Good morning. Thank you for standing by, and welcome to Booz Allen Hamilton's earnings call covering fourth quarter and full year results for fiscal 2013. [Operator Instructions] I'd now like to turn the call to Mr. Curt Riggle.

Thank you, Shannon, and thank you, all, for joining us today for Booz Allen's Fourth Quarter and Full Year Fiscal 2013 Earnings Announcement. I'm Curt Riggle, Director of Investor Relations. And with me to talk about our business and financial results this morning is Ralph Shrader, our Chairman, Chief Executive Officer and President; Sam Strickland, Executive Vice President and Chief Financial Officer; and Horacio Rozanski, Executive Vice President and Chief Operating Officer. We hope you've had an opportunity to read the press release on our fourth quarter and full year earnings that we issued earlier this morning. We have also provided presentation slides on our website, and we are now on Slide 1. As shown on the disclaimer on Slide 2, please keep in mind that some of the items that we will discuss this morning will include statements that may be considered forward-looking and therefore, are subject to known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. Those risks and uncertainties include, among other things, general economic conditions, the availability of government funding for our company's services and other factors discussed in today's earnings release and set forth under the forward-looking statements disclaimer included in our fiscal 2013 fourth quarter and full year earnings release and in our SEC filings. We caution you not to place undue reliance on any forward-looking statements that we may make today and remind you that we assume no obligation to update or revise the information discussed on this call. During today's call, we will also discuss some non-GAAP financial measures and other metrics, which we believe provide useful information for investors. We include an explanation of adjustments and other reconciliations to our non-GAAP measures in the most -- to the most comparable GAAP measures in the fiscal 2013 fourth quarter and full year slides. It is now my pleasure to turn over to our CEO, Ralph Shrader, and he will start on Slide 3.

Thank you, Curt. Good morning, and thank all of you for joining us today. A lot has happened in our nation, our industry and the financial markets since our last earnings call at the end of January. Sequestration officially took effect on March 1, and the lead up to it created significant uncertainty. As we report today, the effects of sequestration on our firm have not been material from a financial results standpoint, but the impact on our clients and on citizens and businesses across the country is very real. As a business leader, I implore Congress to end the blunt instrument of sequestration and tackle the tough choices necessary so we can make smart cuts where appropriate and maintain an effective and steady level of funding for national priorities. Political issues aside, I stand here today feeling both grateful and hopeful. I have the highest appreciation for our clients in the U.S. government and military who are charged with protecting national security and providing citizen services. Their professionalism and patriotic dedication to the mission in spite of uncertainty, budget cuts and furloughs is truly inspiring. I'm grateful to Booz Allen's people who have been affected by structural change in our industry that requires our firm to reduce costs for compensation and overhead in order to be competitive in winning contracts and delivering work in this environment. Our employees' professionalism and dedication in doing more for less has been truly impressive. I'm proud of those in Booz Allen's management ranks who have adapted to the changes in demand and cost pressures and are today managing a dynamic business productively and profitably. The performance of many underlies the fiscal 2013 top and bottom line results we're announcing this morning. Here are the financial headlines for fiscal year 2013. Full year revenue…

Good morning, and thank you for joining us. We are now on Slide 4. As Ralph described a moment ago, our fiscal 2013 has been a challenging but successful year, one in which we have had to make cutbacks in the near term to help position for the long-term strength of our institution. We take pride in the way we have executed our business, and the outcome of that execution is demonstrated in the financial results that we present today. For the year, we maintained our annual revenue close to last year's level and continued to expand margins and grow adjusted earnings. In these challenging times, I think that's a noteworthy accomplishment, and it's result of our very proactive approach to managing the business to adapt to changing circumstances. Now Horacio will talk about Vision 2020 and our efforts to position ourselves for long-term advantage and build our capabilities in the areas where we see growth opportunities. We've been proactive in the short term, too, starting as early as January 2012, when we took action to reduce cost in anticipation of revenue declines. Quarter by quarter since then, we've continued the effort to manage cost by aligning staffing levels much more closely against client demand, reducing infrastructure spending and more carefully managing compensation. These changes have resulted in our evolution into a much more tightly managed business that is well positioned to adjust quickly to the changes in our marketplace. The proof of that is reflected in our quarterly and full year financial results, which showed improvement as the fiscal year progressed. Now let's look at some of the key results and the factors that drove them. Gross revenue for full fiscal year 2013 was $5.76 billion, a 1% increase (sic) [decrease] over fiscal year 2012. Inorganic revenue for the…

Thank you, Sam, and good morning, everybody. You've heard us discuss what we call Vision 2020 now in several of our earnings calls. Today, I would like to provide some updates on where we are, where we're headed and what this means for our business. We started this effort more than a year ago, with a broad discussion with our leaders about our aspirations as a firm, followed by extensive research and analysis on how our core markets may change over the coming years. At the same time, we took an objective look at our internal business, including service offerings, operating model, cost structure and pricing. Finally, we benchmarked our people model against our competitors' and other world-class companies' to understand how we stack up. We left few stones unturned. What emerged from Vision 2020 is a renewed focus for our business and a renewed vision statement. Allow me to read it to you. "Booz Allen Hamilton is committed to ensuring that our clients succeed by integrating leading ideas and technologies into their missions. We strive to operate as a strong independent public company that acts with integrity and offers our people unparalleled professional opportunities to thrive in diverse collaborative teams." Now the core of this vision is the idea that we can maximize results for our clients by leveraging together our premier consulting franchise, our deep client relationship and an increased focus on engineering and technology. We're confident that this approach will drive new growth opportunities and strong financial results for our firm in the medium term, as well as a more defensible core business position in the immediate future. To ensure that this vision becomes a reality, last fall, we launched an ambitious change agenda, which is currently underway. A key element of our agenda is to strengthen…

Thank you, Horacio. We are now on Slide 9. Last quarter, we elected to delay providing guidance for our fiscal year 2014 due to the uncertainty regarding the budget and how our clients would be affected by and in turn, accommodate sequestration. Now with full year consulted with the -- excuse me, now with a full year continuing resolution in place and the across-the-board nature of the sequestration cuts in effect, more clarity exists for the first half of our fiscal year 2014, which coincides with the remainder of the current government fiscal year. It's important to note that uncertainty regarding the government's fiscal 2014 budget remains. That said, for the purpose of forecasting our business, we have assumed that the government fiscal year 2014 will start with a continuing resolution as it has for the past several years and that sequestration will remain in effect at least through our fiscal year 2014. Through our ongoing conversations with clients and the actions they've taken to date, we believe we have enough insight into the situation to provide the following full year guidance for our fiscal 2014, which began on April 1, 2013. At the top line for fiscal 2014 ending March 31, 2014, we expect a low-single digit decline in revenue as compared with the prior fiscal year. At the bottom line, our guidance is for diluted earnings per share is to be in the range of $1.47 to $1.57 per share, adjusted diluted earnings per share to be in the range of $1.55 to $1.65 per share. For fiscal 2014, we are expecting an effective tax rate of 40.5% and a fully diluted share count of approximately 149 million shares.

Thank you, Sam, Ralph and Horacio, and thank you, all, for listening to our summary of results and outlook. Our Senior Vice President and Corporate Controller, Kevin Cook, is here with us as well to answer your questions. Shannon, can you please provide instructions for the question-and-answer session of our call?

[Operator Instructions] Our first question is from Bill Loomis of Stifel. William R. Loomis - Stifel, Nicolaus & Co., Inc., Research Division: Just -- Ralph and Sam, just when you talk about sequestration, and that's factored into your '14 guidance, and you've looked -- you've talked to customers on what they're planning, one thing we're hearing is that customers haven't heard from their bosses so they're not being very specific on the cuts, particularly in the back half of the year, that sequestration will have, and it's been pretty slow in specific actions. Can you just tell us a little more about what you thought about in your fiscal '14 guidance for a low-single digit? Are you expecting that what clients have done so far is what will continue and there's going to be no additional more aggressive actions in the coming couple quarters?

Well, Bill, I guess it depends on how one defines aggressive action, of course. But as you can see by forecasting a slight decline in revenue, we have baked in what we believe will be the -- let's call it, a reasonable range of possible actions that the government could take based on our conversations with our clients. So we've tried to make sure that we stress-test our bottom line forecast to make sure that we can fall within that range as well. So it obviously involves a bit of estimating what the clients are going to do, but we feel like we have a reasonable handle with, let's call it, sufficient contingencies baked into our outlook that we're comfortable putting up this outlook. William R. Loomis - Stifel, Nicolaus & Co., Inc., Research Division: Okay, and just one follow-up on that on the fiscal '14 revenue outlook. What is the organic growth in there? So if we take DSES out, what would it be for fiscal '14?

I don't know the percentage. I think that DSES would probably add somewhere in the neighborhood of $200 million or so of revenue for fiscal 2014. William R. Loomis - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And they added $100 million in fiscal '13?

Right. I'm sorry, that would be the net increase. William R. Loomis - Stifel, Nicolaus & Co., Inc., Research Division: Net increase, got it.

Yes.

Our next question is from George Price of the BB&T Capital Markets. George A. Price - BB&T Capital Markets, Research Division: Just going back off of Bill's question, the DSES. So DSES came in -- so $100 million in revenue. I think you -- for this year, you were talking about $110 million to $120 million. Can you kind of give us some color on what moved away in that revenue stream and how you're thinking about that for DSES in fiscal '14?

The -- well, I think what moved away, there's -- DSES' reasonable -- DSES' billable expenses run somewhere in the 50% range, and those are a bit difficult to predict. So I believe that there were actually some of those billable expenses that were recognized earlier by DSES than the closing date, so those did not make it into our set of financial statements. George A. Price - BB&T Capital Markets, Research Division: Okay. And if -- so I guess, if I ballpark that, given the $100 million and the incremental $200 million, so about $300 million next year, so you're looking at roughly, on an organic basis, 5 to -- with a low-single digit decline, 1% to 3%, so you're looking at roughly 5% to 6% organic decline year-over-year. I mean, is that a reasonable way to look at it?

You know what, that's -- I haven't done that math in a bit. But certainly, if that math works, that's the way to calculate it, yes. George A. Price - BB&T Capital Markets, Research Division: Okay. Last thing on GFY '14, you've also talked about some of the revenue impact stemming from, I think, a lower mix of indirect versus direct labor. And obviously, I think that's been part of what's been behind your ability to manage margins so well in the environment. Is there any way to quantify that impact at all in terms of what that's doing in fiscal '14?

Sorry, I'm going to have to parse that question for me again. If you're talking about the margin compression, I don't -- we clearly don't get in public conversations around things at that level of detail. What's clear is that the success in this business is managing your indirect costs in relation to the direct labor you're able to sell. I mean, that's the key to managing the business profitably, and we're very focused on that. And certainly, the change in our organizational structure that Horacio talked about earlier is trying to make sure we're well positioned to be very agile in this environment so we can respond to changes, both that we expect and more importantly, that we don't expect, that happen to us.

Our next question is from Brian Gesuale of Raymond James. Brian Gesuale - Raymond James & Associates, Inc., Research Division: Just a couple of questions here. Wondering if you can -- in your conversations with your customer base, if you can kind of give us any color or differences between what your defense clientele is saying versus your civil clients and how those markets are either converging or diverging.

This is Horacio. I'll take care of that. I don't know that the differences in clients are at the civil versus defense level, as much as they are inside each agency and depending on the role they play and the mission that they occupy. And so on the civil market, you have health clients that are doing extremely well. You have the VA, which has been exempted from sequestration, and their budgets are unaffected. In defense, you have again, the different services being affected differently by the changing environment, the drawdown from Afghanistan. And so it's really more at the individual client level where we see differences, and a lot of what we're trying to do, as Sam pointed out, is adjust to each one of those individual client portfolios and really go where the opportunities are and serve those clients with what they need as best as we know how. Brian Gesuale - Raymond James & Associates, Inc., Research Division: Great, that's very helpful. Just a follow-up. Given your views for sequestration and continuing resolution, when do -- what do you expect the headcount cadence to be like over the next several quarters, maybe going out 12 months? When do we start to maybe see -- you guys have managed that very tightly. When is the right time to maybe start to expand that a little bit?

Well, there's sort of 2-part answer to that question. We continually expand the number of staff in certain areas. I mean, there are growth areas within the firm that we've talked about in terms -- like cyber and cloud and some of our technology areas. At a macro level, we expect headcount to continue to decrease during the year. But clearly, we'll take a look at midyear, let's see what the funded backlog looks like as of September 30, for example. When we start to see the market normalize a bit, then I think we'd probably feel more comfortable saying, "Okay, let's start adding staff for growth." But make no mistake, we are adding staff in our investment areas now. We're just also cutting back staff in those areas where we're not seeing growth opportunities. Brian Gesuale - Raymond James & Associates, Inc., Research Division: Okay, Sam, that's great. And just one final one, and I'll jump out of the queue. The DSES was your first acquisition in quite a while. You've now had it for about 6 months. How's that integration going? Any things going better that -- or more synergies than you thought? Or how should we think about that? And that's it.

Well, I think we're -- as always, with any integration, there are always a few surprises here and there. But in general terms, I think we're very pleased with the way things have unfolded. We, in fact, got the capability that we were expecting to get, and that's the most important thing. The culture seems to fit pretty well. So we're busy now trying to ensure that we can both protect the business that we have from DSES and also leverage that throughout the rest of -- leverage their capabilities throughout the rest of our markets and vice versa. So we're working those pretty hard, and so far, we're pretty pleased.

[Operator Instructions] Our next question is from Tim McHugh of William Blair. Timothy McHugh - William Blair & Company L.L.C., Research Division: First, just want to ask, given the other inputs you've given to us about fiscal '14, it would appear like you're looking for a kind of continued margin improvement next year. I guess, given the organic decline, can you give us kind of some of the factors that are driving that?

Well, we will -- again, I do try and simplify the business so I can keep track of it, but the key is just managing your indirect cost in relation to your direct labor. So we will continue to work our -- the indirect cost side. We'll continue to invest in those areas where we think there are higher margins. So it's just going to be through good active management, managing very closely when it comes to both adding staff and -- when we have new work and off-boarding staff when we -- when the work goes away. So it's just going to be through aggressive cost management. Clearly, we will also take a look at, particularly, our incentive compensation, which, if you go back in our -- with our partnership culture, the institution is very used to its incentive compensation moving up and down based on the success of the business. As a shareholder, I think that's right, so we'll continue. That would be one of the levers we have as well. Timothy McHugh - William Blair & Company L.L.C., Research Division: Is there -- the ability to take cost out, is it more weighted towards, it sounds like, the indirect cost? It sounds like you have your staffing level pretty well aligned and utilization, so it's more about the SG&A or indirect cost at this point.

Yes. And so it looks -- again, there are certain areas where we could drive utilization up, and we'll continue to look at that. Utilization is generally a function of how many excess staff you have. It's a function of, let's call it, the friction in the business as staff move from one job to the next, and we have invested heavily in the last 18 months or so in getting. We could see this coming, and we said, "Geez, that was an area that we needed to improve," so we feel like we've got much better at redeploying staff quickly as jobs come and go. That's particularly important for a business like Booz Allen, where we have a lot of active task orders. We're not sitting on 5 or 6 5-year task orders. We're sitting on 4,000, 5,000 active task orders, which are churning on a regular basis. So that ability to redeploy staff quickly is incredibly important, and it's something we've been investing in for the last, say, 18 to 24 months. And I'm not going to say we're perfect at it. I don't know that you ever get perfect at that it, but I think we've gotten pretty good. Timothy McHugh - William Blair & Company L.L.C., Research Division: Is there -- I mean, you guys took a fairly aggressive cut to the -- kind of the executive level and some of your partners, I guess, a little over a year ago. And I guess as we look at those indirect costs, is there a point where it starts to get more painful for the organization to keep cutting in those areas? Or do you feel like there's still a lot of room to do that?

Well, I think we -- I mean, we -- it's always painful, Tim, as you can imagine because, of course, generally, you're dealing with people, right? We're not -- there's not -- I mean, that's the major cost in those businesses. So it's not something that we do lightly. It's something that we work very, very hard. But I would never say that it -- I mean, it's been painful having to make adjustments, and then, the partner course [ph] we did last January, that is incredible thing.

But I think it's important to understand that while Sam talks about it being painful, which we all agree, we have a very, very solid cadre of top management talent in this organization, and it goes below the level of partner. So we have a very strong cadre of folks that run all the way down through our vice president and principal senior associate levels that are very strong at managing this business. The other thing that's important to us is client contact, client relationships, being deeply involved with our clients is a hallmark of how we operate. And so I don't think, as an organization, we're ever going to compromise the idea of being able to serve a client to be able to cut costs. I think that's one of the things that we are very mindful of is that we have the right team on the field and the right deployment of talent. Sometimes it's a matter of realigning that talent, and I would like to think that we're doing a much better job of realigning as opposed to simply cutting because one of the, perhaps, inferences to draw from your question is, would we cut more deeply to cut costs just because we had to cut costs at the risk of giving away some of these other items. And the answer to that is a flat out no because we value that too much, and indeed, that really is the thing that distinguishes us in the market. So I think it's this deep talent reservoir that enables us the flexibility to do the things that we're doing, and I think we will continue to manage that and manage it effectively. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay, that's helpful. And one last one on the margins. Just as we think about DSES' impact, is it fair to think that's still a lower margin? Or as you blended that in, is it not really much of a difference versus the core legacy business?

Well, I think as we announced when we did the acquisition, because they tend to be -- have a higher percentage of billable expenses than we do, and billable expenses generally drive less margin, their overall margins are slightly less than ours. They are still accretive to the business, however, and that is factored into our guidance. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay. And then just -- can I ask -- you had great cash flow this year. Can you give us a sense for kind of CapEx or -- and if possible, if you have any sort of outlook directionally for free cash flow or operating cash flow for '14?

Yes, again, a couple-part answer. CapEx, I think, will be on the order of what they were this year. I think as we announced -- as we've talked about in the past, we set about 4 or 5 years ago, to reduce our facilities footprint, and that then continues to reduce our need for capital expenditures. So that -- we do not expect an increase there. On the cash generation side, we did benefit greatly this year from a reduction in our days sales receivables, so-called days sales outstanding. Whether -- at this point, I don't see us continuing to drive that number down for fiscal 2014, so I think we're -- our outlook is for flat to perhaps modest growth in that number. And that, of course, then dampens your cash-generation capability. So I think this year, FY '13, was an extraordinary year. I don't know that -- so FY '14, unless -- given that we're looking at what could be a slight increase in our days sales outstanding, we'll probably see less cash flow generated next year.

Our next question is from Edward Caso of Wells Fargo Securities.

My question is around pricing. What are you seeing sort of on an apples-to-apples basis? And is the sort of the slow pace of decision-making by your clients, given sequestration, the fear of furloughs and so forth, delaying some of those contract downward adjustments that might be felt? And how is that baked into your guidance?

Well, the short answer is that we've baked that into our guidance. Clearly, we're -- we've forecast a decline in our organic revenue, and so that's reflected there. In terms of delays, I think that it's pretty well known that the government has -- when the government is uncertain it, as we all do, tends to not make any long-term actions, so there certainly have been delays in the awards. I think we're cautiously optimistic that we'll start to see an uptick here as September 30 looms, so we'll just have to pay close attention to that. But I think that we have accommodated whatever margin pressures. And again, margin pressures will vary by market, clearly, and we've tried to make sure that, that's factored into our outlooks.

Can you help us out with the interest expense assumption for FY '14, please?

Well, we have -- we're anticipating for FY '14 a stable interest rate environment. In terms of debt paydown, we would pay down the amounts that we're required to. Again, I think, as we've mentioned, we wouldn't -- at this point, wouldn't look to do any early paydowns of our debt. Clearly, we would also, at some point here in the future, take a look at whether or not it would make sense to do -- to go after some repricing in our line of credit if the markets would support that. But we just have to see.

So does that imply that you're assuming a higher adjusted operating margin? Is that fair to assume?

A higher adjusted operating margin?

Right. I'm trying to back into what your operating margin is.

The -- well, as I said, we've tried to factor that into all of our guidance. We have not, in the past, gotten into giving that other than a top and a bottom line basis.

Our next question is from George Price of BB&T Capital Markets. George A. Price - BB&T Capital Markets, Research Division: Just to follow up on a couple of things. First, looking at the -- or talking about the commercial business. Has the -- I'm assuming that there's still -- you're still seeing good growth there, double-digit growth, if you could comment on that. Maybe where is that in terms of size? Would you anticipate that commercial and international together may get to a point in fiscal '14 where you call that out and discuss that in a little bit more detail? Or is that still too soon?

Well, we tend to look at the commercial and international business together. I think, as we've mentioned in the past, that continues to be less than 2% of our revenue, which is pretty, pretty modest actually. While we're continuing to invest, while we are building the client base there, we believe the best approach is that we'll talk about that in greater detail as it becomes a more meaningful part of our business. So at this point, we're focusing there. We're also focusing on our core government business, which generates more than 98% of our revenue. George A. Price - BB&T Capital Markets, Research Division: Okay. Maybe looking over the next quarter or 2, how -- can you give us maybe any additional color on how you see revenue and adjusted EBITDA trending perhaps relative to the fourth quarter? I guess, the question is really sort of implied in your guidance, and maybe you want to break it up by first half versus second half. But do you see any -- anything to call out in terms of how the business is going to -- is assumed to perform with the guidance in the first half versus the second half of '14?

The short answer is no. We have, for good reasons -- as you know, in this business, particularly given the regulated nature of our accounting practices and the fact that we're heavily a cost-reimbursable government contract, it's important that we manage this business on an annual basis. So while, as a public company, we have to report on a quarterly basis, you can be assured that we manage it on an annual basis, so it doesn't behoove us to get into quarterly outlooks simply because that's not the way we take our management actions. George A. Price - BB&T Capital Markets, Research Division: Okay. Last thing is the SIG investment certainly sounds very interesting as a potential differentiator. But I guess stepping back, given the current market, do you think that the current federal market -- and based on the assumption that things are going to kind of continue as they are for the next year or 2, do you think this is a market that's going to really pay for and ensure return on that kind of investment?

I'm so glad you asked that question. I think our answer is absolutely. I think that, especially in a market like this one, a firm like ours is going to continue to succeed and stay ahead of the market by offering innovation and new thinking to our clients. There's been, especially at the early stages of the market turning, sort of a natural retrenchment on the part of clients. But the missions continue, and the missions now need to get done with less funding. And clients, really across all of our markets, are receptive to ideas that allow them to do that. The government is very interested in cloud. The things we're doing around cyber are key. The issues of predictive intelligence, especially in the area of cyber, are even more important now than they were a couple of years ago and are going to continue to be of importance. And we have a close to 100-year track record of trying to find those things and get in front of them and position ourselves to catch the market waves when they come. So I think that there's every reason to be -- to believe that elements of the market will continue to grow. And that's what the SIG is all about, is making sure that we deploy the right knowledge and the right people into the right places to take advantage of those opportunities and -- as opposed to just competing in the same turf over the same things as elements of the market continue to commoditize, which is, again, not a new trend. It's something that's always happened. So in that sense, the SIG is both new in the way that we're doing it and in the level of effort that we're putting behind it and also tried and tested over many, many years, really over many business cycles in terms of our approach to growing and winning in the marketplace.

This ends the question-and-answer portion of our call. I would now like to turn the call over to Ralph Shrader for closing comments.

Well, thank you, Shannon. For all of you, I hope we've been able to convey our deep pride in these solid fiscal year results in what has certainly been a very challenging market. We managed to keep our revenue close to last year's level. We grew our margins, our operating income and adjusted earnings, and we again generated very strong cash flow. As I mentioned earlier, we also were able to pay a total of $8.36 per share in dividends during the year, and our total shareholder return continues to be among the very top in the government services sector. I hope you can hear from us that we are very excited about and continuing to invest in the future, and we believe we have charted the path with our Vision 2020 strategy. So with that, I say thank you very much for joining us, and have a great day.

Ladies and gentlemen, this concludes today's conference. Thanks for your participation, and have a wonderful day.