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FTI Consulting, Inc. Reports 2011 Third Quarter Results

- Record Revenues up 20 percent to $413.8 million
- EPS up 63 percent to $0.70
- $500 million Share Repurchase Completed

WEST PALM BEACH, Fla., Nov. 2, 2011 /PRNewswire via COMTEX/ --FTI Consulting, Inc. (NYSE: FCN), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today reported its financial results for the third quarter ended September 30, 2011.

For the quarter, revenues increased 20 percent to $413.8 million, the highest quarterly revenues in the Company's history. Earnings per diluted share for the quarter were $0.70, representing an increase of $0.27 or 63 percent over the same period in 2010, which included a $5.2 million charge for debt extinguishment. Adjusted EBITDA increased 18 percent for the quarter to $73.6 million, or 17.8 percent of revenues, from $62.2 million, or 18.0 percent of revenues, in the prior year period.

As previously announced on September 9, 2011, the Company received 671,647 shares of its common stock during the quarter as a result of the completion of the accelerated share buyback transaction entered into in March 2011. The total number of shares of FTI Consulting common stock retired under this transaction was 5,733,205 for an aggregate cost of $209.4 million or an average price per share of $36.52. As a result, the $500 million stock repurchase authorized by the Board of Directors in November 2009 has now been completed.

Commenting on these results, Jack Dunn, President and Chief Executive Officer of the Company said: "The third quarter continued to validate our business strategy and market execution. Record results, including 11 percent organic growth, were driven by strong performance in our pro-cyclical businesses and the diversity of our geographic footprint. Operations in Asia Pacific and Latin America, particularly Brazil, continued to outperform. Growth was led by our Economic Consulting, Technology and Forensic and Litigation Consulting practices at 61 percent, 33 percent, and 18 percent, respectively. In Economic Consulting, this represented outstanding organic growth of 30 percent and the addition of the former LECG professionals, who are now fully integrated, with their contributions continuing to exceed our expectations. In Technology, the growth was entirely organic, as was half of the growth in Forensic and Litigation Consulting."

"As we look forward, we remain very confident in our performance and outlook for both the fourth quarter and next year. We expect to end the year with solid growth and a strong position globally to take advantage of opportunities in both emerging and developed markets."

Third Quarter Segment Results

Corporate Finance/Restructuring

Revenues in the Corporate Finance/Restructuring segment were $110.3 million compared with $109.7 million in the third quarter of the prior year. Results were led by growth in the EMEA and Asia Pacific regions as well as in the segment's communications, media and entertainment and healthcare practices. Adjusted Segment EBITDA was $28.3 million in the quarter compared to $24.7 million for the same period in 2010, as the Adjusted EBITDA margin improved 3.2 percentage points to 25.7 percent. On a sequential basis, the Adjusted Segment EBITDA margin increased from 15.4 percent to 25.7 percent.

Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment increased by $15.0 million or 18 percent to record revenues of $99.0 million from $84.0 million in the third quarter of the prior year. Organic revenue growth of $7.7 million, or 9 percent, was driven by higher revenues in the data analytics practice and increased demand in the Asia Pacific region for construction solutions, forensic accounting and litigation support services. The remainder of the increase resulted from revenues generated by the acquired LECG practices. Adjusted Segment EBITDA was $19.2 million in the quarter, or 19.4 percent of segment revenues, compared to $19.5 million, or 23.2 percent of segment revenues, for the same period in 2010. This decrease in Adjusted Segment EBITDA margin was due primarily to the investment in new and acquired practices and senior practitioners.

Economic Consulting

Revenues in the Economic Consulting segment increased $36.2 million or 61 percent to record revenues of $95.7 million up from $59.4 million in the third quarter of the prior year. Organic revenue growth of $17.7 million, or 30 percent, is attributable to increased demand for our competition, financial disputes and European international arbitration practices. The acquired LECG practices contributed $18.3 million to revenues in the quarter. Adjusted Segment EBITDA was $18.7 million, or 19.5 percent of segment revenues, compared to Adjusted Segment EBITDA of $11.9 million, or 19.9 percent of segment revenues, for the same period in 2010.

Technology

Revenues in the Technology segment increased $14.3 million or 33 percent to $57.0 million from $42.7 million in the third quarter of the prior year. The segment continued to benefit from increased litigation, mergers, acquisition and investigation activity. Several large client assignments drove higher demand for its Acuity® review services and its on-demand hosting and processing services. Adjusted Segment EBITDA was $19.6 million or 34.4 percent of segment revenues, compared to Adjusted Segment EBITDA of $13.8 million, or 32.2 percent of segment revenues, for the same period in the prior year.

Strategic Communications

Revenues in the Strategic Communications segment increased 3 percent to $51.8 million from $50.2 million in the third quarter of the prior year, primarily due to a positive impact of foreign currency translation. The segment benefitted from several key financial communications and restructuring projects, but it continued to be impacted by ongoing sluggish capital markets activity. Adjusted Segment EBITDA was $7.4 million, or 14.3 percent of segment revenues, compared to Adjusted Segment EBITDA of $7.2 million, or 14.4 percent of segment revenues, for the same period of 2010. On a sequential basis, the Adjusted Segment EBITDA margin increased from 12.0 percent to 14.3 percent.

Third Quarter Conference Call

FTI will hold a conference call for analysts and investors to discuss third quarter financial results at 9:00 AM Eastern Time on November 2, 2011. The call can be accessed live and will be available for replay over the Internet for 90 days by logging onto the Company's website, http://www.fticonsulting.com/.

About FTI Consulting

FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 3,800 employees located in 23 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. The company generated $1.4 billion in revenues during fiscal year 2010. More information can be found at http://www.fticonsulting.com/.

Use of Non-GAAP Measure

Note: We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets, accretion of contingent consideration and special charges. We define Adjusted Segment EBITDA as a segment's share of consolidated operating income before depreciation, amortization of intangible assets, accretion of contingent consideration and special charges. We define Adjusted Net Income as the net income excluding the impact of the special charges and debt extinguishment costs that were incurred in that period. We define Adjusted earnings per diluted share (Adjusted EPS) as earnings per diluted share excluding the per share impact of the special charges and debt extinguishment costs that were incurred in that period. Although Adjusted EBITDA, Adjusted Segment EBITDA, Adjusted Net Income and Adjusted EPS are not measures of financial condition or performance determined in accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating performance measure for evaluating our results of operations as compared from period to period and as compared to our competitors. EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are common alternative measures of operating performance which may be used by investors, financial analysts and rating agencies to value and compare the financial performance of companies in our industry. We use Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments. Adjusted EBITDA, Adjusted Segment EBITDA, Adjusted Net Income and Adjusted EPS are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. These non-GAAP measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our statements of income. Reconciliations of operating income to EBITDA and Adjusted EBITDA, segment operating income to Adjusted Segment EBITDA, net income to Adjusted Net Income and EPS to Adjusted EPS are included in the accompanying tables to today's press release.

Safe Harbor Statement

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve uncertainties and risks. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions and other matters, business trends and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and estimates will be achieved, and the Company's actual results may differ from our expectations, beliefs and estimates. Further, preliminary results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flow in prior periods and expects that this will occur from time to time in the future. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer, the mix of the geographic locations where our clients are located or where services are performed, adverse financial, real estate or other market and general economic conditions, which could impact each of our segments differently, the pace and timing of the consummation and integration of past and future acquisitions, the Company's ability to realize cost savings and efficiencies, competitive and general economic conditions, retention of staff and clients and other risks described under the heading "Item 1A. Risk Factors" in the Company's most recent Form 10-K and in the Company's other filings with the Securities and Exchange Commission, including the risks set forth under "Risks Related to Our Business Segments" and "Risks Related to Our Operations". We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

FINANCIAL TABLES FOLLOW

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(in thousands, except per share data)






Nine Months Ended


September 30, (1)


2011


2010


(unaudited)





Revenues

$ 1,176,055


$ 1,045,213





Operating expenses




Direct cost of revenues

723,746


617,061

Selling, general and administrative expense

282,189


252,886

Special charges

16,772


30,245

Amortization of other intangible assets

16,795


18,229


1,039,502


918,421





Operating income

136,553


126,792





Other income (expense)




Interest income and other

5,409


4,740

Interest expense

(44,129)


(34,600)

Loss on early extinguishment of debt

-


(5,161)


(38,720)


(35,021)





Income before income tax provision

97,833


91,771





Income tax provision

34,291


34,743





Net income

$ 63,542


$ 57,028









Earnings per common share - basic

$ 1.53


$ 1.25

Weighted average common shares outstanding - basic

41,535


45,708





Earnings per common share - diluted

$ 1.47


$ 1.19

Weighted average common shares outstanding - diluted

43,346


47,726





(1) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K. The impact of the correction of these errors resulted in a decrease in net income of $4.6 and $4.2 million and a decrease in basic and diluted earnings per share of $0.11 and $0.09 for the nine months ended September 30, 2011 and 2010, respectively.

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(in thousands, except per share data)






Three Months Ended


September 30,


2011


2010 (1)


(unaudited)





Revenues

$ 413,802


$ 346,140





Operating expenses




Direct cost of revenues

249,983


206,831

Selling, general and administrative expense

98,591


86,115

Amortization of other intangible assets

5,843


6,286


354,417


299,232





Operating income

59,385


46,908





Other income (expense)




Interest income and other

486


2,527

Interest expense

(14,319)


(11,904)

Loss on early extinguishment of debt

-


(5,161)


(13,833)


(14,538)





Income before income tax provision

45,552


32,370





Income tax provision

16,121


12,246





Net income

$ 29,431


$ 20,124









Earnings per common share - basic

$ 0.73


$ 0.44

Weighted average common shares outstanding - basic

40,182


45,471





Earnings per common share - diluted

$ 0.70


$ 0.43

Weighted average common shares outstanding - diluted

41,919


46,808





(1) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K. The impact of the correction of these errors resulted in a decrease in net income of $1.8 million and a decrease in basic and diluted earnings per share of $0.04 for the three months ended September 30, 2010.

FTI CONSULTING, INC.

OPERATING RESULTS BY BUSINESS SEGMENT

(unaudited)










Average


Revenue-




Adjusted






Billable


Generating


Revenues


EBITDA (1)


Margin


Utilization


Rate


Headcount


(in thousands)









Three Months Ended September 30, 2011












Corporate Finance/Restructuring

$ 110,311


$ 28,313


25.7%


75%


$ 406


711

Forensic and Litigation Consulting

99,064


19,202


19.4%


69%


$ 331


872

Economic Consulting

95,662


18,650


19.5%


85%


$ 487


424

Technology (2)

56,972


19,619


34.4%


N/M


N/M


284

Strategic Communications (2)

51,793


7,429


14.3%


N/M


N/M


590


$ 413,802


93,213


22.5%


N/M


N/M


2,881

Corporate



(19,622)









Adjusted EBITDA (1)



$ 73,591


17.8%



















Nine Months Ended September 30, 2011












Corporate Finance/Restructuring

$ 319,461


$ 62,312


19.5%


70%


$ 422


711

Forensic and Litigation Consulting

275,345


53,285


19.4%


69%


$ 331


872

Economic Consulting

264,401


50,635


19.2%


86%


$ 486


424

Technology (2)

165,137


58,362


35.3%


N/M


N/M


284

Strategic Communications (2)

151,711


19,268


12.7%


N/M


N/M


590


$ 1,176,055


243,862


20.7%


N/M


N/M


2,881

Corporate



(49,696)









Adjusted EBITDA (1) (3)



$ 194,166


16.5%



















Three Months Ended September 30, 2010












Corporate Finance/Restructuring

$ 109,736


$ 24,739


22.5%


71%


$ 421


740

Forensic and Litigation Consulting

84,023


19,528


23.2%


69%


$ 338


799

Economic Consulting

59,417


11,853


19.9%


70%


$ 481


292

Technology (2)

42,721


13,754


32.2%


N/M


N/M


248

Strategic Communications (2)

50,243


7,210


14.4%


N/M


N/M


579


$ 346,140


77,084


22.3%


N/M


N/M


2,658

Corporate



(14,934)









Adjusted EBITDA (1) (3)



$ 62,150


18.0%



















Nine Months Ended September 30, 2010












Corporate Finance/Restructuring

$ 338,298


$ 82,560


24.4%


70%


$ 440


740

Forensic and Litigation Consulting

243,455


57,868


23.8%


72%


$ 327


799

Economic Consulting

191,276


36,682


19.2%


78%


$ 472


292

Technology (2)

128,885


46,798


36.3%


N/M


N/M


248

Strategic Communications (2)

143,299


21,563


15.0%


N/M


N/M


579


$ 1,045,213


245,471


23.5%


N/M


N/M


2,658

Corporate



(45,888)









Adjusted EBITDA (1) (3)



$ 199,583


19.1%































(1) We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets, accretion of contingent consideration and special charges. Amounts presented in the Adjusted EBITDA column for each segment reflect the segments' respective Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as the segments' share of consolidated operating income before depreciation, amortization of intangible assets, accretion of contingent consideration and special charges. Although Adjusted EBITDA and Adjusted Segment EBITDA are not measures of financial condition or performance determined in accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating performance measure for evaluating our results of operations as compared from period to period and as compared to our competitors. We use Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments. Adjusted EBITDA and Adjusted Segment EBITDA for 2010 have been presented in a consistent manner.


Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. These non-GAAP measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Statements of Income. See also our reconciliation of non-GAAP financial measures.


(2) The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.


(3) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K.

FTI CONSULTING, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

(unaudited)










Three Months Ended


Nine Months Ended


September 30,


September 30,


2011


2010


2011


2010









Net income

$ 29,431


$ 20,124


$ 63,542


$ 57,028









Add back: Special charges, net of taxes of $6,574 (2011) and $12,176 (2010)

-


-


10,198


18,069

Add back: Loss on early extinguishment of debt, net of taxes of $1,961

-


3,200


-


3,200

Adjusted net income (1)

$ 29,431


$ 23,324


$ 73,740


$ 78,297









Earnings per common share - diluted

$ 0.70


$ 0.43


$ 1.47


$ 1.19









Adjusted earnings per common share - diluted (1) (2)

$ 0.70


$ 0.50


$ 1.70


$ 1.64









Weighted average common shares outstanding - diluted

41,919


46,808


43,346


47,726









(1) We define adjusted net income and adjusted earnings per diluted share as net income and earnings per diluted share, respectively, excluding the impact of the special charges and loss on early extinguishment of debt that were incurred in that period, and their related income tax effects.









(2) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K.

RECONCILIATION OF OPERATING INCOME AND NET INCOME TO ADJUSTED EBITDA

(in thousands)

(unaudited)















Three Months Ended September 30, 2011

Corporate

Finance /

Restructuring


Forensic and

Litigation

Consulting


Economic

Consulting


Technology


Strategic

Communi-

cations


Corp HQ


Total















Net income













$ 29,431


Interest income and other













(486)


Interest expense













14,319


Income tax provision













16,121

Operating income

$ 25,104


$ 17,581


$ 17,469


$ 14,662


$ 5,495


$ (20,926)


59,385


Depreciation

847


867


680


2,982


739


1,304


7,419


Amortization of other intangible assets

1,507


665


501


1,975


1,195


-


5,843


Accretion of contingent consideration

855


89


-


-


-


-


944

Adjusted EBITDA (1)

28,313


19,202


18,650


19,619


7,429


(19,622)


73,591































Nine Months Ended September 30, 2011





























Net income













$ 63,542


Interest income and other













(5,409)


Interest expense













44,129


Income tax provision













34,291

Operating income

$ 42,080


$ 47,746


$ 45,565


$ 44,026


$ 13,450


$ (56,314)


136,553


Depreciation

2,617


2,579


1,883


8,407


2,243


3,778


21,507


Amortization of other intangible assets

4,345


1,852


1,094


5,929


3,575


-


16,795


Special charges

11,000


839


2,093


-


-


2,840


16,772


Accretion of contingent consideration

2,270


269


-


-


-


-


2,539

Adjusted EBITDA (1) (2)

62,312


53,285


50,635


58,362


19,268


(49,696)


194,166































Three Months Ended September 30, 2010





























Net income













$ 20,124


Interest income and other













(2,527)


Interest expense













11,904


Loss on early extinguishment of debt













5,161


Income tax provision













12,246

Operating income

$ 21,798


$ 17,751


$ 10,998


$ 7,480


$ 5,116


$ (16,235)


$ 46,908


Depreciation

875


800


555


4,442


804


1,301


8,777


Amortization of other intangible assets

1,895


969


300


1,832


1,290


-


6,286


Accretion of contingent consideration

171


8


-


-


-


-


179

Adjusted EBITDA (1) (2)

$ 24,739


$ 19,528


$ 11,853


$ 13,754


$ 7,210


$ (14,934)


$ 62,150































Nine Months Ended September 30, 2010





























Net income













$ 57,028


Interest income and other













(4,740)


Interest expense













34,600


Loss on early extinguishment of debt













5,161


Income tax provision













34,743

Operating income

$ 68,134


$ 46,898


$ 27,079


$ 25,699


$ 13,989


$ (55,007)


$ 126,792


Depreciation

2,796


2,472


1,869


10,525


2,452


4,024


24,138


Amortization of other intangible assets

4,870


2,930


920


5,647


3,862


-


18,229


Special charges

6,589


5,560


6,814


4,927


1,260


5,095


30,245


Accretion of contingent consideration

171


8


-


-


-


-


179

Adjusted EBITDA (1) (2)

$ 82,560


$ 57,868


$ 36,682


$ 46,798


$ 21,563


$ (45,888)


$ 199,583














































(1) We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets, accretion of contingent consideration and special charges. Amounts presented in the Adjusted EBITDA column for each segment reflect the segments' respective Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segments' share of consolidated operating income before depreciation, amortization of intangible assets, accretion of contingent consideration and special charges. Although Adjusted EBITDA and Adjusted Segment EBITDA are not measures of financial condition or performance determined in accordance with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating performance measure for evaluating our results of operations as compared from period to period and as compared to our competitors. We use Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments. Adjusted EBITDA and Adjusted Segment EBITDA for 2010 have been presented in a consistent manner.


Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. These non-GAAP measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Statements of Income. See also our reconciliation of non-GAAP financial measures.


(2) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K.

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(in thousands)






Nine Months Ended


September 30, (1)


2011


2010


(unaudited)

Operating activities




Net income

$ 63,542


$ 57,028

Adjustments to reconcile net income to net cash




provided by operating activities:




Depreciation, amortization and accretion

24,053


24,138

Amortization of other intangible assets

16,795


18,229

Provision for doubtful accounts

9,483


7,179

Non-cash share-based compensation

29,043


25,205

Excess tax benefits from share-based compensation

(198)


(761)

Non-cash interest expense

6,322


10,132

Other

(566)


633

Changes in operating assets and liabilities, net of effects from acquisitions:




Accounts receivable, billed and unbilled

(130,132)


(34,845)

Notes receivable

(4,223)


(20,091)

Prepaid expenses and other assets

(3,670)


1,994

Accounts payable, accrued expenses and other

14,489


9,120

Income taxes

850


6,265

Accrued compensation

21,098


(4,188)

Billings in excess of services provided

(38)


(4,172)

Net cash provided by operating activities

46,848


95,866





Investing activities




Payments for acquisition of businesses, including contingent payments, net of cash received

(62,346)


(60,273)

Purchases of property and equipment

(24,595)


(14,833)

Proceeds from sale or maturity of short-term investments

-


15,000

Other

(127)


(467)

Net cash used in investing activities

(87,068)


(60,573)





Financing activities




Borrowings under revolving line of credit

25,000


20,000

Payments of revolving line of credit

(25,000)


(20,000)

Payments of long-term debt and capital lease obligations

(6,967)


(190,452)

Issuance of debt securities

-


391,647

Payments of debt financing fees

-


(2,843)

Purchase and retirement of common stock

(209,400)


(26,138)

Net issuance of common stock under equity compensation plans

797


4,604

Excess of tax benefits from share-based compensation

198


761

Other

(1)


442

Net cash (used in) provided by financing activities

(215,373)


178,021





Effect of exchange rate changes on cash and cash equivalents

(747)


(1,004)





Net (decrease) increase in cash and cash equivalents

(256,340)


212,310

Cash and cash equivalents, beginning of period

384,570


118,872

Cash and cash equivalents, end of period

$ 128,230


$ 331,182


(1) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K.

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2011 AND DECEMBER 31, 2010

(in thousands, except per share amounts)






September 30,


December 31,


2011


2010 (1)

Assets

(unaudited)



Current assets




Cash and cash equivalents

$ 128,230


$ 384,570

Restricted cash

10,231


10,518

Accounts receivable:




Billed receivables

348,480


268,386

Unbilled receivables

200,999


120,896

Allowance for doubtful accounts and unbilled services

(80,443)


(63,205)

Accounts receivable, net

469,036


326,077

Current portion of notes receivable

26,559


28,398

Prepaid expenses and other current assets

30,784


28,174

Income taxes receivable

11,997


13,246

Deferred income taxes

7,973


4,839

Total current assets

684,810


795,822





Property and equipment, net of accumulated depreciation

75,027


73,238

Goodwill

1,295,679


1,269,447

Other intangible assets, net of amortization

124,623


134,970

Notes receivable, net of current portion

82,678


76,538

Other assets

70,317


60,312





Total assets

$ 2,333,134


$ 2,410,327





Liabilities and Stockholders' Equity




Current liabilities




Accounts payable, accrued expenses and other

$ 108,050


$ 105,864

Accrued compensation

158,263


143,971

Current portion of long-term debt and capital lease obligations

152,047


7,559

Billings in excess of services provided

27,726


27,836

Total current liabilities

446,086


285,230





Long-term debt and capital lease obligations, net of current portion

645,488


785,563

Deferred income taxes

104,163


92,134

Other liabilities

86,375


80,061

Total liabilities

1,282,112


1,242,988





Stockholders' equity




Preferred stock, $0.01 par value; shares authorized -- 5,000; none outstanding

-


-

Common stock, $0.01 par value; shares authorized -- 75,000; shares issued and outstanding -- 40,954 (2011) and 46,144 (2010)

410


461

Additional paid-in capital

365,746


546,336

Retained earnings

737,574


674,032

Accumulated other comprehensive loss

(52,708)


(53,490)

Total stockholders' equity

1,051,022


1,167,339





Total liabilities and stockholders' equity

$ 2,333,134


$ 2,410,327





(1) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K.

SOURCE FTI Consulting, Inc.