Thomson Reports Revenues Up 9% and Earnings Per Share Up 15% in 2004
STAMFORD, Conn., Feb. 10 /PRNewswire-FirstCall/ -- The Thomson Corporation (NYSE: TOC; TSX: TOC), one of the world's leading information services providers, today reported results for the full year and fourth quarter ended December 31, 2004.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020227/NYW014LOGO )
Revenues rose 9% to $8.10 billion in 2004 and earnings increased 15% to $1.54 per share. After adjusting for discontinued operations and one-time items, earnings increased 16% to $1.23 per share for the year. Free cash flow increased 14% to $1.12 billion.
"Thomson delivered solid revenue increases and double-digit growth in earnings and free cash flow in 2004. We achieved our financial targets and solidly positioned the company for continued success in 2005 and beyond," said Richard J. Harrington, president and CEO of Thomson.
"Thomson is reaping the benefits of its business strategies as we move from being a valued content provider to a valued solutions provider, combining critical information, cutting-edge software applications and a growing range of services for our clients. Revenues from electronic products, software and services now make up 66 percent of our total revenues, up from 51 percent five years ago.
"Importantly, we posted significantly higher organic revenue growth compared to the prior year, with each market group contributing to the increase. And, we expect further acceleration of organic growth in 2005.
"Thomson invested $1.5 billion in acquisitions in 2004, acquiring industry leaders such as CCBN, IHI, and TradeWeb. These acquisitions further strengthen our leadership position, round out our product offerings, and enable us to enter adjacent markets and tap new revenue streams. In 2005, we will focus on integrating these businesses to further drive growth and efficiencies.
"We are very pleased with our 2004 performance and we look for strong results again in 2005. Over the long term we are confident our business model can sustain top-line growth of 7 to 9 percent, expanding margins and strong free cash flow."
Results for the Full Year of 2004
Revenues increased 9% to $8.10 billion in 2004 as a result of organic
growth, acquisitions, and favorable currency translation. Excluding the
effects of currency translation, revenues rose 7% in 2004.
Adjusted EBITDA increased 10% to $2.25 billion in 2004. Adjusted EBITDA
margin increased 30 basis points to 27.7% from 27.4% in 2003.
Operating Profit increased 14% to $1.34 billion in 2004. Operating
margin increased 80 basis points to 16.6% from 15.8% in 2003.
Earnings attributable to common shares increased 15% to $1.01 billion,
or $1.54 per share, in 2004, compared to $877 million, or $1.34 per
share, in 2003. After adjusting for discontinued operations and
one-time items, underlying earnings were $805 million, or $1.23 per
share, for 2004, up 16% from $694 million, or $1.06 per share, in 2003.
Adjusted earnings growth was achieved despite a higher effective tax
rate in 2004, which reduced earnings $0.07 per share.
Free Cash Flow was up 14% to $1.12 billion in 2004, compared to
$983 million in the prior year primarily due to higher profits and lower
voluntary pension contributions.
Results for the Fourth Quarter of 2004
As the Corporation drives its product mix to solutions-based electronic
services, revenues and profits tend to occur more consistently over the
year, affecting year-over-year quarterly comparisons. Fourth-quarter
2004 performance is reflective of this shift. The fourth quarter
represented 40% of full-year adjusted earnings in 2004, versus 49% in
2003.
Revenues increased 9% to $2.33 billion in the fourth quarter of 2004 as
a result of organic growth, acquisitions, and favorable currency
translation. Excluding the effects of currency translation, revenues
rose 8% in the quarter.
Adjusted EBITDA increased 4% to $737 million in the quarter. As
expected, adjusted EBITDA margin declined in the quarter to 31.7% from
33.2% in the prior-year period. The decline was a result of a shift in
the timing of certain print shipments in Legal & Regulatory from the
second half of the year to the first half, as well as lower margins in
Learning, which were attributable to several one-time items.
Operating Profit increased 3% to $495 million in the quarter. Operating
margin was 21.3% compared to 22.6% in the prior-year period.
Earnings attributable to common shares increased 11% to $437 million, or
$0.67 per share, in the fourth quarter of 2004, compared to
$395 million, or $0.60 per share, in the fourth quarter of 2003. After
adjusting for discontinued operations, one-time items, and the impact
from tax rate normalization, underlying earnings were $324 million, or
$0.49 per share, for the fourth quarter, compared to $338 million, or
$0.52 per share, in the fourth quarter of 2003. The decline in adjusted
earnings in the quarter reflected a higher effective tax rate which
reduced adjusted earnings $0.05 per share.
Free Cash Flow in the fourth quarter was $432 million, compared to
$482 million in the 2003 period, primarily due to favorable timing of
working capital changes in the prior-year period.
Market Group Full-Year and Fourth-Quarter Highlights
Legal & Regulatory
* Revenues increased 8% in 2004 to $3.39 billion and adjusted operating
profit grew 11% to $882 million.
* Revenue growth was largely driven by increased sales of online legal
products, software and services, including Elite, FindLaw, and the
legal education business. These increases were partially offset by a
slight decline in print and CD sales.
* In the fourth quarter, revenue grew 5% to $946 million and adjusted
operating profit rose 1% to $276 million. Revenue and profit growth in
the quarter was impacted by a decline in print and CD products
resulting from the continued migration of customers from print to
online services, and a shift in print revenues from the second half of
the year to the first half.
Learning
* Revenues were $2.17 billion in 2004, a 6% increase over the prior year.
Adjusted operating profit declined 3% to $327 million primarily as a
result of one-time items.
* Revenue growth in 2004 was the result of acquisitions (including
Capstar and KnowledgeNet), currency translation, and strong performance
in the global higher education markets, including international
operations and vocational education. Revenue growth also reflected
increased sales in corporate e-learning, e-testing, and electronic
library reference products. Growth was moderated by the expiration of
a significant e-testing contract, a higher level of deferred revenues
in 2004 and lower demand for print reference products for libraries.
* In the fourth quarter, revenues grew 5% to $643 million, and adjusted
operating profit declined 20% to $133 million. The decline in adjusted
operating profit in the quarter and full year was due to restructuring
costs associated with existing and acquired businesses, as well as the
lower demand for print reference products for libraries. In addition,
quarter-over-quarter comparisons were negatively affected by one-time
cost savings in the fourth quarter of 2003 and an increased level of
deferred revenue in 2004.
Financial
* Revenues increased 15% in 2004 to $1.73 billion, and adjusted operating
profit increased 31% to $298 million. The increase in adjusted
operating profit was a result of higher revenues, as well as benefits
related to insurance recoveries.
* Revenue growth was due largely to acquisitions. However, Thomson
Financial also posted its first full year of organic revenue growth
since 2000.
* Sales of Thomson ONE workstations continued to show strong growth,
increasing 56% in 2004, as a result of user migration from legacy
products and new client wins.
* In the quarter, revenues were $474 million, a 24% increase over the
prior-year period and adjusted operating profit increased 59% to
$92 million, reflecting higher margins on the incremental revenues.
Organic growth in the quarter was 6%, representing the third
consecutive quarter of organic growth for Thomson Financial.
Scientific & Healthcare
* Revenues were $836 million in 2004, up 10% from 2003, and adjusted
operating profit increased 19% to $222 million.
* Revenue growth was the result of acquisitions (primarily BIOSIS),
continued strong subscription growth of Web of Science, Web of
Knowledge and MICROMEDEX, as well as increased customer spending for
healthcare decision support products.
* In the fourth quarter, revenues grew 13% to $272 million, and adjusted
operating profit increased 22% to $109 million. Revenue growth was
driven by acquisitions (including IHI) and increased subscriptions for
the Web of Science and MICROMEDEX, as well as strong growth in the
continuing medical education business.
Discontinued Operations
* On November 8, 2004, the Thomson Media group, a provider of largely
print-based information products focused on the banking, financial
services and related technology markets, was sold to Investcorp for
approximately $350 million, resulting in a $94 million after-tax gain,
or $0.14 per share.
2005 Financial Outlook
Thomson expects full-year 2005 revenue growth to be in line with the Corporation's long-term target of 7% to 9% (excluding the effects of currency translation). Full-year 2005 revenue growth will continue to be driven by growth from existing businesses and supplemented by tactical acquisitions.
Adjusted EBITDA margins are expected to expand slightly in 2005, reflecting continued operating improvements, partially offset by higher pension costs and corporate expenses.
Thomson also expects to continue to generate strong free cash flow in 2005.
The Thomson Corporation
The Thomson Corporation (http://www.thomson.com), with 2004 revenues of $8.10 billion, is a global leader in providing integrated information solutions to business and professional customers. Thomson provides value-added information, software tools and applications to more than 20 million users in the fields of law, tax, accounting, financial services, higher education, reference information, corporate e-learning and assessment, scientific research and healthcare. With operational headquarters in Stamford, Conn., Thomson has approximately 38,000 employees and provides services in approximately 130 countries. The Corporation's common shares are listed on the New York and Toronto stock exchanges (NYSE: TOC; TSX: TOC).
The Thomson Corporation will webcast a discussion of full-year and fourth-quarter results beginning at 10:30 am EST today. To participate in the webcast, please visit http://www.thomson.com and click on the "Investor Relations" link located at the top of the page.
Note: The Corporation's financial statements are prepared in accordance with Canadian generally accepted accounting principles (GAAP) and are reported in U.S. dollars. Prior periods have been restated for discontinued operations. Segmented results are presented on the basis of ongoing businesses, which exclude disposals. Disposals are businesses sold or held for sale, which do not qualify as discontinued operations. Adjusted EBITDA, adjusted EBITDA margin, adjusted operating profit, free cash flow and adjusted earnings from continuing operations are used by Thomson to measure the Corporation's and its segments' performance but do not have any standardized meaning prescribed by GAAP and therefore are unlikely to be comparable with the calculation of similar measures used by other companies, and should not be viewed as alternatives to operating profit, operating profit as a percentage of revenues, net earnings, cash flow from operations or other measures of financial performance calculated in accordance with GAAP. We reconcile non- GAAP financial measures to the most directly comparable GAAP measure in the following tables. We define adjusted EBITDA as earnings from continuing operations before interest, taxes, depreciation and amortization, net other income and equity in net income/losses of associates, net of tax. Because adjusted EBITDA excludes, amortization, interest and taxes, it provides a more standard comparison among businesses by eliminating differences that arise due to the manner in which they were acquired or funded. We use the measure as a supplemental cash flow metric as adjusted EBITDA also excludes depreciation and amortization of identifiable intangible assets, which are both non-cash charges. Net other income, which normally includes non-operating items such as gains and losses on sales of investments, is excluded from adjusted EBITDA, as this item is not considered relevant to operating performance. Finally, as the results of equity in associates are not directly under our control, we exclude this item from our analysis of current operating performance. We also use adjusted EBITDA margin, which we define as adjusted EBITDA as a percentage of revenues. Adjusted operating profit is defined as operating profit before amortization of identifiable intangible assets. We use this measure for our segments because we do not consider such amortization to be a controllable operating cost for purposes of assessing the current performance of our segments. We also use adjusted operating profit margin, which we define as adjusted operating profit as a percentage of revenues. We evaluate our operating performance based on free cash flow, which we define as net cash provided by operating activities less additions to property and equipment, other investing activities and dividends paid on our preference shares. We use free cash flow as a performance measure because it represents cash available to repay debt, pay common dividends and fund new acquisitions. We present our earnings attributable to common shares and per share amounts after adjusting for non-recurring items, discontinued operations, and other items affecting comparability, which we refer to as adjusted earnings from continuing operations and adjusted earnings per common share from continuing operations. We use these measures to assist in comparisons from one period to another. Adjusted earnings per common share from continuing operations do not represent actual earnings per share attributable to shareholders.
This news release, in particular the section under the heading "2005 Financial Outlook," includes forward-looking statements that are based on certain assumptions and reflect the Corporation's current expectations. These 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: actions of our competitors; failure of our significant investments in technology to increase our revenues or decrease our operating costs; failure to fully derive anticipated benefits from our acquisitions; failure to develop additional products and services to meet our customers' needs, attract new customers or expand into new geographic markets; failure to meet the special challenges involved in expansion of our operations outside North America; failure to recruit and retain high quality management and key employees; consolidation of our customers; increased self- sufficiency of our customers; increased accessibility by our customers to free or relatively inexpensive information sources; failure to maintain the availability of information obtained through licensing arrangements and changes in the terms of our licensing arrangements; changes in the global economic conditions; inadequate protection of our intellectual property rights; an increase in our effective income tax rate; impairment loss affecting our goodwill and identifiable intangible assets recorded on our balance sheet; and failures or disruptions of our electronic delivery systems or the Internet. Additional factors are discussed in the Corporation's materials filed with the securities regulatory authorities in Canada and the United States from time to time, including the Corporation's annual information form, which is contained in its annual report on Form 40-F for the year ended December 31, 2003. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Consolidated Statement of Earnings
(millions of U.S. dollars, except per common share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003 (1) 2004 2003 (1)
(restated) (restated)
Revenues 2,327 2,131 8,098 7,436
Cost of sales, selling,
marketing, general
and administrative
expenses (1,590) (1,424) (5,851) (5,396)
Depreciation (166) (157) (620) (587)
Amortization (76) (69) (286) (279)
Operating profit 495 481 1,341 1,174
Net other (expense)
income (4) (5) 24 74
Net interest expense
and other financing costs (59) (60) (235) (252)
Income taxes (119) (17) (267) (150)
Equity in net earnings
(losses) of associates,
net of tax 1 (1) - (13)
Earnings from
continuing operations 314 398 863 833
Earnings (loss) from
discontinued operations,
net of tax 124 (2) 148 32
Net earnings 438 396 1,011 865
Dividends declared
on preference shares (1) (1) (3) (9)
Net gain on redemption
of Series V
preference shares - - - 21
Earnings attributable
to common shares 437 395 1,008 877
Basic and diluted
earnings per
common share $0.67 $0.60 $1.54 $1.34
Supplemental earnings information:
Earnings attributable to
common shares, as above 437 395 1,008 877
Adjustments:
One time items:
Net other
expense (income) (2) 4 5 (24) (74)
Tax on above item (1) - 10 8
Release of tax credits (6) (64) (41) (64)
Net gain on redemption
of Series V preference
shares - - - (21)
Interim period effective
tax rate
normalization (3) 14 - - -
Discontinued operations (124) 2 (148) (32)
Adjusted earnings
from continuing
operations 324 338 805 694
Adjusted basic and diluted
earnings per common share
from continuing
operations $0.49 $0.52 $1.23 $1.06
Notes to consolidated statement of earnings
(1) Effective January 1, 2004, Thomson adopted a new accounting standard
which required the recognition of liabilities for obligations to
restore leased facilities on termination of leases. This standard
required restatement of all prior periods. In the consolidated
statements of earnings and of cash flow, for the three and twelve
months ended December 31, 2003, depreciation expense was increased by
$1 million and $3 million, respectively; income taxes were decreased
by $1 million for the twelve months ended December 31, 2003; and net
earnings decreased $1 million and $2 million, for the three and twelve
months ended December 31, 2003, respectively. In addition, the company
restated all periods to reflect Thomson Media as a discontinued
operation.
(2) In the three months ended December 31, 2004, net other (expense)
income included a loss on the early redemption of debt, largely offset
by gains on the sale of an investment and a sale of tax losses, which
cannot be used by the company. In the twelve months ended
December 31, 2004, net other (expense) income included these items
and a gain recognized in connection with a legal settlement. In the
twelve months ended December 31, 2003, net other income (expense)
included gains from a sale of an investment and a legal settlement.
(3) Adjustment to reflect income taxes based on the estimated full year
effective tax rate of the consolidated group. As a result of this tax
accounting change, reported earnings for the three months ended
December 31, 2004 reflect income taxes based on estimated effective
tax rates of each of the group's jurisdictions. The adjustment
reallocates estimated full-year income taxes between interim periods,
but has no effect on full year income taxes.
Consolidated Balance Sheet
(millions of U.S. dollars)
(unaudited)
December 31, December 31,
2004 2003 (1)
(restated)
Assets
Cash and cash equivalents 405 683
Accounts receivable, net of allowances 1,648 1,497
Inventories 312 309
Prepaid expenses and other current assets 313 307
Deferred income taxes 214 181
Current assets of discontinued operations - 67
Current assets 2,892 3,044
Property and equipment, net 1,624 1,538
Identifiable intangible assets, net 4,721 4,334
Goodwill 9,119 8,089
Other non-current assets 1,287 1,247
Non-current assets of discontinued operations - 433
Total assets 19,643 18,685
Liabilities and shareholders' equity
Liabilities
Short-term indebtedness 7 87
Accounts payable and accruals 1,738 1,520
Deferred revenue 1,043 939
Current portion of long-term debt 295 484
Current liabilities of discontinued operations - 115
Current liabilities 3,083 3,145
Long-term debt 4,013 3,684
Other non-current liabilities 1,015 998
Deferred income taxes 1,570 1,608
Non-current liabilities of discontinued operations - 57
Total liabilities 9,681 9,492
Shareholders' equity
Capital 2,696 2,639
Cumulative translation adjustment 458 259
Retained earnings 6,808 6,295
Total shareholders' equity 9,962 9,193
Total liabilities and shareholders' equity 19,643 18,685
(1) Effective January 1, 2004, Thomson adopted a new accounting standard
which required the recognition of liabilities for obligations to
restore leased facilities on termination of leases. This standard
required restatement of all prior periods. In the consolidated
balance sheet, retained earnings at December 31, 2003 were reduced by
$7 million. In addition, the company restated the December 31, 2003
balance sheet to reflect Thomson Media as a discontinued operation.
Thomson Reports Full-Year and Fourth-Quarter 2004 Results
Consolidated Statement of Cash Flow
(millions of U.S. dollars)
(unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003 2004 2003
(restated) (restated)
Cash provided by
(used in):
Operating activities
Net earnings 438 396 1,011 865
Remove earnings from
discontinued operations (124) 2 (148) (32)
Add back (deduct)
items not involving cash:
Amortization of
development costs and
capitalized software 9 7 33 38
Depreciation 166 157 620 587
Amortization 76 69 286 279
Net (gains) losses on
disposals of businesses
and investments (49) 5 (53) (52)
Loss from redemption
of bonds 53 - 53 -
Deferred income taxes (7) (78) (3) 21
Equity in (earnings)
losses of associates,
net of tax (1) 1 - 13
Other, net 35 (29) 137 54
Voluntary pension
contribution (7) (31) (7) (81)
Changes in working
capital and other items 48 187 (157) (107)
Cash provided by
operating activities -
discontinued operations 6 23 36 69
Net cash provided by
operating activities 643 709 1,808 1,654
Investing activities
Acquisitions (527) (25) (1,337) (211)
Proceeds from disposals 76 4 87 288
Additions to property
and equipment, less
proceeds from disposals (189) (200) (619) (568)
Other investing
activities (20) (22) (60) (83)
Additions to property
and equipment of
discontinued operations (1) (3) (3) (9)
Proceeds from disposals
of discontinued
operations 337 135 474 137
Cash used in other
investing activities -
discontinued operations - - (5) (15)
Net cash used in
investing activities (324) (111) (1,463) (461)
Financing activities
Proceeds from debt 740 - 1,174 451
Repayments of debt (854) (218) (1,186) (468)
Net repayments under
short-term
loan facilities (15) (234) (90) (230)
Premium on bond
redemption (41) - (41) -
Redemption of Series
V preference shares - - - (311)
Dividends paid on
preference shares (1) (2) (3) (11)
Dividends paid
on common shares (122) (118) (484) (658)
Other financing
activities, net (1) - 1 (1)
Net cash used in
financing activities (294) (572) (629) (1,228)
Translation adjustments 6 1 6 9
Increase (decrease)
in cash and
cash equivalents 31 27 (278) (26)
Cash and cash equivalents
at beginning of period 374 656 683 709
Cash and cash equivalents
at end of period 405 683 405 683
Supplemental cash
flow information:
Net cash provided by
operating activities,
as above 643 709 1,808 1,654
Additions to property
and equipment, as above (189) (200) (619) (568)
Other investing
activities, as above (20) (22) (60) (83)
Additions to property
and equipment of
discontinued operations (1) (3) (3) (9)
Dividends paid on
preference shares,
as above (1) (2) (3) (11)
Free cash flow 432 482 1,123 983
Business Segment Information *
(millions of U.S. dollars)
(unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003 (4) Change 2004 2003 (4) Change
Revenues:
Legal & Regulatory 946 902 5% 3,393 3,138 8%
Learning 643 614 5% 2,174 2,052 6%
Financial 474 383 24% 1,734 1,510 15%
Scientific &
Healthcare 272 241 13% 836 760 10%
Intercompany
eliminations (10) (12) (43) (42)
Total ongoing
businesses 2,325 2,128 9% 8,094 7,418 9%
Disposals (2) 2 3 4 18
Total revenues 2,327 2,131 9% 8,098 7,436 9%
Adjusted EBITDA: (3)
Legal & Regulatory 334 322 4% 1,085 979 11%
Learning 184 219 -16% 521 520 -
Financial 140 102 37% 480 403 19%
Scientific &
Healthcare 117 97 21% 251 217 16%
Corporate and
other (1) (37) (34) (86) (83)
Total ongoing
businesses 738 706 5% 2,251 2,036 11%
Disposals (2) (1) 1 (4) 4
Total Adjusted
EBITDA 737 707 4% 2,247 2,040 10%
Operating Profit: (3)
Adjusted Operating
Profit by Segment
Legal & Regulatory 276 274 1% 882 797 11%
Learning 133 166 -20% 327 336 -3%
Financial 92 58 59% 298 228 31%
Scientific &
Healthcare 109 89 22% 222 186 19%
Corporate
and other (1) (38) (37) (98) (97)
Total ongoing
businesses 572 550 4% 1,631 1,450 12%
Disposals (2) (1) - (4) 3
Total adjusted
operating profit 571 550 4% 1,627 1,453 12%
Amortization (76) (69) -10% (286) (279) -3%
Operating Profit 495 481 3% 1,341 1,174 14%
*Notes to business segment information for continuing operations
(1) Corporate and other includes corporate costs and costs associated with
the Corporation's stock related compensation expense.
(2) Disposals consist of the results of businesses sold or held for sale,
which do not qualify as discontinued operations.
(3) Please see reconciliations to GAAP measures in the following tables.
(4) Effective January 1, 2004, Thomson adopted a new accounting standard
related to the recognition of liabilities for asset retirement
obligations. This standard required restatement of all prior periods.
For the three and twelve months ended December 31, 2003, adjusted
operating profit was decreased by $1 million and $3 million,
respectively.
Reconciliations
Reconciliation of Adjusted EBITDA to Net Earnings and Adjusted Operating
Profit to Operating Profit
(millions of U.S. dollars, unaudited)
For the Three Months Ended December 31, 2004
Scientific & Corporate
Legal & Health- &
Regulatory Learning Financial care Other Ongoing Disposals Total
Adjusted
EBITDA 334 184 140 117 (37) 738 (1) 737
Less:
Depreciation (58) (51) (48) (8) (1) (166) - (166)
Adjusted
operating
profit 276 133 92 109 (38) 572 (1) 571
Less:
Amortization (28) (17) (23) (8) - (76) - (76)
Operating
profit 248 116 69 101 (38) 496 (1) 495
Net other expense (4)
Net interest expense and other financing costs (59)
Income taxes (119)
Equity in net earnings of associates, net of tax 1
Earnings from continuing operations 314
Earnings from discontinued operations, net of tax 124
Net earnings 438
For the Three Months Ended December 31, 2003
Scientific & Corporate
Legal & Health- &
Regulatory Learning Financial care Other Ongoing Disposals Total
Adjusted
EBITDA 322 219 102 97 (34) 706 1 707
Less:
Depreciation (48) (53) (44) (8) (3) (156) (1) (157)
Adjusted
operating
profit 274 166 58 89 (37) 550 - 550
Less:
Amortization (26) (20) (17) (6) - (69) - (69)
Operating
profit 248 146 41 83 (37) 481 - 481
Net other expense (5)
Net interest expense and other financing costs (60)
Income taxes (17)
Equity in net losses of associates, net of tax (1)
Earnings from continuing operations 398
Loss from discontinued operations, net of tax (2)
Net earnings 396
Reconciliation of Adjusted EBITDA to Net Earnings and Adjusted Operating
Profit to Operating Profit (continued)
(millions of U.S. dollars, unaudited)
For the Twelve Months Ended December 31, 2004
Scientific & Corporate
Legal & Health- &
Regulatory Learning Financial care Other Ongoing Disposals Total
Adjusted
EBITDA 1,085 521 480 251 (86) 2,251 (4) 2,247
Less:
Depreciation (203) (194) (182) (29) (12) (620) - (620)
Adjusted
operating
profit 882 327 298 222 (98) 1,631 (4) 1,627
Less:
Amortization (106) (69) (82) (29) - (286) - (286)
Operating
profit 776 258 216 193 (98) 1,345 (4) 1,341
Net other income 24
Net interest expense and other financing costs (235)
Income taxes (267)
Equity in net losses of associates, net of tax -
Earnings from continuing operations 863
Earnings from discontinued operations, net of tax 148
Net earnings 1,011
For the Twelve Months Ended December 31, 2003
Scientific & Corporate
Legal & Health- &
Regulatory Learning Financial care Other Ongoing Disposals Total
Adjusted
EBITDA 979 520 403 217 (83) 2,036 4 2,040
Less:
Depreciation (182) (184) (175) (31) (14) (586) (1) (587)
Adjusted
operating
profit 797 336 228 186 (97) 1,450 3 1,453
Less:
Amortization (106) (83) (64) (26) - (279) - (279)
Operating
profit 691 253 164 160 (97) 1,171 3 1,174
Net other income 74
Net interest expense and other financing costs (252)
Income taxes (150)
Equity in net losses of associates, net of tax (13)
Earnings from continuing operations 833
Earnings from discontinued operations, net of tax 32
Net earnings 865
Reconciliation of Adjusted EBITDA Margin and Adjusted Operating Profit Margin
to Operating Profit Margin
(as a percentage of revenue, unaudited)
For the Three Months Ended December 31, 2004
Scientific &
Legal & Health-
Regulatory Learning Financial care Ongoing Disposals Total
Adjusted EBITDA 35.3% 28.6% 29.5% 43.0% 31.7% (50.0%) 31.7%
Less:
Depreciation (6.1%) (7.9%) (10.1%) (2.9%) (7.1%) - (7.2%)
Adjusted operating
profit 29.2% 20.7% 19.4% 40.1% 24.6% (50.0%) 24.5%
Less:
Amortization (3.0%) (2.7%) (4.8%) (3.0%) (3.3%) - (3.2%)
Operating profit 26.2% 18.0% 14.6% 37.1% 21.3% (50.0%) 21.3%
For the Three Months Ended December 31, 2003
Scientific &
Legal & Health-
Regulatory Learning Financial care Ongoing Disposals Total
Adjusted EBITDA 35.7% 35.7% 26.6% 40.2% 33.2% 33.3% 33.2%
Less:
Depreciation (5.3%) (8.7%) (11.5%) (3.3%) (7.4%) (33.3%) (7.4%)
Adjusted operating
profit 30.4% 27.0% 15.1% 36.9% 25.8% - 25.8%
Less:
Amortization (2.9%) (3.2%) (4.4%) (2.5%) (3.2%) - (3.2%)
Operating profit 27.5% 23.8% 10.7% 34.4% 22.6% - 22.6%
For the Twelve Months Ended December 31, 2004
Scientific &
Legal & Health-
Regulatory Learning Financial care Ongoing Disposals Total
Adjusted EBITDA 32.0% 24.0% 27.7% 30.0% 27.8% (100.0%) 27.7%
Less:
Depreciation (6.0%) (9.0%) (10.5%) (3.4%) (7.6%) - (7.6%)
Adjusted operating
profit 26.0% 15.0% 17.2% 26.6% 20.2% (100.0%) 20.1%
Less:
Amortization (3.1%) (3.1%) (4.7%) (3.5%) (3.6%) - (3.5%)
Operating profit 22.9% 11.9% 12.5% 23.1% 16.6% (100.0%) 16.6%
For the Twelve Months Ended December 31, 2003
Scientific &
Legal & Health-
Regulatory Learning Financial care Ongoing Disposals Total
Adjusted EBITDA 31.2% 25.3% 26.7% 28.6% 27.4% 22.2% 27.4%
Less:
Depreciation (5.8%) (8.9%) (11.6%) (4.1%) (7.9%) (5.5%) (7.9%)
Adjusted operating
profit 25.4% 16.4% 15.1% 24.5% 19.5% 16.7% 19.5%
Less:
Amortization (3.4%) (4.1%) (4.2%) (3.4%) (3.7%) - (3.7%)
Operating profit 22.0% 12.3% 10.9% 21.1% 15.8% 16.7% 15.8%
Media Contact: Investor Contact:
Jason Stewart Frank J. Golden
Vice President, Media Relations Vice President, Investor Relations
(203) 539-8339 (203) 539-8470
jason.stewart@thomson.com frank.golden@thomson.com
SOURCE Thomson Corporation
-0- 02/10/2005
/CONTACT: Media: Jason Stewart, Vice President, Media Relations,
+1-203-539-8339, jason.stewart@thomson.com, Investor: Frank J. Golden, Vice
President, Investor Relations, +1-203-539-8470, frank.golden@thomson.com, both
of Thomson Corporation/
/Photo: http://www.newscom.com/cgi-bin/prnh/20020227/NYW014LOGO /
/Web site: http://www.thomson.com /
(TOC TOC.)
CO: Thomson Corporation
ST: Connecticut
IN: FIN PUB
SU: ERN ERP CCA
AA
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0656 02/10/2005 07:14 EST http://www.prnewswire.com