Good morning. Thank you for standing by and welcome to Booz Allen Hamilton's Earnings Call covering Third Quarter Results for Fiscal 2017. At this time, all participants are in a listen-only mode. Later, there will be an opportunity for questions. I'd now like to turn the call over to Mr. Curt Riggle. Please go ahead.

Great. Thank you, Stephanie. Good morning and thank you for joining us for Booz Allen's third quarter fiscal 2017 earnings announcement. We hope you've had an opportunity to read the press release that we issued earlier this morning. We have also provided presentation slides on our website and are now on slide 1. I'm Curt Riggle, Vice President of Investor Relations, and with me to talk about our business and financial results are Horacio Rozanski, our President and Chief Executive Officer; and Lloyd Howell, Executive Vice President and Chief Financial Officer. 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 services and other factors discussed in today's earnings release and set forth under the forward-looking statements disclaimer included in our third quarter fiscal 2017 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 included an explanation of adjustments and other reconciliations of our non-GAAP measures to the most comparable GAAP measures in our third quarter fiscal 2017 slides. It's now my pleasure to turn the call over to Horacio Rozanski, our CEO, and he will start on slide three.

Thank you, Curt. Good morning, everyone. Happy Monday. Thank you for joining us. This morning Lloyd and I are pleased to share with you another strong performance by the talented women and men of Booz Allen. After our pivot to growth in the last year, we remain in a solid path, confidently and consistently executing against our strategy for sustainable quality growth over the long-term. On today's call, we'll talk about that, as we walk through the details of the third quarter. Also with last week's closing of our acquisition of Aquilent, we want to take this opportunity to provide you an update on our successful systems delivery and digital businesses. SD and digital capabilities are, as many of you know, central components of Booz Allen's transformation under our Vision 2020 strategy. But first, let me start with the third quarter highlights. Thanks for the hard work and dedication of thousands of professionals across our firm. We are seeing a lot of strength in the business. And our year-to-date financials are very much in alignment with our plan for the fiscal year. As we have shared with you previously, throughout FY 2017 we have focused on several objectives. We will continue to differentiate ourselves, and winning the market by offering solutions that blend a very best consulting and mission understanding, with innovative technology. We would execute against our large backlog by hiring additional talent and deploying people quickly to deliver on what we promise to clients. And we would operate with both efficiency and agility, by exercising discipline in our spending, while continuing to invest in areas that position us for future growth. We are on track on all of these goals in the first nine months and we will remain focused on them going forward. Ultimately when packaged together,…

Thank you, Horacio. We are now on slide four. I think the best way to summarize our third quarter is that we remain on a solid growth path because we are executing with discipline against both our plan for the fiscal year and our strategy for the future. We have a near-term plan for business operations that supports our long-term strategy for growth. And we are executing exactly according to our plan for FY 2017. That's how we run the business year-after-year, setting a plan and then managing with foresight and agility, so that we can position ourselves for the next year, the next year and so on. In the last year, our Vision 2020 strategy began to produce year-over-year revenue gains. And, throughout FY 2017, we have been competing from a position of strength in a challenging market. Leaders across our firm have more fully operationalized the investments we've made in specialized talent and capabilities. And we are seeing our portfolio evolve into one that better leverages the integration of all of our functional skills: consulting, engineering, digital, cyber and analytics. Let me run through the specifics. Please turn to slide five. Revenue was up 7.4% over the prior-year quarter, driven by effective deployment of our people on the contracts and response to client demand. Rising demand from our solutions and services also led to an increase in billable expenses. These revenue drivers are the same we've seen throughout this fiscal year. And for the full year, we still expect billable expenses to be about 30% of revenue. We continue to make good progress recruiting and hiring in a very competitive market for the most highly skilled talent. We gained nearly 290 employees during the third quarter, and as of December 31, we had about 440 more employees than…

Thanks, Lloyd. As I said at that the top of the call, even though we just closed on the Aquilent acquisition, I want to use this opportunity to provide an update on our Digital Solutions business. That's the umbrella term we now use to this private set of interconnected, high demand capabilities that include systems delivery, digital, cloud and mobile. Our strategy has been to create a differentiated business built on three pillars; mission understanding, technical depth and a consultative approach. You actually need all three to design, build and deliver complex technical systems that work and most importantly will be adopted by users. In building this business, we have focused on both innovation and scalability. The acquisitions of SPARC last year and now Aquilent help us on both fronts, as that's the progress we've made in hiring talent with a passion for innovation, expertise in cloud, mobile, and modular technologies, and a mastery of advanced methodologies such as agile, DevOps and open source. We've also stood up a dedicated team for incubating new methods and technologies, and we offer a lot of technical training to our people, so that they stay at the very cutting edge in disciplines that are rapidly changing. A third key to achieving sustainable growth has been our success in winning work that is right at the center of our clients' most important missions. For example, Booz Allen created a big data technology platform and suite of analytic tools that helps the Joint Improvised Threat Defeat Organization to more quickly understand and thwart dangerous threats to forward deployed troops. We partner with the IRS to build and deploy an easy-to-use one-stop shop for personalized online tax assistance. At the General Services Administration or GSA, we're integrating and making vastly more efficient the system that processes…

Thank you, Horacio. Stephanie, at this point, can you give instructions for the question-and-answer session of the call?

Thank you. Our first question comes from Amit Singh with Jefferies. Your line is open.

Hi, guys. Thank you for taking my question and strong top line performance. So just regarding the guidance for the full year, could you help me understand how much of that raise in guidance is sort of from the Aquilent M&A and I guess slightly higher expectation for billable expenses? Earlier you were expecting 29% to 30%. Now I think you're expecting 30% versus general improvement in the demand environment.

Amit, thank you for the question. It's a combination of all of the above. As I said in my opening comments, we expect $20 million from the Aquilent acquisition that contribute to the top line. As I also mentioned with a slight uptick in billable expenses due to small business set aside, particularly in our defense and intelligence markets, that's the market that we compete in and we are responding accordingly. We also had some equipment purchases that we were expecting to occur in the fourth quarter move into the third quarter. So – and looking at those dynamics, they certainly have contributed to the top line. But I also want to add that we still are seeing strong demand for our services as indicated by our backlog increase. And the overall team is working very well to compete and win those opportunities.

All right. Prefect. And just one question related to that. I mean, as we look at your fourth quarter which has only two months left, so what can drive that big variability in overall 4% to 6% revenue growth for the full year, which could imply minus 2% to plus 6% for the fourth quarter?

So, as you know, we don't give quarterly guidance, but as I've maintained from the very beginning, we really look at our ability to source and attract the talent and get that talent onboard. So the biggest impact that we see is the continuation of the strong head count growth that we've seen throughout this fiscal year.

All right. Perfect. Thank you.

Our next question comes from Tim McHugh with William Blair. Your line is open. Tim J. McHugh - William Blair & Company, L.L.C.: Yes. Thanks. I apologize. Did you give an update on what you think for EBITDA margin for the year? Did you still expect to see some improvement or has that changed?

We continue to begin alignment with what we have said for the remainder of the year. Our margins are the best in the industry and our updated guidance reflects our margin expectations. Given that the third quarter is behind us, our earnings and margins are right in line with our full fiscal year plan. And they reflect greater spending discipline, which has been the focus throughout the year and our continued investment in capturing opportunities in the capabilities and talent which will fuel our long-term growth. As I've said in the past, we're continuing to see improvement and expect improvement throughout the remainder of the year. Tim J. McHugh - William Blair & Company, L.L.C.: Okay. I'm sorry. And just to clarify, because I wasn't sure there. I think your comment was they remain in line with what you expect for the remainder of the year, but the full year expectation – I guess, is it still for an improvement in the year in the margin?

Correct. Tim J. McHugh - William Blair & Company, L.L.C.: Okay. Thank you.

Our next question comes from Brian Ruttenbur with Drexel Hamilton. Your line is open.

Yes. A couple of clarifications. On the cash flow, on the year, you talked about a 100% free cash flow conversion on the year. So, you expect to end with what kind of cash and debt at the end of the year?

Brian, this is Curt. We've been talking about the cash conversion – in the last call, we talked about 95% to 105%. It's clear at this point, we're going to be over 100% conversion of adjusted net income. We haven't laid out a cash balance expectation, but I think you can do the calculation to get there.

I can do the calculation, correct, but I don't know if you're going to be using any of that cash to pay down debt and what your plans are with that cash? I was – that's a roundabout way of me asking, what are your plans for your cash and your debt for the year?

Brian, I think the way Lloyd laid it out is, the flexibility that we're going to look at in the capital structure and how we use that cash flow would be based on the opportunities that we see.

Okay. And then, last question. Bookings by year-end should be greater than 1.0, is that the plan?

Yes.

Perfect. Thank you very much.

Our next question comes from Robert Spingarn with Credit Suisse. Your line is open.

Good morning, everybody.

Good morning.

I wanted to ask a question about the margins, just coming down – the adjusted EBITDA margin coming down here slightly, you've increased head count modestly year-on-year, your sales are up 6% I think through nine months. So I would expect the margins to have gone up or you're just investing now?

We continue to invest in the business and we'll do so going forward. And so that that contributes to the performance that we have. As I said also, but that is in alignment with what we expect it to achieve throughout the year.

So Lloyd, I mean is there an opportunity here for margins to pop at some point, when you've got the infrastructure that you're – I know it's a constant evolution here and you're constantly growing. But is there a point here, where your structure and your infrastructure will match up the way you wanted to, to your business and, we see some kind of margin lift, even if it's not this year?

Today, we like the structure that we have and the infrastructure that we have. And it solely relies on our ability which we've done for a number of years to invest in the business, which we'll continue to do so.

Let me try and add to this. When we look at the market and we look at the future, we're looking to accelerate our growth rate, especially as it relates to the revenues produced by our own labor, not by subcontract and pass-throughs. And that requires investment. At some point that growth rate will level off into something hopefully higher than it is today and then we'll get a chance to decide, what the right investment posture is. And I think we – Lloyd used the word flexibility, I used the word agility a couple of times in the script, that's what we're focused on right now that we believe we see a strong demand signal for our services for the kinds of things we've been investing on, and we want to double down and make sure that we create the way when we catch it. You know how this business works, and you know that there is opportunity to put more into margins at the right time, we probably will do it, but for the time being, we're very happy with both our performance and our investment posture.

Right. And you see what I'm talking about a 2% increased employees against a 6% increase in sales. I understand some of that's indirect and pass-throughs and so on, but it would seem to me to create opportunity at some point. That's what I'm getting at.

At some point for sure, but I think again, the real question is, how do we want to invest and how fast can we grow the business, and how do we want to think about all of that in the context of not just set of one or two quarters, but in the context of a long-term performance we're trying to drive.

Okay. And then just briefly, Horacio, high level. Have you seen any changes yet from the customer as we transition into this new administration and what are some of the opportunities and challenges that you're beginning to think about in this New Year here under Trump?

First of all, let me say, we're really proud of the work we do for our clients, because we are working at the center of their missions. I said it on the script, but I'll – it bears repeating. The work that we do help save lives, the work that we do helps keep people healthy, helps government run better. And we believe that in the medium term, the opportunities for that and for us to bring our capabilities to bear will create growth, which is sort of the premise of the last conversation. I think it is too soon to tell whether there'll be any kind of small short-term disruption as this transition happens, it wouldn't be the first time or the last time that that happens, we've been – not me personally, but we as a firm have been doing this since 1940, and all of that could be lead up to some near-term disruption, it hasn't yet, but the key point for me is, we see opportunity to contribute to the nation's agenda in the medium-term and to create upside for our stakeholders.

Okay. Thank you.

Our next question comes from John Raviv with Citi. Your line is open.

Hey, good morning, guys.

Good morning.

Thanks for adding some color to capital deployments not priorities, but philosophy. But can you just add a little more color on the capital deployment philosophy, potential timeline for the new authorization whether it just going to be opportunistic or just to keep the share count flat or perhaps have an opportunity to drop share count and also how weighing M&A versus repo in that context?

Sure. As I've said in previous meetings calls, as well as one-on-ones, we really like and enjoy the current strategy which is to really leverage the full range of tools from bolstering our organic growth either through acquisitions to effective debt management to dividends and share repurchase. So we want to maintain flexibility with our capital deployment. As I have stated in the past, our acquisition strategies and direct alignment with Vision 2020 and our investments around key capabilities, cyber systems development, software development, engineering, data analytics, and we'll continue to do that. As it relates to the share repurchases that also is meant to maintain the flexibility. Should we want to or need to or given market conditions, repurchase shares, we'll do that. I would caution that we may move away from keeping the share count flat, depending upon market conditions or the opportunities before us. So, in the past, I think we prioritized different elements of our capital deployment. This morning I'm communicating that we want to maintain the tools that we have, with the highlight or a focus on the flexibility of applying those tools, given market conditions.

Thank you, Lloyd. And on the margin question, I know you mentioned that you still expect EBITDA margin, I believe, to be up year-on-year. That would imply a fourth quarter step up which we don't usually see from you guys. Can you talk about the drivers to achieving that step up? And then, related really, timeline for getting back to the 9.9% level, which you guys – was your previous high. Thanks.

It points back to continued strong management of our business and our costs. It points to continued deployment of our people on our engagements. And as it relates to the time horizon, we want to continue to improve on our margins. But today, we have the best in the industry. Our updated guidance reflects our margin expectations and we will look to continue to improve on that.

Thank you.

Our next question comes from Ron Epstein with Bank of America Merrill Lynch. Your line is open.

Yeah. Hey. Good morning, guys.

Good morning.

Maybe just following up on Rob's question. Not to put words in his mouth, but I think where he was going – and this is the same thing I'm wondering about. What are the potential opportunities in front of you? And have you seen yet – I mean there has been a lot of discussion around increased outsourcing to services to firms like your own and that kind of thing. So, understanding that there could be potential disruptions around the change in leadership in D.C. and that sort of how it goes, where could there be potential upside? And there's also a lot of talk about the defense budget that's going to grow at a trajectory that potentially was higher than what anybody was thinking before kind of we saw this change in the politics. So if you could add a little color there that might be interesting.

Let me start. I guess what I would say is this. Over the last year, even before the change of administration, we are seeing increase in demand for our services. I think we have done a really good job of positioning ourselves against areas that have inherent growth in them, against areas that have inherent opportunity. And not just that, but we build the capabilities where we really make a difference with clients, where we can apply them, which is driving more demand. And I think a lot of our demand expectation comes from that. If on top of that some of these things come to pass around an expanding market, our goal is to outpace the market no matter what the market is. And if you look back, certainly since we went public and you do the math, you'll see that that's what we've done. We are looking at accelerating growth for our own labor base over the next year really assuming a stable market. If the market starts to grow, we'll grow faster than that. So that's pretty much the way we're picking it up. And that's why we are cautiously optimistic about where things are going. Don't know what else is worth there to say there because, again, it's early days. And I think a lot of conversations need to become policy and that process has its own timeline. So we're not banking on that as we sort of talk about optimism.

The only thing I would add is, just given Horacio's opening comments around our systems development business, our investments in the areas that I mentioned are giving us the economics that we hoped for and that we're seeing. So regardless of what may occur at the policy level, we are ever getting closer to the missions of our clients. We have invested in areas that are giving us the returns top-line and bottom-line that we hope to see and we'll continue to move in that direction.

Okay. Great. Thanks.

Our next question comes from Cai von Rumohr with Cowen and Company. Your line is open.

Yes. Thank you very much. So to get to just 9.4% flat year-over-year adjusted EBITDA margins, looks like you'd have to do about 9% in the fourth quarter. And you closed on Aquilent in the fourth quarter, so I assume there is some transaction expenses in there. So that would be very strong performance. Are there any one-timers that would kind of get you to a level that strong, or is this just good strong performance? Thanks.

Cai, this is Curt. I think this reflects good strong performance we talked way back earlier in the year about a relatively flat margin profile for the year, so it's a bit of a change from prior years. So seeing the fourth quarter come in higher than it has in the past is in line within expectation. And let me add, the Aquilent, it's really not a material plus or minus for the quarter end for this year, benefit comes in next year. [0CMQSK-E Curt Riggle] Thank you.

Our next question comes from Carter Copeland with Barclays. Your line is open.

Hey, good morning, gentlemen.

Good morning, Carter.

Just a couple of quick ones. One, just sort of knowing on the capital deployment and the balanced commentary, I think it's probably worth noting, the stock clearly has a benefit priced in associated with potential tax reform and a lower statutory rate, how does that influence the thoughts around share repo in a short-to-medium term and just interested in how you think about that given it could cut both ways? And secondly on the head count, it looks like if you exclude Aquilent, you are up about 100 – a little over 100 heads. Horacio, I wondered if you could kind of – that's the net number, I wondered if you could kind of give us some color around the gross adds versus attrition, where you're adding versus where you're seeing declines? Thanks.

This is Lloyd. Let me take on the tax ramifications. Whether it's a benefit to us in tax reduction or movement of interest rates, I would say all of that contributes to our philosophy around capital deployment going forward. Our crystal ball is probably as good or as poor as anyone else in terms of the timing of when we would expect to see these potential tax reductions. So in the near term, we feel like we've got the right tools and we are applying those tools as best we can. In the longer term, we feel like our capital deployment strategy will accommodate changes that they may occur whether it's tax or interest rate increases. So that's how we have factored in the potential tax and interest rate movement in the future.

On the head count question, Carter, to clarify something, Aquilent is a subsequent event to the quarter. So the 440 number that, I think Lloyd talked about, is not including that. It's all organic. And so, we actually feel pretty happy about that, if you look at the numbers, that's a market difference from what we've seen the last few years, and I think it bodes well for our growth opportunities. And the growth is coming in all the areas that we've been talking about in these calls around Vision 2020, and from the places where we see a great deal of opportunity. And over and above that, we're also moving people internally to the places where there are opportunities. As you know, this is one of the things we pride ourselves of doing quite well, is trying to figure out where the parts going to be and not just skating to it, but sending hordes of people in that direction. And that's what we've been up to.

Yeah. I got the question is where are they coming from? Where are the declines, I guess, is the question?

I think, we're – in our business, we don't quantify that way, because a lot of what we do is we move people around from areas where we see less opportunity to areas where we see more opportunity. And that's actually a pretty fluid thing. And at this moment, the interesting – the heartening thing is, we are seeing opportunity just about everywhere. So we experienced natural attrition like the rest of the world does, but I think in terms of head count, it's pretty good across the board.

Great. Thanks, gentlemen.

I'm showing no further question. I will now turn the call back over to Horacio Rozanski for closing remarks.

Thank you everyone for your questions and for joining us this morning. We have two months left in the fiscal year, and we – as we have been talking about, intend to finish strong and importantly carry our momentum into FY 2018. Lloyd and I are proud to represent the exceptional work of our 23,000 colleagues each quarter on these calls. And Booz Allen is now on its early growth path and the entire firm is feeling optimistic and energized about the opportunities that lie ahead. With that thanks again, and have a good day.

Thank you, ladies and gentlemen. That does conclude today's conference. You may all disconnect, and everyone have a great day.