##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 20-F
  o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 333-08354
 THOMSON REUTERS PLC
 (Exact name of Registrant as specified in its charter)
 England and Wales
(Jurisdiction of incorporation or organization)
 3 Times Square
New York, New York 10036
(Address of principal executive offices)
  Title of each class
    
    Name of each exchange on which registeredOrdinary shares of £10 each
    
    The Nasdaq Stock Market LLC
 
 
 *
 Ordinary
Shares of £10*Reuters
Founders Share of £1 1
  þ o
  o þ
  þ o
  þ o o
  o þ
  o þ
 
 *
    
    The Registrant issued 194,107,278
Thomson Reuters PLC ordinary shares to Reuters Group PLC
shareholders on completion of the Transaction (as defined below). At December
31, 2007, Reuters Group PLC had 1,401,838,175 of its ordinary shares of 25p each
outstanding and 1 Reuters Founders Share of £1 outstanding.




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TABLE OF CONTENTS
 EXPLANATORY NOTE
    
    
    1USE OF CERTAIN TERMS
    
    
    3FORWARD LOOKING STATEMENTS
    
    
    10PART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
    
    
    12ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
    
    
    12ITEM 3. KEY INFORMATION
    
    
    12ITEM 3A. Selected Financial Data
    
    
    12ITEM 3B. Capitalization and Indebtedness
    
    
    42ITEM 3C. Reasons for the Offer and Use of Proceeds
    
    
    42ITEM 3D. Risk Factors
    
    
    42ITEM 4. INFORMATION ON THE COMPANY
    
    
    51ITEM 4A. History and Development of the Company
    
    
    51ITEM 4B. Business Overview
    
    
    70ITEM 4C. Organizational Structure
    
    
    110ITEM 4D. Property, Plants and Equipment
    
    
    111ITEM 4A. UNRESOLVED STAFF COMMENTS
    
    
    111ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
    
    
    111ITEM 5A. Operating Results
    
    
    111ITEM 5B. Liquidity and Capital Resources
    
    
    147ITEM 5C. Research and Development, Patents and Licenses, etc.
    
    
    147ITEM 5D. Trend Information
    
    
    150ITEM 5E. Off-Balance Sheet Arrangements
    
    
    151ITEM 5F. Tabular Disclosure of Contractual Obligations
    
    
    151ITEM 5G. Safe Harbor
    
    
    152ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
    
    
    152ITEM 6A. Directors and Senior Management
    
    
    152ITEM 6B. Compensation
    
    
    163ITEM 6C. Board Practices
    
    
    174ITEM 6D. Employees
    
    
    181ITEM 6E. Share Ownership
    
    
    181ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
    
    
    182ITEM 7A. Major Shareholders
    
    
    182ITEM 7B. Related Party Transactions
    
    
    184ITEM 7C. Interests of Experts and Counsel
    
    
    185




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ITEM 8. FINANCIAL INFORMATION
    
    
    185ITEM 8A. Consolidated Statements and Other Financial Information
    
    
    185ITEM 8B. Significant Changes
    
    
    185ITEM 9. THE OFFER AND LISTING
    
    
    185ITEM 9A. Offer and Listing Details
    
    
    185ITEM 9B. Plan of Distribution
    
    
    188ITEM 9C. Markets
    
    
    188ITEM 9D. Selling Shareholders
    
    
    188ITEM 9E. Dilution
    
    
    189ITEM 9F. Expenses of the Issue
    
    
    189ITEM 10. ADDITIONAL INFORMATION
    
    
    189ITEM 10A. Share Capital
    
    
    189ITEM 10B. Memorandum and Articles of Association
    
    
    191ITEM 10C. Material Contracts
    
    
    191ITEM 10D. Exchange Controls
    
    
    249ITEM 10E. Taxation
    
    
    249ITEM 10F. Dividends and Paying Agents
    
    
    252ITEM 10G. Statement by Experts
    
    
    252ITEM 10H. Documents on Display
    
    
    252ITEM 10I. Subsidiary Information
    
    
    252ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    253ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
    
    
    253PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
    
    
    253ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
    
    
    253ITEM 15. CONTROLS AND PROCEDURES
    
    
    253ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
    
    
    255ITEM 16B. CODE OF ETHICS
    
    
    255ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    255ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
    
    
    256ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
    
    
    256PART IIIITEM 17. FINANCIAL STATEMENTS
    
    
    256ITEM 18. FINANCIAL STATEMENTS
    
    
    256ITEM 19. EXHIBITS
    
    
    257EX-3.1: MEMORANDUM OF ASSOCIATIONEX-3.2: ARTICLES OF ASSOCIATIONEX-15.1: CONSENT OF PRICEWATERHOUSECOOPERS LLP LONDON, ENGLAND FOR REUTERSEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATIONEX-99.1: MANAGEMENT'S DISCUSSION AND ANALYSISEX-99.2: AUDITED CONSOLIDATED FINANCIAL STATEMENTSEX-99.12: SUMMARY DESCRIPTION OF THE AMERICAN DEPOSITARY SHARES




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EXPLANATORY NOTE
 Company Reuters Thomson Implementation Agreement Transaction
     Reuters Scheme
 -1-




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Woodbridge
 -2-




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USE OF CERTAIN TERMS
  Acquisition Facility
 ADS
 Alternative Proposal
 Amended Deed of Mutual Covenant
 Antitrust Conditions
 Approved Person
 Arrangement Resolution
 Audit Committee
 Canadian GAAP
 certificated or in certificated form
 Certificated Share
 Class Rights Actions
 Company
 Computershare
 Corporate Governance Committee
 CRA
 Credit Agreement
 -3-




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CREST
 Cross-Guarantees
 DBRS
 Deed of Mutual Covenant
 Deposit Agreement
 Depositary
 DLC Documents
 DLC structure
 DSUs
 Economic Equivalence
 Effective Date
 English Court
 Equalization and Governance Agreement
 Equalization Ratio
 Equalization Share
 Equivalent Distribution
 Equivalent Resolution
 ESOTs
 -4-




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EU Merger Regulation
 Final Order
 Founders Share
 HMRC
 holder
 HSR Act
 Human Resources Committee
 IFRS
 Implementation Agreement
 Interim Order
 ISOs
 Joint Electorate Actions
 LSE
 Loan Note Option
 Matching Action
 MiFID
 Moodys
 Nasdaq
 NYSE
 OBCA
 OBCA Director
 -5-




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Ontario Court
 Overseas Shareholder
 Permitted Bid Acquisition
 Press Associations
 Procedural Resolutions
 PRSU
 Qualifying Take-Over Bid
 Registrar of Companies
 Register
 Regulations
 Relevant System
 Relevant Terms of Approval
 Reuters
 Reuters Articles
 Reuters EGM
 Reuters Founders Share
 Reuters Founders Share Company
 Reuters Scheme
 Reuters Trust Principles
 -6-




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Reuters Trust Principles Support Agreement
 Reuters Trustees
 RSUs
 S&P
 SARs
 SAYE plans
 SEC
 Series II Preference Shares
 SIP
 Special Voting Share
 Special Voting Share Agreement
 Special Voting Share Agreements
 Take-Over Bid Thresholds
 Tax Act (Canada)
 Thomson
 Thomson Arrangement
 Thomson Articles of Arrangement
 Thomson Reuters
 Thomson Reuters board
 -7-




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Thomson Reuters business
 Thomson Reuters Corporation
 Thomson Reuters Corporation Articles
 Thomson Reuters Corporation By-Laws
 Thomson Reuters Corporation Entrenched Articles
 Thomson Reuters Corporation Entrenched Provisions
 Thomson Reuters Corporation Guarantee
 Thomson Reuters Corporation Special Voting Share
 Thomson Reuters Corporation Special Voting Share Trust
 Thomson Reuters Corporation Special Voting Share Trust Deed
 Thomson Reuters Corporation Special Voting Share Trustee
 Thomson Reuters PLC
 Thomson Reuters PLC Articles
 Thomson Reuters PLC Entrenched Provisions
 Thomson Reuters PLC Guarantee
 Thomson Reuters PLC Memorandum
 Thomson Reuters PLC Special Voting Share
 -8-




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Thomson Reuters PLC Special Voting Share Trust
 Thomson Reuters PLC Special Voting Share Trust Deed
 Thomson Reuters PLC Special Voting Share Trustee
 Transaction
 Transaction Documents
 Triggering Event
 TSX
 UK
 UK Companies Act
 UKLA
 uncertificated form or in uncertificated form
 Uncertificated Share
 United States US
 US dollars, US$ $
 US Exchange Act
 US GAAP
 US Holder
 US Tax Code
 Woodbridge
 -9-




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FORWARD LOOKING STATEMENTS
  
    
    in relation to the Transaction and the DLC structure:
 -
    
    failure to achieve benefits from the Transaction to the extent, or within the
time period currently expected, which could eliminate, reduce or delay the
achievement of synergies expected to be generated by the Transaction;-
    
    failure to maximize the growth potential of, or deliver greater value for,
Thomson Reuters beyond the level that either Thomson or Reuters could have
achieved on its own;-
    
    the relationship of the value of Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares to the economic performance of Thomson
Reuters;-
    
    differences in the trading prices of Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares;-
    
    adverse effects of changes to legislation and regulations on the DLC structure;-
    
    risks and costs not associated with more common acquisition structures;-
    
    exposure of each of Thomson Reuters Corporation and Thomson Reuters PLC to
the credit risk of the other;-
    
    changes in the tax residence of Thomson Reuters Corporation; or Thomson Reuters
PLC:-
    
    classification of Thomson Reuters PLC as a passive foreign investment company
under US federal income tax laws;-
    
    failure of US shareholders to qualify for special reduced withholding rates
on payments of future dividends from Thomson Reuters PLC;-
    
    ability of Reuters Founders Share Company to affect Thomson Reuters
governance and management;-
    
    prevention or discouragement of take-over bids because of provisions in the
DLC Documents;-
    
    different laws and regulations governing the rights and
privileges of Thomson Reuters Corporation shareholders and Thomson Reuters PLC shareholders;
 
    
    changes in the general economy;
    
    actions of competitors;
    
    changes to legislation and regulations;
 -10-




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
    
    increased accessibility to free or relatively inexpensive information sources;
    
    failure to derive fully anticipated benefits from future or existing acquisitions,
joint ventures, investments or dispositions;
    
    failure to develop new products, services, applications and functionalities to meet
customers needs, attract new customers or expand into new geographic markets;
    
    failure of electronic delivery systems, network systems or the Internet;
    
    detrimental reliance on third parties for information;
    
    failure to meet the challenges involved in the expansion of international
operations;
    
    failure to realize the anticipated cost savings and operating efficiencies from the
THOMSONplus initiative, the Reuters Core Plus program and other cost-saving
initiatives, including those designed to make Thomson Reuters a more integrated group;
    
    failure to protect the reputation of Thomson Reuters;
    
    impairment of goodwill and identifiable intangible assets;
    
    failure of significant investments in technology to increase revenues or decrease
operating costs;
    
    increased self-sufficiency of customers;
    
    inadequate protection of intellectual property rights;
    
    downgrading of credit ratings or adverse conditions in the credit markets;
    
    threat of legal actions and claims;
    
    changes in foreign currency exchange and interest rates;
    
    failure to recruit and retain high quality management and key employees;
    
    effect of factors outside the control of Thomson Reuters on funding obligations in
respect of pension and post-retirement benefit arrangements; and
    
    actions or potential actions that could be taken by Woodbridge.
  -11-




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PART I
 
 ITEM 1.
    
    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
  
 ITEM 2.
    
    OFFER STATISTICS AND EXPECTED TIMETABLE
  
 ITEM 3.
    
    KEY INFORMATION
 
 ITEM 3A.
    
    Selected Financial Data
 Unaudited Canadian GAAP Pro Forma Consolidated Financial Statements of Thomson Reuters Corporation
    
    
    have been prepared for illustrative purposes only, and because of their nature,
address a hypothetical situation and, therefore do not represent Thomson Reuters
Corporations actual financial position or results;
    
    do not purport to represent what the consolidated results of operations actually
would have been if the Transaction had occurred on January 1, 2007 or what those
results will be for any future periods or what the consolidated balance sheet would
have been if the Transaction had occurred on December 31, 2007. The pro forma
adjustments are based on information current as at April 16, 2008 (being the latest
practicable date prior to the publication of this Form 20-F); and
    
    have not been adjusted to reflect any matters not directly attributable to
implementing the Transaction. No adjustment, therefore, has been made for actions which
may be taken once the Transaction is complete, such as any integration plans of Thomson
Reuters.
  
    
    Financial information on Thomson as at and for the year ended December 31, 2007 has been extracted without material
adjustment from Thomsons audited consolidated financial
statements set out in Exhibit 99.2 filed as part of this Annual Report on Form 20-F.
 -12-




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
    
    Canadian GAAP and US GAAP financial information on Reuters as at and for the year ended December
31, 2007 has been extracted without material adjustment, except for currency
translation as noted below, from  (a) the Reuters unaudited reconciliations summarizing the
material differences between IFRS as applied by Reuters and Canadian GAAP as applied by
Thomson and (b) the Reuters unaudited reconciliations summarizing the
material differences between Canadian GAAP as applied by Thomson and
US GAAP set out in Note 7  Reconciliation to Canadian GAAP as applied by The Thomson Corporation below
and Note 6 Pro Forma Summary of Differences Between Canadian GAAP and US GAAP below, respectively.
    
    The Reuters figures have been translated from £ to $ using average exchange rates
applicable during the period presented for the unaudited pro forma consolidated
statement of earnings and the period end exchange rate for the unaudited pro forma
consolidated balance sheet.
 $/£1December 31, 2007
    
    Average Spot Rate
    
    
    2.0016December 31, 2007
    
    Period End Rate
    
    
    1.9843
 UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
 For the year ended December 31, 2007
 Pro formaPro forma adjustments
    
    
    
    
    
    
    Thomson(in millions of US dollars, except common share amounts)
    
    Thomson
    
    
    Reuters
    
    
    Other
    
    
    Note
    
    
    ReutersRevenues
    
    
    7,296
    
    
    
    5,232
    
    
    
    (86
    )
    
    
    3(b
    )
    
    
    12,442Cost of sales, selling, marketing, general
and administrative expenses
    
    
    (5,275
    )
    
    
    (4,678
    )
    
    
    431
    
    
    
    3(c), 3(d), 3(e), 3(f
    )
    
    
    (9,522
    )Depreciation
    
    
    (468
    )
    
    
    (280
    )
    
    
    (57
    )
    
    
    3(e
    )
    
    
    (805
    )Amortization
    
    
    (256
    )
    
    
    (88
    )
    
    
    (297
    )
    
    
    3(e
    )
    
    
    (641
    )Operating profit
    
    
    1,297
    
    
    
    186
    
    
    
    (9
    )
    
    
    
    
    
    
    1,474Net other income (expense)
    
    
    (34
    )
    
    
    162
    
    
    
    
    
    
    
    
    
    
    
    128Net interest expense and other financing costs
    
    
    (12
    )
    
    
    (172
    )
    
    
    (243
    )
    
    
    3(g
    )
    
    
    (427
    )Income tax expense
    
    
    (155
    )
    
    
    (28
    )
    
    
    73
    
    
    
    3(h
    )
    
    
    (110
    )Earnings from continuing operations
    
    
    1,096
    
    
    
    148
    
    
    
    (179
    )
    
    
    
    
    
    
    1,065Basic
earnings per common share from continuing operations
    
    
    $1.70
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $1.26Diluted
earnings per common share  from continuing operations
    
    
    $1.69
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $1.26
 -13-




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UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
 As at December 31, 2007
 Pro formaPro forma adjustments
    
    
    
    
    
    
    Thomson(in millions of US dollars)
    
    Thomson
    
    
    Reuters
    
    
    Other
    
    
    Note
    
    ReutersAssetsCash and cash equivalents
    
    
    7,497
    
    
    
    510
    
    
    
    (4,041
    )
    
    3(a)(i)
    
    
    3,966Accounts receivable, net of allowances
    
    
    1,565
    
    
    
    234
    
    
    
    
    
    
    
    
    
    
    
    1,799Prepaid expenses and other current assets
    
    
    508
    
    
    
    384
    
    
    
    (18
    )
    
    3(a)ii, 3(a)(iii)
    
    
    874Deferred income taxes
    
    
    104
    
    
    
    236
    
    
    
    
    
    
    
    
    
    
    
    340Current assets of discontinued operations
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Current assets
    
    
    9,678
    
    
    
    1,364
    
    
    
    (4,059
    )
    
    
    
    
    
    
    6,983Computer hardware and other property, net
    
    
    731
    
    
    
    933
    
    
    
    221
    
    
    3(a)(iii)
    
    
    1,885Computer software, net
    
    
    721
    
    
    
    77
    
    
    
    1,023
    
    
    3(a)(iii)
    
    
    1,821Identifiable intangible assets, net
    
    
    3,438
    
    
    
    534
    
    
    
    4,866
    
    
    3(a)(iii)
    
    
    8,838Goodwill
    
    
    6,935
    
    
    
    810
    
    
    
    (810
    )
    
    3(a)(iii)
    
    
    6,935Unallocated purchase price
    
    
    
    
    
    
    
    
    
    
    12,530
    
    
    3(a)(iii)
    
    
    12,530Other non-current assets
    
    
    1,322
    
    
    
    762
    
    
    
    406
    
    
    3(a)(iii)
    
    
    2,490Deferred income taxes
    
    
    
    
    
    
    331
    
    
    
    
    
    
    
    
    
    
    
    331Non-current assets of discontinued operations
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Total assets
    
    
    22,831
    
    
    
    4,811
    
    
    
    14,177
    
    
    
    
    
    
    
    41,819
 -14-




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Pro formaPro forma adjustments
    
    
    
    
    
    
    ThomsonThomson
    
    
    Reuters
    
    
    Other
    
    
    Note
    
    ReutersLiabilities and shareholders equityLiabilitiesShort-term indebtedness
    
    
    183
    
    
    
    155
    
    
    
    4,939
    
    
    3(a)(i)
    
    
    5,277Accounts payable and accruals
    
    
    1,532
    
    
    
    1,579
    
    
    
    87
    
    
    3(a)(ii), 3(a)(iii)
    
    
    3,198Deferred revenue
    
    
    1,108
    
    
    
    73
    
    
    
    (7
    )
    
    3(a)(iii)
    
    
    1,174Current portion of long-term debt
    
    
    412
    
    
    
    365
    
    
    
    
    
    
    
    
    
    
    
    777Current liabilities of discontinued operations
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Current liabilities
    
    
    3,239
    
    
    
    2,172
    
    
    
    5,019
    
    
    
    
    
    
    
    10,430Long-term debt
    
    
    4,264
    
    
    
    864
    
    
    
    
    
    
    
    
    
    
    
    5,128Other non-current liabilities
    
    
    783
    
    
    
    260
    
    
    
    52
    
    
    3(a)(iii)
    
    
    1,095Deferred income taxes
    
    
    974
    
    
    
    389
    
    
    
    1,802
    
    
    3(a)(iii)
    
    
    3,165Total liabilities
    
    
    9,260
    
    
    
    3,685
    
    
    
    6,873
    
    
    
    
    
    
    
    19,818Shareholders equityCapital
    
    
    2,932
    
    
    
    1,070
    
    
    
    7,360
    
    
    3(a)(i)
    
    
    11,362Retained earnings
    
    
    10,355
    
    
    
    3,368
    
    
    
    (3,368
    )
    
    3(a)(i)
    
    
    10,355Accumulated other comprehensive income
    
    
    284
    
    
    
    (3,312
    )
    
    
    3,312
    
    
    3(a)(i)
    
    
    284Total shareholders equity
    
    
    13,571
    
    
    
    1,126
    
    
    
    7,304
    
    
    
    
    
    
    
    22,001Total liabilities and shareholders equity
    
    
    22,831
    
    
    
    4,811
    
    
    
    14,177
    
    
    
    
    
    
    
    41,819
  Notes:
 1. BASIS OF PRESENTATION
   -15-




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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   3. PRO FORMA ADJUSTMENTS
  (a)
    
    Estimated purchase consideration and related excess purchase consideration over fair value of
net assets acquired are as follows:
 (US$ millions)Estimated Purchase Consideration
    
    
    
    
    
    NotesOrdinary shares, Thomson Reuters PLC
    
    
    8,430
    
    
    
    (i
    )Cash
    
    
    8,657
    
    
    
    (i
    )Transaction costs
    
    
    135
    
    
    (ii
    )Estimated purchase consideration
    
    
    17,222Less: fair value of net (assets) liabilities acquired
    
    
    1,808Excess of purchase consideration over fair value of net assets acquired
    
    
    19,030
 -16-




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(i)
    
    To effect the Transaction, Reuters was acquired by a subsidiary of Thomson Reuters PLC,
through the Reuters Scheme in which each holder of one Reuters ordinary share was entitled to
352.5 pence in cash and 0.16 Thomson Reuters PLC ordinary shares. Under the terms of the
agreement:
 
    
    Thomson funded the cash consideration; and
    
    on closing, one Thomson Reuters PLC ordinary share was equivalent to one Thomson
Reuters Corporation common share under the DLC structure.
    ESOTs
  
    
    Disbursement of $535 million by Reuters to repurchase its ordinary shares during
the period from January 1, 2008 to  February 19, 2008 and from March 10, 2008  to April 9, 2008;
    
    Disbursement of $8,657 million in cash by Thomson being
funded by $3,718 million
in available cash and $4,939 million drawn from Thomsons credit facilities;
    
    The effect of $212 million in cash received by Reuters relating to exercise of
Reuters share-based employee awards;
 -17-




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
    
    Equity of $8,430  million attributable to the issuance of
198.9  million Thomson
Reuters PLC ordinary shares; and
    
    Elimination of Reuters historical shareholders equity balances in capital of $1,070
million, retained earnings of $3,368 million and accumulated other comprehensive income
of ($3,312) million.
 (ii)
    
    Transaction costs represent Thomsons estimated direct costs of carrying out the Transaction
that may be capitalized as part of the overall consideration.
 
    
    An adjustment of $52 million has been made to reclassify this amount out of current
assets and treat it as part of unallocated purchase price.
    
    Of the $135 million in total Transaction costs, $83 million had not been incurred as
at December 31, 2007 and, accordingly, an adjustment has been made to increase accounts
payable and accruals as if those charges had occurred.
  (US$ millions)Cash adjustmentCash funding
    
    
    (8,657
    )Funding provided by credit facilities
    
    
    4,939Funding from available cash
    
    
    (3,718
    )Cash used by Reuters for share buy-back program
    
    
    (535
    )Cash received by Reuters relating to exercise of share-based employee awards
    
    
    212Cash adjustment
    
    
    (4,041
    )Accounts payable and accruals adjustmentTransaction costs accrual
    
    
    83Current portion of unfavorable leases
    
    
    4Accounts payable and accruals adjustment
    
    
    87CapitalIssuance of new shares
    
    
    8,430Less:
elimination of Reuters capital
    
    
    (1,070
    )Capital adjustment
    
    
    7,360
 -18-




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##### Table of Contents



(US$ millions)Transaction costsReclassified from prepaid and other current assets
    
    
    52Transaction costs accrual
    
    
    83Transaction costs
    
    
    135
 (iii)
    
    Pro forma purchase price allocation
 As at December 31, 2007Pro formaPurchaseReuters
    
    
    Fair Value
    
    
    Price(US$ millions)
    
    Book Value
    
    
    Increment
    
    
    AllocationAssetsCash and cash equivalents
    
    
    187
    
    
    
    
    
    
    
    187Accounts receivable, net of allowances
    
    
    234
    
    
    
    
    
    
    
    234Prepaid expenses and other current assets
    
    
    384
    
    
    
    34
    
    
    
    418Deferred income taxes
    
    
    236
    
    
    
    
    
    
    
    236Current assets
    
    
    1,041
    
    
    
    34
    
    
    
    1,075Computer hardware and other property, net
    
    
    933
    
    
    
    221
    
    
    
    1,154Computer software, net
    
    
    77
    
    
    
    1,023
    
    
    
    1,100Identified intangible assets, net
    
    
    534
    
    
    
    4,866
    
    
    
    5,400Goodwill
    
    
    810
    
    
    
    (810
    )
    
    
    Unallocated purchase price
    
    
    
    
    
    
    12,530
    
    
    
    12,530Other non-current assets
    
    
    762
    
    
    
    406
    
    
    
    1,168Deferred income taxes
    
    
    331
    
    
    
    
    
    
    
    331Total assets
    
    
    4,488
    
    
    
    18,270
    
    
    
    22,758LiabilitiesShort-term indebtedness
    
    
    155
    
    
    
    
    
    
    
    155Accounts payable and accruals
    
    
    1,579
    
    
    
    4
    
    
    
    1,583Deferred revenue
    
    
    73
    
    
    
    (7
    )
    
    
    66Current portion of long-term debt
    
    
    365
    
    
    
    
    
    
    
    365Current liabilities
    
    
    2,172
    
    
    
    (3
    )
    
    
    2,169
 -19-




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##### Table of Contents



As at December 31, 2007Pro formaPurchaseReuters
    
    
    Fair Value
    
    
    Price(US$ millions)
    
    Book Value
    
    
    Increment
    
    
    AllocationLong term debt
    
    
    864
    
    
    
    
    
    
    
    864Other non-current liabilities
    
    
    260
    
    
    
    52
    
    
    
    312Deferred income taxes
    
    
    389
    
    
    
    1,802
    
    
    
    2,191Total liabilities
    
    
    3,685
    
    
    
    1,851
    
    
    
    5,536Total net assets acquired
    
    
    803
    
    
    
    16,419
    
    
    
    17,222
   Book value afterAs at
    
    
    
    
    
    
    
    
    
    
    share buy-back andDecember 31,
    
    
    Share buy-back
    
    
    Exercise of
    
    
    exercise of(US$ millions)
    
    2007
    
    
    program
    
    
    share-based awards
    
    
    share-based awardsReuters reconciliation
of selected book valuesCash and cash equivalents
    
    
    510
    
    
    
    (535
    )
    
    
    212
    
    
    
    187
   
    
    An adjustment of $221 million was recorded to increase the carrying value of real
property and buildings.
    
    An adjustment of ($7) million was recorded to reduce the carrying value of Reuters
deferred revenue to $66 million, which represents an estimate of the fair value of the
obligation assumed.
    
    A net adjustment of $384 million was recorded to reflect the estimated fair value
increment of favorable and unfavorable leases. The following table details the fair
value increment.
 -20-




---



##### Table of Contents



(US$ millions)
    
    Fair Value IncrementPrepaid expenses and other current assets
    
    
    34Other non-current assets
    
    
    406Less: Accounts payable and accruals
    
    
    4Less: Other non-current liabilities
    
    
    52Total
    
    
    384
 
    
    Deferred income taxes attributed to the fair value increments, described above and
in section (iv) that follows immediately below, were $1,802 million.(iv)
    
    Preliminary estimates of the fair value of identified intangible assets and developed
technology and their respective estimated useful lives as at December 31, 2007 are summarized
in the following table.
 (US$ millions)
    
    Estimated Fair Value
    
    
    Estimated Useful lifeTrade name
    
    $
    2,000
    
    
    IndefiniteCustomer relationships
    
    
    2,400
    
    
    8  18 yearsOther
    
    
    1,000
    
    
    5 yearsIdentified intangible assets
    
    $
    5,400Developed technology
    
    $
    1,100
    
    
    5  10 years
  (b)
    
    An adjustment of $86 million was recorded to reduce revenues. The adjustment was a result of
reducing the carrying value of Reuters deferred revenue obligation as at January 1, 2007 to
its estimated fair value.(c)
    
    Thomson and Reuters have incurred integration planning and other Transaction-related costs
that do not qualify to be capitalized as part of estimated purchase consideration. These items
were initially recorded as expenses in the statement of earnings. An adjustment of $166
million has been made to reverse the expenses incurred for the year ended December 31, 2007.
This adjustment was recorded because the pro forma statement of
earnings has been prepared
as if the Transaction had occurred on January 1, 2007. Therefore these expenses would have
been incurred prior to the closing of the Transaction. Additionally, these expenses are
non-recurring in nature and are not expected to have a continuing impact on the consolidated
results.(d)
    
    An adjustment of $322 million was recorded to reduce cost of sales, selling, marketing,
general and administrative expenses, eliminating amortization expense related to past service
costs and net actuarial gains and losses in connection with Reuters pension and other
post-retirement benefit plans. This amount was removed as retirement plan assets and
obligations would have been reflected at their fair values on January 1, 2007.(e)
    
    Amortization and depreciation
 
    
    An adjustment of $297 million was recorded to reflect additional amortization
attributable to the preliminary fair value increment allocated to identified intangible
assets.
    
    An adjustment of $57 million was recorded to reflect additional depreciation
attributable to the preliminary fair value increment allocated to computer hardware and
other property, and internal use software.
 -21-




---



##### Table of Contents




    
    An adjustment of $27 million was recorded in cost of sales,
selling, marketing, general and administrative
expenses to reflect additional amortization attributable to the preliminary fair
value increment allocated to capitalized software to be sold externally.
 Pro forma amortization and depreciation expense exclude the total amount of the
purchase price allocation not subject to amortization of
approximately $14,530 million,
representing $12,530 million in unallocated purchase price and  $2,000 million attributed
to the preliminary estimated fair value of the Reuters trade name.On finalization of the purchase price allocation, if the amount not subject to amortization
is allocated to operating assets subject to amortization, pro forma amortization would
increase by approximately $1,751 million, before taxes. Pro forma amortization and the above
noted sensitivity have been based on a remaining weighted average estimated economic life of
8.3 years.A reduction of one year in the weighted average estimated economic life would increase pro
forma amortization by $74 million.(f)
    
    An adjustment of $30 million was recorded to reflect additional rent expense attributable to
amortization of the preliminary fair value increment allocated to favorable and unfavorable
leases.(g)
    
    An adjustment of $243 million was recorded to reflect pro forma interest expense. The
interest charges relate to the $4,939 million drawn from credit facilities to finance a
portion of the estimated cash consideration, as if such amount was borrowed from January 1,
2007 and outstanding as at December 31, 2007. These interest charges will have a continuing
impact on the consolidated results until all borrowings under credit facilities are repaid.(h)
    
    The estimated tax benefits of the above adjustments are $73 million. The estimates reflect
the tax rates of Thomson and Reuters separately and tax jurisdictions in which the pro forma
adjustments were assumed to occur.
  For the year ended December 31, 2007
 (US$ millions)Adjustment
    
    b)
    
    
    c)
    
    
    d)
    
    
    e)
    
    
    f)
    
    
    g)
    
    
    h)
    
    
    TotalRevenues
    
    
    (86
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (86
    )Cost of sales,
selling, marketing,
general and
administrative
expenses
    
    
    
    
    
    
    166
    
    
    
    322
    
    
    
    (27
    )
    
    
    (30
    )
    
    
    
    
    
    
    
    
    
    
    431Depreciation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57
    )Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (297
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (297
    )Operating profit
    
    
    (86
    )
    
    
    166
    
    
    
    322
    
    
    
    (381
    )
    
    
    (30
    )
    
    
    
    
    
    
    
    
    
    
    (9
    )Net interest
expense and other
financing costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (243
    )
    
    
    
    
    
    
    (243
    )Income tax expense
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    
    73
    
    
    
    73Net earnings
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    
    (179
    )
 
 NA  Income tax expense and net earnings presented on a consolidated basis. -22-




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##### Table of Contents



4. PRO FORMA EARNINGS PER SHARE
 Year endedDecember 31, 2007Basic and
diluted pro forma earnings per share from continuing operations computationNumerator (millions of US dollars):Pro forma
earnings from continuing operations
    
    
    1,065Dividends declared on preference shares
    
    
    (6
    )Pro forma
earnings from continuing operations  attributable to common shares
    
    
    1,059Denominator:Thomson weighted-average outstanding common shares
    
    
    641.2Shares of Thomson Reuters PLC
    
    
    198.9Basic pro
forma weighted - average outstanding common shares
    
    
    840.1Thomson effect of stock and other incentive plans
    
    
    3.3Diluted pro
forma weighted - average outstanding common shares
    
    
    843.4Basic pro
forma  earnings per share from continuing operations
    
    
    $1.26Diluted pro
forma  earnings per share from continuing operations
    
    
    $1.26
 5. DIVISIONAL ANALYSIS OF REVENUES
  Pro formaPro forma adjustment
    
    
    ThomsonThomson
    
    
    Reuters
    
    
    Other
    
    
    Reuters
    
    
    % of TotalThomson Financial
    
    
    2,186
    
    
    
    
    
    
    
    
    
    
    
    2,186Reuters
    
    
    
    
    
    
    5,232
    
    
    
    (86
    )
    
    
    5,146Markets division
    
    
    2,186
    
    
    
    5,232
    
    
    
    (86
    )
    
    
    7,332
    
    
    
    59
    %Thomson Legal
    
    
    3,318
    
    
    
    
    
    
    
    
    
    
    
    3,318Thomson Tax & Accounting
    
    
    705
    
    
    
    
    
    
    
    
    
    
    
    705Thomson Scientific
    
    
    651
    
    
    
    
    
    
    
    
    
    
    
    651Thomson Healthcare
    
    
    452
    
    
    
    
    
    
    
    
    
    
    
    452Professional division
    
    
    5,126
    
    
    
    
    
    
    
    
    
    
    
    5,126
    
    
    
    41
    %Eliminations
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    (16
    )Total
    
    
    7,296
    
    
    
    5,232
    
    
    
    (86
    )
    
    
    12,442
    
    
    
    100
    %
  -23-




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##### Table of Contents





See Note 3(b) above for discussion of ($86) million revenue reduction.6.
    
    PRO FORMA SUMMARY OF DIFFERENCES BETWEEN CANADIAN GAAP AND US GAAPThe reconciliations of Reuters historical financial information from Canadian GAAP
as applied by Thomson to US GAAP are set out in Note 8
Unaudited Canadian GAAP to US GAAP Reconciliations.
The reconciliations of Thomsons historical financial
information from Canadian GAAP to US GAAP are set out in
Exhibit 99.2 filed as part of this Annual Report on
Form 20-F.
The unaudited pro forma consolidated financial statements should be read in conjunction with those
reconciliations.Summary adjustments made to present shareholders equity and earnings from continuing operations as at and for the
year ended December 31, 2007 in accordance with US GAAP were extracted from the
reconciliations and are identified in the table below as Canadian GAAP to US GAAP Summary
Difference for Thomson and Reuters, respectively.No additional differences between Canadian GAAP and US GAAP
arose as a consequence of the pro forma adjustments described in Note
3 Pro Forma Adjustments above.The following reconciliation presents the effect of material differences between Canadian
GAAP as applied by Thomson and US GAAP with respect to pro forma net earnings from continuing operations and
shareholders equity.


Year endedDecember 31,(in millions of U.S. dollars)
    
    2007Reconciliation of pro forma earnings from continuing operationsEarnings from continuing operations under Canadian GAAP as applied by Thomson
    
    
    1,065Differences in accounting principles increasing (decreasing)  earnings:Canadian GAAP to US GAAP Summary Difference  Thomson
    
    
    Canadian GAAP to US GAAP Summary Difference  Reuters
    
    
    190Earnings from continuing operations under US GAAP
    
    
    1,255


As atDecember 31,(in millions of U.S. dollars)
    
    2007Reconciliation of pro forma shareholders equityShareholders equity under Canadian GAAP as applied by Thomson
    
    
    22,001Differences in accounting principles increasing (decreasing) shareholders equity:Canadian GAAP to US GAAP Summary Difference  Thomson
    
    
    (559
    )Canadian GAAP to US GAAP Summary Difference  Reuters
    
    
    (205
    )Shareholders equity under US GAAP
    
    
    21,237


-24-



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##### Table of Contents



7. UNAUDITED RECONCILIATION TO CANADIAN GAAP AS APPLIED BY THE THOMSON CORPORATION
 Summary of differences between IFRS (as adopted by the EU) and Canadian GAAP
 Unaudited reconciliation of net earnings from continuing operations for the year ended December 31,
2007
   For the year endedDecember 31, 2007£mProfit from continuing operations
attributable to ordinary shareholders as
previously reported by Reuters under
IFRS
    
    
    
    
    
    
    213Differences in GAAP increasing /
(decreasing) reported profit net
earnings:Business combinations
    
    
    1
    
    
    
    (4
    )Other intangibles
    
    
    2
    
    
    
    (2
    )Employee benefits  pensions
    
    
    3
    
    
    
    (161
    )Stock-based compensation
    
    
    4
    
    
    
    3Derivative instruments and hedging
activities
    
    
    5
    
    
    
    (12
    )Sale and leaseback transactions
    
    
    7
    
    
    
    Property, plant and equipment
    
    
    8
    
    
    
    (16
    )Joint ventures and associates
    
    
    9
    
    
    
    Restructuring
    
    
    10
    
    
    
    7Taxation
    
    
    12
    
    
    
    46Net earnings from continuing operations
attributable to ordinary shareholders
under Thomson Canadian GAAP accounting
policies
    
    
    
    
    
    
    74
 -25-




---



##### Table of Contents



Unaudited reconciliation of shareholders equity attributable to ordinary shareholders as at
December 31, 2007
 As atDecember 31, 2007£mShareholders equity attributable to ordinary
shareholders as previously reported by Reuters
under IFRS
    
    
    
    
    
    
    138Differences increasing / (decreasing) reported
Shareholders equity:Business combinations
    
    
    1
    
    
    
    105Other intangibles
    
    
    2
    
    
    
    (6
    )Employee benefits  pensions
    
    
    3
    
    
    
    251Stock-based compensation
    
    
    4
    
    
    
    10Derivative instruments and hedging
activities
    
    
    5
    
    
    
    (28
    )Investments
    
    
    6
    
    
    
    (2
    )Sale and leaseback transactions
    
    
    7
    
    
    
    (2
    )Property, plant and equipment
    
    
    8
    
    
    
    Joint ventures and associates
    
    
    9
    
    
    
    2Restructuring
    
    
    10
    
    
    
    (5
    )Shares to be repurchased
    
    
    11
    
    
    
    169Taxation
    
    
    12
    
    
    
    (65
    )Shareholders equity attributable to ordinary
shareholders under Thomson Canadian GAAP
accounting policies
    
    
    
    
    
    
    567
 -26-




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##### Table of Contents



Unaudited reconciliation of the income statement for the year ended December 31, 2007
 For the year ended December 31, 2007CanadianAdj.
    
    
    IFRS
    
    
    Adjustments
    
    
    GAAPRef.
    
    
    £m
    
    
    £m
    
    
    £mRevenues
    
    
    9
    
    
    
    2,605
    
    
    
    9
    
    
    
    2,614Cost of sales, selling, marketing, general and
administrative expenses
    
    
    
    
    
    
    (2,147
    )
    
    
    (190
    )
    
    
    (2,337
    )2
    
    
    
    
    
    
    
    (15
    )3
    
    
    
    
    
    
    
    (161
    )4
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    (11
    )7
    
    
    
    
    
    
    
    19
    
    
    
    
    
    
    
    (14
    )10
    
    
    
    
    
    
    
    7Depreciation
    
    
    
    
    
    
    (108
    )
    
    
    (32
    )
    
    
    (140
    )2
    
    
    
    
    
    
    
    (15
    )7
    
    
    
    
    
    
    
    (1
    )8
    
    
    
    
    
    
    
    (16
    )Amortization
    
    
    
    
    
    
    (68
    )
    
    
    24
    
    
    
    (44
    )1
    
    
    
    
    
    
    
    (4
    )2
    
    
    
    
    
    
    
    28Operating profit
    
    
    
    
    
    
    282
    
    
    
    (189
    )
    
    
    93Net other (expense)/income
    
    
    
    
    
    
    25
    
    
    
    56
    
    
    
    815
    
    
    
    
    
    
    
    519
    
    
    
    
    
    
    
    5Net interest expense and other financing costs
    
    
    5
    
    
    
    (34
    )
    
    
    (52
    )
    
    
    (86
    )Income taxes
    
    
    12
    
    
    
    (60
    )
    
    
    46
    
    
    
    (14
    )Earnings from continuing operations
    
    
    
    
    
    
    213
    
    
    
    (139
    )
    
    
    74
 -27-




---



##### Table of Contents



Year ended December 31, 2007
 Aspresented inReutersAs presented in
    
    
    
    
    
    
    publishedthe table above
    
    
    Reclassifications
    
    
    reportCanadian GAAP format
    
    £m
    
    
    £m
    
    
    £m
    
    
    IFRS formatRevenues
    
    
    2,605
    
    
    
    
    
    
    
    2,605
    
    
    RevenueCost of sales,
selling, marketing,
general and
administrative
expenses
    
    
    (2,147
    )
    
    
    (208
    )
    
    
    (2,355
    )
    
    Operating cost
    
    
    
    42
    
    
    
    42
    
    
    Other operating incomeDepreciation
    
    
    (108
    )
    
    
    108Amortization
    
    
    (68
    )
    
    
    68Operating profit
    
    
    282
    
    
    
    10
    
    
    
    292
    
    
    Operating profitsNet other income
    
    
    25
    
    
    
    (10
    )
    
    
    15
    
    
    Profit on disposal/Share of losses of JVs and associatesNet interest
expense and other
financing costs
    
    
    (34
    )
    
    
    151
    
    
    
    117
    
    
    Finance Income
    
    
    
    (151
    )
    
    
    (151
    )
    
    Finance costIncome taxes
    
    
    (60
    )
    
    
    
    
    
    
    (60
    )
    
    TaxationEarnings from
continuing
operations
    
    
    213
    
    
    
    
    
    
    
    213
    
    
    Profit for the year from
continuing operations
 -28-




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##### Table of Contents



Unaudited reconciliation of the balance sheet as at December 31, 2007
 As at December 31, 2007CanadianAdjustment
    
    
    IFRS
    
    
    Adjustments
    
    
    GAAPreference
    
    
    £m
    
    
    £m
    
    
    £mAssetsCash and cash equivalents
    
    
    9
    
    
    
    251
    
    
    
    6
    
    
    
    257Accounts receivable, net of allowances
    
    
    9
    
    
    
    107
    
    
    
    11
    
    
    
    118Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Prepaid expenses and other current assets
    
    
    1
    
    
    
    189
    
    
    
    4
    
    
    
    193Deferred income taxes
    
    
    12
    
    
    
    
    
    
    
    119
    
    
    
    119Current assets
    
    
    
    
    
    
    547
    
    
    
    140
    
    
    
    687Computer hardware and other property, net
    
    
    
    
    
    
    404
    
    
    
    66
    
    
    
    4707
    
    
    
    
    
    
    
    168
    
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    45Computer software, net
    
    
    2
    
    
    
    
    
    
    
    39
    
    
    
    39Identifiable intangible assets
    
    
    
    
    
    
    305
    
    
    
    (36
    )
    
    
    2691
    
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    (45
    )9
    
    
    
    
    
    
    
    7Goodwill
    
    
    1
    
    
    
    309
    
    
    
    99
    
    
    
    408Other non-current assets
    
    
    
    
    
    
    142
    
    
    
    242
    
    
    
    3843
    
    
    
    
    
    
    
    2626
    
    
    
    
    
    
    
    (2
    )9
    
    
    
    
    
    
    
    (18
    )Deferred income taxes
    
    
    12
    
    
    
    286
    
    
    
    (119
    )
    
    
    167Total assets
    
    
    
    
    
    
    1,993
    
    
    
    431
    
    
    
    2,424Liabilities and shareholders equityLiabilitiesShort term indebtedness
    
    
    
    
    
    
    (78
    )
    
    
    
    
    
    
    (78
    )Current portion of long-term debt
    
    
    
    
    
    
    (184
    )
    
    
    
    
    
    
    (184
    )Accounts payable and accruals
    
    
    
    
    
    
    (969
    )
    
    
    173
    
    
    
    (796
    )4
    
    
    
    
    
    
    
    105
    
    
    
    
    
    
    
    (23
    )8
    
    
    
    
    
    
    
    (5
    )9
    
    
    
    
    
    
    
    (6
    )10
    
    
    
    
    
    
    
    1211
    
    
    
    
    
    
    
    16912
    
    
    
    
    
    
    
    16Deferred revenue
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    (37
    )Current liabilities
    
    
    
    
    
    
    (1,268
    )
    
    
    173
    
    
    
    (1,095
    )Long term debt
    
    
    
    
    
    
    (370
    )
    
    
    (65
    )
    
    
    (435
    )5
    
    
    
    
    
    
    
    (5
    )7
    
    
    
    
    
    
    
    (18
    )9
    
    
    
    
    
    
    
    (42
    )Other non-current liabilities
    
    
    
    
    
    
    (102
    )
    
    
    (29
    )
    
    
    (131
    )3
    
    
    
    
    
    
    
    (11
    )9
    
    
    
    
    
    
    
    (1
    )10
    
    
    
    
    
    
    
    (17
    )Deferred income taxes
    
    
    12
    
    
    
    (115
    )
    
    
    (81
    )
    
    
    (196
    )Total liabilities
    
    
    
    
    
    
    (1,855
    )
    
    
    (2
    )
    
    
    (1,857
    )Net assets
    
    
    
    
    
    
    138
    
    
    
    429
    
    
    
    567Shareholders equityCapital
    
    
    
    
    
    
    (539
    )
    
    
    
    
    
    
    (539
    )Retained earnings
    
    
    
    
    
    
    (1,309
    )
    
    
    (388
    )
    
    
    (1,697
    )Accumulated other comprehensive income
    
    
    
    
    
    
    1,710
    
    
    
    (41
    )
    
    
    1,669Total shareholders equity
    
    
    
    
    
    
    (138
    )
    
    
    (429
    )
    
    
    (567
    )Total liabilities and shareholders equity
    
    
    
    
    
    
    (1,993
    )
    
    
    (431
    )
    
    
    (2,424
    )
 -29-




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##### Table of Contents



As
    
    
    
    
    
    
    As presentedpresented in
    
    
    
    
    
    
    in Reutersthe table
    
    
    
    
    
    
    publishedabove
    
    
    Reclassifications
    
    
    reportCanadian GAAP format
    
    £m
    
    
    £m
    
    
    £m
    
    
    
    IFRS formatAssetsCash and cash
equivalents
    
    
    251
    
    
    
    
    
    
    
    251
    
    
    Cash and cash equivalentsAccounts receivable,
net of allowances
    
    
    107
    
    
    
    148
    
    
    
    255
    
    
    Trade and other receivablesInventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    InventoriesPrepaid expenses and
other current assets
    
    
    189
    
    
    
    (189
    )29
    
    
    
    29
    
    
    Other financial assets and derivatives12
    
    
    
    12
    
    
    Current tax debtorsDeferred income taxes
    
    
    Current assets
    
    
    547
    
    
    
    
    
    
    
    547
    
    
    Current assetsComputer hardware and
other property, net
    
    
    404
    
    
    
    
    
    
    
    404
    
    
    Property, plant and equipmentIdentifiable intangible
assets
    
    
    305
    
    
    
    309
    
    
    
    614
    
    
    Intangible assetsGoodwill
    
    
    309
    
    
    
    (309
    )27
    
    
    
    27
    
    
    InvestmentsOther non-current assets
    
    
    142
    
    
    
    (80
    )
    
    
    62
    
    
    Other financial assets and derivativesDeferred income taxes
    
    
    286
    
    
    
    
    
    
    
    286
    
    
    Deferred tax assets39
    
    
    
    39
    
    
    Retirement benefit obligationsNon-current assets of
discontinued operationsNon-current assets
    
    
    1,446
    
    
    
    (14
    )
    
    
    1,432
    
    
    Non-current assets14
    
    
    
    14
    
    
    Non-current assets held for resaleTotal assets
    
    
    1,993
    
    
    
    
    
    
    
    1,993
    
    
    Total assetsLiabilities and
shareholders equityLiabilitiesShort-term indebtedness
    
    
    (78
    )
    
    
    (214
    )
    
    
    (292
    )
    
    Other financial liabilities and derivativesCurrent portion of long
term debt
    
    
    (184
    )
    
    
    184Accounts payable and
accruals
    
    
    (969
    )
    
    
    277
    
    
    
    (692
    )
    
    Trade and other payablesDeferred revenue
    
    
    (37
    )
    
    
    37(247
    )
    
    
    (247
    )
    
    Current tax liabilities(37
    )
    
    
    (37
    )
    
    Provisions for liabilities and chargesCurrent liabilities
    
    
    (1,268
    )
    
    
    
    
    
    
    (1,268
    )
    
    Current liabilitiesLong-term debt
    
    
    (370
    )
    
    
    
    
    
    
    (370
    )
    
    Other financial liabilities and derivatives(102
    )
    
    
    (102
    )
    
    Provisions for liabilities and chargesOther non-current
liabilities
    
    
    (102
    )
    
    
    102Deferred income taxes
    
    
    (115
    )
    
    
    
    
    
    
    (115
    )
    
    Deferred tax liabilitiesNon-current liabilities
    
    
    (587
    )
    
    
    
    
    
    
    (587
    )
    
    Non-current liabilitiesTotal liabilities
    
    
    (1,855
    )
    
    
    
    
    
    
    (1,855
    )
    
    Total liabilitiesNet assets
    
    
    138
    
    
    
    
    
    
    
    138
    
    
    Net assets
 -30-




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##### Table of Contents



1. Business combinations
 Goodwill amortization
    Contingent purchase consideration
  -31-




---



##### Table of Contents



Other intangibles
   2. Other Intangibles
   3. Employee benefits  Pensions
   
   -32-




---



##### Table of Contents



4. Stock-based compensation
 Differences in adoption dates
   Cash-settled stock options and awards
  National Insurance (social security costs) on stock options and awards
  Forfeitures
  -33-




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##### Table of Contents



5. Derivative instruments and hedging activities
 Hedge accounting
   Embedded derivatives
   6. Investments
    7. Sale and leaseback transactions
   8. Property, plant and equipment
   -34-




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##### Table of Contents



9. Joint ventures and associates
  Deferred gain on assets contributed to joint ventures
  Proportionate consolidation
  10. Restructuring
     11. Shares to be repurchased
   -35-




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##### Table of Contents



12. Taxation
  Stock-based compensation
  Intercompany transactions
  Accounting for uncertainty in income taxes
        -36-




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##### Table of Contents



8.
UNAUDITED CANADIAN GAAP TO US GAAP RECONCILIATIONS
 For the year ended December 312007£mNet
earnings from continuing operations attributable to ordinary
shareholders under Thomson Canadian GAAP
    
    
    
    
    
    
    74Differences in GAAP increasing /
(decreasing) reported profit net
earnings:Employee benefits  pensions
    
    
    1
    
    
    
    125Stock-based compensation
    
    
    2
    
    
    
    (9
    )Taxation
    
    
    3
    
    
    
    (21
    )Net
earnings from continuing operations attributable to ordinary
shareholders under Thomson US GAAP 
accounting policies
    
    
    
    
    
    
    169
 As at December 312007£mShareholders equity attributable to ordinary
shareholders under Thomson Canadian GAAP
    
    
    
    
    
    
    567Differences increasing / (decreasing)reported
Shareholders equity:Employee benefits  pensions
    
    
    1
    
    
    
    (120
    )Stock-based compensation
    
    
    2
    
    
    
    (18
    )Taxation
    
    
    3
    
    
    
    35Shareholders equity attributable to ordinary
shareholders under Thomson US GAAP accounting
policies
    
    
    
    
    
    
    464
 -37-




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##### Table of Contents



1. Employee benefits  pensions
  valuation allowance
    2. Stock-based compensation
 Classifications of awards
   3. Taxation
  -38-




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##### Table of Contents



Currency Exchange Rate Information
  Year Ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003High
    
    
    1.1853
    
    
    
    1.1726
    
    
    
    1.2704
    
    
    
    1.3968
    
    
    
    1.5747Low
    
    
    0.9170
    
    
    
    1.0990
    
    
    
    1.1507
    
    
    
    1.1774
    
    
    
    1.2924Rate at end of period
    
    
    0.9881
    
    
    
    1.1653
    
    
    
    1.1659
    
    
    
    1.2036
    
    
    
    1.2924Average rate for period
    
    
    1.0748
    
    
    
    1.1341
    
    
    
    1.2116
    
    
    
    1.3015
    
    
    
    1.4015
  2008
    
    
    2007April 1 toApril 16
    
    
    March
    
    
    February
    
    
    January
    
    
    December
    
    
    November
    
    
    OctoberHigh
    
    
    1.0270
    
    
    
    1.0279
    
    
    
    1.0190
    
    
    
    1.0324
    
    
    
    1.0217
    
    
    
    1.0008
    
    
    
    1.0004Low
    
    
    1.0025
    
    
    
    0.9798
    
    
    
    0.9719
    
    
    
    0.9905
    
    
    
    0.9785
    
    
    
    0.9170
    
    
    
    0.9499Rate at end of period
    
    
    1.0025
    
    
    
    1.0279
    
    
    
    0.9798
    
    
    
    1.0022
    
    
    
    0.9881
    
    
    
    1.0008
    
    
    
    0.9499Average rate for period
    
    
    1.0157
    
    
    
    1.0010
    
    
    
    0.9991
    
    
    
    1.011
    
    
    
    1.0030
    
    
    
    0.9671
    
    
    
    0.9752
  -39-




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##### Table of Contents



Year Ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003High
    
    
    2.1104
    
    
    
    1.9794
    
    
    
    1.9292
    
    
    
    1.9482
    
    
    
    1.7842Low
    
    
    1.9235
    
    
    
    1.7256
    
    
    
    1.7138
    
    
    
    1.7544
    
    
    
    1.5500Rate at end of period
    
    
    1.9843
    
    
    
    1.9586
    
    
    
    1.7188
    
    
    
    1.9160
    
    
    
    1.7842Average rate for period
    
    
    2.0020
    
    
    
    1.8434
    
    
    
    1.8204
    
    
    
    1.8330
    
    
    
    1.6347
  2008
    
    
    2007April 1 toApril 16
    
    
    March
    
    
    February
    
    
    January
    
    
    December
    
    
    November
    
    
    OctoberHigh
    
    
    1.9961
    
    
    
    2.0311
    
    
    
    1.9923
    
    
    
    1.9895
    
    
    
    2.0658
    
    
    
    2.1104
    
    
    
    2.0777Low
    
    
    1.9627
    
    
    
    1.9823
    
    
    
    1.9405
    
    
    
    1.9515
    
    
    
    1.9774
    
    
    
    2.0478
    
    
    
    2.0279Rate at end of period
    
    
    1.9756
    
    
    
    1.9855
    
    
    
    1.9864
    
    
    
    1.9895
    
    
    
    1.9843
    
    
    
    2.0567
    
    
    
    2.0777Average rate for period
    
    
    1.9786
    
    
    
    2.0015
    
    
    
    1.9646
    
    
    
    1.9702
    
    
    
    2.0161
    
    
    
    2.0701
    
    
    
    2.0449
 Selected Historical Financial Data of Thomson
  Selected Historical Financial Data of Reuters
  UK GAAP IFRIC EU IASB
 -40-




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##### Table of Contents



Consolidated income statement data
  £m (except per share data)
    
    Notes
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Amounts in accordance with IFRSContinuing activities:Revenue
    
    
    
    
    
    
    2,605
    
    
    
    2,566
    
    
    
    2,409
    
    
    
    2,339Operating profit
    
    
    
    
    
    
    292
    
    
    
    256
    
    
    
    207
    
    
    
    194Profit before taxation
    
    
    
    
    
    
    273
    
    
    
    313
    
    
    
    238
    
    
    
    396Profit after taxation
    
    
    
    
    
    
    213
    
    
    
    293
    
    
    
    229
    
    
    
    356Profit from discontinued activities
    
    
    
    
    
    
    14
    
    
    
    12
    
    
    
    253
    
    
    
    19Profit for the year
    
    
    
    
    
    
    227
    
    
    
    305
    
    
    
    482
    
    
    
    375Basic earnings per ordinary share
    
    
    
    
    
    
    18.4p
    
    
    
    23.6p
    
    
    
    32.6p
    
    
    
    26.0Basic earnings per ordinary share  continuing
    
    
    
    
    
    
    17.3p
    
    
    
    22.6p
    
    
    
    16.3p
    
    
    
    25.4Diluted earnings per ordinary share
    
    
    
    
    
    
    18.0p
    
    
    
    23.1p
    
    
    
    31.7p
    
    
    
    25.4Diluted earnings per ordinary share  continuing
    
    
    
    
    
    
    16.9p
    
    
    
    22.2p
    
    
    
    15.9p
    
    
    
    24.8Basic earnings per ADS
    
    
    1
    
    
    
    110.1p
    
    
    
    141.9p
    
    
    
    195.8p
    
    
    
    156.1Basic earnings per ADS  continuing
    
    
    1
    
    
    
    103.5p
    
    
    
    135.6p
    
    
    
    97.8p
    
    
    
    152.7Diluted earnings per ADS
    
    
    1
    
    
    
    107.9p
    
    
    
    138.7p
    
    
    
    190.3p
    
    
    
    152.2Diluted earnings per ADS  continuing
    
    
    1
    
    
    
    101.4p
    
    
    
    133.1p
    
    
    
    95.4p
    
    
    
    148.8Dividends declared per ordinary share
    
    
    2
    
    
    
    11.9p
    
    
    
    10.25p
    
    
    
    10.0p
    
    
    
    10.0Dividends declared per ADS:
    
    
    2Expressed in UK currency
    
    
    
    
    
    
    71.4p
    
    
    
    61.5p
    
    
    
    60.0p
    
    
    
    60.0Expressed in US currency
    
    
    
    
    
    
    142.8c
    
    
    
    115.1c
    
    
    
    111.4c
    
    
    
    105.8Weighted average number of ordinary shares (in
millions)
    
    
    
    
    
    
    1,239
    
    
    
    1,297
    
    
    
    1,396
    
    
    
    1,400
 -41-




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##### Table of Contents



Consolidated balance sheet data
  2007
    
    
    2006
    
    
    2005
    
    
    2004£m
    
    
    £m
    
    
    £m
    
    
    £mAmounts in accordance with IFRSTotal assets
    
    
    1,993
    
    
    
    1,920
    
    
    
    2,137
    
    
    
    2,580Net assets
    
    
    138
    
    
    
    172
    
    
    
    511
    
    
    
    570Shareholders equity (attributable to the parent)
    
    
    138
    
    
    
    172
    
    
    
    511
    
    
    
    371Share capital
    
    
    539
    
    
    
    496
    
    
    
    467
    
    
    
    455
 Notes
 1.
    
    Each ADS (American Depositary Share) represents six ordinary shares.
 2.
    
    Dividends declared for 2004-2007 exclude UK tax credits. Amounts receivable could be higher
for US shareholders who have elected to retain benefits of the old US/UK tax treaty.
 
 ITEM 3B. Capitalization and Indebtedness
  
 ITEM 3C. Reasons for the Offer and Use of Proceeds
  
 ITEM 3D. Risk Factors
 Risk Factors
   Risks Related to the Transaction
 Benefits from the Transaction may not be achieved to the extent, or within the time period
currently expected, which could eliminate, reduce or delay the achievement of synergies expected to
be generated by the Transaction.
  
    
    unexpected integration issues, higher than expected integration costs and an overall
post-closing integration process that takes longer than originally anticipated;
    
    the inability to successfully integrate operations, technologies, products and
services;
    
    inconsistent and/or incompatible business practices, operating procedures,
information systems, financial controls and procedures, cultures and compensation
structures between the companies;
    
    difficulty coordinating sales, distribution and marketing efforts to effectively
promote Thomson Reuters products;
 -42-




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##### Table of Contents




    
    loss of key employees;
    
    modification or termination of existing agreements with customers and suppliers and
delayed entry into new agreements with prospective customers and suppliers; and
    
    the diversion of managements attention from day-to-day business as a result of the
need to deal with integration issues.
  The Transaction may not maximize the growth potential of, or deliver greater value for, Thomson
Reuters beyond the level that either Thomson or Reuters could have achieved on its own.
  The value of Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares is
related to the economic performance of Thomson Reuters.
  The trading prices of the Thomson Reuters Corporation common shares and the Thomson Reuters PLC
ordinary shares may not be the same and the difference between them may be material.
  The DLC structure may be adversely affected by changes to legislation and regulations.
  The DLC structure involves risks and costs not associated with more common acquisition structures.
  -43-




---



##### Table of Contents



Each of Thomson Reuters Corporation and Thomson Reuters PLC is exposed to the credit risk of the
other.
  Changes in the tax residence of Thomson Reuters Corporation or Thomson Reuters PLC could cause
adverse tax consequences for Thomson Reuters.
  If Thomson Reuters PLC were classified as a passive foreign investment company under US federal
income tax laws, it  could have adverse tax consequences for US holders of Thomson Reuters PLC
ordinary shares (including those represented by Thomson Reuters PLC ADSs).
 PFIC
 US
holders of Thomson Reuters PLC ordinary shares who do not hold their shares through Thomson Reuters
PLC ADSs might not qualify for special reduced withholding rates on payments of future dividends
from Thomson Reuters PLC.
  -44-




---



##### Table of Contents



Reuters Founders Share Company holds a Reuters Founders Share in each of Thomson Reuters
Corporation and Thomson Reuters PLC and may be in a position to affect the governance and
management of Thomson Reuters.
  Provisions in the DLC Documents that are designed to ensure that shareholders of Thomson Reuters
Corporation and Thomson Reuters PLC are treated on an equivalent basis with respect to take-over
bids and similar transactions may prevent or discourage take-over bids and similar transactions.
  The rights and privileges of Thomson Reuters Corporation shareholders and Thomson Reuters PLC
shareholders are governed by different laws and regulations.
  Risks Related to the Business and Operations of Thomson Reuters
 Thomson Reuters may be adversely affected by changes in the general economy.
  -45-




---



##### Table of Contents



Thomson Reuters operates in highly competitive markets and may be adversely affected by this
competition.
  Thomson Reuters may be adversely affected by changes in legislation and regulation.
   Increased accessibility to free or relatively inexpensive information sources may reduce demand for
the products and services of Thomson Reuters.
  Thomson Reuters may be unable to derive fully the anticipated benefits from its existing or future
acquisitions, joint ventures, investments or dispositions.
  -46-




---



##### Table of Contents



If Thomson Reuters is unable to develop new products, services, applications and functionalities to
meet its customers needs, attract new customers or expand into new geographic markets, its ability
to generate additional revenues may be adversely affected.
  Thomson Reuters relies heavily on network systems and the Internet and any failures or disruptions
may adversely affect its ability to serve its customers.
   
    
    the emergence of proprietary data feeds from other markets;
    
    high market volatility;
    
    decimalization;
    
    reductions in trade sizes resulting in more transactions;
    
    new derivative instruments;
    
    increased automatically-generated algorithmic and program trading;
    
    market fragmentation resulting in an increased number of trading venues; and
    
    multiple listings of options and other securities.
 -47-




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##### Table of Contents



Thomson Reuters is dependent on third parties for information and other services and may not be
able to maintain agreements with these parties and the services provided by third parties may not
be performed adequately, which may reduce profit margins or market share.
  Operating internationally involves challenges that Thomson Reuters may not be able to meet and that
may adversely affect Thomson Reuters ability to grow.
  Thomson Reuters may be unable to realize all of the anticipated cost savings and operating
efficiencies from its initiatives designed to make it a more integrated group.
 plus
 The goodwill of Thomson Reuters is key to its ability to remain a trusted source of information and
news.
  Thomson Reuters may be subject to impairment losses that would reduce its reported assets and
earnings.
  -48-




---



##### Table of Contents



Significant investments in technology by Thomson Reuters may not increase its revenues or decrease
its operating costs, which may adversely affect its financial results.
  The customers of Thomson Reuters may become more self-sufficient, which may reduce demand for its
products and services and adversely affect its financial results.
  The intellectual property rights of Thomson Reuters may not be adequately protected, which may
adversely affect its financial results.
  The credit ratings of Thomson Reuters Corporation and Thomson Reuters PLC may be downgraded, or
adverse conditions in the credit markets may continue, which may impede Thomson Reuters access to
the debt markets or raise its borrowing rates.
  -49-




---



##### Table of Contents



Thomson Reuters may operate in an increasingly litigious environment, which may adversely affect
its financial results.
   Currency fluctuations and interest rate fluctuations may have a significant impact on the reported
revenues and earnings of Thomson Reuters.
  If Thomson Reuters does not continue to recruit and retain high quality management and key
employees, it may not be able to execute its strategy.
  Thomson Reuters has significant funding obligations in respect of pension and post-retirement
benefit arrangements that are affected by factors outside the control of Thomson Reuters.
  Woodbridge controls Thomson Reuters and is in a position to affect Thomson Reuters governance and
operations.
  -50-




---



##### Table of Contents



ITEM 4. INFORMATION ON THE COMPANY
 
 ITEM 4A. History and Development of the Company
    .
 Description of the Transaction
 Key Terms and Conditions
  DLC Structure
  -51-




---



##### Table of Contents



Consideration Payable to Reuters Shareholders
     Arrangements Relating to the Reuters Trust Principles
  
    
    each of Thomson Reuters Corporation and Thomson Reuters PLC covenant to use its best
endeavors to ensure that the Reuters Trust Principles as applied to Thomson Reuters
will be complied with;
    
    the Thomson Reuters Corporation Articles and the Thomson Reuters PLC Articles
contain provisions to safeguard the Reuters Trust Principles on a basis that, after
giving effect to the Transaction, correspond to the principal protections currently
contained in the Reuters Articles;
    
    each of Thomson Reuters Corporation and Thomson Reuters PLC issue to Reuters
Founders Share Company a share with extraordinary voting powers similar to those of the
Founders Share in the capital of Reuters currently held by Reuters Founders Share
Company; and
    
    Woodbridge undertake to use its best endeavors as a shareholder to support the
Reuters Trust Principles in relation to Thomson Reuters and exercise its voting rights
to give effect to this support.
 -52-




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##### Table of Contents



Required Divestitures
    Thomson Arrangement
  Required Approvals
 2 3
  Arrangement Mechanics
  
    
    Thomsons name was changed from The Thomson Corporation to Thomson Reuters
Corporation;
 -53-




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
    
    Thomsons articles of incorporation were amended and restated in the form of the
Thomson Reuters Corporation Articles;
    
    Thomsons by-laws were amended and restated in the form of the Thomson Reuters
Corporation By-Laws;
    
    each of the Equalization and Governance Agreement, the Cross-Guarantees, the Thomson
Reuters Corporation Special Voting Share Trust Deed, the Thomson Reuters PLC Special
Voting Share Trust Deed and the Special Voting Share Agreement was deemed to become
effective and the rights and obligations of Thomson Reuters Corporation pursuant
thereto became binding on and enforceable against Thomson Reuters Corporation in
accordance with its terms;
    
    the Amended Deed of Mutual Covenant was deemed to become effective and the rights
and obligations of Thomson Reuters Corporation pursuant thereto became binding on and
enforceable against Thomson Reuters Corporation in accordance with its terms;
    
    Thomson Reuters Corporation issued the Reuters Founders Share to Reuters Founders
Share Company;
    
    Thomson Reuters Corporation issued the Equalization Share to Thomson Reuters PLC;
and
    
    Thomson Reuters Corporation issued its Special Voting Share to the Thomson Reuters
Corporation Special Voting Share Trustee.
 Reuters Scheme
  Reuters Scheme Mechanics
  Accounting Treatment
  -54-




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##### Table of Contents



Ongoing Reporting Obligations
    Stock Exchange Listings and Index Participation
 Deposit
Agreement
  The Dual Listed Company Structure
 Overview
  -55-




---



##### Table of Contents




    
    Thomson Reuters Corporation and Thomson Reuters PLC remain separate publicly listed
companies;
    
    the boards of directors of the two companies comprise the same individuals, as do
the companies executive management;
    
    shareholders of the two companies ordinarily vote together as a single
decision-making body, including in the election of directors;
    
    shareholders of the two companies receive equivalent cash dividends and capital
distributions;
    
    each company has guaranteed all contractual obligations of the other company and
will guarantee other obligations as agreed; and
    
    a take-over bid or similar transaction is required to be made for shares of both
companies on an equivalent basis.
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##### Table of Contents



Structures of Thomson and Reuters Prior to the Transaction
 
 
 Notes:
 1.
    
    Includes Woodbridge, which as of April 11, 2008 beneficially owned approximately 70% of the
outstanding Thomson common shares.2.
    
    In addition to common shares, Thomson had 6,000,000 Series II Preference Shares issued and
outstanding as of April 11, 2008.3.
    
    Includes ADSs, each of which represented six Reuters ordinary shares.


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##### Table of Contents



Structure of Thomson Reuters After the Transaction
 
 
 Notes:
 1.
    
    Includes Woodbridge, which as of April 11, 2008 beneficially owned approximately 70% of the
outstanding Thomson common shares.2.
    
    Thomson Reuters Corporation continues to have 6,000,000 Series II Preference Shares issued
and outstanding.3.
    
    Includes ADSs, each of which represents six Thomson Reuters PLC ordinary shares.4.
    
    Reuters Group Limited is an indirect wholly-owned subsidiary of Thomson Reuters PLC (except
for Reuters ordinary shares held by employee benefit trusts of Reuters).5.
    
    Reflects the initial asset reorganization that Thomson Reuters Corporation and Thomson
Reuters PLC intend to implement following the Transaction. Thomson Reuters Corporation and
Thomson Reuters PLC may carry out other reorganizations of their assets from time to time. See
The Dual Listed Company Structure in this Item 4A. -58-




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Separate Entities and Listings
     Unified Board and Management
     -59-




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##### Table of Contents



Equalization Principles
  Equalization Ratio
 Dividends and Distributions
    Matching Actions
  
    
    Thomson Reuters PLC must undertake a Matching Action to ensure that the economic
benefits and voting rights of a holder of one Thomson Reuters PLC ordinary share
relative to a holder of one Thomson Reuters Corporation common share are maintained in
proportion to the then prevailing Equalization Ratio; or
    
    an appropriate adjustment to the Equalization Ratio must be made, to ensure that
there is equitable treatment (having regard to the then prevailing Equalization Ratio)
for a holder of one Thomson Reuters PLC ordinary share relative to a holder of one
Thomson Reuters Corporation common share,
 de minimis
 -60-




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Cross-Guarantees
    Insolvency
 Economic Equivalence
 pro rata
  Support Arrangements
  -61-




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##### Table of Contents



Voting Arrangements
  Joint Electorate Actions.
 
    
    the appointment, election, re-election or removal of any director of Thomson Reuters
Corporation or Thomson Reuters PLC;
    
    to the extent such receipt or adoption is required by applicable laws, the receipt
or adoption of the financial statements or accounts of Thomson Reuters Corporation or
Thomson Reuters PLC, or financial statements or accounts prepared on a consolidated
basis, other than any financial statements or accounts in respect of the period(s)
ended prior to the Effective Date;
    
    a change of name of Thomson Reuters Corporation or Thomson Reuters PLC; and
    
    the appointment or removal of the auditors of Thomson Reuters Corporation or Thomson
Reuters PLC.
 Class Rights Actions.
 
    
    the voluntary liquidation of either company;
    
    any adjustment to the Equalization Ratio other than in accordance with the
Equalization and Governance Agreement;
    
    any amendment to, or termination of, the Equalization and Governance Agreement, the
Special Voting Share Agreements or the Cross-Guarantees, other than: (i) any amendment
which is formal or technical in nature and which is not materially prejudicial to the
interests of Thomson Reuters Corporation shareholders or Thomson Reuters PLC
shareholders; or (ii) is necessary to correct any inconsistency or manifest error as
may be agreed by the Thomson Reuters board;
    
    any amendment to, removal or alteration of the effect of (which includes the
ratification of any breach of) any of the Thomson Reuters Corporation Entrenched
Provisions or the Thomson Reuters PLC Entrenched Provisions other than: (i) any amendment
which is formal or technical in nature and which is not materially prejudicial to the
interests of Thomson Reuters Corporation shareholders or Thomson Reuters PLC
shareholders; or (ii) is necessary to correct any inconsistency or manifest error as
may be agreed by the Thomson Reuters board;
    
    a change in the corporate status of Thomson Reuters Corporation from a corporation
existing under the OBCA with its primary listing on the TSX or the NYSE or of Thomson
Reuters PLC from a public limited company incorporated in England and Wales with its
primary listing on the Official List of the UKLA (unless such change occurs in
connection with a termination of the Equalization and Governance Agreement in
circumstances not requiring approval as a Class Rights Action);
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
    
    any other action or matter the Thomson Reuters board determines (either in a
particular case or generally) should be approved as a Class Rights Action; and
    
    any action to be approved as a Class Rights Action pursuant to the Equalization and
Governance Agreement.
  Procedural Resolutions.
 
    
    that certain people be allowed to attend or be excluded from attending a meeting;
    
    that discussion be closed and a question put to a vote (provided no amendments have
been raised);
    
    that a question under discussion not be put to a vote;
    
    to proceed with matters in an order other than that set out in the notice of a
meeting;
    
    to adjourn a debate (for example, to a subsequent meeting); and
    
    to adjourn a meeting.
 Special Voting Shares
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Equivalent Treatment in Relation to Take-Overs
   
    
    are made to all holders of Thomson Reuters Corporation common shares and Thomson
Reuters PLC ordinary shares;
    
    are undertaken with respect to the Thomson Reuters Corporation common shares and
Thomson Reuters PLC ordinary shares at or about the same time; and
    
    are equivalent (although not necessarily the same) in all material respects to the
holders of Thomson Reuters Corporation common shares, on the one hand, and the holders
of Thomson Reuters PLC ordinary shares, on the other hand, including with respect to:
 -
    
    the consideration offered for such shares (taking into account exchange rates
and the Equalization Ratio);-
    
    the information provided to such holders;-
    
    the time available to such holders to consider such offers; and-
    
    the conditions to which the offers are subject.
 Triggering Event
 -64-




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
    
    either prior to or simultaneously with the Triggering Event, such party makes a
Qualifying Take-Over Bid (and, in the event that such Qualifying Take-Over Bid was made
prior to the Triggering Event, such Qualifying Take-Over Bid has not been withdrawn,
abandoned or terminated prior to or simultaneously with the Triggering Event); or
    
    the Triggering Event was an offer to acquire, or an acquisition of, outstanding
Thomson Reuters Corporation common shares and/or Thomson Reuters PLC ordinary shares
made pursuant to an exemption from the take-over bid provisions of applicable laws,
where the value of the consideration paid for any such shares acquired is not in excess
of the respective market values thereof at the date of acquisition.
    Reuters Trust Principles
 Press Associations
 -65-




---



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
    
    that Thomson Reuters shall at no time pass into the hands of any one interest, group
or faction;
    
    that the integrity, independence and freedom from bias of Thomson Reuters shall at
all times be fully preserved;
    
    that Thomson Reuters shall supply unbiased and reliable news services to newspapers,
news agencies, broadcasters and other media subscribers and to businesses, governments,
institutions, individuals and others with whom Thomson Reuters has or may have
contracts;
    
    that Thomson Reuters shall pay due regard to the many interests which it serves in
addition to those of the media; and
    
    that no effort shall be spared to expand, develop and adapt the news and other
services and products of Thomson Reuters so as to maintain its leading position in the
international news and information business.
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Amended Deed of Mutual Covenant
 
    
    Each of Thomson Reuters Corporation, Thomson Reuters PLC and Reuters Founders Share
Company covenants with the Press Associations to use its best endeavors to ensure that
the Reuters Trust Principles are complied with.
    
    The Thomson Reuters board will have due regard to the Reuters Trust Principles and
to the rights and duties of the Reuters Trustees insofar as, by the proper exercise of
its powers and in accordance with the other duties of directors, those principles are
capable of being observed by the Thomson Reuters board.
    
    Thomson Reuters Corporation and Thomson Reuters PLC will have an office of
editor-in-chief of the news services of Thomson Reuters and will provide Reuters
Founders Share Company with the opportunity to consult with the Thomson Reuters board
prior to appointing an individual to, or removing an individual from, such office.
    
    Thomson Reuters Corporation and Thomson Reuters PLC will keep Reuters Founders Share
Company informed of material matters relating to the business and affairs of Thomson
Reuters that may reasonably be expected to affect the interests of Reuters Founders
Share Company in relation to the Reuters Trust Principles.
    
    Reuters Founders Share Company will keep Thomson Reuters Corporation and Thomson
Reuters PLC informed regarding its views on matters relating to the conduct of the
business and affairs of Thomson Reuters in relation to the Reuters Trust Principles.
 Thomson Reuters Corporation Articles
 
    
    As holder of the Reuters Founders Share, Reuters Founders Share Company is entitled
to receive notice of all meetings of shareholders and is entitled to attend and speak
at any such meeting. It is entitled to vote separately as a class in respect of a
resolution pertaining to any matter for which its prior written consent is required.
    
    The rights attaching to the Reuters Founders Share may not be varied or abrogated in
any respect without the prior written consent of Reuters Founders Share Company.
    
    Without the prior written consent of Reuters Founders Share Company, Thomson Reuters
Corporation may not take certain fundamental corporate actions, including liquidation,
dissolution or winding-up, paying dividends in kind, effecting a reorganization (other
than an internal reorganization involving entities within Thomson Reuters),
amalgamating with unaffiliated entities and removing or altering certain provisions in
the Thomson Reuters Corporation Articles and the Thomson Reuters Corporation By-Laws
relating to Reuters Founders Share Company and the Reuters Founders Share.
    
    If any party, other than an Approved Person or an entity within Thomson Reuters, has
become or becomes the beneficial owner of 15% or more of the outstanding voting shares
of Thomson Reuters Corporation, the Reuters Founders Share will carry voting rights
that allow it to negate the voting power of such party by casting the same number of
votes as are cast, and in the same manner as such votes are cast (for, against,
withheld or abstain), by the Thomson Reuters Corporation Special Voting Share Trustee
and holders of voting shares of Thomson Reuters Corporation (aside from such party), in
each case multiplied by one hundred.
    
    If any party, other than an Approved Person or an entity within Thomson Reuters,
becomes or is attempting to become, directly or indirectly, the beneficial owner of 30%
or more of the outstanding voting shares of Thomson Reuters Corporation, the Reuters
Founders Share will carry the following voting rights in respect of Joint Electorate
Actions, or Class Rights Actions if the proposed action has been approved at the
parallel meeting of the Thomson Reuters PLC shareholders: (i) if
there are no Approved Persons or
 -67-




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Approved Persons beneficially own shares to which are attached not
more than 35% of the votes entitled to be cast on the proposed
resolution, the right to
cast a sufficient number of votes to approve or defeat such resolution; (ii) if Approved
Persons beneficially own shares to which are attached more than 35% but less than the
requisite majority of the votes entitled to be cast on such resolution, the right to
cast the greater of (x) a number of votes equal to the number of votes attached to
voting shares beneficially owned by such party plus one and (y) a number of votes
sufficient to constitute the requisite majority of votes entitled to be cast on such
resolution, in combination with votes attached to all voting shares beneficially owned
by Approved Persons and cast in accordance with the Relevant Terms of Approval; or (iii)
if Approved Persons beneficially own, and cast in accordance with the Relevant Terms of
Approval the votes attached to, voting shares to which are attached the requisite
majority of the voting shares entitled to be cast on such resolution, no right to cast
any vote.
    
    Reuters Founders Share Company has the right to requisition a meeting of Thomson
Reuters Corporation shareholders.
    
    For so long as Reuters Founders Share Company is the holder of the Reuters Founders
Share, the Thomson Reuters Corporation board of directors may invite the Reuters
Trustees to attend meetings of the Thomson Reuters Corporation board of directors and
to confer with the Thomson Reuters Corporation board of directors. Reuters Founders
Share Company will make representations to the Thomson Reuters Corporation board of
directors on matters of general interest to Thomson Reuters Corporation and will cause
the Reuters Trustees to be generally available for consultation with the Thomson
Reuters Corporation board of directors.
    
    The directors of Thomson Reuters Corporation will, in the performance of their
duties, have due regard to the Reuters Trust Principles insofar as, by the proper
exercise of their powers as directors and in accordance with their other duties as
directors, the Reuters Trust Principles are capable of being observed by the directors.
 Thomson Reuters PLC Articles
 
    
    As holder of the Reuters Founders Share, Reuters Founders Share Company is entitled
to receive notice of all meetings of shareholders and will be entitled to attend and
speak at any such meeting. It is entitled to vote separately as a class in respect of a
resolution pertaining to any matter for which the prior written consent of Reuters
Founders Share Company is required.
    
    The rights attaching to the Reuters Founders Share may not be varied or abrogated in
any respect without the prior written consent of Reuters Founders Share Company.
    
    Without the prior written consent of Reuters Founders Share Company, Thomson Reuters
PLC may not take certain fundamental corporate actions, including liquidation or
winding-up, paying dividends in kind, effecting a reconstruction and amending, removing
or altering certain provisions in the Thomson Reuters PLC Articles relating to Reuters
Founders Share Company and the Reuters Founders Share.
    
    If any party, other than an Approved Person or an entity within Thomson Reuters,
becomes interested in 15% or more of the outstanding voting shares of Thomson Reuters
PLC, the Reuters Founders Share will carry voting rights that allow it to negate the
voting power of such party by casting the same number of votes as are cast, and in the
same manner as such votes are cast (for, against, withheld or abstain), by the Thomson
Reuters PLC Special Voting Share Trustee and holders of voting shares of Thomson
Reuters PLC (aside from such party), in each case multiplied by one hundred.
    
    If any party, other than an Approved Person or an entity within Thomson Reuters, has
obtained or is attempting to obtain the ability to control the exercise of 30% or more
of the voting rights ordinarily exercisable at meetings of shareholders of Thomson
Reuters PLC, the Reuters Founders Share will carry the following voting rights in
respect of Joint Electorate Actions or Class Rights
 -68-




---



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Actions if the proposed action has been approved at the parallel meeting of the Thomson
Reuters Corporation shareholders: (i) if there are no Approved Persons or Approved
Persons are interested in shares to which are attached not more than 35% of the votes
entitled to be cast on the proposed resolution, the right to cast a sufficient number of
votes to approve or defeat such resolution; (ii) if Approved Persons are interested in shares to which are attached more than 35% but less than the requisite majority of the
votes entitled to be cast on such resolution, the right to cast the greater of (x) a
number of votes equal to the number of votes attached to voting shares in which such
party is interested plus one and (y) a number of votes sufficient to constitute the
requisite majority of votes entitled to be cast on such resolution, in combination with
votes attached to all voting shares in which Approved Persons are interested and cast in
accordance with the Relevant Terms of Approval; or (iii) if Approved Persons are
interested in, and cast in accordance with the Relevant Terms of Approval the votes
attached to, voting shares to which are attached the requisite majority of the voting shares entitled to be cast on such resolution, no right to cast any vote.
    
    Reuters Founders Share Company has the right to requisition a meeting of Thomson
Reuters PLC shareholders.
    
    For so long as Reuters Founders Share Company is the holder of the Reuters Founders
Share, the Thomson Reuters PLC board of directors may invite the Reuters Trustees to
attend meetings of the Thomson Reuters PLC board of directors and to confer with the
Thomson Reuters PLC board of directors. Reuters Founders Share Company will make
representations to the Thomson Reuters PLC board of directors on matters of general
interest to Thomson Reuters PLC and will cause the Reuters Trustees to be generally
available for consultation with the Thomson Reuters PLC board of directors.
    
    The directors of Thomson Reuters PLC will, in the performance of their duties, have
due regard to the Reuters Trust Principles insofar as, by the proper exercise of their
powers as directors and in accordance with their other duties as directors, the Reuters
Trust Principles are capable of being observed by the directors.
 Reuters Trust Principles Support Agreement
 
    
    Reuters Founders Share Company has designated Woodbridge as an Approved Person for
the purposes of the Thomson Reuters Corporation Articles and the Thomson Reuters PLC
Articles. This designation is irrevocable for so long as Woodbridge is controlled by
members of the Thomson family, companies controlled by them and trusts for their
benefit.
    
    Woodbridge will vote its voting shares of Thomson Reuters Corporation and Thomson
Reuters PLC in a manner consistent with the Reuters Trust Principles.
    
    Woodbridge will give Reuters Founders Share Company as much advance notice as
practicable in the circumstances of how it intends to vote at meetings of shareholders
of Thomson Reuters Corporation and Thomson Reuters PLC with a view to providing Reuters
Founders Share Company with a reasonable opportunity to determine whether the manner in
which Woodbridge intends to vote is inconsistent with the Reuters Trust Principles.
Woodbridge will use its best efforts to give such notice to Reuters Founders Share
Company before meeting materials are disseminated to shareholders but will, in any
event, give such notice to Reuters Founders Share Company not less than ten days prior
to the date of the applicable shareholders meeting. Reuters Founders Share Company
will notify Woodbridge of its determination as soon as practicable. All disagreements
and disputes between Woodbridge and Reuters Founders Share Company as to the manner in
which Woodbridge intends to vote at shareholders meetings will be brought to the
attention of the President of Woodbridge and the Chairman of Reuters Founders Share
Company, who will try to resolve the disagreement or dispute, failing which the
disagreement or dispute will be submitted to final and binding arbitration. Where a
shareholders meeting of Thomson Reuters Corporation or Thomson Reuters PLC is to be
held before the disagreement or dispute is resolved, Woodbridge will, subject to
applicable laws, take all actions within its control as are necessary or appropriate to
 -69-




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
    
    Woodbridge will use its best efforts as a shareholder of Thomson Reuters Corporation
and Thomson Reuters PLC to ensure that the Reuters Trust Principles are complied with
in relation to Thomson Reuters.
    
    Without the prior written consent of Reuters Founders Share Company, Woodbridge will
not transfer any voting shares of Thomson Reuters Corporation or Thomson Reuters PLC to
any person that is not an Approved Person, where the transferee would become an
Acquiring Person under the Thomson Reuters Corporation Articles or the Thomson Reuters
PLC Articles.
    
    Without the prior written consent of Reuters Founders Share Company, Woodbridge will
not purchase securities of any class of Thomson Reuters Corporation or Thomson Reuters
PLC if, as a result of such transaction, securities of that company would cease to be
eligible for listing on a stock exchange on which that companys securities are then
listed.
    
    Upon the request of Reuters Founders Share Company, Woodbridge will promptly
requisition the Thomson Reuters board to call a meeting of shareholders of Thomson
Reuters Corporation and/or Thomson Reuters PLC for such purpose as Reuters Founders
Share Company, in its sole and absolute discretion, thinks fit.
 Principal capital expenditures and divestitures
 Thomson Information
  Reuters Information
  
 ITEM 4B. Business Overview
 Overview of Thomson Reuters
    
    
    Markets, which consists of the previous Reuters business combined with Thomson
Financial; and
 -70-




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
    
    Professional, which consists of Thomsons previous non-financial business segments
  Legal, Tax & Accounting, Scientific and Healthcare.
   Key Pro Forma Financial Information
  2007 Pro Forma Financial Information
 Revenues
    
    $12.4 billion59%  Markets41%  ProfessionalOperating profit
    
    $1.5 billionOperating profit margin
    
    11.8%
  Strategy
  Capitalize on a global brand and presence to drive international growth.
   -71-




---



##### Table of Contents



Deliver greater value to customers through a broader range of electronically delivered critical
information and decision support tools.
   Integrate Thomson and Reuters businesses to accelerate growth and capture synergies.
   Leverage increased revenue diversity and scale, financial strength and capital deployment to
maximize shareholder return.
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Businesses, Products and Services
  Markets
  
    
    Sales & Trading a leading provider of information, trading and post-trade
connectivity requirements of buy-side and sell-side customers in the foreign exchange,
fixed income, equities and other exchange-traded instruments, and commodities and
energy markets. The Sales & Trading unit consists of Reuters existing unit and Thomson
Financials Fixed Income and Institutional Equities businesses and Omgeo.
    
    Enterprise a leading provider of information and software that supports business
automation within the capital markets. The Enterprise unit consists of Reuters existing
unit and Thomson Financials enterprise businesses. Major brands include Kondor+, RMDS,
Datascope, and PORTIA.
    
    Investment & Advisory a leading provider of information and decision support
tools and integration services to portfolio managers, wealth managers, investment
bankers, research analysts and corporate executives. The Investment & Advisory unit
consists of Reuters existing Research & Asset Management businesses and Thomson
Financials Investment Management, Investment Banking, Wealth Management, Corporate
Services and Content Strategy businesses. Major brands include Lipper, First Call,
Reuters Knowledge, Datastream and Thomson ONE.
    
    Media a leading provider of comprehensive and timely global information and news
services to the worlds newspapers, television and cable networks, radio stations and
websites, as well as directly to consumers through Reuters-branded digital services
online, mobile and IPTV platforms.
 Professional
  
    
    Legal a leading provider of critical information, decision support tools and
services to legal, intellectual property, compliance, business and government
professionals throughout the world. Major brands include Westlaw, Aranzadi, BAR/BRI,
Carswell, Thomson CompuMark, Thomson Elite, FindLaw, LIVEDGAR and Sweet & Maxwell.
    
    Tax & Accounting a leading provider of critical information, decision support
tools and software applications for tax and accounting professionals in North America.
Major brands include Checkpoint, Creative Solutions and RIA.
    
    Scientific a leading provider of critical information and decision support tools
to researchers, scientists and information professionals in the academic, scientific,
corporate and government marketplaces. Major brands include Derwent World Patents
Index, MicroPatent, Thomson Pharma, Web of Science and ISI Web of Knowledge.
    
    Healthcare a leading provider of critical information and decision support tools
to physicians and other professionals in the healthcare, corporate and government
marketplaces. Major brands include Medstat, Micromedex, PDR (Physicians Desk
Reference) and Solucient.
 Corporate Headquarters
  -73-




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
    
    Strategy and capital allocation.Thomson Reuters will deploy its capital in
opportunities in existing and new businesses that it believes will provide the highest
returns with appropriate levels of risk. Allocation decisions will be made based on
measurable return estimates and detailed risk analysis.
    
    Innovation.Thomson Reuters plans to develop new products and services,
technologies and business models informed by the current and future needs of customers.
In depth understandings of the relevant markets and the ability to respond to changes
will be fostered and rewarded at all levels of the organization. Thomson Reuters
strength in technology will help promote innovation.
    
    Talent.Thomson Reuters senior management understands that attracting, retaining
and motivating talented employees is crucial to the success of its businesses. Talent
management will be aligned with business strategy and integrated into organizational
processes, helping drive a world-class, integrated and engaging approach to attracting,
developing, motivating and retaining a talented workforce.
 Employees
    Dividend Policy of Thomson Reuters
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##### Table of Contents



Thomson Reuters 2008 Dividend Schedule
  Thomson ReutersCorporation &ThomsonThomson
    
    Reuters
    
    Reuters PLCMarch/May 2008 1
    
    $
    0.27000
    
    
    £0.07000
    
    Record Date
    
    
    02/21/2008
    
    
    03/25/2008
    
    Payment Date
    
    
    03/17/2008
    
    
    05/01/2008
    
    April 2008
 Interim Dividends  Closing 2
    
    $
    0.31747
    
    
    £0.03240
    
    Record Date
    
    
    04/16/2008
    
    
    04/16/2008
    
    Payment Date
    
    
    05/01/2008
    
    
    05/01/2008
    
    June 2008 3
    
    
    
    
    
    
    
    Record Date
    
    
    
    
    
    
    
    Payment Date
    
    
    
    
    
    
    
    September 2008 4
    
    
    
    
    
    
    
    0.22253Record Date
    
    
    
    
    
    
    
    08/21/2008Payment Date
    
    
    
    
    
    
    
    09/15/2008December 2008
    
    
    
    
    
    
    
    0.27000Record Date
    
    
    
    
    
    
    
    11/20/2008Payment Date
    
    
    
    
    
    
    
    12/15/2008
 
 Notes:
 1.
    
    Represents a regular quarterly dividend for Thomson shareholders in relation to the fourth
quarter of 2007, and a second-half 2007 dividend for Reuters shareholders.
 2.
    
    Represents accrued/pro-rated dividends from January 1, 2008 through April 16, 2008. For Thomson
shareholders, the accrual/pro-ration is based on $0.27 per share. For Reuters shareholders, the
accrual/pro-ration is based on £0.0551 per share.
 3.
    
    As a result of the interim dividends to be paid for the period up to April 16, 2008, we do not
contemplate paying a dividend in June, as has been Thomsons practice.
 4.
    
    Represents an accrued/pro-rated dividend from April 17, 2008 through June 30, 2008, based on a
quarterly dividend of $0.27 per share.
 Historical Information about Thomson
 Corporate Structure
  -75-




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Jurisdiction ofSubsidiary
    
    Incorporation/FormationThomson Canada Limited
    
    Ontario, CanadaThomson Holdings S.A.
    
    LuxembourgThomson Finance S.A.
    
    LuxembourgLiveNote Technologies Ltd.
    
    England and WalesLiveNote Inc.
    
    Delaware, U.S.A.Engate LLC
    
    Delaware, U.S.A.Emica Corporation
    
    Delaware, U.S.A.Thomson U.S. Holdings Inc.
    
    Delaware, U.S.A.THI (U.S.) Inc.
    
    Delaware, U.S.A.Thomson U.S. Inc.
    
    Delaware, U.S.A.The Thomson Corporation Delaware Inc.
    
    Delaware, U.S.A.Thomson Holdings Inc.
    
    Delaware, U.S.A.Thomson Finance Company
    
    Delaware, U.S.A.Thomson TradeWeb LLC
    
    Delaware, U.S.A.Thomson Healthcare Inc.
    
    Delaware, U.S.A.Physicians Desk Reference Inc.
    
    Florida, U.S.A.Thomson Financial Holdings Inc.
    
    Delaware, U.S.A.Thomcorp Holdings Inc.
    
    New York, U.S.A.Thomson Scientific Inc.
    
    Pennsylvania, U.S.A.Thomson Professional & Regulatory Inc.
    
    Texas, U.S.A.Quantitative Analytics, Inc.
    
    Illinois, U.S.A.Thomson Financial LLC
    
    Delaware, U.S.A.Thomson Legal & Regulatory Inc.
    
    Minnesota, U.S.A.West Publishing Corporation
    
    Minnesota, U.S.A.West Services Inc.
    
    Delaware, U.S.A.Thomson International SA
    
    LuxembourgThe Thomson Corporation PLC
    
    England and WalesThe Thomson Organization Limited
    
    England and WalesTTC (1994) Limited
    
    England and WalesThomson Information & Publishing Holdings Limited
    
    England and WalesThomson Information & Solutions Limited
    
    England and WalesThomson Legal & Regulatory Limited
    
    England and WalesThomson Financial Limited
    
    England and Wales
 -76-




---



##### Table of Contents



Description of the Business
 Overview
  
    
    serve business and professional customers;
    
    target customer segments and sub-segments that it believes provide the best
opportunities for growth and profitability;
    
    integrate critical, must-have data with software, tools and services;
    
    generate subscription-based or recurring revenues;
    
    reach customers directly through a technology platform;
    
    integrate into customers workflows; and
    
    are scalable and leverageable.
     -77-




---



##### Table of Contents



Segments and Corporate Center
 % of 2007Revenues fromElectronic,20071
    
    
    % of 2007
    
    
    Software and
    
    
    Countries withRevenues
    
    
    Revenues
    
    
    Services
    
    
    Operations
    
    
    EmployeesThomson Legal
    
    
    3,318
    
    
    
    45
    
    
    
    67
    
    
    
    21
    
    
    
    12,900Thomson Financial
    
    
    2,186
    
    
    
    30
    
    
    
    98
    
    
    
    35
    
    
    
    8,600Thomson Tax &
Accounting
    
    
    705
    
    
    
    10
    
    
    
    88
    
    
    
    3
    
    
    
    3,800Thomson Scientific
    
    
    651
    
    
    
    9
    
    
    
    96
    
    
    
    23
    
    
    
    2,700Thomson Healthcare
    
    
    452
    
    
    
    6
    
    
    
    83
    
    
    
    9
    
    
    
    1,800Corporate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    3,100Eliminations
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    7,296
    
    
    
    100
    
    
    
    82
    
    
    
    44
    
    
    
    32,900
 
 Note:
 1.
    
    Audited; in millions of US dollars. See Note 23: Segment Information in Thomsons audited
financial information for the year ended December 31, 2007 set
out in Exhibit 99.2
filed as part of this Annual Report on Form 20-F.
    Thomson Legal
 Overview
  -78-




---



##### Table of Contents




    
    North American Legal; and
    
    International Legal & Regulatory.
  % of Total Revenues2007
    
    2006Electronic, software and services
    
    
    67
    %
    
    
    66
    %From North America
    
    
    84
    %
    
    
    84
    %Recurring/subscription-based
    
    
    83
    %
    
    
    84
    %
 Products and Services
 Thomson North American Legal
 Major Brands
    
    Principal Products and Services
    
    CustomersWest
Westlaw
Westlaw Litigator
Westlaw Business
    
    Legal, regulatory and compliance
information-based products and services
    
    Lawyers, law students, law
librarians and other legal
professionalsLiveNote
    
    Deposition, transcript and court
reporting software and services
    
    Lawyers, courts and court
reporters and investigatorsCarswell (Canada)
    
    Legal, regulatory and compliance
information-based products and services
    
    Lawyers, law students, law
librarians and other legal
professionalsWestlaweCarswell (Canada)
    
    Legal, regulatory and compliance
information-based products and services
    
    Lawyers, law students, law
librarians and other legal
professionalsWest km
    
    Integrated knowledge management software
    
    Lawyers, law students, law
librarians and other legal
professionalsThomson Elite 
Elite 3E
    
    Law firm management software, competitive
intelligence
    
    Lawyers, law firm finance and
operations and business
development professionals
 -79-




---



##### Table of Contents



Major Brands
    
    Principal Products and Services
    
    CustomersWest Monitor Suite
    
    Business and market intelligence solutions
    
    Lawyers, law firm finance,
operations and business
development professionalsProLaw
    
    Law firm management software, competitive
intelligence
    
    Lawyers, law firm finance,
operations and business
development professionalsHildebrandt International 
Baker Robbins
    
    Strategic, technology and information
consulting advisory services
    
    Lawyers, law firm finance,
operations and business
development professionalsThomson Litigation 
Consulting
    
    Litigation consulting and support services
    
    Lawyers, law firm finance,
operations and business
development professionalsFindLaw 
HubbardOne
    
    Web-based legal directory, website
creation and hosting services and law
firm marketing solutions
    
    Lawyers and legal professionalsFoundation Press 
West Law School 
Publishing 
BAR/BRI 
West LegalEdcenter 
LegalWorks
    
    Textbooks, study aids, bar review
courses, continuing education materials
and seminars
    
    Law students, lawyers and
legal professionals
     -80-




---



##### Table of Contents



-81-




---



##### Table of Contents



Thomson International Legal & Regulatory
 Major Brands
    
    Principal Products and Services
    
    CustomersWestlaw1
Sweet & Maxwell (UK, Asia)
IDS (UK)
Aranzadi (Spain)
Civitas (Spain)
Karnov (Denmark and Sweden)
Lawbook (Australia)
Brookers (New Zealand)
La Ley (Argentina)
Lawtel (UK)
    
    Legal information-based
products and services
    
    Lawyers, law
students, law
librarians,
corporate legal
professionals,
government agencies
and trademark
professionalsWhite Book (UK, Asia)Archbold (UK)Taxpoint (Australia)
PowerTax (Australia)
    
    Tax and accounting information
and software-based products
and services
    
    Professional
accounting firms,
corporate, finance
and accounting
departments, law
firms and
governmentsThomson CompuMark 
SAEGIS (North America, EMEA)
    
    Trademark search and
protection information
services
    
    Business and legal
and trademark
professionals
 
 Note
 1.
    
    United Kingdom, Denmark, Hong Kong, Spain, Sweden and through a joint venture, Japan.
      -82-




---



##### Table of Contents



Competition
  Thomson Financial
 Overview
   
    
    Corporate, Investment Banking & Investment Management;
    
    Equities, Fixed Income & Wealth Management; and
    
    Omgeo.
  % of Total Revenues2007
    
    2006Electronic, software and services
    
    
    98
    %
    
    
    98
    %From North America
    
    
    75
    %
    
    
    79
    %Recurring/subscription-based
    
    
    80
    %
    
    
    82
    %
 -83-




---



##### Table of Contents



Products and Services
  
    
    Investment banking;
    
    Wealth management;
    
    Investment management;
    
    Institutional equities;
    
    Fixed income;
    
    Corporate management;
    
    Institutional research;
    
    Hedge funds; and
    
    Private equity and consultants.
    Corporate, Investment Banking & Investment Management
 -84-




---



##### Table of Contents



Major Brands
    
    Principal Products and Services
    
    CustomersThomson ONE 
Investment Banking
    
    Analytical tools and databases
of brokerage research,
transactional data,
institutional holdings data,
current and historical
earnings estimates, pricing
information, SEC filings and
news
    
    Investment bankers and
private equity
professionalsSDC Platinum 
Investext 
Global Access 
Thomson Research 
Thomson ONE 
Investment
Management 
Quantitative
Analytics
(TQA) 
Datastream 
I/B/E/S 
First Call 
Baseline 
StreetEvents
    
    Security and portfolio
analytical tools as well as
databases of real-time equity
and fixed income brokerage
research, current and
historical analyst forecast
estimates, investor
presentations, company
accounts data, pricing data,
global aggregated forecast
data at the country, sector
and industry levels, market
indices data, institutional
holdings data, SEC filings and
news
    
    Portfolio managers,
portfolio analysts,
buy-side traders and
research analystsThomson ONE Investor
     Relations 
Thomson ONE Corporate
     Development
    
    Internet-based software
applications providing
corporate information and
news, stock surveillance
services and outbound
communications services
    
    Investor relations
professionals and corporate
financial executivesCapital Markets
Intelligence (CMI)
    
    Market intelligence and
analytical services for market
valuation analysis
    
    Investor relations
professionals and
corporations
     -85-




---



##### Table of Contents



Equities, Fixed Income & Wealth Management
  Major Brands
    
    Principal Products and Services
    
    CustomersThomson ONE Wealth
     Management 
Thomson ONE Equity Sales 
Thomson ONE Fixed Income 
Thomson ONE Hedge Fund
     Trading 
InvestmentView 
Global Topic 
ILX
    
    Electronic financial information,
including real-time market data,
such as pricing data, company
information, news and analytics
    
    Institutional traders, retail
traders, investment advisors
and hedge fund professionalsTradeWeb 
TradeWeb Retail
    
    Online marketplace for fixed income
securities and derivatives
    
    Institutional and retail tradersThomson Transaction Services
    
    Back office data processing services
    
    Brokers and dealersAutEx
    
    Electronic database and real-time
network for trade order indications
and trade executions
    
    Equity tradersThomson Transaction Analytics
    
    Transaction cost analysis and trade
execution compliance services
    
    Brokers, market makers and
exchangeseXimius
    
    Front-office private client
investment management application
    
    Wealth managers and investment
advisors
   -86-




---



##### Table of Contents



Omgeo
 -87-




---



##### Table of Contents



Competition
  Thomson Tax & Accounting
 Overview
   
    
    Research & Guidance;
    
    Professional Software & Services; and
    
    Corporate Software & Services.
  % of Total Revenues2007
    
    
    2006Electronic, software and services
    
    
    88%
    
    
    
    84%From North America
    
    
    100%
    
    
    
    100%Recurring/subscription-based
    
    
    94%
    
    
    
    95%
 -88-




---



##### Table of Contents



Products and Services
  Major Brands
    
    Principal Products and Services
    
    CustomersResearch & Guidance: 
RIA 
PPC 
Checkpoint 
Quickfinder 
Warren Gorham & Lamont (WG&L)
    
    Tax and accounting
information-based products and
services
    
    Professional
accounting firms,
corporate, finance
and accounting
departments, law
firms and
governmentsProfessional Software & Services: 
Creative Solutions 
GoSystem 
UltraTax 
GoFileRoom
    
    Tax and accounting software
and services focused on
compliance and management
solutions
    
    Professional
accounting firms,
tax preparers,
bookkeepers and
enrolled agentsCorporate Software & Services: 
InSource 
CrossBorder Solutions 
Tax Partners 
TrustEase 
eComply 
Fiduciary Practice Systems 
ePropertyTax
    
    Tax and accounting software
and services focused on
compliance and document
management
    
    Corporate tax
departments and
financial services
firms
     -89-




---



##### Table of Contents



Competition
  Thomson Scientific
 Overview
    % of Total Revenues2007
    
    
    2006Electronic, software and services
    
    
    96%
    
    
    
    95%From North America
    
    
    72%
    
    
    
    70%Recurring/subscription-based
    
    
    74%
    
    
    
    76%
 Products and Services
   -90-




---



##### Table of Contents



Major Brands
    
    Principal Products and Services
    
    CustomersISI Web of Knowledge
    
    Comprehensive and integrated
platform that includes the Web
of Science as well as third
party hosted content,
editorially selected websites,
and tools to access, analyze
and manage research
information
    
    Research scientists
and scholars,
government
agencies, research
libraries and
universities and
collegesWeb of Science
    
    Comprehensive database
providing a source for journal
article-cited references and
access to abstracted and
indexed journals
    
    Research scientists
and scholars,
government
agencies, research
libraries and
universities and
collegesThomson Pharma
    
    Integrated web platform that
delivers scientific
literature, patents,
commercial and regulatory
information, company news
communications, professional
meeting reports and other
relevant content
    
    Intellectual
property
professionals, R&D
professionals,
lawyers, business
intelligence staffThomson Innovation
    
    Integrated web platform
providing a global collection
of intellectual property
content, scientific
literature, analytical and
visualization tools, and
document services
    
    Pharmaceutical and
biotechnology
companiesDerwent World Patents Index
    
    Comprehensive database of
English language patent
abstracts from approximately
40 patent authorities around
the world including coverage
of China, Japan and Korea
    
    Intellectual
property
professionals, R&D
professionals,
lawyers and
business
intelligence staffProus Integrity
    
    Integrated web platform
delivering drug discovery
content and analytic
functionality for biologists
and chemists
    
    Pharmaceutical and
biotechnology
companies, academic
centers and
research institutes
    -91-




---



##### Table of Contents



Competition
  Thomson Healthcare
 Overview
   -92-




---



##### Table of Contents



% of Total Revenues2007
    
    
    2006Electronic, software and services
    
    
    83%
    
    
    
    76%From North America
    
    
    100%
    
    
    
    100%Recurring/subscription-based
    
    
    70%
    
    
    
    65%
 Products and Services
  Major Brands
    
    Principal Products and Services
    
    CustomersMicromedex
    
    Comprehensive database set of
drugs, disease information,
medical emergency and poison
control procedures, patient
education and other relevant
clinical, toxicological and
environmental health and
safety information
    
    Physicians,
pharmacists, health
professionals,
pharmaceutical
companies,
hospitals, poison
control centers,
corporations,
government agencies
and insurance
companiesMercuryMD
    
    Medical reference and decision
support tool for personal
digital assistants, delivering
real-time patient data to
clinicians
    
    Physicians, health
professionals and
hospitalsPDR (Physicians Desk Reference)
    
    Database of US Food and Drug
Administration (FDA) approved
drug monographs, delivered in
print and electronic format
    
    Physicians, health
professionals,
pharmaceutical
companies and
government agenciesMedstat Advantage Suite
    
    Decision support products
integrating benchmarks and
analytics, designed for
managing healthcare costs and
quality and employee wellness
and productivity
    
    Large and mid-size
employers,
governmental
healthcare
purchasers, managed
care and insurance
companies,
pharmaceutical
companies and
health services
research providersSolucient
    
    Benchmark, comparative and
market databases, integrated
with analytics to support
marketing and planning,
operational improvement and
clinical performance
improvement
    
    Hospitals,
researchers,
service planners,
patient safety and
quality managers
and financial and
administrative
staff
    -93-




---



##### Table of Contents



Competition
  Technology
     -94-




---



##### Table of Contents



Sales and Marketing
   Seasonality
  Intellectual Property
  Research and Development
  Environmental Matters
  -95-




---



##### Table of Contents



Properties and Facilities
  Facility
    
    Approx. Sq. Ft.
    
    Owned/Leased
    
    Principal UseEagan, Minnesota
    
    
    2,792,000
    
    
    Owned
    
    Thomson Legals North
American Legal
headquarters and West
operating facilitiesNew York, New York
    
    
    435,200
    
    
    Leased
    
    Thomson Financial
offices and headquartersCarrollton, Texas
    
    
    409,150
    
    
    Owned
    
    Thomson Tax & Accounting
operating facilitiesBoston, Massachusetts
(1)
    
    
    370,000
    
    
    Leased
    
    Thomson Financial offices
 
 Note
  Employees
    Legal Proceedings and Regulatory Actions
 Rodriguez v. West Publishing Corp. and
Kaplan Inc.
    -96-




---



##### Table of Contents



Material Contracts
  Sale of Thomson Learning Businesses
  Acquisition Facility
   Credit Agreement
  -97-




---



##### Table of Contents



Credit Ratings
   Moodys Investor Services (Moodys)
  Standard & Poors (S&P)
  DBRS Limited (DBRS)
   -98-




---



##### Table of Contents



Related Party Transactions
       -99-




---



##### Table of Contents



Historical Information about Reuters
 Corporate Structure
  -100-




---



##### Table of Contents



Jurisdiction of Incorporation/Subsidiary
    
    Formation
    
    Principal area of operationReuters AG
    
    Germany
    
    GermanyReuters America Holdings Inc.
    
    USA
    
    WorldwideReuters America LLC
    
    USA
    
    USAReuters Australia Pty Limited
    
    Australia
    
    AustraliaReuters BV
    
    Netherlands
    
    NetherlandsReuters Canada Limited
    
    Canada
    
    Canada/USAReuters Europe SA
    
    Switzerland
    
    Spain/PortugalReuters Finance PLC
    
    UK
    
    UKReuters France SNC
    
    France
    
    FranceReuters Group Overseas Holdings (UK) Limited
    
    UK
    
    WorldwideReuters Holdings Limited
    
    UK
    
    UKReuters Hong Kong Limited
    
    Cook Islands
    
    Hong KongReuters International Holdings SARL
    
    Switzerland
    
    WorldwideReuters Investment Limited
    
    UK
    
    UKReuters Italia SpA
    
    Italy
    
    ItalyReuters Japan Kabushiki Kaisha
    
    Japan
    
    JapanReuters Limited
    
    UK
    
    WorldwideReuters Middle East Limited
    
    Cook Islands
    
    Middle EastReuters Nederland BV
    
    Netherlands
    
    NetherlandsReuters Research Inc
    
    USA
    
    USAReuters SA
    
    Switzerland
    
    WorldwideReuters Singapore Pte Limited
    
    Singapore
    
    SingaporeReuters Svenska AB
    
    Sweden
    
    SwedenReuters Transaction Services Limited
    
    UK
    
    Worldwide
 Jurisdiction of
    
    Principal area of
    
    Percentage ofJoint ventures and associates
    
    incorporation/Formation
    
    operation
    
    equity shares held3 Times Square Associates LLC
    
    USA
    
    USA
    
    501FXMarketSpace Limited
    
    UK
    
    Worldwide
    
    50Times Global Broadcasting
Company Limited
    
    India
    
    India
    
    26
 
 Note:
 1.
    
    This is the equity interest of Reuters but the effective economic interest at December 31, 2007
was 35%. -101-




---



##### Table of Contents



Description of the Business
 Overview
   Restated
    
    
    Restated2007
    
    
    2006
    
    
    2005Business division:Sales & Trading*
    
    
    1,430
    
    
    
    1,301
    
    
    
    987Research & Asset Management
    
    
    895
    
    
    
    800
    
    
    
    658Enterprise
    
    
    1,491
    
    
    
    1,241
    
    
    
    925Media
    
    
    220
    
    
    
    189
    
    
    
    109Shared divisional resources
    
    
    3,706
    
    
    
    3,182
    
    
    
    3,504Total divisions
    
    
    7,472
    
    
    
    6,713
    
    
    
    6,183Global Sales & Service Organization
    
    
    5,843
    
    
    
    5,717
    
    
    
    4,988Editorial
    
    
    2,351
    
    
    
    2,321
    
    
    
    2,210Corporate Services*
    
    
    1,526
    
    
    
    1,551
    
    
    
    1,637Total continuing operations
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,018Discontinued operations
    
    
    
    
    
    
    
    
    
    
    846Total average number of employees
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,864By location:Europe, Middle East and Africa
    
    
    7,359
    
    
    
    7,174
    
    
    
    6,962Americas
    
    
    4,219
    
    
    
    4,252
    
    
    
    4,292Asia
    
    
    5,884
    
    
    
    4,876
    
    
    
    3,764Total continuing operations
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,018Discontinued operations
    
    
    
    
    
    
    
    
    
    
    846Total average number of employees
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,864By function:Production and communications
    
    
    10,335
    
    
    
    9,438
    
    
    
    8,498Selling and marketing
    
    
    4,609
    
    
    
    4,572
    
    
    
    4,179Support services and administration
    
    
    2,518
    
    
    
    2,292
    
    
    
    2,341Total continuing operations
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,018Discontinued operations
    
    
    
    
    
    
    
    
    
    
    846Total average number of employees
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,864The above include:Development staff
    
    
    3,120
    
    
    
    2,670
    
    
    
    2,332
 
 Note
 *
    
    2006 and 2005 have been restated to reflect the way that Reuters was managed in 2007,
Transaction Sales and Hosted are now shown within Sales & Trading rather than in Shared
divisional resources and Global Sales & Service Organization, respectively. Chief Technology
Office is now included in Corporate Services rather than in Shared Divisional resources. -102-




---



##### Table of Contents



Research and Development
  2007
    
    
    2006
    
    
    2005Research and Development Expenditure
    
    
    100
    
    
    
    83
    
    
    
    92
   Divisional
Performance  Overview
  Sales and Service
  -103-




---



##### Table of Contents



Sales & Trading
       Research & Asset Manage
    -104-




---



##### Table of Contents



Enterprise
   
    
    Reuters DataScope real-time datafeeds, streams of machine-readable price data
delivered over Reuters networks at high speed for use in customers information and
trading services;
    
    Reuters DataScope pricing and reference data which help banks and financial
organizations achieve regulatory compliance by delivering accurate financial instrument
prices and reference material for the capital markets globally. In 2006, a new
distribution platform, Reuters DataScope Select, was launched to support back office
and fund valuation processes;
    
    Reuters Market Data System, a resilient content distribution software platform that
enables banks to deliver high volume and low latency data into a wide variety of
financial systems;
    
    Trade and Risk Management systems to help banks manage their trading position and
monitor their exposure to trading risk. In 2006, Reuters acquired Application Networks
Inc., whose coverage of credit derivatives and structured financial products
complements Reuters existing strengths in foreign exchange and treasury risk
management; and
    
    Reuters Messaging, a secure online messaging service that connects financial
professionals within and across existing communities of interest.
  Media
   -105-




---



##### Table of Contents



Properties and Facilities
  Environmental Matters
  Legal Proceedings and Regulatory Actions
 Douglas Gilstrap and Myron Tataryn v. Radianz Ltd., Radianz Americas, Inc., Reuters Limited,
Blaxmill (Six) Limited, Reuters C LLC, Reuters America LLC, and British Telecommunications plc
  -106-




---



##### Table of Contents



Ariel (UK) Limited v. Reuters Group PLC , Reuters C LLC, Reuters Transactions Services Limited,
Instinet Group, Incorporated, the NASDAQ Stock Market Inc. and Silver Lake Partners LP
  Material Contracts
  FXMarketSpace
 CME
 BT Network Services Agreement
 BT
 -107-




---



##### Table of Contents



Fujitsu Master Services and Asset Transfer Agreements
 FS
 Savvis Network Services Agreements
  Sale of Factiva
  Related Party Transactions
    2007
    
    2006
    
    2005£m
    
    £m
    
    £mSalaries and short-term employee benefits
    
    
    16
    
    
    
    12
    
    
    
    8Post-employment benefits
    
    
    1
    
    
    
    1
    
    
    
    1Termination benefits
    
    
    
    
    
    
    
    
    
    
    1Share-based payments
    
    
    9
    
    
    
    8
    
    
    
    6Total
    
    
    26
    
    
    
    21
    
    
    
    16
  -108-




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##### Table of Contents



December 31,
    
    Amounts
    
    Amounts
    
    December 31,
    
    Amounts
    
    Amounts
    
    December 31,2005
    
    invoiced
    
    collected
    
    2006
    
    invoiced
    
    collected
    
    2007£m
    
    £m
    
    £m
    
    £m
    
    £m
    
    £m
    
    £mAmounts receivable:Joint ventures:Factiva*
    
    
    4
    
    
    
    30
    
    
    
    (33
    )
    
    
    1
    
    
    
    
    
    
    
    (1
    )
    
    
    FXMarketSpace
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    6
    
    
    
    10
    
    
    
    (15
    )
    
    
    1Other
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    Associates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    Total amounts receivable
    
    
    4
    
    
    
    37
    
    
    
    (34
    )
    
    
    7
    
    
    
    12
    
    
    
    (18
    )
    
    
    1Amounts payable:Joint ventures:Factiva
    
    
    1
    
    
    
    4
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3 Times Square
Associates
    
    
    
    
    
    
    19
    
    
    
    (19
    )
    
    
    
    
    
    
    16
    
    
    
    (16
    )
    
    
    Associates
    
    
    
    
    
    
    2
    
    
    
    (2
    )
    
    
    
    
    
    
    5
    
    
    
    (4
    )
    
    
    Total
amounts payable
    
    
    1
    
    
    
    25
    
    
    
    (26
    )
    
    
    
    
    
    
    21
    
    
    
    (20
    )
    
    
    
 
 Note:
 *
    
    Reuters disposed of the majority of its investment in Factiva in December 2006. Consequently,
the £1 million receivable from Factiva at December 31, 2006 has been presented within other
receivables.    Factiva
   -109-




---



##### Table of Contents



FXMarketSpace
  3 Times Square Associates LLC (3XSQ Associates)
  Credit Rating
    
 ITEM 4C. Organizational Structure
  -110-




---



##### Table of Contents



ITEM 4D. Property, Plants and Equipment
  
 ITEM 4A. UNRESOLVED STAFF COMMENTS
  
 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 
 ITEM 5A. Operating Results
 Thomson Information
  Reuters Information
 Financial Review
 Non-GAAP Measures
  Underlying change
 Constant currency
 Trading costs
 Trading profit
 -111-




---



##### Table of Contents



Trading cash flow
 Adjusted EPS
 Free cash flow
 Net debt/net funds
 Reuters Performance
 Summary Profit Results
 2007
    
    2006
    
    2005Year to December 31
    
    £m
    
    £m
    
    £mRevenue
    
    
    2,605
    
    
    
    2,566
    
    
    
    2,409Operating costs
    
    
    (2,355
    )
    
    
    (2,351
    )
    
    
    (2,251
    )Other operating income
    
    
    42
    
    
    
    41
    
    
    
    49Operating profit
    
    
    292
    
    
    
    256
    
    
    
    207Net finance costs
    
    
    (34
    )
    
    
    (15
    )
    
    
    (12
    )Profit on disposal of associates, joint
ventures and available-for-sale financial
assets
    
    
    21
    
    
    
    76
    
    
    
    38Share of post-taxation (losses)/profit from
associates and joint ventures
    
    
    (6
    )
    
    
    (4
    )
    
    
    5Profit before taxation
    
    
    273
    
    
    
    313
    
    
    
    238Taxation
    
    
    (60
    )
    
    
    (20
    )
    
    
    (9
    )Profit for the year from continuing operations
    
    
    213
    
    
    
    293
    
    
    
    229Discontinued operationsProfit for the year from discontinued operations
    
    
    14
    
    
    
    12
    
    
    
    253Profit for the year
    
    
    227
    
    
    
    305
    
    
    
    482Basic EPS
    
    
    18.4 p
    
    
    
    23.6 p
    
    
    
    32.6 pAdjusted EPS
    
    
    23.0 p
    
    
    
    17.1 p
    
    
    
    13.8 p
 -112-




---



##### Table of Contents



Revenue, Costs and Profit
 2007
    
    
    2006
    
    
    Actual
    
    
    Underlying
    
    
    2005Year to December 31
    
    £m
    
    
    £m
    
    
    change
    
    
    change
    
    
    £mRecurring
    
    
    2,394
    
    
    
    2,363
    
    
    
    1
    %
    
    
    7
    %
    
    
    2,235Usage
    
    
    139
    
    
    
    132
    
    
    
    6
    %
    
    
    15
    %
    
    
    104Outright
    
    
    72
    
    
    
    71
    
    
    
    1
    %
    
    
    1
    %
    
    
    70Total revenue
    
    
    2,605
    
    
    
    2,566
    
    
    
    2
    %
    
    
    7
    %
    
    
    2,409Operating costs
    
    
    (2,355
    )
    
    
    (2,351
    )
    
    
    
    
    
    
    
    
    
    
    (2,251
    )Operating profit
    
    
    292
    
    
    
    256
    
    
    
    14
    %
    
    
    
    
    
    
    207Operating margin
    
    
    11
    %
    
    
    10
    %
    
    
    
    
    
    
    
    
    
    
    9
    %Trading costs
    
    
    (2,220
    )
    
    
    (2,258
    )
    
    
    (2
    %)
    
    
    3
    %
    
    
    (2,075
    )Trading profit
    
    
    385
    
    
    
    308
    
    
    
    25
    %
    
    
    43
    %
    
    
    334Trading margin
    
    
    15
    %
    
    
    12
    %
    
    
    
    
    
    
    
    
    
    
    14
    %
 2007 Results Compared with 2006
 Revenue
   Recurring revenue
 Usage revenue
 Outright revenue
   -113-




---



##### Table of Contents



Operating Costs and Trading Costs
   Currency
  Full year
    
    
    Full yearAverage Exchange Rates
    
    2007
    
    
    2006£/$US
    
    
    2.00
    
    
    
    1.83£/
    
    
    1.47
    
    
    
    1.47£/¥
    
    
    235.29
    
    
    
    212.92
 Operating Profit and Trading Profit
     Profit for the Year from Continuing Operations
  -114-




---



##### Table of Contents



Profit for the Year from Discontinued Operations
  Earnings Per Share
  Summarized Cash Flow and Free Cash Flow
 Summarized Reuters cash flow
 2007
    
    
    2006
    
    
    2005Year to December 31
    
    £m
    
    
    £m
    
    
    £mNet cash inflow from operating activities
    
    
    476
    
    
    
    258
    
    
    
    253Acquisitions and disposals
    
    
    6
    
    
    
    (2
    )
    
    
    206Purchases of property, plant and equipment, and intangibles
    
    
    (225
    )
    
    
    (228
    )
    
    
    (185
    )Proceeds from sale of property, plant and equipment
    
    
    19
    
    
    
    5
    
    
    
    3Dividends received
    
    
    3
    
    
    
    3
    
    
    
    5Proceeds from issue of shares
    
    
    47
    
    
    
    32
    
    
    
    10Share buy-back
    
    
    (174
    )
    
    
    (527
    )
    
    
    (223
    )Equity dividends paid to shareholders
    
    
    (147
    )
    
    
    (134
    )
    
    
    (140
    )Equity dividends paid to minority interests
    
    
    
    
    
    
    
    
    
    
    (23
    )Other movements
    
    
    (49
    )
    
    
    7
    
    
    
    21Movement in net (debt)/funds
    
    
    (44
    )
    
    
    (586
    )
    
    
    (73
    )Opening net (debt)/funds
    
    
    (333
    )
    
    
    253
    
    
    
    326Closing net (debt)/funds
    
    
    (377
    )
    
    
    (333
    )
    
    
    253
 -115-




---



##### Table of Contents



Reconciliation of net cash flow from continuing operating activities to free cash flow
 2007
    
    
    2006
    
    
    2005Year to December 31
    
    £m
    
    
    £m
    
    
    £mCash flow from continuing operations
    
    
    534
    
    
    
    311
    
    
    
    268Net interest paid
    
    
    (32
    )
    
    
    (19
    )
    
    
    (7
    )Tax paid
    
    
    (26
    )
    
    
    (34
    )
    
    
    (11
    )Capital expenditure
    
    
    (225
    )
    
    
    (228
    )
    
    
    (178
    )Transaction-related costs
    
    
    21
    
    
    
    
    
    
    
    Special contributions to pension schemes
    
    
    4
    
    
    
    187
    
    
    
    Proceeds from sale of property, plant
and equipment
    
    
    19
    
    
    
    5
    
    
    
    3Dividends received
    
    
    3
    
    
    
    3
    
    
    
    5Interim funding repayment from Telerate
    
    
    
    
    
    
    
    
    
    
    (18
    )Repayment of funds to BTC
    
    
    
    
    
    
    
    
    
    
    26Free cash flow
    
    
    298
    
    
    
    225
    
    
    
    88
       
    
    Free cash inflows of £298 million, as noted above;
    
    The cost of the share buy-back program of £174 million;
    
    Dividend payments of £147 million;
    
    Net inflow from acquisitions and disposals of £6 million; and
 -116-




---



##### Table of Contents




    
    Other movements largely consisting of foreign exchange movements on borrowings.
 Dividends
  Balance Sheet
   
    
    The capital expenditure on property, plant and equipment and intangible assets of
£272 million, offset by annual depreciation and amortization of £158 million.
    
    A reduction to the net pension obligations of £120 million resulting from movements
in the valuations of defined benefit obligations that have reduced the reported
deficits of several schemes.
 Summarized Reuters balance sheet
 2007
    
    
    2006
    
    
    2005Year to December 31
    
    £m
    
    
    £m
    
    
    £mNon-current assets
    
    
    1,432
    
    
    
    1,314
    
    
    
    1,179Current assets
    
    
    547
    
    
    
    606
    
    
    
    957Non-current assets classified as held for sale
    
    
    14
    
    
    
    
    
    
    
    1Total assets
    
    
    1,993
    
    
    
    1,920
    
    
    
    2,137Current liabilities
    
    
    (1,268
    )
    
    
    (913
    )
    
    
    (797
    )Non-current liabilities
    
    
    (587
    )
    
    
    (835
    )
    
    
    (829
    )Total liabilities
    
    
    (1,855
    )
    
    
    (1,748
    )
    
    
    (1,626
    )Net assets
    
    
    138
    
    
    
    172
    
    
    
    511Total shareholders equity
    
    
    138
    
    
    
    172
    
    
    
    511
     -117-




---



##### Table of Contents



2008 Outlook
  2006 Results Compared With 2005
 Revenue
    Recurring revenue
 Usage revenue
 Outright revenue
  Operating Costs and Trading Costs
  -118-




---



##### Table of Contents



Operating Profit and Trading Profit
    Profit for the Year from Continuing Operations
     Profit for the Year from Discontinued Operations
  Earnings Per Share
  -119-




---



##### Table of Contents



Summarized Cash Flow
      
    
    Free cash inflows of £225 million, as noted above;
    
    Special contributions of £187 million towards funding the deficit in two UK defined
benefit pension schemes;
    
    The ongoing cost of the share buy-back program, amounting to £527 million;
    
    Dividend payments of £134 million; and
    
    Net outflow from acquisitions and disposals of £2 million, including £79 million
from the disposal of Factiva.
 Dividends
  Balance Sheet
   
    
    The capitalization of property, plant and equipment and intangible assets of £290
million, offset by annual depreciation and amortization charges of £141 million.
 -120-




---



##### Table of Contents




    
    A change in the composition of net debt (net funds in 2005), with lower cash
holdings and higher debt being offset by lower pension obligations due to the special
contributions towards funding the deficits in two UK defined benefit pension schemes.
   Divisional Performance
 Overview
         -121-




---



##### Table of Contents



Sales & Trading Division
 Overview
       -122-




---



##### Table of Contents



Financial Performance
 Sales & Trading division summary operating and trading results
 2007
    
    
    2006
    
    
    Actual
    
    
    UnderlyingYear to December 31
    
    £m
    
    
    £m
    
    
    change
    
    
    changeRevenue
    
    
    1,619
    
    
    
    1,661
    
    
    
    (2
    %)
    
    
    3
    %Trading costs
    
    
    (1,376
    )
    
    
    (1,439
    )
    
    
    (4
    %)
    
    
    Restructuring charges
    
    
    
    
    
    
    (12
    )Other operating income (in trading costs)
    
    
    (22
    )
    
    
    (20
    )Impairments & amortization of business
combination intangibles
    
    
    (33
    )
    
    
    (17
    )Fair value movements in expenses
    
    
    (9
    )
    
    
    (18
    )Operating Costs
    
    
    (1,440
    )
    
    
    (1,506
    )
    
    
    (4
    %)Other operating income
    
    
    27
    
    
    
    27
    
    
    
    Operating Profit
    
    
    206
    
    
    
    182
    
    
    
    13
    %Operating margin
    
    
    13
    %
    
    
    11
    %Trading margin
    
    
    15
    %
    
    
    13
    %
      
    
    Reuters Xtra family revenues, which grew by 4% to £1,042 million (underlying 10%).
Usage revenues grew by 9% (underlying 19%), reflecting the strength of Reuters foreign
exchange franchise as Reuters Prime Brokerage, Reuters Matching and Reuters Electronic
Trading benefited from increased trading volumes in buoyant foreign exchange markets.
 -123-




---



##### Table of Contents




    
    Revenue from Trader family products, which declined 24% to £279 million (20% on an
underlying basis). This reflects customer migrations from legacy products, principally
Telerate and the 2000/3000 series. Revenue attrition from Telerate has remained at
around two percentage points of Sales & Trading revenue (one percentage point of
Reuters revenue), as expected. The Telerate migration is now substantially complete.
     Research & Asset Management Division
 Overview
       -124-




---



##### Table of Contents



Financial Performance
 Research & Asset Management division summary operating and trading results
 2007
    
    
    2006
    
    
    Actual
    
    
    UnderlyingYear to December 31
    
    £m
    
    
    £m
    
    
    change
    
    
    changeRevenue
    
    
    363
    
    
    
    304
    
    
    
    20
    %
    
    
    25
    %Trading costs
    
    
    (328
    )
    
    
    (314
    )
    
    
    5
    %
    
    
    10
    %Other operating income (in trading costs)
    
    
    (5
    )
    
    
    (4
    )Impairments & amortization of business
combination intangibles
    
    
    (4
    )
    
    
    (3
    )Fair value movements in expenses
    
    
    (2
    )
    
    
    (3
    )Operating costs
    
    
    (339
    )
    
    
    (324
    )
    
    
    5
    %Other operating income
    
    
    5
    
    
    
    5
    
    
    
    Operating Profit/(Loss)
    
    
    29
    
    
    
    (15
    )
    
    
    293
    %Operating margin
    
    
    8
    %
    
    
    (5
    %)Trading margin
    
    
    10
    %
    
    
    (3
    %)
         -125-




---



##### Table of Contents



Enterprise Division
 Overview
   
    
    Reuters DataScope real-time datafeeds, streams of machine- readable price data
delivered over our networks at high speed for use in customers information and trading
services;
    
    Reuters DataScope pricing and reference data which help banks and financial
organizations achieve regulatory compliance by delivering accurate financial instrument
prices and reference material for the capital markets globally. In 2006 we launched a
new distribution platform, Reuters DataScope Select, to support back office and fund
valuation processes;
    
    Reuters Market Data System, a resilient content distribution software platform that
enables banks to deliver high volume and low latency data into a wide variety of
financial systems;
    
    Trade and Risk Management systems to help banks manage their trading position and
monitor their exposure to trading risk. In 2006, we acquired Application Networks Inc.,
whose coverage of credit derivatives and structured financial products complements our
existing strengths in FX and treasury risk management; and
    
    Reuters Messaging, a secure online messaging service that connects financial
professionals within and across existing communities of interest.
  -126-




---



##### Table of Contents



Financial Performance
 Enterprise division summary operating and trading results
 2007
    
    
    2006
    
    
    Actual
    
    
    UnderlyingYear to December 31
    
    £m
    
    
    £m
    
    
    change
    
    
    changeRevenue
    
    
    451
    
    
    
    431
    
    
    
    5
    %
    
    
    10
    %Trading costs
    
    
    (360
    )
    
    
    (350
    )
    
    
    3
    %
    
    
    7
    %Restructuring charges
    
    
    
    
    
    
    (1
    )Other operating income (in trading costs)
    
    
    (6
    )
    
    
    (5
    )Impairments & amortization of business
combination intangibles
    
    
    (3
    )
    
    
    (3
    )Fair value movements in expenses
    
    
    (2
    )
    
    
    (3
    )Operating Costs
    
    
    (371
    )
    
    
    (362
    )
    
    
    2
    %Other operating income
    
    
    7
    
    
    
    6
    
    
    
    Operating Profit
    
    
    87
    
    
    
    75
    
    
    
    16
    %Operating margin
    
    
    19
    %
    
    
    18
    %Trading margin
    
    
    20
    %
    
    
    19
    %
        -127-




---



##### Table of Contents



Media Division
 Overview
     -128-




---



##### Table of Contents



Financial Performance
 Media division summary operating and trading results
 2007
    
    
    2006
    
    
    Actual
    
    
    UnderlyingYear to December 31
    
    £m
    
    
    £m
    
    
    change
    
    
    changeRevenue
    
    
    172
    
    
    
    170
    
    
    
    1
    %
    
    
    6
    %Trading costs
    
    
    (156
    )
    
    
    (155
    )
    
    
    
    
    
    
    4
    %Other operating income
(in trading costs)
    
    
    (3
    )
    
    
    (2
    )Impairments & amortization of
business combination
intangibles
    
    
    
    
    
    
    (1
    )Fair value movements in expenses
    
    
    (1
    )
    
    
    (1
    )Operating Costs
    
    
    (160
    )
    
    
    (159
    )
    
    
    1
    %Other operating income
    
    
    3
    
    
    
    3
    
    
    
    Operating Profit
    
    
    15
    
    
    
    14
    
    
    
    7
    %Operating margin
    
    
    9
    %
    
    
    8
    %Trading margin
    
    
    9
    %
    
    
    9
    %
        -129-




---



##### Table of Contents



Supporting Financial Information
 Management of Risks
  Pending Transactions and Post Balance Sheet Events
   Total number ofshares purchased aspart of a publicly
    
    
    Average price paid
    
    
    Cost of sharesMonth
    
    announced program
    
    
    per share (£)
    
    
    purchased (£m)January
    
    
    20,975,000
    
    
    
    5.99
    
    
    
    127February
    
    
    6,965,000
    
    
    
    6.03
    
    
    
    42March
    
    
    7,700,000
    
    
    
    5.92
    
    
    
    46April
    
    
    9,310,000
    
    
    
    5.97
    
    
    
    56
   Treasury Policies
   -130-




---



##### Table of Contents



Financing
     Multicurrency Revolving Credit Facility
   Euro Commercial Paper Program
   Euro Medium Term Note Program
  
 -131-




---



##### Table of Contents



Short-Term Uncommitted Facilities
  Contractual Financial Obligations
  Payments due by periodLess than
    
    
    1-3
    
    
    3-5
    
    
    After 5Total
    
    
    1 year
    
    
    years
    
    
    years
    
    
    yearsas at December 31, 2007
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mFinance lease payables
    
    
    12
    
    
    
    5
    
    
    
    7
    
    
    
    
    
    
    
    Debt obligations (including
future interest payments)
    
    
    809
    
    
    
    331
    
    
    
    477
    
    
    
    1
    
    
    
    Pension obligations*
    
    
    66
    
    
    
    66
    
    
    
    
    
    
    
    
    
    
    
    Other provisions and liabilities**
    
    
    74
    
    
    
    35
    
    
    
    31
    
    
    
    6
    
    
    
    2Operating leases
    
    
    650
    
    
    
    94
    
    
    
    158
    
    
    
    118
    
    
    
    280Purchase obligations
    
    
    1,708
    
    
    
    410
    
    
    
    489
    
    
    
    572
    
    
    
    237Total contractual obligations
    
    
    3,319
    
    
    
    941
    
    
    
    1,162
    
    
    
    697
    
    
    
    519
 
 Notes:
 *
    
    Net pension obligations are recorded on the balance sheet at £11 million (£43 million pension
obligations less £32 million pension funds in surplus). The £66 million represents the
expected payments to be made to the defined benefit schemes in 2008.**
    
    Other provisions and liabilities (excluding net pension obligation) recorded on the balance
sheet total £96 million. Of this, £74 million are financial liabilities that require
settlement in cash. Additionally, the balance sheet contains a deferred tax liability of £115
million. No estimate has been provided for deferred tax in the table above as it is not a
contractually obligated financial liability.   -132-




---



##### Table of Contents



Foreign Exchange
   Operating
    
    
    OperatingRevenue
    
    
    cost
    
    
    profitCurrency impact
    
    £m
    
    
    £m
    
    
    £mImpact of:Stable euro
    
    
    1
    
    
    
    (1
    )
    
    
    Weaker dollar
    
    
    (112
    )
    
    
    85
    
    
    
    (27
    )Weaker yen
    
    
    (15
    )
    
    
    6
    
    
    
    (9
    )Other currencies
    
    
    (13
    )
    
    
    11
    
    
    
    (2
    )Exchange rate movements
    
    
    (139
    )
    
    
    101
    
    
    
    (38
    )Change in currency mix
    
    
    4
    
    
    
    (2
    )
    
    
    2Total currency movements
    
    
    (135
    )
    
    
    99
    
    
    
    (36
    )
  Critical Accounting Policies
  Accounting Policies Involving Management Judgment
  The Impairment of Property, Plant and Equipment, Non-Current Assets Held for Sale and Intangible
Assets (Including Goodwill)
   -133-




---



##### Table of Contents



Intangible Assets
   Defined Benefit Pension Plans
    Share-Based Payments
    Provisions
  -134-




---



##### Table of Contents



Lease Arrangements
   Segment Reporting
      -135-




---



##### Table of Contents



Taxation
   Off-Balance Sheet Arrangements
  Definition of Key Financial Performance Measures
  Underlying and constant currency results
  
    
    Constant currency results are calculated excluding the impact of currency
fluctuations. Variations in currency exchange rates impact the results because Reuters
generates revenues and incurs costs in currencies other than its reporting currency.
Year-on-year, currency exchange rate movements will influence reported numbers to a
greater or lesser extent, and therefore they are discussed separately from underlying
results to make clear their impact on the overall growth or decline in operations.
Constant currency results are calculated by restating the prior periods results using
the current periods exchange rates. This also reflects the variables over which
management has control, as business units do not actively manage currency exposure, and
business division operating performance is managed against targets set on a constant
currency basis. Currency exposure is described in Treasury Policies above.
    
    Underlying results are calculated excluding the impact of currency fluctuations as
well as the results of entities acquired or disposed of during the current or prior
periods from the results of each period under review. Underlying results reflect the
operating results of the ongoing elements of each business division, and measure the
performance of management against variables over which they have
control, without the
year-on-year impact of a step change in revenue and costs that can result from currency
movements and acquisition or disposal activity.
 -136-




---



##### Table of Contents



Exclusion of restructuring charges
      Transaction-related costs
    Exclusion of amortization and impairment of intangibles acquired in a business combination,
investment income, profits/(losses) from disposals, and fair value movements
  -137-




---



##### Table of Contents

\

Amortization and impairment of intangibles acquired in a business combination, investment income
and profits/(losses) from disposals
    Fair value movements
     Tax and adjusted EPS
    -138-




---



##### Table of Contents



Dividend policy
  Free cash flow
  Net debt/funds
  Reconciliations of non-GAAP measures to IFRS
 Reconciliation of operating profit to trading profit and margin measures
 2007
    
    
    2007
    
    
    2006
    
    
    2006
    
    
    2005
    
    
    2005Year to December 31
    
    £m
    
    
    %
    
    
    £m
    
    
    %
    
    
    £m
    
    
    %Operating profit from continuing activities/margin
    
    
    292
    
    
    
    11
    
    
    
    256
    
    
    
    10
    
    
    
    207
    
    
    
    9Excluding:Restructuring charges
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    112
    
    
    
    4Transaction-related costs
    
    
    45
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairments and amortization of business
combination intangibles
    
    
    40
    
    
    
    2
    
    
    
    24
    
    
    
    1
    
    
    
    22
    
    
    
    1Investment income
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    Profit on disposal of subsidiaries
    
    
    (3
    )
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )
    
    
    Fair value movements
    
    
    12
    
    
    
    
    
    
    
    19
    
    
    
    1
    
    
    
    (2
    )
    
    
    Reuters trading profit/margin
    
    
    385
    
    
    
    15
    
    
    
    308
    
    
    
    12
    
    
    
    334
    
    
    
    14
 -139-




---



##### Table of Contents



Reconciliation of profit before tax from continuing operations to adjusted profit before tax
 2007
    
    
    2007
    
    
    2006
    
    
    2006
    
    
    2005
    
    
    2005Year to December 31
    
    £m
    
    
    %
    
    
    £m
    
    
    %
    
    
    £m
    
    
    %Profit before tax/margin from continuing operations
    
    
    273
    
    
    
    11
    
    
    
    313
    
    
    
    12
    
    
    
    238
    
    
    
    10Excluding:Impairments and amortization of business
combination intangibles
    
    
    40
    
    
    
    2
    
    
    
    24
    
    
    
    
    
    
    
    22
    
    
    
    1Transaction-related costs
    
    
    45
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investment income
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    Profit on disposal of subsidiaries, associates
and joint ventures
    
    
    (24
    )
    
    
    (1
    )
    
    
    (80
    )
    
    
    (3
    )
    
    
    (42
    )
    
    
    (2
    )Fair value movements
    
    
    12
    
    
    
    
    
    
    
    19
    
    
    
    1
    
    
    
    (2
    )
    
    
    Profit before tax/margin before impairments and
amortization of business combination intangibles,
Transaction-related costs, investment income,
profit on disposals and fair value movements
(Adjusted profit before tax)
    
    
    345
    
    
    
    14
    
    
    
    276
    
    
    
    11
    
    
    
    215
    
    
    
    9
 Reconciliation of basic EPS to adjusted EPS
 2007
    
    
    2007
    
    
    2006
    
    
    2006
    
    
    2005
    
    
    2005Year to December 31
    
    £m
    
    
    EPS Pence
    
    
    £m
    
    
    EPS Pence
    
    
    £m
    
    
    EPS PenceProfit/basic EPS from continuing activities
    
    
    213
    
    
    
    17.3
    
    
    
    293
    
    
    
    22.6
    
    
    
    229
    
    
    
    16.3Excluding:Impairments and amortization of
business combination intangibles
    
    
    40
    
    
    
    3.3
    
    
    
    24
    
    
    
    1.8
    
    
    
    22
    
    
    
    1.6Transaction-related costs
    
    
    45
    
    
    
    3.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investment income
    
    
    (1
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (0.1
    )Profit on disposal of subsidiaries,
associates and joint ventures
    
    
    (24
    )
    
    
    (2.0
    )
    
    
    (80
    )
    
    
    (6.3
    )
    
    
    (42
    )
    
    
    (2.9
    )Fair value movements
    
    
    12
    
    
    
    0.9
    
    
    
    19
    
    
    
    1.5
    
    
    
    (2
    )
    
    
    (0.2
    )Adjustments to tax charge for tax
effect of excluded items
    
    
    
    
    
    
    
    
    
    
    (34
    )
    
    
    (2.5
    )
    
    
    (13
    )
    
    
    (0.9
    )Profit/basic EPS from continuing
operations before impairments and
amortization of business combination
intangibles, Transaction-related costs,
investment income, profit on disposals,
fair value movements and related taxation
effects (Adjusted EPS)
    
    
    285
    
    
    
    23.0
    
    
    
    222
    
    
    
    17.1
    
    
    
    193
    
    
    
    13.8
 -140-




---



##### Table of Contents



Reconciliation of actual percentage change to underlying change  revenue by division by type
 Impact ofUnderlying
    
    
    Impact of
    
    
    acquisitions
    
    
    Actual% change versus year ended December 31, 2006
    
    change
    
    
    currency
    
    
    & disposals
    
    
    changeRecurring
    
    
    2
    %
    
    
    (5
    %)
    
    
    
    
    
    
    (3
    %)Usage
    
    
    19
    %
    
    
    (10
    %)
    
    
    
    
    
    
    9
    %Outright
    
    
    (4
    %)
    
    
    (5
    %)
    
    
    
    
    
    
    (9
    %)Sales & Trading
    
    
    3
    %
    
    
    (5
    %)
    
    
    
    
    
    
    (2
    %)Recurring
    
    
    25
    %
    
    
    (6
    %)
    
    
    1
    %
    
    
    20
    %Usage
    
    
    4
    %
    
    
    (7
    %)
    
    
    
    
    
    
    (3
    %)Outright
    
    
    (25
    %)
    
    
    (5
    %)
    
    
    
    
    
    
    (30
    %)Research & Asset Management
    
    
    25
    %
    
    
    (6
    %)
    
    
    1
    %
    
    
    20
    %Recurring
    
    
    11
    %
    
    
    (6
    %)
    
    
    
    
    
    
    5
    %Usage
    
    
    2
    %
    
    
    (2
    %)
    
    
    2
    %
    
    
    2
    %Enterprise
    
    
    10
    %
    
    
    (6
    %)
    
    
    1
    %
    
    
    5
    %Recurring
    
    
    6
    %
    
    
    (5
    %)
    
    
    
    
    
    
    1
    %Usage
    
    
    6
    %
    
    
    (7
    %)
    
    
    
    
    
    
    (1
    %)Media
    
    
    6
    %
    
    
    (5
    %)
    
    
    
    
    
    
    1
    %Recurring
    
    
    7
    %
    
    
    (6
    %)
    
    
    
    
    
    
    1
    %Usage
    
    
    15
    %
    
    
    (9
    %)
    
    
    
    
    
    
    6
    %Outright
    
    
    1
    %
    
    
    (3
    %)
    
    
    3
    %
    
    
    1
    %Total revenue
    
    
    7
    %
    
    
    (5
    %)
    
    
    
    
    
    
    2
    %
 Reconciliation of actual percentage change to underlying change  revenue by type
 Impact ofUnderlying
    
    
    Impact of
    
    
    acquisitions
    
    
    Actual% change versus year ended December 31, 2005
    
    change
    
    
    currency
    
    
    & disposals
    
    
    changeRecurring
    
    
    4
    %
    
    
    
    
    
    
    2
    %
    
    
    6
    %Outright
    
    
    24
    %
    
    
    
    
    
    
    2
    %
    
    
    26
    %Usage
    
    
    4
    %
    
    
    (2
    %)
    
    
    1
    %
    
    
    3
    %Total revenue
    
    
    5
    %
    
    
    
    
    
    
    2
    %
    
    
    7
    %
 -141-




---



##### Table of Contents



Reconciliation of actual percentage change to underlying change  revenue by division by product
family
 Impact ofUnderlying
    
    
    Impact of
    
    
    acquisitions
    
    
    Actual% change versus year ended December
31, 2006
    
    change
    
    
    currency
    
    
    & disposals
    
    
    changeReuters Xtra
    
    
    10
    %
    
    
    (6
    %)
    
    
    
    
    
    
    4
    %Reuters Trader
    
    
    (20
    %)
    
    
    (4
    %)
    
    
    
    
    
    
    (24
    %)Recoveries
    
    
    10
    %
    
    
    (5
    %)
    
    
    
    
    
    
    5
    %Sales & Trading
    
    
    3
    %
    
    
    (5
    %)
    
    
    
    
    
    
    (2
    %)Investment Banking, Investment
Management & Corporate
    
    
    34
    %
    
    
    (4
    %)
    
    
    
    
    
    
    30
    %Reuters Wealth Manager
    
    
    11
    %
    
    
    (7
    %)
    
    
    1
    %
    
    
    5
    %Research & Asset Management
    
    
    25
    %
    
    
    (6
    %)
    
    
    1
    %
    
    
    20
    %Reuters Enterprise Information
    
    
    18
    %
    
    
    (6
    %)
    
    
    
    
    
    
    12
    %Reuters Information Management Systems
    
    
    (15
    %)
    
    
    (5
    %)
    
    
    1
    %
    
    
    (19
    %)Reuters Trade and Risk Management
    
    
    14
    %
    
    
    (5
    %)
    
    
    1
    %
    
    
    10
    %Enterprise
    
    
    10
    %
    
    
    (6
    %)
    
    
    1
    %
    
    
    5
    %Agency Services
    
    
    5
    %
    
    
    (5
    %)
    
    
    
    
    
    
    Consumer Media
    
    
    15
    %
    
    
    (9
    %)
    
    
    
    
    
    
    6
    %Media
    
    
    6
    %
    
    
    (5
    %)
    
    
    
    
    
    
    1
    %Total revenue
    
    
    7
    %
    
    
    (5
    %)
    
    
    
    
    
    
    2
    %
 Reconciliation of actual percentage change to underlying change  revenue by geography
 Impact ofUnderlying
    
    Impact of
    
    acquisitions
    
    Actual% change versus year ended December 31, 2006
    
    change
    
    currency
    
    & disposals
    
    changeEurope, Middle East & Africa
    
    
    6
    %
    
    
    (3
    %)
    
    
    
    
    
    
    3
    %Americas
    
    
    7
    %
    
    
    (8
    %)
    
    
    
    
    
    
    (1
    %)Asia
    
    
    9
    %
    
    
    (9
    %)
    
    
    
    
    
    
    Total revenue
    
    
    7
    %
    
    
    (5
    %)
    
    
    
    
    
    
    2
    %
 -142-




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##### Table of Contents



Reconciliation of divisional operating costs to trading costs
 2007*ResearchSales &
    
    
    & AssetTrading
    
    
    Management
    
    
    Enterprise
    
    
    Media
    
    
    ReutersYear to December 31
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mOperating costs
    
    
    1,440
    
    
    
    339
    
    
    
    371
    
    
    
    160
    
    
    
    2,355Impairments and amortization of
business combination intangibles
    
    
    (33
    )
    
    
    (4
    )
    
    
    (3
    )
    
    
    
    
    
    
    (40
    )Transaction-related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45
    )Fair value movements (in expenses)
    
    
    (9
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (1
    )
    
    
    (14
    )Other operating income
    
    
    (22
    )
    
    
    (5
    )
    
    
    (6
    )
    
    
    (3
    )
    
    
    (36
    )Trading costs
    
    
    1,376
    
    
    
    328
    
    
    
    360
    
    
    
    156
    
    
    
    2,220
 2006** restatedResearchSales &
    
    
    & AssetTrading
    
    
    Management
    
    
    Enterprise
    
    
    Media
    
    
    ReutersYear to December 31
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mOperating costs
    
    
    1,506
    
    
    
    324
    
    
    
    362
    
    
    
    159
    
    
    
    2,351Restructuring charges
    
    
    (12
    )
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (13
    )Impairments and amortization of
business combination intangibles
    
    
    (17
    )
    
    
    (3
    )
    
    
    (3
    )
    
    
    (1
    )
    
    
    (24
    )Fair value movements (in expenses)
    
    
    (18
    )
    
    
    (3
    )
    
    
    (3
    )
    
    
    (1
    )
    
    
    (25
    )Other operating income
    
    
    (20
    )
    
    
    (4
    )
    
    
    (5
    )
    
    
    (2
    )
    
    
    (31
    )Trading costs
    
    
    1,439
    
    
    
    314
    
    
    
    350
    
    
    
    155
    
    
    
    2,258
 -143-




---



##### Table of Contents



2005 restated**ResearchSales &
    
    & AssetTrading
    
    Management
    
    Enterprise
    
    Media
    
    TotalYear to December 31
    
    £m
    
    £m
    
    £m
    
    £m
    
    £mOperating costs
    
    
    1,482
    
    
    
    298
    
    
    
    323
    
    
    
    148
    
    
    
    2,251Restructuring charges
    
    
    (76
    )
    
    
    (11
    )
    
    
    (17
    )
    
    
    (8
    )
    
    
    (112
    )Impairments and amortization of
business combination intangibles
    
    
    (14
    )
    
    
    (3
    )
    
    
    (4
    )
    
    
    (1
    )
    
    
    (22
    )Fair value movements (in expenses)
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16
    )Other operating income
    
    
    (16
    )
    
    
    (3
    )
    
    
    (5
    )
    
    
    (2
    )
    
    
    (26
    )Trading costs
    
    
    1,360
    
    
    
    281
    
    
    
    297
    
    
    
    137
    
    
    
    2,075
 
 Notes:*
    
    Divisional operating costs are stated prior to any impact of £45 million of
Transaction-related costs in 2007, which relate to Reuters as a whole and cannot be directly
attributed or allocated to divisions on a reasonable basis.**
    
    In 2007, Reuters made changes to the allocation of revenue and trading costs between
Business Divisions, to reflect changes in the management of Communications revenues and
Reuters Messaging products, and to reflect improvements to the allocation methodology. Prior
year comparatives have therefore been restated to decrease Sales & Trading revenue by £29
million (2005: £17 million) and operating costs by £37 million (2005: £13 million). Research
& Asset Management revenues increased by £6 million (2005: £5 million) and operating costs by
£9 million (2005: £5 million). Enterprise revenues increased by £23 million (2005: £12
million) and operating costs by £27 million (2005: £6 million). Media operating costs
increased by £1 million (2005: £2 million). Reconciliation of divisional operating profit to trading profit
 2007*ResearchSales &
    
    
    & AssetTrading
    
    
    Management
    
    
    Enterprise
    
    
    Media
    
    
    ReutersYear to December 31
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mOperating profit
    
    
    206
    
    
    
    29
    
    
    
    87
    
    
    
    15
    
    
    
    292Impairments and amortization of business
combination intangibles
    
    
    33
    
    
    
    4
    
    
    
    3
    
    
    
    
    
    
    
    40Transaction-related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45Investment income
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )(Profit)/loss on disposal of subsidiaries
    
    
    (2
    )
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (3
    )Fair value movements
    
    
    7
    
    
    
    2
    
    
    
    2
    
    
    
    1
    
    
    
    12Trading profit
    
    
    243
    
    
    
    35
    
    
    
    91
    
    
    
    16
    
    
    
    385
 -144-




---



##### Table of Contents



2006 restated **Research &Sales &
    
    AssetTrading
    
    Management
    
    Enterprise
    
    Media
    
    ReutersYear to December 31
    
    £m
    
    £m
    
    £m
    
    £m
    
    £mOperating profit/(loss)
    
    
    182
    
    
    
    (15
    )
    
    
    75
    
    
    
    14
    
    
    
    256Restructuring charges
    
    
    12
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    13Impairments and amortization of business
combination intangibles
    
    
    17
    
    
    
    3
    
    
    
    3
    
    
    
    1
    
    
    
    24(Profit)/loss on disposal of subsidiaries
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (4
    )Fair value movements
    
    
    14
    
    
    
    2
    
    
    
    2
    
    
    
    1
    
    
    
    19Trading profit/(loss)
    
    
    222
    
    
    
    (10
    )
    
    
    81
    
    
    
    15
    
    
    
    308
 2005 restated **Research &Sales &
    
    
    AssetTrading
    
    
    Management
    
    
    Enterprise
    
    
    Media
    
    
    ReutersYear to December 31
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mOperating profit/(loss)
    
    
    151
    
    
    
    (35
    )
    
    
    82
    
    
    
    9
    
    
    
    207Restructuring charges
    
    
    76
    
    
    
    11
    
    
    
    17
    
    
    
    8
    
    
    
    112Impairments and amortization of business
combination intangibles
    
    
    14
    
    
    
    3
    
    
    
    4
    
    
    
    1
    
    
    
    22(Profit)/loss on disposal of subsidiaries
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Fair value movements
    
    
    (7
    )
    
    
    5
    
    
    
    (1
    )
    
    
    (1
    )
    
    
    (4
    )Trading profit/(loss)
    
    
    3
    
    
    
    (2
    )
    
    
    (2
    )
    
    
    (1
    )
    
    
    (2
    )236
    
    
    
    (18
    )
    
    
    100
    
    
    
    16
    
    
    
    334
 
 Notes:*
    
    Divisional operating costs are stated prior to any impact of £45 million of
Transaction-related costs in 2007, which relate to Reuters as a whole and cannot be directly
attributed or allocated to divisions on a reasonable basis.**
    
    In 2007, Reuters made changes to the allocation of revenue and trading costs between Business
Divisions, to reflect changes in the management of Communications revenues and Reuters
Messaging products, and to reflect improvements to the allocation methodology. Prior year
comparatives have therefore been restated to decrease Sales & Trading revenue by £29 million
(2005: £17 million) and operating costs by £37 million (2005: £13 million). Research & Asset
Management revenues increased by £6 million (2005: £5 million) and operating costs by £9
million (2005: £5 million). Enterprise revenues increased by £23 million (2005: £12 million)
and operating costs by £27 million (2005: £6 million). Media operating costs increased by £1
million (2005: £2 million). -145-




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##### Table of Contents



Reconciliation of cash flows from operating activities to free cash flow and trading cash flow
 2007
    
    2006
    
    2005Dis-
    
    
    
    
    
    
    
    
    
    Dis-
    
    
    
    
    
    
    
    
    
    Dis-Continuing
    
    continued
    
    
    
    
    
    Continuing
    
    continued
    
    
    
    
    
    Continuing
    
    continuedoperations
    
    operations
    
    Reuters
    
    operations
    
    operations
    
    Reuters
    
    operations
    
    operations
    
    ReutersYear to December 31
    
    £m
    
    £m
    
    £m
    
    £m
    
    £m
    
    £m
    
    £m
    
    £m
    
    £mCash generated from
operations
    
    
    534
    
    
    
    
    
    
    
    534
    
    
    
    311
    
    
    
    
    
    
    
    311
    
    
    
    268
    
    
    
    3
    
    
    
    271Interest received
    
    
    67
    
    
    
    
    
    
    
    67
    
    
    
    42
    
    
    
    
    
    
    
    42
    
    
    
    42
    
    
    
    13
    
    
    
    55Interest paid
    
    
    (99
    )
    
    
    
    
    
    
    (99
    )
    
    
    (61
    )
    
    
    
    
    
    
    (61
    )
    
    
    (49
    )
    
    
    
    
    
    
    (49
    )Tax paid
    
    
    (26
    )
    
    
    
    
    
    
    (26
    )
    
    
    (34
    )
    
    
    
    
    
    
    (34
    )
    
    
    (11
    )
    
    
    (13
    )
    
    
    (24
    )Cash flow from
operating
activities
    
    
    476
    
    
    
    
    
    
    
    476
    
    
    
    258
    
    
    
    
    
    
    
    258
    
    
    
    250
    
    
    
    3
    
    
    
    253Purchases of
property, plant and
equipment
    
    
    (116
    )
    
    
    
    
    
    
    (116
    )
    
    
    (122
    )
    
    
    
    
    
    
    (122
    )
    
    
    (138
    )
    
    
    (7
    )
    
    
    (145
    )Proceeds from sale
of property, plant
and equipment
    
    
    19
    
    
    
    
    
    
    
    19
    
    
    
    5
    
    
    
    
    
    
    
    5
    
    
    
    3
    
    
    
    
    
    
    
    3Purchases of
intangible assets
    
    
    (109
    )
    
    
    
    
    
    
    (109
    )
    
    
    (106
    )
    
    
    
    
    
    
    (106
    )
    
    
    (40
    )
    
    
    
    
    
    
    (40
    )Interim funding
payment from
Telerate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18
    )
    
    
    
    
    
    
    (18
    )Transaction-related
costs paid
    
    
    21
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dividends received
    
    
    3
    
    
    
    
    
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    3
    
    
    
    5
    
    
    
    
    
    
    
    5Special
contributions to
pension schemes
    
    
    4
    
    
    
    
    
    
    
    4
    
    
    
    187
    
    
    
    
    
    
    
    187
    
    
    
    
    
    
    
    
    
    
    
    Repayment of funds
to/(from) BTC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26
    
    
    
    (26
    )
    
    
    Free cash flow
    
    
    298
    
    
    
    
    
    
    
    298
    
    
    
    225
    
    
    
    
    
    
    
    225
    
    
    
    88
    
    
    
    (30
    )
    
    
    58Interest received
    
    
    (67
    )
    
    
    
    
    
    
    (67
    )
    
    
    (42
    )
    
    
    
    
    
    
    (42
    )
    
    
    (42
    )
    
    
    (13
    )
    
    
    (55
    )Interest paid
    
    
    99
    
    
    
    
    
    
    
    99
    
    
    
    61
    
    
    
    
    
    
    
    61
    
    
    
    49
    
    
    
    
    
    
    
    49Tax paid
    
    
    26
    
    
    
    
    
    
    
    26
    
    
    
    34
    
    
    
    
    
    
    
    34
    
    
    
    11
    
    
    
    13
    
    
    
    24Restructuring
    
    
    11
    
    
    
    
    
    
    
    11
    
    
    
    52
    
    
    
    
    
    
    
    52
    
    
    
    147
    
    
    
    
    
    
    
    147Other
    
    
    (14
    )
    
    
    
    
    
    
    (14
    )
    
    
    13
    
    
    
    
    
    
    
    13
    
    
    
    3
    
    
    
    (4
    )
    
    
    (1
    )Trading cash flow
    
    
    353
    
    
    
    
    
    
    
    353
    
    
    
    343
    
    
    
    
    
    
    
    343
    
    
    
    256
    
    
    
    (34
    )
    
    
    222Trading cash
conversion*
    
    
    92
    %
    
    
    
    
    
    
    
    
    
    
    111
    %
    
    
    
    
    
    
    
    
    
    
    77
    %
  Note:*
    
    Trading cash conversion = trading cash flow/trading profit -146-




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##### Table of Contents



Components of net debt/funds
 2007
    
    
    2006
    
    
    2005Year to December 31
    
    £m
    
    
    £m
    
    
    £mCash and cash equivalents
    
    
    251
    
    
    
    129
    
    
    
    662Bank overdrafts
    
    
    (9
    )
    
    
    (24
    )
    
    
    (25
    )242
    
    
    
    105
    
    
    
    637Short-term deposit
    
    
    3
    
    
    
    198
    
    
    
    1Borrowings (excluding bank overdrafts)
    
    
    (622
    )
    
    
    (636
    )
    
    
    (385
    )Net (debt)/funds
    
    
    (377
    )
    
    
    (333
    )
    
    
    253
 
 ITEM 5B. Liquidity and Capital Resources
 Thomson Information
  Reuters Information
  
 ITEM 5C. Research and Development, Patents and Licenses, etc.
 Thomson Information
  Reuters Information
   -147-




---



##### Table of Contents



Electronic
Trading
  High-Value
Content
   New Enterprise
Services
   -148-




---



##### Table of Contents



New Markets
    Simplify our organization in order to become stronger, more competitive and more efficient
  Changing the way our product development teams work
  Simplifying our product delivery infrastructure and making it more robust
  Transforming the way our content is created, collected and processed
  Modernizing our customer administration systems
  -149-




---



##### Table of Contents



ITEM 5D. Trend Information
   Markets
    Financial Markets
  The Global Economy
   Financial Services Industry Performance in 2007
   -150-




---



##### Table of Contents



Structural Shifts & Key Market Trends
 Centers of activity are shifting and emerging financial markets are deepening
 
    
    2007 was the first year in which Reuters European corporate and investment banking
revenues surpassed those in the US.
    
    Changing demographics, the expansion of the middle classes in emerging markets and
new pools of investment money from sovereign wealth funds and petrodollars are all
potential catalysts for growth in asset and wealth management, particularly in Asia.
 Increasing importance of risk management and compliance
 
    
    A combination of increasingly complex financial instruments, changing investment
strategies and regulation is highlighting the importance of risk management,
particularly on the buy side.
    
    The credit crisis has reinforced the importance of consistent risk management
throughout financial institutions. Demand for risk products and data for use in risk
systems is expected to increase.
 Growth in new media business models is outpacing traditional media
 
    
    Traditional media companies are continuing to embrace online social networks, video
and user-generated content to engage their audiences.
    
    Online audiences and advertising revenues are growing at a faster rate than revenues
from traditional media.
  
 ITEM 5E. Off-Balance Sheet Arrangements
 Thomson Information
  Reuters Information
  
 ITEM 5F. Tabular Disclosure of Contractual Obligations
 Thomson Information
  Reuters Information
  -151-




---



##### Table of Contents



ITEM 5G. Safe Harbor
   ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.
  ITEM 6A. Directors and Senior Management
 Management and Governance of Thomson Reuters
 Thomson Reuters Board
 Thomson Reuters board
  
    
    Nine of the directors were directors of Thomson prior to the closing of the
Transaction, including David Thomson, who is the Chairman, and W. Geoffrey Beattie, who
is a Deputy Chairman.
    
    Five of the directors were directors of Reuters prior to the closing of the
Transaction, including Niall FitzGerald, who is a Deputy Chairman.
    
    Tom Glocer, the Chief Executive Officer of Thomson Reuters, is also a director.
  RSUs DSUs
 David Thomson1
    
    Thomson Reuters Board/Committee Membership
    
    Thomson Reuters Securities HeldAge: 50
    
    Board of Directors
    
    Common Shares: 6,070Toronto, Ontario, Canada
    
    
    
    Ordinary Shares: 800Other Public Board Memberships
    
    RSUs: 0None
    
    DSUs: 0Options: 0Thomson Director  Since 1998  Non-independent
    
    David Thomson is
Chairman of Thomson Reuters and
a Chairman of Woodbridge.
Previously, Mr. Thomson was a Deputy Chairman of
Woodbridge. Mr. Thomson was named
Chairman of Thomson in May 2002.
  1.
    
    David Thomson and Peter Thomson, who is also a director, are brothers. -152-




---



##### Table of Contents



W. Geoffrey Beattie
    
    Thomson Reuters Board/Committee Membership
    
    Thomson Reuters Securities HeldAge: 48
    
    Board of Directors
Corporate Governance Committee
Human Resources Committee
    
    Common Shares: 200,500Ordinary Shares: 0
RSUs: 116,103
DSUs: 0
Options: 200,000Toronto, Ontario,  Canada
    
    Other Public Board Memberships
Royal Bank of CanadaThomson Director  Since 1998  Non-independent
    
    W. Geoffrey Beattie is Deputy Chairman of Thomson Reuters and
President of Woodbridge. 
Mr. Beattie was named Deputy
Chairman of Thomson in
2000.
 Niall FitzGerald,
    
    Thomson Reuters Board/Committee Membership
    
    Thomson Reuters Securities HeldKBE  Age: 62
    
    Board of Directors
Corporate Governance Committee
Human Resources Committee
    
    Common Shares: 27,658Ordinary Shares: 0
RSUs: 0
DSUs: 0
Options: 0London, United  Kingdom
    
    Other Public Board Memberships
NoneReuters Director  Since 2003  Senior Independent  Director
    
    Niall FitzGerald, KBE, is
Deputy Chairman of Thomson Reuters. 

Mr. FitzGerald was Chairman of Reuters from 2004.
Mr. FitzGerald was Chairman and Chief Executive
Officer of Unilever from 1996 until his retirement in
2004.
Mr. FitzGerald was Chair of the Reuters Nominations Committee.
 Tom Glocer
    
    Thomson Reuters Board/Committee Membership
    
    Thomson Reuters Securities HeldAge: 48
    
    Board of Directors
    
    Common Shares: 0Ordinary Shares:
452,722RSUs: 0
DSUs: 0New York, New York,  United States
    
    Other Public Board MembershipsMerck & Co., Inc.
    
    Ordinary Shares UnderlyingReuters Options:
639,5612Long-Term Incentives: 0Reuters Director  Since 2000  Non-Independent
    
    Tom Glocer is Chief Executive Officer of Thomson Reuters.



 Mr. Glocer joined
Reuters in 1993 and held a number of key leadership positions
during  his Reuters career, including Chief Executive Officer of Reuters
Information and President and
Senior Company Officer, Reuters America. In 2001, he became Chief Executive Officer of Reuters.
 
 2.
    
    Tom Glocer currently holds 3,997,262 options related to
 Reuters
 ordinary shares. On exercise of these
options, Mr. Glocer will receive, for each option held, 352.5 pence
in cash and 0.16 Thomson Reuters PLC ordinary shares.
If Mr. Glocer exercised all of these options, he would be
entitled to receive 639,561 Thomson Reuters PLC ordinary shares. This number
does not account for fractional entitlements on exercise. -153-




---



##### Table of Contents



Mary Cirillo  Age: 60
    
    Thomson Reuters Board/Committee
Membership
Board of Directors
Corporate Governance Committee
Human Resources Committee
    
    Thomson Reuters Securities Held
Common Shares: 0Ordinary Shares: 0
RSUs: 0
DSUs: 7,159
Options: 0New York, New York,  United States
    
    Other Public Board Memberships
Healthcare Property Investors, Inc.
DealerTrack Holdings, Inc.
ACE Ltd.Thomson Director  Since 2005  Independent
    
    Mary Cirillo is a corporate director. Ms. Cirillo was Chair and Chief
Executive Officer of Opcenter, LLC, an Internet consulting firm, from 2000 to
2003. Prior to that, Ms. Cirillo was Chief Executive Officer of Global
Institutional Services at Deutsche Bank.
 Steven A. Denning
    
    Thomson Reuters Board/Committee Membership
    
    Thomson Reuters Securities HeldAge: 59
  New York, New York,  United States
    
    Board of DirectorsHuman Resources CommitteeOther Public Board Memberships
Hewitt Associates Inc.
IHS, Inc.
Eclipsys Corporation
Genpact Limited
    
    Common Shares: 20,000Ordinary Shares: 0
RSUs: 0
DSUs: 17,213
Options: 0Thomson Director  Since 2000  Independent
    
    Steven Denning is Chairman of General Atlantic LLC, a private equity investment firm.
 Lawton Fitt
    
    Thomson Reuters Board/Committee Membership
    
    Thomson Reuters Securities HeldAge: 54
    
    Board of Directors
Audit Committee
    
    Common Shares: 0Ordinary Shares: 4,000RSUs: 0
DSUs: 0
Options: 0New York, New York,  United States
    
    Other Public Board Memberships
CIENA Corporation
Overture Acquisitions Corp.Reuters Director  Since 2004  Independent
    
    Lawton Fitt is a corporate director. From October 2002 to March
2005, Ms. Fitt served as Secretary (CEO) of the Royal Academy
of Arts in London. From 1979 to October 2002, Ms. Fitt was an
investment banker with Goldman Sachs & Co., where she was a
partner from 1994 to October 2002, and a managing director from
1996 to October 2002.
 -154-




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##### Table of Contents



Roger L. Martin  Age: 51
  New York, New York,  United States
    
    Thomson Reuters
Board/Committee Membership
Board of Directors
Audit CommitteeOther Public Board Memberships
Research in Motion Limited
    
    Thomson Reuters Securities Held
Common Shares: 6,000Ordinary Shares: 0
RSUs: 0
DSUs: 18,207
Options: 0Thomson Director  Since 1999  Independent
    
    Roger Martin is Dean of the Joseph L. Rotman School of
Management at the University of Toronto, a post-secondary
educational institution.
 Sir Deryck Maughan
    
    Thomson Reuters Board/Committee Membership
    
    Thomson Reuters Securities HeldAge: 60
    
    Board of Directors
Corporate Governance Committee
    
    Common Shares: 0Ordinary Shares: 0RSUs: 0
DSUs: 0
Options: 0New York, New York,  United States
    
    Other Public Board MembershipsGlaxoSmithKline plcBlackRock Inc.Reuters Director  Since 2005  Independent
    
    Sir Deryck Maughan is a Managing Director of Kohlberg Kravis
Roberts & Co. Sir Deryck was Chairman and Chief Executive Officer
of Citigroup International until 2004.
 Ken Olisa
    
    Thomson Reuters Board/Committee Membership
    
    Thomson Reuters Securities HeldAge: 56
    
    Board of Directors
Audit Committee
    
    Ordinary Shares: 408
RSUs: 0
DSUs: 0
Options: 0London, United  Kingdom
    
    Other Public Board Memberships
Open Text Corporation
Eurasian Natural Resources Corporation PLCReuters Director  Since 2004  Independent
    
    Ken Olisa is the founder and Chairman of Restoration Partners Limited, a
boutique technology merchant bank. Mr. Olisa was Chairman of Interregnum
plc from 2000 to 2006 and Chief Executive Officer since its inception in
1992.
 -155-




---



##### Table of Contents



Richard L. Olver3  Age: 61
  London, United  Kingdom
    
    Thomson Reuters Board/Committee
MembershipBoard of DirectorsHuman Resources CommitteeOther Public Board Memberships
BAE Systems PLC
    
    Thomson Reuters Securities HeldCommon Shares: 0
Ordinary Shares: 1,600RSUs: 0
DSUs: 0
Options: 0Reuters Director  Since 1997  Independent
    
    Richard Olver is Chairman of BAE Systems PLC, a global defence and aerospace
company. Mr. Olver was Deputy Group Chief Executive of BP PLC until 2004. He
was also Chief Executive Officer of BP Exploration and Production Division
between 1998 and 2002.
 
 3.
    
    Mr. Olver was a director of AOA Sidanco from June 1998 to June 1999. On January 28, 1999, AOA
Sidanco filed for bankruptcy protection and subsequently came out of bankruptcy to merge with
TNK to form TNK-BP Ltd. Vance K. Opperman
    
    Thomson Reuters Board/Committee Membership
    
    Thomson Reuters Securities HeldAge: 65
  Minneapolis,  Minnesota, United  States
    
    Board of Directors
Audit CommitteeOther Board Memberships
DeCare Dental LLC
Blue Cross/Blue Shield of Minnesota
Avenet LLC
    
    Common Shares: 50,000Ordinary Shares: 0
RSUs: 0
DSUs: 23,037
Options: 0Thomson Director  Since 1996  Independent
    
    Vance Opperman is President and Chief Executive Officer of Key
Investment, Inc., a holding company. Previously, Mr. Opperman was
President of West Publishing Company.
 John M. Thompson4  Age: 65
  New York, New York,  United States
    
    Thomson Reuters
Board/Committee Membership
Board of Directors
Audit Committee
Corporate Governance CommitteeOther Public Board Memberships

The Toronto-Dominion Bank
Royal Phillips Electronics N.V.
    
    Thomson Reuters Securities Held
Common Shares: 2,500Ordinary Shares: 0
RSUs: 0
DSUs: 13,436
Options: 0Thomson Director  Since 2003  Independent
    
    John Thompson is Chairman of the Board of The
Toronto-Dominion Bank, a financial institution. Mr.
Thompson was Vice Chairman of the Board of IBM until 2002.
 
 4.
    
    Mrs. J.M. Thompson owned 300 common shares of Thomson as of April 17, 2008.
 -156-




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##### Table of Contents



Peter J. Thomson  Age: 42

  Toronto, Ontario,  Canada
    
    Thomson Reuters
Board/Committee MembershipBoard of DirectorsOther Public Board Memberships
None
    
    Thomson Reuters Securities Held

Common Shares: 0Ordinary Shares: 0
RSUs: 0
DSUs: 1,553
Options: 0Thomson Director  Since 1995  Non-Independent
    
    Peter Thomson is Chairman of Woodbridge.
 John A. Tory
    
    Thomson Reuters Board/Committee Membership
    
    Thomson Reuters Securities HeldAge: 78
  Toronto, Ontario,  Canada
    
    Board of Directors
Human Resources CommitteeOther Public Board Memberships
Rogers Communications Inc.
    
    Common Shares: 501,670Ordinary Shares: 0
RSUs: 0
DSUs: 2,726
Options: 0Thomson Director   Since 1978  Non-Independent
    
    John Tory is a director of Woodbridge and was President of Woodbridge
from 1973 to 1998 and Deputy Chairman of Thomson from 1978 to 1997.
 Executive Officers
  Tom Glocer
    
    Chief Executive Officer. Tom Glocer, 48, was the Chief
Executive Officer of Reuters prior to the closing of the
Transaction. Mr. Glocer joined Reuters in 1993 and has
held a number of key leadership positions during his
Reuters career, including Chief Executive Officer of
Reuters Information and President and Senior Company
Officer, Reuters America. In 2001, Mr. Glocer became
Chief Executive Officer of Reuters. Mr. Glocer is a
director of Merck & Co. Inc. and a former non-executive
director of Instinet Group. Mr. Glocer has been a
director of Reuters since 2000.
 -157-




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##### Table of Contents



Robert D. Daleo
    
    Executive Vice President and Chief Financial Officer. Bob Daleo, 58, was Executive
Vice President and Chief Financial Officer of Thomson
prior to the closing of the Transaction. Mr. Daleo began
his career with Thomson in 1994 when he joined Thomson
Newspapers as Senior Vice President and Chief Financial
Officer. In 1996, he was appointed Chief Operating
Officer of Thomson Newspapers, assuming responsibility
for a significant portion of US operations. At the
beginning of 1997, he joined Thomsons corporate
headquarters as Senior Vice President, Finance and
Business Development. In 1998, Mr. Daleo became Chief
Financial Officer of Thomson and has been a director of
Thomson since 2001. Mr. Daleo is a director of Equifax
Inc. and serves on the board of trustees for the New
Jersey Community Development Corporation.James C. Smith
    
    Chief Executive Officer  Professional. Jim Smith, 48,
was the Executive Vice President and Chief Operating
Officer of Thomson prior to the closing of the
Transaction. Previously, Mr. Smith served as President
and Chief Executive Officer of Thomson Learnings
Academic and Reference Group. Before that, Mr. Smith
served as Executive Vice President, Human Resources and
Administration of Thomson. Mr. Smith joined the Thomson
Newspaper Group in 1987. Mr. Smith held several staff
and operating positions of increasing responsibility
within that group, culminating in his role as head of
operations for Thomson Newspapers  US.Devin Wenig
    
    Chief Executive Officer  Markets. Devin Wenig, 41,
was the Chief Operating Officer of Reuters prior to the
closing of the Transaction. Mr. Wenig joined Reuters in
1993 as Corporate Counsel, Reuters America and held a
number of senior management positions before being
appointed President, Investment Banking & Brokerage
Services in January 2001. Mr. Wenig was President,
Business Divisions from 2003 until his appointment as
Chief Operating Officer of Reuters in 2006. Mr. Wenig
also serves on the board of directors of Nastech
Pharmaceutical Company. He is a former non-executive
director of Instinet Group. Mr. Wenig was a
director of Reuters from 2003 until completion of the Transaction on
April 17, 2008.Michael E. Wilens
    
    Executive Vice President of Strategy, Technology and
Innovation. Mike Wilens, 54, was Executive Vice
President and Chief Technology Officer of Thomson prior
to the closing of the Transaction. From 2000 to 2006,
Mr. Wilens was President and Chief Executive Officer of
Thomson Legal & Regulatorys North American Legal
organization. Prior to that, Mr. Wilens was Chief
Technology Officer for Thomson and Thomson West. Before
joining Thomson, Mr. Wilens held senior management
positions with Groupe Lagardère, Lawyers Cooperative
Publishing and HCIA.
 -158-




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##### Table of Contents



Gustav Carlson
    
    Executive Vice President and Chief Marketing & Communications Officer. Gus Carlson,
50, was Senior Vice President, Chief Marketing &
Communications Officer of Thomson prior to the closing
of the Transaction. Mr. Carlson has more than 25 years
of experience as a senior communications professional,
award-winning national business journalist and author.
Before joining Thomson in 2006, Mr. Carlson held senior
communications positions at Accenture, Standard &
Poors, PaineWebber, Barnes & Noble and Hill & Knowlton.
Mr. Carlson is a former business news editor for The New
York Timesand The Miami Herald.Stephen Dando
    
    Executive Vice President and Chief Human Resources Officer. Stephen Dando, 46, was
Group Human Resources Director for Reuters prior to the
closing of the Transaction. Prior to joining Reuters in
2006, Mr. Dando was Director, BBC People and a member of
the BBCs Executive Committee and Executive Board for
five years. Mr. Dando held various appointments at
Diageo over a 12-year period including Global HR
Director, Guinness.Deirdre Stanley
    
    Executive Vice President and General Counsel. Deirdre Stanley, 43, was Senior Vice
President and General Counsel of Thomson prior to the
closing of the Transaction. Prior to joining Thomson in
2002, Ms. Stanley served in various senior executive
positions, including Deputy General Counsel at USA
Networks, Inc. and its successor companies. From 1995
through 1997, Ms. Stanley served as Associate General
Counsel for GTE Corporation, where she headed the
mergers and acquisitions practice group.
 Summary of Director Compensation Arrangements
   Annual retainer for Directors
    
    $
    150,000Annual retainer for Audit Committee and Human Resources Committee Chairs
    
    $
    20,000Annual retainer for Corporate Governance Committee Chair
    
    $
    10,000Annual retainer for Chairman
    
    $
    600,000Annual retainer for each Deputy Chairman
    
    $
    300,000
    1
  
 Note:1.
    
    Mr. FitzGerald also receives RSUs annually with a value at the time of issue equal to the
difference between £600,000 and $300,000. He does not receive a separate retainer for serving
as Chair of the Corporate Governance Committee. -159-




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##### Table of Contents



Thomson Information
  Thomson
    
    
    Committee
    
    
    Thomson Board
    
    
    CommitteeBoard
    
    
    Chair
    
    
    Attendance
    
    
    Attendance
    
    
    TotalName
    
    Retainer ($)
    
    
    Retainer ($)
    
    
    fees ($)
    
    
    fees ($)
    
    
    fees ($)David Thomson
    
    
    500,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500,000W. Geoffrey Beattie
    
    
    250,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,000Mary Cirillo
    
    
    80,000
    
    
    
    
    
    
    
    13,000
    
    
    
    2,000
    
    
    
    95,000Steven A. Denning
    
    
    80,000
    
    
    
    10,000
    
    
    
    12,000
    
    
    
    5,000
    
    
    
    107,000Roger L. Martin
    
    
    80,000
    
    
    
    
    
    
    
    13,000
    
    
    
    16,000
    
    
    
    109,000Vance K. Opperman
    
    
    80,000
    
    
    
    10,000
    
    
    
    13,000
    
    
    
    16,000
    
    
    
    119,000John M. Thompson
    
    
    80,000
    
    
    
    10,000
    
    
    
    11,000
    
    
    
    15,000
    
    
    
    116,000Peter J. Thomson
    
    
    80,000
    
    
    
    
    
    
    
    13,000
    
    
    
    
    
    
    
    93,000John A. Tory
    
    
    80,000
    
    
    
    
    
    
    
    13,000
    
    
    
    5,000
    
    
    
    98,000Total
    
    
    1,310,000
    
    
    
    30,000
    
    
    
    88,000
    
    
    
    59,000
    
    
    
    1,487,000
  Reuters Information
  2007Compensationfor Loss ofSalary/Fees
    
    
    Bonus
    
    
    Benefits1
    
    
    Allowance2&5
    
    
    Office
    
    
    Total£000
    
    
    £000
    
    
    £000
    
    
    £000
    
    
    £000
    
    
    £000Niall FitzGerald, KBE3&4
    
    
    525
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    528Lawton Fitt6
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    99Sir Deryck Maughan7
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    79Ken Olisa8
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    65Dick Olver9
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    77Tom Glocer10&12
    
    
    888
    
    
    
    1,267
    
    
    
    451
    
    
    
    
    
    
    
    
    
    
    
    2,606Total emoluments of
directors11
    
    
    1,658
    
    
    
    1,267
    
    
    
    454
    
    
    
    75
    
    
    
    
    
    
    
    3,454
 -160-




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##### Table of Contents



Notes
   1.
    
    Items included under Benefits are those provided as goods and services received during the year.2.
    
    Items included under Allowances are contractual benefits, which are paid in cash rather than
as goods and services during the year.3.
    
    Non-cash benefits received by Niall FitzGerald consist of chauffeur benefits of £2,661.4.
    
    Niall FitzGerald has waived his £10,000 Nominations Committee chairman fee.5.
    
    Allowances paid to Lawton Fitt, Deryck Maughan, Ken Olisa, and Dick Olver represent travel
allowances to attend overseas board meetings.6.
    
    Fees paid to Lawton Fitt include £18,333 in respect of her position as Chairman of the Audit Committee.7.
    
    Fees paid to Deryck Maughan include £3,333 as a member of the Remuneration Committee.8.
    
    Fees paid to Ken Olisa include £5,000 member of the Audit Committee.9.
    
    Fees paid to Dick Olver include £5,000 in respect of his position as member of the Audit
Committee, and £11,667 in respect of his position as the Senior Independent Director. Dick
Olver was over-paid in error by the company in 2007 by £8,351 and the amount was repaid after
year end.10.
    
    Non-cash benefits received by Tom Glocer included accommodation costs of £268,143, tax
services of £109,681 (including those related to the Thomson transaction), company car and
healthcare benefits totalling £36,210, long-term disability insurance of £2,100, and family
travel of £34,473.11.
    
    The total aggregate emoluments for the directors for the period 1 January 2007 to 31 December
2007 were £5.9m. The total emoluments for 2006 were £5.3m.12.
    
    During the year a group company paid certain personal expenses on behalf of Tom Glocer. The
amount due from Tom Glocer at 31 December 2007, which was the maximum outstanding during the
year, was £1,435. No interest was charged. Tom Glocer repaid the amount as soon as he was
informed that any personal expenses had been borne by the company. Deferred Share Units
  -161-




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##### Table of Contents



Share Ownership Guidelines
  Director Expenses
  Director Indemnification and Insurance Arrangements
    
    
    to the company or to an associated company (an associated company is, in effect, a
company in the same group);
    
    to pay a criminal fine or a regulatory penalty;
    
    in defending criminal proceedings in which the director is convicted;
    
    in defending civil proceedings brought by the company, or an associated company, in
which judgment is given against the director; or
    
    in an unsuccessful application for relief from liability under the UK Companies Act.
  -162-




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##### Table of Contents



ITEM 6B. Compensation
  Executive Compensation Policies
 Overview
  Compensation Philosophy and Objectives
  
    
    link compensation with Thomson Reuters annual and long-term strategic and financial objectives;
    
    align executives interests with those of Thomson Reuters shareholders, with the
ultimate goal of improving shareholder value;
    
    encourage executives to achieve exceptional performance and provide an opportunity
for senior executives to be compensated in the top quartile of the compensation paid by
competitors when superior results are achieved;
    
    attract, motivate and retain high-quality key employees needed to support
financial, operational and strategic growth and success;
    
    provide flexibility to recognize and reward an individual executives performance,
responsibilities, experience, skills, value and contribution; and
    
    structure the compensation program to be regarded positively by
shareholders, employees, the financial community and the public in
general.
 Executive Compensation Analysis
   -163-




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##### Table of Contents



Total Compensation
  
    
    a base salary;
    
    a performance-based annual incentive bonus, which will usually be paid in cash;
    
    long-term incentive bonus awards, including periodic grants (generally annual) of
long-term incentives, such as stock options and/or RSUs, which may be subject to
performance-based and/or time-based vesting requirements;
    
    retirement and health and welfare-related benefits; and
    
    in some instances, perquisites and other personal benefits.
 PRSUs
  Base Salary
   -164-




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##### Table of Contents



Annual Cash Incentive Bonus
     
    
    45% based on revenue growth;
    
    45% based on growth of operating profit before amortization; and
    
    10% based on free cash flow growth.
   Long-Term Incentive Bonus
   Equity-Based Compensation Plans
  -165-




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##### Table of Contents



Thomson common shares
    
    
    Aggregate of Thomson Reutersreserved for
    
    
    Corporation common shares andissuance as at
    
    
    Thomson Reuters PLC ordinary sharesApril 17, 2008
    
    
    reserved for issuance as at April 17, 2008% of
    
    
    
    
    
    % ofPlan
    
    Number
    
    
    Total1
    
    
    Number
    
    
    Total2Stock incentive plan
    
    
    40,000,000
    
    
    
    6.3
    
    
    
    50,000,000
    
    
    
    6.0Employee stock purchase plansUS
    
    
    6,000,000
    
    
    
    0.9
    
    
    
    8,000,000
    
    
    
    1.0Global
    
    
    2,000,000
    
    
    
    0.3
    
    
    
    6,000,000
    
    
    
    0.7Deferred compensation plan
    
    
    6,000,000
    
    
    
    0.9
    
    
    
    7,000,000
    
    
    
    0.8Total
    
    
    54,000,000
    
    
    
    8.4
    
    
    
    71,000,000
    
    
    
    8.5
  Notes:1.
    
    Based on 640,617,002 Thomson common shares outstanding as at April 15, 2008.2.
    
    Based on the aggregate number of (i) 640,617,002 Thomson common shares outstanding as at
April 15, 2008; and (ii) 194,107,278 Thomson Reuters PLC ordinary shares issued to
Reuters shareholders on completion of the Transaction.  Stock Incentive Plan
 ISOs SARs
  -166-




---



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-167-




---



##### Table of Contents




    
    The maximum number of shares that may be issued under the stock incentive plan is
50,000,000 (provided that not more than 5,000,000 shares may be issued under grants other
than stock options, SARs or RSUs). Shares may consist, in whole or in part, of Thomson
Reuters Corporation common shares or Thomson Reuters PLC ordinary shares issued from
treasury or Thomson Reuters Corporation common shares or Thomson Reuters PLC ordinary
shares purchased on the open market or any combination thereof.
    
    The maximum number of shares that may be issued under plan awards held by any one person
under the stock incentive plan must not exceed 5% of the aggregate number of outstanding
Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares
determined on a non-diluted basis. The maximum number of shares for which plan awards may
be granted and which may be otherwise awarded under the stock incentive plan to any
individual during any one year period is 2,500,000.
    
    The maximum number of shares which may be issued under plan awards held by a participant
granted under the stock incentive plan and under any other share compensation arrangement
of Thomson Reuters (i) to all insiders may not exceed 10% of the aggregate number of
outstanding Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary
shares at such time determined on a non-diluted basis, and (ii) to all insiders and such
insiders associates during any one year period may not exceed 5% of the aggregate number
of outstanding Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary shares, at such time determined on a non-diluted basis.
    
    The maximum number of shares that may be issued through ISOs under the stock incentive
plan will be 5,000,000. Shares subject to awards which are cancelled, expired, forfeited or
terminated without having been exercised shall be available for new awards under the stock
incentive plan.
  
    
    increases the maximum number of shares that can be issued under the stock incentive
plan, including an increase to a fixed number of such shares or a change from a fixed
number of such shares to a fixed maximum percentage;
    
    increases the maximum number of shares which may be issued under the awards held by
a participant;
    
    reduces the exercise price of an award (including a cancellation and re-grant of an
award, constituting a reduction of the exercise price of such award), except in
connection with maintaining the value of an award in connection with a change in the
number of outstanding Thomson Reuters Corporation common shares and/or Thomson Reuters
PLC ordinary shares, by reason of a stock dividend or split, recapitalization,
reorganization, merger, amalgamation, consolidation, combination or exchange of shares
or other corporate change affecting such shares;
    
    extends the term of an award beyond its original expiry date, except where the
expiry date would have occurred in a blackout period;
 -168-




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
    
    changes the provisions relating to the transferability of an award, other than for a
transfer by will or the laws of descent and distribution, a transfer by a grantee to an
entity which is controlled by the grantee or a transfer to a former spouse or domestic
partner in connection with a legal obligation or settlement;
    
    changes the provisions relating to adjustments in the number or kind of shares or
securities reserved for issuance or subject to outstanding awards or the exercise
price, in the event of any change in the number of outstanding Thomson Reuters
Corporation common shares and/or Thomson Reuters PLC ordinary shares, by reason of a
stock dividend or split, recapitalization, reorganization, merger, amalgamation,
consolidation, combination or exchange of shares or other corporate change affecting
such shares;
    
    extends eligibility to participate in the stock incentive plan to a non-employee
director;
    
    changes the rights attaching to the Thomson Reuters Corporation common shares and/or
Thomson Reuters PLC ordinary shares; or
    
    is required to be approved by shareholders under applicable laws, regulations or
stock exchange rules.
  Phantom Stock Plan
  Deferred Compensation Plan
    Employee Stock Purchase Plans
  -169-




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##### Table of Contents



SAYE SIP
   Plans for Employees in the UK and Other Countries
    US employees 401(k) retirement savings plan
  -170-




---



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Retirement Benefits
  Perquisites and Other Personal Benefits
  Share Ownership
  Reuters Information
 Basic Salary and Annual Bonus
   -171-




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##### Table of Contents



11 2
  2007
    
    
    2007Salary
    
    
    Bonus£000s
    
    
    £000sTom Glocer
    
    
    888
    
    
    
    1,267David Grigson
    
    
    482
    
    
    
    579Devin Wenig
    
    
    448
    
    
    
    532
     Equity incentive plans
 Overview:
  LTIP:
 
 1
    
    Trading profit is calculated by excluding the following
from operating profit from continuing operations: restructuring charges
associated with acquisitions, Transaction-related costs, impairments and
amortization of intangibles acquired via business combinations, investment
income, profits from disposals of subsidiaries and fair value movements.
Trading margin is trading profit expressed as a percentage of revenue.2
    
    Free cash flow measures cash flows from continuing
operations, other than those which are either discretionary in nature or
unrelated to ongoing recurring operating activities such as special
contributions toward funding defined pension deficits, Transaction-related
costs, acquisitions and dispositions and dividends paid out by Reuters. -172-




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##### Table of Contents



3
      DSOP:
   
    
    minimum 6% a year growth in adjusted EPS4 will be required for 50% of
options to vest;
    
    9% a year growth will be required for 100% of options to vest;
    
    between 6% and 9% growth options will vest on a proportionate basis.
  
 3
    
    Adjusted profit before tax is calculated as profit
before tax from continuing operations before restructuring charges associated
with acquisition Transaction-related costs, restructuring charges associated
with acquisitions, impairments and amortization of business combination
intangibles, investment income, profit on disposals and fair value movements.4
    
    Adjusted EPS is calculated as basic EPS from continuing
operations before impairments and amortization of intangibles acquired via
business combinations, Transaction-related costs, investment income, fair value
movements, disposal profit/losses and related tax effects. -173-




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##### Table of Contents



All employee savings plans
  Personal shareholding policy
  Pensions
     Other benefits
  
 ITEM 6C. Board Practices
 Summary of Corporate Governance Policies and Practices
 Corporate Governance
    -174-




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Thomson Reuters Board and Committee Composition
         -175-




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##### Table of Contents



Independent Directors
  
    
    One of the directors (Tom Glocer) is not independent because he is the Chief
Executive Officer of Thomson Reuters.
    
    Four of the directors (David Thomson, W. Geoffrey Beattie, Peter J. Thomson and John
A. Tory) are not independent because they are directors and current or former executive
officers of Woodbridge, the controlling shareholder of Thomson Reuters. None of these
individuals are members of Thomson Reuters executive management team.
    
    The remaining 10 directors are independent.
  
    
    Mr. Denning is a director of Hewitt Associates Inc. In February 2005, Thomson
entered into an agreement with Hewitt Associates Inc. to outsource certain human
resources administrative functions in order to improve operating and cost efficiencies.
When Thomson initially entered into the agreement, it expected to pay Hewitt an
aggregate of $115 million over a five-year period. This agreement was subsequently
renegotiated and extended in September 2006. Under the new terms, Thomson expects to
pay Hewitt an aggregate of $165 million over a 10-year period. In 2007, Thomson paid
Hewitt $11 million for its services. Mr. Denning did not participate in negotiations
related to the agreement and has refrained from deliberating and voting on any matters
relating to Hewitt Associates Inc. by Thomsons Human Resources Committee and board of
directors.
    
    Mr. Thompson is the non-executive independent Chairman of the board of The
Toronto-Dominion Bank. In the normal course of business, Thomson has a banking
relationship with The Toronto-Dominion Bank and one of the banks affiliates has served
as a dealer for Thomsons recent offerings of debt securities in the United States.
  -176-




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##### Table of Contents



Controlled Company
   Committees
  -177-




---



##### Table of Contents



HumanAudit
    
    
    Corporate Governance
    
    
    ResourcesDirector
    
    Committee
    
    
    Committee
    
    
    CommitteeDavid ThomsonW. Geoffrey Beattie
    
    
    
    
    
    
    
    
    
    
    Niall FitzGerald, KBE
    
    
    
    
    
    Chair
    
    
    
    Tom GlocerMary Cirillo
    
    
    
    
    
    
    
    
    
    
    Steven A. Denning
    
    
    
    
    
    
    
    
    
    ChairLawton Fitt
    
    
    Roger L. Martin
    
    
    Sir Deryck Maughan
    
    
    
    
    
    
    Ken Olisa
    
    
    Richard L. Olver
    
    
    
    
    
    
    
    
    
    
    Vance K. Opperman
    
    ChairJohn M. Thompson
    
    
    
    
    
    
    Peter J. ThomsonJohn A. Tory
    
    
    
    
    
    
    
    
    
    
    
 Audit Committee
     -178-




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##### Table of Contents



Corporate Governance Committee
   Human Resources Committee
    Board, Committee and Director Assessment Process
  Director Qualifications and Board Size
  -179-




---



##### Table of Contents



Director Recruitment, Induction and Education
    Majority Voting Policy
  Director Attendance
  Transactions Involving Directors or Officers
  -180-




---



##### Table of Contents



Code of Business Conduct and Ethics
    
 ITEM 6D. Employees
 Thomson Information
  Reuters Information
  
 ITEM 6E. Share Ownership
  -181-




---



##### Table of Contents



ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 
 ITEM 7A. Major Shareholders
 Thomson Reuters
  Woodbridge
    Relationship with Thomson Reuters
  
    
    corporate governance, including the effectiveness of the Thomson Reuters board;
    
    appointment of the Chief Executive Officer and other members of senior management
and related succession planning;
    
    development of the long-term business strategy of Thomson Reuters and assessment of
its implementation; and
    
    capital strategy.
 
 -182-




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##### Table of Contents



Support of Reuters Trust Principles
  Other Investments
  Control
  Related Party Transactions
   Thomson Information
  Reuters Information
 1
 
 1
    
    None of these parties is the beneficial owner of 5% or
more of Thomson Reuters. -183-




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##### Table of Contents



Number of
    
    
    Percentage of
    
    
    Number of
    
    
    Number of
    
    
    Number ofshares held on
    
    
    issued share
    
    
    shares held on
    
    
    shares held on
    
    
    shares held onMarch 17, 2008
    
    
    capital
    
    
    March 9, 2007
    
    
    March 7, 2006
    
    
    March 2, 2005Schroders Plc
    
    
    62,544,396
    
    
    
    5.05
    
    
    
    99,602,990
    
    
    
    
    
    
    
    ValueAct Capital Master Fund L.P.
    
    
    48,243,934
    
    
    
    3.90
    
    
    
    83,551,212
    
    
    
    
    
    
    
    Fidelity International Limited
    
    
    
    
    
    
    
    
    
    
    82,177,979
    
    
    
    150,753,687
    
    
    
    130,364,252AMVESCAP plc
    
    
    62,194,192
    
    
    
    5.02
    
    
    
    62,194,192
    
    
    
    
    
    
    
    BlackRock Inc.
    
    
    48,978,642
    
    
    
    3.95
    
    
    
    48,978,642
    
    
    
    48,978,642
    
    
    
    48,978,642Legal &
General Investment Management
    
    
    51,519,332
    
    
    
    4.16
    
    
    
    44,901,479
    
    
    
    55,230,590
    
    
    
    58,006,887Barclays PLC
    
    
    40,069,073
    
    
    
    3.24
    
    
    
    40,069,073
    
    
    
    
    
    
    
    53,902,608Capital Group of Companies, Inc.
    
    
    
    
    
    
    
    
    
    
    39,399,900
    
    
    
    42,135,514
    
    
    
    Credit Suisse
    
    
    136,431,306
    
    
    
    11.01
    
    
    
    
    
    
    
    
    
    
    
    Deutsche Bank AG
    
    
    64,268,832
    
    
    
    5.19
    
    
    
    
    
    
    
    
    
    
    
    
   Analysis of shareholders
   
 ITEM 7B. Related Party Transactions
 Thomson Information
  -184-




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##### Table of Contents



Reuters Information
  
 ITEM 7C. Interests of Experts and Counsel
  
 ITEM 8. FINANCIAL INFORMATION
 
 ITEM 8A. Consolidated Statements and Other Financial Information
  
 ITEM 8B. Significant Changes
 Thomson Reuters
  Thomson Information
  Reuters Information
  
 ITEM 9. THE OFFER AND LISTING
 
 ITEM 9A. Offer and Listing Details
 Thomson Reuters
  Thomson Information
 Market for Securities
  -185-




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##### Table of Contents



TSX
    
    
    NYSECanadian dollars per share
    
    
    US dollars per shareHigh
    
    
    Low
    
    
    High
    
    
    LowAnnual market prices2003
    
    
    47.31
    
    
    
    36.85
    
    
    
    36.50
    
    
    
    25.002004
    
    
    47.99
    
    
    
    39.86
    
    
    
    37.29
    
    
    
    29.842005
    
    
    45.50
    
    
    
    38.80
    
    
    
    38.55
    
    
    
    31.092006
    
    
    49.54
    
    
    
    39.50
    
    
    
    43.41
    
    
    
    34.012007
    
    
    51.95
    
    
    
    36.44
    
    
    
    47.26
    
    
    
    36.93Quarterly market prices2006First quarter
    
    
    44.48
    
    
    
    39.50
    
    
    
    38.96
    
    
    
    34.01Second quarter
    
    
    46.50
    
    
    
    42.64
    
    
    
    42.24
    
    
    
    35.88Third quarter
    
    
    45.80
    
    
    
    42.40
    
    
    
    41.02
    
    
    
    37.66Fourth quarter
    
    
    49.54
    
    
    
    43.65
    
    
    
    43.41
    
    
    
    38.42Quarterly market prices2007First quarter
    
    
    51.95
    
    
    
    46.30
    
    
    
    44.19
    
    
    
    39.46Second quarter
    
    
    50.00
    
    
    
    43.17
    
    
    
    44.93
    
    
    
    39.75Third quarter
    
    
    46.19
    
    
    
    41.00
    
    
    
    44.36
    
    
    
    38.27Fourth quarter
    
    
    44.69
    
    
    
    36.44
    
    
    
    47.26
    
    
    
    36.93Monthly market prices2007October
    
    
    44.69
    
    
    
    41.63
    
    
    
    47.26
    
    
    
    42.11November
    
    
    44.16
    
    
    
    36.44
    
    
    
    47.00
    
    
    
    36.93December
    
    
    40.83
    
    
    
    37.49
    
    
    
    41.25
    
    
    
    37.01Monthly market prices2008January
    
    
    40.70
    
    
    
    32.30
    
    
    
    41.16
    
    
    
    32.37February
    
    36.79
    
    
    32.60
    
    
    36.82
    
    
    33.21March
    
    38.80
    
    
    31.67
    
    
    39.05
    
    
    31.96April 1 to
April 16
    
    38.18
    
    
    34.55
    
    
    38.12
    
    
    33.69
 -186-




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Reuters Information
 Trading markets
   The London Stockexchange
    
    
    Nasdaqpounds per share
    
    
    US dollars per ADSHigh
    
    
    Low
    
    
    High
    
    
    LowAnnual market prices2003
    
    
    2.68
    
    
    
    0.96
    
    
    
    27.09
    
    
    
    9.592004
    
    
    4.29
    
    
    
    2.41
    
    
    
    49.15
    
    
    
    25.722005
    
    
    4.31
    
    
    
    3.52
    
    
    
    49.35
    
    
    
    37.332006
    
    
    4.75
    
    
    
    3.49
    
    
    
    54.25
    
    
    
    38.512007
    
    
    6.69
    
    
    
    4.12
    
    
    
    83.70
    
    
    
    48.18Quarterly market prices2006First quarter
    
    
    4.61
    
    
    
    3.80
    
    
    
    48.44
    
    
    
    39.67Second quarter
    
    
    4.10
    
    
    
    3.54
    
    
    
    45.71
    
    
    
    38.67Third quarter
    
    
    4.43
    
    
    
    3.49
    
    
    
    50.06
    
    
    
    38.51Fourth quarter
    
    
    4.75
    
    
    
    4.31
    
    
    
    54.25
    
    
    
    48.20Quarterly market prices2007First quarter
    
    
    4.71
    
    
    
    4.12
    
    
    
    55.32
    
    
    
    48.18Second quarter
    
    
    6.59
    
    
    
    4.66
    
    
    
    81.03
    
    
    
    55.81Third quarter
    
    
    6.60
    
    
    
    5.71
    
    
    
    79.90
    
    
    
    71.33Fourth quarter
    
    
    6.69
    
    
    
    5.74
    
    
    
    83.70
    
    
    
    70.87
 -187-




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The London Stockexchange
    
    
    Nasdaqpounds per share
    
    
    US dollars per ADSHigh
    
    
    Low
    
    
    High
    
    
    LowMonthly market prices2007October
    
    
    6.69
    
    
    
    6.31
    
    
    
    83.40
    
    
    
    78.25November
    
    
    6.65
    
    
    
    5.74
    
    
    
    83.70
    
    
    
    71.25December
    
    
    6.52
    
    
    
    5.80
    
    
    
    76.87
    
    
    
    70.87Monthly market prices2008January
    
    
    6.49
    
    
    
    5.35
    
    
    
    75.80
    
    
    
    66.64February
    
    6.22
    
    
    5.84
    
    
    73.49
    
    
    69.52March
    
    6.14
    
    
    5.68
    
    
    75.00
    
    
    68.76April 1 to
April 16
    
    6.31
    
    
    5.80
    
    
    74.74
    
    
    69.68
  
 ITEM 9B. Plan of Distribution
  
 ITEM 9C. Markets
 Thomson Reuters
  Thomson Information
  Reuters Information
  
 ITEM 9D. Selling Shareholders
  -188-




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ITEM 9E. Dilution
  
 ITEM 9F. Expenses of the Issue
  
 ITEM 10. ADDITIONAL INFORMATION
 
 ITEM 10A. Share Capital
 Capital Structure
 Thomson Reuters Corporation
 Description of Capital Structure
   Common Shares
  Preference Shares
   -189-




---



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Special Voting Share
   Reuters Founders Share
   Equalization Share
  Thomson Reuters PLC
 Description of Capital Structure
  Ordinary Shares
   -190-




---



##### Table of Contents



Founders Share
     
 ITEM 10B. Memorandum and Articles of Association
  
 ITEM 10C. Material Contracts
 Thomson Reuters
 Summaries of Transaction Documents
 www.sedar.com www.sec.gov
 Thomson Reuters PLC Memorandum and Articles of Association
  
    
    to enter into, operate and carry into effect various agreements relating to the
Transaction with Thomson Reuters Corporation; and
    
    to carry on business as a general commercial company and to carry on any trade or
business whatsoever.
  -191-




---



##### Table of Contents



Articles of Association
  Share Capital
  
    
    399,950,000 ordinary shares of £10 each;
    
    one Thomson Reuters PLC Special Voting Share of £500,000; and
    
    one Thomson Reuters PLC Reuters Founders Share of £1.
 Share rights  generally
   Thomson Reuters PLC Ordinary Shares
  Notice of meetings and voting rights
  Dividends
  -192-




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Liquidation, dissolution and winding up
  Thomson Reuters PLC Special Voting Share
  Notice of meetings and voting rights
  
    
    in relation to a resolution of Thomson Reuters PLC to approve a Joint Electorate
Action, the rights:
 -
    
    to cast such number of votes in favor of such resolution as were cast in
favor of the Equivalent Resolution by holders of Thomson Reuters Corporation
common shares at the parallel shareholder meeting;-
    
    to cast such number of votes against such resolution as were cast against the
Equivalent Resolution by holders of Thomson Reuters Corporation common shares at
the parallel shareholder meeting;-
    
    to withhold such number of votes from such resolution as were withheld from
the Equivalent Resolution by holders of Thomson Reuters Corporation common
shares at the parallel shareholder meeting; and-
    
    to abstain from voting such number of votes in respect of such resolution as
were recorded as abstentions in respect of the Equivalent Resolution by holders
of Thomson Reuters Corporation common shares at the parallel shareholder meeting;in each case divided by the Equalization Ratio in effect at the time such
rights are exercised and rounded up to the nearest whole number, and provided
that, for greater certainty, if the holder of the Thomson Reuters PLC Special
Voting Share exercises its voting rights in relation to any such resolution, it
shall be required to exercise all, but not less than all, of such voting rights;
 
    
    in relation to a resolution of Thomson Reuters PLC to approve a Class Rights Action:
 -
    
    if the Equivalent Resolution was approved by the requisite number (as
determined in accordance with the Thomson Reuters Corporation Articles, the
Thomson Reuters Corporation By-laws and applicable laws) of the holders of
Thomson Reuters Corporation common shares at the parallel shareholder meeting, no
right to cast any vote; and
 -193-




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-
    
    if the Equivalent Resolution was not approved by the requisite number (as
determined in accordance with the Thomson Reuters Corporation Articles, the
Thomson Reuters Corporation By-laws and applicable laws) of the holders of
Thomson Reuters Corporation common shares at the parallel shareholder meeting,
the right to cast such number of votes against such resolution as would be
sufficient to defeat it;
 
    
    in relation to any Procedural Resolution, no right to cast any vote; and
    
    in relation to any resolution pertaining to any matter on which the holder of the
Thomson Reuters PLC Special Voting Share is required by applicable laws to vote
separately as a class, the right to cast one vote.
    Dividends
   Liquidation, dissolution and winding up
  -194-




---



##### Table of Contents



Redemption
  
    
    on presentation to the Thomson Reuters PLC board of directors of a notice or
instrument of transfer purporting to require or demand registration or acknowledgement
of the transfer of the Thomson Reuters PLC Special Voting Share by the Thomson Reuters
PLC Special Voting Share Trustee out of the Thomson Reuters PLC Special Voting Share
Trust to (or at the direction of) the Beneficiaries (as defined in the Thomson Reuters
PLC Special Voting Share Trust Deed) of the Thomson Reuters PLC Special Voting Share
Trust; or
    
    on the Thomson Reuters PLC Special Voting Share Trust being terminated in respect of
the Thomson Reuters PLC Special Voting Share or the Thomson Reuters PLC Special Voting
Share becoming held by the Thomson Reuters PLC Special Voting Share Trustee on terms
other than as set out in the Thomson Reuters PLC Special Voting Share Trust Deed (as it
may be amended from time to time in accordance with its terms).
  No transfer of Thomson Reuters PLC Special Voting Share
  Amendment of rights and obligations
  The Thomson Reuters PLC Reuters Founders Share
  Thomson Reuters PLC Reuters Founders Share may defeat resolution to vary or abrogate its rights
  -195-




---



##### Table of Contents



Deemed variations or abrogations of Thomson Reuters PLC Reuters Founders Share rights
  
    
    any special resolution the effect of which, if duly passed, would be to amend,
remove or alter the effect of (which shall include the ratification of any breach of)
any of the Reuters Founders Share Provisions (as defined in the Thomson Reuters PLC
Articles);
    
    any resolution to wind up Thomson Reuters PLC voluntarily or pursuant to paragraph
(a) of section 122 of the Insolvency Act 1986;
    
    any resolution for, or approving or sanctioning, any reconstruction of Thomson
Reuters PLC (other than internal reorganizations involving Thomson Reuters PLC and its
subsidiaries);
    
    any resolution the effect of which, if duly passed, would be to attach or to
authorize the attachment to any share (whether issued or unissued) of any voting rights
which are not identical in all respects with those attached to the Thomson Reuters PLC
ordinary shares; and
    
    any resolution to amend any such resolution as is described in any of the preceding
sub-paragraphs of this paragraph.
 Action without consent of the holder of the Thomson Reuters PLC Reuters Founders Share a deemed
variation or abrogation
  Rights in relation to an Acquiring Person
  
    
    in relation to a resolution of Thomson Reuters PLC to approve a Joint Electorate
Action, the rights:
 -
    
    to cast such number of votes in favor of and against such resolution, to
withhold such number of votes from such resolution and to abstain from voting
such number of votes in respect of such resolution as were cast in favor of and
against such resolution, withheld therefrom or recorded as abstentions in
respect thereof, respectively, by the holder of the Thomson Reuters PLC Special
Voting Share;
 -196-




---



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-
    
    to cast such number of votes in favor of such resolution as were cast in
favor of such resolution by holders of voting shares of Thomson Reuters PLC
other than any voting shares in which an Acquiring Person is interested;-
    
    to cast such number of votes against such resolution as were cast against
such resolution by holders of voting shares of Thomson Reuters PLC other than
any voting shares in which an Acquiring Person is interested;-
    
    to withhold such number of votes from such resolution as were withheld from
such resolution by holders of voting shares of Thomson Reuters PLC other than
any voting shares in which an Acquiring Person is interested; and-
    
    to abstain from voting such number of votes in respect of such resolution as
were recorded as abstentions in respect of such resolution by holders of voting
shares of Thomson Reuters PLC other than any voting shares in which an Acquiring
Person is interested;
 in each case multiplied by one hundred, and provided that, for greater
certainty, if the holder of the Thomson Reuters PLC Reuters Founders Share
exercises its voting rights in relation to any such resolution, it shall be
required to exercise all, but not less than all, of such voting rights;
 
    
    in relation to a resolution of Thomson Reuters PLC to approve a Class Rights Action,
 -
    
    if the Equivalent Resolution is approved by the requisite number (as
determined in accordance with the Thomson Reuters Corporation Articles, the
Thomson Reuters Corporation By-Laws and applicable laws) of the holders of
Thomson Reuters Corporation common shares at the parallel shareholder meeting,
the rights:
 o
    
    to cast such number of votes in favor of such
resolution as were cast in favor of such resolution by holders of voting
shares of Thomson Reuters PLC other than any voting shares in which an
Acquiring Person is interested;o
    
    to cast such number of votes against such
resolution as were cast against such resolution by holders of voting
shares of Thomson Reuters PLC other than any voting shares in which an
Acquiring Person is interested;o
    
    to withhold such number of votes from such
resolution as were withheld from such resolution by holders of voting
shares of Thomson Reuters PLC other than any voting shares in which an
Acquiring Person is interested; ando
    
    to abstain from voting such number of votes in
respect of such resolution as were recorded as abstentions in respect of
such resolution by holders of voting shares of Thomson Reuters PLC other
than any voting shares in which an Acquiring Person is interested;
 in each case multiplied by one hundred, and provided that, for greater
certainty, if the holder of the Thomson Reuters PLC Reuters Founders Share
exercises its voting rights in relation to any such resolution, it shall be
required to exercise all, but not less than all, of such voting rights; and
 -
    
    if the Equivalent Resolution is not approved by the requisite number (as
determined in accordance with the Thomson Reuters Corporation Articles, the
Thomson Reuters Corporation By-laws and applicable laws) of the holders of
Thomson Reuters Corporation common shares at the parallel shareholder meeting, no
right to cast any vote;
 -197-




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##### Table of Contents




    
    in relation to a Procedural Resolution, the rights:
 -
    
    to cast such number of votes in favor of such Procedural Resolution as were
cast in favor of such Procedural Resolution by holders of voting shares of
Thomson Reuters PLC other than any voting shares in which an Acquiring Person is
interested;-
    
    to cast such number of votes against such Procedural Resolution as were cast
against such Procedural Resolution by holders of voting shares of Thomson
Reuters PLC other than any voting shares in which an Acquiring Person is
interested;-
    
    to withhold such number of votes from such Procedural Resolution as were
withheld from such Procedural Resolution by holders of voting shares of Thomson
Reuters PLC other than any voting shares in which an Acquiring Person is
interested; and-
    
    to abstain from voting such number of votes in respect of such Procedural
Resolution as were recorded as abstentions in respect of such Procedural
Resolution by holders of voting shares of Thomson Reuters PLC other than any
voting shares in which an Acquiring Person is interested;
  
    
    in respect of any resolution pertaining to any matter on which the holder of the
Thomson Reuters PLC Reuters Founders Share is required by applicable laws or otherwise
entitled to vote separately as a class, the right to cast one vote.
   Rights in Relation to a Reuters Founders Share Control Event
   -198-




---



##### Table of Contents




    
    in relation to a resolution of Thomson Reuters PLC to approve a Joint Electorate
Action, the right:
 -
    
    if, at the time such votes are cast, there are no Approved Persons or
Approved Persons are interested in such number of outstanding Thomson Reuters
PLC ordinary shares and/or Thomson Reuters Corporation common shares to which
are attached, in the aggregate (after giving effect to the Equalization Ratio),
the right to cast not more than 35% of all votes entitled to be cast on that
Joint Electorate Action by all shareholders of Thomson Reuters PLC and Thomson
Reuters Corporation (excluding the holder of the Thomson Reuters PLC Special
Voting Share and the holder of the Thomson Reuters Corporation Special Voting
Share), to cast such number of votes as would be sufficient to approve or defeat
such resolution;-
    
    if, at the time such votes are cast, Approved Persons are interested in such
number of outstanding Thomson Reuters PLC ordinary shares and/or Thomson Reuters
Corporation common shares to which are attached, in the aggregate (after giving
effect to the Equalization Ratio), the right to cast more than 35% but less than
the requisite majority of all votes entitled to be cast on that Joint Electorate
Action by all shareholders of Thomson Reuters PLC and Thomson Reuters
Corporation (excluding the holder of the Thomson Reuters PLC Special Voting
Share and the holder of the Thomson Reuters Corporation Special Voting Share),
to cast the greater of:
 o
    
    such number of votes as is equal to the sum of
(x) the number of votes attached to all voting shares in which Acquiring
Persons are interested and (y) one vote; and
 -199-




---



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o
    
    such number of votes as will cause the votes
attached to all voting shares in which Approved Persons are interested,
and which are cast in accordance with the Relevant Terms of Approval,
when combined with the votes entitled to be cast by the holder of the
Thomson Reuters PLC Reuters Founders Share, to constitute the requisite
majority of all votes entitled to be cast on such resolution by all
shareholders of Thomson Reuters PLC (excluding the holder of the Thomson
Reuters PLC Special Voting Share); and
 -
    
    if, at the time such votes are cast, Approved Persons are interested in, and
cast in accordance with the Relevant Terms of Approval the votes attached to,
such number of outstanding Thomson Reuters PLC ordinary shares and/or Thomson
Reuters Corporation common shares to which are attached, in the aggregate (after
giving effect to the Equalization Ratio), the right to cast at least the
requisite majority of all votes entitled to be cast on that Joint Electorate
Action by all shareholders of Thomson Reuters PLC and Thomson Reuters
Corporation (excluding the holder of the Thomson Reuters PLC Special Voting
Share and the holder of the Thomson Reuters Corporation Special Voting Share),
no right to cast any vote;
 
    
    in relation to a resolution to approve a Class Rights Action:
 -
    
    if the Equivalent Resolution is approved by the requisite number (as
determined in accordance with the Thomson Reuters Corporation Articles, the
Thomson Reuters Corporation By-laws and applicable laws) of the holders of
Thomson Reuters Corporation common shares at the parallel shareholder meeting,
the rights:
 o
    
    if, at the time such votes are cast, there are no
Approved Persons or Approved Persons are interested in such number of
outstanding Thomson Reuters PLC ordinary shares to which are attached,
in the aggregate, the right to cast not more than 35% of all votes
entitled to be cast on such resolution by all shareholders of Thomson
Reuters PLC (excluding the holder of the Thomson Reuters PLC Special
Voting Share), to cast such number of votes as would be sufficient to
approve or defeat such resolution;o
    
    if, at the time such votes are cast, Approved
Persons are interested in such number of outstanding Thomson Reuters PLC
ordinary shares to which are attached, in the aggregate, the right to
cast more than 35% but less than the requisite majority of all votes
entitled to be cast on such resolution by all shareholders of Thomson
Reuters PLC (excluding the holder of the Thomson Reuters PLC Special
Voting Share), to cast the greater of:o
    
    such number of votes as is equal to the sum of (x) the number of
votes attached to all voting shares in which Acquiring Persons are
interested and (y) one vote; ando
    
    such number of votes as will cause the votes attached to all voting
shares in which Approved Persons are interested, and which are cast in
accordance with the Relevant Terms of Approval, when combined with the
votes entitled to be cast by the holder of the Thomson Reuters PLC
Reuters Founders Share, to constitute the requisite majority of all
votes entitled to be cast on such resolution by all shareholders of
Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC
Special Voting Share);o
    
    if, at the time such votes are cast, Approved
Persons are interested in, and cast in accordance with the Relevant
Terms of Approval the votes attached to, such number of outstanding
Thomson Reuters PLC ordinary shares to which are attached, in the
aggregate, the right to cast at least the requisite majority of all
votes entitled to be
 -200-




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##### Table of Contents



cast on such resolution by all shareholders of Thomson Reuters PLC
(excluding the holder of the Thomson Reuters PLC Special Voting Share),
no right to cast any vote;
 -
    
    if the Equivalent Resolution is not approved by the requisite number (as
determined in accordance with the Thomson Reuters Corporation Articles, the
Thomson Reuters By-Laws and applicable laws) of the holders of Thomson Reuters
Corporation common shares at the parallel shareholder meeting, no right to cast
any vote;
 
    
    in relation to a Procedural Resolution, the rights:
 -
    
    if, at the time such votes are cast, there are no Approved Persons or
Approved Persons are interested in such number of outstanding Thomson Reuters
PLC ordinary shares to which are attached, in the aggregate, the right to cast
not more than 35% of all votes entitled to be cast on that Procedural Resolution
by all shareholders of Thomson Reuters PLC (excluding the holder of the Thomson
Reuters PLC Special Voting Share), to cast such number of votes as would be
sufficient to approve or defeat such Procedural Resolution;-
    
    if, at the time such votes are cast, Approved Persons are interested in such
number of outstanding Thomson Reuters PLC ordinary shares to which are attached,
in the aggregate, the right to cast more than 35% but less than the requisite
majority of all votes entitled to be cast on that Procedural Resolution by all
shareholders of Thomson Reuters PLC (excluding the holder of the Thomson Reuters
PLC Special Voting Share), to cast the greater of:
 o
    
    such number of votes as is equal to the sum of
(x) the number of votes attached to all voting shares in which Acquiring
Persons are interested and (y) one vote; ando
    
    such number of votes as will cause the votes
attached to all voting shares in which Approved Persons are interested,
and which are cast in accordance with the Relevant Terms of Approval,
when combined with the votes entitled to be cast by the holder of the
Thomson Reuters PLC Reuters Founders Share, to constitute the requisite
majority of all votes entitled to be cast on that Procedural Resolution
by all shareholders of Thomson Reuters PLC (excluding the holder of the
Thomson Reuters PLC Special Voting Share); and
 -
    
    if, at the time such votes are cast, Approved Persons are interested in, and
cast in accordance with the Relevant Terms of Approval the votes attached to,
such number of outstanding Thomson Reuters PLC ordinary shares to which are
attached, in the aggregate, the right to cast at least the requisite majority of
all votes entitled to be cast on that Procedural Resolution by all shareholders
of Thomson Reuters PLC (excluding the holder of the Thomson Reuters PLC Special
Voting Share), no right to cast any vote; and
 
    
    at any meeting of the holder of the Thomson Reuters PLC Reuters Founders Share at
which the holder of the Thomson Reuters PLC Reuters Founders Share is entitled to vote
separately as a class, the right to cast one vote.
 Requisition of Shareholders Meeting
  -201-




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Notice of meetings
  Consultation Rights
  Dividends
  Liquidation, dissolution and winding-up
  No transfer of Thomson Reuters PLC Reuters Founders Share
  No shareholders to vote if sums unpaid on shares
  Dividends and other distributions
  -202-




---



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Variation of rights
  -203-




---



##### Table of Contents



Transfer of shares
 Requirements as to form of transfers of Certificated Shares
  Requirements as to transfers of Uncertificated Shares
  Transferor to remain holder until transfer actually registered
  Thomson Reuters PLC board of directors may suspend registration of transfers
  Thomson Reuters PLC board of directors may refuse to register certain renunciations and transfers
of Certificated Shares
  Thomson Reuters PLC board of directors may refuse to register transfers of Certificated Shares of
more than one class of share, unstamped transfers or transfers unaccompanied by proof of
transferors title
  -204-




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Registration of transfers of Uncertificated Shares
  Thomson Reuters PLC board of directors to notify refusals to register transfers of Uncertificated
Shares
  Alteration of share capital
 Increase in capital; consent of the holder of the Thomson Reuters PLC Reuters Founders Share
required for creation of shares with voting rights not identical to those of Thomson Reuters PLC
ordinary shares
  Consolidation, cancellation and subdivision of shares (other than the Thomson Reuters PLC Reuters
Founders Share)
  
    
    consolidate and divide all or any of its capital (other than the Thomson Reuters PLC
Reuters Founders Share) into shares of larger amounts than its existing shares;
    
    cancel any shares (other than the Thomson Reuters PLC Reuters Founders Share) which,
at the date of the passing of the resolution, have not been taken, or agreed to be
taken, by any person and diminish the amount of its capital by the amount of the shares
so cancelled; and
    
    sub-divide its shares, or any of them (other than the Thomson Reuters PLC Reuters
Founders Share), into shares of smaller amounts than is fixed by the Thomson Reuters
PLC Memorandum (subject nevertheless to the provisions of the applicable laws), and so
that the resolution whereby any share is sub-divided may determine that, as between the
holders of the shares resulting from such sub-division, one or more of the shares may,
as compared with the others, have any such preferred, deferred or other special rights,
or be subject to any such restrictions, as Thomson Reuters PLC has power to attach to
unissued or new shares.
 Purchase of shares (other than the Thomson Reuters PLC Reuters Founders Share)
  -205-




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Reduction of capital  exception regarding the Thomson Reuters PLC Reuters Founders Share
  Authority to allot securities and disapplication of pre-emption rights
   
    
    in connection with a rights issue; and
    
    otherwise than in connection with a rights issue, up to an aggregate nominal amount
equal to the section 89 amount;
    equity securities
 prescribed period
 rights issue
 ection 80 amount
 ection 89 amount
 the nominal amount
 -206-




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Disclosure of interests in shares
   
    
    in respect of the shares in relation to which the default occurred the shareholder
shall not be entitled to attend or vote (either in person or by proxy) at a general
meeting or at a separate general meeting of the holders of a class of shares or on a
poll; and
    
    where the default shares represent at least 0.25% of the class of shares concerned
(excluding any shares of that class held as treasury shares), then the direction notice
may additionally direct that any of the following shall be effected:
 -
    
    in respect of the default shares any dividend or other money which would
otherwise be payable on such shares shall be retained by Thomson Reuters PLC
without any liability to pay interest thereon when such money is finally paid to
the shareholder and any shares issued in lieu of dividend be withheld by Thomson
Reuters PLC;-
    
    no transfer of any default shares which are held in certificated form shall
be registered unless the transfer is an approved transfer or
 o
    
    the shareholder is not himself in default as
regards supplying the information requested; ando
    
    the transfer is of part only of the shareholders
holding and when presented for registration is accompanied by a
certificate from the shareholder in a form satisfactory to the Thomson
Reuters PLC board of directors to the effect that after due and careful
enquiry the shareholder is satisfied that no person in default as
regards supplying such information is interested in any of the shares
the subject of the transfer; and
 -
    
    if the Thomson Reuters PLC board of directors so determines, Thomson Reuters
PLC shall be entitled to require the holder of any such default shares which are
held in uncertificated form, by notice in writing to the holder concerned, to
change his holding of uncertificated default shares to certificated form within
such period as may be specified in the notice and require such holder to
continue to hold such default shares in certificated form for so long as the
default subsists. The Thomson Reuters PLC board of directors may also appoint
any person to take such other steps, by instruction by means of a Relevant
System or otherwise, in the name of the holder of such default shares, to effect
conversion of such shares to certificated form and such steps shall be as
effective as if they had been taken by the registered holder of the
uncertificated default shares.
  Uncertificated Shares  general powers
  -207-




---



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General meetings
  
    
    in the case of an annual general meeting by all the shareholders entitled to attend
and vote thereat which for this purpose shall include the holder of the Thomson Reuters
PLC Reuters Founders Share; and
    
    in the case of any other general meeting by a majority in number of the shareholders
having a right to attend and vote thereat, being a majority together holding not less
than 95% in nominal value of the shares giving that right, and by the holder of the
Thomson Reuters PLC Reuters Founders Share.
    
    A Thomson Reuters PLC director is entitled to attend and speak at a general meeting
and at a separate general meeting of the holders of a class of shares or debentures
whether or not he is a shareholder.
    
    A quorum for the transaction of business at a meeting of Thomson Reuters PLC
shareholders shall be either two qualifying persons entitled to vote (unless (i) each
is a qualifying person only because he is authorized to act as the representative of a
corporation in relation to the meeting, and they are representatives of the same
corporation; or (ii) each is a qualifying person only because he is appointed as proxy
of a shareholder in relation to the meeting, and they are proxies of the same
shareholder) or the holder of the Thomson Reuters PLC Reuters Founders Share provided
that:
    
    at any meeting the business of which includes the consideration of any resolution on
which the holder of the Thomson Reuters PLC Special Voting Share is entitled to vote, a
quorum shall not be present for any purpose unless the holder of the Thomson Reuters
PLC Special Voting Share is present in person or by proxy or is represented by a duly
authorized representative; and
    
    at any meeting the business of which includes the consideration of any resolution on
which the holder of the Thomson Reuters PLC Reuters Founders Share is entitled to vote,
a quorum shall not be present for any purpose unless the holder of the Thomson Reuters
PLC Reuters Founders Share is present in person or by proxy or is represented by a duly
authorized representative.
  qualifying person
 -208-




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Thomson Reuters PLC board of directors
 Constitution of the Thomson Reuters PLC board of directors
   Management generally
    Management in Relation to the Equalization and Governance Agreement
  No share qualification  Thomson Reuters PLC directors may attend and speak at general meetings
  Vacation of office as Thomson Reuters PLC director
  
    
    if he shall become prohibited by law from acting as a Thomson Reuters PLC director;
 -209-




---



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
    
    if he shall resign by writing under his hand left at the Office (as defined in the
Thomson Reuters PLC Articles) or if he shall in writing offer to resign and the Thomson
Reuters PLC board of directors shall resolve to accept such offer;
    
    if he shall have a receiving order made against him or shall compound with his
creditors generally or shall apply to the court for an interim order under section 253
of the Insolvency Act 1986 in connection with a voluntary arrangement under that Act;
and/or
    
    if in England and Wales or elsewhere an order shall be made by any court claiming
jurisdiction in that behalf on the ground (however formulated) of mental disorder for
his detention or for the appointment of a guardian or for the appointment of a receiver
or other person (by whatever name called) to exercise powers with respect to his
property or affairs.
 Appointment of Thomson Reuters PLC directors
  
    
    where at such meeting it is expressly resolved not to fill such office or a
resolution for the re-election of such Thomson Reuters PLC director is put to the
meeting and lost;
    
    where such Thomson Reuters PLC director has given notice in writing to Thomson
Reuters PLC that he is unwilling to be re-elected; or
    
    where the default is due to the moving of a resolution in contravention of the next
following paragraph,
  Resolutions to appoint two or more Thomson Reuters PLC directors to be subject to consent of
general meeting
  Filling in casual vacancies and appointing additional Thomson Reuters PLC directors
  
    
    Thomson Reuters PLC may by ordinary resolution appoint any person to be a Thomson
Reuters PLC director either to fill a casual vacancy or as an additional Thomson
Reuters PLC director; and
    
    without prejudice to the above paragraph the Thomson Reuters PLC board of directors
may at any time appoint any person to be a Thomson Reuters PLC director either to fill
a casual vacancy or as an additional Thomson Reuters PLC director.
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Meetings of the Thomson Reuters PLC Board
 Quorum
  Calling of meetings
  Notice of meetings
  Chairman
  Voting at meetings
  Remuneration and expenses
   Powers to give pensions to Thomson Reuters PLC directors
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Directors interests
 Thomson Reuters PLC directors may be interested in contracts with Thomson Reuters PLC and in
companies party to such contracts
  Thomson Reuters PLC directors interests in contracts  general prohibition on voting
  Exceptions to prohibition on voting
  
    
    the giving of any guarantee, security or indemnity (including loans made in
connection therewith) to him in respect of money lent or obligations incurred by him or
any other person at the request of or for the benefit of Thomson Reuters PLC or any of
its subsidiary undertakings;
    
    the giving of any guarantee, security or indemnity to a third party in respect of a
debt or obligation of Thomson Reuters PLC or any of its subsidiary undertakings for
which he himself has assumed responsibility in whole or in part under a guarantee or
indemnity or by the giving of security;
    
    any proposal concerning an offer of shares or debentures or other securities of or
by Thomson Reuters PLC or any of its subsidiary undertakings for subscription or
purchase in which offer he is or may be entitled to participate as a holder of
securities or is to be interested as a participant in the underwriting or
sub-underwriting thereof;
    
    any proposal concerning any other company in which he is interested, directly or
indirectly and whether as an officer or shareholder or otherwise howsoever, provided
that he does not to his knowledge hold an interest in shares (as that term is used in
sections 820 to 824 of the UK Companies Act 2006) representing 1% or more of the issued
shares of any class of such company (excluding any shares of that class held as
treasury shares) (or of any third company through which his interest is derived) or of
the voting rights available to members of the relevant company (any such interest being
deemed for the purpose of the Thomson Reuters PLC Articles to be a material interest in
all circumstances);
    
    any proposal concerning the adoption, modification or operation of any pension,
superannuation or similar scheme or retirement, death or disability benefits scheme or
employees share scheme which has been approved by HMRC or is conditional upon such
approval or does not award him any privilege or benefit not awarded to the employees to
whom such scheme relates; and/or
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
    
    any proposal concerning any insurance which Thomson Reuters PLC is empowered to
purchase and/or maintain for or for the benefit of any Thomson Reuters PLC directors or
for persons who include Thomson Reuters PLC directors.
 Confidential Information
  Borrowing powers
  Forfeiture of shares
    Untraced shareholders
  
    
    during the period of twelve years prior to the date of the publication of the
advertisements referred to below (or, if published on different dates, the first
thereof) no communication has been received by Thomson Reuters PLC from the shareholder
or the person entitled by transmission and no cheque or warrant sent by Thomson Reuters
PLC through the post in a pre-paid letter addressed to the shareholder or to the person
entitled by transmission to the shares at his postal address on the Register or
otherwise the last known postal address given by the shareholder or the person entitled
by transmission to which cheques and warrants are to be sent has been cashed or no
payment made by Thomson Reuters PLC by any other means permitted by the Thomson Reuters
PLC Articles has been claimed or accepted and at least three dividends in respect of
the shares in question have become payable and no dividend in respect of those shares
has been claimed;
 -213-




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
    
    Thomson Reuters PLC shall on expiry of the said period of twelve years have inserted
advertisements in both a national daily newspaper and in a newspaper circulating in the
area in which the last known postal address of the shareholder or the postal address at
which service of notices may be effected in the manner authorized by the Thomson
Reuters PLC Articles is located giving notice of its intention to sell the said shares;
and
    
    during the said period of twelve years and the period of three months following the
publication of the said advertisements Thomson Reuters PLC shall have received no
communication from such shareholder or person.
 Observance of the Reuters Trust Principles
  Cash distributions
    
    
    co-ordinate with the Thomson Reuters Corporation board to agree to the amount of any
Equivalent Distributions;
    
    co-ordinate with the Thomson Reuters Corporation board to agree to the basis of
exchange rates on which the amounts of any Equivalent Distributions shall be
calculated;
    
    co-ordinate with the Thomson Reuters Corporation board to ensure that the record
dates for receipt of Equivalent Distributions are as close as is practicable to the
record dates for cash distributions to the holders of Thomson Reuters Corporation
common shares; and
    
    generally co-ordinate with the Thomson Reuters Corporation board regarding the
timing of all other aspects of the payment or making of any Equivalent Distributions.
 Liquidation
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Takeover bids
  Amendments upon Termination of the Equalization and Governance Agreement
  
    
    Thomson Reuters PLC shall have an irrevocable authority to redeem the Thomson
Reuters PLC Special Voting Share at a sum equal to the amount for the time being paid
up on the Thomson Reuters PLC Special Voting Share together with all unpaid dividends
on the Thomson Reuters PLC Special Voting Share, whether or not such dividends have
been earned or declared, calculated down to the redemption date at any time specified
by the Thomson Reuters PLC board of directors provided always that if Thomson Reuters
PLC shall at any time be unable in compliance with applicable laws to redeem the
Thomson Reuters PLC Special Voting Share on the date specified by the Thomson Reuters
PLC board of directors, then Thomson Reuters PLC shall redeem the Thomson Reuters PLC
Special Voting Share as soon as it is able to comply with such provisions of the
applicable laws;
    
    the Thomson Reuters PLC Entrenched Provisions and all references in the Thomson
Reuters PLC Articles thereto shall be null and void and of no further force or effect;
    
    only in the case of Thomson Reuters PLC becoming a wholly-owned subsidiary of
Thomson Reuters Corporation and, for so long as Reuters Founders Share Company is the
holder of the Thomson Reuters PLC Reuters Founders Share, so long as the effect thereof
is, to the satisfaction of the Reuters Trustees, substantially to preserve and not to
impair the legal rights of the holder of the Thomson Reuters Corporation Reuters
Founders Share in relation to the Thomson Reuters group, Thomson Reuters PLC shall have
an irrevocable authority to redeem the Thomson Reuters PLC Reuters Founders Share at
its nominal value at any time specified by the Thomson Reuters PLC board of directors
provided always that if Thomson Reuters PLC shall at any time be unable in compliance
with applicable laws to redeem the Thomson Reuters PLC Reuters Founders Share on the
date specified by the Thomson Reuters PLC board of directors then Thomson Reuters PLC
shall redeem the Thomson Reuters PLC Reuters Founders Share as soon as it is able to
comply with such provisions of the applicable laws;
    
    only in the case of Thomson Reuters PLC becoming a wholly-owned subsidiary of
Thomson Reuters Corporation and, for so long as Reuters Founders Share Company is the
holder of the Thomson Reuters PLC Reuters Founders Share, so long as the effect thereof
is, to the satisfaction of the Reuters Trustees, substantially to preserve and not to
impair the legal rights of the holder of the Thomson Reuters Corporation Reuters
Founders Share in relation to the Thomson Reuters group, the Thomson Reuters PLC
Reuters Founders Share Provisions and all references in the Thomson Reuters PLC
Articles thereto shall be null and void and of no further force or effect; and
    
    the Thomson Reuters PLC Articles shall be restated as amended with such incidental
or consequential modifications as are necessary to give effect to the foregoing.
 Amendment to Articles of Association effective October 1, 2008
  -215-




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Thomson Reuters Corporation Articles
  Capitalization
  Special Voting Share
  -216-




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
    
    in relation to a resolution to approve a Joint Electorate Action, the rights:
 -
    
    to cast such number of votes in favor of such resolution as were cast in
favor of the Equivalent Resolution by holders of Thomson Reuters PLC
ordinary shares at the parallel meeting of Thomson Reuters PLC shareholders;-
    
    to cast such number of votes against such resolution as were cast against the
Equivalent Resolution by holders of Thomson Reuters PLC ordinary shares at the
parallel meeting of Thomson Reuters PLC shareholders;-
    
    to withhold such number of votes from such resolution as were withheld from
the Equivalent Resolution by holders of Thomson Reuters PLC ordinary shares at
the parallel meeting of Thomson Reuters PLC shareholders; and-
    
    to abstain from voting such number of votes in respect of such resolution as
were recorded as abstentions in respect of the Equivalent Resolution by holders
of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson
Reuters PLC shareholders;
 in each case multiplied by the Equalization Ratio in effect at such time and rounded up
to the nearest whole number, and provided that, if the Thomson Reuters Corporation
Special Voting Share Trustee exercises its voting rights in relation to any such
resolution, it will be required to exercise all, but not less than all, of such voting
rights;
    
    in relation to a resolution to approve a Class Rights Action:
 -
    
    if the Equivalent Resolution was approved by the requisite number of holders
of Thomson Reuters PLC ordinary shares at the parallel meeting of Thomson
Reuters PLC shareholders, no right to cast any vote; and-
    
    if the Equivalent Resolution was not approved by the requisite number of
holders of Thomson Reuters PLC ordinary shares at the parallel meeting of
Thomson Reuters PLC shareholders, the right to cast such number of votes against
such resolution as would be sufficient to defeat it;
 
    
    in relation to a Procedural Resolution, no right to cast any vote; and
    
    in relation to any resolution pertaining to any matter on which the Thomson Reuters
Corporation Special Voting Share Trustee is required by applicable laws to vote
separately as a class, the right to cast one vote.
  -217-




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Reuters Founders Share
  Consent Rights
  Rights in Relation to an Acquiring Person
  
    
    in relation to a resolution to approve a Joint Electorate Action, the rights:
 -
    
    to cast such number of votes in favor of and against such resolution, to
withhold such number of votes from such resolution and to abstain from voting
such number of votes in respect of such resolution as were cast in favor of and
against such resolution, withheld therefrom or recorded as abstentions in
respect thereof, respectively, by the Thomson Reuters Corporation Special Voting
Share Trustee;
 -218-




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-
    
    to cast such number of votes in favor of such resolution as were cast in
favor of such resolution by holders of voting shares of Thomson Reuters
Corporation other than any voting shares which are beneficially owned by an
Acquiring Person;-
    
    to cast such number of votes against such resolution as were cast against
such resolution by holders of voting shares of Thomson Reuters Corporation other
than any voting shares which are beneficially owned by an Acquiring Person;-
    
    to withhold such number of votes from such resolution as were withheld from
such resolution by holders of voting shares of Thomson Reuters Corporation other
than any voting shares which are beneficially owned by an Acquiring Person; and-
    
    to abstain from voting such number of votes in respect of such resolution as
were recorded as abstentions in respect of such resolution by holders of voting
            shares of Thomson Reuters Corporation other than any voting shares which are
beneficially owned by an Acquiring Person;
 in each case multiplied by one hundred, and provided that, for greater certainty, if
Reuters Founders Share Company exercises its voting rights in relation to any such
resolution, it will be required to exercise all, but not less than all, of such voting
rights;
    
    in relation to a resolution to approve a Class Rights Action,
 -
    
    if the Equivalent Resolution is approved by the requisite number (as
determined in accordance with the Thomson Reuters PLC Articles and applicable
laws) of the holders of Thomson Reuters PLC ordinary shares at the parallel
meeting of Thomson Reuters PLC shareholders, the rights:
 o
    
    to cast such number of votes in favor of such resolution as were cast in favor of such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which
are beneficially owned by an Acquiring Person;o
    
    to cast such number of votes against such resolution as were cast against such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which
are beneficially owned by an Acquiring Person;o
    
    to withhold such number of votes from such resolution as were withheld from such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which
are beneficially owned by an Acquiring Person; ando
    
    to abstain from voting such number of votes in respect of such resolution as were recorded as abstentions in respect of such resolution by holders of voting shares of Thomson Reuters Corporation other than any voting shares which are beneficially owned by an Acquiring Person;
 in each case multiplied by one hundred, and provided that, for greater
certainty, if Reuters Founders Share Company exercises its voting rights in
relation to any such resolution, it will be required to exercise all, but not
less than all, of such voting rights;-
    
    if the Equivalent Resolution is not approved by the requisite number (as
determined in accordance with the Thomson Reuters PLC Articles and applicable
laws) of the holders of Thomson Reuters PLC ordinary shares at the parallel
meeting of Thomson Reuters PLC shareholders, no right to cast any vote;
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
    
    in relation to a Procedural Resolution, the rights:
 -
    
    to cast such number of votes in favor of such Procedural Resolution as were
cast in favor of such Procedural Resolution by holders of voting shares of
Thomson Reuters Corporation other than any voting shares which are beneficially
owned by an Acquiring Person;-
    
    to cast such number of votes against such Procedural Resolution as were cast
against such Procedural Resolution by holders of voting shares of Thomson
Reuters Corporation other than any voting shares which are beneficially owned by
an Acquiring Person;-
    
    to withhold such number of votes from such Procedural Resolution as were
withheld from such Procedural Resolution by holders of voting shares of Thomson
Reuters Corporation other than any voting shares which are beneficially owned by
an Acquiring Person; and-
    
    to abstain from voting such number of votes in respect of such Procedural
Resolution as were recorded as abstentions in respect of such Procedural
Resolution by holders of voting shares of Thomson Reuters Corporation other than
any voting shares which are beneficially owned by an Acquiring Person;
 in each case multiplied by one hundred, and provided that, for greater certainty, if
Reuters Founders Share Company exercises its voting rights in relation to any such
Procedural Resolution, it will be required to exercise all, but not less than all, of
such voting rights; and
    
    in respect of any resolution pertaining to any matter on which Reuters Founders
Share Company is required by applicable laws or otherwise entitled to vote separately
as a class, the right to cast one vote.
   Rights upon Delivery of a Reuters Founders Share Control Notice
  -220-




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
    
    in relation to a resolution to approve a Joint Electorate Action, the rights:
 -
    
    if, at the time such votes are cast, there are no Approved Persons or
Approved Persons beneficially own such number of outstanding Thomson Reuters
Corporation common shares and/or Thomson Reuters PLC ordinary shares to which
are attached, in the aggregate (after giving effect to the Equalization Ratio),
the right to cast not more than 35% of all votes entitled to be cast on that
Joint Electorate Action by all shareholders of Thomson Reuters Corporation and
Thomson Reuters PLC (excluding the Thomson Reuters Corporation Special Voting
Share Trustee and the Thomson Reuters PLC Special Voting Share Trustee), to cast
such number of votes as would be sufficient to approve or defeat such
resolution;-
    
    if, at the time such votes are cast, Approved Persons beneficially own such
number of outstanding Thomson Reuters Corporation common shares and/or Thomson
Reuters PLC ordinary shares to which are attached, in the aggregate (after
giving effect to the Equalization Ratio), the right to cast more than 35% but
less than the requisite majority of all votes entitled to be cast on that Joint
Electorate Action by all shareholders of Thomson Reuters Corporation and Thomson
Reuters PLC (excluding the Thomson Reuters Corporation Special Voting Share
Trustee and the Thomson Reuters PLC Special Voting Share Trustee), to cast the
greater of:
 o
    
    such number of votes as is equal to the sum of
(x) the number of votes attached to all voting shares beneficially owned
by all Acquiring Persons and (y) one vote; ando
    
    such number of votes as will cause the votes
attached to all voting shares beneficially owned, and cast in accordance
with the Relevant Terms of Approval, by Approved Persons, when combined
with the votes entitled to be cast by Reuters Founders Share Company, to
constitute the requisite majority of all votes entitled to be cast on
such resolution by all Thomson Reuters Corporation shareholders
(excluding the Thomson Reuters Corporation Special Voting Share
Trustee); and
 -
    
    if, at the time such votes are cast, Approved Persons beneficially own, and
cast in accordance with the Relevant Terms of Approval, the votes attached to,
such number of outstanding Thomson Reuters Corporation common shares and/or
Thomson Reuters PLC ordinary shares to which are attached, in the aggregate
(after giving effect to the Equalization Ratio), the right to cast at least the
requisite majority of all votes entitled to be cast on that Joint Electorate
Action by all shareholders of Thomson Reuters Corporation and Thomson Reuters
PLC (excluding the Thomson Reuters Corporation Special Voting Share Trustee and
the Thomson Reuters PLC Special Voting Share Trustee), no right to cast any
vote;
 
    
    in relation to a resolution to approve a Class Rights Action:
 -
    
    if the Equivalent Resolution is approved by the requisite number (as
determined in accordance with the Thomson Reuters PLC Articles and applicable
laws) of the holders of Thomson Reuters PLC ordinary shares at the parallel meeting of
 -221-




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Thomson Reuters PLC shareholders, the rights:
 o
    
    if, at the time such votes are cast, there are no
Approved Persons or Approved Persons beneficially own such number of
outstanding Thomson Reuters Corporation common shares to which are
attached, in the aggregate, the right to cast not more than 35% of all
votes entitled to be cast on such resolution by all Thomson Reuters
Corporation shareholders (excluding the Thomson Reuters Corporation
Special Voting Share Trustee), to cast such number of votes as would be
sufficient to approve or defeat such resolution;o
    
    if, at the time such votes are cast, Approved
Persons beneficially own such number of outstanding Thomson Reuters
Corporation common shares to which are attached, in the aggregate, the
right to cast more than 35% but less than the requisite majority of all
votes entitled to be cast on such resolution by all Thomson Reuters
Corporation shareholders (excluding the Thomson Reuters Corporation
Special Voting Share Trustee), to cast the greater of:
 §
    
    such number of votes as is equal to the sum of (x) the number of
votes attached to all voting shares beneficially owned by all Acquiring
Persons and (y) one vote; and§
    
    such number of votes as will cause the votes attached to all voting
shares beneficially owned, and cast in accordance with the Relevant
Terms of Approval, by Approved Persons, when combined with the votes
entitled to be cast by Reuters Founders Share Company, to constitute
the requisite majority of all votes entitled to be cast on such
resolution by all Thomson Reuters Corporation shareholders (including
the Thomson Reuters Corporation Special Voting Share Trustee); and
 o
    
    if, at the time such votes are cast, Approved
Persons beneficially own, and cast in accordance with the Relevant Terms
of Approval, the votes attached to, such number of outstanding Thomson
Reuters Corporation common shares to which are attached, in the
aggregate, the right to cast at least the requisite majority of all
votes entitled to be cast on such resolution by all Thomson Reuters
Corporation shareholders (excluding the Thomson Reuters Corporation
Special Voting Share Trustee), no right to cast any vote;
 -
    
    if the Equivalent Resolution is not approved by the requisite number (as
determined in accordance with the Thomson Reuters PLC Articles and applicable
laws) of the holders of Thomson Reuters PLC ordinary shares at the parallel
meeting of Thomson Reuters PLC shareholders, no right to cast any vote;
 
    
    in relation to a Procedural Resolution, the rights:
 -
    
    if, at the time such votes are cast, there are no Approved Persons or
Approved Persons beneficially own such number of outstanding Thomson Reuters
Corporation common shares to which are attached, in the aggregate, the right to
cast not more than 35% of all votes entitled to be cast on that Procedural
Resolution by all shareholders of Thomson Reuters Corporation (excluding the
Thomson Reuters Corporation Special Voting Share Trustee), to cast such number
of votes as would be sufficient to approve or defeat such Procedural Resolution;-
    
    if, at the time such votes are cast, Approved Persons beneficially own such
number of outstanding Thomson Reuters Corporation common shares to which are
attached, in the aggregate, the right to cast more than 35% but less than the
requisite majority of all votes entitled to be cast on that Procedural
Resolution by all shareholders of Thomson Reuters Corporation
 -222-




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(excluding the Thomson Reuters Corporation Special Voting Share
Trustee), to cast the greater of:
 o
    
    such number of votes as is equal to the sum of
(x) the number of votes attached to all voting shares beneficially owned
by all Acquiring Persons and (y) one vote; ando
    
    such number of votes as will cause the votes
attached to all voting shares beneficially owned, and cast in accordance
with the Relevant Terms of Approval, by Approved Persons, when combined
with the votes entitled to be cast by Reuters Founders Share Company, to
constitute the requisite majority of all votes entitled to be cast on
that Procedural Resolution by all Thomson Reuters Corporation
shareholders (excluding the Thomson Reuters Corporation Special Voting
Share Trustee); and
 -
    
    if, at the time such votes are cast, Approved Persons beneficially own, and
cast in accordance with the Relevant Terms of Approval, the votes attached to,
such number of outstanding Thomson Reuters Corporation common shares to which
are attached, in the aggregate, the right to cast at least the requisite
majority of all votes entitled to be cast on that Procedural Resolution by all
shareholders of Thomson Reuters Corporation (excluding the Thomson Reuters
Corporation Special Voting Share Trustee), no right to cast any vote; and
 
    
    at any meeting of the holder of the Reuters Founders Share at which Reuters Founders
Share Company is entitled to vote separately as a class, the right to cast one vote.
 Special Quorum Requirement
  Requisition for Shareholders Meeting
  Consultation Rights
  Equalization Share
  -223-




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Constitution of the Thomson Reuters Corporation Board
  Management Generally
  Management in Relation to the Equalization and Governance Agreement
  Observance of Reuters Trust Principles
  Thomson Reuters News Services
  Cash Distributions
   
    
    coordinates with the Thomson Reuters PLC board of directors to agree to the amount
of any Equivalent Distributions;
 -224-




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
    
    coordinates with the Thomson Reuters PLC board of directors to agree to the basis of
exchange rates on which the amounts of any Equivalent Distributions will be calculated;
    
    coordinates with the Thomson Reuters PLC board of directors to ensure that the
record dates for receipt of Equivalent Distributions are as close in time as is
practicable to record dates for cash distributions to the holders of Thomson Reuters
Corporation common shares; and
    
    generally coordinates with the Thomson Reuters PLC board of directors regarding the
timing of all other aspects of the payment or making of any Equivalent Distributions.
 Insolvency
  Take-Over Bids
  Amendments upon Termination of Equalization and Governance Agreement
  
    
    the Equalization Share will be deemed to have been purchased for cancellation by
Thomson Reuters Corporation upon its payment to the holder thereof of the sum of $1.00;
    
    the Special Voting Share will be deemed to have been purchased for cancellation by
Thomson Reuters Corporation upon its payment to Thomson Reuters Corporation Special
Voting Share Trust of the sum of $1.00;
    
    the Thomson Reuters Corporation Entrenched Articles and all references in the
Thomson Reuters Corporation Articles thereto will be null and void and of no further
force or effect;
    
    only in the case of Thomson Reuters Corporation becoming a wholly-owned subsidiary
of Thomson Reuters PLC and so long as the effect thereof is, to the satisfaction of the
Reuters Trustees, substantially to preserve and not to impair the legal rights of the
holder of the Reuters Founders Share in the capital of Thomson Reuters PLC in relation
to Thomson Reuters, the Reuters Founders Share will be deemed to have been purchased
for cancellation by Thomson Reuters Corporation upon its payment to Reuters Founders
Share Company of the sum of $1.00;
    
    only in the case of Thomson Reuters Corporation becoming a wholly-owned subsidiary
of Thomson Reuters PLC and, for so long as Reuters Founders Share Company is the holder
of the Reuters Founders Share, so long as the effect thereof is, to the satisfaction of
the Reuters Trustees, substantially to preserve and not to impair the legal rights of
the holder of the Reuters Founders Share in the capital of Thomson Reuters PLC in
relation to Thomson Reuters, certain provisions in the Thomson Reuters Corporation
Articles relating to Reuters Founders Share Company and the references in the Thomson
Reuters Corporation Articles thereto will be null and void and of no further force or
effect; and
    
    the Thomson Reuters Corporation Articles will be restated as amended with such
incidental or consequential modifications as are necessary to give effect to the
foregoing.
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Thomson Reuters Corporation By-Laws
  Meetings of Shareholders
 Notice with Respect to Joint Electorate Action or Class Rights Action
  Manner of Voting
  Voting by Proxy
  Objections to Validity of Votes
  Quorum
  
    
    at any meeting the business of which includes the consideration of any resolution on
which the Thomson Reuters Corporation Special Voting Share Trustee is entitled to vote,
a quorum is not present for any purpose unless the Thomson Reuters Corporation Special
Voting Share Trustee is present (through a duly authorized representative) or
represented by proxy; and
    
    at any meeting the business of which includes the consideration of any resolution on
which Reuters Founders Share Company is entitled to vote, a quorum is not present for
any purpose unless Reuters Founders Share Company is present (through a duly authorized
representative) or represented by proxy.
 Adjournment of Meetings
  -226-




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Actions for Shareholder Approval
   Joint Electorate Actions
  Deemed Class Rights Actions
  Class Rights Actions
  Procedure for Approval of Joint Electorate Actions and Class Rights Actions
  Procedural Resolutions
  Coordination with Thomson Reuters PLC
  
    
    the Thomson Reuters Corporation board of directors must (unless such action is
proposed for an annual meeting of Thomson Reuters Corporation shareholders) convene a
special meeting of shareholders as close in time as practicable to the Thomson Reuters
PLC shareholders meeting at which such Joint Electorate Action or Class Rights Action
is to be proposed;
    
    the Thomson Reuters Corporation board of directors must propose for consideration at
such meeting an Equivalent Resolution in respect of such Joint Electorate Action or
Class Rights Action;
    
    the Thomson Reuters Corporation board of directors must submit such Equivalent
Resolution to shareholders as an ordinary resolution unless otherwise required to be
approved as a special resolution; and
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
    
    Thomson Reuters Corporation will co-operate fully with Thomson Reuters PLC in
preparing resolutions, information circulars or statements, explanatory memoranda or
any other information or material required in connection with the proposed Joint
Electorate Action or Class Rights Action.
 Discretionary Matters
  Omission to Give Notice
  Amended Deed of Mutual Covenant
  Reuters Trust Principles
  
    
    that Thomson Reuters shall at no time pass into the hands of any one interest, group
or faction;
    
    that the integrity, independence and freedom from bias of Thomson Reuters shall at
all times be fully preserved;
    
    that Thomson Reuters shall supply unbiased and reliable news services to newspapers,
news agencies, broadcasters and other media subscribers and to businesses, governments,
institutions, individuals and others with whom Thomson Reuters has or may have
contracts;
    
    that Thomson Reuters shall pay due regard to the many interests which it serves in
addition to those of the media; and
    
    that no effort shall be spared to expand, develop and adapt the news and other
services and products of Thomson Reuters so as to maintain its leading position in the
international news and information business.
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Appointment of Trustees to Reuters Founders Share Company
    Additional Covenants
       Other Matters
  -229-




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Variation and Termination
  Governing Law
  Equalization and Governance Agreement
  DLC Structure Operation Principles
  
    
    Thomson Reuters Corporation, Thomson Reuters PLC and their respective subsidiaries
operate as a unified group;
    
    the boards of directors of Thomson Reuters Corporation and Thomson Reuters PLC are
comprised of the same individuals, as are the companies executive management; and
    
    the directors of Thomson Reuters Corporation and Thomson Reuters PLC, in addition to
their duties to the company concerned, have regard to, and take into account in the
exercise of their powers, the best interests of the other company, and of both the
holders of Thomson Reuters Corporation common shares and the holders of Thomson Reuters
PLC ordinary shares.
  Equalization
Principle
  
    
    is entitled to receive from Thomson Reuters PLC distributions of capital or income
equivalent to those of a holder of one Thomson Reuters Corporation common share; and
    
    enjoys equivalent rights as to voting in relation to Joint Electorate Actions as
those of a holder of one Thomson Reuters Corporation common share,
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Economic and Voting Rights, Generally
  
    
    Thomson Reuters PLC will undertake an action such that the economic and voting
rights (in relation to Joint Electorate Actions) of a holder of a Thomson Reuters PLC
ordinary share determined by reference to a holder of a Thomson Reuters Corporation
common share are maintained in proportion to the then prevailing Equalization Ratio
(the Matching Action); or
    
    an appropriate adjustment to the Equalization Ratio will be made in order to ensure
that there is equitable treatment (having regard to the then prevailing Equalization
Ratio) for a holder of one Thomson Reuters PLC ordinary share relative to a holder of
one Thomson Reuters Corporation common share.
  Cash Distributions
 Equivalent Distribution
  Equalization Payment
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Voting Arrangements for Thomson Reuters
  Joint Electorate Actions
  
    
    the appointment, election, re-election or removal of any director of Thomson Reuters
Corporation or Thomson Reuters PLC;
    
    to the extent such receipt or adoption is required by applicable laws, the receipt
or adoption of the financial statements or accounts of Thomson Reuters Corporation or
Thomson Reuters PLC, or financial statements or accounts prepared on a combined basis,
other than any financial statements or accounts in respect of the period(s) ended prior
to the Effective Date;
    
    a change of name of Thomson Reuters Corporation or Thomson Reuters PLC; and
    
    the appointment or removal of the auditors of Thomson Reuters Corporation or Thomson
Reuters PLC.
  Class Rights Actions
  
    
    the voluntary liquidation of either company;
    
    any adjustment to the Equalization Ratio other than in accordance with the
Equalization and Governance Agreement;
    
    any amendment to, or termination of, the Equalization and Governance Agreement, the
Special Voting Share Agreements or the Cross-Guarantees, other than: (i) any amendment
which is formal or technical in nature and which is not materially prejudicial to the
interests of Thomson Reuters Corporation shareholders or Thomson Reuters PLC
shareholders; or (ii) is necessary to correct any inconsistency or manifest error as
may be agreed by the Thomson Reuters board;
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
    
    any amendment to, removal or alteration of the effect of (which will include the
ratification of any breach of) any of the Thomson Reuters Corporation Entrenched
Provisions or the Thomson Reuters PLC Entrenched Provisions;
    
    a change in the corporate status of Thomson Reuters Corporation from a corporation
existing under the OBCA with its primary listing on the TSX or the NYSE or of Thomson
Reuters PLC from a public limited company incorporated in England and Wales with its
primary listing on the Official List of the UKLA (unless such change occurs in
connection with termination of the Equalization and Governance Agreement in
circumstances not requiring approval as a Class Rights Action);
    
    any other action or matter the Thomson Reuters board determines (either in a
particular case or generally) should be approved as a Class Rights Action; and
    
    any action to be approved as a Class Rights Action pursuant to the Equalization and
Governance Agreement.
  Procedural Resolutions
  
    
    that certain persons be allowed to attend or be excluded from attending a meeting;
    
    that discussion be closed and a question put to a vote (provided no amendments have
been raised);
    
    that a question under discussion not be put to a vote;
    
    to proceed with matters in an order other than that set out in the notice of a
meeting;
    
    to adjourn a debate (for example, to a subsequent meeting); and
    
    to adjourn a meeting.
 Take-over Bids
 Equivalent Treatment Principle
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
    
    either prior to or simultaneously with the Triggering Event, such person makes a
Qualifying Take-Over Bid (and, in the event that such Qualifying Take-Over Bid was made
prior to the Triggering Event, such Qualifying Take-Over Bid has not been withdrawn,
abandoned or terminated prior to or simultaneously with the Triggering Event); or
    
    the Triggering Event was a Permitted Bid Acquisition.
  Qualifying Take-Over Bid
  
    
    are made to all holders of Thomson Reuters Corporation common shares and Thomson
Reuters PLC ordinary shares;
    
    are undertaken with respect to the Thomson Reuters Corporation common shares and
Thomson Reuters PLC ordinary shares at or about the same time; and
    
    are equivalent (although not necessarily the same) in all material respects to the
holders of Thomson Reuters Corporation common shares and Thomson Reuters PLC ordinary
shares, including with respect to:
 -
    
    the consideration offered for such shares (taking into account exchange rates
and the Equalization Ratio);-
    
    the information provided to such holders;-
    
    the time available to such holders to consider such offers; and-
    
    the conditions to which the offers are subject.
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
    
    beneficial ownership of 20% or more of the outstanding Thomson Reuters Corporation
common shares;
    
    an interest in 30% or more of the outstanding Thomson Reuters PLC ordinary shares
(taking into account Thomson Reuters PLC ordinary shares in which persons acting in
concert are interested); or
    
    an interest in such number of outstanding Thomson Reuters Corporation common shares
and/or Thomson Reuters PLC ordinary shares (taking into account Thomson Reuters
Corporation common shares and/or Thomson Reuters PLC ordinary shares in which persons
acting in concert are interested) to which are attached, in the aggregate (after giving
effect to the Equalization Ratio), the right to cast 30% or more of all votes entitled
to be cast on a Joint Electorate Action by all shareholders of Thomson Reuters
Corporation and Thomson Reuters PLC (excluding the holder of the Thomson Reuters
Corporation Special Voting Share and the holder of the Thomson Reuters PLC Special
Voting Share), in each case calculated in accordance with applicable laws governing
take-over bids.
 Insolvency
  Economic Equivalence
 
    
    to offer irrevocably Thomson Reuters Corporation common shares to holders of Thomson
Reuters PLC ordinary shares pro rata to their holdings of Thomson Reuters PLC ordinary
shares in consideration for such Thomson Reuters PLC ordinary shares; or
    
    to make a payment to holders of Thomson Reuters PLC ordinary shares,
   Termination of the Equalization and Governance Agreement
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
    
    by mutual agreement of Thomson Reuters Corporation and Thomson Reuters PLC and upon
approval as a Class Rights Action; or
    
    after all insolvency obligations have been satisfied.
  Governing Law
  Special Voting Share Agreements
 Thomson Reuters Corporation Special Voting Share Trust Deed
   Duties of the Trustee
   Indemnification
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Amendments
  Termination
  Governing Law
  Thomson Reuters PLC Special Voting Share Trust Deed
    Duties of the Trustee
  -237-




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Indemnification
  Amendments
  
    
    if such amendment does not materially and adversely affect the rights of any holder
of Thomson Reuters Corporation common shares under the Thomson Reuters PLC Special
Voting Share Trust Deed;
    
    to cure any ambiguity or to correct or supplement any provision in the Thomson
Reuters PLC Special Voting Share Trust Deed which may be defective or inconsistent with
any other provision in such deed or the Thomson Reuters PLC Articles;
    
    to add to the covenants, restrictions or obligations for the benefit of holders of
Thomson Reuters Corporation common shares;
    
    to comply with the requirements of the law governing the Thomson Reuters PLC Special
Voting Share Trust Deed;
    
    to comply with any requirements imposed by the US Internal Revenue Code of 1986, as
amended (the US Tax Code) or to qualify the Thomson Reuters PLC Special Voting Share
Trust as a grantor trust under the US Tax Code;
    
    to amend or waive the terms of the trustee limitation of liability provision of the
Thomson Reuters PLC Special Voting Share Trust Deed in any manner which will not
adversely affect the holders of Thomson Reuters Corporation common shares in any
material respect; or
    
    to evidence and provide for the acceptance of appointment under the Thomson Reuters
PLC Special Voting Share Trust Deed by a successor trustee.
  -238-




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Termination
 pro rata
 Governing Law
  Special Voting Share Agreement
  Attendance and Voting Obligations
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Indemnification
  Amendments to Special Voting Share Agreement
  Termination of Special Voting Share Agreement
  Governing Law
  Cross-Guarantees
 Thomson Reuters Corporation Guarantee
 Unconditional Guarantee
  
    
    any contractual obligations owed to creditors of Thomson Reuters PLC as of, or
incurred after, the Effective Date;
    
    any contractual obligations of certain other persons, referred to as principal
debtors, which are guaranteed by Thomson Reuters PLC as of, or incurred after, the
Effective Date; and
    
    any other obligations of Thomson Reuters PLC or any principal debtor of any kind
which may be agreed to in writing between Thomson Reuters Corporation and Thomson
Reuters PLC,
  
    
    to the extent covered by the terms of any policy of insurance (or indemnity in the
nature of insurance) of which Thomson Reuters PLC (or the principal debtor) has the
benefit and which is in full force and effect;
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
    
    explicitly guaranteed in writing by Thomson Reuters Corporation (otherwise than
under the Thomson Reuters Corporation Guarantee) or for which Thomson Reuters
Corporation has agreed in writing to act as co-obligor or co-issuer;
    
    under an arrangement which explicitly provides that the obligation is not to be
guaranteed by Thomson Reuters Corporation;
    
    owed to Thomson Reuters Corporation, a subsidiary of Thomson Reuters Corporation or
to any of the subsidiaries of Thomson Reuters PLC, save where such obligation is owed
expressly to any subsidiary in its capacity as trustee for a registered occupational
pension scheme;
    
    under or in connection with any guarantee by Thomson Reuters PLC of any obligation
of Thomson Reuters Corporation or any subsidiary of Thomson Reuters Corporation;
    
    excluded from the scope of the Thomson Reuters Corporation Guarantee (see below);
    
    consisting of an obligation to pay a creditor an amount to compensate for any
deduction or withholding for or on account of tax from any payment to that creditor,
where no such deduction or withholding would be required as a result of payment being
made by Thomson Reuters Corporation under the Thomson Reuters Corporation Guarantee
rather than by the relevant principal debtor under the guaranteed obligation;
    
    under a guarantee to the extent that the guaranteed obligation is not a contractual
obligation or is of a type excluded as referred to above; or
    
    owed to holders of Thomson Reuters PLC ordinary shares, in their capacity or
otherwise flowing from their status as holders of such shares.
     Exclusion of Obligations
  -241-




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Termination or Amendment
  
    
    the Equalization and Governance Agreement terminates or ceases to have effect;
    
    the Thomson Reuters PLC Guarantee terminates or ceases to have effect; or
    
    a resolution is passed or an order is made for the liquidation of Thomson Reuters
PLC.
  Governing Law
  Thomson Reuters PLC Guarantee
 Unconditional Guarantee
  
    
    any contractual obligations owed to creditors of Thomson Reuters Corporation as of,
or incurred after, the Effective Date;
    
    any contractual obligations of certain other persons, referred to as principal
debtors, which are guaranteed by Thomson Reuters Corporation as of, or incurred after,
the Effective Date; and
    
    any other obligations of Thomson Reuters Corporation or any principal debtor of any
kind which may be agreed to in writing between Thomson Reuters PLC and Thomson Reuters
Corporation,
  
    
    to the extent covered by the terms of any policy of insurance (or indemnity in the
nature of insurance) of which Thomson Reuters Corporation (or the principal debtor) has
the benefit and which is in full force and effect;
    
    explicitly guaranteed in writing by Thomson Reuters PLC (otherwise than under the
Thomson Reuters PLC Guarantee) or for which Thomson Reuters PLC has agreed in writing
to act as co-obligor or co-issuer;
    
    under an arrangement which explicitly provides that the obligation is not to be
guaranteed by Thomson Reuters PLC;
    
    owed to Thomson Reuters PLC, a subsidiary of Thomson Reuters PLC or to any of the
subsidiaries of Thomson Reuters Corporation, save where such obligation is owed
expressly to any subsidiary in its capacity as trustee for a registered occupational
pension scheme;
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
    
    under or in connection with any guarantee by Thomson Reuters Corporation of any
obligation of Thomson Reuters PLC or any subsidiary of Thomson Reuters PLC;
    
    excluded from the scope of the Thomson Reuters PLC Guarantee (see below);
    
    consisting of an obligation to pay a creditor an amount to compensate for any
deduction or withholding for or on account of tax from any payment to that creditor,
where no such deduction or withholding would be required as a result of payment being
made by Thomson Reuters PLC under the Thomson Reuters PLC Guarantee rather than by the
relevant principal debtor under the guaranteed obligation;
    
    under a guarantee to the extent that the guaranteed obligation is not a contractual
obligation or is of a type excluded as referred to above; or
    
    owed to holders of Thomson Reuters Corporation common shares, in their capacity or
otherwise flowing from their status as holders of such shares.
      Exclusion of Obligations
  Termination or Amendment
  
    
    the Equalization and Governance Agreement terminates or ceases to have effect;
    
    the Thomson Reuters Corporation Guarantee terminates or ceases to have effect; or
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
    
    a resolution is passed or an order is made for the liquidation of Thomson Reuters
Corporation.
  Governing Law
  Reuters Trust Principles Support Agreement
  Designation as Approved Person
  Agreements of Woodbridge with respect to Voting
    -244-




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Additional Agreements of Woodbridge
  
    
    Woodbridge uses its best efforts as a shareholder of Thomson Reuters Corporation and
Thomson Reuters PLC to ensure that the Reuters Trust Principles are complied with in
relation to Thomson Reuters;
    
    Without the prior written consent of Reuters Founders Share Company, Woodbridge will
not transfer any voting shares of Thomson Reuters Corporation or Thomson Reuters PLC to
any person that is not an Approved Person, where the transferee would become an
Acquiring Person under the Thomson Reuters Corporation Articles or the Thomson Reuters
PLC Articles;
    
    Without the prior written consent of Reuters Founders Share Company, Woodbridge will
not purchase securities of any class of Thomson Reuters Corporation or Thomson Reuters
PLC if, as a result of such transaction, securities of that company would cease to be
eligible for listing on a stock exchange on which that companys securities are then
listed; and
    
    Upon the request of Reuters Founders Share Company, Woodbridge will promptly
requisition the Thomson Reuters board to call a meeting of shareholders of Thomson
Reuters Corporation and/or Thomson Reuters PLC for such purpose as Reuters Founders
Share Company, in its sole and absolute discretion, thinks fit.
 Termination
   Implementation Agreement
    
    
    to cooperate and take or cause to be taken all such steps as are within their power
and as may be necessary or desirable to implement the Transaction as soon as reasonably
practicable; and
    
    without prior consent of the parties, not to take a step which they believe could
significantly frustrate Thomson Reuters from obtaining the benefits of the Transaction.
  -245-




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Conditions and Obligations
 Antitrust Conditions
  
    
    the approval of all resolutions necessary for the completion of the Transaction by
Reuters shareholders;
    
    the approval of all resolutions necessary for the completion of the Transaction by
Thomson shareholders;
    
    the approval of the Reuters Scheme by the English Court and the obtaining of the
Interim Order and Final Order from the Ontario Court;
    
    the admission of Thomson Reuters PLC ordinary shares to listing on the Official List
of the UKLA, and their admission to trading on the LSEs main market for listed
securities; and
    
    that no material adverse change in the business, assets, position or profits of
Reuters or Thomson occurred, such condition being waivable by Thomson or Reuters in
respect of a material adverse change of the other company.
  
    
    not to issue such number of Thomson common shares which would result in Woodbridge
holding less than 66 2/3% of the then outstanding Thomson common shares;
    
    not to take or omit to take any action which, if the Equalization and Governance
Agreement were in force, would require an adjustment to the Equalization Ratio (which
until the Effective Date is deemed to be 0.16 Thomson common shares to one Reuters
ordinary share), a Matching Action or a Class Rights Action; and
    
    not to participate in substantive meetings or discussions with any regulatory
authority in respect of the Antitrust Conditions or the other conditions without the
prior consent of Reuters.
  
    
    at the request of Thomson, to agree to divest, hold separate or take any other
action that limits its freedom of action with respect to, or its ability to retain, its
businesses, services or assets, provided that any such action may be conditioned on the
Transaction having been completed;
    
    not to solicit an offer from any person wishing to undertake an offer in respect of
a significant proportion of Reuters ordinary shares, not to sell the whole of or a
substantial part of its consolidated assets, and not to partake in any transaction
inconsistent with the completion of the Transaction;
    
    not to engage in any act or omission which would require the consent of Reuters
shareholders under applicable laws, other than as required to implement the
Transaction, or pursuant to a pre-existing contractual obligation, without the prior
consent of Thomson;
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
    
    not to borrow any funds other than in the ordinary course of business or to meet its
pre-existing obligations, or agree to any additional restrictions with its existing
lenders on its ability to declare dividends and/or transfer assets to Thomson or any
affiliate of Thomson, without the prior consent of Thomson;
    
    not to take or omit to take any action which, if the Equalization and Governance
Agreement were in force, would require an adjustment to the Equalization Ratio (which
until the Effective Date is deemed to be 0.16 Thomson common shares to one Reuters
ordinary share), a Matching Action or a Class Rights Action; and
    
    not to participate in substantive meetings or discussions with any regulatory
authority in respect of the Antitrust Conditions or the other conditions without the
prior consent of Thomson.
 Other Key Provisions of the Implementation Agreement
 Alternative Proposals and Break Fees
     Conduct of the Business
  Representations and Warranties
  -247-




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Declaration and Payment of Dividends
  Reuters Share Plans
  Special Voting Shares and Founders Shares
  Corporate Governance
  Termination
  
    
    Reuters shareholders did not approve the Reuters Scheme;
    
    Thomson failed to obtain the Interim Order or the Final Order;
    
    the English Court failed to sanction the Reuters Scheme;
    
    the Transaction was not completed by December 31, 2008; or
    
    any of the Antitrust Conditions or other conditions were (or became) incapable of
satisfaction and, where such condition was capable of waiver, were not waived.
  Governing Law
  -248-




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Other Agreements
 Thomson Information
  Reuters Information
  
 ITEM 10D. Exchange Controls
 Exchange Controls
  
 ITEM 10E. Taxation
 Taxation information for US shareholders
 Treaty
 US holder
  -249-




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Taxation of dividends
 UK taxation
  US federal income taxation
  Qualified dividend income
 PFIC
  Taxation of capital gains
 UK taxation
  -250-




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Additional tax considerations
 UK inheritance tax
  UK stamp duty and stamp duty reserve tax
   US PFIC status
  -251-




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US information reporting and backup withholding
  
 ITEM 10F. Dividends and Paying Agents
  
 ITEM 10G. Statement by Experts
  
 ITEM 10H. Documents on Display
    
 ITEM 10I. Subsidiary Information
  -252-




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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Thomson Information
  Reuters Information
  
 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
  
 PART II
 
 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  
 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
  
 ITEM 15. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
 Thomson Information
  Reuters Information
  -253-




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Managements Annual Report on Internal Control Over Financial Reporting
 Thomson Information
  Reuters Information
     Report of the Independent Auditors
  -254-




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ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
  
 ITEM 16B. CODE OF ETHICS
  
 ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Thomson Information
   (in millions of US dollars)
    
    2007
    
    
    2006Audit fees
    
    $
    13.7
    
    
    $
    21.1Audit-related fees
    
    
    19.0
    
    
    
    11.5Tax fees
    
    
    10.9
    
    
    
    7.4All other fees
    
    
    0.2
    
    
    
    0.1Total
    
    $
    43.8
    
    
    $
    40.1
 Audit Fees
  Audit-related Fees
  Tax Fees
  All Other Fees
  -255-




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Reuters Information
  
 ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  
 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
 Thomson Information
  Reuters Information
  
 PART III
 
 ITEM 17. FINANCIAL STATEMENTS
  
 ITEM 18. FINANCIAL STATEMENTS
  ExhibitReuters InformationIndex to consolidated financial statements
    
    Annex A-1Report
of Independent Registered Public Accounting Firm to the Members of
Reuters Group PLC
    
    Annex A-2Consolidated income statement for the years ended December 31, 2007, 2006 and 2005
    
    Annex A-3Consolidated statement of recognized income and expense for the years ended December 31, 2007, 2006 and 2005
    
    Annex A-4Consolidated balance sheet as of December 31, 2007, 2006 and 2005
    
    Annex A-5Consolidated cash flow statement for the years ended December 31, 2007, 2006 and 2005
    
    Annex A-6Group accounting policies
    
    Annex A-7Notes to the financial statements
    
    Annex A-8
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ITEM 19. EXHIBITS
 Number
    
    Description3.1
    
    Thomson Reuters PLC Memorandum of
Association filed herewith3.2
    
    Thomson Reuters PLC Articles of
Association filed herewith4.1
    
    Implementation Agreement, dated May 15, 2007, among The Thomson Corporation,
Reuters Group PLC, The Woodbridge Company Limited and Thomson-Reuters Limited,
together with the agreed forms of Equalization and Governance Agreement,
Thomson-Reuters PLC Deed of Guarantee and The Thomson Corporation Deed of
Guarantee (incorporated by reference to Exhibit 99.1 from
Reuters Form 6-K
(File No. 333-08354), dated May
24, 2007)4.2
    
    Credit Agreement dated as of August 14, 2007
(incorporated by reference to Exhibit 99.1 from Thomson Reuters Corporations
Form 6-K dated August 31, 2007)4.3
    
    364-Day Revolving Credit Agreement dated as of May 24, 2007
and as amended on June 27, 2007 (incorporated by reference to Exhibit 99.2 from Thomson Reuters
Corporations Form 6-K dated August 31, 2007)4.4
    
    Trust Indenture dated as of November 20, 2007 (incorporated
by reference to Exhibit 7.1 from Thomson Reuters Corporations
Form F-9 registration statement,
dated November 9, 2007)4.5
    
    Deposit Agreement, dated as of April 17, 2008, by and among
Thomson Reuters PLC, Deutsche Bank Trust Company Americas, as depositary, and all Holders and
Beneficial Owners from time to time of American Depositary Shares evidenced by American
Depositary Receipts issued thereunder (including the form of American Depositary Receipt to be
issued thereunder, attached as Exhibit A thereto)(incorporated by
reference to Exhibit A from
Thomson Reuters PLCs Form F-6 registration statement dated April 17, 2008)4.6
    
    Service Agreement of Thomas H.
Glocer with Reuters Group. PLC
dated as of March 9, 2007 (incorporated by reference to Exhibit 4.10.1 from Reuters Group
PLCs Annual Report on Form 20-F dated March 16, 2007)
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Number
    
    Description4.7
    
    Amended and Restated Programme Agreement, dated June 9, 2006, between Reuters
Group PLC, as Issuer and Guarantor, and Reuters Finance PLC, as Issuer, in respect
of a £1,000,000,000 Euro Medium Term Note Programme (incorporated by reference to
Exhibit 4.6 from Reuters Form 20-F annual report (File
No. 333-08354), as amended, dated March 16, 2007)4.8
    
    Amended and Restated Trust Deed, dated June 9, 2006, among Reuters Group PLC, as
Issuer and as Guarantor, and Reuters Finance PLC, as Issuer, and Citicorp Trustee
Company Limited, in respect of a £1,000,000,000 Euro Medium Term Note Programme
(incorporated by reference to Exhibit 4.6.1 from Reuters Form 20-F annual report (File
No. 333-08354), as amended, dated March 16,
2007)4.9
    
    Amended and Restated Agency Agreement, dated June 9, 2006, among Reuters Group
PLC as Issuer and Guarantor; Reuters Finance PLC as Issuer; Citibank, N.A. as
Agent; Citigroup Global Markets Deutschland AG & CO. KGaA as Paying Agent; and
Citicorp Trustee Company Limited as Trustee, in respect of a £1,000,000,000 Euro
Medium Term Note Programme (incorporated by reference to Exhibit 4.6.2 from
Reuters Form 20-F annual report (File No. 333-08354), as amended,
dated March 16, 2007)4.10
    
    Final Terms dated November 24, 2006, in respect of Reuters Group PLC Issue of EUR
250,000,000 Floating Rate Notes due November 2008 under the £1,000,000,000 Euro
Medium Term Note Programme (incorporated by reference to Exhibit 4.6.7 from
Reuters Form 20-F annual report (File No. 333-08354), dated March 16, 2007)4.11
    
    Subscription Agreement of Reuters Group PLC, dated November 24, 2006, with
respect to EUR 250,000,000 Floating Rate Notes due November 2008 (incorporated by
reference to Exhibit 4.6.8 from Reuters Form 20-F annual report (File No. 333-08354),
dated March 16, 2007)4.12
    
    £680,000,000 Multicurrency Revolving Facility Agreement of Reuters Group PLC,
dated October 26, 2006, arranged by Citigroup Global Markets Limited; Commerzbank
AG London Branch; Deutsche Bank AG, London Branch; Dresdner Bank AG Niederlassung
Luxembourg; HSBC Bank plc; J.P. Morgan plc; Lloyds TSB Bank PLC; Morgan Stanley
Bank International Limited; Société Générale; Standard Chartered Bank; The Royal
Bank of Scotland plc; and UBS Limited, with HSBC Bank plc acting as Agent
(incorporated by reference to Exhibit 4.7 from Reuters Form 20-F annual report (File
No. 333-08354), dated March 16, 2007)
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Number
    
    Description15.1
    
    Consent of PricewaterhouseCoopers LLP London31.1
    
    Certification of Thomson Reuters
PLCs Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Thomson Reuters
PLCs Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Thomson Reuters
PLCs Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 200232.2
    
    Certification of Thomson Reuters
PLCs Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 200299.1
    
    Thomsons managements discussion and analysis
for the year ended December 31, 2007 filed herewith99.2
    
    Thomsons audited consolidated
financial statements for the year ended December 31, 2007 filed
herewith99.3
    
    Equalization and Governance Agreement (incorporated by reference to Exhibit
99.3 from Thomson Reuters Corporations Form 6-K dated April 17, 2008)99.4
    
    Thomson Reuters Corporation Deed of Guarantee (incorporated by reference to
Exhibit 99.4 from Thomson Reuters Corporations Form 6-K dated April 17, 2008)99.5
    
    Thomson Reuters PLC Deed of Guarantee (incorporated by reference to Exhibit
99.5 from Thomson Reuters Corporations Form 6-K dated April 17, 2008)99.6
    
    Thomson Reuters Corporation Voting Share Trust Deed (incorporated by reference to
Exhibit 99.6 from Thomson Reuters Corporations Form 6-K
dated April 17, 2008)99.7
    
    Thomson Reuters PLC Voting Share Trust Deed (incorporated by reference to Exhibit
99.7 from Thomson Reuters Corporations Form 6-K
dated April 17, 2008)99.8
    
    Special Voting Share Agreement (incorporated by reference to Exhibit 99.8
from Thomson Reuters Corporations Form 6-K dated April 17, 2008)99.9
    
    Reuters Trust Principles Support Agreement (incorporated by reference to Exhibit
99.9 from Thomson Reuters Corporations Form 6-K
dated April 17, 2008)
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Number
    
    Description99.10
    
    Amended and Restated Deed of Mutual Covenant (incorporated by reference to Exhibit
99.10 from Thomson Reuters Corporations Form 6-K
dated April 17, 2008)99.11
    
    Engagement Letter of Niall FitzGerald with Reuters Group PLC
dated as of March 2, 2004 (incorporated by reference to Exhibit 4.10.5 from Reuters Group
PLCs Annual Report on Form 20-F dated March 16, 2004)99.12
    
    Summary Description of the Thomson
Reuters PLC American Depositary Shares, evidenced by American
Depositary Receipts filed herewith99.13
    
    Woodbridge Undertaking
(incorporated by reference to Exhibit 99.11 from Thomson Reuters
Corporations Form 6-K dated
April 17, 2008)
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SIGNATURE
  Dated: April 17, 2008
    THOMSON REUTERS PLCBy:
/s/
Deirdre StanleyName:
    Deirdre StanleyTitle:
    Executive Vice President and General Counsel -261-




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REUTERS GROUP PLC
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of
Independent Registered Public Accounting Firm to the Members of
Reuters Group PLC
    
    A-2Consolidated
income statement for the years ended December 31, 2007, 2006 and 2005
    
    A-3Consolidated
statement of recognized income and expense for the year ended December 31, 2007, 2006, and 2005
    
    A-4Consolidated
balance sheet as of December 31, 2007, 2006 and 2005
    
    A-5Consolidated
cash flow statement for the years ended December 31, 2007, 2006 and 2005
    
    A-6Group Accounting Policies
    
    A-7.1Notes to the financial statements
    
    A-8.1
 A-1




---



##### Table of Contents



Report
of Independent Registered Public
Accounting Firm to the Members of Reuters
Group PLC
     
 PricewaterhouseCoopers LLP
 
 A-2




---



##### Table of Contents



Consolidated income statement
 For the
year ended 31 December
 2007
    
    
    2006
    
    
    2005Notes
    
    
    £m
    
    
    £m
    
    
    £mRevenue
    
    
    01,02
    
    
    
    2,605
    
    
    
    2,566
    
    
    
    2,409Operating costs
    
    
    03
    
    
    
    (2,355
    )
    
    
    (2,351
    )
    
    
    (2,251
    )Other operating income
    
    
    04
    
    
    
    42
    
    
    
    41
    
    
    
    49Operating profit
    
    
    
    
    
    
    292
    
    
    
    256
    
    
    
    207Finance income
    
    
    05
    
    
    
    117
    
    
    
    72
    
    
    
    41Finance costs
    
    
    05
    
    
    
    (151
    )
    
    
    (87
    )
    
    
    (53
    )Profit on disposal of associates, joint ventures and
available-for-sale financial assets
    
    
    
    
    
    
    21
    
    
    
    76
    
    
    
    38Share of post-tax (losses)/profits from associates and joint ventures*
    
    
    15
    
    
    
    (6
    )
    
    
    (4
    )
    
    
    5Profit before tax
    
    
    
    
    
    
    273
    
    
    
    313
    
    
    
    238Taxation
    
    
    06
    
    
    
    (60
    )
    
    
    (20
    )
    
    
    (9
    )Profit for the year from continuing operations
    
    
    
    
    
    
    213
    
    
    
    293
    
    
    
    229Profit for the year from discontinued operations
    
    
    07
    
    
    
    14
    
    
    
    12
    
    
    
    253Profit for the year
    
    
    
    
    
    
    227
    
    
    
    305
    
    
    
    482Attributable to:Equity holders of the parent
    
    
    11
    
    
    
    227
    
    
    
    305
    
    
    
    456Minority interest
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    26Earnings per shareFrom continuing and discontinued operationsBasic earnings per ordinary share
    
    
    08
    
    
    
    18.4p
    
    
    
    23.6p
    
    
    
    32.6pDiluted earnings per ordinary share
    
    
    08
    
    
    
    18.0p
    
    
    
    23.1p
    
    
    
    31.7pFrom continuing operationsBasic earnings per ordinary share
    
    
    08
    
    
    
    17.3p
    
    
    
    22.6p
    
    
    
    16.3pDiluted earnings per ordinary share
    
    
    08
    
    
    
    16.9p
    
    
    
    22.2p
    
    
    
    15.9p
 
 *
    
    Share of post-tax (losses)/profits from associates and joint ventures includes a tax charge of £1
million (2006: £2 million, 2005: £1 million).  A-3




---



##### Table of Contents



Consolidated statement of recognised income and expense
 For the
year ended 31 December
 2007
    
    
    2006
    
    
    2005Notes
    
    
    £m
    
    
    £m
    
    
    £mProfit for the year
    
    
    
    
    
    
    227
    
    
    
    305
    
    
    
    482Actuarial gains/(losses) on defined benefit plans
    
    
    11,25
    
    
    
    98
    
    
    
    6
    
    
    
    (48
    )Exchange differences taken directly to reserves
    
    
    11,28
    
    
    
    20
    
    
    
    (95
    )
    
    
    118Exchange differences taken to the income statement on disposal of
assets
    
    
    11,28
    
    
    
    
    
    
    
    
    
    
    
    (2
    )Fair value gains/(losses) on available-for-sale financial assets
    
    
    11,28
    
    
    
    11
    
    
    
    6
    
    
    
    (15
    )Fair value gains on available-for-sale financial assets taken to
the income statement on disposal of assets
    
    
    11
    
    
    
    (18
    )
    
    
    
    
    
    
    (73
    )Fair value gains/(losses) on net investment hedges
    
    
    11,28
    
    
    
    4
    
    
    
    34
    
    
    
    (39
    )Fair value gains taken to the income statement on disposal of net
investment hedges
    
    
    11,28
    
    
    
    
    
    
    
    
    
    
    
    (14
    )Taxation on the items taken directly to or transferred from equity
    
    
    11
    
    
    
    (20
    )
    
    
    (4
    )
    
    
    14Net gains/(losses) not recognised in income statement
    
    
    11
    
    
    
    95
    
    
    
    (53
    )
    
    
    (59
    )Total recognised income for the year
    
    
    
    
    
    
    322
    
    
    
    252
    
    
    
    423Attributable to:Equity holders of the parent
    
    
    
    
    
    
    322
    
    
    
    252
    
    
    
    374Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49
   A-4




---



##### Table of Contents



Consolidated balance sheet
 At 31 December
 2007
    
    
    2006
    
    
    2005Notes
    
    
    £m
    
    
    £m
    
    
    £mAssetsNon-current assets:Intangible assets
    
    
    13
    
    
    
    614
    
    
    
    559
    
    
    
    487Property, plant and equipment
    
    
    14
    
    
    
    404
    
    
    
    371
    
    
    
    358Investments accounted for using the equity method:Investments in joint ventures
    
    
    15
    
    
    
    21
    
    
    
    19
    
    
    
    32Investments in associates
    
    
    15
    
    
    
    6
    
    
    
    19
    
    
    
    4Deferred tax assets
    
    
    26
    
    
    
    286
    
    
    
    281
    
    
    
    276Other financial assets and derivatives
    
    
    16
    
    
    
    62
    
    
    
    47
    
    
    
    22Retirement benefit assets
    
    
    25
    
    
    
    39
    
    
    
    18
    
    
    
    1,432
    
    
    
    1,314
    
    
    
    1,179Current assets:Inventories
    
    
    18
    
    
    
    
    
    
    
    1
    
    
    
    1Trade and other receivables
    
    
    19
    
    
    
    255
    
    
    
    258
    
    
    
    270Other financial assets and derivatives
    
    
    16
    
    
    
    29
    
    
    
    210
    
    
    
    18Current tax debtors
    
    
    
    
    
    
    12
    
    
    
    8
    
    
    
    6Cash and cash equivalents
    
    
    20
    
    
    
    251
    
    
    
    129
    
    
    
    662547
    
    
    
    606
    
    
    
    957Non-current assets classified as held for sale
    
    
    21
    
    
    
    14
    
    
    
    
    
    
    
    1Total assets
    
    
    
    
    
    
    1,993
    
    
    
    1,920
    
    
    
    2,137LiabilitiesCurrent liabilities:Trade and other payables
    
    
    22
    
    
    
    (692
    )
    
    
    (491
    )
    
    
    (456
    )Current tax liabilities
    
    
    23
    
    
    
    (247
    )
    
    
    (196
    )
    
    
    (228
    )Provisions for liabilities and charges
    
    
    24
    
    
    
    (37
    )
    
    
    (60
    )
    
    
    (64
    )Other financial liabilities and derivatives
    
    
    16
    
    
    
    (292
    )
    
    
    (166
    )
    
    
    (49
    )(1,268
    )
    
    
    (913
    )
    
    
    (797
    )Non-current liabilities:Provisions for liabilities and charges
    
    
    24
    
    
    
    (102
    )
    
    
    (204
    )
    
    
    (392
    )Other financial liabilities and derivatives
    
    
    16
    
    
    
    (370
    )
    
    
    (521
    )
    
    
    (371
    )Deferred tax liabilities
    
    
    26
    
    
    
    (115
    )
    
    
    (110
    )
    
    
    (66
    )(587
    )
    
    
    (835
    )
    
    
    (829
    )Total liabilities
    
    
    
    
    
    
    (1,855
    )
    
    
    (1,748
    )
    
    
    (1,626
    )Net assets
    
    
    
    
    
    
    138
    
    
    
    172
    
    
    
    511Shareholders equityShare capital
    
    
    27
    
    
    
    539
    
    
    
    496
    
    
    
    467Other reserves
    
    
    28
    
    
    
    (1,710
    )
    
    
    (1,738
    )
    
    
    (1,692
    )Retained earnings
    
    
    11
    
    
    
    1,309
    
    
    
    1,414
    
    
    
    1,736Total parent shareholders equity
    
    
    
    
    
    
    138
    
    
    
    172
    
    
    
    511Minority interest in equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total equity
    
    
    
    
    
    
    138
    
    
    
    172
    
    
    
    511
  Tom Glocer
    
    David GrigsonCEO
    
    CFO
 A-5




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##### Table of Contents



Consolidated cash flow statement
 For the year ended 31 December
 2007
    
    
    2006
    
    
    2005Notes
    
    
    £m
    
    
    £m
    
    
    £mCash flows from operating activitiesCash generated from operations
    
    
    29
    
    
    
    534
    
    
    
    311
    
    
    
    271Interest received
    
    
    
    
    
    
    67
    
    
    
    42
    
    
    
    55Interest paid
    
    
    
    
    
    
    (99
    )
    
    
    (61
    )
    
    
    (49
    )Tax paid
    
    
    
    
    
    
    (26
    )
    
    
    (34
    )
    
    
    (24
    )Net cash flow from operating activities
    
    
    
    
    
    
    476
    
    
    
    258
    
    
    
    253Cash flows from investing activitiesAcquisitions, net of cash acquired
    
    
    30
    
    
    
    (39
    )
    
    
    (67
    )
    
    
    (124
    )Disposals, net of cash disposed
    
    
    30
    
    
    
    23
    
    
    
    65
    
    
    
    246Purchases of property, plant and equipment
    
    
    
    
    
    
    (116
    )
    
    
    (122
    )
    
    
    (145
    )Proceeds from sale of property, plant and equipment
    
    
    
    
    
    
    19
    
    
    
    5
    
    
    
    3Purchases of intangible assets
    
    
    
    
    
    
    (109
    )
    
    
    (106
    )
    
    
    (40
    )Purchases of available-for-sale financial assets
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Proceeds from sale of available-for-sale financial assets
    
    
    
    
    
    
    23
    
    
    
    
    
    
    
    85Proceeds from closing of derivative contract
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    Dividends received
    
    
    
    
    
    
    3
    
    
    
    3
    
    
    
    5Net cash used in investing activities
    
    
    
    
    
    
    (195
    )
    
    
    (222
    )
    
    
    29Cash flows from financing activitiesProceeds from issue of shares
    
    
    
    
    
    
    47
    
    
    
    32
    
    
    
    10Share buyback
    
    
    
    
    
    
    (174
    )
    
    
    (527
    )
    
    
    (223
    )Decrease/(increase) in short-term investments
    
    
    
    
    
    
    194
    
    
    
    (196
    )
    
    
    248(Decrease)/increase in borrowings
    
    
    
    
    
    
    (66
    )
    
    
    270
    
    
    
    (144
    )Equity dividends paid to shareholders
    
    
    
    
    
    
    (147
    )
    
    
    (134
    )
    
    
    (140
    )Equity dividends paid to minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23
    )Net cash used in financing activities
    
    
    
    
    
    
    (146
    )
    
    
    (555
    )
    
    
    (272
    )Exchange gains/(losses) on cash and cash equivalents
    
    
    
    
    
    
    2
    
    
    
    (13
    )
    
    
    66Net increase/(decrease) in cash and cash equivalents
    
    
    
    
    
    
    137
    
    
    
    (532
    )
    
    
    76Cash and cash equivalents at the beginning of the year
    
    
    
    
    
    
    105
    
    
    
    637
    
    
    
    561Cash and cash equivalents at the end of the year
    
    
    31
    
    
    
    242
    
    
    
    105
    
    
    
    637
 A-6




---



##### Table of Contents



Group Accounting Policies
  Basis of accounting
      Standards, amendments and interpretations effective in 2007
  Basis of consolidation
  Subsidiaries
   A-7.1




---



##### Table of Contents



Associates and joint ventures
    Foreign currency translation
     
    
    income and expenses are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rate prevailing on the transaction date, in which case
income and expenses are translated at the date of the transaction);
 
    
    assets and liabilities are translated at the closing exchange rate at the date of the balance sheet; and
 
    
    all resulting exchange differences are recognised as a separate component of equity.
   A-7.2




---



##### Table of Contents



Revenue recognition
        Pensions and similar obligations
      A-7.3




---



##### Table of Contents



Share-based payments
    Intangible assets
 Goodwill
  Internally generated intangible assets
    Other intangibles
    A-7.4




---



##### Table of Contents



Impairment of non-financial assets
    Property, plant and equipment
   Freehold land
    
    Not depreciatedFreehold buildings
    
    Normally 50 yearsLeasehold property
    
    Over the term of the leaseComputer systems equipment, office equipment
and motor vehicles
    
    2 to 5 years
  Non-current assets held for sale
   A-7.5




---



##### Table of Contents



Financial Assets
 Classification
  
    
    financial assets at fair value through profit and loss;
 
    
    loans and receivables;
 
    
    available-for-sale financial assets.
  Financial assets at fair value through profit and loss
  Loans and receivables
  Available-for-sale financial assets
  Impairment and derecognition
  Cash and cash equivalents
  Inventories and contract work in progress
  A-7.6




---



##### Table of Contents



Trade receivables
  Trade payables
  Provisions
  Leasing
    Borrowings
    Purchases and sales of financial assets
  A-7.7




---



##### Table of Contents



Derivative financial instruments and hedging
  
    
    hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges);
 
    
    hedges of highly probable forecast transactions (cash flow hedges); or
 
    
    hedges of net investments in foreign operations (net investment hedges).
 Fair value hedges
  Cash flow hedges
   Net investment hedges
   Embedded derivatives
  Derivatives that do not qualify for hedge accounting
  A-7.8




---



##### Table of Contents



Financial guarantees
  Fair value estimation
   Interest in shares of Reuters Group PLC
   Dividend distribution
  Taxation
     A-7.9




---



##### Table of Contents



Segment reporting
   Standards, interpretations and amendments to issued standards that are not yet effective
  Standards, interpretations and amendments to issued standards adopted by the EU
       A-7.10




---



##### Table of Contents



Standards, interpretations and amendments to issued standards not yet adopted by the EU
         A-7.11




---



##### Table of Contents



Notes to the financial statements
 01 Segmental analysis  income statement
 Primary reportable segments  business divisions
           A-8.1




---



##### Table of Contents



2007Research& AssetSales &
    
    
    Manage-Trading
    
    
    ment
    
    
    Enterprise
    
    
    Media
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mRevenue
    
    
    1,619
    
    
    
    363
    
    
    
    451
    
    
    
    172
    
    
    
    2,605Operating costs
    
    
    (1,440
    )
    
    
    (339
    )
    
    
    (371
    )
    
    
    (160
    )
    
    
    (2,310
    )Other operating income
    
    
    27
    
    
    
    5
    
    
    
    7
    
    
    
    3
    
    
    
    42Divisional operating profit*
    
    
    206
    
    
    
    29
    
    
    
    87
    
    
    
    15
    
    
    
    337Thomson deal related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45
    )Operating profit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    292Finance income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117Finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (151
    )Profit on disposal of
associates, joint ventures
and available-for-sale
financial assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21Share of post-taxation
losses from associates and
joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )Profit before taxation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    273Taxation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60
    )Profit for the year from
continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    213
 
 *
    
    Divisional operating profit is operating profit less Thomson deal-related costs A-8.2




---



##### Table of Contents



Restated2006Research& AssetSales &
    
    
    Manage-Trading
    
    
    ment
    
    
    Enterprise
    
    
    Media
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mRevenue
    
    
    1,661
    
    
    
    304
    
    
    
    431
    
    
    
    170
    
    
    
    2,566Operating costs
    
    
    (1,506
    )
    
    
    (324
    )
    
    
    (362
    )
    
    
    (159
    )
    
    
    (2,351
    )Other operating income
    
    
    27
    
    
    
    5
    
    
    
    6
    
    
    
    3
    
    
    
    41Operating profit
    
    
    182
    
    
    
    (15
    )
    
    
    75
    
    
    
    14
    
    
    
    256Finance income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72Finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (87
    )Profit on disposal of
associates, joint
ventures and
available-for-sale
financial assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76Share of
post-taxation profits
from associates and
joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )Profit before tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    313Taxation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20
    )Profit for the year
from continuing
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    293
 A-8.3




---



##### Table of Contents



Restated2005Research& AssetSales &
    
    
    Manage-Trading
    
    
    ment
    
    
    Enterprise
    
    
    Media
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mRevenue
    
    
    1,596
    
    
    
    263
    
    
    
    397
    
    
    
    153
    
    
    
    2,409Operating costs
    
    
    (1,482
    )
    
    
    (298
    )
    
    
    (323
    )
    
    
    (148
    )
    
    
    (2,251
    )Other operating income
    
    
    37
    
    
    
    
    
    
    
    8
    
    
    
    4
    
    
    
    49Operating profit
    
    
    151
    
    
    
    (35
    )
    
    
    82
    
    
    
    9
    
    
    
    207Finance income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41Finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53
    )Profit on disposal of
associates, joint
ventures and
available-for-sale
financial assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38Share of
post-taxation profits
from associates and
joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Profit before tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    238Taxation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )Profit for the year
from continuing
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    229
   2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mSales & Trading
    
    
    (5
    )
    
    
    (4
    )
    
    
    2Research & Asset Management
    
    
    1
    
    
    
    
    
    
    
    Enterprise
    
    
    
    
    
    
    
    
    
    
    Media
    
    
    (2
    )
    
    
    
    
    
    
    3Share of post-taxation (losses)/profits from
associates and joint ventures
    
    
    (6
    )
    
    
    (4
    )
    
    
    5
 A-8.4




---



##### Table of Contents



2007
    
    
    
    
    
    
    
    
    
    
    2006
    
    
    
    
    
    
    
    
    
    
    2005Depreciation
    
    
    
    
    
    
    Other
    
    
    Depreciation
    
    
    
    
    
    
    Other
    
    
    Depreciation
    
    
    
    
    
    
    Otherand
    
    
    
    
    
    
    non-cash
    
    
    and
    
    
    
    
    
    
    non-cash
    
    
    and
    
    
    
    
    
    
    non-cashamortisation
    
    
    Impairments
    
    
    expenses
    
    
    amortisation
    
    
    Impairments
    
    
    expenses
    
    
    amortisation
    
    
    Impairments
    
    
    expenses£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mSales & Trading
    
    
    99
    
    
    
    20
    
    
    
    27
    
    
    
    95
    
    
    
    
    
    
    
    36
    
    
    
    89
    
    
    
    1
    
    
    
    39Research & Asset
Management
    
    
    19
    
    
    
    
    
    
    
    6
    
    
    
    19
    
    
    
    
    
    
    
    7
    
    
    
    19
    
    
    
    
    
    
    
    4Enterprise
    
    
    32
    
    
    
    1
    
    
    
    6
    
    
    
    22
    
    
    
    
    
    
    
    8
    
    
    
    20
    
    
    
    1
    
    
    
    2Media
    
    
    7
    
    
    
    
    
    
    
    2
    
    
    
    5
    
    
    
    
    
    
    
    3
    
    
    
    4
    
    
    
    1
    
    
    
    1Total
    
    
    157
    
    
    
    21
    
    
    
    41
    
    
    
    141
    
    
    
    
    
    
    
    54
    
    
    
    132
    
    
    
    3
    
    
    
    46
  Secondary reportable segments  geographical
   2007
    
    
    2006
    
    
    2005Revenue
    
    £m
    
    
    £m
    
    
    £mEurope, Middle East & Africa*
    
    
    1,441
    
    
    
    1,396
    
    
    
    1,330Americas
    
    
    701
    
    
    
    709
    
    
    
    651Asia
    
    
    463
    
    
    
    461
    
    
    
    428Total revenue
    
    
    2,605
    
    
    
    2,566
    
    
    
    2,409
 
 *
    
    To reflect the way Reuters was managed from 2006, UK & Ireland, EMEA West and EMEA East have
been combined into one geographical location. A-8.5




---



##### Table of Contents



02 Revenue by type
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mRecurring
    
    
    2,394
    
    
    
    2,363
    
    
    
    2,235Usage
    
    
    139
    
    
    
    132
    
    
    
    104Outright
    
    
    72
    
    
    
    71
    
    
    
    70Total revenue
    
    
    2,605
    
    
    
    2,566
    
    
    
    2,409
  03 Operating costs
 2007
    
    
    2006
    
    
    2005Costs by nature
    
    £m
    
    
    £m
    
    
    £mSalaries, commission and allowances
    
    
    756
    
    
    
    763
    
    
    
    761Social security costs
    
    
    78
    
    
    
    64
    
    
    
    67Share-based payments (see note 33)
    
    
    36
    
    
    
    30
    
    
    
    30Pension costs (see note 25)
    
    
    40
    
    
    
    61
    
    
    
    55Total staff costs
    
    
    910
    
    
    
    918
    
    
    
    913Services*
    
    
    529
    
    
    
    512
    
    
    
    455Depreciation
    
    
    96
    
    
    
    95
    
    
    
    99Data
    
    
    319
    
    
    
    323
    
    
    
    281Communications
    
    
    249
    
    
    
    279
    
    
    
    289Space
    
    
    156
    
    
    
    151
    
    
    
    162Amortisation of intangibles
    
    
    61
    
    
    
    46
    
    
    
    33Impairments
    
    
    21
    
    
    
    
    
    
    
    3Losses on derivative financial instruments
    
    
    14
    
    
    
    25
    
    
    
    Losses on ineffective portion of net investment hedges
    
    
    
    
    
    
    
    
    
    
    1Losses on financial assets designated at fair value
through profit and loss
    
    
    
    
    
    
    
    
    
    
    15Foreign exchange losses
    
    
    
    
    
    
    2
    
    
    
    Total operating costs
    
    
    2,355
    
    
    
    2,351
    
    
    
    2,251
 2007
    
    
    2006
    
    
    2005Costs by nature
    
    £m
    
    
    £m
    
    
    £mOperating costs include:Research and development expenditure
    
    
    100
    
    
    
    83
    
    
    
    92Operating lease expenditure:Hire of equipment
    
    
    9
    
    
    
    6
    
    
    
    6Other, principally property
    
    
    76
    
    
    
    74
    
    
    
    67Advertising
    
    
    15
    
    
    
    19
    
    
    
    17
 
 *
    
    Services include equipment hire and bought-in services, including consultancy and
contractors, advertising and publicity, professional fees and staff-related expenses. A-8.6




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mFees payable to the companys auditor for the audit of the companys
annual accounts
    
    
    2.5
    
    
    
    2.2
    
    
    
    2.9Fees payable to the companys auditor and its associates for other
services:The audit of the companys subsidiaries, pursuant to legislation
    
    
    1.9
    
    
    
    1.3
    
    
    
    1.3Other services pursuant to legislation
    
    
    3.4
    
    
    
    0.6
    
    
    
    0.4Tax services
    
    
    0.7
    
    
    
    1.0
    
    
    
    2.6Services relating to corporate finance transactions
    
    
    
    
    
    
    0.2
    
    
    
    0.4All other services
    
    
    0.3
    
    
    
    0.2
    
    
    
    0.3Total fees payable
    
    
    8.8
    
    
    
    5.5
    
    
    
    7.9United Kingdom
    
    
    7.3
    
    
    
    3.9
    
    
    
    3.8Overseas
    
    
    1.5
    
    
    
    1.6
    
    
    
    4.1
    A-8.7




---



##### Table of Contents



04 Other operating income
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mProfit on disposal of subsidiaries
    
    
    3
    
    
    
    4
    
    
    
    4Gains on derivative financial instruments
    
    
    1
    
    
    
    5
    
    
    
    18Gains on ineffective portion of net investment hedges
    
    
    1
    
    
    
    1
    
    
    
    Investment income
    
    
    1
    
    
    
    
    
    
    
    1Foreign exchange gains
    
    
    4
    
    
    
    
    
    
    
    3Profit on disposal of property, plant and equipment
    
    
    10
    
    
    
    2
    
    
    
    Other income
    
    
    22
    
    
    
    29
    
    
    
    23Total other operating income
    
    
    42
    
    
    
    41
    
    
    
    49
  05 Finance income and finance costs
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mInterest receivable from:Available-for-sale assets  listed investments
    
    
    
    
    
    
    
    
    
    
    1Loans and receivables  unlisted investments
    
    
    18
    
    
    
    16
    
    
    
    18Derivative financial instruments  hedging instruments
    
    
    49
    
    
    
    33
    
    
    
    18Fair value gains on financial instruments:Derivative financial instruments: fair value hedges
    
    
    46
    
    
    
    3
    
    
    
    1Fair value adjustment to borrowings relating to interest rate risk
    
    
    4
    
    
    
    13
    
    
    
    Foreign exchange gain on retranslation of borrowings
    
    
    
    
    
    
    7
    
    
    
    3Total finance income
    
    
    117
    
    
    
    72
    
    
    
    41Interest payable on:Financial liabilities measured at amortised cost  bank loans and
overdrafts
    
    
    (2
    )
    
    
    (6
    )
    
    
    (4
    )Financial liabilities measured at amortised cost  other borrowings
    
    
    (38
    )
    
    
    (23
    )
    
    
    (23
    )Derivative financial instruments  hedging instruments
    
    
    (54
    )
    
    
    (35
    )
    
    
    (17
    )Fair value losses on financial instruments:Derivative financial instruments: fair value hedges
    
    
    
    
    
    
    (19
    )
    
    
    (1
    )Fair value adjustment to borrowings relating to interest rate risk
    
    
    
    
    
    
    
    
    
    
    (1
    )Foreign exchange retranslation of borrowings
    
    
    (50
    )
    
    
    
    
    
    
    Derivative financial instruments at fair value  held for trading:Interest payable
    
    
    (6
    )
    
    
    (3
    )
    
    
    (5
    )Unwinding of discounts
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )Total finance costs
    
    
    (151
    )
    
    
    (87
    )
    
    
    (53
    )
 A-8.8




---



##### Table of Contents



06 Taxation
 Analysis of charge for the year
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mCurrent taxation:Continuing operations
    
    
    81
    
    
    
    (10
    )
    
    
    (10
    )Discontinued operations
    
    
    (4
    )
    
    
    12
    
    
    
    5077
    
    
    
    2
    
    
    
    40Deferred taxation (see note 26):Continuing operations
    
    
    (21
    )
    
    
    30
    
    
    
    19Discontinued operations
    
    
    
    
    
    
    (12
    )
    
    
    13(21
    )
    
    
    18
    
    
    
    32Continuing operations
    
    
    60
    
    
    
    20
    
    
    
    9Discontinued operations
    
    
    (4
    )
    
    
    
    
    
    
    63Total taxation
    
    
    56
    
    
    
    20
    
    
    
    72
 Tax on items recognised in equity
 2007
    
    
    
    
    
    
    2006
    
    
    
    
    
    
    2005Continuing
    
    
    Discontinued
    
    
    Continuing
    
    
    Discontinued
    
    
    Continuing
    
    
    Discontinued£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mCurrent tax credit on unrealised
exchange movements
    
    
    (2
    )
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    Deferred tax charge/(credit) on
actuarial losses on defined benefit
plans
    
    
    21
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    (10
    )
    
    
    Deferred tax credit on stock options
    
    
    (4
    )
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (10
    )
    
    
    (1
    )Current tax charge/(credit) on
revaluations and fair value
movements
    
    
    1
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    (4
    )
    
    
    
 A-8.9




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##### Table of Contents



Factors affecting tax charge for the year
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mProfit before tax
    
    
    273
    
    
    
    313
    
    
    
    238Profit before tax multiplied by standard rate of corporation
tax in the UK of 30% (2006: 30%, 2005: 30%)
    
    
    82
    
    
    
    94
    
    
    
    71Effects of:Non-tax deductible amortisation and impairment of intangibles
    
    
    5
    
    
    
    5
    
    
    
    4Expenses not deductible for tax purposes
    
    
    12
    
    
    
    2
    
    
    
    4Non-taxable investment disposals and impairments
    
    
    (6
    )
    
    
    (15
    )
    
    
    (13
    )Adjustments in respect of prior years
    
    
    (11
    )
    
    
    (56
    )
    
    
    (23
    )Recognition of tax losses that arose in prior years
    
    
    
    
    
    
    (4
    )
    
    
    (33
    )Effects of changes in tax rates on deferred taxes
    
    
    8
    
    
    
    
    
    
    
    Other differences
    
    
    (30
    )
    
    
    (6
    )
    
    
    (1
    )Total taxation for continuing operations
    
    
    60
    
    
    
    20
    
    
    
    9
    A-8.10




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##### Table of Contents



07 Discontinued operations
   2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mProfits after tax of subsidiaries (net of tax
£nil, 2006: £nil, 2005: £20 million)
    
    
    
    
    
    
    
    
    
    
    69Profit on disposal of subsidiaries (net of tax,
£nil 2006: £nil, 2005: £43 million)
    
    
    14
    
    
    
    12
    
    
    
    184Profit for the year from discontinued operations
    
    
    14
    
    
    
    12
    
    
    
    253Basic earnings per ordinary share for
discontinued operations
    
    
    1.1p
    
    
    
    1.0p
    
    
    
    16.3pDiluted earnings per ordinary share for
discontinued operations
    
    
    1.1p
    
    
    
    0.9p
    
    
    
    15.8p
  Discontinued operations in 2005
     Disposal of subsidiaries: Instinet Group (including BTC)
    A-8.11




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##### Table of Contents



2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mResults of Instinet and BTCRevenue
    
    
    
    
    
    
    
    
    
    
    466Operating costs
    
    
    
    
    
    
    
    
    
    
    (402
    )Operating profit
    
    
    
    
    
    
    
    
    
    
    64Finance income
    
    
    
    
    
    
    
    
    
    
    13Profit on disposal of available-for-sale financial assets
    
    
    
    
    
    
    
    
    
    
    12Profit before taxation
    
    
    
    
    
    
    
    
    
    
    89Taxation
    
    
    
    
    
    
    
    
    
    
    (20
    )Profit for the period
    
    
    
    
    
    
    
    
    
    
    69
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mCash generated from discontinued operations (see
note 29)
    
    
    
    
    
    
    
    
    
    
    3Tax paid
    
    
    
    
    
    
    
    
    
    
    (13
    )Interest received
    
    
    
    
    
    
    
    
    
    
    13Interest paid
    
    
    
    
    
    
    
    
    
    
    Net cash flow from operating activities
    
    
    
    
    
    
    
    
    
    
    3Net cash flow from investing activities*
    
    
    
    
    
    
    
    
    
    
    (474
    )Net cash flow from financing activities
    
    
    
    
    
    
    
    
    
    
    (85
    )Exchange gains on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    57Decrease in cash and cash equivalents from
discontinued operations
    
    
    
    
    
    
    
    
    
    
    (499
    )
 
 *
    
    Net cash flow from investing activities in 2005 includes £582 million relating to cash held
by subsidiaries at the date of disposal. 08 Earnings per ordinary share
   A-8.12




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##### Table of Contents



2007
    
    
    2006
    
    
    2005Weighted average number in millions
    
    £m
    
    
    £m
    
    
    £mOrdinary shares in issue
    
    
    1,479
    
    
    
    1,455
    
    
    
    1,438Non-vested shares held by Employee Share
Ownership Trusts
    
    
    (28
    )
    
    
    (30
    )
    
    
    (32
    )Shares repurchased
    
    
    (212
    )
    
    
    (128
    )
    
    
    (10
    )Basic earnings per share denominator
    
    
    1,239
    
    
    
    1,297
    
    
    
    1,396Issuable under employee share schemes
    
    
    25
    
    
    
    24
    
    
    
    41Diluted earnings per share denominator
    
    
    1,264
    
    
    
    1,321
    
    
    
    1,437Earnings per share from continuing and
discontinued operations
    
    
    2007
    
    
    
    2006
    
    
    
    2005Profit attributable to equity holders of the
company (£m)
    
    
    227
    
    
    
    305
    
    
    
    456Basic earnings per share
    
    
    18.4p
    
    
    
    23.6p
    
    
    
    32.6pDiluted earnings per share
    
    
    18.0p
    
    
    
    23.1p
    
    
    
    31.7pEarnings per share from continuing operations
    
    
    2007
    
    
    
    2006
    
    
    
    2005Profit attributable to equity holders of the
company (£m)
    
    
    213
    
    
    
    293
    
    
    
    229Basic earnings per share
    
    
    17.3p
    
    
    
    22.6p
    
    
    
    16.3pDiluted earnings per share
    
    
    16.9p
    
    
    
    22.2p
    
    
    
    15.9p
 A-8.13




---



##### Table of Contents



09 Remuneration of directors
  Directors remuneration for 2007
 Salary/
    
    
    
    
    
    
    
    
    
    
    
    
    Compensation
    
    
    2007
    
    
    2006Fees
    
    
    Bonus
    
    
    Benefits1
    
    
    Allowance2&5
    
    
    for Loss of Office
    
    
    Total
    
    
    Total£000
    
    
    £000
    
    
    £000
    
    
    £000
    
    
    £000
    
    
    £000
    
    
    £000Niall FitzGerald, KBE 3&4
    
    
    525
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    528
    
    
    
    503Lawton Fitt 6
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    99
    
    
    
    88Penny Hughes 7
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    64
    
    
    
    50Ed Kozel 16
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    27
    
    
    
    85Sir Deryck Maughan 7
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    79
    
    
    
    70Nandan Nilekani 8
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    80
    
    
    
    Ken Olisa 8
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    65
    
    
    
    50Dick Olver 9
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    77
    
    
    
    68Ian Strachan 10
    
    
    64
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    74
    
    
    
    60Tom Glocer 11&15
    
    
    888
    
    
    
    1,267
    
    
    
    451
    
    
    
    
    
    
    
    
    
    
    
    2,606
    
    
    
    2,265David Grigson 12
    
    
    482
    
    
    
    579
    
    
    
    13
    
    
    
    80
    
    
    
    
    
    
    
    1,154
    
    
    
    1,087Devin Wenig 13
    
    
    448
    
    
    
    532
    
    
    
    43
    
    
    
    10
    
    
    
    
    
    
    
    1,033
    
    
    
    1,001Total emoluments of directors
14
    
    
    2,778
    
    
    
    2,378
    
    
    
    510
    
    
    
    220
    
    
    
    
    
    
    
    5,886
    
    
    
    5,327
 
 Notes
  
 1
    
    Items included under Benefits are those provided as goods and services received during the year.2
    
    Items included under Allowances are contractual benefits, which are paid in cash rather than as goods
and services during the year.3
    
    Non-cash benefits received by Niall FitzGerald consist of chauffeur benefits of £2,661.4
    
    Niall FitzGerald has waived his £10,000 Nominations Committee chairman fee.5
    
    Allowances paid to Lawton Fitt, Penny Hughes, Ed Kozel, Deryck Maughan, Nandan Nilekani, Ken Olisa,
Dick Olver and Ian Strachan represent travel allowances to attend overseas board meetings. A-8.14




---



##### Table of Contents



6
    
    Fees paid to Lawton Fitt include £18,333 in respect of her position as Chairman of the Audit Committee.7
    
    Fees paid to Penny Hughes and Deryck Maughan include £3,333 each as members of the Remuneration
Committee.8
    
    Fees paid to Nandan Nilekani and Ken Olisa include £5,000 each as members of the Audit Committee.9
    
    Fees paid to Dick Olver include £5,000 in respect of his position as member of the Audit Committee,
and £11,667 in respect of his position as the Senior Independent Director. Dick Olver was over-paid in
error by the company in 2007 by £8,351 and the amount was repaid after year end.10
    
    Fees paid to Ian Strachan include £13,333 in respect of his position as Chairman of the Remuneration
Committee.11
    
    Non-cash benefits received by Tom Glocer included accommodation costs of £268,143, tax services of
£109,681 (including those related to the Thomson transaction), company car and healthcare benefits
totalling £36,210, long-term disability insurance of £2,100, and family travel of £34,473.12
    
    Non-cash benefits received by David Grigson included healthcare benefits of £1,311 and long-term
disability insurance of £1,300, tax services of £3,231 and a car benefit of £6,425. Cash allowances
consisted of an annual car allowance of £7,420, of which £3,188 was repaid after year end in lieu of
his car benefit and a retirement allowance of £74,930.13
    
    Non-cash benefits received by Devin Wenig consisted of healthcare benefits of £36,323 and tax services
of £6,081. Cash allowances consisted of a car allowance of £9,600. Devin Wenigs salary is paid in US
dollars and the total amount reflected in the table is contractually split between his role as
executive director and Chief Operating Officer.14
    
    The total aggregate emoluments for the directors for the period 1 January 2007 to 31 December 2007
were £5.9m. The total emoluments for 2006 were £5.3m.15
    
    During the year a group company paid certain personal expenses on behalf of Tom Glocer. The amount due
from Tom Glocer at 31 December 2007, which was the maximum outstanding during the year, was £1,435. No
interest was charged. Tom Glocer repaid the amount as soon as he was informed that any personal
expenses had been borne by the company.16
    
    Ed Kozel resigned as a director on 27 April 2007. Other senior managers remuneration
 CompensationSalary/
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    for Loss
    
    
    2007
    
    
    2006Fees
    
    
    Bonus 1
    
    
    Benefits
    
    
    Allowance
    
    
    of Office
    
    
    Total
    
    
    Total£000
    
    
    £000
    
    
    £000
    
    
    £000
    
    
    £000
    
    
    £000
    
    
    £000Other senior
managers as a group
(16 persons) (2006:17 persons)
    
    
    4197
    
    
    
    5,047
    
    
    
    202
    
    
    
    228
    
    
    
    
    
    
    
    9,674
    
    
    
    7,019
 
 Notes:All amounts have been rounded up to the nearest thousand.The following conversion rates were used: US$2: £1, Swiss Franc 2.4: £1, Hong Kong $15.59: £1.
These were the average rates in effect during 2007.1
    
    In 2007, in addition to the annual bonus scheme, the Remuneration
Committee approved an additional one-off bonus to selected employees
(excluding executive directors) on profits over and above a target
trading profit. A-8.15




---



##### Table of Contents



Directors pensions
     Companycontributionin respectof periodAge
    
    
    £000Tom Glocer
    
    
    48
    
    
    
    226David Grigson
    
    
    53
    
    
    
    28Devin Wenig
    
    
    41
    
    
    
    28
    A-8.16




---



##### Table of Contents



Directors interests in long-term plans
 MarketMarket
    
    
    
    
    
    
    price
    
    
    
    
    
    
    
    
    
    
    Numberprice
    
    
    
    
    
    
    per
    
    
    
    
    
    
    
    
    
    
    at 31 DecNumber at 1
    
    
    Number
    
    
    per
    
    
    Number
    
    
    share
    
    
    Number
    
    
    Number
    
    
    2007 (orDate
    
    
    Jan 2007 (or
    
    
    granted
    
    
    share
    
    
    vested
    
    
    at
    
    
    (released)
    
    
    (lapsed)
    
    
    earlier
    
    
    End ofof
    
    
    later date of
    
    
    during
    
    
    at
    
    
    during
    
    
    vesting
    
    
    during
    
    
    during
    
    
    date of
    
    
    qualifying
    
    
    ExpiryPlan
    
    
    award
    
    
    appointment)
    
    
    period
    
    
    grant
    
    
    period
    
    
    date
    
    
    period
    
    
    period
    
    
    departure)
    
    
    period
    
    
    dateThomas Glocer
    
    LTIP1&2
    
    20-Feb-02
    
    
    234,974
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (234,974
    )
    
    
    
    
    
    31-Dec-06
    
    01-Jan-0724-Feb-03
    
    
    1,731,277
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,731,277
    
    
    31-Dec-07
    
    01-Jan-0823-Feb-04
    
    
    544,094
    
    
    
    
    
    
    
    
    
    
    
    544,094
    
    
    £
    4.35
    
    
    
    (544,094
    )
    
    
    
    
    
    
    
    
    
    31-Dec-06
    
    01-Jan-0711-Mar-05
    
    
    417,228
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    417,228
    
    
    31-Dec-07
    
    01-Jan-0815-Mar-06
    
    
    500,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    31-Dec-08
    
    01-Jan-0913-Mar-073
    
    
    
    
    
    
    500,000
    
    
    £
    4.42
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    31-Dec-09
    
    01-Jan-10Total
    
    
    
    
    
    
    
    
    
    
    3,427,573
    
    
    
    500,000
    
    
    
    
    
    
    
    544,094
    
    
    
    
    
    
    
    (544,094
    )
    
    
    (234,974
    )
    
    
    3,148,505Devin Wenig
    
    LTIP1&2
    
    20-Feb-02
    
    
    22,047
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,047
    )
    
    
    
    
    
    31-Dec-06
    
    01-Jan-0724-Feb-03
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    31-Dec-07
    
    01-Jan-0823-Feb-04
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    £
    4.35
    
    
    
    (200,000
    )
    
    
    
    
    
    
    
    
    
    31-Dec-06
    
    01-Jan-0711-Mar-05
    
    
    163,468
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163,468
    
    
    31-Dec-07
    
    01-Jan-0815-Mar-06
    
    
    250,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,000
    
    
    31-Dec-08
    
    01-Jan-0913-Mar-073
    
    
    
    
    
    
    300,000
    
    
    £
    4.42
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300,000
    
    
    31-Dec-09
    
    01-Jan-10Total
    
    
    
    
    
    
    
    
    
    
    835,515
    
    
    
    300,000
    
    
    
    
    
    
    
    200,000
    
    
    
    
    
    
    
    (200,000
    )
    
    
    (22,047
    )
    
    
    913,468David Grigson
    
    LTIP1&2
    
    20-Feb-02
    
    
    37,205
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37,205
    )
    
    
    
    
    
    31-Dec-06
    
    01-Jan-0724-Feb-03
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    31-Dec-07
    
    01-Jan-0823-Feb-04
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    £
    4.35
    
    
    
    (200,000
    )
    
    
    
    
    
    
    
    
    
    31-Dec-06
    
    01-Jan-0711-Mar-05
    
    
    163,468
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163,468
    
    
    31-Dec-07
    
    01-Jan-0815-Mar-06
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    31-Dec-08
    
    01-Jan-0913-Mar-073
    
    
    
    
    
    
    200,000
    
    
    £
    4.42
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    31-Dec-09
    
    01-Jan-10Total
    
    
    
    
    
    
    
    
    
    
    800,673
    
    
    
    200,000
    
    
    
    
    
    
    
    200,000
    
    
    
    
    
    
    
    (200,000
    )
    
    
    (37,205
    )
    
    
    763,468
 
 Notes:1
    
    The LTIP awards are subject to certain performance conditions.2
    
    LTIP awards to executive directors prior to 2004 are subject to a retention period of two years
from vesting, save that this is reduced to one year where the performance period has been
extended to five years. For awards made in or prior to 2003, the plan permits the measurement
period to be extended by up to two years under a re-testing provision. For LTIP awards made
from 2004 onwards no re-testing is permitted.LTIP 2002 did not meet performance conditions and therefore lapsed. Had the awards vested, they
would have been released in March 2007.LTIP 2003 and 2005 did not meet performance conditions and subsequently lapsed in February 2008.3
    
    2007 awards.4
    
    Subject to performance conditions being met, share awards are due for release as soon as
possible after vesting (subject to any restricted period). A-8.17




---



##### Table of Contents



Senior managers interests in long-term plans
 MarketMarket
    
    
    
    
    
    
    price
    
    
    
    
    
    
    
    
    
    
    Numberprice
    
    
    
    
    
    
    per
    
    
    
    
    
    
    
    
    
    
    at 31 DecNumber at 1
    
    
    Number
    
    
    per
    
    
    Number
    
    
    share
    
    
    Number
    
    
    Number
    
    
    2007 (orDate
    
    
    Jan 2007 (or
    
    
    granted
    
    
    share
    
    
    vested
    
    
    at
    
    
    (released)
    
    
    (lapsed)
    
    
    earlier
    
    
    End ofof
    
    
    later date of
    
    
    during
    
    
    at
    
    
    during
    
    
    vesting
    
    
    during
    
    
    during
    
    
    date of
    
    
    qualifying
    
    
    ExpiryPlan
    
    
    award
    
    
    appointment)
    
    
    period
    
    
    grant
    
    
    period4
    
    
    date
    
    
    period4
    
    
    period
    
    
    departure)
    
    
    period
    
    
    dateOther senior
managers as a group
(16 persons) (2006:17 persons)
5
    
    LTIP1&2
    
    20-Feb-02
    
    
    96,017
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (96,017
    )
    
    
    
    
    
    31-Dec-06
    
    01-Jan-0724-Feb-03
    
    
    650,145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    650,145
    
    
    31-Dec-07
    
    01-Jan-0823-Feb-04
    
    
    290,022
    
    
    
    
    
    
    
    
    
    
    
    290,022
    
    
    £
    4.35
    
    
    
    (290,022
    )
    
    
    
    
    
    
    
    
    
    31-Dec-06
    
    01-Jan-0703-Dec-04
    
    
    92,368
    
    
    
    
    
    
    
    
    
    
    
    92,368
    
    
    £
    4.35
    
    
    
    (92,368
    )
    
    
    
    
    
    
    
    
    
    31-Dec-06
    
    01-Jan-0711-Mar-05
    
    
    336,602
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    336,602
    
    
    31-Dec-07
    
    01-Jan-0815-Mar-06
    
    
    479,937
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    479,937
    
    
    31-Dec-08
    
    01-Jan-0902-Aug-06
    
    
    64,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,000
    
    
    31-Dec-08
    
    01-Jan-0913-Mar-07
    
    
    
    
    
    
    884,556
    
    
    £
    4.42
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    884,556
    
    
    31-Dec-09
    
    01-Jan-10RSP3
    
    27-Aug-04
    
    
    52,450
    
    
    
    
    
    
    £
    3.21
    
    
    
    26,225
    
    
    £
    6.32
    
    
    
    (26,225
    )
    
    
    
    
    
    
    26,225
    
    
    27-Aug-06
    
    27-Aug-0803-Dec-04
    
    
    17,238
    
    
    
    
    
    
    £
    3.89
    
    
    
    8,619
    
    
    £
    6.32
    
    
    
    (8,619
    )
    
    
    
    
    
    
    8,619
    
    
    03-Dec-06
    
    03-Dec-0811-Mar-05
    
    
    158,235
    
    
    
    
    
    
    £
    4.19
    
    
    
    52,745
    
    
    £
    4.42
    
    
    
    (52,745
    )
    
    
    
    
    
    
    105,490
    
    
    11-Mar-06
    
    11-Mar-0902-Aug-05
    
    
    14,724
    
    
    
    
    
    
    £
    3.89
    
    
    
    4,908
    
    
    £
    6.09
    
    
    
    (4,908
    )
    
    
    
    
    
    
    9,816
    
    
    02-Aug-06
    
    02-Aug-0915-Mar-06
    
    
    292,867
    
    
    
    
    
    
    £
    3.93
    
    
    
    168,637
    
    
    £
    4.28
    
    
    
    (168,637
    )
    
    
    
    
    
    
    124,230
    
    
    15-Mar-07
    
    15-Mar-1013-Mar-07
    
    
    
    
    
    
    293,124
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    293,124
    
    
    13-Mar-08
    
    13-Mar-1107-Aug-07
    
    
    
    
    
    
    131,252
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    131,252
    
    
    07-Aug-08
    
    07-Aug-11Total
    
    
    
    
    
    
    
    
    
    
    2,544,605
    
    
    
    1,308,932
    
    
    
    
    
    
    
    643,524
    
    
    
    
    
    
    
    (643,524
    )
    
    
    (96,017
    )
    
    
    3,113,996
 
 Notes:1
    
    The LTIP awards are subject to certain performance conditions.2
    
    For awards made in or prior to 2004, the plan permits the measurement period to be extended by
up to two years under a re-testing provision. For LTIP awards made from 2004 onwards no
re-testing is permitted.LTIP 2002 did not meet performance conditions and therefore lapsed. Had the awards vested, they
would have been released in March 2007.LTIP 2003 and 2005 did not meet performance conditions and subsequently lapsed in February 2008.3
    
    The restricted share plan was introduced in 2004. Restricted shares will not normally be
granted for long-term incentive purposes to executive directors or members of the GLT. The
indicated awards were made prior to the appointment of the relevant individuals as GLT members.
RSP awards were also made to GLT members in lieu of the DSOP awards due to them in August 2007.
Awards are normally granted with a four year vesting period, vesting 25% each year. Therefore,
25% vested in 2007 on the anniversary of the date of grant. If this date fell on a non-trading
date, the shares vested at the next available trading date.4
    
    Subject to performance conditions being met, share awards are due for release as soon as
possible after vesting (subject to any restricted period).5
    
    Other senior managers as a group were 15 persons at 1 January 2007 and were 15 persons at 31
December 2007. Lee Ann Daly and David Craig were appointed to GLT on 1 January 2007 and 1 March
2007 respectively. Alex Hungate resigned on 30 September 2007. A-8.18




---



##### Table of Contents



Share options granted to directors
 Number at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number at1 Jan 2007
    
    
    Number
    
    
    Number
    
    
    Number
    
    
    Number
    
    
    31 Dec 2007(or later
    
    
    granted
    
    
    vested
    
    
    (exercised)
    
    
    (lapsed)
    
    
    (or earlier
    
    
    EarliestDate of
    
    
    Exercise
    
    
    date of
    
    
    during
    
    
    during
    
    
    during
    
    
    during
    
    
    date of
    
    
    exercise
    
    
    ExpiryName
    
    Plan
    
    
    grant
    
    
    price
    
    
    appointment)
    
    
    period
    
    
    period
    
    
    period
    
    
    period
    
    
    departure)
    
    
    date
    
    
    dateThomas
Glocer 6
    
    DSOP3
    
    20-Feb-02
    
    £
    5.28
    
    
    
    461,295
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (461,295
    )
    
    
    
    
    
    20-Feb-07
    
    20-Feb-1202-Aug-02
    
    £
    2.66
    
    
    
    915,654
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (915,654
    )
    
    
    
    
    
    02-Aug-07
    
    02-Aug-1224-Feb-03
    
    £
    1.35
    
    
    
    1,307,514
    
    
    
    
    
    
    
    
    
    
    
    (1,307,514
    )
    
    
    
    
    
    
    
    
    
    24-Feb-06
    
    24-Feb-1304-Aug-03
    
    £
    2.45
    
    
    
    706,594
    
    
    
    
    
    
    
    
    
    
    
    (706,594
    )
    
    
    
    
    
    
    
    
    
    04-Aug-06
    
    04-Aug-1323-Feb-04
    
    £
    4.07
    
    
    
    789,430
    
    
    
    
    
    
    
    789,430
    
    
    
    (789,430
    )
    
    
    
    
    
    
    
    
    
    23-Feb-07
    
    23-Feb-1427-Aug-04
    
    £
    3.21
    
    
    
    1,000,928
    
    
    
    
    
    
    
    1,000,928
    
    
    
    (1,000,928
    )
    
    
    
    
    
    
    
    
    
    27-Aug-07
    
    27-Aug-1411-Mar-05
    
    £
    4.19
    
    
    
    719,473
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    719,473
    
    
    11-Mar-08
    
    11-Mar-1502-Aug-05
    
    £
    3.89
    
    
    
    774,959
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    774,959
    
    
    02-Aug-08
    
    02-Aug-1515-Mar-06
    
    £
    3.93
    
    
    
    625,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    625,000
    
    
    15-Mar-09
    
    15-Mar-1602-Aug-06
    
    £
    3.93
    
    
    
    625,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    625,000
    
    
    02-Aug-09
    
    02-Aug-1613-Mar-07 5
    
    £
    4.42
    
    
    
    
    
    
    
    625,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    625,000
    
    
    13-Mar-10
    
    13-Mar-1707-Aug-07 5
    
    £
    6.19
    
    
    
    
    
    
    
    625,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    625,000
    
    
    07-Aug-10
    
    07-Aug-17SAYE 4
    
    07-Apr-04
    
    £
    3.14
    
    
    
    1,200
    
    
    
    
    
    
    
    1,200
    
    
    
    (1,200
    )
    
    
    
    
    
    
    
    
    
    01-Jun-07
    
    01-Dec-0714-Apr-05
    
    £
    3.33
    
    
    
    569
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    569
    
    
    01-Jun-08
    
    01-Dec-0810-Apr-06
    
    £
    3.14
    
    
    
    1,191
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,191
    
    
    01-Jun-09
    
    01-Dec-0903-Apr-07  5
    
    £
    3.53
    
    
    
    
    
    
    
    1,070
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,070
    
    
    01-Jun-10
    
    01-Dec-10Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,928,807
    
    
    
    1,251,070
    
    
    
    1,791,558
    
    
    
    (3,805,666
    )
    
    
    (1,376,949
    )
    
    
    3,997,262
 A-8.19




---



##### Table of Contents



Number at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number at1 Jan 2007
    
    
    Number
    
    
    Number
    
    
    Number
    
    
    Number
    
    
    31 Dec 2007(or later
    
    
    granted
    
    
    vested
    
    
    (exercised)
    
    
    (lapsed)
    
    
    (or earlier
    
    
    EarliestDate of
    
    
    Exercise
    
    
    date of
    
    
    during
    
    
    during
    
    
    during
    
    
    during
    
    
    date of
    
    
    exercise
    
    
    ExpiryName
    
    Plan
    
    
    grant
    
    
    price
    
    
    appointment)
    
    
    period
    
    
    period
    
    
    period
    
    
    period
    
    
    departure)
    
    
    date
    
    
    dateDevin
Wenig6
    
    DSOP3
    
    27-Dec-002&3
    
    £
    11.39
    
    
    
    6,913
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,913
    )
    
    
    
    
    
    27-Dec-01
    
    27-Dec-0725-Jun-012&3
    
    £
    8.62
    
    
    
    9,135
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,135
    
    
    25-Jun-02
    
    25-Jun-1120-Feb-022&3
    
    £
    5.28
    
    
    
    25,936
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,936
    
    
    20-Feb-03
    
    20-Feb-1202-Aug-022&3
    
    £
    2.66
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    02-Aug-03
    
    02-Aug-1224-Feb-03
    
    £
    1.35
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    24-Feb-06
    
    24-Feb-1304-Aug-03
    
    £
    2.45
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    04-Aug-06
    
    04-Aug-1323-Feb-04
    
    £
    4.07
    
    
    
    122,950
    
    
    
    
    
    
    
    122,950
    
    
    
    
    
    
    
    
    
    
    
    122,950
    
    
    23-Feb-07
    
    23-Feb-1427-Aug-04
    
    £
    3.21
    
    
    
    155,892
    
    
    
    
    
    
    
    155,892
    
    
    
    
    
    
    
    
    
    
    
    155,892
    
    
    27-Aug-07
    
    27-Aug-1411-Mar-05
    
    £
    4.19
    
    
    
    281,886
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    281,886
    
    
    11-Mar-08
    
    11-Mar-1502-Aug-05
    
    £
    3.89
    
    
    
    303,625
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    303,625
    
    
    02-Aug-08
    
    02-Aug-1515-Mar-06
    
    £
    3.93
    
    
    
    325,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    325,000
    
    
    15-Mar-09
    
    15-Mar-1602-Aug-06
    
    £
    3.93
    
    
    
    325,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    325,000
    
    
    02-Aug-09
    
    02-Aug-1613-Mar-075
    
    £
    4.42
    
    
    
    
    
    
    
    375,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    375,000
    
    
    13-Mar-10
    
    13-Mar-1707-Aug-075
    
    £
    6.19
    
    
    
    
    
    
    
    375,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    375,000
    
    
    07-Aug-10
    
    07-Aug-17SAYE4
    
    07-Apr-041
    
    $
    7.27
    
    
    
    1,200
    
    
    
    
    
    
    
    1,200
    
    
    
    (1,200
    )
    
    
    
    
    
    
    
    
    
    01-Jun-07
    
    01-Dec-0714-Apr-051
    
    $
    7.93
    
    
    
    1,134
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,134
    
    
    01-Jun-08
    
    01-Dec-08Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,158,671
    
    
    
    750,000
    
    
    
    280,042
    
    
    
    (1,200
    )
    
    
    (6,913
    )
    
    
    2,900,558
 A-8.20




---



##### Table of Contents



Number at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number at1 Jan 2007
    
    
    Number
    
    
    Number
    
    
    Number
    
    
    Number
    
    
    31 Dec 2007(or later
    
    
    granted
    
    
    vested
    
    
    (exercised)
    
    
    (lapsed)
    
    
    (or earlier
    
    
    EarliestDate of
    
    
    Exercise
    
    
    date of
    
    
    during
    
    
    during
    
    
    during
    
    
    during
    
    
    date of
    
    
    exercise
    
    
    ExpiryName
    
    Plan
    
    
    grant
    
    
    price
    
    
    appointment)
    
    
    period
    
    
    period
    
    
    period
    
    
    period
    
    
    departure)
    
    
    date
    
    
    dateDavid
Grigson 6
    
    DSOP3
    
    20-Feb-02
    
    £
    5.28
    
    
    
    75,757
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75,757
    )
    
    
    
    
    
    20-Feb-07
    
    20-Feb-1202-Aug-02
    
    £
    2.66
    
    
    
    150,375
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150,375
    )
    
    
    
    
    
    02-Aug-07
    
    02-Aug-1224-Feb-03
    
    £
    1.35
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    24-Feb-06
    
    24-Feb-1304-Aug-03
    
    £
    2.45
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    04-Aug-06
    
    04-Aug-1323-Feb-04
    
    £
    4.07
    
    
    
    122,950
    
    
    
    
    
    
    
    122,950
    
    
    
    
    
    
    
    
    
    
    
    122,950
    
    
    23-Feb-07
    
    23-Feb-1427-Aug-04
    
    £
    3.21
    
    
    
    155,892
    
    
    
    
    
    
    
    155,892
    
    
    
    
    
    
    
    
    
    
    
    155,892
    
    
    27-Aug-07
    
    27-Aug-1411-Mar-05
    
    £
    4.19
    
    
    
    281,886
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    281,886
    
    
    11-Mar-08
    
    11-Mar-1502-Aug-05
    
    £
    3.89
    
    
    
    303,625
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    303,625
    
    
    02-Aug-08
    
    02-Aug-1515-Mar-06
    
    £
    3.93
    
    
    
    250,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,000
    
    
    15-Mar-09
    
    15-Mar-1602-Aug-06
    
    £
    3.93
    
    
    
    250,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,000
    
    
    02-Aug-09
    
    02-Aug-1613-Mar-075
    
    £
    4.42
    
    
    
    
    
    
    
    250,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,000
    
    
    13-Mar-10
    
    13-Mar-1707-Aug-075
    
    £
    6.19
    
    
    
    
    
    
    
    250,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,000
    
    
    07-Aug-10
    
    07-Aug-17SAYE4
    
    07-Apr-04
    
    £
    3.14
    
    
    
    1,200
    
    
    
    
    
    
    
    1,200
    
    
    
    (1,200
    )
    
    
    
    
    
    
    
    
    
    01-Jun-07
    
    01-Dec-0714-Apr-05
    
    £
    3.33
    
    
    
    569
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    569
    
    
    01-Jun-08
    
    01-Dec-0803-Apr-075
    
    £
    3.53
    
    
    
    
    
    
    
    1,070
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,070
    
    
    01-Jun-10
    
    01-Dec-10Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,992,254
    
    
    
    501,070
    
    
    
    280,042
    
    
    
    (1,200
    )
    
    
    (226,132
    )
    
    
    2,265,992
 
 Notes:1
    
    The options indicated are over American Depositary Shares (ADSs). Each ADS represents six
ordinary shares, is denominated in US dollars and trades on The NASDAQ Global Select Market. For
the purposes of this disclosure, ADSs have been converted into the equivalent number of ordinary
shares and an equivalent option price.2
    
    The indicated awards were made prior to the appointment of the relevant individual as an
executive director. The DSOP options granted prior to the appointment as an executive director
have no performance condition.3
    
    Save as disclosed in note 2 above, exercise of each DSOP award is conditional
on performance
criteria. Performance conditions were varied during 2006.4
    
    Options granted under the SAYE Plan have no performance conditions.5
    
    2007 award.6
    
    There were total gains of £14,904,955.09 on the exercise of share options in 2007 (2006: £27,384). At 31 December 2007, the market close price of our shares was 637.00 pence per share and $76.09
per ADS. The highest prices during the year were 668.50 pence per share and $83.70 per ADS and
the lowest were 418.89 pence per share and $48.18 per ADS. A-8.21




---



##### Table of Contents



Share options granted to senior managers
 Number at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number at1 Jan 2007
    
    
    Number
    
    
    Number
    
    
    Number
    
    
    Number
    
    
    31 Dec 2007(or later
    
    
    granted
    
    
    vested
    
    
    (exercised)
    
    
    (lapsed)
    
    
    (or earlier
    
    
    EarliestDate of
    
    
    Exercise
    
    
    date of
    
    
    during
    
    
    during
    
    
    during
    
    
    during
    
    
    date of
    
    
    exercise
    
    
    ExpiryName
    
    Plan
    
    
    grant
    
    
    price
    
    
    appointment)
    
    
    period
    
    
    period
    
    
    period
    
    
    period
    
    
    departure)
    
    
    date
    
    
    dateOther senior
managers as a group
(16 persons) (2006:17 persons)
4
    
    DSOP3
    
    27-Dec-00
    
    £
    11.39
    
    
    
    25,414
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,883
    )
    
    
    5,531
    
    
    27-Dec-01
    
    27-Dec-0725-Jun-01
    
    £
    8.62
    
    
    
    54,347
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,347
    
    
    25-Jun-02
    
    25-Jun-1121-Dec-01
    
    £
    6.92
    
    
    
    15,425
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,425
    
    
    21-Dec-02
    
    21-Dec-1120-Feb-02
    
    £
    5.28
    
    
    
    5,697
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,697
    )
    
    
    
    
    
    20-Feb-03
    
    20-Feb-0720-Feb-02
    
    £
    5.28
    
    
    
    107,260
    
    
    
    
    
    
    
    
    
    
    
    (23,148
    )
    
    
    
    
    
    
    84,112
    
    
    20-Feb-03
    
    20-Feb-1202-Aug-02
    
    £
    2.66
    
    
    
    641,708
    
    
    
    
    
    
    
    
    
    
    
    (200,000
    )
    
    
    
    
    
    
    441,708
    
    
    02-Aug-03
    
    02-Aug-1224-Feb-03
    
    £
    1.35
    
    
    
    277,775
    
    
    
    
    
    
    
    105,893
    
    
    
    (103,575
    )
    
    
    
    
    
    
    174,200
    
    
    24-Feb-04
    
    24-Feb-1301-Apr-03
    
    £
    1.08
    
    
    
    18,750
    
    
    
    
    
    
    
    18,750
    
    
    
    
    
    
    
    
    
    
    
    18,750
    
    
    01-Apr-04
    
    01-Apr-1304-Aug-03
    
    £
    2.45
    
    
    
    501,250
    
    
    
    
    
    
    
    170,625
    
    
    
    (142,500
    )
    
    
    
    
    
    
    358,750
    
    
    04-Aug-04
    
    04-Aug-1323-Feb-04
    
    £
    4.07
    
    
    
    277,375
    
    
    
    
    
    
    
    69,344
    
    
    
    (63,750
    )
    
    
    
    
    
    
    213,625
    
    
    23-Feb-05
    
    23-Feb-1427-Aug-04
    
    £
    3.21
    
    
    
    199,064
    
    
    
    
    
    
    
    49,766
    
    
    
    (61,812
    )
    
    
    
    
    
    
    137,252
    
    
    27-Aug-05
    
    27-Aug-1411-Mar-05
    
    £
    4.19
    
    
    
    113,308
    
    
    
    
    
    
    
    28,327
    
    
    
    (36,162
    )
    
    
    
    
    
    
    77,146
    
    
    11-Mar-06
    
    11-Mar-1502-Aug-05
    
    £
    3.89
    
    
    
    122,044
    
    
    
    
    
    
    
    30,511
    
    
    
    (38,950
    )
    
    
    
    
    
    
    83,094
    
    
    02-Aug-06
    
    02-Aug-1515-Mar-06
    
    £
    3.93
    
    
    
    148,000
    
    
    
    
    
    
    
    37,000
    
    
    
    (17,750
    )
    
    
    
    
    
    
    130,250
    
    
    15-Mar-07
    
    15-Mar-1602-Aug-06
    
    £
    3.93
    
    
    
    233,000
    
    
    
    
    
    
    
    58,250
    
    
    
    (17,750
    )
    
    
    
    
    
    
    215,250
    
    
    02-Aug-07
    
    02-Aug-1613-Mar-07
    
    £
    4.42
    
    
    
    
    
    
    
    731,032
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    731,032
    
    
    13-Mar-08
    
    13-Mar-17SAYE 1
    
    11-Apr-02
    
    £
    4.48
    
    
    
    2,216
    
    
    
    
    
    
    
    2,216
    
    
    
    (2,216
    )
    
    
    
    
    
    
    
    
    
    01-Jun-07
    
    01-Dec-0711-Apr-022
    
    $
    8.05
    
    
    
    1,806
    
    
    
    
    
    
    
    1,806
    
    
    
    (1,806
    )
    
    
    
    
    
    
    
    
    
    01-Jun-07
    
    01-Dec-0707-Apr-04
    
    £
    3.14
    
    
    
    7,200
    
    
    
    
    
    
    
    7,200
    
    
    
    (7,200
    )
    
    
    
    
    
    
    
    
    
    01-Jun-07
    
    01-Dec-0707-Apr-042
    
    $
    7.27
    
    
    
    1,200
    
    
    
    
    
    
    
    1,200
    
    
    
    (1,200
    )
    
    
    
    
    
    
    
    
    
    01-Jun-07
    
    01-Dec-0714-Apr-05
    
    £
    3.33
    
    
    
    3,072
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,072
    
    
    01-Jun-08
    
    01-Dec-0810-Apr-06
    
    £
    3.14
    
    
    
    3,554
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,554
    
    
    01-Jun-09
    
    01-Dec-0910-Apr-062
    
    $
    6.77
    
    
    
    1,188
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,188
    )
    
    
    
    
    
    01-Jun-09
    
    01-Dec-0903-Apr-07
    
    £
    3.53
    
    
    
    
    
    
    
    7,215
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,215
    
    
    01-Jun-10
    
    01-Dec-10Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,760,653
    
    
    
    738,247
    
    
    
    580,888
    
    
    
    (717,819
    )
    
    
    (26,768
    )
    
    
    2,754,313
 
 Notes:1
    
    Options granted under the SAYE Plan have no performance conditions.2
    
    The options indicated are over American Depositary Shares (ADSs). Each
ADS represents six ordinary shares, is denominated in US dollars and
trades on NASDAQ. For the purposes of this disclosure, ADSs have been
converted into the equivalent number of ordinary shares and an
equivalent option price.3
    
    The DSOP was approved by the shareholders in April 2001. Awards are
normally granted with a four year vesting period, vesting 25% each
year. Therefore, 25% vested in 2007 on the anniversary of the date of
grant. If this date fell on a non-trading date, the shares vested at
the next available trading date.4
    
    Other senior managers as a group were 15 persons at 1 January 2007 and
were 15 persons at 31 December 2007. Lee Ann Daly and David Craig were
appointed to GLT on 1 January 2007 and 1 March 2007 respectively. Alex
Hungate resigned on 30 September 2007.At 31 December 2007, the market close price of our shares was 637.00
pence per share and $76.09 per ADS. The highest prices during the year
were 668.50 pence per share and $83.70 per ADS and the lowest were
418.89 pence per share and $48.18 per ADS. A-8.22




---



##### Table of Contents



10 Employee information
  Restated
    
    
    Restated2007
    
    
    2006
    
    
    2005Business division:Sales & Trading*
    
    
    1,430
    
    
    
    1,301
    
    
    
    987Research & Asset Management
    
    
    895
    
    
    
    800
    
    
    
    658Enterprise
    
    
    1,491
    
    
    
    1,241
    
    
    
    925Media
    
    
    220
    
    
    
    189
    
    
    
    109Shared divisional resources
    
    
    3,706
    
    
    
    3,182
    
    
    
    3,504Total divisions
    
    
    7,472
    
    
    
    6,713
    
    
    
    6,183Global Sales & Service Organisation
    
    
    5,843
    
    
    
    5,717
    
    
    
    4,988Editorial
    
    
    2,351
    
    
    
    2,321
    
    
    
    2,210Corporate Services*
    
    
    1,526
    
    
    
    1,551
    
    
    
    1,637Total continuing operations
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,018Discontinued operations
    
    
    
    
    
    
    
    
    
    
    846Total average number of employees
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,864By location:Europe, Middle East and Africa
    
    
    7,359
    
    
    
    7,174
    
    
    
    6,962Americas
    
    
    4,219
    
    
    
    4,252
    
    
    
    4,292Asia
    
    
    5,884
    
    
    
    4,876
    
    
    
    3,764Total continuing operations
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,018Discontinued operations
    
    
    
    
    
    
    
    
    
    
    846Total average number of employees
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,864By function:Production and communications
    
    
    10,335
    
    
    
    9,438
    
    
    
    8,498Selling and marketing
    
    
    4,609
    
    
    
    4,572
    
    
    
    4,179Support services and administration
    
    
    2,518
    
    
    
    2,292
    
    
    
    2,341Total continuing operations
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,018Discontinued operations
    
    
    
    
    
    
    
    
    
    
    846Total average number of employees
    
    
    17,462
    
    
    
    16,302
    
    
    
    15,864The above include:Development staff
    
    
    3,120
    
    
    
    2,670
    
    
    
    2,332
 
 *
    
    2006 and 2005 have been restated to reflect the way that Reuters was managed in 2007,
Transaction Sales and Hosted are now shown within Sales & Trading rather than in Shared
divisional resources and Global Sales & Service Organisation, respectively. Chief Technology
Office is now included in Corporate Services rather than in Shared Divisional resources.  A-8.23




---



##### Table of Contents



11 Consolidated reconciliation of changes in equity
 Attributable to equity
    
    
    Minority
    
    
    Totalholders of the parent
    
    
    interest
    
    
    equityShare
    
    
    Other
    
    
    Retainedcapital
    
    
    reserves
    
    
    earningsNote
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m1 January 2005
    
    
    
    
    
    
    455
    
    
    
    (1,647
    )
    
    
    1,690
    
    
    
    201
    
    
    
    699Actuarial losses on defined benefit plans
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    (48
    )
    
    
    
    
    
    
    (48
    )Exchange differences taken directly to reserves
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    
    
    
    
    21
    
    
    
    118Exchange differences taken to the income statement
on disposal of assets
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (2
    )Fair value losses on available-for-sale financial
assets
    
    
    16
    
    
    
    
    
    
    
    (22
    )
    
    
    
    
    
    
    7
    
    
    
    (15
    )Fair value gains on available-for-sale financial
assets taken to the income statement on disposal of
assets
    
    
    16
    
    
    
    
    
    
    
    (68
    )
    
    
    
    
    
    
    (5
    )
    
    
    (73
    )Fair value losses on net investment hedges
    
    
    16
    
    
    
    
    
    
    
    (39
    )
    
    
    
    
    
    
    
    
    
    
    (39
    )Fair value gains taken to the income statement on
disposal of net investments
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    (14
    )Taxation on the items taken directly to or
transferred from equity
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    10
    
    
    
    
    
    
    
    14Net expense recognised directly in equity
    
    
    
    
    
    
    
    
    
    
    (44
    )
    
    
    (38
    )
    
    
    23
    
    
    
    (59
    )Profit for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    456
    
    
    
    26
    
    
    
    482Total recognised (expense)/income for 2005
    
    
    
    
    
    
    
    
    
    
    (44
    )
    
    
    418
    
    
    
    49
    
    
    
    423Employee share schemes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42
    
    
    
    7
    
    
    
    49Taxation on employee share schemes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    11Repurchase of own shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (224
    )
    
    
    
    
    
    
    (224
    )Shares to be repurchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (59
    )
    
    
    
    
    
    
    (59
    )Proceeds from shares issued to ordinary shareholders
    
    
    27
    
    
    
    12
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    10Proceeds of shares issued to minority shareholders
of Instinet
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    3Dividends:
    
    
    32Final dividend for 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (86
    )
    
    
    
    
    
    
    (86
    )Interim dividend for 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (54
    )
    
    
    
    
    
    
    (54
    )Share of Instinets dividend paid to
minority shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23
    )
    
    
    (23
    )Other movements in equity
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )Minority interest in subsidiary disposed in the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (237
    )
    
    
    (237
    )31 December 2005
    
    
    
    
    
    
    467
    
    
    
    (1,692
    )
    
    
    1,736
    
    
    
    
    
    
    
    511
 A-8.24




---



##### Table of Contents



Attributable to equity
    
    
    Minority
    
    
    Totalholders of the parent
    
    
    interest
    
    
    equityShare
    
    
    Other
    
    
    Retainedcapital
    
    
    reserves
    
    
    earningsNote
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m1 January 2006
    
    
    
    
    
    
    467
    
    
    
    (1,692
    )
    
    
    1,736
    
    
    
    
    
    
    
    511Actuarial gains on defined benefit plans
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    6Exchange differences taken directly to reserves
    
    
    
    
    
    
    
    
    
    
    (95
    )
    
    
    
    
    
    
    
    
    
    
    (95
    )Fair value gains on available-for-sale financial
assets
    
    
    16
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    6Fair value gains on net investment hedges
    
    
    16
    
    
    
    
    
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    34Tax on items taken directly to or transferred from
equity
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (1
    )
    
    
    
    
    
    
    (4
    )Net expense recognised directly in equity
    
    
    
    
    
    
    
    
    
    
    (58
    )
    
    
    5
    
    
    
    
    
    
    
    (53
    )Profit for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    305
    
    
    
    
    
    
    
    305Total recognised (expense)/income for 2006
    
    
    
    
    
    
    
    
    
    
    (58
    )
    
    
    310
    
    
    
    
    
    
    
    252Employee share schemes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    30Tax on employee share schemes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Repurchase of own shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (467
    )
    
    
    
    
    
    
    (467
    )Shares to be repurchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53
    )
    
    
    
    
    
    
    (53
    )Shares allotted during the year
    
    
    27
    
    
    
    41
    
    
    
    
    
    
    
    (9
    )
    
    
    
    
    
    
    32Shares cancelled during the year
    
    
    27
    
    
    
    (12
    )
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    Dividends:
    
    
    32Final dividend for 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (81
    )
    
    
    
    
    
    
    (81
    )Interim dividend for 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53
    )
    
    
    
    
    
    
    (53
    )31 December 2006
    
    
    
    
    
    
    496
    
    
    
    (1,738
    )
    
    
    1,414
    
    
    
    
    
    
    
    172
 A-8.25




---



##### Table of Contents



Attributable to equity
    
    
    Minority
    
    
    Totalholders of the parent
    
    
    interest
    
    
    equityShare
    
    
    Other
    
    
    Retainedcapital
    
    
    reserves
    
    
    earningsNote
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m1 January 2007
    
    
    
    
    
    
    496
    
    
    
    (1,738
    )
    
    
    1,414
    
    
    
    
    
    
    
    172Actuarial gains on defined benefit plans
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    98
    
    
    
    
    
    
    
    98Exchange differences taken directly to reserves
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    20Fair value gains on available-for-sale
financial assets
    
    
    16
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    11Fair value gains on available-for-sale
financial assets taken to the income statement
on disposal of assets
    
    
    16
    
    
    
    
    
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    (18
    )Fair value gains on net investment hedges
    
    
    16
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    4Tax on items taken directly to or transferred
from equity
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    (21
    )
    
    
    
    
    
    
    (20
    )Net income recognised directly in equity
    
    
    
    
    
    
    
    
    
    
    18
    
    
    
    77
    
    
    
    
    
    
    
    95Profit for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    227
    
    
    
    
    
    
    
    227Total recognised income for 2007
    
    
    
    
    
    
    
    
    
    
    18
    
    
    
    304
    
    
    
    
    
    
    
    322Employee share schemes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    30Tax on employee share schemes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Repurchase of own shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (121
    )
    
    
    
    
    
    
    (121
    )Shares to be repurchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (169
    )
    
    
    
    
    
    
    (169
    )Shares allotted during the year
    
    
    27
    
    
    
    53
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    47Shares cancelled during the year
    
    
    27
    
    
    
    (10
    )
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    Dividends:
    
    
    32Final dividend for 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (86
    )
    
    
    
    
    
    
    (86
    )Interim dividend for 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (61
    )
    
    
    
    
    
    
    (61
    )31 December 2007
    
    
    
    
    
    
    539
    
    
    
    (1,710
    )
    
    
    1,309
    
    
    
    
    
    
    
    138
   A-8.26




---



##### Table of Contents



12 Segmental analysis  balance sheet
 Primary reportable segments
  31 December 2007Research&`Sales &
    
    
    Asset Man-Trading
    
    
    agement
    
    
    Enterprise
    
    
    Media
    
    
    Shared
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mAssets (excluding
investment in
associates and
joint ventures)
    
    
    764
    
    
    
    271
    
    
    
    227
    
    
    
    83
    
    
    
    621
    
    
    
    1,966Investment in
associates and
joint ventures
    
    
    18
    
    
    
    4
    
    
    
    1
    
    
    
    4
    
    
    
    
    
    
    
    27Total assets
    
    
    782
    
    
    
    275
    
    
    
    228
    
    
    
    87
    
    
    
    621
    
    
    
    1,993Total liabilities
    
    
    (386
    )
    
    
    (122
    )
    
    
    (112
    )
    
    
    (50
    )
    
    
    (1,185
    )
    
    
    (1,855
    )Capital expenditure
    
    
    160
    
    
    
    52
    
    
    
    49
    
    
    
    11
    
    
    
    
    
    
    
    272
 Restated31 December 2006Research&`Sales &
    
    
    Asset Man-Trading
    
    
    agement
    
    
    Enterprise
    
    
    Media
    
    
    Shared
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mAssets (excluding
investment in
associates and
joint ventures)
    
    
    745
    
    
    
    243
    
    
    
    182
    
    
    
    56
    
    
    
    656
    
    
    
    1,882Investment in
associates and
joint ventures
    
    
    15
    
    
    
    4
    
    
    
    1
    
    
    
    18
    
    
    
    
    
    
    
    38Total assets
    
    
    760
    
    
    
    247
    
    
    
    183
    
    
    
    74
    
    
    
    656
    
    
    
    1,920Total liabilities
    
    
    (430
    )
    
    
    (116
    )
    
    
    (115
    )
    
    
    (57
    )
    
    
    (1,030
    )
    
    
    (1,748
    )Capital expenditure
    
    
    172
    
    
    
    32
    
    
    
    76
    
    
    
    10
    
    
    
    
    
    
    
    290
 A-8.27




---



##### Table of Contents



Restated31 December 2005Research&`Sales &
    
    
    Asset Man-Trading
    
    
    agement
    
    
    Enterprise
    
    
    Media
    
    
    Shared
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mAssets (excluding
investment in
associates and
joint ventures)
    
    
    667
    
    
    
    246
    
    
    
    178
    
    
    
    49
    
    
    
    961
    
    
    
    2,101Investment in
associates and
joint ventures
    
    
    11
    
    
    
    5
    
    
    
    3
    
    
    
    17
    
    
    
    
    
    
    
    36Total assets
    
    
    678
    
    
    
    251
    
    
    
    181
    
    
    
    66
    
    
    
    961
    
    
    
    2,137Total liabilities
    
    
    (542
    )
    
    
    (141
    )
    
    
    (150
    )
    
    
    (76
    )
    
    
    (717
    )
    
    
    (1,626
    )Capital expenditure*
    
    
    241
    
    
    
    53
    
    
    
    38
    
    
    
    14
    
    
    
    
    
    
    
    346
 
 *
    
    Capital expenditure in 2005 excludes Instinct Group, which was classified as a discontinued
operation prior to its disposal.   Secondary
reportable segments
 31 December 2007
    
    
    31 December 2006
    
    
    31 December 2005Total
    
    
    Capital
    
    
    Total
    
    
    Capital
    
    
    Total
    
    
    Capitalassets
    
    
    expenditure
    
    
    assets
    
    
    expenditure
    
    
    assets
    
    
    expenditureBy geographical location
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mEurope, Middle East & Africa
    
    
    710
    
    
    
    144
    
    
    
    616
    
    
    
    124
    
    
    
    589
    
    
    
    191Americas
    
    
    531
    
    
    
    89
    
    
    
    522
    
    
    
    108
    
    
    
    520
    
    
    
    99Asia
    
    
    228
    
    
    
    39
    
    
    
    194
    
    
    
    58
    
    
    
    143
    
    
    
    56Central
    
    
    524
    
    
    
    
    
    
    
    588
    
    
    
    
    
    
    
    885
    
    
    
    Total
    
    
    1,993
    
    
    
    272
    
    
    
    1,920
    
    
    
    290
    
    
    
    2,137
    
    
    
    346
  A-8.28




---



##### Table of Contents



13 Intangible assets
 InternallyTrade
    
    
    Customer
    
    
    Technology
    
    
    generated
    
    
    PurchasedGoodwill
    
    
    names
    
    
    relationships
    
    
    know-how
    
    
    software
    
    
    software
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mCost:1 January 2005
    
    
    209
    
    
    
    29
    
    
    
    1
    
    
    
    144
    
    
    
    44
    
    
    
    54
    
    
    
    481Exchange differences
    
    
    24
    
    
    
    3
    
    
    
    4
    
    
    
    6
    
    
    
    1
    
    
    
    2
    
    
    
    40Additions:Acquisition of subsidiaries
    
    
    103
    
    
    
    4
    
    
    
    59
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    170Other additions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    11
    
    
    
    40Reclassifications**
    
    
    (9
    )
    
    
    (3
    )
    
    
    
    
    
    
    (65
    )
    
    
    
    
    
    
    (3
    )
    
    
    (80
    )31 December 2005
    
    
    327
    
    
    
    33
    
    
    
    64
    
    
    
    89
    
    
    
    74
    
    
    
    64
    
    
    
    651Exchange differences
    
    
    (32
    )
    
    
    (4
    )
    
    
    (7
    )
    
    
    (7
    )
    
    
    (1
    )
    
    
    (2
    )
    
    
    (53
    )Additions:Acquisition of subsidiaries
    
    
    18
    
    
    
    1
    
    
    
    11
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    46Other additions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    21
    
    
    
    114Adjustments*
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    231 December 2006
    
    
    315
    
    
    
    30
    
    
    
    68
    
    
    
    98
    
    
    
    166
    
    
    
    83
    
    
    
    760Exchange differences
    
    
    (1
    )
    
    
    (1
    )
    
    
    1
    
    
    
    (1
    )
    
    
    3
    
    
    
    
    
    
    
    1Additions:Acquisition of subsidiaries
    
    
    13
    
    
    
    4
    
    
    
    1
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    28Other additions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90
    
    
    
    19
    
    
    
    10931 December 2007
    
    
    327
    
    
    
    33
    
    
    
    70
    
    
    
    107
    
    
    
    259
    
    
    
    102
    
    
    
    898Amortisation and impairment:1 January 2005
    
    
    (18
    )
    
    
    (11
    )
    
    
    
    
    
    
    (66
    )
    
    
    (38
    )
    
    
    (32
    )
    
    
    (165
    )Exchange differences
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (2
    )
    
    
    (7
    )Charged in the year:Amortisation
    
    
    
    
    
    
    (3
    )
    
    
    (4
    )
    
    
    (15
    )
    
    
    (3
    )
    
    
    (10
    )
    
    
    (35
    )Impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Reclassifications**
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    3
    
    
    
    4431 December 2005
    
    
    (18
    )
    
    
    (13
    )
    
    
    (4
    )
    
    
    (46
    )
    
    
    (42
    )
    
    
    (41
    )
    
    
    (164
    )Exchange differences
    
    
    
    
    
    
    2
    
    
    
    1
    
    
    
    4
    
    
    
    
    
    
    
    2
    
    
    
    9Charged in the year:Amortisation
    
    
    
    
    
    
    (4
    )
    
    
    (7
    )
    
    
    (13
    )
    
    
    (10
    )
    
    
    (12
    )
    
    
    (46
    )31 December 2006
    
    
    (18
    )
    
    
    (15
    )
    
    
    (10
    )
    
    
    (55
    )
    
    
    (52
    )
    
    
    (51
    )
    
    
    (201
    )Exchange differences
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Charged in the year:Amortisation
    
    
    
    
    
    
    (3
    )
    
    
    (7
    )
    
    
    (12
    )
    
    
    (28
    )
    
    
    (11
    )
    
    
    (61
    )Impairment
    
    
    
    
    
    
    (9
    )
    
    
    
    
    
    
    (9
    )
    
    
    (2
    )
    
    
    (1
    )
    
    
    (21
    )31 December 2007
    
    
    (18
    )
    
    
    (27
    )
    
    
    (17
    )
    
    
    (76
    )
    
    
    (83
    )
    
    
    (63
    )
    
    
    (284
    )Carrying amount:31 December 2005
    
    
    309
    
    
    
    20
    
    
    
    60
    
    
    
    43
    
    
    
    32
    
    
    
    23
    
    
    
    48731 December 2006
    
    
    297
    
    
    
    15
    
    
    
    58
    
    
    
    43
    
    
    
    114
    
    
    
    32
    
    
    
    55931 December 2007
    
    
    309
    
    
    
    6
    
    
    
    53
    
    
    
    31
    
    
    
    176
    
    
    
    39
    
    
    
    614
 
 *
    
    Adjustments of £2 million to goodwill in 2006 relate to the finalisation of fair value
adjustments in respect of the acquisition of Telerate. Fair value adjustments are based on an
independent valuation performed by professionally-qualified valuers.**
    
    Reclassifications in 2005 relate to Instinet Group, which was classified as a discontinued
operation prior to its disposal. A-8.29




---



##### Table of Contents



Nature (included in
    
    Date of
    
    Carrying amount
    
    Remaining amortisationArising on acquisition of
    
    category)
    
    acquisition
    
    £m
    
    periodTelerate
    
    Customer relationships
    
    June 2005
    
    
    
    35

    
    7 years, 5 monthsApplication Networks
    
    Technology know-how
    
    June 2006
    
    
    
    10

    
    3 years, 5 months
 Impairment tests of goodwill
   A-8.30




---



##### Table of Contents



Carrying amount of goodwill at31 December 2007
    
    
    31 December 2006
    
    
    31 December 2005Business division
    
    Cash Generating Unit
    
    £m
    
    
    £m
    
    
    £mSales & Trading
    
    Sales & Trading
    
    
    149
    
    
    
    146
    
    
    
    157Research & Asset Management
    
    Investment Banking & Investment Management
    
    
    93
    
    
    
    93
    
    
    
    103Wealth Management
    
    
    
    
    
    
    
    
    
    
    Lipper
    
    
    33
    
    
    
    28
    
    
    
    31Enterprise
    
    Enterprise (excluding Risk)
    
    
    7
    
    
    
    3
    
    
    
    4Risk
    
    
    22
    
    
    
    22
    
    
    
    9Media
    
    Media
    
    
    5
    
    
    
    5
    
    
    
    5Total
    
    
    
    
    309
    
    
    
    297
    
    
    
    309
 Key assumptions used in the value in use calculations are as follows:
    Impairment tests of other intangible assets
   A-8.31




---



##### Table of Contents



14 Property, plant and equipment
 OfficeComputer
    
    
    equipmentFreehold
    
    
    Leasehold
    
    
    systems
    
    
    and motorproperty
    
    
    property
    
    
    equipment
    
    
    vehicles
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mCost:1 January 2005
    
    
    153
    
    
    
    187
    
    
    
    858
    
    
    
    193
    
    
    
    1,391Exchange differences
    
    
    1
    
    
    
    8
    
    
    
    36
    
    
    
    4
    
    
    
    49Additions
    
    
    5
    
    
    
    41
    
    
    
    80
    
    
    
    11
    
    
    
    137Acquisitions
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    2Disposals
    
    
    
    
    
    
    (8
    )
    
    
    (91
    )
    
    
    (15
    )
    
    
    (114
    )Reclassifications*
    
    
    (1
    )
    
    
    (62
    )
    
    
    (41
    )
    
    
    (36
    )
    
    
    (140
    )31 December 2005
    
    
    158
    
    
    
    166
    
    
    
    843
    
    
    
    158
    
    
    
    1,325Exchange differences
    
    
    (5
    )
    
    
    (10
    )
    
    
    (57
    )
    
    
    (10
    )
    
    
    (82
    )Additions
    
    
    9
    
    
    
    37
    
    
    
    75
    
    
    
    9
    
    
    
    130Disposals
    
    
    
    
    
    
    (4
    )
    
    
    (193
    )
    
    
    (24
    )
    
    
    (221
    )31 December 2006
    
    
    162
    
    
    
    189
    
    
    
    668
    
    
    
    133
    
    
    
    1,152Exchange differences
    
    
    2
    
    
    
    4
    
    
    
    16
    
    
    
    5
    
    
    
    27Additions
    
    
    1
    
    
    
    44
    
    
    
    83
    
    
    
    6
    
    
    
    134Acquisitions
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Disposals
    
    
    (1
    )
    
    
    (3
    )
    
    
    (53
    )
    
    
    (30
    )
    
    
    (87
    )31 December 2007
    
    
    164
    
    
    
    234
    
    
    
    715
    
    
    
    114
    
    
    
    1,227Disposals
    
    
    
    
    
    
    8
    
    
    
    89
    
    
    
    14
    
    
    
    111Reclassifications*
    
    
    
    
    
    
    31
    
    
    
    33
    
    
    
    34
    
    
    
    9831 December 2005
    
    
    (75
    )
    
    
    (70
    )
    
    
    (688
    )
    
    
    (134
    )
    
    
    (967
    )Exchange differences
    
    
    2
    
    
    
    4
    
    
    
    47
    
    
    
    9
    
    
    
    62Charged in the year
    
    
    (4
    )
    
    
    (15
    )
    
    
    (67
    )
    
    
    (9
    )
    
    
    (95
    )Disposals
    
    
    
    
    
    
    3
    
    
    
    192
    
    
    
    24
    
    
    
    21931 December 2006
    
    
    (77
    )
    
    
    (78
    )
    
    
    (516
    )
    
    
    (110
    )
    
    
    (781
    )Exchange differences
    
    
    (1
    )
    
    
    (2
    )
    
    
    (14
    )
    
    
    (5
    )
    
    
    (22
    )Charged in the year
    
    
    (4
    )
    
    
    (15
    )
    
    
    (69
    )
    
    
    (8
    )
    
    
    (96
    )Acquisitions
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Disposals
    
    
    
    
    
    
    2
    
    
    
    47
    
    
    
    28
    
    
    
    7731 December 2007
    
    
    (82
    )
    
    
    (93
    )
    
    
    (553
    )
    
    
    (95
    )
    
    
    (823
    )Carrying amount:31 December 2005
    
    
    83
    
    
    
    96
    
    
    
    155
    
    
    
    24
    
    
    
    35831 December 2006
    
    
    85
    
    
    
    111
    
    
    
    152
    
    
    
    23
    
    
    
    37131 December 2007
    
    
    82
    
    
    
    141
    
    
    
    162
    
    
    
    19
    
    
    
    404
 
 *
    
    Reclassifications in 2005 relate to Instinet Group, which was classified as a discontinued
operation prior to its disposal, other assets held for sale at the balance sheet date and
depreciation capitalised as intangible assets. A-8.32




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005Carrying amount of leasehold property
    
    £m
    
    
    £m
    
    
    £mLong-term leaseholds
    
    
    96
    
    
    
    66
    
    
    
    33Short-term leaseholds
    
    
    45
    
    
    
    45
    
    
    
    63Total leasehold property
    
    
    141
    
    
    
    111
    
    
    
    96
 A-8.33




---



##### Table of Contents



15 Investments accounted for using the equity method
 Interests
    
    
    Interestsin joint
    
    
    inventures
    
    
    associates
    
    
    Total£m
    
    
    £m
    
    
    £mNet assets/cost:1 January 2005
    
    
    29
    
    
    
    5
    
    
    
    34Exchange differences
    
    
    2
    
    
    
    
    
    
    
    2Arising in year  share of:Operating profits
    
    
    5
    
    
    
    
    
    
    
    5Interest receivable
    
    
    1
    
    
    
    
    
    
    
    1Taxation
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Additions
    
    
    1
    
    
    
    
    
    
    
    1Dividends received
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Disposals
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Impairments
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )31 December 2005
    
    
    32
    
    
    
    3
    
    
    
    35Reclassifications*
    
    
    (14
    )
    
    
    
    
    
    
    (14
    )Exchange differences
    
    
    (3
    )
    
    
    (1
    )
    
    
    (4
    )Arising in year  share of:Operating profits
    
    
    
    
    
    
    1
    
    
    
    1Interest receivable
    
    
    1
    
    
    
    
    
    
    
    1Taxation
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Additions
    
    
    8
    
    
    
    
    
    
    
    8Dividends received
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )31 December 2006
    
    
    19
    
    
    
    3
    
    
    
    22Reclassifications**
    
    
    
    
    
    
    2
    
    
    
    2Exchange differences
    
    
    
    
    
    
    1
    
    
    
    1Arising in year  share of:Operating losses
    
    
    (5
    )
    
    
    (1
    )
    
    
    (6
    )Additions
    
    
    9
    
    
    
    
    
    
    
    9Dividends received
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )31 December 2007
    
    
    21
    
    
    
    5
    
    
    
    26
 
 *
    
    Reclassifications in 2006 relate to Reuters investment in Factiva, which was classified as a
non-current asset held for sale and sold during the year.**
    
    Reclassifications in 2007 relate to Reuters investment in TIMES NOW, which was classified as
a non-current asset held for sale, and Pluck which was classified as an available-for-sale
asset. A-8.34




---



##### Table of Contents



Interests
    
    
    Interestsin joint
    
    
    inventures
    
    
    associates
    
    
    Total£m
    
    
    £m
    
    
    £mGoodwill:1 January 2005
    
    
    
    
    
    
    1
    
    
    
    131 December 2005
    
    
    
    
    
    
    1
    
    
    
    1Additions
    
    
    
    
    
    
    15
    
    
    
    1531 December 2006
    
    
    
    
    
    
    16
    
    
    
    16Additions
    
    
    
    
    
    
    5
    
    
    
    5Reclassifications**
    
    
    
    
    
    
    (20
    )
    
    
    (20
    )31 December 2007
    
    
    
    
    
    
    1
    
    
    
    1Carrying amount:31 December 2005
    
    
    32
    
    
    
    4
    
    
    
    3631 December 2006
    
    
    19
    
    
    
    19
    
    
    
    3831 December 2007
    
    
    21
    
    
    
    6
    
    
    
    27
 
 *
    
    Reclassifications in 2006 relate to Reuters investment in Factiva, which was classified as a
non-current asset held for sale and sold during the year.**
    
    Reclassifications in 2007 relate to Reuters investment in TIMES NOW, which was classified as
a non-current asset held for sale, and Pluck which was classified as an available-for-sale
asset.      A-8.35




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mOperating profits
    
    
    (5
    )
    
    
    1
    
    
    
    5Interest receivable
    
    
    
    
    
    
    1
    
    
    
    1Taxation
    
    
    (1
    )
    
    
    (2
    )
    
    
    (1
    )Set-up costs of FXMarketSpace
    
    
    
    
    
    
    (4
    )
    
    
    Share of post-taxation
(losses)/profits from
associates and joint
ventures
    
    
    (6
    )
    
    
    (4
    )
    
    
    5
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mIncome
    
    
    7
    
    
    
    63
    
    
    
    83Expenses
    
    
    (12
    )
    
    
    (64
    )
    
    
    (78
    )(Losses)/profit
    
    
    (5
    )
    
    
    (1
    )
    
    
    5Non-current assets
    
    
    54
    
    
    
    61
    
    
    
    76Current assets
    
    
    16
    
    
    
    18
    
    
    
    37Current liabilities
    
    
    (41
    )
    
    
    (49
    )
    
    
    (20
    )Non-current liabilities
    
    
    (8
    )
    
    
    (11
    )
    
    
    (61
    )Carrying value
    
    
    21
    
    
    
    19
    
    
    
    32
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mRevenues
    
    
    5
    
    
    
    10
    
    
    
    21(Loss)/Profit
    
    
    (1
    )
    
    
    1
    
    
    
    Assets
    
    
    10
    
    
    
    48
    
    
    
    19Liabilities
    
    
    (4
    )
    
    
    (29
    )
    
    
    (15
    )Carrying value
    
    
    6
    
    
    
    19
    
    
    
    4
 A-8.36




---



##### Table of Contents



16 Other financial assets and liabilities
   2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mAvailable-for-sale financial assets:Equity securities
    
    
    14
    
    
    
    17
    
    
    
    13Other available-for-sale financial assets
    
    
    4
    
    
    
    9
    
    
    
    5Short-term deposits
    
    
    3
    
    
    
    198
    
    
    
    1Derivative financial instruments (see note 17):Cross-currency interest rate swaps  fair value hedges < 1 year
    
    
    14
    
    
    
    
    
    
    
    Cross-currency interest rate swaps  fair value hedges > 1 year
    
    
    20
    
    
    
    
    
    
    
    14Cross-currency interest rate swaps  net investment hedges
    
    
    34
    
    
    
    30
    
    
    
    Forward foreign exchange contracts  held for trading
    
    
    1
    
    
    
    
    
    
    
    Embedded derivatives in revenue contracts
    
    
    
    
    
    
    
    
    
    
    7Embedded derivatives in supplier contracts
    
    
    1
    
    
    
    3
    
    
    
    Total
    
    
    91
    
    
    
    257
    
    
    
    40Less: Non-current portion
    
    
    (62
    )
    
    
    (47
    )
    
    
    (22
    )Current portion
    
    
    29
    
    
    
    210
    
    
    
    18
   2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m1 January
    
    
    26
    
    
    
    18
    
    
    
    158Additions
    
    
    1
    
    
    
    
    
    
    
    1Fair value adjustments transferred to equity
    
    
    11
    
    
    
    6
    
    
    
    (50
    )Reclassifications*
    
    
    4
    
    
    
    4
    
    
    
    (23
    )Disposals
    
    
    (24
    )
    
    
    (2
    )
    
    
    (68
    )31 December
    
    
    18
    
    
    
    26
    
    
    
    18
 
 *
    
    The reclassification in 2007 relates to the 17% interest in Pluck Corporation reclassified
following the expiry of an option to acquire 100% of the equity interest. Reclassifications in
2006 relate to a minority preference share interest in a Factiva entity that Reuters retained
following the disposal of the majority of Reuters investment in Factiva. Reclassifications in
2005 include balances transferred to assets held for sale and liabilities associated with
assets held for sale. A-8.37




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mBorrowings:Bank overdrafts
    
    
    9
    
    
    
    24
    
    
    
    25Term notes and commercial paper
    
    
    610
    
    
    
    632
    
    
    
    383Finance lease payables
    
    
    12
    
    
    
    4
    
    
    
    2Total borrowings
    
    
    631
    
    
    
    660
    
    
    
    410Derivative financial instruments (see note 17)Cross-currency interest rate swaps  fair value hedges < 1 year
    
    
    1
    
    
    
    2
    
    
    
    Cross-currency interest rate swaps  fair value hedges > 1 year
    
    
    
    
    
    
    7
    
    
    
    Cross-currency interest rate swaps  net investment hedges
    
    
    
    
    
    
    
    
    
    
    9Forward
foreign exchange contracts  held for trading
    
    
    1
    
    
    
    
    
    
    
    Embedded
derivatives in revenue contracts
    
    
    28
    
    
    
    18
    
    
    
    Embedded
derivatives in supplier contracts
    
    
    1
    
    
    
    
    
    
    
    1Total
    
    
    662
    
    
    
    687
    
    
    
    420Less:
Noncurrent portion
    
    
    (370
    )
    
    
    (521
    )
    
    
    (371
    )Current
portion
    
    
    292
    
    
    
    168
    
    
    
    49
   Minimum
    
    
    Present value oflease payments
    
    
    minimum lease payments2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mWithin one year
    
    
    6
    
    
    
    2
    
    
    
    1
    
    
    
    5
    
    
    
    2
    
    
    
    1One to five years
    
    
    7
    
    
    
    2
    
    
    
    1
    
    
    
    7
    
    
    
    2
    
    
    
    1Total
    
    
    13
    
    
    
    4
    
    
    
    2
    
    
    
    12
    
    
    
    4
    
    
    
    2
  A-8.38




---



##### Table of Contents



2007
    
    
    
    
    
    
    2006
    
    
    
    
    
    
    2005Fair value
    
    
    
    
    
    
    Fair value
    
    
    
    
    
    
    Fair valuegain/(loss)
    
    
    Fair value
    
    
    gain/(loss)
    
    
    Fair value
    
    
    gain/(loss)
    
    
    Fair valuein income
    
    
    gain/(loss)
    
    
    in income
    
    
    gain/(loss)
    
    
    in income
    
    
    gain/(loss)statement
    
    
    in equity
    
    
    statement
    
    
    equity
    
    
    statement
    
    
    in equity£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mAvailable-for-sale
financial assets
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    (50
    )Embedded derivatives
in revenue contracts
    
    
    (10
    )
    
    
    
    
    
    
    (24
    )
    
    
    
    
    
    
    21
    
    
    
    Embedded derivatives
in supplier contracts
    
    
    (3
    )
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    (2
    )
    
    
    Hedging instruments:Cross-currency
interest rate swaps
 fair value hedges
    
    
    50
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (1
    )
    
    
    Cross-currency
interest rate swaps
 net investment
hedges
    
    
    1
    
    
    
    4
    
    
    
    1
    
    
    
    34
    
    
    
    (1
    )
    
    
    (39
    )Other derivatives:Gains
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    Losses
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    Other financial assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    Total
    
    
    37
    
    
    
    15
    
    
    
    (22
    )
    
    
    40
    
    
    
    1
    
    
    
    (89
    )
 17 Derivatives and other financial instruments
 Management of financial risk
   Liquidity risk
  A-8.39




---



##### Table of Contents




    
    the undiscounted contractual maturities of the financial assets; and
 
    
    the undiscounted contractual maturities of the financial liabilities, including
interest that will accrue to those liabilities, except where Reuters is entitled and intends
to repay the liability before its maturity.
 A-8.40




---



##### Table of Contents



2007Contractual maturityWithin
    
    
    One to
    
    
    Two to
    
    
    Three to
    
    
    Four to
    
    
    More thanone year
    
    
    two years

    
    three years

    
    four years

    
    five years

    
    five years


    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    £mAvailable-for-sale financial assets
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18Short-term investments
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
        
    
    3Cash and cash equivalents
    
    
    251
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
        
    
    251Other financial assets
    
    
    203
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
        4
    
    209Derivative receivable leg, settled gross
    
    
    661
    
    
    
    41
    
    
    
    693
    
    
    
    
    
    
    
    
    
    
    
        
    
    1,395Derivative payable leg, settled gross
    
    
    (632
    )
    
    
    (40
    )
    
    
    (637
    )
    
    
    
    
    
    
    
    
    
    
        
    
    (1,309
    )Financial liabilitiesBorrowings
    
    
    (284
    )
    
    
    (21
    )
    
    
    (388
    )
    
    
    
    
    
    
    
    
    
    
        
    
    (693
    )Other financial liabilities
    
    
    (680
    )
    
    
    (20
    )
    
    
    (12
    )
    
    
    (4
    )
    
    
    (2
    )
    
    
        (2
    )


    (720
    )Total
    
    
    (460
    )
    
    
    (40
    )
    
    
    (344
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
        2
    
    (846
    )2006Contractual maturityWithin
    
    
    One to
    
    
    Two to
    
    
    Three to
    
    
    Four to
    
    
    More thanone year
    
    
    two years

    
    three years

    
    four years

    
    five years

    
    five years


    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    £mAvailable-for-sale financial assets
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26Short-term investments
    
    
    198
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
       
    
    198Cash and cash equivalents
    
    
    129
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
       
    
    129Other financial assets
    
    
    224
    
    
    
    2
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
       7
    
    234Derivative receivable leg, settled gross
    
    
    319
    
    
    
    331
    
    
    
    36
    
    
    
    682
    
    
    
    
    
    
    
      
    
    1,368Derivative payable leg, settled gross
    
    
    (321
    )
    
    
    (334
    )
    
    
    (38
    )
    
    
    (671
    )
    
    
    
    
    
    
       
    
    (1,364
    )Financial liabilitiesBorrowings
    
    
    (171
    )
    
    
    (197
    )
    
    
    (16
    )
    
    
    (353
    )
    
    
    
    
    
    
       
    
    (737
    )Other financial liabilities
    
    
    (507
    )
    
    
    (19
    )
    
    
    (7
    )
    
    
    (5
    )
    
    
    (3
    )
    
    
       (5
    )
    (546
    )Total
    
    
    (103
    )
    
    
    (217
    )
    
    
    (24
    )
    
    
    (347
    )
    
    
    (3
    )
    
    
      2
    
    (692
    )
 A-8.41




---



##### Table of Contents



2005Contractual maturityWithin
    
    
    One to
    
    
    Two to
    
    
    Three to
    
    
    Four to
    
    
    More thanone year
    
    
    two years

    
    three years

    
    four years

    
    five years

    
    five years


    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    £mAvailable-for-sale financial assets
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18Short-term investments
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Cash and cash equivalents
    
    
    662
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
       
    
    662Other financial assets
    
    
    218
    
    
    
    1
    
    
    
    3
    
    
    
    1
    
    
    
    
    
    
    
       7
    
    230Derivative receivable leg, settled gross
    
    
    186
    
    
    
    34
    
    
    
    34
    
    
    
    34
    
    
    
    687
    
    
    
       
    
    975Derivative payable leg, settled gross
    
    
    (183
    )
    
    
    (33
    )
    
    
    (33
    )
    
    
    (33
    )
    
    
    (693
    )
    
    
       
    
    (975
    )Financial liabilitiesBorrowings
    
    
    (63
    )
    
    
    (16
    )
    
    
    (20
    )
    
    
    (16
    )
    
    
    (360
    )
    
    
       
    
    (475
    )Other financial liabilities
    
    
    (473
    )
    
    
    (30
    )
    
    
    (8
    )
    
    
    (8
    )
    
    
    (4
    )
    
    
       (7
    )
    (530
    )Total
    
    
    366
    
    
    
    (44
    )
    
    
    (24
    )
    
    
    (22
    )
    
    
    (370
    )
    
    
       
    
    (94
    )
 Capital structure
  Standard & Poors (FFO/NetMoodys (RCF/Net Debt**)
    
    
    Debt***)Rating Agency
    
    2007

    
    2006

    
    2005

    
    2007

    
    2006

    
    2005Target Credit Rating
    
    Baa1
    
    
    A3
    
    
    
    A3
    
    
    BBB+
    
    
    A -
    
    
    
    A -Target % set by Agency
    
    
    17
    %*
    
    
    20
    %
    
    
    20
    %
    
    
    30
    %*
    
    
    35
    %
    
    
    35
    %Reuters
Actual %
    
    
    39
    %*
    
    
    28
    %
    
    
    31
    %
    
    
    62
    %
    
    
    39
    %
    
    
    67
    %
 
 *
    
    Percentages based on Reuters estimates**
    
    RCF (Retained Cashflow)***
    
    FFO (Funds from Operations) A-8.42




---



##### Table of Contents



Foreign Currency Risk
    Hedges of net investment in foreign entity
     
  A-8.43




---



##### Table of Contents



10%
    
    
    Total10%
    
    
    7%
    
    
    weakening
    
    
    weakeningweakening
    
    
    weakening
    
    
    in other
    
    
    in allin US dollar
    
    
    in Euro
    
    
    currencies
    
    
    currenciesagainst £
    
    
    against £
    
    
    against £
    
    
    against £2007
    
    
    £ m
    
    
    
    £ m
    
    
    
    £ m
    
    
    
    £ mTotal change in fair value
    
    
    38
    
    
    
    (12
    )
    
    
    (8
    )
    
    
    18Impact recognised in income statement
    
    
    6
    
    
    
    (11
    )
    
    
    (8
    )
    
    
    (13
    )Impact recognised in equity
    
    
    32
    
    
    
    (1
    )
    
    
    
    
    
    
    312006Total change in fair value
    
    
    36
    
    
    
    
    
    
    
    7
    
    
    
    43Impact recognised in income statement
    
    
    3
    
    
    
    1
    
    
    
    4
    
    
    
    8Impact recognised in equity
    
    
    33
    
    
    
    (1
    )
    
    
    3
    
    
    
    352005Total change in fair value
    
    
    18
    
    
    
    (6
    )
    
    
    (6
    )
    
    
    6Impact recognised in income statement
    
    
    (9
    )
    
    
    (4
    )
    
    
    (8
    )
    
    
    (21
    )Impact recognised in equity
    
    
    27
    
    
    
    (2
    )
    
    
    2
    
    
    
    27
 Interest Rate Risk
     A-8.44




---



##### Table of Contents



Hedges of fair values
  
     2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m100 basis points increase in US Dollar Interest Rate
    
    
    (3
    )
    
    
    (3
    )
    
    
    (3
    )100 basis points increase in Sterling Interest Rate
    
    
    
    
    
    
    
    
    
    
    5100 basis points increase in Euro Interest Rate
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    (3
    )
    
    
    (3
    )
    
    
    2Impact recognised in income statement
    
    
    (3
    )
    
    
    (3
    )
    
    
    2Impact recognised in equity
    
    
    
    
    
    
    
    
    
    
    
 A-8.45




---



##### Table of Contents



GrossContractPeriod
    
    
    AmountReceived
    
    Paid
    
    
        Hedged Risk
    
    
    (Years)
    
    
    £m2007 Net investment hedges:Sterling floating
    
    US dollar floating
    
    Foreign exchange
    
    
    2010
    
    
    
    280Sterling floating
    
    US dollar floating
    
    Foreign exchange
    
    
    2008
    
    
    
    102Sterling floating
    
    Euro floating
    
    Foreign exchange
    
    
    2010
    
    
    
    102006 Net investment hedges:Sterling floating
    
    US dollar floating
    
    Foreign exchange
    
    
    2010
    
    
    
    280Sterling floating
    
    US dollar floating
    
    Foreign exchange
    
    
    2008
    
    
    
    102Sterling floating
    
    Swiss franc floating

    Foreign exchange
    
    
    2010
    
    
    
    34Sterling floating
    
    Euro floating
    
    Foreign exchange
    
    
    2010
    
    
    
    102005 Net investment hedges:Sterling floating
    
    US dollar floating
    
    Foreign exchange
    
    
    2010
    
    
    
    280Sterling floating
    
    Swiss franc floating

    Foreign exchange
    
    
    2010
    
    
    
    24
 A-8.46




---



##### Table of Contents



GrossContractPeriod
    
    
    AmountReceived
    
    Paid
    
    
    Hedged Risk
    
    
    (Years)
    
    
    £m2007 Fair value hedges:Japanese yen fixed
    
    Sterling floating
    
    Interest rate and foreignexchange
    
    
    2008
    
    
    
    5Euro fixed
    
    Sterling floating
    
    Interest rate
    
    
    2010
    
    
    
    332Euro fixed
    
    Sterling floating
    
    Interest rate
    
    
    2010
    
    
    
    10Euro floating
    
    Sterling floating
    
    Foreign exchange
    
    
    2008
    
    
    
    1692006 Fair value hedges:Japanese yen fixed
    
    Sterling floating
    
    Interest rate and foreignexchange
    
    
    2008
    
    
    
    5Euro fixed
    
    Sterling floating
    
    Interest rate
    
    
    2010
    
    
    
    332Euro fixed
    
    Sterling floating
    
    Interest rate
    
    
    2010
    
    
    
    10Euro floating
    
    Sterling floating
    
    Foreign exchange
    
    
    2008
    
    
    
    1692005 Fair value hedges:Japanese yen fixed
    
    Sterling floating
    
    Interest rate and foreignexchange
    
    
    2008
    
    
    
    5Euro fixed
    
    Sterling floating
    
    Interest rate
    
    
    2008
    
    
    
    351Euro fixed
    
    Sterling floating
    
    Interest rate
    
    
    2010
    
    
    
    10
   Embedded derivatives
   A-8.47




---



##### Table of Contents



Price risk
    Assets a
    
    
    Liabilities atfair value
    
    
    fair valuethrough
    
    
    through
    
    
    Derivatives
    
    
    
    
    
    
    OtherLoans and
    
    
    the profit
    
    
    the profit
    
    
    used for
    
    
    Available
    
    
    financialReceivables
    
    
    and loss
    
    
    and loss
    
    
    hedging
    
    
    for sale
    
    
    liabilities
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m2007Financial assets as per
balance sheetOther financial assets and
derivatives
    
    
    3
    
    
    
    2
    
    
    
    
    
    
    
    68
    
    
    
    18
    
    
    
    
    
    
    
    91Trade and other receivables
    
    
    255
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    255Cash and cash equivalents
(see note 20)
    
    
    251
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    251Financial liabilities as
per balance sheetOther financial liabilities and
derivatives
    
    
    
    
    
    
    
    
    
    
    (30
    )
    
    
    (1
    )
    
    
    
    
    
    
    (631
    )
    
    
    (662
    )31 December 2007
    
    
    509
    
    
    
    2
    
    
    
    (30
    )
    
    
    67
    
    
    
    18
    
    
    
    (631
    )
    
    
    (65
    )2006Financial assets as per
balance sheetOther financial assets and
derivatives
    
    
    198
    
    
    
    3
    
    
    
    
    
    
    
    30
    
    
    
    26
    
    
    
    
    
    
    
    257Trade and other receivables
    
    
    258
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    258Cash and cash equivalents
(see note 20)
    
    
    129
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    129Financial liabilities as
per balance sheetOther financial liabilities and
derivatives
    
    
    
    
    
    
    
    
    
    
    (18
    )
    
    
    (9
    )
    
    
    
    
    
    
    (660)
    
    
    
    (687
    )Total
    
    
    585
    
    
    
    3
    
    
    
    (18
    )
    
    
    21
    
    
    
    26
    
    
    
    (660
    )
    
    
    (43
    )
 A-8.48




---



##### Table of Contents



Assets a
    
    
    Liabilities atfair value
    
    
    fair valuethrough
    
    
    through
    
    
    Derivatives
    
    
    
    
    
    
    OtherLoans and
    
    
    the profit
    
    
    the profit
    
    
    used for
    
    
    Available
    
    
    financialReceivables
    
    
    and loss
    
    
    and loss
    
    
    hedging
    
    
    for sale
    
    
    liabilities
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m2005Financial assets as per
balance sheetOther financial assets and
derivatives
    
    
    1
    
    
    
    7
    
    
    
    
    
    
    
    14
    
    
    
    18
    
    
    
    
    
    
    
    40Trade and other receivables
    
    
    270
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    270Cash and cash equivalents
(see note 20)
    
    
    662
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    662Financial liabilities as
per balance sheetOther financial
liabilities and
derivatives
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (9
    )
    
    
    
    
    
    
    (410
    )
    
    
    (420
    )Total
    
    
    933
    
    
    
    7
    
    
    
    (1
    )
    
    
    5
    
    
    
    18
    
    
    
    (410
    )
    
    
    552
  Counterparty credit risk
     A-8.49




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005%
    
    
    %
    
    
    %Financial institutions
    
    
    62
    
    
    
    65
    
    
    
    72Corporations in other sectors
    
    
    21
    
    
    
    21
    
    
    
    14Newspapers, broadcast news media & news agencies
    
    
    14
    
    
    
    11
    
    
    
    9Governments, central banks & other organisations
    
    
    3
    
    
    
    3
    
    
    
    5Total
    
    
    100
    
    
    
    100
    
    
    
    100
 A-8.50




---



##### Table of Contents



18 Inventories
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mWork in progress on contracts
    
    
    
    
    
    
    1
    
    
    
    1
 19 Trade and other receivables
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mTrade receivables
    
    
    118
    
    
    
    123
    
    
    
    138Less: Provision for impairment
    
    
    (11
    )
    
    
    (13
    )
    
    
    (18
    )107
    
    
    
    110
    
    
    
    120Amounts owed by associates and joint ventures
    
    
    1
    
    
    
    6
    
    
    
    4Other receivables
    
    
    57
    
    
    
    80
    
    
    
    68Prepayments and accrued income
    
    
    90
    
    
    
    62
    
    
    
    78Total trade and other receivables
    
    
    255
    
    
    
    258
    
    
    
    270
   Provision for doubtful debts
    A-8.51




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mBalance at 1 January
    
    
    (13
    )
    
    
    (18
    )
    
    
    (31
    )Utilisation of provision
    
    
    3
    
    
    
    4
    
    
    
    5Unused provision released to profit
    
    
    3
    
    
    
    3
    
    
    
    4Increase in provision
    
    
    (4
    )
    
    
    (3
    )
    
    
    (5
    )Disposals*
    
    
    
    
    
    
    
    
    
    
    10Foreign exchange differences
    
    
    
    
    
    
    1
    
    
    
    (1
    )Balance at 31 December
    
    
    (11
    )
    
    
    (13
    )
    
    
    (18
    )
 
 *
    
    The disposal of £10 million in 2005 relates to Instinet.   2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mNot overdue
    
    
    43
    
    
    
    52
    
    
    
    58Past due 0-30 days
    
    
    22
    
    
    
    11
    
    
    
    18Past due 31-60 days
    
    
    22
    
    
    
    20
    
    
    
    18Past due 61-90 days
    
    
    10
    
    
    
    16
    
    
    
    13Past due 91-180 days
    
    
    7
    
    
    
    8
    
    
    
    8Past due 181-365 days
    
    
    3
    
    
    
    3
    
    
    
    5107
    
    
    
    110
    
    
    
    120
  A-8.52




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mCanadian Dollar
    
    
    6
    
    
    
    6
    
    
    
    3Swiss Franc
    
    
    2
    
    
    
    3
    
    
    
    4Euro
    
    
    37
    
    
    
    34
    
    
    
    36United Kingdom Pounds Sterling
    
    
    48
    
    
    
    53
    
    
    
    65Japanese Yen
    
    
    11
    
    
    
    13
    
    
    
    11Singapore Dollar
    
    
    2
    
    
    
    3
    
    
    
    2US Dollar
    
    
    73
    
    
    
    95
    
    
    
    90Other
    
    
    30
    
    
    
    26
    
    
    
    19209
    
    
    
    233
    
    
    
    230
  20 Cash and cash equivalents
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mCash:Cash in hand and at bank
    
    
    106
    
    
    
    79
    
    
    
    98Unlisted cash equivalents:Term deposits  UK
    
    
    26
    
    
    
    2
    
    
    
    12Term deposits  overseas
    
    
    2
    
    
    
    5
    
    
    
    3Other investments  UK
    
    
    117
    
    
    
    37
    
    
    
    546Other investments  overseas
    
    
    
    
    
    
    6
    
    
    
    3Cash and cash equivalents
    
    
    251
    
    
    
    129
    
    
    
    662
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mBrazil
    
    
    2
    
    
    
    1
    
    
    
    2China
    
    
    
    
    
    
    
    
    
    
    1Venezuela
    
    
    4
    
    
    
    3
    
    
    
    2Total restricted cash
    
    
    6
    
    
    
    4
    
    
    
    5
 A-8.53




---



##### Table of Contents



21 Non-current assets and liabilities held for sale
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mNon-current assets classified as held for sale:Property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    1Assets of associate held exclusively for resale
    
    
    14
    
    
    
    
    
    
    
    Total assets classified as held for sale
    
    
    14
    
    
    
    
    
    
    
    1Liabilities directly associated with non-current
assets classified as held for sale:Liabilities of associate held exclusively for resale
    
    
    
    
    
    
    
    
    
    
    Total net assets classified as held for sale
    
    
    14
    
    
    
    
    
    
    
    1
    22 Trade and other payables
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mTrade payables
    
    
    62
    
    
    
    56
    
    
    
    14Accruals
    
    
    336
    
    
    
    276
    
    
    
    264Deferred income
    
    
    33
    
    
    
    31
    
    
    
    25Amounts owed to associates and joint ventures
    
    
    1
    
    
    
    1
    
    
    
    11Other payables
    
    
    215
    
    
    
    94
    
    
    
    107Other taxation and social security
    
    
    45
    
    
    
    33
    
    
    
    35Total trade and other payables
    
    
    692
    
    
    
    491
    
    
    
    456
  A-8.54




---



##### Table of Contents



23 Current tax liabilities
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mCurrent tax liabilities
    
    
    247
    
    
    
    196
    
    
    
    228
  24 Provisions for liabilities and charges
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mProvisions for post-employment benefits (see note 25)
    
    
    43
    
    
    
    145
    
    
    
    317Other provisions for liabilities and charges
    
    
    96
    
    
    
    119
    
    
    
    139Total provisions
    
    
    139
    
    
    
    264
    
    
    
    456Less: Non-current portion
    
    
    (102
    )
    
    
    (204
    )
    
    
    (392
    )Current portion
    
    
    37
    
    
    
    60
    
    
    
    64
  OtherRationalization
    
    
    Legal/compliance
    
    
    property
    
    
    Other
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m1 January 2007
    
    
    95
    
    
    
    7
    
    
    
    2
    
    
    
    15
    
    
    
    119Exchange differences
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Charged in the year
    
    
    14
    
    
    
    3
    
    
    
    3
    
    
    
    14
    
    
    
    34Utilised in the year
    
    
    (32
    )
    
    
    (2
    )
    
    
    (1
    )
    
    
    (7
    )
    
    
    (42
    )Released
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    (17
    )Unwinding of discounts
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    131 December 2007
    
    
    69
    
    
    
    8
    
    
    
    4
    
    
    
    15
    
    
    
    96
   A-8.55




---



##### Table of Contents



A-8.56




---



##### Table of Contents



25 Retirement benefits
  Defined contribution plans
  Companycontribution% of employees
    
    
    % of basic salaryReuters Retirement Plan
    
    
    16.1
    
    
    
    11.0
    *Reuters 401(k) Pension Plans
    
    
    20.0
    
    
    
    6.0
 
 *
    
    7.0% plus 4% through salary sacrifice arrangements.  Defined benefit plans
    A-8.57




---



##### Table of Contents



Movement on pension provisions and similar obligations
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m1 January
    
    
    (131
    )
    
    
    (317
    )
    
    
    (263
    )Income statement (see note 3):Defined benefit plans*
    
    
    (8
    )
    
    
    (30
    )
    
    
    (27
    )Post-retirement medical benefits
    
    
    (1
    )
    
    
    
    
    
    
    (3
    )Actuarial gains and losses taken directly to reserves:Defined benefit plans*
    
    
    97
    
    
    
    8
    
    
    
    (46
    )Post-retirement medical benefits
    
    
    1
    
    
    
    (2
    )
    
    
    (2
    )Exchange differencesDefined benefit plans*
    
    
    
    
    
    
    1
    
    
    
    Post-retirement medical benefits
    
    
    
    
    
    
    1
    
    
    
    (42
    )
    
    
    (339
    )
    
    
    (341
    )Contributions paid
    
    
    31
    
    
    
    208
    
    
    
    24Net scheme surpluses/provisions
    
    
    (11
    )
    
    
    (131
    )
    
    
    (317
    )Schemes in surplus recognised within non-current assets
    
    
    (32
    )
    
    
    (14
    )
    
    
    31 December
    
    
    (43
    )
    
    
    (145
    )
    
    
    (317
    )Composed of:Defined benefit plans*
    
    
    (28
    )
    
    
    (129
    )
    
    
    (302
    )Post-retirement medical benefits
    
    
    (8
    )
    
    
    (9
    )
    
    
    (8
    )Other
    
    
    (7
    )
    
    
    (7
    )
    
    
    (7
    )31 December
    
    
    (43
    )
    
    
    (145
    )
    
    
    (317
    )
 
 *
    
    The figures for defined benefit plans include a number of immaterial schemes which have not
been valued under IAS 19. Retirement benefit assets
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mSchemes in surplus
    
    
    32
    
    
    
    14
    
    
    
    Reimbursement rights
    
    
    7
    
    
    
    4
    
    
    
    Total retirement benefit assets
    
    
    39
    
    
    
    18
    
    
    
    
 A-8.58




---



##### Table of Contents



Amounts recognised in respect of material defined benefit plans
  Defined benefit assets/(liabilities) recognised in the balance sheet
 PostretirementOverseas
    
    
    medicalUK Plans

    
       Plans

    
benefits

    
    

    
    

    
    
    
 Total2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mPresent value of
funded obligations
    
    
    (1,067
    )
    
    
    (1,233
    )
    
    
    (1,148
    )
    
    
    (133
    )
    
    
    (157
    )
    
    
    (167
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,200
    )
    
    
    (1,390
    )
    
    
    (1,315
    )Fair value of plan
assets
    
    
    1,202
    
    
    
    1,158
    
    
    
    902
    
    
    
    143
    
    
    
    140
    
    
    
    139
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,345
    
    
    
    1,298
    
    
    
    1,041135
    
    
    
    (75
    )
    
    
    (246
    )
    
    
    10
    
    
    
    (17
    )
    
    
    (28
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145
    
    
    
    (92
    )
    
    
    (274
    )Present value of
unfunded
obligations
    
    
    (16
    )
    
    
    (15
    )
    
    
    (19
    )
    
    
    (4
    )
    
    
    (3
    )
    
    
    (4
    )
    
    
    (8
    )
    
    
    (9
    )
    
    
    (8
    )
    
    
    (28
    )
    
    
    (27
    )
    
    
    (31
    )119
    
    
    
    (90
    )
    
    
    (265
    )
    
    
    6
    
    
    
    (20
    )
    
    
    (32
    )
    
    
    (8
    )
    
    
    (9
    )
    
    
    (8
    )
    
    
    117
    
    
    
    (119
    )
    
    
    (305
    )Plan asset not
recognised in the
balance sheet
    
    
    (111
    )
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    (3
    )
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (119
    )
    
    
    (3
    )
    
    
    (3
    )IAS 19 deficit
recognised in the
balance sheet
    
    
    (16
    )
    
    
    (102
    )
    
    
    (265
    )
    
    
    (10
    )
    
    
    (25
    )
    
    
    (35
    )
    
    
    (8
    )
    
    
    (9
    )
    
    
    (8
    )
    
    
    (34
    )
    
    
    (136
    )
    
    
    (308
    )IAS 19 surplus
recognised in the
balance sheet
    
    
    24
    
    
    
    12
    
    
    
    
    
    
    
    8
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    14
    
    
    
    Fair value of
reimbursement
rights not
recognised as
pension plan assets
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    4
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    4
    
    
    
    4
   A-8.59




---



##### Table of Contents



Amounts recognised in the income statement
 PostretirementOverseas
    
    
    medicalUK Plans

    
       Plans

    
benefits

    
    

    
    

    
    
    
 Total2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mCurrent service cost
    
    
    20
    
    
    
    23
    
    
    
    19
    
    
    
    8
    
    
    
    10
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    33
    
    
    
    30Interest cost
    
    
    61
    
    
    
    55
    
    
    
    52
    
    
    
    5
    
    
    
    5
    
    
    
    5
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    67
    
    
    
    60
    
    
    
    57Expected gain on plan assets
    
    
    (72
    )
    
    
    (61
    )
    
    
    (51
    )
    
    
    (6
    )
    
    
    (6
    )
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (78
    )
    
    
    (67
    )
    
    
    (58
    )Past service cost
    
    
    
    
    
    
    6
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    6
    
    
    
    3Gains on curtailments
    
    
    (1
    )
    
    
    (3
    )
    
    
    (2
    )
    
    
    (7
    )
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    (3
    )
    
    
    (5
    )Gains on settlements
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Total recognised in the
income statement
    
    
    8
    
    
    
    20
    
    
    
    18
    
    
    
    
    
    
    
    9
    
    
    
    6
    
    
    
    1
    
    
    
    
    
    
    
    2
    
    
    
    9
    
    
    
    29
    
    
    
    26Included within:Operating profit
    
    
    8
    
    
    
    22
    
    
    
    20
    
    
    
    
    
    
    
    9
    
    
    
    6
    
    
    
    1
    
    
    
    
    
    
    
    2
    
    
    
    9
    
    
    
    31
    
    
    
    28Profit on disposal of
associates, joint
ventures and
available-for-sale
financial assets
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    Profit for the year
from discontinued
operations
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )Total recognised in the
income statement
    
    
    8
    
    
    
    20
    
    
    
    18
    
    
    
    
    
    
    
    9
    
    
    
    6
    
    
    
    1
    
    
    
    
    
    
    
    2
    
    
    
    9
    
    
    
    29
    
    
    
    26Actual return on plan assets
    
    
    50
    
    
    
    92
    
    
    
    146
    
    
    
    5
    
    
    
    10
    
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55
    
    
    
    102
    
    
    
    164
 A-8.60




---



##### Table of Contents



Further amounts recognised in the statement of recognised income and expense
 PostretirementOverseas
    
    
    medicalUK Plans

    
       Plans

    
benefits

    
    

    
    

    
    
    
 Total2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mActuarial losses/(gains)
    
    
    (192
    )
    
    
    5
    
    
    
    46
    
    
    
    (20
    )
    
    
    (13
    )
    
    
    (3
    )
    
    
    (2
    )
    
    
    2
    
    
    
    2
    
    
    
    (214
    )
    
    
    (6
    )
    
    
    45Effect of asset ceiling
    
    
    111
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    3(81
    )
    
    
    5
    
    
    
    46
    
    
    
    (15
    )
    
    
    (13
    )
    
    
    
    
    
    
    (2
    )
    
    
    2
    
    
    
    2
    
    
    
    (98
    )
    
    
    (6
    )
    
    
    48Deferred taxation
impact of actuarial
gains and losses
recognised in the
statement of recognised
income and expense
    
    
    18
    
    
    
    (1
    )
    
    
    (10
    )
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    21
    
    
    
    1
    
    
    
    (10
    )Total recognised in the
statement of recognised
income and expense
    
    
    (63
    )
    
    
    4
    
    
    
    36
    
    
    
    (12
    )
    
    
    (10
    )
    
    
    
    
    
    
    (2
    )
    
    
    1
    
    
    
    2
    
    
    
    (77
    )
    
    
    (5
    )
    
    
    38
 Cumulative amounts recognised in the statement of recognised income and expense
 PostretirementOverseas
    
    
    medicalUK Plans

    
       Plans

    
benefits

    
    

    
    

    
    
    
 Total2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mBalance of
actuarial losses at
1 January
    
    
    246
    
    
    
    241
    
    
    
    195
    
    
    
    (6
    )
    
    
    7
    
    
    
    10
    
    
    
    4
    
    
    
    2
    
    
    
    
    
    
    
    244
    
    
    
    250
    
    
    
    205Net actuarial
losses/(gains)
recognised in year
    
    
    (192
    )
    
    
    5
    
    
    
    46
    
    
    
    (20
    )
    
    
    (13
    )
    
    
    (3
    )
    
    
    (2
    )
    
    
    2
    
    
    
    2
    
    
    
    (214
    )
    
    
    (6
    )
    
    
    45Balance of
actuarial
losses/(gains) at
31 December
    
    
    54
    
    
    
    246
    
    
    
    241
    
    
    
    (26
    )
    
    
    (6
    )
    
    
    7
    
    
    
    2
    
    
    
    4
    
    
    
    2
    
    
    
    30
    
    
    
    244
    
    
    
    250Balance of asset
limit effects at 1
January
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    3
    
    
    
    Effects of the
asset ceiling in
the year
    
    
    111
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    3Balance of asset
limit effects at 31
December
    
    
    111
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    119
    
    
    
    3
    
    
    
    3
 A-8.61




---



##### Table of Contents



Changes in the present value of the defined benefit obligation
 PostretirementOverseas
    
    
    medicalUK Plans

    
       Plans

    
benefits

    
    

    
    

    
    
    
 Total2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mOpening defined
benefit obligation
    
    
    (1,248
    )
    
    
    (1,167
    )
    
    
    (995
    )
    
    
    (160
    )
    
    
    (171
    )
    
    
    (160
    )
    
    
    (9
    )
    
    
    (8
    )
    
    
    (3
    )
    
    
    (1,417
    )
    
    
    (1,346
    )
    
    
    (1,158
    )Current service cost
    
    
    (20
    )
    
    
    (23
    )
    
    
    (19
    )
    
    
    (8
    )
    
    
    (10
    )
    
    
    (11
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28
    )
    
    
    (33
    )
    
    
    (30
    )Past service cost
    
    
    
    
    
    
    (6
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (6
    )
    
    
    (3
    )Interest cost
    
    
    (61
    )
    
    
    (55
    )
    
    
    (52
    )
    
    
    (5
    )
    
    
    (5
    )
    
    
    (5
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (67
    )
    
    
    (60
    )
    
    
    (57
    )Gains on
curtailments
    
    
    1
    
    
    
    3
    
    
    
    2
    
    
    
    7
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    3
    
    
    
    5Liabilities
extinguished on
settlements
    
    
    2
    
    
    
    
    
    
    
    8
    
    
    
    3
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    1
    
    
    
    8Actuarial gains/
(losses)
    
    
    214
    
    
    
    (36
    )
    
    
    (141
    )
    
    
    21
    
    
    
    9
    
    
    
    (8
    )
    
    
    2
    
    
    
    (2
    )
    
    
    (2
    )
    
    
    237
    
    
    
    (29
    )
    
    
    (151
    )Contributions by
employees
    
    
    
    
    
    
    (1
    )
    
    
    (3
    )
    
    
    (3
    )
    
    
    (4
    )
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (5
    )
    
    
    (7
    )Benefits paid
    
    
    29
    
    
    
    37
    
    
    
    34
    
    
    
    14
    
    
    
    8
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43
    
    
    
    45
    
    
    
    48Exchange
differences on
overseas plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    (6
    )
    
    
    13
    
    
    
    (1
    )Closing defined
benefit obligation
    
    
    (1,083
    )
    
    
    (1,248
    )
    
    
    (1,167
    )
    
    
    (137
    )
    
    
    (160
    )
    
    
    (171
    )
    
    
    (8
    )
    
    
    (9
    )
    
    
    (8
    )
    
    
    (1,228
    )
    
    
    (1,417
    )
    
    
    (1,346
    )
 A-8.62




---



##### Table of Contents



Changes in the fair value of plan assets
 PostretirementOverseas
    
    
    medicalUK Plans

    

    Plans

    
     benefits

    
    

    
    

    
    
    
    Total2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mOpening fair value of
plan assets
    
    
    1,158
    
    
    
    902
    
    
    
    781
    
    
    
    140
    
    
    
    139
    
    
    
    124
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,298
    
    
    
    1,041
    
    
    
    905Expected return
    
    
    72
    
    
    
    61
    
    
    
    51
    
    
    
    6
    
    
    
    6
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78
    
    
    
    67
    
    
    
    58Assets transferred on
settlements
    
    
    (2
    )
    
    
    
    
    
    
    (7
    )
    
    
    (3
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    (1
    )
    
    
    (7
    )Actuarial gains/(losses)
    
    
    (22
    )
    
    
    31
    
    
    
    95
    
    
    
    (1
    )
    
    
    4
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23
    )
    
    
    35
    
    
    
    106Contributions by
employer
    
    
    25
    
    
    
    200
    
    
    
    13
    
    
    
    6
    
    
    
    7
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    207
    
    
    
    19Contributions by
employees
    
    
    
    
    
    
    1
    
    
    
    3
    
    
    
    3
    
    
    
    4
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    5
    
    
    
    7Benefits paid
    
    
    (29
    )
    
    
    (37
    )
    
    
    (34
    )
    
    
    (14
    )
    
    
    (8
    )
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (43
    )
    
    
    (45
    )
    
    
    (48
    )Exchange differences on
overseas plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    (11
    )
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    (11
    )
    
    
    1Closing fair value of
plan assets
    
    
    1,202
    
    
    
    1,158
    
    
    
    902
    
    
    
    143
    
    
    
    140
    
    
    
    139
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,345
    
    
    
    1,298
    
    
    
    1,041
    A-8.63




---



##### Table of Contents



Major categories of plan assets as a percentage of total plan assets
 PostretirementOverseas
    
    

    medicalUK Plans

    

    Plans

    

    benefits

    
    

    
    

    
    
    
    Total2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005%
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %Equities
    
    
    43
    
    
    
    44
    
    
    
    55
    
    
    
    44
    
    
    
    45
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43
    
    
    
    44
    
    
    
    54Bonds
    
    
    44
    
    
    
    45
    
    
    
    36
    
    
    
    48
    
    
    
    47
    
    
    
    45
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    45
    
    
    
    37Property
    
    
    6
    
    
    
    7
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    6
    
    
    
    6Cash
    
    
    
    
    
    
    1
    
    
    
    2
    
    
    
    3
    
    
    
    4
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    2
    
    
    
    2Other
    
    
    7
    
    
    
    3
    
    
    
    
    
    
    
    5
    
    
    
    4
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    3
    
    
    
    1
   Principal actuarial assumptions at the balance sheet date (expressed as a weighted average)
 Overseas
    
    
    Post retirementUK Plans

    

    Plans

    

    medical benefits2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005%
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %Discount rate
    
    
    5.80
    
    
    
    4.93
    
    
    
    4.75
    
    
    
    4.11
    
    
    
    3.49
    
    
    
    3.29
    
    
    
    6.50
    
    
    
    6.00
    
    
    
    5.50Inflation assumption
    
    
    3.30
    
    
    
    3.00
    
    
    
    2.75
    
    
    
    1.77
    
    
    
    1.57
    
    
    
    1.47
    
    
    
    
    
    
    
    
    
    
    
    Rate of increase in salaries
    
    
    4.55
    
    
    
    4.25
    
    
    
    4.00
    
    
    
    2.82
    
    
    
    2.61
    
    
    
    2.39
    
    
    
    
    
    
    
    
    
    
    
    Rate of increase in pensions in
payment
    
    
    3.00
    
    
    
    3.00
    
    
    
    2.75
    
    
    
    1.54
    
    
    
    1.38
    
    
    
    1.38
    
    
    
    
    
    
    
    
    
    
    
    Medical cost trend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.00
    
    
    
    5.00
    
    
    
    5.50Expected rate of return on
reimbursement rights
    
    
    
    
    
    
    5.10
    
    
    
    
    
    
    
    
    
    
    
    4.75
    
    
    
    4.25
    
    
    
    
    
    
    
    
    
    
    
    Expected rate of return on assets:Equities
    
    
    8.20
    
    
    
    8.10
    
    
    
    8.00
    
    
    
    6.18
    
    
    
    6.42
    
    
    
    7.10
    
    
    
    
    
    
    
    
    
    
    
    Bonds
    
    
    5.80
    
    
    
    4.49
    
    
    
    4.00
    
    
    
    3.53
    
    
    
    3.14
    
    
    
    2.92
    
    
    
    
    
    
    
    
    
    
    
    Property
    
    
    6.40
    
    
    
    6.20
    
    
    
    6.00
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash
    
    
    4.50
    
    
    
    4.25
    
    
    
    4.00
    
    
    
    2.68
    
    
    
    2.28
    
    
    
    2.44
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    4.50
    
    
    
    4.25
    
    
    
    
    
    
    
    2.10
    
    
    
    6.05
    
    
    
    5.47
    
    
    
    
    
    
    
    
    
    
    
    
 A-8.64




---



##### Table of Contents



UK mortality assumptions
   Life expectation in yearsMale
    
    
    Female31 December 2007Retiring at reporting date at age 65
    
    
    22
    
    
    
    24Retiring at reporting date + 25 years at age 65
    
    
    23
    
    
    
    25
 Life expectation in yearsMale
    
    
    Female31 December 2006Retiring at reporting date at age 65
    
    
    21
    
    
    
    24Retiring at reporting date + 25 years at age 65
    
    
    22
    
    
    
    24
  A-8.65




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##### Table of Contents



History of experience gains and losses
 2007
    
    
    2006
    
    
    2005Post
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Post
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Postretirement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    retirement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    retirementUK
    
    
    Overseas
    
    
    medical
    
    
    
    
    
    
    UK
    
    
    Overseas
    
    
    medical
    
    
    
    
    
    
    UK
    
    
    Overseas
    
    
    medicalPlans
    
    
    Plans
    
    
    benefits
    
    
    Total
    
    
    Plans
    
    
    Plans
    
    
    benefits
    
    
    Total
    
    
    Plans
    
    
    Plans
    
    
    benefits
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mDefined benefit
obligation
    
    
    (1,083
    )
    
    
    (137
    )
    
    
    (8
    )
    
    
    (1,228
    )
    
    
    (1,248
    )
    
    
    (160
    )
    
    
    (9
    )
    
    
    (1,417
    )
    
    
    (1,167
    )
    
    
    (171
    )
    
    
    (8
    )
    
    
    (1,346
    )Plan assets
    
    
    1,202
    
    
    
    143
    
    
    
    
    
    
    
    1,345
    
    
    
    1,158
    
    
    
    140
    
    
    
    
    
    
    
    1,298
    
    
    
    902
    
    
    
    139
    
    
    
    
    
    
    
    1,041Deficit
    
    
    119
    
    
    
    6
    
    
    
    (8
    )
    
    
    117
    
    
    
    (90
    )
    
    
    (20
    )
    
    
    (9
    )
    
    
    (119
    )
    
    
    (265
    )
    
    
    (32
    )
    
    
    (8
    )
    
    
    (305
    )Experience
adjustments on plan
liabilities
    
    
    (81
    )
    
    
    (11
    )
    
    
    (1
    )
    
    
    (93
    )
    
    
    14
    
    
    
    (3
    )
    
    
    3
    
    
    
    14
    
    
    
    (16
    )
    
    
    6
    
    
    
    (1
    )
    
    
    (11
    )Experience
adjustments on plan
assets
    
    
    22
    
    
    
    1
    
    
    
    
    
    
    
    23
    
    
    
    31
    
    
    
    4
    
    
    
    
    
    
    
    35
    
    
    
    95
    
    
    
    11
    
    
    
    
    
    
    
    106
 26 Deferred tax
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £m1 January 2007
    
    
    171
    
    
    
    210
    
    
    
    247Acquisitions/disposals
    
    
    (4
    )
    
    
    (11
    )
    
    
    (46
    )Income statement (credit)/charge)
    
    
    21
    
    
    
    (18
    )
    
    
    (19
    )Equity (charge)/credit
    
    
    (21
    )
    
    
    (1
    )
    
    
    10Exchange differences
    
    
    
    
    
    
    (10
    )
    
    
    8Stock options deferred tax in equity
    
    
    4
    
    
    
    1
    
    
    
    1031 December 2007
    
    
    171
    
    
    
    171
    
    
    
    210
  A-8.66




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##### Table of Contents



Deferred tax liabilities
 FixedAssets
    
    
    Other
    
    
    Total£m
    
    
    £m
    
    
    £m1 January 2007
    
    
    (12
    )
    
    
    (98
    )
    
    
    (110
    )Acquisitions/Disposals
    
    
    
    
    
    
    (4
    )
    
    
    (4
    )Exchange differences
    
    
    
    
    
    
    
    
    
    
    Charged to income statement
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )31 December 2007
    
    
    (13
    )
    
    
    (102
    )
    
    
    (115
    )
 Deferred tax assets
 Fixed
    
    
    
    
    
    
    StockAssets
    
    
    Losses
    
    
    options
    
    
    Other
    
    
    Total£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m1 January 2007
    
    
    62
    
    
    
    111
    
    
    
    17
    
    
    
    91
    
    
    
    281Credited/ (charged) to income statement
    
    
    13
    
    
    
    (15
    )
    
    
    5
    
    
    
    19
    
    
    
    22Credited/(charged) in equity
    
    
    
    
    
    
    15
    
    
    
    4
    
    
    
    (36
    )
    
    
    (17
    )Realisation of stock option deductions
    
    
    
    
    
    
    8
    
    
    
    (8
    )
    
    
    
    
    
    
    Exchange differences
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31 December 2007
    
    
    75
    
    
    
    119
    
    
    
    18
    
    
    
    74
    
    
    
    286Net Deferred Tax Asset31 December 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17131 December 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    171
  A-8.67




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##### Table of Contents



27 Share capital
  Called upshare
    
    
    Share
    
    
    Sharecapital
    
    
    premium
    
    
    capital£m
    
    
    £m
    
    
    £m1 January 2005
    
    
    359
    
    
    
    96
    
    
    
    455Shares allotted during the year
    
    
    1
    
    
    
    11
    
    
    
    1231 December 2005
    
    
    360
    
    
    
    107
    
    
    
    467Shares allotted during the year
    
    
    7
    
    
    
    34
    
    
    
    41Shares cancelled during the year
    
    
    (12
    )
    
    
    
    
    
    
    (12
    )31 December 2006
    
    
    355
    
    
    
    141
    
    
    
    496Shares allotted during the year
    
    
    5
    
    
    
    48
    
    
    
    53Shares cancelled during the year
    
    
    (10
    )
    
    
    
    
    
    
    (10
    )31 December 2007
    
    
    350
    
    
    
    189
    
    
    
    539
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mAuthorised:One Founders Share of £1
    
    
    
    
    
    
    
    
    
    
    2,100 million ordinary shares of 25p each
    
    
    525
    
    
    
    525
    
    
    
    525525
    
    
    
    525
    
    
    
    525Allotted, called up and fully paid:One Founders Share of £1
    
    
    
    
    
    
    
    
    
    
    Ordinary shares of 25p each
    
    
    350
    
    
    
    355
    
    
    
    360350
    
    
    
    355
    
    
    
    360Number of ordinary shares of 25p each (millions)
    
    
    1,401
    
    
    
    1,422
    
    
    
    1,441Shares allotted during the year in millions18,557,662 shares in Reuters Group PLC were
issued under employee share schemes at prices
ranging from £nil to 630p per share.
Transaction costs incurred on issue of shares
amounted to £nil (2006: £nil, 2005: £nil)
    
    
    19
    
    
    
    29
    
    
    
    6
  A-8.68




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##### Table of Contents



Total numberof shares
    
    
    
    
    
    
    Approximatepurchased as
    
    
    
    
    
    
    value of sharespart of
    
    
    
    
    
    
    that maypublicly
    
    
    Average price
    
    
    be purchasedannounced
    
    
    paid per
    
    
    under theMonth
    
    programme
    
    
    share (£)
    
    
    programme (£m)2005 :July
    
    
    1,500,000
    
    
    
    3.89
    
    
    
    994August
    
    
    8,500,000
    
    
    
    3.70
    
    
    
    962September
    
    
    7,150,000
    
    
    
    3.73
    
    
    
    936October
    
    
    2,800,000
    
    
    
    3.53
    
    
    
    926November
    
    
    22,800,000
    
    
    
    3.89
    
    
    
    836December
    
    
    14,650,000
    
    
    
    4.08
    
    
    
    7762006 :January
    
    
    10,500,000
    
    
    
    4.32
    
    
    
    731February
    
    
    18,450,000
    
    
    
    4.06
    
    
    
    655March
    
    
    13,725,000
    
    
    
    3.89
    
    
    
    601April
    
    
    6,000,000
    
    
    
    3.98
    
    
    
    577May
    
    
    9,435,000
    
    
    
    3.86
    
    
    
    541June
    
    
    17,750,000
    
    
    
    3.67
    
    
    
    475July
    
    
    6,770,000
    
    
    
    3.75
    
    
    
    450August
    
    
    13,000,000
    
    
    
    3.89
    
    
    
    399September
    
    
    9,750,000
    
    
    
    4.11
    
    
    
    358October
    
    
    8,725,000
    
    
    
    4.43
    
    
    
    319November
    
    
    9,500,000
    
    
    
    4.57
    
    
    
    276December
    
    
    5,594,000
    
    
    
    4.55
    
    
    
    2502007 :January
    
    
    5,700,000
    
    
    
    4.43
    
    
    
    225February
    
    
    6,300,000
    
    
    
    4.32
    
    
    
    197March
    
    
    11,850,000
    
    
    
    4.41
    
    
    
    145April
    
    
    7,675,000
    
    
    
    4.85
    
    
    
    107
 A-8.69




---



##### Table of Contents



Total numberof sharespurchased as
    
    
    
    
    
    Totalpart of publicly
    
    Average price
    
    cost of sharesannounced
    
    paid per
    
    purchasedMonth
    
    programme
    
    share (£)
    
    (£m)2007 :December
    

    5,050,000
    
    

    6.14
    
    

    31
  A-8.70




---



##### Table of Contents



28 Other reserves
  Capital
    
    
    
    
    
    
    Available
    
    
    
    
    
    
    
    
    
    
    Totalredemption
    
    
    Other
    
    
    for-sale
    
    
    Hedging
    
    
    Translation
    
    
    otherreserve
    
    
    reserve
    
    
    reserve
    
    
    reserve
    
    
    reserve
    
    
    reserves£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m1 January 2005
    
    
    1
    
    
    
    (1,718
    )
    
    
    94
    
    
    
    30
    
    
    
    (54
    )
    
    
    (1,647
    )Exchange differences taken directly to reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    97Exchange differences taken to the income
statement on disposal of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Fair value losses on available-for-sale
financial assets
    
    
    
    
    
    
    
    
    
    
    (22
    )
    
    
    
    
    
    
    
    
    
    
    (22
    )Fair value gains on available-for-sale
financial assets taken to the income statement
on disposal of assets
    
    
    
    
    
    
    
    
    
    
    (68
    )
    
    
    
    
    
    
    
    
    
    
    (68
    )Fair value losses on net investment hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39
    )
    
    
    
    
    
    
    (39
    )Fair value gains taken to the income statement
on disposal of net investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    
    
    
    
    (14
    )Other movements
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Tax on items taken directly to or transferred
from reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    (12
    )
    
    
    431 December 2005
    
    
    1
    
    
    
    (1,719
    )
    
    
    4
    
    
    
    (7
    )
    
    
    29
    
    
    
    (1,692
    )Exchange differences taken directly to reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (95
    )
    
    
    (95
    )Fair value gains on available-for-sale
financial assets
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    6Fair value gains on net investment hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    
    
    
    
    34Redemption of share capital
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12Tax on items taken directly to or transferred
from reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10
    )
    
    
    7
    
    
    
    (3
    )31 December 2006
    
    
    13
    
    
    
    (1,719
    )
    
    
    10
    
    
    
    17
    
    
    
    (59
    )
    
    
    (1,738
    )Exchange differences taken directly to reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    20Fair value gains on available-for-sale
financial assets
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    11Fair value gains on available-for-sale
financial assets taken to the income statement
on disposal of assets
    
    
    
    
    
    
    
    
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    (18
    )Fair value gains on net investment hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Redemption of share capital
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10Tax on items taken directly to or transferred
from reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    2
    
    
    
    131 December 2007
    
    
    23
    
    
    
    (1,719
    )
    
    
    3
    
    
    
    20
    
    
    
    (37
    )
    
    
    (1,710
    )
      A-8.71




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##### Table of Contents



29 Net cash flow from operating activities
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mProfit for the year from continuing operations
    
    
    213
    
    
    
    293
    
    
    
    229Adjustments for:Depreciation
    
    
    96
    
    
    
    95
    
    
    
    99Impairment of associates and joint ventures
    
    
    
    
    
    
    
    
    
    
    2Impairment of intangibles
    
    
    21
    
    
    
    
    
    
    
    1Amortisation of intangibles
    
    
    61
    
    
    
    46
    
    
    
    33Profit on disposal of property, plant and equipment
    
    
    (10
    )
    
    
    (2
    )
    
    
    Employee share scheme charges
    
    
    34
    
    
    
    30
    
    
    
    30Foreign exchange losses/(gains)
    
    
    18
    
    
    
    (14
    )
    
    
    (8
    )Fair value movements on derivatives
    
    
    13
    
    
    
    19
    
    
    
    (18
    )Fair value movements on other financial assets
    
    
    
    
    
    
    
    
    
    
    16Profits on disposals
    
    
    (24
    )
    
    
    (80
    )
    
    
    (42
    )Income from investments
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Share of post-taxation losses/(profits) of associates
and joint ventures
    
    
    6
    
    
    
    4
    
    
    
    (5
    )Finance income
    
    
    (117
    )
    
    
    (72
    )
    
    
    (41
    )Finance costs
    
    
    151
    
    
    
    87
    
    
    
    53Taxation
    
    
    60
    
    
    
    20
    
    
    
    9Movements in working capital:Decrease in inventories
    
    
    1
    
    
    
    
    
    
    
    2(Increase)/decrease in trade and other receivables
    
    
    (12
    )
    
    
    23
    
    
    
    3Increase/(decrease) in trade and other payables
    
    
    75
    
    
    
    51
    
    
    
    (52
    )(Decrease)/increase in pensions deficit
    
    
    (26
    )
    
    
    (176
    )
    
    
    9Decrease in provisions
    
    
    (25
    )
    
    
    (13
    )
    
    
    (27
    )Decrease in amounts payable to discontinued operations
    
    
    
    
    
    
    
    
    
    
    (24
    )Cash generated from continuing operations
    
    
    534
    
    
    
    311
    
    
    
    268Profit for the year from discontinued operations
    
    
    14
    
    
    
    12
    
    
    
    253Adjustments for:Depreciation
    
    
    
    
    
    
    
    
    
    
    4Amortisation of intangibles
    
    
    
    
    
    
    
    
    
    
    2Loss on disposal of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    4Employee share scheme charges
    
    
    
    
    
    
    
    
    
    
    18Profits on disposals
    
    
    (14
    )
    
    
    (12
    )
    
    
    (278
    )Finance income
    
    
    
    
    
    
    
    
    
    
    (13
    )Taxation
    
    
    
    
    
    
    
    
    
    
    20Movements in working capital:Increase in trade and other receivables
    
    
    
    
    
    
    
    
    
    
    (28
    )Decrease in trade and other payables
    
    
    
    
    
    
    
    
    
    
    (17
    )Increase in provisions
    
    
    
    
    
    
    
    
    
    
    14Decrease in amounts receivable from continuing operations
    
    
    
    
    
    
    
    
    
    
    24Cash generated from discontinued operations
    
    
    
    
    
    
    
    
    
    
    3Cash generated from operations
    
    
    534
    
    
    
    311
    
    
    
    271
 A-8.72




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##### Table of Contents



30 Cash flow from acquisitions and disposals
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mAcquisitions (including joint ventures and associates):Subsidiary undertakings (see note 36)
    
    
    (23
    )
    
    
    (32
    )
    
    
    (135
    )Joint ventures and associates
    
    
    (14
    )
    
    
    (27
    )
    
    
    (1
    )Deferred payments for acquisitions in prior years
    
    
    (4
    )
    
    
    (9
    )
    
    
    (8
    )(41
    )
    
    
    (68
    )
    
    
    (144
    )Less: cash acquired
    
    
    2
    
    
    
    1
    
    
    
    20Acquisitions, net of cash acquired
    
    
    (39
    )
    
    
    (67
    )
    
    
    (124
    )Disposals (including joint ventures and associates):Subsidiary undertakings*
    
    
    24
    
    
    
    (15
    )
    
    
    824Joint ventures and associates
    
    
    (1
    )
    
    
    80
    
    
    
    1Instinet (deemed disposal)
    
    
    
    
    
    
    
    
    
    
    323
    
    
    
    65
    
    
    
    828Add: cash disposed
    
    
    
    
    
    
    
    
    
    
    (582
    )Disposals, net of cash disposed
    
    
    23
    
    
    
    65
    
    
    
    246
 
 *
    
    The cash inflow of £24 million for subsidiary undertakings principally consists of a tax
settlement on disposal of Instinet Group which was completed in December 2005. (2006 outflow
of £15 million for subsidiary undertakings represents transaction fees on the disposal of
Instinet Group). 31 Reconciliation of cash and cash equivalents
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mCash and cash equivalents (see note 20)
    
    
    251
    
    
    
    129
    
    
    
    662Bank overdrafts
    
    
    (9
    )
    
    
    (24
    )
    
    
    (25
    )Total cash and cash equivalents
    
    
    242
    
    
    
    105
    
    
    
    637
 A-8.73




---



##### Table of Contents



32 Dividends
 2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mPrior year final paid
    
    
    86
    
    
    
    81
    
    
    
    86Current year interim paid
    
    
    61
    
    
    
    53
    
    
    
    54147
    
    
    
    134
    
    
    
    140Per ordinary share
    
    Pence
    
    
    Pence
    
    
    PencePrior year final paid
    
    
    6.90
    
    
    
    6.15
    
    
    
    6.15Current year interim paid
    
    
    5.00
    
    
    
    4.10
    
    
    
    3.85
   33 Employee share plans
  Long-Term Incentive Plan (LTIP)
     Discretionary Share Option Plan (DSOP)
 A-8.74




---



##### Table of Contents



Save-as-you-Earn (SAYE)
  Annual Bonus Profit Sharing Plan (ABPSP)
 Restricted Share Plan (RSP)
   Performance related share plan (PRSP)
 Plan 2000
 A-8.75




---



##### Table of Contents



Weightedaverageexerciseprice forSAYE
    
    
    Plan
    
    
    DSOP
    
    
    
    
    
    
    LTIP &
    
    
    
    
    
    
    optionPlan
    
    
    2000
    
    
    & RSP
    
    
    ABSP
    
    
    PRSP
    
    
    Total
    
    
    plans £Ordinary shares
under option in
millions (including
ADSs):At 31 January 2005
    
    
    29.9
    
    
    
    11.4
    
    
    
    59.2
    
    
    
    
    
    
    
    14.6
    
    
    
    115.1
    
    
    
    2.71Granted
    
    
    3.4
    
    
    
    
    
    
    
    7.5
    
    
    
    2.3
    
    
    
    2.2
    
    
    
    15.4
    
    
    
    2.07Forfeited
    
    
    (2.5
    )
    
    
    (0.4
    )
    
    
    (2.5
    )
    
    
    (0.1
    )
    
    
    (0.4
    )
    
    
    (5.9
    )
    
    
    4.60Exercised
    
    
    (1.2
    )
    
    
    
    
    
    
    (4.8
    )
    
    
    (0.1
    )
    
    
    (0.7
    )
    
    
    (6.8
    )
    
    
    1.66Expired or lapsed
    
    
    (1.4
    )
    
    
    (10.3
    )
    
    
    (4.0
    )
    
    
    
    
    
    
    (4.4
    )
    
    
    (20.1
    )
    
    
    3.8831 December 2005
    
    
    28.2
    
    
    
    0.7
    
    
    
    55.4
    
    
    
    2.1
    
    
    
    11.3
    
    
    
    97.7
    
    
    
    2.70Granted
    
    
    5.3
    
    
    
    
    
    
    
    9.0
    
    
    
    
    
    
    
    2.8
    
    
    
    17.1
    
    
    
    1.68Forfeited
    
    
    (0.9
    )
    
    
    
    
    
    
    (1.6
    )
    
    
    (0.1
    )
    
    
    (0.2
    )
    
    
    (2.8
    )
    
    
    1.64Exercised
    
    
    (20.7
    )
    
    
    
    
    
    
    (7.7
    )
    
    
    (2.0
    )
    
    
    
    
    
    
    (30.4
    )
    
    
    1.08Expired or lapsed
    
    
    (0.6
    )
    
    
    (0.7
    )
    
    
    (4.1
    )
    
    
    
    
    
    
    (0.6
    )
    
    
    (6.0
    )
    
    
    4.1231 December 2006
    
    
    11.3
    
    
    
    
    
    
    
    51.0
    
    
    
    
    
    
    
    13.3
    
    
    
    75.6
    
    
    
    2.56Granted
    
    
    4.4
    
    
    
    
    
    
    
    8.3
    
    
    
    
    
    
    
    3.1
    
    
    
    15.8
    
    
    
    2.14Forfeited
    
    
    (1.2
    )
    
    
    
    
    
    
    (3.5
    )
    
    
    
    
    
    
    (0.5
    )
    
    
    (5.2
    )
    
    
    3.18Exercised
    
    
    (3.6
    )
    
    
    
    
    
    
    (15.5
    )
    
    
    
    
    
    
    (2.4
    )
    
    
    (21.5
    )
    
    
    2.29Expired or lapsed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.5
    )
    
    
    (8.5
    )
    
    
    31 December 2007
    
    
    10.9
    
    
    
    
    
    
    
    40.3
    
    
    
    
    
    
    
    5.0
    
    
    
    56.2
    
    
    
    2.84Of which exercisable
    
    
    0.2
    
    
    
    
    
    
    
    19.6
    
    
    
    
    
    
    
    
    
    
    
    19.8Number of
participants at 31
December 2007
    
    
    6,558
    
    
    
    
    
    
    
    5,102
    
    
    
    
    
    
    
    135
 Expense included in theincome statement for yearended
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m31 December 2005
    
    
    5
    
    
    
    
    
    
    
    18
    
    
    
    2
    
    
    
    5
    
    
    
    3031 December 2006
    
    
    6
    
    
    
    
    
    
    
    16
    
    
    
    1
    
    
    
    7
    
    
    
    3031 December 2007
    
    
    5
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    6
    
    
    
    36
 A-8.76




---



##### Table of Contents



ExercisableweightedaverageWeighted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    exerciseaverage
    
    
    Options
    
    
    Options
    
    
    Options
    
    
    price forremaining
    
    
    exercisable at
    
    
    exercisable at
    
    
    exercisable at
    
    
    optionsTotal shares
    
    
    contractual
    
    
    31 December
    
    
    31 December
    
    
    31 December
    
    
    exercisable atunder option
    
    
    life
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    31 DecemberRange of exercise prices
    
    (million)
    
    
    (months)
    
    
    (million)
    
    
    (million)
    
    
    (million)
    
    
    2007Ordinary shares£0.00  £2.00
    
    
    18.5
    
    
    
    31
    
    
    
    2.6
    
    
    
    6.8
    
    
    
    2.5
    
    
    £
    1.32£2.01  £5.00
    
    
    29.0
    
    
    
    59
    
    
    
    10.6
    
    
    
    17.1
    
    
    
    12.0
    
    
    £
    2.89£5.01  £7.00
    
    
    4.8
    
    
    
    67
    
    
    
    3.6
    
    
    
    5.7
    
    
    
    5.1
    
    
    £
    5.69£7.01  £9.00
    
    
    3.0
    
    
    
    42
    
    
    
    3.0
    
    
    
    3.6
    
    
    
    4.6
    
    
    £
    8.62£9.01  £11.00
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    £
    0.00ADSs*$10.01  $30.00
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    $
    0.00$30.01  $50.00
    
    
    0.6
    
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    42.86$50 +
    
    
    0.3
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    51.0956.2
    
    
    
    
    
    
    
    19.8
    
    
    
    33.2
    
    
    
    24.7
 
 *
    
    One ADS is equivalent to six ordinary shares.  A-8.77




---



##### Table of Contents



2007SAYE Plan
    
    
    DSOP
    
    
    RSP
    
    
    LTIPWeighted average fair value (£)
    
    
    1.67
    
    
    
    1.14
    
    
    
    4.25
    
    
    
    2.95
 Monte CarloBlack Scholes
    
    
    Black Scholes
    
    
    Black Scholes
    
    
    simulation basedoptions
    
    
    options
    
    
    options
    
    
    customised optionsOptions pricing model used
    
    pricing model
    
    
    pricing model
    
    
    pricing model
    
    
    pricing modelKey assumptions used:Weighted average share price (£)
    
    
    4.82
    
    
    
    5.04
    
    
    
    4.50
    
    
    
    4.33Range of exercise prices (£)
    
    
    3.53
    
    
    
    4.42-6.19
    
    
    Nil
    
    
    NilRange of expected volatility (%)
    
    
    27
    %
    
    
    22%-46
    %
    
    
    22%-34
    %
    
    
    26
    %Range of risk-free rates (%)
    
    
    6
    %
    
    
    5%-6
    %
    
    
    5%-6
    %
    
    
    6
    %Range of expected option term (life)
    
    3 years
    
    
    
    0.5 to 7 years
    
    
    
    0.5 to 4 years
    
    
    3 yearsRange of expected dividend yields
    
    
    2.5
    %
    
    
    2.1%-2.5
    %
    
    
    2.1%-2.5
    %
    
    
    2.5
    %
 2006SAYE Plan
    
    
    DSOP
    
    
    RSP
    
    
    LTIPWeighted average fair value (£)
    
    
    1.17
    
    
    
    1.73
    
    
    
    3.65
    
    
    
    3.39
 Monte CarloBlack Scholes
    
    
    Black Scholes
    
    
    Black Scholes
    
    
    simulation basedoptions
    
    
    options
    
    
    options
    
    
    customised optionsOptions pricing model used
    
    pricing model
    
    
    pricing model
    
    
    pricing model
    
    
    pricing modelKey assumptions used:Weighted average share price (£)
    
    
    3.77
    
    
    
    4.20
    
    
    
    3.88
    
    
    
    4.53Range of exercise prices (£)
    
    
    3.14
    
    
    
    3.93
    
    
    Nil
    
    
    NilRange of expected volatility (%)
    
    
    35
    %
    
    
    23%-48
    %
    
    
    25%-41
    %
    
    
    36
    %Range of risk-free rates (%)
    
    
    5
    %
    
    
    4%-5
    %
    
    
    5
    %
    
    
    5
    %Range of expected option term (life)
    
    3 years
    
    
    
    4 to 7 years
    
    
    
    1 to 4 years
    
    
    3 yearsExpected dividends (per year)
    
    
    10p
    
    
    
    10p-10.65p
    
    
    
    10p-10.65p
    
    
    
    10p
 2005SAYE Plan
    
    
    DSOP
    
    
    RSP
    
    
    LTIPWeighted average fair value (£)
    
    
    1.61
    
    
    
    1.30
    
    
    
    3.81
    
    
    
    2.49
 A-8.78




---



##### Table of Contents



Monte CarloBlack Scholes
    
    
    Black Scholes
    
    
    Black Scholes
    
    
    simulation basedoptions
    
    
    options
    
    
    options
    
    
    customised optionsOptions pricing model used
    
    pricing model
    
    
    pricing model
    
    
    pricing model
    
    
    pricing modelKey assumptions used:Weighted average share price (£)
    
    
    4.12
    
    
    
    3.97
    
    
    
    4.04
    
    
    
    4.05Range of exercise prices (£)
    
    
    3.33
    
    
    
    3.89-4.05
    
    
    Nil
    
    
    NilRange of expected volatility (%)
    
    
    47
    %
    
    
    28%-54
    %
    
    
    28%-54
    %
    
    
    48
    %Range of risk-free rates (%)
    
    
    5
    %
    
    
    4%-5
    %
    
    
    4%-5
    %
    
    
    5
    %Range of expected option term (life)
    
    3 years
    
    
    
    4 to 7 years
    
    
    
    1 to 4 years
    
    
    3 yearsExpected dividends (per year)
    
    
    10p
    
    
    
    10p
    
    
    
    10p
    
    
    
    10p
     34 Related party transactions
   A-8.79




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mSalaries and short-term employee benefits
    
    
    16
    
    
    
    12
    
    
    
    8Post-employment benefits
    
    
    1
    
    
    
    1
    
    
    
    1Termination benefits
    
    
    
    
    
    
    
    
    
    
    1Share-based payments
    
    
    9
    
    
    
    8
    
    
    
    6Total
    
    
    26
    
    
    
    21
    
    
    
    16
    31
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    
    
    
    31December
    
    
    Amounts
    
    
    Amounts
    
    
    December
    
    
    Amounts
    
    
    Amounts
    
    
    December2005
    
    
    invoiced
    
    
    collected
    
    
    2006
    
    
    invoiced
    
    
    collected
    
    
    2007£m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £m
    
    
    £mAmounts receivable:Joint ventures:Factiva*
    
    
    4
    
    
    
    30
    
    
    
    (33
    )
    
    
    1
    
    
    
    
    
    
    
    (1
    )
    
    
    FXMarketSpace
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    6
    
    
    
    10
    
    
    
    (15
    )
    
    
    1Other
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    Associates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    Total amounts receivable
    
    
    4
    
    
    
    37
    
    
    
    (34
    )
    
    
    7
    
    
    
    12
    
    
    
    (18
    )
    
    
    1Amounts payable:Joint ventures:Factiva
    
    
    1
    
    
    
    4
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3 Times Square Associates
    
    
    
    
    
    
    19
    
    
    
    (19
    )
    
    
    
    
    
    
    16
    
    
    
    (16
    )
    
    
    Associates
    
    
    
    
    
    
    2
    
    
    
    (2
    )
    
    
    
    
    
    
    5
    
    
    
    (4
    )
    
    
    1Total amounts payable
    
    
    1
    
    
    
    25
    
    
    
    (26
    )
    
    
    
    
    
    
    21
    
    
    
    (20
    )
    
    
    1
 
 *
    
    Reuters disposed of the majority of its investment in Factiva in December 2006. Consequently,
the £1 million receivable from Factiva at 31 December 2006 has been presented within other
receivables (see note 19).  A-8.80




---



##### Table of Contents



FXMarketSpace
  3 Times Square Associates LLC (3XSQ Associates)
  Factiva
     A-8.81




---



##### Table of Contents



35 Contingencies and commitments
 Contingent liabilities and contingent assets
   Douglas Gilstrap and Myron Tataryn v. Radianz Ltd., Radianz Americas, Inc., Reuters Limited,
Blaxmill (Six) Limited, Reuters C LLC, Reuters America LLC, and British Telecommunications PLC
  Ariel (UK) Limited v. Reuters Group PLC, Reuters C LLC, Reuters Transactions Services Limited,
Instinet Group, Incorporated, the NASDAQ Stock Market Inc. and Silver Lake Partners LP
  A-8.82




---



##### Table of Contents



Capital commitments
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mProperty, plant and equipment
    
    
    14
    
    
    
    10
    
    
    
    16Intangible assets
    
    
    26
    
    
    
    9
    
    
    
    13Total capital commitments
    
    
    40
    
    
    
    19
    
    
    
    29
 Groups share of contingent liabilities and commitments in respect of associates and joint ventures
  Warranties and indemnities
  Operating lease payables
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mYear ended 31 December2006
    
    
    
    
    
    
    
    
    
    
    792007
    
    
    
    
    
    
    88
    
    
    
    742008
    
    
    94
    
    
    
    79
    
    
    
    632009
    
    
    85
    
    
    
    70
    
    
    
    542010
    
    
    73
    
    
    
    60
    
    
    
    512011
    
    
    62
    
    
    
    55
    
    
    
    472012 (and thereafter for 2005 comparatives)
    
    
    56
    
    
    
    51
    
    
    
    3052013 and thereafter
    
    
    280
    
    
    
    249
    
    
    
    Total operating lease payables
    
    
    650
    
    
    
    652
    
    
    
    673
  A-8.83




---



##### Table of Contents



36 Acquisitions
 Acquisition of Feri Fund Market Information Limited
  Book
    
    
    Fair value
    
    
    Provisionalvalue
    
    
    adjustments
    
    
    fair value£m
    
    
    £m
    
    
    £mNon-current assets:Intangible assets
    
    
    
    
    
    
    8
    
    
    
    8Current assets:Cash and cash equivalents
    
    
    2
    
    
    
    
    
    
    
    2Current liabilities
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Non-current liabilitiesDeferred tax
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Net (liabilities)/assets acquired
    
    
    
    
    
    
    6
    
    
    
    6Total consideration
    
    
    
    
    
    
    
    
    
    
    12Consideration satisfied by:Cash
    
    
    
    
    
    
    
    
    
    
    12
    £mCash consideration
    
    
    12Cash acquired
    
    
    (2
    )Total outflow of cash and cash equivalents
    
    
    10
 A-8.84




---



##### Table of Contents



Acquisition of ClearForest Limited
  Book
    
    
    Fair value
    
    
    Provisionalvalue
    
    
    adjustments
    
    
    fair value£m
    
    
    £m
    
    
    £mNon-current assets:Intangible assets
    
    
    
    
    
    
    6
    
    
    
    6Current assets:Other current assets
    
    
    1
    
    
    
    
    
    
    
    1Current liabilities
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Non-current liabilitiesDeferred tax
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Net liabilities acquired
    
    
    (1
    
    
    
    4
    
    
    
    3Goodwill
    
    
    
    
    
    
    
    
    
    
    7Total consideration
    
    
    
    
    
    
    
    
    
    
    10Consideration satisfied by:Cash
    
    
    
    
    
    
    
    
    
    
    10
   £mCash consideration
    
    
    10Total outflow of cash and cash equivalents
    
    
    10
 A-8.85




---



##### Table of Contents



Other acquisitions
  Book
    
    
    Fair value
    
    
    Provisionalvalue
    
    
    adjustments
    
    
    fair value£m
    
    
    £m
    
    
    £mNon-current assets:Intangible assets
    
    
    
    
    
    
    1
    
    
    
    1Net assets acquired
    
    
    
    
    
    
    1
    
    
    
    1Goodwill
    
    
    
    
    
    
    
    
    
    
    Total consideration
    
    
    
    
    
    
    
    
    
    
    1
   £mCash consideration
    
    
    1Total outflow of cash and cash equivalents
    
    
    1
   37 Disposals
  2007
    
    
    2006
    
    
    2005£m
    
    
    £m
    
    
    £mOn disposal of subsidiary undertakings
    
    
    3
    
    
    
    4
    
    
    
    4On disposal of associates, joint ventures and available-for-sale financial assets
    
    
    21
    
    
    
    76
    
    
    
    38Recorded in the income statement
    
    
    24
    
    
    
    80
    
    
    
    42
 A-8.86




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38 Post balance sheet events
  The following table provides a summary of the shares bought back during this period:
 Total numberof sharespurchased aspart of
    
    
    
    
    
    
    Total cost ofpublicly
    
    
    Average price
    
    
    sharesannounced
    
    
    paid per
    
    
    purchasedMonth
    
    programme
    
    
    share (£)
    
    
    (£m)January
    
    
    20,975,000
    
    
    
    5.99
    
    
    
    127February
    
    
    6,965,000
    
    
    
    6.03
    
    
    
    42March
    
    
    3,100,000
    
    
    
    6.00
    
    
    
    19
    A-8.87




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A-8.88




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##### Table of Contents



39 Significant subsidiary undertakings, joint ventures and associates
  Principal area of
    
    
    Percentage of equitySubsidiary undertakings
    
    Country of incorporation
    
    
    operation
    
    
    shares heldReuters AG
    
    Germany
    
    Germany
    
    
    100Reuters America Holdings Inc*
    
    USA
    
    Worldwide
    
    
    100Reuters America LLC
    
    USA
    
    USA
    
    
    100Reuters Australia Pty Limited
    
    Australia
    
    Australia
    
    
    100Reuters BV
    
    Netherlands
    
    Netherlands
    
    
    100Reuters Canada Limited
    
    Canada
    
    Canada/USA
    
    
    100Reuters Europe SA
    
    Switzerland
    
    Spain/Portugal
    
    
    100Reuters France SAS
    
    France
    
    France
    
    
    100Reuters Finance PLC*
    
    UK
    
    UK
    
    
    100Reuters Group Overseas Holdings
(UK) Ltd*
    
    UK
    
    Worldwide
    
    
    100Reuters Holdings Limited*
    
    UK
    
    UK
    
    
    100Reuters Hong Kong Limited
    
    Cook Islands
    
    Hong Kong
    
    
    100Reuters International Holdings SARL*
    
    Switzerland
    
    Worldwide
    
    
    100Reuters Investments Limited*
    
    UK
    
    UK
    
    
    100Reuters Italia SpA
    
    Italy
    
    Italy
    
    
    100Reuters Japan Kabushiki Kaisha
    
    Japan
    
    Japan
    
    
    100Reuters Limited
    
    UK
    
    Worldwide
    
    
    100Reuters Middle East Limited
    
    Cook Islands
    
    Middle East
    
    
    100Reuters Nederland BV*
    
    Netherlands
    
    Netherlands
    
    
    100Reuters Research Inc
    
    USA
    
    USA
    
    
    100Reuters SA
    
    Switzerland
    
    Worldwide
    
    
    100Reuters Singapore Pte Limited
    
    Singapore
    
    Singapore
    
    
    100Reuters Svenska AB
    
    Sweden
    
    Sweden
    
    
    100Reuters Transaction Services Limited
    
    UK
    
    Worldwide
    
    
    100
 Principal area of
    
    
    Percentage of equityJoint ventures
    
    Country of incorporation
    
    
    operation
    
    
    shares held3 Times Square Associates LLC
    
    USA
    
    USA
    
    
    50
    **FXMarketSpace Limited
    
    UK
    
    Worldwide
    
    
    50
 
 *
    
    Denotes investment companies. All other entities are operating companies.**
    
    The Group has an equity shareholding of 50% in 3 Times Square Associates LLC. However,
Reuters has an effective economic interest of 35% at 31 December 2007.     A-8.89