During our call today, we will be discussing a number of non-GAAP financial measures as that's how we manage the business. For example, when we discuss revenue growth, we will be referring to the non-GAAP measure core revenue growth before the effect of foreign exchange, unless otherwise noted. When we discuss operating income, operating margin and EPS, these will all be on a non-GAAP basis before any noncore gains and charges.A reconciliation between these and other non-GAAP financial measures and the most roughly comparable GAAP measure can be found in the schedules to our earnings release. They can also be found in the supplemental reconciliation schedule that we post on the Investor Relations section of our website. Later today, you will also find a transcript of this call on our Investor Relations site. With that, I'll now turn the call over to Sara Mathew. Sara? Sara Mathew Thank you, Kathy, and good morning, everyone. Here's what you can expect on today's call. I'll begin with a brief review of our first quarter results. Next, I will discuss our performance in North America and expectations for the rest of the year. I will close with the recent developments in China. This will provide you with a high-level rationale for the revised guidance expectations in 2012. Once I am done, Rich will follow with a detailed discussion of 2012 with an emphasis on the North American business. Finally, Byron, Manny, Rich and I will be available to take your questions. Last night, we announced our first quarter results. Core revenue was up 1%; operating income, up 3%; EPS, up 5%; and year-to-date free cash flow was $152 million. Simply put, I am disappointed with our top line performance, especially in North America, which was down 1% to prior year after 2 quarters of growth in the second half of 2011. The shortfall in North America was concentrated in Risk Management Solutions, or RMS, where reported revenue was down 5% in the quarter and partially offset by growth in Sales & Marketing.
Let me begin with the specifics on the RMS miss. This context, we expected RMS to be down 2% in Q1, including a 1 point drag from the accounting changes we discussed with you in the fourth quarter call. Our 5% decline in RMS is 3 points worse than expected, due primarily to sharp declines in project revenue and credit contracts outside of DNBi. The miss occurred late in the first quarter, giving us little time to respond.I'll begin with DNBi. Our core DNBi performance was in line with expectations. Retention was in the low 90s and lift returned to the mid-single digit range after a dip in the fourth quarter. Moving to the non-DNBi business. These customers access D&B data through subscription plans, usage-based credit contracts and projects designed to address specific issues. We are seeing 2 trends with these customers. First, an increase in customers moving to smaller usage-based plans in an attempt to save money in the near term. Of note, if they exceed the allotted usage, we will see incremental revenue later in the year. Second, we saw a decline in project-based revenues as project spend is often viewed as discretionary. Stepping back, the declines in these 2 areas reflect a certain cautiousness in customer spend that we did not see coming, and we believe this could persist throughout 2012. Based on what we've seen to date, we now expect full year RMS revenue trends to be negative, down in the low-single digit range versus our prior expectation of flat performance. Rich will provide additional details in a moment. Moving to S&MS. We continue to see solid results driven by value-added solutions and growth in our Data-as-a-Service, or DaaS offering. This includes D&B360, a product for the CRM space, and D&B Direct, which allows us to embed our data into existing customer applications, opening up new markets and new opportunities for D&B. Read the rest of this transcript for free on seekingalpha.com