Thomson Reuters Business Classification (TRBC) is an industry classification system that is owned
and operated by Thomson Reuters. The market-oriented system tracks the primary business of a
corporation and reflects global industry practices by grouping together correlated companies that
offer products and services into similar end markets.
This document highlights the differences between TRBC and competing systems and explains why
these differences matter to investors.
TABLE OF CONTENTS
SUMMARY................................................................. 2
Energy Sector ............................................................ 3
Basic Materials .......................................................... 4
Industrials ................................................................. 5
Cyclical Consumer Goods & Services ......................... 7
Non-Cyclical Consumer Goods & Services ................. 9
Financials ................................................................ 10
Healthcare............................................................... 11
Technology.............................................................. 12
Telecommunications ............................................... 13
Utilities.................................................................... 14
SUMMARY
Why choose TRBC over other classification systems?
1. Global coverage and market oriented schema

With 130 countries, over 74,000 companies and 10 years of history, TRBC provides
unrivalled global and local views into world markets.
2. Built to be the backbone of our content and index offering

Thomson Reuters has decades of experience in creating intelligent information from
data and has worldwide operations that are unparalleled in the scope of content
collected.

In addition to TRBC based Indices, TRBC allows an integrated classification solution
across news, estimate aggregates, fundamentals, research and many other content
areas.
3. Our expertise and select methodology allow for well-defined Sectors

Sectors are detailed enough to focus on particular industries while still providing enough
constituents for effective analysis.

TRBC is up to date, with major revisions launched in August 2009 that revised the Retail,
Banking and Energy sectors to reflect economic changes.
4. Frequent Review of company status

Thomson Reuters has a large global team of analysts in six countries to provide local
language capabilities.

In addition to regular review of company filings to identify organic changes in revenue,
the team also constantly monitors the media, M&A transactions and other corporate
actions. This ensures that classifications are always up to date.
5. Ease of access and cost

TRBC is available across Thomson Reuters desktop and datafeed products.

TRBC is available for index, product or other licensing at competitive rates.
ENERGY
COAL
TRBC places coal miners within the Energy Sector. This reflects the end consumer use of coal as an
energy source and is in line with our market-based approach. TRBC has an Industry Group
dedicated to Coal given the importance of Coal as an energy source and the distinctive business
model versus Oil & Gas operators. Where the coal is produced for the exclusive use of steel
production, coking coal, companies are assigned to the Steel Industry. TRBC also breaks Coal into
its own Industry Group, recognizing its importance as a fuel source.
Why does this matter?
Over 50% of Energy produced in China and the USA is based on Coal and the price of coal versus oil,
gas and alternatives drives price performance.
What do other providers do?

ICB allocates the coal industry to Mining within the Basic Materials Economic Sector.

GICS includes Coal in the Oil, Gas and Consumable Fuels Industry.
RENEWABLE ENERGY
TRBC recognizes the distinct market for renewable energy and assigns companies engaged in
providing the full range of services in building, operating and servicing renewable energy
equipment and biofuels.
Why does this matter?
Renewable Energy is significant and growing component of global energy demand. The market is
uniquely impacted by government policy, the cost of input materials and the price of fossil fuel
substitutes.
What do other providers do?

GICS does not recognize the Renewable Energy Industry. Companies are assigned to a
broad variety of Industries based on which products they produce. For example, solar
power companies are allocated to Semiconductors, solar power installation companies
are assigned to Electrical Equipment. Wind turbine producers are assigned to Heavy
Electrical Equipment. Biofuels are included in Consumable Fuels alongside Coal. GICS
commented on their approach in the attached announcement.
http://www.mscibarra.com/news/pressreleases/archive/20100331_pr.pdf

ICB does support an Alternative Energy Sector.
BASIC MATERIALS
APPLIED RESOURCES
The Basic Materials Economic Sector includes all companies who supply the raw materials for
Industrial production. By their nature they serve multiple end markets within Industrial production.
TRBC seeks to distinguish the mainly extractive businesses from those that provide further
processing such as forestry and containers. The Applied Resources Business Sector has distinctive
price performance over the economic cycle compared to the extractive industries. The
Construction and Metals & Minerals Business Sectors are normally slower to respond to increases
in economic demand while the Forestry, Paper and Containers Industries, as intermediate industrial
inputs, tend to respond faster.
Why does this matter?
Investors following a Macro-Economic investment style can more easily isolate the Micro-Economic
impact on companies from the Mineral & Metals, Construction Materials and extractive sector
versus the Applied Resources sector.
What do other providers do?

ICB includes Construction Materials within Industrial rather than alongside the other
primary inputs, or similar construction inputs like Steel.

ICB classifies containers as Consumer Products.

GICS separates wood and paper from paper containers into different Industry Groups.
CHEMICALS
Agricultural chemicals are isolated by TRBC but they are included in specialty chemicals by ICB. The
agricultural chemicals market is a distinct end market driven by agricultural demand and demographic
pressures. For example, potash prices move in very different cycles compared to other chemical prices.
INDUSTRIALS
AEROSPACE AND DEFENCE
TRBC has a single industry for aerospace manufacturers because aerospace companies generally
serve both military and commercial end markets and it is not possible to effectively segregate the
companies without introducing major distortions. TRBC also includes companies who primarily
serve the defence industry but may not produce capital goods.
Why does this matter?
TRBC carefully reviews the major components and number of likely constituents of each Industry
when designing the schema. The goal is to avoid forcing companies into artificially granular
segments which would result in an arbitrary segregation of companies. Almost all aerospace
companies serve both civil and military markets. In addition there are several dominant players
and substantial global industry concentration. For example, Boeing is the largest commercial
aerospace company but also has a large military exposure. Companies providing ancillary defence
services are impacted by Government procurement cycles and therefore have similar price
performance to defence contractors providing capital goods.
What do other providers do?

ICB has separate commercial and military aerospace industries.

GICS has a single Aerospace and Defence Sub-Industry.
TRANSPORT
TRBC provides a segmented view of transport infrastructure with air, marine and ground
transportation industry groups with further breakdowns between freight and passenger. Following
the market-oriented approach TRBC assigns supporting services within each industry.
TRBC places airlines within the Industrial segment alongside other transportation services which
move in relation of the industrial business cycle and generate the majority of their profits from
business travel.
Shipping companies that predominantly transport oil & gas are assigned to the Oil and Gas
transportation Industry. The market orientated nature of TRBC ensures that companies that are
easily identifiable as being dependent on a specific market are assigned to the relevant Industry.
Why does this matter?
There are different dynamics in the markets for freight and passengers, TRBC uses a market-based
approach versus a mode of transport approach. This allows investors to implement strategies that
take advantage of those differences.
What do other providers do?

ICB aggregates air, road and port infrastructure into a single industry.

ICB places airlines within consumer services, travel & leisure, separating airlines from
other transportation

GICS breaks ground transportation into Railroads and Trucking while TRBC breaks them
into Freight Transportation-Ground and Passenger Transportation-Ground and Sea
OTHER DIFFERENCES WITHIN INDUSTRIALS
INDUSTRIAL CONGLOMORATES
TRBC maintains conglomerates as a stand alone business sector, reflecting the size and importance
of these companies and the fact that conglomerates are engaged in providing a very broad range of
goods and services. GICS classifies conglomerates within industrial goods, which implies that
conglomerates are less engaged in service areas.
DIVERSIFIED TRADING AND DISTRIBUTION
Wholesale trading and distribution companies, especially Japanese keiretsu, generally provide the
service of distributing rather than producing capital goods. TRBC considers them as part of
Industrial Services while GICS includes the industry within Capital Goods.
BUSINESS SERVICES AND SUPPLIES
TRBC identifies Commercial Printing and Environmental Services as independent industries and the
rest are divided between Business Support Services and Business Support Supplies. However, GICS
isolates more specific services such as Office Services & Supplies, Human Resources and
Employment Services, Security & Alarm services and Research and Consulting services in addition
to Diversified Support Services. Building further granularity in this area can result in industries only
catering for certain countries and regions, such as North America.
ELECTRICAL COMPONENTS AND EQUIPMENT
TRBC segregates between electrical components/equipment and heavy electrical equipment
because of the different end market demands for large capital intensive purchases of heavy
equipment and the more fluid demand for electrical components. ICB segregates between
electrical components/equipment and electronic equipment.
CYCLICAL CONSUMER GOODS & SERVICES
CONSUMER PRODUCTS AND SERVICES
TRBC segregates consumer products and services into their cyclical and non-cyclical nature.
Why does this matter?
The elasticity of demand varies significantly between the cyclical and non-cyclical sectors. These
demand patterns result in heightened sensitivity to, or added protection from, economic
conditions. Investors will seek a ‘safe-haven’ in Non-Cyclicals during downturns, and look to switch
investments to Cyclicals when consumer demand is strong.
What do other providers do?

ICB seeks to isolate Consumer Goods from Consumer Services. This results in a mixture
of businesses that are cyclical such as Automobiles, being grouped together with
businesses that are not, such as Household Products.

ICB groups all Retailers together which means that non-cyclical businesses such as Food
& Drug Retailers are included alongside other retailers.

GICS has Consumer Staples and Consumer Discretionary Sectors.
OTHER DIFFERENCES WITHIN CONSUMER CYCLICALS
LEISURE PRODUCTS
TRBC segregates Toys and Games and Recreational Products as patterns of demand differ for these
industries and within each industry companies compete for the same consumer spend.
Photographic equipment is considered part of Recreational Products in TRBC. GICS breaks out
Leisure Products and Photographic Products, which excludes digital cameras as these are classified
in Consumer Electronics by GICS. Photography is a very narrow industry to be included in a global
schema and is dominated by some large players or included within major electronic providers.
TRBC is more market orientated as we treat them as one of many consumer electronic devices
within the overall convergence of consumer devices.
INTERNET RETAIL
TRBC considers the Internet as a general tool that virtually all retailers use as a channel and it is no
longer a distinct industry of its own. While Amazon sells a broad range of products, its competitors
are traditional and online retailers, not only other exclusively online retailers. GICS maintains
Internet and Catalog Retail as a third level Industry classification. TRBC assigns online auction
platforms, such as Ebay, to the IT industry, as these companies do not carry inventory and have a
different cost structure and audience when compared to pure retail businesses.
WHOLESALE
GICS maintains wholesale distributors in each of Consumer Discretionary and Staples sectors while
TRBC classifies specialty wholesalers with related manufacturers and general distributors with
diversified retailers. It is often difficult in practice to separate wholesale from retail, especially as
companies increasing integrate their sourcing. A wholesale industry will always be incomplete
within also integrating either the full logistics supply chain, or incorporating those companies that
have large supply chain operations in-house (such as most large grocery operations).
NON - CYCLICAL CONSUMER GOODS & SERVICES
CONSUMER PRODUCTS AND SERVICES
TRBC segregates consumer products and services into their cyclical and non-cyclical nature. This
allows investors to easily isolate those companies that are less sensitive to the economic cycle.
Consumers continue to purchase these products and services during economic downturns, and the
price performance of these industries diverges from more cyclical businesses.
What do other providers do?

ICB spreads the more defensive, non-cyclical businesses across their consumer goods
and services sectors.
a. Services - Food & Drug Retailers
b. Products - Tobacco, Personal Products, Nondurable Household Products, Food &
Beverages

GICS has Consumer Staples and Consumer Discretionary Sectors.
FINANCIALS
The financial sector is a large and complex sector that encompasses four main types of businesses,
banking, insurance, real estate and supporting services. TRBC is unique in recognising the
importance of these supporting and enabling services that have distinct business models, but are
inextricably linked to the fortunes of the wider financial sector. Two of these industries are stock
exchanges, and financial technology/information providers.
Why does this matter?
Investors look to isolate companies that are primarily influences by interest rate movements and
other direct impacts on lending institutions from those organisations who serve the industry but
are insulated from short term fluctuations.
FINANCIAL AND COMMODITY MARKET OPERATORS.
This industry has been added to TRBC partly in response to the trend of exchanges changing their
ownership models from partnership or state owned, into publicly listed stocks. Traditional
monopolies in this area have also been broken down as alternative trading venues have developed.
SPECIALITY INVESTMENT SERVICES.
This industry captures organisations that provide financial technology, support services and
information services to the financial sector. This business differs from traditional business to
business publishing because of the technology, content and integrated nature of these
organisations with their customers. It is a business model is not dependent on advertising but on a
combination of transactions.
What do other providers do?

ICB does not isolate Exchange operators.

GICS classifies exchanges within specialised finance alongside many other types of
business.

ICB & GICS combine supporting services into general business support services,
publishing or specialty financials.
HEALTHCARE
HEALTHCARE EQUIPMENT & SUPPLIES
Healthcare supplies and equipment are often provided by the same company together with long
term distribution or leasing services, which is why TRBC has a single industry that reflects the
business reality of organisations that work with healthcare providers. Capital Intensive and
Advanced equipment is broken out because of the higher margins and greater role of technology
and financing. TRBC has two Industry Groups, one for equipment and supplies, and another for
healthcare providers. This provides index providers with more helpful groupings.
What do other providers do?

GICS classify companies into Healthcare Equipment and Healthcare Supplies.

ICB combine providers, equipment and supplies at the 3rd level, only breaking these
down at the 4th level.
TECHNOLOGY
Internet services were significant during the dot.com boom, but the nature of the industry as a
distinct sector has evolved, with almost all businesses using many of the technologies that have
been developed. The internet and software services have become general business tools. TRBC
combines all related services into Information Technology Services and Consulting.
What do other providers do?

ICB has a separate Industry for Internet Service Providers whilst TRBC includes such
services into IT Services and Consulting

GICS maintains Internet Software & Services, IT consulting & other services
SOFTWARE
TRBC has one industry, Software, that covers both system and application software companies
because the ‘category killer’, Microsoft, cannot easily be allocated to either side without an
arbitrary judgement that has a significant impact on the remaining constituents.
What do other providers do?

GICS splits software into two categories, Application Software and Systems Software.
TELECOMMUNICATIONS
ICB defines fixed line telecommunication services in a separate industry. TRBC on the other hand
uses Integrated Telecommunications Services, which correctly considers the vast majority of legacy
fixed line service companies are also engaged in wireless communications.
GICS separates out alternative carriers that are focused on data communication services. In
practice these services are offered by standard carriers as well. Data services continue to be
integrated into conventional telecommunication services such as the integration of voice and video
services.
UTILITIES
TRBC includes independent power generators into Utilities – Electric, but GICS created a separate
Industry, Independent Power Producers and Energy Traders. While this distinction is logical, it
limits the usefulness of the 4th level for index creation as it becomes very fragmented unless
looking at a global or large regional grouping.