Frank J. Golden - Senior Vice President of Investor Relations James C. Smith - Chief Executive Officer, President and Non-Independent Director Stephane Bello - Chief Financial Officer and Executive Vice President.

Drew McReynolds - RBC Capital Markets, LLC, Research Division David Chu - BofA Merrill Lynch, Research Division Vince Valentini - TD Securities Equity Research William G.

Bird - FBR Capital Markets & Co., Research Division Andre Benjamin - Goldman Sachs Group Inc., Research Division Ato Garrett - Deutsche Bank AG, Research Division Toni Kaplan - Morgan Stanley, Research Division Tim Casey - BMO Capital Markets Canada Douglas M. Arthur - Evercore Partners Inc., Research Division Matthew Walker - Nomura Securities Co.

Ltd., Research Division.

Ladies and gentlemen, thank you for standing by, and welcome to the Thomson Reuters First Quarter 2014 Earnings Call. [Operator Instructions] And as a reminder, this conference is being recorded. I'll now turn the conference over to Frank Golden, Senior Vice President, Investor Relations. Please go ahead, sir..

Thanks very much, and good morning, and thank you, all, for joining us as we report our first quarter results. We'll begin today with our CEO, Jim Smith, followed by our CFO, Stephane Bello. Following their presentations, we'll open the call for questions.

[Operator Instructions] Throughout today's presentation, keep in mind that when we compare performance period-on-period we look at revenue growth rates before currency, as we believe this provides the best basis to measure the underlying performance of the business. Today's presentation contains forward-looking statements.

Actual results may differ materially due to a number of risks and uncertainties discussed in reports and filings that we provide to regulatory agencies. You can access these documents on our website or by contacting our Investor Relations Department. Let me now turn it over to the CEO of Thomson Reuters, Jim Smith..

Thank you, Frank, and thanks to those of you on the call for joining us. Today, we'll begin with a review of the first quarter's results, and I'll update you on the progress we continue to make. I will then turn it over to Stephane, who will review the results in more detail. Now to the results for the quarter.

In short, the year is off to a good start, with the first quarter's performance consistent with our full year expectations. As you've heard me say on several calls, the key is the trend line, not the performance in any given quarter, and the trend continues to improve. I'm pleased with the trajectory of the business.

As I said last month at our Investor Day, our actions are taking hold, and enabling us to build a much better platform to support future growth as we execute more effectively, launch better products and simplify the business, and we can see that from these results.

For the quarter, total revenues were up 1%, reflecting an exceptional period for Tax & Accounting, continuing good growth from IT and Science and a marked improvement for our Legal segment, all of which more than offset a decline in Financial's revenues. Our Financial business continues to make progress.

That said, given the subscription nature of that business and its lag effect, our progress will not translate into top line improvement in 2014. Simply put, Financial's revenue performance this year reflects last year's negative net sales.

However, the current trend in our net sales performance continues to improve, and we are making tangible progress on the cost side.

At the consolidated level, EBITDA rose 8%, primarily from lower severance charges this quarter as compared to the first quarter of last year, and underlying operating profit rose 14%, again, primarily due to lower severance charges. Adjusted EPS was $0.08 better than Q1 of last year. We've also made progress returning more capital to shareholders.

Since announcing our $1 billion share buyback program last October, we returned nearly $1.1 billion in capital to shareholders through share repurchases and dividends, and lastly, we are reaffirming our full year 2014 outlook. Let's now look at the results by big business segment for the quarter.

Financial's revenues declined 1%, which was expected in light of the negative net sales performance in 2013. The business continues to make significant operational progress, with substantial improvement in execution.

For example, during the quarter, we launched Eikon 4.0, as well as Accelus Org ID, an exciting Know Your Customer product in our Risk business. We also closed the legacy Reuters 3000 Xtra, with over 120,000 customers upgraded to Eikon.

Net sales, as expected, were negative for the quarter, though better than the first quarter of 2013 and the fourth quarter of 2013. In fact, net sales in both the Americas and Asia were positive for the quarter. That was offset by continued softness in Europe.

For 2014, we forecast better net sales than 2013, which should lead to improving growth next year. Now as you can see on this slide, we're no longer reporting 4 units within the Financial segment, given that the business is no longer managed under that structure.

As David Craig discussed at Investor Day, we are moving to a unified platform, which gives us the opportunity to now operate and manage as one business operating at scale. Prior to that, we had 4 business units, each with own development organizations, their own commercials, their own strategy, their own products.

This change has enabled us to simplify our structure, and remove costs. It also means we can spend in areas that drive the biggest benefits, while ending investment in duplicative areas. The Legal segment's revenues rose 2%, a nice rebound from Q4, with strong performance from our growth businesses, including Elite, Practical Law and FindLaw.

However, this was moderated by a decline in U.S. print revenues of 3% and by U.S. online legal information, down 2%. Tax & Accounting had a very strong quarter, with revenues up 13%, of which 10% was organic.

That was driven by strong growth across the business, including the Corporate business, which was up 22%, and the Professional business, which was up 10%.

IP & Science also had a good start to the year, with revenues up 4%, driven by subscription revenue growth of 5% and transaction revenue growth of 3%, and our global growth businesses continued to perform, up 7% for the quarter. And I would remind you that the GGO results are included within each of the 4 business segments.

Let me conclude by reiterating a couple of points we made at Investor Day that bear repeating.

First, we believe that going forward, we will achieve a gradual improvement in revenue performance, which is a natural evolution as our growth businesses comprise a larger proportion of total revenue, as new products take hold and as we continue to improve our competitive position.

Second, as we shift to an enterprise model, we have the opportunity to further reduce cost. And we have targeted $400 million of additional savings by 2017. These savings will provide bottom line momentum in the near term, while also enabling us to reinvest a portion in the business.

And third, through a combination of improving top line growth and taking advantage of scale initiatives and employing a more balanced approach with regard to the allocation of our free cash flow between tactical acquisitions and share buybacks, I firmly believe our business is fully capable of delivering steady, top line growth improvement and attractive bottom line returns.

Now before I turn it over to Stephane, I'd like to take a moment to recognize colleagues from Reuters News. Journalists Jason Szep, Andrew R.C. Marshall and the team who won the 2014 Pulitzer Price for International Reporting. The award speaks volumes about the dedication and courage of our journalists.

And it reminds all of us of the high level of professionalism to which we aspire every day across our company. With that, I want to thank you, and I'll turn it over to Stephane to discuss the first quarter's results in further detail..

Thank you, Jim, and good morning or good afternoon to you all. As Frank indicated earlier, I will speak to revenue growth before currency throughout today's presentation. This first slide provides a snapshot of our first quarter results, which do reflect the impact of charges during the quarter, consistent with what we announced last October.

And as mentioned in our press release, these charges had a $10 million negative impact at the EBITDA level. As a reminder, we still expect to incur a total of $120 million of charges for the full year, and we would expect the balance of the charges to be spread relatively evenly over the remaining 3 quarters.

Revenues were up 1% during the first quarter. Organic revenues were flat, which represents an improvement of about 100 basis points relative both to the same period last year and to our Q4 results. So this performance is very much in line with the gradual improvement in revenue growth we had been expecting as a result of our mix dynamics.

Overall, our Professional businesses grew 5%, 3% organic, while F&R declined 1% and went down 3% organically. Adjusted EBITDA in the quarter was up 8% with an EBITDA margin of 26.2%, which represented an improvement of 180 basis points from the prior year period. This increase was primarily due to lower onetime charges compared to Q1 last year.

In the first 3 months of 2014, charges totaled $10 million compared to $78 million in the first quarter of last year. Now excluding the charges from both periods, the margin in the first quarter of this year was 26.5% compared to 27% in 2013.

The 50 basis points decline was primarily the result of the revenue decline of Financial business, which I will discuss later in the presentation. Foreign exchange added 10 basis points positive impact on the margin during the quarter. Finally, underlying operating profit in Q1 increased 14%, again primarily due to lower charges.

Now let me provide you with some additional color on the performance of individual businesses, starting with Legal. During the quarter, our legal business grew 2%, and was flat on an organic basis. So this level of organic growth represents a 200 basis points improvement over our Q4 performance. Excluding the impact of U.S.

print, Legal's organic revenue growth during Q1 would have been positive 1%. Subscription revenues, which accounted for about 3/4 of the total were up 3%, 1.5% organically. Transactional revenues, 11% of the total, were down 2%. This was in line with our expectations. It was primarily driven by lower ancillary revenues from Westlaw in the U.S.

Turning to our profitability metrics. Legal's EBITDA increased 3%, and operating profit increased 7%. Now here's a more detailed look at the revenue performance within Legal. At a recent Investor Day, we introduced this new way of looking at revenues.

It allows us to focus our attention on the changing revenue mix of the business, as our growth business has become a larger proportion of total revenues. As a reminder, what we call our growth businesses include everything except core legal research in the U.S., both print and online.

So in aggregate, these growth businesses, which made up 44% of Legal's total revenue base during the quarter grew 7%, 4% organic, and this was driven by solid performance from Elite, Practical Law and FindLaw. U.S. print revenues, which represented about 15% of the total, were down 3%.

As indicated earlier, we expect to see mid-to-high single-digit revenue declines for U.S. print for the full year. And finally, U.S. online legal information, which is about 40% of total revenues, declined 2%. Turning to our Tax & Accounting business. That segment delivered a very strong quarter. Revenues grew 13%, of which 10% was organic.

Recurring revenues is about 80% of the total, grew 9% organically, and transaction revenues grew 11% organically. From a profitability standpoint, EBITDA was up 17%, and operating profit was up 22% in the quarter, with a related margin of 210 and 230 basis points, respectively, primarily reflecting the flow-through of the strong revenue growth.

As we always remind you, small movements in the timing of revenues and expenses can impact margins in any given quarter for the Tax & Accounting business, and as such, full year margins are more reflective of the segment's underlying performance.

As you can see on this final slide, we achieved strong growth in Tax & Accounting for the quarter across all segments. In particular, the Corporate and Professional segments delivered organic growth rates of 14% and 10%, respectively. Now turning to our IP & Science business. First quarter revenues were 4%, with organic growth at 3%.

And each of the IP & Science businesses recorded organic growth for the quarter, with Scientific & Scholarly Research performing particularly well and delivering 8% organic revenue growth. This revenue growth led to a 3% increase in EBITDA, with operating profit flat due to a $2 million increase in depreciation and amortization expenses.

EBITDA and operating profit margins declined 40 and 90 basis points, respectively, due to the dilutive impact of acquisitions made in 2013. And as you can see on this slide, the majority of IP & Science revenue is recurring.

During the first quarter, recurring revenues represented about 3/4 of the total, and it grew 5%, 4% organic, while transaction revenues in Q1 were up 3% and 2% organically. Now turning to our Financial & Risk business. Performance for both revenue growth and profit was in line with our expectations.

Financial & Risk revenues were down 1%, with a 2% contribution from acquisitions. The organic revenue was down 3%. This organic revenue decline reflected the continued impact of our sales performance over the prior 12 months period.

Now as Jim mentioned, the trend line in F&R's net sales performance is encouraging, as the first quarter net sales, although still negative, were better than the prior-year period, with the Americas and Asia both positive, and we anticipate this gradually improving trend to continue over the balance of the year.

The EBITDA margin and operating margins were both up 260 basis points, and the primary driver of the improvement was lower onetime cost compared to the prior year period. Excluding onetime costs from both periods, the EBITDA margin for F&R was down 60 basis points, primarily due to the flow-through of the 3% decline in organic revenue.

We anticipate seeing year-on-year margin improvement for the balance of the year, as expense savings have a greater impact as we progress through to 2014. And one of the key reasons we expect to see such a margin improvement over the balance of the year is related to the benefits resulting from the actions we took in the fourth quarter of last year.

We continue to realize savings from the headcount reductions related to platform shutdowns and other efficiency initiatives implemented over the last 18 months. However, the margin impact of the savings actions we announced at the end of last year will be greater as 2014 progresses.

This chart shows that at as we have simplified and continue to simplify the Financial & Risk organization, our headcount continues to decrease. As we mentioned during our recent Investor Day, we are targeting a 20% reduction over a 2-year period.

For perspective, F&R headcount stood at around 19,400 at the end of the first quarter, and is expected to be at around 18,500 by the end of the year. Looking at the Financial & Risk revenue in a bit more detail. Recurring revenues, which were 76% of the total, declined 2% during the quarter, 3% organically.

This decline was the result of the negative net sales performance in 2013. Transaction revenues, 13% of the total, increased 3%, but it went down 4% on an organic basis as a result of lower foreign exchange values across the industry. Recoveries, about 11% of total revenues, declined 1%, and as a reminder, recoveries are low-margin revenues.

Looking at revenues for the first quarter by geography. Europe, Middle East and Africa, which represents F&R's largest geographic segment, was down 3%, reflecting the continuing challenges, particularly in the European banking sector. Revenues in the Americas were flat, and revenues in Asia were up 1%.

Now let me turn to the review of our consolidated results. First quarter adjusted EPS was $0.46 per share, $0.08 higher than a year ago. This $0.08 increase was attributable to higher operating profit, which was primarily driven by lower charges, partially offset by a slightly higher tax rate.

For the full year, we remain comfortable with our guidance for interest expense of between $450 million and $475 million, as well as an effective tax rate for the year of between 13% and 15%. Turning to free cash flow. The first quarter is usually our weakest quarter from a cash generation perspective, and this quarter was no exception.

It is not reflective of what we expect for our full year performance, which to remind you, is between $1.3 billion and $1.5 billion.

While our free cash flow performance in the first quarter was negative, it was close to $100 million better than last year despite the negative impact of higher cash severance charges, which were about $40 million higher on a year-on-year basis. Again, this is from a cash perspective.

This year-on-year improvement was driven by better working capital performance and by lower capital expenditures. And finally, let me update you on our capital strategy. During the first quarter, we bought back about 8 million shares for a total capital outlay of $264 million.

Though from the announcement of $1 billion buyback program last October through the end of the first quarter, we had repurchased over 15 million shares for an aggregate capital outlay of $564 million.

And as Jim mentioned, over the past 6 months, we had returned nearly $1.1 billion to shareholders through a combination of share repurchases and dividends. Finally, at the end of the first quarter, our net debt-to-adjusted-EBITDA ratio was 2.3x, which was well within our target of 2.5x. So to wrap up, we are pleased with our start of the year.

And based on the first quarter results, we are reaffirming our outlook for the full year. Let me now turn it back over to Frank..

Thanks very much, Stephane, and that concludes the presentation. So I'd like now to open the call for questions, please..

[Operator Instructions] Our first question will come from Drew McReynolds with RBC Capital..

Maybe just 2 quick ones for me. Just on the Eikon situation. I'm just wondering if Frank or Jim, you can give us an update just on the kind of number installations and billing terminals that you have. And then just in terms of the U.S. legal print, obviously, down a little bit more modestly this quarter.

Can you help us just understand why the fluctuations in those organic growth declines quarter-to-quarter?.

Why don't I start with the second question first, and then come back -- and I think I'll kick the Eikon question to Stephane, if that's okay. The -- I think the simplest answer on the legal print question is seasonality. We publish on different cycles throughout the year. So it just depends upon what the publishing schedules are.

As we've said, we still expect that to be more a mid-single-digit decline for the full year, and we expect that's influenced by seasonality. As a kicker into the Eikon number, we finished the number roughly in line with where we were at the beginning of the year, and that's a net of solid gross sales and some cancellations.

And I would just remind you that this is going to be a little bit of a different journey this year than we had last year, where we were working very hard to do a new 1:1 swap out of Xtra 3000s for Eikon.

Now as we begin to move the functionality from the old Thomson ONE products onto the Elektron infrastructure and accessible through the Eikon platform and viewer, this will be a slower and steadier journey, and one that will be managed to maximize revenue, as opposed to just move people as quickly as we possibly can..

And if I can just follow up there, Jim.

Was that, kind of in line with what you're expecting as you kind of kick off the Thomson ONE migration?.

Yes, it is absolutely in line with our expectations..

Our next question is from Sara Gubins with the Bank of America..

This is David Chu for Sara Gubins. In Legal, it appears that some costs were pushed back.

Can you help us think about Legal margins for the rest of the year?.

Sure, David. It's Stephane answering. I don't think there's any change to what we said earlier. I think, for the full year, we would still expect the Legal EBITDA margin to be flat to maybe down slightly. And that's really a combination of 2 factors.

One is the revenue mix change, which is very favorable from a revenue perspective, as the growth businesses are representing a bigger proportion of the total, but this growth businesses have a lower margin than the very, very profitable U.S. print and U.S. online businesses.

And that will be offset by continuing actions, efficiency actions that the Legal business will take. So overall, if we can get the Legal business to continue to gradually improve the top line growth, as you've seen very much in the first quarter, they were up 200 basis points.

I'm not expecting this kind of improvement every quarter we see, but it was great to see them move back up from the negative R&D growth we have in the fourth quarter. That's really our priority in Legal. And if we can do that while maintaining margins, I think that will be our objectives for the Legal business..

Okay, great. And then just one follow-up, so can you speak to the timing of shutdowns for the data networks? Just wondering how much there is left to do and the timing of these events..

Sure. I mean, like that's very much the area of focus now. And I think it goes back to the earlier question of Drew, right, whereas, last year, we were very focused on transitioning from -- or essentially upgrading all the 3000 Xtra customers onto Eikon, which was a much better front-end platform than 3000 Xtras was.

Now we're very focused -- the F&R team is very focused on the simplification of the back end of the system, so very focused on the full-tick network. You remember Tim Collier speaking about that at Investor Day. There, the migration of clients have been fully migrated.

We're still running the platform in parallel for a few more weeks, but we're well ahead with that migration. The next big one is the band-optimized network, which we are in the process of migrating. That one is going to take a little longer. I would expect that we would be done with this one by the end of this year or very early next year.

And if we do that, I think we'll have the largest proportion of our back-end systems on Elektron, which is -- which will be really a great achievement..

Our next question is from Vince Valentini with TD Securities..

Two-pronged question on the transformation program.

Any further visibility on when you'll identify any restructuring costs and announce those? And secondly, I'm wondering, as you do all this massive real estate consolidation, are you taking a look to customer service? Is there a way to sort of optimize the efficiency and effectiveness of your customer service that, I think, is pretty fragmented across all your business groups? Are you creating sort of larger call centers as you do this transformation?.

Yes. Look, that's a great question. To the first one, no. We're not at a point where we have any further visibility. We're working the plan and looking at everything. And we do not, at this point, anticipate or see any future charges that we haven't announced to this point.

We'll do -- if that opportunity presents itself, we'll let you know as soon as we know, but we don't see that yet. As far as the location strategy, we think there's a number of positives from looking at our location strategy.

The cost benefits are obvious, but our location strategy is really being led by the business teams, and it's all about where we want to interface with customers.

It's where we want our talent located, and I think there is a real opportunity for us to improve our customer service by reflecting better our customer footprint in our -- where we locate our workforce. So I think there are a lot of positives to the real estate strategy that we're looking at right now..

We'll go next to William Bird with FBR..

I was just wondering if you can speak to F&R, the wider, organic revenue decline seem to somewhat counter to the improving net sales trend you've seen recently. So I was just was wondering why that is and what you expect going forward..

Sure. Let me try to take that one. I think that the -- you're right. I think that the numbers we publish don't do justice to the progress that's happening on the line, and we -- F&R has been at minus 3% organic now for like the last 4 quarters, I think, if I'm correct.

If you look at the rounding of the number, you can see that, actually, in Q1 of last year, they were at like -- I think it was like minus 3.3% or something, and this year, they're more like minus 2.5%. So there is underlying improvement. It's modest, but we never expected it to be really accelerated and really flat.

The other point I would make, following the first quarter, is that there's one piece of the revenue growth that we can't really predict, and that's the one that's related to transaction revenues. And in Q1 of last year, you'll remember that transaction revenues were actually up slightly.

Organically, I think it was up 2% or 3%, and this year, they're down 4%. So that also has a dampening effect on the overall organic growth rate of F&R..

And could you speak to what you're seeing in Europe?.

Look, as we said, right, I think looking at the leading indicator, which is net sales, Europe was the only region which was still negative in Q1. So there's a little bit of improvement, but it's still, by far, the region that's pulling us down the most on the F&R business. The other 2 regions were positive this quarter.

For perspective in Q1 of last year, all 3 regions were negative. So we've seen progress everywhere, but the progress has led to essentially a move from negative to positive in Q1 for net sales for the Americas and for Asia, but that was not the case yet for Europe..

Our next question is from Andre Benjamin with Goldman Sachs..

There's a lot of attention to the desktops within the F&R business. I was first hoping you could provide us with the percentage of F&R business that's desktop versus the rest, and then maybe give us a little bit of color on what you're seeing in terms of trends for feed demand and what the growth rates have been there..

Sure, Andre. I think we've said in the past that the Financial desktop business represents a little less than 50% of F&R's total revenue base, so probably around 45% of the revenue base, and that's obviously the portion of the business that's declining right now.

The rate of decline is -- from a revenue perspective is still in the mid-single-digit area at this point in time..

And with regard to the feeds in terms of what you're seeing in terms of demand for that business?.

Feeds actually is more of a growth area. Both the market is growing, and our business is growing too. So demand remains actually quite strong in the feed business..

I guess, without pushing on specifics, then maybe shifting to the tax business, doesn't get really discussed very much, growth accelerated the last 3 quarters to double-digit on a constant-currency basis.

Could you maybe talk a little bit about the pickup there and whether we should assume that, that normalizes back down to the kind of mid-single digits it's tended to be or if there's something special going on that we should assume that continues?.

I would say that the 10% organic growth really was extremely pleasing for us, and it really demonstrates the tremendous work that the management team has done there that the -- through the investments that they have done, and more importantly, how well accepted the product is.

And you can see that, that growth rate is very well balanced across the segments, both in the Professional and the Corporate side. And now the smaller government business is kind of coming back, following some of the issues we had last year.

I would expect that for the full year -- I would probably not expect to see like the continuation of double-digit organic growth rate.

I mean, that would be quite remarkable, but I do think there's -- this is a business that has the potential to grow mid-to-high single digit, and that's probably what we would expect for the full year for Tax & Accounting..

We'll go next to Ato Garrett with Deutsche Bank..

Two quick ones for me. One, can you give me a little bit more of an update on Practical Law as you've been deploying that into the U.S., just want to get a sense of how that's going relative to establishing its footprint here.

And then two, just wanted to dive into the improving trends of the net sales a little bit to see if you guys could disaggregate that between trends as far as cancellations moderating or gross sales improving..

Why don't I take the first one, and then the second one to Stephane. Yes, I think we're very encouraged by Practical Law in the U.S. And as we begin -- it's been a very, very successful integration for us, particularly in the U.K.

And as we've got our editorial teams together in the United States, I think we see more and more opportunity to ramp up that kind of practical know-how solution from a Practical Law perspective and incorporate that into our legal solutions at an even faster clip.

So the short answer is that we have exceeded all of our kind of near-term goals for that acquisition, and acceptance is proving to be very strong. And demand for us to ramp up even faster is there. So that's a big success story for us..

And on the net sales coverage you were asking, we have been -- steady improvement in our, what we call our gross sales for -- over the last 2 quarters actually. And the first quarter gross sales were actually -- showed a marked improvement relative to what they were in Q1 last year.

What's offsetting that is the cancellation we continue to see, and these cancellation come in, like the large accounts, as Jim mentioned, in his remarks primarily as large banks continue to reduce headcount..

Okay, great.

And then I think that sounds like those cancellations are probably more concentrated within Europe, being that's where your sales are still -- the net sales are still negative there, but then in the U.S., would you see that trend stemmed a bit?.

Yes, it probably stems a little bit in the U.S., absolutely. I would say, overall, the retention rate in the first quarter was about flat. And what we would expect, as we mentioned, is that as the year progresses we may see some improvement in the retention rate due to the fact that we get a much better and stickier product than what's typical ..

And next we have Toni Kaplan with Morgan Stanley..

There have been a couple of media reports in the past few months on further expected sell side cuts at certain large banks, especially in Europe. So obviously, it isn't a new trend, something that's been going on for a while now.

But do you feel the trajectory of net new sales in F&R being more at risk now than you thought last quarter? Or do you feel like the operating environment is still about the same like it's been, challenging?.

I think -- look, it's a good question, and we see the same headlines that you do. And obviously, we're in constant communication with all those customers, and I -- we think that the environment remains challenging. Our biggest customers are the world's biggest banks, and they're hardly in a state of normalcy or back to the good old days.

I think we can all agree to that. So we think it's a continuing challenging environment, but it has been for quite some time, and I don't -- it doesn't feel to us like it's worsening. In fact, it -- we are at a point -- and as I said last year, where it's not everything getting worse all the time anymore. There are real positive pockets out there.

And even in a choppy and tough environment, we are finding opportunities to grow because whenever we can be in a position to help those big banks who are all struggling with their costs, where we can be in a position to help them reduce their cost, when we can be in a position to help provide industry utilities that can help take costs out by doing things that they can all no longer afford to do for themselves, that's a real opportunity for growth.

So in some ways, the current environment has opened the door for us to have broad strategic conversations with our biggest customers that we wouldn't have had 5 years ago because folks are considering a whole range of services.

And while -- we all love a more robust environment for the big sell-side banks, I have to say that there is opportunity within the current environment today. If you look at various pockets, if you look at our Risk business, for example, was up 11% or -- in the first quarter all in. And that's a positive story for us.

Our compliance products and services, the reason we launched this Accelus Org ID product is that we think there's a great deal of opportunity for us to grow there. So yes, I expect it will remain a challenged environment for our largest customers, particularly in Europe right now, but there's opportunity in that as well..

Our next question is from Tim Casey with BMO..

Could you reconcile your comments on -- you mentioned you thought the you were making tangible progress on the cost side, yet you indicated margins were down in the first quarter in F&R if we x out the severance charges.

Could you reconcile those comments for us?.

Sure, Tim. Let me try to take this one. Actually, the first quarter results were very much in line with what we expected. And as I mentioned in my remarks, that the actions we took at the end of last year will have a greater impact on the expense base as the year progresses.

The simple reason for that, I think, is that, as we've seen -- if you were to look at our headcount number at the end of last year and what it was at the end of the first quarter, you see a big decrease.

However, because of the way the notification rules work in certain countries, particularly in Europe, many of the people actually left later in the quarter. So you didn't see the full impact of the expense benefit in Q1, but it should become more transparent in the second quarter..

We will move on to Doug Arthur with Evercore..

Stephane, 2 questions.

The $68 million drop in severance in the quarter which -- I mean, as you guys are explaining it, explains most of the margin improvement, irrespective of the $120 million in charges that you're marking for '14, is that -- from a quarterly point of view, is that going to be the biggest delta that you see for the remaining of the year on the severance line?.

Yes, with the exception of Q4. You see we took like a very large severance cost last year also. But if you exclude that one, which we clearly identified, there was not a lot in terms of severance, nothing really material meaningful in Q2 or Q3..

Okay. And then just a follow-up on Legal.

The 2% decline in online legal, is that something you think flattens out as the year goes on? Or how do you see that playing out?.

Well, that was impacted partially by transaction revenue within Westlaw, as I mentioned. So that's a little harder to predict. The same issue we have in Legal and Financial for the proportion of the revenue base that's transactional in Q1.

This is what we call the ancillary revenue, which is really transaction revenues associated with Westlaw, show a bigger decline than maybe in prior quarters. So it really will depend on that aspect, I think, to see the overall evolution of the core online subscription rate..

That will come from Matthew Walker with Nomura..

Just a quick clarification, if you could, on one thing which is Legal and other thing which is the buyback. On the buyback side, I guess, you've noted through quite well, you've got only $400 million or so to do in the last 3 quarters.

Does that suggest that you're going to increase the buyback figure? Or if you have room to do so? And the second one was on Legal.

When you look at the 4% for the non-online and the non-print business, the 4% organic growth, what was the figure for Q4, if you have it for that definition of revenue, i.e., the growth revenues, what was the growth rate in Q4 for growth Legal?.

Matthew, let me take the first question, the buyback while the team is frenetically researching the answer to your second question. Hopefully, we'll have it by the time I'm done on the buyback issue. But you're right, I mean, our intent was to move forward with space on the buyback.

When we announced the program, we said quite clearly that our intent was to complete that $1 billion buyback and that it was not like a figure that we would not intend to completely achieve.

I think what's important is you heard through our comments that we've stated very clearly that we view share buyback as another important lever of our overall value-creation toolbox going forward.

So obviously, we need to review the next [indiscernible] once we complete the first $1 billion buyback program that you can read from our comments that I think the intent was not to do one and then finish it there.

We will, obviously, review like the circumstances when we're closer to the end of this $1 billion buyback, and see what other costs for capital there might be at the time, but as I said, share buyback is an important lever for us to create shareholder value by returning capital to shareholders..

And Matthew, as it relates to the fourth quarter, growth rates for those growth businesses in Legal, we'll follow up with you after the call on that. So that will conclude our call today, and we'd like to thank you, all, very much for joining us..

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