Mollie Hawkes - Assistant Vice President of Strategic Communications Steven H. Gunby - Chief Executive Officer, President and Director David M. Johnson - Chief Financial Officer.

Kevin D. McVeigh - Macquarie Research Randle G. Reece - Avondale Partners, LLC, Research Division Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division Timothy McHugh - William Blair & Company L.L.C., Research Division Jerry R.

Herman - Stifel, Nicolaus & Company, Incorporated, Research Division Paul Ginocchio - Deutsche Bank AG, Research Division Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division David Gold - Sidoti & Company, Inc..

Good day, everyone, and welcome to the FTI Consulting Third Quarter 2014 Earnings Conference Call. As a reminder, today's call is being recorded. And now for opening remarks and instructions, I'd like to turn the call over to Mollie Hawkes, Director of Investor Relations at FTI Consulting. Please go ahead, ma'am..

Good morning. Welcome to the Consulting FTI Conference Call to discuss the company's third quarter 2014 results as reported this morning. Management will begin with formal remarks, after which, we'll take your questions.

Before we begin, I would like to remind everyone that this conference call may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 of the Securities Exchange Act of 1934 that involve risks and uncertainties.

Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, future revenues, future results and performance expectations, plans or intentions relating to financial performance, acquisitions, business trends and other information or other matters that are not historical, including statements regarding estimates of our future financial results and other matters.

For a discussion of risks and other factors that may cause actual results or events to differ from those contemplated by forward-looking statements, investors should review the safe harbor statement in the earnings press release issued this morning, a copy of which is available on our website at www.fticonsulting.com as well as other disclosures under the heading of Risk Factors and Forward-Looking Information in our most recent Form 10-K and in our other filings filed with the SEC.

Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this conference call and will not be updated.

During the call, we will discuss certain non-GAAP financial measures, such as adjusted EBITDA, adjusted segment EBITDA, total adjusted segment EBITDA, adjusted earnings per share and adjusted net income.

For a discussion of these and other non-GAAP financial measures as well as our reconciliation of non-GAAP financial measures to the most recently comparable GAAP measures, investors should review the press release and the accompanying financial tables that we issued this morning.

Lastly, an earnings presentation and an Excel and PDF version of our historical financial and operating data, which has been updated to include our third quarter 2014 results, was posted to our Investor Relations website this morning.

With these formalities out of the way, I am joined today by Steven Gunby, our President and Chief Executive Officer; and our recently elected Chief Financial Officer, David Johnson. At this time, I will turn the call over to our President and Chief Executive Officer, Steven Gunby..

Thank you, Mollie. It's nice that I've got a few months under my belt, so I don't feel like I'm just staring at this Polycom, but I've met some of you. So let me join Mollie in welcoming you to the call, and I look forward to getting to Q&A, where I can hear your voices as well as mine.

This quarter was obviously a good quarter, one that exceeded the forecast we had, had earlier in the year, the forecast many of you had. And I'm sure that leaves you with a lot of questions and interest in the details.

So I'm going to quickly just go to the preliminary remarks and then turn this over to David to get through some of the details that may be on your mind and also get to Q&A.

But before I do that, I thought -- David and Mollie and I all thought it might be of interest if I shared a few perspectives on, a little bit higher level, on what some of the drivers of this quarter were and some perspectives on those drivers. And let me frame that in terms of 3 different drivers.

One driver, which is obviously a good driver, but it ties closely to the event-driven nature of our business, which is the number of large assignments we've had during the quarter. And that's probably the largest driver of the outperformance versus our earlier forecast.

One of the great things about this company, one of the things you guys have noticed, I've noted, one of the best things is due to the strength of the professionals we have here and our reputation.

Corporations and lawyers tend to come here when there's truly a critical need, and that allows us to disproportionately win some of the largest assignments. That's not only a good thing, it's a great thing. It's the cornerstone of our business.

Having said that, you and I all know, we all know that being the big event business introduces some potential volatility quarter-to-quarter. In some quarters, you have the big events and you have the benefit of being involved in some of the major events, and those quarters tend to surprise on the upside.

On the other hand, in other quarters, you have fewer large events and those quarters tend to underperform. This quarter, we had expected the run-off of a number of major global complex cross-border events that had benefited our results in the second quarter.

In particular, we had anticipated reduced demand in Technology and Forensic and Litigation Consulting businesses. Instead, a number of the key events in those 2 practices continued into the third quarter. And that's obviously a good driver.

And part of our strategy going forward, as we discussed on our Investor Day, is to build that reputation, to build upon that reputation and get even a higher share of those events going forward. But of course, looking at it as a basis for forecasting, one needs to be a bit cautious.

At some future date, inevitably, David and I will be in front of you where one of the -- where we don't have those large events. And so this is a great piece of news and, obviously, we're excited about it and proud of the work we are doing on some of these large events. And we're pleased that these engagements extended into the third quarter.

We would suggest that, that is a soft foundation on which to build future forecast. So that's the first driver. The second key driver of outperformance during the quarter is actually something that I'm disappointed in, which David tells me that he's not used to -- it's not usual that CEOs express disappointment about things that led to outperformance.

But in this case, both he and I agree that part of the reason the quarter was better than expected is because we under invested relative to what we had targeted. This is not a major issue.

Our third quarter results are strong, but they do represent a slippage, to some extent, represent a slippage of investment spend from the third quarter to the fourth quarter in a few places.

First of all, some of the central spend that we anticipated making in the third quarter to uncover other cost opportunities and commercial opportunities to drive profit improvement in 2015 took a while to get organized.

And so those efforts have been organized and they're starting, but the bulk of those efforts are slipping into the fourth quarter and first quarter versus the third quarter. And we had budgeted costs in the third quarter that have slipped.

Second, and relatedly, in some of the businesses where we had hoped to invest more in business and development and in R&D, it took a little bit longer to hire the people that we had hoped. Again, this is not a major effect, but it caused some underspend in the third quarter relative to expectations.

More generally, and this I think is an important point, as some of you have noticed and as we've discussed, as part of our focus on organic growth, we have committed to grow our leverage. I think some of you have noticed this in our job postings. We are not committed to growing leverage in every place.

Rather, we've been following a disciplined process of looking at where we have a right to win and focusing on growing leverage behind our senior professionals in those areas. And that is a key thrust going forward. And we've made progress on that, but in some areas, we are behind on those hiring goals.

We're making progress in the sense that where we identify the right candidates, we had a very high conversion rate. But this focus on leverage and organic growth is a pretty big change in philosophy from where we were in the past, and we found restarting our recruiting engine in a bigger way has taken us a little bit more time than we thought.

And with Holly Paul onboard and a tremendous ongoing commitment from the Executive Committee, we are making good progress. But clearly, our headcount in a number of key places in the third quarter was below where we had hoped it would be at this point in the year.

So falling short of our expectations in each of these areas of investment obviously benefited our third quarter of earnings. But falling short here is not actually a good thing. It's something that improves your earnings, but by failing to invest in something that you think is actually key and beneficial for the long term.

I am not actually particularly worried about this. My experience is in any major change effort, things slip. And you budget a certain amount of slippage into your expectation setting. And my sense is this slower ramp in investment does not, in any way, compromise where I see this company able to get to, both in 2016 and beyond.

But I thought it was important to mention that, that was a not particularly a happy contributor to the third quarter earnings. Mollie said by this point in the script, I was way too dour for a good quarter. So let me change the tone to be a little bit more upbeat. The last driver I want to discuss is actually a driver I'm very excited about.

It's a key driver of the quarter and is one that engenders ongoing confidence for me for the company going forward. And that is, embedded in this quarter, are also signs that many of the initiatives that we talked about on Investor Day are beginning to bear fruit. There's a lot of examples that I could point to.

Let me just pick 3, give you some illustrations. I think you'll remember that in Economic Consulting at Investor Day, we talked about a number of initiatives, including one around International Arbitration.

International Arbitration is a place where we have a leadership position, a right to win, but we thought there was opportunity by ongoing investment to grow that business, and we committed to that investment. Embedded into this quarter are signs that, that is actually bearing fruit.

And that not only contributes to this quarter, but gives us ongoing confidence that we can continue to invest behind that initiative and continue to grow our position there. So that's a basis for excitement. Similarly, you can go through other segments and find similar stories, construction solutions in FLC is a similar story.

Probably harder to see it in the FLC numbers because it's hidden behind some large jobs, but it's also a very successful thrust that we're rolling out globally. And the results in this quarter not only contributed to the results, but yielded continued confidence in our ability to make those investments.

The last example I'll cite, which I think, David, he'll go into more detail on, is in Corporate Finance and Restructuring. As you know, the bankruptcy markets have not turned around. And waiting for the bankruptcy markets to turn around is not a strategy for this business.

We talked about at Investor Day that we had real opportunities to win in key non-distressed businesses, and that we had committed to investing in those. And in this quarter, a number of those initiatives, again, showed significant fruit -- bore significant fruit.

We still have a long way to go to turn that business to where we want it to be, but the progress we're making there is really exciting. And congratulations to the team that's been driving that. So I could go through some other examples and if you're interested, you can ask David or me during our Q&A.

But this progress, this third driver, along with the fact that during this quarter, we were able to launch some of the cross-segment initiatives that we talked about at Investor Day, are to me a core basis for optimism going forward. We talked about it at Investor Day. The event-driven nature of this business means large jobs, common large jobs go.

The question is the mission that we've taken on and that our leadership team has taken on is to build a more powerful underlying business, with more powerful, sustainable underlying trends, one that confirms for our best professionals that this is the place where they can come and build a career and build sustained growth in real businesses, and one that offers you, the investor, the confidence that we can, over time, grow this business profitably regardless of the business conditions and the economic conditions.

For this third driver, though it's probably the smallest absolute contributor to the financials -- the growth of the financials in this quarter, it's the one that has me the most excited. It's something that we can and we will build on in the fourth quarter and going forward. So that's one way to interpret the results.

That's not tied to the specific numbers segment-by-segment. So for a little bit more detailed view of the quarter, let me turn this over to David. And I'm happy to answer any questions on this perspective during Q&A.

David?.

Thanks, Steve. It's a pleasure to be here. I'm going to refer to some of the slides in the presentation that we posted to the website, and I think it's incorporated into the webcast. Turning first to Slide 4. The revenues this quarter were $451.2 million, that's up 8.8% over last year and down slightly from $454.3 million in Q2.

Fully diluted earnings per share were $0.55 compared to a loss per share of $1.29 in the prior year quarter and $0.42 in Q2 of this year. As a reminder, last year's third quarter included a nondeductible goodwill impairment charge for Strat Comm, that was $83.8 million; and a special charge of $10.4 million for headcount reductions.

Those were primarily in Corporate Finance and Forensic and Litigation Consulting. EPS this quarter included a special charge related to executive departures, primarily, our former CFO, Roger Carlile and our Chairman, North America, David Bannister. Certain payments were accelerated.

Other compensation obligations were reversed or forfeited, so there were pluses and minuses. But net-net, that reduced fully diluted EPS by about $0.08. And EPS last quarter, second quarter, included $0.14 of special charges primarily related to the termination of the leases for the corporate plane in the West Palm Beach office.

So our adjusted EPS, which excludes all of those special charges, were $0.63 this quarter, $0.55 last quarter and $0.72 in Q3 last year. Adjusted EBITDA for the quarter was $63.4 million compared to $59.9 million in Q2 this year, and $72.5 million in Q3 last year. So turning to our segments on Slide 5.

In Corporate Finance/Restructuring, revenues increased 6.4% to $100 million compared to $94 million last year. Revenues were down 4% from $104 million, sequentially, from Q2 this year.

The increase in revenues over prior year was driven by higher demand for North American non-distressed service offerings that Steve spoke about, and growth in the European transaction advisory and tax practices. That was partially offset by continued softness in global bankruptcy and restructuring engagements.

The decrease in revenues versus second quarter this year was also driven by the same trend in bankruptcy restructuring, with particular softness in North America and Asia Pacific and, most notably, weakness in Australia. We also saw decreased revenue in our North America real estate advisory practice in third quarter versus 2Q this year.

Adjusted segment EBITDA was $15.5 million or 15.5% of segment revenues compared to $19.4 million at the 20.6% margin in the prior year quarter and $19.1 million, an 18.4% margin, in Q2 this year. The decrease in adjusted segment EBITDA margin in 2014 quarter versus last year came from lower realized prices on the non-distressed work.

Declines in bankruptcy and restructuring work, which was higher margin; and higher performance-based compensation. The decrease from second quarter this year was also due to declines in bankruptcy and restructuring work, plus some slightly lower utilization sequentially.

Now absent a recovery in traditional distressed work, we do not see EBITDA margins in this segment recovering from current levels in the near term. In Forensic and Litigation Consulting, or FLC, revenues increased $7.7 million to $121.7 million in the quarter compared to $113.1 million in the prior year quarter.

Revenues were up 2.2% from $119.1 million in Q2 this year. Versus last year, organic growth up revenue 4.8%. The largest drivers were increased demand in the North American investigations practice; and globally in construction solutions and disputes.

That year-to-year growth was particularly impressive, given that last year's quarter benefited from a handful of very large success fees, which contributed more than $0.06 of earnings to this segment in Q3 last year. Success fees this year were at a much more normal run rate.

Revenues were also impacted by a decline, even excluding success fees in our health solutions practice, as we continue to see challenges in the operations improvement lines of business in health solutions, particularly, in securing large engagements.

The FLC adjusted segment EBITDA was $22.3 million or 18.3% of segment revenue this quarter compared to $25.4 million or 22.4% of segment revenues last year, and essentially flat compared to $22.3 million, Q2 this year.

The decrease in the adjusted segment EBITDA margin versus last year's third quarter was partly driven by the absence of those high-margin success fees, weaker performance in health solutions and higher performance-based comp expense.

Those drags year-over-year were partially offset by higher utilization in global disputes, investigations, construction solutions and data analytics practices. As Steve said, we're firing on almost all the cylinders here.

The decrease in EBITDA margin versus second quarter this year was driven by slightly lower utilization and higher compensation expense. The comp increase was due both to higher performance-based accruals in the practices where we're having a good year and salaries for added headcount.

In Economic Consulting, revenues increased 6.6% to $120.5 million in the quarter, that's compared to $113.1 million last year. Revenues were $117.2 million sequentially from Q2 this year. 1.1% of the revenue increase over third quarter last year came from ForEx.

The rest came from higher demand for M&A-related services and higher realized pricing in our International Arbitration practice due to staff and engagement mix. Compared to second quarter this year, sequentially, we saw an increase in revenues from finance and M&A-related engagements also, but with a reduction in antitrust litigation work.

We feel very well positioned here, and we're particularly pleased by a surge in first look M&A work that we saw in the third quarter. Adjusted segment EBITDA was $18.4 million in ECON or 15.3% of revenues compared to $23.2 million or 20.5% of revenues in the prior year quarter, and $18 million, which is a 15.4% margin, versus Q2 this year.

The decrease in adjusted segment EBITDA margin versus last year was driven by increased compensation expense, including the contract changes we have described in prior calls. Our 3Q '14 margin is substantially the same as 2Q '14, and that's consistent with what we expect from the ECON practice going forward. Turning to Technology.

In the third quarter, revenues increased 21.8% to $62.4 million compared to $51.2 million in the prior year quarter and $60.7 million in Q2. The increase in revenues was primarily driven by higher demand globally for our products and services in complex, large-scale global investigations. And that more than offset lower services pricing.

Adjusted segment EBITDA for the quarter was $17.8 million or 28.6% of segment revenues. That compared to $15.4 million or 30% of segment revenues last year, and $15.1 million in 2Q, and that was a 24.9% margin in Q2.

The decrease in adjusted segment EBITDA margin versus the same quarter in 2013 was due to an increase in the mix of lower-margin services and investments in global data centers and operation support, business development, R&D and marketing activities.

The increase in margin versus second quarter was due to an improvement in the mix of services provided. In Strategic Communications, revenues increased 7.5% to $46.6 million in the quarter, compared to $43.3 million in the prior year quarter. Revenues were $53.3 million in Q2 this year.

Favorable ForEx contributed 2.3% to revenue growth versus last year's quarter, and the remaining 5.2% came from increased project work in North America and Asia Pacific. The primary driver of the revenue decrease this year versus the second quarter was a large decline in pass-through revenues.

Adjusted segment EBITDA was $6.6 million or 14.2% of segment revenues, compared to $4 million or 9.3% the prior year quarter, and $5.8 million, 10.9% margin, in Q2 this year.

The increase in adjusted segment EBITDA margin versus the same quarter last year, and over 2Q, was due to mix changes towards more profitable engagements, also reduced headcount and lower expenses. That -- expenses reflect many of the cost initiatives we described at our Investor Day.

Turning to the balance sheet, cash and cash equivalents were $179 million at quarter end. Net cash provided by operating activities was $97.6 million compared to $84 million in last year's quarter. The increase primarily came from higher cash collections, which was partially offset by higher compensation and operating expense payments.

Net accounts receivable balance increased by $89 million from year end, $71 million from the prior year quarter and decreased $14 million from second quarter this year. DSOs were 107 at the end of September. That's up 5 days from last year, but down 1 day from June 30. Turning to our outlook.

As you saw in our press release, we currently expect full year revenues to range between $1.755 billion and $1.77 billion and adjusted EPS between $1.85 and $2. It goes without saying that we were delighted to have earned $0.63 adjusted EPS this quarter, but we cannot multiply that by 4 and create a new run rate for the company, at least not now.

As Steve mentioned before, part of our success this quarter came from delays in hiring and a slow ramp-up of other investments we believe that are critical for our future.

More of those investments will come online in the fourth quarter, and we will hopefully reach the level at which they will be just a permanent part of our comparison sometime in 2015. We're in the budgeting cycle right now and we look forward to sharing guidance for 2015 with you on our next call.

But the biggest investment we are making is a long-term investment in increased revenue-generating professionals to drive leverage and organic growth. There will be other specific expenses in the fourth quarter that give us foundation for our guidance. And our guidance obviously assumes we will not repeat third quarter adjusted EPS of $0.63.

For example, in November, we will gather all of our Senior Managing Directors from across the globe and bring them together for a major meeting to further accelerate our work to reorient FTI towards organic, sustainable growth. This is a big deal both in the benefits we hope to gain but also the cost.

It's hard to precisely fix the revenue impact of taking that many producers offline for several days, but the direct cost alone could be $0.07 per share.

Those expenses, together with the normal seasonality in our business driven by producer and client vacations in December, and the fact that FLC and Technology have now had 2 quarters of outsized performance driven by a few very large engagements, lead us to put some bounce on our expectations for the fourth quarter. There will be added expenses.

And we're planning those. We know they're coming. And the impact of seasonality is also reasonably predictable. The only real wildcard is the large engagements.

Nonetheless, our results this quarter actually give us increased confidence that we can achieve our 2016 EPS goals of $2.50 plus and make the required investments that are needed to fund sustained organic growth in 2015, 2016 and beyond. So with that, operator, we'll open up the call for questions..

[Operator Instructions] Our first question comes from Kevin McVeigh with Macquarie..

Steve, or whomever, I wonder -- it seems like the headcount is kind of below where you were, but the revenue really exceeded expectations on a nice way.

Was that a function of just you had more tenured folks stepping up? Or just any sense of what drove the incremental revenue beat, even if the hiring wasn't where you wanted it to be?.

So let me take a crack at it and, David, you can add if it makes sense. But Kevin, I think the revenue comes from -- the incremental revenue comes, essentially, from the largest jobs. I mean, there's lots of different causes always.

But the bulk of it comes from the largest jobs just continuing, while we're getting some of the underlying growth in some of the other businesses. For example, ECON had been slow in the first quarter. ECON got back on track the way we expected it to.

But what happened is that we had these large jobs in a couple of the other segments, like Tech and FLC, and those continued into the third quarter. The truth is, you can always bootstrap to get some of the stuff done, even without the headcount. You basically blow off vacations, you have people work in 70-hour weeks.

And you can do that for a while, but that's not a sustainable way to grow the business. And so what we had -- for a couple of the businesses, we were running on fumes. We have just too few, too little headcount relative to where they're running on a sustainable basis.

And that makes your earnings in those segments look outrageously good but they're, in some ways, they're not sustainable. And So that's how you can marry those 2 phenomena.

Does that answer your question, Kevin?.

It does, it does. And then my second question, and I'll get back in the queue was, Steve and David, since you've been here a couple of questions now, I mean, I just sense in terms of the calls, just a much different feel of the organization overall.

How has that helped internally in terms of internal folks, and then on the recruiting side as well, because it really feels like you're on a significant upward trajectory in an early stage, and just culturally, how has that been helping?.

You or me?.

You do culture..

I'll do culture. Maybe next time, we'll have Holly be on that call and she can do culture. Look, I think, I think -- look, you'd have to talk with some of our folks on that, right? I wasn't here a year ago, and David wasn't here a year ago. But what I would say is this is a great company. And there are really, really good people here.

And a lot of people know in their hearts that there have been a few years here where we haven't lived up to the history of this company or the potential of this company. And people are leaning forward. They're eager for us to get back on that track.

And so I found it -- there's a lot of people to meet, and so it's a challenging thing to get out and meet everybody, but got to tell you, when I meet people, it's motivating for me. And I think the culture of this place is good and it's going in the right direction. So I hope that partially answers your question, Kevin..

It does. It does..

Our next question comes from Randy Reece with Avondale Partners..

I don't know what you're complaining about headcount, Steve. It's better than I thought you would do..

Thanks, Randy..

I don't know how you've managed this sort of hire up with the cost involved. I'd like you to talk a little bit more about the stages in that process of developing a plan for stepping up your hiring intentions, and then how you manage incrementally -- as you go through the process, how you manage and tweak your campaign to achieve your goals..

So look, that's a detailed question, a complicated one. Let me try to see if I can begin to address it. But it's particularly complicated because what we're not doing is saying just blanket hire of 1 million first-year consultants in every place around the world.

The hiring needs are derived from us trying to look at each business saying where do we have a right to win and what is necessary to support growth in those businesses? And sometimes, what the right type of person is, is a midlevel person who's frustrated at a competitor, who doesn't feel like they have a right to -- that they're being encouraged to grow there.

Sometimes, it is first years. Each of those have their own unique circumstances because if it's first years, you typically have to go wait for recruiting cycles. You have to look for the right time of year. And if you missed the recruiting cycle, you have to figure out where you're going to get those folks. Laterals.

A lot of times, laterals come because of trust and they know somebody and they believe -- and we have a great proposition here in many of our businesses where we're going to grow, but unless people know it, they're not going to leave the comfort of their home.

And if you haven't been reaching out as aggressively recently, then you haven't been out in the marketplace touching people. So we have a series of different initiatives by segment, by geography that varies depending on the exact goals that we have. Orchestrating that is a challenge. A lot of that is not done through the HR organization.

Some of that is done by our professionals, just reorienting the time. And it's a complicated thing because, often, you're doing that in your busiest businesses, where people don't have that much time. But also it's been -- we've asked the HR organization to step up in a big way.

And Holly Paul, if you haven't met, you should meet, is a terrific add to our team. I know she just had 3 days worth of meetings with all of her HR team, where they were saying, "Wow, how do we get this all done?" And it wasn't -- and it was with a sense of enthusiasm and conviction. It's a lot to do, Randy, but -- and it's a multipart program.

We're trying to organize it and drive it.

Does that help?.

Yes. Just extending from that, your direct costs as a percentage of revenue has moved to 65%. And that's been on a steady uptrend for a number of years.

Is there a point on the horizon we should expect that to max out and start to go the other way? And are there ways that you can influence your gross margin, so to speak, in the future to improve -- improve that, reverse that trend because it would go a long way to helping you reach your EBITDA goals?.

Yes. So look, the -- I'm not sure I've looked at the exact trajectory of that specific number, but let me make sure I underscore a point on that, and this is an important point. When you look at direct costs as a percentage of revenue, often, the instinct is to sort of cut staff.

But -- and that's the instinct in every professional services firm I've been at. And yet, what you find is that doesn't actually work because what you end up doing is you cut leverage, you cut your junior staff, and the issue usually is partner productivity.

When partner productivity plummets, the revenue, the denominator in all those calculations per partner is the problem. And so what you have to do is you have to figure out who are your best professionals, can you support them more and get the revenue per partner up again.

And if you get the revenue per partner up, the direct cost as a percentage of sales drops. Now that's -- you obviously have to disaggregate that. You can't just hire willy-nilly because then you're hiring more direct cost than your revenue per partner, and that part stays the same and then the costs go the wrong way.

But it's that sort of disciplined thinking through each segment of our business that is what we're going through. And obviously, the way I measure it is I don't look at that specific ratio. I look at partner productivity. David and I are monitoring that very actively once a month with our ExCo.

But the goal of that is to actually change those economic perspectives that you're talking about.

Does that help, Randy?.

Very much..

Our next question comes from Tobey Sommer with SunTrust..

Just one numbers question to start.

What was the size of the large projects that you got a sense are due to end? Can you put some parameters around that?.

Well, no, not really. Obviously, some of our most important clients are most sensitive about those sorts of things.

But if you look at the kind of the delta between the run rate we were on in the second and the third quarter and then the anticipated run rate into the fourth quarter, interestingly enough, the actual contribution to profit from the businesses, second to third quarter, was almost exactly flat. So the delta really was expense.

If you then look at the delta going into the fourth quarter, I'd say a little bit more than half of that is expense, which not only do we control, we plan on spending.

And then if you look at the other half of the delta downward in fourth quarter for which we're being -- I think, looking appropriately at the guidance, I would say maybe half of that is stuff that's almost kind of wired in, in terms of seasonality and in things that we think are under way in terms of the just the rhythm of how the revenue is going to build in the pipeline.

But then I would say, there's probably 1/4 of that -- or 1/2, a 1/4 of the EPS delta and then a 1/2 of the non-expense part of it that, you could arguably say, is driven by large jobs. So yes if, for some reason, none of those dropped off, could there be upside in kind of a 1/4 of the delta? Yes.

Again, it's difficult to exactly box off what's a large job, what's not a large job. A lot of these large jobs have a bunch of associated revenue with them, smaller, ancillary assignments.

But I think that, that's kind of the dimensions of what the possibility plus or minus is if the accelerators stayed floored on those sorts of engagements through fourth quarter. That being said, in October, we're seeing a little bit of early indications that these tree is not going to grow to heaven with regards to those large engagements.

So we think it's appropriate to be cautious..

In terms of headcount and hiring, it looks like you hired a little bit over 100 revenue-generating people, both sequentially and year-over-year. But you started out by saying you weren't able to hire quite as fast.

How many more people would you have added in the quarter if every -- all the stars had aligned?.

Maybe 100?.

Well, in a perfect world, we would have transported down from the starship consulting, 500 revenue people. But what, in practice, could possibly have happened if the wind had been on our back, given our recruiting resources, maybe 100 more..

Okay. And you talked about the increased leverage that your strategy entails.

Do you have to wait for graduation in the spring? Or is it not contingent upon that and more focused on recent grads?.

I mean, the answer is yes. Leverage is driven by both, but I think probably the most impactful leverage is going to be at the mid-levels in terms of its ability to get more profitable revenue per producing SMD. So no, we don't have to wait for the annual cycle, but that's a very important part of our recruiting, too..

Okay.

And last question for me, and I'll get back in the queue, is how does international growth compare to the company's overall growth rate? What is it as a percentage of sales? And could you discuss kind of currency in general?.

We're looking at that..

I'd be happy to take that offline if you don't have those numbers now..

Yes, we'll take that offline. I mean, the answer is it's kind of all over the place. Global -- it's in restructuring. We saw some particular weakness internationally, especially in Australia, which is probably sort of not positive.

On the other hand, in Europe, we're seeing some real successes in ECON and in some of the other businesses and also Strat Comm, too. So I think it's hard to discern a global trend. We'll tally it up and we can give you the breakout for growth offline..

Our next question comes from Tim McHugh with William Blair..

So one quick question.

Just the continuation or the contribution from long, large cases, were these new cases that came onboard, meaning, there's just a normal churn in it? Or is it some of the stuff from early this year just has had longer legs than you would have expected?.

David's just shuffling papers here. Let me take a crack at that, Tim, and then he can correct me if I get it wrong. No, I think it's mostly continuation of cases that are large cases that contributed to the second quarter results that we had anticipated might either settle or end or reduce substantially into the second half of the year.

That continued into the third quarter..

Okay. And can you talk, the European tax and TAS practice was brought up. That's an area you talked about even at the Investor Day, and I think before about being an upfront investment you've made on people. You brought over that we're on garden leave.

Is that -- can we take that comment as a sign that, that business is ramping up? And I guess the -- and losses are up from investment.

Are you starting to see some traction with that going in the other direction?.

Yes. We're making progress there. We're excited about that. We got a long way to go to turn that to its full potential, but we're excited about those -- both of those bets in Europe, and they're making progress..

Is it fair -- is it still in an investment mode or a loss-making mode? Or is it significant enough that, that's not a major drag on profits anymore?.

Are we to answer at that level of detail?.

No, I don't think we're able to break it at that level of detail yet. But -- so I would not say there was a giant contribution in the quarter from that..

Okay. And then....

Tim, let me say this in a different way. The hope there is that, that business turns to a profit generator, one actually that we thereby continue to invest in it in the sense of continuing to add headcount. Because if we have the success we hope, we're going to have room to bet behind the bet, if that makes sense.

And what I would say is we're showing real progress in those bets at this point.

Was that helpful?.

Yes. That helps. You also talked about wanting to push the lever, the staffing pyramid up or out, I guess, might be the right way to say it.

Can you quantify for us at all where you got to? Maybe this quarter, where you hope to get that to in terms of a partner SMD to kind of a junior-level consultant kind of ratio or just some other metric so we can gauge kind of the progress on that over time?.

Yes, I would think we would have to do that by segment. Because it's quite different leverage ratios. You might run in Strat Comm at a leverage ratio of 12 and you might run in certain disputes business -- businesses at a ratio of 3 or 4. So it's quite different. And the mix affects it.

So Corp Fin, as we're now growing performance improvement, leverage ratio on our performance improvement business in Corp Fin, the target leverage there is quite different than the target leverage you have for if you're a Chief Restructuring Officer in a bankruptcy.

And so I don't have an aggregate number, in part, because we're changing the mixes of the percentages of our businesses.

So if we wanted to get -- I don't know if we release that level of detail or not, but we can maybe get back on a little bit more general parameters around that down the road or -- David?.

Yes, I think that will be, frankly, a major part of our guidance discussion for 2015 next quarter. As Steve said, it's a major strategic investment from us right now. We're trying to figure out exactly how much investment we're going to make and leverage and what is the target leverage ratio for each segment.

We haven't finalized that yet, though directionally, everybody knows that, with rare exceptions, more leverage is the answer. So I think we can certainly commit to giving you a lot more tangible detail on what we expect to get to and what our plans are next quarter. But right now, the hood is open there. Everybody knows more is the answer.

It's just a question of how much more..

And the right core [ph] is an important issue too, right? I mean, leverage isn't leverage. Great people is a different thing than lots of good people. So we have to work through this to make sure we're getting the people who can build the business, Tim..

Okay. That's helpful. And then you brought up 20 -- guidance for next year. I guess, the standard answer is probably we got to wait until you get through the budgeting process, but you are in a unique situation where you gave out a number in June for next year that people have kind of in their minds.

Without, I guess, maybe being more specific, informed by the budget process, just given what you've seen between June and now, how does -- how should we think about that kind of guidance that you gave previously? Are there factors that make you feel more positive? Or are there -- is it unchanged, I guess, from what you were thinking at that time?.

Yes. Mollie is putting in front of me what we said then, since I wasn't here. But look, I think they're pretty much exactly what we said.

The fact that -- or the revenue and profit generation of this company can be quite strong, as we saw in the second and the third quarter, obviously, gives us more confidence as we start to make more concrete our investment expectations and what needs to be in the permanent run rate of this company in terms of both cost of leveraging junior- and middle-level professionals, but also, frankly, consistent investment every year in what's in the -- the businesses and the people and the products are going to generate the growth in the 2 or 3 years forward.

I'd say those pretty much offset and leave us -- we're not updating the guidance that was given for 2015 today. But I think our path is, we are where we are for 2014. We are unwavering in our goals for 2016. So you can kind of draw a line between them.

I think we're pretty confident that we can be on that line between them while still making the investments necessary. What we're spending a huge amount of time right now is finalizing that investment program for 2015..

Your next question comes from Jerry Herman with Stifel..

First, I sort of have a 2-part question on your producers.

And your results wouldn't necessarily suggest this, but given the significant changes the organization has gone through, have you seen any change in sort of regrettable attrition? Has that increased in any way? And really, sort of part 2 of that question is you guys have taken a different approach in terms of higher compensating executives, but can you speak to any changes or updates with regard to the producers and compensation changes?.

So let me take that -- those 2 parts on. Look, as far as I know, and I monitor this, we have not had substantial regrettable attrition at all, and I've been pleased with it. I think the -- as I talked about earlier, I think -- and look, there are 4,000 individuals out there.

I'm sure there are 4,000 different stories, but if you get to touch people, I think people are excited about creating a new FTI that starts to fulfill their aspirations. And I think -- so I'm sure there will be, at different points in time, some regrettable attrition, that happens in all professional services, but it kills me.

I think I really like to avoid that. And so far, I've seen no substantial regrettable attrition. So we're excited about that..

David, it's actually down this year. I mean, regrettable isn't a term we have in-house, but voluntary definitely is down. And then part 2 of your question was -- I've forgotten. Oh, comp....

So look, on that one, let -- so let me talk to that for a second and let me make a big, a very sharp distinction between comp at the executive and managerial level and the comp at our SMD level. We've made substantial changes in the comp structures for my direct reports at the C-suite level, the new people we've brought in.

My comps -- as you know, my comp structure is quite different than was historically, and the 3 new people we've brought in have been brought in with a very different comp structure. And I think that's what you're referring to. And we've had conversations at the ExCo level about the comp structure for the rest of my direct reports.

And we're in the process of seeing if we can retool that to be more performance-driven and more congruent with where we're trying to take the company. And that is something that's actively being worked on by our chief HR Officer, Holly Paul, and we're trying to make very substantial progress on that over the next months.

So that is a place where I think we need to move fast just because we need to have the right leadership team with the right mental maps aligned and pulling in the same direction, and we're moving fast on that. I draw a big distinction between that and changing comp structures for the partners in a major partnership.

We have very different comp structures scattered around our organization, very different history. Some people come from one type of firm. Some people come from another type of firm. And you don't change that just unilaterally top-down.

If the partnership, if the group decides that they -- that we want to change or we -- we will have the right conversation to do that, but that's a much more careful and slow process. You do that precipitously, people jump out the window even if they would be benefited because people don't like thrust like, change thrust upon them.

If your direct reports don't like this thrust changed upon -- change thrust upon them, a little bit tough. That's what part of being in the C-suite is. But you don't do that with your 450 SMDs or SMD equivalents. And so that will have discussions. There's always been discussions.

Some of our segments are much more set up to be low -- not performance-based comp but more focused on building, teaming within the segment. Some of them are very much performance based. There's lots of different philosophies about what's the right way.

We'll probably have conversations about that over time, but I would say that's a thoughtful, slow conversation as opposed to what we're doing at the C-Suite level.

Does that help?.

Yes. Another question I had was with regard to the investments that you guys have referenced to drive organic growth. Steve, I was hoping you would help us sort of frame what -- or quantify, in some way, what those investments have been thus far since the plan was initiated.

And any measure on how they have created yields? What those investments have yielded? You've given some good examples today, but is there any way to put framework around that in terms of size or contribution?.

You want me to take that or you what to take that?.

Well, on contribution, I mean, I think it's, frankly at this early stage, extremely difficult. I would give you the largest example so far is the senior producer SMD meeting we're having this quarter. That's going to be a very expensive investment, extremely difficult to measure what its marginal return is.

Our assumption going in is that it will be excellent. But it will play out in hundreds of different ways in terms of synergies with regards to teams working together, product opportunities that heretofore had not been discerned, building greater enthusiasm and understanding of some of our initiatives.

And if we can't discern a measurable, or at least, a discernible return after we do it, we don't do it again. But the -- I would say, the majority of the investments are of that nature. They're investments in ideas. They're investments in coordination. They're investments in study. That's the lion's share of the direct investments this year.

And they're not huge. I don't think we really have the ability to even break them out as a dollar amount, though we can work on that.

I think going forward, as the largest part of the investments starts turning towards leverage and changing the business model with regards to how we lever producers, then yes, we'll be able to have a fairly tangible measures of the return and we'll be tinkering with the leverage model for each segment to maximize profit.

Steve, if you have a different take on it..

No, look, just that it's a wide range of investments, and some of the them are very concrete and discrete, to pay for headhunters to find David and Holly, and that's pretty clear.

And those are onetime, except that you might have other onetime things like that when you are in a change effort, which is why we're suggesting you build in a certain amount of investment into your forecast.

Some of them are pretty squishy in terms of the benefits, but we're -- we are really excited about it, even if it's hard to quantify, like the all SMD meeting. And then there's some other stuff, which is -- like some of the stuff that got delayed into quarter, or a couple of consulting pieces of work where we're looking at indirect expenses.

And that's very clearly measurable. You spend a certain amount and we're going to hopefully drive down our indirect expenses by a certain amount, which would show up hopefully by the second half of next year. And not in huge way, but in a way that makes the investment in the fourth quarter cost effective.

And so it's a wide range of these sorts of things.

I think the reason we haven't been breaking them out is because we're trying to -- and this is, David, this is important for you to hear and to contribute to as we go forward is, I think the issue is if you -- at least, from my experience, is if you're in a change effort like we are, where we're trying to take this company from one period of greatness to the next one, you're going to have ongoing investments.

The specific consulting study may be different, specific headhunter search may be different. Instead of doing the all SMD meeting, you do something else that invests behind your people, but my experience is there is always a substantial amount of investment in order to move from one model to the next generation of success.

And so I'm pretty willing for us to have accountability for us to show results at the end of the day. But we can't be thinking of treating those investments as onetime because there's going to be another group of other so-called onetime investments behind it.

And that's why we're encouraging you to think of those as a slug of ongoing investments, even though the specific studies and so forth may be different.

Does that make any sense?.

Yes. Very helpful. I appreciate it..

And our goal is to have the right level of ongoing investment be just a permanent part of our run rate comparison starting in 2015. And then we won't be speaking about investments as a discrete thing. It'll just be a cost of doing the business..

Next, we'll hear from Paul Ginocchio with Deutsche Bank..

Just a quick question on the performance improvement. I think some of your private competitors do a lot of performance improvement because they have a lot of sort of debtor-side consultants in the restructuring process. And I think that makes it easier to do both -- to do performance improvement.

Can you just kind of give us a breakout within your Corp Fin/Restructuring division, sort of credit-side experts versus debtor-side experts? And how big currently performance improvement is, maybe as a rough percentage, within Corp Fin/Restructuring?.

Let me give you one qualitative point and then I'll let David see if he has the quantitative side. I think we are obviously very strong in certain creditor side. But I think people underestimate how much debtor side work we actually do. So that's probably worth clearing up.

And we do actually a quite substantial amount of debtor side, and I don't know if we released the specific numbers, but I'll let David decide that. And so there's that. There's also some areas where we have I think unique advantages versus some of our competitors because of some of the multiple businesses we're in.

For example, we have a business which we call the Office of the CFO, where we have a group of people who sometimes do debtor -- who sometimes work in bankruptcy, who are ex-CFOs who have worked in bankruptcy. Well, there are companies that need to go public and private companies that need to rapidly scale up their internal finance capability.

And they all need studies. They need people who can do the study but also be on the ground and help ramp it up. We have a group of people who can go do that, and those people not only come -- are in our Corp Fin business, but if they need to, they can draw on some of the accounting experts that we have in FLC.

We have some of the great, deepest accounting experts in FLC who can be brought into that. And so this Office of the CFO business, to me, is an area where we absolutely have a right to win, and we're scaling it. And that's -- and we're not behind anybody in our right to win there.

So I think what we've been trying to do is to look for not just performance improvement that puts us in the face of a McKinsey or a BCG or other people. It's a place where we have within that the right to win and let's scale those up rapidly.

Does that make sense, Paul?.

Yes..

David, anything to add?.

Non-distressed revenues were about 40% of the total segment revenue in Corporate Finance. And again, how you define that can vary.

But with regards to headcount, actually, I had this conversation with the man who runs that practice and he actually very strongly corrected me and said, "Look, the vast majority of our people there are not debtor, they're not distressed, they're not non-distressed.

They're experts who can work on any one of these types of engagements." So we might have some particular producers or originators who have strong guide on the debtor or the creditor space. The vast majority of the capability there can go where the work is and where the need is for the clients.

So we don't look at having a lot of, say, stranded headcount in one side of it or another..

Great. And David, just a follow-up on that non-distressed revs, roughly 40s.

Is health care the biggest piece of that? Or is it performance improvement?.

Health care has captured in a different segment than Corp Fin. Healthcare is...[indiscernible].

Sorry, yes.

So performance improvement is the biggest part of non-distressed?.

No, I wouldn't say that. Again, the non-distressed is a much broader group of services as we execute in Corporate Finance, which also includes, for example, our TMT, Telecom Media, and Technology practice. You have post-merger integration. You have tax and TAS, as we were talking about before. I mean, there's a lot of stuff we do that's non-distressed.

Performance improvement, I think, has a much perhaps more clearly understood delineation in health services and that competitor space than it would in our larger Corp Fin business, where we do a lot of different kinds of non-distressed work..

Our next question comes from Joseph Foresi with Janney Montgomery Scott..

I understand that the initiatives are fairly new, but any idea of what kind of measurements we -- or measure, what kind of measuring stick we could use to kind of get an understanding of the progress you've made or when we'll be able to get better visibility on those measurements?.

Well, the way -- and Joseph, I can't remember, were you at our Investor Day? I'm trying to remember....

Yes, I know you laid them out fairly clearly, but I just -- and I know you gave some goalposts, but I was wondering, on a quarter-by-quarter basis, when the visibility would kind of improve on something that we could look at directly..

Yes, so I'll let David think about that. Part of the issue here is some of these are competitively sensitive. I gave these goalposts because I want you to have a guide and know where we were shooting.

And I think we owe it to you to tell you if we are, as a company as a whole, radically off from those goalposts or we still believe we're on track for those. But then it's broken down into very specific bets, where we're saying we're going to scale up because we think we could win competitively.

And I'm not sure if I want to be giving week-by-week or even quarter-by-quarter tips to our competitors that says, "Oh, boy. These guys are succeeding there. Maybe I've got to focus there also." So I think I'm going to have to let David think about how we balance that with you. Let me say, at the highest level, I laid that out.

As you'll remember, we gave financial goalposts which were tied to specific initiatives to every segment for 2016. We do not assume that everybody would actually hit those numbers when we modeled our $2.50 a share. We, in fact, had gone through a probabilistic discounting of those.

I would say, at this point, if I had to sit down and do the probabilistic discounting, probably every number would change a bit. But I'm still -- some of them up, some of them down because of what you've seen in the interim 3 months.

But I would say that there's nothing that has made me less confident about where we're trying to be in 2016, and where we are on these initiatives. And -- but we've got a lot of work to do, is the other side of this. I mean, we got a lot of work, a lot of investment to do. We don't sit here and get to where we need to in 2016.

We've got a lot of work to do. But I'm saying the goalposts, overall goalposts, are still in intact from my perspective.

Does that help, Joseph?.

Yes, it does help.

On the -- on the events, why did they continue in this quarter? What was the surprise on that side? And I know this was asked probably 2 or 3 different ways, but any color you can give around the size and margin contribution from the events that had the positive impact in this quarter?.

Well, I tried to give some dimensioning of the potential impact, good or ill, on fourth quarter. It's again difficult -- well, it's impossible for us to go into the real detail, obviously, given these are investigations or other projects that are obviously sensitive.

But the dimensions of what -- well, where FTI is most important and most valuable to its clients is in situations where the need for us is somewhat out of their control.

And so how long you will need to produce pursuant to a document to an investigation, how wide-ranging it becomes, whether -- if it's a dispute, whether that's resolved early or late, is very much out of our control and, in many cases, outside of the control of our clients. So difficult to be much more specific than that.

But yes, I would say about 1/4 of the delta between our second and third quarter run rate and the fourth quarter run rate that's in our guidance, probably, you could say is in the zone of the amount of exposure, up or down, to the pace dropping on these large engagements..

All right. That's helpful. And are -- these are engagements, I mean, correct me if I'm wrong, that could start and stop at any point in time? Not necessarily, there's a tail to them and then they may end.

Is that a fair way of thinking about them?.

I would look at them as freight trains that unexpectedly drop off 1, 2 or even larger numbers of cars. It's....

You've seen too many Westerns..

Yes, probably.

Does that help?.

Was that helpful, Joe or was that confusing?.

I don't know if I'm going to touch that analogy one way or another. I think I'll probably just stay away from it. On initial....

[indiscernible] That's the model. Yes..

Yes. So it's just, I guess, keep it on the track or I'm sure you can use a bunch of different other things there. On the -- just my last one from me.

Any way to think about the margin profile as we kind of just brush up our models, again, keeping goalposts in mind but also these events as we head into next year? And I'm thinking more on the consolidated basis..

Well, I think the biggest driver of margin volatility is going to be corporate level expense. That was the big driver, one of the drivers second to third quarter. I think the individual segment margins were not looking for big changes in most of them. I think ECON is at a reasonable run rate where it is.

I think Corp Fin is not going to get to a much better run rate unless distressed comes back. I think FLC could drop a little bit as they kind come off their white-hot pace. And Tech is going to be a bit volatile as you saw in the second to third quarter. In Strat Comm, we're very pleased.

We had a previous question about how do you measure the benefit of the initiatives. We'll, they've been on a cost discipline initiative for a while even before Investor Day, and I think you're seeing that in the stabilization of their margins. And they've been on kind of a slow, steady improvement there. So I hope that that's helpful.

We are a sum of our parts with regards to margins. There's not a stable corporate margin. It really does build up from the individual units..

Our next question comes from David Gold with Sidoti..

I just have 2 quick questions. One was, I just wanted to get a little bit of better sense. When we talk about the sort of delay in hiring and investment spending, if you could give a sense for what went wrong there.

Was it just a later start? Or less folks coming onboard than you expected? Or where did we miss there?.

Yes, I think -- look, I think it's -- if you just think about -- I came in as the new CEO, we start launching a whole set of initiatives and people put down numbers in terms of where they think they can get to.

And then they turn to people and ask them to go hire folks and it's -- but the sum of the numbers is radically different than what the sum of the numbers were that people thought they were going to do. And because it's very different than the direction that people had.

And then you -- and then, therefore -- and then, by the way, if you haven't been out recruiting for a while, it sometimes takes a little bit of time to sort of reestablish contacts and reestablish access points and so forth. And so I think we just missed a little bit how long it would take to ramp some of that back up.

It's not a -- I don't think it's a material issue with respect to where we'll get to in the medium-term, but it was a shortfall in terms of this quarter.

Does that help, David?.

Sure. So....

And then the same issue -- the same issue with respect to some of the other stuff. So for example, I mean, it's a trivial case, but I wanted to launch a review of some of our indirect expenses in the third quarter.

And then we had to figure out who that'll report to, and I ultimately decided that, that should report to one of our new hires and the new hires were getting up to speed. And so it took us a little bit longer to get that thing organized.

So instead of that consulting expenditure being in the third quarter, the consulting expenditure will be in the fourth quarter. I mean, it's not more romantic or more profound than that.

And some of that happens when you have this number of new initiatives and a management team that's getting itself organized around those new initiatives, some new members of the management team. My experience is that I did a lot of change efforts in my previous life, and my experience is some of that happens to all the change efforts.

You don't know exactly which things are going to slip, but if you lose yourself into believing everything is going to be on time, then you're going to get disappointed. On the other hand, you have to have an edge and urgency and demand because you can't allow everything to slip.

So you have to walk the line between that edge of we got to get this stuff done and occasionally, knowing that stuff will slip. But it's not more profound than that, David.

Does that help?.

It does, it does.

Do you think that part of it is new hires proving to be more expensive maybe than anticipated? Or is that not a factor in the equation?.

I don't think so. I think that we've had pretty good luck in getting the people converted when we find them and more, I think -- and Holly -- I'll check with Holly, but I think that the truth is I think it's within the ballpark of what we thought we would get. It's more around accessing all the pools that you want to go to.

I mean, we all like to believe that when we put up a sign, everybody stops what they're doing and says, let me apply. But you need to reach out to people. They don't notice that you -- and then they have a perception that you weren't growing this business or that business, and you have to change that.

And then you -- and once you get through that process, then people say, "Wow, that's a great opportunity." But that process takes longer if you haven't been doing as steadily for a while. And I think that's what we're encountering. But it's not an expense issue as far as I know.

Does that help?.

Perfect. Just one last quick one. So with the delay in the hiring and the spending, I think you said earlier, no change to 2015. But I guess, the natural would be to think that some of this expense -- the would leak into 2015.

Is that a fair assumption?.

Let me say this, and then David can correct me. I've only talked about 2016. I have aspirational targets for 2016 and we're not changing those aspirational targets for 2016. I see us on the path of trying to create a business that can hit those numbers in 2016 and grow beyond and have a sustainable growth rate beyond.

And that's what I'm trying to organize our company around. The quarter-to-quarter in between now and then can be affected by a whole lot of things. Slippage of spend from 1 quarter, a windfall of some big jobs that we didn't expect, a shortfall of big jobs. I haven't focused on that in Investor Day.

The only thing I did was give a range in between the 2 numbers where we thought '14 was going to come out in 2016. If you remember, at Investor Day, I focused on really on the '16 numbers, and then we had a forecast at that time for '14. So I don't personally have a view on '15 at this point.

I have not formed a view that moves us off of previous estimates, but I haven't formed a different view either. We're going to do that during the budgeting process, which is under way. And I think of '15 as part of the change effort that is going to get us to '16 and beyond, is the way I think about that.

So does that help, David?.

Perfect, perfect. It sure does..

Okay. Thank you much..

Thank you..

I'd like to thank everyone for joining today's call. The call has now concluded..

Thank you, all..