Ladies and gentlemen, thank you for standing by. And welcome to the Thomson Reuters First Quarter 2011 Earnings Conference Call. [Operator Instructions] And also as a reminder, this teleconference is being recorded. And at this time, I will turn the conference call over to your host, Senior Vice President, Investor Relations, Mr. Frank Golden. Please go ahead, sir.

Good morning, and thank you for joining as we report our first quarter 2011 results. We'll begin today with Thomson Reuters' CEO, Tom Glocer, who will be followed by our CFO, Bob Daleo. Now following Tom and Bob's presentations, we'll open the call for questions, and I'd ask that you please limit yourselves to one question each. Throughout today's presentation, keep in mind that when we compare performance period on period, we look at revenue growth rates before currency, as we believe this provides the best basis to measure the underlying performance of the business. In today's earnings release, we announced that we have signed an agreement for the sale of our BAR/BRI Legal Education business, which is expected to close late this quarter. And earlier this month, we closed on the sale of our Scandinavian Legal and Tax & Accounting business. We also announced today our intention to sell our Enterprise Risk and PORTIA businesses in the Markets division. These dispositions are expected to close in the second half of this year. Today's presentation and discussion excludes the results of these 4 disposals. Now on our website, you'll find the results for the first quarter, including these businesses for purposes of comparability. Lastly, also on our website, we provide 2 years of financials excluding the results of these disposals. 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 regulatory agencies. You can access these documents on our website or by contacting our Investor Relations department. It's now my pleasure to introduce the Chief Executive Officer of Thomson Reuters, Tom Glocer.

Thank you, Frank. And thank you, all, for joining us this morning. I plan to cover 3 topics today. First, I'll discuss our first quarter 2011 results. Second, I'll comment on a few major developments in the quarter. And third, I'll provide an update on our 2011 outlook before turning it over to Bob. But before I begin, I'd be remiss if I didn't acknowledge that it's just over 3 years since the acquisition of Reuters. And over that period, we've integrated the company, rolled out innovative product platforms, built to #39 global brand, safely navigated the financial crisis and returned to growth. We've accomplished a lot, but there's much more to do. The investments that we've made in our new product platforms position us to compete successfully and achieve results from scale. And we're finding new ways to leverage and combine assets across our businesses to meet evolving customer needs and to further consolidate platforms. It's gratifying to me to see the fruits of this progress just beginning to be borne out in our financial results that I'll share with you now. I'm pleased with the first quarter's results for both the Professional and Markets division. The positive momentum we experienced in the fourth quarter carried into the first quarter as revenues increased 5%, the strongest quarter since Q4 2008, and a significant improvement compared to a 2% decline in the first quarter of 2010. The Professional division's revenues were up 8% and the Markets division's revenues grew 2%, which would've been 3% excluding recoveries. And Bob will provide you with more detail in a moment on this. As I mentioned last quarter, the current economic environment for us is one of rising business optimism, although that optimism and the opportunities for growth are unevenly distributed across the globe.…

Thank you, Tom. And good morning and good afternoon to everyone. Today, I'll cover the first quarter results and I'll provide an update on our full year outlook. Now our results in the first quarter were consistent with our expectations that we outlined at the time of the fourth quarter results. And they provide the confirmation that we're tracking to the outlook we discussed in February for accelerating revenue growth and strong margin and free cash flow improvement. As in our prior quarters, I will speak to revenue growth before currency. Reported revenues are also highlighted on each slide. In addition, for consistency and comparability with our previously reported results, all the results that I'm going to discuss today are on an ongoing basis and exclude the BAR/BRI and Scandinavia Enterprise Risk and PORTIA businesses, all of which are included in disposals. And as Frank mentioned, appended to this presentation on our website are a set of slides including the results for Enterprise Risk and PORTIA. With the consolidated business, revenues in the first quarter were up 5% versus the prior year, with a 3% benefit from acquisitions. Growth accelerated during the quarter, and both Professional and Markets divisions achieved organic revenue growth. Adjusted EBITDA was up 4% in the quarter and underlying operating profit was up 1% in the quarter despite recording these $39 million of one-time charges. Now as you can see from this chart, growth has accelerated as our markets recover and we realized the benefits of the investments we made last year. This growth was driven by 3 primary factors. First, coming off a year of investment in new product platforms such as WestlawNext, Eikon, Elektron, the ONESOURCE global tax workstation and Advantage Suite 5.0, we've never had a more advanced set of products delivered to…

Okay. Thanks very much, Bob. Operator, we are happy to take questions now. So if we could field the first question, please?

[Operator Instructions] And our first question will come from Paul Steep with Scotia Capital.

Tom, I wonder if you could talk a little bit about the adjusted EBITDA margin gain expected in the back half of the year. How much of that is dependent on revenue growth versus completed integration programs that are sort of already in hand? And how should we think about that sort of phasing in over the back end of the year?

Well, as you could see from our results, there is a significant phasing effect. Bob just mentioned that the first quarter is typically the smallest quarter from a profit point of view. And I know some of you have properly phased the expectations through the year and others seemed to have just put it through exactly equal each quarter. And I think the best I can tell you is we've sat down and redone all our forecasts on the basis of the most recent data and the sales information we've got. And it still looks strongly like we're tracking to the guidance, 300 basis points plus over the full year, and it'll obviously be more back-end weighted. But we always expected it would be. As between the revenues and the cost, at this point in the year, frankly, on a subscription model, the revenues still can move, but we're far enough in that there's no pronounced effect, whether it's cost or revenue.

Okay. And just a last follow-up on that. The use of proceeds out of the $1 billion from the sale, how should we sort of think about where that cash gets redeployed into the business or how it will be redeployed?

Since Bob grabs that cash immediately, I'm going to let him answer that.

Okay. Paul, I think that this cash, like any cash that we generate in our business, we think of in -- as within our capital allocation model. So our primary objective in this cash would be to redeploy it into the business. We think we have a long runway of opportunities of growth and investments. We're not going to be solely about this and it's not going to burn a hole in our pocket. And like anything else, if -- as we have demonstrated in the past, we have as our capital strategy, I think we're very well disciplined between what we allocate to reinvestment and how we return cash to shareholders. And so over the longer term, as we generate this cash, if we -- and the cash we generate from the business, if we can't find the appropriate uses for it, which I have no doubt we will be able to do, but if we can't, we'll certainly find ways to return it to the shareholders, either in dividends or buybacks as we have done in the past.

Our next question in queue, that will come from the line of Drew McReynolds with RBC Capital Markets.

Just my question on margin guidance for 2011, as of the end of last quarter, the basis that we were using was 19.3%, which excluded the divestitures that you announced last quarter. Does that 19.3% base, by which 2011 guidance is determined, do the 2 new divestitures impact that at all? Should we be using something that's higher or lower as a result?

I think you should continue to use that basis because those businesses in the aggregate [ph] were about the same.

Our next question in queue, that will come from the line of Vince Valentini with TD Securities.

I'm hoping I can sneak in a clarification as well as a question. On Slide 24, you say free cash flow was $2 billion last year, and then you have 20% to 25% growth as your guidance. It was my impression that 20% to 25% growth was off of the free cash flow after integration costs last year, which was more like $1.6 billion. So I'm hoping you just clarify that. The question I have is on these new restructuring costs of $39 million. Can you just give us some more detail on what those actually entail? And can you confirm that the 100 basis point of margin increase for the year on your guidance would absorb those $39 million in costs, you'd expect to still grow 100 bps even with that drag?

Well, I'll answer the first one, I'll turn it over to Tom for the second. And the answer to the first one is easy. Yes, it is free cash flow after integration.

And you are right on the basis on which you were comparing 2010. So it was a 20%, 25% growth off of the underlying, or actually off of the actual which was around $1.6 billion. And in terms of the $39 million, let me back up and first say, I view this as a really good thing, right? We have taken large integration charges associated with the Reuters integration. That program is ending this year. It's on track. Obviously, we produce more savings than we initially thought, and that's all great. But we don't stop looking for regular, annual, incremental efficiencies in the business. And what you see us doing here with the $39 million is identifying early in the year new opportunities. In this case, to answer to your question, Vince, it's mostly people cost. We did a streamlining and delayering in the Professional division and similarly, in Markets. They're beginning now that we're through with integration to go through and look at spans of control and number of layers. So that's where most of the costs are, it's severance-related. And not only does it pay for itself in the year incurred, which is how we can get back to answer your third part of the question, to the still 100 basis points improvement, it will pay a dividend greater than that next year because we'll get the full year effect.

Our next question in queue, that will come from the line of Phillip Huang with UBS Securities.

I just want to -- actually, I have a further clarification on the one-time charges. Just given that these efficiency opportunities are ongoing, I was wondering what you think in terms of how much more of such costs do you expect to see in the coming quarters.

How much more of related to this particular activity or additional activities? Is that your question?

Yes, or just in general, given that this is sort of one-time in the quarter. But I think you also mentioned in the release that these efficiency opportunities are ongoing. I was wondering if we can expect to see these type of costs from, I guess, like every couple of quarters or so.

We really don't have anything at this particular time. But I think that, that reference was more towards just taking opportunities as they arrive. But we don't have any. I think that we'll probably see another $5 million or $6 million over the course of the year, really maybe second quarter related to these. But then again, they're all self-funding, they're all included in our ability to achieve our outlook. But there's nothing significant beyond that on the horizon at this point.

I guess, do you guys look at this on an annual, like do you guys look at it every year? Or do you think that this is kind of like as you go along, if you find opportunities, that's something that you would do?

It's just a normal course of managing the business. As we evaluate, situations change and opportunities present themselves, and we encourage our businesses to always think about how to be more effective and more efficient. And so...

Yes, I think the way, Phillip, I look at it is this, if you're on an annual guidance basis and you're looking at EPS for the year or any of the lines, there should be no effect. But because people are sensitive quarter-to-quarter, we're calling out the extraordinary costs incurred early in the year, so you don't think that, that's actually the underlying trend in the business. So you may have, every year, something similar, but on an annual basis, it all washes out.

Got it. And I think you just mentioned that the 100 basis point improvement in the margin for your outlook, that excludes the restructuring charges. Is that correct?

No, that includes -- well, what we have said was we would spend $39 million. And during the course of this year, we will recoup virtually the same amount of savings, so it is netted into that number.

And our next question in queue, that will come from the line of Michael Meltz with JPMorgan. David Lewis - JP Morgan Chase & Co: This is David Lewis for Michael. Could you provide an update on the customer conversations you were having with the rollout of WestlawNext now that we're a year in? Given the significant efficiencies of the WestlawNext drive, could the value proposition support more attractive pricing as the legal market slowly recovers?

It's Tom, David. The conversations continue to be very positive. And you see that playing out in the continually upticking of the percentage of our revenues converted over to WestlawNext and the number of users. Undoubtedly, there is additional pricing room, given the productivity increase. We've been careful, though, and recognizing that many of the law firms are still coming out of a very difficult period. And so we've been conservative in our approach and looking to get as much migrated and rolled out while still achieving, I think, quite an attractive overall increase in it. And we look at it -- actually, the people running the business who are closest to it look at it constantly and tweak these models.

And our next question in queue, that will come from the line of Tim Casey with BMO Capital Markets.

First, a clarification then a question. Just on the guidance that you reaffirmed, that you've reaffirmed the growth rates, but it is essentially going to be off a lower base because of the divestitures. I just want to make sure I'm looking at that correctly. And secondly, on the proceeds, you mentioned $1 billion. That includes all announced divestitures, including the 2 that were announced today, I'm assuming. And is there a way you can give us a breakdown of how you're getting to the $1 billion? How much is with the Markets group and how much is with the previously announced ones?

I'll take the second question, Tim, and leave the clarification for Bob. Normally, I'd be happy to provide that breakdown, but for one thing, which is we've just announced the last 2 in Markets. These are really valuable assets, and we've had a good track record at even surprising ourselves sometimes in how much comes in from them. So I'd rather not start signaling expectations for the market. But after the facts, we'd be more than happy to do it.

But you're quite confident you'll get the cash this year, Tom?

Yes, I think it's -- given where we are in these processes, yes, there's always the possibility that, depending on who the buyer is, that there's an antitrust delay. But given what these particular assets are and the structure of those markets, I'd expect that these can get done this year.

And to answer your first question, Tim, the guidance is off of the base, which would exclude these businesses, okay? So the percentages hold, but the base is different because of the dispositions.

And our next question in queue, that will come from the line of Brian Karimzad with Goldman Sachs.

On the emerging markets within the Markets division there, can you give us a sense on how growth is there and kind of what's been holding it back a bit? Because the latest headline, we look at the growth in Asia and EMEA, and I know you have Japan and Western Europe in those numbers. It's certainly not meaningfully above what we're seeing in the Americas. I was wondering if you can help us understand what's going on and potentially what could accelerate it.

Well, I think you're seeing -- certainly in the Asia-Pac, you're seeing the sluggish, for a good reason, performance in Japan pulling down. I mean, last time, I looked at relative breakdown, Japan was about 40% of overall Asia in Markets. And although we all hope in all of our businesses to see a recovery in Japan, that did have a pronounced effect in the first quarter for us. The other thing I just mentioned, this is really in the weed for people who love to tweak their models, but the way the Japanese market works, the beginning of the year is actually April 1 there. And so although, we put through our price increases January 1 and the rest of the year, it's April 1 in Japan, and that has an effect given the size of Japan also.

All right. And any color just on some of the developing markets themselves and what their growth rates have been and some initiatives?

Well, I was just through the Gulf a couple of weeks ago, and that's reasonably large market for us. And that's recovering nicely after a sort of flat to negative time in growing out of the Dubai restructuring. Southeast Asia, still strong. Latin America, really strong for us, especially on the Professional side as we launched Revista Online in Brazil, which looks really, really promising.

And our next question in queue, that will come from the line of Patrick Wellington with Morgan Stanley.

A couple of points of clarification, Tom. I mean, firstly, on organic growth in Markets, I think twice in the presentation you refer to it as 2% in the quarter, although the table on Page 10 refers to it as being 1%. So I was wondering which is the correct number. Second question is on the disposals in Markets. As you say, Enterprise Risk and PORTIA looked like they could be valuable businesses. Can you give us some idea of what their organic growth rates are? Were they above or below average for the division? And really, why you think it is suitable to sell these businesses? And then finally, can you give us a little bit more on 2 specific markets, what's going on in Sales & Trading, which is still sort of dropping along at 0 growth, maybe a little bit disappointing? And what you think will start to move the large law market in due course?

Okay. There are a whole bunch of questions. I'll start taking them apart, and at least Bob will pick up. So on the reasons for the divestitures in Markets, you're right, these are very attractive businesses. But we're also very serious in Markets, to follow the 2 platform strategy that Devin Wenig outlined at the recent Investor Day, Elektron and Eikon. The Risk Management business is really a trade risk, trade management business. It's a deployed software business, as you know, done on an outright basis as opposed to the rest of our business, which is much more a recurring subscription basis. So both the nature of the business itself, selling large deployed software systems on a once-off consulting like basis, and the business model accounting, which is on an outright versus the recurring, just doesn't fit the overall way we run that business. It's attractive, it's growing, but it shouldn't have a pronounced effect one way or the other on the growth rates in Markets. Now large law. Large law is recovering, but they're still quite cautious. I see a lot of those folks. The very strong performance you see in our Business of Law segment, that's separate from WestlawNext, sales of things like our Elite ERP system, very strong in large law. So you're seeing the refresh of technology cycle apply there. And I've been out on a whole bunch of the sales calls there, and that's very positive. But law firms themselves are being cautious in adding heads. There's still a couple of law firms here or there that haven't worked through their problems from the last couple of years. So I think it will be steady and recovering in large law, but not an instant pop.

And Patrick, the organic growth is 2%, excluding recoveries and 1% including recoveries.

And Tom, just Sales & Trading, flat for the last couple of quarters. You want it [ph] to sort of be a little bit better at this stage?

Yes. Well, my view, it always should be better. The business, our model always tends to be slow to slow down and slow to pick up speed. But when it does, very attractive operating leverage. In particular, in Sales & Trading, what you're seeing for us is the Exchange Traded Instruments unit has been slower, in particular, impacted by recoveries. So if you took recoveries out, which as you know is other people's revenues that we're forced to account within our own, you'd see a stronger performance in Sales & Trading. It will pick up. Fixed income has been improving for us. Commodities & Energy has been growing strongly. And on the transaction side, FX volumes have been good. On the information terminal side, there's slow progress, but I do expect that will improve.

And that final question will come from the line of Jonathan Helliwell with Berenberg.

Just specifically going back to that organic growth question in Markets. The 1% figure you're giving us or the 2% excluding recoveries, you said was mainly driven by change of ownership at Tradeweb. Can you just remind us the broad shape [ph] of what you did there, and in particular, whether you've treated a change in consolidation of Tradeweb as organic growth?

No, we did not. That was in -- core Tradeweb actually grew 9% without change in ownership.

Right. And the organic figure, 1%, that you gave us is driven by the 9% core growth, not by the change of ownership.

Absolutely, yes.

Okay. That will conclude our call. We'd like to thank you for joining us today.

Thank you. And ladies and gentlemen, this conference call will be available for replay after 10:30 a.m. Eastern Time today through May 5, 2011, at midnight. You may access the AT&T teleconference replay system at any time by dialing (800)475-6701 and entering the access code of 200869. International participants may dial (320)365-3844. And that does conclude your conference for today. We do thank you for your participation and for using AT&T's executive teleconference. You may now disconnect.