Welcome to the XPO Logistics Third Quarter 2013 Conference Call and Webcast. My name is Dawn, and I will be the operator for today's call. [Operator Instructions] Please note that this conference is being recorded. Before the call begins, let me read a brief statement on behalf of the company regarding forward-looking statements and the use of non-GAAP financial measures. During this call, the company will be making certain forward-looking statements within the meaning of applicable securities laws which, by their nature, involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those projected in the forward-looking statements. A discussion of factors that could cause actual results to differ materially is contained in the company's SEC filings. The forward-looking statements in the company's earnings release or made on this call are made only as of today and the company has no obligation to update any of these forward-looking statements, including its outlook, except to the extent required by law. During the call, the company also may refer to certain non-GAAP financial measures as defined under the applicable SEC rules. Reconciliations of such non-GAAP financial measures to the most comparable GAAP measures are contained in the company's earnings release and the related financial tables. You can find a copy of the company's earnings release, which contains additional important information regarding forward-looking statements and non-GAAP financial measures, in the Investors section of the company's website at www.xpologistics.com. I will now turn the call over to Brad Jacobs. Mr. Jacobs, you may begin.

Thank you, Dawn, and good morning, everybody. Welcome to our call. With me today are John Hardig, our CFO; Scott Malat, our Chief Strategy Officer; and Karl Meyer, the CEO of our last-mile business, 3PD. We're also joined by Will O'Shea, the Chief Sales and Marketing Officer of 3PD; and Tavio Headley, our new Director of Investor Relations. Tavio was most recently an analyst at Jefferies, covering transportation. And before that, he was an economist for the ATA, the American Trucking Associations. We're happy to have Tavio on the team and I'm sure he's going to be a huge help for all of you. As you saw on the numbers last night, we delivered exceptionally strong revenue growth in the quarter. Our revenue was up 173% year-over-year. Some of that came from our acquisition of 3PD, which we completed in August. But our organic revenue growth was also very solid. Companywide, we had 42% organic growth in the quarter. And in brokerage, we delivered 146% organic growth. We also increased our margins. Gross margin dollars were up 251% and we increased gross margin percentage in each of our business segments. In freight brokerage, we bucked the industry trend and delivered 100 basis points of gross margin improvement year-over-year. And sequentially, our brokerage margin was up 40 basis points. As expected, we reported a loss in the third quarter. The largest contributor to the loss came from the strategic investments we've made in long-term growth, including salespeople and technology. These investments are paying off and I'm happy to say that we're on track to report positive EBITDA in the fourth quarter and expect to exceed our plan for $1 billion of revenue run rate by the end of December. Our latest acquisition, 3PD, has made a seamless transition to XPO. As…

Thanks, Brad. I'll cover the performance of our 3 business units during the quarter. Freight brokerage revenue was up 374% from last year to $152.6 million, and gross margin dollars increased by 583%. Our mid-quarter acquisition of 3PD added $46.5 million to the revenue increase in the quarter. The balance of the increase came from our acquisitions of Turbo, Covered and Interide, and from the organic growth of our cold-start locations. Our freight brokerage cold-starts are now at a combined revenue run rate of over $120 million. And our freight brokerage business, overall, had strong organic growth in the quarter, up 146% year-over-year. Freight brokerage gross margin percentage increased 18.1% for the quarter. This increase was driven, in large part, by the 3PD acquisition. But even excluding 3PD, gross margin was higher both sequentially and year-over-year. This trend carried over into October, when we saw another nice pickup in gross margin versus September. In last-mile, our 3PD business continued to benefit from strong retail sales of heavy goods, as well as an increase in e-commerce. 3PD's revenue increased 18% year-over-year. Gross margin in last-mile was 28.4%, which is lower than it had been in prior quarters. This was due to higher-than-seasonally-normal delivery volumes for several retail customers in September that resulted in higher carrier costs. So far, in October, volume growth in last-mile continue to be strong and our margin has trended back up. In expedited transportation, our revenue increased 6% to $25.1 million for the third quarter. Revenue increased due to the contribution of Air Charter, partially offset by a decrease in revenue in our over-the-road expedite business. Gross margin percentage for expedite was 18.1%, which is up 220 basis points sequentially and up 150 basis points from 1 year ago. Using latent analysis and selection, we strategically focused…

Thanks, John. I want to start by adding some color about our operating environment. From a macro perspective, the market continues to be relatively steady and balanced. Truck pricing in the third quarter was up only slightly on a year-over-year basis, which is how it's been going for most of this year. Business picked up over the last few weeks, after a slow beginning of October, possibly due to the government shutdown. In this type of low-growth environment, coupled with balanced capacity, it's no surprise that brokerage margins in the industry have been pressured. Despite this, we're improving gross margins consistently as we execute our plan. We're pricing better and we're purchasing transportation better, as our sales reps gain experience and the algorithms in our Freight Optimizer have more data to mine. At the same time, we're growing organically at a rate in excess of 40%. And in a more favorable brokerage environment, when the market's no longer balanced, we should get an additional boost. Within brokerage, as Brad noted, the last-mile sector has been strong. Home goods retailers and manufacturers have posted solid results. Black Friday is not for several weeks, but the first November promotions hit the stores this week, and with our growing exposure to Internet sales, we expect Cyber Monday to be a big driver for us. Looking further out, favorable housing trends have given retailers and manufacturers the confidence to invest in going direct to market. And as a result, we're participating in a lot of national bids. Seasonally, the fourth quarter is typically slower than the third quarter for brokerage, that includes last-mile. But given everything we have going on, we still expect to have sequential revenue growth in freight brokerage in the fourth quarter. Here are some key strategic areas that are driving…

[Operator Instructions] Our first question comes from Justin Yagerman from Deutsche Bank.

Just a couple of housekeeping items and then I'll ask a strategic question. What are you -- John, do you have an estimate for what you think DA [ph] is going to be in the fourth quarter?

It should be basically what we did in the third quarter plus another $2.3 million for a full quarter of 3PD.

Okay. All right. I just wanted to get that out of the way. And then, the 125 -- the ABL that you put into place, what's your current availability under that facility?

Well, we can borrow up to 85% of our AR on that facility. So our current eligible AR is just about $115 million. So we can borrow up to 85% of that in terms of the availability.

Okay. And the litigation that you guys have been reporting, is that still C.H. Robinson, or is there other litigation that's going on concerning the business?

No, it's primarily C.H. Robinson.

Okay. All right. And then, I guess, as we think about acquisitions on a go-forward basis, you listed a bunch of different silos that you're considering. How do you think about those and prioritize them on a go-forward basis? Obviously, 3PD was a big step in what appears to be a good direction. Just curious, Brad, how you're thinking about the opportunities right now.

We're thinking of opportunities, opportunistically. So we are looking at deals in last-mile. We are looking at deals in expedite, in LTL. We're dabbling in some opportunities in managed transportation. And, obviously, truckload. So most of our acquisitions over time will be truckload, because that's going to be the biggest part of our business going forward. But we're also looking at these other ancillaries as well, and it really depends on what's -- when the stars line up for which kind of transactions.

I'm assuming that applies to size, as well?

Size? We're looking at big, small and medium. So it's really all over the board. Our approach to acquisitions is to cast a wide net, look at lots of acquisition opportunities at the same time and be very disciplined with making sure we dot all the Is and cross all the Ts before we get to the finish line.

Yes. All right, and last one. On the margin, I actually have the same phrasing as you used in your prepared remarks. So you bucked the trend of the industry, so far, on a 100 basis points of improvement on freight brokerage. You did talk about LTL becoming a bigger part of the mix in the quarter, how much of this, do you think, is technology-driven and how much of it, do you think, is mix-driven in terms of what's going on in your business as it evolves?

Well, I -- it's hard to nail that down. I can hypothesize with you, but I am very proud that despite what most of our competitors are showing in terms of margin compression, our freight brokerage had a 100-basis-points margin improvement year-over-year and had 40-basis-points margin improvement sequentially. What's causing that, I think, is internal actions. I think we're hiring the right people to begin with, we're giving them proper training, we're empowering them with technology that's getting increasingly better at pricing and at truck-finding. And I think all those factors, together, are showing margin improvement. And plus, the maturation of the sales force. We're hiring lots of people over the last couple of years, and the experience is -- maturation is getting higher and higher as they have more months under their belt.

Our next question comes from William Greene from Morgan Stanley.

Brad, can you comment, at all, on some of the dynamics in the quarter? Hours of service, did that affect you? What are you kind of seeing in the markets as we look out in the fourth quarter now relating to changes in the regulatory landscape?

We're not seeing much from hours of service. I mean, the main thing we hear about hours of service is our carrier base complaining about it. And saying that it wasn't thought through very carefully and wasn't designed by anyone who has ever driven a truck, and it's hurting their productivity. But you really can't say that it's -- at least we can't really say, in our observations and experience, that it's tightening up capacity in any appreciable, noticeable measure. Because if it is, there must be something else creating supply. Because we're not -- apart for some pockets of tightness, our boards are getting cleaned up pretty consistently by midafternoon, which, to us, is the main measure to know that -- whether there's tight or loose capacity. So right now it's -- we would categorize it as the same-old, same-old it's been for about 2 years now. Very balanced equilibrium. Not extraordinarily difficult to find a truck. And we don't see that changing, barring some unsuspecting -- unexpected new circumstance anytime real soon.

When you look at kind of how you just described the market and you think about the differences in the market, maybe excess supply or even excess demand in that world, is this a good market for you? Or do you prefer a market where -- that more demands is always good for everybody?

Let's be clear. This is a lousy market for us, and it's a lousy market for truck brokers all across the board. And the last couple of years have been lousy. And we've had the situation where we're growing a business in its early stages in the lousiest part of the cycle, where shippers don't really desperately need you to find capacity. They need you because they don't have a roomful of 500 people calling trucks all day long. But they're not desperate to find capacity. And on the trucking side, they can find freights, it's not impossible to find freights. So you don't have either of your constituents on either side, the shippers or the truckers, really urgently needing your services. So you really got to hustle a lot.

Okay, good. I have a question on some of the longer-term guidance metrics. So near-term, we've got the fourth quarter comment on EBITDA. Do you think that EBITDA comment is dependent on more acquisitions? Or you're run rating at a point where you feel very confident you're going to get there anyway? And then I have one sort of longer-term after that.

Hey, Bill, it's Scott. We're on track to do the positive EBITDA. We could potentially close acquisitions or not. Acquisitions are very hard to figure out when they'll close, as Brad said. When you look at the quarter, from the third quarter to fourth, we'll improve our productivity. Our people have become more productive over the same number of salespeople. 3PD will be in the results for the full quarter, as you think about it sequentially. We had almost $5 million in cost from litigation and M&A. Now, we're continuing on M&A activity, but that sounds like a high number, and we'd expect that to move down. So if you think about the productivity improvements and all the things we have going on, we're heading in the right direction.

Okay, very helpful. And then, when we look longer-term, and we're trying to see when we'll kind of normalize in terms of getting the steady-state sort of EBITDA targets we've talked about, how soon does this start to translate into a net earnings number? Like when could we see positive earnings, not just EBITDA?

We haven't given guidance yet regarding EBITDA or the earnings next year, we've barely started the budgeting process. But we're definitely going to keep the focus on the EBITDA rather than the net income because we think that's a more meaningful measure. Because like all acquisitive companies, not just companies in transportation making acquisitions, because of the way the accounting rules have evolved over the last few years, there's a huge amount of depreciation and amortization on the purchase price. So it kind of decreases the net income a lot of more than it does the EBITDA.

Our next question comes from Scott Schneeberger from Oppenheimer. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: Brad, in your quote in the press release, it says, "Momentum is resonating with large shippers." Could you just give us a little bit more commentary on what you're alluding to there? And then, just some discussion of your strategic and national accounts.

Sure. So I was at CSCMP in Denver, the big trade show for shippers, a couple weeks ago. And we had our strategic accounts team and we had Will O'Shea out there, too, from 3PD. And we had a booth and we met with a few dozen shippers over a period of several days. And it was a very, very positive response. And what resonates with shippers are a few things about XPO. Number one, that we got a lot of capacity. I mean, we have a lot of capacity, we're moving 17,000 deliveries a day. Number two, we sort of come out of nowhere. I mean, 2 years ago, XPO Logistics didn't exist. And now, we've made a real statement that we're committed to being one of the largest capacity providers. And to continue to grow so, that we'll have more capacity going forward. And thirdly, I think what resonates with them is the culture of the company is passionately focused on delivering world-class service. So everybody from top to bottom is very acutely aware of how we're doing with each customer on on-time pickup, on on-time delivery, on rectifying problems when they inevitably come up. And shippers like to hear that. They like to see that. And they like the experiences of a team that's really hungry for their business and really wants it bad. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: I know you guys mentioned that 3PD would kind of run on its own out of the gates. But could you speak to synergies you're seeing between XPO legacy and 3PD, thus far, and maybe some synergistic goals you have over time?

Hey, Scott, this is Karl. So our focus right after completing the deal was to go after the low-hanging fruit. And that was really in 2 areas. One was introducing the XPO national accounts team to some of our large retailers, and we've done that. We've been able to get core carrier status with some of our retailers. Then on the other side, it was -- and using the XPO relationships to bring in last-mile capabilities. And we've been able to do that as well. I think longer term, we're focused on integrating electronically into the system so that all of the offices across the XPO brokers' network can quote last-mile services in real time and book those orders. And we expect to have that, I think, mid-first quarter next year. Scott A. Schneeberger - Oppenheimer & Co. Inc., Research Division: Great, that's helpful. And it segues into my last question. Could you just give us an update just overall XPO on IT developments and what you're seeing as that's one of your areas of focus, optimizing operations?

Thanks, Scott. Yes, we have literally over 100 projects so I can go on this topic for a long time, which I'm very passionate about and enjoy. The Freight Optimizer continues to improve the algorithms on pricing and carrier. We actually just -- we're rolling out new releases on a very fast clip. So every 3 to 4 weeks, a new release comes out for the Freight Optimizer. Latest things have improved the algorithms on the pricing and the carrier side. So we continue to improve those as we get more data. LTL, which we rolled out across the entire network more recently, we opened up carrier -- customer portal so that our customers go online, they dispatch loads and they can do all their business in LTL right on the website. So we've launched carrier and customer portals. We're continuing to, for the rest of the year, work on order input and other parts of the platform, in addition to continuing to improve how we find a truck and how we price. There's a lot going on in IT.

I'll go to the next person. We have Ryan Cieslak from KeyBanc.

Brad, maybe if you could just talk a little bit about really nice organic growth here in the quarter. And you have been putting up, obviously, some strong organic growth the last couple of quarters. Obviously, the comps are going to get more difficult. But what type of organic growth or run rate or level do you think is sustainable over the next couple of quarters? Or how should be thinking about organic growth in the current freight environment?

We think we continue to grow organically very fast. And if you think about freight brokerage, it's our fastest-growing part of the business. Even if that were to decrease from the 140s and 150% growth that we've been seeing organically on a quarter basis, that becomes a larger piece of the mix. So our fastest growing part of the business are becoming a larger part of the mix, which could continue to sustain the organic growth. When you think about over the next several years, we're going from a little under $1 billion today, to 2017, we're about $5 billion in revenue. About $1.5 billion to $2 billion of that will come from acquisitions. The rest will come organically.

Okay. And then I'm sorry if I missed this, but did you guys give a EBITDA figure for 3PD in the quarter? Or did I miss that?

No. We didn't give out EBITDA for 3PD. We did give out revenue and gross margin, and then 3PD's included in our freight brokerage segment. And you can see operating income and EBITDA for our freight brokerage segment.

Okay. Then maybe just directionally, I mean, is there expectation that there's -- I mean, what level of EBITDA or profitability do you guys expect in the fourth quarter from 3PD? Just trying to get a sense of what type of accretion, if any, was in this quarter or maybe into next quarter?

3PD contributed low single-digit millions of EBITDA in the third quarter because we only closed on it midway through the quarter in August 15 -- on August 15. It'll obviously be in the quarter -- for the whole quarter in the fourth quarter. And the EBITDA contribution seasonally is roughly about the same. Within $1 million of EBITDA on a quarterlized basis. So for the whole quarter, it'll be high single-digit millions of contribution in EBITDA.

Okay. And then, Brad, it sounded like when talking about 3PD, things are running on track. Even maybe -- this is maybe my words, but maybe a little bit ahead of what you guys were thinking from a top line perspective. But how should we be thinking about the level of revenue into the fourth quarter? I know, Scott, you'd mentioned typically seasonally, it does decline. But it sounds like there's a lot going on. There's new business opportunities. Should we see, sequentially, that ramp into the fourth quarter? Obviously, when normalizing for full quarter this -- in the third quarter. Just trying to get a sense of what aspect of the sequential trend in 3PD is seasonal and what aspect is actually some potential synergies or new business you guys are currently gaining?

Well, we'll continue to grow, like we said, sequentially, third to fourth. Like you said -- so if we break up the different parts of the business, expedite and freight forwarding typically move down from third quarter to fourth quarter. Now in expedite, we'll see if we can buck the trend. We'll see if we can do just as much or hopefully a little more in revenue. But usually, third quarter, fourth quarter's down. Freight forwarding, third quarter, fourth quarter, is typically down a bit. And then in freight brokerage, we're growing very quickly. So if we talk a few years from now, 3, 4 years from now, third quarter's probably going to be higher than fourth quarter. That, excluding last-mile and 3PD, we'd expect to continue to kick up as our cold-starts continue to ramp up and we continue to grow. 3PD, typically, does a little less revenue in the fourth quarter in last-mile than they do in other quarters. That's been moving a little bit in the direction where fourth quarter's catching up. Second quarter and third quarter usually are stronger. But we have a stronger Internet presence. Cyber Monday is becoming more important to us, Black Friday promotions. So fourth quarter has been increasing, but there's still that time at the end of December where there's not much going on.

Okay. And the last one I have and I'll get back in line is, longer term, your goals that you guys have laid out following the 3PD acquisition and maybe the potential impact mix is going to have on your margins, maybe versus your original plan. How should we be thinking about what is the right margin high profile, longer term when you hit those goals? And I think you guys have laid out more of a mid-single digit EBITDA margin. But does that change now with final mile in there and potentially some other mix impacting going forward?

We're still modeling about 6% EBITDA margin, long term, if you go out a few years. When you layer in all the different mix of the different business segments that we are in and will be in, that probably will shake out.

[Operator Instructions] Our next question comes from Jack Atkins from Stephens.

So I've got a couple of housekeeping items here. First, John, what's the correct share count that we should be using for the fourth quarter?

It's -- Jack, it was in the back of the press release. If you look at the table, it's there. It kind of lays out all these relevant share counts that you need. And if you have any questions about that table, then feel free to reach out to me, and I can talk to you about it in more detail, but...

I guess the question that I have from that, though, is that there was a transaction, I guess, a conversion from the convertible securities into common stock. And I just didn't know -- how that 600,000 or 700,000 shares should be treated. Is that already in diluted share count or is that additive?

Yes, it will be the same because those are converted to shares, and we already include them in our fully converted. So it will just shift from the shares that you see now under the line of convertible securities over to common shares.

Okay. So those were already in diluted share count for the third quarter?

Yes, they were. Yes.

Okay. Okay. And then what are the total revenue from acquired businesses over the last 12 months in the quarter, not just from 3PD? Do you have that, John?

I don't. Jack, we're not -- we really haven't been giving out specific company revenue numbers. So I mean, all of that is included in our brokerage segment.

I got you. Just -- you broke out an organic growth number, and I'm just trying to understand what's sort of included in that base. And so, if you could just kind of give me a total acquired revenue number, not for each specific company, I think that would be helpful.

Okay. That makes sense. From an organic perspective, what is included in there is only our first acquisition that had a full quarter last year. It was Continental. All of our other acquisitions are all within a year of buying them or were only part of the quarter of last year. So that's not organic growth base yet. Next quarter, Kelron will be in our organic growth base. And then, it will continue on from there.

Okay. Okay. And then last couple of questions. In your investor presentation in the last couple of months, you noted, I think, the revenue and EBITDA targets have been pushed out, I think, to 2017 from 2016. Could you maybe talk about what drove that extension of the timeframe for those long-term goals?

That really wasn't as big a change as you may think it was. I mean, the original goal was end 2016 on run rates of $5 billion and $300 million. And calendar 2017 would be to report it. But if you really -- 6% and 6.5% does the other.

Okay. Okay. And then, just kind of digging into that a little bit more. On the $1.5 billion to $2 billion of acquired revenue, I guess, can you clarify what you mean by that? Is that a contribution from acquired businesses in total? Or is that just the revenue run rate that you acquired at the time of the purchase?

That is the revenue from those acquired businesses, as of 2016 -- as of 2017.

Okay, and that's incremental to what you already purchased? Or that's total acquired from the date that, Brad, you made your initial capital investment?

That's incremental to what we've already purchased.

Our next question comes from David Campbell from Thompson, Davis & Company. David P. Campbell - Thompson, Davis & Company: I'm just curious about the 42% Jack was trying to get, the 42% organic growth rate. That's the growth rate for the company, excluding one acquisition, which -- the first acquisition, which has now been in there for 12 months. Is that the way to look at it?

That's right. That's right. David P. Campbell - Thompson, Davis & Company: Yes. And freight brokerage is largely cold-starts, so you call it organic. Is that correct?

That's right, yes. Organic -- cold-starts are included in our organic base. Everything, including acquisitions. David P. Campbell - Thompson, Davis & Company: Right, right. And someone, I think, mentioned interest cost in the fourth quarter versus the $6.4 million. Is there something nonrecurring in that $6.4 million?

Yes. It was -- there was a $3 million fee that we paid to support the 3PD acquisition. So we had a debt commitment from a group of investment banks to finance the 3PD acquisition. And we ended up not drawing on that facility, but we did pay the commitment fee. And that fell on the interest line. David P. Campbell - Thompson, Davis & Company: So going forward, it should move more like $3.4 million on a quarterly basis?

Exactly. David P. Campbell - Thompson, Davis & Company: Right. Okay. And the expedited, Scott, you were pretty optimistic about expedited. And fourth quarter is usually a seasonal decrease. Is that based upon what's happened in October? Because December, really nothing goes on. I mean, last week of December.

That's right, yes. Our expedite in the back half of December is very weak. It's a combination of a factor of -- things have been picking up in expedite. And expedite's a good business. That's a business we like a lot. It's a business we're a top 5 player in. And shippers need us. As people move to just-in-time inventory, they need to use expedited services. When you think about their cost to carry inventory, it's so much larger than the cost of expedite. So we've seen a slow environment for expedite in the past. It has been getting incrementally better. We're dealing with it better as well. We've been doing better lane selection. We still had -- we made a decision to improve profitability, and we had lower volumes in the third quarter as a result. And that's continued to pick up into the fourth quarter. So maybe something in line with the third quarter, where you typically see it move down. Hopefully, it can be in line.

Dave, you might notice the growth margin in expedite was up 210 basis points over 2Q. David P. Campbell - Thompson, Davis & Company: Well, it used to be 21%. You've got a ways to go.

That's right. David P. Campbell - Thompson, Davis & Company: And knowing you, you'll get there.

We'll do our best. David P. Campbell - Thompson, Davis & Company: All I wanted to do was -- so it -- that's about everything. Just one more question, the freight brokerage revenue in the fourth quarter, you mentioned would be up because of the 3PL -- 3PD. What about the rest of it? Would that be down from the third quarter?

No, that should be up. But that should be up not due to any specific thing going on in the external market, just because we've hired more people. And a lot of people coming out of the training programs and they're in the phones. And a lot of people have been working for a few months, and now their gross margin production is increasing. So because of the internal measures we're taking -- that we're doing, the fourth quarter will show more revenue than the third quarter in all likelihood.

Our next question comes from David Tamberrino from Stifel. David J. Tamberrino - Stifel, Nicolaus & Co., Inc., Research Division: Maybe just staying with where you just ended in terms of headcount. It looks like you've been growing headcount after adjusting for 3PD for the quarter by about 100, give or take heads, sequentially, for the past couple of quarters. What are the hiring plans look like for the fourth quarter of this year? And is that kind of a good number, about 400 people per year that you're going to be bringing in to freight brokerage?

300 to 400, in that band. 300, 350, 400. All depending on the quality of people that we find and how we feel about integrating them and training them and putting them on the phones and -- put in that range, yes, that's a good number. We're up to 1,950 employees now. David J. Tamberrino - Stifel, Nicolaus & Co., Inc., Research Division: That's just under 2,000. So in terms of hiring plans for the fourth quarter, you're ramping that up. Is another 100 probably a good idea for where you're looking to end the year?

We're adding. We're ramping up a bit from the third quarter. It has been a little accelerated. So we should do a bit more than we did in the third quarter. David J. Tamberrino - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And do you have larger training classes now? Do you expect a larger amount of people to be coming out into the sales floor? Or is it kind of a steady run rate now, where you have the same 30 or 40 people per week or whatever maybe coming out, it's not necessarily accelerating?

We actually had our largest training class ever starting just recently, 50 people in one shot. So we're taxing the system. We're pushing the envelope on that. David J. Tamberrino - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And do you think that at that capacity, since you add 5 or 10 more, how does that work?

I'm sorry, I couldn't hear the 5 to 10 more. What' that about? David J. Tamberrino - Stifel, Nicolaus & Co., Inc., Research Division: Yes, if you got 50 going in now, and that's your largest size class, how many more people do you think you can get layered onto that before you kind of don't have enough space or can't put any more people in the room for the class?

It's hard to say. We've got it all incrementally on that. What's really important is that we keep the quality of the people real high, which we've been able to do. And we keep the quality of the training really high, which we're also doing as well. I mean, as long as we can maintain the quality control in both those facets, there's no reason other than psychological ones when we can't increase the number of people. There's a big country out there, and there's a lot of people to hire. Hiring a few dozen people here, few dozen people there, it's really a question of just getting organized and approaching it with the right psychology. David J. Tamberrino - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And maybe one last one. How was your turnover rate from 2Q to 3Q? Was it flat? Did it pick up? Did it come down at all?

Turnover rate for the last 12 months has been relatively steady. Our voluntary churn has been in the low 20s. And I mean -- that David, no matter what it is, even if we're less than that, it's too much. The turnover is the enemy because you invest in people, we put them through a couple of months of training, put them on-the-job training after that, we chew up resources to mentor them and to teach them. And they really don't contribute to the company on a profitable basis until month 12, month 13, when they're contributing $12,000, $13,000 gross margin per month. So anybody who quits or gets fired in the first year, that's not good. And our goal is to reduce that as much as possible.

Our next question comes from Barry Haimes from Sage Asset Management.

Had a couple of questions related to cold-starts. Saw in the press release, the cheat [ph] in the quarter and the one planned for Louisville. And how many cold-starts in total does that bring you to since inception? Is there any sort of -- I know everyone is different, but is there sort of a mean or median revenue per cold-start we should think about? And then, for the fourth quarter and 2014, do you have any plans yet in terms of number of cold-starts we should be thinking about?

Okay, Barry. Cold-starts, the first question, we've had 22 so far. So 10 in freight forwarding; 11 in freight brokerage, including the 3 we talked about today; 1 in expedite, 1 in Birmingham. So 11, 10 and 1. Revenue on cold-start will depend -- depends what city it's in and what demographics are and how strong the leader is. But if you look at the ones we've done so far, they got up to about -- rough numbers, about $10 million, $11 million in aggregate per month after a little over a year. In terms of number of cold-starts that we'll do over time, we'll have to improvise on that, and it will depend on the quality of the people and on our appetite. But something in the magnitude of 3 or 4 cold-starts a year feels right. What we're mainly focusing on is there's about a dozen cities that we did some research on where the demographics look really good, both for hiring people from the industry and hiring people who want this type of a job. And they have a capability in those cities to be mega-locations that could be much larger than your typical cold-start, ones that could be hundreds of people rather than dozens of people. And that's a larger focus for us. Having said that, we're happy to work on onesies and twosies as well.

Our next question comes from Jamie Lee from JPMorgan. James B. Lee - JPMorgan Chase & Co.: You guys exchanged some of your converts for stock. Can you just talk a little about how that process came about? And is there any more appetite for these transactions going forward?

That came about in the reverse inquiry way, where we had convert holders who said converts are trading at $140 or whatever, and do you want to exchange that for common? And at a reasonable premium, it made sense to, from a financial engineering point of view. It's not something we're actively going out and tendering for. We're not -- we looked at it a little bit once we got through these inquiries in terms of doing it maybe 10 or 4 [ph] . But it didn't make any sense to do that with stock because we'd be putting common stock into hands that weren't natural long-term holders for that common stock. And we wanted to do everything we can to protect the common stockholders. But to the extent that it makes sense, from a math point of view, to do a common exchange with ones who are already short to common. Then basically, it's not creating any over -- any new supply for the common. So it's making sense to do that. So that's not a large number of our convert holders. It's a small number. With those small number, the ones who approached us, we listened to them. James B. Lee - JPMorgan Chase & Co.: Okay. And you mentioned there was a cash premium that was paid. Can you tell us how much that was?

It was small, but it was consistent with what is normally paid in those. But we didn't disclose it publicly. James B. Lee - JPMorgan Chase & Co.: Okay. Will it be disclosed in the Q?

I don't think so. I don't think we're required to disclose that. And for commercial and competitive reasons, I don't think we'd want to disclose it. It wasn't a lot.

We have a follow-up question from Justin Yagerman from Deutsche Bank.

Two quick ones. Timing on Louisville for the cold-start -- or Louisville, I guess, is the right way to pronounce it.

Yes, Louisville is actually part of our Interide acquisition. They had an office in Louisville and that -- it's already opened. And we're going to continue to scale that up and grow. And we were fortunate enough to work with the state and getting some tax incentives for that. So that will be -- that's already open, and we'll continue to scale it up. So we don't have Louisville, or however you want to pronounce it, Justin, as a cold start, because we acquired it. But we are real happy that the state of Kentucky supported us with the tax incentives to grow it more.

Okay. Are those taxes going to be a help in the fourth quarter?

Not a whole lot. I mean, it's a couple of million dollars over 10 years.

Over 10 years. Okay, that's...

That's okay. 10 years go by, and we'll take a couple of million dollars.

If you want to give me a couple of million dollars over the next 10 years, I will be happy to take it. And last question, how much was the increase in intangibles at 3PD in the quarter? And what's that going to look like in the fourth quarter?

It was -- the total intangible book for the transaction was $148 million, and the annual amortization on that is going to be about $22 million a year. There are some big pieces of that, that are going to roll up pretty fast. There's a $12 million carrier valuation that has a 2-year life. So $6 million of that $22 million will roll off after the first 2 years. And then, there's $18 million of technology that has a 4-year life. And so $4.5 million will roll off in year 4.

Okay. So the carrier portion was $12 million and that's 2 years. The $18 million technology was how -- was 4 years, you said?

4 years. That's right.

Okay, great. And then the rest is over what period of time?

There's a customer relationship piece. It has a 10-year life. It's $110 million. And, Justin, this will all be in the 10-Q. So you can see it in excruciating detail. But then there's 2 -- there's a trade name that is a short one also. It's 3.5 years, and that's about $6 million.

Thank you. I will now turn the call back to Brad Jacobs for closing remarks.

Okay. Well, thank you, everyone, for participating in the call. The numbers that I would highlight ending the call would be the 42% organic growth in the quarter, companywide, the 146% organic growth in brokerage and the fact that we increased gross margin percentage in every single one of our business segments. And most proud of all is that the margin, the gross margin in freight brokerage, increased 100 basis points year-over-year and sequentially. And the final number I'd highlight is 17,000 number of deliveries we're moving a day. So the company has really grown substantially over the last 2 years. Thank you very much. And we'll be seeing you soon.

Thank you, ladies and gentlemen. This concludes the XPO Logistics Third Quarter 2013 Conference Call and Webcast. Thank you for participating. You may now disconnect.