Ladies and gentlemen, thank you for standing by, and welcome to the Thomson Reuters Fourth Quarter and Full Year Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the conference over to our host, Frank Golden, Head of Investor Relations. Please, go ahead.

Good morning and thank you for joining us today for our fourth quarter and full year 2020 earnings call. This morning, I'm joined by our CEO, Steve Hasker; and our CFO, Mike Eastwood, each of whom will report our results and will take your questions following our presentation. They will also discuss the [indiscernible] Change Program we announced this morning and our outlook for 2021 through 2023. To enable us to get to as many questions as possible we'd appreciate it if you would limit yourselves to one question each and one follow-up when we open the phone lines later. Throughout today's presentation when we compare performance period on period we discuss revenue growth rates before currency as well as on an organic basis as we believe this provides the best basis to measure the underlying performance of the business. Today's presentation does contain forward-looking statements. Actual results may differ materially due to a number of risks and uncertainties related to the COVID-19 pandemic and other risks discussed in reports and filings that we provide from time to time to regulatory agencies. You may access these documents on our website or by contacting our investor relations department. Now I will pass it over to Steve Hasker.

Thank you Frank and thanks to all of you for joining us today. I will begin by stating that we're very pleased with our results for the fourth quarter and the full year. Our results met or exceeded our guidance targets for revenue growth, adjusted EBITDA margin and free cash flow. Despite the enormous challenges in 2020 related to the pandemic our performance reaffirmed the resilience of our markets and businesses. We adapted and supported our customers in their evolving ways of working and I'm very proud and appreciative of how our people performed during this period. Now to our results. For the fourth quarter revenues were up 2% and adjusted EBITDA increased 33% to $525 million reflecting a margin of 32.5%. For the full year adjusted EBITDA margin was 33% and includes having spent about $70 million in the fourth quarter on initiatives to better position us for 2021 and beyond. This strong performance resulted in adjusted earnings per share of $0.54 compared to $0.37 per share in the fourth quarter of last year. Turning to the segments. The Big three businesses achieved organic revenue growth of 5% for the quarter and 4% for the full year, a very good performance particularly given the global economic environment. Legal had another good quarter and built on the third quarter's results with revenues up 5% before currency and organic revenues up 4%. Legal also recorded double-digit recurring sales in the quarter and full year. Legal's recurring revenues which are 93% of its total revenues increased 5% organically up from 4% in Q3. Westlaw Edge continues to drive strong sales growth and ended the quarter at a 52% ACV penetration. We expect to achieve a penetration rate of between 60% and 65% by year-end 2021. Edge has now been adopted by all…

Thank you Steve and thanks to all of you for joining us today. As a reminder I will talk to revenue growth before currency and on an organic basis. Let me start by discussing the revenue performance of our Big 3 segments. Organic revenues and revenues at constant currency were both up about 5% for the quarter. Legal professionals revenues increased 5% and organic revenues were up 4%. Recurring organic revenue growth of 5% was partially offset by a 6% decline in transaction revenues primarily related to our elite business. Westlaw Edge continues to drive over 100 basis points to Legal’s organic growth while continuing to maintain a healthy premium. Our government business which is reported within Legal had another strong quarter with total revenue growth of 14% and organic growth of 10%. In our corporate segment total revenues increased 4% and organic revenues were up 3%. Recurring organic revenues were up a healthy 6% but transaction revenues declined 11% primarily due to lower implementation revenues. And finally tax and accounting's total revenues grew 6% with organic revenues up 8%. The difference between total growth and organic growth was mainly related to the sale of our government tax business in November 2019. Also we accelerated the release of some of our UltraTax state software from January to December to align with the traditional December release of our U.S. federal software. Excluding this timing benefit organic revenues were still up a healthy 5.5%. Moving to Reuters News. Revenues declined 1% with organic revenues down 3% mainly due to lower news agency revenues and the cancellation of in-person conferences at Reuters events due to COVID-19. This performance was slightly better than we had anticipated due to the conversion of several in-person conferences to virtual events. And global print revenues declined 10% in…

Thanks very much Mike and Steve. That concludes our formal remarks and presentation. Before we open it up for questions I want to mention and reiterate what Steve and Mike had said that we'll be hosting a virtual Investor Day on Tuesday March 16. Now that session will run from 8:30 in the morning till about 12 noon with presentations from our management team who will provide a more detailed discussion regarding our Change Program and then they will also be highlighting our growth initiatives including seven strategic growth priorities Steve has discussed. We will be sending more information on the Investor Day later this week including a link to register for the meeting. So with that I would like to open it up for questions. So if we could take the first question operator please?

Thank you. [Operator Instructions] We'll go to the line of Toni Kaplan with Morgan Stanley. Please go ahead.

Thank you. I wanted to talk about the levers that you mentioned, the transitioning from a holding company to an operating company and from a content provider to content driven technology company. I guess, do you see this as a significant change in culture at the company or do you think that just with the $500 million-$600 million investment and new direction that you can get there? Just trying to understand what it means for turnover and for hiring just anything on sort of that aspect. Thank you.

Yes Toni. It's Steve. I'll start. Look I think we have a very strong existing culture. It's been built up over decades and it's built around integrity and trust and if you speak with our customers they'll reflect that. They trust what we say and what we do and so we want to continue that and I think that's an important sort of foundation stone for our activities going forward and for the Change Program. We have real strengths in content. Our content is in many cases if not most cases where we're providing solutions for customers. Our content is unique but to that we need to add more AI and machine learning capabilities, more software capabilities, more cloud expertise and more SaaS expertise. We've started to do that and we've made some really good progress with Westlaw Edge and Checkpoint Edge and we've made some really good progress in terms of the hires that have come on board including Kirsty Roth and David Wong, Sunil Pandita and Pat Wilburn; all of whom have those kinds of expertise in space. So from a culture standpoint, I think it's much more of an evolution than it is a revolution and I think in terms of the formulation of our teams you'll see us continue to build the skills within the associates who've been here for long periods of time but also supplement those skills where we need to.

Got it. And just for follow-up. You talked about bringing CapEx down to 6% to 6.5% of revenue. I guess if you're becoming more of a technology driven company is that, why is that the right level? I understand the main motivation is free cash flow and I appreciate that. Just wanted to understand if maybe the CapEx level needs to be higher than that just on a sustainable basis. Thanks.

Toni, Mike here. We've had a lot of debate and discussion internally. One data point that I would share with you that we have worked on a lot with Kirsty Roth, David Wong and others is currently about 33% of our capital is spent on keep the lights on more of the legacy, we think over time which we'll discuss more at the Investor Day we can decrease that in the 15% range. What that actually means is that we can decrease our absolute level spend Toni but actually spend more on our product development. So ultimately that's where our focus is is deploying our capital to the growth initiatives. Right now we're spending an exorbitant amount on the KTLO portion of our business. So that's where we see it. Certainly as opportunities arise going forward whether it be organically or inorganically we won't be shy if we think there's a customer need to meet there but that's how we modulated that 6 to 6. Toni is really that driver and keep the lights on in the legacy.

Thanks so much.

Thank you. And we'll go to the line of Drew McReynolds with RBC. Please go ahead.

Yes. Thanks very much. Good morning. Just to broad Toni's question out a little bit maybe for you Steve. The 2023 outlook is well above I think forecasts out there, certainly above what Thompson has done historically. What gives you confidence that you can kind of pull this kind of lifts up in the business and to follow up for Mike you've architected a lot of restructurings and carve outs at Thompson over the years. Can you just size this one up in terms of complexity and achievability? Thank you.

Yes. Thanks Drew. With regard to the confidence point I'm glad you picked that up because I think as a team we are confident and that confidence is built through the sort of design and early stages of execution of the Change Program and it comes from three places. I think the first is the sort of resilience of our core franchises. 2020 was a tough year for our customers and therefore a tough year for us and yet we posted pretty solid organic growth within the Big 3. So we look at that resilience and say we're starting from a position of strength. Secondarily, we've spent a lot of time in the COVID environment deeply connected with our customers. We really doubled down with a bit of a mantra when the pandemic hit, when in doubt call a customer and when in doubt provide just more and more support more and more help for customers and what we've seen across the segments, across all of the professionals that we serve is a change in their behavior and an appetite to make increased and smart investments in information and technology. So if we get it right we're going to have a really powerful tailwind there which gives us confidence And then thirdly, we have put together a team of folks who are very experienced here at Thomson Reuters and have driven change before and added some highly talented folks from the outside and in both the team and that Change Program the purpose built to create an operating company and to create a content-driven technology company. So it's sort of the combination of where we started from, what we're seeing in the external markets and the team and program that we've constructed and all of those things together, I think just give us a great deal of confidence and that's not to say we'll get every aspect right and I think we've built-in enough room to move to be able to experiment, make some mistakes along the way but we do as you said start from a position of significant confidence. Mike?

Hye Drew. I'll compare the ‘21 to ‘23 Change Program to what we did in 2018 and 2019 back in 2018 and 2019 we had three primary vectors or goals. One was to eliminate the stranded cost, pre-Refinitiv or pre- Blackstone we had $280 million of corporate costs and we're down to roughly $130 million in 2020. So we accomplished that. Our second goal back in 2018 was to separate from Refinitiv and thanks to a hell of a lot of work from Stuart Beaumont, John Lyons, Rodney and Smith and many many others Tom Kim we are largely complete with the separation. So I think you put two check marks there. The third element of the 2018 initiative was really to advance our efforts in regards to digital and then also our lead to cash really consolidating multiple systems internally to improve the customer experience. We still have more work to do on that third one. What makes the current Change Program different for me Drew is the really, really intense focus on improving the end-to-end customer experience which I believe will improve our NPS. Currently our Net Promoter Score is significantly below the industry, the B2B industry average but our goal is not to get to the industry average is to far exceed that and as we improve the NPS and the customer experience I'm quite optimistic we'll be able to accelerate our revenue and to Steve's point early into Toni's question the pivot to the operating company, I think will yield some efficiencies for us along the way. Last point I would make Drew is in regards to confidence level, I think I and the full team, the Thompson Reuters team learned to help a lot in the last 12 months with COVID especially in regards to what's possible. That might sound very basic but a lot of things that we accomplished in the last 12 months, I'm not confident we would have unfortunately without COVID because it really eliminated some of the mythbusters within our company and I'm sure in the economy overall. So my confidence and conviction is quite high Drew and I think on March 16 you'll hear from 10 additional colleagues. We will go deeper into the story.

Got it. Thank you very much.

Thank you. We will go to the line of Vince Valentini with TD Securities. Please go ahead.

Yes. Thanks very much. Just looking at the dividends if we take that new dividend over $1.62 in the midpoint of the 2021 free cash flow guidance obviously a bit of an elevated pair ratio at 77% but if we just assume that seven is now the new normal and you increased it 7% each the subsequent two years, you'd be back to just under 50% by my math on your 2023 guidance. So I just want to make sure you can level set us on that is? Is 7% some sort of one-off catch-up dividend increase or should we take this as a signal of what you think the dividend growth potential is for the next couple of years as you go through this cycle?

Yes. Several points there Vince. Your math is correct. Our payout ratio for ‘21 and ‘22 will be above our target of 50% to 60%. We had discussions with our board regarding 2021. We set our dividend increases in January of each year with board approval. So your first point your math is correct. As we go into 2023 based on our target expense we will be below that 50% to 60%. The 7% is not a fixed target as we go forward. We will assess that on an annual basis going forward as we did in 2021 but based on the current targets events for 2023 we would certainly have some optionality there.

Okay and just to clarify on taxes the money you're talking about $90 million soon and then another $600 million to $700 million owed in the UK is that a separate amount from the $700 million on the LSE transaction?

Yes. That's a good question. Let me break it down. It's two separate categories of payments. First in regards to the London Stock Exchange, the $700 million is due on the closing of the transaction. That's the portion that's not tax deferrable that was related to the Tradeweb piece. So that's the first piece. The second piece relates to some disputes we have with the UK HMRC and the majority of that actually events relates to our divestiture of the intellectual property and science business and also the F&R business but it's two separate items. The first piece events in regards to the LSEG transaction would not be refunded. We believe on the second piece we'll have to advance it just due to the UK tax regulation but in our viewpoint we will be refunded the majority of that because we think we have a very strong position. We have multiple external advisors and they have the same strong view as us.

Thank you.

Thank you. We will go to the line of Gary Bisbee with BMA Securities. Please go ahead.

Hey guys, good morning and congratulations on announcing the program. I guess I'm sure there'll be more details at the investor day but I'd love some more detail on two areas. First where does that $600 million of cost saves come from? Can you bucket some of the key buckets numbers and then what are the key things to drive the revenue accelerators? I see focusing on the seven product categories you mentioned SMB several times but can you break down some of the key factors? Thank you.

Yes. Gary there are multiple pieces there. I'll start and ask Steve to supplement. You didn't ask the first part that I'm going to mention Gary but it might be helpful for the overall other audience. The $500 million to $600 million investment, we break that down into three tranches Gary. First is in regards to the omni-channel digital SMB. That's the first third. The second third relates to what we call modernized technology and operations. Some of you will be familiar that at the end of 2020 we had completed the majority of our cloud migration with the exception of our data center in Eagan, Minnesota outside Minneapolis and then we have a few small leased data centers around. So that will be a big objective for us as we work through with Andy Martin's Paul Fischer and the Legal group along with Kirsty and David and then the third tranche is organization and location. So third of third of third in regards to the actual investments. In regards to your question on savings; multiple categories there as we work through it Gary. Certainly attrition will be a portion of that as we work through it. As we pivot to the operating company, we think there's a lot of opportunity within product technology editorial because we have a lot of legacy acquisitions that we have still have not fully integrated and we think we will be able to be more efficient with those parts of the business. And then lastly, I would mention sourcing procurement as a category and then real estate. If you go back six or seven years we had over 500 office locations. We're down to 100 now. Mary Alice Vuicic, our Chief People Officer has done a wonderful job in the last 12 months evolving our workplace of the future and really the workplace of today. So a lot of key learnings there that will help us continue to optimize our footprint as we move forward. Let me pause to see if Steve wants to add anything to that before I go to the revenue piece Gary.

Well said Mark. I think Gary we've been, I think we've looked comprehensively across our activities and most importantly focused on the customer experience and the investments that we're making are in and around the omni-channel digital. They're in and around the underlying operations and technology that support our customer experience and they're in around both the people and real estate footprint that serves that and that then flows through into the cost base. We think when we get this right, we're going to have a significantly lower cost to serve. And to Mike's earlier point a higher net promoter score from our customers. So that's the sort of equation that we've worked against here but Mike back to you on the revenue.

Yes. Gary I'll start on the revenue piece. I'm sure Steve will want to supplement the first word I'm going to use Gary is focus and that might sound incredibly basic but around July 1 of this year 2020 we had Elizabeth Beastrom. Elizabeth is our President of the Global Print business but we asked her to double hat and lead our Practical Law business which is a product used by our legal professional customers and also our corporate customers. And I think with the focus that Elizabeth has put on this in the last eight months not just Elizabeth but the Elizabeth and the team we have also now began to apply that to our indirect tax with Sunil Pandita our new President of the Corporates business. So focus I'll mention first let me get a little bit more tactical Gary. NPS our retention is already 90% but we're quite optimistic that we can continue to improve our retention as we move forward. As you know each percentage point on retention is roughly $50 million to $60 million for us and then pricing I think as we improve our customer experience we can maintain the pricing that we currently experience is about 3% overall which varies by segment for us. David Wong with product innovation. I think we're just scratching the surface with our product innovation. Charlie Claxton recently joined David's team as head of our design and we'll be continuing to add more talent within our product area. And then I think upselling cross sales. Cross-sell you've been hearing us discuss that for a while now. I think as Kirsty Roth and others help us with our internal systems which we're making progress on that will make it easier for Brian Peccarelli's sales organizations. Michael Friedenberg within Reuters to really cross-sell and support our customers. So those are some of the areas not to mention SMB as you k now Gary about a third of our business today comes from small firms but we think we have the opportunity to drive further reach within SMB. I'll pass to Steve.

Yes. Just one other comment on this Gary. We will talk a lot more about this at Investor Day and I hope and Investor Day you get a sense for at least two things. One is this set of elevated growth expectations pretty broadly diversified across these growth initiatives. So we're not overly reliant on sort of one big bet or Hail Mary or anything like that and the second is there is lots of upside here in terms of attracting new customers and maybe most importantly our ability to shift new products. I think we've had a pretty modest cadence in terms of organic product innovation and I hope that you'll get a sense in Investor Day certainly from many of the team but specifically from David Wong and Shawn Malhotra who's our head of engineering that we have very high expectations of our ability to innovate in and around the marketplaces that we operate today.

Gary, if I could just add one additional point. I know you were focused rightly on the organic side but as I mentioned in my remarks we have the ability and desire to deploy capital when the opportunity is right for our customers and for our shareholders there. As you know we have about $700 million of the $2 billion reinvestment fund that we set aside a couple of years ago with the Blackstone transaction. So we'll continue to look Gary for opportunities to supplement the organic items that Steve and I mentioned with inorganic opportunities.

Thank you.

And we'll go to the line of Kevin McVeigh with Credit Suisse. Please go ahead.

Great. Thanks so much and congratulations. Hey Steve and Mike, this might be better for Mike but I think one of the underappreciated parts of this initiative is how much better position you are internally from an operational perspective and maybe just compare and contrast the transition away from Refinitiv back in ‘18 because I feel a key part of it is just management's ability to execute just given a much more streamlined business. If there's anything you call out there just as you put this plan together because I think that's a more subtle point that really increases the probability of success as you engage these next couple of years?

Yes. Kevin. I'll start Mike's obviously been here for longer and seen can give you more, better historical perspective than I can but here's sort of in my mind the key difference, right? And that is that we don't have F&R in the portfolio anymore. And that was as you know a very different business and it is a very complex business by nature of sort of the markets in which it operates and the customers that it serves. And so we don't have that on the agenda. Instead we've got the Big 3 segments Print and Reuters and we feel so that is a manageable portfolio and there are some real similarities across the customer needs and the customer experience we need to provide and to that we've added. I think an extraordinary amount of expertise to an already strong associate base here at Thomson Reuters. People like Kirsty Roth who've done this before at significantly larger scale in very similar if not tighter time frames under shifting sands from external point of view and so those are the two things that I think differentiate it in my mind at least from where we might have been but I'll turn it over to Mike.

Kevin, I'll just add one small item in addition to F&R is now with LSEG, the amount of time all the colleagues that I mentioned had to spend on the separation. There is more time that we can really focus on building our products now. We try to kind of ring fence that group as much as possible but we can now deploy those funds and resources to building and accelerating new products and capabilities.

Super helpful. And then just with retention at 90% kind of where do we think we can get back to and then if this is a third respective you can [indiscernible] but that new product innovation the 200 million, is that in the organic target or would that be something in addition as you execute on that?

Let me break it down first. In regards to retention Kevin, I think we'll get a better feel with the Investor Day. You certainly we feel like we can get a percentage point as we move forward. We have a lot of customer pain points that we are addressing. We're very straightforward with our customers in that regard and then as we continue to add more and more capabilities you're very familiar with all the work that Andy Martin, Mike Dane has done on Westlaw Edge just illustratively and Charlotte Rushton and tax accounting professionals is now working on the initiative that she'll discuss. So I wouldn't be surprised Kevin if we can get another percent left but we'll closely monitor that and keep you up to date as we move forward. And then Kevin in regards to the revenue lift from the Change Program that is reflected in the targets that we provided today.

Thank you so much. Great job.

Yes. Thank you Kevin.

Thank you. We will go to the line of Aravinda Galappatthige with Canaccord Genuity. Please go ahead.

Good morning. Thanks for taking my questions. My first question is on and I have a follow-up after that, my first question is on the software and services component. I think Mike in the past you've been kind enough to kind of give us a breakdown as to what that component was in some of the key divisions including Legal and also on a consolidated basis. As you look to sort of your 2022 and 2023 targets is there a number or a percentage you have in mind as to where that would transition to? And as my follow-up with respect to the $600 million to $700 million in tax on the disputed item, I know you talked about $90 million in Q1. Is there any sort of color as to how that would, how the remainder would sort of phase out and I apologize if I missed the commentary on that. Thank you.

Yes, Aravinda let me take the second question first. The $90 million we estimate would be paid in Q1 of this year and then the $600 million to $700 million estimate that I referenced, yes we're still contending that if paid it would be Q3 of 2021. While we're on the topics of tax, the tax associated with the LSEG transaction Aravinda those would be paid quarterly, April ‘15, June ‘15, 9/15,12/15. They are just from a timing perspective. All of these items are factored into our liquidity forecast for the full year. Let me just provide some grounding on the software and content and I'll ask Steve to share his thoughts prospectively. Today if you look at the Legal business about 30% estimated is software. Within Corporates about 60% and in tax about 75%. So for total TR looking at about 40% software. So I'll ask Steve to share his thoughts prospectively.

Yes. Look, I think part of this transition Aravinda to a content driven technology company is to explicitly increase that software portion. I think if you look at we're at sort of 35% to 40% on software today there is quite a bit of upside there but one of the things we'll do, I think is that we will blur that and I think our customers are demanding we do that. Basically say to me when I speak with them look we love your content but we need it delivered in different more innovative, more customer friendly ways and more usable ways and so I think you'll see more and more this blend of unique content, world-class AI and machine learning and best-of-breed software that'll really blend the solution. As long as we're solving the customer problem better than anyone else I'm confident that will translate into these healthy growth rates.

Thank you very much. I will pass it on.

We'll go to the line of George Tong with Goldman Sachs. Please go ahead.

Hi, thanks. Good morning. You mentioned that your $500 million to $600 million in investment breaks out into three tranches; the omni-channel, SMB, modernization of tech and operations and the broader organization. Can you talk a little bit more about these initiatives within the tranches and how this compares with where your seven strategic investment priorities fall?

Sure. I'll start and then ask Steve to supplement. First category I'm going to call it more of the go to market which includes smaller customers more difficult self-serve and SMB and omni-channel. At the heart of that George is addressing our internal systems. We as you know have had many acquisitions over the years. So we're looking to consolidate the many desperate systems that we have today into as few as possible. What that does is improve our operational efficiency but more importantly it improves the sales, go to market teams’ efficiency because they're dealing with fewer systems day-to-day. They get the full view across total TR in regards to the cross-sell that we mentioned earlier. Also within this is SMB. We're building the case of capabilities mentioned Kirsty, [Hurly] and David, [indiscernible] our chief digital officer is working on this. We have about 500,000 customers today. That number has been fairly constant over the last few years. We think these SMB capabilities will allow us to attract and retain additional new customers as we move forward. The second tranche in regards to modernizing our technology and operations Kirsty, Sean, [indiscernible] and David Wong will discuss more at our Investor Day. I mentioned earlier the cloud migration but we have some more older underlying editorial type technology that we're in the process of investing in the next two years. That will accelerate our time to market. And then lastly on organization and location, in different parts of organization now we might have like for example, call centers or in finance different areas that are kind of repeated multiple times as a pivot to the operating company, we will be able to have leverage there and I mentioned the locations a few minutes ago. Steve?

Yes. I think very explicitly if you look at those three buckets so digital and omni-channel, customer experience, modernizing ops and tech and the organization and location footprint they feed into the seven. So products like Practical Law, HighQ Westlaw, Pandera and Onvio the cloud audit suite and indirect tax all of these we believe will be significantly enhanced by those three investments. So there is a very explicit link between the investment we are making and the upgrade and innovation around those products and that's what we'll dive into on the March 16.

Very helpful. And then just as a follow-up you mentioned that organic revenue growth should reach 6% to 7% in the Big three by 2023. Can you break out what that growth might look like within legal, tax and accounting and Corporates assumptions and there that's included in that target?

George, we'll go deeper on that with the March 16 Investor Day. Paul Fisher will cover Legal. Charlotte Rushton Tax and Brian and Erin will cover the Corporates we'll share more on that then George.

Got it. Thank you.

And we'll go to the line of Manav Patnaik with Barclays. Please go ahead.

Thank you. Good morning. Just to follow up slightly there. I mean on a high level that 6% to 7% growth rate like how much of that is market growth that you're assuming because you compared the transition or the evolution to F&R before and one of the problems I think was the market at F&R and high impression has always been legal with the tough market as well. So just curious how you guys have factored what the market growth looks like? Was this all innovation driven?

Sure Manav. Once again we're going to hear more about this from the segment presidents on March 16. We've certainly updated our total addressable market data and as we going to triangulate what we see from a market growth perspective to our internal estimates is fairly consistent. Once again we'll share both the tam estimates by subsegment along with our estimates of the Big 3 that George just asked about on March 16 but from our viewpoint there's pretty good symmetry in regards to the tam estimates that we see and then are also the internal. There are some deviations if you look at a Westlaw product that has really-really strong presence in the market and then some of our earlier products that are in the earlier stages may not be a huge growth contributor today but we see a lot of upside going forward. But we think we have good symmetry between our internal estimates Manav and then also the tam estimates.

Okay fair enough. I'll wait for that in the Investor Day. And then the other question I had was this obviously seems like a pretty big organic lift but I think along the way you mentioned a few times that you still want to do deals and I was just curious what the capacity there is? I'm guessing these are all small deals or is there capacity to integrate a large deal amidst all this change going on?

Yes. I'll talk about it from a sort of an organizational capacity and then Mike will remind us of the financial capacity. We're very focused on median exceeding our customer needs and the Change Program. That is our laser focus for 2021 and 2022. So in terms of our capacity for inorganic activity we're going to be open to acquisitions that are reinforcing of the Change Program and reinforcing of our ability to meet and exceed customer needs today within the Big 3 and so ideally we would do a number of tuck-in acquisitions this year and next that meet that criteria but we're going to be pretty hard-edged about making sure that our focus stays on the Change Program and that the acquisitions indeed meet that criteria.

Yes. I was going to a similar reference. Let's say execute the Change Program like [hell] I mean that's our first, second, third priority and then we have the capacity to make an acquisition smaller or mid-sized acquisitions if it's the right time and also meets our customer needs is this way I view it but the $700 million that I referenced earlier that remains from the 2 billion original investment fund obviously our capacity far exceeds the $700 million but we don't have an urgency to put it to work. We will put it to work at the right time for our customers and shareholders.

I think we have time for one more question operator.

Thank you. Our final question will come from Doug Arthur with Huber Research. Please go ahead.

Yes. Thank you. Steve, in terms of the addressable markets that this transformation is targeting, is this kind of a dual track you think your large for instance legal companies are going to -- the COVID issue has dramatically changed the way they will work going forward. So this is meant to address that but it seems on the same vein that this is all about expanding the market into SMBs and really growing that customer base. I'm just trying to get a sense of priority.

Yes. I think certainly this year and in the next the priority is to meet and exceed the needs of our existing customers and so you refer to the large law firms I've spent a lot of time over the last 12 months with the managing partners, the chairs of the large law firms and as I've mentioned before in this environment every single one of them in their own words has said a version of we need to spend less on real estate more on information technology and our focus is on making sure that we're part of that solution set. So we do think there's upside. Despite our very high share with the large law firms we think there's real upside as they change the ways of working and move their budgets around appropriately to sort that. The SMB opportunity for us is we think a big one but it's a slightly longer term one. We're going to build, we're building those capabilities today. That process is going well. We will get it online as soon as we can but the focus is very much on that first category with a clear eye toward the second.

Great. Thank you.

Thanks Doug.

Thanks everyone for joining us today. That will conclude our call. If you have any follow-up questions feel free to reach out to me. As I mentioned we will be sending out a notice regarding our Investor Day on March 16 later this week. If you do not receive that for some reason or you're not on our distribution list please reach out to me. We will make sure we get it to you and we look forward to sharing more with you three weeks from today. Thank you.

Thanks everyone.

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