FTI Consulting Reports Second Quarter 2021 Financial Results

Second Quarter 2021 Revenues of $711.5 Million, Up 17.0% Compared to $607.9 Million in Prior Year Quarter
Second Quarter 2021 EPS of $1.77, Up 39.4% Compared to $1.27 in Prior Year Quarter; Second Quarter 2021 Adjusted EPS of $1.74, Up 31.8% Compared to $1.32 in Prior Year Quarter
Company Raises Full Year 2021 Guidance Ranges for Revenues and EPS and Raises Lower End of Guidance Range for Full Year 2021 Adjusted EPS

WASHINGTON, July 29, 2021 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the quarter ended June 30, 2021.

Second quarter 2021 revenues of $711.5 million increased $103.6 million, or 17.0%, compared to revenues of $607.9 million in the prior year quarter. Excluding the estimated positive impact from foreign currency translation ("FX"), revenues increased $78.9 million, or 13.0%, compared to the prior year quarter. Acquisition-related revenues contributed $19.1 million in the quarter. Excluding the estimated positive impact of FX and acquisition-related revenues, revenues increased $59.8 million, or 9.8%, compared to the prior year quarter, primarily due to higher demand in the Forensic and Litigation Consulting, Technology and Economic Consulting segments. Net income of $62.8 million compared to $48.2 million in the prior year quarter. The increase in net income was primarily due to higher operating profits in the Forensic and Litigation Consulting, Technology and Economic Consulting segments, which was partially offset by lower operating profits in the Corporate Finance & Restructuring segment compared to the prior year quarter.

Adjusted EBITDA of $92.3 million, or 13.0% of revenues, compared to $75.8 million, or 12.5% of revenues, in the prior year quarter. The increase in Adjusted EBITDA was due to higher revenues, which was partially offset by higher compensation, primarily related to a 10.1% increase in billable headcount and higher variable compensation, as well as an increase in selling, general and administrative ("SG&A") expenses compared to the prior year quarter.

Second quarter 2021 diluted earnings per share ("EPS") of $1.77 compared to $1.27 in the prior year quarter. Second quarter 2021 EPS included a $3.1 million fair value remeasurement of acquisition-related contingent consideration, which increased EPS by $0.09 and $2.4 million of non-cash interest expense related to the Company's 2.0% convertible senior notes due 2023 ("2023 Convertible Notes"), which decreased EPS by $0.06. Second quarter 2021 Adjusted EPS of $1.74, which excludes the fair value remeasurement and non-cash interest expense, compared to Adjusted EPS of $1.32 in the prior year quarter.

Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “Our continued strong results reflect our multi-year commitment to attract, develop and support the best professionals and thereby invest behind our leading positions and emerging adjacencies. That powerful trajectory leaves me ever more convinced of our ability going forward to help our clients with an ever-increasing share of their most significant challenges and opportunities.”

Cash Position and Capital Allocation
Net cash provided by operating activities of $125.6 million for the quarter ended June 30, 2021 compared to $153.0 million for the quarter ended June 30, 2020. The year-over-year decrease in net cash provided by operating activities was largely due to an increase in salaries, primarily related to headcount growth, which was partially offset by an increase in cash collected compared to the prior year quarter.

Cash and cash equivalents of $256.9 million at June 30, 2021 compared to $304.2 million at June 30, 2020 and $233.4 million at March 31, 2021. Total debt, net of cash, of $159.4 million at June 30, 2021 compared to $47.0 million at June 30, 2020 and $252.8 million at March 31, 2021. The sequential decrease in total debt, net of cash, was primarily due to repayment of borrowings under the Company’s senior secured bank revolving credit facility.

There were no share repurchases during the quarter ended June 30, 2021. As of June 30, 2021, approximately $167.1 million remained available for common stock repurchases under the Company’s stock repurchase authorization.

Second Quarter 2021 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment decreased $15.0 million, or 6.1%, to $231.0 million in the quarter, compared to $246.0 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues decreased $24.9 million, or 10.1%, compared to the prior year quarter. Acquisition-related revenues contributed $17.0 million in the quarter. Excluding the estimated positive impact from FX and acquisition-related revenues, revenues decreased $41.9 million, or 17.0%, due to lower demand for restructuring services, which was partially offset by higher demand for transactions and business transformation services compared to the prior year quarter. Adjusted Segment EBITDA of $40.2 million, or 17.4% of segment revenues, compared to $76.3 million, or 31.0% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was due to lower revenues and higher compensation, primarily related to a 19.8% increase in billable headcount compared to the prior year quarter.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $44.4 million, or 41.7%, to $150.7 million in the quarter, compared to $106.4 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $41.3 million, or 38.8%. Acquisition-related revenues contributed $2.1 million in the quarter. Excluding the estimated positive impact from FX and acquisition-related revenues, revenues increased $39.2 million, or 36.9%, primarily due to higher demand for investigations and disputes services. Adjusted Segment EBITDA of $18.0 million, or 11.9% of segment revenues, compared to a loss of $9.0 million in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by higher compensation related to an increase in variable compensation and a 5.5% increase in billable headcount compared to the prior year quarter.

Economic Consulting
Revenues in the Economic Consulting segment increased $31.8 million, or 21.0%, to $183.3 million in the quarter, compared to $151.5 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $25.3 million, or 16.7%, primarily due to higher demand for non-merger and acquisition ("M&A")-related antitrust and financial economics services, which was partially offset by lower realized rates and demand for M&A-related antitrust services compared to the prior year quarter. Adjusted Segment EBITDA of $30.7 million, or 16.7% of segment revenues, compared to $21.7 million, or 14.3% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by higher compensation related to an increase in variable compensation and a 9.1% increase in billable headcount compared to the prior year quarter.

Technology
Revenues in the Technology segment increased $31.6 million, or 67.0%, to $78.6 million in the quarter, compared to $47.1 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $29.9 million, or 63.4%, primarily due to higher demand for cross-border investigations, litigation and M&A-related “second request” services compared to the prior year quarter. Adjusted Segment EBITDA of $18.5 million, or 23.5% of segment revenues, compared to $6.4 million, or 13.7% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by an increase in compensation and higher SG&A expenses compared to the prior year quarter.

Strategic Communications
Revenues in the Strategic Communications segment increased $10.9 million, or 19.2%, to $67.8 million in the quarter, compared to $56.9 million in the prior year quarter. Excluding the estimated positive impact from FX, revenues increased $7.3 million, or 12.9%, primarily due to higher demand for corporate reputation and public affairs services compared to the prior year quarter. Adjusted Segment EBITDA of $13.5 million, or 19.9% of segment revenues, compared to $10.0 million, or 17.6% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was due to higher revenues, which was partially offset by an increase in compensation and higher SG&A expenses compared to the prior year quarter.

2021 Guidance
After a record first half of 2021, the Company is raising its full year 2021 guidance ranges for revenues and EPS, and raising the lower end of its Adjusted EPS guidance range for full year 2021. The Company now estimates that revenues will range between $2.700 billion and $2.800 billion. This compares to the previous range of between $2.575 billion and $2.700 billion. The Company now estimates that EPS will range between $5.89 and $6.39. This compares to the previous range of between $5.60 and $6.30. The Company now estimates that Adjusted EPS will range between $6.00 and $6.50. This compares to the previous range of between $5.80 and $6.50. The $0.11 per share variance between EPS and Adjusted EPS guidance for full year 2021 includes estimated non-cash interest expense of $0.20 per share related to the Company's 2023 Convertible Notes and the second quarter 2021 $0.09 per share gain related to the fair value remeasurement of acquisition-related contingent consideration.

Second Quarter 2021 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss second quarter 2021 financial results at 9:00 a.m. Eastern Time on Thursday, July 29, 2021. The call can be accessed live and will be available for replay over the internet for 90 days by logging onto the Company’s investor relations website here.

About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 6,400 employees located in 29 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $2.46 billion in revenues during fiscal year 2020. More information can be found at www.fticonsulting.com.

Non-GAAP Financial Measures
In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Certain of these financial measures are considered not in conformity with GAAP ("non-GAAP financial measures") under the United States Securities and Exchange Commission ("SEC") rules. Specifically, we have referred to the following non-GAAP financial measures:

Total Segment Operating Income
Adjusted EBITDA
Total Adjusted Segment EBITDA
Adjusted EBITDA Margin
Adjusted Net Income
Adjusted Earnings per Diluted Share
Free Cash Flow

We have included the definitions of Segment Operating Income (Loss) and Adjusted Segment EBITDA, which are GAAP financial measures, below in order to more fully define the components of certain non-GAAP financial measures presented in this press release. We define Segment Operating Income (Loss) as a segment’s share of consolidated operating income. We define Total Segment Operating Income, which is a non-GAAP financial measure, as the total of Segment Operating Income (Loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment’s share of consolidated operating income before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment’s ability to generate cash.

We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, gain or loss on sale of a business and losses on early extinguishment of debt. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies. We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share ("Adjusted EPS"), which are non-GAAP financial measures, as net income and EPS, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes and the gain or loss on sale of a business. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with an additional understanding of our business operating results, including underlying trends.

We define Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by (used in) operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company’s ability to generate cash for ongoing business operations and other capital deployment.

Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this 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, share repurchases 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 materially from our expectations, beliefs and estimates. Further, unaudited quarterly results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flows 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; fluctuations in the price per share of our common stock; adverse financial, real estate or other market and general economic conditions; the impact of the COVID-19 pandemic and related events that are beyond our control, which could affect our segments, practices and the geographic regions in which we conduct business differently and adversely; and other future events, which could impact each of our segments, practices and the geographic regions in which we conduct business differently and could be outside of our control; the pace and timing of the consummation and integration of future acquisitions; the Company’s ability to realize cost savings and efficiencies; competitive and general economic conditions; retention of staff and clients; new laws and regulations or changes thereto; and other risks described under the heading "Item 1A, Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC, and in the Company’s other filings with the SEC. 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 BALANCE SHEETS
(in thousands, except per share amounts)

	June 30,			December 31,
	2021			2020
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	256,875		$	294,953
Accounts receivable, net	846,121			711,357
Current portion of notes receivable	32,093			35,253
Prepaid expenses and other current assets	78,373			88,144
Total current assets	1,213,462			1,129,707
Property and equipment, net	117,477			101,642
Operating lease assets	223,618			156,645
Goodwill	1,240,057			1,234,879
Intangible assets, net	37,653			41,550
Notes receivable, net	55,675			61,121
Other assets	50,485			51,819
Total assets	$	2,938,427		$	2,777,363
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable, accrued expenses and other	$	156,736		$	170,066
Accrued compensation	368,882			455,933
Billings in excess of services provided	36,944			44,172
Total current liabilities	562,562			670,171
Long-term debt, net	391,581			286,131
Noncurrent operating lease liabilities	230,133			161,677
Deferred income taxes	169,009			158,342
Other liabilities	95,932			100,861
Total liabilities	1,449,217			1,377,182
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 — 34,282 (2021) and 34,481 (2020)	343			345
Additional paid-in capital	4,270			—
Retained earnings	1,590,467			1,506,271
Accumulated other comprehensive loss	(105,870		)	(106,435		)
Total stockholders' equity	1,489,210			1,400,181
Total liabilities and stockholders' equity	$	2,938,427		$	2,777,363

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)

	Three Months Ended June 30,

	2021			2020
	(Unaudited)
Revenues	$	711,486		$	607,852
Operating expenses
Direct cost of revenues	490,722			413,011
Selling, general and administrative expenses	133,930			126,928
Amortization of intangible assets	2,854			2,314
	627,506			542,253
Operating income	83,980			65,599
Other income (expense)
Interest income and other	(912		)	2,202
Interest expense	(5,294		)	(5,157		)
	(6,206		)	(2,955		)
Income before income tax provision	77,774			62,644
Income tax provision	14,992			14,470
Net income	$	62,782		$	48,174
Earnings per common share ― basic	$	1.88		$	1.33
Weighted average common shares outstanding ― basic	33,458			36,169
Earnings per common share ― diluted	$	1.77		$	1.27
Weighted average common shares outstanding ― diluted	35,374			37,852
Other comprehensive income, net of tax
Foreign currency translation adjustments, net of tax expense of $0	$	5,807		$	9,568
Total other comprehensive income, net of tax	5,807			9,568
Comprehensive income	$	68,589		$	57,742

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)

	Six Months Ended June 30,

	2021			2020
	(Unaudited)
Revenues	$	1,397,763		$	1,212,445
Operating expenses
Direct cost of revenues	959,146			815,258
Selling, general and administrative expenses	260,476			253,887
Amortization of intangible assets	5,655			4,645
	1,225,277			1,073,790
Operating income	172,486			138,655
Other income (expense)
Interest income and other	122			7,219
Interest expense	(10,091		)	(10,018		)
	(9,969		)	(2,799		)
Income before income tax provision	162,517			135,856
Income tax provision	35,239			30,935
Net income	$	127,278		$	104,921
Earnings per common share ― basic	$	3.80		$	2.89
Weighted average common shares outstanding ― basic	33,470			36,292
Earnings per common share ― diluted	$	3.61		$	2.76
Weighted average common shares outstanding ― diluted	35,218			38,021
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments, net of tax expense of $0	$	565		$	(21,534	)
Total other comprehensive income (loss), net of tax	565			(21,534		)
Comprehensive income	$	127,843		$	83,387

FTI CONSULTING, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
	(Unaudited)						(Unaudited)
Net income	$	62,782		$	48,174		$	127,278		$	104,921
Add back:
Remeasurement of acquisition-related contingent consideration	(3,130		)	—			(3,130		)	—
Non-cash interest expense on convertible notes	2,380			2,255			4,728			4,480
Tax impact of non-cash interest expense on convertible notes	(619		)	(586		)	(1,229		)	(1,165		)
Adjusted Net Income	$	61,413		$	49,843		$	127,647		$	108,236
Earnings per common share — diluted	$	1.77		$	1.27		$	3.61		$	2.76
Add back:
Remeasurement of acquisition-related contingent consideration	(0.09		)	—			(0.09		)	—
Non-cash interest expense on convertible notes	0.07			0.06			0.13			0.12
Tax impact of non-cash interest expense on convertible notes	(0.01		)	(0.01		)	(0.03		)	(0.03		)
Adjusted earnings per common share — diluted	$	1.74		$	1.32		$	3.62		$	2.85
Weighted average number of common shares outstanding ― diluted	35,374			37,852			35,218			38,021

FTI CONSULTING, INC.
RECONCILIATION OF EPS GUIDANCE TO ADJUSTED EPS GUIDANCE

	Year Ended December 31, 2021
	Low			High
Guidance on estimated earnings per common share — diluted (GAAP) ⁽¹⁾	$	5.89		$	6.39
Remeasurement of acquisition-related contingent consideration	(0.09		)	(0.09		)
Non-cash interest expense on convertible notes, net of tax	0.20			0.20
Guidance on estimated adjusted earnings per common share (non-GAAP) ⁽¹⁾	$	6.00		$	6.50

_________________
⁽¹⁾ The forward-looking guidance on estimated 2021 EPS and Adjusted EPS does not reflect other gains and losses (all of which would be excluded from Adjusted EPS) related to the future impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, or gain or loss on sale of a business as these items are dependent on future events that are uncertain and difficult to predict. The forward-looking guidance excludes any shares of common stock potentially issuable upon conversion of the 2023 Convertible Notes from the calculation of EPS.

FTI CONSULTING, INC.
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
(in thousands)

Three Months Ended June 30, 2021 (Unaudited)	Corporate Finance & Restructuring			Forensic and Litigation Consulting		Economic Consulting		Technology		Strategic Communications		Unallocated Corporate			Total
Net income															$	62,782
Interest income and other															912
Interest expense															5,294
Income tax provision															14,992
Operating income	$	40,103		$	16,492	$	29,204	$	15,340	$	12,198	$	(29,357	)	$	83,980
Depreciation and amortization	1,317			1,286		1,495		3,178		558		770			8,604
Amortization of intangible assets	1,884			224		—		—		745		1			2,854
Remeasurement of acquisition-related contingent consideration	(3,130		)	—		—		—		—		—			(3,130		)
Adjusted EBITDA	$	40,174		$	18,002	$	30,699	$	18,518	$	13,501	$	(28,586	)	$	92,308

Six Months Ended June 30, 2021 (Unaudited)	Corporate Finance & Restructuring			Forensic and Litigation Consulting		Economic Consulting		Technology		Strategic Communications		Unallocated Corporate			Total
Net income															$	127,278
Interest income and other															(122		)
Interest expense															10,091
Income tax provision															35,239
Operating income	$	74,402		$	44,498	$	54,436	$	33,899	$	21,318	$	(56,067	)	$	172,486
Depreciation and amortization	2,570			2,538		2,842		6,217		1,097		1,501			16,765
Amortization of intangible assets	3,771			398		—		—		1,484		2			5,655
Remeasurement of acquisition-related contingent consideration	(3,130		)	—		—		—		—		—			(3,130		)
Adjusted EBITDA	$	77,613		$	47,434	$	57,278	$	40,116	$	23,899	$	(54,564	)	$	191,776

FTI CONSULTING, INC.
RECONCILIATION OF NET INCOME AND OPERATING INCOME (LOSS) TO ADJUSTED EBITDA
(in thousands)

Three Months Ended June 30, 2020 (Unaudited)	Corporate Finance & Restructuring		Forensic and Litigation Consulting			Economic Consulting		Technology		Strategic Communications		Unallocated Corporate			Total
Net income															$	48,174
Interest income and other															(2,202		)
Interest expense															5,157
Income tax provision															14,470
Operating income (loss)	$	73,811	$	(10,382	)	$	20,216	$	3,432	$	8,798	$	(30,276	)	$	65,599
Depreciation and amortization	1,038		1,165			1,433		3,003		552		693			7,884
Amortization of intangible assets	1,415		170			45		—		684		—			2,314
Adjusted EBITDA	$	76,264	$	(9,047	)	$	21,694	$	6,435	$	10,034	$	(29,583	)	$	75,797

Six Months Ended June 30, 2020 (Unaudited)	Corporate Finance & Restructuring		Forensic and Litigation Consulting			Economic Consulting		Technology		Strategic Communications		Unallocated Corporate			Total
Net income															$	104,921
Interest income and other															(7,219		)
Interest expense															10,018
Income tax provision															30,935
Operating income	$	120,475	$	9,124		$	31,612	$	15,021	$	16,290	$	(53,867	)	$	138,655
Depreciation and amortization	2,017		2,581			2,703		5,898		1,138		1,370			15,707
Amortization of intangible assets	2,718		456			89		—		1,382		—			4,645
Adjusted EBITDA	$	125,210	$	12,161		$	34,404	$	20,919	$	18,810	$	(52,497	)	$	159,007

FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT

	Segment Revenues		Adjusted EBITDA			Adjusted EBITDA Margin		Utilization		Average Billable Rate		Revenue- Generating Headcount
	(in thousands)											(at period end)
Three Months Ended June 30, 2021 (Unaudited)
Corporate Finance & Restructuring	$	230,971	$	40,174		17.4	%	59	%	$	456	1,632
Forensic and Litigation Consulting	150,746		18,002			11.9	%	60	%	$	344	1,399
Economic Consulting	183,306		30,699			16.7	%	75	%	$	524	884
Technology ⁽¹⁾	78,646		18,518			23.5	%	N/M		N/M		429
Strategic Communications ⁽¹⁾	67,817		13,501			19.9	%	N/M		N/M		771
	$	711,486	$	120,894		17.0	%					5,115
Unallocated Corporate			(28,586		)
Adjusted EBITDA			$	92,308		13.0	%

Six Months Ended June 30, 2021 (Unaudited)
Corporate Finance & Restructuring	$	457,174	$	77,613		17.0	%	59	%	$	456	1,632
Forensic and Litigation Consulting	301,567		47,434			15.7	%	60	%	$	350	1,399
Economic Consulting	352,579		57,278			16.2	%	75	%	$	504	884
Technology ⁽¹⁾	158,105		40,116			25.4	%	N/M		N/M		429
Strategic Communications ⁽¹⁾	128,338		23,899			18.6	%	N/M		N/M		771
	$	1,397,763	$	246,340		17.6	%					5,115
Unallocated Corporate			(54,564		)
Adjusted EBITDA			$	191,776		13.7	%

Three Months Ended June 30, 2020 (Unaudited)
Corporate Finance & Restructuring	$	246,011	$	76,264		31.0	%	71	%	$	494	1,362
Forensic and Litigation Consulting	106,381		(9,047		)	(8.5	)%	46	%	$	327	1,326
Economic Consulting	151,493		21,694			14.3	%	73	%	$	508	810
Technology ⁽¹⁾	47,084		6,435			13.7	%	N/M		N/M		386
Strategic Communications ⁽¹⁾	56,883		10,034			17.6	%	N/M		N/M		761
	$	607,852	$	105,380		17.3	%					4,645
Unallocated Corporate			(29,583		)
Adjusted EBITDA			$	75,797		12.5	%

Six Months Ended June 30, 2020 (Unaudited)
Corporate Finance & Restructuring	$	453,760	$	125,210		27.6	%	70	%	$	473	1,362
Forensic and Litigation Consulting	253,978		12,161			4.8	%	52	%	$	332	1,326
Economic Consulting	283,631		34,404			12.1	%	70	%	$	478	810
Technology ⁽¹⁾	105,807		20,919			19.8	%	N/M		N/M		386
Strategic Communications ⁽¹⁾	115,269		18,810			16.3	%	N/M		N/M		761
	$	1,212,445	$	211,504		17.4	%					4,645
Unallocated Corporate			(52,497		)
Adjusted EBITDA			$	159,007		13.1	%

___________________
N/M - Not meaningful
⁽¹⁾ 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.

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Six Months Ended June 30,
	2021			2020
	(Unaudited)
Operating activities
Net income	$	127,278		$	104,921
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	16,765			15,707
Amortization and impairment of intangible assets	5,655			4,645
Acquisition-related contingent consideration	(1,130		)	1,120
Provision for expected credit losses	8,236			11,624
Share-based compensation	12,190			12,147
Amortization of debt discount and issuance costs and other	5,685			6,000
Deferred income taxes	9,802			4,128
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, billed and unbilled	(138,838		)	(42,804		)
Notes receivable	8,921			5,993
Prepaid expenses and other assets	6,728			8,979
Accounts payable, accrued expenses and other	(13,518		)	2,230
Income taxes	6,695			(2,344		)
Accrued compensation	(88,024		)	(107,217		)
Billings in excess of services provided	(7,471		)	4,285
Net cash provided by (used in) operating activities	(41,026		)	29,414
Investing activities
Payments for acquisition of businesses, net of cash received	(9,833		)	—
Purchases of property and equipment and other	(27,696		)	(13,885		)
Net cash used in investing activities	(37,529		)	(13,885		)
Financing activities
Borrowings under revolving line of credit	292,500			90,000
Repayments under revolving line of credit	(192,500		)	(55,000		)
Purchase and retirement of common stock	(46,133		)	(99,678		)
Share-based compensation tax withholdings and other	(7,475		)	(6,523		)
Payments for business acquisition liabilities	(7,496		)	(3,948		)
Deposits	602			5,098
Net cash provided by (used in) financing activities	39,498			(70,051		)
Effect of exchange rate changes on cash and cash equivalents	979			(10,645		)
Net decrease in cash and cash equivalents	(38,078		)	(65,167		)
Cash and cash equivalents, beginning of period	294,953			369,373
Cash and cash equivalents, end of period	$	256,875		$	304,206

FTI CONSULTING, INC.
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW
(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net cash provided by (used in) operating activities	$	125,558		$	152,976		$	(41,026	)	$	29,414
Purchases of property and equipment	(19,724		)	(5,663		)	(27,725		)	(13,899		)
Free Cash Flow	$	105,834		$	147,313		$	(68,751	)	$	15,515

FTI Consulting, Inc.
555 12th Street NW
Washington, DC 20004
+1.202.312.9100

Investor & Media Contact:
Mollie Hawkes
+1.617.747.1791
mollie.hawkes@fticonsulting.com

Source: FTI Consulting, Inc.

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