University of Toronto - St. George - Presentation

Batting in the 6th Inning of a Turnaround Match

Thomson Reuters (NYSE:TRI)

University of Toronto, St. George Campus

Tepid market in F&R

and Legal segments

Losing market share to

competitors

Do

wn

sid

e D

rive

rsU

ps

ide

Su

pp

ort

Solid free cash flows

Stable annual dividends

Low treasury bond yields

Stock Price DriversValuation

HOLDRECOMMENDATION

ONE-YEAR PRICE TARGET: US$42.00

ONE-YEAR RETURN (INCL. YIELD): 9.50%

Buy Hold Sell

$35.84 $48.50

PRICE AS OF FEB 23, 2015: $39.75

Investment Highlight


ThesisFinancial Analysis

Valuation Risks Conclusion

2

TRI Will Not Hit 2013 EPS Guidance

$0.25-$0.35

$0.55

$0.05-$0.20

Capital

StrategyCost Revenue

Ad

jus

ted

EP

S

$1.76

$2.12

$1.85$1.83

$1.98

$2.80

2010 2011 2012 2013 2014 2017

Management Guidance




3

2013 2014 2017

$0.55

CO

ST

RE

PU

RC

HA

SE

RE

VE

NU

ES

COST TARGET:

$0.55/share or $400 million

Complex organization resulting from past acquisitions

20% of head count synergies realized

0

5000

10000

15000

20000

25000

2012 2013 2014 2015E 2016E 2017E 2018E

F&R Full-time Employees Estimated

20%

Headcount

Platform Simplification

Multiple platforms and data delivery systems

Migrating to 1 unified service platform and product

front end

Savings of $200 million

COSTS: Hitting a Home Run, 75% Achieved




4

2013 2014 2017

CO

ST

S

RE

PU

RC

HA

SE

RE

VE

NU

ES

REPURCHASE TARGET:

$.05-$0.20/share or $900 - $3,800 Million

$0.05-

$0.20

Repurchases

Model forecasts $4.8Bn cash after paying dividends

and meeting Net Debt to EBITDA target of 2.5

$1.0 Billion purchase completed in FTY2014

$887

$1,824

$2,818

$3,872

$4,994

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$0.05 $0.10 $0.15 $0.20 $0.25

FR

EE

CA

SH

FLO

W

EPS TARGET

Cash Required to Meet EPS Target

REPURCHASES: Sauntering to Home Plate; Enough Cash to Meet Target




5

Americas comprise 86% of revenues

US legal segment only growing at 1.4%

Secular shifts away from print

Historical CAGR: 1.3%

Forecast Period CAGR: 1.2%

Legal: 30% of Revenues

Financial & Risk: 50% of Revenues

Oligopolistic industry, high fixed costs

Desktop 45% of F&R revenue; Eikon key product

Eikon has lost 2.5% market share in 4 years

Thorough analysis of banks and asset managers

shows industry growth of 1.7%

Historical CAGR: -1.3%


REVENUES: TRI Will Strike-Out on Revenue Targets

2013 2014 2017

CO

ST

S

RE

PU

RC

HA

SE

RE

VE

NU

ES

$0.25-$0.35

REVENUE TARGET:

$.25-$0.35/share or CAGR 4.0% - 5.7%




6

Overall Forecasted Revenue Growth


-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E

CAGR 2%

2013 2014 2017

CO

ST

S

RE

PU

RC

HA

SE

RE

VE

NU

ES

$0.25-$0.35

REVENUE TARGET:

$.25-$0.35/share or CAGR 4.0% - 5.7%

Strong growth in Corporate and Professional

Complexity of tax laws to drive future growth

Historical CAGR: 5.8%


Tax & Accounting: 10% of Revenues





7

REVENUES: TRI Will Strike-Out on Revenue TargetsFinancial Analysis




Low Profitability

0%10%20%30%40%50%60%

EBITDA Margin

EBITDA Margin is lower than industry average

0.0%

10.0%

20.0%

30.0%

40.0%

2013 2014 2015E 2016E 2017E 2018E 2019E

EBITDA Margin

Industry Average EBITDA Margin

8

ROE Driven by Financial Leverage & Asset Turnover ROIC Close to WACC

1.50x

2.00x

2.50x

3.00x

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

8.50%

9.00%

9.50%

2013 2014 2015E 2016E 2017E 2018E 2019E

DuPont Analysis

ROE Net Income Margin Assets/Equity

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

8.50%

9.00%

9.50%

2013 2014 2015E 2016E 2017E 2018E 2019E

ROE Sales/Assets

6.0%

6.9%6.5%

5.3%

6.0%

7.1%

6.4%6.9%

7.2% 7.4% 7.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2010 2011 2012 2013 2014 WACC 2015E 2016E 2017E 2018E 2019E

ROIC

TRI is on the cusp of creating or destroying value

Profitability Analysis




9

Result Summary

Three Scenarios: Base, Bull and Bear

Perpetual Growth Rate: 2%

Exit EBITDA Multiple: 11.0x

DCF

American and European Comparables

Two Multiples: EV/EBITDA and EV/Revenue

Comparables

6.40x

2.65x

11.20x

2.49x

0.00x

2.00x

4.00x

6.00x

8.00x

10.00x

12.00x

14.00x

AmericanMedian

EuropeanMedian

High Low

EV

/Revenue

14.30x

11.30x

21.90x

10.84x

0.00x

5.00x

10.00x

15.00x

20.00x

25.00x

AmericanMedian

EuropeanMedian

High Low

EV

/EB

ITD

A

$44.2

$42.7

$38.3

$42.3

DCF - Perpetuity Growth

DCF - EBITDA Multiple

Comparables - EV/Revenue

Comparables - EV/EBITDA

Valuation Results Valuation Methodology WeightFair Value

Per Share

Comparables Using EV/EBITDA 20% $42.3

Comparables Using EV/Revenue 20% $38.3

FCFF Fair Value Multiple Method 30% $42.7

FCFF Fair Value Perpetuity Method 30% $44.2

Target Price: $42.00

$42.00

$35.33$43.43

$53.10

$0.00

$20.00

$40.00

$60.00

Bear Base Bull

Valuation




10

Monte Carlo Simulation

Moderate Fluctuation in Revenue Growth

Will Not Change Our Hold Recommendation

Terminal Growth Rate

$48.33 1.50% 1.75% 2.00% 2.25% 2.50%

5.50% $60.47 $64.74 $69.62 $75.26 $81.83

6.00% $52.62 $55.93 $59.66 $63.88 $68.71

6.50% $46.34 $48.98 $51.91 $55.18 $58.86

WACC 7.14% $39.91 $41.93 $44.16 $46.61 $49.32

7.50% $36.92 $38.70 $40.63 $42.75 $45.08

8.00% $33.30 $34.79 $36.40 $38.15 $40.07

8.50% $30.20 $31.46 $32.82 $34.29 $35.89

Valuation Sensitive to WACC, Terminal Growth Rate and Exit EBITDA Multiple

Exit EBITDA Multiple

9.0x 10.0x 11.0x 12.0x 13.0x

$36.93 $41.11 $45.29 $49.47 $53.65

$36.26 $40.37 $44.48 $48.59 $52.71

$35.61 $39.65 $43.70 $47.74 $51.79

$34.79 $38.75 $42.71 $46.67 $50.63

$34.35 $38.26 $42.18 $46.09 $50.00

$33.74 $37.59 $41.44 $45.29 $49.14

$33.14 $36.92 $40.71 $44.50 $48.29

Sensitivity Analysis

Buy Hold Sell

$35.84 $48.50

Fre

qu

en

cy

Bin




11

50%

• Ability to execute on EPS improvements is key

• Further Cost Saving is still a challenge

Execution Risk

• Better/worse than anticipated economic climate

impacts our valuation

Macroeconomic Climate

• A 10% depreciation of Euro against USD will

result in ~$90 million decrease in EBITDA

Currency Fluctuations

• Thomson family maintains a major

voice among shareholders

• Thomson Reuters is ranked at the

lowest 25 percentile compared to

113 TSX companies

Corporate Governance

Current: $39.75

Buy Hold Sell

$28.45 $38.49

Current: $39.75

Buy Hold Sell

$45.14 $61.07

Rotman

Corporate

Governance

Score

TR

I

62.00%12.00%

9.00%

17.00%Revenue

Risks




60%

7%

14%

19%Expenses

US $

Euro

GBP

Other

12

TRI is Up to Bat




Cost Saving: $140 Million/ Year

Repurchase: 86 Million Shares

$3.8 Billion

Acquisition: $2.5 Billion

$1.7 BillionMax. Cash Attainable by the end of 2017

Target EPS: $2.80 Our Estimate: $2.62

$0.18

Deficit

2013 EPS: $1.80

Revenue

Repurchase

Cost

Repurchase

Cost

Revenue

$0.55

$0.20

$0.25 - $0.35

How to make up the EPS deficit?

APPENDIX: Company

14

Stock Price

02/23/2015 Price: US$ 39.75

CA$ 50.04

52 weeks High(USD): 41.44

52 weeks Low(USD): 33.21

YTD Change % : -0.53/-1.31%

Market Cap (USD): 31689.4 M

Shares Outstanding: 796.0M

0

500

1000

1500

2000

2500

0

5

10

15

20

25

30

35

40

45

9-2

1-0

7

11-2

1-0

7

1-2

1-0

8

3-2

1-0

8

5-2

1-0

8

7-2

1-0

8

9-2

1-0

8

11-2

1-0

8

1-2

1-0

9

3-2

1-0

9

5-2

1-0

9

7-2

1-0

9

9-2

1-0

9

11-2

1-0

9

1-2

1-1

0

3-2

1-1

0

5-2

1-1

0

7-2

1-1

0

9-2

1-1

0

11-2

1-1

0

1-2

1-1

1

3-2

1-1

1

5-2

1-1

1

7-2

1-1

1

9-2

1-1

1

11-2

1-1

1

1-2

1-1

2

3-2

1-1

2

5-2

1-1

2

7-2

1-1

2

9-2

1-1

2

11-2

1-1

2

1-2

1-1

3

3-2

1-1

3

5-2

1-1

3

7-2

1-1

3

9-2

1-1

3

11-2

1-1

3

1-2

1-1

4

3-2

1-1

4

5-2

1-1

4

7-2

1-1

4

9-2

1-1

4

11-2

1-1

4

1-2

1-1

5

TRI S&P 500

Stock DataStock Price

15

0

5

10

15

20

25

30

35

40

45

9-21-07 3-21-08 9-21-08 3-21-09 9-21-09 3-21-10 9-21-10 3-21-11 9-21-11 3-21-12 9-21-12 3-21-13 9-21-13 3-21-14 9-21-14

TRI

01/03/2013 Acquire

Practical Law

2010/09/14:

TRI launched EIKON

2011

3 billions goodwill

Impairment Charge 09/28/2011:

James Smith

becomes CEO

04/17/2008

Acquire

Reuters

TIMELINE OF KEY EVENTS

16

Significant Acquisitions and Divestures

Date Role Target Buyer/Investors Sellers Size($mm)

Jan-06-2015 Buyer - Parent Flow tivity, LLC Boomer Consulting, Inc. 0

Aug-07-2014 Buyer GenoSpace, LLC Thomson Reuters Corporation (TSX:TRI) 5

Dec-12-2012 Seller - Parent Investor Relations, Public Relations and

Multimedia Services Businesses

NASDAQ OMX Corporate Solutions, Inc. Thomson Reuters (Markets) LLC; Thomson Reuters Global

Resources 390

Jul-09-2012 Buyer FX Alliance Inc Thomson Reuters Corporation (TSX:TRI) LabMorgan Corporation; Technology Crossover Ventures;

The Bank of New York Mellon Corp, Private Banking &

Securities Investments; Westpac Banking (NY),

Investment Arm Seller Funds: TCV Member Fund, L.P.;

Technology Crossover Ventures VI, L.P. 679.9

Apr-23-2012 Seller - Parent Truven Health Analytics Inc. (nka:Truven

Holding Corp.)

Veritas Capital Buyer Funds: Veritas Capital Fund IV, L.P. Thomson Reuters Global Resources; Thomson Reuters

U.S.A. Inc. 1250

Feb-29-2012 Seller - Parent Thomson Reuters (Markets) LLC, Portia

Investment Operations Platform Business

SS&C Technologies Holdings, Inc. (NasdaqGS:SSNC) Thomson Reuters (Markets) LLC

170

Jul-04-2011 Buyer - Parent Solcara Limited Thomson Reuters (Professional) UK Ltd. Access Intelligence plc (AIM:ACC) 4.02

May-16-2011 Buyer Global Objectives Limited Thomson Reuters Corporation (TSX:TRI) HarbourVest Partners, LLC; Spectrum Equity Investors 530

Nov-18-2010 Buyer Pangea3 LLC Thomson Reuters Corporation (TSX:TRI) Sequoia Capital India; The GlenRock Group, LLC 95

Nov-11-2010 Buyer - Parent Connect 4 Pty Ltd. Thomson Reuters (Professional) Australia Limited Fairfax Business Media 9.96

May-17-2010 Buyer Affinitext, UAE legislation Library Thomson Reuters Corporation (TSX:TRI) Affinitext Inc. 10

Feb-02-2010 Buyer Super law yers Thomson Reuters Corporation (TSX:TRI) Key Professional Media, Inc. 15

Dec-17-2009 Buyer - Parent Bionure, S.L Digna Biotech S.L.; Galenicum Health, S.L.; Prous Science

S.A.U. 2.02

Sep-10-2009 Target - Parent Tradew eb Markets LLC Barclays Capital PLC; Thomson Financial, Inc. 68

Apr-22-2008 Seller Thomson Reuters, A Copy Of The Thomson

Fundamentals Database

FactSet Europe Limited Thomson Reuters Corporation (TSX:TRI)

73

Mar-31-2008 Seller - Parent Pluck Corporation Demand Media, Inc. (NYSE:DMD) Austin Ventures; Mayfield Fund; Reuters Group PLC

(nka:Thomson Reuters UK Limited) 66.29

Oct-11-2007 Target - Parent Tradew eb Markets LLC Credit Suisse Innoventure Capital AG; Deutsche Bank AG,

Investment Arm; Goldman Sachs Group, Merchant

Banking Division; JPMP Capital, LLC; Lehman Brothers,

Private Equity Division; Merrill Lynch Global Private Equity;

Morgan Stanley Private Equity; Royal Bank Equity Finance;

UBS Capital

Thomson Financial, Inc.

180

Jun-28-2007 Buyer - Parent FERI Fund Market Information Ltd. Reuters Group PLC (nka:Thomson Reuters UK Limited) Feri Rating and Research GmbH 5.36

Jun-18-2007 Seller - Parent TA Indigo Holding Corporation

(nka:IntraLinks Holdings, Inc. (NYSE:IL))

Rho Capital Partners, Inc.; TA Associates, Inc. (nka:TA

Associates Management, L.P.) Buyer Funds: Rho

Ventures IV, L.P.; TA X, L.P.

Apax Partners LLP; Canaan Partners; Deutsche Bank AG,

Investment Arm; Emigrant Capital Corp.; Ernst & Young

LLP; Inclusive Ventures, LLC; Johnson & Johnson

Development Corporation; New York City Investment Fund

Manager, Inc.; New York Community Investment Company;

Portview Communications Partners LP; Reuters Group

PLC (nka:Thomson Reuters UK Limited); Tow erBrook

Capital Partners L.P.; Wachovia Capital Partners, Inc.

(nka:Pamlico Capital) Seller Funds: Catalyst Investments;

Tow erbrook Investors I, L.P.

215

May-11-2007 Seller Thomson Corp., Thomson Learning And

Thomson Nelson Learning

Apax Partners LLP; OMERS Private Equity The Thomson Corporation (nka:Thomson Reuters

Corporation (TSX:TRI)) 7750

May-08-2007 Buyer Reuters Group PLC (nka:Thomson Reuters

UK Limited)

The Thomson Corporation (nka:Thomson Reuters

Corporation (TSX:TRI)) 18794.38

17

APPENDIX: Thesis Supporting Data

18

Segments: 3-Year Rolling CAGR Calculations

Segment Revenues and 3-Year Rolling CAGR

Segment Revenues and 3- year Rolling CAGR

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Finance and Risk $6,902.00$7,297.00$6,802.22$6,647.99$6,538.00$6,651.45$6,774.16$6,883.87$6,999.09$7,116.27$7,235.45

Legal $3,027.00$3,221.00$3,266.00$3,351.00$3,379.00$3,485.94$3,548.48$3,605.40$3,660.18$3,715.79$3,715.79

Tax & Accounting $907.00 $1,050.00$1,161.00$1,243.00$1,370.00$1,473.71$1,586.69$1,686.23$1,793.06$1,854.95$1,892.05

Intellectual Property $789.00 $852.00 $894.00 $982.00 $1,011.00 $999.82 $1,000.92$1,001.02$1,018.14$1,033.41$1,048.91

3-Year F&R CAGR -0.48% -3.06% -1.31% 0.02% 1.19% 1.15% 1.09% 1.11%

3-Year Legal CAGR 2.57% 1.33% 1.14% 1.32% 1.64% 1.13% 1.04% 1.01%

3-Year T&A CAGR 8.58% 5.79% 5.67% 5.84% 5.02% 4.59% 4.16% 3.23%

3-Year T&A CAGR 4.25% 4.85% 4.18% 0.60% -0.33% 0.04% 0.57% 1.07%

19

Revenue CAGR Calculations

Calculation of Required Growth Rate

2013 2014 2015 2016 2017

Earnings Per Share $1.83 $1.85 $2.80

Required Growth Rates in

'13

Required Growth Rates after '14

results

Low

End

High

End

Low

End

High

End

Revenue Contribution $0.25 $0.35 Revenue Contribution $0.23 $0.33

% Growth from Revenue 13.7% 19.1%

% Growth from

Revenue 12.6% 18.0%

CAGR over 4 years 3.25% 4.47% CAGR over 3 years 4.03% 5.68%

20

TRI Acquisition History

TRI’s Acquisition History

$379 $349 $612

$1,200 $1,301 $1,241 19

31

26

39

2928

5

10

15

20

25

30

35

40

45

50

$100

$600

$1,100

$1,600

$2,100

$2,600

$3,100

$3,600

2008 2009 2010 2011 2012 2013

Total cash consideration # Acquisitions

21

Share Repurchase Calculations

• Management guidance: Net Debt to EBITDA of 2.5

• At Net Debt to EBITDA of 2.25, $4.6Bn of cash flows

available

• $1.0Bn worth of shares already repurchased in 2014

$2,156.58

$3,416.37

$4,640.49

0.20

0.70

1.20

1.70

2.20

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

2010 2011 2012 2013 2014 2015E 2016E 2017E

US

D M

ILLIO

N

Net Debt Available Net Debt to EBITDA

$887

$1,824

$2,818

$3,872

$4,994

$6,188

$7,464

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35

US

D M

ILL

ION

EPS: USD / SHARE

2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E

Cash & equivalents 864 422 1,283 1,316 1,018 1,500 2,906 3,455 4,654 6,291 8,359

Dividends paid 901 963 1,024 1,041 1,036 1,034 1,034 1,034 1,034 1,034 1,034

Repurchase of Common Stock 0 326 168 400 1,023 0 0 0 0 0 0

Actual Net Debt to EBITDA Ratio 2.13 1.96 1.73 2.15 1.62 2.07 2.12 1.95 1.96 2.08 2.34

Net Debt to EBITDA 2.13 1.96 1.73 2.15 1.62 2.25 2.25 2.25 2.25 2.25 2.25

Net Debt at Desired Ratio $8,233.07 $8,607.55 $8,869.17 $9,044.93 $9,182.65 $9,213.80

Actual Net Debt $6,076.48 $5,191.18 $4,228.68 $3,225.34 $2,209.90 $1,227.89

Excess Net Debt Capacity $2,156.58 $3,416.37 $4,640.49 $5,819.58 $6,972.75 $7,985.91

Net Debt Available $2,156.58 $3,416.37 $4,640.49 $5,819.58 $6,972.75 $7,985.91

22

Significant Acquisitions and Divestures

23

F&R Segment

1.Tepid Market in F &R and Legal Segments

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

21

22

23

24

25

26

27

2009 2010 2011 2012 2013

Financial Data Market

Finanical Market Data Spending (Billions)

Market Data Spending Growth Rate

275.8

272.5

273

273.5

274

274.5

275

275.5

276

2009 2010 2011 2012 2013

Total Revenue (Billions)

264.5 CAGR 1.4%

24

F&R Segment

2.Continuously losing data market share to competitors

From 2005 to 2013 :

TRI’s market share declined from 37% to 27%

Bloomberg’s market share increased from 25% to 32%

TRI launched EIKON37%

36%

34%

29.40%

33%

30.05%29.48%

27%

25%

26%

24%

29.20%

30.30% 30.44% 30.82%31.71%

20%

22%

24%

26%

28%

30%

32%

34%

36%

38%

2006 2008 2009 2010 2011 2012 2013 2014

TRI Bloomberg

25

F&R Segment

3. Revenue Growth is sluggish

-10%

-5%

0%

5%

10%

15%

10.5

11

11.5

12

12.5

13

13.5

14

2008 2009 2010 2011 2012 2013

Thomson Reuters

Revenues(Billions)

Revenue Growth Rate Poly. (Revenue)

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

0

2

4

6

8

10

2008 2009 2010 2011 2012 2013

Bloomberg L.P.

Revenues(Billions)

Revenue Growth Rate

Poly. (Revenue)

26

APPENDIX: Market Support

27

US 30 Year Yields, TRI stock performance, Canadian Mining Index

28

Beta Regression, TRI Vs. S&P 500 stock chart

29

TRI and Peers Stock Returns

30

APPENDIX: Economy

31

US Macro Economics

0

2

4

6

8

10

12

US Unemployment Rate

14480.3

14720.3

14417.9

14958.3

15533.8

16244.6

16800

1.66%

-2.05%

3.75%

3.85%

4.58%

3.42%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

13000

13500

14000

14500

15000

15500

16000

16500

17000

2008 2009 2010 2011 2012 2013 2014

USD GDP USD GDP Growth Rate

US economy is recovering

32

Global Macroeconomics

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2008 2009 2010 2011 2012 2013

India

GDP GDP Growth Rate

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2008 2009 2010 2011 2012 2013

China

GDP GDP Growth Rate

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

0

500

1000

1500

2000

2500

3000

2008 2009 2010 2011 2012 2013

Brazil

GDP GDP Growth Rate

Developing Countries’ GDP Growth Rate is Slower

33

APPENDIX: FINANCE & RISK

34

Transactions Non-Desktop Desktop Recoveries

39%

45%

16%Americas

EMEA

Asia

FINANCE & RISK: OVERVIEW

Organic Growth Rates

• Porter’s 5 forces analysis: Oligopolistic structure, high barriers to entry

• Continued weakness in desktop

• Non-desktop showing some growth

2014 Share of Total Revenues: 51.6%

2014 Revenues: $6.5 billion

2014 Adj. EBITDA Margin: 24.3%

2010 2011 2012 2013

Trading -3% -1% -3% -6%Investors -5% -2% -2% -1%

Marketplaces 7% 10% 1% -3%GRC -3% 0% 17% 10%

35

Context Methodology AnalysisRecommenda

tion

Non - Desktop

Non-Desktop, Transactions, Risk

• 3-year CAGR 4.65%

• Strong growth to continue

Transactions Risk

8.0%

1.8% 1.8%

7.1%

4.65%4.65%

4.65% 4.65%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2011 2012 2013 2014E 2015E 2016E 2017E 2018E

Growth Rate Estimated

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E

Average Trades/ Day Estimated Trades/ Day

• 4-year CAGR -5.8%

• Reversal to 2010 levels. CAGR 7.7%

0%

5%

10%

15%

20%

25%

30%

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

2011 2012 2013 2014E 2015E 2016E 2017E 2018E

GRC Estimated Organic Growth

• 3-year CAGR 14%

• Estimate future CAGR of 5.35% into

2018

36

DESKTOPS: Market Share Position

• Eikon 4.0 well received by financial community

• Cost efficient: 13 user customizable packages

• Expect market share gains for Eikon

• Forecast 60-40 split of new desktops in TRI’s favor

37%36%

34%

29.40%33%

30.05%29.48%

27%25% 26%24%

29.20%30.30%

30.44%30.82% 31.71%

20%

22%

24%

26%

28%

30%

32%

34%

36%

38%

2006 2008 2009 2010 2011 2012 2013 2014

TRI Bloomberg

Historical Bloomberg Vs. Eikon Market Share

37

Sell - Side

DESKTOPS: Market growth rate 1.7%

Buy - Side

0

20000

40000

60000

80000

100000

120000

140000

160000

2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E

Bank of America Deutsche Bank Barclays Citi

Goldman Sachs JP Morgan Morgan Stanley Estimated Total

• 2010 to 2013 buy-side costs CAGR: 2.25%

• Expect pace to continue into 2018

• 2010 - 2013 trading, IB revenue CAGR -1.4%

• Expect return to 2010 levels by 2018, or 1.2% CAGR

-50%

-40%

-30%

-20%

-10%

0%

10%

0

5000

10000

15000

20000

25000

30000

2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E

Blackrock State StreetT Row Price InvescoAXA LazardFortress Estimated Total Investment Management

38

Sell-Side IB Revenue Calculations: Bank Of America

Bank of America Corporation (NYSE:BAC) > Financials > Segments

In Millions of USD. View By: Line Items Restatement: Latest Filings

Period Type: Annual Order: Latest on Right

Currency: US Dollar Conversion: Historical

Units:

S&P Capital IQ

(Default) Decimals: Capital IQ (Default)

Business Segments

For the Fiscal Period Ending

Restated

12 months

Dec-31-2008

Reclassified

12 months

Dec-31-2009

12 months

Dec-31-2010

Reclassified

12 months

Dec-31-2011

Reclassified

12 months

Dec-31-2012

12 months

Dec-31-2013

Currency USD USD USD USD USD USD

Revenues

Consumer & Business Banking - Deposits (Includes Business

Banking)

- - - - 13,294.0 14,286.0

Consumer & Business Banking - Consumer Lending 11,358.0 (1,574.0) - - 12,348.0 12,474.0

Consumer Real Estate Services - Home Loans - - - - 4,574.0 3,132.0

Consumer Real Estate Services - Legacy Assets & Servicing - - - - 2,735.0 4,740.0

Global Wealth and Investment Management (GWIM) 5,643.0 14,726.0 14,737.0 16,097.0 16,252.0 17,734.0

Global Banking - - 16,446.0 16,902.0 16,016.0 15,406.0

Global Markets - - 19,101.0 15,628.0 14,250.0 15,918.0

39

Sell-Side IB Revenue Calculations: Deutsche Bank, Barclays

Deutsche Bank AG (DB:DBK) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Reclassified

12 months

Dec-31-2008

Reclassified

12 months

Dec-31-2009

Reclassified

12 months

Dec-31-2010

Reclassified

12 months

Dec-31-2011

Restated

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Corporate Banking & Securities - 20,599.1 21,807.6 17,991.6 20,261.1 18,498.9

Barclays PLC (LSE:BARC) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Reclassified

12 months

Dec-31-2008

Reclassified

12 months

Dec-31-2009

Restated

12 months

Dec-31-2010

Restated

12 months

Dec-31-2011

Restated

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Barclays Core - Barclaycard 3,094.6 3,623.3 3,936.3 4,658.7 5,355.5 5,834.5

Barclays Core - Investment Bank 4,091.2 17,533.3 19,864.2 15,766.2 18,807.0 17,415.7

Barclays Core - Head Office (593.0) (2,920.6) 621.4 2,941.9 (6,504.7) (566.6)

UK Retail and Business Banking (UK RBB) 6,087.3 5,241.9 5,678.8 6,358.5 6,688.3 6,917.9

Europe Retail and Business Banking (Europe RBB) 1,438.0 1,583.1 1,055.5 1,240.6 733.0 627.8

Africa Retail and Business Banking (Africa RBB) 954.3 4,206.4 4,178.3 4,517.1 3,731.8 3,798.6

Corporate Banking 3,495.3 2,621.8 2,506.1 3,369.9 3,512.4 4,315.4

Wealth and Investment Management 1,847.5 2,053.1 2,393.6 2,691.3 2,896.4 2,846.0

Investment Management (104.9) 64.6 - - - -

Absa 2,680.8 - - - - -

Total Revenues 22,991.2 34,006.9 40,234.2 41,544.1 35,219.8 41,189.4

40

Sell-Side IB Revenue Calculations: Citi, Goldman Sachs

Citigroup Inc. (NYSE:C) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Restated

12 months

Dec-31-2008

Reclassified

12 months

Dec-31-2009

12 months

Dec-31-2010

Reclassified

12 months

Dec-31-2011

Reclassified

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Citicorp - Global Consumer Banking 21,262.0 17,536.0 20,494.0 32,151.0 33,189.0 31,627.0

Citicorp - Institutional Clients Group 32,444.0 35,306.0 33,260.0 32,068.0 30,493.0 33,553.0

The Goldman Sachs Group, Inc. (NYSE:GS) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Reclassified

12 months

Nov-28-2008

Fiscal

Year

Change

Restated

12 months

Dec-31-2009

Restated

12 months

Dec-31-2010

Reclassified

12 months

Dec-31-2011

Reclassified

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues FYC

Investment Banking 5,453.0 FYC 4,984.0 4,810.0 4,355.0 4,926.0 6,004.0

41

Sell-Side IB Revenue Calculations: JP Morgan

JPMorgan Chase & Co. (NYSE:JPM) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Restated

12 months

Dec-31-2008

Reclassified

12 months

Dec-31-2009

12 months

Dec-31-2010

12 months

Dec-31-2011

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Consumer & Community Banking - Consumer & Business Banking - - 17,106.0 17,531.0 16,840.0 16,963.0

Consumer & Community Banking - Mortgage Banking - - 2,430.0 4,948.0 14,453.0 12,707.0

Consumer & Community Banking - Card, Merchant Services &

Auto (Card)

6,415.0 3,551.0 11,902.0 15,520.0 14,817.0 16,021.0

Corporate & Investment Bank - - 34,724.0 34,269.0 34,805.0 34,457.0

Commercial Banking 4,313.0 4,266.0 5,743.0 6,210.0 6,784.0 6,888.0

Asset Management 7,499.0 7,777.0 8,898.0 9,476.0 9,860.0 11,255.0

Corporate/Private Equity (1,912.0) 6,554.0 7,400.0 4,239.0 (1,054.0) 1,282.0

Corporate (2,029.0) (1,891.0) (2,148.0) (2,533.0) (2,859.0) (3,192.0)

Investment Bank (IB) 10,320.0 25,830.0 - - - -

Retail Financial Services (RFS) 13,615.0 15,043.0 - - - -

Treasury & Securities Services (TSS) 8,052.0 7,289.0 - - - -

Total Revenues 46,273.0 68,419.0 86,055.0 89,660.0 93,646.0 96,381.0

42

Sell-Side IB Revenue Calculations: Morgan Stanley

Morgan Stanley (NYSE:MS) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Restated

12 months

Nov-30-2008

Fiscal

Year

Change

Press Release

12 months

Dec-31-2008

Reclassified

12 months

Dec-31-2009

Reclassified

12 months

Dec-31-2010

Reclassified

12 months

Dec-31-2011

Reclassified

12 months

Dec-31-2012

12 months

Dec-31-2013

Currency USD USD USD USD USD USD USD

Revenues FYC

Institutional Securities 14,768.0 FYC 11,081.0 - 16,129.0 17,683.0 11,025.0 15,443.0

Wealth Management 7,019.0 FYC 6,887.0 - 12,519.0 12,772.0 13,034.0 14,214.0

Investment Management 547.0 FYC 463.0 - 2,685.0 1,887.0 2,219.0 2,988.0

Corporate (194.0) FYC (195.0) - (103.0) (115.0) (176.0) (228.0)

Total Revenues 22,140.0 FYC 18,236.0 - 31,230.0 32,227.0 26,102.0 32,417.0

43

Buy-Side Cost Calculations: Blackrock

BlackRock, Inc. (NYSE:BLK) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Restated

12 months

Dec-31-2008

Reclassified

12 months

Dec-31-2009

12 months

Dec-31-2010

12 months

Dec-31-2011

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Asset Management Business 5,064.0 4,700.0 8,612.0 9,081.0 9,337.0 10,180.0

Total Revenues 5,064.0 4,700.0 8,612.0 9,081.0 9,337.0 10,180.0

Operating Profit Before Tax

Asset Management Business 1,593.0 1,278.0 2,998.0 3,249.0 3,524.0 3,857.0

Total Operating Profit Before Tax 1,593.0 1,278.0 2,998.0 3,249.0 3,524.0 3,857.0

44

Buy-Side Cost Calculations: State Street

State Street Corporation (NYSE:STT) > Financials > Segments

In Millions of the reported currency. View By: Line Items Restatement: Latest Filings


Currency: Reported Currency Conversion: Historical

Units:

S&P Capital IQ


Business Segments


Reclassified

12 months

Dec-31-2008

12 months

Dec-31-2009

Reclassified

12 months

Dec-31-2010

12 months

Dec-31-2011

Reclassified

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Investment Servicing 8,791.0 7,369.0 8,120.0 8,428.0 8,484.0 8,581.0

Investment Management 1,486.0 1,115.0 1,152.0 1,166.0 1,214.0 1,297.0

Other 418.0 7.0 (344.0) - (46.0) -

Divestitures (2.0) - - - - -

Total Revenues 10,693.0 8,491.0 8,928.0 9,594.0 9,652.0 9,878.0

Net Profit Before Tax

Investment Servicing 3,092.0 2,449.0 2,615.0 2,538.0 2,443.0 2,405.0

Investment Management (40.0) 118.0 60.0 267.0 350.0 461.0

Other (203.0) (42.0) (589.0) (269.0) (27.0) (180.0)

Divestitures (7.0) - - - - -

Total Net Profit Before Tax 2,842.0 2,525.0 2,086.0 2,536.0 2,766.0 2,686.0

45

Buy-Side Cost Calculations: T. Rowe Price Group

T. Rowe Price Group, Inc. (NasdaqGS:TROW) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Restated

12 months

Dec-31-2008

Reclassified

12 months

Dec-31-2009

Reclassified

12 months

Dec-31-2010

12 months

Dec-31-2011

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Investment Advisory Services 2,121.3 1,867.4 2,367.2 2,750.2 3,024.8 3,485.7

Total Revenues 2,121.3 1,867.4 2,367.2 2,750.2 3,024.8 3,485.7


Investment Advisory Services 848.5 701.6 1,036.5 1,226.9 1,364.3 1,637.4

Total Operating Profit Before Tax 848.5 701.6 1,036.5 1,226.9 1,364.3 1,637.4

46

Buy-Side Cost Calculations: Invesco

Invesco Ltd. (NYSE:IVZ) > Financials > Segments




Units:

S&P Capital IQ


Business Segments

For the Fiscal Period Ending 12 months

Dec-31-2008

Reclassified

12 months

Dec-31-2009

Reclassified

12 months

Dec-31-2010

Reclassified

12 months

Dec-31-2011

Reclassified

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Investment Management 3,307.6 2,627.3 3,487.7 3,982.3 4,050.4 4,644.6

Total Revenues 3,307.6 2,627.3 3,487.7 3,982.3 4,050.4 4,644.6


Investment Management 747.8 484.3 589.9 882.1 842.6 1,120.2

Total Operating Profit Before Tax 747.8 484.3 589.9 882.1 842.6 1,120.2

47

Buy-Side Cost Calculations: AXA Group

AXA Group (ENXTPA:CS) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Reclassified

12 months

Dec-31-2008

Restated

12 months

Dec-31-2009

Reclassified

12 months

Dec-31-2010

Restated

12 months

Dec-31-2011

Restated

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Life & Savings 28,655.1 130,328.9 116,056.3 86,125.4 110,052.1 119,946.3

Property & Casualty 37,201.1 40,735.2 37,869.3 37,364.1 40,586.7 42,715.7

International Insurance 4,839.0 4,576.1 4,485.4 4,515.8 4,387.9 4,709.8

Asset Management 5,687.1 5,153.7 5,063.4 4,613.2 4,910.0 5,604.9

Banking 558.9 685.1 674.5 684.6 622.3 706.5

Holdings & Other Companies 2,217.6 1,719.8 42.9 883.4 98.9 526.1

Corporate (2,091.8) (2,214.3) (2,142.8) (1,991.6) (2,077.9) (2,134.5)

Total Revenues 77,067.0 180,984.6 162,048.9 132,194.9 158,580.0 172,074.6


Life & Savings (2,603.2) 4,644.9 3,262.5 3,602.5 4,770.3 4,869.5

Property & Casualty 1,897.6 3,161.6 2,944.7 2,956.8 3,685.1 4,080.4

International Insurance 121.6 683.6 645.0 543.0 418.0 442.1

Asset Management 1,317.7 1,113.6 659.7 302.7 747.6 1,429.5

Banking (18.2) (4.3) (2.7) (283.2) (46.1) 4.1

Holdings & Other Companies 1,885.0 507.3 (706.7) 84.4 (777.9) (391.1)

Corporate (1,105.3) (1,328.6) (1,131.7) (1,154.9) (1,236.7) (1,166.4)

Total Operating Profit Before Tax 1,495.1 8,778.2 5,670.8 6,051.3 7,560.2 9,268.1

48

Buy-Side Cost Calculations: Lazard

Lazard Ltd. (NYSE:LAZ) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Reclassified

12 months

Dec-31-2008

12 months

Dec-31-2009

12 months

Dec-31-2010

Reclassified

12 months

Dec-31-2011

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Financial Advisory 1,022.9 986.8 1,119.9 992.1 1,049.1 980.6

Asset Management 614.8 601.7 849.7 897.4 896.3 1,039.1

Corporate (80.5) (58.0) (64.2) (60.0) (32.9) (34.4)

Total Revenues 1,557.2 1,530.5 1,905.4 1,829.5 1,912.4 1,985.4


Financial Advisory 225.9 (11.9) 168.9 62.4 (8.5) 20.9

Asset Management (63.4) 97.2 265.3 268.5 236.8 335.1

Corporate (137.4) (267.5) (190.6) (95.4) (104.3) (139.2)

49

Buy-Side Cost Calculations: Fortress

Fortress Investment Group LLC (NYSE:FIG) > Financials > Segments




Units:

S&P Capital IQ


Business Segments


Reclassified

12 months

Dec-31-2008

Reclassified

12 months

Dec-31-2009

12 months

Dec-31-2010

Reclassified

12 months

Dec-31-2011

Reclassified

12 months

Dec-31-2012

12 months

Dec-31-2013


Revenues

Private Equity - Funds 68.2 168.0 179.7 130.2 130.5 150.1

Private Equity - Permanent Capital Vehicles 54.1 50.4 48.1 53.4 56.5 76.5

Liquid Hedge Funds 235.2 112.2 165.8 112.7 145.2 261.3

Credit - Hedge Funds 161.4 106.1 226.9 200.3 231.5 292.7

Credit - PE Funds 15.7 62.6 206.1 190.9 167.0 216.1

Logan Circle - - 13.3 20.1 26.8 35.8

Corporate 197.1 84.8 (45.8) (27.8) 16.9 14.6

Total Revenues 731.8 584.1 794.1 679.6 774.3 1,047.3


Private Equity - Funds - - 126.9 92.8 85.4 94.5

Private Equity - Permanent Capital Vehicles - - 18.0 24.8 28.8 30.9

Liquid Hedge Funds - - 63.6 13.8 45.3 112.9

Credit - Hedge Funds - - 72.3 37.2 92.5 120.9

Credit - PE Funds - - 95.8 101.2 34.0 56.1

Logan Circle - - (14.9) (17.3) (9.8) (11.8)

Corporate - - (3.7) 0.4 0.6 -

Total Operating Profit Before Tax 358.0 252.9 276.8 403.5

50

DESKTOPS: Market growth rate 1.7%

51

F&R Platforms Before and After

52

Thomson Reuters F&R Products

53

APPENDIX: Legal

54

Legal : OVERVIEW

Organic Growth Rate

• US Legal Service Market is tepid

• Core Legal Research stays sluggish (especially US print)

2014 Share of Total Revenues: 27%

2014 Revenues: $ 3.4 billion


2011 2012 2013

Core Legal

Research -2% -2% -1%

Business of Law 13% 7% 7%

Corporation,

Government and

Academic

4% 2% 0%

Global Business 4% 5% -1%

41.18%

11.76%

23.53%

23.53%

Core Legal Research

Business of Law

Corporation, Government and Academic

Global Business

86%

10%4%

Americans EMEA Asia

55

US Legal Online Research

Market Share is StableUS Legal Service Market Revenue

275.8

0

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E

CAGR

1.4%

264

48.60% 51.08% 51.50% 52.65% 53.98%

27.15% 25.91% 25.23% 24.62% 23.77%

24.26% 23.01% 23.27% 22.73% 22.25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2018E

Market Share of Online Legal Research

Thomos Reuter Rees Elsevier(LexisNexis) Wolters Kluwer

56

US Print Suffers from Industry Transformation

Growth Rate of US Print

-6%

-5% -5%

-6% -6%-6% -6% -6% -6%

-6%

-6%

-6%

-6%

-5%

-5%

-5%

-5%

-5%

-4%

2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E

• Industry Transform from Print Service

to Electronic Service

• Continues to decline 5% annually

57

Business of Law Corporation, Government and Academic

• Increase as transforming from outside counsel to in-

house counsel

• 2010 – 2013 Growth Driver for Legal Segment

• Grows at high speed in future

Business Of Law & Corporation, Government and Academic

33.5

39.8

0

5

10

15

20

25

30

35

40

45

50

2011 2012 2013 2014E 2015E 2016E 2017E 2018E

Corporate in-house Legal Spending

CAGR4%

13%

7% 7%7% 7% 7%6% 6%

5%

0%

2%

4%

6%

8%

10%

12%

14%

2011 2012 2013 2014E 2015E 2016E 2017E 2018E

58

Asia

Global Business

• 2009 to 2013 Asia Legal Service

revenues (billions) CAGR 5.9%

• Strong Growth

Europe Volatile Historical Growth

• 2009 to 2013 Legal Service revenues

CAGR 3.2%

0

20

40

60

80

100

120

CAGR5.9%

0

50

100

150

200

250

CAGR3.2%

4%

5%

-1% -1%2011 2012 2013 2014(Q1-Q3)

increase in Latin American, and declines in UK and Spain

18% increase in Latin American

10% decrease in Latin American

59

Thomson Reuters Legal Products

60

APPENDIX: Tax & Accounting

61



2014 Operating Profit Margin: 21.5%Tax & Accounting: OVERVIEW

Organic Growth Rate

• Strong growth led by Corporate and Professional Segments

• Heavily Concentrated in North America

• Thread of new entrants remains significant

2011 2012 2013 2014

Professional 8% 8% 10% 9%

Corporate 7% 10% 9% 12%

Government 0% (29%) (33%) 31%

Knowledge Solutions 3% 4% 3% 2%

27%

40%

4%

29%

Revenue by Segments

Professional Corporate Government Knowledge Solutions

94%

3% 3%

Revenue by Geography

North America EMEA Asia

62


tion

Corporate

Corporate and Professional

Professional

• 4 Year CAGR 9.49%

• Expected to Continue Growth over the Next 4 Years

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

2011 2012 2013 2014 2015E 2016E 2017E 2018E

Historical Expected

• 4 Year CAGR 8.75%

• Expected to Continue Growth over the Next 4 Years

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

2011 2012 2013 2014 2015E 2016E 2017E 2018E

Historical Expected

63

Government and Knowledge Solutions

Knowledge Solutions

• 4 Year CAGR 3%

• Expected to Grow Moderately

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

2011 2012 2013 2014 2015E 2016E 2017E 2018E

Historical Expected

Government

• Small proportion of T&A Revenue

• Volatile Organic Growth over the Past Years

• New Management Team Shows Signs of Recovery

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

2012 2013 2014 2015E 2016E 2017E 2018E

Historical Expected

64

APPENDIX: Intellectual Property & Science

65

Intellectual Property & Science: Overview

• Growth of China Spending on R&D

• Overall small growth lead by spending in Aerospace sector

• Porter’s Five Force

51%

16%

33%

IP Solutions Life Sciences Scientific and Scholarly Research

Organic Growth Rates

2011 2012 2013

IP Solutions 7% 0% 2%

Life Sciences 12% 5% 3%

Scientific & Scholarly

Research

5% 2% 7%


2013 EBITDA Margin: 31.0%

2013 Operating Profit Margin: 22.9%

78%

17%

5%

Americas EMEA Asia

66

Intellectual Property Solutions

Patent Applications and Publications: Indicators of Innovation

0

100

200

300

400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013 2014

US Innovation Indicators

Patent Applications Publications

• Patent and Publication expected to remain consistent at 1% and 7%

CAGR

67

Life Sciences

Life Science Industry R&D Spending

• Overall growth of 3% CAGR in US Life Science spending

• US represents over 45% of Life Science R&D Spending market

-

50

100

150

200

250

2011 2012 2013 2014 2015 2016 2017

Life Science Industry R&D Spending

Global US

68

Scientific & Scholarly Research

U.S. University Spending

Continued Spending Among Top

Universities

• Academic performs ~60% of all U.S.

basic research

• Federal funding for academia will

increase 2.5% in 2015

• U.S. universities continue to lead

world rankings

0%

20%

40%

60%

80%

100%

120%

Top 400 Top 50 Top 10

U.S. Standing Among World’s Top

Universities

US Non US

69

APPENDIX: Financial Statement

70

Historical and Projected Statements

Income StatementProjected Fiscal Years Ending December 31

($ in millions of U.S. dollars except per share amounts) 2013 2014 2015 2016 2017 2018 2019

Finance and Risk 6,648 6,538 6,651 6,774 6,884 6,999 7,116

Legal 3,351 3,379 3,486 3,548 3,605 3,660 3,716

Tax & Accounting 1,243 1,370 1,474 1,587 1,686 1,793 1,855

Intellectual Property 982 1,011 1,000 1,001 1,001 1,018 1,033

Corporate and Other revenues 331 319 344 351 358 365 373

Eliminations revenues (12) (12) (12) (12) (12) (12) (12)

Total Revenue From ongoing operations 12,543 12,605 12,943 13,250 13,523 13,824 14,081

Disposals 159 2 - - - - -

Total revenue 12,702 12,607 12,943 13,250 13,523 13,824 14,081

Revenue deferral & recognition - -

Total GAAP accounting revenues 12,702 12,607 12,943 13,250 13,523 13,824 14,081

Cost of revenues 9,486 9,304 9,478 9,621 9,781 10,007 10,207

Gross profit 3,216 3,303 3,465 3,628 3,742 3,817 3,875

Margin 25% 26% 27% 27% 28% 28% 28%

Finance and Risk cash costs (5,192) (4,947) (4,950) (4,964) (5,005) (5,096) (5,188)

Legal cash costs (2,157) (2,141) (2,244) (2,287) (2,328) (2,370) (2,412)

Tax and Accounting cash costs (865) (953) (997) (1,060) (1,115) (1,186) (1,227)

Intellectual Property cash costs (678) (683) (669) (680) (690) (700) (711)

Corporate and Other cash costs (594) (580) (618) (630) (643) (656) (669)

Integration costs - - - - - - -

EBITDA from ongoing operations 3,068.6 3,313.0 3,477.2 3,640.3 3,753.6 3,828.6 3,886.6

Margin 24.2% 26.3% 26.9% 27.5% 27.8% 27.7% 27.6%

Other businesses (disposals) 64.00 1,064.00 0.00 0.00 0.00 0.00 0.00

Total EBITDA 3,132.58 4,377.00 3,477.24 3,640.32 3,753.60 3,828.56 3,886.57

Depreciation & amortization of computer software (1,189) (1,175) (1,137) (1,164) (1,188) (1,215) (1,237)

Amortization of other identifiable intangible assets (641) (647) (651) (666) (680) (695) (708)

EBIT 1,303 2,555 1,689 1,810 1,886 1,919 1,941

Margin 10.3% 20.3% 13.1% 13.7% 13.9% 13.9% 13.8%

Interest expense (460) (442) (455) (463) (468) (461) (443)

Interest income - - - - - - -

Gain (loss) on investments - (85) - - - - -

Unusuals and Other 190 (7) - - - - -

Earnings before taxes 1,033 2,021 1,235 1,347 1,418 1,458 1,498

Tax expense (848) (62) (370) (404) (425) (437) (450)

Net income (loss) 184.6 1,959.0 864.2 942.9 992.6 1,020.5 1,048.9

Minority interest - (50) - - - - -

Net income attributable to Thomson Reuters 185 1,909 864 943 993 1,020 1,049

Diluted shares outstanding 828 796 771.00$ 746.00$ 721.00$ 721.00$ 721.00$

Diluted earnings (loss) per share (IFRS) 0.22$ 2.40$ 1.12$ 1.26$ 1.38$ 1.42$ 1.45$

Operating EPS per share 1.50$ 1.87$ 2.19$ 2.43$ 2.62$ 2.66$ 2.69$ 71


Cash Flow StatementProjected Fiscal Years Ending December 31

($ in millions of U.S. dollars) 2013 2014 2015 2016 2017 2018 2019 2020

Funds From Operating Activities

Net income (loss) 185 1,959 864 943 993 1,020 1,049 1,058

Depreciation And Amortization 1,830 1,822 1,788 1,830 1,868 1,910 1,945 1,970

Deferred Income Taxes 434 (273) - - - - - -

Disposal/Sale of Assets (195) (9) - - - - - -

Other Non-Cash Items 289 (701) - - - - - -

Funds from operations 2,543 2,798 2,652 2,773 2,861 2,930 2,994 3,027

Change in operating assets and liabilities 60 (432) 254 22 16 21 13 (1)

Pension Contributions (500)

Cash flow from operating activities 2,103 2,366 2,907 2,795 2,876 2,951 3,007 3,027

Funds From Investing Activities

Acquisitions, net of cash (1,241) (167) - - - - - -

Proceeds from Disposal of businesses 550 14 - - - - - -

Capital Expenditures (1,004) (968) (1,011) (1,008) (1,015) (1,038) (1,057) (1,070)

Other Investing Activities 67 50 - - - - -

Investing cash flow s from discountinued operations 6 - - - - - -

Cash flow from investing activities (1,622) (1,071) (1,011) (1,008) (1,015) (1,038) (1,057) (1,070)

CFADS (cash flow s available for debt service) 481 1,295 1,896 1,787 1,861 1,913 1,950 1,956

Funds From Financing Activities

Proceeds From Debt 3,268 1,480 206 1,144 306 - - -

Repayment of Debt (2,240) (1,120) (534) (564) (704) - (563) (632)

Net repayment under short term loan (3) - - - - - - -

Issuance of Common Stock - - - - - - - -

Repurchase of Common Stock (400) (1,023) (1,000) (1,000) (1,000) - - -

Dividends paid (1,041) (1,036) (1,034) (1,034) (1,034) (1,034) (1,034) (1,034)

Other f inancing activities (19) 129 - - - - - -

Cash flow from financing activities (435) (1,570) (2,362) (1,453) (2,432) (1,034) (1,597) (1,666)

Translation Adjustments on Cash (13) (22) - - - - - -

Beginning cash balance 1,283 1,316 1,018 552 886 315 1,195 1,548

Change in cash & equivalents 33 (297) (466) 334 (570) 879 353 290

Ending cash balance 1,316 1,018 552 886 315 1,195 1,548 1,838

72


Projected Fiscal Years Ending December 31

($ in millions of U.S. dollars) 2013 2014 2015 2016 2017 2018 2019 2020

Assets

Current Assets

Cash & equivalents 1,316 1,018 552.1 885.7 315.3 1,194.7 1,547.8 1,838.2

Trade & Other Receivables 1,751 1,810 1,850 1,894 1,933 1,976 2,013 2,038

Other Financial Assets 183 161 161 161 161 161 161 161

Other Current Assets 650 657 657 657 657 657 657 657

Assets Held for Sale - - - - - - - -

Total Current Assets 3,900 3,646 3,220 3,598 3,066 3,989 4,378 4,694

Computer Hardw are & Other Property 1,291 1,182 1,124 1,053 975 894 812 729

Computer Softw are 1,622 1,529 1,460 1,375 1,280 1,184 1,085 986

Other Intangible Assets 7,890 7,124 6,473 5,807 5,127 4,432 3,724 3,007

Goodw ill 16,871 16,403 16,403 16,403 16,403 16,403 16,403 16,403

Other Financial Assets 192 127 127 127 127 127 127 127

Other Noncurrent Assets 583 536 536 536 536 536 536 536

Deferred Tax 90 50 50 50 50 50 50 50

Total Assets 32,439 30,597 29,394 28,949 27,564 27,615 27,116 26,533

Liabilities & Shareholders Equity

Current Liabilities

Current Indebtness 596 534 564 704 - 563 632 755

Payables, Accruals, and Provision 2,624 2,443 2,762 2,828 2,886 2,950 3,005 3,043

Deferred/Unearned Revenue (Short-Term) 1,348 1,355 1,362 1,395 1,423 1,455 1,482 1,501

Other Financial Liabilities 193 265 233 201 169 136 104 72

Liabilities Associated w ith Assets for Sale - - - - - - - -

Total Current Liabilities 4,761 4,597 4,922 5,127 4,478 5,105 5,223 5,371

Notes & LT Indebtness 7,470 7,576 7,012 6,308 6,308 6,308 5,839 5,138

Provisions and Other Non-current Liabilities 1,759 2,171 2,377 3,521 3,827 3,263 3,100 3,046

Other Financial Liabilities 102 161 161 161 161 161 161 161

Deferred Tax 1,917 1,433 1,433 1,433 1,433 1,433 1,433 1,433

Total Liabilities 16,009 15,938 15,904 16,550 16,206 16,270 15,757 15,149

Capital 10,347 10,157 9,157 8,157 7,157 7,157 7,157 7,157

Retained Earnings (Accumulated Deficit) 7,303 7,168 6,999 6,908 6,867 6,853 6,869 6,893

Accumulated Other Comprehensive Income (1,614) (3,147) (3,147) (3,147) (3,147) (3,147) (3,147) (3,147)

Non-Controlling Interest 394 481 481 481 481 481 481 481

Total Shareholders' Equity 16,430 14,659 13,490 12,399 11,358 11,344 11,360 11,384

Total Liabilities & Shareholders' Equity 32,439 30,597 29,394 28,949 27,564 27,615 27,116 26,533

Balance Sheet

73

APPENDIX: Valuation

74

DCF Valuation

DCF Valuation ResultsCashflow Forecast

*All dollar amounts in millions 2015E 2016E 2017E 2018E 2019E

Free cash flow s to the f irm (FCFF) 2,214 2,111 2,189 2,236 2,260

Enterprise Value EBITDA Multiple Method Enterprise Value Perpetual Growth Method WACC Assumptions

EBITDA Multiple 11.0x Perpetual grow th of f irm cash flow s 2.00% Valuation date 31-Dec-15

Terminal Year EBITDA 3,887 30-yr US government bond rate 2.5%

Expected market return 8.5%

Present Value of Terminal Value 33,581 Present Value of Terminal Value 35,211 Market risk premium 6.0%

Present Value of Forecast FCF 8,187 Present Value of Forecast FCF 7,670 Beta 0.91

Enterprise Value 41,767 Enterprise Value 42,881 CAPM cost of equity 8.0%

- Debt 9,389 - Debt 9,389 Cost of debt 4.5%

+ Cash 552 + Cash 552 Tax rate 14.0%

Equity Value (Market Cap) 32,931 Equity Value (Market Cap) 34,044 After tax cost of debt 3.9%

Shares outstanding 771 Shares outstanding 771 Target gearing 20.0%

Fair value share price $42.71 Fair value share price 44.16 WACC 7.1%

75

Comparable Firms’ Ratios

Company Name Market Enterprise Net Debt / EV/Revenue (3)(4)

EV/EBITDA (3)(4)

P/E (3)(4)

Thomson Reuters Cap. (1)

Value (2)

EV 2013A LTM NTM 2015E 2013A LTM NTM 2015E 2013A LTM NTM 2015E

U.S. Comparables

Factset $5.9 B $5.8 B (2.4%) 6.4x 6.2x 5.9x 5.4x 17.4x 17.1x 15.8x 14.6x 24.7x 23.4x 20.3x 22.9x

MarketAxess $2.8 B $2.6 B (6.5%) 11.2x 10.2x 9.3x 8.5x 21.9x 19.7x 17.5x 14.7x 29.1x 32.6x 39.6x 33.1x

Mcgraw Hill $24.2 B $24.0 B (4.7%) 5.0x 4.7x 4.5x 4.2x 13.9x 12.5x 11.2x 10.3x 22.9x 25.7x 20.8x 21.5x

Moody's $19.0 B $19.8 B 2.2% 6.4x 6.1x 5.5x 5.2x 14.2x 13.1x 12.1x 11.0x 19.7x 22.3x 22.2x 21.1x

MSCI $6.0 B $6.3 B 5.4% 6.3x 5.8x 5.9x 5.4x 14.3x 14.4x 14.9x 13.7x 22.2x 24.6x 28.5x 25.9x

U.S. Comparables Average $11.6 B $11.7 B (1.2%) 7.1x 6.6x 6.2x 5.7x 16.3x 15.4x 14.3x 12.9x 23.7x 25.7x 26.3x 24.9x

European Comparables

ICAP $3.0 B $3.1 B 4.0% 2.5x 2.7x 2.7x 2.7x 11.3x 10.8x 10.2x 9.5x 68.2x 98.5x 12.5x 16.0x

Markit $4.7 B $5.2 B 8.2% 5.6x 5.0x 4.9x 4.7x 14.2x 13.0x 11.1x 11.0x N/A 18.4x 17.6x 17.9x

Pearson $10.9 B $13.1 B 16.5% 2.5x 2.7x 2.7x 2.5x 14.2x 16.0x 15.5x 13.7x 32.9x NA 16.3x 17.7x

Reed Elsevier $12.9 B $16.0 B 19.4% 2.7x 2.6x 2.5x 2.4x 10.8x 11.8x 12.5x 11.8x 23.2x 23.4x 17.9x 19.0x

Wolters Kluw er $7.9 B $10.1 B 22.0% 2.8x 2.9x 2.8x 2.6x 11.1x 11.6x 11.4x 10.5x 15.5x NA 15.5x 16.1x

European Comparables Average $7.9 B $9.5 B 14.0% 3.2x 3.2x 3.1x 3.0x 12.3x 12.6x 12.1x 11.3x 35.0x 46.7x 15.9x 17.4x

Thomson Reuters $30.4 B $38.3 B 18.8% 3.0x 3.0x 3.0x 2.9x 12.2x 14.2x 11.1x 10.2x 32.5x 70.1x 18.6x 19.0x

Average $11.6 B $13.1 B 7.5% 4.9x 4.7x 4.5x 4.2x 14.1x 14.0x 13.0x 11.9x 29.1x 37.6x 20.9x 20.9x

Sources: Capital IQ, Bloomberg, Company Information

76


tion

Comparable Valuation

Company Name 2015E EV/Revenue 2015E EV/EBITDA

U.S. Comparables

Factset Yes 5.4x Yes 14.6x

MarketAxess Yes 8.5x Yes 14.7x

Mcgraw Hill Yes 4.2x Yes 10.3x

Moody's Yes 5.2x Yes 11.0x

MSCI Yes 5.4x Yes 13.7x

U.S. Comparables Average 5.7x 12.9x

European Comparables

ICAP Yes 2.7x Yes 9.5x

Markit Yes 4.7x Yes 11.0x

Pearson Yes 2.5x Yes 13.7x

Reed Elsevier Yes 2.4x Yes 11.8x

Wolters Kluw er Yes 2.6x Yes 10.5x

European Comparables Average 3.0x 11.3x

Combined Average 3.0x 12.1x

Thomson Reuters Metric 2.8x 10.2x

Total Enterprise Value $38,903 $42,012

- Debt $9,953 $9,953

+ Cash $552 $552

Equity Value $29,503 $32,612

Fair Value Share Price $38.27 $42.30

77

APPENDIX: Risk Analysis

78

Risk Analysis

Risk

Execution

Risk

High ProbabilityLow Probability

Low Impact

High Impact

Market

Risk

Legislation

&

Regulation

IP

Rights

Alternative

Information

Exchange

Rate Risk

79


tion

Where We Could Be Wrong

Macroeconomic Climate

Execution Risk

Risk Model Implication

Eikon 4.0 fails to attract

customers and continues to

loose market share

F&R-Desktop revenue shrinks 8.3%

annually in the next two years

Further cost savings are not

realized

EBITDA Margin remains at 2014

level

Buy Hold Sell

$28.45 $38.49


Better than expected GDP

growth in the U.S. and global

economies will impact our

valuation

Bull Case in DCF Valuation

Buy Hold Sell

$45.14 $61.07

$43.43

$53.10

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

DC

F Im

plied

Pri

ce

22%

$43.43

$33.47

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

DC

F Im

plied

Pri

ce

(23%)

80


tion

Currency Risk


Unhedged fluctuation in FX

market impacts company

profitability

Considering the revenue/cost

structure, effect of exchange rate

fluctuations in EBITDA is estimated

under different scenarios.60%

7%

14%

19%Expenses

US $

Euro

GBP

Other62.00%12.00%

9.00%

17.00%Revenues

$3,465

$3,352

$3,250

$3,300

$3,350

$3,400

$3,450

$3,500

2015 E

BIT

DA

($M

illio

n)

If USD Appreciates 10%

(3.3%)

$3,465

$3,376

$3,300

$3,350

$3,400

$3,450

$3,500

2015 E

BIT

DA

($M

illio

n)

If Euro Depreciates 10% against

USD

(2.6%)

81

Governance Risk

Governance Structure

10%

33%57%

% of Ownership

Public & Other

Institutions

The Woodbridge

Company Limited

82

Governance Risk

Governance Risk

Individual Potential

• Significant share

ownership by Thompson

Family

Group Potential Board Decision Output Ending Shareholder Score

• No split between CEO

and Chair position

• Poor director

assessment

• Performance peer group

and CEO share

ownership requirements

• Average score on TSX

is113 with a standard

deviation of 20

-14

-16

-14

Average TSXTRI

83

APPENDIX: Governance and Key People

84

Governance Analysis

Key People

David Thomson

James C. Smith David W. Binet

85

Governance Analysis

Key People

David Thomson

• Chairman and Deputy Chairman of the

Woodbridge Company Limited, and the principal

shareholder of The Thomson Corporation

• MA from Cambridge University

• President of Hudson's Bay Company and its

subsidiaries Zellers and Simpsons until 1990

• Director at Thomson Reuters Corporation since

1988

• Evident preference for taking the back seat in

management

86

Governance Analysis

Key People

James C. Smith

• President and Chief Executive Officer, Thomson

Reuters

• Marshall University

• Chief Executive Officer at Thomson Reuters UK

Limited and Thomson Reuters Corp., since

January 1, 2012

• Chief Operating Officer of Thomson Reuters UK

Limited since September 28, 2011

• Served as the Chief Executive Officer and

President of Professional Division of Thomson

Reuters Corporation and Thomson Reuters UK

Limited

87

Governance Analysis

Key People

David W. Binet

• President and Chief Executive Officer of The

Woodbridge Company Limited since January 1,

2013

• Senior Vice President at Thomson Reuters

Corporation and Secretary until January 2013

• Partner at Tory Tory DesLauriers and Binnington

• Director of The Woodbridge Company Limited since

January 1, 2013.

• Member of the board of The Globe and Mail

• Board member on a number of companies which

Woodbridge controls

• Law degree from McGill University,

• BA from Queen’s University

• Graduate degree in journalism from Northwestern

University.

88

Governance Analysis

Key People

Name Position

David Thomson

James C. Smith

Sheila Bair

Manvinder S. Banga

David W. Binet

Mary Cirillo

Michael E. Daniels

Steven A. Denning

P. Thomas Jenkins

Ken Olisa

Vance K. Opperman

Peter J. Thomson

Wulf von Schimmelmann

Chairman

President and CEO

Director

Director

Deputy Chairman

Director

Director

Director

Director

Director

Director

Director

Director

89

Governance Analysis

Key People

Name Position

James C. Smith

Stephane Bello

Jus Carlson

David W. Craig

Carla Jones

Richard H. King

Gonzalo Lissarrague

Niel Masterson

Basil Moftah

Brian Peccarelli

President and CEO

Executive VP and CFO

Executive VP and CCO

President, Financial & Risk

Senior VP, Office of CEO

Executive VP and COO

President Global Growth & Operations

Executive VP and CTO

President, Intellectual Property & Science

President, Tax & Accounting

90

Governance Analysis

Key People

Name Position

James T. Powell

Andrew Rashbass

Brian Scanlon

Deirdre Stanley

Susan Taylor Martin

Peter Warwick

Executive VP and CTO

Chief Executive, Reuters

Executive VP and CSO

Executive VP, General Counsel

President, Legal

Chief People Officer

91

APPENDIX: Conclusion Figures’ Calculation

92

Required Acquisition Calculations

EPS Deficit = $0.18

Net Income = .18 x 771 mm Shares = $140 million

@ a 30% Tax Rate, EBT = $200

Interest = 13% of EBITDA

EBITDA = $230 million

Assuming a 11.0x buy-out multiple,

Takeover price = $2.5 Billion

Cash Flow Forecast

Cash Attainable at the End of 2017

2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E

Cash & equivalents 864 422 1,283 1,316 1,018 552 886 315 1,195 1,548 1,838

Dividends paid 901 963 1,024 1,041 1,036 1,034 1,034 1,034 1,034 1,034 1,034

Repurchase of Common

Stock 0 326 168 400 1,023 1,000 1,000 1,000 0 0 0

Debt

$7,518.0

0

$7,594.0

0

$7,231.0

0

$8,066.0

0 $8,110.00

$7,781.5

5

$8,361.8

7

$7,963.7

1

$7,963.7

1

$7,400.4

0

$6,768.1

0

Cash $864.00 $422.00

$1,283.0

0

$1,316.0

0

$1,018.0

0 $552.10 $885.72 $315.26

$1,194.7

0

$1,547.8

1

$1,838.2

0

EBITDA

$3,126.0

0

$3,661.0

0

$3,447.2

2

$3,132.5

8

$4,377.0

0

$3,477.2

4

$3,640.3

2

$3,753.6

0

$3,828.5

6

$3,886.5

7

$3,897.1

5


Actual Net Debt to EBITDA

Ratio 2.13 1.96 1.73 2.15 1.62 2.24 2.30 2.12 2.08 1.90 1.74


Net Debt at Desired Ratio 8693.104 9100.804 9383.994 9571.404 9716.416 9742.878

Actual Net Debt 7229.45 7476.146 7648.452 6769.011 5852.59 4929.903

Excess Net Debt Capacity 1463.654 1624.658 1735.542 2802.392 3863.827 4812.975

Net Debt Capacity

$1,463.6

5

$1,624.6

6

$1,735.5

4

$2,802.3

9

$3,863.8

3

$4,812.9

8

Historical TRI Valuation

6.00x

8.00x

10.00x

12.00x

14.00x

16.00x

18.00x

TEV/LTM EBITDA

TEV/LTM EBITDA Average Average EV/EBITDA

Documents

University of Toronto - St. George - Presentation