire further LSEG shares, or make a takeover offer for LSEG for designated time periods. The Blackstone/Thomson Reuters Entity has also committed to vote its LSEG shares in line with the LSEG Board’s recommendation.

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Dividends

After the transaction closes, Thomson Reuters’ free cash flow will benefit from any future dividends paid by LSEG to its shareholders.

Expected synergies

The following information regarding expected cost and revenue synergies has been provided to Thomson Reuters by LSEG and is forward-looking information. Readers are encouraged to consult LSEG’s public disclosures (including its announcement dated August 1, 2019 regarding the proposed transaction) for additional information.

LSEG is targeting annual run-rate cost synergies in excess of £350 million by the end of year five following closing. These synergies are separate from and in addition to Refinitiv’s previously announced and ongoing $650 million target cost savings program (which is discussed later in this management’s discussion and analysis). LSEG is also targeting annual run-rate revenue synergies in excess of £225 million by the end of year five following closing.

Reuters News Agreement

Reuters News’ 30-year agreement with Refinitiv signed in October 2018 will continue after the closing of the transaction within the combined business.

Other Matters

Although it is currently expected that LSEG will only issue shares as consideration for the transaction, LSEG may, at its option, settle up to $2.5 billion of the consideration in cash. Payment of any cash consideration will reduce the number of LSEG shares issued to the Blackstone/Thomson Reuters Entity.

We expect that the LSEG transaction will be predominantly tax-deferred for Thomson Reuters, but that a portion of the taxes will become payable when the deal closes. We intend to fund this tax liability by either selling down some of our LSEG shares (as permitted under the lock-up agreement described above) and/or by employing other means such that we do not expect the tax payment to materially impact our liquidity position.

Once applicable post-closing lock-up periods expire, if we sell LSEG shares, we will generate cash which we would decide at the time how to best utilize.

Results of Operations – Continuing Operations

Consolidated Results

	Year ended December 31,
					Change
(millions of U.S. dollars, except per share amounts and margins)	2019		2018		Total		Constant Currency
IFRS Financial Measures
Revenues		5,906		5,501		7%
Operating profit		1,199		780		54%
Diluted EPS from continuing operations		$3.12		$0.24		n/m
Non-IFRS Financial Measures(1)
Revenues		5,906		5,501		7%		8%
Organic revenue growth								4%
Adjusted EBITDA		1,493		1,365		9%		8%
Adjusted EBITDA margin		25.3%		24.8%		50bp		(10)bp
Adjusted EBITDA less capital expenditures		988		789		25%
Adjusted EBITDA less capital expenditures margin		16.7%		14.3%		240bp
Adjusted EPS		$1.29		$0.75		72%		65%

(1) Refer to Appendices A and B of this management’s discussion and analysis for additional information and reconciliations of our non-IFRS financial measures to the most directly comparable IFRS financial measures.

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Thomson Reuters Annual Report 2019

Revenues

	Year ended December 31,
					Change
(millions of U.S. dollars)	2019		2018		Total		Constant Currency		Organic
Recurring revenues		4,604		4,138		11%		12%		5%
Transactions revenues		610		637		(4%)		(3%)		-
Global Print revenues		693		728		(5%)		(3%)		(3%)
Eliminations/Rounding		(1)		(2)
Revenues		5,906		5,501		7%		8%		4%

Revenues increased 7% in total and 8% in constant currency due to growth in recurring revenues, which comprised 78% of our 2019 business, and the inclusion of new revenues in our Reuters News business for providing news and editorial content to Refinitiv under the 30-year agreement signed in October 2018. Contributions from acquisitions were largely offset by reductions from the sales of certain small businesses. Global Print and transactions revenues declined, with the latter reflecting the sales of several small businesses.

Revenues increased 4% on an organic basis, as 5% growth in recurring revenues more than offset a decline in Global Print revenues. Our Legal Professionals, Corporates and Tax & Accounting Professionals segments, which collectively comprised about 80% of our 2019 revenues, grew 5% organically, driven by 6% recurring revenue growth that reflected strong net sales, improved retention and higher price realization.

Foreign currency negatively impacted revenue growth due to the strengthening of the U.S. dollar against the British pound sterling, Euro, Brazilian real and Argentine peso, compared to the prior year.

Operating profit, adjusted EBITDA and adjusted EBITDA less capital expenditures

Operating profit increased significantly due to a benefit from the revaluation of warrants that we hold in Refinitiv relating to the proposed sale of Refinitiv to LSEG. Adjusted EBITDA, which excludes that benefit among other items, increased in total and in constant currency as higher revenues more than offset higher expenses, which included higher costs and investments to reposition our company following the separation from F&R. The adoption of IFRS 16 benefited adjusted EBITDA by $42 million.

In 2019, the adjusted EBITDA margin was negatively impacted by 120bp due to the addition of revenues and expenses associated with the Refinitiv News agreement with Refinitiv and 40bp due to dilution from recent acquisitions. However, the 2019 adjusted EBITDA margin benefited by 70bp from the adoption of IFRS 16 and 60bp from foreign currency.

Adjusted EBITDA less capital expenditures and the related margin increased due to higher adjusted EBITDA and lower capital expenditures.

Operating expenses

	Year ended December 31,
					Change
(millions of U.S. dollars)	2019		2018		Total		Constant   Currency
Operating expenses		4,413		4,131		7%		9%

Operating expenses increased in total and in constant currency primarily due to costs to provide editorial content to Refinitiv for the first nine months of 2019. These costs had been previously allocated to the F&R business in the prior year before we sold a majority interest on October 1, 2018. Operating expenses also increased due to higher costs associated with recently acquired businesses and higher investments to reposition our business, which included the acceleration of digital strategies, replication of capabilities that we lost with the separation from F&R and severance. The adoption of IFRS 16 decreased operating expenses by $42 million in 2019. Operating expenses benefited from a positive impact from foreign currency reflecting the strengthening of the U.S. dollar.

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Thomson Reuters Annual Report 2019

Depreciation and amortization

	Year ended December 31,
(millions of U.S. dollars)	2019		2018		Change
Depreciation		154		110		40%
Amortization of computer software		449		400		12%
Subtotal		603		510		18%
Amortization of other identifiable intangible assets		114		109		5%

^· Depreciation and amortization of computer software on a combined basis increased as higher expense from the adoption of IFRS 16 and newly acquired assets, including those associated with recently acquired businesses, more than offset the completion of depreciation and amortization for certain assets acquired in previous years. IFRS 16 increased depreciation expense by $40 million in 2019.

^· Amortization of other identifiable intangible assets increased as expense associated with recent acquisitions more than offset the completion of amortization of assets acquired in previous years.

Other operating gains, net

	Year ended December 31,
(millions of U.S. dollars)	2019		2018
Other operating gains, net		423		29

The 2019 period included a $419 million benefit from the revaluation of warrants that we hold in Refinitiv related to the proposed transaction to sell Refinitiv to LSEG and $23 million of income related to a license that allows Refinitiv to use the “Reuters” mark to brand its products and services (see the “Related Party Transactions” section of this management’s discussion and analysis for additional information). Other operating gains, net, also included net losses from the sale of several small businesses and acquisition costs associated with newly acquired businesses.

The 2018 period included a $16 million gain on the sale of a Canadian wholly-owned subsidiary to a company affiliated with Woodbridge, our principal shareholder, $6 million of income related to the license that allows Refinitiv to use the “Reuters” mark and a pension plan curtailment gain due to a reduction of employees that participated in our company’s plans.

Net interest expense

	Year ended December 31,
(millions of U.S. dollars)	2019		2018		Change
Net interest expense		163		260		(37%)

The decrease in net interest expense reflected significantly lower debt for the first nine months of the year, as we used a portion of the proceeds from the F&R transaction on October 1, 2018 to repay $4 billion of debt. See the “Liquidity and Capital Resources – Cash Flow” section of this management’s discussion and analysis for additional information regarding our financing activities.

Other finance costs (income)

	Year ended December 31,
(millions of U.S. dollars)	2019		2018
Other finance costs (income)		65	(13)

Other finance costs (income) primarily included gains or losses on the impact of fluctuations of foreign currency exchange rates on certain intercompany funding arrangements and gains or losses related to changes in foreign exchange contracts. Additionally, both periods included losses for premiums incurred for the early redemption of debt securities.

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Thomson Reuters Annual Report 2019

Share of post-tax (losses) earnings in equity method investments

	Year ended December 31,
(millions of U.S. dollars)	2019		2018
Refinitiv		(609)		(240)
Other equity method investments		10		7
Share of post-tax (losses) in equity method investments		(599)		(233)

In 2019, our share of the post-tax loss from our 45% interest in Refinitiv reflected interest expense for Refinitiv’s debt, charges relating to the revaluation of preferred equity securities relating to the proposed transaction to sell Refinitiv to LSEG, and expenses to scale its business related to its annual cost savings target. Refinitiv achieved run-rate savings of $520 million at the end of 2019, which is 80% of its total annual cost savings run-rate target. Refinitiv believes it is on track to achieve its full annual cost savings run-rate target of $650 million by the end of 2020.

In 2018, our share of post-tax losses in Refinitiv reflected our share of losses from October 1, 2018, the date that Refinitiv became an investment, through December 31, 2018. We provide additional information about the performance of our investment in Refinitiv in Appendix D of this management’s discussion and analysis.

Tax (benefit) expense

	Year ended December 31,
(millions of U.S. dollars)	2019		2018
Tax (benefit) expense		(1,198)		136

Our effective income tax rate on earnings from continuing operations was a benefit of 322.0%, compared to a 45.3% expense in 2018. In December 2019, we reorganized the operations of certain foreign affiliates that were subject to different tax rates. The reorganization resulted in an increase in the tax basis of the reorganized business to the acquiror and a related tax benefit of $1.2 billion. We recognized a $1.2 billion deferred tax asset, which we expect to realize in subsequent periods, based on the historical and expected future profitability of the reorganized business. We also recorded a $58 million tax charge in 2019 related to the enactment of foreign tax reform. The charge reflected our estimate of the deferred taxes required on temporary differences between the book and tax basis of certain assets, which we expect to reverse during periods that will be subject to the applicable new foreign tax rates.

Our 2018 tax expense included $90 million of net charges related to the internal restructuring of certain retained businesses and investments as a consequence of the F&R transaction and a $27 million tax charge related to the U.S. Tax Cuts and Jobs Act of 2017 (the Tax Act) that were subject to ongoing legislative updates and regulatory guidance in 2018.

The comparability of our tax (benefit) expense was further impacted by various transactions and accounting adjustments during each year. Notably, our 2019 tax expense included a $150 million benefit (2018—$59 million benefit) related to our share of losses in equity method investments, primarily related to our 45% investment in Refinitiv since October 1, 2018. Additionally, the tax (benefit) expense in each year reflected the mix of taxing jurisdictions in which pre-tax profits and losses were recognized.

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Thomson Reuters Annual Report 2019

The following table sets forth certain components within income tax (benefit) expense that impact comparability from year to year, including tax (benefit) expense associated with items that are removed from adjusted earnings:

	Year ended December 31,
(millions of U.S. dollars)	2019		2018
Tax (benefit) expense
Tax items impacting comparability:
Reorganization of certain foreign affiliate operations(1)		(1,197)		-
Net tax charges related to restructuring(2)		-		90
Corporate tax laws and rates(3)		52		5
Discrete changes to uncertain tax positions(4)		(23)		27
Deferred tax adjustments(5)		(36)		4
Subtotal		(1,204)		126
Tax related to:
Amortization of other identifiable intangible assets		(24)		(23)
Share of post-tax losses in equity method investments		(150)		(59)
Other operating gains, net		102		2
Fair value adjustments		-		1
Subtotal		(72)		(79)
Total		(1,276)		47

(1) Tax benefit from reorganization of the operations of certain foreign affiliates that were subject to different tax rates.

(2) Relates to the internal restructuring of certain retained businesses and investments as a consequence of the F&R transaction.

(3) Relates to changes in deferred tax liabilities due to changes in U.S. and foreign tax law and rates, and changes to U.S. state deferred tax liabilities resulting from changes in apportionment factors and the F&R transaction.

(4) Relates to the release of tax reserves that are no longer required due to the expiration of statute of limitations and updates to tax regulations under the Tax Act. In 2018, related to certain elements of the Tax Act that were subject to ongoing legislative updates and regulatory guidance.

(5) Relates primarily to requirements associated with disposals and acquisitions.

Because the items described above impact the comparability of our tax expense or benefit for each year, we remove them from our calculation of adjusted earnings, along with the pre-tax items to which they relate. The computation of our adjusted tax expense is set forth below:

	Year ended December 31,
(millions of U.S. dollars)	2019		2018
Tax (benefit) expense		(1,198)		136
Remove: Items from above impacting comparability		1,276		(47)
Total tax expense on adjusted earnings		78		89

Our 2019 effective tax rate on adjusted earnings was 10.7% (2018 – 15.0%). On an adjusted earnings basis, our effective income tax rates in both years were lower than the Canadian corporate income tax rate of 26.5%. The difference is primarily attributable to lower tax rates and differing tax rules applicable to certain of our operating and financing subsidiaries outside of Canada. As a global company, our income taxes depend on the laws of numerous countries and the provisions of multiple income tax conventions between various countries in which we operate.

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Thomson Reuters Annual Report 2019

Because of the requirements of income tax accounting under IAS 12, Income Taxes, income tax expense can differ significantly from taxes paid in any reporting period. We paid income taxes from net earnings on our worldwide business as follows:

	Year ended December 31,
Taxes paid (millions of U.S. dollars)	2019		2018
Taxes paid related to continuing operations		268		270
Taxes paid related to discontinued operations		45		38
Taxes paid on disposals		1		–
Total taxes paid		314		308

Our effective tax rate and our cash tax cost in the future will depend on the laws of numerous countries and the provisions of multiple income tax conventions between various countries in which we operate. Our effective tax rate will be dependent upon tax laws and conventions remaining unchanged or favorable to our company, as well as the geographic mix of our profits. See the “Liquidity and Capital Resources – Contingencies” section of this management’s discussion and analysis for further discussion of income tax liabilities.

Earnings and diluted EPS from continuing operations

	Year ended December 31,
(millions of U.S. dollars, except per share amounts)	2019		2018		Change
Earnings from continuing operations		1,570		164		857%
Diluted EPS from continuing operations		$3.12	$	0.24		n/m

Earnings from continuing operations and the related per share amount increased significantly due primarily to the $1.2 billion deferred tax benefit associated with the reorganization of certain foreign operations discussed earlier. Additionally, diluted EPS from continuing operations benefited from a significant reduction in weighted average outstanding common shares due to share repurchases and the November 2018 share consolidation (see the “Liquidity and Capital Resources—Share Repurchases” section of this management’s discussion and analysis for additional information). The adoption of IFRS 16 did not have a material impact on earnings from continuing operations or the related per share amount.

Adjusted earnings and adjusted EPS

	Year ended December 31,
(millions of U.S. dollars, except per share amounts)	2019		2018		Change
Adjusted earnings		646		503		29%
Adjusted EPS	$	1.29	$	0.75		72%

Adjusted earnings increased due to higher adjusted EBITDA, as lower interest expense was almost entirely offset by higher depreciation and amortization of computer software. Adjusted EPS reflected higher adjusted earnings, as well as a significant benefit from a reduction in weighted average common shares outstanding due to share repurchases and the November 2018 share consolidation.

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Segment Results

The following is a discussion of our five reportable segments and our Corporate costs. We assess revenue growth for each segment, as well as the businesses within each segment, in constant currency.

See Appendix A of this management’s discussion and analysis for additional information.

Legal Professionals

	Year ended December 31,
					Change
(millions of U.S. dollars, except margins)	2019		2018		Total		Constant Currency		Organic
Recurring revenues		2,235		2,159		4%		5%		4%
Transactions revenues		184		214		(14%)		(13%)		(2%)
Revenues		2,419		2,373		2%		3%		4%
Segment adjusted EBITDA		901		816		10%		10%
Segment adjusted EBITDA margin		37.2%		34.4%		280bp		240bp

Revenues increased in total and in constant currency. The increase in constant currency was driven by growth in recurring revenues (92% of the Legal Professionals segment), which more than offset a decline in transactions revenues (8% of the Legal Professionals segment) driven by the sale of several small businesses. Revenues from law firms, which include large global law firms and represented just over two-thirds of the segment’s revenues, and the Global business, representing smaller law firms outside the U.S., both increased 2%. U.S. government revenues increased 7%.

Revenues also increased on an organic basis, reflecting growth in recurring revenues driven by a continued strong contribution from Westlaw Edge, the newest version of our legal research platform, and benefits from higher customer retention, which more than offset an organic decline in transactions revenues. We continue to experience strong demand and expect organic revenue growth for our Legal Professionals business to range between 4% and 5% in 2020.

Segment adjusted EBITDA and the related margin increased due to higher revenues and lower expenses from efficiency actions in 2018. Foreign currency benefited the year-over-year change in segment adjusted EBITDA margin by 40bp.

Corporates

	Year ended December 31,
					Change
(millions of U.S. dollars, except margins)	2019		2018		Total		Constant Currency		Organic
Recurring revenues		1,093		995		10%		11%		8%
Transactions revenues		228		243		(6%)		(5%)		(1%)
Revenues		1,321		1,238		7%		8%		6%
Segment adjusted EBITDA		433		395		10%		9%
Segment adjusted EBITDA margin		32.8%		31.9%		90bp		30bp

Revenues increased in total and in constant currency. The increase in constant currency was driven by growth in recurring revenues (83% of the Corporates segment), which benefited from the acquisitions of Integration Point and HighQ. Transactions revenues declined due to the sale of our Pangea 3/Legal Managed Services (LMS) business in May 2019.

On an organic basis, revenue growth also reflected growth in recurring revenues due to the strong performance of our legal and tax products, which more than offset a decline in transactions revenues. In 2020, we expect our Corporates business to achieve organic revenue growth of 6% to 8%.

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Segment adjusted EBITDA and the related margin increased despite the dilutive impact of acquisitions, as higher revenues more than offset higher expenses. Foreign currency benefited the year-over-year change in segment adjusted EBITDA margin by 60bp.

Tax & Accounting Professionals

	Year ended December 31,
					Change
(millions of U.S. dollars, except margins)	2019		2018		Total		Constant Currency		Organic
Recurring revenues		703		658		7%		9%	10%
Transactions revenues		141		136		4%		6%	2%
Revenues		844		794		6%		8%	8%
Segment adjusted EBITDA		323		273		18%		19%
Segment adjusted EBITDA margin		38.2%		34.3%		390bp		340bp

Revenues increased in total and in constant currency. The increase in constant currency was driven by growth in recurring revenues (83% of the Tax & Accounting Professionals segment), and by the acquisition of the Confirmation business, which drove growth in transactions revenues. The loss of revenues from the sale of a government business in the segment in November 2019 caused a slight negative impact to recurring revenue growth in total and in constant currency.

Organic revenue growth reflected increases in recurring revenues and transactions revenues due to strong demand for our products, as well as a timing benefit from permanently accelerating the release date of some of our UltraTax state tax software from January 2020 to December 2019 to align with the traditional December release of our U.S. federal tax software. As a result of the acceleration in release dates, we expect organic revenue growth for Tax & Accounting Professionals in the first quarter to range between 1% and 2%. However, for the balance of the year, we expect organic revenue growth for the segment to range between 6% to 8%.

Segment adjusted EBITDA and the related margin increased primarily due to higher revenues. Foreign currency benefited the year-over-year change in segment adjusted EBITDA margin by 50bp.

Reuters News

	Year ended December 31,
					Change
(millions of U.S. dollars, except margins)	2019		2018		Total		Constant Currency		Organic
Recurring revenues		573		326		75%		77%	2%
Transactions revenues		57		44		30%		29%	3%
Revenues		630		370		70%		72%	2%
Segment adjusted EBITDA		35		27		32%		(6%)
Segment adjusted EBITDA margin		5.6%		7.2%		(160)bp		(300)bp

Revenues significantly increased in total and in constant currency due to new revenues from providing news and editorial content to Refinitiv under a 30-year agreement signed in October 2018. Organic revenues, which exclude the initial contract value of the 30-year Reuters News agreement from October 1, 2018 through September 30, 2019, increased primarily due to a price increase above the minimum value of the agreement with Refinitiv. In 2020, we expect the Reuters News business to achieve low single digit organic revenue growth.

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Under the arrangement with Refinitiv, Reuters News will recognize revenue of at least $325 million per year under a 30-year agreement signed in October 2018. As the revenue is expected to be largely offset by associated expenses within the Reuters News segment, there is no corresponding increase to adjusted EBITDA. Prior to the closing of the F&R transaction, the costs to produce this content were allocated to the F&R business and therefore were included as part of discontinued operations, rather than as a component of Reuters News’ adjusted EBITDA. Effective October 1, 2018, Reuters News reports these costs as part of its adjusted EBITDA.

Segment adjusted EBITDA increased due to the benefit of foreign currency. On a constant currency basis, segment adjusted EBITDA declined due to investments in the business. The decrease in segment adjusted EBITDA margin partially reflected the dilutive impact of the Refinitiv agreement. Foreign currency benefited the year-over-year change in segment adjusted EBITDA margin by 140bp.

Global Print

	Year ended December 31,
					Change
(millions of U.S. dollars, except margins)	2019		2018		Total		Constant Currency		Organic
Revenues		693		728		(5%)		(3%)		(3%)
Segment adjusted EBITDA		295		320		(8%)		(7%)
Segment adjusted EBITDA margin		42.6%		44.0%		(140)bp		(180)bp

Revenues decreased in total, in constant currency, and on an organic basis. In 2020, we expect Global Print revenues to decline between 4% and 5%.

Segment adjusted EBITDA and the related margin decreased primarily due to lower revenues. However, the margin remained strong, as the segment continued to closely manage its costs. Foreign currency benefited the year-over-year change in segment adjusted EBITDA margin by 40bp.

Corporate costs

	Year ended December 31,
(millions of U.S. dollars)	2019		2018
Corporate costs		494		466

Corporate costs increased due to higher investments to reposition our business compared to the prior year. Both years included significant investments following the separation of F&R from the rest of our company, including acceleration of digital strategies, replication of capabilities that we lost with the separation from Refinitiv and severance.

Results of Discontinued Operations

(Loss) earnings from discontinued operations, net of tax, included the following:

	Year ended December 31,
(millions of U.S. dollars)	2019		2018
(Loss) earnings from discontinued operations, net of tax		(6)		3,859

In 2019, (loss) earnings from discontinued operations, net of tax, included residual income and expense items related to businesses that were previously classified as discontinued operations, including F&R.

In 2018, earnings from discontinued operations primarily included a $3.4 billion gain on the sale of a 55% interest in F&R.

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Thomson Reuters Annual Report 2019

Review of Fourth-Quarter Results

Consolidated Results

	Three months ended December 31,
					Change
(millions of U.S. dollars, except per share amounts and margins)	2019		2018		Total		Constant Currency
IFRS Financial Measures
Revenues		1,583		1,527		4%
Operating profit		216		135		60%
Earnings (loss) from continuing operations		1,321		(103)		n/m
Diluted EPS from continuing operations		$2.63		$(0.19)		n/m
Net earnings (includes discontinued operations)		1,324		3,375		(61%)
Diluted EPS (includes discontinued operations)		$2.64		$6.13		(57%)
Net cash provided by (used in) operating activities (includes discontinued operations)		355		(10)		n/m
Net cash (used in) provided by investing activities (includes discontinued operations)		(294)		15,513		n/m
Net cash used in financing activities (includes discontinued operations)		(390)		(13,767)		n/m
Non-IFRS Financial Measures(1)
Revenues		1,583		1,527		4%		4%
Organic revenue growth								4%
Adjusted EBITDA		396		274		44%		44%
Adjusted EBITDA margin		25.0%		17.9%		710bp		680bp
Adjusted EBITDA less capital expenditures		256		118		116%
Adjusted EBITDA less capital expenditures margin		16.1%		7.7%		840bp
Adjusted earnings		185		102		79%
Adjusted EPS		$0.37		$0.19		95%		89%
Free cash flow (includes discontinued operations)		209		(167)		n/m

(1) Refer to Appendix A for additional information on non-IFRS financial measures. Refer to Appendix B of this management’s discussion for a reconciliation of earnings from continuing operations to adjusted EBITDA and adjusted EBITDA less capital expenditures.

Revenues

Revenues increased 4% in total and in constant currency, all of which was organic, as contributions from acquisitions were largely offset by reductions due to sales of businesses. Revenues increased 4% on an organic basis for the third consecutive quarter reflecting growth in recurring and transactions revenues of 6% and 2% respectively, which more than offset a 4% decline in Global Print revenues. Our Legal Professionals, Corporates and Tax & Accounting Professionals segments, which collectively comprised about 80% of our 2019 revenues, grew 6% organically driven by recurring revenues.

Operating profit, adjusted EBITDA and adjusted EBITDA less capital expenditures

Operating profit, adjusted EBITDA and the related margin increased due to higher revenues and lower expenses, which reflected lower costs and investments to reposition Thomson Reuters following the separation of F&R from our company. The adoption of IFRS 16 benefited adjusted EBITDA and the related margin by $12 million and 90bp in the fourth quarter of 2019.

Adjusted EBITDA less capital expenditures and the related margin increased due to higher adjusted EBITDA and lower capital expenditures.

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Thomson Reuters Annual Report 2019

Earnings and diluted EPS from continuing operations

In 2019, earnings from continuing operations and the related per share amount reflected a $1.2 billion deferred tax benefit associated with the reorganization of certain foreign operations. In 2018, the loss from continuing operations and the related per share amount was due to our share of losses from our 45% equity interest in Refinitiv.

Net earnings and diluted EPS

In 2019, net earnings and diluted EPS included a $1.2 billion deferred tax benefit. In 2018, net earnings and diluted EPS included a $3.4 billion gain on sale of a 55% interest in F&R, which was included within discontinued operations.

Adjusted earnings and adjusted EPS

Adjusted earnings and the related per share amount, which excludes the items above and reflects other adjustments, increased primarily due to higher adjusted EBITDA.

Cash flow from operating activities. Net cash provided by operating activities increased primarily due to higher operating profit and lower tax payments.

Cash flow from investing activities. In 2019, net cash used in investing activities primarily included acquisition spending of $177 million and capital expenditures of $140 million. In 2018, net cash provided by investing activities primarily reflected approximately $16.1 billion of net proceeds from the sale of a 55% interest in F&R.

Cash flow from financing activities. In 2019, net cash used in financing activities primarily comprised returns to our common shareholders through dividends and share repurchases. In 2018, net cash used in financing activities included the return of $10.9 billion to common shareholders and debt repayments of $4.0 billion, both of which were funded from the proceeds from the F&R transaction.

Free cash flow. Free cash flow increased primarily due to the same factors that increased cash flows from operating activities.

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Thomson Reuters Annual Report 2019

Segment Results

	Three months ended December 31,
						Change
(millions of U.S. dollars, except margins)	2019		2018		Total		Constant Currency		Organic
Revenues
Legal Professionals		617		600		3%		4%		4%
Corporates		331		315		5%		5%		5%
Tax & Accounting Professionals		274		252		9%		11%		12%
Reuters News		164		155		5%		5%		(1%)
Global Print		196		206		(5%)		(4%)		(4%)
Eliminations/ Rounding		1		(1)
Consolidated revenues		1,583		1,527		4%		4%		4%
Adjusted EBITDA
Legal Professionals		215		221		(3%)		(2%)
Corporates		103		84		23%		18%
Tax & Accounting Professionals		135		120		13%		14%
Reuters News		4		6		(23%)		(86%)
Global Print		77		87		(12%)		(13%)
Corporate costs		(138)		(244)		n/a		n/a
Consolidated adjusted EBITDA		396		274		44%		44%
Adjusted EBITDA margin
Legal Professionals		34.9%		36.8%		(190)bp		(200)bp
Corporates		31.1%		26.5%		460bp		340bp
Tax & Accounting Professionals		49.1%		47.4%		170bp		120bp
Reuters News		2.4%		3.3%		(90)bp		(230)bp
Global Print		39.5%		42.6%		(310)bp		(380)bp
Corporate costs		n/a		n/a		n/a		n/a
Consolidated adjusted EBITDA margin		25.0%		17.9%		710bp		680bp

Legal Professionals

Revenues increased in total and in constant currency. The increase in constant currency was driven by 5% growth in recurring revenues (92% of the Legal Professionals segment in the fourth quarter), which included a contribution from the acquisition of HighQ. Transactions revenues declined 13% primarily due to the sale of several small businesses. Revenues from law firms increased 4% while revenues from the U.S. government grew 9%. Revenues from Global businesses were essentially unchanged.

On an organic basis, revenues also increased due to growth in recurring revenues driven by a continued strong contribution from Westlaw Edge and benefits from higher customer retention. Transactions revenues were essentially unchanged on an organic basis.

Segment adjusted EBITDA and the related margin decreased due to higher expenses, which were timing-related, and the dilutive impact of acquisitions. Foreign currency benefited the year-over-year change in segment adjusted EBITDA margin by 10bp.

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Thomson Reuters Annual Report 2019

Corporates

Revenues increased in total and in constant currency, all of which was organic, as the contributions from the Integration Point, Confirmation and HighQ acquisitions were offset by the loss of revenues from the sale of LMS. The increase in constant currency was driven by 7% growth in recurring revenues (85% of the Corporates segment in the fourth quarter), which more than offset a 4% decline in transactions revenues due to the sale of the LMS business in May 2019.

On an organic basis, revenues increased due to 5% growth in recurring revenues and 6% growth in transaction revenues, reflecting the strong performance of our legal and tax products.

Segment adjusted EBITDA and the related margin increased, despite the dilutive impact of acquisitions, due to higher revenues and lower expenses from efficiency initiatives. Foreign currency benefited the year-over-year change in segment adjusted EBITDA margin by 120bp.

Tax & Accounting Professionals

Revenues increased in total and in constant currency. The increase in constant currency was driven by 10% growth in recurring revenues (89% of the Tax & Accounting Professionals segment in the fourth quarter), despite the loss of revenues from the sale of a government business. Transactions revenues grew 19% primarily due to the contribution from the Confirmation acquisition. The segment’s former government business, which generated about $40 million in annual revenues, was sold in November 2019.

On an organic basis, revenues increased due to 13% growth in recurring revenues and 9% growth in transactions revenues. Revenue growth reflected strong demand for our products as well as a timing benefit from permanently accelerating the release date of some of our UltraTax state tax software from January 2020 to December 2019 to align with the traditional December release of our U.S. federal tax software. Due to the acceleration in product release dates, we expect revenue growth in the first quarter of 2020 for the Tax & Accounting Professionals segment to range between 1% and 2%. Revenue growth for the segment is expected to be between 6% and 8% for the remaining portion of 2020.

Segment adjusted EBITDA and the related margin increased primarily due to higher revenues. Foreign currency benefited the year-over-year change in segment adjusted EBITDA margin by 50bp.

Tax & Accounting Professionals is a more seasonal business relative to our other businesses, with a higher percentage of its segment adjusted EBITDA historically generated in the fourth quarter and to a slightly lesser extent, the first quarter, due to the release of certain tax products. Small movements in the timing of revenues and expenses can impact quarterly margins. Full-year margins are more reflective of the segment’s performance.

Reuters News

Revenues increased in total and in constant currency primarily due to the October 2019 acquisition of FC Business Intelligence, which was rebranded as Reuters Events. Revenues declined on an organic basis, primarily due to timing.

Segment adjusted EBITDA and the related margin decreased primarily due to additional investment in the business. Foreign currency benefited the year-over-year change in segment adjusted EBITDA margin by 140bp.

Global Print

Revenues decreased in total, in constant currency, and on an organic basis.

Segment adjusted EBITDA and the related margin decreased primarily due to the revenue decline. Foreign currency benefited the year-over-year change in segment adjusted EBITDA margin by 70bp.

Corporate costs

Corporate costs decreased due to lower investments to reposition our business compared to the prior-year period. Both periods included significant investments following the separation of F&R from the rest of our company, which included the acceleration of digital strategies, replication of capabilities that we lost with the separation from Refinitiv and severance.

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Thomson Reuters Annual Report 2019

Liquidity and Capital Resources

Capital Strategy

We have a disciplined capital strategy that is aligned with our business strategy. We are focused on having the investment capacity to drive revenue growth, both organically and through acquisitions, while also maintaining our long-term financial leverage and credit ratings and continuing to provide returns to shareholders.

We expect that the operating leverage of our business will increase our free cash flow as we increase revenues. We target a maximum leverage ratio of 2.5x net debt to adjusted EBITDA and have set a target to pay out 50% to 60% of our expected free cash flow as dividends to our shareholders. We expect to continue a modest share repurchase program to offset the dilution associated with our dividend reinvestment and equity incentive plans, and we plan to maintain our outstanding shares at about 500 million. In the future, we expect that proceeds from sales of LSEG shares after completion of the LSEG transaction and after the expiration of the applicable contractual lock-up provisions, will provide us with further options for investment and returns to shareholders.

In October 2018, we sold a 55% interest in our F&R business to private equity funds affiliated with Blackstone for approximately $17 billion and retained a 45% interest in the new company, which is now known as Refinitiv. In keeping with our capital strategy, we returned $10 billion of the proceeds to our shareholders, repaid $4 billion of debt, and used $1 billion for taxes, pension contributions, bond redemption costs and other fees and expenses of the transaction, including approximately $600 million to reposition our business for growth and scale. We set aside $2 billion as an investment fund, of which we have spent over half on acquisitions to date. These acquired businesses strengthen our offerings and enable us to extend our platform with new capabilities that we believe will provide opportunities to expand our positions, better serve our customers and supplement our organic growth.

Our principal sources of liquidity are cash on hand, cash provided by our operations, our commercial paper program and credit facility. From time to time, we also issue debt securities. Our principal uses of cash are for debt repayments, debt servicing costs, dividend payments, capital expenditures, share repurchases and acquisitions. We believe that our existing sources of liquidity will be sufficient to fund our expected 2020 cash requirements in the normal course of business.

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

Cash Flow

Summary of Consolidated Statement of Cash Flow

	Year ended December 31,
(millions of U.S. dollars)	2019		2018	$ Change
Net cash provided by operating activities		702	2,062	(1,360)
Net cash (used in) provided by investing activities		(1,384)	14,729	(16,113)
Net cash used in financing activities		(1,201)	(14,936)	13,735
(Decrease) increase in cash and bank overdrafts		(1,883)	1,855	(3,738)
Translation adjustments		5	(20)	25
Cash and bank overdrafts at beginning of period		2,703	868	1,835
Cash and bank overdrafts at end of period		825	2,703	(1,878)
Non-IFRS Financial Measures(1)
Free cash flow (includes discontinued operations)		159	1,107	(948)

(1) Refer to Appendices A and B of this management’s discussion and analysis for additional information and reconciliations of our non-IFRS financial measures to the most directly comparable IFRS financial measures.

Operating activities. Cash flow from operations decreased primarily due to the loss of cash flows from our former F&R business, in which we sold a majority interest on October 1, 2018, investments to reposition our company following the separation from F&R and a pension contribution of $167 million.

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Investing activities. In 2019, net cash used in investing activities included $998 million of acquisition spending, primarily for the Confirmation, HighQ and FC Business Intelligence businesses, and $505 million of capital expenditures, which were slightly offset by $74 million in proceeds from the sales of several small businesses. In 2018, net cash provided by investing activities included approximately $16.1 billion of net proceeds from the sale of a 55% interest in our F&R business that was included in discontinued operations. The proceeds were partly offset by $478 million of acquisition spending, primarily for Integration Point and a $248 million equity contribution to Refinitiv, $576 million of capital expenditures within continuing operations, and $362 million of capital expenditures related to F&R that were included in discontinued operations.

Financing activities. Net cash used in financing activities in 2019 was primarily comprised of returns to our common shareholders through dividends and share repurchases. In 2018, net cash used in financing activities included the return of $10.9 billion to common shareholders, as well as debt repayments of $4.0 billion, both of which were funded from the proceeds of the F&R transaction. Refer to the “Long-term debt” and “Share repurchases” subsections below for additional information regarding our debt repayments and share repurchases.

Cash and bank overdrafts. The reduction in cash and cash equivalents was driven by spending on acquisitions from the funds that we set aside from the proceeds of the F&R transaction.

Free cash flow. The decrease in free cash flow reflected the same factors as cash from operating activities.

Additional information about our debt, dividends and share repurchases is as follows:

^· Commercial paper program. Our commercial paper program provides cost-effective and flexible short-term funding. There were no commercial paper borrowings in 2019. In 2019, we reduced the size of our commercial paper program from $2.0 billion to $1.8 billion in connection with reducing the size of our credit facility (as discussed below). In 2018, issuances of commercial paper reached a peak of $2.0 billion, however, there was no outstanding commercial paper at December 31, 2018. In January 2020, we issued $630 million of commercial paper for debt repayments ahead of their 2021 maturity. See the “Subsequent Events” section of this management’s discussion and analysis for additional information.

^· Credit facilities. Through November 2019, we had in place a $2.4 billion credit facility. In 2018, we borrowed and repaid $370 million against this facility.

In December 2019, we amended the facility and reduced its size to $1.8 billion. We also extended the facility to December 2024. We have the option to request an increase in the lenders’ commitment, subject to approval by the lenders, to a maximum commitment of $2.4 billion. The facility may be used to provide liquidity for general corporate purposes (including acquisitions or support for our commercial paper program). There were no outstanding borrowings under the facility at December 31, 2019. Based on the company’s current credit ratings, the cost of borrowing under the facility is priced at LIBOR/EURIBOR plus 112.5 basis points. In July 2017, the U.K. Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. As a result, public and private sector industry initiatives are currently underway to identify an alternative reference rate.

If our debt rating is downgraded by Moody’s or Standard & Poor’s, our facility fees and borrowing costs may increase, although availability would be unaffected. Conversely, an upgrade in our ratings may reduce our facility fees and borrowing costs. We also 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. If we complete an acquisition with a purchase price of over $500 million, the ratio of net debt to EBITDA would temporarily increase to 5.0:1 for three quarters after completion, at which time the ratio would revert to 4.5:1. We were in compliance with this covenant at December 31, 2019.

In 2018, we borrowed and repaid $1.0 billion under a former credit facility that was cancelled on October 1, 2018.

^· Long-term debt. We did not make any debt repayments in 2019. In October 2018, we used part of the proceeds from the sale of a 55% interest in our F&R business to repay $4 billion of debt. Additional information about specific debt securities that we repaid is provided in note 20 of our 2019 annual consolidated financial statements. In January 2020, we redeemed notes ahead of their 2021 maturity. See the “Subsequent Events” section of this management’s discussion and analysis for additional information.

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We have a debt shelf prospectus under which we may issue up to $3.0 billion principal amount of debt securities from time to time through August 2020. We have not issued any debt securities under the prospectus.

^· 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 deterioration in general economic and business conditions and adverse publicity. Any downgrades in our credit ratings may impede our access to the debt markets or result in higher borrowing rates.

The following table sets forth the credit ratings 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)	F1
Trend/Outlook	Negative Outlook	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. Dividends on our common shares are declared in U.S. dollars. In February 2019, we announced a $0.04 per share increase in the annualized dividend to $1.44 per common share (beginning with the common share dividend that we paid in March 2019). In our consolidated statement of cash flow, dividends paid on common shares are shown net of amounts reinvested in our company under our dividend reinvestment plan (DRIP). Registered holders of common shares may participate in our DRIP, under which cash dividends are automatically reinvested in new common shares. Common shares are valued at the weighted-average price at which the shares traded on the Toronto Stock Exchange (TSX) during the five trading days immediately preceding the record date for the dividend.

Details of dividends declared per common share and dividends paid on common shares in the last two years were as follows:

	Year ended December 31,
(millions of U.S. dollars)	2019		2018
Dividends declared per common share		$1.440		$1.385
Dividends declared		721		925
Dividends reinvested		(23)		(25)
Dividends paid		698		900

The decrease in dividends paid in 2019 was due to reductions in the number of outstanding common shares, primarily from our 2018 substantial issuer bid/tender offer and return of capital.

In February 2020, we announced an $0.08 per share increase in the annualized dividend rate to $1.52 per common share (beginning with the common share dividend that we plan to pay in March 2020). See the “Subsequent Events” section of this management’s discussion and analysis for additional information.

^· Share repurchases. We may buy back shares (and subsequently cancel them) from time to time as part of our capital strategy. Our share repurchases are typically effected under a normal course issuer bid (NCIB). In August 2019, we renewed our NCIB for an additional 12 months. Under the renewed NCIB, we may repurchase up to 25 million common shares between August 19, 2019 and August 18, 2020 in open market transactions on the TSX, the NYSE and/or other exchanges and alternative trading systems, if eligible, or by such other means as may be permitted by the TSX and/or NYSE or under applicable law, including private agreement purchases if we receive an issuer bid exemption order from applicable securities regulatory authorities in Canada for such purchases. The price that our company will pay for shares in open market transactions under the NCIB will be the market price at the time of purchases or such other price as may be permitted by TSX.

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In 2019, we repurchased $488 million of our common shares primarily in accordance with our two buyback programs. In October 2019, we announced a plan to repurchase up to an additional $200 million of common shares under our NCIB in 2020. These repurchases were completed in February 2020.

Details of share repurchases under our NCIB in the last two years were as follows:

	Year ended December 31,
	2019		2018
Share repurchases (millions of U.S. dollars)		488		1,174
Shares repurchased (number in millions)		7.8		26.8
Share repurchases – average price per share in U.S. dollars		$62.33		$43.87

Decisions regarding any future repurchases will depend on factors such as market conditions, share price and other opportunities to invest capital for growth. We may elect to suspend or discontinue our share repurchases at any time, in accordance with applicable laws. From time to time when we do not possess material nonpublic information about ourselves or our securities, we may enter into a pre-defined plan with our broker to allow for the repurchase of shares at times when we ordinarily would not be active in the market due to our own internal trading blackout periods, insider trading rules or otherwise. Any such plans entered into with our broker will be adopted in accordance with applicable Canadian securities laws and the requirements of Rule 10b5-1 under the U.S. Securities Exchange Act of 1934, as amended. We entered into such a plan with our broker on December 20, 2019. As a result, we recorded a $200 million liability in “Other financial liabilities” within current liabilities at December 31, 2019 with a corresponding amount recorded in equity in the consolidated statement of financial position (2018 – $21 million).

Financial Position

Our total assets were $17.3 billion at December 31, 2019, compared to $17.0 billion at December 31, 2018. The increase was primarily due to a deferred tax benefit and the revaluation of warrants that we hold in Refinitiv, which more than offset the portion of the decrease in cash and cash equivalents due to returns to shareholders (refer to the “Cash Flow” section of this management’s discussion and analysis for additional information).

At December 31, 2019, the carrying amounts of our total current liabilities exceeded total current assets by $0.1 billion, principally because current liabilities include a significant amount of deferred revenue, which arises from the sale of subscription-based products and services that many customers pay for in advance. The cash received from these advance payments is used to currently fund the operating, investing and financing activities of our business. However, for accounting purposes, these advance payments must be deferred and recognized over the term of the subscription. As such, we typically reflect a negative working capital position in our consolidated statement of financial position. In the ordinary course of business, deferred revenue does not represent a cash obligation, but rather an obligation to perform services or deliver products, and therefore when we are in that situation we do not believe it is indicative of a liquidity issue, but rather an outcome of the required accounting for our business model.

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Net Debt⁽¹⁾

	December 31,
(millions of U.S. dollars)	2019		2018
Current indebtedness		579		3
Long-term indebtedness		2,676		3,213
Total debt		3,255		3,216
Swaps		62		76
Total debt after swaps		3,317		3,292
Remove fair value adjustments for hedges(2)		–		4
Total debt after currency hedging arrangements		3,317		3,296
Remove transaction costs and discounts included in the carrying value of debt		36		40
Add: Lease liabilities (current and non-current)(3)		322		–
Less: cash and cash equivalents(4)		(825)		(2,706)
Net debt (1)		2,850		630

(1) Net debt is a non-IFRS financial measure, which we define in Appendix A of this management’s discussion and analysis.

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

(3) In 2019, we revised our definition of net debt to include lease liabilities recorded in connection with the adoption of IFRS 16 on January 1, 2019.

(4) Includes cash and cash equivalents of $34 million and $24 million at December 31, 2019 and 2018, respectively, held in subsidiaries, which have regulatory restrictions, contractual restrictions or operate in countries where exchange controls and other legal restrictions apply and are therefore not available for general use by our company.

At December 31, 2019, our total debt position (after swaps) was $3.3 billion. The maturity dates for our term debt are well balanced with no significant concentration in any one year. At December 31, 2019, the average maturity of our term debt was approximately 10 years at an average interest rate (after swaps) of less than 5%, all of which is fixed. Our leverage ratio of net debt to adjusted EBITDA was below our maximum target leverage ratio of 2.5:1. The increase in our net debt is primarily due to a decrease in our cash and cash equivalents (refer to the “Cash Flow” section of this management’s discussion and analysis for additional information).

The following table illustrates our expected term debt maturities (after swaps) at December 31, 2019.

(1) Amount comprised of $579 million of current indebtedness and $62 million of related swap liability.

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Financial Risk Management

Our global operations expose us to a variety of financial risks including market risk (primarily currency risk and interest rate risk), credit risk and liquidity risk. The section entitled “Financial Risk Management” in note 20 of our 2019 annual consolidated financial statements provides a detailed discussion of the material financial risks that we believe we are exposed to and our approach to mitigating the potential adverse effects on our financial performance. Under the oversight of our Chief Financial Officer, our centralized corporate treasury group is responsible for our financial risk management strategy and execution and operates under strict guidelines and internal control processes. We strive to minimize the potential adverse economic effects associated with financial risks on our financial performance and to ensure we have sufficient liquidity to fund our operations, reinvest in our business, pay dividends and service our debt obligations.

Most of our business is conducted in U.S. dollars. However, 19% of our 2019 revenues and 30% of our 2019 expenses were denominated in currencies other than the U.S. dollar, the most significant of which are the British pound sterling and the Canadian dollar, with the balance spread over several currencies, including the Euro, Brazilian real, Argentine peso and the Indian rupee. Changes in foreign exchange rates typically impact the growth in our expenses more than our revenues, because a higher percentage of our expenses are denominated in foreign currency. In 2019, foreign currency decreased revenue growth and operating expenses by 1% and 2%, respectively. We routinely monitor our currency exposures and may enter into derivative financial instruments in order to mitigate our foreign exchange risk. Refer to note 20 of our 2019 annual consolidated financial statements for additional information.

The following charts outline the currency profile of our revenues and operating expenses included in the calculation of adjusted EBITDA for 2019:

We monitor the financial stability of the foreign countries in which we operate. To mitigate risk of loss, we monitor the creditworthiness of our customers and have policies and procedures for trade receivables collection and global cash management to ensure adequate liquidity is available to us.

We also monitor the financial strength of financial institutions with which we have banking and other commercial relationships, including those that hold our cash and cash equivalents, as well as those which are counterparties to derivative financial instruments and other arrangements.

Approximately 58% of our cash and cash equivalents at December 31, 2019 were held by subsidiaries outside the U.S. We have historically accessed such funds in a tax efficient manner to meet our liquidity requirements. Due to our legal entity structure, we continue to expect to have access to our funds held by subsidiaries outside the U.S. in a tax efficient manner.

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Off-Balance Sheet Arrangements, Commitments and Contractual Obligations

The following table summarizes our debt, leases and off-balance sheet contractual obligations:

(millions of U.S. dollars)	2020		2021		2022		2023		2024		Thereafter		Total
Current debt(1)		579		-		-		-		-		-		579
Long-term debt(2)		-		-		-		600		242		1,869		2,711
Interest payable(2)		132		128		128		128		102		1,196		1,814
Debt-related hedges outflows(1)		499		-		-		-		-		-		499
Debt-related hedges inflows(1)		(437)		-		-		-		-		-		(437)
Lease obligations(3)		91		86		73		53		45		208		556
Unconditional purchase obligations		300		219		180		160		62		1		922
Defined benefit obligations		35		-		-		-		-		-		35
Total		1,199		433		381		941		451		3,274		6,679

(1) Represents early repayment of hedged Canadian debt and US dollar denominated debt redeemed in January 2020.

(2) Represents our contractual principal and interest payments.

(3) Includes leases with a term of 12 months or less, certain low value assets and lease commitments, which have not yet commenced, all of which are not recognized in the consolidated statement of financial position.

We provide further information about certain of our obligations below:

^· Subsidiary guarantees – For certain property leases, banking arrangements and commercial contracts, we guarantee the obligations of some of our subsidiaries. We also guarantee borrowings by our subsidiaries under our credit agreement.

^· Unconditional purchase obligations – We have various obligations for materials, supplies, outsourcing and other services contracted in the ordinary course of business. In the table above, certain commitments have been estimated over the contractual period.

^· Defined benefit obligations – We sponsor defined benefit plans that provide pension and other post-employment benefits to covered employees. As of December 31, 2019, the fair value of plan assets for our material funded pension plans was 94% of the plan obligations. In 2019, we contributed $203 million to our material defined benefit plans, including $167 million that we contributed to a U.K. defined benefit pension plan in February 2019 to satisfy U.K. pension law funding obligations arising from the F&R transaction. In 2020, we expect to contribute approximately $35 million to our material defined benefit plans, $7 million in accordance with the normal funding policy of funded plans and $28 million for claims expected to arise under unfunded and retiree medical plans.

The amount and timing of any future required contributions to pension plans could differ significantly from our estimates at December 31, 2019. We cannot estimate contributions beyond 2020 because they depend on future economic conditions, plan performance, and potential future government legislation. For certain plans, the trustees have the right to call for special valuations, which could subsequently result in us having to make an unexpected contribution. Additionally, from time to time, we may elect to make voluntary contributions to improve the funded status of the plans.

^· Disposition contingencies – In certain disposition agreements, we guarantee indemnification obligations of our subsidiary that sold the business or assets. We believe that based upon current facts and circumstances, additional payments in connection with these transactions would not have a material impact on our consolidated financial statements.

^· Refinitiv warrants - The terms of our investment in Refinitiv include warrants that provide for a potential exchange of value between private equity funds affiliated with Blackstone and our company at the time of an initial public offering (IPO) or change in control of Refinitiv, depending on the value of Refinitiv at that date. Under the terms of the warrant agreement, the closing of the proposed transaction with LSEG will constitute a change in control whereby the exercise of the warrants in connection with the closing will increase our ownership of Refinitiv from 45% to 47.6%. These warrants are a derivative instrument, recorded within “Other financial assets – current” in the consolidated statement of financial position and accounted for at fair value each reporting period. Changes in value are recorded within “Other operating gains, net” in the consolidated income statement. Refer to Appendix F of this management’s discussion and analysis for additional information.

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

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, employment matters, commercial matters, defamation claims and intellectual property infringement claims. The outcome of all of the matters against us is subject to future resolution, including the uncertainties of litigation. Based on information currently known to us and after consultation with outside legal counsel, management believes that the ultimate resolution of any 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 and we are routinely under audit by many different taxing authorities in the ordinary course of business. There are many transactions and calculations during the course of business for which the ultimate tax determination is uncertain, as taxing authorities may challenge some of our positions and propose adjustments or changes to our tax filings.

As a result, we maintain provisions for uncertain tax positions that we believe appropriately reflect our risk. These provisions are made using our best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. We review the adequacy of these provisions at the end of each reporting period and adjust them based on changing facts and circumstances. Due to the uncertainty associated with tax audits, it is possible that at some future date, liabilities resulting from such audits or related litigation could vary significantly from our provisions. However, based on currently enacted legislation, information currently known to us and after consultation with outside tax advisors, management believes that the ultimate resolution of any such matters, individually or in the aggregate, will not have a material adverse impact on our financial condition taken as a whole.

For additional information, please see the “Risk Factors” section of this annual report, which contains further information on risks related to legal and tax matters.

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Outlook

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

Trends

The needs of our professional customers continue to evolve, and we believe we are well positioned to serve them. Technology is modernizing the legal, tax and accounting professions, making our customers more efficient. Law firms are transitioning away from time-based billing and accounting firms are moving into more advisory services, as traditional audit and tax compliance become more commoditized. To optimize their efficiency, our customers want to integrate their workflows with our content and technology, as well as with third party applications. They are increasingly focused on using technology to collaborate with their clients, as well as on the impact of advanced technologies like artificial intelligence and machine learning. Open ecosystems increase efficiency because they allow tax and accounting professionals to access all their tools, including solutions from other vendors, in a single place, and to collaborate with their clients. Additionally, many of our customers do business around the world and need solutions that help them comply with multiple, complex regulatory regimes.

Relative to our Reuters News business, the media sector continues to transform, with the traditional news agency business declining. While demand in the financial professional segment is growing, Reuters is limited in its ability to participate in a number of sectors due to its exclusive agreement with Refinitiv. In the business to business segment, we believe there is opportunity in the conference and events segment.

The competitive landscape is crowded and evolving. In addition to traditional information service providers, large and mid-size technology companies are increasingly pursuing growth in professional market segments. In some areas, we also compete with large global accounting firms that have enough scale to develop their own technology solutions. Start-ups continually drive innovation, particularly in data analytics and audit automation. In the global news market segment, alternatives are evolving from social media and technology companies, and traditional competitors are creating their own media platforms. While competition continues to be intense and dynamic, we believe that our strengths – high quality content, deep domain expertise, technology expertise and strong customer relationships – will allow us to continue to serve the needs of our customers.

Priorities

We plan to continue Thomson Reuters’ evolution into a platforms-based business information software and services leader by leveraging our core capabilities in content and technology, bringing our solutions together for our customers, and building an open ecosystem where legal, tax and accounting professionals collaborate and transact. We are focusing on the following key priorities in 2020:

^· Deliver higher organic revenue growth by adding new customers, using better analytics, increasing cross-selling and upselling and improving retention;

^· Deploy the remaining portion of our reinvestment fund (approximately $800 million) to target acquisitions that strengthen our value proposition, advance our platform strategy and extend to highly adjacent market segments;

^· Continue to embed artificial intelligence and machine learning technology in our solutions;

^· Invest in our platforms by building cloud-based, integrated and open solutions;

^· Further improve sales performance and productivity through better tools to add new customers and commercial models that reflect our customers’ needs; and

^· Build end-to-end digital capabilities to simplify the buying, renewal and upgrade experience for our products.

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Financial Outlook

The following table sets forth our updated 2020 full-year outlook. The updated 2020 Outlook:

^· Assumes constant currency rates relative to 2019; and

^· Does not factor in the impact of any acquisitions or divestitures that may occur in 2020.

We believe this type of guidance provides useful insight into the performance of our business.

Non-IFRS Financial Measures	2019 Actual	2020 Outlook (Communicated on October 31, 2019)	2020 Outlook (Updated on February 25, 2020)
		Before currency and excluding the impact of future acquisitions/disposals
Revenue growth	7.4% 3.7% Organic	Not provided 4.0% – 4.5% Organic	4.5% – 5.5% 4.0% – 4.5% Organic
Adjusted EBITDA margin	25.3%	Approximately 31%	31.5% – 32.0%
Corporate costs	$564 million(1)	$140 million – $150 million	$140 million – $150 million
Free cash flow	$159 million	$1.0 billion – $1.2 billion	$1.2+ billion
Capital expenditures, as a percentage of revenues	8.6%	7.5% – 8.0%	7.5% – 8.0%
Depreciation and amortization of computer software	$603 million	Not provided	$625 million – $650 million
Interest expense	$163 million	Not provided	$175 million – $200 million
Effective tax rate on adjusted earnings	10.7%	Approximately 20%	Approximately 17% – 19%

(1) Includes $70 million of capital expenditures that were associated with our program to reposition our company after the separation from F&R, stranded costs that were eliminated and one-time costs that were completed in 2019.

In the first quarter of 2020, we expect organic revenue growth of approximately 2% and total growth of approximately 3%, reflecting timing-related factors within the Tax & Accounting Professionals, Print and Reuters News segments. We expect that this performance, which is not indicative of our expectations for full year organic revenue growth of 4.0% to 4.5% and total growth of 4.5% to 5.5%, to be the low point for the year.

The following table summarizes our material assumptions and risks that may cause actual performance to differ from our expectations as set forth in our updated 2020 financial outlook.

Revenues
Material assumptions	Material risks
·   Gross domestic product (GDP) growth in the United States (79% of 2019 revenues) and secondarily, in other countries where we operate ·   Continued increase in the demand and need for high quality information and tools that automate or manage workflow and drive productivity and efficiency ·   Continued need for trusted products and services that help customers navigate evolving and complex legal, tax, accounting, regulatory, geopolitical and commercial changes, developments and environments, as well as for increased demand for business events and conferences ·   Continued increase in customers seeking software-as-a-service or other cloud-based offerings ·   Ability to provide an integrated and open platform that combines information, technology and human expertise to meet evolving customer demands. ·   Acquisition of new customers by enhancing our digital platforms and propositions and through other sales initiatives ·   Improvement in customer retention through commercial simplification efforts and customer service improvements ·   Growth in our recurring and transaction revenues exceed an anticipated decline in Global Print revenues	·   Global economic uncertainty due to factors including continued regulatory reform around the world and changes in the political environment that may limit business opportunities for our customers, lowering their demand for our products and services ·   Demand for our products and services could be reduced by changes in customer buying patterns, or our inability to execute on key product or customer support initiatives ·   Pressure on certain customers may constrain the number of professionals employed ·   Competitive pricing actions and product innovation could impact our revenues ·   Our sales, commercial simplification and product initiatives may be insufficient to retain customers or generate new sales

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Adjusted EBITDA margin
Material assumptions	Material risks
·   Our ability to achieve revenue growth targets ·   Business mix continues to shift to higher-growth product offerings ·   Continued investment in growth markets, customer service, product development and digital capabilities	·   Same as the risks above related to the revenue outlook ·   The costs of required investments exceed expectations or actual returns are below expectations ·   Acquisition and disposal activity may dilute adjusted EBITDA margin

Free Cash Flow
Material assumptions	Material risks
·   Our ability to achieve our revenue and adjusted EBITDA margin targets ·   Capital expenditures expected to be between 7.5% and 8.0% of revenues in 2020	·   Same as the risks above related to the revenue and adjusted EBITDA margin outlook ·   A weaker macroeconomic environment could negatively impact working capital performance ·   Capital expenditures may be higher than currently expected resulting in higher cash outflows ·   The timing and amount of tax payments to governments may differ from our expectations

Effective tax rate on adjusted earnings
Material assumptions	Material risks
·   Our ability to achieve our adjusted EBITDA target ·   The mix of taxing jurisdictions where we recognized pre-tax profit or losses in 2019 does not significantly change ·   No unexpected changes in tax laws and treaties within the jurisdictions where we operate ·   The completion of the proposed sale of Refinitiv to LSEG, or the sale of another significant, but non-strategic, equity investment at a significant gain in 2020 ·   Depreciation and amortization of computer software between $625 and $650 million ·   Interest expense between $175 million and $200 million	·   Same as the risks above related to adjusted EBITDA ·   A material change in the geographical mix of our pre-tax profits and losses ·   A material change in current tax laws or treaties to which we are subject, and did not expect ·   The tax rates and calculations that apply to our taxable income could be impacted if these transactions do not occur ·   Depreciation and amortization of computer software as well as interest expense may be significantly higher or lower than expected

Our Outlook contains various non-IFRS financial measures. We believe that providing reconciliations of forward-looking non-IFRS financial measures in our Outlook would be potentially misleading and not practical due to the difficulty of projecting items that are not reflective of ongoing operations in any future period. The magnitude of these items may be significant. Consequently, for Outlook purposes only, we are unable to reconcile these non-IFRS measures to the most comparable IFRS measures because we cannot predict, with reasonable certainty, the impact of changes in foreign exchange rates which impact (i) the translation of our results reported at average foreign currency rates for the year and (ii) other finance income or expense related to intercompany financing arrangements. Additionally, we cannot reasonably predict the occurrence or amount of other operating gains and losses, which include fair value adjustments relating to warrants we hold in Refinitiv as well as gains or losses that generally arise from business transactions we do not currently anticipate.

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Related Party Transactions

As of March 4, 2020, our principal shareholder, Woodbridge, beneficially owned approximately 66% 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 and are not significant to our results of operations or financial condition either individually or in the aggregate.

In April 2018, we sold a Canadian wholly owned subsidiary to a company affiliated with Woodbridge for $16 million. The subsidiary’s assets consisted of accumulated losses that management did not expect to utilize against future taxable income prior to their expiry. As such, no tax benefit for the losses had been recognized in our consolidated financial statements. Under Canadian law, certain losses may only be transferred to related companies, such as those affiliated with Woodbridge. A gain of $16 million was recorded within “Other operating gains, net” within the consolidated income statement. In connection with this transaction, our board of directors’ Corporate Governance Committee obtained an independent fairness opinion. We utilized the independent fairness opinion to determine that the negotiated price between us and the purchaser was reasonable. After receiving the recommendation of the Corporate Governance Committee, the board of directors approved the transaction. Directors who were not considered independent because of their positions with Woodbridge refrained from deliberating and voting on the matter at both the committee and board meetings.

In October 2018, we returned approximately $6.5 billion to our shareholders pursuant to a substantial issuer bid/tender offer under which we repurchased approximately 138 million shares at a price of $47 per share. As part of this transaction, Woodbridge sold approximately 88.9 million shares through a proportionate tender which allowed it to maintain its equity ownership percentage in Thomson Reuters prior to the transaction. Woodbridge effected its proportionate tender offer through a Qualifying Holdco Alternative (as described in the offer documents), which our company also offered to other shareholders to assist them in achieving certain Canadian tax objectives without having adverse consequences to our company or other shareholders.

Transactions with Refinitiv

As part of our sale of a 55% interest in our F&R business in October 2018, Reuters News and Refinitiv entered into an agreement pursuant to which Reuters News will supply news and editorial content to the Refinitiv partnership for a minimum of $325 million per year through October 1, 2048. For the year ended December 31, 2019, we recorded revenues under this agreement of $336 million (2018 – $81 million). For the duration of the agreement, Refinitiv may also license the “Reuters” mark to brand its products and services, subject to certain contractual restrictions. For the year ended December 31, 2019, we recorded $23 million (2018 – $6 million) of income in “Other operating gains, net” within the consolidated income statement under this license.

Additionally, our company and Refinitiv sell products and services to each other in the normal course of business. These transactions are not significant to our company’s results of operations or financial condition either individually or in the aggregate.

To facilitate the separation, our company and Refinitiv agreed to provide certain operational services to each other, including technology and administrative services, for a specified multi-year period. Additionally, our company and Refinitiv extended property leases to each other. For the years ended December 31, 2019 and 2018, we recorded the following amounts as expense or contra-expense, as applicable, related to these transactions:

(millions of U.S. dollars)	Provided by Thomson Reuters to Refinitiv Contra-expense		Provided by Refinitiv to Thomson Reuters (Expense)
	Year ended December 31,		Year ended December 31,
	2019	2018	2019	2018
Transitional services	26	12	(52)	(21)
Properties leased	39	16	(34)	(14)

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We included $79 million of minimum lease payments owed to Refinitiv under non-cancellable leases in our disclosure of minimum lease payments (see the “Off-Balance Sheet Arrangements, Commitments and Contractual Obligations” section of this management’s discussion and analysis for additional information). Refinitiv owes us minimum lease payments of $56 million under non-cancellable lease agreements. Additionally, we included $15 million of purchase obligations to Refinitiv related to certain operational services, including technology and administrative services, in our disclosure of future unconditional purchase obligations (see the “Off-Balance Sheet Arrangements, Commitments and Contractual Obligations” section of this management’s discussion and analysis for additional information). Refinitiv has $16 million of purchase obligations to us for similar operational services.

At December 31, 2019, the consolidated statement of financial position included a receivable from Refinitiv of $135 million (2018 – $332 million) and a payable to Refinitiv of $102 million (2018 – $249 million) related to all transactions between the two companies.

Transactions with other associates and joint ventures

From time to time, we enter into transactions with our investments in other associates and joint ventures. These transactions typically involve providing or receiving services in the normal course of business.

In connection with the 2008 acquisition of Reuters, we assumed a lease agreement with 3XSQ Associates, an entity owned by a subsidiary of 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. On October 1, 2018, the lease was transferred to Refinitiv as part of the F&R transaction. The lease provided us with approximately 690,000 square feet of office space. We retained our investment in 3XSQ Associates, which we account for using the equity method. Prior to the closing of the F&R transaction, our costs under this lease arrangement for rent, taxes and other expenses were $34 million in 2018.

Subsequent Events

Debt repayments

In January 2020, we redeemed C$550 million principal amount of 3.309% notes due November 2021 and $139 million principal amount of 3.95% notes due September 2021 prior to their scheduled maturity for $640 million, including early redemption premiums and settlement of related cross-currency swaps. The repayments were funded with commercial paper borrowings.

2020 dividends

In February 2020, we announced an $0.08 per share increase in the annualized dividend to $1.52 per common share, which was approved by our board of directors. A quarterly dividend of $0.38 per share will be paid on March 18, 2020 to shareholders of record as of March 6, 2020.

Appointment of New Chief Executive Officer and Chief Financial Officer

On February 25, 2020, we announced that Steve Hasker was appointed President & Chief Executive Officer, replacing James C. Smith, and Mike Eastwood was appointed Chief Financial Officer, replacing Stephane Bello. These appointments and organizational changes are effective on March 15, 2020. Effective March 15, 2020, Mr. Smith will be Chairman of the Thomson Reuters Foundation and will provide transitional support to Mr. Hasker into 2021. Mr. Bello will be Vice Chairman and President, Enterprise Centre, on March 15, 2020 and will also provide transitional support to Mr. Eastwood into 2021. On March 15, 2020, Mr. Hasker will also become a member of our board of directors and Mr. Smith will step down as a director. Please see the “Executive Officers and Directors” section of this annual report for additional information about Mr. Hasker and Mr. Eastwood.

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Changes in Accounting Policies

IFRS 16, Leases

Effective January 1, 2019, we adopted IFRS 16, Leases (“IFRS 16”), which introduced a single lease accounting model that eliminated the prior distinction between operating and finance leases for lessees. IFRS 16 was adopted using the modified retrospective method, including a set of practical expedients and elections. Under this approach, the cumulative effect of adoption of $11 million was recorded as an adjustment to retained earnings at January 1, 2019 and comparative period information was not restated. From January 1, 2019, we:

^· Recognize right-of-use assets and lease liabilities on the consolidated statement of financial position for leases having a term of more than 12 months;

^· Depreciate right-of-use assets on a straight-line basis over the shorter of the estimated useful life of the asset or the remaining lease term;

^· Present interest expense on lease liabilities as a component of “Finance costs, net,” within the consolidated income statement;

^· Present the principal portion of our total lease payments within “Financing activities” and the interest portion within “Operating activities” on the consolidated statement of cash flow; and

^· Recognize a receivable, which arises from sublease arrangements, equal to the net investment in the lease on the consolidated statement of financial position.

Prior to January 1, 2019, we classified all lease commitments as operating and did not record them on the consolidated statement of financial position. Operating lease payments were recognized as expense on a straight-line basis over the lease term in “Operating expenses” within the consolidated income statement and operating lease payments were reported as “Operating activities” in the consolidated statement of cash flow.

We applied certain practical expedients and elections at January 1, 2019, the initial application date of IFRS 16. Specifically, we:

^· Continued to treat contracts determined to be leases under the prior accounting standard as leases under IFRS 16;

^· Measured right-of-use assets and lease liabilities, regardless of commencement date, using incremental borrowing rates as of January 1, 2019;

^· Retained prior assessments of onerous lease contracts under IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and

^· Excluded from recognized assets and liabilities, as applicable (a) initial direct costs to enter the lease, (b) leases with a remaining term of 12 months or less from January 1, 2019 and (c) low-value leases, all of which will continue to be accounted for as “Operating expenses” in the consolidated income statement.

The following table reconciles operating lease commitments at December 31, 2018 to lease liabilities recognized in the consolidated statement of financial position at January 1, 2019, the date of initial application:    

	January 1,
(millions of U.S. dollars)	2019
Operating lease commitments at December 31, 2018		329
Leases beginning after January 1, 2019		(65)
Operating lease commitments subject to IFRS 16 adoption		264
Discounted at 4.1%, the weighted-average incremental borrowing rate at January 1, 2019		(26)
Exemption for short-term leases		(41)
Lease liabilities at January 1, 2019		197

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The following table sets forth the adoption impacts on the consolidated statement of financial position at January 1, 2019:

	December 31,				January 1,
(millions of U.S. dollars)	2018 As Revised		IFRS 16 Adoption Adjustment		2019 Opening Balance
Other financial assets – current		76		6		82
Prepaid expenses and other current assets		426		(5)		421
Property and equipment, net		473		128		601
Other non-current assets		499		34		533
Total assets		17,018		163		17,181
Payables, accruals and provisions		1,778		(31)		1,747
Other financial liabilities – current		95		43		138
Provisions and other non-current liabilities		1,124		140		1,264
Total liabilities		7,808		152		7,960
Retained earnings		4,739		11		4,750

Total assets increased by $163 million, primarily due to the recognition of right-of-use assets of $128 million, and net investments in subleases of $40 million. Total liabilities increased by $152 million, as the recognition of $197 million of new lease liabilities was partially offset by the reclassification of liabilities associated with the former operating leases.

IAS 19, Plan Amendments, Curtailment or Settlement

Effective January 1, 2019, we adopted IAS 19 amendments, Plan Amendment, Curtailment or Settlement, which clarifies the accounting for amendments, curtailments or settlements for defined benefit plans. These changes require an entity to remeasure its defined benefit liability and use the updated assumptions from the remeasurement to determine current service and net interest for the remainder of the reporting period after the change. The IAS 19 amendments did not have a material impact on the consolidated income statement, cash flow and financial position for the year ended December 31, 2019.

IFRIC 23, Uncertainty over Income Tax Treatments

Effective January 1, 2019, we adopted IFRIC 23, Uncertainty over Income Tax Treatments, which adds to the requirements of IAS 12, Income Taxes, by specifying how to reflect the effects of uncertainty in the accounting for income taxes. An uncertainty arises when it is unclear how a tax law applies to a particular transaction, or whether a taxation authority will accept a company’s tax treatment. IFRIC 23 did not have a material impact on the consolidated income statement, cash flow and financial position for the year ended December 31, 2019.

IFRIC Agenda Decision, Presentation of Liabilities or Assets Related to Uncertain Tax Treatments

In September 2019, the IFRIC issued an agenda decision that clarified that liabilities associated with uncertain tax positions should be presented as either current tax liabilities or deferred tax liabilities and assets associated with uncertain tax positions should be presented as either current tax assets or deferred tax assets. As a result of this guidance, we changed our accounting policy and retrospectively revised the presentation of our uncertain tax positions, which were previously recorded in “Provisions and other non-current liabilities” in the consolidated statement of financial position. For additional information regarding the impact of this change, refer to note 3 of our 2019 annual consolidated financial statements.

Amendments to IFRS 3, Business Combinations

In October 2018, the IASB issued amendments to IFRS 3 to clarify the definition of a business to provide further guidance whether a transaction should be accounted for as a business combination or as an asset acquisition. The amendments are effective for periods beginning on or after January 1, 2020, but earlier application is permitted. We applied these amendments in the preparation of our consolidated financial statements for the year-ended December 31, 2019.

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IFRS 15, Revenue from Contracts with Customers

Effective January 1, 2018, the Company adopted IFRS 15, Revenue from Contracts with Customers.

Critical Accounting Estimates and Judgments

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

Additional Information

Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (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 were 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.

We are engaged in a long-term efficiency initiative which impacts our financial reporting. We are enhancing our order-to-cash (OTC) applications and related workflow processes in phases over multiple years. 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 and automate processes across our organization through this initiative.

As we are implementing this initiative in phases over an extended period, the nature and extent of activity will vary by quarter. The initiative could result in material changes to our internal control over financial reporting depending on the nature and volume of work completed, as we will continue to modify the design and documentation of the related internal control processes and procedures, as necessary.

We adopted IFRS 16 on January 1, 2019 and deployed a lease tracking system to comply with the requirements of the new standard. As part of the deployment, we modified our existing internal controls at that time and implemented new internal controls over financial reporting where appropriate.

Following the separation of the F&R business from our company in October 2018, a significant number of employees who performed accounting and reporting functions were transferred to Refinitiv. Transition services agreements have been in place between Thomson Reuters and Refinitiv since the companies separated. While a number of key controls continue to be performed under the transition services agreements, there were no material changes in key controls over our financial reporting processes.

Except as described above, there was no change in our internal control over financial reporting during 2019 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019 and based on that assessment determined that our internal control over financial reporting was effective. Refer to our 2019 annual consolidated financial statements for our management’s report on internal control over financial reporting.

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Share Capital

As of March 4, 2020, we had outstanding 495,101,048 common shares, 6,000,000 Series II preference shares, 6,090,772 stock options and a total of 3,909,734 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 2019 annual report (which contains information required in an annual information form) and our other disclosure documents, reports, statements or other information that we file with the Canadian securities regulatory authorities through SEDAR at www.sedar.com and in the United States with the SEC at www.sec.gov.

Cautionary Note Concerning Factors That May Affect Future Results

Certain statements in this management’s discussion and analysis are forward-looking, including, but not limited to, the 2020 business outlook, the number of LSEG shares that the company is projected to indirectly own upon closing of the proposed LSEG/Refinitiv transaction, the parties’ expectation that LSEG will only issue shares as consideration for the proposed LSEG/Refinitiv transaction, the company’s current expectations regarding the timing for closing of the proposed LSEG/Refinitiv transaction, the parties’ expectations for a combined business and the company’s expectations regarding the potential tax consequences of the proposed LSEG/Refinitiv transaction, as well as statements regarding the company’s intention to target a dividend payout ratio of between 50% to 60% of its free cash flow; statements regarding the future growth and profitability of our customer segments; statements about the estimated future growth of the market segments in which Thomson Reuters’ businesses operate; the company’s plans to make future share repurchases; and Refinitiv’s cost savings target. The words “expect”, “believe”, “target” and “will” and similar expressions identify forward-looking statements. While we believe that we have a reasonable basis for making forward-looking statements in this management’s discussion and analysis, they are not a guarantee of future performance or outcomes and there is no assurance that the proposed LSEG/Refinitiv transaction will be completed or that any other events described in any forward-looking statement will materialize. Forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from current expectations. Many of these risks, uncertainties and assumptions are beyond our company’s control and the effects of them can be difficult to predict.

Some of the material risk factors that could cause actual results or events to differ materially from those expressed in or implied by forward-looking statements in this management’s discussion and analysis include, but are not limited to, changes in the general economy; actions of competitors; fraudulent or unpermitted data access or other cyber-security or privacy breaches; failures or disruptions of data centers, network systems, telecommunications, or the Internet; failure to develop new products, services, applications and functionalities to meet customers’ needs, attract new customers and retain existing ones, or expand into new geographic markets and identify areas of higher growth; changes to law and regulations; failure to adapt to organizational changes and effectively implement strategic initiatives; failure to attract, motivate and retain high quality management and key employees; failure to derive fully the anticipated benefits from existing or future acquisitions, joint ventures, investments or dispositions; failure to meet the challenges involved in operating globally; failure to maintain a high renewal rate for recurring, subscription-based services; dependency on third parties for data, information and other services; inadequate protection of intellectual property rights; tax matters, including changes to tax laws, regulations and treaties; fluctuations in foreign currency exchange and interest rates; failure to protect the brands and reputation of Thomson Reuters; threat of legal actions and claims; downgrading of credit ratings and adverse conditions in the credit markets; failure to efficiently complete the separation of Refinitiv from Thomson Reuters; failure to complete the proposed LSEG/Refinitiv transaction; the effect of factors outside of the control of Thomson Reuters on funding obligations in respect of pension and post-retirement benefit arrangements; risk of antitrust/competition-related claims or investigations; actions or potential actions that could be taken by the company’s principal shareholder, The Woodbridge Company Limited; and impairment of goodwill and other identifiable intangible assets. Additional factors are discussed in the “Risk Factors” section of this 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.

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Our company’s 2020 business outlook is based on information currently available to the company and is based on various external and internal assumptions made by the company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the company believes are appropriate under the circumstances.

Our company has provided a business outlook for the purpose of presenting information about current expectations for 2020. This information may not be appropriate for other purposes. You are cautioned not to place undue reliance on forward-looking statements which reflect expectations only as of the date of this management’s discussion and analysis. Except as may be required by applicable law, Thomson Reuters disclaims any obligation to update or revise any forward-looking statements.

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Appendix A

Non-IFRS Financial Measures

We use non-IFRS financial measures as supplemental indicators of our operating performance and financial position. Additionally, we use non-IFRS measures as performance metrics as the basis for management incentive programs. These measures do not have any standardized meaning prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies. Except for free cash flow and ROIC, all our non-IFRS measures exclude the results of the F&R business, which was reported as a discontinued operation through October 1, 2018, the closing date of the sale. All our non-IFRS measures exclude the results of our equity investment in Refinitiv.

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 Appendix B and the “Liquidity and Capital Resources” section of our management’s discussion and analysis. Following the adoption of IFRS 16, we updated our definition of net debt to include lease liabilities. We also updated our definition of free cash flow such that it continues to include lease payments that are now classified within financing activities. As a result, there is no change to the amount of our free cash flow, despite the change in balance sheet recognition for leases.

How We Define It	Why We Use It and Why It Is Useful to Investors	Most Directly Comparable IFRS Measure/Reconciliation
Segment adjusted EBITDA, consolidated adjusted EBITDA and the related margins
Segment adjusted EBITDA represents earnings from continuing operations before tax expense or benefit, net interest expense, other finance costs or income, depreciation, amortization of software and other identifiable intangible assets, our share of post-tax earnings or losses in equity method investments, other operating gains and losses, certain asset impairment charges, fair value adjustments and corporate related items. Consolidated adjusted EBITDA is comprised of adjusted EBITDA from each reportable segment and Corporate costs. The related margins are expressed as a percentage of revenues.	Provides a consistent basis to evaluate operating profitability and performance trends by excluding items that we do not consider to be controllable activities for this purpose. Represents a measure commonly reported and widely used by investors as a valuation metric. Additionally, this measure is used to assess our ability to incur and service debt.	Earnings from continuing operations
Adjusted EBITDA less capital expenditures and the related margin
Adjusted EBITDA less capital expenditures. The related margin is expressed as a percentage of revenues.	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

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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 EPS
Net earnings: ·   excluding the post-tax impacts of fair value adjustments, amortization of other identifiable intangible assets, other operating gains and losses, certain asset impairment charges, other finance costs or income, our share of post-tax earnings or losses in equity method investments, discontinued operations and other items affecting comparability. We calculate the post-tax amount of each item excluded from adjusted earnings based on the specific tax rules and tax rates associated with the nature and jurisdiction of each item. ·   We also deduct dividends declared on preference shares.	Provides a more comparable basis to analyze earnings and is also a measure commonly used by shareholders to measure our performance.	Net earnings and diluted earnings per share
Adjusted EPS is calculated from adjusted earnings using diluted weighted-average shares.
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 pre-tax adjusted 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.