Good morning, and thank you for joining the Tetra Tech Earnings Call. By now, you should have received a copy of the press release. If you have not, please contact the company's corporate office at (626) 351-4664. With us today from management are Dan Batrack, Chairman and Chief Executive Officer; and Steve Burdick, Chief Financial Officer. They will provide a brief overview of the results, and we'll then open up the call for questions. During the course of the conference call, Tetra Tech management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements concerning future events and Tetra Tech's future financial performance. The statements are only predictions and may differ materially from future actual events or results. Tetra Tech's Form 10-K and 10-Q reports to the Securities and Exchange Commission identify certain risk factors that could cause actual results to differ materially from the forward-looking statements. Tetra Tech undertakes no duty to update forward-looking statements. In addition, since management will be presenting some non-GAAP financial measures as references, the appropriate GAAP financial reconciliations are posted in the Investor Relations section of Tetra Tech's website. [Operator Instructions] With that, I would now like to turn the call over to Dan Batrack. Please go ahead, Mr. Batrack.

Great. Thank you very much, Eva, and good morning, and welcome to our fiscal year 2012 year end and our fourth quarter earnings release conference call. While Steve Burdick, our Chief Financial Officer, will present the specifics of our financials, I'll start with a brief overview of some of our key financial metrics for both the year of 2012 and the last fourth quarter. First, I would like to start with the fourth quarter. We ended the year with a very strong fourth quarter to the year. In the fourth quarter, we set all-time record highs for each of our key financial metrics. Revenue was over $700 million for the first time at $719 million for the quarter. Our net revenue was $536 million for the quarter, which was an increase of 13% year-over-year. Our EBITDA, operating income and our diluted earnings per share for our shareholders were all up 12% year-over-year. And even with a very high revenue quarter that we had this last fourth quarter, we continued to add to our backlog, setting a new all-time record of $2.14 billion of funded and authorized work, which was up 10% year-over-year. I would like now to review our performance by customer because that's where all of our work comes from. In the fourth quarter, work for our international clients grew by 21% year-over-year. This work continues to be dominated by our Canadian-based clients, but it also includes our international operations in Brazil, Chile and Australia. International work is now 32% of our revenue, slightly exceeding even my own estimate for where we'd be at the end of fiscal year 2012. In the U.S., commercial revenue continues to grow rapidly. We were up 15% year-on-year driven by work from a very broad base of our commercial clients that included oil…

Well, thank you, Dan. I will begin with the fiscal 2012 fourth quarter financial overview in a bit more detail. Overall, our fourth quarter results met our previous guidance. Comparing the fourth quarter results this year to last year, revenue increased $43.7 million or about 6% to $719.4 million primarily as a result of growth in our U.S. commercial and international markets. Net revenue increased a healthy 13% to $536 million for the same reasons I previously noted for revenue. I do want to point out that our net revenue was growing at a faster pace than revenue because we are involved in more self-performance work especially for our commercial and international projects. Income from operations increased by 12% to $48.5 million. When compared to the revenue growth, we did experience a higher growth rate in our operating income. EBITDA also increased 12% to about $63 million. As Dan mentioned earlier in his presentation, we realigned our segments including the elimination of the EAS group. Together with this action and others, we had several moving pieces impacting our financial quarter 4 results. And I'll go through those pieces with you now. Overall, there was a negligible net impact to EPS. Our quarter 4 EPS is $0.47 on a GAAP basis. Without these net adjustments on a pro forma basis, our EPS would have been about $0.48 for the quarter. The moving pieces individually did have an impact, and I'll go through those as we see on the chart if you're following along on the webcast. The first item relates to severance and retention. We reduced management personnel in the EAS group segment as a result of eliminating this group. In addition, we did reduce staff primarily in overhead positions in operating units that were also affected by the various realignments.…

Thanks, Steve. In 2012, we made good progress in both our geographic and market expansion in accordance with our strategic growth plans. We acquired 2 companies in Brazil. We now have permanent operations on 5 continents, and we actually worked in 131 countries last year on different projects. And today, our International business is the largest client sector in the entire company. It's been just quite a move for us this past year. In 2012, we also added a pipeline engineering design services firm with the acquisition of Rooney Engineers, and we leveraged all the different capability we had within the company internally, mostly across North America, to begin building a midstream oil and gas engineering practice. And we've made great progress with that. In fact, as a result of these combinations, oil and gas is now the fastest-growing service line in the company, and in 2012, it grew at over 30% internally. In October, we announced the acquisition of ASA Brazil. That was our first one, first month of fiscal year 2013, and one small acquisition done. And while they may be small, about 50 people, they are a great technical fit. They provide expertise in oil and gas, water, oceanography and other marine-related expertise areas. ASA Brazil brings to us a technical expertise in the offshore marine environment and the local client relationships in Brazil that complement our existing water and environmental skills, and it's just what we were looking for in a smaller acquisition. As I've said before, they're not only a great technical fit but I'll tell you they're a great cultural fit. They're led by a U.S.-trained PhD who specializes in coastal and oceanographic computer modeling and they have an excellent financial track record, in fact, something I would like the rest of Tetra Tech…

[Operator Instructions] The first question comes from to Tahira Afzal with KeyBanc.

Aleena Khan, I'm an associate on Tahira's team. She's not able to join us this morning. So I guess sort of my first question is if you could talk about your guidance, what clearly the fiscal cliff is sort of baked into the lower end, but could you talk about what gets you to the high end of guidance or even upside?

Well, first of all, we have not baked in the fiscal cliff at the low end. We have baked in a slowdown in the federal orders, a lot of disruptions and gridlock if you want to refer to it. But we've not specifically baked in the fiscal cliff, and I think most have just put that out there with an asterisk. That's almost a non sequitur, we have to see what transpire from that. But at the high end, just take a few things to actually touch the high end or even in fact, move through it. Now, on the federal side here in the U.S. if we actually saw a reconciliation of the different parties in the U.S., if we actually saw them move forward with their funding, and we aren't necessarily looking for a plus up in the budgets we're just looking for clarity in the programs that we have in place. And we have pushing $10 billion in federal contract capacity. If they just access that to move [ph] programs that they've already identified, that would allow us to move toward the top end. I also think an overall economic recovery, which should -- if it drove increase in commodity prices and minerals, would help us in our mining sector, and I think that our oil and gas is going to continue to grow quite nicely although an increase in prices in commodities of oil and gas would help also. So to touch our $2.3 billion in net revenue and the $1.95, a little bit of clearing up of the federal budget. State I think, is doing fine. I don't think that they'll actually grow our numbers, it represents a small part. And a little bit of economic recovery in the minerals and strength, continued strength in oil and gas and I think we're good for the top end.

And my second question in terms of your markets, you had 19% organic growth in international during the quarter, could you sort of walk through your Canadian markets and the 2013 opportunities you might see there?

Well, I want to start off with mining. I hear a lot about -- I hear and I'm asked quite frequently that there's a presumption that our Canadian business is all mining, and that's not the case. In fact, it's far less than half. It's probably around 1/3 of it. So let me start with oil and gas. We are active in the oil sands. It's growing at a very fast pace and I could expect that it will continue and we can actually expand the work we're doing not just from the waste handling, from the piping, from the tailings but also, with some of the process end. And we actually are making progress there and we're working with most of the majors. And so that will be a key market that we expect to grow. We expect if you move down from the exploration or the production down to the midstream, which is the piping, we've had some very nice midstream piping design contracts and I expect there to be a lot more. And with the Canadians looking to substantially increase their oil production primarily out of oil sands, they need more pipelines to move that. They do have operators that are turning it from the syn [ph] crude to actually usable product and that needs to be moved, which is new product that also requires new pipelines, and we expect to materially participate in that. And right now, we have a very de minimis presence, that'll become a good contributor. In the Far East, hydroelectric power is growing and the expansions in Hydro Manitoba, Hydro-Québec, particularly Hydro-Québec being the largest grower. We expect there to be more hydroelectric production opportunities for us. Everything from sitting [ph] of new facilities to transmission lines, new orders there, and that helps meet the United States' requirement for renewable energy portfolio requirements, that's a big growth. And I do think that mining is going to continue to be strong for us. Now no doubt as economic slowdowns impact base metals, things like iron and others, a move to gold and others with respect to sort of counter-cyclical with respect to more economic uncertainty gold is being driven by. So our diversity into other minerals has actually helped us. So I expect it to continue to be strong. So those are just some of the areas and then, of course, that's the one area and right now, the only area of our international operations that we have government work. It's still a small part, but the actual municipal infrastructure water supply, wastewater and solid waste continue to be strong really across Canada, from British Columbia all the way out to Québec Province.

Your next question comes from Corey Greendale with First Analysis.

A couple questions. First of all, on the margins. So if you look at the fiscal '13 guidance, it does -- there is some margin improvement assumed there. It looks to me just by back of the envelope calculation, like that margin expansion is coming from the decrease in amortization relative to '12, and other than that, it looks like you're modeling kind of flat at the midpoint. So can you just speak to kind of what's going on with the underlying margins and is that conservatism or otherwise, all else equal, I would think that margins would be better even without the lower amortization next year just given the mix shift toward commercial and international.

Well, Corey, you've got it right. That is right. If you take amortization out, the contribution from the reduced IA going into 2013 I will say, it's roughly flat. Some of that is embedded in our first quarter. If you want to call it conservatism, I'll just call it caution, but I will say that we have a year-on-year comp that was really quite competitive. And while we did see some of the highest margin work, for instance in mining, growing very, very fast last year, it's still growing but at a lower rate. So you are correct that we have essentially, an in line margin, but I do think that depending on how you model the different combination of revenue growth on the net revenue and the different points on the EPS, you can actually see that is going up more markedly depending on where you pick the point. So we hope to hit that and actually go up.

Okay. And then I just had a kind of mechanical question. In the fiscal '11 Q4, I think organic growth was hit by a calendar discrepancy. But was there any -- was the calendar apples-to-apples this year or was there some benefit from an extra week or something like that?

This year, it was apples-to-apples. Last year, we are actually short at a week. So the previous year, we had 53 weeks instead of 52. So our double-digit growth that we reported in 2011 was actually even higher than that. But the comparisons of last year was actually apples-to-apples.

Okay. So then, you went through all the drivers of growth but could you just maybe elaborate a little bit more? So in Q3 of this year, organic growth was 1.7%, Q4 was 7.2%. So if it wasn't the calendar, what drove the acceleration?

It's just timing, some of the projects starting up in early July instead of late June. So really if you wanted to take the combination of a 7% and essentially a 2%, it puts us at about a 5% organic growth rate between those 2 quarters or you can really -- the best representation is probably to take the year because we do have some seasonality because of the different timing of weather in the north. And we were 7% for the year. So really, if you want to sort of take the quarter vagarities [ph] out because of weather and climate, that put us at 7% for the year, and we were slightly higher than that for the fourth quarter.

Okay, and well, I think historically, you used to say that the backlog was maybe representing 9 months of revenue, and I realized, with the change in mix, it's probably shorter now. But could you help us, give us kind of an estimate of what the duration of the backlog is now?

Well, it's actually -- I used to say that -- used to present that it was about 75% in the first 12 months, and the remaining 25% over the next roughly, 6 months. So in 18 months, essentially all of it would burn up. This does not represent long-term construction or O&M projects. This is front-end consulting and execution work that's relatively short. And because of the shift to more commercial and more international, which is commercial, it's even shorter. So I would say we are going to burn 80%, maybe even slightly more than that in a 12-month period, and the remaining 20%, oh boy, over the next -- for sure, over the next 6 months, but at a nearer term than that. So it does represent a quicker burn than before. So the percentage of a given year has actually gone up compared to historical rates because of it being shorter duration of the projects.

Your next question comes from Andy Wittmann with Robert W. Baird. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Just on the purchase accounting adjustments on the earnouts. Just wanted to get a little bit more perspective on that. When we think about that obviously, not earning your expected earnout seems like maybe some of the acquisitions underperformed, but I guess it's also possible that the way you've accounted for it may have been conservative. So can you just give us some color as to how to think about the lack of recognition of these earnouts that resulted in a gain in the quarter?

Yes, absolutely. That's a really good question, Andy. When a firm joins Tetra Tech, typically, we pay 2/3 of the purchase price upfront, and the remaining 1/3 over the next 2 or 3 years. And the recognition or let me use the word the receipt of those earnout dollars to the firm that's joining Tetra Tech are directly linked with their commitment or the presentation of their operating income that they'll make in a given year. Now, like all people that feel quite proud and quite high performance with their company, we use their number. So if they tell us they are going to make 20% operating income margins, that's what I believe them to be. Now if they produce 15%, and by the way, that 20% hypothetically is a number then that's tagged to their earnout, and then, of course, they grow every year. So it goes 20% on a bigger number and it grows, as you would imagine, through the 3 years. If, in fact, they produce 15% while it's quite higher than Tetra Tech's average, it's quite what we may have put into our plan for the street, that's why we wouldn't miss the number, we may temper it with respect to what we would present to an AOP or an annual operating plan or a guidance. So they can miss the earnout number. And in fact, there were multiple companies, in fact, many, many companies that fell into this category that actually aggregated to the number, the $17 million that Steve presented. Yet, their performance was really quite well. In fact, in most all instances, their performance was better than we had either anticipated or better than the company's average. So inferring that a payout means that they didn't contribute meaningfully or aren't successful is not the right correlation. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Okay. That's very helpful. I guess on the other side with some of the charges here on EAS. What -- as you look ahead obviously, you did this to be more efficient in the operation. What do you think is the kind of go-forward impact to the cost structure either in dollars -- annual dollars or margin basis points that you think that you can receive as a result of the restructuring actions?

Well, I think it's still -- I'll start with your very last question. I think it's 1% to 2% that's going to help move us toward that 13%. So I'd say in the short term, about 1%. We do have some -- like anytime you move something from one location to another, you've got a little bit of administrative work in getting them integrated so that's going to take place over the next couple of quarters. So I'd say you should see the impact of that toward the end of 2013. We did -- I don't want to use the word eliminate although that's probably the most accurate word. We did reduce the overall administrative cost that we have embedded by having a fourth unit. So as we moved that into the other really, EAS went to ECS and TSS we didn't take those costs and just re-embed them into those units. The structure, the management, the systems that we have in those 2 are capable of handling a substantially larger operation. And so while we did put some more risk management and contracts in there, it's a relatively small amount. So this actually ended up with larger operating units, our business groups. It ended up in less unit overhead or support costs per dollar revenue or per person and it will be more efficient, and I think maybe 1% in 2013 and longer term, I think it could be up to 2%.

Your next question comes from Alex Rygiel with FBR. Alexander J. Rygiel - FBR Capital Markets & Co., Research Division: Dan, a couple of quick questions. First, as it relates to the acquisition pipeline in the oil and gas market, what geographies are you talking about and could you also then transition and discuss Brazil? And following those 2 acquisitions down there, what is the market potential for your services? And is it more attractive today now that you've been on the ground for a number of quarters or less attractive?

Let me start with oil and gas. We're looking primarily in oil and gas in North America. And for us, that's really United States and Canada. We've got our first material foothold in the design, the midstream. We're going to be primarily focused on midstream. Our strategy and logic is pretty simple. Oil and gas can drop in price, and so maybe exploration will slow down. But the capacity that exists at the wellhead or the production area still has to get to a place where you either can export it to a consumer or to where it's going to be utilized for a consumer like a power plant, and that means pipelines because it's not going to go down the road in trucks. And there's a huge deficit in pipelines both in Canada and the United States. And certainly, you can look at the Canadian oil sands production increase rates, they're enormous. And whether or not a keystone comes through the United States down to Houston or whether or not it goes out to the Pacific Ocean in British Columbia, for export, they got to put it through a pipeline. So we're focused on the midstream and again, in the United States and Canada. So take a look for that. And I would like to see that movement happen on the acquisitive side to help move us even quicker in 2013. For Brazil, we've been down there short time now. Our first acquisition was a long time ago. I think it's 90 days now. So our data set's pretty limited still, but so far, we've been very happy with it. It is a big market for us. Now, we are going to be focused primarily on the commercial side, and I don't want to completely pin ourselves in by…

Yes. Look, after the emergency response is complete, the adaptive planning process begins. And that will go through several budget cycles for many, many years. So for us in order to address this storm, it's really 2 things. It's the upfront science and it's the follow-on engineering, taking the ideas and the solutions and turning them into actual designs that can be implemented. And for us, that means modeling, forecasting, planning, design of structures. And I'll tell you, great example is like the award-winning design that we had done in New Orleans for the inter-harbor navigational channel. That worked great through the last hurricanes had hit. And I'll tell you that having done it and then having it proved in real life through a storm, you can't get better than that. So we do both. We're going to do the earliest science that will actually start I believe, in the coming quarters. The first quarter or 2 are emergency response, pumping the water out and actually getting the city and the coastlines back to work. But then it's going to move to science-based studies, which is absolutely in our center wheelhouse and then followed with the design engineering and actually the implementation. And I think New Orleans is a great example of where that actually was implemented in the country by the federal government, and it drove several hundreds of millions of dollars for Tetra Tech not only in design but in implementation. So I would expect over a longer term, over the next year or 2 or 3, it to be somewhat similar. And it's not a 1 or 2 quarter issue for Tetra Tech, it's a multi-year issue. And in fact, in New Orleans, it was 5, 6 years and I would expect just given the geographic expanse of the Eastern Seaboard that's been affected, it could actually be larger and longer in duration.

Your next question comes from John Rogers with D.A. Davidson. John Rogers - D.A. Davidson & Co., Research Division: Dan, just a little bit more on acquisitions and the business mix. The areas that you see growing, particularly the commercial and the international, are those businesses potentially more volatile from a margin point of view? I know when you've done a lot of government business in the past, it's been essentially pass-through work, and I just wanted to think about how we should be thinking about quarters ahead in terms of potential volatility.

Well, I think that to the extent that you would infer or that it could be inferred that -- and I'm not going to go to -- I can go to acquisitions but actually, let me go to the underlying issue, which is actually the client and the work. So if you're referring to mining, mining is no doubt more cyclical and there is less margin at the trough when there's less spending because you can't shut down your back office as quick as you can, the revenue could be turned off potentially. Oil and gas is similar. If oil dropped to $30 a barrel, there's no doubt that again, the revenue drops quickly, and you can't shut your back office costs and it impacts your margins. We have been quite quick and we've moved quickly on this. I would point to state and local as cut by 50% by us to give an example. And did it compress margins? Yes, but it didn't take them too much. Now I would say that it would affect both acquisitions that are in those commodities and what we have internally. We are attempting to address that, and I'll say that in the case of minerals, we're diversifying minerals from agriculture with potash. We're moving to energy with respect to uranium. We're moving to precious metals which sometimes are currency hedges. So that's number one. The second is most of our work is very front end, which is feasibility studies, evaluation, and it is much more insulated from the big variations in the CapEx projects. So when you heard BHP, I'll just call it because it was just widely advertised on the headlines that they were stopping $80 billion or putting on hold $80 billion of CapEx projects. Our numbers really didn't change much. We're doing the front-end studies. Now the flip side is when they announced $100 billion is going to get turned back on and people think our revenues are going to go through the roof, no, we're still steady, continue to grow, looking at their overall portfolio of evaluations of the different mining sector clients that we support. So we're quite insulated by being removed, 1 or 2 steps removed from the CapEx budgets and that's true with both minerals and it's also true with oil and gas. And so that's what I -- that's the sort of our perspective on the level of volatility that we have associated with this commodity work. John Rogers - D.A. Davidson & Co., Research Division: And in terms of the actual work when you have a project or an assignment for a commercial customer, do the margins that you realize on that work tend to be stable or come in as planned? Is there both upside and downside to that? I guess that's what I'm trying to understand as well.

Most of it is stable. A lot of the very front-end work we do for commercial clients is on a time and material basis. And so when you charge an hour, unless our engineer gets a huge raise, that isn't built in, that's already baked into the project at the beginning. As we move toward the detail design and then certainly construction, it moves fixed price but that's still a relatively small part of our business right now. John Rogers - D.A. Davidson & Co., Research Division: Okay, and then lastly, if I could. In terms of the acquisition or potential pipeline out there, it sounds as if you've got at least, a decent list of prospects or opportunities there. How quickly do you have to close those to impact '13?

We've actually -- first of all, let me go back and refer you to the slide and a comment, and I'll restate what I mentioned earlier, and I've done this every year. Our future guidance does not include any acquisitions. So if I do 0 acquisitions unless -- and I do know there's a few analysts, and I think we have one that actually includes revenue from acquisitions during the year even though we don't provide it. So if -- I think that's you, John. So if you put the number in there, in order to hit your number, I'd have to sit down and go through your model for acquisitions to see what we'd have to do. But even your model actually just has a, what I'd call just a fair pace across the year. It doesn't have to happen in our Q1, and so I don't think there's a big bust even in your forecast. But I would just say that for those analysts that include acquisitions at the beginning of the year, they should not, as we make an announcement of an acquisition, then re-increase their guidance for the year. To double us up from the beginning and then hit us again during the quarters, which some of our people here think happen sometimes. Now with that said, let me just make one comment. You may hear this from others. It is quite an interesting artifact we've seen in the past 60 days roughly. Here in the United States it hasn't been our #1 focus for acquisitions because of the economic environment but because of the administration and the potential tax change for capital gains treatment, it has driven a number of firms to actually approach ourselves, and I'm sure it's not just Tetra Tech. But we have had a number approach us and ask us how fast can you go? That we've been dating you for a while, Tetra Tech. We like you. We're a good fit. We've known each other. You know what, let's just forget this dating and get moving. Can you finish by December 31 because it's going to save us owners x amount in capital gains increase based on their perceived tax changes here in the new fiscal year. So it is interesting. It has sort of exercised some of our M&A staff and could tax us. And so, it is something that if you asked me 60 days ago, I'd say U.S. is materially a less priority, but some interesting things have become available from a purely financial motivation by these owners.

Your next question comes from Noelle Dilts with Stifel, Nicolaus. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: My first question, I was hoping -- you've mentioned a little bit of this on the call, pieces of it, but I was hoping you could talk a little bit more about the energy markets and what you're seeing just in terms of kind of the mix domestically. We're looking at a pretty significant slowdown in wind next year, and I'd just be curious to hear your thoughts on the trend in that market.

Well, I'd say we serve conventional and unconventional. Unconventional being generally renewable. Wind, solar, geothermal, a few others. We've actually seen those be flat. We internally see our wind work, which most of our renewable energy is wind and the transmission lines from these different renewable sources to the grid, and we've seen it'd be flat. We've actually seen some of the transmission lines actually pick up because they can be used, not only for renewable sources but also conventional or even coming across the border for Canada. So we've actually seen some of the -- refer to T&D, transmission and distribution, actually picking up. So that's actually been strong but wind specifically for us, we think 2013 will be, I'll use the word stable. That's code for flat. Revenue should be the same as we saw in 2012 and that's really with the same mix we have both on studies and turnkey implementation of putting the turbines in and commissioning them. So what we see for the next 12 months is relatively flat. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: Okay. Great, and then can you just comment on the cross-selling opportunities you're seeing with some of your acquisitions in Canada and even with some of your more traditional businesses. I know that was part of the strategy when you acquired some of these operations. Can you just talk about the progress you're making on that front?

Well, it has really not only met my expectations, but it has exceeded it. And I know that folks here internally as we do acquisitions like to use the word synergy, but what's really happened is the work that we've brought in, the firms we've brought in, in Canada were primarily front-end firms and people that did the planning, exploration and the upfront engineering work. And essentially when we went to Canada, we had no environmental work, and that was just over the past 3 years. And this past year, we've actually won some of our largest environmental remediation and assessment contracts we have in company in Canada, exclusively from leveraging the environmental capability we have here in the U.S., which is many years, if not, decades ahead of any other country in the world on the environmental compliance remediation assessment area. One of them we've press released openly was Port Hope mining. It's one of the large uranium sediment remediation projects we've had. We've had a recent announcement on others that we've done in Canada, and so the leverage has really been, or if you want to call it cross-selling, has been very, very good. And I'll also say that the cross-selling to our existing mining clients we had in the United States, where we were doing back-end remediation and environmental work, has been exceptional for us doing the front-end work. So it has been a 2-way street both up to Canada and down to the U.S.

The next question comes from Michael Legg with Roth Capital.

Could you just talk a little bit about the dollar amount of cost savings from the realignment? And if that offsets any of the reduced -- you mentioned you shut down a couple of business lines there, what type of revenue reduction that might be just so we can factor it into the organic growth rate.

Well, I'll start with the back end. We're not expecting -- well, nominal, very nominal revenue reduction. It was almost nothing and we just elected certain areas and geographies not to continue where we either didn't have critical mass or it just didn't look promising. And so I would say that any reduction we had on an election to go forward with a small business line here or there, and most of it was geographic, would more than be made up in the growth in the other areas we have within the EAS components that went to either TSS or ECS. So as far as net revenue reduction is part of this realignment, I do not expect any. In fact, I expect that to increase within those units that went to the others. Now cost savings, there's no doubt that it's a combination of 2013 and beyond. We will save far more than we incurred in the fourth quarter as part of this realignment, and I think I indicated earlier on a question, maybe we could see 1% of our margin improvement in 2013 and then more in the future. So it will more than pay for itself, this realignment. And the efficiency and the linkage for our clients of having these aligned with our front end is even better. And I'd just say a word in support of the EAS group, they did have a tough row to hoe this past few years because that is where most of our state and local work was. That's where it got hit the hardest on tax receipts, reduction in work. And so they did have a very difficult client mix to work with. A lot of the work for the EAS was beginning to come from or had been coming from our TSS and our ECS units. And so when more and more of it was being handed down for design from the upfront group, why hand it off to another unit? Just embed it with the one where they're receiving their funding and it just makes so much more sense plus it makes both our ECS and our TSS groups billion-dollar units on scale, and so the back-office costs become much more efficient, and I expect our RCM unit is going to get up to that same level pretty quick.

Okay, and just kind of a follow-up to that. From a realignment perspective in the foreseeable future, should we expect any other cost in the next year or 2 or are we pretty much set?

We're pretty much set.

Our final question comes from David Rose with Wedbush Securities.

I have just 2 quickies. If you could walk us through the progression of margins in RCM as you work through the backlog, if you could provide us a little bit more color on the front-end cost you're incurring. Margins are flat year-over-year, down sequentially but it's clear that you believe the business is going to be better. So what are the give and takes?

Yes, let me comment on that because I think that if you saw -- if we, at Tetra Tech, saw a 25% increase in our revenues in ECS or TSS, you would expect there to be a -- somewhere between modest to material increase in margin. And that would make sense because we have a bigger revenue base, we have the same back-office cost, and therefore, it drops to the bottom line. That's not true in RCM, at least, for Tetra Tech. When we get more revenue, we actually -- when we start a construction project, we only recognize a very small or in fact, no profit at the beginning of the project. We actually won't [ph] embed some caution until we get mobilization complete, until we get some of the -- maybe through the first material permitting or through the first major phase. So you'll actually see revenue coming through the book. So you'll see revenue go up and you'll see a natural lag with profitability because we internally, inherently are cautious on our profit recognition. So it's not on an hourly basis or a cost plus where your profit recognition is linearly linked to your revenue, that's not the case. RCM is different, there's a lag. And so if we complete the project on time, on schedule, we will finish it on budget then you'll see an increase in the profitability as the risk begins to abate during the execution of the project. So it's not how much better is the RCM going to run although no doubt, we're going to continue to increase that, you need to look at it as to phasing of the execution of the individual projects and then the catch up on the profitability as we don't run into surprises because we don't want to end up in a position where we recognized a bunch of profit we had a problem with, whether we had a problem with something and then ended up writing it down. You've not seen that come from Tetra Tech and we're doing what we can to make sure that doesn't happen in the future either.

So to that point, do we see the margins pick up more meaningfully in Q2, Q3, how should we think about that?

I think it's going to ramp up during the year and I didn't have a chance to share with our business group president that we have moved his upper end up to double digits, and you've not seen that for a number of years out of that group. But I think you're going to see it ramp up to that. You'll see it ramp up just steadily through the year.

Okay, great, and then lastly, given the uncertainty in the environment, what are you doing from a project management perspective to stay ahead of the cost? Obviously, you've demonstrated that with EAS, but the rest of the business, were there trigger points for flexing the business? And then what segments of your business are you seeing potential project delays?

Well, we've been pretty good. I know that we -- ultimately, we're not the measure, our shareholders are the measure if they feel we're doing this quick enough. But I will say, through the economic downturn of 2008 even through now, we did not show a loss in any business segment any quarter at all. Now we've been quite quick with respect to managing the business, the back-office cost as it goes down and we're very -- we do have an enterprise risk management program that we prioritize in all of our larger fixed price contracts. To be direct, we're very much on top of those, watch those very closely. You've not seen big project write-offs from Tetra Tech. I want to be cautious to say ever but not really and we're continuing that in -- and that turns up significantly when we see an economic downturn. So most of our issues have been managing the business when we see a decreasing revenue stream, which we saw in RCM and EAS through the economic downturn. I think we've done really quite well on that. And as you can see, our margin expansion on a collective company has increased and I'm not going to say -- I'm not going to jinx ourselves and say that'll never happen to us but we're very much on top of that, David. Well, thank you very much for your questions and interest in Tetra Tech. I really look forward to speaking with you again next quarter. And I'll tell you, for all of us here at Tetra Tech, we're excited to be in 2013 and look for some of the new markets that are just starting for us, becoming headliners for us and major contributors that everyone in the company that exists here today can contribute in. So with that, I look forward to talking to you next quarter, and goodbye.

Ladies and gentlemen, this concludes our conference for today. Thank you, all, for participating, and have a nice day. All parties may disconnect now.