FTI Consulting Annual Report 2008

FY2008 Annual Report · FTI Consulting
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WHEN THE 
GAME CHANGES

2008 ANNUAL REPORT

®

In a world in which contraction and retrenchment 

were the watchwords of the day, FTI delivered a 

record performance, driven by the importance 

of what we do to help our clients in this time of 

economic and ﬁnancial stress. We are pleased 

that we were able to generate record results in 

an environment that has been such a challenge 

for so many enterprises.

DEAR FELLOW STOCKHOLDER:

In the spirit of our recently launched When the Game Changes marketing 

campaign, we begin this letter by pronouncing that in 2008, the game 
changed for good. As we said in our 2007 Annual Report, “What began as a 
crisis in the U.S. sub-prime sector has erupted into a full-blown ﬁnancial and 
economic pandemic, attacking transparency, liquidity and, most importantly, 
conﬁdence in the world’s ﬁnancial markets and the organizations and 
institutions that rely on them.” When we said this a year ago we believed the 
near term future would be painful, but no one could have foreseen the events 
of the past 12 months. What actually developed is deeper, more destructive 
and more pervasive than anything we have ever seen before.

The economic chaos that deﬁned the year is well documented, as the gradual deterioration in business conditions 

seen at the beginning of the year snowballed into a precipitous, and unprecedented, dislocation of the ﬁnancial 
markets, and indeed the global economy in the second half. In a world in which contraction and retrenchment 
were the watchwords of the day, FTI delivered a record performance, driven by the importance of what we do to 
help our clients in this time of economic and ﬁnancial stress. We are pleased that we were able to generate record 
results in an environment that has been such a challenge for so many enterprises.

Highlights of our performance for the year are as follows:
(cid:154)(cid:21)(cid:21)(cid:71)(cid:90)(cid:107)(cid:90)(cid:99)(cid:106)(cid:90)(cid:21)(cid:91)(cid:100)(cid:103)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:21)(cid:88)(cid:97)(cid:94)(cid:98)(cid:87)(cid:90)(cid:89)(cid:21)(cid:39)(cid:46)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:38)(cid:35)(cid:40)(cid:21)(cid:87)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:21)(cid:91)(cid:103)(cid:100)(cid:98)(cid:21)
(cid:25)(cid:38)(cid:35)(cid:37)(cid:21)(cid:87)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:21)(cid:94)(cid:99)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)(cid:33)(cid:21)(cid:108)(cid:94)(cid:105)(cid:93)(cid:21)(cid:86)(cid:97)(cid:97)(cid:21)(cid:100)(cid:91)(cid:21)(cid:100)(cid:106)(cid:103)(cid:21)(cid:87)(cid:106)(cid:104)(cid:94)(cid:99)(cid:90)(cid:104)(cid:104)(cid:21)(cid:104)(cid:90)(cid:92)(cid:98)(cid:90)(cid:99)(cid:105)(cid:104)(cid:21)
contributing to this growth. 

(cid:154)(cid:21)(cid:21)(cid:68)(cid:103)(cid:92)(cid:86)(cid:99)(cid:94)(cid:88)(cid:21)(cid:92)(cid:103)(cid:100)(cid:108)(cid:105)(cid:93)(cid:21)(cid:108)(cid:86)(cid:104)(cid:21)(cid:86)(cid:21)(cid:103)(cid:100)(cid:87)(cid:106)(cid:104)(cid:105)(cid:21)(cid:38)(cid:44)(cid:26)(cid:21)(cid:91)(cid:100)(cid:103)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:33)(cid:21)(cid:100)(cid:99)(cid:21)(cid:105)(cid:100)(cid:101)(cid:21)

(cid:100)(cid:91)(cid:21)(cid:86)(cid:21)(cid:38)(cid:46)(cid:26)(cid:21)(cid:94)(cid:99)(cid:88)(cid:103)(cid:90)(cid:86)(cid:104)(cid:90)(cid:21)(cid:94)(cid:99)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)(cid:35)

(cid:154)(cid:21)(cid:21)(cid:76)(cid:90)(cid:21)(cid:88)(cid:100)(cid:99)(cid:107)(cid:90)(cid:103)(cid:105)(cid:90)(cid:89)(cid:21)(cid:105)(cid:93)(cid:94)(cid:104)(cid:21)(cid:104)(cid:105)(cid:103)(cid:100)(cid:99)(cid:92)(cid:21)(cid:103)(cid:90)(cid:107)(cid:90)(cid:99)(cid:106)(cid:90)(cid:21)(cid:101)(cid:90)(cid:103)(cid:91)(cid:100)(cid:103)(cid:98)(cid:86)(cid:99)(cid:88)(cid:90)(cid:21)(cid:94)(cid:99)(cid:105)(cid:100)(cid:21)

excellent proﬁtability, with EBITDA for 2008 increasing 
(cid:40)(cid:38)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:39)(cid:45)(cid:40)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:33)(cid:21)(cid:91)(cid:103)(cid:100)(cid:98)(cid:21)(cid:25)(cid:39)(cid:38)(cid:43)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:21)(cid:94)(cid:99)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)(cid:35)
(cid:154)(cid:21)(cid:21)(cid:68)(cid:106)(cid:103)(cid:21)(cid:98)(cid:86)(cid:103)(cid:92)(cid:94)(cid:99)(cid:104)(cid:21)(cid:103)(cid:90)(cid:98)(cid:86)(cid:94)(cid:99)(cid:90)(cid:89)(cid:21)(cid:104)(cid:105)(cid:103)(cid:100)(cid:99)(cid:92)(cid:33)(cid:21)(cid:108)(cid:94)(cid:105)(cid:93)(cid:21)(cid:58)(cid:55)(cid:62)(cid:73)(cid:57)(cid:54)(cid:21)(cid:86)(cid:104)(cid:21)(cid:86)(cid:21)

(cid:101)(cid:90)(cid:103)(cid:88)(cid:90)(cid:99)(cid:105)(cid:21)(cid:100)(cid:91)(cid:21)(cid:103)(cid:90)(cid:107)(cid:90)(cid:99)(cid:106)(cid:90)(cid:21)(cid:94)(cid:99)(cid:88)(cid:103)(cid:90)(cid:86)(cid:104)(cid:94)(cid:99)(cid:92)(cid:21)(cid:91)(cid:103)(cid:100)(cid:98)(cid:21)(cid:39)(cid:38)(cid:35)(cid:43)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:39)(cid:38)(cid:35)(cid:46)(cid:26)(cid:35)
(cid:154)(cid:21)(cid:21)(cid:67)(cid:90)(cid:105)(cid:21)(cid:94)(cid:99)(cid:88)(cid:100)(cid:98)(cid:90)(cid:21)(cid:91)(cid:100)(cid:103)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:21)(cid:103)(cid:100)(cid:104)(cid:90)(cid:21)(cid:40)(cid:43)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:38)(cid:39)(cid:42)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:21)(cid:91)(cid:103)(cid:100)(cid:98)(cid:21)

(cid:25)(cid:46)(cid:39)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:21)(cid:94)(cid:99)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)(cid:35)(cid:21)

(cid:154)(cid:21)(cid:21)(cid:58)(cid:86)(cid:103)(cid:99)(cid:94)(cid:99)(cid:92)(cid:104)(cid:21)(cid:101)(cid:90)(cid:103)(cid:21)(cid:89)(cid:94)(cid:97)(cid:106)(cid:105)(cid:90)(cid:89)(cid:21)(cid:104)(cid:93)(cid:86)(cid:103)(cid:90)(cid:21)(cid:94)(cid:99)(cid:88)(cid:103)(cid:90)(cid:86)(cid:104)(cid:90)(cid:89)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:39)(cid:35)(cid:40)(cid:41)(cid:21)

(cid:88)(cid:100)(cid:98)(cid:101)(cid:86)(cid:103)(cid:90)(cid:89)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:39)(cid:35)(cid:37)(cid:37)(cid:21)(cid:86)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:21)(cid:86)(cid:92)(cid:100)(cid:21)(cid:89)(cid:90)(cid:104)(cid:101)(cid:94)(cid:105)(cid:90)(cid:21)(cid:86)(cid:99)(cid:21)(cid:94)(cid:99)(cid:88)(cid:103)(cid:90)(cid:86)(cid:104)(cid:90)(cid:21)(cid:100)(cid:91)(cid:21)
(cid:38)(cid:44)(cid:26)(cid:21)(cid:94)(cid:99)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:88)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:110)(cid:188)(cid:104)(cid:21)(cid:89)(cid:94)(cid:97)(cid:106)(cid:105)(cid:90)(cid:89)(cid:21)(cid:104)(cid:93)(cid:86)(cid:103)(cid:90)(cid:104)(cid:21)(cid:100)(cid:106)(cid:105)(cid:104)(cid:105)(cid:86)(cid:99)(cid:89)(cid:94)(cid:99)(cid:92)(cid:21)(cid:86)(cid:104)(cid:21)(cid:86)(cid:21)
result of our equity offering in the fall of 2007.

(cid:154)(cid:21)(cid:21)(cid:56)(cid:100)(cid:99)(cid:105)(cid:103)(cid:86)(cid:103)(cid:110)(cid:21)(cid:105)(cid:100)(cid:21)(cid:98)(cid:86)(cid:99)(cid:110)(cid:21)(cid:88)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:94)(cid:90)(cid:104)(cid:21)(cid:108)(cid:93)(cid:94)(cid:88)(cid:93)(cid:21)(cid:86)(cid:103)(cid:90)(cid:21)(cid:103)(cid:90)(cid:105)(cid:103)(cid:90)(cid:99)(cid:88)(cid:93)(cid:94)(cid:99)(cid:92)(cid:21)

in this environment, we invested heavily in the 
intellectual capital of our business to sustain 
our market position and competitive advantage, 
increasing the number of billable professionals by  
(cid:39)(cid:46)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:39)(cid:33)(cid:42)(cid:39)(cid:40)(cid:35)

At the same time, we continued strong investment in 
our future success. We further strengthened our ﬁnancial 
position, which is critical in these constricted capital 
(cid:98)(cid:86)(cid:103)(cid:96)(cid:90)(cid:105)(cid:104)(cid:35)(cid:21)(cid:59)(cid:100)(cid:103)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:91)(cid:106)(cid:97)(cid:97)(cid:34)(cid:110)(cid:90)(cid:86)(cid:103)(cid:33)(cid:21)(cid:108)(cid:90)(cid:21)(cid:92)(cid:90)(cid:99)(cid:90)(cid:103)(cid:86)(cid:105)(cid:90)(cid:89)(cid:21)(cid:86)(cid:21)(cid:103)(cid:90)(cid:88)(cid:100)(cid:103)(cid:89)(cid:21)(cid:25)(cid:39)(cid:37)(cid:37)(cid:21)
(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:21)(cid:94)(cid:99)(cid:21)(cid:88)(cid:86)(cid:104)(cid:93)(cid:21)(cid:91)(cid:103)(cid:100)(cid:98)(cid:21)(cid:100)(cid:101)(cid:90)(cid:103)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:104)(cid:33)(cid:21)(cid:108)(cid:90)(cid:97)(cid:97)(cid:21)(cid:94)(cid:99)(cid:21)(cid:90)(cid:109)(cid:88)(cid:90)(cid:104)(cid:104)(cid:21)(cid:100)(cid:91)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:25)(cid:38)(cid:39)(cid:42)(cid:21)
million in net income we reported and nearly three times 
(cid:105)(cid:93)(cid:90)(cid:21)(cid:25)(cid:43)(cid:46)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:21)(cid:94)(cid:99)(cid:21)(cid:100)(cid:101)(cid:90)(cid:103)(cid:86)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:88)(cid:86)(cid:104)(cid:93)(cid:21)(cid:196)(cid:100)(cid:108)(cid:21)(cid:108)(cid:90)(cid:21)(cid:92)(cid:90)(cid:99)(cid:90)(cid:103)(cid:86)(cid:105)(cid:90)(cid:89)(cid:21)(cid:94)(cid:99)(cid:21)
(cid:39)(cid:37)(cid:37)(cid:44)(cid:35)(cid:21)(cid:73)(cid:93)(cid:94)(cid:104)(cid:21)(cid:104)(cid:105)(cid:103)(cid:100)(cid:99)(cid:92)(cid:21)(cid:88)(cid:86)(cid:104)(cid:93)(cid:21)(cid:196)(cid:100)(cid:108)(cid:21)(cid:90)(cid:99)(cid:86)(cid:87)(cid:97)(cid:90)(cid:89)(cid:21)(cid:106)(cid:104)(cid:21)(cid:105)(cid:100)(cid:21)(cid:90)(cid:109)(cid:94)(cid:105)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:21)(cid:94)(cid:99)(cid:21)(cid:86)(cid:21)
favorable liquidity position, with cash and equivalents of 
(cid:86)(cid:87)(cid:100)(cid:106)(cid:105)(cid:21)(cid:25)(cid:38)(cid:46)(cid:39)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:35)(cid:21)(cid:62)(cid:105)(cid:21)(cid:94)(cid:104)(cid:21)(cid:105)(cid:93)(cid:94)(cid:104)(cid:21)(cid:195)(cid:99)(cid:86)(cid:99)(cid:88)(cid:94)(cid:86)(cid:97)(cid:21)(cid:104)(cid:105)(cid:103)(cid:90)(cid:99)(cid:92)(cid:105)(cid:93)(cid:21)(cid:105)(cid:93)(cid:86)(cid:105)(cid:21)(cid:101)(cid:97)(cid:86)(cid:88)(cid:90)(cid:89)(cid:21)
us in a tremendous position to take advantage of growth 
opportunities that arose over the course of the year, 
invest in our brand and attract and retain exceptionally 
talented professionals in the marketplace.

(cid:68)(cid:107)(cid:90)(cid:103)(cid:86)(cid:97)(cid:97)(cid:33)(cid:21)(cid:100)(cid:106)(cid:103)(cid:21)(cid:101)(cid:90)(cid:103)(cid:91)(cid:100)(cid:103)(cid:98)(cid:86)(cid:99)(cid:88)(cid:90)(cid:21)(cid:94)(cid:99)(cid:21)(cid:39)(cid:37)(cid:37)(cid:45)(cid:21)(cid:103)(cid:90)(cid:196)(cid:90)(cid:88)(cid:105)(cid:90)(cid:89)(cid:21)(cid:87)(cid:103)(cid:100)(cid:86)(cid:89)(cid:34)(cid:87)(cid:86)(cid:104)(cid:90)(cid:89)(cid:21)

contributions across our business segments.

(cid:67)(cid:100)(cid:105)(cid:21)(cid:104)(cid:106)(cid:103)(cid:101)(cid:103)(cid:94)(cid:104)(cid:94)(cid:99)(cid:92)(cid:97)(cid:110)(cid:33)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:98)(cid:100)(cid:104)(cid:105)(cid:21)(cid:101)(cid:103)(cid:100)(cid:99)(cid:100)(cid:106)(cid:99)(cid:88)(cid:90)(cid:89)(cid:21)(cid:89)(cid:103)(cid:94)(cid:107)(cid:90)(cid:103)(cid:21)(cid:100)(cid:91)(cid:21)(cid:100)(cid:106)(cid:103)(cid:21)
business in the year was the accelerating impact of the 
recession and the evaporation of credit, leading to one 
of the deepest, longest and most pervasive restructuring 
cycles ever. While all our segments participated in this 
phenomenon to some degree in 2008, nowhere within 
the ﬁrm were the beneﬁts of these trends felt more 
(cid:104)(cid:105)(cid:103)(cid:100)(cid:99)(cid:92)(cid:97)(cid:110)(cid:21)(cid:105)(cid:93)(cid:86)(cid:99)(cid:21)(cid:108)(cid:94)(cid:105)(cid:93)(cid:94)(cid:99)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:56)(cid:100)(cid:103)(cid:101)(cid:100)(cid:103)(cid:86)(cid:105)(cid:90)(cid:21)(cid:59)(cid:94)(cid:99)(cid:86)(cid:99)(cid:88)(cid:90)(cid:36)(cid:71)(cid:90)(cid:104)(cid:105)(cid:103)(cid:106)(cid:88)(cid:105)(cid:106)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)
segment, which produced an outstanding performance. 
(cid:56)(cid:100)(cid:103)(cid:101)(cid:100)(cid:103)(cid:86)(cid:105)(cid:90)(cid:21)(cid:59)(cid:94)(cid:99)(cid:86)(cid:99)(cid:88)(cid:90)(cid:21)(cid:92)(cid:90)(cid:99)(cid:90)(cid:103)(cid:86)(cid:105)(cid:90)(cid:89)(cid:21)(cid:103)(cid:90)(cid:107)(cid:90)(cid:99)(cid:106)(cid:90)(cid:21)(cid:100)(cid:91)(cid:21)(cid:25)(cid:40)(cid:44)(cid:41)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:21)
(cid:89)(cid:106)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:33)(cid:21)(cid:86)(cid:99)(cid:21)(cid:94)(cid:99)(cid:88)(cid:103)(cid:90)(cid:86)(cid:104)(cid:90)(cid:21)(cid:100)(cid:91)(cid:21)(cid:41)(cid:40)(cid:26)(cid:21)(cid:100)(cid:107)(cid:90)(cid:103)(cid:21)(cid:86)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:21)(cid:86)(cid:92)(cid:100)(cid:35)(cid:21)(cid:54)(cid:104)(cid:21)
the recession continued to gain strength, the momentum 
in this segment increased over the course of the year. 
Driven by the substantial growth in revenue, EBITDA for 
(cid:105)(cid:93)(cid:90)(cid:21)(cid:104)(cid:90)(cid:92)(cid:98)(cid:90)(cid:99)(cid:105)(cid:21)(cid:103)(cid:100)(cid:104)(cid:90)(cid:21)(cid:43)(cid:37)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:38)(cid:38)(cid:41)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:21)(cid:94)(cid:99)(cid:21)(cid:39)(cid:37)(cid:37)(cid:45)(cid:35)(cid:21)

(cid:58)(cid:88)(cid:100)(cid:99)(cid:100)(cid:98)(cid:94)(cid:88)(cid:21)(cid:56)(cid:100)(cid:99)(cid:104)(cid:106)(cid:97)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:86)(cid:97)(cid:104)(cid:100)(cid:21)(cid:93)(cid:86)(cid:89)(cid:21)(cid:86)(cid:99)(cid:21)(cid:90)(cid:109)(cid:88)(cid:90)(cid:97)(cid:97)(cid:90)(cid:99)(cid:105)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:33)(cid:21)(cid:86)(cid:104)(cid:21)(cid:94)(cid:105)(cid:21)
experienced strong demand from companies contending 
with the recession and credit crisis. Segment revenue 
(cid:92)(cid:103)(cid:90)(cid:108)(cid:21)(cid:86)(cid:99)(cid:21)(cid:94)(cid:98)(cid:101)(cid:103)(cid:90)(cid:104)(cid:104)(cid:94)(cid:107)(cid:90)(cid:21)(cid:39)(cid:43)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:39)(cid:39)(cid:37)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:35)(cid:21)(cid:75)(cid:94)(cid:103)(cid:105)(cid:106)(cid:86)(cid:97)(cid:97)(cid:110)(cid:21)(cid:86)(cid:97)(cid:97)(cid:21)(cid:100)(cid:91)(cid:21)
this growth was organic. Momentum was strong early in 
the year from strategic M&A activity and related anti-
trust matters. As the year progressed demand began to 
come from companies starting to prepare for litigation 
arising from the credit crisis. EBITDA for the segment 
(cid:94)(cid:99)(cid:88)(cid:103)(cid:90)(cid:86)(cid:104)(cid:90)(cid:89)(cid:21)(cid:39)(cid:40)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:42)(cid:46)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:35)(cid:21)

As the economic crisis progressed the business climate 
(cid:87)(cid:90)(cid:88)(cid:86)(cid:98)(cid:90)(cid:21)(cid:101)(cid:86)(cid:103)(cid:86)(cid:97)(cid:110)(cid:111)(cid:90)(cid:89)(cid:21)(cid:94)(cid:99)(cid:21)(cid:72)(cid:90)(cid:101)(cid:105)(cid:90)(cid:98)(cid:87)(cid:90)(cid:103)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:68)(cid:88)(cid:105)(cid:100)(cid:87)(cid:90)(cid:103)(cid:33)(cid:21)(cid:88)(cid:86)(cid:106)(cid:104)(cid:94)(cid:99)(cid:92)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)
pace of litigation and regulatory actions to slow markedly 
as corporate legal budgets came under pressure, and 
the transition in presidential administrations and a new 
(cid:56)(cid:100)(cid:99)(cid:92)(cid:103)(cid:90)(cid:104)(cid:104)(cid:21)(cid:88)(cid:86)(cid:106)(cid:104)(cid:90)(cid:89)(cid:21)(cid:103)(cid:90)(cid:92)(cid:106)(cid:97)(cid:86)(cid:105)(cid:100)(cid:103)(cid:110)(cid:21)(cid:90)(cid:99)(cid:91)(cid:100)(cid:103)(cid:88)(cid:90)(cid:98)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:88)(cid:105)(cid:94)(cid:100)(cid:99)(cid:104)(cid:21)(cid:105)(cid:100)(cid:21)(cid:87)(cid:90)(cid:21)
temporarily deferred. Within this environment, Forensic 
(cid:86)(cid:99)(cid:89)(cid:21)(cid:65)(cid:94)(cid:105)(cid:94)(cid:92)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:21)(cid:56)(cid:100)(cid:99)(cid:104)(cid:106)(cid:97)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:93)(cid:86)(cid:89)(cid:21)(cid:86)(cid:21)(cid:104)(cid:100)(cid:97)(cid:94)(cid:89)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:35)(cid:21)(cid:71)(cid:90)(cid:107)(cid:90)(cid:99)(cid:106)(cid:90)(cid:21)
(cid:94)(cid:99)(cid:88)(cid:103)(cid:90)(cid:86)(cid:104)(cid:90)(cid:89)(cid:21)(cid:38)(cid:44)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:39)(cid:42)(cid:41)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:33)(cid:21)(cid:89)(cid:103)(cid:94)(cid:107)(cid:90)(cid:99)(cid:21)(cid:97)(cid:86)(cid:103)(cid:92)(cid:90)(cid:97)(cid:110)(cid:21)(cid:87)(cid:110)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)
contributions of strategic acquisitions we’ve made in that 
segment and steady growth from its regulated and special 
industries practices centered on insurance, healthcare, 
and pharmaceuticals, as well as its intellectual property 
and construction practices. EBITDA for the segment was 
(cid:25)(cid:42)(cid:45)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:33)(cid:21)(cid:94)(cid:99)(cid:21)(cid:97)(cid:94)(cid:99)(cid:90)(cid:21)(cid:108)(cid:94)(cid:105)(cid:93)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:21)(cid:86)(cid:92)(cid:100)(cid:21)(cid:97)(cid:90)(cid:107)(cid:90)(cid:97)(cid:104)(cid:35)(cid:21)

After an extremely strong start to 2008, over the course 

(cid:100)(cid:91)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:21)(cid:100)(cid:106)(cid:103)(cid:21)(cid:73)(cid:90)(cid:88)(cid:93)(cid:99)(cid:100)(cid:97)(cid:100)(cid:92)(cid:110)(cid:21)(cid:104)(cid:90)(cid:92)(cid:98)(cid:90)(cid:99)(cid:105)(cid:33)(cid:21)(cid:104)(cid:94)(cid:98)(cid:94)(cid:97)(cid:86)(cid:103)(cid:21)(cid:105)(cid:100)(cid:21)(cid:59)(cid:65)(cid:56)(cid:33)(cid:21)
had to contend with a fall off in large litigation cases, 
merger-related activity and government-led regulatory 
and enforcement actions, as well as competitive pricing, 
especially for smaller engagements, in the slow economy. 
Despite this, the Technology segment had a good year, 
(cid:92)(cid:90)(cid:99)(cid:90)(cid:103)(cid:86)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:103)(cid:90)(cid:107)(cid:90)(cid:99)(cid:106)(cid:90)(cid:21)(cid:100)(cid:91)(cid:21)(cid:25)(cid:39)(cid:39)(cid:37)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:33)(cid:21)(cid:86)(cid:99)(cid:21)(cid:94)(cid:99)(cid:88)(cid:103)(cid:90)(cid:86)(cid:104)(cid:90)(cid:21)(cid:100)(cid:91)(cid:21)(cid:40)(cid:42)(cid:26)(cid:21)
over a year ago, due to a combination of organic growth 
and acquisitions made during the year. EBITDA for the 
(cid:104)(cid:90)(cid:92)(cid:98)(cid:90)(cid:99)(cid:105)(cid:21)(cid:103)(cid:100)(cid:104)(cid:90)(cid:21)(cid:38)(cid:44)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:44)(cid:41)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:35)(cid:21)(cid:57)(cid:106)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:21)(cid:108)(cid:90)(cid:21)
(cid:86)(cid:88)(cid:102)(cid:106)(cid:94)(cid:103)(cid:90)(cid:89)(cid:21)(cid:54)(cid:105)(cid:105)(cid:90)(cid:99)(cid:90)(cid:109)(cid:21)(cid:56)(cid:100)(cid:103)(cid:101)(cid:100)(cid:103)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:33)(cid:21)(cid:86)(cid:21)(cid:97)(cid:90)(cid:86)(cid:89)(cid:94)(cid:99)(cid:92)(cid:21)(cid:90)(cid:34)(cid:57)(cid:94)(cid:104)(cid:88)(cid:100)(cid:107)(cid:90)(cid:103)(cid:110)(cid:21)
software developer, which brought a sizeable portfolio 
of intellectual property, a cadre of talented software 
developers in the e-Discovery space and an excellent 
roster of clients. We aggressively moved to integrate 
Attenex® into the Technology segment and accelerate 
product development to introduce the next generation 
of industry-leading products based on the combined 
technology platforms. 

The accelerating declines in equities and the 

disappearance of credit had an impact on the capital 
(cid:98)(cid:86)(cid:103)(cid:96)(cid:90)(cid:105)(cid:104)(cid:21)(cid:86)(cid:88)(cid:105)(cid:94)(cid:107)(cid:94)(cid:105)(cid:94)(cid:90)(cid:104)(cid:21)(cid:100)(cid:91)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:72)(cid:105)(cid:103)(cid:86)(cid:105)(cid:90)(cid:92)(cid:94)(cid:88)(cid:21)(cid:56)(cid:100)(cid:98)(cid:98)(cid:106)(cid:99)(cid:94)(cid:88)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:104)(cid:21)
segment in the second half. Exacerbating the slower 
environment was also a negative foreign exchange impact 
brought on by the sharp increase in the U.S. Dollar against 
foreign currencies, most notably the British Pound. 
(cid:67)(cid:90)(cid:107)(cid:90)(cid:103)(cid:105)(cid:93)(cid:90)(cid:97)(cid:90)(cid:104)(cid:104)(cid:33)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:104)(cid:90)(cid:92)(cid:98)(cid:90)(cid:99)(cid:105)(cid:21)(cid:98)(cid:94)(cid:105)(cid:94)(cid:92)(cid:86)(cid:105)(cid:90)(cid:89)(cid:21)(cid:105)(cid:93)(cid:90)(cid:104)(cid:90)(cid:21)(cid:93)(cid:90)(cid:86)(cid:89)(cid:108)(cid:94)(cid:99)(cid:89)(cid:104)(cid:21)(cid:87)(cid:110)(cid:21)
leveraging its expertise in crisis communications to win 
engagements with companies that were increasingly

faced with communications issues stemming from 
adverse events, major restructuring initiatives, or 
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(cid:103)(cid:90)(cid:107)(cid:90)(cid:99)(cid:106)(cid:90)(cid:21)(cid:92)(cid:103)(cid:100)(cid:108)(cid:105)(cid:93)(cid:21)(cid:100)(cid:91)(cid:21)(cid:39)(cid:38)(cid:26)(cid:21)(cid:91)(cid:100)(cid:103)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:39)(cid:39)(cid:42)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:33)(cid:21)
driven by both acquisitions and organic growth as the 
segment adapted to changes in the marketplace. EBITDA 
(cid:91)(cid:100)(cid:103)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:104)(cid:90)(cid:92)(cid:98)(cid:90)(cid:99)(cid:105)(cid:21)(cid:103)(cid:100)(cid:104)(cid:90)(cid:21)(cid:38)(cid:40)(cid:26)(cid:21)(cid:105)(cid:100)(cid:21)(cid:25)(cid:42)(cid:42)(cid:21)(cid:98)(cid:94)(cid:97)(cid:97)(cid:94)(cid:100)(cid:99)(cid:21)(cid:89)(cid:106)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:35)(cid:21)
(cid:76)(cid:90)(cid:21)(cid:87)(cid:90)(cid:97)(cid:94)(cid:90)(cid:107)(cid:90)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:104)(cid:105)(cid:86)(cid:92)(cid:90)(cid:21)(cid:94)(cid:104)(cid:21)(cid:104)(cid:90)(cid:105)(cid:21)(cid:91)(cid:100)(cid:103)(cid:21)(cid:72)(cid:105)(cid:103)(cid:86)(cid:105)(cid:90)(cid:92)(cid:94)(cid:88)(cid:21)(cid:56)(cid:100)(cid:98)(cid:98)(cid:106)(cid:99)(cid:94)(cid:88)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:104)(cid:21)
to take advantage of this current environment to 
convert event-driven assignments into long term 
retainer-based relationships and accelerate its market 
share gains.

2008 was not only another year of strong ﬁnancial 

performance, but also another year in which we 
executed on the three dimensions of our strategic 
growth plan to increase our global operating platform, 
enhance the breadth of our services and strengthen 
our domain expertise in industries that are undergoing 
(cid:105)(cid:103)(cid:86)(cid:99)(cid:104)(cid:91)(cid:100)(cid:103)(cid:98)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:86)(cid:97)(cid:21)(cid:88)(cid:93)(cid:86)(cid:99)(cid:92)(cid:90)(cid:21)(cid:86)(cid:99)(cid:89)(cid:36)(cid:100)(cid:103)(cid:21)(cid:97)(cid:100)(cid:99)(cid:92)(cid:21)(cid:105)(cid:90)(cid:103)(cid:98)(cid:21)(cid:104)(cid:90)(cid:88)(cid:106)(cid:97)(cid:86)(cid:103)(cid:21)
pressure. Keys to accelerating that execution are strategic 
investments and acquisitions, and 2008 was a productive 
year on that front. The following examples illustrate how 
they serve to advance our strategic development.

(cid:54)(cid:104)(cid:21)(cid:89)(cid:94)(cid:104)(cid:88)(cid:106)(cid:104)(cid:104)(cid:90)(cid:89)(cid:21)(cid:86)(cid:87)(cid:100)(cid:107)(cid:90)(cid:33)(cid:21)(cid:108)(cid:90)(cid:21)(cid:86)(cid:88)(cid:102)(cid:106)(cid:94)(cid:103)(cid:90)(cid:89)(cid:21)(cid:54)(cid:105)(cid:105)(cid:90)(cid:99)(cid:90)(cid:109)(cid:21)(cid:56)(cid:100)(cid:103)(cid:101)(cid:100)(cid:103)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:33)(cid:21)
a leading e-Discovery software provider. The transaction 
is a watershed event for our Technology segment that 
combines two of the most well respected brands in 
the industry, creates in our opinion the most robust 
set of e-Discovery capabilities in the marketplace, 
and signiﬁcantly enhances the segment’s position 
within the growing corporate market for e-Discovery 
(cid:101)(cid:103)(cid:100)(cid:89)(cid:106)(cid:88)(cid:105)(cid:104)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:104)(cid:90)(cid:103)(cid:107)(cid:94)(cid:88)(cid:90)(cid:104)(cid:35)(cid:21)(cid:68)(cid:106)(cid:103)(cid:21)(cid:101)(cid:103)(cid:94)(cid:98)(cid:86)(cid:103)(cid:110)(cid:21)(cid:91)(cid:100)(cid:88)(cid:106)(cid:104)(cid:21)(cid:93)(cid:86)(cid:104)(cid:21)(cid:87)(cid:90)(cid:90)(cid:99)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)
successful integration of these organizations and, as 
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announced the integration of the Attenex® and Ringtail® 
platforms, delivering a single e-Discovery system of 
record that combines the visual analysis and rapid review 
capabilities of Attenex® with the enterprise-class case 
management redaction and production features  
of Ringtail® Legal™. We have always been a leader in  
the market for high-end e-Discovery solutions, and  
we believe this new generation leapfrogs the other 
offerings available.

We have viewed the real estate and construction 

industries as ones which will offer us long term 
opportunities as they contend with an increasingly 
challenging environment brought on by the global 
recession and credit crisis. Many of the large real estate 
and construction ﬁrms are international in scope, so there 
is a growing need for advisors who can serve them on a 
global scale. We substantially bolstered our capabilities in 
(cid:105)(cid:93)(cid:90)(cid:21)(cid:86)(cid:103)(cid:90)(cid:86)(cid:21)(cid:108)(cid:94)(cid:105)(cid:93)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:86)(cid:88)(cid:102)(cid:106)(cid:94)(cid:104)(cid:94)(cid:105)(cid:94)(cid:100)(cid:99)(cid:21)(cid:100)(cid:91)(cid:21)(cid:73)(cid:93)(cid:90)(cid:21)(cid:72)(cid:88)(cid:93)(cid:100)(cid:99)(cid:87)(cid:103)(cid:86)(cid:106)(cid:99)(cid:21)(cid:66)(cid:88)(cid:56)(cid:86)(cid:99)(cid:99)(cid:21)
Group (“SMG”), a leading, dedicated national real estate 
consulting ﬁrm. SMG’s expertise has already contributed 
(cid:105)(cid:100)(cid:21)(cid:103)(cid:90)(cid:104)(cid:105)(cid:103)(cid:106)(cid:88)(cid:105)(cid:106)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)(cid:90)(cid:99)(cid:92)(cid:86)(cid:92)(cid:90)(cid:98)(cid:90)(cid:99)(cid:105)(cid:104)(cid:21)(cid:108)(cid:94)(cid:105)(cid:93)(cid:94)(cid:99)(cid:21)(cid:100)(cid:106)(cid:103)(cid:21)(cid:56)(cid:100)(cid:103)(cid:101)(cid:100)(cid:103)(cid:86)(cid:105)(cid:90)(cid:21)

Finance segment and to new engagements with sovereign 
wealth funds in the Middle East. We also acquired Rubino 
(cid:66)(cid:88)(cid:60)(cid:90)(cid:90)(cid:93)(cid:94)(cid:99)(cid:21)(cid:56)(cid:100)(cid:99)(cid:104)(cid:106)(cid:97)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:60)(cid:103)(cid:100)(cid:106)(cid:101)(cid:33)(cid:21)(cid:108)(cid:93)(cid:100)(cid:104)(cid:90)(cid:21)(cid:101)(cid:103)(cid:94)(cid:98)(cid:86)(cid:103)(cid:110)(cid:21)(cid:90)(cid:98)(cid:101)(cid:93)(cid:86)(cid:104)(cid:94)(cid:104)(cid:21)(cid:94)(cid:104)(cid:21)
in the construction and government contracts sectors, 
(cid:86)(cid:99)(cid:89)(cid:21)(cid:55)(cid:103)(cid:90)(cid:108)(cid:90)(cid:103)(cid:21)(cid:56)(cid:100)(cid:99)(cid:104)(cid:106)(cid:97)(cid:105)(cid:94)(cid:99)(cid:92)(cid:33)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:74)(cid:35)(cid:64)(cid:35)(cid:188)(cid:104)(cid:21)(cid:97)(cid:90)(cid:86)(cid:89)(cid:94)(cid:99)(cid:92)(cid:21)(cid:101)(cid:103)(cid:100)(cid:107)(cid:94)(cid:89)(cid:90)(cid:103)(cid:21)(cid:100)(cid:91)(cid:21)
dispute resolution and procurement management services 
to the construction, engineering, transportation and oil & 
gas industries.

The U.K. is one of the largest business and ﬁnancial 
centers in the world so, to further build out our global 
(cid:101)(cid:97)(cid:86)(cid:105)(cid:91)(cid:100)(cid:103)(cid:98)(cid:21)(cid:105)(cid:93)(cid:90)(cid:103)(cid:90)(cid:33)(cid:21)(cid:108)(cid:90)(cid:21)(cid:101)(cid:106)(cid:103)(cid:88)(cid:93)(cid:86)(cid:104)(cid:90)(cid:89)(cid:21)(cid:59)(cid:100)(cid:103)(cid:90)(cid:99)(cid:104)(cid:94)(cid:88)(cid:21)(cid:54)(cid:88)(cid:88)(cid:100)(cid:106)(cid:99)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:65)(cid:65)(cid:56)(cid:21)
(FA), a London-based independent forensic accounting 
practice. The combination of FA and Brewer with our 
existing operations in London makes it FTI’s second largest 
ofﬁce. In less than two and a half years we have, through 
strategic internal hires and acquisitions, developed 
(cid:86)(cid:21)(cid:87)(cid:106)(cid:104)(cid:94)(cid:99)(cid:90)(cid:104)(cid:104)(cid:21)(cid:105)(cid:93)(cid:90)(cid:103)(cid:90)(cid:21)(cid:105)(cid:93)(cid:86)(cid:105)(cid:21)(cid:99)(cid:100)(cid:108)(cid:21)(cid:93)(cid:86)(cid:104)(cid:21)(cid:86)(cid:101)(cid:101)(cid:103)(cid:100)(cid:109)(cid:94)(cid:98)(cid:86)(cid:105)(cid:90)(cid:97)(cid:110)(cid:21)(cid:41)(cid:37)(cid:37)(cid:21)
professionals across the full range of our ﬁve segments. 
London now serves as the hub of our European operations 
and, between the U.K. and continental Europe, we expect 
(cid:105)(cid:100)(cid:21)(cid:104)(cid:90)(cid:90)(cid:21)(cid:103)(cid:100)(cid:87)(cid:106)(cid:104)(cid:105)(cid:21)(cid:92)(cid:103)(cid:100)(cid:108)(cid:105)(cid:93)(cid:21)(cid:94)(cid:99)(cid:21)(cid:39)(cid:37)(cid:37)(cid:46)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:87)(cid:90)(cid:110)(cid:100)(cid:99)(cid:89)(cid:35)(cid:21)

Beyond London, 2008 also saw FTI build out or establish 

positions in a number of other regions, including Latin 
(cid:54)(cid:98)(cid:90)(cid:103)(cid:94)(cid:88)(cid:86)(cid:33)(cid:21)(cid:54)(cid:104)(cid:94)(cid:86)(cid:33)(cid:21)(cid:58)(cid:106)(cid:103)(cid:100)(cid:101)(cid:90)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:56)(cid:86)(cid:99)(cid:86)(cid:89)(cid:86)(cid:35)(cid:21)(cid:62)(cid:99)(cid:21)(cid:39)(cid:37)(cid:37)(cid:45)(cid:33)(cid:21)(cid:86)(cid:87)(cid:100)(cid:106)(cid:105)(cid:21)(cid:38)(cid:45)(cid:26)(cid:21)
of revenues were generated outside the US, compared 
(cid:105)(cid:100)(cid:21)(cid:38)(cid:43)(cid:26)(cid:21)(cid:94)(cid:99)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)(cid:35)(cid:21)(cid:76)(cid:90)(cid:21)(cid:86)(cid:103)(cid:90)(cid:21)(cid:98)(cid:86)(cid:96)(cid:94)(cid:99)(cid:92)(cid:21)(cid:92)(cid:100)(cid:100)(cid:89)(cid:21)(cid:101)(cid:103)(cid:100)(cid:92)(cid:103)(cid:90)(cid:104)(cid:104)(cid:21)(cid:100)(cid:99)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)
globalization of our business and expect to see activity 
beyond our borders expand signiﬁcantly from current 
levels in the future.

(cid:65)(cid:100)(cid:100)(cid:96)(cid:94)(cid:99)(cid:92)(cid:21)(cid:94)(cid:99)(cid:105)(cid:100)(cid:21)(cid:39)(cid:37)(cid:37)(cid:46)(cid:33)(cid:21)(cid:108)(cid:90)(cid:21)(cid:104)(cid:105)(cid:103)(cid:100)(cid:99)(cid:92)(cid:97)(cid:110)(cid:21)(cid:87)(cid:90)(cid:97)(cid:94)(cid:90)(cid:107)(cid:90)(cid:21)(cid:105)(cid:93)(cid:86)(cid:105)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:110)(cid:21)(cid:93)(cid:86)(cid:104)(cid:21)(cid:99)(cid:90)(cid:107)(cid:90)(cid:103)(cid:21)(cid:87)(cid:90)(cid:90)(cid:99)(cid:21)(cid:98)(cid:100)(cid:103)(cid:90)(cid:21)(cid:86)(cid:101)(cid:101)(cid:103)(cid:100)(cid:101)(cid:103)(cid:94)(cid:86)(cid:105)(cid:90)(cid:97)(cid:110)(cid:21)(cid:86)(cid:97)(cid:94)(cid:92)(cid:99)(cid:90)(cid:89)(cid:21)
with the demands of the marketplace than it is now. As 
the leading event-driven consulting ﬁrm, our business 
thrives on high levels of activity across four distinct, yet 
complementary market-based events: capital markets 
transactions, restructuring and bankruptcies, litigation 
(cid:86)(cid:99)(cid:89)(cid:21)(cid:89)(cid:94)(cid:104)(cid:101)(cid:106)(cid:105)(cid:90)(cid:104)(cid:33)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:103)(cid:90)(cid:92)(cid:106)(cid:97)(cid:86)(cid:105)(cid:100)(cid:103)(cid:110)(cid:21)(cid:94)(cid:99)(cid:107)(cid:90)(cid:104)(cid:105)(cid:94)(cid:92)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:104)(cid:35)(cid:21)(cid:68)(cid:106)(cid:103)(cid:21)(cid:101)(cid:100)(cid:103)(cid:105)(cid:91)(cid:100)(cid:97)(cid:94)(cid:100)(cid:21)
of businesses has been designed to capitalize on the way 
in which these events tend to either complement or 
displace one another at various phases in the economic 
and political cycle.

As a result of the spreading impact of the global 

ﬁnancial crisis and the pressures of the world economy, 
we believe the current restructuring cycle will continue 
for a number of years to come in what will be the longest, 
broadest and deepest since the Great Depression. So far 
this year we are seeing unprecedented demand for our 
restructuring services, and are opening a record number 
of matters on a daily basis. Economic and ﬁnancial 
pressures will also force industry consolidation that will 
drive continued strategic M&A and related anti-trust 
(cid:86)(cid:88)(cid:105)(cid:94)(cid:107)(cid:94)(cid:105)(cid:110)(cid:21)(cid:91)(cid:100)(cid:103)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:58)(cid:88)(cid:100)(cid:99)(cid:100)(cid:98)(cid:94)(cid:88)(cid:21)(cid:56)(cid:100)(cid:99)(cid:104)(cid:106)(cid:97)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:104)(cid:90)(cid:92)(cid:98)(cid:90)(cid:99)(cid:105)(cid:35)(cid:21)

As the year progresses and the new administration 
asserts itself and companies and regulators begin to sort 
through the causes of and culprits behind the ﬁnancial 
crisis and the numerous frauds that have been uncovered 
in its wake, we expect to see increased regulatory, 
litigation and enforcement activity, which will drive 
demand for services across multiple business segments. 
(cid:73)(cid:93)(cid:90)(cid:21)(cid:68)(cid:87)(cid:86)(cid:98)(cid:86)(cid:21)(cid:86)(cid:89)(cid:98)(cid:94)(cid:99)(cid:94)(cid:104)(cid:105)(cid:103)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:21)(cid:93)(cid:86)(cid:104)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:98)(cid:86)(cid:99)(cid:89)(cid:86)(cid:105)(cid:90)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)
willingness to take a more active role in addressing the 
excesses of the past and pursuing the contributors to the 
(cid:88)(cid:106)(cid:103)(cid:103)(cid:90)(cid:99)(cid:105)(cid:21)(cid:90)(cid:88)(cid:100)(cid:99)(cid:100)(cid:98)(cid:94)(cid:88)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:195)(cid:99)(cid:86)(cid:99)(cid:88)(cid:94)(cid:86)(cid:97)(cid:21)(cid:94)(cid:97)(cid:97)(cid:104)(cid:35)(cid:21)(cid:59)(cid:65)(cid:56)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:73)(cid:90)(cid:88)(cid:93)(cid:99)(cid:100)(cid:97)(cid:100)(cid:92)(cid:110)(cid:21)
have already been retained in the investigations of the 
two largest alleged frauds to be uncovered thus far, 
Bernard Madoff and Stanford Financial, and Economic 
(cid:56)(cid:100)(cid:99)(cid:104)(cid:106)(cid:97)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:94)(cid:104)(cid:21)(cid:87)(cid:90)(cid:94)(cid:99)(cid:92)(cid:21)(cid:88)(cid:86)(cid:97)(cid:97)(cid:90)(cid:89)(cid:21)(cid:100)(cid:99)(cid:21)(cid:105)(cid:100)(cid:21)(cid:93)(cid:90)(cid:97)(cid:101)(cid:21)(cid:88)(cid:97)(cid:94)(cid:90)(cid:99)(cid:105)(cid:104)(cid:21)(cid:86)(cid:104)(cid:104)(cid:90)(cid:104)(cid:104)(cid:21)
damages coming out of the credit crisis. 

(cid:73)(cid:93)(cid:90)(cid:21)(cid:102)(cid:106)(cid:90)(cid:104)(cid:105)(cid:94)(cid:100)(cid:99)(cid:21)(cid:91)(cid:100)(cid:103)(cid:21)(cid:72)(cid:105)(cid:103)(cid:86)(cid:105)(cid:90)(cid:92)(cid:94)(cid:88)(cid:21)(cid:56)(cid:100)(cid:98)(cid:98)(cid:106)(cid:99)(cid:94)(cid:88)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:104)(cid:21)(cid:94)(cid:99)(cid:21)(cid:39)(cid:37)(cid:37)(cid:46)(cid:21)
is the health of the capital markets and when investor 
psychology and the availability of credit will recover 
enough to allow for the resumption of M&A activity. They 
are the leaders in M&A communications and, when the 
tide turns and transactions begin to happen again, this 
will drive demand for their services as well as the anti-
(cid:105)(cid:103)(cid:106)(cid:104)(cid:105)(cid:21)(cid:108)(cid:100)(cid:103)(cid:96)(cid:21)(cid:101)(cid:90)(cid:103)(cid:91)(cid:100)(cid:103)(cid:98)(cid:90)(cid:89)(cid:21)(cid:87)(cid:110)(cid:21)(cid:58)(cid:88)(cid:100)(cid:99)(cid:100)(cid:98)(cid:94)(cid:88)(cid:21)(cid:56)(cid:100)(cid:99)(cid:104)(cid:106)(cid:97)(cid:105)(cid:94)(cid:99)(cid:92)(cid:35)(cid:21)

To ensure that we take full advantage of these 

successes and reinforce our unmatched positioning within 
our market, we are making a signiﬁcant investment in 
the integration of our businesses around the world and 
strengthening of the FTI brand in the markets where 
we operate. We recently launched the ﬁrst globally 
(cid:88)(cid:100)(cid:100)(cid:103)(cid:89)(cid:94)(cid:99)(cid:86)(cid:105)(cid:90)(cid:89)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:89)(cid:94)(cid:99)(cid:92)(cid:21)(cid:94)(cid:99)(cid:94)(cid:105)(cid:94)(cid:86)(cid:105)(cid:94)(cid:107)(cid:90)(cid:104)(cid:21)(cid:94)(cid:99)(cid:21)(cid:100)(cid:106)(cid:103)(cid:21)(cid:56)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:110)(cid:188)(cid:104)(cid:21)(cid:93)(cid:94)(cid:104)(cid:105)(cid:100)(cid:103)(cid:110)(cid:21)
through our When the Game Changes campaign, which 
features global print and television advertising in support 
of our sponsorship of golfer Padraig Harrington and other 
sporting events, and our Behind the Headlines campaign, 
which promotes our global intellectual capital through 
new and innovative channels. 

Following on the investment we are making in our 
brand, because our success hinges so directly on our 
people, we are redoubling our efforts to ensure that 
we continue to be the employer of choice to the best 
professionals who want to work with the best clients.  
We are investing in global training initiatives and  
career development of our best and most promising 
professionals to promote retention of high performers 
and are integrating performance management systems 
across our operations to ensure consistency in evaluating 
(cid:104)(cid:105)(cid:86)(cid:91)(cid:91)(cid:35)(cid:21)(cid:56)(cid:100)(cid:98)(cid:87)(cid:94)(cid:99)(cid:90)(cid:89)(cid:21)(cid:108)(cid:94)(cid:105)(cid:93)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:94)(cid:99)(cid:107)(cid:90)(cid:104)(cid:105)(cid:98)(cid:90)(cid:99)(cid:105)(cid:104)(cid:21)(cid:108)(cid:90)(cid:21)(cid:86)(cid:103)(cid:90)(cid:21)(cid:98)(cid:86)(cid:96)(cid:94)(cid:99)(cid:92)(cid:21)(cid:94)(cid:99)(cid:21)
deﬁning and building the FTI brand, the results of these 
initiatives will be to reinforce our culture and more 
tightly align everyone’s identity with and interests in FTI. 
Greater collaboration among all our professionals will 
enhance our organic growth prospects as well as  
our proﬁtability.

(cid:68)(cid:107)(cid:90)(cid:103)(cid:86)(cid:97)(cid:97)(cid:33)(cid:21)(cid:100)(cid:106)(cid:103)(cid:21)(cid:101)(cid:90)(cid:103)(cid:91)(cid:100)(cid:103)(cid:98)(cid:86)(cid:99)(cid:88)(cid:90)(cid:21)(cid:94)(cid:99)(cid:21)(cid:105)(cid:93)(cid:94)(cid:104)(cid:21)(cid:88)(cid:93)(cid:86)(cid:100)(cid:105)(cid:94)(cid:88)(cid:21)(cid:90)(cid:99)(cid:107)(cid:94)(cid:103)(cid:100)(cid:99)(cid:98)(cid:90)(cid:99)(cid:105)(cid:21)
underscores the relevance of all of our segments to the 
events that threaten the well-being of our clients as well 
as the strength of our platform both from a geographic 
(cid:86)(cid:99)(cid:89)(cid:21)(cid:104)(cid:96)(cid:94)(cid:97)(cid:97)(cid:104)(cid:21)(cid:101)(cid:90)(cid:103)(cid:104)(cid:101)(cid:90)(cid:88)(cid:105)(cid:94)(cid:107)(cid:90)(cid:35)(cid:21)(cid:76)(cid:90)(cid:21)(cid:93)(cid:86)(cid:107)(cid:90)(cid:21)(cid:87)(cid:106)(cid:94)(cid:97)(cid:105)(cid:21)(cid:105)(cid:93)(cid:94)(cid:104)(cid:21)(cid:56)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:110)(cid:21)(cid:105)(cid:100)(cid:21)
be able to advise our clients on the toughest issues 
that threaten their businesses, their reputation, their 
enterprise value, and in some cases, even their very 
existence. As evidenced by today’s headlines, these 
threats run rampant and challenge our clients as never 
before. As the Company Behind the Headlines, FTI is in a 
unique position to stand shoulder to shoulder with them 
due to our vision and the excellence of our people who 
are the trusted advisors to their clients in these times 
(cid:100)(cid:91)(cid:21)(cid:99)(cid:90)(cid:90)(cid:89)(cid:35)(cid:21)(cid:70)(cid:106)(cid:94)(cid:105)(cid:90)(cid:21)(cid:104)(cid:94)(cid:98)(cid:101)(cid:97)(cid:110)(cid:33)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:40)(cid:33)(cid:40)(cid:42)(cid:44)(cid:21)(cid:90)(cid:98)(cid:101)(cid:97)(cid:100)(cid:110)(cid:90)(cid:90)(cid:104)(cid:21)(cid:100)(cid:91)(cid:21)(cid:59)(cid:73)(cid:62)(cid:21)(cid:86)(cid:103)(cid:90)(cid:21)
our value proposition. As a company dedicated to the 
(cid:88)(cid:100)(cid:99)(cid:88)(cid:90)(cid:101)(cid:105)(cid:21)(cid:105)(cid:93)(cid:86)(cid:105)(cid:21)(cid:185)(cid:58)(cid:99)(cid:105)(cid:90)(cid:103)(cid:101)(cid:103)(cid:94)(cid:104)(cid:90)(cid:21)(cid:75)(cid:86)(cid:97)(cid:106)(cid:90)(cid:21)(cid:50)(cid:21)(cid:71)(cid:90)(cid:101)(cid:106)(cid:105)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:21)(cid:109)(cid:21)(cid:71)(cid:90)(cid:104)(cid:106)(cid:97)(cid:105)(cid:104)(cid:33)(cid:186)(cid:21)
our people are the key drivers of each variable in  
the equation.

In closing, we have never been in a better position to serve our market and to 
generate value for our stockholders, and at the same time attract the very best 
talent in our industry. We wish to thank our employees, clients and stockholders 
for all of their contributions and support, and look forward to continued success 
in the years to come.

(cid:63)(cid:86)(cid:88)(cid:96)(cid:21)(cid:55)(cid:35)(cid:21)(cid:57)(cid:106)(cid:99)(cid:99)(cid:33)(cid:21)(cid:62)(cid:75)
President and  
(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)

Dennis J. Shaughnessy
(cid:56)(cid:93)(cid:86)(cid:94)(cid:103)(cid:98)(cid:86)(cid:99)(cid:21)(cid:100)(cid:91)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:55)(cid:100)(cid:86)(cid:103)(cid:89)

(cid:57)(cid:100)(cid:98)(cid:94)(cid:99)(cid:94)(cid:88)(cid:21)(cid:57)(cid:94)(cid:67)(cid:86)(cid:101)(cid:100)(cid:97)(cid:94)
(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:75)(cid:94)(cid:88)(cid:90)(cid:21)(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21) 
(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:68)(cid:101)(cid:90)(cid:103)(cid:86)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008

OR

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934
For the transition period from

to

Commission file number 001-14875

FTI CONSULTING, INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland
(State or Other Jurisdiction of Incorporation or Organization)

52-1261113
(I.R.S. Employer Identification No.)

777 Flagler Drive, Suite 1500,
West Palm Beach, Florida
(Address of Principal Executive Offices)

33401
(Zip Code)

(561) 515-1900
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange on which Registered

Common Stock, $0.01 par value

New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the

Securities Act. Yes È No ‘

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of

the Act. Yes ‘ No È

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or

15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes È No ‘

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not

contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated

filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer È Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company ‘

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the

Act). Yes ‘ No È

The aggregate market value of the voting and nonvoting common stock held by non-affiliates of the registrant

was $3.4 billion, based on the closing sales price of the registrant’s common stock on June 30, 2008.

The number of shares of registrant’s common stock outstanding on February 13, 2009 was 51,117,091.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of our definitive Proxy Statement to be filed with the Securities and Exchange Commission within 120

days after the end of our fiscal year are incorporated by reference into Part III of this Annual Report on Form 10-K.

FTI CONSULTING, INC. AND SUBSIDIARIES

Annual Report on Form 10-K
Fiscal Year Ended December 31, 2008

INDEX

PART I

Item 1.

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 2.

Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 3.

Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 4.

Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 6.

Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . .

Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 8.

Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

1

22

33

33

33

33

34

37

39

69

71

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . .

121

Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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PART III

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters…. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . .

122

Item 14.

Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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PART IV

Item 15. Exhibits and Financial Statement Schedule

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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FTI CONSULTING, INC.

PART I

ITEM 1. BUSINESS

Forward-Looking Information

This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of

Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. Forward-looking statements include
statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and
performance, future capital expenditures, expectations, plans or intentions relating to acquisitions and other
matters, business trends and other information that is not historical. Forward-looking statements often contain
words such as estimates, expects, anticipates, projects, plans, intends, believes, forecasts and variations of such
words or similar expressions. Any forward-looking statements, including, without limitation, management’s
examination of historical operating trends, are based upon our historical performance and our current plans,
estimates and expectations at the time we make them and various assumptions. There can be no assurance that
management’s expectations, beliefs and projections will result or be achieved. Our actual financial results,
performance or achievements could differ materially from those expressed in, or implied by, any forward-looking
statements. The inclusion of any forward-looking information should not be regarded as a representation by us or
any other person that the future plans, estimates or expectations contemplated by us will be achieved. Given
these risks, uncertainties and other factors, you should not place undue reliance on any forward-looking
statements.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the

forward-looking statements contained in, or implied by, this Annual Report. Important factors that could cause
our actual results to differ materially from the forward-looking statements we make in this Annual Report are set
forth in this report, including under the heading “Risk Factors” in Part I — Item 1A. They include risks and
uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects,
growth strategy and liquidity, including the following:

•

•

•

•

•

•

•

•

•

•

•

•

•

our ability to attract and retain qualified professionals and senior management;

conflicts resulting in our inability to represent certain clients;

our former employees joining competing businesses;

our ability to manage our professionals’ utilization and billing rates and maintain or increase the
pricing of our other services and products;

our ability to make acquisitions and integrate the operations of acquisitions as well as the costs of
integration;

our ability to adapt to and manage the risks associated with operating in non-U.S. markets;

our ability to replace senior managers and practice leaders who have highly specialized skills and
experience;

our ability to identify suitable acquisition candidates, negotiate advantageous terms and take advantage
of opportunistic acquisition situations;

periodic fluctuations in revenues, operating income and cash flows;

damage to our reputation as a result of claims involving the quality of our services;

fee discounting or renegotiation, lower pricing, less advantageous contract terms and unexpected
terminations of client engagements;

competition;

general economic factors, industry trends, bankruptcy rates, capital market conditions, merger and
acquisition activity, major litigation activity and other events outside of our control;

1

•

•

•

•

•

our ability to manage growth;

changes in demand for our services;

risk of non-payment of receivables;

our outstanding indebtedness; and

proposed changes in accounting principles.

There may be other factors that may cause our actual results to differ materially from our forward-looking

statements. All forward-looking statements attributable to us or persons acting on our behalf apply only as of the
date of this Annual Report and are expressly qualified in their entirety by the cautionary statements included
herein. We undertake no obligation to publicly update or revise any forward-looking statements to reflect
subsequent events or circumstances and do not intend to do so.

When we use the terms “FTI,” “we,” “us” and “our” we mean FTI Consulting, Inc., a Maryland corporation,

and its consolidated subsidiaries.

Company Overview

We are a leading global business advisory firm dedicated to helping organizations protect and enhance their
enterprise value in difficult and increasingly complex economic, legal and regulatory environments. We operate
through five business segments:

• Corporate Finance/Restructuring;

•

•

Forensic and Litigation Consulting;

Strategic Communications;

• Technology; and

• Economic Consulting.

We work closely with our clients to help them anticipate, understand, manage and overcome complex
business matters arising from such factors as the economy, financial and credit markets, governmental regulation
and legislation and litigation. We assist clients in addressing a broad range of business challenges, such as
bankruptcy, restructuring, credit issues and indebtedness, mergers and acquisitions (M&A), interim business
management, electronic discovery, management and retrieval of electronically stored information, reputation
management and strategic communications. We also provide services to help our clients to take advantage of
economic, regulatory, financial and other business opportunities. We have expertise in highly specialized
industries, including real estate and construction, automotive, telecommunications, healthcare, energy and
utilities, chemicals, banking, insurance, pharmaceuticals, retail, information technology and communications,
and media and entertainment. Our experienced professionals include many individuals who are widely
recognized as experts in their respective fields. Our professionals include PhDs, MBAs, JDs, CPAs, CPA-ABVs
(who are CPAs accredited in business valuations), CPA-CFFs (who are CPAs certified in financial forensics),
CRAs (certified risk analysts), Certified Turnaround Professionals, Certified Insolvency and Reorganization
Advisors, Certified Fraud Examiners, ASAs (accredited senior appraisers), construction engineers and former
senior government officials. Our clients include Fortune 500 corporations, FTSE 100 companies, law firms and
local, state and federal governments and agencies in the United States and many other countries. We believe
clients retain us because of our recognized expertise and capabilities in highly specialized areas, as well as our
reputation for satisfying clients’ needs.

From December 31, 2007, we increased our number of revenue-generating professionals by approximately
29% to 2,523 as of December 31, 2008, and we increased our total number of employees by approximately 33%
to 3,378 as of December 31, 2008. As of December 31, 2008, we had operations across 37 U.S. cities and 22

2

foreign countries — the United Kingdom (UK), Ireland, France, Germany, Spain, Belgium, Russia, Australia,
China (including Hong Kong), Japan, Singapore, the United Arab Emirates, Bahrain, South Africa, Argentina,
Brazil, Colombia, Panama, Mexico, Canada, India and the British Virgin Islands.

2008 Growth through Acquisitions

In 2008, we grew through 16 acquisitions:

Acquisitions

Location

2008 Date
Acquired

Expanded/New Capabilities

CORPORATE FINANCE/RESTRUCTURING SEGMENT

The Schonbraun-McCann
Group *

U.S.

April 1

We added a new full-scale, turnkey real estate
consulting, advisory and critical solutions capability.

Canada ULC

Canada November 28 We added a Canadian presence with the acquisition

of five experienced restructuring professionals
located in Toronto, Canada, who bring significant
general restructuring and receivership trustee
experience in Canada and Latin America.

CXO, L.L.C. *

U.S.

December 31 We added 12 professionals with experience providing

consulting, management and advisory services to
companies in crisis or companies needing to improve
performance in financial or operational areas,
including interim management, crisis management,
turnaround consulting, creditor advisory and
financial/operational restructuring services.

FORENSIC AND LITIGATION CONSULTING SEGMENT

Thompson Market Services
Limited

Hong
Kong,
China

January 29 We added 60 professionals specializing in intellectual

property and brand protection service offerings in
Hong Kong and China.

Rubino & McGeehin
Consulting Group, Inc.

U.S.

February 8 We expanded our construction consulting services,

including comprehensive dispute, litigation and
investigations services and expert witness testimony
services.

TSC-Tecnologia Servicos E
Comerico De Equipamentos
De Informatica, LTDA

Brazil

February 28 We expanded our capabilities to provide integrated

investigation and technology services to Latin
American clients.

Brewer Consulting Limited

UK

March 14 We expanded our construction consulting services

Forensic Accounting Partners
Limited

UK

April 1

STRATEGIC COMMUNICATIONS SEGMENT

capabilities outside of the U.S. with locations in the
UK and the United Arab Emirates, specializing in the
analysis of damages, schedule delays and impacts
associated with construction claims.

We expanded our capabilities to provide
investigation, forensic accounting, dispute advisory
and expert witness services in the UK and Europe.

Affluent-Dynamics LLC

U.S.

January 3 We expanded our market research capabilities in the

northeastern U.S.

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Acquisitions

Blueprint Partners

Location

2008 Date
Acquired

Expanded/New Capabilities

Belgium February 27 We added a new Belgium location, specializing in
policy advocacy services to clients in the European
Union and its member states to help clients navigate
this complex environment, including intelligence
gathering, stakeholder relations and transaction and
competition support and complementary services in
communication, training and media relations.

Kinesis, LLC

U.S.

July 24

We expanded our delivery of strategic, creative and
tactical branding, marketing and communications
services through the internet and other digital
channels.

Porter Novelli, Perth Australia
(PNP)

Australia

October 24 We expanded our public relations services in

Australia.

The Element Agency

Canada December 19 We added a strategic communications consultancy

TECHNOLOGY SEGMENT

Strategic Discovery, Inc.

U.S.

location in Canada specializing in services in
sustainability, issue advocacy and corporate social
responsibility initiatives.

February 8 We expanded our presence in the western U.S. with
e-discovery, proactive litigation response offerings,
records/retention management and strategic
technology consulting services.

Attenex Corporation

U.S.

July 1

We expanded our proprietary software to include
interface solutions for e-discovery management and
review, patented data de-duplication and clustering
technology.

ECONOMIC CONSULTING SEGMENT

Assets from Dr. Paul Milgrom
and Dr. David Salant *
Auction Technologies, LLC **

U.S.

October 22 We added a new Auction Solutions practice
advising clients on auction design, bidding
strategies, and related matters, headed by
consultants, Dr. Paul Milgrom and Dr. David
Salant, and made a minority investment in their
auction-software company, Auction Technologies,
LLC.

*
Asset acquisition.
** Minority interest.

Our Business Segments

We discuss our five business segments in greater detail below.

Corporate Finance/Restructuring

Our Corporate Finance/Restructuring segment focuses on strategic, operational, financial and capital needs
of businesses around the world. We address the full spectrum of financial and transactional challenges facing our
clients, which include companies, boards of directors, private equity sponsors, banks, lenders and other financing
sources, and other parties-in-interest. We advise on a wide range of areas, including restructuring, bankruptcy,

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claims management, mergers and acquisitions, post-acquisition integration, valuations, tax issues and
performance improvement. We also provide expert witness testimony, bankruptcy and insolvency litigation
support and trustee and examiner services. We have particular expertise in the automotive, chemicals,
communications, media and entertainment, energy and utilities, healthcare, real estate and financial services and
retail industries.

A number of factors affect the demand for our corporate finance/restructuring services including general
economic conditions, the availability of credit, leverage levels, lending activity, over-expansion of businesses,
competition, merger and acquisition activity and management crises. The increased demand for restructuring and
bankruptcy services that began in 2007 continued during 2008, as the economy slowed into recession, the
financial and credit and housing crises accelerated, banking issues continued to surface and credit availability
tightened. We often see weak demand for one or more of our service offerings being counterbalanced by stronger
demand for other service offerings. For example, demand for restructuring services may increase during a period
of reduced demand for our transaction advisory or post-acquisition integration services. If demand for one or
more of our corporate finance/restructuring services weakens, we are often able to shift professionals to work on
engagements in other service offerings or our other business segments.

The services offered by our Corporate Finance/Restructuring segment include:

Turnaround and Restructuring Services. We provide advisory services to debtors, creditors and other

stakeholders of companies confronting liquidity problems, excessive leverage, underperformance, over-
expansion or other business or financial issues. We lead and manage the financial aspects of in-court
restructuring processes by offering services that help our clients assess the impact of a bankruptcy filing on their
financial condition and operations. We assist our clients in planning for a smooth transition into and out of
bankruptcy, facilitating sales of assets and arranging debtor-in-possession financing. We help our clients right-
size infrastructure, improve working capital management, sell non-core assets or business units and recapitalize.
We also perform due diligence reviews, financial statements and cash flow and EBITDA analyses, recommend
credit alternatives, assist in determining optimal capital structure, monitor portfolios of assets, assess collateral
and provide crisis credit and securitized transaction assistance.

Transaction Advisory Services (Mergers and Acquisitions). Our Transaction Advisory Services (TAS)

practice combines the disciplines of financial accounting, investment banking, tax advice, valuation services and
Securities and Exchange Commission (SEC) regulatory experience to help our clients maximize value and
minimize risk in mergers and acquisitions. We provide many services relating to business acquisitions that
include: performing due diligence reviews, evaluating key value drivers and risk factors, advising on the most
advantageous tax and accounting structure for the transaction and assessing quality of earnings, quality of
balance sheet and working capital requirements. We identify value enhancers and value issues. We provide
comprehensive tax consulting intended to maximize a client’s return on investment. We help structure post-
acquisition earn-outs and price adjustment mechanisms to allow a client to realize optimal value. We advise
clients regarding regulatory and SEC requirements and internal controls and compliance with the Sarbanes-Oxley
Act of 2002 (Sarbanes-Oxley). We help structure retention and exit strategies. We also perform services for
clients involved in purchase price disputes such as assessing the consistent application of GAAP, earn-out issues,
working capital issues, settlement ranges and allocation of purchase price for tax purposes. We have the capacity
to provide investment banking services through our Financial Industry Regulatory Authority (FINRA) registered
subsidiary, which focuses on identifying and executing value-added transactions for public and private middle
market companies in the communications and media and entertainment industries.

Equity Sponsor Services. Equity sponsors are under significant pressure to achieve investment return and
liquidity expectations from their investments in portfolio companies and desired exit strategies. We help equity
sponsors to take proactive steps toward revitalizing businesses, achieving investment expectations and
strengthening inexperienced management and weak leadership by assisting in the development and execution of
business plans, offering unbiased assessments, allowing a sponsor to focus on other opportunities rather than

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spending considerable time on an underperforming investment, enhancing management by supplementing the
existing management team with turnaround specialists, and assisting with obtaining financing or providing
credibility to support lender negotiations and credit concessions.

Interim Management Services. Through FTI Palladium Partners, we provide interim management services
to companies in crisis. Our professionals can fill the roles of chief executive officer, chief financial officer, chief
operating officer, chief restructuring officer and other key management positions to improve viability, stabilize
financial position and protect enterprise value, resolve regulatory compliance issues, establish credibility with
stakeholders and drive long-term positive change.

Real Estate and Financial Advisory Practice. In April 2008, the real estate and financial advisory services

practice (Real Estate Advisory) was formed in our Corporate Finance/Restructuring segment through the
acquisition of The Schonbraun McCann Group (SMG). The Real Estate Advisory practice bridges the gap
between real estate and finance, by providing expertise in business consulting, financial, tax and real estate
advisory services to clients within all sectors of the real estate industry. This practice represents real estate
investment trusts (REITs), real estate operating companies, owners and developers from the private and public
sectors, hospitality property owners, financial institutions, sovereign funds, hedge funds and pension fund
advisors and corporations with significant real estate interests. Our Real Estate Advisory client services include
two main areas of focus, Real Estate Consulting and Tax Consulting, providing the following services:

Mergers & Acquisitions. We provide M&A advisory services by analyzing a client’s market position to

determine what opportunities exist to increase value by helping clients strategically target the right candidates.

Strategy Development & Implementation. We work with companies in the development, implementation

and execution of solutions designed to gain competitive operating and investment advantage. Some of the
specific services offered include portfolio optimization, transaction management service, and the development of
comprehensive operations strategies and implementation plans

Real Estate Underwriting and Due Diligence. We offer underwriting and general due diligence services to

owners, investors, lenders, governments, special interest groups and origination and securitization groups for
both business and real estate assets.

Financial Outsourcing. We provide accounting outsourcing services to real estate and financial services
organizations, including external financial and management reporting and accounting department oversight.

Tax Consulting and Compliance. We advise our clients on complex tax and deal structuring issues affecting

the real estate industry.

Cost Segregation. Our cost segregation service identifies opportunities for cost savings and improved cash
flow through the analysis of depreciable lives of real estate assets triggered by events such as new construction,
renovation or expansion, property acquisition, historic property renovation or a like kind exchange.

From December 31, 2007, we increased the number of revenue-generating professionals in our Corporate

Finance/Restructuring segment by approximately 65% to 669 professionals as of December 31, 2008.

Forensic and Litigation Consulting

Our Forensic and Litigation Consulting segment provides law firms, companies, government clients and
other interested constituencies with dispute advisory, investigations, forensic accounting, business intelligence
assessments and risk mitigation services. We assist our clients in all phases of government and regulatory
investigations, inquiries and litigation, regardless of the subject matter of the proceeding or investigation,
including pre-filing assessments, discovery, trial preparation, expert testimony and investigation and forensic

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accounting services. We have particular expertise in the pharmaceutical, healthcare, construction and financial
and insurance services industries. We have the capacity to provide our full array of services across jurisdictional
boundaries around the world.

A number of factors affect the demand for our forensic and litigation consulting services, including, the
number of large complex litigations, governmental and regulatory investigations, class-action suits, business
espionage and illegal or fraudulent activity. During 2008, we continued to see a decline in active large complex
litigation matters that negatively impacted demand for our trial services and general expert services and a slow
down in governmental and regulatory investigations during the second half of the year, which weakened demand
for our investigation and forensic accounting services. Client demand for our regulated industry services, in
particular compliance and monitoring, our global construction solutions services and intellectual property
services partially offset this impact. If demand weakens for a particular service offering, we are often able to shift
professionals to work on engagements of our other business segments.

Among the services offered by our Forensic and Litigation Consulting segment are:

Forensic Accounting and Financial Investigations. We combine investigative accounting and financial
reporting skills with business and practical experience to provide forensic accounting and financial investigations
requested by boards of directors, audit committees, special litigation committees and other entities. We identify,
collect, analyze and interpret financial and accounting data and information, applying the relevant data and
information to identify and analyze legal and financial issues, identify options, make recommendations and
render opinions. We employ investigative skills, establish document and database controls, prepare analytical
models, perform forensic accounting, present expert testimony and prepare written reports. We have particular
expertise providing consulting assistance and expert witness services to securities counsel and their clients
regarding the Division of Enforcement of the SEC inquiries and investigations and we help clients institute the
necessary internal controls to comply with the Foreign Corrupt Practices Act (FCPA) and to investigate
suspected violations.

Business Intelligence and Investigations. We have experience in complex factual and regulatory

investigations combining teams of former federal prosecutors and regulators, law enforcement and intelligence
officials, forensic accountants, industry specialists and computer forensic specialists. Our capabilities and
services include white collar defense intelligence and investigations, complex commercial and financial
investigations, business intelligence and investigative due diligence, FCPA investigations, political risk
assessments, fraud and forensic accounting investigations, computer forensics and electronics evidence,
specialized fact-finding, domestic and international arbitration proceedings, asset searching and analysis,
intellectual property and branding protection, anti-money laundering consulting and ethics and compliance
program design.

Dispute Advisory Services. We provide pre-trial, in-trial and post-trial dispute advisory services, as well as
dispute advisory services in a broad range of alternative dispute resolution forums, to help clients assess potential
threatened and pending claims resulting from complex events and transactions. We analyze records and
information, including electronic information, to locate assets, trace flows of funds, identify illegal or fraudulent
activity, reconstruct events from incomplete and/or corrupt data, uncover vital evidence, quantify damages and
prepare for trial or settlement. In many of our engagements we also act as an expert witness. Our services
include:

Early Case Assessment. We help determine what really happened and when, to assist with case strategy and

possible early settlement.

Discovery Assistance. We help to draft document requests, gather pertinent information and provide

assistance during interrogatories and depositions.

Case Strategy Evaluation. We analyze financial records and business conduct to help counsel understand

potential causes of action and quantify potential recoveries.

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Damages Analyses. We provide damages quantification and expert testimony for a wide variety of cases
including lost profits, breach of contract, purchase price disputes, business interruption, environmental claims,
government contract matters and construction disputes and fraud cases.

Settlement Services. We help clients mitigate the cost of or avoid litigation by evaluating claims and risks,
coordinating business expertise with legal and technical analysis, developing cost-effective settlement strategies
and implementing successful business resolutions.

Intellectual Property. Our intellectual property team consists of professionals who are dedicated to

intellectual property matters, including litigation support and damages quantification as well as intellectual
property valuation, royalty compliance, licensing and technology and intellectual property management and
commercialization.

Construction Services. Our construction services team offers a broad range of dispute resolution services to

assist construction law firms, owners and contractors in preventing, mitigating and resolving construction
disputes. We work with our clients to identify risks and help achieve a cost-effective, trouble-free project from
planning to completion.

Trial Services. We provide high-quality, cost-effective methods to prepare for and help try cases. Our trial
technology professionals have supported clients in the courtroom in some of the largest and most complex civil
trials. Through the use of our proprietary information technology, we help control litigation costs, expedite the
in-trial process and provide our clients with the ability to readily organize, access and present case-related data.
Our proprietary TrialMax® software integrates documents, photographs, animations, deposition video, audio and
demonstrative graphics into a single trial preparation and presentation tool. Our graphics consulting services
select the most appropriate presentation formats to maximize impact and memorability, and then create
persuasive graphic presentations that support, clarify and emphasize the key themes of a case. We provide
illustrations and visual aids that help simplify complex technical subjects for jurors, through opening and closing
statement consulting, witness presentations, research presentations, exhibit plans and outlines, hardboards, scale
models, storyboards, timelines and technical and medical illustrations.

From December 31, 2007, we increased the number of revenue-generating professionals in our Forensic and

Litigation Consulting segment by approximately 49% to 639 professionals as of December 31, 2008.

Strategic Communications

We provide advice and consulting services relating to financial communications, brand communications,
public affairs and reputation management and business consulting. We believe that we have developed a unique,
integrated offering that incorporates a broad scope of services, diverse sector coverage and global reach that
distinguishes us from other strategic communications consultancies. We are able to advise clients from almost
every major business center in the world. We combine our core investor relations, public relations and public
affairs capabilities with other services to present clients with integrated business communications solutions.

A number of factors affect the demand for our strategic communications services, including merger and

acquisition activity, public stock offerings, business crises and governmental legislation and regulation. During
2008, demand for our strategic communications services flattened as the global economic, financial and real
estate crises expanded throughout the year, particularly due to the decline in mergers and acquisitions, stock
offerings and capital market transactions and companies’ reevaluation of discretionary spending on such services
as branding, communications, marketing and media and investor relations. This was partially offset by several
high profile restructuring and recapitalization projects during 2008.

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Our Strategic Communications segment provides the following services:

Strategic Business Consulting. Our strategic business consulting sub-practice helps solve and manage
business problems that companies face. Our services include business plan development, market sizing and
discovery research, marketing segmentation research and analysis, change management advice, surveys and
polling.

Strategic Financial Communications and Investor Relations. We specialize in advising clients on capital
markets communications strategies, whether through ongoing investor relations advice and support, shareholder
targeting, peer group analysis, financial news management or other activities crucial to maintaining a fair
valuation. Our services include the research and analysis of shareholder demographics, investor targeting, road
show management, financial conference support, investor perception audits, financial news and calendar
management, disclosure policy assistance, peer monitoring and analysis and advice on governance issues.

Restructuring and Recapitalization Communications. Our restructuring and recapitalization
communications practice offers an integrated consultancy service to clients that are facing various levels of
financial distress. We advise our clients on the communications aspects surrounding a range of situations from
renegotiating credit facilities to rebuilding balance sheets through access to the equity markets, downsizing
business activities and bankruptcy or insolvency. Our offerings in this area provide a unique ability to handle
complex cross-border multi-stakeholder communications programs, which align our capabilities in disciplines
such as financial communications, crisis management, employee communications and public and regulatory
affairs.

Reputation Management and Public Affairs. We help clients respond quickly and effectively to

developments that threaten to damage reputation or market share, and work with them to shape public debate. We
counsel clients regarding strategic communications, litigation communications, shareholder and other activist
activity, community relations, corporate social responsibility, media relations, information monitoring and
analysis, political intelligence, policy formation, political and media campaigns, third party and coalition
mobilization, state aid issues and monopoly, antitrust and competition regulatory affairs.

Corporate Positioning and Brand Communications. We provide creative services to build consumer and

business-to-business brands, including corporate brand positioning advice, strategic marketing advice,
business-to-business marketing consultancy, consumer communications, media relations, qualitative and
quantitative research, sponsorship consultancy, thought leadership consultancy and launch and event
management.

Mergers and Acquisitions, Business Combinations and Capital Market Communications. We act as a

communications advisor to clients affected by business combinations and restructurings, proxy contests,
regulatory investigations, shareholder activism, initial public stock offerings and other capital markets events.
Our services include strategic boardroom advice, financial calendar support, financial and business media
relations, corporate governance and socially responsible investment advice, capital market intelligence, investor
relations and strategic communications advice.

Proprietary Research Tools and Strategic Planning. Our dedicated Research group includes

professionals from across all disciplines, including public relations, investor relations and public affairs, who
conduct customized research to identify perceptions, trends and opportunities within key stakeholder audiences.
Our services include reputation benchmarking, peer analysis, benchmarking and financial market valuations,
brand awareness studies and brand extension audits, including customer focus groups, shareholder analysis and
investor targeting, consumer trend analysis, public opinion polling and policymaker perception audits.

Corporate Social Responsibility and Strategic Philanthropy. Corporate social responsibility (CSR) is
one of the most powerful drivers of business culture and brand value. We help clients develop creative and multi-
dimensional CSR campaigns to assure they are aligned with business objectives, brand position and the needs of

9

all stakeholders. Our approach includes defining the corporate positioning and brand proposition, surveying the
audience to gauge social sentiments and needs, selecting a program that resonates with the marketplace, building
the communications plan, launching the initiative for maximum visibility and evaluating the success of the
program.

Internal Communications and Employee Alignment. We provide advice and services relating to

re-branding, culture change, restructuring, facility closures, workforce rationalization and mergers and takeovers.
Our services include communications infrastructure consultancy, attitudinal research, event management,
intranets/extranets consultancy, management and staff training, corporate restructuring and culture change.

Design and Marketing Communications. Our design and marketing teams specialize in brand identity

development, website development, advertising and using new digital media channels to enhance the impact of
traditional communications and marketing channels. We help clients with print and digital communications with
a focus on corporate identity, website development, advertising, interactive marketing campaigns, video and
animation, brochures, fact sheets, testimonials and other marketing materials and annual report development.

Media Relations. Our media relations services advise and assist clients with respect to financial, business

and trade media programs, broadcast placement, market commentary, executive visibility, consumer/lifestyle
media, regional media programs, Op Ed placement, media monitoring and intelligence gathering and online
media programs.

Media and Presentation Training. We provide training courses aimed at directors and senior management

in media communications, executive presentation, speech writing and conference management and facilitation.

Consumer Affairs. We help clients to engage and understand the public and to champion their issues. We

specialize in brand turnarounds and issues campaigns. Our services include strategic planning services, consumer
affairs impact campaigns, research and development services and direct marketing services.

From December 31, 2007, we increased the number of revenue-generating professionals in our Strategic

Communications segment by approximately 10% to 592 professionals as of December 31, 2008.

Technology

Our Technology segment is a leading information management and electronic discovery service and

software provider. We provide products, services and consulting to law firms, companies, courts and government
agencies worldwide. We assist with internal investigations, regulatory investigations, early case assessment,
litigation and joint defense, antitrust and competition investigations, including “second requests” under the Hart
Scott Rodino Antitrust Improvements Act of 1976 (HSR Act), and knowledge management for critical corporate
information. We provide a comprehensive suite of application tools and related services to help clients locate and
produce electronically stored information (ESI), including e-mail, computer files, voicemail, instant messaging,
and financial and transactional data. Our services also help to identify, convert, categorize and produce relevant
documents into electronically searchable format. We have the capacity to identify, analyze, process and present
potentially relevant electronic information for interested parties, and ultimately manage the presentation of
information to our clients. Our proprietary Ringtail® technology is used for e-discovery purposes, including
litigation support and knowledge management. In addition, Ringtail® has been used in transactional settings to
support information “deal rooms” and merger and acquisition activity. Our Ringtail® technology is designed to
ensure quality, reduce risk, increase productivity and improve cost effectiveness in the review, preparation and
production of large amounts of ESI. Our proprietary Attenex® technology is used to collect, search and manage
enterprise data. Attenex®, in association with Ringtail®, enables rapid identification of relevant content for
litigation, investigations and regulatory response projects. We integrate data processing, native file document
review and reporting tools into an enterprise application designed to accelerate review and deliver defensibility
of process.

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A number of factors affect the demand for our technology services, including competing services and
products, price and the number of large complex litigations, class action proceedings, merger and acquisition
activity and governmental and internal investigations. Prior to 2006, we operated our Technology business as part
of our Forensic and Litigation Consulting segment.

The services offered by our Technology segment include:

Technology Consulting Services. Our technology consulting services include:

Litigation Readiness and Records Management Compliance. Recent amendments to the Federal Rules of

Civil Procedure (FRCP) and heightened scrutiny by regulatory agencies and prosecutors have placed greater
emphasis on the need to manage electronic information actively with an eye toward the discovery process in
potential litigation. Our professionals have experience working with a wide variety of systems and sources of ESI
across multiple industries and jurisdictions to better position organizations facing critical investigative, litigation
or dispute related demands.

Electronic Discovery and Computer Forensics. We assist companies facing time-sensitive demands placed

upon electronic data, networks and systems. We help our clients meet requirements for uncovering, analyzing
and producing data from a variety of sources, including e-mail, voicemail, backup tapes, shared server files and
databases, often on multiple continents. We provide both proactive and reactive support using expert services,
methodologies and tools that help companies and their legal advisers understand technology-related issues. Our
technical experts work closely with our forensic accountants and financial investigation professionals to recover,
organize and analyze ESI, regardless of the format or language of the data.

Financial and Enterprise Data Analytics. Increases in the volume of transactional and company data require

companies to take new approaches to assessing and prioritizing what is relevant when managing complex cases
and issues. Our Financial and Enterprise Data Analytics (FEDA) team delivers strategic business solutions for
clients requiring in-depth analysis of large, disparate sets of financial, operational and transactional data. FEDA
involves:

•

•

•

•

•

•

identifying, acquiring, synthesizing, mining, analyzing and reporting upon relevant data;

identifying the relationships among multiple sources and types of data;

designing and implementing accounting, economic and financial settlement or damages models;

transforming large-scale data sets into workable databases;

distributing or sharing information among interested parties such as experts, corporate and outside
counsel and codefendants; and

developing visualization dashboards and summary analysis to enhance the productivity related to
subsequent analysis and use of the information.

Second Requests. “Second requests” refer to requests from the Department of Justice or Federal Trade
Commission for additional information and documentary support relevant to the government’s assessment under
the HSR Act of proposed acquisitions and business combinations. A “second request” can probe every area of a
company’s operations and communications, including e-mail, electronic documents, products, markets, sales,
customers, advertising, patents and trademarks, management and accounting systems data. We offer advanced
technology and related services to identify, collect, process and review relevant electronic data and produce
documents responsive to the government-based request. We also help determine what tools, software, document
formats and metadata will satisfy the request.

Ringtail® Based Solutions. Our Ringtail® on-premise and on-demand platform for data and document

management includes:

Data Acquisition. Ringtail® provides a collection of advanced electronic discovery and analysis techniques,

as well as native file processing services. These services can quickly extract e-mail and other data from hard

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drives and a variety of locations for storing messages, as well as provide the data in a specified format. This
information also can be provided in Ringtail® Legal™ format for use in a Ringtail® on-premise system or
directly uploaded into a location on the Ringtail® on-demand environment hosted by FTI.

Data Culling. We provide services to index, search and select focused sub-populations of large data sets

prior to processing and review, which saves time at the beginning of a matter. FTI also provides de-duplication
and near-duplication detection services for the Ringtail® on-demand client to help reduce the document set to a
more manageable level. Ringtail® incorporates third party software to provide these solutions.

Data Review and Coding. Our Ringtail® Legal™ product is a scalable and configurable web-centric
platform to facilitate rapid review and coding of documents. A team is able to review and code documents from
any computer connected to the Internet or on a local intranet for internal corporate use. Clients can install
Ringtail® Legal™ on their server site, or quickly launch a case from our dedicated servers through the FTI
Ringtail® on-demand product. Ringtail® provides multi-lingual support as one of the distinctive aspects of its
capabilities.

Data Production. Ringtail® Legal™ has the power and flexibility to scale and meet large and small

document production needs.

Attenex®. In July 2008, we acquired Attenex®, an early e-discovery case assessment tool. The Attenex®
Patterns® software enables rapid identification of relevant content for litigation, investigations and regulatory
response projects. We integrate data processing, native file document review and reporting tools into an
enterprise application designed to accelerate review and deliver defensibility of process. The software can be
deployed on-premise or in a hosted environment through an Attenex® Advantage™ partner. The Attenex® family
of software products includes:

Attenex® Patterns® Document Mapper (Document Mapper). Document Mapper is innovative content
analysis and discovery software that allows teams to quickly review, categorize and identify relevant information
from large document collections. Document Mapper clusters like documents together to help reviewers analyze
similar material and make faster and more accurate document decisions. Reviewers quickly gain a high-level
understanding of a collection’s main concepts or themes and can easily categorize documents, or entire document
clusters, as responsive or non-responsive. This product’s design enables faster, more accurate review with a
combination of document analysis, keyword searching and visualization in an easy-to-use interface.

Attenex® Patterns® Workbench (Workbench). Workbench is a flexible processing tool that automates
activities involved in preparing electronic content for review. The application features patented suppression and
de-duplication technology that significantly reduces and organizes data for a more focused investigation and
document review. Workbench loads the targeted data and performs cataloging, extracting, suppressing, indexing,
analyzing and the general preparation of electronic files for review. Also, Workbench allows data specialists to
cull out information by date, keywords, custodians, file type and other metadata.

Attenex® Patterns® Matter Manager (Matter Manager). Matter Manager focuses on project management for

e-discovery. This tool gives project managers and lead attorneys visibility and awareness of the number of
documents processed, reviewed and marked. Information can be easily exported to support client reporting needs.

From December 31, 2007, we increased the number of revenue-generating professionals in our Technology

segment by approximately 4% to 359 professionals as of December 31, 2008.

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Economic Consulting

Our Economic Consulting segment provides law firms, companies, government entities and other interested

parties with clear analysis of complex economic issues for use in legal and regulatory proceedings, strategic
decision making and public policy debates in the U.S. and around the world. We deliver sophisticated economic
analysis and modeling of issues arising in mergers and acquisitions, complex antitrust litigation, commercial
disputes, regulatory proceedings and securities litigation. Our statistical and economic experts help clients
analyze complex economic issues such as the economic impact of deregulation on a particular industry or the
amount of commercial damages suffered by a business as a result of particular events. We have deep industry
experience in such areas as commercial and investment banking, telecommunications, energy, transportation,
healthcare, IT/Internet and pharmaceuticals. Our professionals regularly provide expert testimony on damages,
rates and prices, valuations (including valuations of complex derivatives), competitive effects and intellectual
property disputes. They also provide analyses and advice relating to antitrust and competition cases, regulatory
proceedings, business valuations and public policy.

A number of factors affect the demand for our economic consulting services including merger and
acquisition activity (particularly large mergers of firms that are perceived to compete with each other in
providing goods and services), general economic conditions, competition and governmental investigations.
During 2008, demand for our economic consulting services remained strong for the year. Declines in merger and
acquisition activity in the second half of the year were partially offset by increases in antitrust litigation,
securities cases and increased regulatory activity.

Our Economic Consulting segment includes:

Compass Lexecon. Our Compass Lexecon practice provides economic and econometric consulting services
to assist clients in public policy debates, regulatory proceedings, antitrust lawsuits and securities and commercial
litigation. Our services include financial and economic analyses of policy, regulatory and litigation matters for
corporations, governments and public-sector entities in the U.S. and around the world.

Network Industries Strategies. Our Network Industries Strategies practice advises major network
industries—such as telecommunications, electric power, energy and transportation—on strategic and tactical
challenges associated with transitioning from heavily regulated to more competitive environments.

Auction Solutions. In October 2008, we established our Auction Solutions practice, which advises clients

on auction design and implementation, bidding strategies and related matters.

From December 31, 2007, we increased the number of revenue-generating professionals in our Economic

Consulting segment by approximately 12% to 264 professionals as of December 31, 2008.

Our Business Drivers

Factors that drive demand for our services include:

• Adverse Developments Relating to Financial Markets and the Economy. The economic recession,

deteriorating and volatile financial markets, restrictive credit and financing conditions, high corporate
debt levels and increasing default rates drive demand for certain services offered by our Corporate
Finance/Restructuring segment, such as credit advisory, restructuring, bankruptcy, turnaround, creditor
rights and related consulting services. Companies facing covenant compliance problems and similar
difficulties are less likely to be able to amend existing facilities or refinance without incurring
substantial costs and significantly more restrictive terms. In addition, tightening credit markets force
companies and lenders into more frequent negotiations as borrowers experience covenant or liquidity
issues and lenders express greater concern over protecting their positions. Companies that invest in
sub-prime loans or debt or security instruments collateralized by less credit worthy collateral also face
losses that jeopardize their financial results and operations. Demand for our services has been strong in
industry sectors such as automotive, real estate and housing, retail, banking and financial services,

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airlines, technology and other business that relied heavily on third party financing or issued or invested
in sub-prime credit instruments and/or debt or securities of industries that rely heavily on credit.

• Operational Challenges and Opportunities. Businesses face significant challenges that necessitate
continual evaluation and reevaluation of strategy, risks and opportunities both as a result of crisis
driven situations and in the normal course of business. These challenges include enterprise risk
management, global expansion, competition from both established companies and emerging economies
and new and changing regulatory requirements and legislation. Management, companies and their
boards need outside help to recognize, understand and evaluate such events and effect change, which
drives demand for independent expertise that can combine general business acumen with specialized
technical expertise driving demand for our Corporate Finance/Restructuring, Economic Consulting and
Forensic and Litigation Consulting segments.

• Global Demand for Independent Expertise. As a result of increased public scrutiny, regulatory

complexity and complex disputes and litigation, businesses, boards of directors, creditors, stakeholders,
regulators and their advisors increasingly engage independent consulting firms to provide objective and
expert analyses and advice. This is particularly true in highly complex and sophisticated areas such as
restructurings, bankruptcies, economic consulting, forensic accounting, corporate mismanagement and
fraud-related investigations and high-stakes litigation and regulatory proceedings. Stockholder activism
and limitations on the ability of traditional accounting firms to provide certain consulting services,
especially after enactment of Sarbanes-Oxley, has contributed to the demand for independent expertise.
A desire to avoid actual and apparent conflicts of interest also drives the use of consultants and experts
who are unaffiliated with a company’s management and outside legal, accounting and other advisors.

• Regulatory Complexity, Public Scrutiny and Investigations. Increasingly complex global regulations
and legislation, greater scrutiny of corporate governance, instances of corporate malfeasance and more
stringent and complex reporting requirements drive demand for our services. The need to understand
and address the impact of regulation and legislation as well as the increasing costs of doing business
have prompted companies to focus on better assessing and managing risks and opportunities. In
addition, boards of directors, audit committees and independent board committees have been
increasingly tasked with conducting internal investigations of financial wrongdoing, regulatory
non-compliance and other issues. These factors drive demand for independent consultants and experts
to investigate and provide analyses and to support the work of outside legal counsel, accountants and
other advisors. The current environment also increasingly demands the use of multiple disciplinary
service offerings like ours, which combine skills and expertise, such as financial reporting skills,
forensic accounting investigative skills like those offered by our Corporate Finance/Restructuring and
Forensic and Litigation Consulting segments and technology management services like those offered
by our Technology segment, with business and practical experience.

• Merger and Acquisition Activity. The overall strength of the economy and merger and acquisition

activity are important drivers for our businesses. In a weak economy and during periods of decreased
merger and acquisition activity, we experience weaker demand for our economic consulting experts
and our forensic and litigation consulting and transaction advisory services as transactions are delayed
or abandoned. However, companies may need our services if transactions are renegotiated, or
transactions that have been completed do not perform as expected. In times of strong economic growth
and increased merger and acquisition activity, companies and regulators engage our Economic
Consulting segment for advice on issues such as antitrust regulations and enforcement and intellectual
property matters. Merger and acquisition clients utilize our Strategic Communications segment for
services such as public relations, media and investor communications. They also employ our Corporate
Finance/Restructuring segment for services such as due diligence investigations, asset valuations and
financing advice.

• Litigation and Disputes. The volume of litigation and business disputes, the complexity of the issues
presented, and the amount of potential damages and penalties drive demand for our technology,
forensic and litigation consulting and economic consulting services. Law firms and their clients as well

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as government regulators and other interested third parties rely on independent outside resources to
evaluate claims, facilitate discovery, assess damages, provide expert reports and testimony, manage the
pre-trial and in-trial process and effectively present evidence. During 2008, the number of large
litigation and class action litigation cases and regulatory actions and investigations declined, resulting
in weakened demand for such services.

• Complex Market Environment Requiring Strategic Communications. Strategic, business and

financial communications have become increasingly important in today’s 24-hour media cycle as
reputational risk becomes a rising concern of companies and their managers. Large corporations face
an increasingly complicated market environment, which creates a need for an integrated and
consultative approach covering different aspects of communications. This is a principal driver of
demand for our strategic communication services.

• Growth of Multinational Firms and Changes in Non-U.S. Markets. The growth of multi-national
firms is precipitating increased antitrust and competition scrutiny and the spread internationally of
issues and practices that historically have been more common in the U.S., such as increased and
complex litigation, government regulation and corporate restructuring activities. These developments
help drive demand for our Corporate Finance/Restructuring, Forensic and Litigation Consulting,
Technology and Economic Consulting services. The need to store, retrieve and transmit data among
different jurisdictions that have different languages, privacy and other laws also drives demand for our
technology services. Multinational firms also need to establish global branding, investor relations and
communications strategies, which drive demand for our strategic communications services.

• Growth of Companies in the Developing World. Growth companies in the developing world are

seeking access to markets in developed countries. The recognition by such companies that best practice
communications advice is a key component in achieving this objective also drives demand for our
strategic communications services.

Our Competitive Strengths

We compete primarily on the basis of the breadth of our services, the quality of our work, our geographic
reach, our reputation and performance record, our brand recognition, the prominence of our professionals, our
ability to staff multiple significant engagements across different disciplines in multiple locations, and our strong
client relationships. We believe our success is driven by a combination of long-standing competitive strengths,
including:

• Preeminent Practices and Professionals. We believe that our business segments include some of the
preeminent practices and professionals in our industry today. In November 2008, The Deal LLC’s
Bankruptcy Insider quarterly deal tables ranked our Corporate Finance/Restructuring segment as the
top crisis management firm by number of cases. In October 2008, our Strategic Communications
segment, FD, was named public relations firm of the year in Asia by Financial Times and
Mergermarket. In December 2008, our Technology segment was named a “strong positive” vendor in
Gartner Research’s “MarketScope for E-Discovery Software Product Vendors, 2008” report. In August
2008, our Technology segment was recognized as a top provider of electronic discovery software and
services in 23 categories of the 2007 Socha-Gelbmann Survey. The Attenex® and Ringtail®
e-discovery software offerings garnered 15 of the 23 placements, making 2007 the third consecutive
year Attenex has been highly ranked by the Socha-Gelbmann Survey and the second for FTI. Our
Economic Consulting segment includes six former chief economists of the Antitrust Division of the
Department of Justice, as well as numerous other high-profile academic affiliates, including three
Nobel Prize winners.

• Diversified Revenue Sources. We believe we offer a diversified portfolio of services, which we have
organized into five business segments. We began to separately manage our technology business in
January 2006 and our Strategic Communications segment was created with the acquisition of the FD

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group of companies in October 2006. We believe that our broad service offerings and the diversity of
our revenue streams help to manage fluctuations due to market conditions in any one of our segments.
Currently we have operations across 37 U.S. cities and in 22 foreign countries — the UK, Ireland,
France, Germany, Spain, Belgium, Russia, Australia, China (including Hong Kong), Japan, Singapore,
the United Arab Emirates, Bahrain, South Africa, Argentina, Brazil, Colombia, Panama, Mexico,
Canada, India and the British Virgin Islands. We believe this helps to mitigate the impact on our
business of events and changes in a particular service sector or country.

• Diversified Portfolio of Elite Clients. We provide services to a diverse group of clients, including
global Fortune 500 companies, FTSE 100 companies, global banks, and local, state and national
governments and agencies in the U.S. and other countries. Among our top ten clients in 2008 were five
nationally recognized law firms, which engaged us to assist with the representation of multiple clients
on multiple matters.

• High Level of Repeat and Referral Business and Attractive, Highly Recurring Financial Model. We

derive a substantial portion of our revenues from repeat clients or referrals. Many of our client
relationships are long-standing and include multiple contact points within an organization, increasing
the depth and continuity of these relationships. We cultivate critical relationships with financial
institutions and law firms, which have served as entry points into significant, high-profile and
reputation-enhancing engagements. In addition, our Strategic Communications segment has a financial
model that includes recurring retainer based engagements. Clients of this segment are typically billed
on a project-based billing system that reflects the value added by the business rather than on a time and
materials basis.

• Premium Brand Names with Leading Market Positions. We believe that the FTI brand and the other

brands under which we conduct business are some of the most recognized brand names in our industry.
In addition, for 2008 we believe we had leading market positions in our Corporate Finance/
Restructuring segment based on number of cases as reported in The Deal LLC’s Bankruptcy Insider
quarterly deal tables published in November 2008. The reputations of our individually recognized
professionals, many of whom are leading members of their respective fields, strengthen our brand and
market positions. We also have benefited from our strategy of acquiring leading practitioners and, in
select cases, continuing to use their brand names, either independently or coupled with the FTI brand,
such as FD, Ringtail®, Attenex®, Compass Lexecon, Cambio Health Solutions and The Schonbraun
McCann Group.

•

Strong Cash Flow. Our business model has several characteristics that produce strong cash flows
including high margins, with a relatively low level of capital expenditures. Our strong cash flow
supports our acquisition and growth strategies and our ability to service our indebtedness.

Our Business Strategy

We build long-term repeat client relationships based on the quality of our services and our reputation and

the recognition of our professionals. We provide diverse complimentary services to meet our clients’ needs
around the world. We emphasize client service and satisfaction. We aim to build strong brand recognition. The
following are key elements of our business strategy:

• Leverage Our Relationships and Expertise. We work hard to maintain our existing client relationships
and develop new ones. We believe that the strength of our existing client relationships and the quality
of our reputation coupled with our recognized industry expertise, successful track record and size are
the most critical elements in a decision to retain us. We believe the significant amount of repeat
business and referrals that we receive from our clients demonstrates this. We strive to build client
relationships on a company-wide basis and encourage cross-selling among our business segments.
Many of our professionals are recognized experts in their respective fields. By successfully leveraging
our reputation, experience and broad client base and the expertise of our professionals, we expect to
continue to obtain engagements from both existing and new clients.

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• Expand the Breadth of Our Services and Geographic Presence. We strive to offer our clients

comprehensive solutions to their most complex problems, wherever they are in the world. Increasingly,
our clients demand expertise across multiple markets and continents. To meet this demand, we provide
our clients with a complete suite of services across all five business segments. We have increased our
presence in Europe, Asia, Latin America, the Middle East and other international locations to better
serve our clients and to capitalize on markets for our services in those regions.

•

Selectively Acquire Companies and Integrate Our New Professionals and Capabilities. We follow a
disciplined approach to executing and integrating acquisitions, targeting those that complement our
business strategy or operate in an attractive specialized niche. From 2002 through December 31, 2008,
we have completed 38 acquisitions that have enhanced and expanded our businesses. We intend to
continue to selectively pursue strategic acquisitions. We seek to integrate acquisitions in a way that
fosters organic growth and provides synergies or cross-segment, cross-service or cross-geographic
growth opportunities. We typically structure our acquisitions to retain the services of key individuals
from the acquired companies.

• Attract and Retain Highly Qualified Professionals. Our professionals are crucial to delivering our
services to clients and generating new business. As of December 31, 2008, we employed 2,523
revenue-generating professionals, many of whom have established and widely recognized names in
their respective practice areas. Through our substantial staff of highly qualified professionals, we can
handle a number of large, complex assignments simultaneously. To attract and retain highly qualified
senior managing directors and managing directors, we offer significant compensation opportunities,
including sign-on bonuses, forgivable loans, incentive bonuses and equity compensation, along with a
competitive benefits package and the chance to work on challenging engagements with other highly
skilled professionals. We have employment arrangements with many of our senior managing directors
and managing directors that include non-competition and non-solicitation obligations.

• Optimize Utilization and Billing Rates of FTI Professionals who Bill on an Hourly Basis. The
professionals in our Corporate Finance/Restructuring, Economic Consulting and Forensic and
Litigation Consulting segments primarily bill on an hourly basis. Our goal is to manage growth to
maintain high utilization rates rather than intermittently expanding our staff in anticipation of short-
term increased demand. We carefully monitor and strive to attain utilization rates that allow us to
maintain our profitability, make us less vulnerable to fluctuations in our workload and minimize
seasonal factors affecting utilization. A significant number of our professionals have skill sets that
allow us to reassign them to new engagements in different business segments or practices within
segments as the staffing needs may arise. The nature of our services also allows us to bill premium
rates for the services of revenue-generating professionals, which enhances our profitability. As we have
expanded our business offerings and our mix of business has changed, utilization has become a less
meaningful measure of productivity and profitability, particularly with respect to our Strategic
Communications segment, which receives retainer based compensation, and our Technology segment,
which also bills on a unit basis or derives revenues from license fees.

• Build Brand Recognition. We have been investing in our FTI brand and our visibility to reinforce

recognition of our brand in the marketplace and plan on continuing to make such expenditures in 2009.
Our branding initiatives include investment in corporate sponsorships, such as our recent sponsorship
arrangement with Padraig Harrington, which was entered into in the fourth quarter of 2008, strategic
placement of print media in specialty journals, brand placement in strategic locations where our clients
are likely to congregate, and participation in high profile conferences and seminars. In 2009, we intend
to advertise on select network and cable television programs that we believe are of interest to the
companies that use or have need of our services. Our professionals are also widely published. For
example, one of our Technology segment thought leaders has been instrumental in co-authoring two
books on e-discovery practice and has worked closely with the judiciary in helping them craft the
federal electronic discovery rules.

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Our Employees

Our success depends on our ability to attract and retain our expert professional work force. Our

professionals include PhDs, MBAs, JDs, CPAs, CPA-ABVs (who are CPAs accredited in business valuations),
CPA-CFFs (who are CPAs certified in financial forensics), CRAs (certified risk analysts), Certified Turnaround
Professionals, Certified Insolvency and Reorganization Advisors, Certified Fraud Examiners, ASAs (accredited
senior appraisers), construction engineers and former senior government officials. Since December 31, 2007, we
increased the number of revenue-generating professionals by approximately 29% to 2,523 and we increased our
total number of employees by approximately 33% to 3,378 as of December 31, 2008. We also engage
independent contractors to supplement our professionals on client engagements as needed. Most of our
professionals have many years of experience in their respective fields of practice, and are well recognized for
their expertise and experience. None of our employees are subject to collective bargaining contracts or
represented by a union. We believe our relationship with our employees is good.

Employment Agreements

As of December 31, 2008, we had written employment agreements with 174 of our 244 senior managing
directors and senior vice presidents in the segments, who we are referring to as SMDs. We do not have written
employment agreements with substantially all of our professionals below the SMD level. The employment
agreements with our SMDs expire between 2009 and 2018, with 45 SMD agreements expiring in 2011 and 31
SMD agreements expiring in 2012 primarily as a result of our 2006 and 2007 initiatives to renegotiate long-term
employment arrangements with certain SMDs who participate in our senior managing director incentive
compensation program (SMD IC Program). These long-term employment arrangements and the SMD IC
Program are discussed below.

The employment agreements with employees at the SMD and equivalent level generally provide for fixed
salary and participation in incentive payment programs (which in some cases may be based on financial measures
such as earnings before interest, taxes, depreciation and amortization). They may also provide for long-term
equity incentives in the form of stock options or restricted stock awards. In some cases, we extend unsecured
general recourse, forgivable loans to professionals. We believe that the loan arrangements enhance our ability to
attract and retain senior professionals. Some or all of the principal amount and accrued interest of the loans we
make to employees will be forgiven by us upon the passage of time, provided that the professional is an
employee on the forgiveness date, and upon other specified events, such as death or disability or termination of
employment by us without cause or by the employee with good reason. Our executive officers are not eligible to
receive loans and no loans have been made to them.

Generally, our employment agreements with SMDs provide for salary continuation benefits, accrued
bonuses and other benefits beyond the termination date if the professional leaves our employ for specified
reasons prior to the expiration date of the employment agreement. The length and amount of payments to be paid
by us following the termination or resignation of a professional varies depending on whether the person resigned
for “good reason” or was terminated by us with “cause,” resigned without “good reason” or was terminated by us
without “cause,” died or became “disabled,” or was terminated as a result of a “change in control” (all such terms
as defined in such professional’s employment agreement). These employment agreements contain
non-competition and non-solicitation covenants, which under specified circumstances may extend beyond the
expiration or termination of the employment term depending upon the reason for such termination. Under the
non-competition covenants, the professional generally agrees not to offer or perform consulting services of the
type performed during his employment with us, directly or indirectly through another person or entity, in
competition with us, within specified geographic areas, subject, in some cases, to specified exceptions.
Generally, such professionals also agree not to solicit business regarding any case, matter or client with or on
which such professional worked on our behalf, or to solicit, hire, or influence the departure of any of our
employees, consultants or independent contractors. In these employment agreements, the professionals also agree
to maintain the confidentiality of our proprietary information and affirm that we are the owners of copyrights,
trademarks, patents and inventions developed during the course of their employment.

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Senior Managing Director Incentive Compensation Program and Employment Terms

In 2006, we implemented our SMD IC Program, which is designed to align the interests of SMDs with the

interests of our company and its stakeholders. As of December 31, 2008, there were 59 SMDs participating in the
SMD IC Program from our Corporate Finance/Restructuring, Forensic and Litigation Consulting, Technology
and Economic Consulting segments, representing approximately 29%, 28%, 39% and 5% of the total SMDs in
each such segment, respectively. Senior management designates the participants in the SMD IC Program subject
to approval by the Compensation Committee of our Board of Directors. As current written employment
agreements approach their expiration date, as special arrangements entered into with professionals who joined us
in connection with acquisitions come to an end, and as part of our annual performance evaluation process, we
consider admitting other SMDs (including SMDs in other business segments) into the program. Each year we
also evaluate whether current participants should be eligible for additional awards under this program. Our
executive officers are not eligible to participate in the SMD IC Program.

The benefits under our SMD IC Program include a cash payment in the form of an unsecured general
recourse, forgivable loan. We also provide significant additional payments upon the execution and during the
term of the employment agreement in the form of stock options and restricted stock awards or, alternatively, cash
payments if we do not have adequate equity securities available under stockholder approved equity plans.

The typical term of an employment agreement under the SMD IC Program is five years. Substantially all of

the employment agreements entered into with 26 SMDs in 2006, 25 SMDs in 2007 and eight SMDs in 2008
participating in the SMD IC Program, will expire in 2011, 2012 and 2013, respectively. In an effort to reduce
risk, we have included a renewal provision in most of the employment agreements that provides the agreements
will renew for one year, from year to year, beginning at the end of their initial terms unless a party provides
written notice of non-renewal to the other party at least 90 days prior to the date of the expiration of the initial
term or any extended term. Despite the renewal provisions, we could face retention issues at the end of the terms
of those agreements and large compensation expenses to secure extensions. The admission of additional SMDs
into the SMD IC Program may result in the concentration of expirations in future years. There is no assurance we
will enter into new long-term employment agreements with other SMDs, although that is our intention. We
intend to admit SMDs from certain other business segments as their current written employment agreements or
special arrangements entered into in connection with the hiring of those professionals expire.

We funded unsecured, general recourse forgivable loans in an aggregate amount of approximately $23.0
million in 2006, $22.0 million in 2007 and $7.3 million in 2008 to SMDs admitted into the SMD IC Program. In
each of those years we also funded approximately $8.0 million, $13.0 million and $19.0 million, respectively, of
unsecured forgivable loans to other key professionals. In February 2009, additional loans in the aggregate amount
of $7.9 million were authorized to nine new SMDs who have been designated to join and eight SMDs who have
been designated to participate at a higher tier in the SMD IC Program, subject to management’s final discretion
whether to admit such SMDs into the program or to a higher tier. We also anticipate funding forgivable loans to
new hires and professionals who join us in connection with acquisitions as well as current employees on a
case-by-case basis. The amount of forgivable loans we make could be significant.

We awarded stock options to purchase an aggregate of 685,000 shares of our common stock and awarded

99,500 shares of restricted stock in 2006, stock options to purchase an aggregate of 730,000 shares of our
common stock and 140,000 shares of restricted stock in 2007, and stock options to purchase an aggregate of
117,000 shares of common stock and 19,620 shares of restricted stock in 2008 to SMDs upon their first joining
the SMD IC Program or qualifying to move up to a higher participation tier. We also awarded additional stock
options to purchase an aggregate of approximately 42,000 shares of our common stock and approximately 46,000
shares of restricted stock in 2007 and stock options to purchase an aggregate of approximately 61,480 shares of
our common stock and approximately 94,840 shares of restricted stock in 2008, in substitution of a portion of
such year’s annual bonus payments and as matching equity awards to SMDs participating in the SMD IC
Program. In February 2009, awards of stock options exercisable for an aggregate of 219,000 shares of common
stock, and 37,500 shares of restricted stock were authorized for award to nine new participants invited to join and

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eight current participants who qualify for higher participation tiers in the SMD IC Program, subject to
management’s final discretion whether to admit such SMDs into the program or to a higher tier. Additional SMD
IC Program awards will also be granted in 2009 and years thereafter to previously admitted participants based on
each participant’s annual bonus award for the prior bonus year and as SMDs join or move to higher tiers under
the program. We also anticipate making equity awards to members of management and other employees during
2009 but are not able to estimate the type and number of shares that will be subject to those awards at this time,
although they may be significant.

Marketing and Sales

We rely primarily on our senior professionals to identify and pursue business opportunities. Referrals from

clients, law firms and other intermediaries and our reputation from prior engagements are also key factors in
securing new business. Our professionals often learn about new business opportunities from their frequent
contacts and close working relationships with clients. In marketing our services, we emphasize our experience,
the quality of our services and our professionals’ particular areas of expertise, as well as our ability to quickly
staff new and large engagements. While we aggressively seek new business opportunities, we maintain high
professional standards and carefully evaluate potential new client relationships and engagements before
accepting them.

We have a staff of nine marketing professionals who are tasked primarily with marketing the services of our

Forensic and Litigation Consulting, Strategic Communications and Technology segments. Our segments also
directly market their services.

We have been investing in our FTI brand and our visibility to reinforce recognition of our brand in the

marketplace and plan on continuing to make such expenditures in 2009. Our branding initiatives include
investment in corporate sponsorships, such as our recent sponsorship arrangement with Padraig Harrington,
which we entered into in the fourth quarter of 2008, strategic placement of print media in specialty journals, and
brand placement in strategic locations where our clients are likely to congregate. In 2009, we intend to advertise
on select network and cable television programs that we believe are of interest to the companies that use or have
need of our services. We also host and participate in seminars, conferences and other events. These events help
us promote brand recognition, discuss events of interest to our clients and target client groups, discuss our
company and business segments and facilitate client development. They also strengthen our relationships with
existing clients.

Clients

We provide services to a diverse group of clients, including global Fortune 500 companies, FTSE 100

companies, major law firms and local, state and national governments and agencies in the U.S. and other
countries throughout the world.

A substantial portion of our revenues are derived from repeat or referral business. In 2008, no single client

accounted for more than 10% of our total revenues. No single client accounted for more than 10% of the 2008
revenues of any of our business segments, except for two clients that each accounted for more than 10% of the
revenues of our Technology segment business, the loss of which would not have a material adverse effect on FTI
and our subsidiaries as a whole but could have a material adverse effect on the Technology segment if that
business was not quickly replaced. Among our top ten clients were five nationally recognized law firms, which
engaged us to assist with the representation of multiple clients on multiple matters. In some cases, we may have
engagements with law firms that represent a larger percentage of our overall revenue or the revenue of a
segment; however, each law firm is engaging us on behalf of different clients. For this purpose, we recognize the
ultimate client of the law firm as our client.

Competition

Our businesses are highly competitive. Our competitors range from large organizations, such as the global
accounting firms and large consulting and software companies that offer a broad range of consulting services, to
small firms and independent contractors that provide one or more specialized services. We compete primarily on

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the basis of institutional and individual reputations, ability to immediately staff a significant engagement,
performance record and quality of work, range of services provided, geographic reach and existing client
relationships. Our Technology segment, and to a lesser extent our other segments, may also compete on price,
although the critical nature of our services, particularly those provided by our Corporate Finance/Restructuring,
Forensic and Litigation Consulting and Economic Consulting segments, typically reduces price to a secondary
consideration. Since our businesses depend in a large part on professional relationships, there are low barriers of
entry for professionals, including our professionals wanting to work independently, start their own firms or to
change employers.

Our Corporate Finance/Restructuring segment primarily competes with global accounting firms and

specialty boutiques providing restructuring or merger and acquisition services. Our Forensic and Litigation
Consulting segment primarily competes with other large consulting companies with service offerings similar to
ours. Our Strategic Communications segment competes against the large public relations firms and boutique
merger and acquisition and crisis management communications firms. Our Technology segment primarily
competes against consulting and software providers specializing in the discovery of specific electronic
information and the management of electronic content. In the past year, new and existing competitors have
competed more aggressively against the Technology segment on the basis of price, particularly with respect to
hosting and e-discovery services. Our Economic Consulting segment primarily competes with individually
recognized economists, specialty boutiques and large consulting companies with service offerings similar to ours.

Some service providers are larger than we are and on any given engagement may have a competitive
advantage over us with respect to one or more competitive factors. The smaller local or regional firms, while not
offering the range of services we provide, often are able to provide the lowest price on a specific engagement for
reasons such as lower overhead costs and proximity to the engagement.

Patents, Licenses and Trademarks

We consider the Ringtail® Casebook™ and Ringtail® Legal™ software and other technologies and software

that we acquired in connection with the acquisition of Ringtail in 2005 to be proprietary and confidential. We
also consider our TrialMax® comprehensive trial preparation software to be proprietary and confidential. The
Ringtail® and TrialMax® software and technology are not protected by patents. We rely upon non-disclosure
agreements and contractual agreements and internal controls, including confidentiality and invention disclosure
agreements with our employees and independent contractors, and license agreements with third parties, to protect
our proprietary information. Despite these safeguards, there is a risk that competitors may obtain and use such
information.

In July 2008, we acquired Attenex® and the Attenex® family of products, including Attenex® Patterns®
Document Mapper, Attenex® Patterns® Workbench and Attenex® Patterns® Matter Manager, all of which we
consider to be proprietary and confidential. We hold 16 U.S. patents and have 14 U.S. patents pending, covering
various aspects of Attenex® software products. We also hold three non-U.S. patents issued under the Patent
Cooperation Treaty (PCT), 11 non-U.S. patents are pending under the PCT, and 16 additional patent applications
are pending in other non-U.S. jurisdictions, covering various aspects of Attenex® software products. We also rely
upon non-disclosure, license and other agreements to protect our interests in these products.

We believe that the FTI brand and other brands under which we conduct business are some of the most

recognized brand names in our industry. We also have benefited from our strategy of acquiring leading
practitioners and, in select cases, continuing to use their brand names, either independently or coupled with the
FTI brand, such as FD, Ringtail®, Attenex®, Patterns®, TrialMax®, Compass Lexecon, Cambio Health Solutions
and The Schonbraun McCann Group. We have also developed marketing language such as “The Company
Behind the Headlines” and “When the Game Changes,” and logos and designs that we have registered or taken
steps to register and protect. In some cases, but not all, the trademarks have been registered in the U.S. and/or
foreign jurisdictions, or, in some cases, applications have been filed and are pending. In the case of “FTI,” we use
the trademark pursuant to a Consent and Coexistence Agreement entered into in May 2003. We believe the steps
we take to protect our trademarks and brands are sufficient.

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We believe that our non-patented software and intellectual property, particularly some of our process
software and intellectual property, are important to our Forensic and Litigation Consulting and Technology
segments. We rely upon non-disclosure agreements and contractual agreements and internal controls, including,
confidentiality and invention disclosure agreements with our employees and independent contractors, and license
agreements with third parties, to protect our proprietary information. Despite these safeguards, there is a risk that
competitors may obtain and use such information.

Corporate Information

FTI Consulting, Inc. is a Maryland corporation, incorporated in 1982. We are a publicly traded company

with common stock listed on the New York Stock Exchange, or NYSE, under the symbol “FCN.”

Our executive offices are located at 777 Flagler Drive, Suite 1500, West Palm Beach, Florida 33401,

telephone no. 561-515-1900. Our website is http://www.fticonsulting.com.

Financial Information on Industry Segments and Geographic Areas

We manage and report operating results through five reportable segments and two geographic areas. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Note 19 in the
Notes to Consolidated Financial Statements” for a discussion of revenues, net income and total assets by business
segment and revenues for the U.S. and all foreign countries as a group.

Available Information

We are subject to the information requirements of the Exchange Act. Therefore, we file periodic reports,
proxy statements and other information with the SEC. Such reports, proxy statements and other information may
be obtained by visiting the Public Reference Room of the SEC at 100 E Street, NE, Washington, DC 20549. You
may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
In addition, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding issuers that file electronically.

We make available, free of charge, on or through our website at www.fticonsulting.com, our annual,
quarterly and current reports and any amendments to those reports, as well as our other filings with the SEC, as
soon as reasonably practicable after electronically filing them with the SEC. Information posted on our website is
not part of this Annual Report on Form 10-K or any other report filed with the SEC in satisfaction of the
requirements of the Exchange Act. Copies of this Annual Report on Form 10-K as well as other periodic reports
filed with the SEC may also be requested at no charge from our Corporate Secretary, FTI Consulting, Inc. 500
East Pratt Street, Suite 1400, Baltimore, Maryland 21202, telephone no. 410-951-4800.

ITEM 1A. RISK FACTORS

All of the following risks could materially and adversely affect our business, financial condition and results
of operations. In addition to the risks discussed below and elsewhere in this Annual Report on Form 10-K, other
risks and uncertainties not currently known to us or that we currently consider immaterial could, in the future,
materially and adversely affect our business, financial condition and financial results.

Risks Related to Our People

Our failure to retain and recruit qualified professionals could negatively affect our financial results and our
ability to staff client engagements, maintain relationships with clients and drive future growth.

We deliver sophisticated professional services to our clients. To attract and retain clients, we need to

demonstrate professional acumen and build trust and strong relationships. Our professionals have highly

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specialized skills. They also develop strong bonds with the clients they serve. Our continued success depends
upon our ability to attract and retain professionals who have expertise, reputations and client relationships critical
to maintaining and developing our business. We face intense competition in recruiting and retaining highly
qualified professionals to drive our organic growth and support expansion of our services and geographic
footprint.

As of December 31, 2008, we had written employment agreements with 174 of our 244 SMDs. These
employment agreements expire between 2009 and 2018, with 45 expiring in 2011 and 31 expiring in 2012,
primarily because of our 2006 and 2007 initiatives to renegotiate long term employment arrangements with
certain SMDs who have been designated as participants in our SMD IC Program. We monitor contract
expirations carefully to commence dialogues with professionals regarding their employment well in advance of
the actual contract expiration dates. Our goal is to renew employment agreements when advisable and to stagger
the expirations of the agreements if possible. Because of the high concentration of contract expirations in certain
years, we may experience high turnover or other adverse consequences, such as higher costs, loss of clients and
engagements or difficulty staffing engagements, if we are unable to renegotiate employment arrangements or the
costs of retaining qualified professionals become higher. We cannot assure that we will be able to attract and
retain enough qualified professionals to maintain or expand our business. Moreover, competition has been
increasing our costs of retaining and hiring qualified professionals, a trend which could adversely affect our
operating margins and financial results.

We incur substantial costs to hire and retain our professionals and we expect these costs to continue and grow.

We make unsecured general recourse forgivable loans and grant stock option and restricted stock awards to
attract and retain our professional employees. In 2006, we implemented our SMD IC Program, which is designed
to align the interests of our professionals with the interests of our company and its stakeholders. The cost of
implementing and retaining our SMD IC Program has been significant. Participants receive cash payments in the
form of unsecured general recourse forgivable loans. We also make forgivable loans to new hires and
professionals who join us in connection with acquisitions as well as current employees on a case-by-case basis.
Some or all of the principal amount and accrued interest of the loans we make to employees will be forgiven by
us upon the passage of time, provided that the professional is an employee on the forgiveness date, and upon
other specified events, such as death or disability or termination by us without cause or by the employee with
good reason. We expect to continue issuing significant amounts of unsecured, general recourse, forgivable loans.
We also provide significant additional payments under the SMD IC Program in the form of stock options and
restricted stock awards or, alternatively, cash if we do not have adequate equity securities available under
stockholder approved equity plans. We also anticipate making equity awards to management and other
employees during 2009, which we are not able to estimate at this time but they may be significant.

We rely heavily on our executive officers and the heads of our business segments for the success of our
business.

We rely heavily on our executive officers and the heads of our business segments to manage our segments

and operations. Given the highly specialized nature of our services and the scale of our operations, our executive
officers and senior managers must have a thorough understanding of our service offerings as well as the skills
and experience necessary to manage a large organization. If one or more members of our management team
leaves and we cannot replace them with suitable candidates quickly, we could experience difficulty in managing
our business properly. This could harm our business prospects, client relationships, employee morale and
financial results.

We may not have, or may choose not to pursue, legal recourse against professionals who leave our company to
form or join competitors.

Our professionals typically have close relationships with the clients they serve, based on their expertise and

bonds of personal trust and confidence. Although our clients generally contract for services with us as a company,

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and not with individual professionals, in the event that professionals leave, such clients may decide that they prefer
to continue working with a professional rather than with our company. Substantially all of our written employment
arrangements with our SMDs include non-competition and non-solicitation covenants. These restrictions have
generally been drafted to comply with state “reasonableness” standards. However, states generally interpret
restrictions on competition narrowly and in favor of employees. Therefore, a state may hold certain restrictions on
competition to be unenforceable. In the case of employees outside of the U.S., we draft non-competition provisions
in an effort to comply with applicable foreign law. In the event an employee departs and acts in a way that we
believe violates his or her non-competition or non-solicitation agreement, we will consider any legal remedies we
may have against such person on a case-by-case basis. We may decide that preserving cooperation and a
professional relationship with the former employee or client, or other concerns, outweigh the benefits of any
possible legal recovery. We may also decide that our chance of success does not justify the costs of pursuing a legal
remedy. Therefore, we may decide not to pursue legal action, even if it is available to us.

Risks Related to Our Operations

If we do not effectively manage the utilization of our professionals our financial results could decline.

If we fail to manage the utilization of our professionals who bill on an hourly basis or maintain or increase

the hourly rates we charge our clients for our services, we may experience adverse consequences, such as non- or
lower-revenue-generating professionals, the loss of clients and engagements or the inability to appropriately staff
engagements. In such event, our financial results may decline. A number of factors affect the utilization of our
professionals. Some of these factors are not within our control, including general economic and financial market
conditions, the number, size and timing of client engagements, our ability to forecast demand for our services and
maintain an appropriate level of professionals, our ability to utilize professionals across segments, acquisitions
and the hiring of new professionals and staff vacations. Factors that could negatively affect utilization in our
Corporate Finance/Restructuring segment include the completion of bankruptcy proceedings, completion of
current engagements, fewer and smaller bankruptcy cases, a strong economy, easy credit availability, low interest
rates and a decline in merger and acquisition activity. Factors that could negatively affect utilization in our
Forensic and Litigation Consulting segment include the settlement of litigation, fewer and less complex legal
disputes, fewer class action suits, completion of engagements, less government regulation or fewer regulatory
investigations and the timing of government investigations. Factors that could adversely affect utilization in our
Economic Consulting segment include reductions in merger and acquisition activity, fewer regulatory filings and
less litigation, reduced antitrust and competition regulation and fewer government investigations and
proceedings. Our global expansion into new locations where we are not well known or where demand for our
services is not well developed could also contribute to low or lower utilization rates in certain locations.

We calculate the utilization rate for our professionals that bill on an hourly basis by dividing the number of

hours worked on client assignments during a period by the total available working hours, assuming a 40-hour
work week and a 52-week year. Available working hours include vacation and professional training days, but
exclude holidays. The hourly rates we charge our clients for our services and the number of hours our
professionals are able to charge our clients for our services are also affected by the level of expertise and
experience of the professionals working on a particular engagement and, to a lesser extent, the pricing and
staffing policies of our competitors.

Our Strategic Communications segment derives revenues from fixed monthly fee and retainer based

contracts. Factors that could adversely affect our Strategic Communications segment’s revenues include a decline
in merger and acquisition activity, fewer event driven crises affecting businesses, fewer public securities
offerings and general economic decline that may reduce certain discretionary spending by clients. Our
Technology segment derives revenue from recurring licensing fees and the amount of data hosted for a client.
Factors that could adversely affect our Technology segment’s revenues include the settlement of litigation and a
decline in and less complex litigation proceedings and governmental investigations. In addition, lower priced
competition could adversely affect the revenues of these segments.

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Our international operations involve special risks.

Primarily as a result of acquisitions, we operate in 22 countries in addition to the U.S. We expect to continue

our international expansion, and our international revenues are expected to account for an increasing portion of
our revenues in the future. In the year ended December 31, 2008, operations outside of the U.S. accounted for
approximately 18% of our total revenues, of which approximately 65% were generated by our Strategic
Communications segment.

Our international operations involve financial and business risks that differ from or are in addition to those

faced by our U.S. operations, including:

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cultural and language differences;

limited “brand” recognition for FTI in non-U.S. markets;

employment laws and rules and related social and cultural factors that could result in lower utilization
rates and cyclical fluctuations in utilization and revenues;

currency fluctuations between the U.S. dollar and foreign currencies could adversely affect financial
and operating results;

different regulatory requirements and other barriers to conducting business;

greater difficulties in resolving the collection of receivables when legal proceedings are necessary;

greater difficulties in managing our non-U.S. operations in certain locations;

higher operating costs;

longer sales cycles;

restrictions or adverse tax consequences for the repatriation of earnings;

differing accounting principles and standards;

potentially adverse tax consequences, such as trapped foreign losses;

different or less stable political and economic environments; and

civil disturbances or other catastrophic events that reduce business activity.

If we are not able to quickly adapt to our new geographic markets outside of the U.S., our business

prospects and results of operations could be negatively impacted.

Risks Related to Our Client Relationships

If we are unable to accept client engagements due to real or perceived relationship issues, our revenues,
growth, client engagements and prospects may be negatively affected.

Our inability to accept engagements from clients or prospective clients, represent multiple clients in

connection with the same or competitive engagements, and any requirement that we resign from client
engagements may negatively impact our revenues, growth and financial results. While we follow internal
practices to assess real and potential issues in the relationships between and among our clients, engagements,
practices and professionals, such concerns cannot always be avoided. For example, we generally will not
represent parties adverse to each other in the same matter. Under federal bankruptcy rules, we generally may not
represent both a debtor and its creditors in the same proceeding, and we are required to notify the U.S. Trustee of
real or potential conflicts. Even if we begin a bankruptcy-related engagement, the U.S. Trustee could find that we
no longer meet the disinterestedness standard because of real or potential changes in our status as a disinterested
party, and order us to resign, which could result in disgorgement of fees. Acquisitions may require us to resign
from a current client engagement because of relationship issues that are not currently identifiable. In addition,
businesses that we acquire or employees who join us may not be free to accept engagements they could have
accepted prior to our acquiring them because of relationship issues.

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Claims involving our services could harm our overall professional reputation and our ability to compete and
attract business and hire and retain qualified professionals.

Our engagements involve matters that may result in a severe impact on a client’s business, cause the client a

substantial monetary loss or prevent the client from pursuing business opportunities. Our ability to attract new
clients and generate new and repeat engagements depends upon our ability to maintain a high degree of client
satisfaction as well as our reputation among industry professionals. As a result any claims against us involving
the quality of our services may be more damaging than similar claims against businesses in other industries.

We may incur significant costs and may lose engagements as a result of claims by our clients regarding our
services.

Many of our engagements involve complex analysis and the exercise of professional judgment, including
litigation and governmental investigatory matters where we act as experts. Our Technology segment may host or
act as a repository for confidential and proprietary client information, the loss or disclosure of which could result
in significant losses and damages. Therefore, we are subject to the risk of professional liability. We maintain a
limited amount of liability insurance. Any claim by a client or a third party against us could expose us to
professional or other liabilities in excess of the amount of our insurance limits. Damages and/or expenses
resulting from any successful claims against us, for indemnity or otherwise, in excess of the amount of insurance
coverage we maintain, would have to be borne directly by us and could harm our profitability, financial resources
and reputation.

Our clients may terminate our engagements with little or no notice and without penalty, which may result in
unexpected declines in our utilization and revenues.

Our engagements center on transactions, disputes, litigation and other event-driven occurrences that require
independent analysis or expert services. Transactions may be postponed or cancelled, litigation may be settled or
be dismissed, and disputes may be resolved, in each case with little or no prior notice to us. If we cannot manage
our backlog, our professionals may be underutilized until we can reassign them or obtain new engagements,
which can adversely affect financial results.

Much of our business involves large client engagements that we staff with a substantial number of

professionals. The engagement letters that we typically enter into with clients do not obligate them to continue to
use our services. Typically, our engagement letters permit clients to terminate our services at any time without
penalties. If clients unexpectedly cancel engagements with us or curtail the scope of our engagements, we may be
unable to replace the lost revenues from those engagements, quickly eliminate costs associated with those
engagements, or quickly find other engagements to utilize our professionals. Any decrease in revenues without a
corresponding reduction in our costs will likely harm our profitability.

We may not have, or may choose not to pursue, legal remedies against clients who terminate their
engagements.

The engagement letters that we typically have with clients do not obligate them to continue to use our
services and permit them to terminate the engagement without penalty at any time. Even if the termination of an
ongoing engagement by a client could constitute a breach of the client’s engagement agreement, we may decide
that preserving the overall client relationship is more important than seeking damages for the breach, and for that
or other reasons that are not currently identifiable, decide not to pursue any legal remedies against a client, even
though such remedies may be available to us. We make the determination whether to pursue any legal actions
against a client on a case-by-case basis.

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Risks Related to Competition

If we fail to compete effectively, we may miss new business opportunities or lose existing clients and our
revenues and profitability may decline.

The market for our consulting services is highly competitive. Our competitors range from large

organizations, such as the global accounting firms and the large management and financial consulting companies
that offer a broad range of consulting services, to small firms and independent contractors that focus on
specialized services. Some of our competitors have significantly more financial resources, a larger national or
international presence, larger professional staffs and greater brand recognition than we do. Some have lower
overhead and other costs and can compete through lower cost service offerings. Since our business depends in
large part on professional relationships, our business has low barriers of entry for professionals wanting to start
their own firms or work independently. In addition, it is relatively easy for professionals to change employers. If
we cannot compete effectively with our competitors or if the costs of competing, including the costs of retaining
and hiring professionals, becomes too expensive, our expected revenue growth and financial results may differ
materially from our expectations.

We may face competition from parties who sell us their businesses and from professionals who cease working
for us.

In connection with our acquisitions, we generally obtain non-solicitation agreements from the professionals
we hire, as well as non-competition agreements from senior managers and professionals. The agreements prohibit
such individuals from competing with us during the term of their employment and for a fixed period afterwards
and seeking to solicit our employees or clients. In some cases, but not all, we may obtain non-competition or
non-solicitation agreements from parties who sell us their business or assets. The duration of post-employment
non-competition and non-solicitation agreements typically range from six- to 12-months. Non-competition
agreements with the sellers of businesses or assets that we acquire may continue longer than 12 months. Certain
activities may be carved out of or otherwise may not be prohibited by these arrangements. We cannot assure that
one or more of the parties from whom we acquire assets or a business and who do not join us or leave our
employment will not compete with us or solicit our employees or clients in the future. Such persons, because
they have worked for our company or a business that we acquire, may be able to compete more effectively with
us, or be more successful in soliciting our employees and clients, than unaffiliated third parties.

Risks Relating to our Acquisition Strategy

If we fail to find suitable acquisition candidates, or if we are unable to take advantage of opportunistic
acquisition situations, our ability to expand our business may be slowed or curtailed.

If the competition for acquisitions increases, or if the cost of acquiring businesses or assets becomes too

expensive, the number of suitable acquisition opportunities may decline, the cost of making an acquisition may
increase or we may be forced to agree to less advantageous acquisition terms for the companies that we are able
to acquire. Alternatively, at the time an acquisition opportunity presents itself, internal and external pressures
(including, but not limited to, borrowing capacity under our amended and restated senior secured bank credit
facility or the availability of alternative financing), may cause us to be unable to pursue or complete an
acquisition. Our ability to grow our business, particularly through acquisitions, may depend on our ability to raise
capital by selling equity or debt securities or obtaining additional debt financing. There can be no assurance that
we will be able to obtain financing when we need it or on terms acceptable to us. As a result of these factors, we
may be unable to grow our business or expand our client offerings as quickly as we have in the past or as we
currently plan.

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We may have difficulty integrating our acquisitions or convincing clients to allow assignment of their
engagements to us, which can reduce the benefits we receive from acquisitions.

A substantial amount of our growth has resulted from acquisitions. The process of managing and integrating

our acquisitions into our existing operations may result in unforeseen operating difficulties and may require
significant financial, operational and managerial resources that would otherwise be available for the operation,
development and expansion of our existing business. To the extent that we misjudge our ability to integrate and
properly manage acquisitions, we may have difficulty achieving our operating, strategic and financial objectives.

Acquisitions also may involve a number of special financial, business and operational risks, such as:

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difficulties in integrating diverse corporate cultures and management styles;

disparate company policies and practices;

client relationship issues;

decreased utilization during the integration process;

loss of key existing or acquired personnel;

increased costs to improve or coordinate managerial, operational, financial and administrative systems;

dilutive issuances of equity securities, including convertible debt securities to finance acquisitions;

the assumption of legal liabilities;

amortization of acquired intangible assets;

future earn-out payments or other price adjustments; and

potential write-offs relating to the impairment of goodwill.

In addition to the integration challenges mentioned above, our acquisitions of non-U.S. companies offer
distinct integration challenges relating to non-U.S. GAAP financial reporting, foreign laws and governmental
regulations, including tax and employee benefit laws, and other factors relating to operating in countries other
than the U.S., which have been discussed above in the discussion regarding the difficulties we may face
operating globally.

Asset transactions may require us to seek client consents to the assignment of their engagements to us or a

subsidiary. All clients may not consent to an assignment. In certain cases, such as government contracts and
bankruptcy engagements, the consents of clients cannot be solicited until after the acquisition has closed. Further,
such engagements may be subject to security clearance requirements or bidding provisions with which we might
not be able to comply. There is no assurance that local, state, federal or foreign governments will agree to novate
their contracts to us.

Strategic acquisitions in the Technology segment may not be accretive in the near term.

To compete for strategic acquisitions that complement our Technology segment, competitive market
conditions may require us to pay prices that represent a higher multiple of revenues or profits than acquisitions
we make in other business sectors. Because technology companies often are high-growth businesses, they
typically can command higher purchase price multiples. As a result of these competitive dynamics, certain
acquisitions with strategic importance to the future growth and profitability of our Technology segment may not
be accretive to our overall financial results in the near term.

We may have a different system of governance and management from the companies we acquire or their
parents, which could cause professionals who join us from acquired companies to leave us.

Our governance and management practices and policies do not mirror the policies and practices of acquired

companies or their parents. In some cases, different management practices and policies may lead to workplace

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dissatisfaction on the part of acquired professionals. Some professionals may choose not to join our company or
leave after joining us. Existing professionals may leave us as well. The loss of key professionals may harm our
business and results of operations and cause us not to realize the anticipated benefits of the acquisition.

Acquisition candidates may be reluctant to accept shares of our common stock as purchase price
consideration and we may have to issue a greater number of shares due to stock price fluctuations or structure
alternative consideration and certain companies we acquire and their principals may negotiate stock price
guarantees.

We structure many acquisitions to pay a portion of the purchase price in shares of our common stock. The

number of shares issued as consideration is typically based on an average closing price per share of our common
stock for a number of days prior to the closing of such acquisition. We believe that payment in the form of FTI
shares of common stock provides the acquired entity and its principals with a vested interest in the future success
of the acquisition and FTI. The recent extreme volatility of stock markets and the recent decline and volatility of
the price per share of FTI common stock may result in acquisition candidates being reluctant to accept our shares
as consideration. In such cases, we may have to issue more shares, if stock constitutes part of the consideration,
pay the entire purchase price in cash, or negotiate an alternative price structure. The result may be an increase in
the cost of an acquisition.

Certain acquisition related agreements contain stock price guarantees that may result in cash payments in

the future if our price per share falls below a specified per share market value on the date restrictions lapse.
Acquisition candidates may continue to negotiate stock value guarantees, particularly in light of our recent stock
price volatility.

Risks Related to Our Business Segments
Changes in capital markets, merger and acquisition activity and legal or regulatory requirements and general
economic or other factors beyond our control could reduce demand for our services, in which case our
revenues and profitability could decline.

A number of factors outside of our control affect demand for our services. These include:
the U.S. and global economy;
•
the U.S. and global financial markets, including the availability, costs and terms of credit;
•
the level of leverage incurred by companies;
•
•
over-expansion by businesses;
• merger and acquisition activity;
•
•
•
•

business and management crises;
new and complex laws and regulations;
other economic and geographic factors; and
general business conditions.

For example, our Corporate Finance/Restructuring segment provides various restructuring and restructuring-
related services to companies in financial distress or their creditors or other stakeholders. In 2008, as the U.S. and
global economic decline took hold and accelerated, we saw an increase in large bankruptcy and restructuring
transactions. That reversed the trend that the segment had been experiencing between 2005 and 2007, which saw
a decline in large cases and resulted in a greater portion of that segment’s business being comprised of
bankruptcy and restructuring engagements involving mid-size companies. In our experience, mid-size
bankruptcy and restructuring engagements are more susceptible to cyclical factors such as holidays and vacations
and lower utilization during those periods.

Crisis situations that are outside our control also drive demand for the services of our four other business

segments. For example, decreases in litigation filings, class action suits and regulatory investigations and
settlements of proceedings may adversely affect our Forensic and Litigation Consulting and Technology
segments. A decline in mega-merger and acquisition transactions and public stock offerings may adversely affect
our Strategic Communications segment. A decline in merger and acquisition activity or mega-acquisitions may

29

adversely affect our Economic Consulting segment, which provides antitrust and competition advice and
damages consulting. We are not able to predict the positive or negative effects that future events or changes to
the U.S. or global economy, financial markets and business environment could have on our operations. Changes
to any of the factors described above as well as other events, including by way of example, continuing
contractions of world economies, banking and credit markets and real estate and retail industries, the enactment
of tort reform, changes to laws and regulations, including changes to the bankruptcy code and a decline in
government enforcement or litigation or monetary damages or remedies that are sought, may have adverse effects
on one or more of our segments.

We may not manage our growth effectively and our profitability may suffer.

We have experienced rapid growth in recent years. This rapid expansion of our business may strain our
management team, human resources and information systems. We cannot assure that we can successfully manage
the integration of the companies and assets we acquire or that they will result in the financial, operational and
other benefits that we anticipate. To manage our growth successfully, we may need to add qualified managers
and employees and periodically update our operating, financial and other systems, as well as our internal
procedures and controls. We also must effectively motivate, train and manage a larger professional staff. Some
acquisitions may not be immediately accretive to earnings and some expansion may result in significant
expenditures, which may adversely affect profitability in the near term. If we fail to add qualified managers and
employees, estimate costs or manage our growth effectively, our business, financial results and financial
condition may be harmed.

Our revenues, operating income and cash flows are likely to fluctuate.

We have experienced periodic fluctuations in our revenues, operating income and cash flows and expect that

this will continue to occur in the future. We experience fluctuations in our annual or quarterly revenues and
operating income because of the timing of our client assignments, utilization of our revenue-generating
professionals, the types of assignments we are working on at different times, new hiring, business and asset
acquisitions and decreased productivity because of vacations taken by our professionals. Our profitability is
likely to decline if we experience an unexpected variation in the number or timing of client assignments or in the
utilization rates of our professionals, especially during the third quarter when substantial numbers of our
professionals take vacations. We may also experience future fluctuations in our cash flows because of increases
in employee compensation, including changes to our incentive compensation structure and the timing of
incentive payments, which we generally pay during the first quarter of each year. Also, the timing of future
acquisitions and the cost of integrating them may cause fluctuations in our operating results.

Our segments may face risks of fee non-payment, clients may seek to renegotiate existing fees and contract
arrangements, and clients may not accept billable rate increases, which could result in loss of clients, fee
write-offs, reduced revenues and less profitable business.

Our segments are engaged by clients who are experiencing or anticipate experiencing financial distress or

are facing complex challenges that could result in financial liabilities. This is particularly true in light of the
current economy and the credit and real estate crises. Such clients may not have sufficient funds to continue
operations or to pay for our services. We typically do not receive retainers before we begin performing services
on a client’s behalf in connection with a significant number of engagements in our Forensic and Litigation
Consulting and Economic Consulting segments and with respect to bankruptcy engagements in our Corporate
Finance/Restructuring segment. In the cases where we have received retainers, we cannot assure the retainers will
adequately cover our fees for the services we perform on behalf of these clients. With respect to bankruptcy
cases, bankruptcy courts have the discretion to require us to return all, or a portion of, our fees.

We have received requests to discount our fees or to negotiate lower rates for our services and to agree to
contract terms relative to the scope of services and other terms that may limit the size of an engagement or our ability
to pass through costs. We consider these requests on a case-by-case basis. We have been experiencing these types of

30

requests and negotiations more frequently as the economy has deteriorated. In addition, our clients and prospective
clients may not accept rate increases that we have recently put into effect or plan to implement in the future. Fee
discounts, pressure to not increase or even decrease our rates and less advantageous contract terms, could result in the
loss of clients, lower revenues and operating income, higher costs and less profitable engagements. More write-offs
than we expect in any period would have a negative impact on our results of operations. There is no assurance that
client engagements will be renewed or replaced in a timely manner or if at all, or that engagements will generate the
same volume of work or revenues, and be as profitable as past engagements.

The Technology segment provides a high volume of services to certain of its clients. In 2008, two clients of

the Technology segment each accounted for more than 10% of that segment’s revenues. The loss of any one of
these clients or a substantial decrease in that business could have a material adverse effect on the Technology
segment if that business was not quickly replaced. Our Technology segment has recently experienced significant
price competition from lower cost competitors.

Our Technology segment faces certain risks, including the risk that (i) its proprietary software products may
be subject to technological changes and obsolescence, which would make it more difficult for us to compete,
and (ii) we may not effectively protect the intellectual property used by that segment.

The software and products of our Technology segment are subject to rapid technological innovation. There
is no assurance that we will successfully develop new versions of our Ringtail® and Attenex® software, or other
products. Our software may not keep pace with industry changes and innovation. There is no assurance that new
or improved applications or software will compete effectively with the software and technology developed and
offered by competitors and will be accepted by our clients. If our Technology segment is unable to develop and
offer competitive software and products or is otherwise unable to capitalize on market opportunities, the revenues
and growth of the Technology segment and the Company could decline.

The success of our technology business and its ability to compete depends, in part, upon our technology and

other intellectual property, including our proprietary Ringtail®, Attenex® and TrialMax® software and other
proprietary information and intellectual property rights. We rely on a combination of copyright, trademark,
patent laws, trade secrets, confidentiality procedures and contractual provisions to protect these assets. Our
Ringtail® and TrialMax® software and related documentation are protected principally under trade secret and
copyright laws, which afford only limited protection, and the laws of some jurisdictions provide less protection
for our proprietary rights than the laws of the U.S. Certain Attenex® software is protected by patents granted in
the U.S. and foreign jurisdictions. Unauthorized use and misuse of our intellectual property could have a material
adverse effect on our business, financial condition and results of operations and the legal remedies available to us
may not adequately compensate us for the damages caused by unauthorized use.

Risks Related to Our Indebtedness

Our substantial indebtedness could adversely affect our financial condition and business operations.

We have a significant amount of indebtedness. As of December 31, 2008, we had total outstanding
borrowings of $567.9 million of which $565.0 million is under our 7 5⁄ 8% senior notes due 2013, 3 3⁄4% senior
subordinated convertible notes due 2012 and 7 3⁄4% senior notes due 2016 (collectively, our notes) and $9.2
million of outstanding letters of credit under our senior secured bank revolving credit facility. We have an
additional $165.8 million of revolving credit available under our senior secured bank credit facility.

Our substantial indebtedness could have important consequences. For example, it could:

• make it more difficult to satisfy our other financial obligations;

•

•

increase our vulnerability to adverse economic and industry conditions;

require us to dedicate a substantial portion of our cash flows from operations to payments on our
indebtedness, thereby reducing the availability of our cash flows to fund working capital, capital
expenditures, research and development efforts and other general corporate purposes;

31

•

•

limit our ability to borrow additional funds; or

limit our ability to make future acquisitions.

Our notes and senior secured bank credit facility contain restrictive covenants that limit our ability to engage

in activities that we may feel would be beneficial to our business. In addition, our failure to comply with those
covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all
of our outstanding indebtedness.

To service our indebtedness, we require a significant amount of cash. Our ability to generate cash depends on
many factors beyond our control.

Our ability to make payments on our indebtedness and to fund capital expenditures and acquisitions depends

on our ability to generate cash from our operations. This, to a certain extent, is subject to economic, financial,
competitive, legislative, regulatory and other factors that are beyond our control.

Based on our current level of operations, we believe our cash flows from operations, available cash and

available borrowings under our senior secured bank credit facility will be adequate to meet our liquidity needs
for the next 12 months. We cannot provide assurance, however, that our business will generate sufficient cash
flows from operations, that cost savings and operating improvements will be realized or that future borrowings
will be available to us under our senior secured bank credit facility or that we can obtain alternative financing
proceeds in an amount sufficient to enable us to pay our indebtedness and fund our other cash needs and business
growth. We cannot provide assurance that we will be able to obtain additional third party financing or refinance
any of our existing indebtedness on commercially reasonable terms or at all, particularly in light of the current
economy and credit situation.

We may be required to pay substantial amounts in cash to holders of our convertible notes at the time of
conversion prior to maturity.

Our 3 3⁄4% senior subordinated convertible notes will mature on July 15, 2012. Beginning in the fourth
quarter of 2007, our convertible notes became convertible at the option of the holders, and will continue to be
convertible until the trading price of our common stock falls below the conversion price during a conversion
measurement period, as specified in the indenture governing the convertible notes. We may be required to pay
substantial amounts in cash to holders of our convertible notes prior to their stated maturity due to conversions.
The indentures governing our senior notes generally allow for these payments, and our senior secured bank credit
facility permits these payments in some, but not all, circumstances. Payments of our convertible notes upon
conversion could be construed to be a prepayment of principal on subordinated debt, and our existing and future
senior debt may prohibit us from making those payments, or may restrict our ability to do so by requiring that we
satisfy certain covenants relating to the making of restricted payments. If we are unable to pay the conversion
consideration, we could seek consent from our senior creditors to make the payment. If we are unable to obtain
their consent, we could attempt to refinance the senior debt. If we were unable to obtain consent or refinance the
debt, we would be prohibited from paying the cash portion of the conversion consideration, in which case we
would have an event of default under the indenture governing our convertible notes. An event of default under
the convertible note indenture could constitute an event of default under the indentures governing our senior
notes and senior secured bank credit facility.

The indenture governing the convertible notes provides that the convertible notes are convertible only upon

the occurrence of certain events; therefore, we are not able to control the timing of any conversion of the
convertible notes. As a result of making cash payments on the convertible notes, we may not have sufficient cash
to pay the principal of, or interest on, our other indebtedness and fund our other cash needs. We may attempt to
borrow under our senior secured bank credit facility to help fund such payments, but there can be no assurance
that we will have sufficient availability under that or any successor facility or that our credit facility lenders will
allow us to draw on that facility for the purpose of making payments on our notes.

32

Our indebtedness is guaranteed by substantially all of our domestic subsidiaries and will be required to be
guaranteed by future subsidiaries including those organized or that join us in connection with acquisitions.

Substantially all of our U.S. subsidiaries guarantee our obligations under our notes. They also guarantee and

their assets are pledged to secure our senior secured bank credit facility. Future subsidiaries formed or
incorporated in the U.S., including those organized or acquired by us in connection with acquisitions, will be
required to guarantee the notes and our senior secured bank debt and to pledge their assets as collateral for our
senior secured credit facility. If we default on any indebtedness, our U.S. subsidiaries could be required to make
payments under their guarantees, and our senior secured lenders could foreclose on their assets to satisfy unpaid
obligations, which would materially adversely affect our business and financial results.

We may be able to incur substantially more debt, which could exacerbate the risks associated with our
substantial leverage.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of

our senior secured bank credit facility and the indentures governing our notes do not prohibit the incurrence of
additional debt. As of December 31, 2008, we had $175.0 million of revolving availability under our senior
secured bank credit facility, subject to $9.2 million of outstanding letters of credit. If new debt is added to both
our and our subsidiaries’ current debt levels, the related risks that we and they now face due to our existing debt
level could intensify.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None

ITEM 2. PROPERTIES

Our executive offices located in West Palm Beach, Florida consist of 16,103 square feet under a lease
expiring August, 2018. Under various leases expiring through August 2017, we lease 51,340 square feet of office
space for our principal corporate facilities located in Annapolis, Maryland. We also lease offices to support our
operations in 35 other cities across the U.S., including New York, Chicago, Denver, Houston, Dallas, Los
Angeles, San Francisco and Washington, D.C., and we lease office space to support our international locations in
22 countries — the UK, Ireland, France, Germany, Spain, Belgium, Russia, Australia, China (including Hong
Kong), Japan, Singapore, the United Arab Emirates, Bahrain, South Africa, Argentina, Brazil, Colombia,
Panama, Mexico, Canada, India and the British Virgin Islands. We believe our existing facilities are adequate to
meet our current requirements and that suitable space will be available as needed.

ITEM 3. LEGAL PROCEEDINGS

From time to time in the ordinary course of business, we are subject to claims, asserted or unasserted, or

named as a party to lawsuits or investigations. Litigation, in general, and intellectual property and securities
litigation in particular, can be expensive and disruptive to normal business operations. Moreover, the results of
legal proceedings cannot be predicted with any certainty and in the case of more complex legal proceedings, such
as intellectual property and securities litigation, the results are difficult to predict at all. We are not aware of any
asserted or unasserted legal proceedings or claims that we believe would have a material adverse effect on our
financial condition or results of our operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to our stockholders for consideration during the fourth quarter ended

December 31, 2008.

33

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Price of and Dividends on Our Common Equity and Related Stockholder Matters

Market Information. Our common stock trades on the New York Stock Exchange under the symbol “FCN.”

The following table lists the high and low sale prices per share for our common stock based on the closing sales
price as reported on the New York Stock Exchange for the periods indicated.

2008

2007

High

Low

High

Low

Quarter Ended

March 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$71.79
70.99
74.19
71.69

$52.20
55.47
64.86
41.16

$35.12
38.40
53.47
62.78

$26.09
34.42
38.61
50.86

Number of Stockholders of Record. As of January 30, 2009, the number of record holders of our common

stock was 422.

Dividends. We have not declared or paid any cash dividends on our common stock to date and we do not
anticipate paying any cash dividends on our shares of common stock in the foreseeable future because we intend
to retain our earnings, if any, to finance the expansion of our business, make acquisitions and for general
corporate purposes. Our senior secured bank credit facility and the indentures governing our senior notes restrict
our ability to pay dividends.

Securities Authorized for Issuance under Equity Compensation Plans

The following table lists information regarding outstanding stock options and authorized shares of common

stock reserved for future issuance under our equity compensation plans as of December 31, 2008. None of the
plans have outstanding warrants or rights other than options, except for stock awards, including shares of
restricted and unrestricted stock, and deferred stock awards, including stock units and restricted stock units. We
have not issued any shares of our common stock to employees as compensation under plans that have not been
approved by our security holders. The number of securities to be issued upon exercise of outstanding options,
warrants and rights included in Column (a) of the following table excludes:

•

•

•

•

•

4,000 shares of common stock issued as unvested stock awards under our 1997 Stock Option Plan, as
amended;

265,815 shares of common stock issued as unvested stock awards under our 2004 Long-Term Incentive
Plan (as Amended and Restated Effective as of May 14, 2008);

726,647 shares of common stock issued as unvested stock awards under our 2006 Global Long-Term
Incentive Plan (as Amended and Restated Effective as of May 14, 2008);

18,750 shares of common stock issued as stock unit awards and restricted stock unit awards under our
Deferred Compensation Plan for Key Employees and Non-Employee Directors (as Amended and
Restated Effective as of May 14, 2008); and

137,895 shares of common stock sold under our 2007 Employee Stock Purchase Plan, as amended
(ESPP), and 1,255,735 shares deregistered with the SEC on January 30, 2009 upon termination of our
ESPP, which was effective January 1, 2009.

34

Equity Compensation Plan Information as of December 31, 2008

Plan Category

(a)

(b)

(c)

Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights

(in thousands)

Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights

Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a))

(in thousands)

Equity compensation plans approved by our

security holders . . . . . . . . . . . . . . . . . . . . . . . .
Equity compensation plans not approved by our
security holders . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,953(1)

—

4,953

$30.19

—

$30.19

702(2)

—

702

(1)

(2)

Includes 1,240,666 shares of common stock issuable upon vesting and exercise of outstanding stock options
granted under our 1997 Stock Option Plan, 1,788,716 shares of common stock issuable upon vesting and
exercise of outstanding stock options granted under our 2004 Long-Term Incentive Plan, as amended, and
1,923,607 shares of common stock issuable upon vesting and exercise of outstanding stock options granted
under our 2006 Global Long-Term Incentive Plan, as amended.

Includes (a) 115,390 shares of common stock available for issuance under our 2004 Long-Term Incentive
Plan, as amended, including 60,616 shares of common stock available for stock awards; and (b) 586,746
shares of common stock available for issuance under our 2006 Global Long-Term Incentive Plan, as
amended, including 252,077 shares of common stock available for stock awards. Does not include
1,338,342 shares of common stock available under our Deferred Compensation Plan for Key Employees and
Non-Employee Directors, as amended.

Issuances of Unregistered Securities

As part of the acquisition consideration related to our 2008 acquisitions, we issued an aggregate of 861,671

unregistered shares of our common stock. Below is a discussion of unregistered shares of our common stock
issued in connection with acquisitions made in the fourth quarter of 2008, which have not been previously
reported in filings with the SEC.

Effective October 28, 2008, we issued an aggregate of 2,300 share of our common stock in payment of
$200,000 (Australian Dollars) representing a portion of the purchase price for the acquisition of the capital shares
of Kudos Consultants Pty Ltd. Based on the formula in the Purchase Agreement, the $200,000 (Australian
Dollars) was converted to approximately $127,310 (US Dollars) by applying an exchange rate of approximately
1.57096 Australian Dollars for one US Dollar (the average exchange rates for the five consecutive trading days
prior to the relevant date that the stock is issued (which was determined to be October 28, 2008)). The number of
shares issued was determined by dividing (a) $127,310 (US dollars) by (b) $55.344 per share (the average closing
price per share of our common stock as reported on the New York Stock Exchange for the five consecutive
trading days prior to and including the relevant date that the stock is issued (which was determined to be October
28, 2008)). The 2,300 shares of our common stock were offered, sold and issued without registration in a private
placement in reliance on the exemption from registration under Regulation S promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended, in offshore transactions. We did not
engage in general solicitation, advertising and directed selling efforts in connection with the offering of these
shares of our common stock.

Effective December 31, 2008, we issued an aggregate of 143,086 shares of our common stock in payment of

$6,250,000 representing a portion of the purchase price for the acquisition of substantially all of the assets of

35

CXO L.L.C. The number of shares issued was determined by dividing (a) $6,250,000 by (b) $43.68 per share (the
average closing price per share of our common stock as reported on the New York Stock Exchange for the five
consecutive trading days prior to and excluding December 31, 2008). The 143,086 shares of our common stock
were offered, sold and issued without registration in a private placement in reliance on the exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended. We did not engage in general
solicitation, advertising and directed selling efforts in connection with the offering of these shares of our
common stock.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information with respect to purchases we made of our common stock during

the fourth quarter of 2008 (in thousands except per share amounts).

Total Number
of Shares
Purchased (a)

Average
Price Paid
per Share

Total Number of
Shares Purchased
as Part of Publicly
Announced
Program

Approximate
Dollar Value that
May Yet Be
Purchased Under
the Program (b)

October 1 through October 31, 2008 . . . . . . . . . . . .
November 1 through November 30, 2008 . . . . . . . .
December 1 through December 31, 2008 . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9
48
13

70

$64.46
57.30
43.25

—
—
—

—

$50,000
$50,000
$50,000

(a) Represents 69,724 shares of common stock withheld to cover payroll tax withholdings related to the lapse of

restrictions on restricted stock.

(b)

In October 2003, our Board of Directors initially approved a share repurchase program under which we
were authorized to purchase shares of our common stock. From time to time, our Board of Directors has
increased the amount of or reauthorized share repurchases under the program. On February 25, 2008, our
Board of Directors authorized up to $50.0 million of stock purchases under the stock repurchase program
through February 25, 2009. On February 25, 2009, our Board of Directors authorized up to $50.0 million of
stock purchases under the stock repurchase program through February 25, 2010.

36

ITEM 6. SELECTED FINANCIAL DATA

We derived the selected financial data presented below for the periods or dates indicated from our

consolidated financial statements. Our consolidated financial statements as of and for the years ended
December 31, 2008, 2007, and 2006 were audited by KPMG LLP, an independent registered public accounting
firm. Our consolidated financial statements as of and for the years ended December 31, 2005 and 2004 were
audited by Ernst & Young LLP, an independent registered public accounting firm. The data below should be read
in conjunction with our consolidated financial statements, related notes and other financial information appearing
in “ — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “
— Item 8. Financial Statements and Supplementary Data.”

A number of factors have caused our results of operations and financial position to vary significantly from

one year to the next and can make it difficult to evaluate period-to-period comparisons because of a lack of
comparability. The most significant of these factors are as follows:

Acquisitions

Our results of operations and financial position were impacted by our significant acquisition activities

during 2008, 2007, 2006 and 2005. See Note 8 — “Acquisitions” to our consolidated financial statements for
more information.

Share-Based Payments

Effective January 1, 2006, we adopted Financial Accounting Standards Board (FASB) Statement

No. 123(R), “Share Based Payment,” using the modified prospective transition method under which prior period
amounts are not restated for comparative purposes. In 2006, we began to recognize expense associated with all
share-based awards based on the grant-date fair value of the awards. As a result of adopting Statement
No. 123(R), our results of operations are different than they would have been if we had continued to account for
share-based compensation under Accounting Principles Board (APB) Opinion No. 25. See Note 5 — “Share-
Based Compensation” to our consolidated financial statements for the financial statement impact.

Revenues

In December 2005, we received a $22.5 million success fee in connection with the resolution of a legal case

involving a bankrupt estate for which we served as fiduciary for several years. We used approximately
$9.5 million of the proceeds to compensate professionals primarily in the Corporate Finance/Restructuring
segment who participated in the assignment and to provide incentive compensation for other employees. This
amount was recorded as accrued compensation in our consolidated balance sheet as of December 31, 2005.

Special Charges

Special charges primarily consist of severance and other contractual employee related costs associated with

reductions in workforce. During the third quarter of 2006, we recorded special charges totaling $23.0 million.
The charges reflect actions we took to address certain underperforming operations. In particular, we restructured
our Corporate Finance/Restructuring UK operations and consolidated certain of our non-core practices in the
U.S., primarily through reductions in workforce. See “ — Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations” for more information.

37

Stockholders’ Equity

In October 2007, we closed on a public offering of 4,830,000 shares of the Company’s common stock,
which included 630,000 shares sold pursuant to the exercise of the underwriter’s option to purchase additional
shares, at a price to the public of $50.00 per share, less the underwriting discount and commissions. The net
proceeds of the offering were $231.4 million, after payment of the underwriting discounts, commissions and
offering expenses. We used the net proceeds from the offering for general corporate purposes, including the
continuation of our strategic acquisition program.

INCOME STATEMENT DATA
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating Expenses

Direct cost of revenues . . . . . . . . . . . . . . . .
Selling, general and administrative

expense . . . . . . . . . . . . . . . . . . . . . . . . . .
Special charges . . . . . . . . . . . . . . . . . . . . . .
Amortization of other intangible assets . . . .

Operating income . . . . . . . . . . . . . . . . . . . . . . .
Interest income and other . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . .
. . .
Litigation settlement (losses) gains, net

Income from continuing operations, before

income tax provision . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . .

205,631
80,196

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 125,435

Earnings per common share — basic . . . . . . .
Earnings per common share — diluted . . . . . .
Weighted average number of common shares

$
$

2.55
2.34

outstanding

Year Ended December 31,

2008

2007

2006

2005

2004

(in thousands, except per share data)

$1,293,145

$1,001,270

$ 707,933

$539,545

$427,005

705,611

548,407

389,032

291,592

234,970

330,052
—
18,824

1,054,487

238,658
8,685
(41,051)
(661)

255,238
—
10,615

814,260

187,010
7,639
(43,857)
(1,002)

149,790
57,669

92,121

2.14
2.00

$

$
$

178,572
22,972
11,175

127,727
—
6,534

106,730
—
6,836

601,751

425,853

348,536

106,182
2,119
(28,949)
(187)

113,692
145
(15,021)
(1,629)

78,469
313
(6,399)
1,672

79,165
37,141

97,187
40,819

74,055
31,177

42,024

$ 56,368

$ 42,878

1.06
1.04

$
$

1.38
1.35

$
$

1.02
1.01

$

$
$

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49,193

53,603

43,028

45,974

39,741

40,947

42,099

40,526

41,787

42,512

BALANCE SHEET DATA
Cash and cash equivalents . . . . . . . . . . . . . . . . . .
Working capital (a) . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt and capital lease obligations,

including current portion and fair value hedge
adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . .

December 31,

2008

2007

2006

2005

2004

(in thousands)

$ 191,842
128,545
2,088,169

$ 360,463
280,465
1,858,624

$

91,923
116,490
1,391,156

$153,383
193,208
959,461

$ 25,704
60,241
703,827

569,490
1,123,827

573,425
972,250

570,358
565,100

348,431
454,269

105,000
496,154

(a) Working capital is defined as current assets less current liabilities

38

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following is a discussion and analysis of our consolidated financial condition, results of operations,
liquidity and capital resources for each of the three years in the period ended December 31, 2008 and significant
factors that could affect our prospective financial condition and results of operations. You should read this
discussion together with our consolidated financial statements and notes included in “ — Item 8. Financial
Statements and Supplementary Data.” Historical results and any discussion of prospective results may not
indicate our future performance. This section contains certain “forward-looking statements” within the meaning
of federal securities laws that involve risks and uncertainties, including statements regarding our plans,
objectives, goals, strategies and financial performance. Our actual results could differ materially from the results
anticipated in these forward-looking statements.

Business Overview

We are a leading global business advisory firm dedicated to helping organizations protect and enhance their

enterprise value in difficult and increasingly complex economic, legal and regulatory environments. We work
closely with our clients to help them anticipate, understand, manage and overcome complex business matters
arising from such factors as the economy, financial and credit markets, governmental regulation and legislation
and litigation. We assist clients in addressing a broad range of business challenges such as bankruptcy,
restructuring, credit issues and indebtedness, mergers and acquisitions, interim business management, electronic
discovery, management and retrieval of electronically stored information, reputation management and strategic
communications. Our experienced teams of professionals include many individuals who are widely recognized as
experts in their respective fields. We believe clients retain us because of our recognized expertise and capabilities
in highly specialized areas, as well as our reputation for satisfying client needs.

As of December 31, 2008, we had a total headcount of 3,378 of which 2,523 were revenue-generating
professionals. As of December 31, 2008, we had operations across 37 U.S. cities and 22 foreign countries:
Argentina, Australia, Bahrain, Belgium, Brazil, the British Virgin Islands, Canada, China (including Hong
Kong), Colombia, France, Germany, India, Ireland, Japan, Mexico, Panama, Russia, Singapore, South Africa,
Spain, United Arab Emirates, and the United Kingdom (UK).

We report financial results for the following five operating segments:

The Corporate Finance/Restructuring segment focuses on strategic, operational, financial and capital

needs of businesses around the world and provides consulting and advisory services relating to turnaround,
performance improvement, lending solutions, financial and operational restructuring, restructuring advisory,
mergers and acquisitions (M&A), transaction advisory and interim management.

The Forensic and Litigation Consulting segment provides law firms, companies, government clients and

other interested parties around the world with end-to-end forensic and litigation services, including pre-filing
assessments, discovery, trial preparation, expert testimony and other trial support services.

The Strategic Communications segment provides advice and consulting services relating to financial
communications, brand communications, public affairs and reputation management and business consulting.

The Technology segment provides products, services and consulting to law firms, companies, courts and
government agencies worldwide with the principal business focus on the collection, preservation, review and
production of electronically stored information.

The Economic Consulting segment provides law firms, companies, government entities and other
interested parties with clear analysis of complex economic issues for use in legal and regulatory proceedings,
strategic decision making and public policy debates in the U.S. and internationally.

39

We derive substantially all of our revenues from providing professional services to both U.S. and global
clients. Over the past several years the growth in our revenues and profitability has resulted from the acquisitions
we have completed and from our ability to attract new and recurring engagements.

Most of our services are rendered under time and expense arrangements that require the client to pay us a

fee for the hours that we incur at agreed upon rates. Under this arrangement we also bill our clients for
reimbursable expenses, which may include the cost of producing our work product, and other direct expenses that
we incur on behalf of the client, such as travel costs and materials that we purchase to produce presentations for
courtroom proceedings. We also render services where the client is required to pay us a fixed monthly fee or
recurring retainer. These arrangements are generally cancellable at any time. Some of our engagements contain
performance-based arrangements in which we earn a success fee when and if certain predefined outcomes occur.
This type of success fee may supplement a time-and-expense or fixed-fee arrangement. Success fee revenues
may cause significant variations in our revenues and operating results due to the timing of achieving the
performance-based criteria. In our Technology segment, clients may also be billed based on the amount of data
stored on our electronic systems, the volume of information processed and the number of users directly licensing
our Ringtail ® and Attenex ® products for installation within their own environments. While our business has
evolved over the last several years, seasonal factors, such as the timing of our revenue-generating professionals’
vacations and holidays, continue to impact the timing of our revenues.

Our financial results are primarily driven by:

•

•

•

•

•

•

the number of revenue-generating professionals;

the utilization rates of the billable professionals we employ;

the rate per hour we charge our clients for services;

the number and size of engagements we secure;

fees from clients on a retained basis; and

licensing of our software products and other technology services.

We define EBITDA as operating income before depreciation and amortization of intangible assets plus
non-operating litigation settlements. Although EBITDA is not a measure of financial condition or performance
determined in accordance with generally accepted accounting principles (GAAP), we believe that it 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 is a common alternative measure of operating performance used
by investors, financial analysts and credit rating agencies to value and compare the financial performance of
companies in our industry. We use EBITDA to evaluate and compare the operating performance of our segments
and it is one of the primary measures used to determine employee bonuses. We also use EBITDA to value the
businesses we acquire or anticipate acquiring. EBITDA is 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.
This non-GAAP measure should be considered in addition to, but not as a substitute for or superior to, the
information contained in our statements of income.

We evaluate the performance of our operating segments based on operating income excluding depreciation,

amortization of other intangible assets, special charges, unallocated corporate expenses and including
non-operating litigation settlement gains and losses, which we refer to as “segment EBITDA.” Segment EBITDA
consists of the revenues generated by that segment, less the direct costs of revenues and selling, general and
administrative costs that are incurred directly by that segment as well as an allocation of certain centrally
managed costs, such as information technology services, accounting, marketing and facility costs. Although
segment EBITDA is not a measure of financial condition or performance determined in accordance with
generally accepted accounting principles, we use it to evaluate and compare the operating performance of our
segments and it is one of the primary measures used to determine employee incentive compensation. Unallocated

40

corporate expenses include costs related to centrally managed administrative functions which have not been
allocated to the segments. These administrative costs include corporate office support costs, human resources,
legal, company-wide business development functions, as well as costs related to overall corporate management.
In addition, certain accounting and information technology costs are unallocated.

Executive Highlights

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings per common share — diluted . . . . . . . . . . . . . . . . . . . . . . .
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . .
Total number of employees at December 31, . . . . . . . . . . . . . . . . . . .

Year Ended December 31,

2008

2007

% Growth

(dollars in thousands, except per share amounts)
29.2%
$1,001,270
$1,293,145
17.0%
$
$
2.00
2.34
31.0%
$ 215,974
$ 282,858
190.8%
68,736
$ 199,852
$
32.5%
2,549
3,378

We define acquisition growth as the results of operations of acquired companies in the first year following

the effective date of an acquisition. Our definition of organic growth is the change in the results of operations
excluding the impact of acquisitions.

Revenue for the year ended December 31, 2008 increased 29.2% to $1.3 billion, compared to $1.0 billion in

the prior year. The Company grew its revenue through organic growth of 17.4% plus contributions from
companies acquired. Acquisitions contributed to growth of the Corporate Finance/Restructuring, Forensic and
Litigation Consulting, Technology and Strategic Communications segments. The appreciation of the US Dollar
against other currencies had the effect of reducing revenue by 1.2% for the full year, mostly in the fourth quarter.

The Company experienced robust growth in the first half of 2008, driven by the confluence of accelerating

work related to the global credit crisis, strong merger and acquisition activity and work by the Technology
segment on a number of large product liability cases. While the issues surrounding the global credit crisis
continued to drive demand for a number of FTI’s services throughout the year, the combination of a precipitous
decline in worldwide equity markets, significantly reduced availability of credit, rapidly deteriorating economic
conditions and a reduction in the pace of litigation and regulatory investigations caused slower growth in the
second half of the year.

EBITDA, as previously defined, increased by $66.9 million, or 31.0%, to $282.9 million compared to
$216.0 million in the same period last year. EBITDA was 21.9% of revenue in 2008 compared to 21.6% of
revenue in 2007. All operating segments contributed to the EBITDA growth in the period, with a particularly
strong contribution from the Corporate Finance/Restructuring segment. Higher margins in the Corporate Finance/
Restructuring segment and slower growth of the Company’s unallocated Corporate expenses relative to revenue
offset lower margins in other segments.

Earnings per share is $2.34 per diluted share, or a 17% increase over the prior year of $2.00 per diluted
share, reflective of the Company’s higher operating earnings partially offset by higher average weighted shares.
Included in the calculation of EPS was an increase in the weighted average share count of 7.6 million, or 16.6%,
reflecting shares issued in the Company’s Secondary public offering in the fourth quarter of 2007, exercise of
stock options, shares issued for acquisitions and increases in the dilution adjustments for the company’s
convertible notes and options.

Cash provided by operating activities in 2008 was $199.9 million, an increase of $131.1 million over the

prior year, reflective of the Company’s stronger revenues and improved cash collection efforts in 2008. Our
fourth quarter collections remained strong despite the changing economic climate. The principal use of cash was
to fund the acquisition of sixteen businesses, as discussed below.

41

Headcount increased by 829, or 32.5% to 3,378 through a combination of hiring to support the growth of the

business and the addition of employees who joined the Company through acquired businesses.

Operational Highlights

Organic revenue growth remained strong throughout the year for the Company’s Corporate Finance/

Restructuring and Economic Consulting segments, which are benefiting most directly from the current
worldwide economic and financial challenges. The Corporate Finance/Restructuring segment continued to be
active in restructuring assignments in a growing range of industries being impacted by the global credit crisis
such as financial services, retail, automotive and the homebuilding/real estate/construction markets. Segment
growth was also enhanced by increasing revenue from the UK restructuring practice, which has gained greater
market acceptance, increased headcount and expanded its range of offerings to meet demand for its services.
Economic Consulting saw strong demand throughout the year. Early in the year this demand was generated by
the need for strategic M&A consulting services, while later in the year demand shifted to stockholder class
actions and other economic engagements arising out of the turmoil in the financial markets, as well as
accelerating demand for traditional antitrust litigation support in areas such as price fixing and other types of
collusive behavior.

The Strategic Communications segment, which is significantly impacted by activity within the capital
markets, had a strong first half, as it benefited from engagements related to the credit crisis in addition to M&A
projects and growth in revenue from retained clients. However, the financial market collapse and accelerating
impact of the global recession caused a decline in capital markets engagements and pressure on fees from
retained clients in the second half. The segment was able to partially offset these headwinds in the second half of
2008 with an increase in its financial crisis management assignments, and also benefited from contributions from
businesses acquired over the past year to broaden its service offerings and enhance its ability to support clients on
a global basis. In addition, the segment was the most impacted by foreign exchange, which reduced the
segment’s revenue by 4.6% and operating profit by 3.1% for the year.

The Forensic and Litigation Consulting segment, which relies on litigation and regulatory investigations and

proceedings, was negatively impacted by a reduction in demand for their services that began in August and
continued to decline over the remainder of the year. Organic growth in Forensic and Litigation Consulting was
constrained by lower levels of litigation due to the challenging global economic environment and by the
slowdown in regulatory investigations typically associated with the political calendar leading up to the change in
Presidential administrations.

The Technology segment experienced an extremely strong first half of 2008, driven by large product
liability cases and increasing demand from outside the U.S. as the segment leveraged the growing market
awareness of its technology services and processing. Overall growth slowed in the second half due to less
demand for M&A driven technology processing and consulting as a result of the economic downturn, and a
decrease in certain types of investigative and securities related projects. Profitability in the segment was
adversely impacted by an increase in market competition and the discounting of unit based pricing on a global
basis as a result of competition and the market’s demand for increasing efficiency for large scale matters in the
management, processing, review and production of electronically stored information (ESI). Profitability was also
negatively impacted by increased investment in research and development (R&D) by the Technology segment to
accelerate new product introductions.

During 2008, we completed sixteen business combinations for a total acquisition cost of $368.9 million,
consisting of cash, transaction costs and liabilities assumed of $315.4 million and 861,671 restricted shares of our
common stock valued at $53.5 million.

Beyond organic growth, we expand our business through the acquisition of businesses and the hiring of

practice groups. Because the talented professionals we seek are highly sought after, the success of our

42

acquisitions is dependent upon structuring transactions that are mutually agreeable to the sellers and ourselves
and attracting and retaining the key professionals who represent the intellectual capital within the businesses that
we are buying. To achieve these objectives we use a number of different strategies.

In the case of businesses we acquire, we often structure a portion of the purchase price as contingent
consideration to be paid to the seller at a later date. The contingent consideration represents the difference
between the seller’s and our perceived values of the business based upon our respective performance estimates at
the time of acquisition. The use of contingent consideration allows us to shift some of the valuation risk, inherent
at the time of acquisition, to the seller based upon the outcome of future financial targets that the seller
contemplates in its valuation. Contingent consideration is payable annually as agreed upon performance targets
are met and is generally subject to a maximum amount within a specified time period. Contingent consideration
is recorded as additional purchase price with the adjustment recorded as an increase to goodwill if the
contingency is satisfied. Additional consideration related to acquired businesses recorded as an adjustment to
goodwill was $52.6 million, $43.1 million, and $17.0 million for the years ended December 31, 2008, 2007 and
2006, respectively.

Another element of our strategy to attract and retain professionals is to enter into long term employment

agreements, typically over a term of five years, the benefits of which include a cash payment in the form of
unsecured general recourse, forgivable loans. The forgivable loans are recorded annually as expense by the
Company on a pro-rata basis over the term of the loan.

Certain acquisition related restricted stock agreements contain stock price guarantees that may result in cash

payments in the future if our per share price falls below a specified per share market value on the date the stock
restrictions lapse. The future settlement of any contingency related to security price per share will be recorded as
an adjustment to additional paid-in capital.

The sixteen acquisitions furthered FTI’s strategy of expanding its range of services and geographical

presence and developing industry-focused solutions.

• A significant focus of acquisition activity was to increase resources in the global real estate and

construction industry, where FTI anticipates a growing amount of work coming from the impact of the
global credit crisis. The company purchased Rubino McGeehin Consulting Group (RMCG), a
consulting company in the construction and government contracts sector; Brewer Consulting, a UK
company providing dispute, resolution and procurement services to the construction, engineering,
transportation, and oil and gas industries; and The Schonbraun McCann Group (SMG), a leading
consulting firm to the real estate industry.

•

FTI’s Technology segment enhanced its proprietary technology through the purchase of Attenex
Corporation, a leading e-discovery software provider, and expanded its global footprint through the
purchase of San Francisco-based Strategic Discovery Inc., a leader in the litigation discovery industry,
which will serve as a bridge into the Asian markets.

• To further build out its global platform in the UK, we purchased Forensic Accounting LLC (FA), a
London-based independent forensic accounting practice. The combination of the FA and Brewer
acquisitions with the existing operations in London make it FTI’s second largest office, with
approximately 367 professionals across the Strategic Communications, Corporate Finance/
Restructuring, Forensic and Litigation Consulting, and Technology segments. Other acquisitions made
outside the US were TSC Brasil, a computer forensics and information technology consultant in the
Brazilian and certain other Latin American markets, Thompson Market Services, an investigations
practice in China that will help clients protect their brands and intellectual property in that region, and
Blueprint Partners, a premier public affairs consultancy in Brussels that gives FTI an initial presence in
one of the world’s key regulatory and political centers.

•

Finally, the Strategic Communications segment purchased Kinesis Marketing, a strategic online
communications firm, to strengthen its interactive capabilities.

43

On August 6, 2008, the Company announced that it intended to sell a minority interest in its Technology
business through an initial public offering (“IPO”) of a newly formed company and to distribute the remaining
shares of the new company to its shareholders within twelve months of completion of the IPO in a spin-off,
split-off or a combination of these transactions. However, due to the unprecedented decline and instability of the
equity capital markets in the fourth quarter of 2008, the Company announced that it will delay its filing for an
IPO of its Technology business.

Critical Accounting Policies

General. Our discussion and analysis of our financial condition and results of operations are based on our
consolidated financial statements, which we have prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. We evaluate our estimates, including those related to bad debts, goodwill,
income taxes and contingencies on an ongoing basis. We base our estimates on historical experience and on
various other assumptions that we believe are reasonable under the circumstances. These results form the basis
for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe that the following critical accounting policies reflect our more significant judgments and

estimates used in the preparation of our consolidated financial statements.

Revenue Recognition. We recognize revenues in accordance with Staff Accounting Bulletin (SAB)
No. 101, “Revenue Recognition in Financial Statements,” as amended by SAB 104, “Revenue Recognition.”
Revenue is recognized when pervasive evidence of an arrangement exists, the related services are provided, the
price is fixed or determinable and collectability is reasonably assured. We recognize revenues for our
professional services rendered under time-and-expense engagements based on the hours incurred at agreed upon
rates as work is performed. We recognize revenues from reimbursable expenses in the period in which the
expense is incurred.

In our Corporate Finance/Restructuring and Strategic Communications segment we are periodically engaged

to provide services in connection with client matters where payment of our fees is deferred until the conclusion
of the matter or upon the achievement of performance-based criteria. We recognize revenues for these
arrangements when all the performance-based criteria are met and collection of the fee is reasonably assured.

In our Strategic Communications segment most clients pay us an up front fee that will be earned in fixed

amounts over an agreed upon period. These arrangements can be either long-term retainers or based on projects
of a short-term nature.

Some clients, primarily in our Corporate Finance/Restructuring segment, pay us retainers before we begin
any work for them. We hold retainers on deposit until we have completed the work. We apply these retainers to
final billings and refund any excess over the final amount billed to clients, as appropriate, when we complete our
work. If the client is in bankruptcy, fees for our professional services may be subject to approval by the court. In
some cases, a portion of the fees to be paid to us by a client is required by a court to be held until completion of
our work. We make a determination whether to record all or a portion of such holdback as revenue prior to
collection on a case-by-case basis.

We record allowances for estimated realization adjustments to the professional service fees of our Corporate

Finance/Restructuring segment that are subject to review by bankruptcy courts. We record provisions for fee
adjustments and discretionary pricing adjustments as a reduction of revenues when they become known.
Revenues recognized, but not yet billed to clients, have been recorded as unbilled receivables in the consolidated
balance sheets.

44

We recognize revenue related to sales of our software licenses in our Technology segment using guidance

from American Institute of Certified Public Accountants (AICPA) Statement of Position 97-2, “Software
Revenue Recognition” (SOP 97-2), as amended. Emerging Issues Task Force 00-21 “Accounting for Revenue
Arrangements with Multiple Deliverables” is considered for those arrangements in our Technology segment with
multiple deliverables.

If at the outset of an arrangement we determine that the arrangement fee is not fixed or determinable,
revenue is deferred until the arrangement fee becomes due and payable by the customer. Substantially all of our
software license agreements do not include any acceptance provisions. If an arrangement allows for customer
acceptance of the software, we defer revenue until the earlier of customer acceptance or when the acceptance
rights lapse.

Additionally, revenues related to the amount of data stored or processed, or the number of pages or images

processed, are recognized as the services are provided based on agreed-upon rates.

Allowance for Doubtful Accounts and Unbilled Services. We record an allowance for doubtful accounts for

estimated losses resulting from the inability of our clients to pay our fees or for disputes that affect our ability to
fully collect our billed accounts receivable, as well as potential fee reductions imposed by bankruptcy courts.
Even if a bankruptcy court approves interim payment of our services, it has the discretion to require us to refund
all or a portion of our fees due to the outcome of the case or a variety of other factors. We estimate the allowance
for doubtful accounts by reviewing individual client accounts and determining collectability based on discussions
with the client, review of historical payment practices and aging analysis. However, our actual experience may
vary significantly from our estimates. If the financial condition of our clients were to deteriorate, resulting in
their inability or unwillingness to pay our fees, or the bankruptcy court requires us to refund certain fees that
were previously unanticipated, we may need to record additional allowances or write-offs in future periods. This
risk is mitigated to the extent that we may receive retainers from some of our clients prior to performing
significant services, primarily in the Corporate Finance/Restructuring and Strategic Communications segments.

We record an allowance for unbilled services to reflect anticipated fee and discretionary pricing adjustments
when they become known, prior to billing the client. Revenues recognized, but not yet billed to clients, have been
recorded as unbilled receivables in the consolidated balance sheets.

The provision for unbilled services is recorded as a reduction to revenues to the extent the provision relates
to fee adjustments, estimates of fee reductions that may be imposed by bankruptcy courts and other discretionary
pricing adjustments. The provision for doubtful accounts relates to a client’s inability or unwillingness to make
required payments, and is recorded as bad debt expense which we classify within selling, general and
administrative expense. Bad debt expense totaled $22.5 million, $11.8 million and $8.6 million in 2008, 2007
and 2006, respectively.

Goodwill and Other Intangible Assets. In accordance with SFAS No. 142, Goodwill and Other Intangible

Assets (SFAS 142), we test our goodwill and other indefinite lived intangible assets for impairment at least
annually or more frequently if events or changes in circumstances indicate that this asset may be impaired. We
account for our acquisitions under the purchase method of accounting pursuant to SFAS No. 141, “Business
Combinations”. Goodwill represents the purchase price of acquired businesses in excess of the fair market value
of net assets acquired. Other intangible assets include trade names, customer relationships, contract backlog,
non-competition agreements and software.

We test our goodwill using a fair value approach at the reporting unit level. A reporting unit is the operating

segment, or a business one level below that operating segment if discrete financial information is prepared and
regularly reviewed by segment management. When available and as appropriate, we use comparative market
multiples to establish fair values. If comparable market multiples are not available, we estimate fair value using
discounted cash flows.

45

We assess the impairment of our intangible assets whenever events or changes in circumstances indicate

that the carrying value may not be recoverable. Factors we consider important that could trigger an impairment
review include the following:

•

•

•

•

significant underperformance relative to expected historical or projected future operating results;

a significant change in the manner of our use of the acquired asset or the strategy for our overall
business;

a significant negative industry or economic trend; and or

our market capitalization relative to net book value.

As of December 31, 2008, we concluded that our goodwill and other intangible assets were not impaired.

During the fourth quarter of 2008 and the through the first two weeks of February 2009, our average stock price
declined as compared to the average trading price during the first three quarters of 2008. We attribute the recent
stock price decline primarily to industry-wide factors and general market conditions. Our market value per share
continues to trade in a range that significantly exceeds our book value per share.

SFAS 142 also requires that intangible assets with definite lives be amortized over their estimated useful

lives and reviewed for impairment whenever events or changes in circumstances indicate an asset’s carrying
value may not be recoverable in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. We amortized our acquired intangible assets on a straight-line basis with definite lives over
periods ranging primarily from 5 to 15 years.

Share-Based Compensation. Effective January 1, 2006, we adopted FASB Statement No. 123(R) and began

to recognize expense in our statement of operations associated with all share-based awards based on the fair
value of the award as of the grant date. SFAS No. 123(R) requires that the cost resulting from all share-based
compensation arrangements, such as our stock option and restricted stock plans, be recognized in the financial
statements based on their grant date fair value. Under the fair value recognition requirements of SFAS No.
123(R), share-based compensation cost is recognized as expense over the requisite service or performance period
of the award. We have elected to use the Black-Scholes pricing model to determine the fair value of stock options
on the dates of grant, consistent with that used for pro forma disclosures under SFAS No. 123. Restricted stock is
measured based on the fair market values of the underlying stock on the dates of grant. The Black-Scholes
pricing model requires, various highly judgmental assumptions including volatility and expected option life. The
expected volatility and expected life are based on our historical experience. We must also make assumptions
regarding the risk-free interest rate and the expected dividend yield. The risk-free interest rate is based on U.S.
Treasury interest rates whose term is consistent with the expected life of the share-based award. The dividend
yield on our common stock is assumed to be zero since we do not pay dividends and have no current plans to do
so in the future. In addition, we are required to estimate the expected forfeiture rate and only recognize expense
for those shares expected to vest. We estimate the forfeiture rate based on historical experience. To the extent our
actual forfeiture rate is different from our estimate, stock-based compensation expense is adjusted accordingly.
Stock-based compensation awards may also be issued in connection with the achievement of certain performance
targets. We review the likelihood of required performance achievements on a periodic basis and will adjust
compensation expense on a prospective basis to reflect any change in estimate to properly reflect compensation
expense over the remaining balance of the service or performance period. If factors change and we employ
different assumptions in the application of Statement No. 123(R) in future periods, the compensation expense
that we record may differ significantly from what we have recorded in the current period.

Income Taxes. Our income tax provision consists principally of federal, state and international income

taxes. We generate income in a significant number of states located throughout the U. S. as well as several
foreign countries. Our effective income tax rate may fluctuate due to a change in the mix of earnings between
higher and lower state or country tax jurisdictions and the impact of non-deductible expenses. Additionally, we
record deferred tax assets and liabilities using the asset and liability method of accounting which requires us to

46

measure these assets and liabilities using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse. We have not recorded any significant valuation allowances on our deferred tax assets as
we believe the recorded amounts are more likely than not to be realized. If the assumptions used in preparing our
income tax provision differ from those used in the preparation of our income tax return, we may experience a
change in our effective income tax rate for the year.

Significant New Accounting Pronouncements

In November 2008, the Emerging Issues Task Force (EITF) affirmed the consensus-for-exposure on Issue

No. 08-7, “Accounting for Defensive Intangible Assets” as a consensus with certain revisions (EITF Issue
No. 08-7). EITF Issue No. 08-7 states that a defensive intangible asset should be accounted for as a separate unit
of accounting at acquisition, not combined with the acquirer’s recognized or unrecognized intangible assets. In
addition, it states that a defensive intangible asset should be assigned a useful life that reflects the entity’s
consumption of the expected benefits related to the asset. This Issue will be applied prospectively for intangible
assets acquired on or after the beginning of the first annual reporting period beginning on or after December 15,
2008, in order to coincide with the effective date of FASB Statement No. 141(R), “Business Combinations,”
discussed below. To the extent that we acquire defensive intangible assets, they will be assigned a useful life and
amortized in accordance with this guidance. Currently, we do not own any defensive intangible assets.

In May 2008, the FASB issued FSP No. APB 14-1, “Accounting for Convertible Debt Instruments that May

be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (FSP APB 14-1). FSP APB 14-1
requires issuers of convertible debt instruments that may be settled in cash upon conversion (including partial
cash settlement) to separately account for the liability and equity (conversion feature) components of the
instruments. As a result, interest expense should be imputed and recognized based upon the entity’s
nonconvertible debt borrowing rate, which will result in lower net income. Our 3 3⁄4% convertible senior
subordinated notes due 2012 issued in August 2005 will be subject to FSP APB 14-1. Prior to FSP APB 14-1,
Accounting Principles Board Opinion No. 14, “Accounting for Convertible Debt and Debt Issued with Stock
Purchase Warrants” (APB 14), provided that no portion of the proceeds from the issuance of the instruments
should be attributable to the conversion feature. Upon retroactive adoption of FSP APB 14-1 in 2009, interest
expense for 2007 and 2008 will increase by $3.9 million and $4.2 million, respectively. This will result in an
after tax reduction in diluted earnings per common share of approximately $0.05 in both 2007 and 2008. In
addition, the carrying amount of the 3 3⁄4% convertible senior notes will be retroactively adjusted to reflect a
discount of $31.3 million on the date of issuance, with an offsetting increase in additional paid-in capital of $18.4
million and deferred tax liability of $12.9 million.

In April 2008, the FASB issued a final FSP FAS 142-3, “Determination of the Useful Life of Intangible

Assets” (FSP FAS 142-3), which amends the factors that should be considered in developing renewal or
extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement
142, “Goodwill and Other Intangible Assets” (SFAS 142). FSP FAS 142-3 will be effective for fiscal years
beginning after December 15, 2008 and interim periods within those fiscal years and is not expected to have an
impact on our consolidated financial statements.

In March 2008, the Financial Accounting Standards Board (FASB) issued Statement 161, “Disclosures

about Derivatives and Hedging Activities” (Statement No. 161), which amends FASB Statement No. 133,
“Accounting for Derivative Instruments and Hedging Activities”, by requiring expanded disclosures about an
entity’s derivative instruments and hedging activities for increased qualitative, quantitative and credit risk
factors. As Statement No. 161 only contains disclosure provisions, it will not impact our accounting for
derivative transactions. Statement No. 161 will be effective for fiscal years beginning after November 15, 2008
and interim periods within those fiscal years.

In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements” (Statement No. 157).

Statement No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosure

47

requirements regarding fair value measurements. Statement No. 157 does not require any new fair value
measurements. However, on February 12, 2008, the FASB issued FASB Staff Position No. FAS 157-2,
“Effective Date of FASB Statement No. 157” (FSP FAS 157-2). FSP FAS 157-2 delays the effective date of
Statement No. 157 for all nonfinancial assets and nonfinancial liabilities until fiscal years beginning after
November 15, 2008 and interim periods within those fiscal years. The market participant and exit price approach
to valuing nonfinancial assets detailed in Statement No. 157 may impact the values that we assign to nonfinancial
assets in future business combinations and may also impact the fair value used in the assessment of goodwill and
intangible asset impairment in future years.

In December 2007, the FASB issued Statement No. 141 (revised 2007), “Business Combinations”

(Statement No. 141(R)), which replaces FASB Statement No. 141. Statement No. 141(R) establishes principles
and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. The
Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial
effects of the business combination. Statement No. 141(R) applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after
December 15, 2008, and interim periods within those fiscal years. We are required to adopt Statement
No. 141(R) as of our fiscal year beginning January 1, 2009. The key changes in accounting dictated by Statement
141(R) which will affect the accounting for future acquisitions include:

•

•

•

•

the recognition of transaction costs related to a business combination in current period earnings rather
than as a capitalized component of the purchase price;

the recognition of the fair value of contingent consideration at the acquisition date rather than when the
contingency is determinable beyond a reasonable doubt;

the subsequent adjustment to fair value at each reporting date of any contingent consideration
recognized with an offset to current period earnings; and

the subsequent adjustment to deferred tax asset valuation allowances and income tax uncertainties after
the acquisition date will be recognized in current period earnings.

In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated

Financial Statements, an amendment of ARB No. 51” (Statement No. 160). The standard changes the accounting
for noncontrolling (minority) interests in consolidated financial statements including the requirements to classify
noncontrolling interests as a component of consolidated stockholders’ equity, to identify earnings attributable to
noncontrolling interests reported as part of consolidated earnings, and to measure gain or loss on the
deconsolidated subsidiary based upon the fair value of the noncontrolling equity investment. Additionally,
Statement No. 160 revises the accounting for both increases and decreases in a parent’s controlling ownership
interest. Statement No. 160 is effective for fiscal years beginning after December 15, 2008, with early adoption
prohibited.

48

RESULTS OF OPERATIONS

Segment and Consolidated Operating Results:

Year Ended December 31,

2008

2007
(in thousands, except per share amounts)

2006

Revenues

Corporate Finance/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forensic and Litigation Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . .
Strategic Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 374,504
253,918
224,481
220,359
219,883

$ 261,625
217,028
185,333
162,837
174,447

$212,617
193,287
40,708
117,230
144,091

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,293,145

$1,001,270

$707,933

Operating income

Corporate Finance/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forensic and Litigation Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . .
Strategic Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 108,013
52,118
47,287
58,090
55,123

$

70,412
53,135
42,893
55,053
42,861

$ 48,270
51,671
12,989
41,549
30,811

Segment operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated corporate expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

320,631
(81,973)
—

264,354
(77,344)
—

185,290
(56,136)
(22,972)

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

238,658

187,010

106,182

Other income (expense)

Interest income and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation settlement losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income before income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,685
(41,051)
(661)

(33,027)

205,631
80,196

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 125,435

Earnings per common share — basic . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings per common share — diluted . . . . . . . . . . . . . . . . . . . . . . . . . .

$
$

2.55
2.34

7,639
(43,857)
(1,002)

2,119
(28,949)
(187)

(37,220)

(27,017)

149,790
57,669

79,165
37,141

92,121

$ 42,024

2.14
2.00

$
$

1.06
1.04

$

$
$

Reconciliation of Operating Income to EBITDA:

Year Ended December 31,

2008

2007

2006

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: amortization of other intangible assets . . . . . . . . . . . . . . . . . . .
Litigation settlement losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$238,658
26,037
18,824
(661)

(in thousands)
$187,010
19,351
10,615
(1,002)

$106,182
13,197
11,175
(187)

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: special charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

282,858
—

215,974
—

130,367
22,972

Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$282,858

$215,974

$153,339

49

Year Ended December 31, 2008 compared to December 31, 2007

Revenue

Revenues increased $291.9 million or 29.2% to $1.3 billion in 2008 from $1.0 billion in 2007. Revenue
growth from acquisitions was approximately $118.5 million, or 11.8%. Organic revenue growth was $173.4
million, or 17.4%. Acquisition growth included the revenue from the sixteen businesses acquired in 2008 by the
Corporate Finance/Restructuring, Forensic and Litigation Consulting, Technology and Strategic Communications
segments as well as a partial year’s revenue from six businesses acquired by the Strategic Communications
segment in 2007. The organic revenue growth was led by the Corporate Finance/Restructuring and Economic
Consulting segments, both of which are benefiting directly and indirectly from the current economic and
financial challenges and revenue growth from the Technology segment, driven by large product liability
engagements in 2008. See “Segment Results” for an expanded discussion of segment revenue.

Segment Operating Income

Segment operating income increased $56.2 million, or 21.3%, to $320.6 million in 2008 from $264.4
million in 2007 including growth from acquisitions of $12.2 million, or 4.6%. Four of our segments improved
versus the prior year, led by strong revenue performance within the Corporate Finance/Restructuring and
Economic Consulting segments. Forensic and Litigation Consulting operating income was relatively flat to the
prior year, impacted by a slowdown in the second half of the year and higher short-term costs related to
acquisition integration. Segment SG&A expense increased by $70.2 million to $248.1 million or 19.2% of
revenues in 2008 as compared to $177.9 million or 17.8% of revenue in 2007, including acquired company
SG&A, higher investment in research and development costs to support our Technology business, higher
infrastructure support and facility costs to support our organic growth and slightly higher bad debt expense at
1.7% of revenue in 2008 versus 1.2% of revenue in 2007.

Amortization expense, a component of operating income increased by $8.2 million to $18.8 million versus

$10.6 million in 2007 as a result of newly acquired amortizable intangible assets, including customer
relationships, software, and non-competition agreements for our sixteen acquired businesses.

See “Segment Results” for an expanded discussion of segment operating income.

Unallocated Corporate Expenses

Unallocated corporate expenses increased $4.7 million, or 6.0%, to $82.0 million in 2008 from $77.3

million in 2007. The increase was primarily due to the following:

• Net compensation cost increased $1.7 million primarily due to the hiring of additional corporate

employees to support our growing organization;

•

Professional services increased $1.4 million primarily due to transaction related expenses, partially
offset by lower legal services related to the global tax planning initiative completed in 2007; and

• Rent and occupancy expenses increased $1.2 million primarily due to expansion of our corporate

facilities to support our growing organization.

Interest Income and Other

Interest income and other increased $1.1 million, to $8.7 million in 2008 from $7.6 million in 2007. The

increase is primarily due to a net foreign exchange gain of $1.8 million largely related to the remeasurement of
our British pound denominated debt and liabilities on U.S. entities and U.S. dollar cash balances held by foreign
entities. These gains were partially offset by the remeasurement of U.S. dollar denominated intercompany
payables on foreign entities.

50

Interest expense

Interest expense decreased $2.8 million, to $41.1 million in 2008 from $43.9 million in 2007. The decrease
was primarily due to the favorable impact of lower interest rates on our variable interest rate hedge contracts and
slightly lower debt balances in 2008.

Income tax provision

Our effective tax rate for 2008 increased to 39.0 % from 38.5% in 2007. The increase in rate is primarily
due to a non-recurring benefit that was recognized in 2007 related to a change in our international tax structure
that reduced the amount of foreign earnings that will be subject to U.S. federal income tax.

Year Ended December 31, 2007 compared to December 31, 2006

Revenue

Revenues for 2007 increased $293.3 million, or 41.4%, to $1.0 billion in 2007 from $0.7 billion in 2006.
Revenue growth from acquisitions was approximately $157.4 million, or 22.2%. Organic revenue growth was
$135.9 million or 19.2%. Organic revenue growth was lead by the Corporate Finance/Restructuring and
Technology segments, followed by the Economic Consulting segment. The Corporate Finance/Restructuring
segment revenue growth was driven by an increase in transaction advisory and healthcare consulting revenue.
Organic revenue growth in the Technology segment was driven by accelerating global demand for e-discovery
software and professional services coupled with high processing volumes related to investigations, antitrust
matters and product liability engagements. The growth in Economic Consulting revenue was driven by
consulting associated with several large antitrust engagements and mergers and acquisitions. See “Segment
Results” for an expanded discussion of segment revenue.

Segment Operating Income

Segment operating income increased $79.1 million, or 42.7%, to $264.4 million in 2007 from $185.3

million in 2006. Segment operating income growth from acquisitions was $37.6 million, or 20.3%. Organic
operating income growth was $41.5 million, or 22.4%. Organic operating income growth was lead by the
Corporate Finance/Restructuring segment, followed by the Technology and Economic Consulting segments. See
“Segment Results” for an expanded discussion of segment operating income.

Unallocated Corporate Expenses

Unallocated corporate expenses increased $21.2 million, or 37.8%, to $77.3 million in 2007 from $56.1

million in 2006. The increase was primarily due to the following:

•

•

•

Salaries, bonuses and benefits increased $7.6 million primarily as a result of hiring additional corporate
employees to support our growing organization;

Stock based compensation expense increased $3.9 million as a result of an increase in the amount of
stock-based incentives that were awarded in March 2007, the acceleration of certain market-based
awards and the increase in participation in our employee stock purchase plan;

Professional services increased $3.8 million due primarily to the expense associated with legal, tax and
other external consulting services related to our global tax planning initiative completed during the
year, and our continuing efforts to upgrade our accounting and reporting systems to more efficiently
handle the complex reporting needs of an international organization;

• Travel, meals and entertainment expense increased $2.9 million primarily related to the increase in

corporate travel; and

• Marketing expense increased $2.0 million related to activities to promote our organization.

51

Special Charges

During the third quarter of 2006 we recorded special charges totaling $23.0 million. The charges reflect

actions we took to address certain underperforming operations. In particular we restructured our corporate
finance UK operations and consolidated certain of our non-core practices in the U.S., primarily through
reductions in workforce. The charges consisted of:

•

$22.1 million of severance and other contractual employee related costs associated with the reduction
in workforce, including $0.6 million related to the accelerated vesting of share-based awards; and

• A $0.9 million non-cash intangible impairment charge associated with the contract backlog we

acquired in May 2005 in connection with our acquisition of Cambio.

These actions had the impact of reducing total headcount by 61, including 51 of our revenue-generating
professionals. We reduced the number of revenue-generating professionals by 11 in our Forensic and Litigation
Consulting segment, by 21 in our Corporate Finance/Restructuring segment and by 19 in our Economic
Consulting segment. We expect to make cash payments in connection with the reduction in workforce through
2009.

Special charges by segment for the year ended December 31, 2006 were as follows:

(in thousands)

Forensic and Litigation Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Finance/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2006

$ 9,890
7,740
4,148
1,194

Total Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$22,972

Interest Income and Other

Interest income and other increased $5.5 million, to $7.6 million in 2007 from $2.1 million in 2006. Interest
income on forgivable loans accounted for $3.1 million of the increase. Interest forgiven related to loans made to
employees under our senior managing director incentive compensation program was reclassified from interest
income to compensation expense in 2007. This reclassification had no impact on our pre-tax income, net income
or earnings per share; however, it did result in an increase in direct costs of revenues and interest income in 2007.
In addition, interest income increased $2.5 million in due to higher cash and cash equivalent balances available
for investment in 2007. The additional interest earned on cash and cash equivalents was due to the investment of
the proceeds from the public stock offering in the fourth quarter of 2007.

Interest Expense

Interest expense increased $14.9 million to $43.9 million in 2007 from $28.9 million in 2006. The increase

was primarily due to the issuance of $215 million in principal amount 7 3⁄4% notes in October 2006.

Income tax provision

Our effective tax rate decreased from 46.9% in 2006 to 38.5% in 2007. Approximately one-third of the rate
decrease was attributable to the implementation of a tax planning strategy that substantially reduced the amount
of foreign earnings that were subject to U. S. federal income tax. The balance of the decrease was due to a
reduction in state income taxes, primarily due to legislative changes and a decrease in nondeductible expenses as
a percentage of pre-tax income.

52

SEGMENT RESULTS

Segment EBITDA

We evaluate the performance of our operating segments based on operating income excluding depreciation,

amortization of other intangible assets, special charges, unallocated corporate expenses and including
non-operating litigation settlement gains and losses, which we refer to as “segment EBITDA.” Segment EBITDA
consists of the revenues generated by that segment, less the direct costs of revenues and selling, general and
administrative costs that are incurred directly by that segment as well as an allocation of certain centrally
managed costs, such as information technology services, accounting, marketing and facility costs. Although
segment EBITDA is not a measure of financial condition or performance determined in accordance with
generally accepted accounting principles, we use it to evaluate and compare the operating performance of our
segments and it is one of the primary measures used to determine employee incentive compensation. Unallocated
corporate expenses include costs related to centrally managed administrative functions which have not been
allocated to the segments. These administrative costs include corporate office support costs, human resources,
legal, company-wide business development functions, as well as costs related to overall corporate management.
In addition, certain accounting and information technology costs are unallocated.

Segment operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: amortization of other intangible assets . . . . . . . . . . . . . . . . . . . . . . .
Less: Non-operating litigation settlement losses, net . . . . . . . . . . . . . . . . . . . . .

$320,631
20,342
18,824
(436)

(in thousands)
$264,354
14,582
10,615
(798)

$185,290
9,101
11,175
(735)

Total Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$359,361

$288,753

$204,831

Year Ended December 31,

2008

2007

2006

Other Segment Operating Data

Year Ended December 31,

2008

2007

2006

Number of revenue-generating professionals: (at period end)

Corporate Finance/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forensic and Litigation Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Strategic Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

669
639
592
359
264

406
430
538
344
236

322
388
424
256
206

Total revenue-generating professionals . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,523

1,954

1,596

Utilization rates of billable professionals: (1)

Corporate Finance/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forensic and Litigation Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75%
70%
83%

80%
75%
85%

77%
78%
80%

Average billable rate per hour: (2)

Corporate Finance/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forensic and Litigation Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 434
340
446

$ 409
321
412

$ 400
305
386

(1) We calculate the utilization rate for our billable professionals by dividing the number of hours that all of our
billable professionals worked on client assignments during a period by the total available working hours for
all of our billable professionals during the same period, assuming a 40-hour work week and a 52-week year.
Available working hours include vacation and professional training days, but exclude holidays. Utilization

53

rates are presented for our segments that primarily bill clients on an hourly basis. Where presented,
utilization is based on a 2,032 hour year. We have not presented a utilization rate for our Technology
segment and Strategic Communications segment as most of the revenues of these segments are not
generated on an hourly basis.

(2) For engagements where revenues are based on number of hours worked by our billable professionals,

average billable rate per hour is calculated by dividing revenues for a period by the number of hours worked
on client assignments during the same period. We have not presented an average billable rate per hour for
our Technology segment and Strategic Communications segment as most of the revenues of these segments
are not generated on an hourly basis.

CORPORATE FINANCE/RESTRUCTURING

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses:

Direct cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expense . . . . . . . . . . . . . . . . .
Amortization of other intangible assets . . . . . . . . . . . . . . . . . . . . .

Segment operating income . . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation settlement losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: depreciation and amortization of intangible assets . . . .
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,

2008

2007

2006

(dollars in thousands, except rate per hour)
$212,617
$261,625
$374,504

208,170
54,759
3,562

266,491

108,013
—
6,165

149,955
41,096
162

191,213

70,412
(526)
1,743

126,160
35,536
2,651

164,347

48,270
(730)
3,974

$114,178

$ 71,629

$ 51,514

Gross profit margin (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment EBITDA as a percent of revenues . . . . . . . . . . . . . . . . . . . . . .
Number of revenue generating professionals (at period end) . . . . . . . .
Utilization rates of billable professionals . . . . . . . . . . . . . . . . . . . . . . . .
Average billable rate per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

44.4%
30.5%
669
75%
434

$

42.7%
27.4%
406
80%
409

$

40.7%
24.2%
322
77%
400

$

(1) Revenues net of direct costs, as a percentage of revenues

Year ended December 31, 2008 compared to December 31, 2007

Revenues increased $112.9 million, or 43.1%, to $374.5 million in 2008 from $261.6 million in 2007.
Revenue growth from acquisitions was approximately $33.1 million, or 12.6%. Our 2008 acquisitions were
primarily focused on the addition of a general advisory real estate subpractice. Organic revenue growth was
$79.8 million, or 30.5%. Excluding the estimated impact of foreign currency translation of $2.3 million, which
was primarily due to the weakening of the British pound relative to the U.S. dollar, organic revenue growth
would have been approximately 31.4%. The demand for restructuring consulting was strong in 2008 due to
continued instability in the sub-prime mortgage, automotive, monoline insurers, financial institution and housing
related markets. The key drivers of the organic revenue growth were an increase in chargeable hours due to the
addition of approximately 100 revenue generating professionals in 2008 and to a lesser extent bill rate increases
that went into effect in the first quarter of 2008. While professional staff utilization increased for much of the
segment, a decline in utilization in our Transaction Advisory and our general advisory Real Estate subpractices
caused by the market dislocation in the latter half of 2008 resulted in a year over year decline in the total segment
utilization rate.

Gross profit margin increased 1.7 percentage points to 44.4% in 2008 from 42.7% in 2007. The

improvement in gross profit margin was primarily due to a higher level of success fees and improved leverage
from a favorable staff mix in 2008.

54

Selling, general and administrative (SG&A) expense increased $13.7 million to $54.8 million in 2008 from

$41.1 million in 2007. As a percentage of revenue, SG&A was 14.6% in 2008, down favorably from 15.7% in
2007. The increase in SG&A expense in 2008 was primarily due to $7.0 million from businesses acquired in
2008, higher travel expenses and facility costs and higher bad debt expense, at 1.8% of revenue versus 1.6% in
the prior year.

Amortization expense increased by $3.4 million in 2008 to $3.6 million from $0.2 million in 2007. The
increase in amortization expense was primarily due to the amortization of intangible assets acquired in a business
combination completed in the second quarter of 2008.

Segment EBITDA increased $42.6 million, or 59.4%, to $114.2 million in 2008 from $71.6 million in 2007.

Acquisitions accounted for approximately $6.8 million of the increase. The remaining increase in segment
EBITDA was primarily due to organic revenue growth at improved margins. Segment EBITDA as a percent of
revenues improved 3.1 percentage points to 30.5% in 2008 from 27.4% in 2007. Segment EBITDA as a percent
of revenues improved due to a higher gross profit margin in 2008 and a decrease in SG&A expense as a percent
of revenues.

Year Ended December 31, 2007 compared to December 31, 2006

Revenues increased $49.0 million, or 23.0%, to $261.6 million in 2007 from $212.6 million in 2006. All of

the revenue growth in 2007 was organic revenue growth. Revenue growth was primarily due to increased
revenue from our transaction advisory services and healthcare sub-practices.

Gross profit margin increased 2.0 percentage points to 42.7% in 2007 from 40.7% in 2006. The increase in

gross profit margin was due to an improvement in the Corporate Finance marketplace which resulted in increased
revenue and improved leverage. In addition, we realized the benefit of certain actions we took in the third quarter
of 2006 to restructure our underperforming operations.

SG&A expense increased $5.6 million to $41.1 million in 2007 from $35.5 million in 2006. The primary

drivers of the increase were a $1.8 million increase in recruiting costs, a $1.8 million increase in bad debt
expense and a $1.5 million increase in rent and occupancy costs.

Segment EBITDA increased $20.1 million, or 39.0%, to $71.6 million in 2007 from $51.5 million in 2006.

This increase was primarily due to revenue growth at improved gross profit margins. Segment EBITDA as a
percent of revenue improved 3.2 percentage points to 27.4% in 2007 from 24.2% in 2006. This increase was the
result of a higher gross profit margin in 2007 and a decrease in SG&A expense as a percent of revenues.

The number of revenue-generating professionals increased by 84 over 2006, due to hiring associated with

the increased demand for our services. The average billable rate per hour increased as a result of billing rate
increases that went into effect in January 2007, along with a change in staff mix working on engagements. Senior
management within the segment had increased billable hours in 2007 as compared to 2006, which increased the
overall average billable rate.

55

FORENSIC AND LITIGATION CONSULTING

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating expenses:

Direct cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expense . . . . . . . . . . . . . . . . .
Amortization of other intangible assets . . . . . . . . . . . . . . . . . . . . .

Segment operating income . . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation settlement losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: depreciation and amortization of intangible assets . . . .

Year Ended December 31,

2008

2007

2006

(dollars in thousands, except rate per hour)
$193,287
$217,028
$253,918

148,310
50,597
2,893

201,800

52,118
—
5,375

119,282
42,509
2,102

163,893

53,135
(175)
4,332

104,091
35,740
1,785

141,616

51,671
(5)
3,640

Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 57,493

$ 57,292

$ 55,306

Gross profit margin (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment EBITDA as a percent of revenues . . . . . . . . . . . . . . . . . . . . . .
Number of revenue generating professionals (at period end) . . . . . . . .
Utilization rates of billable professionals (2) . . . . . . . . . . . . . . . . . . . . .
Average billable rate per hour (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

41.6%
22.6%
639
70%
340

$

45.0%
26.4%
430
75%
321

$

46.1%
28.6%
388
78%
305

(1) Revenues net of direct costs, as a percentage of revenues

(2) The calculation for utilization and average billable rate per hour excludes the impact of revenue billed on an

other than time and materials basis and the impact of certain newly acquired businesses.

Year Ended December 31, 2008 compared to December 31, 2007

Revenues increased $36.9 million, or 17.0%, to $253.9 million in 2008 from $217.0 million in 2007.

Revenue growth from acquisitions was approximately $31.2 million, or 14.4%. Our acquisitions were focused on
expansion both domestically and internationally of our existing lines of business, primarily in construction
services, investigations and forensic accounting. Organic revenue growth was $5.7 million, or 2.6%. Organic
revenue growth from our North American consulting practice was approximately $5.8 million with continued
strength in both investigation and dispute driven projects for regulated industries (e.g. pharmaceutical, healthcare
and insurance). Organic revenue growth from our Latin American Investigations business was approximately
$4.9 million due to global demand for our Foreign Corrupt Practices Act investigations, general fraud
investigations and business intelligence services. Our construction services group had organic revenue growth of
approximately $3.8 million due to additional headcount and higher utilization. Offsetting this revenue growth
was a decline in organic revenue from Trial Services of approximately $6.0 million. Utilization is down
significantly in Trial Services as a result of fewer large litigation matters in 2008 prompted by the current
economic environment. In addition, our Asia Pacific practice has experienced a decline in organic revenue of
approximately $2.8 million. Our financial institution clients have been impacted by the U.S. economic downturn
and credit crisis resulting in less investigative due diligence work in Asian markets.

The number of revenue generating professionals increased by 209 in 2008 primarily due to professionals

added as a result of acquisitions. The average billable rate per hour increased due to yearly billing rate increases
that took place in September 2007 and September 2008 and some slight effect of a differing mix of professionals
utilized.

Gross profit margin decreased by 3.4 percentage points to 41.6% in 2008 from 45.0% in 2007. Acquisitions
contributed 1.5 percentage points to the decline due to higher short term integration expenses, including facility

56

costs and retention payments. In addition, market pressures in Asia Pacific and Europe similar to those
experienced in the U.S. impacted these acquired businesses. The gross profit margin on our legacy business
declined approximately 1.9 percentage points in 2008 primarily due to lower utilization.

SG&A expense increased $8.1 million to $50.6 million in 2008, from $42.5 million in 2007. As a

percentage of revenue, SG&A was almost flat at 19.9% compared to 19.6% in 2008 and 2007, respectively. The
increase in SG&A expense in 2008 was primarily due to $6.5 million from businesses acquired in 2008, and
higher bad debt expense at 2.0% of revenue versus 1.6% in the prior year.

Segment EBITDA increased $0.2 million, or 0.4%, to $57.5 million in 2008 from $57.3 million in 2007.
Acquisitions accounted for an increase in EBITDA of approximately $3.2 million. The remaining $3.0 million
decrease in segment EBITDA was primarily due the lower gross profit margin in 2008. Segment EBITDA as a
percent of revenues decreased 3.8 percentage points to 22.6% in 2008 from 26.4% in 2007 due to the lower gross
profit margin in 2008 and acquisition integration costs.

Year Ended December 31, 2007 compared to December 31, 2006

Revenues increased $23.7 million, or 12.3%, to $217.0 million in 2007 from $193.3 million in 2006. The
primary driver of revenue growth in 2007 was additional revenue from acquired businesses, which accounted for
approximately $21.1 million of the revenue growth year-over-year. During 2007, we experienced a decline in
active large complex litigation matters and governmental and regulatory investigations which weakened demand
for our forensic accounting and litigation services. Strong client demand for our business intelligence and
investigative services partially offset this impact.

The number of revenue-generating professionals increased by 42 over 2006, with approximately 40
professionals added as a result of acquisitions. The average billable rate per hour increased due to yearly billing
rate increases that took effect in September 2006 and 2007.

Gross profit margin decreased 1.1 percentage points to 45.0% in 2007 from 46.1% in 2006. The decrease in
gross profit margin was primarily the result of the implementation of a comprehensive long-term incentive plan
to promote the retention of senior managing directors, which resulted in an increase in share-based compensation
and forgivable loan expense in 2007.

SG&A expense increased $6.8 million to $42.5 million in 2007 from $35.7 million in 2006. SG&A expense
from acquisitions was $3.7 million. Excluding the impact of acquisitions, SG&A expense increased $3.1 million
primarily due to higher occupancy costs in 2007.

Segment EBITDA increased $2.0 million, or 3.6%, to $57.3 million in 2007 from $55.3 million in 2006.
Acquisitions accounted for approximately $6.4 million of the increase. Excluding acquisitions, segment EBITDA
decreased $4.4 million due to a lower gross profit margin in 2007 and an increase in SG&A expense driven by
higher occupancy costs. Segment EBITDA as a percent of revenue decreased 2.2 percentage points to 26.4% in
2007, from 28.6% in 2006. The growth of SG&A expenses at a greater rate than revenue growth in 2007, coupled
with a lower gross profit margin, caused a decline in Segment EBITDA as a percent of revenue in 2007.

57

STRATEGIC COMMUNICATIONS

Year Ended December 31,

2008

2007

2006 (2)

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating expenses:

Direct cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expense . . . . . . . . . . . . . . . . . . . . .
Amortization of other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . .

Segment operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation settlement losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: depreciation and amortization of intangible assets . . . . . . . .

$224,481

(dollars in thousands)
$185,333

$40,708

125,150
46,980
5,064

177,194

47,287
(201)
8,078

97,377
41,409
3,654

142,440

42,893
(97)
6,030

18,372
8,610
737

27,719

12,989
—
1,184

Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 55,164

$ 48,826

$14,173

Gross profit margin (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment EBITDA as a percent of revenues . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of revenue generating professionals (at period end) . . . . . . . . . . . .

44.2%
24.6%
592

47.5%
26.3%
538

54.9%
34.8%
424

(1) Revenues net of direct costs, as a percentage of revenues.

(2) The Strategic Communications segment was formed as a result of the acquisition of FD in October 2006.

Year Ended December 31, 2008 compared to December 31, 2007

Revenues increased $39.1 million, or 21.1%, to $224.5 million in 2008 from $185.3 million in 2007.

Revenue growth from acquisitions was approximately $31.3 million, or 16.9%. Organic revenue growth was $7.8
million, or 4.2%. Excluding the estimated impact of foreign currency translation of $8.6 million, which was
primarily due to the weakening of the British pound relative to the U.S. dollar, organic revenue growth would
have been approximately 8.9%. Organic revenue growth was driven by an increase in retained revenues of
approximately $2.7 million (including a growing contribution from offices outside of the core UK and U.S.
operations) and an increase in direct costs passed through to clients of approximately $4.0 million. Project based
revenue increased approximately $1.1 million from the prior year. The decline in the M&A activity and collapse
in the IPO markets, particularly in the UK and Ireland, resulted in less project based capital markets work in
2008. However, the decline in M&A work was offset by our engagement on a series of major financial crisis
management projects during the year.

Gross profit margin decreased 3.3 percentage points to 44.2% in 2008 from 47.5% in 2007. Excluding the

impact of acquisitions, which positively impacted the gross profit margin by approximately 1.1 percentage
points, the decline in gross profit margin was due to a combination of the decline in higher margin capital
markets projects as a proportion of total revenue, an increase in lower margin pass through revenues as a
proportion of total revenue and higher employee related expenses.

SG&A expense increased $5.6 million to $47.0 million in 2008 from $41.4 million in 2007. As a percentage

of revenue, SG&A was 20.9% in 2008, down favorably from 22.3% in 2007. The increase in SG&A expense in
2008 was primarily due to $5.0 million from businesses acquired in 2008. Excluding the impact of acquisitions,
SG&A expense increased $0.6 million, including a positive impact from foreign currency translation of
approximately $2.4 million. The increase before the impact of foreign currency translation included a $1.7
million provision for the settlement of a litigation case related to the bankruptcy of a past client, and higher
facility costs and slightly higher bad debt expense, at 0.9% of revenue versus 0.6% in the prior year.

58

Amortization of intangible assets increased $1.4 million to $5.1 million in 2008 from $3.7 million in 2007.

The increase in amortization expense was primarily due to the amortization of intangible assets acquired in
business combinations completed in 2008 and the second half of 2007.

Segment EBITDA increased $6.3 million, or 13.0%, to $55.2 million in 2008 from $48.8 million in 2007.
Segment EBITDA from acquisitions was approximately $11.2 million. Excluding acquisitions, segment EBITDA
declined $4.9 million due to a lower gross profit margin in 2008 and the negative impact of foreign currency
translation of approximately $1.5 million. Segment EBITDA as a percent of revenues decreased 1.7 percentage
points to 24.6% in 2008 from 26.3% in 2007. Acquisitions and SG&A expense reductions positively impacted
Segment EBITDA as a percent of revenues, partially offsetting the impact of a lower gross profit margin on
organic revenues and the provision for the settlement of a litigation case.

The number of revenue generating professionals increased by 54 over 2007, with approximately 67

professionals added as a result of acquisitions.

Year Ended December 31, 2007 compared to December 31, 2006

The Strategic Communications segment was formed as a result of the acquisition of FD in October 2006.

Due to the timing of the acquisition, the results for the year ended December 31, 2006 are for a three month
period.

Revenues increased $144.6 million, or 355.3%, to $185.3 million in 2007 from $40.7 million in 2006.
Revenue growth from acquisitions was approximately $133.6 million, or 328.2%. Organic revenue growth was
approximately $11.0 million, or 27.1%. The organic revenue growth was due to an increase in project based
revenue related to mergers and acquisitions and initial public offerings and an increase in direct costs passed
through to clients. Fluctuations in exchange rates, primarily due to the weakening of the U.S. dollar relative to
the British pound, accounted for approximately $1.7 million of the organic revenue growth.

Gross profit margin decreased 7.4 percentage points to 47.5% in 2007 from 54.9% in 2006. The decrease in

gross profit margin was primarily due to the timing of the recognition of incentive compensation in 2006 and a
higher level of direct costs passed through to and incurred on behalf of clients in 2007. No incentive
compensation was recorded in the fourth quarter of 2006 per the terms of the acquisition agreement.

SG&A expense increased $32.8 million to $41.4 million in 2007 from $8.6 million in 2006. Acquisitions
accounted for $31.9 million of the increase. Excluding the impact of acquisitions, SG&A expense increased $0.9
million due to an increase in overhead staff and marketing expenses to support the growth in this segment.

Segment EBITDA increased $34.6 million, or 244.5%. to $48.8 million in 2007 from $14.2 million in 2006.

Acquisitions accounted for $36.5 million of the increase. Excluding acquisitions, segment EBITDA decreased
$1.8 million, primarily due to higher incentive compensation in 2007. Correspondingly, segment EBITDA as a
percent of revenues declined by 8.5 percentage points to 26.3% in 2007 from 34.8% in 2006 points primarily due
to the lower gross profit margin in 2007.

The number of revenue-generating professionals increased by 114 over 2006, with approximately 90

professionals added as a result of acquisitions.

59

TECHNOLOGY

Year Ended December 31,

2008

2007

2006

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating expenses:

$220,359

(dollars in thousands)
$162,837

$117,230

Direct cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expense . . . . . . . . . . . . . . . . . . . .
Amortization of other intangible assets . . . . . . . . . . . . . . . . . . . . . . . .

87,659
69,586
5,024

75,619
30,920
1,245

Segment operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation settlement losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: depreciation and amortization of intangible assets . . . . . . .

58,090
(235)
15,651

55,053
—
7,868

162,269

107,784

51,926
22,471
1,284

75,681

41,549
—
5,416

Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 73,506

$ 62,921

$ 46,965

Gross profit margin (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment EBITDA as a percent of revenues . . . . . . . . . . . . . . . . . . . . . . . . .
Number of revenue generating professionals (at period end) . . . . . . . . . . .

60.2%
33.4%
359

53.6%
38.6%
344

55.7%
40.1%
256

(1) Revenues net of direct costs, as a percentage of revenues

Year Ended December 31, 2008 compared to December 31, 2007

Revenues increased $57.5 million, or 35.3%, to $220.4 million in 2008 from $162.8 million in 2007.
Revenue growth from acquisitions was $22.8 million, or 14.0%. Organic revenue growth was $34.7 million, or
21.3%. Organic revenue growth was driven by an increased volume of unit based revenue and other sales in our
software-as-a-service (‘SaaS”) business primarily attributable to product liability engagements. Unit based
revenue is defined as revenue billed on a per item, per page or some other unit based method and includes
revenue from data processing and storage, software usage and software licensing. In the second half of 2008 we
experienced softness in demand for M&A related technology processing services and consulting services and a
decrease in certain fact finding projects as a result of the general economic downturn. In addition, the market’s
demand for increased efficiency in large scale management, processing, review and production of electronically
stored information (ESI) and increased competition has resulted in lower unit based pricing.

Gross profit margins increased by 6.6 percentage points to 60.2% in 2008 from 53.6% in 2007. In 2008, all

R&D expenses were classified as SG&A expense. However, in 2007 approximately $5.3 million of R&D
expense was included under direct costs. On a comparable basis, 2007 gross profit margins would have been
56.8% yielding an increase of 3.4 percentage points from 2007 to 2008. Of this increase, acquisitions accounted
for 1.0 percentage points. The remaining 2.4 percentage point increase was due to favorable impacts from unit
volume increases and a more profitable mix as the business generated proportionally more higher-margin unit-
based revenue, even though impacted by the unfavorable impact of unit-based pricing declines.

SG&A expense increased $38.7 million to $69.6 million in 2008, or 31.6% of revenue in 2008 versus 19.0%

of revenue in 2007. $15.7 million of the increase related to R&D spending in support of our Ringtail® and
Attenex® products. The remaining increase in SG&A included $11.6 million of increased infrastructure spending
to support our growing domestic and international customer base, including investments in customer support,
sales, marketing, human resource and finance functions, $7.9 million related to current year acquisitions, and
$2.3 million of higher bad debt expense at 2.2% of revenue versus 1.3% in the prior year.

60

Amortization of intangible assets increased $3.8 million to $5.0 million in 2008 from $1.2 million in 2007.

The increase in amortization expense was primarily due to the amortization of intangible assets acquired in a
business combination completed in the third quarter of 2008.

Segment EBITDA increased $10.6 million, or 16.8%, to $73.5 million in 2008 from $62.9 million in 2007.
Acquisitions accounted for $3.2 million of the increase in segment EBITDA. The remaining growth in segment
EBITDA was due to revenue growth. Segment EBITDA as a percent of revenues decreased 5.2 percentage points
to 33.4% in 2008 from 38.6% in 2007 primarily due to increased R&D and other SG&A expense as a percent of
revenue in 2008.

Year Ended December 31, 2007 compared to December 31, 2006

Revenues increased $45.6 million, or 38.9%, to $162.8 million in 2007 from $117.2 million in 2006.
Revenue growth from acquisitions was $2.7 million, or 2.3%. Organic revenue growth was $42.9 million, or
36.6%. Organic revenue growth was driven by accelerating global demand for e-discovery software and
professional services coupled with high processing volumes related to investigations, antitrust matters and
product liability engagements. Our investment in a global network operating platform has provided a mechanism
to support growth opportunities servicing international matters in the Far East and Europe, which contributed to
revenue growth in our offshore operations.

Gross profit margin decreased 2.1 percentage points to 53.6% in 2007 from 55.7% in 2006. The decrease in

gross profit margin was primarily the result of entering into a comprehensive incentive compensation plan to
promote the long-term retention of our senior managing directors, which resulted in an increase in share-based
compensation and forgivable loan expense in 2007. Gross profit margin was also impacted by investments in our
global technology infrastructure and delivery platform giving rise to increased depreciation expense.

SG&A expense increased $8.4 million to $30.9 million in 2007 from $22.5 million in 2006. The primary
drivers of the increase in selling, general and administrative expenses were a $4.1 million increase in rent and
occupancy costs and an increase in salaries and benefits, marketing and travel-related expenses related to
domestic and international growth in our segment.

Segment EBITDA increased $15.9 million, or 34.0%, to $62.9 million in 2007 from $47.0 million in 2006.

The increase in segment EBITDA was due to revenue growth. Segment EBITDA as a percent of revenue
decreased 1.5 percentage points to 38.6% in 2007, from 40.1% in 2006. The decrease in segment EBITDA as a
percent of revenue was due to the lower gross profit margin in 2007.

61

ECONOMIC CONSULTING

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating expenses:

Direct cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expense . . . . . . . . . . . . . . . . .
Amortization of other intangible assets . . . . . . . . . . . . . . . . . . . . .

Segment operating income . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: depreciation and amortization of intangible assets . . . .

Year Ended December 31,

2008

2007

2006

(dollars in thousands, except rate per hour)
$144,091
$174,447
$219,883

136,322
26,157
2,281

164,760

55,123
3,897

106,174
21,960
3,452

131,586

42,861
5,224

88,483
20,079
4,718

113,280

30,811
6,062

Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 59,020

$ 48,085

$ 36,873

Gross profit margin (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment EBITDA as a percent of revenues . . . . . . . . . . . . . . . . . . . . . .
Number of revenue generating professionals (at period end) . . . . . . . .
Utilization rates of billable professionals . . . . . . . . . . . . . . . . . . . . . . . .
Average billable rate per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38.0%
26.8%
264
83%
446

$

39.1%
27.6%
236
85%
412

$

38.6%
25.6%
206
80%
386

$

(1) Revenues net of direct costs, as a percentage of revenues

Year ended December 31, 2008 compared to December 31, 2007

Revenues increased $45.4 million, or 26.0%, to $219.9 million in 2008 from $174.4 million in 2007.
Revenue growth was primarily due to improved pricing for our services in 2008, due to billing rate increases in
January 2008 and October 2008 for most of the economic consulting segment. In addition, increased demand for
our services in 2008 prompted an increase of 28 revenue generating professionals which resulted in more
chargeable hours. There was a strong market for antitrust litigation consulting throughout 2008, while strategic
M&A and financial economic consulting experienced high demand in the early part of 2008 and returned to more
normal levels toward the end of the year. Utilization in 2008 was slightly lower than the prior year at 83%.

Gross profit margin decreased 1.1 percentage points to 38.0% in 2008 from 39.1% in 2007. The decrease in

gross profit margin was primarily due to an increase in incentive compensation as a percentage of revenues
which was required to attract and retain key management personnel who are in high demand in the marketplace.

SG&A expense increased $4.2 million to $26.2 million in 2008 from $22.0 million in 2007. As a percentage

of revenue, SG&A was 11.9% in 2008, down favorably from 12.6% in 2007. The increase in SG&A expense in
2008 was driven primarily by an increase of $2.7 million of bad debt expense in 2008 at 1.7% of revenue in 2008
versus 0.6% in the prior year. In addition, employee related and occupancy costs have increased as a result of
employee growth.

Segment EBITDA increased $10.9 million, or 22.7%, to $59.0 million in 2008 from $48.1 million in 2007.

The increase in segment EBITDA was due to revenue growth. Segment EBITDA as a percent of revenue
decreased 0.8 percentage points to 26.8% in 2008 from 27.6% in 2007 due to the lower gross profit margin in
2008 partially offset by lower SG&A expenses as a percentage of revenue.

Year Ended December 31, 2007 compared to December 31, 2006

Revenues increased $30.4 million, or 21.1%, to $174.5 million in 2007 from $144.1 million in 2006.
Revenues increased due to an increased demand for our services driven by several large antitrust engagements,
private equity merger and acquisition consulting in early 2007, and financial economic and strategic merger and
acquisition consulting in the latter half of the year.

62

Gross profit margin increased 0.5 percentage points to 39.1% in 2007 from 38.6% in 2006. The margin
improvements that resulted from our headcount reductions in 2006 were offset by increased costs associated with
stock option grants resulting from our higher stock price in 2007.

SG&A expense increased $1.9 million to $22.0 million in 2007 from $20.1 million in 2006. The primary

driver of the increase in selling, general and administrative expenses was a $1.7 million increase in rent and
occupancy costs.

Segment EBITDA increased $11.2 million, or 30.4%, to $48.1 million in 2007 from $36.9 million in 2006.

The primary reason for the increase in segment EBITDA was revenue growth at improved margins. Segment
EBITDA as a percent of revenues increased 2.0 percentage points to 27.6% in 2007 from 25.6% in 2006 driven
by a higher gross profit margin and a decrease in SG&A expenses as a percent of revenues in 2007.

The number of revenue-generating professionals increased by 30 over 2006 due to hiring associated with the

increased demand for our services. The average billable rate per hour increased due to billing rate increases in
January 2007 for most of the economic consulting group, with additional rate increases in June 2007 and October
2007 for some of our sub-practice groups.

Liquidity and Capital Resources

Cash Flows

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,

2008

2007

2006

$ 199,852
(376,512)
20,251

(dollars in thousands)
$ 68,736
(68,183)
269,653

$ 56,315
(297,385)
177,415

We have generally financed our day to day operations and capital expenditures solely through cash flows

from operations. During the first quarter of our fiscal year, our working capital needs generally exceed our cash
flows from operations due to the payments of annual incentive compensation and acquisition contingent payment
amounts. Our cash flows generally improve subsequent to the first quarter of each year.

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

We have included an immaterial prior period reclassification in our Condensed Consolidated Statements of
Cash Flows to reflect the twice yearly issuance of shares to employees under our Employee Stock Purchase Plan.
The reclassification results in an increase in net cash provided by financing activities and a corresponding
decrease in net cash provided by operating activities. The amount of this correction for the years ended
December 31, 2007 and 2006 is $9.2 million and $7.7 million, respectively.

Cash provided by operating activities increased by $131.1 million, to $199.9 million from $68.7 million in

2007. The increase was primarily due to an increase in net income (adjusted for noncash items) of approximately
$97.1 million and a decrease in our net investment in working capital of approximately $34.0 million. Year over
year working capital reductions were primarily impacted by strong accounts receivable performance as we
collected our accounts receivable more quickly during 2008 as compared to 2007, a higher level of advanced
billings, and a decrease in forgivable loan funding in 2008. These reductions were partially offset by higher year
over year compensation and bonus payments and an increase in income tax payments in 2008 as compared to
2007.

63

Our operating assets and liabilities consist primarily of billed and unbilled accounts receivable, notes
receivable, accounts payable, accrued expenses and accrued compensation expense. The timing of billings and
collections of receivables as well as payments for compensation arrangements affect the changes in these
balances.

Net cash used in investing activities for the twelve months ended December 31, 2008 was $376.5 million as

compared to cash used in investing activities of $68.2 million for the twelve months ended December 31, 2007.
The increase in cash used in investing activities is primarily due to an increase in cash used to fund acquisitions.
For the twelve months ended December 31, 2008, net cash used in investing activities included $299.9 million
paid to fund acquisitions and $45.7 million of acquisition contingent payments. For the twelve months ended
December 31, 2007, net cash used in investing activities included $5.3 million used to acquire the remaining 3%
of share capital of FD, $8.7 million of acquisition contingent payments, and $18.4 million related to other
acquisition activities.

Capital expenditures were $35.7 million during the twelve months ended December 31, 2008 as compared

to $36.4 million for the twelve months ended December 31, 2007. Capital expenditures in 2008 primarily related
to leasehold improvements, the purchase of software and the purchase of data processing equipment. Capital
expenditures in 2007 primarily related to leasehold improvements to support the expansion and renovation of our
offices, investment in infrastructure to support our technology segment and investment in corporate information
technology equipment and software. We had no material outstanding purchase commitments as of December 31,
2008.

Our financing activities consisted principally of borrowings and repayments under long-term debt

arrangements as well as issuances of common stock. During the twelve months ended December 31, 2008, our
financing activities consisted of an $8.7 million repayment of notes payable, primarily to former shareholders of
an acquired business, and $20.6 million of cash received from the issuance of common stock under equity
compensation plans. During the twelve months ended December 31, 2007, our financing activities consisted of
the $231.4 million proceeds from a public offering of 4,830,000 shares of the Company’s common stock, our
borrowing and repayment of $25.0 million on our senior secured bank line of credit, $18.1 million of cash used
to repurchase shares of our common stock under our share repurchase programs and $46.3 million of cash
received from the issuance of common stock under equity compensation plans.

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

During 2007, our cash flows from operating activities increased $12.4 million as compared to 2006. The

increase in cash provided by operating activities was primarily due to increased net income before non-cash
items, lower forgivable loan payments in 2007 and the $11.2 million we received from two of our landlords to
fund tenant improvements. These landlord payments will be accounted for as a reduction of rent expense over the
life of the related lease. We invested in our professionals in the form of incentive compensation and forgivable
loans and signing bonuses in 2007 and 2006. We funded approximately $35 million in forgivable loans in 2007
as compared to approximately $42 million in forgivable loans and refundable signing bonuses in 2006. We also
used $8.0 million during 2006 to fund loans in connection with the Compass acquisition.

Our operating assets and liabilities consist primarily of cash and cash equivalents, billed and unbilled
accounts receivable, forgivable loans included in notes receivable, accounts payable, accrued expenses and
accrued compensation expense. The timing of billings and collections of receivables as well as payments for
compensation arrangements affect the changes in these balances. Our billed and unbilled accounts receivable, net
of billings in excess of services provided have increased across most of our operating segments since
December 31, 2006. This was primarily due to increased revenues during 2007. At December 31, 2007, a trade
receivable for our economic consulting segment, which is classified in other long-term assets, represented $18.1
million of fees for services rendered where payment will not be received until completion of the client
engagement.

64

Net cash used in investing activities during 2007 decreased by $229.2 million as compared to 2006 due to a
$235.1 million decrease in cash used to fund acquisition activities offset by an increase of $6.1 million in capital
expenditures. For the year ended December 31, 2007, net cash used in investing activities included $5.2 million
of cash used to acquire the remaining 3% of the share capital of FD; $8.7 million of contingent consideration
payments; and $18.4 million of cash payments related to other acquisition activities. Net cash used in investing
activities for the year ended December 31, 2006 included $195.3 million in cash to acquire FD, $46.9 million in
cash used to acquire Compass, and $21.3 million of net cash to complete three other acquisitions during 2006.

Our financing activities for the year ended December 31, 2007 consisted principally of a public offering of

common stock, borrowings and repayments on our line of credit and $18.1 million used to buy shares of our
common stock under our share repurchase program offset by $37.1 million of cash received from the exercise of
stock options. In October 2007, we closed on a public offering of 4,830,000 shares of the Company’s common
stock, which included 630,000 shares sold pursuant to the exercise of the underwriter’s option to purchase
additional shares at a price to the public of $50.00 per share less the underwriting discount and commissions. The
net proceeds from the offering were $231.4 million, after payment of the underwriting discounts, commissions
and offering costs. We used the net proceeds from the offering for general corporate purposes, including the
continuation of our strategic acquisition program. During 2006, our financing activities consisted primarily of
$215.0 million of gross proceeds from our senior notes offering in October 2006; the repayment of term loans on
behalf of FD in the amount of $25.5 million; and $23.4 million of cash used to repurchase shares of our common
stock, including $6.8 million we paid to settle the accelerated share repurchase agreement that is described in
Note 17 — “Stockholders’ Equity.”

In October 2003, our Board of Directors first authorized a stock repurchase program. In February 2008, our
Board of Directors authorized a stock repurchase program which is currently in effect through February 2009 in
the aggregate of $50 million. The shares of stock may be purchased through an open market transaction and will
be funded with a combination of cash on hand, existing bank credit facilities or new credit facilities.

Capital Resources

Our amended and restated senior secured bank credit facility provides for a $175.0 million revolving line of

credit. The maturity date of the revolving line of credit is September 30, 2011. We may choose to repay
outstanding borrowings under the senior secured bank credit facility at any time before maturity without penalty.
Debt under the senior secured credit facility bears interest at an annual rate equal to the Eurodollar rate plus an
applicable margin or an alternative base rate defined as the higher of (1) the lender’s announced prime rate or
(2) the federal funds rate plus the sum of 50 basis points and an applicable margin. Under the senior secured
credit facility, the lenders have a security interest in substantially all of our assets.

Our senior secured bank credit facility and the indentures governing our senior notes contain covenants

which limit our ability to: incur additional indebtedness; create liens; pay dividends on our capital stock, make
distributions or repurchases of our capital stock or make specified other restricted payments; consolidate, merge
or sell all or substantially all of our assets; guarantee obligations of other entities; enter into hedging agreements;
and enter into transactions with affiliates or related persons or engage in any business other than consulting
related businesses. The senior secured credit facility requires compliance with financial ratios, including total
indebtedness to earnings before interest, taxes, depreciation and amortization (EBITDA); EBITDA to specified
charges; and the maintenance of a minimum net worth, each as defined under the senior secured bank credit
facility. At December 31, 2008, we were in compliance with all covenants as stipulated in the senior secured
bank credit facility and the indentures governing our senior notes.

As of December 31, 2008, our capital resources included $191.8 million of cash and cash equivalents and

$175.0 million of available borrowing capacity under our revolving line of credit. The availability of borrowings
under our revolving line of credit is subject to specified borrowing conditions. We use letters of credit primarily
as security deposits for our office facilities. Letters of credit reduce the availability under our revolving line of

65

credit. As of December 31, 2008, we had $9.2 million of outstanding letters of credit, which reduced the
available borrowings under our revolving line of credit to $165.8 million.

On July 28, 2008, FTI and its guarantor subsidiaries entered into an amendment to the Credit Agreement
governing our senior secured bank credit facility with the bank group lenders, effective as of June 30, 2008. The
amendment changes certain provisions of the Credit Agreement to permit an increase of the principal amount of
the loan commitments under the revolving credit facility of up to $25.0 million (for a maximum of $175.0
million) if existing or new lenders agree to provide increased commitments and to allow borrowings in foreign
currencies, including the British Pound Sterling and Euro. On August 15, 2008, a commitment agreement was
signed increasing the principal amount of the loan commitments to $175.0 million.

The amendment modified the requirements for permitted acquisitions with respect to the notice

requirements and applicable financial covenants. The amendment also includes a number of technical
modifications to the covenant restrictions intended to improve our ability to operate internationally. Specifically,
the covenants related to investments were modified to allow any investment made prior to June 30, 2008, to
permit investments in foreign subsidiaries by other foreign subsidiaries, to permit additional investments in
foreign subsidiaries by FTI and its domestic subsidiaries in an amount outstanding at any one time of up to $30.0
million and to permit other investments in an amount up to $5.0 million. The covenant restrictions on liens were
modified to allow liens granted by a foreign subsidiary to FTI or another subsidiary to secure indebtedness of
such foreign subsidiary and to allow liens by a foreign subsidiary to secure indebtedness of up to $20.0 million.
Restrictions on indebtedness were changed to allow borrowings by a foreign subsidiary not to exceed $20.0
million and guarantees of such borrowings. The restricted payment covenant was modified to allow each
subsidiary to make restricted payments to the owners of their own capital stock.

Future Capital Needs

We anticipate that our future capital needs will principally consist of funds required for:

•

•

•

•

•

•

•

operating and general corporate expenses relating to the operation of our business;

capital expenditures, primarily for information technology equipment, office furniture and leasehold
improvements;

debt service requirements;

funds required to compensate designated senior managing directors under our senior managing director
incentive compensation program;

discretionary funding of our stock repurchase program;

potential earn-out obligations related to our acquisitions; and

potential acquisitions of businesses that would allow us to diversify or expand our service offerings.

We currently anticipate capital expenditures will be about $40 million to $43 million to support our

organization during 2009, including direct support for specific client engagements. Our estimate takes into
consideration the needs of our existing business as well as the needs of our recently completed acquisitions, but
does not include the impact of any purchases that we may be required to make as a result of future acquisitions or
specific client engagements that are not currently contemplated. Our capital expenditure requirements may
change if our staffing levels or technology needs change significantly from what we currently anticipate; if we
are required to purchase additional equipment specifically to support a client engagement; or if we pursue and
complete additional acquisitions.

Holders of our 3 3⁄4% convertible senior notes may convert them only under certain circumstances, including

certain stock price related conversion contingencies. Upon conversion, the principal portion of the convertible
notes will be paid in cash and any excess of the “conversion value” over the principal portion of the

66

convertible notes will be paid either in cash, shares of our common stock or a combination of shares of our
common stock and cash at our option. The “conversion value” of each note is the average closing price of our
shares over the “conversion reference period,” as defined in the indenture, times the initial conversion rate of
31.998, subject to adjustment upon specified events.

On October 15, 2007, the $150 million aggregate principal amount of 3 3⁄4% convertible notes (Notes) due

July 15, 2012 became convertible at the option of the holders and are currently convertible through April 15,
2009 as provided in the indenture covering the Notes. The Notes became convertible as a result of the closing
price of our common stock exceeding the conversion threshold price of $37.50 per share (120% of the applicable
conversion price of $31.25 per share) for at least 20 days in the 30 consecutive trading days of each of the
periods ended October 15, 2008 and January 15, 2009.

Upon surrendering any Note for conversion, in accordance with the Indenture, the holder of such Note shall

receive cash in the amount of the lesser of (i) the $1,000 principal amount of such Note or (ii) the “conversion
value” of the Note as defined in the Indenture. The conversion feature results in a premium over the face amount
of the notes equal to the difference between our stock price as determined by the calculation set forth in the
Indenture and the conversion price of $31.25 times the conversion ratio of 31.998 shares of common stock for
each $1,000 principal amount of the notes. We retain our option to satisfy any conversion value in excess of each
$1,000 principal amount of the Notes with shares of common stock, cash or a combination of both cash and
shares. The premium will be calculated using the stock price calculation defined in the Indenture. Assuming
conversion of the full $150 million principal amount of the Notes, for every $1.00 the market price of our
common stock exceeds $31.25 per share, we will be required, at our option, either to pay an additional $4.8
million or to issue shares of our common stock with a then market price equivalent to $4.8 million to settle the
conversion feature. We have adequate capital resources to fund potential conversions.

The Notes are registered securities. As of December 22, 2008, the last trade date before December 31, 2008,

the Notes had a market price of $1,463 per $1,000 principal amount of Notes, compared to an estimated
conversion value of approximately $1,406 per $1,000 principal amount of Notes. Because the Notes have
historically traded at market prices above the estimated conversion values, we do not anticipate holders will elect
to convert their Notes. However, we believe we have adequate capital resources to fund potential conversions.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements other than operating leases and we have not entered into any

transactions involving unconsolidated subsidiaries or special purpose entities.

Future Contractual Obligations

The following table sets forth our estimates as to the amounts and timing of contractual payments for our
most significant contractual obligations as of December 31, 2008. The information in the table reflects future
unconditional payments and is based on the terms of the relevant agreements, appropriate classification of items
under generally accepted accounting principles currently in effect and certain assumptions such as interest rates.
Future events could cause actual payments to differ from these amounts.

Future contractual obligations related to our long-term debt assume that payments will be made based on the

current payment schedule and exclude any additional revolving line of credit borrowings or repayments
subsequent to December 31, 2008 and prior to the September 30, 2011 maturity date.

The interest obligation on our long-term debt assumes that our senior notes and our convertible notes will

bear interest at their stated rates. Our convertible notes are convertible prior to their stated maturity upon the
occurrence of certain events beyond our control. Upon conversion, the principal is payable in cash. We enter into
derivative contracts, mainly to protect against adverse interest rate movements on the value of our long-term

67

debt, under which we are required to either pay cash to or receive cash from counterparties depending on changes
in interest rates. These derivative contracts consist of interest rate swap agreements with notional amounts
totaling $60.0 million. Derivative contracts are carried at fair value on our consolidated balance sheet. Because
the derivative contracts recorded on our consolidated balance sheet at December 31, 2008 do not represent the
amounts that may ultimately be paid under these contracts, they are excluded from the following table. However,
our total interest expense will be impacted by net cash flows under these derivative contracts. Further discussion
of our derivative instruments is included in Note 14 — ”Long-Term Debt and Capital Lease Obligations” to our
consolidated financial statements.

Future contractual obligations related to our operating leases are net of contractual sublease receipts. Long-

term debt that is callable by the holder has been classified as maturing in 2009 on the following table.

Contractual Obligations

Total

2009

2010

2011

2012

2013

Thereafter

(in thousands)

Long-term debt
. . . . . . . . . . . . .
Interest on long-term debt . . . . .
Capital lease obligations . . . . . .
Operating leases . . . . . . . . . . . .

564,998
223,727
1,609
287,794

$149,998
37,538
900
36,530

$ — $ — $ — $200,000
24,288
37,536
—
440
24,168
35,585

37,536
49
27,854

37,536
220
32,671

$215,000
49,293
—
130,986

Total obligations . . . . . . . . . . . .

$1,078,128

$224,966

$73,561

$70,427

$65,439

$248,456

$395,279

Future Outlook

We believe that our anticipated operating cash flows and our total liquidity, consisting of our cash on hand

and $165.8 million of availability under our revolving line of credit are sufficient to fund our capital and liquidity
needs for at least the next twelve months. In making this assessment, we have considered:

•

•

•

•

•

•

•

•

our $191.8 million of cash and cash equivalents at December 31, 2008;

funds required for debt service payments, including interest payments on our long-term debt;

funds required for capital expenditures during 2009 of about $40 million to $43 million;

funds required to satisfy earn-out and other obligations in relation to our acquisitions;

funds required to compensate designated senior managing directors and other key professionals by
issuing unsecured forgivable employee loans;

the discretionary funding of our share repurchase program;

the funds required to satisfy conversion of convertible notes; and

other known future contractual obligations.

For the last several years, our cash flows from operations have exceeded our cash needs for capital
expenditures and debt service requirements. We believe that our cash flows from operations, supplemented by
short-term borrowings under our revolving line of credit, as necessary, will provide adequate cash to fund our
long-term cash needs from normal operations.

Our conclusion that we will be able to fund our cash requirements by using existing capital resources and

cash generated from operations does not take into account the impact of any acquisition transactions anticipated
or any unexpected changes in significant numbers of employees. The anticipated cash needs of our business
could change significantly if we pursue and complete additional business acquisitions, if our business plans
change, if economic conditions change from those currently prevailing or from those now anticipated, or if other
unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business.

68

Any of these events or circumstances, including any new business opportunities, could involve significant
additional funding needs in excess of the identified currently available sources and could require us to raise
additional debt or equity funding to meet those needs. Our ability to raise additional capital, if necessary, is
subject to a variety of factors that we cannot predict with certainty, including:

•

•

•

•

•

our future profitability;

the quality of our accounts receivable;

our relative levels of debt and equity;

the volatility and overall condition of the capital markets; and

the market prices of our securities.

Any new debt funding, if available, may be on terms less favorable to us than our amended and restated

senior secured credit facility or the indentures that govern our senior notes and convertible notes.

Effect of Inflation. Inflation is not generally a material factor affecting our business. General operating

expenses such as salaries, employee benefits and lease costs are, however, subject to normal inflationary
pressures.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in interest rates, changes in the price of our common stock and

changes in foreign exchange rates.

Interest Rate Risk

We are exposed to interest rate risk related to debt obligations outstanding and derivatives employed to
hedge changes in fair value on $60 million of our fixed rate debt. Interest rate changes expose our fixed rate
long-term borrowings to changes in fair value and expose our variable rate borrowings and derivative contracts to
changes in future cash flows. From time to time, we use derivative instruments, primarily consisting of interest
rate swap agreements, to manage our interest rate exposure by achieving a desired proportion of fixed rate versus
variable rate borrowings. All of our derivative transactions are entered into for non-trading purposes.

Our income statement exposure to changes in interest rates is currently limited to our $60 million notional

amount interest rate swaps with a pay rate based on the three month London Interbank Offering Rate (LIBOR). A
1% increase in three month LIBOR would increase our pre-tax interest expense by approximately $0.6 million
annually while a 1% decrease in LIBOR would reduce pre-tax interest expense by approximately $0.6 million
annually.

The following table presents principal cash flows and related interest rates by year of maturity for our fixed
rate senior notes and a comparison of the fair value of the debt at December 31, 2008 and 2007. Our convertible
notes which are callable by the holder have been shown as maturing in 2009. The fair values have been
determined based on quoted market prices for our senior notes and convertible notes.

Year of Maturity

December 31, 2008

December 31, 2007

2009

2010 2011 2012

2013

Thereafter

Total

(dollars in thousands)

Fair
Value

Total

Fair
Value

Long-term debt

Fixed rate . . . . . . . . . . . $149,951 $— $— $— $200,000 $215,000 $564,951 $583,427 $565,334 $746,540
Average interest rate . . .

4% —% —% —%

8%

8%

7%

7%

69

Equity Price Sensitivity

We currently have outstanding $150.0 million in principal amount of 3 3⁄4% convertible senior subordinated

notes due July 15, 2012. We are subject to equity price risk related to the convertible feature of this debt. The
convertible notes are convertible only under certain conditions at the option of the holder. Upon conversion, the
principal portion of the convertible notes will be paid in cash and any excess of the “conversion value” over the
principal portion will be paid either in cash, shares of our common stock or a combination of shares of our common
stock and cash at our option. Upon normal conversions, for every $1.00 the market price of our common stock
exceeds $31.25 per share, we will be required to pay either an additional $4.8 million in cash or to issue shares of
our common stock with a then market price equivalent to $4.8 million, at our option, to settle the conversion feature.
If a specified fundamental change event occurs, the conversion price of our convertible notes may increase
depending on our common stock price at that time. However, the number of shares of our common stock issuable
upon conversion of a note may not exceed 41.5973 per $1,000 principal amount of convertible notes. As of
October 15, 2007, the $150.0 million aggregate principal of the 3 3/4% convertible notes due June 15, 2012 became
convertible at the option of the holders and remains convertible through April 15, 2009 as provided in the indenture
covering the notes. These notes were classified as a current liability as of December 31, 2008.

The high and low sale prices per share for our common stock based on the closing sales price as reported on

the New York Stock Exchange during 2008 were $74.19 and $41.16.

Certain acquisition related restricted stock agreements contain stock price guarantees that may result in cash

payments in the future if our share price falls below a specified per share market value on the date the stock
restrictions lapse (“the determination date”). The future settlement of any contingency related to security price will
be recorded as an adjustment to additional paid-in capital. As of December 31, 2008 we are not obligated to make
any price protection related payments under existing contractual arrangements. However, we will be required to do
so in the future if our share price falls below the price guarantee on the determination date. The following table
details by year the cash outflow that would result from the price protection payments assuming a share price equal
to our closing share price at December 31, 2008 on the determination date and assuming a 20% decrease and
increase in our share price from the December 31, 2008 closing share price on the determination date.

Cash outflow, assuming:
Closing share price of $44.68 at December 31, 2008 . . . . . .
20% decrease in share price . . . . . . . . . . . . . . . . . . . . . . . . . .
20% increase in share price . . . . . . . . . . . . . . . . . . . . . . . . . .

$145
212
78

$383
628
139

$11,803
16,047
7,559

$545
796
293

$1,104
1,830
377

$13,980
19,513
8,446

2009

2010

2011

2012

2013

Total

(in thousands)

Foreign Currency Exchange Rate Risk

Exchange Rate Risk

We consider our direct exposure to foreign exchange rate fluctuations to be minimal at this time. Our foreign

currency exposure primarily relates to monetary assets and liabilities of FTI that are denominated in currencies other
than the functional currency of our subsidiaries. Gains or losses from foreign currency remeasurement are included in
interest income and other on our Consolidated Statements of Income and to date have not been significant.

Translation of Financial Results

Most of our foreign subsidiaries operate in a functional currency other than the United States dollar (USD);
therefore, increases or decreases in the value of the USD against other major currencies will affect our net operating
revenues, operating income and the value of balance sheet items denominated in foreign currencies. The net impact of
a change in translation rates is recorded as a component of stockholders equity in accumulated other comprehensive
For the year ended December 31, 2008, consolidated revenues decreased by 1.2%, operating income decreased by
0.4%, and fully diluted earnings per share were unaffected by fluctuating foreign exchange rates.

70

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FTI Consulting, Inc. and Subsidiaries

Consolidated Financial Statements

INDEX

Management’s Report on Internal Control over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Report of Independent Registered Public Accounting Firm — Internal Control over Financial Reporting . .

Report of Independent Registered Public Accounting Firm — Consolidated Financial Statements . . . . . . . .

Consolidated Balance Sheets — December 31, 2008 and 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Income — Years Ended December 31, 2008, 2007 and 2006 . . . . . . . . . . . . . .

Consolidated Statements of Stockholders’ Equity — Years Ended December 31, 2008, 2007 and 2006 . . . .

Consolidated Statements of Cash Flows — Years Ended December 31, 2008, 2007 and 2006 . . . . . . . . . . .

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

72

73

74

75

76

77

78

79

71

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial
reporting and for performing an assessment of the effectiveness of internal control over financial reporting as of
December 31, 2008. Internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. Our system of internal control over
financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts and expenditures are being made
only in accordance with the authorization of our management and directors; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets
that could have a material effect on the financial statements. Under the supervision and with the participation of
our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation
of the effectiveness of our internal control over financial reporting as of December 31, 2008 based on the
framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO). Based on that evaluation, our management concluded that our internal
control over financial reporting was effective as of December 31, 2008.

KPMG LLP, the independent registered public accounting firm that audited our financial statements, has

issued an audit report on their assessment of internal controls over financial reporting, which is included
elsewhere in this Annual Report.

Date: March 2, 2009

/s/

JACK B. DUNN, IV
Jack B. Dunn, IV
President and Chief Executive Officer
(principal executive officer)

/s/

JORGE CELAYA
Jorge Celaya
Executive Vice President and Chief Financial Officer
(principal financial officer)

72

Report of Independent Registered Public Accounting Firm — Internal Control over Financial Reporting

The Board of Directors and Stockholders
FTI Consulting, Inc.:

We have audited FTI Consulting, Inc. and subsidiaries’ (the “Company”) internal control over financial
reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s
management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion
on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audit also included performing such other procedures as we considered necessary
in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board

(United States), the consolidated balance sheets of the Company as of December 31, 2008 and 2007, and the
related consolidated statements of income, stockholders’ equity and comprehensive income, and cash flows for
each of the years in the three-year period ended December 31, 2008, and our report dated March 2, 2009
expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Baltimore, Maryland
March 2, 2009

73

Report of Independent Registered Public Accounting Firm — Consolidated Financial Statements

The Board of Directors and Stockholders
FTI Consulting, Inc.

We have audited the accompanying consolidated balance sheets of FTI Consulting, Inc. and subsidiaries

(the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of income,
stockholders’ equity and comprehensive income and cash flows for each of the years in the three-year period
ended December 31, 2008. In connection with our audit of the consolidated financial statements, we also have
audited financial statement Schedule II, Valuation and Qualifying Accounts. These consolidated financial
statements and financial statement schedule are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial statements and financial statement schedule
based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position of FTI Consulting, Inc. and subsidiaries as of December 31, 2008 and 2007, and the results
of their operations and their cash flows for each of the years in the three-year period ended December 31, 2008,
in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial
statement schedule when considered in relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.

As discussed in Note 16, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in

Income Taxes — An Interpretation of FASB Statement No. 109, on January 1, 2007.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board

(United States), the Company’s internal control over financial reporting as of December 31, 2008, based on
criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and our report dated March 2, 2009 expressed an
unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Baltimore, Maryland
March 2, 2009

74

December 31,

2008

2007

$ 191,842

$ 360,463

237,009
98,340
(45,309)

290,040
15,145
31,055
24,372

190,900
84,743
(30,467)

245,176
11,687
33,657
10,544

661,527
67,843
940,878
84,673
52,374
51,329

FTI Consulting, Inc. and Subsidiaries

Consolidated Balance Sheets
(in thousands, except per share data)

Assets

Current assets

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billed receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unbilled receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts and unbilled services . . . . . . . . . . . . . . . . . . .

Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net of accumulated depreciation . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
Other intangible assets, net of amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes receivable, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

552,454
78,575
1,151,388
189,304
56,500
59,948

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,088,169

$1,858,624

Liabilities and Stockholders’ Equity

Current liabilities

. . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable, accrued expenses and other
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt and capital lease obligations . . . . . . . . . . . . . . .
Billings in excess of services provided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 109,036
133,103
150,898
30,872

$ 103,410
102,054
157,772
17,826

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt and capital lease obligations, net of current portion . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

423,909
418,592
76,804
45,037

964,342

381,062
415,653
49,113
40,546

886,374

Commitments and contingent liabilities (notes 8, 14 and 15)
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 — 50,934 (2008) and 48,979 (2007) . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . . .

509
717,158
486,493
(80,333)

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,123,827

490
601,637
361,058
9,065

972,250

Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . .

$2,088,169

$1,858,624

See accompanying notes to the consolidated financial statements

75

FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Income
(in thousands, except per share data)

Year Ended December 31,

2008

2007

2006

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,293,145

$1,001,270

$707,933

Operating expenses

Direct cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expense . . . . . . . . . . . . . . . . . . . .
Special charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of other intangible assets . . . . . . . . . . . . . . . . . . . . . . . .

705,611
330,052
—
18,824

548,407
255,238
—
10,615

389,032
178,572
22,972
11,175

1,054,487

814,260

601,751

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

238,658

187,010

106,182

Other income (expense)

Interest income and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation settlement losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income before income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,685
(41,051)
(661)

(33,027)

205,631
80,196

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 125,435

Earnings per common share — basic . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Earnings per common share — diluted . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

2.55

2.34

7,639
(43,857)
(1,002)

2,119
(28,949)
(187)

(37,220)

(27,017)

149,790
57,669

79,165
37,141

92,121

$ 42,024

2.14

2.00

$

$

1.06

1.04

$

$

$

See accompanying notes to the consolidated financial statements

76

FTI Consulting, Inc. and Subsidiaries

Consolidated Statement of Stockholders’ Equity and Comprehensive Income
(in thousands)

Common Stock
Shares Amount

Additional
Paid-in
Capital

Unearned
Compensation

Retained
Earnings

Accumulated
Other
Comprehensive
(Loss) Income

Total

Balance December 31, 2005 . . . . . . . . . . . . . . . . . 39,009
Comprehensive income:

Cumulative translation adjustment, net of

$390

$238,055

$(11,089)

$226,913

$ —

$ 454,269

income taxes of $801 . . . . . . . . . . . . . . . . . —

—
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

—
—

Total comprehensive income . . . . . . . . . . . . . . . . .

Issuance of common stock in connection with:
Exercise of options, including income tax

598
benefit of $2,538 . . . . . . . . . . . . . . . . . . . .
402
Employee stock purchase plan . . . . . . . . . . . .
Restricted share grants . . . . . . . . . . . . . . . . . .
264
Business combinations . . . . . . . . . . . . . . . . . . 2,217
(600)

Purchase and retirement of common stock . . . . . .
Reclassification due to adoption of new

accounting standard (Note 2) . . . . . . . . . . . . . . . —
Share-based compensation . . . . . . . . . . . . . . . . . . . —

6
4
3
22
(6)

—
—

11,965
8,433
(3)
56,253
(23,370)

(11,089)
14,106

—
—

—
—
—
—
—

11,089
—

—
42,024

1,394
—

—
—
—
—
—

—
—

—
—
—
—
—

—
—

1,394
42,024

43,418

11,971
8,437
—
56,275
(23,376)

—
14,106

Balance December 31, 2006 . . . . . . . . . . . . . . . . . 41,890
Comprehensive income:

Cumulative translation adjustment, net of

$419

$294,350

$ — $268,937

$ 1,394

$ 565,100

income taxes of $4,156 . . . . . . . . . . . . . . . —

—

Unrealized gains on cash equivalents, net of

taxes of $30 . . . . . . . . . . . . . . . . . . . . . . . . — —
—

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . —

—

—
—

Total comprehensive income . . . . . . . . . . . . . . . . .

Issuance of common stock in connection with:
Exercise of options, including income tax

benefit of $18,737 . . . . . . . . . . . . . . . . . . . 1,785
424

Employee stock purchase plan . . . . . . . . . . . .
Restricted share grants, less net settled shares
of 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Public stock offering . . . . . . . . . . . . . . . . . . . 4,830
237
Business combinations . . . . . . . . . . . . . . . . . .
(500)
Purchase and retirement of common stock . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . —

19
4

55,824
9,949

(1,206)
467
231,360
7,740
(18,113)
21,266

48
2
(5)

—

292
21 —

3

—

—
—

—
—

—
—
—
—
—
—

—

7,726

7,726

—
92,121

(55)
—

—
—

—
—
—
—
—
—

—
—

—
—
—
—
—
—

(55)
92,121

99,792

55,843
9,953

(1,203)
467
231,408
7,742
(18,118)
21,266

Balance December 31, 2007 . . . . . . . . . . . . . . . . . 48,979
Comprehensive income:

Cumulative translation adjustment, net of

$490

$601,637

$ — $361,058

$ 9,065

$ 972,250

income tax benefit of $4,957 . . . . . . . . . . . —

—

Unrealized gains on cash equivalents, net of

taxes of $30 . . . . . . . . . . . . . . . . . . . . . . . . — —
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

—

—
—

Total comprehensive income . . . . . . . . . . . . . . . . .

Issuance of common stock in connection with:
Exercise of options, including income tax

benefit of $11,048 . . . . . . . . . . . . . . . . . . .
Employee stock purchase plan . . . . . . . . . . . .
Restricted share grants, less net settled shares
of 86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock units issued under incentive

548
302

233

5
3

2

compensation plan . . . . . . . . . . . . . . . . . . . —

Business combinations . . . . . . . . . . . . . . . . . .
872
Share-based compensation . . . . . . . . . . . . . . . . . . . —

—

—

9

23,193
13,338

(4,933)

3,496
54,215
26,212

—

—
—

—
—

—

—
—
—

—

(89,453)

(89,453)

—
125,435

55

—

—
—

—

—
—
—

—
—

—

—
—
—

55
125,435

36,037

23,198
13,341

(4,931)

3,496
54,224
26,212

Balance December 31, 2008 . . . . . . . . . . . . . . . . . 50,934

$509

$717,158

$ — $486,493

$(80,333)

$1,123,827

See accompanying notes to the consolidated financial statements

77

FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Cash Flow
(in thousands)

Year Ended December 31,

2008

2007

2006

Operating activities

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating activities:

$ 125,435

$ 92,121

$ 42,024

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash loss on subleased facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, net of effects from acquisitions:

Accounts receivable, billed and unbilled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable, accrued expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued special charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billings in excess of services provided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,037
18,824
22,474
26,381
(10,820)
3,030
—
—
1,309

(49,251)
(9,377)
(11,577)
52
(3,434)
15,671
34,190
10,908

19,351
10,615
11,777
22,703
(17,986)
3,139
—
—
357

(85,565)
(22,037)
(1,771)
17,517
(8,703)
(683)
27,687
214

13,197
11,175
8,573
14,680
(2,118)
2,830
441
933
785

(22,654)
(33,351)
(697)
8,672
14,288
8,493
(14,286)
3,330

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

199,852

68,736

56,315

Investing activities

Payments for acquisition of businesses, including contingent payments and acquisition costs, net of

cash received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property and equipment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(345,541)
(35,674)
4,703

(32,243)
(36,422)
482

(267,332)
(30,359)
306

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(376,512)

(68,183)

(297,385)

Financing activities

Borrowings under revolving line of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of revolving line of credit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of short-term borrowings of acquired subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings under long-term credit facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of debt financing fees and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock, net of offering costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and retirement of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuance of common stock under equity compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess of tax benefits from share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
(2,275)
(8,744)
—
—
—
—
—
20,562
10,820
(112)

25,000
(25,000)
—
(7,945)
—
—
—
231,408
(18,118)
46,322
17,986
—

40,000
(40,000)
—
(25,476)
215,000
400
(9,119)
—
(23,376)
17,868
2,118
—

Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,251

269,653

177,415

Effect of exchange rate changes and fair value adjustments on cash and cash equivalents . . . . . . . . . . . .

(12,212)

(1,666)

2,195

Net (decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(168,621)
360,463

268,540
91,923

(61,460)
153,383

Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 191,842

$360,463

$ 91,923

Supplemental cash flow disclosures

Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid for income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 39,013
64,945

$ 40,200
58,352

Non-cash investing and financing activities:

Issuance of common stock to acquire businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of notes payable to acquire business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of stock units under incentive compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of notes payable as contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

54,224
—
3,496
506

7,742
—
1,057
8,096

22,447
28,648

56,275
6,875
—
—

See accompanying notes to the consolidated financial statements

78

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements
(dollar and share amounts in tables expressed in thousands, except per share data)

1. Description of business and summary of significant accounting policies

Description of business

FTI Consulting, Inc. and subsidiaries, (collectively, “we”, “our” or “FTI”) is a leading global advisory firm

dedicated to helping organizations protect and enhance their enterprise value in difficult and increasingly
complex economic, legal and regulatory environments. Our experienced team of professionals includes many
individuals who are widely recognized as experts in their respective fields. We believe clients retain us because
of our recognized expertise and capabilities in highly specialized areas, as well as our reputation for satisfying
our clients’ needs. We operate through five business segments: Corporate Finance/Restructuring, Forensic and
Litigation Consulting, Strategic Communications, Technology and Economic Consulting.

Accounting principles

Our financial statements are prepared in conformity with United States (U.S.) generally accepted accounting

principles (GAAP).

Consolidation

The consolidated financial statements reflect the operating results of FTI and its majority owned

subsidiaries. All significant intercompany transactions and balances have been eliminated.

Financial statement presentation

We have included an immaterial prior period reclassification in our Consolidated Statements of Cash Flows

to reflect the twice yearly issuance of shares to employees under our Employee Stock Purchase Plan (ESPP).
This reclassification results in an increase in net cash provided by financing activities and a corresponding
decrease in net cash provided by operating activities. The amount of this correction is $9.2 million and $7.7
million, for the years ended December 31, 2007 and 2006, respectively.

Some prior year amounts have been reclassified to conform to the current year presentation.

Foreign currency

Results of operations for our non-U.S. subsidiaries are translated from the designated functional currency to

the reporting currency of the U.S. dollar. Revenues and expenses are translated at average exchange rates while
assets and liabilities are translated at year-end exchange rates. Resulting translation adjustments are recorded as a
component of stockholders’ equity in accumulated other comprehensive income.

Transaction gains and losses arising from currency exchange rate fluctuations on transactions denominated

in a currency other than the local functional currency are included in interest income and other on our
Consolidated Statements of Income.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates

and assumptions that affect the amounts reported in the consolidated financial statements and accompanying
notes. Due to the inherent uncertainty involved in making those assumptions, actual results could differ from
those estimates.

79

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

We use estimates to determine the amount of the allowance for doubtful accounts necessary to reduce

accounts receivable and unbilled receivables to their expected net realizable value and to account for any
potential fee reductions that may be imposed by bankruptcy courts. We estimate the amount of the required
allowance by reviewing the status of significant client matters and past-due receivables as trends and realization
adjustments to our revenues. Actual collection experience has not varied significantly from estimates, due
primarily to credit policies, the controls and procedures designed to estimate realization adjustments to our
revenues, and a lack of historical concentrations of accounts receivable. Accounts receivable balances are not
collateralized.

We also make estimates in determining self-insurance reserves for certain employee benefit plans, accruals
for incentive compensation and other ordinary accruals. These estimates are based upon historical trends, current
experience and knowledge of relevant factors.

Revenue recognition

We recognize revenues in accordance with Staff Accounting Bulletin (SAB) No. 101, “Revenue

Recognition in Financial Statements,” as amended by SAB 104, “Revenue Recognition.” Revenue is recognized
when pervasive evidence of an arrangement exists, the related services are provided, the price is fixed or
determinable and collectability is reasonably assured. We recognize revenues for our professional services
rendered under time-and-expense engagements based on the hours incurred at agreed upon rates as work is
performed. We recognize revenues from reimbursable expenses in the period in which the expense is incurred.

In our Corporate Finance/Restructuring and Strategic Communications segment we are periodically engaged

to provide services in connection with client matters where payment of our fees is deferred until the conclusion
of the matter or upon the achievement of performance-based criteria. We recognize revenues for these
arrangements when all the performance-based criteria are met and collection of the fee is reasonably assured.

In our Strategic Communications segment most clients pay us an up front fee that will be earned in fixed

amounts over an agreed upon period. These arrangements can be either long-term retainers or based on projects
of a short-term nature.

Some clients, primarily in our Corporate Finance/Restructuring segment, pay us retainers before we begin
any work for them. We hold retainers on deposit until we have completed the work. We apply these retainers to
final billings and refund any excess over the final amount billed to clients, as appropriate, when we complete our
work. If the client is in bankruptcy, fees for our professional services may be subject to approval by the court. In
some cases, a portion of the fees to be paid to us by a client is required by a court to be held until completion of
our work. We make a determination whether to record all or a portion of such holdback as revenue prior to
collection on a case-by-case basis.

We record allowances for estimated realization adjustments to the professional service fees of our Corporate

Finance/Restructuring segment that are subject to review by bankruptcy courts. We record provisions for fee
adjustments and discretionary pricing adjustments as a reduction of revenues when they become known.
Revenues recognized, but not yet billed to clients, have been recorded as unbilled receivables in the consolidated
balance sheets.

80

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

We recognize revenue related to sales of our software licenses in our Technology segment using guidance

from American Institute of Certified Public Accountants (AICPA) Statement of Position 97-2, “Software
Revenue Recognition” (SOP 97-2), as amended. Emerging Issues Task Force 00-21 “Accounting for Revenue
Arrangements with Multiple Deliverables” is considered for those arrangements in our Technology segment with
multiple deliverables.

If at the outset of an arrangement we determine that the arrangement fee is not fixed or determinable,
revenue is deferred until the arrangement fee becomes due and payable by the customer. Substantially all of our
software license agreements do not include any acceptance provisions. If an arrangement allows for customer
acceptance of the software, we defer revenue until the earlier of customer acceptance or when the acceptance
rights lapse.

Additionally, revenues related to the amount of data stored or processed, or the number of pages or images

processed, are recognized as the services are provided based on agreed-upon rates.

Direct cost of revenues

Direct cost of revenues consists primarily of billable employee compensation and related payroll benefits,

the cost of consultants assigned to revenue-generating activities and direct expenses billable to clients. Direct
cost of revenues also includes depreciation expense on the equipment of our technology segment that is used to
process client information. Direct cost of revenues does not include an allocation of overhead costs.

Share-Based Compensation

Effective January 1, 2006, we adopted FASB Statement No. 123(R) and began to recognize expense in our

statement of operations associated with all share-based awards based on the fair value of the award as of the
grant date. SFAS No. 123(R) requires that the cost resulting from all share-based compensation arrangements,
such as our stock option and restricted stock plans, be recognized in the financial statements based on their grant
date fair value. Under the fair value recognition requirements of SFAS No. 123(R), share-based compensation
cost is recognized as expense over the requisite service or performance period of the award. We have elected to
use the Black-Scholes pricing model to determine the fair value of stock options on the dates of grant, consistent
with that used for pro forma disclosures under SFAS No. 123. Restricted stock is measured based on the fair
market values of the underlying stock on the dates of grant. The Black-Scholes pricing model requires, various
highly judgmental assumptions including volatility and expected option life. The expected volatility and expected
life are based on our historical experience. We must also make assumptions regarding the risk-free interest rate
and the expected dividend yield. The risk-free interest rate is based on U.S. Treasury interest rates whose term is
consistent with the expected life of the share-based award. The dividend yield on our common stock is assumed
to be zero since we do not pay dividends and have no current plans to do so in the future. In addition, we are
required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. We
estimate the forfeiture rate based on historical experience. To the extent our actual forfeiture rate is different
from our estimate, stock-based compensation expense is adjusted accordingly. Stock-based compensation awards
may also be issued in connection with the achievement of certain performance targets. We review the likelihood
of required performance achievements on a periodic basis and will adjust compensation expense on a prospective
basis to reflect any change in estimate to properly reflect compensation expense over the remaining balance of
the service or performance period. If factors change and we employ different assumptions in the application of
Statement No. 123(R) in future periods, the compensation expense that we record may differ significantly from
what we have recorded in the current period.

81

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Selling, general, and administrative expense

Research and development

Research and development costs related to software development are expensed as incurred. Development
activities involve a plan or design for the production of new or substantially improved products. When we have
determined that technological feasibility for our software products is reached, costs related to the project are
capitalized.

Advertising costs

Advertising costs consist of marketing, advertising through print and other media, professional event
sponsorship and public relations. These costs are expensed as incurred. Advertising costs totaled $10.9 million,
$9.7 million, and $4.6 million during 2008, 2007 and 2006, respectively.

Income taxes

Our income tax provision consists principally of federal, state and international income taxes. We generate

income in a significant number of states located throughout the United States as well as several foreign countries.
Our effective income tax rate may fluctuate due to a change in the mix of earnings between higher and lower
state or country tax jurisdictions and the impact of non-deductible expenses. Additionally, we record deferred tax
assets and liabilities using the asset and liability method of accounting which requires us to measure these assets
and liabilities using the enacted tax rates and laws that will be in effect when the differences are expected to
reverse. We have not recorded any significant valuation allowances on our deferred tax assets as we believe the
recorded amounts are more likely than not to be realized.

Cash equivalents

Cash equivalents consist of highly liquid short-term investments, principally money market funds,

commercial paper and certificates of deposit with maturities of three months or less at the time of purchase. We
carry these investments at fair value, based on quoted market prices or other readily available market
information. Unrealized gains and losses, net of taxes, are included in accumulated other comprehensive income,
which is reflected as a separate component of stockholders’ equity. Gains are recognized when realized in our
consolidated statements of income. Losses are recognized as realized or when we have determined that an other-
than-temporary decline in fair value has occurred. Gains and losses are determined using the specific
identification method. At December 31, 2008 and 2007, we had cash and cash equivalents of $191.8 million and
$360.5 million, respectively. At December 31, 2007, we had an unrealized loss of $84,882 on a commercial
paper investment. We did not own any commercial paper at December 31, 2008.

Allowance for doubtful accounts and unbilled services

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our
clients to pay our fees or for disputes that affect our ability to fully collect our billed accounts receivable, as well
as potential fee reductions imposed by bankruptcy courts. Even if a bankruptcy court approves our services, it has
the discretion to require us to refund all or a portion of our fees due to the outcome of the case or a variety of
other factors. We estimate the allowance for these risks by reviewing the status of all accounts and recording
reserves based on our experiences in these cases and historical bad debt expense. However, our actual experience
may vary significantly from our estimates. If the financial condition of our clients were to deteriorate, resulting in

82

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

their inability or unwillingness to pay our fees, or the bankruptcy court requires us to refund certain fees, we may
need to record additional allowances or write-offs in future periods. This risk is mitigated to the extent that we
may receive retainers from some of our clients prior to performing significant services.

The provision for unbilled services is recorded as a reduction to revenues to the extent the provision relates
to fee adjustments, estimates of fee reductions that may be imposed by bankruptcy courts and other discretionary
pricing adjustments. The provision for doubtful accounts relates to a client’s inability or unwillingness to make
required payments, and is classified in selling, general and administrative expense. The provision for doubtful
accounts totaled $22.5 million, $11.8 million, and $8.6 million for the years ended December 31, 2008, 2007 and
2006, respectively.

Property and equipment

We record property and equipment, including improvements that extend useful lives, at cost, while

maintenance and repairs are charged to operations as incurred. We calculate depreciation using the straight-line
method based on estimated useful lives ranging from three to seven years for furniture, equipment and internal
use software. We amortize leasehold improvements over the shorter of the estimated useful life of the asset or the
lease term. We capitalize costs incurred during the application development stage of computer software
developed or obtained for internal use. Capitalized software developed for internal use is classified within
furniture, equipment and software and is amortized over the estimated useful life of the software, which is
generally three years.

Goodwill and other intangible assets

In accordance with SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142), we test our goodwill

and other indefinite lived intangible assets for impairment at least annually or more frequently if events or
changes in circumstances indicate that this asset may be impaired. We account for our acquisitions under the
purchase method of accounting pursuant to SFAS No. 141, “Business Combinations”. Goodwill represents the
purchase price of acquired businesses in excess of the fair market value of net assets acquired. Other intangible
assets include trade names, customer relationships, contract backlog, non-competition agreements and software.

We test our goodwill using a fair value approach at the reporting unit level. A reporting unit is the operating

segment, or a business one level below that operating segment if discrete financial information is prepared and
regularly reviewed by segment management. When available and as appropriate, we use comparative market
multiples to establish fair values. If comparable market multiples are not available, we estimate fair value using
discounted cash flows.

We assess the impairment of our intangible assets whenever events or changes in circumstances indicate

that the carrying value may not be recoverable. Factors we consider important that could trigger an impairment
review include the following:

•

•

•

•

significant underperformance relative to expected historical or projected future operating results;

a significant change in the manner of our use of the acquired asset or the strategy for our overall
business;

a significant negative industry or economic trend; and or

our market capitalization relative to net book value.

83

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

As of December 31, 2008, we concluded that our goodwill and other intangible assets were not impaired.

During the fourth quarter of 2008 and the through the first two weeks of February 2009, our average stock price
declined as compared to the average trading price during the first three quarters of 2008. We attribute the recent
stock price decline primarily to industry-wide factors and general market conditions. Our market value per share
continues to trade in a range that significantly exceeds our book value per share.

SFAS 142 also requires that intangible assets with definite lives be amortized over their estimated useful

lives and reviewed for impairment whenever events or changes in circumstances indicate an asset’s carrying
value may not be recoverable in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets . We amortized our acquired intangible assets on a straight-line basis with definite lives over
periods ranging primarily from 5 to 15 years.

Impairment of long-lived assets

We review long-lived assets such as property, plant and equipment and acquired intangible assets subject to

amortization for impairment whenever events or changes in circumstances indicate that the carrying amount of
an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include a
significant deterioration of operating results, changes in business plans, or changes in anticipated future cash
flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount
of the assets to discounted net future cash flows we expect the assets to generate. We group assets at the lowest
level for which there are identifiable cash flows that are largely independent of the cash flows generated by other
asset groups. If the total of the expected discounted future cash flows is less than the carrying amount of the
asset, an impairment loss is recognized for the difference between the fair value and carrying value of assets. The
discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of
like risk.

Debt financing fees

We amortize the costs we incur to obtain debt financing over the terms of the underlying obligations using

the effective interest method. The amortization of debt financing costs is included in interest expense.
Unamortized debt financing costs are classified within other assets in our consolidated balance sheets.

Capitalized software to be sold, leased or otherwise marketed

We capitalize costs for software products that will be sold, leased or otherwise marketed when technological

feasibility has been established. Thereafter, all software development costs are capitalized and subsequently
reported at the lower of unamortized cost or net realizable value. Capitalized costs are amortized based on current
and future revenue for each product with an annual minimum equal to the straight-line amortization over the
remaining estimated economic life of the product. We classify software products to be sold, leased or otherwise
marketed as noncurrent other assets.

Interest rate swaps

We sometimes use derivative instruments, consisting primarily of interest rate swap agreements, to manage
our exposure to changes in the fair values or future cash flows of some of our long-term debt. We may enter into
interest rate swap transactions with financial institutions acting as the counter-party. We do not use derivative
instruments for trading or other speculative purposes.

84

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

We formally document all relationships between hedging instruments and hedged items and the risk
management objective and strategy for each hedge transaction. For interest rate swaps, the notional amounts,
rates and maturities of our interest rate swaps are closely matched to the related terms of hedged debt obligations.
We match the critical terms of the interest rate swap to the critical terms of the underlying hedged item to
determine whether the derivatives we use for hedging transactions are highly effective in offsetting changes in
either the fair value or cash flows of the underlying hedged item. If it is determined that a derivative ceases to be
a highly effective hedge, or if the anticipated transaction is no longer likely to occur, we discontinue hedge
accounting and recognize all subsequent derivative gains and losses in our income statement.

Derivative instruments designated in hedging relationships that mitigate exposure to changes in the fair

value of our fixed-rate debt are considered fair value hedges. Derivative instruments designated in hedging
relationships that mitigate exposure to the variability in future cash flows of our variable-rate debt are considered
cash flow hedges.

We record all derivative instruments in other assets or other liabilities on our consolidated balance sheets at

their fair values. If the derivative is designated as a fair value hedge and the hedging relationship qualifies for
hedge accounting, changes in the fair values of both the derivative and hedged portion of our debt are recognized
in interest expense in our consolidated statements of income. If the derivative is designated as a cash flow hedge
and the hedging relationship qualifies for hedge accounting, the effective portion of the change in the fair value
of the derivative is recorded in other comprehensive income and reclassified to interest expense when the hedged
debt affects interest expense. The ineffective portion of the change in fair value of the derivative qualifying for
hedge accounting and changes in fair value of derivative instruments not qualifying for hedge accounting are
recognized in interest expense in the period of the change. Hedge transactions that qualify for hedge accounting
using the short-cut method, have no net effect on our results of operations.

Billings in excess of services provided

Billings in excess of services provided represent amounts billed to clients, such as retainers, in advance of
work being performed. Clients may make advance payments, which are held on deposit until completion of work.
These amounts are either applied to final billings or refunded to clients upon completion of work. Retainers in
excess of related accounts receivable and unbilled receivables are recorded as billings in excess of services
provided within the liability section of our consolidated balance sheets.

2. Earnings per common share

Basic earnings per common share is calculated by dividing net income by the weighted average number of

common shares outstanding during the period. Diluted earnings per common share adjusts basic earnings per
share for the effects of potentially dilutive common shares. Potentially dilutive common shares primarily include
the dilutive effects of shares issuable under our equity compensation plans, including restricted shares using the
treasury stock method, and shares issuable upon conversion of our convertible senior subordinated notes
assuming the conversion premium was converted into common stock based on the average market price of our
stock during the period. The conversion feature of the convertible notes had a dilutive effect on our earnings per
share in 2008 and 2007 because the average price per share of our common stock for the years ended
December 31, 2008 and 2007 was above the current conversion price of the notes.

85

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Year Ended December 31,

2008

2007

2006

Numerator - basic and diluted

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$125,435

$92,121

$42,024

Denominator

Weighted average number of common shares outstanding -basic . . . . . . . . .
Effect of dilutive stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of dilutive convertible notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of dilutive restricted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49,193
1,600
2,367
443

43,028
1,285
1,294
367

39,741
592
—
193

Weighted average number of common shares outstanding -diluted . . . . . . .

53,603

45,974

40,526

Earnings per common share — basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Earnings per common share — diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Antidilutive stock options and restricted shares . . . . . . . . . . . . . . . . . . . . . . . .

$

$

2.55

2.34

455

$

$

2.14

2.00

$

$

1.06

1.04

1,223

2,053

3. New accounting standards not yet adopted

In November 2008, the Emerging Issues Task Force (EITF) affirmed the consensus-for-exposure on Issue

No. 08-7, “Accounting for Defensive Intangible Assets” as a consensus with certain revisions (EITF Issue
No. 08-7). EITF Issue No. 08-7 states that a defensive intangible asset should be accounted for as a separate unit
of accounting at acquisition, not combined with the acquirer’s recognized or unrecognized intangible assets. In
addition, it states that a defensive intangible asset should be assigned a useful life that reflects the entity’s
consumption of the expected benefits related to the asset. This Issue will be applied prospectively for intangible
assets acquired on or after the beginning of the first annual reporting period beginning on or after December 15,
2008, in order to coincide with the effective date of FASB Statement No. 141(R), “Business Combinations,”
discussed below. To the extent that we acquire defensive intangible assets, they will be assigned a useful life and
amortized in accordance with this guidance. Currently, we do not own any defensive intangible assets.

In May 2008, the FASB issued FSP No. APB 14-1, “Accounting for Convertible Debt Instruments that May

be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (FSP APB 14-1). FSP APB 14-1
requires issuers of convertible debt instruments that may be settled in cash upon conversion (including partial
cash settlement) to separately account for the liability and equity (conversion feature) components of the
instruments. As a result, interest expense should be imputed and recognized based upon the entity’s
nonconvertible debt borrowing rate, which will result in lower net income. Our 3 3⁄4% convertible senior
subordinated notes due 2012 issued in August 2005 will be subject to FSP APB 14-1. Prior to FSP APB 14-1,
Accounting Principles Board Opinion No. 14, “Accounting for Convertible Debt and Debt Issued with Stock
Purchase Warrants” (APB 14), provided that no portion of the proceeds from the issuance of the instruments
should be attributable to the conversion feature. Upon retroactive adoption of FSP APB 14-1 in 2009, interest
expense for 2007 and 2008 will increase by $3.9 million and $4.2 million, respectively. This will result in an
after tax reduction in diluted earnings per common share of approximately $0.05 in both 2007 and 2008. In
addition, the carrying amount of the 3 3⁄4% convertible senior notes will be retroactively adjusted to reflect a
discount of $31.3 million on the date of issuance, with an offsetting increase in additional paid-in capital of $18.4
million and deferred tax liability of $12.9 million.

86

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

In April 2008, the FASB issued a final FSP FAS 142-3, “Determination of the Useful Life of Intangible

Assets” (FSP FAS 142-3), which amends the factors that should be considered in developing renewal or
extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement
142, “Goodwill and Other Intangible Assets” (SFAS 142). FSP FAS 142-3 will be effective for fiscal years
beginning after December 15, 2008 and interim periods within those fiscal years and is not expected to have an
impact on our consolidated financial statements.

In March 2008, the Financial Accounting Standards Board (FASB) issued Statement 161, “Disclosures

about Derivatives and Hedging Activities” (Statement No. 161), which amends FASB Statement No. 133,
“Accounting for Derivative Instruments and Hedging Activities”, by requiring expanded disclosures about an
entity’s derivative instruments and hedging activities for increased qualitative, quantitative and credit risk
factors. As Statement No. 161 only contains disclosure provisions, it will not impact our accounting for
derivative transactions. Statement No. 161 will be effective for fiscal years beginning after November 15, 2008
and interim periods within those fiscal years.

In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements” (Statement No. 157).

Statement No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosure
requirements regarding fair value measurements. Statement No. 157 does not require any new fair value
measurements. However, on February 12, 2008, the FASB issued FASB Staff Position No. FAS 157-2,
“Effective Date of FASB Statement No. 157” (FSP FAS 157-2). FSP FAS 157-2 delays the effective date of
Statement No. 157 for all nonfinancial assets and nonfinancial liabilities until fiscal years beginning after
November 15, 2008 and interim periods within those fiscal years. The market participant and exit price approach
to valuing nonfinancial assets detailed in Statement No. 157 may impact the values that we assign to nonfinancial
assets in future business combinations and may also impact the fair value used in the assessment of goodwill and
intangible asset impairment in future years.

In December 2007, the FASB issued Statement No. 141 (revised 2007), “Business Combinations”

(Statement No. 141(R)), which replaces FASB Statement No. 141. Statement No. 141(R) establishes principles
and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. The
Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial
effects of the business combination. Statement No. 141(R) applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after
December 15, 2008, and interim periods within those fiscal years. We are required to adopt Statement
No. 141(R) as of our fiscal year beginning January 1, 2009. The key changes in accounting dictated by Statement
141(R) which will affect the accounting for future acquisitions include:

•

•

•

•

the recognition of transaction costs related to a business combination in current period earnings rather
than as a capitalized component of the purchase price;

the recognition of the fair value of contingent consideration at the acquisition date rather than when the
contingency is determinable beyond a reasonable doubt;

the subsequent adjustment to fair value at each reporting date of any contingent consideration
recognized with an offset to current period earnings; and

the subsequent adjustment to deferred tax asset valuation allowances and income tax uncertainties after
the acquisition date will be recognized in current period earnings.

87

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated

Financial Statements, an amendment of ARB No. 51” (Statement No. 160). The standard changes the accounting
for noncontrolling (minority) interests in consolidated financial statements including the requirements to classify
noncontrolling interests as a component of consolidated stockholders’ equity, to identify earnings attributable to
noncontrolling interests reported as part of consolidated earnings, and to measure gain or loss on the
deconsolidated subsidiary based upon the fair value of the noncontrolling equity investment. Additionally,
Statement No. 160 revises the accounting for both increases and decreases in a parent’s controlling ownership
interest. Statement No. 160 is effective for fiscal years beginning after December 15, 2008, with early adoption
prohibited.

4. Interest income and other

The table below presents the components of interest income and other as shown on the Consolidated

Statements of Income.

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange transaction gains (losses), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$7,454
867
364

$8,173
(940)
406

$2,575
(165)
(291)

Interest income and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$8,685

$7,639

$2,119

Year Ended December 31,

2008

2007

2006

5. Share-based compensation

Share-based incentive compensation plans

Our 2004 Long-Term Incentive Plan provides for grants of option rights, appreciation rights, restricted or
unrestricted shares, performance awards or other share-based awards to our officers, employees, non-employee
directors and individual service providers. We are authorized to issue up to 3,000,000 shares of common stock
under the 2004 plan, of which no more than 600,000 shares of common stock may be issued in the form of
restricted or unrestricted shares, performance awards or other share-based awards. As of December 31, 2008,
115,390 shares of common stock are available for grant under our 2004 Long-Term Incentive Plan, of which
60,616 shares may be granted as share-based awards.

The FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan provides for grants of stock options, stock

appreciation rights, restricted or unrestricted shares, performance awards or other share-based or cash-based
awards to our officers, employees, non-employee directors and individual service providers. We are authorized to
issue up to 3,500,000 shares of common stock under the 2006 plan, of which no more than 1,100,000 shares of
common stock may be issued in the form of restricted or unrestricted shares or other share-based awards. As of
December 31, 2008, 586,746 shares of common stock were available for grant under our 2006 Global Long-Term
Incentive Plan, of which 252,077 shares may be granted as share-based awards.

The FTI Consulting, Inc. Deferred Compensation Plan for Key Employees and Non-Employee Directors
provides for grants of stock unit and restricted stock unit awards to our key employees, other highly-compensated
employees and non-employee directors. We are authorized to issue up to 1,500,000 shares of common stock
under the deferred compensation plan. As of December 31, 2008, 1,338,342 shares of common stock were
available for grant under our Deferred Compensation Plan for Key Employees and Non-Employee Directors.

88

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Options have been granted to employees with exercise prices equal to or exceeding the market value of our

common stock on the grant date and expire ten years subsequent to award. Vesting provisions for individual
awards are established at the grant date at the discretion of the compensation committee of our board of directors.
Options granted under our share-based incentive compensation plans generally vest over three to six years,
although we have granted options that vest over eight years. Restricted shares are generally contingent on
continued employment and vest over periods of three to ten years. Some stock options and restricted share
awards vest upon the earlier of the achievement of a service condition, performance condition, or the
achievement of a market condition. Our share-based incentive compensation plans provide for accelerated
vesting if there is a change in control, as defined in the applicable plan. The employment agreements with
executive officers and other employees provide for accelerated vesting on other events, including death,
disability, termination without good cause and termination by the employee with good reason. We issue new
shares of our common stock whenever stock options are exercised or share awards are granted.

Periodically, we issue restricted and unrestricted shares to employees upon employment or in connection
with performance evaluations. The fair market value on the date of issue of unrestricted shares is immediately
charged to compensation expense. The fair market value on the date of issue of restricted shares is charged to
compensation expense ratably over the remaining service period as the restrictions lapse.

Employee stock purchase plan

The FTI Consulting, Inc. 2007 Employee Stock Purchase Plan (the “Plan”) allowed eligible employees to
subscribe to purchase shares of common stock through payroll deductions. Our U.S. sub-plan allowed deductions
of up to 15% of eligible compensation, subject to limitations. Under the U.S. sub-plan, the purchase price was the
lower of 85% of the fair market value of our common stock on the first trading day or the last trading day of each
semi-annual offering period. Under the U.S. sub-plan, the aggregate number of shares purchased by an employee
could not exceed $25,000 of fair market value annually, subject to limitations imposed by Section 423 of the
Internal Revenue Code. Under this plan, employees purchased 304,277 shares of common stock at $23.71 during
the year ended December 31, 2007. Employees purchased 302,093 shares of common stock at a weighted
average price per share of $44.16 during the year ended December 31, 2008. The Plan has been terminated
effective January 1, 2009 pursuant to action taken by the Board of Directors of the Registrant on December 18,
2008. On January 30, 2009, the Company filed an Amendment to deregister 1,255,735 shares of common stock,
par value $0.01 per share, which remained available for issuance under the Plan as of January 1, 2009.

The FTI Consulting, Inc. Employee Stock Purchase Plan was in effect prior to the plan described above. The

provisions of this plan were substantially the same as the provisions under the FTI Consulting, Inc. 2007
Employee Stock Purchase Plan. Employees purchased shares of common stock under this plan during the
following periods at the weighted average prices per share as indicated: year ending December 31, 2007, 120,439
at $22.75 and year ending December 31, 2006, 402,299 at $20.97. Shares are no longer available for purchase
under this plan.

Share-based compensation expense

We use the Black-Scholes option-pricing model to value our option and purchase plan grants using the
assumptions in the following table. The risk-free interest rate is based on the yield curve of U.S. Treasury strip
securities with remaining terms similar to the expected term of the option or purchase plan award. The dividend
yield on our common stock is assumed to be zero since we do not pay dividends and have no current plans to do
so in the future. To estimate the market price volatility of our common stock, we use the historical volatility of

89

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

our common stock over a time period equal to the expected term of the option or purchase plan award. The
expected life of option grants is based on historical observations of the actual time lapsed between the grant date
and exercise date. Groups of option holders that have similar historical exercise behavior with regard to option
exercise timing and forfeiture rates are considered separately for valuation and attribution purposes.

Year Ended December 31,

2008

2007

2006

Assumptions
Risk-free interest rate–option plan grants . . . . . . . . . . . . .
Risk-free interest rate–purchase plan grants . . . . . . . . . . .
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected life of option grants . . . . . . . . . . . . . . . . . . . . . .
Expected life of stock purchase plan grants . . . . . . . . . . .
Stock price volatility–option plan grants . . . . . . . . . . . . .
Stock price volatility–purchase plan grants . . . . . . . . . . .

1.86% – 4.13% 3.38% – 4.89% 4.29% – 5.20%
3.11% – 4.60% 4.94% – 5.02% 4.37% – 5.25%
0%
3 – 10 years
0.5 year
32.36% – 43.46% 32.2% – 48.7% 41.7% – 51.7%
35.48% – 41.24% 29.9% – 34.5% 32.0% – 37.7%

0%
3 – 10 years
0.5 year

0%
3 – 6 years
0.5 year

The table below reflects the total share-based compensation expense recognized in our income statements
for the years ended December 31, 2008, 2007 and 2006. FASB Statement No. 123(R) requires forfeitures to be
estimated at the time an award is granted and revised, if necessary, in subsequent periods if actual forfeitures
differ from those estimates. Pre-vesting forfeitures were estimated to be between 0% and 3% based on historical
experience. For the years ended December 31, 2008, 2007 and 2006, share-based compensation expense is based
on awards ultimately expected to vest and has been reduced for estimated forfeitures.

2008

2007

2006

Option Grants
and Stock
Purchase Plan
Rights

Restricted
Stock
Grants

Option Grants
and Stock
Purchase Plan
Rights

Restricted
Stock
Grants

Option Grants
and Stock
Purchase Plan
Rights

Restricted
Stock
Grants

$ 8,577

$ 3,599

$ 6,699

$3,032

$ 3,309

$1,224

7,702
—

6,503
—

16,279
4,737

10,102
3,483

9,659
—

16,358
4,448

4,370
—

7,402
2,866

7,800
18

11,127
3,011

1,763
566

3,553
1,515

Income Statement Classification

Direct cost of revenues . . . . . . . . .
Selling, general and administrative
expense . . . . . . . . . . . . . . . . . . .
Special charges . . . . . . . . . . . . . . .

Share-based compensation

expense before income taxes . . .
Income tax benefit . . . . . . . . . . . . .

Share-based compensation, net of

income taxes . . . . . . . . . . . . . . .

$11,542

$ 6,619

$11,910

$4,536

$ 8,116

$2,038

During 2006, we issued 207,790 options to non-employees with an exercise price of $28.09. The shares vest

equally over a four year period beginning January 6, 2011 and expire January 6, 2016. Expense associated with
the options is amortized over the life of the option using the liability method of accounting and are subsequently
marked-to-market. Expenses included in the table above related to these non-employee options are $(0.1) million
and $2.5 million for the years ended December 31, 2008 and 2007, respectively. As of December 31, 2008 and
2007, $3.0 million and $3.1 million, respectively, were included in other liabilities.

In July 2008, we issued 34,790 restricted shares with a price floor guarantee to employees. The expense

associated with these awards is amortized over the vesting period using the liability method of accounting. The

90

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

expense related to these awards included in the table above for the year ended December 31, 2008 is $0.3
million.

As of December 31, 2008, there was $28.4 million of unrecognized compensation cost related to unvested

stock options, net of forfeitures. That cost is expected to be recognized ratably over a weighted-average period of
3.3 years as the options vest. There were no share-based compensation costs capitalized as of December 31,
2008.

General stock option and share-based award information

The following table summarizes the option activity under our share-based incentive compensation plans as
of and during the year ended December 31, 2008. The aggregate intrinsic value in the table below represents the
total pre-tax intrinsic value (the difference between the closing price of our common stock on the last trading day
of 2008 and the exercise price, multiplied by the number of in-the-money options) that would have been received
by the option holders had all option holders exercised their options on December 31, 2008. This amount changes
based on changes in the fair market value of our common stock.

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

Shares

Options outstanding, January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . . .

5,075

$26.20

Options granted during the period:

Exercise Price = fair market value . . . . . . . . . . . . . . . . . . . .
Exercise Price > fair market value . . . . . . . . . . . . . . . . . . . .
Options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

384
45
(548)
(3)

$67.19
$68.88
$22.17
$64.45

Options outstanding, December 31, 2008 . . . . . . . . . . . . . . . . . . . . .

4,953

$30.19

6.8 years

$83,045

Options exercisable, December 31, 2008 . . . . . . . . . . . . . . . . . . . . . .

2,521

$25.01

5.7 years

$50,341

Cash received from option exercises under all share-based payment arrangements for the years ended
December 31, 2008, 2007 and 2006 was $12.2 million, $37.1 million and $10.2 million, respectively. The actual
tax benefit realized from stock options exercised totaled to $7.7 million, $19.3 million and $2.6 million,
respectively, for the years ended December 31, 2008, 2007 and 2006.

The intrinsic value of options exercised is the amount by which the market value of our common stock on

the exercise date exceeds the exercise price. The total intrinsic value of options exercised was:

•

•

•

$22.7 million during the year ended December 31, 2008;

$51.7 million during the year ended December 31, 2007; and

$6.6 million during the year ended December 31, 2006.

91

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

The table below reflects the weighted-average grant-date fair value of stock options granted, shares
purchased under our employee stock purchase plan and restricted shares granted during the years ended
December 31, 2008, 2007 and 2006.

Year Ended December 31,

2008

2007

2006

Weighted average fair value of grants

Stock options:

Grant price = fair market value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Grant price > fair market value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee stock purchase plan shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$24.87
$30.52
$17.12
$67.37

$15.65
$21.44
$ 7.71
$34.58

$13.64
$10.49
$ 6.86
$26.44

Following is a summary of the status of stock options outstanding and exercisable at December 31, 2008.

Exercise Price Range

$ 3.23 - $22.36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$23.40 - $26.45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$26.47 - $27.89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$27.90 - $57.00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$59.25 - $74.05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Options Outstanding

Options Exercisable

Weighted-
Average
Exercise
Price

$19.30
$25.75
$27.62
$34.06
$67.53

Weighted-
Average
Remaining
Contractual
Term

5.0 years
6.8 years
7.1 years
7.3 years
9.3 years

Weighted-
Average
Exercise
Price

$19.29
$25.48
$27.43
$34.72
$59.25

Shares

990
697
456
356
22

2,521

Shares

1,041
1,251
1,217
1,013
431

4,953

A summary of our unvested restricted share award activity during the year ended December 31, 2008 is
presented below. The fair value of unvested restricted share-based awards is determined based on the closing
market price of our common stock on the grant date. Pre-vesting forfeitures were estimated to be between 0%
and 1.5% based on historical experience.

Unvested restricted shares outstanding, January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . .
Restricted share awards granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share awards vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share awards forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unvested restricted shares outstanding, December 31, 2008 . . . . . . . . . . . . . . . . . . . . .

Weighted-
Average Grant-
Date Fair
Value

$26.97
67.74
24.11
29.08

$41.48

Shares

966
320
(320)
(2)

964

92

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

A summary of our restricted share units’ activity during the year ended December 31, 2008 is presented

below. The fair value of restricted share-based units is determined based on the closing market price of our
common stock on the grant date. Pre-vesting forfeitures were estimated to be between 0% and 1.5% based on
historical experience.

Restricted shares units outstanding, January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share units granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share units released . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted shares units outstanding, December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted-
Average
Grant-
Date Fair
Value

$26.28
65.15
32.70
$40.44

Shares

143
54
(1)
196

As of December 31, 2008, there was $29.7 million of unrecognized compensation cost related to unvested

restricted share-based compensation arrangements. That cost is expected to be recognized ratably over a
weighted-average period of 3.3 years as the awards and units vest. The total fair value of restricted share-based
awards and units that vested during the years ended December 31, 2008, 2007 and 2006 was $7.6 million, $3.4
million and $2.2 million, respectively.

6. Research and Development Costs

Research and development costs related to software development charged to expense totaled $18.0 million,

$7.6 million and $5.7 million, for the years ended December 31, 2008, 2007 and 2006, respectively. Research
and development costs are included in selling, general and administrative expense on the Consolidated
Statements of Income for the year ended December 31, 2008. For the years ended December 31, 2007 and 2006,
$5.3 million and $2.6 million, respectively, of research and development expenses were classified as direct cost
of revenues, and $2.2 million and $3.1 million, respectively, of research and development costs were classified as
selling, general and administrative expense.

7. Special charges

During the third quarter of 2006, we recorded special charges totaling $23.0 million. The charges reflect

actions we took to address certain underperforming operations. In particular, we restructured our Corporate
Finance/Restructuring UK operations and consolidated certain of our non-core practices in the U.S., primarily
through reductions in workforce. The charges consisted of $22.1 million of severance and other contractual
employee related costs associated with the reduction in workforce, including $0.6 million related to the
accelerated vesting of share-based awards; and a $0.9 million non-cash intangible impairment charge associated
with the contract backlog we acquired in May 2005 in connection with our acquisition of Cambio Health
Solutions.

93

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

The liability for special termination charges is included in accounts payable, accrued expense and other on

the consolidated balance sheets. Activity related to the liability for special termination charges for the three years
ended December 31, 2008 follows.

Balance, December 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance, December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(in millions)

$14.3
(9.6)
0.1

4.8
(3.5)
(0.2)

Balance, December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 1.1

8. Acquisitions

We record assets acquired and liabilities assumed in business combinations on our balance sheet as of the

respective acquisition dates based upon their estimated fair values at the acquisition date. We include the results
of operations of businesses acquired in our income statement beginning on the acquisition dates. We allocate the
acquisition cost to identifiable tangible and intangible assets and liabilities based upon their estimated relative
fair values. We allocate the excess of the purchase price over the estimated fair values of the underlying assets
acquired and liabilities assumed to goodwill. We determine the fair value of intangible assets acquired based, in
part, upon independent valuations. The fair value of shares of our common stock issued in connection with a
business combination is based on a five-day average of the closing price of our common stock two days before
and two days after the date we agree to the terms of the acquisition and publicly announce the transaction. In
certain circumstances, the allocations of the excess purchase price are based on preliminary estimates and
assumptions. Accordingly, the allocations are subject to revision when we receive final information, including
independent appraisals and other analyses. With the exception of the acquisition of FD International (Holdings)
Limited, or FD, described below, the business combinations consummated in 2006, 2007, and 2008 were not
deemed significant as outlined in Rule 3-05 of Regulation S-X; therefore proforma results have not been
presented.

Certain acquisition related restricted stock agreements contain stock price guarantees that may result in cash

payments in the future if our share price falls below a specified per share market value on the date the stock
restrictions lapse (“the determination date”). The future settlement of any contingency related to security price
will be recorded as an adjustment to additional paid-in capital. As of December 31, 2008, we are not obligated to
make any price protection related payments under existing contractual arrangements. However, we will be
required to do so in the future if our share price falls below the price guarantee on the determination date. Our
stock price guarantee provisions have stock floor prices that range from $22.26 to $69.62 per share and have
determination dates that range from 2009 to 2013.

In certain transactions a portion of our purchase price is in the form of contingent consideration. The
contingent consideration represents the difference between the seller’s and our perceived values of the business
based upon our respective performance estimates at the time of acquisition. The use of contingent consideration
allows us to shift some of the valuation risk, inherent at the time of acquisition, to the seller based upon the
outcome of future financial targets that the seller contemplates in its valuation. Contingent consideration is
payable annually as agreed upon performance targets are met and is generally subject to a maximum amount

94

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

within a specified time period. Contingent consideration is recorded as additional purchase price with the
adjustment recorded as an increase to goodwill if the contingency is satisfied. Additional consideration related to
acquired businesses recorded as an adjustment to goodwill was $52.6 million, $43.1 million, and $17.0 million
for the years ended December 31, 2008, 2007 and 2006, respectively.

2008 Acquisitions

During 2008, we completed sixteen business combinations for a total acquisition cost of $368.9 million,
consisting of cash, transaction costs and liabilities assumed of $315.4 million and 861,671 restricted shares of our
common stock valued at $53.5 million. Certain purchase agreements for these business combinations contain
provisions that include additional payments, some of which may be payable in shares of our common stock at our
discretion, based on achievement of annual financial targets in each of the next two to six years. Any contingent
consideration payable in the future will be applied to goodwill. Based on 2008 financial results, we have accrued
additional contingent consideration of $2.6 million, which has been included in the preceding disclosed
acquisition costs.

The assets and liabilities of the acquisitions completed in 2008 were recorded on the consolidated balance
sheet at their respective fair values. The fair values were determined on each of the respective closing dates and
are subject to refinement as independent valuations are completed.

2007 Acquisitions

During 2007, we completed seven business combinations for a total acquisition cost of $42.5 million,

consisting of cash and transaction costs of $36.5 million and 169,999 restricted shares of our common stock
valued at $6.0 million. The purchase agreements for these business combinations contain provisions that include
additional payments, some of which may be payable in shares of our common stock at our discretion, based on
achievement of annual financial targets in each of the next two to four years. Any contingent consideration
payable in the future will be applied to goodwill. Based on 2007 and 2008 financial results, we have paid or
accrued additional contingent consideration of $16.0 million, which has been included in the preceding disclosed
acquisition costs.

2006 Acquisitions

FD International (Holdings) Limited

In October 2006, we completed our acquisition of approximately 97% of the share capital of FD, a global

strategic business and financial communications consulting firm headquartered in London. FD provides
consulting services related to financial communications, brand communications, public affairs and issues
management and strategy development. The total acquisition cost was $338.2 million, including transaction
costs. The total acquisition cost consists of $320.2 million in cash and transaction costs, offset by cash received
of $25.5 million, 1.2 million restricted shares of our common stock valued at $28.5 million and, notes payable to
certain sellers of FD shares in the aggregate principal amount of $15.0 million. In February 2007, we acquired
the remaining 3% of FD’s share capital that was outstanding for cash and common stock consideration totaling
$7.6 million, which has been included in the acquisition costs disclosed above. Based on the 2006, 2007 and
2008 financial results, we have paid or accrued additional contingent consideration of $76.9 million, which has
been included in the preceding disclosed acquisition costs.

95

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

For each year ending between December 31, 2006 and December 31, 2010, former shareholders of FD who

elected the earn-out option will qualify for:

•

•

additional consideration based on earnings before interest, taxes and amortization, or EBITA, of the
business unit (as defined in the offer to purchase); and

conditional contractual protection against a decline in the value of the shares of our common stock
issued as purchase price below the issuance price of $22.26 per share.

The three principal executive officers of FD have entered into contracts of employment with FTI that

contain covenants not to compete with FD for a 12 month period following termination of employment. The
three principal FD executives also have been awarded stock options to purchase shares of our common stock and
restricted shares of our common stock. We also entered into restricted stock agreements with the former FD
shareholders who elected the earn-out option who have agreed not to sell, transfer, assign, pledge or otherwise
dispose of the shares of common stock after the closing. The contractual restrictions on transfer will lapse as to
all restricted shares issued as consideration for the purchase of their capital shares of FD on September 30, 2009,
except that, after September 30, 2007, senior management of FD, at its discretion, may waive the restrictions
with respect to all or a portion of a holder’s restricted shares and the restrictions will lapse immediately upon
death or a change in control of FTI. If a forfeiture event (as defined in the offer to purchase) occurs, any
restrictions on the shares of our common stock then held by such holder will be extended to September 30, 2013.

Our consolidated financial statements include the operating results of FD from the date of acquisition. The

unaudited pro forma financial information below for the year ended December 31, 2006 assumes that our
material business acquisition of FD had occurred at the beginning of the period.

Pro forma financial information for the acquisition of Financial Dynamics

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings per common share — basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$800,809
$ 84,768
1.11
$

Earnings per common share — diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

1.09

96

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

During the fourth quarter of 2007, we finalized the allocation of the purchase price of FD to the individual

assets acquired and liabilities assumed. To assist management in the allocation, we engaged valuation specialists.
The following table summarizes the final allocation of purchase price to total assets acquired and liabilities
assumed.

Direct cost of business combination

Cash paid, including transaction costs, net of cash received . . . . . . . . . . . . . . . . . . . . .
Common stock issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . .
Estimated 2008 earned contingent consideration (cash and notes payable)

$264,089
28,546
14,971
30,605

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$338,211

Net assets acquired

Accounts receivable, billed and unbilled, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships (estimated 15 year weighted-average useful life)
. . . . . . . . . .
Trade name (indefinite useful life) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-compete agreements (estimated 4 year weighted-average useful life)
. . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billings in excess of services provided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 23,555
16,286
5,389
37,490
7,649
1,507
287,580
2,404
(24,075)
(2,601)
(16,973)

Total net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$338,211

Other

During 2006, we completed five other business combinations. The total acquisition cost was $113.5 million,

consisting of cash and transaction costs of $83.3 million and 1.1 million restricted shares of our common stock
valued at $30.2 million. The purchase agreements for these business combinations contain provisions that include
additional consideration based on the achievement of annual financial targets in each of the next four to five
years. Any contingent consideration payable in the future will be applied to goodwill. Based on 2006, 2007 and
2008 financial results, we have paid or accrued additional contingent consideration of $13.9 million, which has
been included in the preceding acquisition costs.

9. Concentrations of risk

We derive approximately 82% of our revenues from providing professional services to our clients in the

U.S. We believe that the geographic and industry diversity of our customer base throughout the U.S. minimizes
the risk of incurring material losses due to concentrations of credit risk. We are periodically engaged to provide
services in connection with client matters where payment of our fees is deferred until the conclusion of the
matter. At December 31, 2008 and 2007, we had an unsecured trade receivable of $19.0 million and
$18.1 million, respectively, related to fees for services rendered in connection with a client matter where
payment will not be received until the completion of the engagement. This amount is classified as non-current
within other assets.

97

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

10. Balance Sheet Details

December 31,

2008

2007

Prepaid expenses and other current assets

Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 22,046
3,331
5,678

$ 15,668
14,966
3,023

$ 31,055

$ 33,657

Notes receivable

Notes receivable from employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note receivable from purchasers of former subsidiary . . . . . . . . . . . . . . .

$ 14,645
500

$ 11,187
500

$ 15,145

$ 11,687

Notes receivable, net of current portion

Notes receivable from employees, net of current portion . . . . . . . . . . . . .
Notes receivable from purchasers of former subsidiary and other . . . . . .

$ 56,000
500

$ 51,324
1,050

$ 56,500

$ 52,374

Accounts payable, accrued expenses and other

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 13,241
26,391
49,067
20,337

$ 12,782
19,861
43,095
27,672

$109,036

$103,410

Notes receivable due from employees include signing bonuses granted in the form of general recourse

forgivable loans to attract and retain highly-skilled professionals. The notes are unsecured, and are being
amortized to expense over their forgiveness periods of one to ten years. Professionals who terminate their
employment with us prior to the end of the forgiveness period are required to repay the outstanding, unforgiven
loan balance and any accrued but unforgiven interest.

11. Property and Equipment

Property and equipment consist of the following:

December 31,

2008

2007

Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer equipment and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 37,524
4,335
24,091
70,753

$ 33,315
5,671
19,742
60,000

Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . .

136,703
(58,128)

118,728
(50,885)

Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 78,575

$ 67,843

Depreciation expense was $26.0 million in 2008, $19.4 million in 2007 and $13.2 million in 2006.

98

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

12. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by reportable segment are as follows:

Balance, December 31, 2006 . . . . . .
Goodwill acquired during the

year . . . . . . . . . . . . . . . . . . . . .
Contingent consideration . . . . . .
Adjustments to allocation of

purchase price . . . . . . . . . . . . .

Foreign currency translation

adjustment

. . . . . . . . . . . . . . .
Balance December 31, 2007 . . . . . . .
Goodwill acquired during the

year . . . . . . . . . . . . . . . . . . . . .
Contingent consideration (1) . . .
Adjustments to allocation of

purchase price . . . . . . . . . . . . .

Foreign currency translation
adjustment and other
. . . . . . .
Balance December 31, 2008 . . . . . . .

Corporate
Finance/
Restructuring

Forensic and
Litigation
Consulting

Strategic
Communications

Economic
Consulting Technology

Total

$298,571

$141,455

$232,528

$178,169 $ 34,988 $ 885,711

—
—

—

—
298,571

92,019
—

6,802
1,051

10,135
35,994

—
3,550

—
2,500

16,937
43,095

—

—

149,308

50,679
1,083

(15,475)

(50)

(38)

(15,563)

10,558
273,740

3,569
40,794

—

181,669

1,206
8,169

140
37,590

81,563
—

10,698
940,878

229,036
50,046

—

(612)

(4,198)

—

—

(4,810)

(656)
$389,934

(11,329)
$189,129

(51,165)
$262,740

—

(63,762)
$191,044 $118,541 $1,151,388

(612)

(1) Contingent consideration of $2.6 million for 2008 acquisitions has been included in goodwill acquired

during the year.

Other intangible assets with finite lives are amortized over their estimated useful lives. We recorded

amortization expense of $18.8 million in 2008, $10.6 million in 2007, and $11.2 million in 2006. Based solely on
the amortizable intangible assets recorded as of December 31, 2008, we estimate amortization expense to be
$22.9 million in 2009, $20.6 million in 2010, $19.7 million in 2011, $18.9 million in 2012, $16.9 million in 2013
and $64.6 million in years after 2013. Actual amortization expense to be reported in future periods could differ
from these estimates as a result of new intangible asset acquisitions, changes in useful lives or other relevant
factors. During the third quarter of 2006, we determined that the backlog we acquired in May 2005 in connection
with our acquisition of Cambio had a shorter life than we originally estimated, and therefore, we recorded a $0.9
million non-cash intangible impairment charge within our Corporate Finance/Restructuring segment. This
amount is recorded as a special charge in our income statement.

December 31, 2008

December 31, 2007

Useful
Life
in Years

Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
Amortization

Amortized intangible assets

Customer relationships . . . . . . . . . . . . . . . . .
Non-competition agreements . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tradenames . . . . . . . . . . . . . . . . . . . . . . . . . .
Contract backlog . . . . . . . . . . . . . . . . . . . . . .

5 to 15
1 to 10
5 to 6
1 to 5
1

Unamortized intangible assets

Tradenames . . . . . . . . . . . . . . . . . . . . . . . . . .

Indefinite

$133,113
17,194
37,700
9,555
273
197,835

25,678
$223,513

$19,897
5,735
6,401
2,153
23
34,209

—
$34,209

$ 69,286
12,277
4,400
1,432
—
87,395

14,478
$101,873

$11,402
3,138
2,493
167
—
17,200

—

$17,200

99

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

For acquisitions completed during 2008 and 2007, the aggregate amount of purchase price assigned to

intangible assets other than goodwill consisted of the following.

December 31, 2008

December 31, 2007

Weigted-
Average
Amortization
Period in
Years

Amortized intangible assets

Contract backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-competition agreements . . . . . . . . . . . . . . . . . . . . . . .
Tradenames . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1
14
5
5
6

Weigted-
Average
Amortization
Period in
Years

Fair
Value

— $ —
11,003
11.8
5.5
3,029
1,112
5.0
— $ —

15,144

Fair Value

$

275
78,336
5,427
8,512
33,300

125,850

Unamortized intangible assets

Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Indefinite

11,200

Indefinite

—

$137,050

$15,144

13. Fair Value of Financial Instruments

Effective January 1, 2008 we adopted the provisions of Statement of Financial Accounting Standards
No. 157, “Fair Value Measurements” (SFAS 157) as they relate to our financial assets and liabilities. We
consider the recorded value of certain of our financial assets and liabilities, which consist primarily of cash and
cash equivalents, accounts receivable and accounts payable, to approximate the fair value of the respective assets
and liabilities at December 31, 2008 and 2007 based upon the short-term nature of the assets and liabilities.
SFAS 157 defines fair value, establishes a framework for measuring fair value under GAAP and enhances
disclosures about fair value measurements.

SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a

liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly
transaction between market participants on the measurement date. SFAS 157 also establishes a fair value
hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. The adoption of SFAS 157 did not change our fair value
measurements.

The following table presents assets and liabilities measured at fair value at December 31, 2008.

Description

Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hedge adjustment on long-term debt . . . . . . . . . . . . . . . . . . . .

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

$—

$—

$—

$—

$2,884

$2,884

$2,884

$2,884

$—

$—

$—

$—

Total

$2,884

$2,884

$2,884

$2,884

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

The fair values of the interest rate swaps are based on a valuation which is driven by the present value of
expected future cash flows using discount rates appropriate with the risks involved. We entered into interest rate
swaps to hedge the risk of changes in fair value attributable to changes in market interest rates associated with
$60 million of our 7 5⁄ 8% senior notes due 2013. These interest rate swaps qualify for hedge accounting using the
short cut method under SFAS 133, “Accounting for Derivative Instruments and Hedging Activities.” As a result,
the changes in fair value of the interest rate swaps and the changes in the fair value of the hedged debt are
assumed to be equal and offsetting and have no effect on our results of operations. The fair value adjustment
related to the interest rate swap is included in other assets on the Condensed Consolidated Balance Sheet.

We have determined the estimated fair values of financial instruments using available market information
and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data
to develop fair value estimates. As a result, the estimates presented below are not necessarily indicative of the
amounts that we could realize or be required to pay in a current market exchange. The use of different market
assumptions, as well as estimation methodologies, may have a material effect on the estimated fair value
amounts.

Long-term debt, including current portion . . . . . . . . . . . . . . . . . . . .
Interest rate swap assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

567,882
2,884

583,475
2,884

Carrying
Amount

Estimated
Fair
Value

Carrying
Amount

573,425
371

Estimated
Fair
Value

754,260
371

December 31,

2008

2007

Long-term debt

We determined the fair value of the long-term debt based on quoted market prices for our senior notes.

Interest rate swap assets

The carrying amount of our interest rate swap assets is fair value. The fair value of our interest rate swaps is

based on estimates obtained from bankers to settle the agreements, which approximates fair value.

101

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

14. Long-Term Debt and Capital Lease Obligations

7 5⁄ 8% senior notes due 2013, including a fair value hedge adjustment of

$2,884 — December 31, 2008 and $371 — December 31, 2007 . . . . . . . . .
7 3⁄4% senior notes due 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 3⁄4% convertible senior subordinated notes due 2012 . . . . . . . . . . . . . . . . . . .
Notes payable to former shareholders of acquired business . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Long-term debt, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,

2008

2007

$202,884
215,000
149,951
47
—

567,882
149,998

$417,884
1,608
$
900

$200,371
215,000
150,000
7,720
334

573,425
157,772

$415,653
$ —
—

Capital lease obligations, net of current portion . . . . . . . . . . . . . . . . .

708

—

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

portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$418,592

$415,653

7 5⁄ 8% senior notes due 2013. In August 2005, we completed the sale in a Rule 144A private placement of

$200.0 million in principal amount of 7 5⁄ 8% senior notes due June 15, 2013, generating net cash proceeds of
$194 million after deducting fees and expenses and the initial purchasers’ discounts. All of these notes were
exchanged for senior notes with identical terms registered with the Securities and Exchange Commission (SEC)
in February 2007. Cash interest is payable semi-annually beginning December 15, 2005 at a rate of 7.625% per
year. We may choose to redeem some or all of these starting June 15, 2009 at an initial redemption price of
103.813% of the aggregate principal amount of these notes plus accrued and unpaid interest. We may choose to
redeem up to 35% of the original principal amount of the notes using the proceeds of one or more sales of
qualified equity securities at 107.625% of their principal amount, plus accrued and unpaid interest to the date of
redemption. These notes are senior unsecured indebtedness of ours and rank equal in right of payment with all of
our other unsubordinated, unsecured indebtedness. We have agreed to specific registration rights with respect to
these notes. If we do not maintain the registration of the notes effective through maturity, subject to limitations,
then the annual interest rate on these notes will increase by 0.25% every 90 days, up to a maximum of 1.0%, until
the default ceases to exist. If we have a registration default and subsequently correct it, the annual interest rate on
the notes will revert to 7.625%.

We use derivative instruments, consisting primarily of interest rate swap agreements, to manage our
exposure to changes in the fair values or future cash flows of some of our long-term debt which are caused by
interest rate fluctuations. We do not use derivative instruments for trading or other speculative purposes. The use
of derivative instruments exposes us to market risk and credit risk. Market risk is the adverse effect that a change
in interest rates has on the value of a financial instrument. While derivative instruments are subject to
fluctuations in values, these fluctuations are generally offset by fluctuations in fair values or cash flows of the
underlying hedged items. Credit risk is the risk that the counterparty exposes us to loss in the event of
non-performance. We enter into derivative financial instruments with high credit quality counterparties and
diversify our positions among such counterparties in order to reduce our exposure to credit losses.

102

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

From time to time, we hedge the cash flows and fair values of some of our long-term debt using interest rate

swaps. We enter into these derivative contracts to manage our exposure to interest rate changes by achieving a
desired proportion of fixed rate versus variable rate debt. In an interest rate swap, we agree to exchange the
difference between a variable interest rate and either a fixed or another variable interest rate multiplied by a
notional principal amount. We record all interest rate swaps at their fair market values within other assets or
other liabilities on our balance sheet. As of December 31, 2008, the fair value of our interest rate swap
agreements was an asset of $2.9 million. As of December 31, 2007, the fair value of our interest rate swap
agreements was an asset of $0.4 million.

In August 2005, we entered into two interest rate swap agreements to hedge the risk of changes in the fair
value of a portion of our 7 5⁄ 8% fixed rate senior notes. The interest swap agreements mature on June 15, 2013.
Under the terms of the interest rate swap agreements, we receive interest on the $60.0 million notional amount at
a fixed rate of 7.625% and pay a variable rate of interest, which was between 5.60% and 7.85% for the year
ended December 31, 2008, based on the LIBOR as the benchmark interest rate. The maturity, payment dates and
other critical terms of these swaps exactly match those of the hedged senior notes. In accordance with FASB
Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” the swaps are accounted for
as effective hedges. Accordingly, the changes in the fair values of both the swaps and the debt are recorded as
equal and offsetting gains and losses in interest expense. No hedge ineffectiveness has been recognized as the
critical provisions of the interest rate swap agreements match the applicable provisions of the debt. For the year
ended December 31, 2008, the impact of effectively converting the interest rate of $60.0 million of our senior
notes from fixed rate to variable rate decreased interest expense by $0.9 million. For the years ended
December 31, 2007 and 2006, the impact of effectively converting the interest rate increased interest expense by
$0.5 million and $0.3 million, respectively.

7 3⁄4% senior notes due 2016. In October 2006, we completed the issuance and sale in a rule 144A private
placement of $215.0 million in principal amount of 7 3⁄4% senior notes due October 1, 2016, which generated net
cash proceeds of $208 million after deducting fees and expenses and the initial purchasers’ discounts. All of
these notes were exchanged for senior notes with identical terms registered with the SEC in February 2007. Cash
interest is payable semiannually beginning April 1, 2007 at a rate of 7.75% per year. We may choose to redeem
some or all of these notes starting October 1, 2011 at an initial redemption price of 103.875% of the aggregate
principal amount of these notes plus accrued and unpaid interest. On or before October 1, 2009, we may choose
to redeem up to 35% of the original principal amount of the notes using the proceeds of one or more sales of
qualified equity securities at 107.75% of their principal amount, plus accrued and unpaid interest to the date of
redemption. These notes are senior unsecured indebtedness of ours and rank equal in right of payment with all of
our other unsubordinated, unsecured indebtedness. We have agreed to specific registration rights with respect to
these notes. If we do not maintain the registration of the notes effective through maturity, subject to limitations,
then the annual interest rate on these notes will increase by 0.25% every 90 days, up to a maximum of 1.0%, until
the default ceases to exist. If we have a registration default and subsequently correct it, the annual interest rate on
the notes will revert to 7.75%.

3 3⁄4% convertible senior subordinated notes due 2012. In August 2005, we completed the sale in a rule
144A private placement of $150.0 million in principal amount of 3 3⁄4% convertible senior subordinated notes due
July 15, 2012, which generated net cash proceeds of $144 million after deducting fees, expenses and the initial
purchasers’ discounts. All of these notes were exchanged for convertible notes with terms registered with the
SEC in January 2006. Cash interest is payable semiannually beginning January 15, 2006 at a rate of 3.75% per
year. The convertible notes are non-callable. Upon conversion, the principal portion of the convertible notes will
be paid in cash and any excess of the “conversion value” over the principal portion will be paid either in cash,

103

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

shares of our common stock or a combination of shares of our common stock and cash at our option. The
“conversion value” of each note is the average closing price of our shares over the “conversion reference period,”
as defined in the indenture, times the initial conversion rate of 31.998, subject to adjustment upon specified
events. Assuming conversion of the full $150 million principal amount of the notes, for every $1.00 the market
price of our common stock exceeds $31.25 per share, we will be required, at our option, either to pay an
additional $4.8 million or to issue shares of our common stock with a then market price equivalent to $4.8
million to settle the conversion feature. The convertible notes may be converted at the option of the holder unless
earlier repurchased: (1) on or after June 15, 2012; (2) if a specified fundamental change event occurs; (3) if the
closing sale price of our common stock for a specified time period exceeds 120% of the conversion price for a
specified time period; or (4) if the trading price for a convertible note is less than 95% of the closing sale price of
our common stock into which it can be converted for a specified time period.

On October 15, 2007, the $150.0 million aggregate principal amount of the notes due July 15, 2012 became

convertible at the option of the holders and is currently convertible through April 15, 2009 as provided in the
indenture covering the notes. The notes became convertible as a result of the closing price per share of our
common stock exceeding the conversion threshold price of $37.50 per share (120% of the applicable conversion
price of $31.25 per share) for at least 20 days in the 30 consecutive trading days of each of the periods ended
October 15, 2007, January 15, 2008, April 15, 2008, July 15, 2008, October 15, 2008, and January 15, 2009.

Upon surrendering any note for conversion, in accordance with the indenture, the holder of such note shall

receive cash in the amount of the lesser of (i) the $1,000 principal amount of such Note or (ii) the “conversion
value” of the note as defined in the indenture. The conversion feature results in a premium over the face amount
of the notes equal to the difference between our stock price as determined by the calculation set forth in the
indenture and the conversion price per share of $31.25 times the conversion ratio of 31.998 shares of common
stock for each $1,000 principal amount of the notes. We retain our option to satisfy any conversion value in
excess of each $1,000 principal amount of the notes with shares of common stock, cash or a combination of both
cash and shares. The premium will be calculated using the stock price calculation defined in the indenture.
Assuming conversion of the full $150.0 million principal amount of the notes, for every $1.00 the market price
per share of our common stock exceeds $31.25 per share, we will be required, at our option, either to pay an
additional $4.8 million or to issue shares of our common stock with a then market price equivalent to $4.8
million to settle the conversion feature.

Secured bank credit facility. Our amended and restated senior secured bank credit facility provides for a

$175.0 million revolving line of credit. The maturity date of the revolving line of credit is September 30, 2011.
We may choose to repay outstanding borrowings under the senior secured bank credit facility at any time before
maturity without penalty. Debt under the senior secured credit facility bears interest at an annual rate equal to the
Eurodollar rate plus an applicable margin or an alternative base rate defined as the higher of (1) the lender’s
announced prime rate or (2) the federal funds rate plus the sum of 50 basis points and an applicable margin.
Under the senior secured credit facility, the lenders have a security interest in substantially all of our assets.

Our senior secured bank credit facility and the indentures governing our senior notes contain covenants

which limit our ability to incur additional indebtedness; create liens; pay dividends on our capital stock, make
distributions or repurchases of our capital stock or make specified other restricted payments; consolidate, merge
or sell all or substantially all of our assets; guarantee obligations of other entities; enter into hedging agreements;
enter into transactions with affiliates or related persons or engage in any business other than consulting related
businesses. The senior secured credit facility requires compliance with financial ratios, including total
indebtedness to earnings before interest, taxes, depreciation and amortization (EBITDA); EBITDA to specified

104

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

charges; and the maintenance of a minimum net worth, each as defined under the senior secured bank credit
facility. At December 31, 2008, we were in compliance with all covenants as stipulated in the senior secured
bank credit facility and the indentures governing our senior notes.

On July 28, 2008, FTI and its guarantor subsidiaries entered into an amendment to the credit agreement
governing our senior secured bank credit facility with the bank group lenders, effective as of June 30, 2008. The
amendment changed certain provisions of the credit agreement to permit an increase of the principal amount of
the loan commitments under the revolving credit facility of up to $25.0 million (for a maximum of $175.0
million) if existing or new lenders agree to provide increased commitments and to allow borrowings in foreign
currencies, including the British Pound Sterling and Euro. On August 15, 2008, a commitment agreement was
signed increasing the principal amount of the loan commitments to $175.0 million.

The amendment modified the requirements for permitted acquisitions with respect to the notice

requirements and applicable financial covenants. The amendment also includes a number of technical
modifications to the covenant restrictions intended to improve our ability to operate internationally. Specifically,
the covenants related to investments were modified to allow any investment made prior to June 30, 2008, to
permit investments in foreign subsidiaries by other foreign subsidiaries, to permit additional investments in
foreign subsidiaries by FTI and its domestic subsidiaries in an amount outstanding at any one time of up to $30.0
million and to permit other investments in an amount up to $5.0 million. The covenant restrictions on liens were
modified to allow liens granted by a foreign subsidiary to FTI or another subsidiary to secure indebtedness of
such foreign subsidiary and to allow liens by a foreign subsidiary to secure indebtedness of up to $20.0 million.
Restrictions on indebtedness were changed to allow borrowings by a foreign subsidiary not to exceed $20.0
million and guarantees of such borrowings. The restricted payment covenant was modified to allow each
subsidiary to make restricted payments to the owners of their own capital stock. No borrowings were outstanding
under the secured bank credit facility at December 31, 2008 or December 31, 2007.

Notes payable to shareholders of acquired business. In connection with the acquisition of FD, we issued

£3.6 million of notes to former FD shareholders who elected to receive notes in lieu of cash. These notes are
unsecured and bear interest based on London Interbank Offered Rate, or LIBOR, that compounds quarterly.
These notes are redeemable at any time and accordingly they have been classified as a current obligation. The
outstanding balance of these notes was not material at December 31, 2008. At December 31, 2007 the
outstanding balance of these notes was £2.1 million. Former FD shareholders who elected to receive notes in lieu
of cash may also elect to receive any earn-out consideration in the form of notes. In 2008 and 2007, respectively,
we issued £0.3 million and £4.1 million of notes in lieu of cash for earn-out consideration as part of this
agreement. These additional notes are redeemable at any time prior to their maturity in March 2010, and have
been classified as a current obligation. At December 31, 2008 the outstanding balance of these notes was
immaterial. At December 31, 2007 the outstanding balance of these notes was £1.8 million.

Guarantees. Currently, we do not have any debt guarantees related to entities outside of the consolidated

group. As of December 31, 2008, substantially all of our domestic subsidiaries are guarantors of borrowings
under our senior secured credit facility, our senior notes and our convertible notes in the amount of
$565.0 million.

105

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Future maturities of long-term debt

For years subsequent to December 31, 2008, scheduled annual maturities of long-term debt outstanding as
of December 31, 2008 are as follows. Long-term debt that is callable by the holder has been shown as maturing
in 2009 in the following table.

2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter

Plus fair value hedge adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Long-term
Debt

$149,998
—
—
—
200,000
215,000

564,998

2,884
—

Capital
Lease
Obligations

$ 970
481
231
50
—
—

1,732

—
124

Total

$150,968
481
231
50
200,000
215,000

566,730

2,884
124

$567,882

$1,608

$569,490

15. Commitments and Contingencies

Operating lease commitments

We lease office space and equipment under non-cancelable operating leases and equipment under capital

leases. The leases normally provide for the payment of minimum annual rentals and may include scheduled rent
increases. We recognize scheduled rent increases on a straight-line basis over the initial lease term. Some leases
include provisions for renewal options of up to five years. Some of our leases for office space contain provisions
whereby the future rental payments may be adjusted for increases in operating expenses above specified amounts.

We entered into a lease agreement for office space in Washington, D.C. that commenced in November 2006

and expires in November 2021. In accordance with the lease terms, we received a cash inducement of $10.8
million in 2007. We have classified the inducements as deferred rent within other liabilities on our balance sheet.
We are amortizing the cash inducements over the life of the lease as a reduction to the rent expense.

Rental expense, net of rental income was $44.8 million during 2008, $35.8 million during 2007 and

$20.2 million during 2006. For years subsequent to December 31, 2008, future minimum payments for all
operating lease obligations that have initial non-cancelable lease terms exceeding one year, net of rental income
of $1.6 million in 2009, $1.4 million in 2010, $0.4 million in 2011, $0.1 million in 2012 and none in 2013 are as
follows.

2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating
Leases

$ 36,530
35,585
32,671
27,854
24,168
130,986

$287,794

106

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Contingencies

We are subject to legal actions arising in the ordinary course of business. In management’s opinion, we

believe we have adequate legal defenses and/or insurance coverage with respect to the eventuality of such
actions. We do not believe any settlement or judgment relating to any pending legal action would materially
affect our financial position or results of operations.

16. Income Taxes

Significant components of deferred tax assets and liabilities are as follows:

December 31, 2008

December 31, 2007

Asset

Liability

Asset

Liability

Current deferred tax assets (liabilities)

Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . .
Accrued vacation and bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued sublease losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 8,574
12,260
254
2,980
807
—
192

$

— $ 4,452
2,680
—
454
—
2,222
—
1,823
—
—
(695)
—
—

$ —
—
—
—
—
(973)
(114)

Total current deferred tax assets (liabilities) . . . . . . . . . . . . . . . . .

25,067

(695)

11,631

(1,087)

Long-term deferred assets (liabilities)

Property, equipment and capitalized software . . . . . . . . . . . . . .
Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forgivable notes receivable from employees . . . . . . . . . . . . . . .
Foreign tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued special charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill and other intangible asset amortization . . . . . . . . . . .
Currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . .
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,097
11,537
9,510
9,998
4,388
734
—

—
—

—
—
—
—
—
—
(1,260)
(113,758)

—
(50)

1,798
10,196
6,321
5,831
8,945
—
—
—
—
1,744

—
—
—
—
—
—
(3,519)
(75,502)
(4,927)
—

Total long-term deferred tax assets (liabilities) . . . . . . . . . . . . . . .

$38,264

$(115,068) $34,835

$(83,948)

Total deferred tax assets (liabilities) . . . . . . . . . . . . . . . . . . . . . . . .

$ (52,432)

$(38,569)

As of December 31, 2008, we have not recorded a $9.3 million deferred tax liability related to the tax basis

difference in the investment in our foreign subsidiaries as the investment is permanent in duration.

We also have $4.4 million of foreign tax credit carryforwards that begin to expire in 2015. Based upon
current levels of foreign source income and foreign income taxes, we expect to use the $4.4 million of credits by
2011.

The company has not established a valuation allowance for any of its deferred assets as it expects that future

taxable income as well as the reversal of temporary differences will enable the company to fully utilize its
deferred tax assets.

107

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

The components of income before tax from continuing operations are as follows.

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$149,773
55,858

$113,099
36,691

$82,917
(3,752)

$205,631

$149,790

$79,165

Year Ended December 31,

2008

2007

2006

The components of the income tax provision from continuing operations are as follows.

Year Ended December 31,

2008

2007

2006

Current

Federal
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$58,075
13,313
11,838

$39,328
10,275
11,715

$23,986
5,917
3,385

83,226

61,318

33,288

Deferred

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,287)
257
—

(2,518)
(1,131)
—

2,282
1,787
(216)

Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$80,196

$57,669

$37,141

(3,030)

(3,649)

3,853

Our income tax provision from continuing operations resulted in effective tax rates that varied from the

statutory federal income tax rate as follows:

Year Ended December 31,

2008

2007

2006

Federal income tax provision at statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal benefit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation not deductible for tax purposes . . . . . . . . . . . . . . . . . .
Expenses not deductible for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill amortization on foreign acquisitions deductible for U.S. tax

35.0%
4.3
0.7
1.3

purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in state tax laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2.3)
—

35.0%
4.8
0.7
1.8

(3.0)
(0.8)

35.0%
6.2
1.8
3.9

—
—

39.0%

38.5%

46.9%

At December 31, 2008, we had a net income tax receivable of $3.3 million as compared to a net income tax

receivable of $6.6 million at December 31, 2007.

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”

(FIN 48), an interpretation of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 clarifies the

108

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

accounting for uncertainty in income taxes recognized in our financial statements. It also prescribes a recognition
threshold and measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. This interpretation also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods and expanded disclosure with respect to
uncertainty in income taxes. We adopted the guidance of FIN 48 effective January 1, 2007. The adoption of this
accounting pronouncement did not have a material effect on our financial position, results of operations or cash
flows. Furthermore, we are not aware of any tax positions for which it is reasonably possible that the total
amounts of unrecognized tax benefits would significantly decrease or increase within the next twelve months.

We file numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and in many
city, state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations for years
prior to 2004 and are no longer subject to state and local or foreign tax examinations by tax authorities for years
prior to 2000. In addition, open tax years related to state and foreign jurisdictions remain subject to examination
but are not considered material to our financial position, results of operations or cash flows.

During 2008, there were no material changes to the liability for uncertain tax positions. Interest and

penalties related to uncertain tax positions are classified as such and excluded from the income tax provision. As
of December 31, 2008, our accrual for the payment of tax-related interest and penalties was not material.

Goodwill

We recorded goodwill from the acquisitions completed in 2008, 2007 and 2006 as a result of the value of
the assembled workforce we acquired and the ability to earn a higher rate of return from the acquired business
than would be expected if those net assets had to be acquired or developed separately. Excluding the U.S. and a
small European component of the FD acquisition, we believe the goodwill recorded as a result of these
acquisitions will be fully deductible for income tax purposes over 15 years. For U.S. tax purposes, the U.S. and a
small European component of the FD acquisition will be treated as stock transactions and, as a result, the
goodwill associated with these acquisitions is not deductible for income tax purposes.

17. Stockholders’ Equity

Common stock

Holders of our common stock are entitled to one vote per share on all matters submitted for action by the
stockholders and share equally, share for share, if dividends are declared on the common stock. In the event of
any liquidation, dissolution or winding up of our company or upon the distribution of our assets, all assets and
funds remaining after payment in full of our debts and liabilities, and after the payment of all liquidation
preferences, if any, applicable to any outstanding preferred stock, would be divided and distributed among the
holders of our common stock ratably. There are no redemption or sinking fund requirements applicable to shares
of our common stock.

In October 2007, we closed on a public offering of 4,830,000 shares of the Company’s common stock
(which included 630,000 shares sold pursuant to the exercise of the underwriter’s option to purchase additional
shares) at a price to the public of $50.00 per share, less the underwriting discount and commissions. The net
proceeds of the offering were $231.4 million, after payment of the underwriting discounts, commissions and
offering expenses. We used the net proceeds from the offering for general corporate purposes, including the
continuation of our strategic acquisition program.

109

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Common stock repurchase program

In October 2003, our Board of Directors initially approved a share repurchase program under which we

were authorized to purchase shares of our common stock. From time to time, our Board of Directors has
reauthorized an amount of authorized share repurchases under the initial program. On February 25, 2008, our
Board of Directors authorized a share repurchase program of up to $50.0 million of stock repurchases through
February 25, 2009. The shares of common stock could be purchased through open market or privately negotiated
transactions and were to be funded with a combination of cash on hand, existing bank credit facilities or new
credit facilities. On February 25, 2009 our Board of Directors authorized a stock repurchase program in the
aggregate of $50.0 million which is currently in effect through February 2010.

During 2008, we did not purchase any shares under the common stock repurchase program. During 2007,

we purchased and retired 0.5 million shares of our common stock for a total cost of about $18.1 million. During
2006, we purchased and retired 0.6 million shares of our common stock for a total cost of about $16.6 million.
Since inception of the program, we purchased and retired a total of 8.1 million shares of our common stock for a
total cost of $204.3 million.

18. Employee Benefit Plans

We maintain a qualified defined contribution 401(k) plan, which covers substantially all of our U.S.
employees. Under the plan, participants are entitled to make pre-tax contributions up to the annual maximums
established by the Internal Revenue Service. We match a certain percentage of participant contributions pursuant
to the terms of the plan, which are limited to a percent of the participant’s eligible compensation. The percentage
match is at the discretion of our board of directors. We made contributions related to the plan of $7.1 million
during 2008, $5.6 million during 2007 and $5.5 million during 2006.

We also maintain several defined contribution pension schemes for our employees in the United Kingdom

and other foreign countries. The assets of the schemes are held separately from those of the Company in
independently administered funds. We contributed $4.7 million to these plans during 2008, and $4.4 million
during 2007. The contribution for 2006 was immaterial.

19. Segment Reporting

We manage our business in five reportable operating segments: Corporate Finance/Restructuring, Forensic

and Litigation Consulting, Strategic Communications, Technology, and Economic Consulting.

The Corporate Finance/Restructuring segment focuses on strategic, operational, financial and capital needs

of businesses around the world and provides consulting and advisory services relating to turnaround,
performance improvement, lending solutions, financial and operational restructuring, restructuring advisory,
mergers and acquisitions, transaction advisory and interim management. The Forensic and Litigation Consulting
segment provides law firms, companies, government clients and other interested parties around the world with
end-to-end forensic and litigation services, including pre-filing assessments, discovery, trial preparation, expert
testimony and other trial support services. The Strategic Communications segment provides advice and
consulting services relating to financial communications, brand communications, public affairs and reputation
management and business consulting. The Technology segment provides products, services and consulting to law
firms, companies, courts and government agencies worldwide with the principal business focus on the collection,
preservation, review and production of electronically stored information. The Economic Consulting segment

110

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

provides law firms, companies, government entities and other interested parties with clear analysis of complex
economic issues for use in legal and regulatory proceedings, strategic decision making and public policy debates
in the U.S. and internationally.

We evaluate the performance of our operating segments based on operating income excluding depreciation,

amortization of other intangible assets, special charges, unallocated corporate expenses and including
non-operating litigation settlement gains and losses, which we refer to as “segment EBITDA.” Segment EBITDA
consists of the revenues generated by that segment, less the direct costs of revenues and selling, general and
administrative costs that are incurred directly by that segment as well as an allocation of certain centrally
managed costs, such as information technology services, accounting, marketing and facility costs. Although
segment EBITDA is not a measure of financial condition or performance determined in accordance with
generally accepted accounting principles, we use it to evaluate and compare the operating performance of our
segments and it is one of the primary measures used to determine employee incentive compensation. Unallocated
corporate expenses include costs related to centrally managed administrative functions which have not been
allocated to the segments. These administrative costs include corporate office support costs, human resources,
legal, company-wide business development functions, as well as costs related to overall corporate management.
In addition, certain accounting and information technology costs are unallocated.

The table below presents revenues and operating income for our reportable segments for the three years

ended December 31, 2008.

Year Ended December 31,

2008

2007

2006

Revenues

Corporate Finance/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forensic and Litigation Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . .
Strategic Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 374,504
253,918
224,481
220,359
219,883

$ 261,625
217,028
185,333
162,837
174,447

$212,617
193,287
40,708
117,230
144,091

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,293,145

$1,001,270

$707,933

Segment EBITDA

Corporate Finance/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forensic and Litigation Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . .
Strategic Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 114,178
57,493
55,164
73,506
59,020

$

71,629
57,292
48,826
62,921
48,085

$ 51,514
55,306
14,173
46,965
36,873

Total segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 359,361

$ 288,753

$204,831

111

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

The table below reconciles segment profit to income before income tax provision.

Year Ended December 31,

2008

2007

2006

Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated corporate expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate litigation settlement (losses) gains . . . . . . . . . . . . . . . . . . . . . . . . . .
Special charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$359,361
(20,342)
(18,824)
(81,973)
8,685
(41,051)
(225)
—

$288,753
(14,582)
(10,615)
(77,344)
7,639
(43,857)
(204)
—

$204,831
(9,101)
(11,175)
(56,136)
2,119
(28,949)
548
(22,972)

Income before income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$205,631

$149,790

$ 79,165

For the year ended December 31, 2006, the detail of the special charges by segment is as follows:

Forensic and Litigation Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Finance/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 9,890
7,740
4,148
1,194

Total Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$22,972

The table below presents assets by segment. Segment assets primarily include accounts and notes

receivable, fixed assets purchased specifically for the segment, goodwill and other intangible assets.

Corporate Finance/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forensic and Litigation Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Strategic Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated corporate assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,

2008

2007

$ 556,638
297,785
404,994
266,405
322,047

1,847,869
240,300

$ 396,914
233,104
417,153
115,750
277,635

1,440,556
418,068

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,088,169

$1,858,624

112

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

The table below details information on our revenues for the three years ended December 31, 2008. We do

not have a single customer that represents ten percent or more of our consolidated revenues. Revenues have been
attributed to location based on the location of the entity generating the revenue.

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All foreign countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,056,616
236,529

$ 838,941
162,329

$671,603
36,330

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,293,145

$1,001,270

$707,933

Year Ended December 31,

2008

2007

2006

The table below details information on our net assets at December 31, 2008 and 2007. Net assets have been

attributed to geographic location based on the location of the entity holding the assets.

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All foreign countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 911,868
211,959

$858,650
113,600

Total net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,123,827

$972,250

December 31,

2008

2007

20. Supplemental Condensed Consolidating Guarantor and Non-Guarantor Financial Information

Substantially all of our United States subsidiaries are guarantors of borrowings under our senior notes and
our convertible notes. The guarantees are full and unconditional and joint and several. All of our guarantors are
direct or indirect, wholly-owned subsidiaries. There are no significant restrictions on our ability or the ability of
any guarantor to obtain funds from our subsidiaries by dividend or loan.

The following financial information presents condensed consolidating balance sheets, income statements
and statements of cash flows for FTI Consulting, Inc., all guarantor subsidiaries, all non-guarantor subsidiaries
and the eliminations necessary to arrive at the consolidated information for FTI Consulting, Inc. and its
subsidiaries. For purposes of this presentation, we have accounted for our investments in our subsidiaries using
the equity method of accounting. The principal eliminating entries eliminate investment in subsidiary and inter-
company balances and transactions.

113

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Condensed Consolidating Balance Sheet Information as of December 31, 2008

FTI
Consulting, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated

Assets

Cash and cash equivalents . . . . . .
Accounts receivable, net . . . . . . . .
Intercompany receivables . . . . . . .
Other current assets . . . . . . . . . . .

Total current assets . . . . . .
Property and equipment, net . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . .
Other intangible assets, net . . . . . .
Investments in subsidiaries . . . . . .
Other assets . . . . . . . . . . . . . . . . . .

$ 131,412
87,859
74,743
52,097

346,111
45,089
416,302
4,284
1,200,661
62,787

$

11,663
164,198
173,048
21,166

370,075
24,457
536,964
138,976
818,145
146,431

$

48,767
37,983
91,030
5,523

183,303
9,029
198,122
46,044
737,504
8,538

$

— $ 191,842
290,040
—
—
70,572

(338,821)
(8,214)

(347,035)

—
—
—

(2,756,310)
(101,308)

552,454
78,575
1,151,388
189,304
—
116,448

Total assets . . . . . . . . . . . . .

$2,075,234

$2,035,048

$1,182,540

$(3,204,653) $2,088,169

Liabilities

Intercompany payables . . . . . . . . .
Other current liabilities . . . . . . . . .

$ 178,994
269,922

$

Total current liabilities . . . .
Long-term debt, net
. . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . .

448,916
417,883
84,608

83,024
111,081

194,105
709
35,557

Total liabilities . . . . . . . . . . .
Stockholders’ equity . . . . . . . . . . . . . .

951,407
1,123,827

230,371
1,804,677

$

76,803
51,120

127,923
—
102,984

230,907
951,633

$ (338,821) $

(8,214)

(347,035)

—

(101,308)

—
423,909

423,909
418,592
121,841

(448,343)
(2,756,310)

964,342
1,123,827

Total liabilities and

stockholders’ equity . . . .

$2,075,234

$2,035,048

$1,182,540

$(3,204,653) $2,088,169

114

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Condensed Consolidating Balance Sheet Information as of December 31, 2007

FTI
Consulting, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated

Assets

$

Cash and cash equivalents . . . . . . .
Accounts receivable, net
. . . . . . . .
Intercompany receivables . . . . . . .
Other current assets . . . . . . . . . . . .

$ 328,505
135,158
10,686
46,145

Total current assets . . . . . . .
Property and equipment, net
. . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . .
Other intangible assets, net
. . . . . .
Investments in subsidiaries . . . . . .
Other assets . . . . . . . . . . . . . . . . . .

520,494
47,962
414,889
5,409
746,834
67,484

$

1,273
70,597
116,616
4,117

192,603
11,792
322,697
36,455
258,356
173,927

$ 30,685
39,421
47,712
5,626

123,444
8,089
203,292
42,809
166,087
7,031

— $ 360,463
245,176
—
—
55,888

—

(175,014)

(175,014)

—
—
—

(1,171,277)
(144,739)

661,527
67,843
940,878
84,673
—
103,703

Total assets . . . . . . . . . . . . . .

$1,803,072

$995,830

$550,752

$(1,491,030) $1,858,624

Liabilities

Intercompany payables . . . . . . . . .
Other current liabilities . . . . . . . . .

$

Total current liabilities . . . .
Long-term debt, net . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . .

Total liabilities . . . . . . . . . . .
Stockholders’ equity . . . . . . . . . . . . . .

Total liabilities and

73,737
269,322

343,059
415,653
72,110

830,822
972,250

$ 46,544
46,742

$ 54,733
67,755

93,286
—
12,580

105,866
889,964

122,488
—
146,951

269,439
281,313

$ (175,014) $

(2,757)

(177,771)

—

(141,982)

(319,753)
(1,171,277)

—
381,062

381,062
415,653
89,659

886,374
972,250

stockholders’ equity . . . . .

$1,803,072

$995,830

$550,752

$(1,491,030) $1,858,624

115

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Condensed Consolidating Statement of Income Information for the Year Ended December 31, 2008

Revenues . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses

Direct cost of revenues . . . . . . . . . .
Selling, general and administrative
expense . . . . . . . . . . . . . . . . . . . .

Amortization of other intangible

FTI
Consulting, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations Consolidated

$493,919

$1,143,520

$239,626

$(583,920) $1,293,145

276,291

870,642

135,059

(576,381)

705,611

165,370

122,021

50,200

(7,539)

330,052

assets . . . . . . . . . . . . . . . . . . . . . .

1,125

12,438

5,261

—

18,824

442,786

1,005,101

190,520

(583,920)

1,054,487

Operating income . . . . . . . . . . . . . . . . .
Other income (expense) . . . . . . . . . . . .

51,133
(36,621)

Income before income tax

provision . . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . .
Equity in net earnings of

14,512
6,284

138,419
6,724

145,143
62,851

49,106
(3,130)

45,976
11,061

—
—

—
—

238,658
(33,027)

205,631
80,196

subsidiaries . . . . . . . . . . . . . . . . . . . .

117,207

34,370

10,428

(162,005)

—

Net income . . . . . . . . . . . . . . . . . . . . . . .

$125,435

$ 116,662

$ 45,343

$(162,005) $ 125,435

Condensed Consolidating Statement of Income Information for the Year Ended December 31, 2007

Revenues . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses

Direct cost of revenues . . . . . . . . . . .
Selling, general and administrative

FTI
Consulting, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations Consolidated

$544,360

$701,421

$168,838

$(413,349) $1,001,270

304,674

570,115

84,662

(411,044)

548,407

expense . . . . . . . . . . . . . . . . . . . . .

179,633

35,381

42,529

(2,305)

255,238

Amortization of other intangible

assets . . . . . . . . . . . . . . . . . . . . . .

2,006

5,028

3,581

—

10,615

Operating income . . . . . . . . . . . . . . . . . .
Other income (expense) . . . . . . . . . . . . .

Income before income tax provision . .
Income tax provision . . . . . . . . . . . . . . .
Equity in net earnings of

486,313

610,524

130,772

(413,349)

814,260

58,047
(38,713)

19,334
7,810

90,897
2,544

93,441
38,144

38,066
(1,051)

37,015
11,715

—
—

—
—

187,010
(37,220)

149,790
57,669

subsidiaries . . . . . . . . . . . . . . . . . . . . .

80,597

25,299

2,755

(108,651)

—

Net income . . . . . . . . . . . . . . . . . . . . . . .

$ 92,121

$ 80,596

$ 28,055

$(108,651) $

92,121

116

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Condensed Consolidating Statement of Income Information for the Year Ended December 31, 2006

Revenues . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses

Direct cost of revenues . . . . . . . . . .
Selling, general and administrative

expense . . . . . . . . . . . . . . . . . . . .
Special charges . . . . . . . . . . . . . . . .
Amortization of other intangible

assets . . . . . . . . . . . . . . . . . . . . . .

Operating income . . . . . . . . . . . . . . . . .
Other income (expense) . . . . . . . . . . . .

Income (expense) before income tax

provision . . . . . . . . . . . . . . . . . . . . . .
Income tax provision (benefit) . . . . . . .
Equity in net earnings of

FTI
Consulting, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations Consolidated

$478,160

$187,952

$41,821

$ —

$707,933

259,763

100,583

28,686

140,809
14,992

1,865
417,429

60,731
(26,522)

27,943
1,082

8,449
138,057

49,895
(507)

34,209
18,714

49,388
20,221

9,820
6,898

861
46,265

(4,444)
(72)

(4,516)
(1,794)

—

—
—

—
—

—
—

—
—

389,032

178,572
22,972

11,175
601,751

106,182
(27,101)

79,081
37,141

subsidiaries . . . . . . . . . . . . . . . . . . . .

26,529

6,118

1,980

(34,543)

84

Net income (loss) . . . . . . . . . . . . . . . . . .

$ 42,024

$ 35,285

$ (742)

$(34,543)

$ 42,024

117

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Condensed Consolidating Statement of Cash Flow Information for the Year Ended December 31, 2008

FTI
Consulting, Inc.

Guarantor
Subsidiaries

Non-Guarantor

Subsidiaries Consolidated

Operating activities

Net cash provided by operating activities . . . . . . . . . . . . . . . .

$ 72,352

$ 72,137

$ 55,363

$ 199,852

Investing activities

Payments for acquisition of businesses, net of cash

received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .

Purchases of property and equipment and other

(333,830)
(15,464)

(3,860)
(9,068)

(7,851)
(6,439)

Net cash used in investing activities . . . . . . . . . . . . . . . .

(349,294)

(12,928)

(14,290)

Financing activities

Payment of short-term borrowings of acquired subsidiary . . .
Payment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock and other . . . . . . . . . . . . . . . . . . . .
Excess tax benefits from share based equity . . . . . . . . . . . . . .
Intercompany transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by (used in) financing activities . . . . .

Effects of exchange rate changes and fair value adjustments

—
(8,261)
20,450
10,820
56,785

79,794

(2,275)
(483)
—
—
(46,061)

(48,819)

—
—
—
—
(10,724)

(10,724)

on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . .

55

—

(12,267)

Net (decrease) increase in cash and cash equivalents . . . . . . . . .
Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . .

(197,093)
328,505

10,390
1,273

18,082
30,685

(345,541)
(30,971)

(376,512)

(2,275)
(8,744)
20,450
10,820
—

20,251

(12,212)

(168,621)
360,463

Cash and cash equivalents, end of year . . . . . . . . . . . . . . . . . . . .

$ 131,412

$ 11,663

$ 48,767

$ 191,842

Condensed Consolidating Statement of Cash Flow Information for the Year Ended December 31, 2007

FTI
Consulting, Inc.

Guarantor
Subsidiaries

Non-Guarantor

Subsidiaries Consolidated

Operating activities

Net cash provided by operating activities . . . . . . . . . . . . . . . .

$ 13,491

$ 45,576

$ 9,669

$ 68,736

Investing activities

Payments for acquisition of businesses, net of cash

received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .

Purchases of property and equipment and other

Net cash used in investing activities . . . . . . . . . . . . . . . .

Financing activities

Capital contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and retirement of common stock . . . . . . . . . . . . . . .
Intercompany transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,402)
(27,890)

(29,292)

(313,649)
(18,118)
318,292
231,408
56,363

(8,466)
(2,897)

(11,363)

260,821
—

(297,353)

—
—

(22,375)
(5,153)

(27,528)

52,828
—
(20,939)
—
—

Net cash provided by (used in) financing activities . . . . .

274,296

(36,532)

31,889

Effects of exchange rate changes and fair value adjustments

on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net increase (decrease) in cash and cash equivalents . . . . . . . . .
Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . .

—

258,495
70,010

—

(2,319)
3,592

(1,666)

12,364
18,321

(32,243)
(35,940)

(68,183)

—
(18,118)
—
231,408
56,363

269,653

(1,666)

268,540
91,923

Cash and cash equivalents, end of year . . . . . . . . . . . . . . . . . . . .

$ 328,505

$

1,273

$ 30,685

$360,463

118

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

Condensed Consolidating Statement of Cash Flow Information for the Year Ended December 31, 2006

Operating activities

Net cash provided by (used in) operating activities . . . . . . . . .

$ 31,865

$ 37,077

$(12,627)

$ 56,315

FTI
Consulting, Inc.

Guarantor
Subsidiaries

Non-Guarantor

Subsidiaries Consolidated

Investing activities

Payments for acquisition of businesses, net of cash

received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .

Purchases of property and equipment and other

(293,228)
(26,710)

Net cash (used in) provided by investing activities . . . . .

(319,938)

Financing activities

Issuance of debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and retirement of common stock . . . . . . . . . . . . . . .
Intercompany transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by (used in) financing activities . . . . .

Effects of exchange rate changes and fair value adjustments
on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net (decrease) increase in cash and cash equivalents . . . . . . . . .
Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . .

215,000
(25,476)
(23,376)
29,418
11,267

206,833

—
(81,240)
151,250

386
(2,801)

(2,415)

—
—
—
(31,212)
—

(31,212)

—
3,450
142

25,510
(542)

24,968

(267,332)
(30,053)

(297,385)

—
—
1,794
—

1,794

2,195
16,330
1,991

215,000
(25,476)
(23,376)
—
11,267

177,415

2,195
(61,460)
153,383

Cash and cash equivalents, end of year . . . . . . . . . . . . . . . . . . . .

$ 70,010

$ 3,592

$ 18,321

$ 91,923

119

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

21. Quarterly Financial Data (unaudited)

March 31

June 30

September 30 December 31

Quarter Ended

2008

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$307,102

$337,670

$325,497

$322,876

Operating expenses

Direct cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . .
Amortization of other intangible assets . . . . . . . . . . . . . . . .

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation settlement (losses) gains, net
. . . . . . . . . . . . . . . . . .

Income before income tax provision . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

172,521
72,572
2,898

247,991

59,111
3,311
(10,618)
(1)

51,803
20,514

188,166
77,773
4,457

270,396

67,274
2,089
(10,303)
(435)

58,625
23,215

174,514
91,508
5,664

271,686

53,811
1,980
(9,914)
(275)

45,602
18,059

170,410
88,199
5,805

264,414

58,462
1,305
(10,216)
50

49,601
18,408

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 31,289

$ 35,410

$ 27,543

$ 31,193

Earnings per common share — basic . . . . . . . . . . . . . . . . . . . .

Earnings per common share — diluted . . . . . . . . . . . . . . . . . .

Weighted average common shares outstanding

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007

$

$

0.65

0.59

$

$

0.72

0.66

$

$

0.56

0.51

$

$

0.63

0.58

48,325

52,717

49,155

53,700

49,541

54,460

49,738

53,411

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$227,725

$239,692

$253,334

$280,519

Operating expenses

Direct cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . .
Amortization of other intangible assets . . . . . . . . . . . . . . . .

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation settlement (losses) gains, net
. . . . . . . . . . . . . . . . . .

Income before income tax provision . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

126,181
60,358
2,737

189,276

38,449
483
(10,951)
(741)

27,240
11,978

131,349
61,910
2,748

196,007

43,685
2,478
(11,391)
(167)

34,605
11,523

139,131
63,007
2,293

204,431

48,903
239
(10,865)
36

38,313
15,330

151,746
69,963
2,837

224,546

55,973
4,439
(10,650)
(130)

49,632
18,838

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 15,262

$ 23,082

$ 22,983

$ 30,794

Earnings per common share — basic . . . . . . . . . . . . . . . . . . . .

Earnings per common share — diluted . . . . . . . . . . . . . . . . . .

Weighted average common shares outstanding

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

0.37

0.36

$

$

0.56

0.53

$

$

0.55

0.50

$

$

0.66

0.60

41,498

42,518

41,333

43,412

41,992

45,595

46,996

51,347

The sum of the quarterly earnings per share amounts may not equal the annual amounts due to changes in

the weighted-average number of common shares outstanding during each quarterly period.

120

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures”

(as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended), as of the end of the
period covered by this Annual Report on Form 10-K was made under the supervision and with the participation
of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon this
evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls
and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or
submitted under the Securities Exchange Act is timely recorded, processed, summarized and reported and
(b) include, without limitation, controls and procedures designed to ensure that information required to be
disclosed by us in reports filed or submitted under the Securities Exchange Act is accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management’s report on internal control over financial reporting is included in “Item 8. Financial

Statements and Supplementary Data.”

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting that occurred during the
quarter ended December 31, 2008 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

121

PART III

Certain information required in Part III is omitted from this report, but is incorporated herein by reference

from our definitive proxy statement for the 2009 Annual Meeting of Stockholders to be filed within 120 days
after the end of our fiscal year ended December 31, 2008, pursuant to Regulation 14A with the Securities and
Exchange Commission.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information contained in our proxy statement under the captions “Information About the Board of

Directors and Committees,” “Corporate Governance,” “Executive Officers and Compensation,” and “Section
16(a) Beneficial Ownership Reporting Compliance” is incorporated herein by reference.

We have adopted the FTI Consulting, Inc. Policy on Ethics and Business Conduct, or Code of Ethics, which

applies to our chairman of the board, president, chief executive officer, chief financial officer, corporate
controller and our other financial professionals, as well as our chief operating officer, chief administrative
officer, general counsel and chief risk and compliance officer and our other officers, directors, employees and
independent contractors. The Code of Ethics is publicly available on our website at http://www.fticonsulting.com/
web/about/governance.html. If we make any substantive amendments to the Code of Ethics or grant any waiver,
including any implicit waiver, from a provision of the Code of Ethics to our chairman of the board, president,
chief executive officer, chief operating officer, chief financial officer, corporate controller or persons performing
similar functions, other executive officers or directors, we will disclose the nature of such amendment or waiver
on that website or in a report on Form 8-K filed with the SEC. We will provide printed copies of our corporate
governance documents, including, without limitation, our Corporate Governance Guidelines, the Charters of the
Committees of our Board of Directors, our Code of Ethics, our Conflicts of Interest Policy and our Anti-
Corruption Policy to any person, without charge, upon request to our Corporate Secretary, FTI Consulting, Inc.,
500 East Pratt Street, Suite 1400, Baltimore, Maryland 21202, telephone number (410) 951-4800.

ITEM 11. EXECUTIVE COMPENSATION

The information contained in our proxy statement under the caption “Executive Officers and Compensation”

is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

The information contained in our proxy statement under the captions “Security Ownership of Certain
Beneficial Owners and Management” and this Annual Report on Form 10-K under the caption “Part II — Item 5.
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities — Securities Authorized for Issuance under Equity Compensation Plans” is incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE

The information contained in our proxy statement under the captions “Executive Officers and

Compensation — Certain Relationships and Related Party Transactions,” “Information About the Board of
Directors and Committees” and “Corporate Governance” is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information contained in our proxy statement under the caption “Auditor Services” is incorporated

herein by reference.

122

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a)

(1) The following financial statements are included in this Annual Report on Form 10-K:

Management’s Report on Internal Control over Financial Reporting

Report of Independent Registered Public Accounting Firm — Internal Control over Financial
Reporting

Reports of Independent Registered Public Accounting Firm — Consolidated Financial Statements

Consolidated Balance Sheets — December 31, 2008 and 2007

Consolidated Statements of Income — Years Ended December 31, 2008, 2007 and 2006

Consolidated Statements of Stockholders’ Equity — Years Ended December 31, 2008, 2007 and 2006

Consolidated Statements of Cash Flows — Years Ended December 31, 2008, 2007 and 2006

Notes to Consolidated Financials Statements

(2) The following financial statement schedule is included in this Annual Report on Form 10-K:

Schedule II — Valuation and Qualifying Accounts

All schedules, other than the schedule listed above, are omitted as the information is not required or is
otherwise furnished.

123

FTI Consulting, Inc. and Subsidiaries

Schedule II — Valuation and Qualifying Accounts
(in thousands)

Balance
at
Beginning
of Period

Additions

Provision
for Doubtful
Accounts

Charged
to Other
Accounts*

Balance
at End
of
Period

Deductions**

Description

Year Ended December 31, 2008

Reserves and allowances deducted from asset

accounts:

Allowance for doubtful accounts and

unbilled services . . . . . . . . . . . . . . . . . . .

$30,467

$22,474

$5,852

$13,484

$45,309

Year Ended December 31, 2007

Reserves and allowances deducted from asset

accounts:

Allowance for doubtful accounts and

unbilled services . . . . . . . . . . . . . . . . . . .

$20,351

$11,777

$6,319

$ 7,980

$30,467

Year Ended December 31, 2006

Reserves and allowances deducted from asset

accounts:

Allowance for doubtful accounts and

unbilled services . . . . . . . . . . . . . . . . . . .

$17,330

$ 8,570

$3,494

$ 9,043

$20,351

*

**

Includes estimated provision for unbilled services recorded as a reduction to revenues (i.e., fee, rate and
other adjustments).
Includes estimated direct write-offs of uncollectible and unrealizable accounts receivable.

124

Exhibit
Number

1.1**

1.2**

1.3**

1.4

2.1**

2.2**

2.3**

2.4**

2.5**

Description of Exhibits

Purchase Agreement, dated as of July 28, 2005, by and among FTI Consulting, Inc., the guarantors
named therein and the Initial Purchasers named therein, relating to the 7 5⁄ 8% Senior Notes due 2013.
(Filed with the Securities and Exchange Commission on August 3, 2005 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated July 28, 2005 and incorporated herein by
reference.)

Purchase Agreement, dated as of July 28, 2005, by and among FTI Consulting, Inc., the guarantors
named therein and the Initial Purchasers named therein, relating to the 3 3⁄4% Senior Subordinated
Convertible Notes due July 15, 2012. (Filed with the Securities and Exchange Commission on
August 3, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated July 28,
2005 and incorporated herein by reference.)

Purchase Agreement dated September 27, 2006, by and among FTI Consulting, Inc., the Guarantors
named therein and the Initial Purchasers named therein, relating to the 7 3⁄4% Senior Notes due 2016.
(Filed with the Securities and Exchange Commission, on October 3, 2006 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K/A (Amendment No. 2) dated September 27, 2006 and
incorporated herein by reference.)

Underwriting Agreement dated October 3, 2007, by and among FTI Consulting, Inc. and Deutsche
Bank Securities Inc., Banc of America Securities LLC and Goldman, Sachs & Co. (Filed with the
Securities and Exchange Commission on October 3, 2007 as an exhibit to FTI Consulting, Inc.’s
Post-Effective Amendment to Registration Statement on Form S-3 (333-146366) dated October 3,
2007 and incorporated herein by reference.)

Agreement for the Purchase and Sale of Assets dated as of July 24, 2002, by and between
PricewaterhouseCoopers LLP and FTI Consulting, Inc. (Filed with the Securities and Exchange
Commission on July 26, 2002 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K
dated July 24, 2002 and incorporated herein by reference.)

LLC Membership Interests Purchase Agreement dated as of January 31, 2000, by and among FTI
Consulting, Inc., and Michael Policano and Robert Manzo. (Filed with the Securities and Exchange
Commission on February 15, 2000 as an exhibit to FTI Consulting, Inc.’s Current Report on
Form 8-K dated February 4, 2000 and incorporated herein by reference.)

Asset Purchase Agreement dated October 22, 2003, by and among KPMG LLP, DAS Business LLC
and FTI Consulting, Inc. (Filed with the Securities and Exchange Commission on November 14,
2003 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated November 3, 2003
and incorporated herein by reference.)

Asset Purchase Agreement dated September 25, 2003, by and among FTI Consulting, Inc., LI
Acquisition Company, LLC, Nextera Enterprises, Inc., Lexecon Inc., CE Acquisition Corp. and ERG
Acquisition Corp. (Filed with the Securities and Exchange Commission on October 2, 2003 as an
exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated September 25, 2003 and
incorporated herein by reference.)

Asset Purchase Agreement dated February 16, 2005, by and among FTI Consulting, Inc., FTI, LLC,
FTI Repository Services, LLC, FTI Consulting Ltd., FTI Australia Pty Ltd, Edward J. O’Brien and
Christopher R. Priestley, Messrs. Edward J. O’Brien and Christopher R. Priestley trading as the
Ringtail Suite Partnership, Ringtail Solutions Pty Ltd, on its behalf and as trustee for Ringtail Unit
Trust, Ringtail Solutions, Inc. and Ringtail Solutions Limited. (Filed with the Securities and
Exchange Commission on February 23, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report
on Form 8-K dated February 16, 2005 and incorporated herein by reference.)

125

Exhibit
Number

2.6**

2.7**

2.8

2.9

2.10

2.11

2.12**

Description of Exhibits

Asset Purchase Agreement, dated as of May 23, 2005, by and among Cambio Health Solutions, LLC,
Cambio Partners, LLC, each of the individuals named in Exhibit A thereto that becomes a party
thereto prior to the Closing (as defined therein) by executing a joinder agreement on or after the date
thereof, FTI Consulting, Inc, FTI, LLC, FTI Cambio LLC, and the Seller Representative (as defined
therein). (Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated May 23, 2005 and incorporated herein by
reference.)

Purchase Agreement, dated as of November 15, 2005, by and among FTI Compass, LLC, a Maryland
limited liability company, FTI Consulting, Inc., a Maryland corporation, FTI, LLC, a Maryland
limited liability company, Competition Policy Associates, Inc., a District of Colombia corporation
(the “Company”), and the stockholders of the Company listed on Schedule I thereto. (Filed with the
Securities and Exchange Commission on November 19, 2006 as an exhibit to FTI Consulting, Inc.’s
Current Report on Form 8-K dated November 22, 2005 and incorporated by reference herein.)

Form of Irrevocable Undertaking entered into by Controlling Shareholder Group of FD International
(Holdings) Limited. (Filed with the Securities and Exchange Commission on October 10, 2006 as an
exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated October 3, 2006 and
incorporated herein by reference.)

Form of Irrevocable Undertaking entered into by Executive Officers of FD International (Holdings)
Limited. (Filed with the Securities and Exchange Commission on October 10, 2006 as an exhibit to
FTI Consulting, Inc.’s Current Report on Form 8-K dated October 3, 2006 and incorporated herein
by reference.)

Form of Irrevocable Undertaking entered into by Other Shareholders of FD International (Holdings)
Limited. (Filed with the Securities and Exchange Commission on October 10, 2006 as an exhibit to
FTI Consulting, Inc.’s Current Report on Form 8-K dated October 3, 2006 and incorporated herein
by reference.)

Warranty Deed dated as of September 11, 2006 between FTI FD LLC and the Warrantors named
therein. (Filed with the Securities and Exchange Commission on October 10, 2006 as an exhibit to
FTI Consulting, Inc.’s Current Report on Form 8-K dated October 3, 2006 and incorporated herein
by reference.)

Asset Purchase Agreement dated March 31, 2008 by and among FTI Consulting, Inc., FTI SMC
Acquisition LLC, The Schonbraun McCann Consulting Group LLC, the individuals listed on
Schedule I thereto and Bruce Schonbraun as the Members’ Representative. The registrant has
requested confidential treatment with respect to certain portions of this exhibit pursuant to Rule 24b-
2 of the Securities Act. Such portions have been omitted from this exhibit and filed separately with
the Securities and Exchange Commission. (Filed with the SEC on April 4, 2008 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated March 31, 2008 and incorporated herein by
reference.)

2.13**

Agreement and Plan of Merger, dated as of June 9, 2008, by and among FTI Consulting, Inc.,
Attenex Corporation, Ace Acquisition Corporation, and Richard B. Dodd and William McAleer, as
the Shareholder Representatives. (Filed with the SEC on June 12, 2008 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated June 9, 2008 and incorporated herein by
reference.)

3.1

Articles of Incorporation of FTI Consulting, Inc., as amended and restated. (Filed with the Securities
and Exchange Commission on May 23, 2003 as an exhibit to FTI Consulting, Inc.’s Current Report
on Form 8-K dated May 21, 2003 and incorporated herein by reference.)

126

Exhibit
Number

3.2

3.3

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

Description of Exhibits

By-laws of FTI Consulting, Inc., as amended and restated through September 17, 2004. (Filed with
the SEC on November 9, 2004 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2004 and incorporated herein by reference.)

Amendment No. 6 to By-Laws of FTI Consulting, Inc. dated as of December 18, 2008. (Filed with
the Securities and Exchange Commission on December 22, 2008 as an exhibit to FTI Consulting,
Inc.’s Current Report on Form 8-K dated December 18, 2008 and incorporated herein by reference.)

Indenture dated August 2, 2005 among FTI Consulting, Inc., the guarantors named therein and
Wilmington Trust Company, as trustee, relating to 7 5⁄ 8% Senior Notes due 2013. (Filed with the SEC
on August 3, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated July 28,
2005 and incorporated herein by reference.)

Indenture, dated as of August 2, 2005, by and among FTI Consulting, Inc., the guarantors named
therein and Wilmington Trust Company, as trustee, relating to 3 3⁄4% Senior Subordinated
Convertible Notes due July 15, 2012. (Filed with the Securities and Exchange Commission on
August 3, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated July 28,
2005 and incorporated herein by reference.)

Form of Note (included as Exhibit A to Exhibit 4.1). (Filed with the Securities and Exchange
Commission on August 3, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K
dated July 28, 2005 and incorporated herein by reference.)

Registration Rights Agreement, dated as of August 2, 2005, among FTI Consulting, Inc., Goldman,
Sachs & Co. and Banc of America Securities LLC. (Filed with the Securities and Exchange
Commission on August 3, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K
dated July 28, 2005 and incorporated herein by reference.)

First Supplemental Indenture relating to the 7 5⁄ 8% Senior Notes due 2013, dated as of December 16,
2005, by and among FTI Consulting, Inc., the guarantors names therein, FTI Compass, LLC, FTI
Investigations, LLC and Wilmington Trust Company, as trustee. (Filed with the Securities and
Exchange Commission on January 13, 2006 as an exhibit to FTI Consulting, Inc.’s Amendment no. 1
to its Registration Statement on Form S-3 and incorporated herein by reference.)

First Supplemental Indenture relating to the 3 3⁄4% Senior Subordinated Convertible Notes due
July 15, 2012, dated as of December 16, 2005, by and among FTI Consulting, Inc., the guarantors
named therein, FTI Compass, LLC, FTI Investigations, LLC and Wilmington Trust Company, as
trustee. (Filed with the Securities and Exchange Commission on January 13, 2006 as an exhibit to
FTI Consulting, Inc.’s Amendment no. 1 to its Registration Statement on Form S-3 and incorporated
herein by reference.)

Second Supplemental Indenture relating to the 3 3⁄4% Senior Subordinated Convertible Notes due
July 15, 2012, dated as of February 22, 2006, by and among FTI Consulting, Inc., the guarantors
named therein, Competition Policy Associates, Inc. and Wilmington Trust Company, as trustee.
(Filed with the Securities and Exchange Commission on February 24, 2006 as an exhibit to FTI
Consulting, Inc.’s Post-Effective Amendment no. 2 to its Registration Statement on Form S-3 and
incorporated herein by reference.)

Second Supplemental Indenture relating to 7 5⁄ 8% Senior Notes due 2013, dated as of February 22,
2006, by and among FTI Consulting, Inc., Competition Policy Associates, Inc., District of Colombia
corporation, the other guarantors named therein, and Wilmington Trust Company, as trustee. (Filed
with the Securities and Exchange Commission on November 9, 2006 as an exhibit to FTI Consulting,
Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 and incorporated
herein by reference.)

127

Exhibit
Number

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

Description of Exhibits
Third Supplemental Indenture relating to 7 5⁄ 8% Senior Notes due 2013, dated as of September 15,
2006, by and among FTI Consulting, Inc., FTI International Risk, LLC, a Maryland limited liability
company, International Risk Limited, a Delaware corporation, the other guarantors named therein,
and Wilmington Trust Company, as trustee. (Filed with the Securities and Exchange Commission on
November 9, 2006 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006 and incorporated herein by reference.)
Third Supplemental Indenture relating to 3 3⁄4% Convertible Senior Subordinated Notes due July 15,
2012, dated as of September 15, 2006, by and among FTI Consulting, Inc., FTI International Risk,
LLC, a Maryland limited liability company, International Risk Limited, a Delaware corporation, the
other guarantors named therein, and Wilmington Trust Company, as trustee. (Filed with the
Securities and Exchange Commission on November 9, 2006 as an exhibit to FTI Consulting, Inc.’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 and incorporated herein by
reference.)
Indenture dated as of October 3, 2006, relating to the 7 3⁄4% Senior Notes due 2016, by and among
FTI Consulting, Inc., the guarantors named therein and Wilmington Trust Company, as trustee.
(Filed with the Securities and Exchange Commission on October 10, 2006 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated October 3, 2006 and incorporated herein by
reference.)
Form of Note relating to 7 3⁄4% Senior Notes due 2016. (Filed with the Securities and Exchange
Commission on October 10, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form
8-K dated October 3, 2006 and incorporated herein by reference.)

Form of Put and Call Option Agreement. (Filed with the Securities and Exchange Commission on
October 10, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated October
3, 2006 and incorporated herein by reference.)
Fourth Supplemental Indenture relating to 7 5⁄ 8% Senior Notes due 2013, dated as of September 15,
2006, by and among FTI Consulting, Inc., FTI FD LLC, a Maryland limited liability company, FTI
BKS Acquisition LLC, a Maryland limited liability company, the other guarantors named therein,
and Wilmington Trust Company, as trustee. (Filed with the Securities and Exchange Commission on
December 15, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-4 (File
No. 333-139407) and incorporated herein by reference.)
Fourth Supplemental Indenture relating to 3 3⁄4% Convertible Senior Subordinated Notes due July 15,
2012, dated as of November 7, 2006, by and among FTI Consulting, Inc., FTI FD LLC, a Maryland
limited liability company, FTI BKS Acquisition LLC, a Maryland limited liability company, the
other guarantors named therein, and Wilmington Trust Company, as trustee. (Filed with the
Securities and Exchange Commission on December 15, 2006 as an exhibit to FTI Consulting, Inc.’s
Registration Statement on Form S-4 (File No. 333-139407) and incorporated herein by reference.)
First Supplemental Indenture relating to the 7 3⁄4% Senior Notes due 2016, dated as of December 11,
2006, by and among FTI Consulting, Inc., FD U.S. Communications Inc., a New York corporation,
FD MWA Holdings, Inc., a Delaware corporation, Dittus Communications Inc., a District of
Colombia corporation, International Risk Limited, a Delaware Corporation, FTI Holder LLC, a
Maryland limited liability company, the other guarantors named therein, and Wilmington Trust
Company, as trustee. (Filed with the Securities and Exchange Commission on December 15, 2006 as
an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-4 (File No. 333-139407) and
incorporated herein by reference.)

128

Exhibit
Number

4.17

4.18

4.19

4.20

4.21

4.22

4.23

Description of Exhibits
Fifth Supplemental Indenture relating to 7 5⁄ 8% Senior Notes due 2013, dated as of December 7,
2006, by and among FTI Consulting, Inc., FD U.S. Communications Inc., a New York corporation,
FD MWA Holdings, Inc., a Delaware corporation, Dittus Communications Inc., a District of
Colombia corporation, FTI Holder LLC, a Maryland limited liability company, the other guarantors
named therein, and Wilmington Trust Company, as trustee. (Filed with the Securities and Exchange
Commission on December 15, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement on
Form S-4 (File No. 333-139407) and incorporated herein by reference.)
Fifth Supplemental Indenture relating to 3 3⁄4% Convertible Senior Subordinated Notes due July 15,
2012, dated as of December 7, 2006, by and among FTI Consulting, Inc., FD U.S. Communications
Inc., a New York corporation, FD MWA Holdings, Inc., a Delaware corporation, Dittus
Communications Inc., a District of Colombia corporation, FTI Holder LLC, a Maryland limited
liability company, and the other guarantors named therein, and Wilmington Trust Company. (Filed
with the Securities and Exchange Commission on December 15, 2006 as an exhibit to FTI
Consulting, Inc.’s Registration Statement on Form S-4 (File No. 333-139407) and incorporated
herein by reference.)

Release entered into as of January 2, 2007 by Wilmington Trust Company in favor of Teklicon, Inc.
releasing Teklicon’s unconditional guarantee of FTI Consulting, Inc.’s obligations under its 7 5⁄ 8%
Senior Notes due 2013. (Filed with the Securities and Exchange Commission on May 9, 2007 as an
exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31,
2007 and incorporated herein by reference.)

Release entered into as of January 2, 2007 by Wilmington Trust Company in favor of Teklicon, Inc.
releasing Teklicon’s unconditional guarantee of FTI Consulting, Inc.’s obligations under its 3 3⁄4%
Convertible Senior Subordinated Notes due July 15, 2012. (Filed with the Securities and Exchange
Commission on May 9, 2007 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q
for the quarter ended March 31, 2007 and incorporated herein by reference.)

Release entered into as of January 2, 2007 by Wilmington Trust Company in favor of Teklicon, Inc.
releasing Teklicon’s unconditional guarantee of FTI Consulting, Inc.’s obligations under its 7 3⁄4%
Senior Notes due 2016. (Filed with the Securities and Exchange Commission on May 9, 2007 as an
exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31,
2007 and incorporated herein by reference.)
Sixth Supplemental Indenture relating to 7 5⁄ 8% Senior Notes due 2013, dated as of December 27,
2007, among FTI Consulting, Inc., FTI General Partner LLC, a Maryland limited liability company,
Stratcom Hispanic, Inc., a Florida corporation, FTI Consulting LLC, a Maryland limited liability
company, FTI Hosting LLC, a Maryland limited liability company, Ashton Partners, LLC, an Illinois
limited liability company, and FTI US LLC, a Maryland limited liability company, the other
Guarantors and Wilmington Trust Company, as trustee. (Filed with the Securities and Exchange
Commission on February 29, 2008 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form
10-K for the year ended December 31, 2007 and incorporated herein by reference.)
Sixth Supplemental Indenture relating to 3 3⁄4% Convertible Senior Subordinated Notes due July 15,
2012, among FTI Consulting, Inc., FTI General Partner LLC, a Maryland limited liability company,
Stratcom Hispanic, Inc., a Florida corporation, FTI Consulting LLC, a Maryland limited liability
company, FTI Hosting LLC, a Maryland limited liability company, Ashton Partners, LLC, an Illinois
limited liability company, and FTI US LLC, a Maryland limited liability company, the other
Guarantors and Wilmington Trust Company, as trustee. (Filed with the Securities and Exchange
Commission on February 29, 2008 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form
10-K for the year ended December 31, 2007 and incorporated herein by reference.)

129

Exhibit
Number

4.24

4.25

4.26

4.27

4.28

4.29

Description of Exhibits
Second Supplemental Indenture relating to the 7 3⁄4% Senior Notes due 2016, dated as of
December 31, 2007, by and among FTI Consulting, Inc., FTI General Partner LLC, a Maryland
limited liability company, Stratcom Hispanic, Inc., Florida corporation, FTI Consulting LLC, a
Maryland limited liability company, FTI Hosting LLC, a Maryland limited liability company, Ashton
Partners, LLC, a Illinois limited liability company, and FTI US LLC, a Maryland limited liability
company, the other Guarantors and Wilmington Trust Company, as trustee. (Filed with the Securities
and Exchange Commission on February 29, 2008 as an exhibit to FTI Consulting, Inc.’s Annual
Report on Form 10-K for the year ended December 31, 2007 and incorporated herein by reference.)
Seventh Supplemental Indenture relating to 7 5⁄ 8% Senior Notes due 2013, dated as of May 23, 2008,
among FTI RMCG Acquisition LLC, a Maryland limited liability company, FTI SMC Acquisition
LLC, a Maryland limited liability company, and RMCG Consulting, Inc., a Florida corporation, FTI
Consulting, Inc., a Maryland corporation, the other Guarantors (as defined in the Indenture referred
to therein) and Wilmington Trust Company, as trustee. (Filed with the Securities and Exchange
Commission on November 6, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2008 and incorporated herein by reference.)
Seventh Supplemental Indenture relating to 3 3⁄4% Convertible Senior Subordinated Notes due
July 15, 2012, dated as of May 23, 2008 among FTI RMCG Acquisition LLC, a Maryland limited
liability company, FTI SMC Acquisition LLC, a Maryland limited liability company, and RMCG
Consulting, Inc., a Florida corporation, FTI Consulting, Inc., a Maryland corporation, the other
Guarantors (as defined in the Indenture referred to therein) and Wilmington Trust Company, as
trustee. (Filed with the Securities and Exchange Commission on November 6, 2008as an exhibit to
FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and
incorporated herein by reference.)
Eighth Supplemental Indenture relating to 7 5⁄ 8% Senior Notes due 2013, dated as of September 24,
2008, among Attenex Corporation, a Washington corporation and FD Kinesis, LLC, a New Jersey
limited liability company, FTI Consulting, Inc., a Maryland corporation (the “Company”), the other
Guarantors (as defined in the Indenture referred to therein) and Wilmington Trust Company, as
trustee. (Filed with the Securities and Exchange Commission on November 6, 2008 as an exhibit to
FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and
incorporated herein by reference.)
Eighth Supplemental Indenture relating to 3 3⁄4% Convertible Senior Subordinated Notes due July 15,
2012, dated as of September 24, 2008, among Attenex Corporation, a Washington corporation and
FD Kinesis, LLC, a New Jersey limited liability company, FTI Consulting, Inc., a Maryland
corporation, the other Guarantors (as defined in the Indenture referred to therein) and Wilmington
Trust Company, as trustee. (Filed with the Securities and Exchange Commission on November 6,
2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2008 and incorporated herein by reference.)
Third Supplemental Indenture relating to the 7 3⁄4% Senior Notes due 2016, dated as of May 22,
2008, among FTI RMCG Acquisition LLC, a Maryland limited liability company, FTI SMC
Acquisition LLC, a Maryland limited liability company, and RMCG Consulting, Inc., a Florida
corporation, FTI Consulting, Inc., a Maryland corporation, the other Guarantors (as defined in the
Indenture referred to therein) and Wilmington Trust Company, as trustee. (Filed with the Securities
and Exchange Commission on November 6, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2008 and incorporated herein by
reference.)

130

Exhibit
Number

4.30

10.1*

10.2*

10.3*

10.4*

10.5*

10.6*

10.7**

10.8**

Description of Exhibits
Fourth Supplemental Indenture relating to the 7 3⁄4% Senior Notes due 2016, dated as of September
26, 2008, among Attenex Corporation, a Washington corporation and FD Kinesis, LLC, a New
Jersey limited liability company, FTI Consulting, Inc., a Maryland corporation, the other Guarantors
(as defined in the Indenture referred to therein) and Wilmington Trust Company, as trustee. (Filed
with the Securities and Exchange Commission on November 6, 2008 as an exhibit to FTI Consulting,
Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and incorporated
herein by reference.)

1992 Stock Option Plan, as amended. (Filed with the Securities and Exchange Commission as an
exhibit to FTI Consulting, Inc.’s Registration Statement on Form SB-1, as amended
(File No. 333-2002), and incorporated herein by reference.)

1997 Stock Option Plan, as amended. (Filed with the Securities and Exchange Commission on
April 10, 2002 as an exhibit to FTI Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A
and incorporated herein by reference.)

Employee Stock Purchase Plan, as amended. (Filed with the Securities and Exchange Commission on
April 7, 2004 as an exhibit to FTI Consulting, Inc.’s definitive proxy statement on Schedule 14A and
incorporated herein by reference.)

Employment Agreement dated as of November 5, 2002, between FTI Consulting, Inc. and Jack B.
Dunn, IV. (Filed with the Securities and Exchange Commission on March 27, 2003 as an exhibit to
FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2002 and
incorporated herein by reference.)

Employment Agreement dated as of November 5, 2002, between FTI Consulting, Inc. and Stewart J.
Kahn. (Filed with the Securities and Exchange Commission on March 27, 2003 as an exhibit to FTI
Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2002 and
incorporated herein by reference.)

Employment Agreement dated as of November 5, 2002, between FTI Consulting, Inc. and
Theodore I. Pincus. (Filed with the Securities and Exchange Commission on March 27, 2003 as an
exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2002
and incorporated herein by reference.)

Amended and Restated Credit Agreement, dated as of November 28, 2003, among FTI Consulting,
Inc. and its subsidiaries named therein and Bank of America, N.A, as administrative agent and the
other lenders named therein. (Filed with the Securities and Exchange Commission on December 12,
2003 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated November 28, 2003
and incorporated herein by reference.)

First Amendment dated as of April 19, 2005, to the Amended and Restated Credit Agreement dated
November 28, 2003, by and among FTI Consulting, Inc., a Maryland corporation, the Guarantors
identified on the signature pages, the Lenders identified on the signature pages, and Bank of
America, N.A., as administrative agent. Exhibits, schedules (or similar attachments) to the Credit
Agreement are not filed. FTI Consulting Inc. will furnish supplementally a copy of any omitted
exhibit or schedule to the Securities and Exchange Commission upon request. (Filed with the
Securities and Exchange Commission on April 22, 2005 as an exhibit to FTI Consulting, Inc.’s
Current Report on Form 8-K dated April 19, 2005 and incorporated herein by reference.)

10.9**

Second Amendment, dated as of August 2, 2005, to the Amended and Restated Credit Agreement,
dated as of November 28, 2003, by and among FTI, the guarantors named therein, Bank of America,
N.A., as administrative agent, and the lenders named therein. (Filed with the Securities and Exchange
Commission on August 3, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K
dated July 28, 2005 and incorporated herein by reference.)

131

Exhibit
Number

10.10

10.11

10.12

10.13

10.14*

10.15*

10.16*

10.17*

10.18*

10.19*

10.20*

Description of Exhibits

Amended and Restated Pledge Agreement, dated as of November 28, 2003, among the pledgors
named therein and Bank of America, N.A, as Administrative Agent. (Filed with the Securities and
Exchange Commission on December 12, 2003 as an exhibit to FTI Consulting, Inc.’s Current Report
on Form 8-K dated November 28, 2003 and incorporated herein by reference.)

Amended and Restated Security Agreement, dated as of November 28, 2003, among the grantors
named therein and Bank of America, N.A, as Administrative Agent. (Filed with the Securities and
Exchange Commission on December 12, 2003 as an exhibit to FTI Consulting, Inc.’s Current Report
on Form 8-K dated November 28, 2003 and incorporated herein by reference.)

Registration Rights Agreement dated as of August 30, 2002, by and between FTI Consulting, Inc.,
PricewaterhouseCoopers LLP and the other signatories thereto. (Filed with the Securities and
Exchange Commission on September 13, 2002 as an exhibit to FTI Consulting, Inc.’s Current Report
on Form 8-K dated August 30, 2002 and incorporated herein by reference.)

Transition Services Agreement dated as of August 30, 2002, by and between
PricewaterhouseCoopers LLP and FTI Consulting, Inc. (Filed with the Securities Exchange
Commission on September 13, 2002 as an exhibit to FTI Consulting, Inc.’s Current Report on Form
8-K dated August 30, 2002 and incorporated herein by reference.)

Employment Agreement dated September 20, 2004 between FTI Consulting, Inc. and Dennis J.
Shaughnessy. (Filed with the Securities and Exchange Commission on November 9, 2004 as an
exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2004 and incorporated herein by reference.)

Restricted Stock Agreement between FTI Consulting, Inc. and Dennis J. Shaughnessy dated
October 18, 2004. (Filed with the Securities and Exchange Commission on November 9, 2004 as an
exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2004 and incorporated herein by reference.)

Incentive Stock Option Agreement between FTI Consulting, Inc. and Dennis J. Shaughnessy dated
October 18, 2004. (Filed with the Securities and Exchange Commission on November 9, 2004 as an
exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2004 filed and incorporated herein by reference.)

Amendment dated September 23, 2004 to the Employment Agreement dated November 5, 2002
between FTI Consulting, Inc. and Jack B. Dunn, IV. (Filed with the Securities and Exchange
Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2004 filed with the SEC on November 9, 2004 and incorporated herein by
reference.)

Restricted Stock Agreement between FTI Consulting, Inc. and Jack B. Dunn, IV, dated
September 23, 2004. (Filed with the Securities and Exchange Commission on November 9, 2004 as
an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September
30, 2004 and incorporated herein by reference.)

Employment Agreement dated as of November 1, 2005 between Dominic DiNapoli and FTI
Consulting, Inc. (Filed with the Securities and Exchange Commission on November 2, 2005 as an
exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated November 1, 2005 and
incorporated herein by reference.)

Restricted Stock Agreement between FTI Consulting, Inc. and Dominic DiNapoli, dated as of
November 1, 2005. (Filed with the Securities and Exchange Commission on November 2, 2005 as an
exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated November 1, 2005 and
incorporated herein by reference.)

132

Exhibit
Number

10.21*

10.22*

10.23*

10.24*

10.25*

10.26*

10.27*

10.28*

Description of Exhibits

Incentive Stock Option Agreement between FTI Consulting, Inc. and Dominic DiNapoli, dated as of
November 1, 2005. (Filed with the Securities and Exchange Commission on November 2, 2005 as an
exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated November 1, 2005 and
incorporated herein by reference.)

FTI Consulting, Inc. Performance-Based Incentive Compensation Plan. (Filed with the Securities and
Exchange Commission on December 1, 2004 as an exhibit to FTI Consulting, Inc.’s Current Report
on Form 8-K dated December 1, 2004 and incorporated herein by reference.)

FTI Consulting, Inc. 2004 Long-Term Incentive Plan, as Amended and Restated as of April 27, 2005.
(Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated May 18, 2005 and incorporated herein by
reference.)

Form of Incentive Stock Option Agreement used with 2004 Long-Term Incentive Plan. (Filed with
the Securities and Exchange Commission on November 9, 2004 as an exhibit to FTI Consulting,
Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 and incorporated
herein by reference.)

Form of Restricted Stock Agreement used with 2004 Long-Term Incentive Plan, as amended. (Filed
with the Securities and Exchange Commission on November 9, 2004 as an exhibit to FTI Consulting,
Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 and incorporated
herein by reference.)

Form of Incentive Stock Option Agreement used with 1997 Stock Option Plan, as amended. (Filed
with the Securities and Exchange Commission on February 24, 2005 as an exhibit to FTI Consulting,
Inc.’s Current Report on Form 8-K dated October 28, 2005 and incorporated herein by reference.)

Incentive Stock Option Agreement between FTI Consulting, Inc. and Jack B. Dunn, IV, dated as of
October 28, 2004. (Filed with the Securities and Exchange Commission on February 24, 2005 as an
exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated October 28, 2005 and
incorporated herein by reference.)

Incentive Stock Option Agreement between FTI Consulting, Inc. and Jack B. Dunn, IV, dated as of
February 17, 2005. (Filed with the Securities and Exchange Commission on February 24, 2005 as an
exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated October 28, 2005 and
incorporated herein by reference.)

10.29* Written Summary of Non-Employee Director Compensation approved by the Board of Directors of

FTI Consulting, Inc. on April 27, 2005. (Filed with the Securities and Exchange Commission on May
3, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated April 27, 2005 and
incorporated herein by reference.)

10.30*

10.31*

10.32*

FTI Consulting, Inc. Non-Employee Director Compensation Plan, established effective April 27,
2005. (Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated May 18, 2005 and incorporated herein by
reference.)

Form of FTI Consulting, Inc. Non-Employee Director Compensation Plan Stock Option Agreement.
(Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated May 18, 2005 and incorporated herein by
reference.)

Form of FTI Consulting, Inc. Non-Employee Director Compensation Plan Restricted Stock
Agreement. (Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to
FTI Consulting, Inc.’s Current Report on Form 8-K dated May 18, 2005 and incorporated herein by
reference.)

133

Exhibit
Number

10.33*

10.34*

10.35*

10.36*

10.37*

10.38*

Description of Exhibits

Form of FTI Consulting, Inc. Non-Employee Director Compensation Plan Stock Unit Agreement.
(Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated May 18, 2005 and incorporated herein by
reference.)

FTI Consulting, Inc. Incentive Compensation Plan, Amended and Restated Effective October 25,
2005. (Filed with the Securities and Exchange Commission on October 28, 2005 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated October 25, 2005 and incorporated herein by
reference).

Form of Nonqualified Stock Option Agreement used with 2004 Long-Term Incentive Plan. (Filed
with the Securities and Exchange Commission on January 13, 2006 as an exhibit to FTI Consulting,
Inc.’s Registration Statement on Form S-4/A and incorporated herein by reference.)

Restricted Stock Agreement between FTI Consulting, Inc. and John A. MacColl dated as of
January 9, 2006. (Filed with the Securities and Exchange Commission on January 13, 2006 as an
exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-4/A and incorporated herein by
reference.)

Amendment No. 1 dated as of January 9, 2006, to the Employment Agreement dated as of March 31,
2004 between FTI Consulting, Inc. and Barry S. Kaufman (Filed with the Securities and Exchange
Commission on January 12, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K
dated January 9, 2006 and incorporated herein by reference.)

Stock Option Agreement between FTI Consulting, Inc. and John A. MacColl dated as of January 9,
2006. (Filed with the Securities and Exchange Commission on March 7, 2006 as an exhibit to FTI
Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2005 and
incorporated herein by reference.)

10.39**

Third Amendment dated as of February 24, 2006, to the Amended and Restated Credit Agreement
dated as of November 28, 2003, by and among FTI Consulting, Inc., a Maryland corporation, the
Guarantors identified on the signature pages, the Lenders identified on the signature pages, and Bank
of America, N.A., as administrative agent. (Filed with the Securities and Exchange Commission on
March 6, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 6,
2006 and incorporated herein by reference.)

10.40*

10.41*

10.42*

10.43*

Amendment No. 1 to Employment Agreement dated as of November 2, 2002, made and entered into
as of the 21st day of March, 2006, by and between FTI Consulting, Inc., a Maryland corporation with
its principal executive office in Baltimore, Maryland, and Theodore I. Pincus. (Filed with the
Securities and Exchange Commission on March 21, 2006 as an exhibit to FTI Consulting, Inc.’s
Current Report on Form 8-K dated March 21, 2006 and incorporated herein by reference.)

Amendment to FTI Consulting, Inc. 2004 Long-Term Incentive Plan, as Amended and Restated
effective April 27, 2005. (Filed with the Securities and Exchange Commission on March 31, 2006 as
an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 31, 2006 and
incorporated herein by reference.)

Amendment dated as of June 6, 2006 to the FTI Consulting, Inc. Non-Employee Director
Compensation Plan. (Filed with the Securities and Exchange Commission on June 7, 2006 as an
exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 7, 2006 and incorporated
herein by reference.)

Amendment dated as of June 6, 2006 to the FTI Consulting, Inc. 2004 Long-Term Incentive Plan, as
Amended and Restated Effective as of April 27, 2005, as further amended. (Filed with the Securities
and Exchange Commission on June 7, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on
Form 8-K dated June 7, 2006 and incorporated herein by reference.)

134

Exhibit
Number

10.44*

10.45*

10.46*

10.47*

10.48*

10.49*

10.50*

10.51*

10.52*

Description of Exhibits

FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan. (Filed with the Securities and
Exchange Commission, on June 6, 2006 as exhibit 4.3 to FTI Consulting, Inc.’s Registration
Statement on Form S-8 (333-134789) and incorporated herein by reference.)

Form of FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan Incentive Stock Option
Agreement. (Filed with the Securities and Exchange Commission on June 6, 2006 as an exhibit to
FTI Consulting, Inc.’s Registration Statement on Form S-8 (333-134789) and incorporated herein by
reference.)

Form of FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan Restricted Stock Agreement.
(Filed with the Securities and Exchange Commission on June 6, 2006 as an exhibit to FTI
Consulting, Inc.’s Registration Statement on Form S-8 (333-134789) and incorporated herein by
reference.)

FTI Consulting, Inc. Deferred Compensation Plan for Key Employees and Non-Employee Directors.
(Filed with the Securities and Exchange Commission on April 28, 2006 as an exhibit to FTI
Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A and incorporated herein by
reference.)

Form of FTI Consulting, Inc. Deferred Compensation Plan For Key Employees and Non-Employee
Directors Restricted Stock Unit Agreement for Non-Employee Directors. (Filed with the Securities
and Exchange Commission on June 6, 2006 as an exhibit to FTI Consulting, Inc.’s Registration
Statement on Form S-8 (333-134790) and incorporated herein by reference.)

Form of FTI Consulting, Inc. Deferred Compensation Plan For Key Employees and Non-Employee
Directors Stock Unit Agreement for Non-Employee Directors. (Filed with the Securities and
Exchange Commission on June 6, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement
on Form S-8 (333-134790) and incorporated herein by reference.)

FTI Consulting, Inc. 2007 Employee Stock Purchase Plan. (Filed with the Securities and Exchange
Commission on April 28, 2006 as an exhibit to FTI Consulting, Inc.’s Definitive Proxy Statement on
Schedule 14A and incorporated herein by reference.)

Offer Letter dated January 9, 2006 to and accepted by John A. MacColl. (Filed with the Securities
and Exchange Commission on June 9, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on
Form 8-K dated June 6, 2006 and incorporated herein by reference.)

Offer Letter dated May 17, 2005 to and accepted by David G. Bannister. (Filed with the Securities
and Exchange Commission on June 9, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on
Form 8-K dated June 6, 2006 and incorporated herein by reference.)

10.53** Amended and Restated Credit Agreement entered into as of September 29, 2006, among FTI

Consulting, Inc., a Maryland corporation, the Guarantors (defined therein), the Lenders (defined
therein) and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.
(Filed with the Securities and Exchange Commission on October 2, 2006 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated September 29, 2006 and incorporated herein by
reference.)

10.54** Amended and Restated Security Agreement dated as of September 29, 2006, by and among the

parties identified as “Grantors” on the signature pages thereto and such other parties as may become
Grantors after the date thereof and Bank of America, N.A., as administrative agent for the holders of
the Secured Obligations. (Filed with the Securities and Exchange Commission on October 2, 2006 as
an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated September 29, 2006 and
incorporated herein by reference.)

135

Exhibit
Number

Description of Exhibits

10.55** Amended and Restated Pledge Agreement dated as of September 29, 2006, by and among the parties

10.56

identified as “Pledgors” on the signature pages thereto and such other parties as may become
Pledgors after the date thereof and Bank of America, N.A., as administrative agent for the holders of
the Secured Obligations. (Filed with the SEC on October 2, 2006 as an exhibit to FTI Consulting,
Inc.’s Current Report on Form 8-K dated September 29, 2006 and incorporated herein by reference.)
Exchange and Registration Rights Agreement dated as of October 3, 2006, relating to 7 3⁄4% Senior
Notes due 2016, by and among FTI, the guarantors named therein and the Initial Purchasers named
therein. (Filed with the Securities and Exchange Commission on October 10, 2006 as an exhibit to
FTI Consulting, Inc.’s Current Report on Form 8-K dated October 3, 2006 and incorporated herein
by reference.)

10.57**

Parent Guaranty Agreement dated as of October 4, 2006, between FTI Consulting, Inc. and FTI FD
Inc. (Filed with the Securities and Exchange Commission on October 10, 2006 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated October 3, 2006 and incorporated herein by
reference.)

10.58*

10.59*

10.60*

10.61*

10.62*

10.63*

10.64*

FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan, Amended and Restated Effective
October 25, 2006. (Filed with the Securities and Exchange Commission on October 26, 2006 as an
exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated October 25, 2006 and
incorporated herein by reference.)

FTI Consulting, Inc. Incentive Compensation Plan. (Filed with the Securities and Exchange
Commission on April 28, 2006 as an exhibit to FTI Consulting, Inc.’s Definitive Proxy Statement on
Schedule 14A and incorporated herein by reference.)

FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan/Appendix II: Australian Sub-Plan.
(Filed with the Securities and Exchange Commission on December 15, 2006 as an exhibit to FTI
Consulting, Inc.’s Registration Statement on Form S-4 (File No. 333-139407) and incorporated
herein by reference.)

FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan/Appendix III: Ireland Sub-Plan. (Filed
with the Securities Exchange Commission on December 15, 2006 as an exhibit to FTI Consulting,
Inc.’s Registration Statement on Form S-4 (File No. 333-139407) and incorporated herein by
reference.)

FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan/Appendix IV: United Kingdom Sub-
Plan. (Filed with the Securities and Exchange Commission on December 15, 2006 as an exhibit to
FTI Consulting, Inc.’s Registration Statement on Form S-4 (File No. 333-139407) and incorporated
herein by reference.)

FTI Consulting, Inc. Non-Employee Director Compensation Plan Stock Option Agreement under FTI
Consulting, Inc. 2006 Global Long-Term Incentive Plan. (Filed with the Securities and Exchange
Commission on December 13, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form
8-K dated December 11, 2006 and incorporated herein by reference.)

FTI Consulting, Inc. Non-Employee Director Compensation Plan Restricted Stock Agreement under
FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan. (Filed with the Securities and
Exchange Commission on December 13, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report
on Form 8-K dated December 11, 2006 and incorporated herein by reference.)

136

Exhibit
Number

10.65

10.66*

10.67*

10.68*

10.69*

10.70*

10.71*

10.72*

10.73*

10.74*

Description of Exhibits

Release entered into as of January 4, 2007 in favor of FTI Consulting, Inc. and Teklicon, Inc. by
Bank of America, N.A., as Administrative Agent, releasing Teklicon’s unconditional guarantee of
FTI Consulting, Inc.’s obligations under the Amended and Restated Credit Agreement entered into as
of September 29, 2006, Amended and Restated Security Agreement dated as of September 29, 2006,
and Amended and Restated Pledge Agreement dated as of September 29, 2006. (Filed with the
Securities and Exchange Commission on May 9, 2007 as an exhibit to FTI Consulting, Inc.’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 and incorporated herein by
reference.)

FTI Consulting, Inc. Non-Qualified Stock Option Agreement under FTI Consulting, Inc. 2006 Global
Long-Term Incentive Plan. (Filed with the Securities and Exchange Commission on May 9, 2007 as
an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31,
2007 and incorporated herein by reference.)

Amendment No. 1 made and entered into as of April 23, 2007 to the Employment Agreement dated
as of September 20, 2004, by and between FTI Consulting, Inc. and Dennis J. Shaughnessy. (Filed
with the Securities and Exchange Commission on April 26, 2007 as an exhibit to FTI Consulting,
Inc.’s Current Report on Form 8-K dated April 23, 2007 and incorporated herein by reference.)

Offer Letter dated June 14, 2007 to and accepted by Jorge A. Celaya (Filed with the Securities and
Exchange Commission on July 10, 2007 as an exhibit to FTI Consulting, Inc.’s Current Report on
Form 8-K dated July 9, 2007 and incorporated herein by reference.)

Amendment No. 2 made and entered into as of November 2, 2007 to the Employment Agreement
dated as of November 5, 2002, by and between FTI Consulting, Inc. and Theodore I. Pincus. (Filed
with the Securities and Exchange Commission on February 29, 2008 as an exhibit to FTI Consulting,
Inc.’s Annual Report on Form 10-K for the year an ended December 31, 2007 and incorporated
herein by reference.)

FTI Consulting, Inc. Non-Employee Director Compensation Plan Amended and Restated Effective as
of February 20, 2008. (Filed with the Securities and Exchange Commission on May 7, 2008 as an
exhibit to FTI Consulting, Inc.’s Quarter Report on Form 10-Q for quarter ended March 31, 2008.)

FTI Consulting, Inc. Deferred Compensation Plan For Key Employees and Non-Employee Directors
Restricted Stock Unit Agreement for Non-Employee Directors Under the Non-Employee Director
Compensation Plan, as Amended and Restated Effective as of February 20, 2008. (Filed with the
Securities and Exchange Commission on May 7, 2008 as an exhibit to FTI Consulting, Inc.’s Quarter
Report on Form 10-Q for quarter ended March 31, 2008 and incorporated herein by reference.)

FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan Restricted Stock Agreement Under the
Non-Employee Director Compensation Plan, as Amended and Restated Effective as of February 20,
2008. (Filed with the Securities and Exchange Commission on May 7, 2008 as an exhibit to FTI
Consulting, Inc.’s Quarter Report on Form 10-Q for quarter ended March 31, 2008 and incorporated
herein by reference.)

FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan Restricted Stock Agreement Under the
Non-Employee Director Compensation Plan, as Amended and Restated Effective as of February 20,
2008. (Filed with the Securities and Exchange Commission on May 7, 2008 as an exhibit to FTI
Consulting, Inc.’s Quarter Report on Form 10-Q for quarter ended March 31, 2008 and incorporated
herein by reference.)

FTI Consulting, Inc. Deferred Compensation Plan for Key Employees and Non-Employee Directors
[Amended and Restated Effective as of May 14, 2008]. (Filed with the Securities and Exchange
Commission on August 7, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on
Form 10-Q for quarter ended June 30, 2008 and incorporated herein by reference.)

137

Exhibit
Number

10.75*

10.76*

10.77*

10.78*

10.79*

10.80*

Description of Exhibits

Form of Restricted Stock Unit Agreement for Non-Employee Directors under the Non-Employee
Director Compensation Plan, as Amended and Restated Effective as of February 20, 2008. (Filed
with the Securities and Exchange Commission on August 7, 2008 as an exhibit to Quarterly Report
on Form 10-Q for quarter ended June 30, 2008 and incorporated herein by reference.)

Form of Stock Unit Agreement for Non-Employee Directors under the Non-Employee Director
Compensation Plan, as Amended and Restated Effective as of February 20, 2008. (Filed with the
Securities and Exchange Commission on August 7, 2008 as an exhibit to FTI Consulting, Inc.’s
Quarterly Report on Form 10-Q for quarter ended June 30, 2008 and incorporated herein by
reference.)

FTI Consulting, Inc. 2004 Long-Term Incentive Plan [Amended and Restated Effective as of
May 14, 2008]. (Filed with the Securities and Exchange Commission on August 7, 2008 as an exhibit
to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for quarter ended June 30, 2008 and
incorporated herein by reference.)

Form of FTI Consulting, Inc. 2004 Long-Term Incentive Plan Incentive Stock Option Agreement.
(Filed with the Securities and Exchange Commission on August 7, 2008 as an exhibit to FTI
Consulting, Inc.’s Quarterly Report on Form 10-Q for quarter ended June 30, 2008 and incorporated
herein by reference.)

FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan [Amended and Restated Effective as of
May 14, 2008]. (Filed with the Securities and Exchange Commission on August 7, 2008 as an exhibit
to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for quarter ended June 30, 2008 and
incorporated herein by reference.)

Form of FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan Restricted Stock Agreement
Under the Non-Employee Director Compensation Plan, as Amended and Restated Effective as of
February 20, 2008. (Filed with the Securities and Exchange Commission on August 7, 2008 as an
exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for quarter ended June 30, 2008 and
incorporated herein by reference.)

10.81**

First Amendment to Credit Agreement and Security Agreement dated as of June 30, 2008, by and
among FTI Consulting, Inc., a Maryland corporation, the Guarantors identified on the signature
pages, the Lenders identified on the signature pages, and Bank of America, N.A., as administrative
agent. (Filed with the Securities and Exchange Commission on August 1, 2008 as an exhibit to FTI
Consulting, Inc.’s Current Report on Form 8-K dated July 28, 2008 and incorporated herein by
reference.)

10.82** Commitment Agreement dated as of August 15, 2008, by and among FTI Consulting, Inc., a

Maryland corporation, the Guarantors identified on the signature pages, the Lenders identified on the
signature pages, and Bank of America, N.A., as administrative agent. (Filed with the Securities and
Exchange Commission on August 19, 2008 as an exhibit to FTI Consulting, Inc.’s Current Report on
Form 8-K/A dated July 28, 2008 and incorporated herein by reference.)

10.83*

10.84*

Form of Restricted Stock Agreement under the FTI Consulting, Inc. 2006 Global Long-Term
Incentive Plan, as amended and restated. (Filed with the Securities and Exchange Commission on
November 6, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form10-Q for the
quarter ended September 30, 2008 and incorporated herein by reference.)

Form of Incentive Stock Option Agreement under the FTI Consulting, Inc. 2006 Global Long-Term
Incentive Plan, as amended and restated. (Filed with the Securities and Exchange Commission on
November 6, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form10-Q for the
quarter ended September 30, 2008 and incorporated herein by reference.)

138

Exhibit
Number

Description of Exhibits

10.85** * Amendment No. 2 effective as of August 11, 2008 to the Employment Agreement dated

November 5, 2002 between FTI Consulting, Inc. and Jack B. Dunn, IV. (Filed with the Securities and
Exchange Commission on November 6, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly
Report on Form10-Q for the quarter ended September 30, 2008 and incorporated herein by
reference.)

Amendment No. 3 as of December 31, 2008 to the Employment Agreement dated November 5, 2002
between FTI Consulting, Inc. and Jack B. Dunn, IV.

Amendment No. 2 as of December 31, 2008 to the Employment Agreement dated as of September
20, 2004, by and between FTI Consulting, Inc. and Dennis J. Shaughnessy.

Amendment No. 1 as of December 31, 2008 to the Employment Agreement dated as of November 1,
2005 by and between Dominic DiNapoli and FTI Consulting, Inc.

10.86†*

10.87†*

10.88†*

10.89†** * Employment Agreement by and among, FD U.S. Communications, Inc., FTI Consulting, Inc. and

Declan Kelly.

10.90†*

10.91†*

10.92*†

Amendment as of August 1, 2008 to the Employment Agreement by and among, FD U.S.
Communications, Inc., FTI Consulting, Inc. and Declan Kelly.

Second Amendment as of December 16, 2008 to the Employment Agreement by and among, FD
U.S. Communications, Inc., FTI Consulting, Inc. and Declan Kelly.

Amendment made and entered into as of December 31, 2008 to Offer Letter dated June 14, 2007 to
and accepted by Jorge A. Celaya.

10.93*†

Employment Letter dated as of December 31, 2008 to and accepted by Roger Carlile.

10.94*†

Offer Letter dated April 26, 2006 to and accepted by Eric B. Miller.

10.95*†

Amendment made and entered into as of December 31, 2008 to Offer Letter dated April 26, 2006 to
and accepted by Eric B. Miller.

11.1†

14.0

21.1†

23.0†

31.1†

31.2†

32.1†

32.2†

99.1†

99.2†

Computation of Earnings Per Share (included in Note 1 to the Consolidated Financial Statements
included in Part II — Item 8 herein).

FTI Consulting, Inc. Policy on Ethics and Business Conduct, as Amended and Restated Effective
December 18, 2008. (Filed with the Securities and Exchange Commission on December 22, 2008 as
an exhibit to FTI Consulting, Inc.’s Form 8-K dated December 18, 2008 and incorporated herein by
reference.)

Subsidiaries of FTI Consulting, Inc.

Consent of KPMG LLP

Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15D-14(a) under the
Securities Exchange Act of 1934, as amended (Section 302 of the Sarbanes-Oxley Act of 2002).

Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15D-14(a) under the
Securities Exchange Act of 1934, as amended (Section 302 of the Sarbanes-Oxley Act of 2002).

Certification of Principal Executive Officer Pursuant to 18 USC. Section 1350 (Section 906 of the
Sarbanes-Oxley Act of 2002).

Certification of Principal Financial Officer Pursuant to 18 USC. Section 1350 (Section 906 of the
Sarbanes-Oxley Act of 2002).

Policy on Disclosure Controls, as last amended and restated effective as of May 14, 2008.

Policy Statement on Inside Information and Insider Trading, as last amended and restated effective as
of May 14, 2008.

139

Exhibit
Number

99.3

99.4

99.5

99.6

99.7†

99.8†

Description of Exhibits

Policy on Conflicts of Interest. (Filed with the Securities and Exchange Commission on
March 27, 2003 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year
ended December 31, 2002 and incorporated herein by reference.)

Corporate Governance Guidelines, as last amended and restated effective as of June 6, 2006. (Filed
with the Securities and Exchange Commission on December 15, 2006 as an exhibit to FTI
Consulting, Inc.’s Registration Statement on Form S-4 (File No. 333-139407) and incorporated
herein by reference.)

Categorical Standards of Director Independence, as last amended and restated effective as of
May 19, 2004. (Filed with the Securities and Exchange Commission on March 15, 2005 as an
exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for year ended December 31, 2004
and incorporated herein by reference.)

Charter of Audit Committee, as last amended and restated effective as of December 11, 2006. (Filed
with the Securities and Exchange Commission on December 15, 2006 as an exhibit to FTI
Consulting, Inc.’s Registration Statement on Form S-4 (File No. 333-139407) and incorporated
herein by reference.)

Charter of the Compensation Committee, as last amended and restated effective as of August 1,
2008.

Charter of the Nominating and Corporate Governance Committee, as last amended and restated
effective as of August 1, 2008.

99.9

Anti-Corruption Policy effective as of August 1, 2007.

* Management contract or compensatory plan or arrangement.

†

Filed herewith.

** With certain exceptions that were specified at the time of initial filing with the Securities and Exchange

Commission, exhibits, schedules (or similar attachments) are not filed with the SEC. FTI Consulting, Inc.
will furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon request.

140

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the

Registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized
this 2nd day of March 2009.

FTI CONSULTING, INC.

By:
Name:
Title:

/S/

JACK B. DUNN, IV
Jack B. Dunn, IV
President and Chief Executive Officer

SIGNATURE

CAPACITY IN WHICH SIGNED

DATE

/S/ DENNIS J. SHAUGHNESSY

Chairman of the Board

March 2, 2009

Dennis J. Shaughnessy

/S/

JACK B. DUNN, IV
Jack B. Dunn, IV

/S/

JORGE A. CELAYA
Jorge A. Celaya

/S/ CATHERINE M. FREEMAN

Catherine M. Freeman

/S/ BRENDA J. BACON

Brenda J. Bacon

/S/ MARK H. BEREY

Mark H. Berey

Chief Executive Officer and
President and Director
(Principal Executive Officer)

Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)

Senior Vice President, Controller
and Chief Accounting Officer
(Principal Accounting Officer)

Director

Director

March 2, 2009

March 2, 2009

March 2, 2009

March 2, 2009

March 2, 2009

/S/ DENIS J. CALLAGHAN

Director

March 2, 2009

Denis J. Callaghan

/S/

JAMES W. CROWNOVER
James W. Crownover

Director

March 2, 2009

/S/ GERARD E. HOLTHAUS

Director

March 2, 2009

Gerard E. Holthaus

/S/ MATTHEW F. MCHUGH

Director

March 2, 2009

Matthew F. McHugh

/S/ GEORGE P. STAMAS

Director

March 2, 2009

George P. Stamas

/S/ GARY C. WENDT

Gary C. Wendt

Director

141

March 2, 2009

Exhibit 21.1

Schedule of Subsidiaries of FTI Consulting, Inc.

Name

85Four Ltd.

A & B Financial Dynamics gmbh (50%)

Ashton Partners, L.L.C.

Attenex Corporation

Jurisdiction of Incorporation

England and Wales

Germany

Illinois

Washington

Beachhead Media and Investor Relations

(Proprietary) Limited (74%) . . . . . . . . . . . . . . . . . . .

S. Africa

Blueprint Partners SA

Brewer Consulting Limited

Belgium

England And Wales

Compass Lexecon LLC (fka Lexecon, LLC) (fka LI

Acquisition Company, LLC)

Maryland

Competition Policy Associates, Inc.

Dittus Communications, Inc.

FCN Holdings CV

FD (Beijing) Consulting Co., Ltd.

FD Australia Holdings Pty Ltd

FD Dubai Limited

FD India Limited

FD International Ltd.

FD Kinesis, LLC (fka Kinesis, LLC)

FD MWA Holdings Inc.

FD Russia Limited

FD Singapore PTE Ltd.

District of Columbia

District of Columbia

Netherlands

Beijing

Victoria, Australia

England and Wales

England and Wales

England and Wales

New Jersey

Delaware

England and Wales

Singapore

FD Third Person Pty Limited (FKA Third Person

Communications Pty Limited) . . . . . . . . . . . . . . . . . New South Wales

FD US Communications, Inc.

. . . . . . . . . . . . . . . . . . . . New York

FDFTI Mexico S DE RL DE CV . . . . . . . . . . . . . . . . . . Mexico

Financial Dynamics Asia Ltd. . . . . . . . . . . . . . . . . . . . . Hong Kong

Financial Dynamics Ireland Ltd.

. . . . . . . . . . . . . . . . .

Ireland

Financial Dynamics Ltd.

. . . . . . . . . . . . . . . . . . . . . . . . England and Wales

Financial Dynamics S.A.S.

. . . . . . . . . . . . . . . . . . . . . .

France

FTI Cambio LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maryland

FTI Capital Advisors, LLC (fka FTI Merger &

Acquisition Advisors, LLC)

. . . . . . . . . . . . . . . . . . . Maryland

FTI Consulting B.V. (fka Irharo B.V.) . . . . . . . . . . . . . Netherlands

FTI Consulting Canada LLC . . . . . . . . . . . . . . . . . . . . Maryland

FTI Consulting Canada ULC . . . . . . . . . . . . . . . . . . . . British Columbia

FTI Consulting Gibraltar Ltd.

. . . . . . . . . . . . . . . . . . . Gibraltar

FTI Consulting International Limited . . . . . . . . . . . . . BVI

FTI Consulting Limited (UK - fka Carmill

Limited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . England and Wales

FTI Consulting LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . Maryland

FTI Consulting Panama, SDAD. LTDA. . . . . . . . . . . .

Panama

FTI Consulting S.ar.L. . . . . . . . . . . . . . . . . . . . . . . . . . . Luxembourg

FTI Consulting Spain, S.R. L. . . . . . . . . . . . . . . . . . . . .

Spain

FTI Consulting SRL (fka FTI Consulting S.A.) . . . . . Argentina

FTI Consulting, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maryland

FTI CXO Acquisition LLC . . . . . . . . . . . . . . . . . . . . . . Maryland

FTI Financial Services Limited (fka Hoodwell

Limited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . England and Wales

FTI Forensic Accounting Limited (fka Forensic

Accounting Partners Limited)

. . . . . . . . . . . . . . . . . England and Wales

FTI General Partner LLC . . . . . . . . . . . . . . . . . . . . . . . Maryland

FTI Holder Consultoria LTDA (fka FTI Holder
Consultoria S.A.) (fka Arbok Holdings S.A.)

. . . . . Brazil

FTI Hosting LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maryland

FTI International LLC (fka FTI FD LLC) . . . . . . . . . Maryland

FTI Investigations, LLC . . . . . . . . . . . . . . . . . . . . . . . . Maryland

FTI Ringtail (AUST) PTY LTD (fka: FTI Australia

Pty Ltd.)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Australia

FTI RMCG Acquisition LLC . . . . . . . . . . . . . . . . . . . . Maryland

FTI SMG LLC (fka FTI SMC Acquisition LLC) . . . . Maryland

FTI Technology LLC (FKA FTI Repository Services,

LLC ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maryland

FTI UK Holdings Limited . . . . . . . . . . . . . . . . . . . . . . . England and Wales

FTI US LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maryland

FTI, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maryland

G3 Consulting Limited . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom

Gravitas Comunicaciones Estrategicos Limitada . . . . Colombia

Gravitas Panama S.A.

. . . . . . . . . . . . . . . . . . . . . . . . . .

Panama

International Risk (Singapore) Pte Ltd.

. . . . . . . . . . .

Singapore

International Risk Limited . . . . . . . . . . . . . . . . . . . . . . Hong Kong

IRL (Holdings) Limited . . . . . . . . . . . . . . . . . . . . . . . . . British Virgin Is.

K Capital Source Limited . . . . . . . . . . . . . . . . . . . . . . .

Ireland

FD Third Person Perth Pty Limited (fka Kudos

Consultants Pty Limited) . . . . . . . . . . . . . . . . . . . . . . Australia

FD Public Affairs Limmtied (fka LLM

Communications Limited) . . . . . . . . . . . . . . . . . . . . . England and Wales

Orion Technology Comercio e Servicos LTDA . . . . . . Brazil

RMCG Consulting, Inc. (fka and dba Rubino &

McGeehin Consulting Group, Inc.) . . . . . . . . . . . . .

Florida

Sante Communications Limited . . . . . . . . . . . . . . . . . . England and Wales

Tecnologia Servicos e Comercio de Equipamentos de

Informática, LTDA . . . . . . . . . . . . . . . . . . . . . . . . . . Brazil

The Lost City Esttates S.A. . . . . . . . . . . . . . . . . . . . . . .

Panama

Thompson Market Services (Shanghai) Co. Ltd . . . . .

PRC

Thompson Market Services Limited . . . . . . . . . . . . . . Hong Kong

Watson, Edgar, Bishop, Meakin & Aquirre Inc.

. . . . British Columbia

Exhibit 23.0

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
FTI Consulting, Inc.

We consent to the incorporation by reference in the registration statements No. 333-30173, 333-30357, 333-32160, 333-64050,

333-92384, 333-105741, 333-115786, 333-115787, 333-125104 and 333-134790 on Form S-8 and registration statement No. 333-
129715 on Form S-3 of FTI Consulting, Inc. of our reports dated March 2, 2009, with respect to the consolidated balance sheets of
FTI Consulting, Inc. as of December 31, 2008 and 2007, and the related consolidated statements of income, stockholders’ equity and
comprehensive income and cash flows, for each of the years in the three-year period ended December 31, 2008 and related financial
statement schedule, and the effectiveness of internal control over financial reporting as of December 31, 2008, which reports appear in
the December 31, 2008 Annual Report on Form 10-K of FTI Consulting, Inc.

As discussed in Note 17, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — An

Interpretation of FASB Statement No. 109, on January 1, 2007.

Baltimore, Maryland
March 2, 2009

/s/ KPMG LLP

Exhibit 31.1

Certification of Principal Executive Officer

Pursuant to Rule 13a-14(a)

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Jack B. Dunn, IV, certify that:

1.

I have reviewed this Annual Report on Form 10-K of FTI Consulting, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report,

fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to

be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

(c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that

occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of
an Annual Report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board
of directors (or persons performing the equivalent functions):

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

Date: March 2, 2009

By:

/S/ JACK B. DUNN, IV

Jack B. Dunn, IV
President and Chief Executive Officer
(principal executive officer)

Exhibit 31.2

Certification of Principal Financial Officer

Pursuant to Rule 13a-14(a)

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Jorge A. Celaya, certify that:

1.

I have reviewed this Annual Report on Form 10-K of FTI Consulting, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report,

fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to

be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

(c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that

occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of
an Annual Report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board
of directors (or persons performing the equivalent functions):

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

Date: March 2, 2009

By:

/S/ JORGE A. CELAYA

Jorge A. Celaya
Executive Vice President and
Chief Financial Officer
(principal financial officer)

Exhibit 32.1

Certification of Principal Executive Officer

Pursuant to 18 USC. Section 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Annual Report of FTI Consulting, Inc. (the “Company”) on Form 10-K for the year ended December 31,

2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jack B. Dunn, IV, President and
Chief Executive Officer (principal executive officer) of the Company, certify, pursuant to 18 USC. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.

2.

the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company.

Date: March 2, 2009

By:

/S/ JACK B. DUNN, IV

Jack B. Dunn, IV
President and Chief Executive Officer
(principal executive officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the

Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

Certification of Principal Financial Officer

Pursuant to 18 USC. Section 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Annual Report of FTI Consulting, Inc. (the “Company”) on Form 10-K for the year ended December 31,

2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jorge A. Celaya, Executive Vice
President and Chief Financial Officer (principal financial officer) of the Company, certify, pursuant to 18 USC. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.

2.

the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company.

Date: March 2, 2009

By:

/S/ JORGE A. CELAYA

Jorge A. Celaya
Executive Vice President and Chief Financial Officer
(principal financial officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the

Company and furnished to the Securities and Exchange Commission or its staff upon request.

PERFORMANCE GRAPH

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(cid:100)(cid:91)(cid:21)(cid:56)(cid:71)(cid:54)(cid:21)(cid:62)(cid:99)(cid:105)(cid:90)(cid:103)(cid:99)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:86)(cid:97)(cid:33)(cid:21)(cid:62)(cid:99)(cid:88)(cid:33)(cid:21)(cid:65)(cid:58)(cid:56)(cid:60)(cid:21)(cid:56)(cid:100)(cid:103)(cid:101)(cid:100)(cid:103)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:33)(cid:21)(cid:61)(cid:106)(cid:103)(cid:100)(cid:99)(cid:21)(cid:56)(cid:100)(cid:99)(cid:104)(cid:106)(cid:97)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:60)(cid:103)(cid:100)(cid:106)(cid:101)(cid:21)(cid:62)(cid:99)(cid:88)(cid:35)(cid:33)(cid:21)(cid:67)(cid:86)(cid:107)(cid:94)(cid:92)(cid:86)(cid:99)(cid:105)(cid:21)(cid:56)(cid:100)(cid:99)(cid:104)(cid:106)(cid:97)(cid:105)(cid:94)(cid:99)(cid:92)(cid:33)(cid:21)(cid:62)(cid:99)(cid:88)(cid:35)(cid:33)(cid:21)(cid:71)(cid:90)(cid:104)(cid:100)(cid:106)(cid:103)(cid:88)(cid:90)(cid:104)(cid:21)
(cid:56)(cid:100)(cid:99)(cid:99)(cid:90)(cid:88)(cid:105)(cid:94)(cid:100)(cid:99)(cid:104)(cid:33)(cid:21)(cid:62)(cid:99)(cid:88)(cid:35)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:71)(cid:100)(cid:87)(cid:90)(cid:103)(cid:105)(cid:21)(cid:61)(cid:86)(cid:97)(cid:91)(cid:21)(cid:62)(cid:99)(cid:105)(cid:90)(cid:103)(cid:99)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:86)(cid:97)(cid:33)(cid:21)(cid:62)(cid:99)(cid:88)(cid:35)(cid:21)(cid:88)(cid:100)(cid:97)(cid:97)(cid:90)(cid:88)(cid:105)(cid:94)(cid:107)(cid:90)(cid:97)(cid:110)(cid:33)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:69)(cid:90)(cid:90)(cid:103)(cid:21)(cid:60)(cid:103)(cid:100)(cid:106)(cid:101)(cid:35)(cid:21)(cid:68)(cid:106)(cid:103)(cid:21)(cid:88)(cid:100)(cid:98)(cid:98)(cid:100)(cid:99)(cid:21)(cid:104)(cid:105)(cid:100)(cid:88)(cid:96)(cid:21)(cid:101)(cid:103)(cid:94)(cid:88)(cid:90)(cid:21)(cid:94)(cid:104)(cid:21)(cid:101)(cid:106)(cid:87)(cid:97)(cid:94)(cid:104)(cid:93)(cid:90)(cid:89)(cid:21)
(cid:90)(cid:107)(cid:90)(cid:103)(cid:110)(cid:21)(cid:108)(cid:90)(cid:90)(cid:96)(cid:89)(cid:86)(cid:110)(cid:21)(cid:90)(cid:109)(cid:88)(cid:90)(cid:101)(cid:105)(cid:21)(cid:93)(cid:100)(cid:97)(cid:94)(cid:89)(cid:86)(cid:110)(cid:104)(cid:35)(cid:21)(cid:73)(cid:93)(cid:90)(cid:21)(cid:69)(cid:90)(cid:90)(cid:103)(cid:21)(cid:60)(cid:103)(cid:100)(cid:106)(cid:101)(cid:21)(cid:94)(cid:99)(cid:89)(cid:90)(cid:109)(cid:21)(cid:108)(cid:86)(cid:104)(cid:21)(cid:88)(cid:100)(cid:98)(cid:101)(cid:94)(cid:97)(cid:90)(cid:89)(cid:21)(cid:87)(cid:110)(cid:21)(cid:106)(cid:104)(cid:21)(cid:86)(cid:104)(cid:21)(cid:100)(cid:91)(cid:21)(cid:57)(cid:90)(cid:88)(cid:90)(cid:98)(cid:87)(cid:90)(cid:103)(cid:21)(cid:40)(cid:38)(cid:33)(cid:21)(cid:39)(cid:37)(cid:37)(cid:45)(cid:35)

(cid:73)(cid:93)(cid:90)(cid:21)(cid:92)(cid:103)(cid:86)(cid:101)(cid:93)(cid:21)(cid:86)(cid:104)(cid:104)(cid:106)(cid:98)(cid:90)(cid:104)(cid:21)(cid:86)(cid:99)(cid:21)(cid:94)(cid:99)(cid:107)(cid:90)(cid:104)(cid:105)(cid:98)(cid:90)(cid:99)(cid:105)(cid:21)(cid:100)(cid:91)(cid:21)(cid:25)(cid:38)(cid:37)(cid:37)(cid:21)(cid:94)(cid:99)(cid:21)(cid:90)(cid:86)(cid:88)(cid:93)(cid:21)(cid:100)(cid:91)(cid:21)(cid:59)(cid:73)(cid:62)(cid:33)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:72)(cid:27)(cid:69)(cid:21)(cid:42)(cid:37)(cid:37)(cid:21)(cid:62)(cid:99)(cid:89)(cid:90)(cid:109)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:69)(cid:90)(cid:90)(cid:103)(cid:21)(cid:60)(cid:103)(cid:100)(cid:106)(cid:101)(cid:21)(cid:100)(cid:99)(cid:21)(cid:57)(cid:90)(cid:88)(cid:90)(cid:98)(cid:87)(cid:90)(cid:103)(cid:21)(cid:40)(cid:38)(cid:33)(cid:21)(cid:39)(cid:37)(cid:37)(cid:40)(cid:35)(cid:21)

The comparison assumes that all dividends, if any, are reinvested into additional shares of common stock during the 
holding period.

CORPORATE TEAM

BOARD OF DIRECTORS

CORPORATE INFORMATION

Jack B. Dunn, IV
(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)(cid:21)

Dennis J. Shaughnessy
(cid:56)(cid:93)(cid:86)(cid:94)(cid:103)(cid:98)(cid:86)(cid:99)(cid:21)(cid:100)(cid:91)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:55)(cid:100)(cid:86)(cid:103)(cid:89)(cid:21)

Dennis J. Shaughnessy
(cid:56)(cid:93)(cid:86)(cid:94)(cid:103)(cid:98)(cid:86)(cid:99)(cid:21)(cid:100)(cid:91)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:55)(cid:100)(cid:86)(cid:103)(cid:89)

Jack B. Dunn, IV
(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)(cid:21)

Executive Ofﬁce
777 South Flagler Drive,
(cid:69)(cid:93)(cid:94)(cid:97)(cid:97)(cid:94)(cid:101)(cid:104)(cid:21)(cid:69)(cid:100)(cid:94)(cid:99)(cid:105)(cid:33)(cid:21)(cid:72)(cid:106)(cid:94)(cid:105)(cid:90)(cid:21)(cid:38)(cid:42)(cid:37)(cid:37)(cid:21)(cid:76)(cid:90)(cid:104)(cid:105)(cid:21)(cid:73)(cid:100)(cid:108)(cid:90)(cid:103)(cid:33)
(cid:76)(cid:90)(cid:104)(cid:105)(cid:21)(cid:69)(cid:86)(cid:97)(cid:98)(cid:21)(cid:55)(cid:90)(cid:86)(cid:88)(cid:93)(cid:33)(cid:21)(cid:59)(cid:65)(cid:21)(cid:40)(cid:40)(cid:41)(cid:37)(cid:38)
(cid:32)(cid:38)(cid:21)(cid:42)(cid:43)(cid:38)(cid:34)(cid:42)(cid:38)(cid:42)(cid:34)(cid:38)(cid:46)(cid:37)(cid:37)

David G. Bannister
(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:75)(cid:94)(cid:88)(cid:90)(cid:21)(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)
(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:54)(cid:89)(cid:98)(cid:94)(cid:99)(cid:94)(cid:104)(cid:105)(cid:103)(cid:86)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)(cid:21)

Roger D. Carlile
(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:75)(cid:94)(cid:88)(cid:90)(cid:21)(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21) 
(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:61)(cid:106)(cid:98)(cid:86)(cid:99)(cid:21)(cid:71)(cid:90)(cid:104)(cid:100)(cid:106)(cid:103)(cid:88)(cid:90)(cid:104)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)(cid:21)

Jorge A. Celaya
(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:75)(cid:94)(cid:88)(cid:90)(cid:21)(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21) 
(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:59)(cid:94)(cid:99)(cid:86)(cid:99)(cid:88)(cid:94)(cid:86)(cid:97)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)

Dominic DiNapoli
(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:75)(cid:94)(cid:88)(cid:90)(cid:21)(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21) 
(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:68)(cid:101)(cid:90)(cid:103)(cid:86)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)(cid:21)

Declan M. Kelly
(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:75)(cid:94)(cid:88)(cid:90)(cid:21)(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21) 
(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:62)(cid:99)(cid:105)(cid:90)(cid:92)(cid:103)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)

John A. MacColl
(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:75)(cid:94)(cid:88)(cid:90)(cid:21)(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21) 
(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:71)(cid:94)(cid:104)(cid:96)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)(cid:21)

Eric B. Miller
Executive Vice President and 
General Counsel

Catherine M. Freeman
(cid:72)(cid:90)(cid:99)(cid:94)(cid:100)(cid:103)(cid:21)(cid:75)(cid:94)(cid:88)(cid:90)(cid:21)(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:33)(cid:21)(cid:56)(cid:100)(cid:99)(cid:105)(cid:103)(cid:100)(cid:97)(cid:97)(cid:90)(cid:103)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)
(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:54)(cid:88)(cid:88)(cid:100)(cid:106)(cid:99)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)(cid:21)

Curt A. H. Jeschke, Jr.
(cid:75)(cid:94)(cid:88)(cid:90)(cid:21)(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:183)(cid:21)(cid:62)(cid:99)(cid:105)(cid:90)(cid:103)(cid:99)(cid:86)(cid:97)(cid:21)(cid:54)(cid:106)(cid:89)(cid:94)(cid:105)(cid:21)

Joanne F. Catanese
(cid:54)(cid:104)(cid:104)(cid:100)(cid:88)(cid:94)(cid:86)(cid:105)(cid:90)(cid:21)(cid:60)(cid:90)(cid:99)(cid:90)(cid:103)(cid:86)(cid:97)(cid:21)(cid:56)(cid:100)(cid:106)(cid:99)(cid:104)(cid:90)(cid:97)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:72)(cid:90)(cid:88)(cid:103)(cid:90)(cid:105)(cid:86)(cid:103)(cid:110)

Brenda J. Bacon
(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)(cid:21)(cid:100)(cid:91)(cid:21)
Brandywine Senior Living

Principal Place of Business
(cid:46)(cid:37)(cid:46)(cid:21)(cid:56)(cid:100)(cid:98)(cid:98)(cid:90)(cid:103)(cid:88)(cid:90)(cid:21)(cid:71)(cid:100)(cid:86)(cid:89)
(cid:54)(cid:99)(cid:99)(cid:86)(cid:101)(cid:100)(cid:97)(cid:94)(cid:104)(cid:33)(cid:21)(cid:66)(cid:86)(cid:103)(cid:110)(cid:97)(cid:86)(cid:99)(cid:89)(cid:21)(cid:39)(cid:38)(cid:41)(cid:37)(cid:38)

Mark H. Berey
(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:75)(cid:94)(cid:88)(cid:90)(cid:21)(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:100)(cid:91)(cid:21) 
Miller Global Properties and
(cid:69)(cid:103)(cid:90)(cid:104)(cid:94)(cid:89)(cid:90)(cid:99)(cid:105)(cid:21)(cid:100)(cid:91)(cid:21)(cid:66)(cid:61)(cid:55)(cid:21)(cid:75)(cid:90)(cid:99)(cid:105)(cid:106)(cid:103)(cid:90)(cid:104)(cid:21)(cid:65)(cid:65)(cid:56)

Denis J. Callaghan
Retired Former Director of  
(cid:67)(cid:100)(cid:103)(cid:105)(cid:93)(cid:21)(cid:54)(cid:98)(cid:90)(cid:103)(cid:94)(cid:88)(cid:86)(cid:99)(cid:21)(cid:58)(cid:102)(cid:106)(cid:94)(cid:105)(cid:110)(cid:21)(cid:71)(cid:90)(cid:104)(cid:90)(cid:86)(cid:103)(cid:88)(cid:93)(cid:21)(cid:91)(cid:100)(cid:103)(cid:21)
Deutsche Bank Alex. Brown 

James W. Crownover
(cid:59)(cid:100)(cid:103)(cid:98)(cid:90)(cid:103)(cid:21)(cid:61)(cid:90)(cid:86)(cid:89)(cid:21)(cid:100)(cid:91)(cid:21)(cid:66)(cid:88)(cid:64)(cid:94)(cid:99)(cid:104)(cid:90)(cid:110)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:56)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:110)(cid:188)(cid:104)(cid:21)
Southwest Practice and co-headed  
McKinsey’s worldwide energy practice

Gerard E. Holthaus
(cid:56)(cid:93)(cid:86)(cid:94)(cid:103)(cid:98)(cid:86)(cid:99)(cid:21)(cid:100)(cid:91)(cid:21)(cid:105)(cid:93)(cid:90)(cid:21)(cid:55)(cid:100)(cid:86)(cid:103)(cid:89)(cid:21)(cid:86)(cid:99)(cid:89)
(cid:56)(cid:93)(cid:94)(cid:90)(cid:91)(cid:21)(cid:58)(cid:109)(cid:90)(cid:88)(cid:106)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:68)(cid:91)(cid:195)(cid:88)(cid:90)(cid:103)(cid:21)(cid:100)(cid:91)(cid:21) 
Algeco Scotsman 

Matthew F. McHugh
(cid:59)(cid:100)(cid:103)(cid:98)(cid:90)(cid:103)(cid:21)(cid:67)(cid:94)(cid:99)(cid:90)(cid:21)(cid:73)(cid:90)(cid:103)(cid:98)(cid:21) 
(cid:74)(cid:99)(cid:94)(cid:105)(cid:90)(cid:89)(cid:21)(cid:72)(cid:105)(cid:86)(cid:105)(cid:90)(cid:104)(cid:21)(cid:56)(cid:100)(cid:99)(cid:92)(cid:103)(cid:90)(cid:104)(cid:104)(cid:98)(cid:86)(cid:99)

George P. Stamas
Partner at Kirkland & Ellis 

Gary C. Wendt
(cid:59)(cid:100)(cid:103)(cid:98)(cid:90)(cid:103)(cid:21)(cid:56)(cid:58)(cid:68)(cid:21)(cid:100)(cid:91)(cid:21)(cid:56)(cid:100)(cid:99)(cid:104)(cid:90)(cid:88)(cid:100)(cid:21)(cid:62)(cid:99)(cid:88)(cid:35)(cid:21)(cid:86)(cid:99)(cid:89)
(cid:56)(cid:93)(cid:86)(cid:94)(cid:103)(cid:98)(cid:86)(cid:99)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:56)(cid:58)(cid:68)(cid:21)(cid:100)(cid:91)(cid:21)(cid:60)(cid:58)(cid:21)(cid:56)(cid:86)(cid:101)(cid:94)(cid:105)(cid:86)(cid:97)(cid:21)(cid:72)(cid:90)(cid:103)(cid:107)(cid:94)(cid:88)(cid:90)(cid:104)

Annual Stockholders’ Meeting
(cid:73)(cid:93)(cid:90)(cid:21)(cid:39)(cid:37)(cid:37)(cid:46)(cid:21)(cid:86)(cid:99)(cid:99)(cid:106)(cid:86)(cid:97)(cid:21)(cid:98)(cid:90)(cid:90)(cid:105)(cid:94)(cid:99)(cid:92)(cid:21)(cid:100)(cid:91)(cid:21) 
stockholders will be held on  
(cid:63)(cid:106)(cid:99)(cid:90)(cid:21)(cid:40)(cid:33)(cid:21)(cid:39)(cid:37)(cid:37)(cid:46)(cid:33)(cid:21)(cid:86)(cid:105)(cid:21)(cid:46)(cid:47)(cid:40)(cid:37)(cid:21)(cid:86)(cid:35)(cid:98)(cid:35)(cid:21)(cid:86)(cid:105)(cid:21) 
our executive ofﬁces at  
777 South Flagler Drive,
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Independent Registered
Public Accounting Firm
KPMG LLP
Baltimore, Maryland

Transfer Agent
American Stock Transfer &  
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Stock
FTI’s stock trades on the  
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Investor Relations Firm
FD
Wall Street Plaza
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Stockholder Information
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10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports and proxy statements as 
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SEC and NYSE Certiﬁcations
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Exchange was submitted on June 11, 2008.

 
®

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