Welcome to The Thomson Third Quarter 2007 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]. And as a reminder, today's conference is being recorded. I would now like to turn the conference over to our host, Vice President of Investor Relations, Mr. Frank Golden. Please go ahead.

Thanks you and good morning and welcome to The Thomson Corporation's third quarter 2007 earnings call. Those of you listening should have a copy of today's earnings release and related slides which are posted on our website at thomson.com. Dick Harrington, our President and CEO, will begin this morning by discussing the third quarter highlights and he will provide an update on the proposed Reuters acquisition. Bob Daleo, our CFO, will then take us through the details of the quarter and year-to-date results and Bob will also review the Company's financial metrics. Following Dick and Bob's presentations, we will open the call for questions. We are also joined this morning by Jim Smith our COO and Mike Wilens, our Chief Technology Officer. Please limit yourself to one question each to enable us to get to as many questions as possible. Now, today's earnings release has appended to it some additional UK required reporting schedules related to our 2007 profit margin outlook. When we originally provided our outlook in February, which was prior to the announcement of the Reuters transaction, we noted that our 2007 operating profit margin was expected to be at or above 2006 levels, despite increasing efficiency initiatives, i.e. THOMSONplus. Today, we are updating our profit margin forecast to exclude costs related to the Reuters transaction. This is the only change we have made to the previous guidance. Due to the UK takeover code requirements, when we update a profit forecast while the Reuters transaction is ongoing, we are required to describe the bases and assumptions related to the forecast within the release. We are also required to include opinions, letters... opinion and letters related to the forecast from PWC and our financial advisors for the Reuters transaction, Perella Weinberg and Bear Stearns. While this is unusual from the U.S. and Canadian perspective, it is the UK requirement. Now, the following discussion contains forward-looking statements that relate to future results and events and are based on Thomson's current expectations. Actual results may differ materially from those currently expected due to a number of risks and uncertainties discussed in documents that we provide to the regulatory agencies. This presentation also contains disclosures of certain non-GAAP financial measures. As required by regulatory rules, we have provided a reconciliation of each of these measures to the most directly comparable GAAP measure in the Investor Relations section of our website found at thomson.com. Let me now introduce, the President and CEO of the Thomson Corporation, Dick Harrington.

Thank you Frank. Good morning and thank you for joining us. This morning I will begin by reviewing the Company's third quarter operating results, next I will discuss the growth drivers of our business... the business that are delivering growth and returns. Third, I will provide a regulatory update related to the Reuters acquisition, I will also touch on the opportunities that Thomson-Reuters combination will bring for our customers, employees and shareholders. Let me begin with the financial results for the quarter, after posting a 6% organic growth rate in the first half of the year. We continue that momentum in the third quarter. The high organic revenue growth is a direct result of our success in building workflow solutions and investing in technology platforms that are being used, across the Company to drive growth. Revenue for the quarter was up 9%, led by our legal and our tax and accounting businesses, though every segment contributed. Operating profit decreased 1% due to several one-time costs that Bob Daleo will describe later. Removing these costs from both periods, underlying operating profiting increased 16% and the margin improved 80 basis points. Adjusted earnings per share for the quarter were up 55% to $0.48 per share, given the results for the first nine months of the year and the continuing strong business environment, we are well positioned for a solid finish to the year. As I discussed in the our recent Investor Day meetings we are helping our businesses, so we are helping our business and professional customers become more productive by delivering integrated information solutions. We are number one or number two, in the market segments in which we compete, which positions us, to meet and exceed our customers' needs. We deliver our information solutions electronically to enable us to roll out…

Thank you Dick and good morning everyone. I want to begin by reviewing the third quarter nine months results and will also discuss several items affecting our overall expenses. As you will see, there are several moving pieces within the business this quarter, which mask a strong operating performance. I will also review several of our key metrics and conclude with our outlook for the balance of the year. Now, the results, continuing operations for the third quarter saw a revenue growth of 11%, 6% was organic, 3% was acquisitions and 2% foreign exchange. Operating profit declined 1%, however, underlying operating profit rose 16% after adjusting for several unusual items and these include $29 million of Reuters acquisition-related integration cost. $11 million of incremental THOMSONplus expense, which totaled $24 million versus $13 million in the prior period. The good news is we are running ahead of these costs, because we are ahead on the program. I will talk more about this little bit later. And we also incurred a $13 million related to the anticipated settlement of a law suit in our legal segment. Excluding these items the operating margin increased 80 basis points to 21%. Year-to-date revenues are also 11% and 6% organically and excluding the one-time items, I previously mentioned, margins are up 130 basis points. Now I will discuss the third quarter results within each of the five business segments starting with Legal. Our Legal segment have very strong quarter building on its solid first half results. Revenue was up 11%, 8% organic, 1% from acquisitions and 2% from exchange. Online revenue increased by 10% almost entirely organic and was once again driven by U.S. Westlaw, which now has grown at least 8% organically to the last 10 consecutive quarters. U.S. Westlaw growth continues to benefit from…

Thanks very much Bob. And that concludes our formal remarks and we will open the lines for questions. So we could have the first question please. Question And Answer

[Operator Instructions]. One moment please for the first question from the line of Drew McReynolds from RBC Capital Markets. Please go ahead.

Thanks very much. Good morning. Just on the THOMSONplus program and the acceleration maybe you can provide just a little color on what's behind the acceleration here and also maintaining a $150 million in savings is there is a chance that you can outperform that number when its all said and done? Thanks.

Hi Drew this Bob. First of all I will tell you that we certainly are not going to stop at a $150 million I mean if we had the opportunity to exceed that we will, right now though it looks as though that certainly will be wrong hint. What's driving the acceleration are a couple of things, first, it is simply just better execution then and taking us so less time then we thought. And second of all I think what's motivating us to try to move these quicker is we want to have these complete before we really get into the middle of the Reuters integration as we anticipate when we complete the proposed acquisition. So those two things combined.

Okay, Thank you.

Hey, thank you and our next question comes from line of Tim Casey, from BMO, please go ahead.

Thanks, can you talk about, when you expect to have some sort of roadmap that you'll be able to present to your customers in the financial segment, obviously we've got some decisions to make on integrating Reuters when do you think you will be out talking to customers, so that they can decide what products there are going to continue to take some that may drop and obviously someday may accelerate? Thanks.

Yes, Tim I think it's very difficult to first to answer the question why we are in middle of the DOJ and European Commission process.

Well okay.

Thank you, Mr. Casey. Our next question comes from the line of Karl Choi from Merrill Lynch, please go ahead.

Hi, good morning. I just want to ask in the Thomson Financial area, have you seen any changes in our renewal patent or, more pricing resistance given from the market model, and I shouldn't speaking of second question the Thomson Learning proceeds in the quarter should we expect a tax payment down the road or this is a kind of proceeds? Thanks.

I will answer the second one, tax saving will be done there will be a tax payment down the road, because of the timing of the transaction, the actual tax payment is due towards the end of the shares when we completed the transaction.

On Thomson Financial we... I would say there is been obviously some minor issues with customers who want to take a wait and see attitude and what the new products are, but that said, I think we are performing the units that are performing... Bob mentioned a number of units that are performing at 7 plus percent. Organic growth, those units we would expect to perform regardless of the transaction and so we feel pretty comfortable at Thomson Financial, is basically achieving market rates, growth based on the product line that we have, and so although there is some noise out there from some of the customers, it had minimal effect, on Thomson Financial.

Bob, can you quantify the tax payment?

Can I quantify the tax payment, it's got to be about $1.3 billion roughly. I am sorry I missed that part of the question.

Great, thank you.

Thank you, sir. Our next question comes from the line of Peter Appert from Goldman Sachs, please go ahead.

Thank you. Can you talk a little bit about how deep you are able to go pre-transaction in terms of planning the integration and I asked specifically in the context of the $29 million in the cost issue side, which seems like a very high number, at least based on my understanding if the restrictions in there, so how deep can you go and why are those costs so high?

Well, Peter, first of all, what we can do is obviously anything dealing with basically, what the corporate office is going to look like, which is HR, finance, etcetera, certain infrastructure cost, what we have not been able to, what we will be able to do until a review is done is too deeper dive into customers and into products etcetera. So as far as cost are concerned I will let Bob go through the cost with you.

There are really too large components of it, one is consultants because we have hired Deloitte and McKinsey to help us manage that and they are working with us full time in terms of laying out the planning. So the consultants, costs are upfront in terms of helping new plan and then once you acquire the business then you execute and those consulting costs fall all the way. So the bulk will fall away. The other thing is that, we have put in place as you would expect a series of retention bonuses with our own people to make sure that we get the continuity of performance in the business and that we treat our employees fairly. It's particularly as it relates to Thomson Financial because as we said and it is known by employees that we are integrating Thomson Financial into workers. So there are many good people there, we want to make sure we continue to motivate the sales organization, keep management in place and there are costs associated with that but above and beyond the normal run rate cost of the business and that's why these costs because they are our own employees these costs we need to expand as opposed to include them as part of any deal cost.

I understand and 29 would that be a run rate for the next couple of quarters or for the fourth quarter let's say?

it generally would be for the.... as I've said it's really would be for the fourth quarter I think that we will as we get closer into 2008 we will share what information we have. Okay.

Thank you.

Thank you sir. Our next question comes from the line of Michael Meltz from Bear Stearns. Please go ahead.

Great thank you. I just two questions one a follow up on Peter's question there the $60 million you are talking about is any of that is there separate capitalized cost regarding that integration effort and then I have a follow up.

In terms of the integration cost, the integration cost are not... the integration costs are not separate from that. Those will be things like bank fees and legal fees and others. Those costs are capitalized in fact you do some small amounts of them reflected on our cash flow where we maintain this to banks and so on. So roughly about $20 million in the quarter. So those are separate. These costs integration costs are actually costs that we need to expense because they are in preparation of the transaction don't qualify, for being capitalize as prior to the transaction.

Okay, and Bob, the detail you gave on TradeWeb and that deal can you talk a little bit about the actual economics for Thomson how is this... what you are contributing and then how you are going to account for all this going forward, how should we be thinking about that?

We will accounting for TradeWeb markets, we will have a minority interest. So we will eliminate 15%. The TradeWeb new markets will account for an equity basis, so it will not appear to... it will appear in the segment but it won't appear in the revenue, we will just see the portion of profit that we get.

So you are still going to consolidate all the revenues that you currently have right now?

Yes, but we would not consolidate revenues out of TradeWeb new markets where we have a minority interest. We'd only be showing our share of the profits.

So when we are thinking about the gross that TradeWeb's been putting up recently is the new market opportunity, is that presumably just new markets you are going to be leading into here or they are... is your growth rate going to be impacted because of that separation?

We will... part of the agreement with the banks is that they are going to continue to support and actually strengthen their support of the core TradeWeb business in the markets we are currently in. So we would expect to enjoy a better growth rate, in the core TradeWeb business, the only thing that we will see is that as I mentioned, there is a relation between... the new... think of the new markets as a way for us to capture the ability to expand into a different asset classes, but the reality is the sales of the operations of platforms will be supported as a TradeWeb and there will be a fee that will be charged for new markets business, by TradeWeb, which we'll have a reasonable markets and so that will contribute to profits. And so between that and between our share the profits reps and the growth, we will be able to share in that benefit. Now going forward in the instant query we will certainly you know report on what's going on in the new markets business even though it may not be a directly added to our overall revenues. So we'll try to make it as clear as we can, because ultimately what happens here is that our shareholders get value at that value creation of that and so we want to be able to share with you how that's going.

Okay, Thank you.

Thank you.

Thank you sir. Our next question comes from line of Mark Braley from Deutsche Bank. Please go ahead.

Yes, good afternoon all rather good morning, and just a couple on TradeWeb and kind of continuing the same. Can you just tell us what the revenue base would be for the TradeWeb markets business, and i.e. TradeWeb plus all types and terms in order raising, and then am I correct in thinking that the revenue base for the new markets business is actually zero on day one, or are the banks actually contractually committed to putting a certain amount of business, so does it have a kind of base revenue level when it starts?

Yes, I like the second question, TradeWeb new markets today has a small amount of revenue about $7 million, until the contract that we retransferring, but, they have... this other banks have committed contracts that they will move in there and importantly they are committed to support this operation with their future liquidity. So we expect to se some significant growth there. In terms of TradeWeb and our equities business, the revenues there are about $270 million.

And of that TradeWeb online, was that 200 --

Yes.

Brilliant, Thank you.

Thank you sir. Our next question comes from the line of Vince Valentini from TD Newcrest. Please go ahead.

Thanks very much. Bob, can you tell us if there is no further acquisitions from now to the end of the year. Approximately how much would prior acquisitions add to the fourth quarter revenue?

I really don't have it on top of my head, but I would tell you that in the fourth quarter last year we acquired solution towards the end of the quarter and that's the largest contributor. So I think that the fourth quarter acquisition revenue will fall away. I don't know how much though, I really can't I really can't put my finger on that right now.

I guess the follow up to that is my math suggests in order to do only 9% for the full year, as soon as you are done 11% year-to-date, you need to do 4% revenue growth in the fourth quarter, and I know you have talked about some of the items in the $5 million print shift, but it doesn't seem like enough to me to get all the way down to 4% unless it's virtually zero acquisitions contribution but --

Well remember you got foreign exchange as well.

Okay, so you are saying 9% is sort of a hard jelling or is there a possibility to do greater than 9% for the year if markets hold up stable?

I wouldn't speculate on that. We don't talk about the quarters you know, that means [ph] I would say that we have had good momentum in the third quarter and, our business is doing well.

Good thanks.

Okay. Thank you sir, our next question comes from the line of Randal Rudniski from CSFB, please go ahead.

Thanks. Also a follow up on the TradeWeb transaction, can you explain the rationale for contributing AutEx and Thomson Order Routing to that TradeWeb markets given if there are somewhat distinct businesses?

The real key Randal to carry to this is that first of all Order Routing goes with TradeWeb, that's an integral product TradeWeb and AutEx and AutEx is being converted to converted over the TradeWeb platform to basically have one unit doing these types of transactions. So we can reduce the trading platform, AutEx is a trading platform although not a satisfictated as TradeWeb so that what we do is combined real estate an platforms trading platform although not a sophisticated as trade web so that's so what we do is combine those trading platforms on one. So we would have the large block shares as well as the treasuries and other instruments and the auto routing is just a natural process that goes with that. It's almost like its almost part of the plumbing.

And those two businesses you have to say to equities trades as well. Does the equities part of the business get transferred over time trade web markets as well or do you

Yes the entire business goes over and that same system can be planned for fixed income which is why.

And secondly the in terms of the THOMSONplus costs in 2008 is would that be in the range of $30 million is that where we are going to get through after you accelerate this spending in 2007.

The numbers Randall that we had given which we still stand by is $50 million for 2008 on the expense side. The 430 million that Bob had mentioned that we anticipated spending in 2009 is now being moved into 2007.

Yes, okay thank you.

Thank you. And gentlemen there are no further questions in queue at this time. Please continue.

Okay, if there are no further questions then that will conclude our call we like to thank you for joining us for the Thomson third quarter earnings call and if you have any follow up question feel free contact us, Thank you,

Thank you, ladies and gentleman this conference will be made available for replay after 12 PM Eastern Time today until November 1st at midnight. You may access the AT&T Executive Playback Service at any time by dialing 1800-475-6701 and entering the access code 891562, International participants may dial 1320-365-3844 once again that those numbers are 1800-475-6701 and 1320-365-3844 with the access code 891562. That does conclude our conference for today. We thank you, for your participation and for using AT&T Executive Teleconference service, you may now disconnect.