Welcome to the Thomson Reuters third quarter 2009 earnings call. (Operator Instructions). As a reminder, today’s call is being recorded. I’d now like to turn the conference over to our host, Vice President, Investor Relations, Frank Golden. Please go ahead sir.

Good morning and thank you for joining us. We’ll begin today with Thomson Reuters’ CEO Tom Glocer, who will be followed by our CFO Bob Daleo. Following Tom and Bob’s presentations, we will open the call for questions. Before we begin, I am pleased to point out that for the first time since Reuters’ acquisition, we’re reporting actual growth rates for the quarter, not pro forma results, something I am sure will please you as much as it has our accounting group. Today’s presentation contains forward-looking statements. Actual results may differ materially due to a number of risks and uncertainties discussed in reports and filings that we provide to the regulatory agencies. You can access these documents on our website or by contacting our Investor Relations department. It is now my pleasure to introduce the Chief Executive Officer of Thomson Reuters, Tom Glocer.

Thank you, Frank, and thank you for joining us this morning. I plan to cover two topics today. First, I’ll discuss our results for the quarter and second, I’ll provide an update on current trading. Three-quarters of the way through the year we continue to perform well in what remains a challenging environment. Our tax and accounting and healthcare and science businesses continue to perform well, and the recurring subscription parts of our legal and market’s divisions held up well. Across the business, sequential quarterly net sales have improved, though they are still negative in markets. Now, although we believe that we’re past the bottom in terms of real economic activity, our reported year-over-year growth figures have gone negative, but we expect this dip to be shallow and limited to the next few quarters, and this is the direct result of the mathematics of the subscription model which I discussed on last quarter’s call and at our recent Investor Day in Toronto. Let’s now look at the results for the third quarter keeping in mind that when we compare our performance period-on-period, we look at revenue growth rates before currency as we believe this provides the best spaces to measure the underlying performance of the business. I am never pleased with performance when the numbers are preceded by a minus sign, but compared to our peers and the industry as a whole; I believe that Thomson Reuters performed well in the third quarter. Total revenues declined 2% with the professional division up 2% and the markets division down 4%. Market’s recurring subscription revenues excluding recoveries were down less than 1% and legal’s recurring subscription revenues grew 6%, and together these categories represent over 60% of total company revenues. The more resilient professional division performed well given the challenging economic environment…

As a reminder again, throughout today’s presentation, I will speak to revenue before currency adjustments just as Tom did, and reported revenues are also highlighted on each slide. Consolidated revenues for the third quarter were $3.2 billion, down 2%. Underlying operating profit was up 3% to $711 million, and the corresponding margin rose 180 basis points. Margin expansion was driven by integration related savings, our tight cost controls, and the benefit of currency. Year to date revenues of $9.6 billion are up 1% and underlying operating profit is up 5% to $2.1 billion. The corresponding margin is up 180 basis points. Despite the improvement in margins year to date, I’ll remind you our full year margins are subject to the impact of timing and seasonality. As we reminded you last quarter, margins will trend downwards in the second half of the year relative to last year, largely attributable to slowing topline growth, but also revenue mix and increased corporate expenses primarily related to higher pension expense arising from our conversion to GAAP from GAAP to IFRS which we pointed out on that call. Nonetheless, we expect margins for the full year will be comparable to 2008. Now, I’d like to turn to the performance of the businesses. The professional division revenues were $1.4 billion, a 2% increase in the quarter—half from organic growth and half from acquisitions. Segment operating profit declined 2% and the margin decreased 70 basis points over the prior year. Efficiency initiatives and cost controls across division were insufficient to offset slowing revenue growth, changing business mix of that revenue, and the impact of dilution of acquisitions. Year to date revenues are $4 billion, up 4%--again half organic and half from acquisitions—and the year to date operating profit for the division is up 1% to $1.1 billion…

That concludes our presentation. I would like to ask the operator open this portion of the session for Q&A.

(Operator Instructions) Your first question comes from the line of Paul Steep – Scotia Capital. Paul Steep – Scotia Capital: A big picture question, firs for Tom and then maybe a clarification for Bob. Tom, you can maybe talk a little bit about Cobalt, what the opportunity is beyond price inflation in terms of cross-selling and clients to get more involved in the platform. It looked like that was the highlight of the investor day.

It’s a very innovative platform, and what we’ve seen in our legal business is the more touch points we have, the more of our various services that we can deliver into a given law firm, the greater the reported growth we get from that firm. So the very positive thing is we’re not taking anything away in the existing very successful competitive Westlaw product. It’s not bad to have something that’s going up at 6% in terms of subscription sales, in terms of the carnage we see now, and also because of the sophistication of really the analytics and the search that are in Cobalt, I think we will be able to extend our share leads in the current market, as you mentioned, improve on pricing, although it ends up being a very close working with the customer to make sure that they’re valuing from the additional efficiency and we’re participating in the value that the platform brings, but, yes, it’s a very positive exciting thing for us, and it’ll be coming at a very appropriate time in 2010. Paul Steep – Scotia Capital: The clarification for Bob is, Tom talked a lot about the subscription. I think he handled that. The recoveries is the bit that I think I’d love some clarification on in terms of what’s the amount of the headwind we face into the next couple of quarters from these sort of pass-through changes that are happening?

First of all, they do represent a small part of the business, and a very small part of profits. It’s a very low margin business, so while it certainly affects the headline revenue growth, it has little if any impact on the profitability or cost structure of the business, and we have seen recoveries challenged all year long. They represent 10% of the market’s overall revenues. It’s hard for us to predict that. What you’re seeing in recoveries is the revenue challenges of some of the best exchanges, and also some of these exchanges are simply moving to direct billing, which is fine with us too. It’s something that we report on. I think you should know about it, but you should also know that of all the issues that we have this certainly isn’t one that significant, but I think it could last certainly throughout the balance of this year and maybe into 2010, but I really don’t have a window on that.

I’d just jump into to say I totally agree with Bob. The thing that I’ve always looked at and take as a healthy sign is when we compare our growth rate, or in this case, the decline of 4% versus the double digit decline in recoveries, what that tells me is our share of wallet is increasing, and in the day to day work by the salesforce with customers, there is a substitution effect because it’s exchange fees and it’s certain third party data, and we’re doing exactly what I’d expect us to do which is in making sure that when there are reductions we keep more of whatever budget is available at a given client.

Your next question comes from the line of Vince Valentini - TD Newcrest.

I wanted to make sure I understand your outlook on the legal segment completely. You said that the subscription revenues were up 6%, and you’ve now told us that net sales have turned back to being positive in the third quarter. Should we read through into that 6% as being a sustainable type of number? I would have there’s still some lag effect to come from all the headcount reduction earlier in the year. As contracts come up for renewal, would you expect to see some pain on that 6% subscription number before it turns back up again?

I feel good about the subscription number of 6%. You’re right, every quarter there are new contracts coming up. The legal market seems to really have bottomed earlier in the year, more in the first quarter, and we’ve been seeing improvement. The overall environment isn’t brilliant in the legal world. I think it’ll be a long slow improvement, but then again that’s why I’m really pleased that we haven’t been sitting still and we have Cobalt coming on stream next year, so I feel real good about the core of our business, the electronic subscription business. I think we will continue to see attrition in print, and we have that baked into our numbers going forward, but this is a really good business, and strategically and structurally that market remains sound.

Your next question comes from the line of Patrick Wellington - Morgan Stanley.

Tim, could you give us a bit more feel for the scale of markets net new sales? How is that going between the first couple of quarters? We know that we were down in Q1 and Q2, but can you give us a bit more color about the direction there? Secondly, you made a few references as we went through that it’ll be a few more quarters before revenues for the group pick up, and I think you said that the calculation is mathematical, so for those of us weak with our math, exactly how many quarters are you showing as negative revenue growth on your forecast at the moment?

Patrick, I’ve never thought you were weak on your math, though I think your impression was right on in the market when you wrote about the shallow dip several quarters ago as I remember. Let me try and help a bit. There are obviously two factors that impact the timing of what does a few mean. One is what I’ve been calling the mathematics of the subscription model. You understand well, everyone on this call understands well, which is just what happens when you get full year effect, let’s say next year, on sales activity that’s been spread or cancellation activity that’s been spread through 2009, and were that the only factor at all, it would be relatively straight forward. There tends to be a three quarter lag and you can figure out what that means. The complicating factor is obviously the environment as a whole isn’t constant, and what underlies our outlook and the discussion Bob and I have is in our businesses we’re not trying to predict what the overall economy does, whether it is U, V, or W. We’re basically saying we’ve reasonably good visibility because of the nature of our business, and therefore we have seen a market improvement in the sales activity in the second half of the year versus the first half of the year, and unless the overall economy lurches down badly or there is some terrible event, that should result in let’s say a stronger reported set of revenues in the second half of 2010 than in the first half, so a better exit rate than an entry rate, but calling the exact quarter is difficult, and I think we were gutsy earlier in the year when we went out with guidance in this most difficult year. We are trying to give you as good a sense of where the business is. We feel it’s under good control and we understand the trends, but neither Bob nor I can control the underlying macroeconomies we operate in. And in terms of the game I used to enjoy playing with you and Reuters which is exactly what is the net sales month on month. I would describe it in words as a significant improvement in Q3 versus Q2 in terms of market’s net sales. They are still negative, but they’re much less negative, and all other things being equal, I would expect that trend to continue, but again subject to no guarantees on the macroenvironment.

Your next question comes from the line of Drew McReynolds - RBC Capital Markets.

Tom, that was good color on the underlying trend. When you talk about needing cancellations in key centers to obviously improve, can you just maybe give us a little bit more color on what conditions out there are really required to be put in place specifically within markets division in order for that to happen, and again strictly talking about cancellations in the key centers?

Obviously one of the great benefits of this business and why it has performed well is that in fact it isn’t just one center or one type of business. It’s nicely diversified by geography and product, but I’ll try nonetheless to tackle it. I’ve been impressed through this entire year with how the market scene has been able to continue to sell, so their gross sales are very good, and not only in places like China and India where the whole world recognizes it’s more of a V shape, but if you look at the enterprise group that they could right through this year be growing their revenue 8% and plus in earlier quarters is a testament to how valuable what they do is because I can tell you having been with a ton of clients over the last 18 months, no one is spending a penny on anything that they don’t absolutely need. So now back to answer your question in that context, Drew, what I’m looking for is the cancellation activity to abate to allow the strong trend in gross sales to pull up the overall results, and what would be required? Well, I think we’re already beginning to see a stabilization in terms of headcount reduction. People have continued to trim a bit through the year, but not like they were year end last year and into the first two quarters, so that’s a trend that I’d expect to continue, and I think we also need to see a little bit more clarity on the regulatory picture. Legislation in the US—it looks like Obama will get some form of financial reform legislation changes going through. It’s the same in the UK as well. Once that’s clear, people will be able to sort of longer term plans, and I think that will feed through to greater confidence in the market as well, but beyond that it’s obviously very difficult to have clear visibility on the timing of when that’ll happen.

Your next question comes from the line of Thomas Singlehurst – Citigroup.

I have one general and then one relatively specific one. Bob, you mentioned when talking about the markets revenue that the 3Q would mark the high point in terms of margin disappointments in the cycle. Could you just confirm that, and would that comment apply to the group as a whole, and going into next year should we be how should we be thinking about margins? The second question was actually very specifically on investment advisory. The recent purchase of Hugin, although it is very small, but does this signal more of a direct attempt to get into the newswire distribution market?

In terms of margins, I was very specific to certainly the markets division, simply in the sense that obviously we operate highly leveraged businesses, and so that when revenue softens you’ll see some decline. We’ve done a great job. They’ve done a terrific job of pulling costs out and doing integration, but it is likely that that kind of a margin will be the high point for them, without a doubt, and the implications for the company as a whole is that markets represent substantial amount of the business. We also signaled that we thought professional would see some bit of margin erosion. We’ve been talking about that all year. So by implication that’s why we’ve come back even though we’re ahead through three quarters, we’ll be losing some of that in the fourth quarter, and it will be comparable to 2008. As far as 2010, I think that there is a lot of work that need to be done between now and then. We’re very good, as Tom said, at managing these businesses, and so certainly everything we will do will be to try to minimize any of the impact on soft revenues in terms of the bottomline, but I think there is more to stay tuned, because we’ll talk specifically about 2010 when we release our results at the end of the fourth quarter.

Just to pick up on Hugin, it certainly wasn’t a large business. We purchased it in the corporates segment of investment and advisory, and I think it’s a European based and focused business that does connect let’s say issuers of securities out with the audiences for their communication which is very much part and parcel of the existing corporates strategy, and I think the way you should see it is it’s the next logical step in what our corporates business can do. We understand the workflow of the Frank Golden position around the world, and it also represents what has been to date a successful strategy in corporate, which is to globalize and bring some of the same services we have so we can cross-sell into their existing client base, and we can take their capabilities global. It’s one of those middle of the fairway acquisitions, and so far it looks good.

The next question comes from the line of Randal Rudniski with Credit Suisse. Randal Rudniski – Credit Suisse: I had a question on the outlook for the legal division because in the outlook statement it seems to, maybe it’s my reading, tie a shallow dip in legal to negative net sales in legal subscription revenues, but your subscription revenues look like they have been quite strong all year, and even in the performance review of legal you indicate subscription revenues grew, so is there an inconsistence there?

The way you explain it, it does sound like an inconsistency, but I’ll try to make it not. You have to remember something: When you look at the legal business of all the segments, I believe that only 60 something percent of that business is actually subscription revenues. The rest of that is print, which we really don’t count as subscription, and I’d call them transaction and slurry, whatever you want to call non-subscription services, and so what’s happening is the growth in subscription in the early part of the year was sufficient to offset what has been a real challenging market in these other areas, and what we are saying is that as growth moderates because our subscription sales, while positive, have not been as positive as they were in prior years, so as that positive growth of subscriptions starts to wean a bit, the decline in the non-subscription areas and particularly print will really drag the business and has dragged the business to date, and that’s what we expect when we talk about the longer term. Randal Rudniski – Credit Suisse: So when it comes to some of these ancillary businesses which were down, I think, 15% year over year in this quarter, and I think that’s pretty consistent with the pace of decline in the first half, can you describe where you’re seeing the pressure there?

It’s a couple of areas. For example, we are the largest provider of back office software to law firms through Elite. In this environment, you can imagine that that no one is doing much of that, and the declines in Elite have been 20% plus. We have a consulting business that provides consulting services to law firms, and that has been significantly impacted, so those really are the kinds of areas. They tend to be, I would say, certainly important services, but in challenging times can be viewed as discretionary, and those are the areas where we have seen the greatest decline, and obviously print is one of those areas where we have done, as we have talked about, such a very good job of transitioning from print to electronic that we have made print a little bit less essential to our customers in many areas, and that’s where we’ve seen the decline.

The next question comes from the line of Mark O'Donnell with J.P. Morgan. Mark O'Donnell – J.P. Morgan: You’ve got your free cash flow growing, and you’ve done a lot of the Cobalt and Utah investments and perhaps seeing the worst of the net sales. What is the thinking then on the dividend than use of cash going into next year?

That’s a fair question. We’ll talk about the dividend with our board in early next year once we have actually closed the books and seen the cash, and we make a decision at that time. I would remind you that our philosophy has always been that we view dividends as an important part of value creation for shareholders, and we’ve consistently stuck to that, and I think earlier this when a lot of other companies were obviously cutting their dividends tremendously, we came out with another increase consistently, and to signal not only the fact that we have a strong company but we have a very strong business model, and we recognize the linkage between that and creating value for our shareholders, so I really don’t want to comment on that. That’s the board’s purview about dividend increases, but I think as I said in my remarks, we have a very strong business model, a very strong balance sheet, and we will use those to our advantage during this period.

The next question comes from the line of Mark Braley with Deutsche Bank Securities. Mark Braley – Deutsche Bank Securities: On the subject of the full year margin guidance, I’m afraid this is one of those analyst questions where I ask you whether you’re being ridiculously conservative for the full year. Your margin 3-9 months is actually quite considerably ahead, so you’re building in enough room for the fourth quarter margin to be down a long way, something like a profit swing of about $150 million. You have given us just a few reasons around that—pensions, phasing, timing of investments, etc. I just want to clarify those issues you have identified could potentially impact profit year on year by as much as $150 million in the fourth quarter.

You need to remember that our guidance has always been excluding currency, and a substantial part of the improvement year to date has been in currency, and so while we may show an end of year improvement year to year, we believe a substantial part of that will be currency, so you do that math, I don’t know if you calculated that into it. I’ll remind you the fourth quarter is a big quarter for Thomason Reuters. We have a lot of moving parts. A number of corporate expenses get booked in that quarter, which haven’t shown yet, and a large portion of our revenues in the fourth quarter and a large portion of our margin comes from the fourth quarter, and last year as I said, in the fourth quarter we saw 170 basis point improvement year over year, fourth quarter ’08 to ’07, and so there are a lot of moving parts in this, and frankly that’s why we continue to stick with our guidance that we will be comparable and leave it at that. Mark Braley – Deutsche Bank Securities: On two of the issues, the pensions and other corporate cost, just what’s coming through on pensions this year? Does that get you to where you need to be in terms of funding levels? Are you allowing if market stays where they are that wouldn’t be either a contributor or a drag into next year, and the corporate costs, are we basically there talking about is incentivization because of what share price has done over the last 12 months?

The answer to the second question is yes, and the first question, the pension costs have very little to do if anything with our pension. Our pensions are fully funded. We don’t have an issue. I’ll remind you the difference here is that in US GAAP or Canadian GAAP, you’re able to take gains or losses. You take them to the balance sheet and smooth them over time. In IFRS, you take them to the P&L, and so what we are seeing here is the substantial full year, over $30 million, impact of this effect of move in investment asset values taken directly to the P&L, and so that’s what we have seen, that’s what we will see again in the fourth quarter.

That concludes our call. We appreciate you joining us, and we’ll speak to you again in February on the fourth quarter results.