Ladies and gentlemen, thank you for standing by. Welcome to the Thomson Reuters second quarter 2009 earnings call. (Operator Instructions) As a reminder, today’s call is being recorded. I’ll now turn the conference over to Mr. Frank Golden, Senior Vice President, Investor Relations. Please go ahead sir.

Good morning and thank you for joining us. We’ll begin today with our CEO Tom Glocer, who will be followed by our CFO Bob Daleo. Following their presentations, we’ll open the call for questions. Before we begin let me point out that this marks the first quarter Thomson Reuters is reporting under international financial reporting standards, or IFRS. For those of you who were unable to join our webcast last month when we described the changes to our financial statements resulting from converting to IFRS from Canadian GAAP, let me direct you to our website where you will find that presentation including the 2008 quarterly P&L on a consolidated basis, and for the Markets and Professional divisions also on a quarterly basis. Finally, you will also find our balance sheet for 2008 and first quarter 2009 reflecting IFRS standards. Today’s presentation contains forward-looking statements. Actual results may differ materially due to a number of risks and uncertainties [inaudible] some reports and filings we provide to regulatory agencies. You can access these documents on our website or by contacting our Investor Relations department. I would now like to introduce the Chief Executive Officer of Thomson Reuters, Tom Glocer.

Thanks for joining us today. I plan to copy, to cover three topics in our session. First, I’ll discuss our results for the quarter. Second, I’ll provide an update on current market conditions. And third I’ll provide an update on our unification proposal. So I’m pleased to report that halfway through the year we continue to perform well in what remains a challenging economic environment. The global economy is still fragile, but things are no longer getting worse and the outlines of the post crisis, reset world can begin to be seen. Government interventions around the world have helped stabilize the financial system, and layoffs at large law firms are down significantly from levels seen in the first quarter. Despite the challenges, our business has held up well over the past year. We’ve continued to grow, and have further solidified our competitive position. Not surprisingly, our rate of growth has slowed compared to last year, but our strategy of continuing to invest in our businesses in good times and bad has enabled us to outperform the market through the cycle. Let’s now look at the results for the second quarter, keeping in mind that when we compare our performance year-on-year, we look at revenue growth rates before currency, as we believe this provides the best basis to measure the performance of our business. I’m pleased with the performance of the company for the second quarter, as total revenue rose 2% with the Professional division up 4% and the Markets division just positive. Moreover, Markets recurring revenue, which excludes recoveries, and core Westlaw revenue both grew 4% and together represent over 50% of total company revenues. This performance is a testament not only to the balance of our businesses, but also the strength of our franchises in the challenging financial services…

Thank you, Tom, and good day to everyone. Today I am going to discuss the results for the second quarter, I’m going to briefly provide an update on our integration initiatives and finish with an update on our 2009 outlook. Now growth was sustained in the second quarter despite the weak economy and its impact on our customers. Across the company revenues from our core products continued to underpin this growth while print, ancillary and transaction related revenues continued to lag their strong 2008 performance. Our geographic market and product diversity are helping to sustain growth and give us confidence that we will achieve our 2009 objectives. And we continue to push forward and make progress with our integration and legacy savings programs, having now accelerated 2009 year end target to at least $1 billion of combined run rate savings. Now to the results for the second quarter. During the quarter the strengthening U.S. dollar had a negative impact on reported revenue growth. However, that same strengthening had a favorable impact on margins given that we have a large component of our cost based in sterling, against which the dollar saw significant appreciation. Now as Tom has noted and throughout the presentation I will speak to revenue growth before currency. Reported revenues are also highlighted on each of the slides. And let me also point out that organic revenue growth is reflected on the P&L, in the earnings release at the consolidated, divisional and segment level. Now consolidated revenues in the second quarter of $3.3 billion were up 2%, 1% organic and 1% from acquisitions. Underlying operating profit was up 11% and the corresponding margin increased 330 basis points. Now approximately two-thirds of this increase came from synergy savings and tight cost controls across the company, with the one-third coming…

Thanks very much, Bob. And now we would like to take your questions, so if we could have the first question please.

(Operator Instructions) Your first question comes from Drew McReynolds - RBC Capital Markets.

Just with respect to the expansion in markets year-over-year between looking at Q1 you had EBITDA margin expansion by 200 basis points, and this quarter 400 basis points. Just wondering if you could kind of break that down maybe, didn’t see it in the presentation, what the FX contribution was and if there was anything else we should kind of take into account there.

Bob, do you want to hit the FX as a percentage? I mean I would make the general point, equally true for both quarters in Markets that, you know, like anyone else because of the difficulty in the environment Devin Wenig really rode costs management tightly, concentrated investments primarily in Project Utah the common platform and in customer service. But really was tough on the other costs. So when in fact the revenues as you’ve seen have held up better than others might expect, that’s flown down to the bottom line in margin expansion and additional operating profit. Bob?

Yes, Drew, the foreign exchange impact actually for the quarter and the year is about 100 basis points in each period.

Just maybe for Bob, the corporate other costs excluding integration obviously a little higher. There’s some IFRS impact in there. How are we supposed to, I guess, model this going forward? I think you were run rating on a quarterly basis of about $60 million in core corporate costs. You know is this just going to be a volatile line segment going forward? And if not, maybe just a little bit of guidance on how we should be modeling this.

I think you would take the core corporate costs, and I would model them at around $250 million and you would be fine.

With respect to the Legal division you alluded to pretty soft print in the quarter, and I know print has a measurably higher contribution in the back half of the year. Just wondering, you know, if that print is still in line with what you would have expected at this point in the cycle, or you know should we see some I guess more difficult revenue and margin pressure particularly in Q4?

I’ll take this one, Drew. You know I think it’s generally in line. The experience the last time there was a significant recession in Legal was, you know, quite bearish, but at that point print constituted a much larger percentage of overall legal revenue. Now that it’s, you know, really quite contained and that transfer of revenue from print to electronic continues, we’re sensitive to it but you know the absolute amounts aren’t so great that, you know, we don’t expect that to have a particularly dramatic effect in the second half of the year.

Okay. I’ll leave it there. Thanks very much.

Operator, if I could just before we take the next question, if I could ask everyone to hold yourselves to one question and one follow up so we can get to as many possible please.

Your next question comes from Colin Tennant - Nomura International PLC.

I’ve got a question about the Market division. You’ve given us obviously the Q2 numbers. I just wondered looking at the results that some of the banks have posted which I think have been above expectations, I wondered if you could give us an idea of where you think the investment cycle is headed as far as the banks are concerned? Are the customers you’re talking to, are they beginning to think about spending money on market base systems, headcount, etc. again or is it still too early? And I guess related to that, I’m wondering if you could update us a little bit on the progress with the Project Utah. I think last time we spoke you were indicating Q1 of 2010 for the likely launch date for that. I wondered if that’s still on track.

Sure. It’s Tom, Colin. I’ll jump in. So I’ve been in London all week and I’ve seen a number of our clients here and I’ve been seeing them in North America on and off through the quarter as well. Somewhere in my remarks I referred to the recovery as not being evenly distributed. I certainly didn’t believe that, you know, when we did our annual results in February that we’d be sitting here at mid-year and there would be people talking about hiring with multi-year guaranteed bonuses. There are folks who have obviously been doing really well off their trading franchises, perhaps not surprisingly since cost of funds is near zero. And I’ve heard quite a few say look, you know we actually took too much cost out of the platform. We’re finding we need to hire a bit to, you know, to really handle the amount of business. Now that is really a capital markets and trading perspective, but the good news is that obviously lines up with both our sales and trading and enterprise division. Enterprise you can see has remained strong right through, so 7% growth again in the quarter. I’ve been talking to the sales guys here. They continue to sell well, they’re happy we made the small acquisition of [Vawhew] that has high, high velocity pic capture engines. It’s just another part of that Enterprise plumbing, and that’s been selling very well. The caution I guess I’d give is that it’s not at all uniform. You know M&A has not significantly picked up. There are parts of the franchise that are still quite calm. So I’d put it this way, the environment feels much better for our banking clients. Early this afternoon when the Bank of England left interest rates where they were, they referred to “improving conditions in the banking sector” but that “the recovery remains fragile.” If you added “and unevenly distributed” to that I think you’d see the pattern that we are. But look, I am always encouraged when our customers do well. Then it’s just an issue of timing before that translates into good things for us. In terms of Utah, the timing there is unchanged. Q1 remains a good date, product is looking really good, it’s in integration testing and scale testing now. Many parts of it, versions have been out with clients, so that’s all shaping up well for next year.

Your next question comes from Vince Valentini - TD Newcrest.

Sticking with Markets, I was a little surprised that your subscription and recurring revenues didn’t decelerate at all in Q2. You reported the same 2% growth rate that you had said in Q1. Does that suggest that sort of headcount based reductions have now leveled off for you and we should still this 2% or is there still some sort of flow through of the lag effect that you’ll see in the back half of the year?

I guess I’d make a couple of observations there, Vince. First, look, we’re obviously happy. It fits the theme that Bob and I were talking about in the first quarter that the underlying engine, the recurring subscription engine of our business whether you’re talking Legal with Westlaw, core, or whether in Markets you’re talking about recurring subscriptions, those are holding up much better than people expected. And what’s been dragging things down are either ancillary and print or consulting in Legal or transactions in outright in Markets. That said, the two points I’d make are one, you know the curves are never perfectly smooth so given the absolute amounts involved, you can see them bounce around. So it won’t be a perfectly smooth plot. Second quarter may be a little bit better in that respect. It came in a little stronger than I had personally expected, but I’m happy about that. In terms of second half of the year, you know, there are fewer heads coming out now but, you know, just in terms of the way in which revenues lag sales activity in a subscription model, I don’t think that you should just assume that let’s say recurring subscriptions stays flat at 2 and that’s as low as it ever goes and comes back up. I don’t want to get into the exactly where does it fall. Let me characterize it generally as far more shallow than anyone expected going into this year, and that’s a very good thing.

Your next question comes from Thomas Singlehurst – Citigroup. Thomas Singlehurst – Citigroup: I’ve got one question with two parts. They’re both on Legal actually. The first thing that slightly surprised me was the fine law trend that it’s growing as strongly as it is, given it looks like competitors are struggling, whether you had any comment on that. And then the second part of the question is, I don’t know if you have a sort of underlying revenue for U.S. legal [pre] bad stuff which Lexis sort of gave whether we can get a sense of what it would have been if we exclude the ancillary revenues and the print and such like.

Sure. And one thing. I’ll speak to Bob and then turn it over to Bob. One thing Bob and I care a lot about, and this is more internally focused than necessarily out to the city or the street is, you know, basically to present the numbers as they are. We manage this entire business. You buy a share of stock in the entire company. And, you know, I could, you know, only count Enterprise sales in China on Wednesday and blow you away with a big number. But the truth of the matter is we’ve chosen the parts of Legal to be in. The overall number is 2%. We think that’s a good number and we think you should look, if you’re so inclined, look at other people’s businesses on their all in number, because it’s not like they got stuck with their business as an accident. There’s a conscious management decision there. As for fine law, and I’ll let Bob chime in on both points, as for fine law it’s a good business. And what we’re finding is not surprisingly that at a time like this, the one thing law firms and remember these are many small and medium sized law firms, the one thing they don’t want to do is tamper with the shingle at the front door that attracts them the very business that they know they need. And on a relative basis, fine law is very efficient. It doesn’t cost that much and they can see the results it brings in the door because it’s all online. Bob, do you want to jump in on either of those?

I think you’ve answered them both more than adequate. I don’t have anything to add. Thomas Singlehurst – Citigroup: The new front end for Westlaw, when does that stuff come out and when does it [inaudible]?

Also Q1 of next year, and so again in all of these cases the, you know, the introduction isn’t one big bang where you throw a switch. It’ll be phased in but we expect to see revenues on these new platforms in both Markets and Legal next year.

Your next question comes from Paul Steep - Scotia Capital.

Actually, Tom, just a follow on that last point. That was where I was going. With Cobalt maybe we could talk a little bit about what it actually means to the business beyond just a front end in terms of new product functionality or expanding or growing Legal or sort of heading Legal in a new direction, if it does at all.

Sure. Well I guess I’d start with the, take it as my personal view, the existing generation of Westlaw is an excellent product. When I grew up, I used to be a practicing lawyer, I learned on the original generations of Westlaw and the wall terminal, and this is a great product that exists today. The one thing that I would say, and this is generically true of our products and frankly true in the financial world as well is that the consumer world has introduced a level of ease of use, search, navigation, mobility that has trailed in the professional world. And there have been at various times folks that have tried to come into any markets with more modern, call it the Google generation approach. One of the most important strategic things that Cobalt does in the Legal business is marry up an incomparably deep and rich and professional set of content and tools with an interface which a young generation coming out of law school as I did 25 years ago won’t look at it and say, “Boy, that’s, you know, your uncle’s army, your dad’s army.” So I think that will long term end up being strategically and structurally an important protection from the business from anyone that might use innovation as a wedge to let’s say come in and compete.

Bob, the level of investment, sounds like that’s going to tail over the end of this year. Is that effectively sort of the end of Cobalt or does that carry into ‘010 as well and CapEx?

I think the most significant portion of the expenditure will occur in 2009, but as you might expect there are always modifications that one does when you launch a product, and we would anticipate there would be some spending related to that in 2010.

Your next question comes from Sami Kassab - Exane BNP Paribas.

Two questions if I may. First of all regarding the competitive landscape in the Legal market, you interestingly reported that growth was driven by the government unit and LexisNexis reported they had some declining revenues in the government unit. Can you discuss competitive movement within that government unit? Do you think you’re taking share on LexisNexis or is the product [inaudible] strictly comparable maybe? And secondly regarding the Tax and Accounting margins, I understand that they are lower than historically. They reflect acquisitions. Can you comment as to when you expect margins to normalize back again? Do you expect the synergy effects for next year or will it take longer?

Sure. I’ll push the tax margin question to Bob then tackle the first one about sort of relative share in government. You know when we try and really analyze market share and competitive position, we do it as rigorously as we can in all of our businesses with real grounded data. And those have generally come back showing that we are taking share across these various segments. It is difficult even for us to lay our results against Reed or anyone else’s and compare sort of apples to apples. It is true that on the face of what each company is reporting that we seem to be doing, government is a driver of growth and it’s no great surprise. You know every business I know from General Electric to J.P. Morgan says that government is an important market now for them. The only other thing I guess I’d caution Vis a vie Reed is that after their sizable ChoicePoint acquisition, their results may begin over time to be less and less comparable to ours. There is a large government public records element to ChoicePoint that may be showing up in those numbers. So, you know, we have good, we have a lot of respect for our competitors and we’re just happy our business is growing.

Just before you go into the Tax and Accounting, do you see clients are canceling duplicate subscriptions? Or is that not really happening across the U.S. market?

You mean where, let’s say a given law firm or a government unit has both LexisNexis and Westlaw?

Exactly Tom.

There are isolated cases going in both directions, but in general, you know, every large law firm I know of really takes both services. And the issue is one of what’s the user preference, what’s the commercial policy and overall who’s got the right tool for what the clients need to do. So, you know, the short answer is what you have to really watch is utilization rate of the two services within each firm and the relative pricing power, which again comes back through functionality and quality of product. So it’s not easy to just look at one-on-one bakeoffs.

Sami, this is Bob. I’ll take that. I’ll also just mention that in the government world that most government units only take one service. They don’t take two. So there are bakeoffs that go on there all the time, and we win some and lose some and vice versa. But we seem to be doing reasonably well at this point overall. In terms of Tax and Accounting, the answer is that we absolutely expect these margins, particularly as we get into 2010 and 2011, to start I’d say bouncing back to what would be more traditional for us would be the, you know, the mid-20% margins. I think that one of the things that you should look at, we don’t talk about it because in fact we drive the business on operating income but if you look at the EBITDA margins you get a very, very different story. I mean on a year-to-date basis Tax and Accounting EBITDA is 24.5% compared to a year ago it was 24.1, so it actually showed continued increase. One of the things that drags it down obviously is the fact that we are amortizing software costs from software acquisitions that we make, which are in the line below EBITDA. The other thing I would mention to you is one of the reasons why you see some of the shift is that this business has a couple of different business models. Had a content business, a traditional content business here represents only about 30% of the revenue base. And the balance is software and services, which while they’re growing faster have lower margins. And I think I’ve said this to you before. That doesn’t discourage us because unlike content businesses, the software and service businesses while they may have lower operating margins, they have lower capital requirements. And so from a return on investment basis they’re very, very high. So when you manage a portfolio you seek to balance all of those and we’re very happy to have these kinds of businesses in our portfolio to drive growth and improve return on investment. And at the same time we have content businesses that also drive the margin improvement as well.

Your next question comes from Patrick Wellington - Morgan Stanley.

On timing, if I remember correctly you had a negative sales quarter in the first quarter in Market. Didn’t result in negative organic revenue growth in Q2 but can you give us some idea of what your sales quarter has been like in Q2? And related to this sort of timing issues, you said that the environment in legal employment has picked up a bit or in the second quarter instead of the rate decline. How quickly might one expect to see the positive benefits of that in your Legal subscription model?

Good questions both. First let’s do Markets. Q2 probably no great surprise, was also negative on an average monthly sales basis, which is again what I look at as I’ve mentioned before. The good news in that I suppose for Markets is things did not get worse. They were roughly comparable, maybe a little bit better in the second quarter but, you know, the trend is flat. But that’s two negative quarters and you know enough of the mathematics of the subscription model to where that leads you. In terms of Legal, the thing we were pointing to is that the first quarter saw a ton of layoffs, an unusual number relative to how law firms typically run. Those dropped off very markedly in the second quarter. There was a sense that law firms, you know, law firms unlike banks, I mean it’s painful obviously for any institution and for every human being that loses a job. But law firms have a social contract where it’s particularly hard to fire your lifelong partners. And so they try and get it done and do one wave rather than sort of wave after wave. And it looks like that was the first quarter. They’re not charitable institutions, so it’s not that they wouldn’t do more if things didn’t get much worse. But in general when I speak to lots of the managing partners around London and New York and some of the mid-size firms elsewhere, business has started to pick up just a little bit in the second quarter for them. So they’re feeling a little bit better. So when you put that all together, I wouldn’t yet want to talk about our revenues on percentage basis but speaking sort of on behalf of our clients or our markets, it looks like the client base that we’ve served has hit their bottom and the client base is coming back up a little bit. And that’s very much what we hope for for their benefit and frankly for ours. And then the issue just becomes a timing one of how does that play out given our subscription model.

If I could ask another trend one, you raised the rationalization cost guidance to $500 million I think in the last results thing. There was some fall over from the previous year. Yet you’re running behind that $500 million schedule after a half year. Are we necessarily going to hit that $500 million total?

You mean this is the cost to achieve synergy as opposed?

The cost to achieve synergy.

Yes, we’re running a little bit ahead of that. There’s a good amount of cost in the second half. I don’t know. Bob, do you want to tackle the issue of where we stand Vis a vie cost to achieve?

I think, Patrick, our guidance is obviously we’re still sticking with that. Obviously our objective is not to spend as much money as we can to achieve these savings. So, but right now I think I’ve said this before to appreciate the level of complexity in driving an integration like this, we’re aggregating performance of literally dozens and dozens and dozens of complex projects. And each of those has a manager involved, a leader and lays out not only what the benefits are going to be but the costs. To date all of those managers are coming back to us and saying they’re still going to spend this money and we are relying on them to provide that advice to you. Our expectation is that we will spend it. The question is does it all fall into 2009 or does some of it flow over? We’re not sure at this point, but we’ve left the guidance exactly where it is. Obviously as the year progresses and we refine our thinking we’ll certainly share that with you, just as we’ve done on the benefit side.

Your next question comes from Tim Casey – BMO Capital Markets.

Tom, just wanted to go back to your comments that you believe you’re outperforming the market in the Markets group. Once again implying you’re capturing share. I’m just wondering how you arrive at that conclusion, you know, what touch points are giving you confidence to say that? And what areas if any do you feel, you know, are better opportunities to capture more share and conversely any areas you think you’re at risk?

Sure. Well, I look at sort of three principal things. So the first is the granular market share data, market by market, that we look at internally to guide our strategic decision making, our allocation of capital decisions, etc. And those are telling us that we’ve been picking up share, and I’ll explain in a moment why that shouldn’t really surprise us. Although it’s pleasant. The second is some third party data that’s out there. There’s a study running around from Mitchell Madison Group that suggests we’re picking up a couple of points. And then the third element really is, and this is the harder one, but it’s attempting to do read across from whatever information is available publicly. So, you know, take a look at our Enterprise group that had another good quarter, 7% growth. There we really benchmark against a bunch of smaller tech providers but the biggest one on the information side is IDC, and you can do a pretty straight read across. They are the principal competition for the information. And they were growing, I can’t remember the exact number, about half the rate of Enterprise. And then there’s been some data, in fact there was even an article in the FT today and I’ve seen the number bandied about that, you know, Bloomberg lost 4% of their terminals, call it November to the present. And if you, you know, it’s no secret what they cost. The models’ pretty straightforward, you do the math, it’s somewhere around $200 to $250 million of revenue and you compare that to the performance in Markets. And, you know, I’m not saying that our terminal product is better in every single niche across the board, but coming back to the reasons why we shouldn’t be surprised, let’s say vis a vie Bloomberg, the markets that we participate in and that happen to be markets we’re very good in, have been doing relatively better. Starting with the banks on the trading floor, the rates business, our Tradeweb business was up about 7% in the quarter benefiting from, you know, good utilization there. Energy and commodities was up. Emerging markets was up, Enterprise as I’ve mentioned. So those are businesses that are doing relatively well and those are businesses where conveniently we have a leadership position. So I put all of that together and say you know with some confidence that we’re taking share in this market.

Very helpful. Thank you.

Sure.

Operator, we’d like to take one final question please.

Your last question comes from Richard Jones - Goldman Sachs.

I’ve got a question on the Legal margin, if that’s okay. I think you said that the Legal margin is likely to be smaller, down rather than up year-on-year in the second half rather than the first half. I just wondered if you could run through again what the dynamics between the margin being up in the first half and then likely to be down slightly in the second half are.

Bob, do you have the two half comparison to hand?

Sure. Well, in the first half the margins were up about 90 basis points. But the bulk of that was primarily FX and certainly when we think about performance for the business we don’t ever anticipate favorable trends in foreign exchange, so we’re just talking core operation. And what you’re really seeing when you strip our foreign exchange is in fact that there has been very nominal improvement in Legal margin. And as we have talked about and discussed, obviously with the softening sales to large law firms, where we had seen improvements in revenues in the Legal segment they’re in areas that have a lower margin than what we would get out of normal core Westlaw business. So that’s one factor. And we also said that we expected the sales growth to not improve materially in the second half. In addition to that, we have anticipated making investments in certain infrastructure, right? And we’ve also said that we do expect print to continue to decline and print is a little bit more slanted to the back half of the year than the first half of the year, so with the decline in print obviously you lose profitability. But again we’re talking about, you know, basis points here. We’re not talking about huge margin movement. We’re just providing some guidance, because traditionally this is a wonderful business and we’ve always seen traditionally slight margin gains year-in and year-out. We’re just cautioning that this is not going to happen in 2009.

So just to clarify it’s the full year margin you think will be down slightly, not just the second half?

Absolutely. Absolutely.

With that, that will be our final question. And we would like to thank you all for joining us today.

Ladies and gentlemen this conference is available for replay. It starts today at 12:00 PM Eastern and will last until August 13th at midnight. You may access the replay at any time by dialing 800-475-6701 or 320-365-3844. The access code is 106901. Those numbers again, 800-475-6701 or 320-365-3844. The access code, 106901. That does conclude your conference for today. We do thank you for your participation. You may now disconnect.