Ladies and gentlemen, thank you for standing by. Welcome to the Thomson Reuters Full Year and First Quarter 2010 Earnings Call [Operator Instructions] I would now like to turn the conference over to our host, Frank Golden, Senior Vice President Investor Relations.

Thank you. Good morning, and thank you for joining us today. We will begin today with Thomson Reuters' CEO Tom Glocer who will be followed by our CFO, Bob Daleo. Following Tom's and Bob's presentations, we'll open the call for questions. I ask that you please limit yourselves to one question each so that we can get to as many questions as possible. Let me point out, prior to our presentation, that we made a revenue reclassification between our business segments and the markets division this quarter. We moved communications and professional publishing-related revenues. The net results in 2009 was an increase of $87 million to our Sales & Trading unit with the related reductions to the other segments. On our website, you'll find an updated set of figures for 2008 and 2009 reflecting this change. Now 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.

Thanks, Frank, and thank you all for joining us today. I plan to cover three topics. First, I'll discuss our Q1 results. Second I'll provide you with selected highlights for the quarter. And third, I'll discuss our market position and our expectations for the balance of the year given the positive momentum building in our fourth and our first quarters. Now as I discuss our first quarter results, keep in mind that when we compare performance period-on-period, we look at revenue growth before currency as we believe this provides the best basis to measure the underlying performance of the business. I'm pleased with the first quarter results, which were in line, actually a little bit ahead of our expectations. As I stated last quarter, and is even more clearer today given these results, we're past the bottom in terms of real economic activity although we're likely to report negative year-on-year results for the first half of 2010 given the subscription nature of our business model. First quarter revenues were down 2% as the impact from last year's negative net sales took hold. From a net sales standpoint, we hit bottom in Q2 of last year, and trends have continued to improve since then with both Q4 and Q1 of this year positive on a consolidated basis. Even the hard-hit markets division recorded positive net sales in two of the three months this quarter although still a bit negative for the quarter as a whole on an average monthly basis. The professional division revenues rose 1%, which we believe to be a good performance compared to our peers and the industry as a whole. Professional division growth was driven by the Tax & Accounting and Healthcare & Science businesses, up 7% combined. Legal was down 3% overall but subscription revenues, which…

Thank you, Tom, and good morning, everyone. Today, I will discuss the results of the first quarter and briefly provide an update on our integration initiatives and going to end with some detail on our recent debt restructuring and our current capital structure. And as Tom mentioned, we certainly are pleased with our performance in the first quarter. We're tracking to our expectations with few surprises and results thus far are consistent with the full year guidance we presented in February. While our revenue growth rates in the first quarter certainly slowed relative to last year, underlying trends remain encouraging across our markets. Law firm layoffs have subsided and financial services firms have begun hiring again. And our geographic diversity, our market diversity and our product diversity have all combined to soften the impact of the headwinds we have been dealing with. As Tom mentioned, our net sales trends continue to show improvement particularly in the Markets division where they were the most suppressed in 2009. Accordingly, we believe our reported results have bottomed down, which is supported by the sequential revenue growth Markets recorded in the first quarter. Given these trends, we believe we're well positioned to return to growth in the second half of this year. Lastly, we continue to make progress with our integration and legacy savings programs and are confident we will achieve our targeted savings of $1.6 billion by the end of next year. Now let's turn to the first quarter. Let me remind you that I will speak to revenue growth before currency for the reasons Tom mentioned. Reported revenues are highlighted on each slide. Foreign exchange had a favorable impact on our revenues in the first quarter versus the prior period and had about a 50 basis point benefit to our consolidated margins.…

Thanks very much, Bob. And operator, we'd now like to open up the call for questions, please.

[Operator Instructions] Our first question comes from the line of Phillip Huang with UBS.

First, just a clarification, I think you mentioned at the beginning of the call that, I think that accounting change moved to $87 million to Sales & Trading revenues this quarter. I just wanted to know how did that impact the reported organic growth?

It did not because we would have adjusted the prior-year.

My question is, I know we've seen a turnaround in that since mid-last year, but for the first time since the economic downturn, we're seeing an improvement in the year-over-year organic revenue trend from Markets. Can you maybe give us a sense of how sustainable this is in light of disynergies from sunsetting legacy products? Was there any sort of timing-related items that helped the quarter? Or do you think that in the hindsight, the minus 6% organic revenue growth in Q4 was the bottom, and we can expect more than moderate declines and eventually back to organic growth from this point on?

It's Tom. I'd certainly agree with the trend as you've described it. So recalling always the lag mathematically between the economic activity which shows itself in our net sales and then the year-on-year, period-on-period performance, we think we bottomed in Markets in terms of actual economic activity in Q2 of last year. And therefore, in terms of reported results, the bottom sort of straddles Q4, Q1 of this year. And you will continue to see that climb out and headed towards revenue growth in the second half of the year.

And our next question will go to line of Vince Valentini with TD Newcrest.

We see this morning that private equity firms have purchased IDC. Now that that's official and we know that you didn't buy it, can you walk us through your thought process. Did you take a look at this asset or you're just being more disciplined these days of not wanting to make any acquisitions while you finish off your integration programs? And then also, maybe, if you have any thoughts about the new owners [ph](46:13) there if it will change things and Enterprise space and an impact your competitive environment in any way?

Vince, Bob would scold me if I let you get by with saying that we are now more disciplined. I think he'd tell you, we've have always been disciplined. Obviously, it's very directly in one of our markets, in particular, in the Enterprise information part of our Enterprise unit in Markets. I think as Bob has just gone through, the Enterprise information unit is about 60% of the revenues of the overall Enterprise unit. So call it around $750 million of revenues. That's been growing very well for us. Actually, we compete head-to-head with IDC there. We don't see any particular change in the competitive landscape. The buyers are very sophisticated. We know both Silver Lake and Worbert [ph](47:18) well, and have worked with them before on different things. So we take it really as an endorsement. A quick back of the envelope valuation I did on the way to work this morning suggests that it's about 5% of Thomson Reuters revenues, that is the comparable revenues in Enterprise information. But as the multiple paid, it would correspond to about 10% of our market cap. So it's a really nice read across. We think our business is growing faster. So it doesn't affect us competitively and is a nice reconfirmation of why we've been investing in that unit.

And our next question will go to the line Paul Steep of Scotia Capital.

Tom, actually, why don't we talk about Elektron, since that sort of feeds to what you just talked about. Maybe you could talk twofold to it. One on monetization opportunity in terms of is it more transitioning existing clients and then upside on new clients? And than secondly, the cost synergies sort of baked into the overall program from deploying Elektron?

Well, what's exciting to me is that no part of our business moves as quickly as the low latency computer-to-computer Enterprise part. It's the sort of very sharp point of the knife in terms of deployment of technology. It's where we have wonderful assets arrayed. There are competitors and there's constant innovation going on. So what Elektron really amounts to is a rethinking and replatforming of that machine-to-machine infrastructure part of the business. And not only does it allow for very low latency, therefore, very high speed communications into our market data platforms and execution venues, it allows clients an incredible range of choice. They can take a direct feed from us right at their premises, if that's how they prefer it. They can co-locate their algorithms in our hosting facilities, essentially in a financial services cloud. They can get the same data with the same data models and symbology as they use front office in their desktops in all of their applications. So I can't necessarily tie it to any particular increment that you'll be able to identify in our revenues, other than it's a great sign that we continue to invest to support our leadership position in that infrastructure business, number one. Number two, on the cost side, it will have benefits to it because it's a very scalable architecture. And above all, what it represents is a sort of sophisticated segmentation in where do we deliver the expensive to deliver fast data. So rather than shooting it all over the world, it goes only to those markets where folks are really trading that way. And it allows us to, in essence, manage the other data flows for both our and for our customers benefit, so it's really positive.

And our next question will go to the line of Paul Sullivan of Barclays Capital.

A quick question on Legal. Just in relationship to the 2,300 accounts that you were talking about in relation to WestlawNext. Can you try and sort of just size that for us in terms of penetration of your existing customer base either by a sort of number or by revenue and quantify the pricing uplift that you're seeing on average? And where do you think that incremental money is coming from? Are you seeing it cannibalize some of the Print business as we go through this year? And are there any signs of you, now starting to more materially displace some of your competitors?

This is Bob. The 2,300 represents about 3% of Legal's overall customer base. And why it varies depending upon the segment, the average uplift so far has been about 10%, and we haven't seen that come from print. Substantially, most of the customers that we have to date are from small to mid-sized law firms and the corporates where print is not a significant part of that marketplace, so we haven't seen a displacement. And we have seen a reasonable outcome from competition or I look at that in another way, there are customers who are new to us. That, if I remember correctly, about 40% of those new customers were not customers of Thomson Reuters Legal before. So it's been very, very successful. And we really, are tracking ahead of our own expectations both in terms of the price realization, market acceptance and the amount of customers who we've converted . But we have a long way to go. We'd like to convert 100% of our customer base to get the full benefit of this. And so our expectations are realistic and that will take a couple of years to do that.

We will go to the line of William Bird with Bank of America.

I was wondering if you could just discuss how quickly will your 8% deferred revenue growth on the balance sheet convert to actual revenue growth? And could you also just discuss how net sales developed within the quarter?

Actually, Bill, that's an interesting question. We'd really don't look at that particular one and so I'd have to study it. I think that there are probably other factors involved in that 8% growth and show a growth in sales, because I can tell you, certainly, I don't think that we've had an 8% growth in that business over that period. So from my perspective, I don't see that happening. It's hard for me to react it out. Certainly, take a look at it offline, but I don't understand -- I really can't respond to that other than saying, perhaps, part of that is influenced of certain by acquisitions that we make, which on a year-to-year comparison, would increase that. And that would actually factor out from an organic perspective. When we talk about growth year-to-year, we're referring to organic growth. So I really can't understand that and I'll certainly, will go and take a look at it and will post the answer to that to the website.

And we'll go to the line of Brian Karimzad of Goldman Sachs.

On the WestlawNext, just out of curiosity, what color do you have on the reception to the fill-in on the large law side? I know that's going to be a bit slower because of the duration of the contracts there. But any color you can provide on the reception and how does that will bake in on pricing?

It's Tom. They've been very welcoming and very receptive because pretty much any lawyer who looks at it, who, like me, who's ever had to do this sort of work, gets it quickly and intuitively, how much more efficient it can make you. Salesforce is being the lovable animals we know them to be, will go for the simpler sales first. So that's one reason you see a lot of the solo and small practitioners. But we think we will be able to sell-in, penetrate the large law firms. We have a large event for them coming up next week, in fact. What I can't predict is whether the pricing trends that Bob has described around the 10% uplift, will be the same once we get through the entire customer base or move one direction or another. But we certainly deliver a lot more value with the product.

And we'll go to the line of Drew McReynolds of RBC.

Question for you Tom, just bigger picture, when you look at all the things happening in the world on the sovereign credit issues and regulatory developments in the U.S., just a little bit of a crystal ball. But just curious to know net, how you ultimately think it impacts your business, whether that's across Professional or Markets?

I can give you the short term and I'll try and venture further out. So short-term, the instability in Greece in particular, and spreading to other sovereigns has certainly increased the volumes we're seeing in our FX business, and that trend is continuing in the second quarter. And it's also driving a significant sort of need for pricing information, news, and plays into a real strength that Thomson Reuters has or Thomson Reuters Markets has, which is the global coverage, the ability to report seamlessly from bureaus in Athens, London and emerging market's desks. That's been a very nice factor. Going out a little bit further, obviously, the potential in Europe could be severe. We've been reporting on what it would take for Greece to pull out of the euro, which is unprecedented and there is no mechanism for. It could drive very significant continued volatility in currency rates, all of which, I think are positive trends. But ultimately, we care about the health of the economies we operate in. Like everyone else, we'd be affected by a true crisis brought on by domino and solvency. Closer to home, in the U.S., we're following very carefully the financial reform legislation, and I should say we are in other markets as well. To date, and again, I'd caution it's a very moving target, that is headed in the direction which is I would say, neutral to positive for us in terms of market structure, in terms of transparency, mechanisms and pricing that will be mandated in the solution. And in particular, the out turn, where does the swaps market go. But it's further out than that, I wouldn't hazard a guess.

And we have a question from Colin Tennant with Nomura.

Just looking at the new launches that you mentioned, three big platforms are going out this year. I wonder if you could quantify the specific costs around the actual launch activity which may fall away next year or would it be replaced with ongoing sales and marketing around those products?

Colin, this is Bob, and I'll respond. We've tried to provide some guidance on that in a broad way by identifying about 100 basis points of margin, that we thought we would margin erosion in 2010, as a consequence of these launches rolling out. And that is a combination of two things. There is certainly, some one-time cost that occur as a result of a launch, the marketing and expense promotion things, such as what we've done with WestlawNext and what we're doing with Eikon. But then there is -- I'd say majority of the costs so, are really more run rate cost. Things like amortization of capitalized cost to develop products. And also, they are then -- the development staff then moves to maintenance, and so those costs become run rate. And so what has to happen for a number of these products is that the revenue growth has to catch up with that, so where they become a contribution. So I would say that majority of the costs are run rate. That 100 basis points probably, fairly captures what those investments are. And with that, we do expect to that we will see margin expansion, as we said, in 2011 and beyond as a consequence of these platform launches.

And our next question comes from the line of Patrick Wellington with Morgan Stanley.

A question about the market sales improvement. Tom, you said I think at the fourth quarter, that you chose to flank the positive number in January because it's a natural focus on when you cross that zero line. You seem to have crossed the zero line back in the other direction at some point in the quarter. Do you want to tell us what that tells us about this market upturn? Are we solid in this market upturn or is that just an aberration? And then secondly, just relating back to that last question, we had some cost presumably, for the launch WestlawNext in Q1. Bob, do you want to give us a better idea of when the Utah Eikon costs will fall incrementally by quarter and maybe, also on the global tax workstation, which quarters is that first impact felt?

I'll answer that question first and then I'll let Tom handle the first one. We have repeatedly said that Eikon will launch in the second half of the year, so that's when that will happen. One source, we have incurred some of those costs in because some of it was expensed in the first half of this year, but more will occur in the second half.

Patrick, I forgot how good you were with the slide rule against Markets' quarter-on-quarter sales. The facts are pretty straightforward. There was one negative month in the first quarter. As I mentioned, trying to be objective about it, the average monthly sales in the first quarter were still negative. So we're still below the zero line. But the trend, if you start counting Q2 of 2009, Q3, Q4, Q1 shows a very significant ramp up toward and close to the zero line. And what it suggests to me is the trend is intact. And variably, it's lumpy on the way down, a bit lumpy on the way up, which is why I look at the average monthly. But I do expect that to cross imminently, let's say. So when I look out rest of this year, it's really more relevant for what does 2011 look like now. You know roughly, what our expectation is for this year. I'm pleased with the book of business that's building towards next year, especially given the Elektron launch, Eikon later in the year, Reuters Insider next week. So I think Markets is in a good shape. Everyone in the team has done a great job.

And next, we'll go to the line of Michael Meltz [JPMorgan]. David Lewis - JP Morgan Chase & Co: This is Dave Lewis for Michael Meltz. I just wanted to see if you guys could touch on the -- just following up on the last question. Do you guys get us a touch on the pricing environment for Markets, if that's improved over the past quarter or so?

Well, Bob and I will both jump in. So two data points to look at. One, we in fact, did put through a price increase, our normal annual one. Yield was just a little bit under 2%. So even in the environment, when those letters went out, call it last October for effectiveness, January 1, a little bit later in Japan, first quarter. So even in a difficult environment, it has been possible to price. And again, I'd stress, that's an average price. So some parts of the product line have priced up significantly more than that. I think we've returned to a stable pricing environment. If we can deliver value, new content, new functionality for clients, they'll pay for it. That's been clear through the crisis in Enterprise, and I think we're now seeing stability come back into both the Desktop business and other parts of the market.

I would just add that while that yield for this year's price increases, roughly, some of it was a year ago. The environment, I'd say, was far more favorable, meaning that you always get certain push backs from some clients or whatever, and you should try to consider that in your thinking. We had far or less of that. The price increase in 2010 was, I think, far better received than the price increase in 2009. So the market environment seems to be improving in that regard.

And our next question will go to the line of Tim Casey with BMO Capital Markets.

Given its importance, could you refresh our memory and update any changes to the rollout of Eikon? And I know it's a multi-year product rollout, but any more granularity you can give us on when you think the really big customer impacts will be? Is it really a 2011 story or would it even be 2012 before you really start to see the breadth of customers on the new platform?

Nothing has really changed in the last quarter, other than we're that much further along in testing of the platform, and it looks very good. Scheduled release is on time. I've been saying at least for a year, that I think the impact really is a 2011 and then continuing. So there's not going to be a significant Eikon component of our revenues until then. But I think we will see very positive effects before 2012, just like we're beginning to see them in WestlawNext. And a bit similar to that, the smaller shops where you have less of a major opening up of the infrastructure are first go in. New clients and smaller shops with the larger global accounts taking a while to schedule in with their own release agendas.

And Next, we'll go to the line of Mark Braley with Deutsche Bank.

I wonder if I can just come back to you on some comments during the slides about currency. I just want to clarify what the benefit was within the Markets business from FX on the margin, and I think what the hits was within the Legal business on margin from FX? And then my follow-up, if I can, was basically, can you sort of give us a steer as to what the second quarter integration charge number will be, because it's not really a number we've a prayer of forecasting, to be frank?

The impact in the Markets division for foreign exchange was roughly about 70 basis points. So it really was roughly actually, about 100 basis points, I should say. Correct that.

So 100 basis points favorable in Markets?

Yes.

And in Legal?

I don't know if I have that granularity here. I think it's probably less of an impact if any, in Legal. I would say, it probably doesn't have any.

The second part of the question of Mark's question was whether we had any visibility for him on the Q2 integration cost number.

The answer to that is not really. I think that we look at it and we said we've projected about $475 million. I think that the $97 million is a bit lighter than probably we would have expected. But as I've said frequently, these integration program is a series of quite a few different projects. And knowing when they come together, we're honestly, very focused on making sure we drive these projects to completion during the specific time periods. My expectation would be that we'd see a little bit of a catch up in integration spend in the second quarter. So if you to took the $475 million and divided it evenly, that gives you about $120 million roughly, a quarter. So my estimate should be a little better than, a little more than $120 million in the second quarter.

Our final question will come from the line of Randal Rudniski with Crédit Suisse. Randal Rudniski - Crédit Suisse First Boston, Inc.: First of all, Bob, you referred to some revenue to synergies in the Markets division in Q1. Is there any way to sort of quantify how large that was and what that might be for the full year?

Randy, that's a question that we really have trouble with, because 40,000 customers, all these different platforms, we probably would grind our internal systems to a halt if we we're trying to track that. We know it's a negative impact. I wouldn't even hazard a guess. We know it contributes, like I said, to the revenue decline. But we're focused on the positive side of that, and that is, that as we eliminate these platforms and products and consolidate, we're improving the efficiency and effectiveness of that company. And over the long-term, we feel confident we're going to recoup that growth. So I wish I could be more specific. But we made a conscious decision that we were going to do this, take these actions and we look and said, can we track it, and the answer was, boy this would be really tough to do. So I can't give you a specific on that. We do know that it's having an impact though. Randal Rudniski - Crédit Suisse First Boston, Inc.: And second of all, you renewed the NCIB. And in that paragraph you indicated you haven't repurchased any shares since in 2008, but you might in 2010. So I guess the question is, what sort of criteria are you really looking for in order to become active with that buyback program?

First of all, the reason why we renewed it primarily was because it expired. And the NCIB is like a shelf offering for debt. And so I think, we all think and the board agrees that having a standard ability for the company to enter the market to buyback shares is good part, prudent part of our long-term capital strategy. I don't think you should read into this, says that we have any intentions of buying stock at this time. We are spending our money right now appropriately so, on investing in our business and returning a healthy dividend to our shareholders. And we have always had a preference for using dividends as a way to return value and that certainly, that's still is our preference. But I don't think that you should read into it as anything more than just prudent good financial management that the company has filed for and keeps the capacity for the NCIB should the opportunity warranted and should our cash availability warranted.

Right, we want to keep the flexibility without having to go back to the market and say that our intention has changed. So our intention is agility. You can judge over the past year what the likely results may be. But we don't want to be pinned down because it would sort of undermine the benefit of having that flexibility in the capital structure.

Okay. With that question, I will conclude our call. I'd like to remind those of you who would like to join does for our Investor Day, which will focus on our Legal business at our headquarters in Eagan, Minnesota. That will take place on June 3. If you had not received our invitation, then by all means, please contact my office and we will forward you the invitation. That's June 3 in Eagan Minnesota. So with that, that concludes our call. Thanks very much for joining us.

. Thank you. Ladies and gentlemen, this conference will be available for replay after 10:30 a.m. Eastern time today through Tuesday, May 11, 2010 at midnight. You may access the AT&T teleconference replay system at anytime by dialing 1-800-475-6701 and entering the access code 153995. International participants, please dial (320) 365-3844. That does conclude our conference for today. Thank you for your participation and for using the AT&T executive teleconference service. You may now disconnect.