Year ended December 31
(millions of U.S. dollars, unaudited)
2008
2007
Net cash provided by operating activities
2,761
1,816
Capital expenditures
(906)
(608)
Other investing activities
(26)
(37)
Capital expenditures of discontinued operations
–
(97)
Other investing activities of discontinued operations
(7)
(2)
Dividends paid on preference shares
(5)
(6)
Free cash flow1
1,817
1,066
1
Free cash flow is net cash provided by operating activities less capital expenditures, other investing activities and dividends paid on preference shares. Thomson Reuters uses
free cash flow as a performance measure because it represents cash available to repay debt, pay dividends and fund new acquisitions.
In 2008, free cash flow was affected by certain unusual items. The following analysis removes these items to derive our underlying free cash flow:
In 2008, free cash flow was affected by certain unusual items. The following analysis removes these items to derive our underlying free cash flow:
Year ended December 31
2008
Free cash flow
1,817
One-time Reuters acquisition, integration and synergy costs
518
Underlying free cash flowa)
2,335
Adjustments for certain itemsb)
(450)
1,885
a)
Underlying free cash flow is free cash flow excluding one-time cash costs related to the Reuters acquisition and costs associated with integration and synergy programs.
b)
To provide a more normalized 2008 underlying free cash flow number we adjust for two timing-related items:
- Interest costs which were substantially lower in 2008 since we benefited from having interest income and only a partial year of interest expense related to the Reuters acquisition debt.
- The 2008 amount does not include what is traditionally negative free cash flow from the Reuters business in the first quarter of the year, which will be reflected in 2009.
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