		Three months ended September 30,		Nine months ended September 30,
(millions of U.S. dollars, except per common share amounts)		2007		2006 (note 9)		2007		2006 (note 9)

Revenues		1,801		1,622		5,278		4,756
Cost of sales, selling, marketing, general and administrative expenses		(1,307	)	(1,141	)	(3,848	)	(3,425	)
Depreciation		(116	)	(108	)	(348	)	(322	)
Amortization		(66	)	(59	)	(189	)	(178	)

Operating profit		312		314		893		831
Net other (expense) income (note 7)		(6	)	(5	)	6		36
Net interest income (expense) and other financing costs		40		(60	)	(64	)	(168	)
Income taxes (note 8)		(31	)	(42	)	(46	)	(89	)

Earnings from continuing operations		315		207		789		610
Earnings from discontinued operations, net of tax (note 9)		2,654		212		2,781		119

Net earnings		2,969		419		3,570		729
Dividends declared on preference shares		(1	)	(1	)	(4	)	(4	)

Earnings attributable to common shares		2,968		418		3,566		725
Earnings per common share (note 11):
Basic earnings per common share:
	From continuing operations		0.49		0.32		1.22		0.94
	From discontinued operations		4.14		0.33		4.34		0.18

Basic earnings per common share		4.63		0.65		5.56		1.12

Diluted earnings per common share:
	From continuing operations		0.49		0.32		1.22		0.94
	From discontinued operations		4.12		0.33		4.31		0.18

Diluted earnings per common share		4.61		0.65		5.53		1.12

The related notes form an integral part of these consolidated financial statements.

(millions of U.S. dollars)		September 30, 2007		December 31, 2006 (note 9)

Assets
Cash and cash equivalents		7,455		334
Accounts receivable, net of allowances		1,327		1,362
Inventories		85		72
Prepaid expenses and other current assets		452		296
Deferred income taxes		152		153
Current assets of discontinued operations (note 9)		92		1,048

	Current assets		9,563		3,265
Computer hardware and other property, net		643		625
Computer software, net		694		647
Identifiable intangible assets, net		3,484		3,456
Goodwill		6,804		6,543
Other non-current assets		1,180		1,082
Non-current assets of discontinued operations (note 9)		550		4,514

Total assets		22,918		20,132

Liabilities and shareholders' equity
Liabilities
Short-term indebtedness		3		333
Accounts payable and accruals		2,562		1,304
Deferred revenue		949		964
Current portion of long-term debt		403		264
Current liabilities of discontinued operations (note 9)		79		874

	Current liabilities		3,996		3,739
Long-term debt		3,418		3,681
Other non-current liabilities		833		785
Deferred income taxes		1,031		997
Non-current liabilities of discontinued operations (note 9)		56		449

Total liabilities		9,334		9,651

Shareholders' equity
Capital		2,904		2,799
Retained earnings		10,163		7,169
Accumulated other comprehensive income		517		513

Total shareholders' equity		13,584		10,481

Total liabilities and shareholders' equity		22,918		20,132

	Three months ended September 30,		Nine months ended September 30,
(millions of U.S. dollars)	2007		2006 (note 9)		2007		2006 (note 9)

Cash provided by (used in):
Operating activities
Net earnings	2,969		419		3,570		729
Remove income from discontinued operations	(2,654	)	(212	)	(2,781	)	(119	)
Add back (deduct) items not involving cash:
	Depreciation	116		108		348		322
	Amortization	66		59		189		178
	Net gains on disposals of businesses and investments (note 7)	—		—		(8	)	(44	)
	Deferred income taxes	(9	)	(26	)	(70	)	(3	)
	Other, net	65		56		200		165
Pension contribution	—		(4	)	(3	)	(9	)
Changes in working capital and other items (note 16)	(110	)	(33	)	(206	)	(151	)
Cash (used in) provided by operating activities — discontinued operations (note 9)	(16	)	266		(82	)	261

Net cash provided by operating activities	427		633		1,157		1,329

Investing activities
Acquisitions, less cash therein (note 14)	(132	)	(196	)	(315	)	(408	)
Proceeds from sales of discontinued operations (note 9)	7,577		86		8,050		105
Proceeds from other disposals	—		—		11		60
Capital expenditures, less proceeds from disposals	(143	)	(110	)	(383	)	(270	)
Other investing activities	(10	)	(11	)	(33	)	(26	)
Capital expenditures of discontinued operations (note 9)	(2	)	(47	)	(97	)	(130	)
Acquisitions by discontinued operations (note 9)	—		(29	)	(54	)	(35	)
Other investing activities of discontinued operations (note 9)	4		(3	)	(2	)	(13	)

Net cash provided by (used in) investing activities	7,294		(310	)	7,177		(717	)

Financing activities
Repayments of debt	(229	)	—		(249	)	(73	)
Net (repayments) borrowings of short-term loan facilities	(234	)	143		(370	)	299
Purchase of sterling call options	(76	)	—		(76	)	—
Repurchase of common shares (note 10)	—		(67	)	(75	)	(358	)
Dividends paid on preference shares	(1	)	(1	)	(4	)	(4	)
Dividends paid on common shares	(153	)	(138	)	(459	)	(415	)
Other financing activities, net	4		5		19		21

Net cash used in financing activities	(689	)	(58	)	(1,214	)	(530	)

Translation adjustments	1		2		1		2

Increase in cash and cash equivalents	7,033		267		7,121		84
Cash and cash equivalents at beginning of period	422		224		334		407

Cash and cash equivalents at end of period	7,455		491		7,455		491

The Thomson Corporation
Consolidated Statement of Changes in Shareholders' Equity
(unaudited)

The related notes form an integral part of these consolidated financial statements.

The Thomson Corporation
Notes to Consolidated Financial Statements (unaudited)
(unless otherwise stated, all amounts are in millions of U.S. dollars)

The unaudited interim consolidated financial statements of The Thomson Corporation ("Thomson" or the "Company") include all controlled companies and are prepared in accordance with accounting principles generally accepted in Canada ("Canadian GAAP"). All intercompany transactions and balances are eliminated on consolidation.

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the requirements of the Canadian Institute of Chartered Accountants ("CICA") Handbook Section 1751, Interim Financial Statements. Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with Canadian GAAP have been omitted or condensed. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2006, as set out in the Company's 2006 Annual Report.

In the opinion of management, the unaudited interim consolidated financial statements include all adjustments (consisting of normal recurring accruals) considered necessary by management to present a fair statement of the results of operations, financial position and cash flows. The consolidated financial statements were prepared using the same accounting policies and methods as those used in the Company's financial statements for the year ended December 31, 2006, except as explained in Note 5.

Prior periods have been restated for discontinued operations. Where necessary, certain amounts for 2006 have been reclassified to conform to the current period's presentation.

Historically, the Company's revenues and operating profits from continuing operations have been proportionately the smallest in the first quarter and the largest in the fourth quarter, as certain product releases are concentrated at the end of the year, particularly in the regulatory and healthcare markets. As costs continue to be incurred more evenly throughout the year, operating margins have historically increased as the year progresses. For these reasons, the performance of the Company's businesses may not be comparable quarter to consecutive quarter and should be considered on the basis of results for the whole year or by comparing results in a quarter with the results in the same quarter for the previous year.

In May 2007, Thomson agreed to acquire Reuters Group PLC ("Reuters") and to combine the two companies' businesses through a dual listed company ("DLC") structure. The transaction is subject to receipt of required regulatory, shareholder and court approvals and other customary closing conditions. After the proposed transaction closes, the combined business will be called Thomson-Reuters. The parent companies of the combined business will be called The Thomson Corporation, an Ontario corporation, which will be renamed Thomson-Reuters Corporation, and Thomson-Reuters PLC, a United Kingdom company. The DLC structure will enable Thomson and Reuters to combine management and operations as a single economic entity while retaining the two parent companies' separate legal identities, primary listings and, it is intended, their existing index participations. The DLC structure will be accomplished through contractual arrangements between the two parent companies and provisions in each parent company's organizational documents. The boards of the two parent companies will be identical and the combined business will be managed by a single senior executive management team.

To effect the proposed transaction, a newly formed United Kingdom company, Thomson-Reuters PLC, will acquire Reuters Group PLC through a scheme of arrangement in which each Reuters share will be entitled to 352.5 pence per share in cash and 0.16 Thomson-Reuters PLC shares. Upon implementation of the transaction, one Thomson-Reuters PLC share will be equivalent to one share of Thomson-Reuters Corporation. Based on the closing Thomson share price and the applicable $/£ exchange rate on May 14, 2007, which was the day before the Company and Reuters announced their agreement, each Reuters share was valued at approximately 691 pence per share.

Based on the current issued share capital of each of Thomson and Reuters, The Woodbridge Company Limited ("Woodbridge") and other companies affiliated with it would own shares representing approximately 53% of the aggregate voting and economic interests of the combined Thomson-Reuters business, other Thomson shareholders would own shares representing approximately 23% and Reuters shareholders would own shares representing approximately 24%. As of October 24, 2007, Woodbridge and other companies affiliated with it beneficially owned approximately 70% of the Company's common shares.

The U.S. Department of Justice, the European Commission and the Canadian Competition Bureau are reviewing the transaction. In addition, Thomson and Reuters have made filings with antitrust/competition authorities in other jurisdictions around the world. Thomson and Reuters are cooperating with the antitrust/competition authorities. Given the complementary nature of the two companies' businesses and the highly competitive nature of the financial information services industry, the Company remains confident that it and Reuters will receive the required antitrust/competition approvals. In October 2007, the Company announced a regulatory update. See Note 20 for further discussion.

Following completion of the regulatory review process in the United States and European Union, Thomson and Reuters will also submit the proposed transaction to their respective shareholders for approval and will apply for requisite court approvals in Ontario, Canada and England.

Effective January 1, 2007, Thomson voluntarily adopted a new accounting policy for uncertain income tax positions. As a result of this change in accounting policy, the Company recorded a non-cash charge of $33 million to its opening retained earnings as of January 1, 2007 with an offsetting increase to non-current liabilities.

Under its previous policy, the Company would reserve for tax contingencies if it was probable that an uncertain position would not be upheld. Under its new policy, the Company evaluates a tax position using a two-step process:

The Company believes that this new policy will provide reliable and more relevant information because all tax positions of the Company will be affirmatively evaluated for recognition, derecognition and measurement using a consistent threshold of more-likely-than-not, based on the technical merits of a tax position. In addition, the Company will be providing more information about uncertainty related to income tax assets and liabilities.

The Company was not able to retroactively apply this new policy as the data to determine the amounts and probabilities of the possible outcomes of the various tax positions that could be realized upon ultimate settlement was not collected in prior periods. Further, significant judgments are involved in assessing these tax positions and the Company has concluded that it is not possible to estimate the effects of adopting the policy at an earlier date.

The Company will continue to recognize interest and penalties on underpayment of income taxes as an income tax expense.

Effective January 1, 2006, Thomson adopted CICA Handbook Section 1530, Comprehensive Income, CICA Handbook Section 3855, Financial Instruments — Recognition and Measurement and CICA Handbook Section 3865, Hedges. These new Handbook Sections provided comprehensive requirements for the recognition and measurement of financial instruments, as well as standards on when and how hedge accounting may be applied. Handbook Section 1530 also introduced a new component of equity referred to as accumulated other comprehensive income.

Under these new standards, all financial instruments, including derivatives, are included on the consolidated balance sheet and are measured either at fair market value or, in limited circumstances, at cost or amortized cost. Derivatives that qualify as hedging instruments must be designated as either a "cash flow hedge," when the hedged item is a future cash flow, or a "fair value hedge," when the hedged item is the fair value of a recognized asset or liability. The effective portion of unrealized gains and losses related to a cash flow hedge are included in other comprehensive income. For a fair value hedge, both the derivative and the hedged item are recorded at fair value in the consolidated balance sheet and the unrealized gains and losses from both items are included in earnings. For derivatives that do not qualify as hedging instruments, unrealized gains and losses are reported in earnings.

In accordance with the provisions of these new standards, the Company reflected the following adjustments as of January 1, 2006:

The adoption of these new standards had no material impact on the Company's consolidated statement of earnings. The unrealized gains and losses included in "Accumulated other comprehensive income" were recorded net of taxes, which were nil.

In April 2006, the Emerging Issues Committee of the CICA ("EIC") issued Abstract 161, Discontinued Operations ("EIC-161"). The abstract addresses the appropriateness of allocating interest expense to a discontinued operation and disallows allocations of general corporate overhead. EIC-161 was effective upon its issuance and did not have an impact on the Company's consolidated financial statements.

In July 2006, the Company adopted EIC Abstract 162, Stock-Based Compensation for Employees Eligible to Retire Before the Vesting Date ("EIC-162"), retroactively to January 1, 2006. The abstract clarifies the proper accounting for stock-based awards granted to employees who either are eligible for retirement at the grant date or will be eligible before the end of the vesting period and continue vesting after, or vest upon, retirement. In such cases, the compensation expense associated with the stock-based award will be recognized over the period from the date of grant to the date the employee becomes eligible to retire. EIC-162 did not have an impact on the Company's financial statements.

THOMSONplus is a series of initiatives, announced in 2006, which will allow the Company to become a more integrated operating company by leveraging assets and infrastructure across all segments of its business. To accomplish these initiatives, the Company had previously reported that it expected to incur approximately $250 million of expenses from inception through 2009 primarily related to technology and restructuring costs and consulting services. Because THOMSONplus is a series of initiatives, it was noted that the timing of these costs and savings may shift between different calendar years. While the Company's overall estimates of costs and savings for the program remain unchanged, it now expects to complete the program and reach its savings targets earlier than originally estimated. As a result, the Company is accelerating spending that was planned for future years into 2007. Currently, it expects to incur expenses of approximately $130 million in 2007 and $50 million in 2008. The Company does not expect to incur expenses in 2009 as was originally reported. In 2006, it incurred $60 million of expenses consisting primarily of consulting fees and severance. The Company also incurred $9 million of expenses associated with businesses that were reclassified to discontinued operations in 2006 related to severance and vacated leased properties.

The Company incurred $24 million and $85 million of expenses associated with THOMSONplus in the three- and nine-month periods ended September 30, 2007, respectively. These expenses primarily related to consulting services. In the nine-month period of 2007, these costs also reflected severance. The consulting costs primarily related to efforts to deploy SAP as its company-wide ERP system, which will continue throughout 2007 and 2008, as well as efforts to improve its customer service infrastructure. In the nine-month period, severance costs principally related to the elimination of certain finance positions in conjunction with the establishment of centralized service centers and efforts to streamline the operations of Thomson Financial. Because THOMSONplus is a corporate program, expenses associated with it are reported within the Corporate and Other segment. Restructuring activities represented approximately $4 million and $33 million of the expense for the three- and nine-month periods ended September 30, 2007, respectively. The liabilities associated with these restructuring activities were not material as of September 30, 2007 and December 31, 2006.


	Three months ended September 30,				Nine months ended September 30,
	2007		2006		2007		2006

Net gains on disposals of businesses and investments	—		—		8		44
Equity in net earnings of associates	—		—		4		1
Other expense	(6	)	(5	)	(6	)	(9	)

Net other (expense) income	(6	)	(5	)	6		36

For the nine-month periods ended September 30, 2007 and 2006, net gains on disposals of businesses and investments were comprised primarily of income from, and gains on sales of, equity investments.

For the three-month period ended September 30, 2007, other expense includes $9 million related to changes in the fair value of sterling call options. Such options were acquired in the third quarter as part of the Company's hedging program to mitigate exposure to changes in the $/£ exchange rate on the cash consideration to be paid on the proposed transaction with Reuters. See Note 15 for further discussion.

As discussed in Note 5, the Company voluntarily adopted a new policy for accounting for uncertain tax positions effective January 1, 2007. As a result of this change, the Company recorded a non-cash charge of $33 million to its opening retained earnings as of January 1, 2007 with an offsetting increase to non-current liabilities.

Inclusive of the impact of the change in accounting policy, the Company had $205 million of unrecognized tax benefits as of January 1, 2007. If recognized, approximately $70 million of these benefits would favorably affect the Company's income tax expense. As of January 1, 2007, the Company had accrued $26 million for interest and penalties associated with tax positions.

As a global company, Thomson and its subsidiaries are subject to numerous federal, state and provincial income tax jurisdictions. As of September 30, 2007, the tax years subject to examination by major jurisdiction are as follows:


Jurisdiction		Tax Years

Canada — Federal and Ontario Province		1997 to 2006
United States — Federal		2003 to 2006
United Kingdom		2005 and 2006

The Company has multiple years subject to examination in other jurisdictions in which it does business as well.

At September 30, 2007, $1.3 billion of current income taxes payable was included in accounts payable and accruals primarily related to income taxes owed on the gain on sale of Thomson Learning's higher education, careers and library reference businesses.

The following businesses are classified as discontinued operations within the consolidated financial statements for all periods presented. None of the businesses was considered fundamental to the current integrated information offerings of Thomson.

In April 2007, the Company approved plans to sell Fakta, its regulatory information business in Sweden. This business was managed within Thomson Legal.

In March 2007, the Company approved plans within Thomson Healthcare to sell PLM, a provider of drug and therapeutic information in Latin America; the New England Institutional Review Board, an ethical review board that monitors clinical research involving human subjects; and CenterWatch, a provider of clinical research information.

In October 2006, the Company announced its intention to sell Thomson Learning through three independent processes, each on its own schedule, as follows:

In future periods, the net proceeds will be adjusted for the payment of taxes and post-closing adjustments. The Company recorded impairment charges associated with certain of these businesses of $14 million in the fourth quarter of 2006. Based on estimates of fair value, as well as current carrying value, at March 31, 2007, these impairment charges were reversed in the first quarter of 2007.

Additionally, in the fourth quarter of 2006 the Company approved plans within Thomson Legal to sell its business information and news operations, which include the Company's Market Research and NewsEdge businesses. Based on estimates of fair value at March 31, 2007, the Company recorded impairment charges to identifiable intangible assets of $3 million before taxes related to these businesses. The Company completed the sale of its Market Research and NewsEdge businesses in May 2007 and July 2007, respectively.

In June 2006, the Company's board of directors approved plans to sell IOB, a Brazilian regulatory business within Thomson Legal, and Thomson Medical Education, a provider of sponsored medical education within Thomson Healthcare. The Company completed the sale of Thomson Medical Education in April 2007 and IOB in June 2007.

In the first quarter of 2006, the Company approved plans within Thomson Legal to sell Lawpoint Pty Limited, an Australian provider of print and online regulatory information services; and Law Manager, Inc., a software and services provider. The Company completed the sale of Law Manager in April 2006 and Lawpoint in June 2006.

Also in the first quarter of 2006, the Company approved plans within Thomson Learning to sell Peterson's, a college preparatory guide; the North American operations of Thomson Education Direct, a consumer-based distance learning career school; and K.G. Saur, a German publisher of biographical and bibliographical reference titles serving the library and academic communities. Based on estimates of fair market value at March 31, 2006, Thomson recorded impairment charges associated with certain of these businesses related to identifiable intangible assets and goodwill of $40 million before taxes. The Company completed the sale of Peterson's in July 2006 and K.G. Saur in August 2006. The Company completed the sale of its North American operations of Thomson Education Direct in March 2007.

In December 2005, the Company's board of directors approved a plan to dispose of American Health Consultants, a medical newsletter publisher and medical education provider within Thomson Healthcare. The Company completed the sale in the third quarter of 2006.

The Company adjusts liabilities previously established for businesses that have been sold when actual results differ from estimates used in establishing such liabilities. Adjustments are made in conjunction with the expiration of representations and warranty periods or to reflect the refinement of earlier estimates. In the three and nine months ended September 30, 2007 and 2006, the Company adjusted disposal liabilities related to previous dispositions. These amounts, which principally related to tax liabilities, are included in "Other" below.


	September 30, 2007
	Thomson Legal	Thomson Learning	Thomson Healthcare	Total

Current assets:
Accounts receivable, net of allowances	2	73	3	78
Inventory	—	—	1	1
Other current assets	1	12	—	13

Total current assets	3	85	4	92

Non-current assets:
Computer hardware and other property	—	42	1	43
Computer software	—	44	—	44
Identifiable intangible assets	1	74	3	78
Goodwill	3	359	7	369
Other non-current assets	—	16	—	16

Total non-current assets	4	535	11	550

Current liabilities:
Accounts payable and accruals	2	57	3	62
Deferred revenue	5	11	1	17

Total current liabilities	7	68	4	79

Non-current liabilities:
Other non-current liabilities	—	56	—	56

Total non-current liabilities	—	56	—	56


	December 31, 2006
	Thomson Legal	Thomson Learning	Thomson Healthcare	Total

Current assets:
Accounts receivable, net of allowances	15	538	36	589
Inventory	1	252	1	254
Other current assets	4	70	5	79
Deferred income taxes	—	124	2	126

Total current assets	20	984	44	1,048

Non-current assets:
Computer hardware and other property	7	157	8	172
Computer software	5	145	1	151
Identifiable intangible assets	29	838	18	885
Goodwill	8	3,003	24	3,035
Other non-current assets	1	270	—	271

Total non-current assets	50	4,413	51	4,514

Current liabilities:
Accounts payable and accruals	15	499	25	539
Deferred revenue	38	260	20	318
Other current liabilities	16	1	—	17

Total current liabilities	69	760	45	874

Non-current liabilities:
Other non-current liabilities	4	38	2	44
Deferred income taxes	12	385	8	405

Total non-current liabilities	16	423	10	449


	Three months ended September 30, 2007
	Thomson Legal		Thomson Learning		Thomson Healthcare	Other	Total

Revenues from discontinued operations	4		88		5	—	97

(Loss) earnings from discontinued operations before income taxes	(1	)	(1	)	1	—	(1	)
(Loss) gain on sale of discontinued operations	(4	)	3,714		—	—	3,710
Income taxes	14		(1,074	)	4	1	(1,055	)

Earnings from discontinued operations	9		2,639		5	1	2,654


	Three months ended September 30, 2006
	Thomson Legal		Thomson Learning		Thomson Healthcare		Other	Total

Revenues from discontinued operations	22		818		31		—	871

(Loss) earnings from discontinued operations before income taxes	(3	)	243		5		—	245
Gain on sale of discontinued operations	—		4		40		—	44
Income taxes	1		(60	)	(19	)	1	(77	)

(Loss) earnings from discontinued operations	(2	)	187		26		1	212


	Nine months ended September 30, 2007
	Thomson Legal		Thomson Learning		Thomson Healthcare		Other	Total

Revenues from discontinued operations	46		942		38		—	1,026

(Loss) earnings from discontinued operations before income taxes	(18	)	24		(4	)	—	2
(Loss) gain on sale of discontinued operations	(23	)	3,757		137		—	3,871
Income taxes	23		(1,118	)	(8	)	11	(1,092	)

(Loss) earnings from discontinued operations	(18	)	2,663		125		11	2,781


	Nine months ended September 30, 2006
	Thomson Legal		Thomson Learning		Thomson Healthcare		Other		Total

Revenues from discontinued operations	87		1,721		98		—		1,906

(Loss) earnings from discontinued operations before income taxes	(15	)	113		16		—		114
Gain (loss) on sale of discontinued operations	5		4		40		(1	)	48
Income taxes	8		(35	)	(22	)	6		(43	)

(Loss) earnings from discontinued operations	(2	)	82		34		5		119

"Proceeds from sales of discontinued operations" within the consolidated statement of cash flow for the three months ended September 30, 2007 represent cash received from the sale of Thomson Learning's higher education, careers and library reference businesses and NewsEdge. For the nine months ended September 30, 2007, this amount also includes the North American operations of Thomson Education Direct, NETg, Thomson Medical Education and Market Research. For the nine months ended September 30, 2006, such proceeds represent cash received from the sale of Lawpoint, Law Manager, Peterson's, K.G. Saur and American Health Consultants.

The carrying values of businesses disposed of during the nine months ended September 30, 2007 consisted of current assets of $822 million, non-current assets of $4,183 million, current liabilities of $519 million and non-current liabilities of $380 million as of the date of disposal.

Since May 2005, Thomson has had in place a share repurchase program which has allowed it to repurchase up to 15 million of its shares in a given 12 month period. The Company most recently renewed this program in May 2007. Since May 2005, the Company has repurchased and subsequently cancelled approximately 20 million shares for approximately $744 million. The Company has not repurchased any shares under the current program and suspended repurchases in May 2007 as a result of its proposed acquisition of Reuters. The following summarizes the Company's repurchases in 2006 and 2007.


Three-month period ended	Shares Repurchased	Average Price per Share		Number of Shares Available for Repurchase

March 31, 2006	4,570,000	$	36.83
June 30, 2006	3,110,000	$	39.58
September 30, 2006	1,710,600	$	39.27
December 31, 2006	1,289,400	$	41.41
March 31, 2007	1,305,000	$	41.74
June 30, 2007	495,000	$	42.68
September 30, 2007	—		—	15,000,000

Shares that the Company repurchases are cancelled. Thomson may repurchase shares in open market transactions on the Toronto Stock Exchange or the New York Stock Exchange. Decisions regarding the timing of future repurchases will be based on market conditions, share price and other factors. Thomson may elect to suspend or discontinue the program at any time. From time to time when the Company does not possess material nonpublic information about its activities or its securities, the Company may enter into a pre-defined plan with its broker to allow for the repurchase of shares at times when the Company ordinarily would not be active in the market due to its own internal trading blackout periods, insider trading rules or otherwise. Any such plans entered into with the Company's broker will be adopted in accordance with the applicable Canadian securities laws and the requirements of Rule 10b5-1 under the U.S. Securities Exchange Act of 1934.

Basic earnings per common share are calculated by dividing earnings attributable to common shares by the sum of the weighted-average number of common shares outstanding during the period plus vested deferred share units. Deferred share units represent the amount of common shares certain employees have elected to receive in the future in lieu of cash compensation.

Diluted earnings per common share are calculated using the denominator of the basic calculation described above adjusted to include the potentially dilutive effect of outstanding stock options and other securities. The Company uses the treasury stock method to calculate diluted earnings per common share.

Earnings used in determining earnings per common share from continuing operations are presented below. Earnings used in determining earnings per common share from discontinued operations are the earnings from discontinued operations as reported within the consolidated statement of earnings.


	Three months ended September 30,				Nine months ended September 30,
	2007		2006		2007		2006

Earnings from continuing operations	315		207		789		610
Dividends declared on preference shares	(1	)	(1	)	(4	)	(4	)

Earnings from continuing operations attributable to common shares	314		206		785		606

The weighted-average number of common shares outstanding, as well as a reconciliation of the weighted-average number of common shares outstanding used in the basic earnings per common share computation to the weighted-average number of common shares outstanding used in the diluted earnings per common share computation, is presented below:


	Three months ended September 30,		Nine months ended September 30,
	2007	2006	2007	2006

Weighted average number of common shares outstanding	640,426,833	641,691,386	640,248,541	644,349,186
Vested deferred share units	859,103	692,703	829,582	651,383

Basic	641,285,936	642,384,089	641,078,123	645,000,569
Effect of stock and other incentive plans	3,185,795	2,035,097	3,211,346	1,734,142

Diluted	644,471,731	644,419,186	644,289,469	646,734,711

The Company's net defined benefit plan expense is comprised of the following elements:


	Three months ended September 30,
	Pensions				Other post-retirement plans
	2007		2006		2007	2006

Current service cost	24		16		1	1
Interest cost	37		36		4	2
Expected return on plan assets	(40	)	(40	)	—	—
Amortization of net actuarial losses	11		13		2	1

Net defined benefit plan expense	32		25		7	4


	Nine months ended September 30,
	Pensions				Other post-retirement plans
	2007		2006		2007	2006

Current service cost	56		47		3	2
Interest cost	111		104		9	7
Expected return on plan assets	(120	)	(116	)	—	—
Amortization of net actuarial losses	33		40		3	3
Amortization of prior service cost	—		1		—	—

Net defined benefit plan expense	80		76		15	12

In the third quarter of 2007, the U.S. District Court for the Western District of Pennsylvania adversely decided against the Company in a patent infringement case related to a business formerly owned by Thomson Financial. The Company subsequently posted a $95 million letter of credit in connection with its appeal. The letter of credit represents the amount of the district court's judgment, plus fees and interest. At this time, the Company believes that the ultimate outcome of this matter will not have a material adverse effect on the Company's financial condition, taken as a whole.

In 2005, the Company became aware of an inquiry by the Serious Fraud Office in the United Kingdom regarding the refund practices relating to certain duplicate subscription payments made by some of the customers in the Sweet & Maxwell and Gee businesses in the United Kingdom. In August 2007, the Company was notified by the authorities that they had completed their inquiry and no action would be taken against Thomson.

As previously disclosed, the Company is a defendant in a lawsuit involving its BAR/BRI business, Park v. The Thomson Corporation and Thomson Legal & Regulatory Inc., which was filed in the U.S. District Court for the Southern District of New York. The lawsuit alleges primarily violations of U.S. federal antitrust laws. In the third quarter of 2007, the Company accrued $13 million in connection with an agreement in principle to settle the case.

The Company is engaged in various legal proceedings and claims that have arisen in the ordinary course of business. Some of these matters are described in management's discussion and analysis for each of the three month period ended March 31, 2007 and the year ended December 31, 2006. During the three-month period ended September 30, 2007, other than the actions noted above, there have been no material developments to these matters. The outcome of all of the proceedings and claims

against the Company, including, without limitation, those described in management's discussion and analysis for each of the three month period ended March 31, 2007 and the year ended December 31, 2006, is subject to future resolution, including the uncertainties of litigation. Based on information currently known by the Company and after consultation with outside legal counsel, management believes that the probable ultimate resolution of any such proceedings and claims, individually or in the aggregate, will not have a material adverse effect on the Company's financial condition, taken as a whole.

The number of transactions completed during the three-month and nine-month periods ended September 30, 2007 and 2006 and the related cash consideration were as follows:


Number of transactions	Three months ended September 30,	Nine months ended September 30,
	2007	2006	2007	2006

Businesses and identifiable intangible assets acquired	9	8	26	20
Investments in businesses	—	—	—	1


Cash consideration	Three months ended September 30,		Nine months ended September 30,
	2007	2006	2007	2006

Businesses and identifiable intangible assets acquired	82	146	265	356
Contingent consideration payment — TradeWeb LLC	50	50	50	50
Investments in businesses	—	—	—	2

Total acquisitions	132	196	315	408

Included in these acquisitions were the purchases of (i) Prous Science, a provider of life sciences information solutions, in September 2007; (ii) CrossBorder Solutions, a provider of tax software, in March 2007; (iii) Quantitative Analytics, Inc., a provider of financial database integration and analysis solutions, in March 2006; and (iv) MercuryMD, Inc., a provider of mobile information systems serving the healthcare market in June 2006.

The value of goodwill and identifiable intangible assets acquired in connection with these transactions is detailed below.

All acquisitions have been accounted for using the purchase method and the results of acquired businesses are included in the consolidated financial statements from the dates of acquisition. For acquisitions made during the nine-month period ended September 30, 2007, approximately one half of the acquired goodwill is not deductible for tax purposes. For the nine-month period ended September 30, 2006, the majority of the acquired goodwill is not deductible for tax purposes. Purchase price allocations related to certain acquisitions may be subject to adjustment pending completion of final valuations.

Included in assets and liabilities of discontinued operations were two acquisitions purchased for cash consideration of $54 million.

Additionally, during the third quarter of 2007 and 2006, the Company paid $50 million in each period for contingent earnout payments related to the 2004 TradeWeb LLC acquisition as the associated contingency was satisfied. The payment in 2007 constitutes the final payment under this agreement.

In August 2007, the Company entered into a new syndicated credit agreement with a group of banks. This new credit agreement consists of a $2.5 billion five-year unsecured revolving credit facility. Under the terms of the new agreement, the Company may request an increase in the amount of the lenders' commitments up to a maximum amount of $3.0 billion. This

new agreement is available to provide liquidity in connection with the Company's commercial paper program and for general corporate purposes of the Company and its subsidiaries including, following the closing of the proposed transaction with Reuters, Thomson-Reuters PLC and its subsidiaries. The maturity date of the agreement is August 14, 2012. However, the Company may request that the maturity date be extended under certain circumstances, as set forth in the agreement, for up to two additional one-year periods. The syndicated credit agreement contains certain customary affirmative and negative covenants, each with customary exceptions. The financial covenant related to this agreement is described below. In connection with entering into this new agreement, the Company terminated the existing unsecured revolving bilateral loan agreements that had previously provided an aggregate commitment of $1.6 billion.

Additionally, in May 2007, the Company entered into a £4.8 billion acquisition credit facility. The Company entered into this facility as a result of requirements of the U.K. Panel on Takeovers and Mergers, which require the Company and its financial advisors for the transaction to confirm its ability to finance its proposed transaction with Reuters. The Company may only draw down amounts under this facility to finance the proposed transaction, to refinance any existing debt of Reuters or its subsidiaries after the closing, and to pay fees and expenses that the Company incurs in connection with the proposed transaction and the credit facility. As of September 30, 2007, the Company had not utilized this facility. In July 2007, the Company reduced the aggregate lending commitment under the facility to £2.5 billion after receiving proceeds from the sale of Thomson Learning's higher education, careers and library reference assets. In accordance with the terms of the new facility, the Company is required to hold certain of these sale proceeds in "permitted investments," as defined by the facility, until the closing of the proposed Reuters transaction. These "permitted investments" include, among other investments, money market funds that are rated at least "A-"or better. The facility is structured as a 364-day credit line with subsequent extension/term-out options that would allow the Company to extend the final maturity until May 2009.

Under the terms of the syndicated credit agreement and acquisition credit agreement, the Company must maintain a ratio of net debt as of the last day of each fiscal quarter to adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization and other modifications described in the agreement) for the last four quarters ended of not more than 4.5:1. Net debt is total debt adjusted to factor in the impact of swaps and other hedge agreements related to the debt, and is reduced to reflect the Company's cash and cash equivalents balance. As of September 30, 2007, the Company was in compliance with this covenant.

On October 2, 2007, the Company completed the offering of $800 million of 5.70% notes due 2014. The net proceeds from this offering were approximately $790 million. See Note 20.

In July 2007, the Company repaid C$250 million of debentures upon their maturity.

In January 2006, the Company repaid $50 million of privately placed notes upon their maturity.

As the funding of the cash consideration required to be paid to Reuters shareholders will fluctuate based on the $/£ exchange rate, in July 2007 the Company commenced a hedging program to mitigate exposure to changes in the $/£ exchange rate. In the third quarter of 2007, the Company paid approximately $76 million for the purchase of several sterling call options with a cumulative notional value of £2,300 million and various strike prices of approximately $2.05/£1.00. These options are stated at their fair value in the consolidated balance sheet and changes in their fair value are reflected within the consolidated statement of earnings. The fair value of these options at September 30, 2007, was approximately $67 million.

Additionally, after completion of the sale of Thomson Learning's higher education, careers and library reference businesses, the Company invested a portion of the proceeds in sterling-denominated money market funds. As of September 30, 2007, the balance in these funds, which were included in consolidated balance sheet as cash and cash equivalents, totaled approximately £1.4 billion.


	Three months ended September 30,				Nine months ended September 30,
	2007		2006		2007		2006

Accounts receivable	(39	)	(48	)	76		82
Inventories	(2	)	(3	)	(10	)	(10	)
Prepaid expenses and other current assets	(22	)	36		(58	)	21
Accounts payable and accruals	49		42		(138	)	(139	)
Deferred revenue	(83	)	(89	)	(57	)	(67	)
Income taxes	—		38		25		(29	)
Other	(13	)	(9	)	(44	)	(9	)

	(110	)	(33	)	(206	)	(151	)

During the nine months ended September 30, 2007 and 2006, the Company issued 622,992 and 552,987 shares respectively, to employees in connection with its employee stock purchase plans.

As of September 30, 2007, Woodbridge and other companies affiliated with it together beneficially owned approximately 70% of the Company's common shares.

From time to time, in the normal course of business, Woodbridge and its affiliates purchase some products and service offerings from the Company. These transactions are negotiated at arm's length on standard terms, including price, and are not significant to the Company's results of operations or financial condition individually or in the aggregate.

In the normal course of business, a Woodbridge-owned company rents office space from one of the Company's subsidiaries. Additionally, a number of the Company's subsidiaries charge a Woodbridge-owned company fees for various administrative services. In 2006, the total amounts charged to Woodbridge for these rentals and services were approximately $2 million. In the nine months ended September 30, 2007, these rentals and services totaled approximately $1 million.

The employees of Jane's Information Group ("Jane's"), a business sold by the Company to Woodbridge in April 2001, participated in the Company's pension plans in the United States and United Kingdom, as well as the defined contribution plan in the United States, until June 2007, when Woodbridge sold Jane's to a third party. As a consequence of the sale, Jane's employees have ceased active participation in the Company's plans. During its period of participation, Jane's made proportional contributions to these pension plans as required, and made matching contributions in accordance with the provisions of the defined contribution plan. As part of its original purchase from the Company, Woodbridge assumed the pension liability associated with the active employees of Jane's.

Thomson purchases property and casualty insurance from third party insurers and retains the first $500,000 of each and every claim under the programs via the Company's captive insurance subsidiary. Woodbridge is included in these programs and pays Thomson a premium commensurate with its exposures. In 2006, these premiums were approximately $50,000, which would approximate the premium charged by a third party insurer for such coverage. In the nine months ended September 30, 2007, these premiums totaled approximately $36,000.

The Company has entered into an agreement with Woodbridge under which Woodbridge has agreed to indemnify up to $100 million of liabilities incurred either by the Company's current and former directors and officers or by the Company in providing indemnification to these individuals on substantially the same terms and conditions as would apply under an arm's length, commercial arrangement. A third party administrator will manage any claims under the indemnity. Thomson pays Woodbridge an annual fee of $750,000, which is less than the premium that the Company would have paid for commercial insurance.

The Company has entered into a contract with Hewitt Associates Inc. to outsource certain human resources administrative functions in order to improve operating and cost efficiencies. Mr. Denning, one of the Company's directors and chairman of the board's Human Resources Committee, is also a director of Hewitt. Mr. Denning has not participated in negotiations related to the contract and has refrained from deliberating and voting on the matter by the Human Resources Committee and the board of directors. Under the current contract terms, the Company expects to pay Hewitt an aggregate of approximately $165 million over a 10 year period beginning in 2006. In 2006, Thomson paid Hewitt $16 million for its services. In the nine months ended September 30, 2007, the Company paid Hewitt approximately $9 million associated with this agreement.

Thomson is a global provider of integrated information solutions for business and professional customers. Effective January 1, 2007, the Company realigned its continuing operations into five new segments consisting of Legal, Financial, Tax & Accounting, Scientific and Healthcare. Prior period segment data have been restated to conform to this presentation. The accounting policies applied by the segments are the same as those applied by the Company.

The reportable segments of Thomson are strategic business groups that offer products and services to target markets, as follows:

Providing workflow solutions throughout the world to legal, intellectual property, compliance, and other business professionals, as well as government agencies.

Providing products and integration services to financial and technology professionals in the corporate, investment banking, institutional, retail wealth management and fixed income sectors of the global financial community.

Providing integrated information and workflow solutions for tax and accounting professionals in North America.

Providing information and services to researchers, scientists and information professionals in the academic, scientific, corporate and government marketplaces.

Providing information and services to physicians and other professionals in the healthcare, corporate and government marketplaces.

Additionally, in March 2007, a broker research business managed by the Legal segment was transferred to the Financial segment. Financial information for all periods has been restated to reflect this transfer.


	Three months ended September 30, 2007				Three months ended September 30, 2006
	Revenues		Segment operating profit		Revenues		Segment operating profit

Legal	856		274		769		259
Financial	544		117		508		97
Tax & Accounting	142		26		119		21
Scientific	160		41		148		38
Healthcare	102		15		81		10

Segment totals	1,804		473		1,625		425
Corporate and other⁽¹⁾	—		(95	)	—		(52	)
Eliminations	(3	)	—		(3	)	—

Total	1,801		378		1,622		373


	Nine months ended September 30, 2007				Nine months ended September 30, 2006
	Revenues		Segment operating profit		Revenues		Segment operating profit

Legal	2,458		778		2,228		693
Financial	1,611		319		1,497		269
Tax & Accounting	457		95		387		73
Scientific	471		120		440		105
Healthcare	294		28		216		20

Segment totals	5,291		1,340		4,768		1,160
Corporate and other⁽¹⁾	—		(258	)	—		(151	)
Eliminations	(13	)	—		(12	)	—

Total	5,278		1,082		4,756		1,009

In accordance with CICA Handbook Section 1701, Segment Disclosures, the Company discloses information about its reportable segments based upon the measures used by management in assessing the performance of those reportable segments. The Company uses segment operating profit, which is operating profit before amortization of identifiable intangible assets, to measure the operating performance of its segments. Management uses this measure because amortization of identifiable intangible assets is not considered to be a controllable operating cost for purposes of assessing the current performance of the segments. While in accordance with Canadian GAAP, the Company's definition of segment operating profit may not be comparable to that of other companies.

The following table reconciles segment operating profit per the reportable segment information to operating profit per the consolidated statement of earnings:


	Three months ended September 30,				Nine months ended September 30,
	2007		2006		2007		2006

Segment operating profit	378		373		1,082		1,009
Less: Amortization	(66	)	(59	)	(189	)	(178	)

Operating profit	312		314		893		831

Note 19: Reconciliation of Canadian to U.S. Generally Accepted Accounting Principles

The consolidated financial statements have been prepared in accordance with Canadian GAAP, which differ in some respects from U.S. GAAP. The following table presents the material differences between Canadian and U.S. GAAP:


			Three months ended September 30,					Nine months ended September 30,
			2007			2006		2007			2006

Net earnings under Canadian GAAP				2,969			419		3,570			729
Differences in GAAP increasing (decreasing) reported earnings:
	Business combinations			67			6		77			14
	Derivative instruments and hedging activities			4			1		(8	)		3
	Income taxes			(28	)		3		(60	)		(23	)

Net income under U.S. GAAP				3,012			429		3,579			723

Earnings under U.S. GAAP from continuing operations				315			194		752			594
Earnings under U.S. GAAP from discontinued operations				2,697			235		2,827			129

Net income under U.S. GAAP				3,012			429		3,579			723

Basic earnings per common share, under U.S. GAAP, from:
		Continuing operations	$	0.49		$	0.30	$	1.17		$	0.91
		Discontinued operations, net of tax	$	4.21		$	0.37	$	4.41		$	0.20

Basic earnings per common share			$	4.70		$	0.67	$	5.58		$	1.11

Diluted earnings per common share, under U.S. GAAP, from:
		Continuing operations	$	0.49		$	0.30	$	1.16		$	0.91
		Discontinued operations, net of tax	$	4.18		$	0.36	$	4.39		$	0.20

Diluted earnings per common share			$	4.67		$	0.66	$	5.55		$	1.11

Prior to January 1, 2001, various differences existed between Canadian and U.S. GAAP for the accounting for business combinations, including the establishment of acquisition-related liabilities. The net increase to income primarily relates to (i) costs that are required to be recorded as operating expenses under U.S. GAAP which, prior to January 1, 2001, were capitalized under Canadian GAAP; (ii) overall decreased amortization charges due to basis differences; and (iii) differences in gain or loss calculations on business disposals resulting from the above factors.

Under U.S. Statement of Financial Accounting Standards ("FAS") 133, Accounting for Derivative Instruments and Hedging Activities, as amended by FAS 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, all derivative instruments are recognized in the balance sheet at their fair values, and changes in fair value are recognized either immediately in earnings or, if the transaction qualifies for hedge accounting, when the transaction being hedged affects earnings. Effective January 1, 2006, the Company adopted the same recognition and measurement principles as allowed under new Canadian GAAP accounting standards as discussed in Note 5.

Prior to January 1, 2006, in accordance with Canadian GAAP, the Company disclosed the fair values of derivative instruments in the notes to the annual consolidated financial statements, but did not record such fair values in the consolidated balance sheet, except for derivative instruments that did not qualify as hedges. From January 1, 2004, derivative instruments that did not qualify as hedges were recorded in the balance sheet at fair value, and the change in fair value subsequent to January 1, 2004 was recorded in the income statement. The fair value as of January 1, 2004 was deferred and amortized into earnings in conjunction with the item it previously hedged. The reconciling items subsequent to January 1, 2004 relate to historical balances due to the fact that the adoption of the standards occurred at a later date for Canadian GAAP.

Under Canadian GAAP, the Company estimates separate annual effective income tax rates for each taxing jurisdiction and individually applies such rates to the interim period's pre-tax income of each jurisdiction. Under U.S. GAAP, the Company estimates the average annual effective income tax rate, excluding jurisdictions that generate net losses where the Company does not expect to receive a tax benefit, and applies that rate to the Company's interim period pre-tax income excluding the

interim period pre-tax loss of those loss jurisdictions. Additionally, U.S. GAAP requires that the effect of a change in tax laws be recorded upon enactment. Under Canadian GAAP, changes in tax laws are recorded upon substantial enactment.


	Three months ended September 30,				Nine months ended September 30,
	2007		2006		2007		2006

Additional provision due to different accounting principles described above	(6	)	5		(35	)	(18	)
Tax effect of U.S. GAAP pre-tax reconciling items	(22	)	(2	)	(25	)	(5	)

Total income taxes per reconciliation	(28	)	3		(60	)	(23	)

As discussed in Note 5, effective January 1, 2007, the Company adopted a new accounting policy under Canadian GAAP for uncertain income tax positions which conforms to the provisions of Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN 48"). The adoption of FIN 48 was required for U.S. GAAP purposes as of January 1, 2007. As a result of this adoption, there is no material difference in treatment between Canadian and U.S. GAAP for uncertain income tax positions.

In September 2006, the FASB issued FAS 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FAS 157 is effective for the Company in the first quarter of 2008. The Company is currently evaluating the statement's impact on its financial statements.

In February 2007, the FASB issued FAS 159, The Fair Value Option for Financial Assets and Financial Liabilities. This statement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. FAS 159 is effective for the Company in the first quarter of 2008. The Company is currently evaluating the statement's impact on its financial statements.

On October 2, 2007, the Company completed an offering of $800 million of 5.7% debentures due 2014. The net proceeds from this offering were approximately $790 million. The Company intends to use these proceeds (i) to repay its $400 million principal amount of 5.75% notes which will mature in February 2008, (ii) to replace funds used to repay its C$250 million principal amount of 6.50% notes which matured in July 2007, and (iii) for general corporate purposes. On October 20, 2007, the shelf prospectus under which the Company completed this offering expired.

On October 5, 2007, the Company completed the acquisition of Deloitte Tax LLP's Property Tax Services business. The unit will be known as Thomson Property Tax Services and will be included in the Thomson Tax & Accounting segment.

Also, on October 5, 2007, the Company completed the transfer of all liabilities and assets with respect to the Thomson Regional Newspapers Pension Plan ("TRN plan") to a third party. As a result of the transfer, the Company no longer maintains responsibility for the TRN plan. A gain of approximately $33 million will be recognized in the fourth quarter of 2007 in connection with this transaction.

On October 8, 2007, the Company announced three developments related to the proposed acquisition of Reuters:

On October 11, 2007, the Company announced that it had formed a partnership with a consortium of nine global securities dealers to seek to further expand TradeWeb, its electronic trading unit within Thomson Financial. The partnership will utilize TradeWeb's established market position to create a global multi-asset class execution venue for clients. Under the terms of the agreement, the dealers will invest approximately $180 million to purchase a 15% stake in an entity that includes TradeWeb's established markets, as well as the Company's Autex and order routing businesses, which will be named TradeWeb Markets. Additionally, Thomson and the dealers will fund additional investment in asset class expansion through a new entity, TradeWeb New Markets. Under terms of the agreement, Thomson's contribution to this new entity will be an initial cash investment of $30 million, with a commitment for an additional $10 million, and certain assets valued at approximately $30 million. The consortium will contribute $60 million, with a commitment for an additional $40 million, as well as certain contracts valued at approximately $180 million. Thomson will own 20% of TradeWeb New Markets and the consortium will own 80%. The infrastructure, including the existing TradeWeb platform, and management of TradeWeb Markets will support both companies. TradeWeb New Markets will pay a fee for services provided by TradeWeb Markets. Under terms of the agreement, these two entities will merge upon meeting either certain performance or time-based milestones. The ownership interests of the merged entity will be based upon the fair values of the two entities at the time of merger. Until the merger, Thomson will consolidate the results of TradeWeb Markets, reflecting the consortium's share of earnings as a minority interest, and reflect its minority share in TradeWeb NewMarkets as an equity investment. After the merger, the accounting treatment for the Company's investment will reflect its ultimate ownership stake and degree of control over the entity.

On October 12, 2007, the Company completed the sale of Prometric to ETS for $310 million and a 6% promissory note for $125 million due in 2014. The principal amount of the note is subject to adjustment based on the continuity of offerings from certain customer contracts.

(millions of U.S. dollars)		Stated Share Capital*		Contributed Surplus	Total Capital		Retained Earnings		Accumulated Other Comprehensive Income ("AOCI")		Total Retained Earnings and AOCI		Total

Balance, December 31, 2006		2,642		157	2,799		7,169		513		7,682		10,481
Opening balance adjustment for income tax accounting change (note 5)		—		—	—		(33	)	—		(33	)	(33	)

Restated balance, December 31, 2006		2,642		157	2,799		7,136		513		7,649		10,448
Comprehensive income:
	Net earnings						3,570				3,570		3,570
	Unrecognized net loss on cash flow hedges								(35	)	(35	)	(35	)
	Foreign currency translation adjustments								166		166		166
	Net gain reclassified to income								(127	)	(127	)	(127	)

Comprehensive income							3,570		4		3,574		3,574
Dividends declared on preference shares		—		—	—		(4	)	—		(4	)	(4	)
Dividends declared on common shares		—		—	—		(471	)	—		(471	)	(471	)
Common shares issued under Dividend Reinvestment Plan ("DRIP")		12		—	12		—		—		—		12
Repurchase of common shares (note 10)		(7	)	—	(7	)	(68	)	—		(68	)	(75	)
Effect of stock compensation plans		61		39	100		—		—		—		100

Balance, September 30, 2007		2,708		196	2,904		10,163		517		10,680		13,584

(millions of U.S. dollars)		Stated Share Capital*		Contributed Surplus	Total Capital		Retained Earnings		AOCI		Total Retained Earnings and AOCI		Total

Balance, December 31, 2005		2,599		127	2,726		6,992		245		7,237		9,963
Opening balance adjustment for net deferred gain on cash flow hedges (note 5)		—		—	—		—		51		51		51

Restated balance, December 31, 2005		2,599		127	2,726		6,992		296		7,288		10,014
Comprehensive income:
	Net earnings						729		—		729		729
	Unrecognized net gain on cash flow hedges						—		11		11		11
	Foreign currency translation adjustments						—		167		167		167
	Net gain reclassified to income						—		(19	)	(19	)	(19	)

Comprehensive income							729		159		888		888
Dividends declared on preference shares		—		—	—		(4	)	—		(4	)	(4	)
Dividends declared on common shares							(425	)	—		(425	)	(425	)
Common shares issued under DRIP		10		—	10		—		—		—		10
Repurchase of common shares (note 10)		(36	)	—	(36	)	(322	)	—		(322	)	(358	)
Effect of stock compensation plans		37		31	68		—		—		—		68

Balance, September 30, 2006		2,610		158	2,768		6,970		455		7,425		10,193