FTI Consulting

CRITICAL THINKING AT 
THE CRITICAL TIME ™

™
™

2009 ANNUAL REPORT

2009 was a year in which the world stabilized and entered the early 

stages of a recovery after a paralyzing credit crisis and the worst 

recession in a generation. FTI’s business, which is constructed to 

perform well through both good times and bad, reflected the shift 

in demand drivers from activities that predominated during the 

downturn toward those experienced in economic expansion.  

We are pleased that during this transition we were able to deliver  

a year of record revenues, earnings and free cash flow.

DEAR FELLOW STOCKHOLDER:

In our 2008 Annual Report, we noted that “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.”  We described the economic scene as “chaos,” 
and aptly so.  Against this backdrop, and despite the trends in the markets,  
FTI delivered a record performance in 2008.

Today, we are pleased to report that in 2009, despite one of the worst 

economies in memory, we were able to repeat that performance with another 
year of record revenues, earnings and cash flow. We believe this performance 
validates the efforts we have undertaken to build a company that: 

•  Benefits from growth drivers across the entire economic cycle
•  Provides critical thinking to our clients at the critical time
•  Is “built to last”

Our financial highlights from 2009 include:

• 

Exceptionally strong demand for our countercyclical 
services, driving an 8% increase in revenues to $1.4 
billion from $1.3 billion.

•  Profitability growing faster than revenues, with 

EBITDA in 2009 increasing 13% to $317.3 million, or 
22.7% of revenues, from $279.5 million, or 21.6% of 
revenues, in 2008.

•  Net income for 2009 rising 18% to $143.0 million from 

• 

$120.9 million in 2008.
Earnings per diluted share increasing 19% to $2.70 
from $2.26.

•  Cash flow from operations growing 27% to 

$252 million from $197 million in 2008 due to an 
exceptionally strong period for accounts receivable 
collections.

•  After capital expenditures, free cash flow for the year 

of $222 million.

•  Use of our substantial liquidity to invest in areas 

that further enhance the value of our business. In 
addition to several small acquisitions and strategic 
hires, in November we announced and funded a $250 
million accelerated stock buyback transaction (“ASB”) 
which led to the repurchase of 5,455,591 shares. 

•  We exited 2009 with $134 million in cash, cash 

equivalents and short term investments, and are 
confident that our current liquidity gives us the 
resources we need to continue to successfully pursue 
our strategy and fund our growth. 

If chaos was the order of the day in 2008, 2009 was 

a year in which the world stabilized and began to 
transition to more favorable conditions. The paralysis 
and negativism that had gripped the capital markets in 
2008 subsided, and capital markets began to operate more 
freely, credit became more available and companies, 
more confident in the likelihood of an economic recovery, 
became more willing to invest in their businesses. The 
transition we witnessed in the business and financial 
arenas over the course of the year was also manifest in 
FTI’s business. Events that prevailed in the downturn, 
like bankruptcy and restructuring, dominated our 
performance early in the year, but we began to see 
evidence as the year progressed of activities associated 
with a modest economic expansion, such as capital 
markets and merger and acquisition (M&A) activity.

If 2008 was a strong year for our Corporate Finance/
Restructuring segment, 2009 was even stronger, as the 
combination of pervasive fear, high unemployment and 
tight global credit markets forced an unprecedented 
number of companies to seek advice or file for 
bankruptcy. Demand for this segment’s services was 

widely-spread across different sectors of the economy, 
including retail, financial services, real estate, insurance, 
entertainment, and energy, among others. Our position 
as a leading restructuring practice in the U.S. enabled 
us to participate in many of the largest, highest profile 
corporate restructurings of the year, including Lehman 
Brothers, General Motors, and CIT. Segment revenues rose 
by over 37% to a record $514.2 million from a very strong 
$374.5 million in 2008. This drove a substantial increase in 
the segment’s profitability, as EBITDA increased 54% to  
$175.6 million, or 35.1% of revenues, from $114.2 million, 
or 30.5% of revenues, last year.

Our Forensic and Litigation Consulting segment also 
had a very good year. It, too, generated record revenues, 
despite efforts by corporate managers to control spending 
and a government that is in the process of regaining 
control of the regulatory landscape. Compared to many 
industry participants who experienced contracting 
businesses, our Forensic and Litigation Consulting 
segment revenues grew to $259.2 million with EBITDA of 
$59.6 million and increasing market share. Examples of 
our leading market position include our selection to work 
on two of the largest and highest-profile financial fraud 
cases in recent years, the Madoff and Stanford Financial 
matters. Revenue from these and other large ongoing 
financial fraud cases, combined with strong showings in 
the segment’s intellectual property, regulated industries, 
and Latin American investigations practices, contributed 
to our superior performance.

Our Technology segment also performed well despite 
reduced litigation activity and a generally slow year for 
large mergers in 2009. While segment revenues of $211.7 
million were slightly down compared to a very strong 
2008, EBITDA and margin were actually higher, growing 
to $75.7 million, or 36% of revenue compared to 33% 
last year. During the year we successfully completed the 
integration of Attenex Corporation, which was acquired 
in July 2008, and the combined business, now called 
FTI Technology, includes a fully-integrated research 
and development effort, combined sales and support 
functions and a global team of over 600 employees. 
While we continued to invest aggressively in research 
and development, the successful integration of Attenex 
and other cost control efforts resulted in a substantial 
reduction in operating costs for the segment over the 
course of the year.

We remain committed to delivering the industry 

standard for e-discovery software, service and 
consulting, and during the year continued to invest to 
ensure that we maintain our position as the firm that 
organizations go to when faced with high stakes, “bet 
the company” challenges. Beyond the successful creation 
of FTI Technology, our strategic view of the trends in 

the e-discovery market led us to create and launch 
Acuity, our new integrated e-discovery and document 
review offering, in February of 2010. Acuity addresses 
the developing needs of our clients by providing them 
with award-winning technology that offers a single 
point of control over the e-discovery and document 
review process while seeking to drive significant cost 
savings for our clients in the review process, by far 
the most expensive part of e-discovery and a part of 
the e-discovery continuum in which heretofore FTI did 
not participate. In addition to Acuity, we introduced 
Ringtail® QuickCull in late-2009, a revolutionary product 
that streamlines and lowers the cost of e-discovery by 
focusing legal teams only on what is important for case 
strategy. The Technology segment continues to be the 
go-to solution when companies and organizations need  
to “be ready and be right.” We see that business poised 
for growth in the coming year and beyond.

The Economic Consulting segment also had a record 
revenue year in 2009. Anticipating an increase in demand 
internationally for antitrust advice, and for damages 
analysis and disputes resolution flowing out of the credit 
crisis, we invested heavily in the future of the segment.  
We increased the number of professionals by 
approximately 14%, including a number of world-
class experts; expanded our presence in London, the 
beachhead for our expansion into the European market; 
and established new offices in New York and Los Angeles. 
For the year, Economic Consulting’s revenues grew to 
$234.7 million, up 7% over the $219.9 million generated 
by the segment in 2008 with record revenues in the third 
and fourth quarters. The segment produced EBITDA of 
$47.8 million, even after the significant investments made 
in professionals and the opening of new offices which 
are in the process of growing into normalized levels of 
utilization and profitability.

The Strategic Communications segment is our most 

global and most economically sensitive business. 
Revenues for the segment were $180.1 million in 2009, 
reflecting a decline in corporate discretionary spending, 
a significantly lower level of IPO and M&A activity and 
headwinds from unfavorable foreign exchange rates due 
to the stronger US dollar. EBITDA for the segment was 
$24.9 million. We responded to market conditions early in 
the year by undertaking a number of initiatives to reduce 
costs in the segment and were rewarded with a steady 
progression of improved profitability throughout 2009. 
Despite the adverse operating environment during the 
year, the Strategic Communications segment remained 
one of the most active global M&A communications 
advisors in the world, strong evidence that it continues  
to be a global market leader across the economic cycle.
From a strategic standpoint in 2009 we continued  

to execute on our goal of investing in global expansion, 
domain expertise and an expanded range of specialist 
skills. Our acquisition activity was below the pace of 
2008, as we focused on the continued integration of the 
15 organizations that we acquired that year. We believe 
the benefits of this focus on efficiency will be evident for 
years to come.

Given the long-term structural transformations 

occurring in the telecom, media and cable sectors, at the 
very end of 2008 we acquired CXO LLC, a premier interim 
and turnaround management services firm with particular 
focus on these industries. We integrated CXO into our 
Communications, Media and Entertainment practice 
(CME) and this was an important factor in the excellent 
performance of CME in 2009.

We also saw continued growth in the number, size 
and complexity of international arbitration cases. The 
amounts in dispute are often very large, the valuation 
and damages issues are complex and the cases must be 
resolved across multiple jurisdictions. FTI is ideally suited 
to advise our clients on these matters, and we made 
considerable progress in building out our International 
Arbitration practice during the year. From our original 
base in London, we have expanded on a global scale 
with resources in Paris, Geneva, Hong Kong, New York, 
Washington and Toronto.

We also further extended our depth in complex 
investigations to better serve clients in the new era  
of greater regulatory ardor. We recruited a team of 20 
forensic and investigations professionals in our Boston 
office which expands our expertise in this critical 
discipline, and we launched a financial investigations  
and litigation-focused practice in Paris to better serve  
the Continental European market.

As we look into 2010 there are significant cross currents 
that cloud our crystal ball. On the positive side, the world 
seems to have passed the danger point of a catastrophic 
financial or economic meltdown. Global capital markets 
are again active, so high quality companies can once 
again access the markets to address their financing 
needs. Managements have moved beyond their bunker 
mentalities and are looking to invest in their businesses 
and grow through acquisitions. 

On the other hand, unemployment remains high, 
the broader banking industry is still fragile, and there 
are strains on state and municipal debt in the US and 
sovereign debt around the globe.

Within this context, we look to have another record 
year in 2010. We have intellectual capital and financial 
strength that are unmatched in our industry. We have 
built the Company to perform well in a wide range 
of economic markets. Having grown throughout the 
downside of the economic cycle, we now expect  

to participate in the upside of the cycle as well. We 
anticipate that the procyclical demand drivers of our 
business - M&A and antitrust enforcement, complex 
financial disputes, regulatory activism and corporate 
spending - will all be stronger this year than in 2009.

The capital markets, especially the level of strategic 

M&A activity, drive business across a broad range 
of our segments, and we expect more favorable and 
active markets in 2010 compared to 2009. Virtually 
all of our segments can benefit, whether it is advising 
on the antitrust or competition implications of M&A, 
transaction-communications or due diligence.

As we have said in the past, we have been looking 
for increased government regulatory and enforcement 
activity, particularly from the Securities and Exchange 
Commission and the Department of Justice. These 
agencies have been charged with investigating the 
tremendous destruction of value during the crisis. They 
have the mandate of popular sentiment and increased 
budgets behind them. As our selection in the Madoff and 
Stanford cases demonstrates, FTI’s leading investigations, 
e-discovery and financial economics practices place us at 
the forefront of advisers to call when clients are facing a 
significant threat or opportunity.

We are seeing signs of momentum building in terms 
of the number of new engagements in our Forensic and 
Litigation Consulting and Economic Consulting segments, 
as well as in the form of increased net retainer wins in our 
Strategic Communications segment.

Our Corporate Finance/Restructuring segment 

should also have another very good year driven by our 
international markets, industry-specific expertise in areas 
such as healthcare (where reform should drive additional 
demand), media and telecommunications, and growth in 
the segment’s transaction support business as the M&A 
and capital markets improve.

From this position of strategic and financial strength, 

we are dedicated to maintaining FTI as the “gold 
standard” of service and of intellectual capital in the 
industry and we continue to build a highly profitable 
global business that can grow across the economic cycle.

We are dedicated to reinvesting in our firm and 

managing it to evolve with the developing opportunities 
in the marketplace. We are investing in the tools and 
infrastructure to support this vision. From CRM to 
training to branding, our capital is behind our plans,  
and our organizational structure is evolving to better 
serve the needs of our clients around the world.
We also continue to be optimistic about the 

opportunities we have to expand our pool of exceptional 
talent, both by aggressively courting professionals who 
can add to our intellectual capital and through selective 
acquisitions, as identifying and integrating “win-win” 
transactions is an area in which we believe we excel.  
Our priorities are to strengthen and broaden our offerings 
in Continental Europe, Asia and Latin America, and to 
add significant additional domain expertise that we can 
leverage throughout our firm.

In closing, we remain extremely optimistic for 2010 as no matter what the 
economic cycle, critical thinking at the critical time on behalf of the world’s 
greatest clients is always an imperative. We wish to thank our employees, clients  
and stockholders for all their contributions and support, and we look forward  
to continued success in the years to come. 

Jack B. Dunn, IV
President and  
Chief Executive Officer

Dennis J. Shaughnessy
Chairman of the Board

Dominic DiNapoli
Executive Vice President and  
Chief Operating Officer

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, 2009

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any,

every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes ‘ No ‘

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter)

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. È

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 non-voting common stock held by non-affiliates of the registrant was $2.6

billion, based on the closing sales price of the registrant’s common stock on June 30, 2009.

The number of shares of registrant’s common stock outstanding on February 16, 2010 was 46,481,250.

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, 2009

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

21

33

33

33

33

34

36

39

66

68

Item 9.

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

118

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

118

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

118

PART III

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

119

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

119

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

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

119

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

119

Item 14.

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

119

PART IV

Item 15. Exhibits and Financial Statement Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120

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. All 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:

•

•

•

•

•

•

•

•

•

•

•

•

changes in demand for our services;

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 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;

1

•

•

•

•

•

•

competition;

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

our ability to manage growth;

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;

• Economic Consulting;

• Technology; and

•

Strategic Communications.

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
restructuring (including bankruptcy), financing and credit issues and indebtedness, interim business management,
forensic accounting and litigation services, mergers and acquisitions (M&A), antitrust and competition matters,
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.

2

From December 31, 2008, we increased our number of revenue-generating professionals by approximately
5% to 2,638 as of December 31, 2009, and we increased our total number of employees by approximately 3% to
3,472 as of December 31, 2009. As of December 31, 2009, we had operations across 35 U.S. cities and 21
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 and the British Virgin Islands.

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 creditor groups, as well as other parties-in-interest. We advise on a wide range of areas, including
restructuring (including bankruptcy), financings, claims management, mergers and acquisitions (M&A), 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, M&A activity and management crises. The increased demand for restructuring (and bankruptcy)
services that began in 2007 continued during 2009, as the economic recession, financial, credit, banking and real
estate crises, and tight credit markets continued. 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, our objective is to manage utilization by shifting professionals to work on engagements in other service
offerings or our other business segments, as needed.

In 2009, the services offered by our Corporate Finance/Restructuring segment included:

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.

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.

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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 and company management take proactive steps toward revitalizing businesses, achieving investment
expectations and strengthening inexperienced management and weak leadership, by assisting in the development,
modification and execution of business plans and offering unbiased assessments, thereby allowing a sponsor to
focus on new opportunities. Our services include providing professionals to enhance management by
supplementing the existing management team with turnaround specialists and other interim executives, assisting
with obtaining or modifying financing, providing credibility to support lender negotiations and credit concessions
and a variety of other mission-critical services that may be key to a company’s survival and success.

Transaction Advisory Services (M&A). 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.

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, 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. Real estate consulting services include M&A advisory services,
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, accounting outsourcing
services to real estate and financial services organizations, including external financial and management
reporting and accounting department oversight and the development, implementation and execution of solutions
designed to gain competitive operating and investment advantage and to identify cost savings. Tax consulting
advises clients on complex tax and deal structuring issues affecting the real estate industry.

In 2009, we expanded our Corporate Finance/Restructuring segment with a new office in Germany. From

December 31, 2008, we increased the number of revenue-generating professionals in our Corporate Finance/
Restructuring segment by approximately 13% to 758 professionals as of December 31, 2009.

Forensic and Litigation Consulting

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

other interested parties 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,

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including pre-filing assessments, discovery, trial preparation, expert testimony and investigation and forensic
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. In December 2009, the Forensic and Litigation Consulting segment launched a new
insurance actuarial consulting practice.

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 2009, we continued to see a general decline in active large
complex litigation matters that negatively impacted demand for our trial services and general expert services, a
slowdown in governmental and regulatory investigations, including Foreign Corrupt Practices Act cases,
weakened demand for our investigation and forensic accounting services, and a decline in our Asia Pacific
international risk practice due to the continuing impact of the U.S. economic recession on its financial customer
base. These declines were partially off-set by investigative and forensic accounting services provided in
connection with two large U.S. fraud investigations and growth in our Latin American investigations practice and
our construction solutions business. If demand weakens for a particular service offering, our objective is to
manage utilization by shifting professionals to work on engagements of our other business segments, as needed.

In 2009, the services offered by our Forensic and Litigation Consulting segment included:

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.

Global Risk and Investigations Practice (GRIP). 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.

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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.

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. Our trial technology professionals advise and support clients in large and highly 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.

In 2009, we expanded our Forensic and Litigation Consulting segment with an office in France. From
December 31, 2008, we increased the number of revenue-generating professionals in our Forensic and Litigation
Consulting segment by approximately 4% to 667 professionals as of December 31, 2009.

Economic Consulting

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

parties with 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,
international arbitration, 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, media and
entertainment, 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.

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A number of factors affect the demand for our economic consulting services including M&A 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 2009, demand for
strategic M&A and financial economic consulting services declined relative to 2008. This decline was partially
offset by revenue from our recently formed European economic consulting practice based in London and two
new offices in the U.S.

In 2009, our Economic Consulting segment included:

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.

Energy Solutions. Our energy solutions practice advises clients regarding conflicting regulatory
frameworks, power industry restructuring, contractual disputes and litigation to the gas, oil and other energy
industries.

International Arbitration. Our international arbitration practice works with companies, governments and
members of the international bar to provide independent advice and expert testimony, relating to valuation and
damages in a wide variety of commercial and treaty disputes before international arbitration tribunals, including
London, Washington D.C., Stockholm, Paris, Geneva and Dubai.

In 2009, we expanded our Economic Consulting segment with two new offices in the U.S. and with a
headquarters in London and offices in Paris and Toronto. From December 31, 2008, we increased the number of
revenue-generating professionals in our Economic Consulting segment by approximately 14% to 302
professionals as of December 31, 2009.

Technology

Our Technology segment is a leading electronic discovery and information management software and
service provider. We provide products, services and consulting to companies, law firms, 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 secure management analysis and use of
critical corporate information. We provide a comprehensive suite of software and services to help clients locate,
review and produce electronically stored information (ESI), including e-mail, computer files, voicemail, instant
messaging, and financial and transactional data.

Our proprietary Ringtail® software is used for e-discovery and document review, including litigation

support and secure information management. Ringtail® is also used in transactional settings to support
information “deal rooms” and M&A activity. Our Ringtail® technology is designed to ensure quality, reduce risk,
increase productivity and support cost effective review, preparation and production of large amounts of ESI. Our
proprietary Attenex® technology is used to collect, search and manage enterprise data. We have integrated
Attenex’® patented visual analytics technology with Ringtail® in a combined offering that enables rapid

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identification of relevant content for litigation, investigations and regulatory response projects. In 2009, we
introduced the Ringtail QuickCull® appliance for on-premises use by companies to assess, integrate and reduce
ESI prior to legal review.

FTI e-discovery software can be deployed either on-premises by the company, law firm, government agency

or other client, or on-demand as a hosted solution through FTI or its network of third-party service providers,
which helps clients scale to the unique demands of their needs and helps maintain a consistent and cost-effective
e-discovery process. 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 financial and
enterprise data analysis (FEDA) and other technology business as part of our Forensic and Litigation Consulting
segment. We have made the decision to again operate our FEDA practice as part of our Forensic and Litigation
Consulting segment beginning in 2010.

In 2009, the software and services offered by our Technology segment included:

Litigation Readiness. Our experienced professionals work 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. Our litigation readiness services include the development of proactive
information privacy and security programs, plain English records policies, retention schedules, litigation hold
strategies, archiving software selection and backup tape disposition strategies.

Identification, Preservation and Collection. 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 and forensically reconstruct complex
transaction data.

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.

Early Case Assessments. Our Technology segment offers a flexible and customizable set of early case

assessment tools and services to help companies and their legal teams evaluate each case.

Software Products and Services. Our software products and services include the following e-discovery

capabilities:

• Data Acquisition and Conversion. Ringtail® provides clients with advanced electronic discovery and
analysis techniques, as well as native format data processing services. These services can quickly
extract e-mail and other data from a number of sources and provide the data in the client’s specified
format. Data can be delivered in Ringtail® Legal™ format for use in the client’s Ringtail® on-premise
system or hosted in a Ringtail® on-demand environment by FTI or an FTI service provider.

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• Data Culling. Ringtail® QuickCull®, which was introduced in August 2009, is a software appliance
designed for on-premises use by clients 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 by eliminating
irrelevant data. We also provide Ringtail® QuickCull® as a hosted offering for clients that prefer an
on-demand environment. FTI provides de-duplication and near-duplication detection services for
Ringtail® on-demand clients to help reduce the document set prior to review. In some cases, Ringtail®
incorporates third party software to provide these solutions. Attenex® Patterns® Workbench automate
the process of preparing electronic content for review and includes patented suppression and
de-duplication technology along with other features to help clients manage and reduce larger data sets.

• Data Review and Coding. Our Ringtail® Legal™ product is a scalable and configurable web-centric
platform to facilitate rapid review and coding of documents. Clients can install Ringtail® Legal™ on
their own servers or quickly launch a case from dedicated FTI or third party servers with the FTI
Ringtail® on-demand product. Ringtail® provides multi-lingual support as one of the distinctive aspects
of its capabilities. Attenex® Patterns® Document Mapper (Document Mapper) groups similar
documents together to help reviewers make faster and more accurate document decisions. Document
Mapper is a component of the Ringtail® analytics module, which provides clients with ways to review
and organize large sets of data for review.

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

document production needs and produce documents in all electronic formats for its clients.

Financial and Data Enterprise Analysis (FEDA). 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 structured data experts deliver strategic business solutions for clients requiring
in-depth analysis of large, disparate sets of financial, operational and transactional data. Among the services
offered are:

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•

•

•

•

•

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

In addition, our professionals provide e-discovery process consulting and project management, by assisting

clients to manage the various phases of e-discovery, develop cost estimates to support excess burden claims,
publish litigation holds, select e-discovery and information management technology and develop defensible and
repeatable procedures for handling ESI. In addition, we provide strategic discovery advice to counsel and
conduct system inventories to develop data map and provide expert testimony. Prior to 2006, we operated FEDA
as part of our Forensic and Litigation Consulting segment.

From December 31, 2008, we decreased the number of revenue-generating professionals in our Technology

segment by approximately 5% to 338 professionals as of December 31, 2009.

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

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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
2009, demand for our strategic communications services declined due to the global economic recession and
financial and real estate crises, particularly due to the decline in mergers and acquisitions, stock offerings and
capital market transactions and companies’ reductions of discretionary spending on such services as branding,
communications, marketing and media and investor relations.

In 2009, the services provided by our Strategic Communications segment included:

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. 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.

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

from across many 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
all stakeholders. Our approach includes defining corporate and brand positioning, 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, 2008, we decreased the number of revenue-generating professionals in our Strategic

Communications segment by approximately 3% to 573 professionals as of December 31, 2009.

Our Business Drivers

Factors that drive demand for our services include:

• Financial Markets and the Economy. Rapidly changing financial markets and the economy drive

demand for many of our services. 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 have been 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

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over protecting their positions. Companies that invest in sub-prime loans or debt or security
instruments collateralized by less credit worthy collateral also have faced 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, 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. As credit becomes more
available, we assist clients to restructure debt and modify covenants. In addition, when the economy is
good or improving, capital markets and M&A transactions increase, which benefits our Economic
Consulting and Strategic Communications segments.

• 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 perceived 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. In efforts to advance legislative
and policy objectives, clients also increasingly rely on our Economic Consulting segment to provide
substantive economic analyses and white papers that demonstrate the economic effects of various
alternative scenarios.

• Financial Fraud. Governmental agencies and prosecutors have been under increasing pressure to
uncover and investigate financial misconduct and recover illegal gains amid public demand for
crackdowns on Wall Street misdeeds. On November 17, 2009, the U.S. government announced the
creation of a new interagency task force to crack down on financial fraud. The task force led by the

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Department of Justice and Treasury Department is aimed at investigating and prosecuting mortgage,
securities and corporate fraud, as well as recovering funds for victims. In addition, the weak economy
has made it increasingly difficult for persons to perpetuate fraudulent activities without detection. The
pace at which alleged and actual fraudulent activities are being investigated and coming to light has put
significant strain on the resources of law enforcement and other agencies. As a result, outside resources
are being tapped to assist law enforcement and prosecutors identify and recover illegal financial and
other benefits and prosecute the perpetrators. These factors have driven significant demand for forensic
account investigative skills like those offered by our Forensic and Litigation Consulting segment and
electronic discovery tools like those offered by our Technology segment in 2009.

• M&A Activity. The overall strength of the economy and M&A activity are important drivers for our

businesses. In a weak economy and during periods of decreased M&A 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 segments. Law firms and their clients as
well 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 2009, the expected increase in
the number of large litigation and class action litigation cases and regulatory actions and investigations
did not materialize, resulting in weak demand for such services.

• Market Environment Drives Strategic Communications Services. A number of factors affect the

demand for our Strategic Communications segment, including merger and acquisition activity, public
stock offerings, business crises, governmental legislation and regulation and the need for an integrated
and consultative approach covering different aspects of communications, During 2009, demand for our
Strategic Communications segment declined due to the global economic recession and financial and
real estate crises, particularly due to the decline in mergers and acquisitions, stock offerings and capital
market transactions and companies’ reductions of discretionary spending on such services as branding,
communications, marketing and media and investor relations. There have been companies, however,
that face reputational risk issues, which also drive demand for the services offered by our Strategic
Communications segment.

• Growth of Multinational Firms and Changes in Non-U.S. Markets. The growth of multi-national
firms and global consolidation can precipitate 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 the services offered by our Corporate Finance/
Restructuring, Forensic and Litigation Consulting, Economic Consulting and Technology segments.
The need to store, retrieve and transmit data among different jurisdictions that have different
languages, privacy and other laws also drives demand for the services offered by our Technology
segment. Multinational firms also need to establish global branding, investor relations and
communications strategies, which drive demand for our strategic communications services.

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• 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 the
services offered by our Strategic Communications segment.

Our Competitive Strengths

We compete primarily on the basis of the breadth of our services, the quality of our work, the prominence of

our professionals, our geographic reach, our reputation and performance record, our brand recognition, 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 December 2009, The Deal LLC’s
Bankruptcy League Tables ranked our Corporate Finance/Restructuring segment as both the number
one crisis management firm and debtor crisis management firm based on the number of active cases as
of September 30, 2009. Our Strategic Communications segment remained the most active global public
relations adviser on M&A transactions, topping Mergermarket’s 2009 global, European and Asia-
Pacific league tables by volume. Our Strategic Communications segment also maintained its global
leadership position in middle-market transactions by both value and volume as reported by
Mergermarket’s 2009 global European and Asia-Pacific league tables. In December 2009, our
Technology segment was named a “strong positive” vendor in Gartner Research’s “MarketScope for
E-Discovery Software Product Vendors, 2009” report. In October 2009, our Ringtail® Legal™
e-discovery software was named by KM World Magazine to its “Trend-Setting Product Award of
2009” list. 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
group of companies in October 2006. We believe that our broad service offerings and diversity of our
revenue streams help to manage fluctuations due to market conditions in any one of our segments.
Currently we have operations across 35 U.S. cities and in 21 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 and the British Virgin Islands. We believe our diversity 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 2009 were four
internationally 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, 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.

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• 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, we believe we had leading market positions in our Corporate Finance/Restructuring
segment based on number of active cases as of September 30, 2009, as reported in The Deal LLC’s
Bankruptcy Insider quarterly deal tables published in December 2009. 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 consistent cash flows
including high margins, and a relatively low level of capital expenditures. Our strong cash flow
supports business operations, capital expenditures, research and development efforts in our Technology
segment, and our ability to service our indebtedness and pursue our acquisition and growth strategies.

Our Business Strategy

We build long-term repeat client relationships based on the quality of our services, 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.

• 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. In 2009, we expanded
our Corporate Finance/Restructuring segment with a new office in Germany; our global Economic
Consulting segment with two new offices in the U.S., a headquarters in London, and offices in Paris
and Toronto; and our forensic and litigation consulting practice with a new office in France.

•

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, 2009,
we have completed 38 acquisitions that have enhanced and expanded our businesses. In June 2009, we
acquired the 50% equity interest in our Strategic Communications segment’s German joint venture
owned by our joint venture partner. 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.

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• Attract and Retain Highly Qualified Professionals. Our professionals are crucial to delivering our
services to clients and generating new business. As of December 31, 2009, we employed 2,638
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 substantially all of our senior 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 expand 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 staffing needs
may arise. The nature of our services also allows us to bill premium rates for the services of certain
revenue-generating professionals or with respect to certain engagements, 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 continue to invest in our FTI brand and our visibility to reinforce

recognition of our brand in the marketplace. Our branding initiatives include investment in corporate
sponsorships, such as our sponsorship arrangement with professional golfer Padraig Harrington, which
started in late 2008, strategic placement of print media in specialty journals, the publication of the FTI
Journal, a dedicated magazine that is available on the Internet and free of charge to our clients and
stakeholders, which began publication in the Fall of 2009, and FTI – TV, a web-based video
broadcaster of information relating to FTI expertise and of interest to the global business community,
brand placement in strategic locations where our clients are likely to congregate, and participation in
high profile conferences and seminars, which also started in 2009. We have also advertised on select
network and cable television programs and in select sports venues 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 to craft the federal
electronic discovery rules.

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. During the period from
December 31, 2008 to December 31, 2009, we increased the number of revenue-generating professionals by
approximately 5% to 2,638 and we increased our total number of employees by approximately 3% to 3,472. 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.

16

Employment Agreements

As of December 31, 2009, we had written employment agreements with 189 of our 281 senior managing
directors and senior vice presidents in the segments, who we are collectively 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 2010 and 2019, with 12 SMD agreements expiring in
2010, 53 SMD agreements expiring in 2011 and 42 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 (EBITDA)). They may also provide for
long-term equity incentives in the form of stock options and/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 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, as applicable to
such loan. 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 such 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. Under the non-competition covenants, the professional
generally agrees not to offer or perform 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.

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, 2009, there were 66 SMDs participating in the
SMD IC Program from our Corporate Finance/Restructuring, Forensic and Litigation Consulting, Economic
Consulting and Technology segments, representing approximately 28%, 26%, 4% and 53% 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 and as part of our annual performance evaluation process, we consider
admitting other SMDs into the program. Each year we also evaluate whether current participants should be
eligible for additional upfront 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 up-front and during the term of the

17

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, upon admission
to the program and execution of a new employment agreement or upon moving up to a higher tier in the SMD IC
Program.

We intend to continue to admit SMDs from our business segments into the SMD IC Program on a case by

case basis.

We funded unsecured, general recourse forgivable loans in an aggregate amount of approximately $23.0

million in 2006, $22.0 million in 2007, $7.3 million in 2008 and $7.9 million in 2009 to SMDs participating in
the SMD IC Program. In each of those years ,we also funded approximately $8.0 million, $13.0 million, $19.0
million and $31.3 million, respectively, of unsecured forgivable loans to other key professionals. In February
2010, additional loans in the aggregate amount of $8.5 million were authorized to 12 new SMDs who have been
designated to join, and three 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 continue to fund 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, stock options to purchase an aggregate of 117,000
shares of common stock and 19,620 shares of restricted stock in 2008, and stock options to purchase an aggregate
of 219,000 shares of common stock and 37,500 shares of restricted stock in 2009 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, 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, and stock options to purchase an
aggregate of approximately 117,750 shares of our common stock and approximately 177,178 shares of restricted
stock in 2009 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 2010, awards of stock options exercisable for an
aggregate of 228,000 shares of common stock, and 31,000 shares of restricted stock were authorized for award to
12 new participants invited to join and three 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 2010 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 2010 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.

18

We have a staff of seven 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 to continue to make such expenditures in 2010. Our branding initiatives include investment
in corporate sponsorships, such as our recent sponsorship arrangement with Padraig Harrington, which started in
late 2008, strategic placement of print media in specialty journals, the publication of the FTI Journal, a dedicated
magazine that is available on the Internet and free of charge to our clients and stakeholders, which began
publication in the Fall of 2009. Also introduced in 2009 was FTI — TV, a web-based video broadcaster of
information relating to FTI expertise and of interest to the global business community, and brand placement in
strategic locations where our clients are likely to congregate. In 2009, we advertised on select network and cable
television programs that we believe were of interest to the companies that use or have need of our services and
expect to continue selective advertising in 2010. 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, facilitate client development, and 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 2009, no single client

accounted for more than 10% of our total revenues. No single client accounted for more than 10% of the 2009
revenues of any of our business segments, except for one client that accounted for approximately 17% of the
revenues of our Technology segment and one client that accounted for approximately 11% of the revenues of our
Forensic and Litigation Consulting segment. The loss of such client by such segment would not have a material
adverse effect on FTI and our subsidiaries as a whole but could have a material adverse effect on such segment if
that business was not quickly replaced. Among our top ten clients were four internationally 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 engages us on behalf of multiple clients. For this purpose, we recognize the
ultimate client of the law firm as our client.

Competition

We do not compete against the same companies across all of our segments or services. Instead we compete

with different companies or businesses of companies depending on the particular nature of a proposed
engagement and the requested service(s). Our businesses are highly competitive. Our competitors include large
organizations, such as the global accounting firms and large management and financial consulting companies,
which offer a broad range of consulting services, investment banking firms, consulting and software companies,
which offer niche services that are the same or similar to services or products offered by one or more of our
segments, and small firms and independent contractors that provide one or more specialized services.

We compete primarily on 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 makes
price 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 electing to work independently, start their
own firms or change employers.

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Our Corporate Finance/Restructuring segment primarily competes with global accounting firms, investment
banks and specialty boutiques providing restructuring or M&A services. Our Forensic and Litigation Consulting
segment primarily competes with other large consulting companies with service offerings similar to ours. Our
Economic Consulting segment primarily competes with individually recognized economists, specialty boutiques
and large consulting companies with service offerings similar to ours. Our Technology segment primarily
competes with 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 Strategic Communications segment competes with the large public relations firms and
boutique merger and acquisition and crisis management communications firms.

Some service providers are larger than we are and on certain engagements may have an advantage over us

with respect to one or more competitive factors. Specialty boutiques or smaller local or regional firms, while not
offering the range of services we provide, may compete with us on the basis of geographic proximity, specialty
service or price advantage.

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
have also developed other Ringtail products such as Ringtail® QuickCull® that we consider proprietary and
confidential. We 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 seek to use such intellectual property.

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 21 U.S. patents and have 16 U.S. patents pending, covering
various aspects of certain software products of our Technology segment. We also hold five non-U.S. patents
issued in Canada and Europe, 14 non-U.S. patent applications pending in Canada and Europe, and no additional
patent applications have been issued or are pending in other countries, covering various aspects of software of
our Technology segment. We have three patents pending relating to services of our Economic Consulting
segment. 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 we take
the appropriate steps to protect our trademarks and brands.

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.

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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 Business Segments

Changes in capital markets, M&A 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 2008/2009 economic recession;

the U.S. and global economy in general;

the U.S. and global financial markets, including the availability, costs and terms of credit;

21

•

the level of leverage incurred by companies;

• merger and acquisition activity;

•

•

•

•

•

over-expansion by businesses;

business and management crises;

new and complex laws and regulations;

other economic and geographic factors; and

general business conditions.

Our Corporate Finance/Restructuring segment provides various restructuring and restructuring-related
services to companies in financial distress or their creditors or other stakeholders. In 2009, as the U.S. and global
economic decline continued, we worked on large bankruptcy and restructuring engagements. 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.

Factors outside of our control also drive demand for the services of our 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, Economic Consulting and Technology
segments. Our Economic Consulting segment, which provides antitrust and competition advice and damages
consulting, has experienced decreased utilization due to fewer large mergers and acquisitions, and client imposed
delays in authorizing major work on engagements until later in the litigation cycle. Our Strategic
Communications segment has seen utilization decline and retainer revenues decrease across the full range of its
services, primarily as a result of decreased M&A and public stock offering activity, and client decisions to
postpone or curtail discretionary spending.

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, changes to laws and regulations,
including changes to the bankruptcy code, tort reform , banking reform, or 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.

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, decreased productivity because of vacations taken by our professionals and economic factors
beyond our control. 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.

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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
2008/2009 economic recession, 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 receiving these
types of 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 significant 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.

Our Technology segment has recently experienced significant price competition from lower cost
competitors. The clients of our Technology segment increasingly prefer fixed and other alternative fee
arrangements that place cost ceilings or other limitations on our fee structure. The Technology segment’s ability
to service clients with these fee arrangements at a cost that does not directly correlate to time and materials may
negatively impact or result in a loss of the profitability of such engagement, adversely affecting the financial
results of the segment.

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 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. 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, innovative or improved software or products
will be developed, compete effectively with the software and technology developed and offered by competitors,
or be accepted by our clients or the marketplace. 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, net
income and growth of the Technology segment and the Company could decline.

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 foreign jurisdictions provide less protection for our proprietary rights than the laws of the U.S.

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Certain aspects of our Attenex® software are 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.

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.

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 we cannot predict with certainty, including general economic and financial
market conditions, the number, size and timing of client engagements, demand for our services, appropriate
professional staffing levels, utilization of professionals across segments, acquisitions 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 recovering
or strong economy, easy credit availability, low interest rates and less M&A 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, the timing of the completion of
engagements, less government regulation or fewer regulatory investigations and the timing of government
investigations and litigation. Factors that could adversely affect utilization in our Economic Consulting segment
include less M&A activity, fewer regulatory filings and less litigation, reduced antitrust and competition
regulation, fewer government investigations and proceedings and timing of client utilization of our services. 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 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. Our Strategic
Communications segment derives revenues from fixed monthly fee and retainer based contracts. Factors that

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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. In addition, lower priced competition
could adversely affect the revenues of these segments.

Our international operations involve special risks.

Primarily as a result of acquisitions, we operate in 21 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, 2009, operations outside of the U.S. accounted for
approximately 18% of our total revenues, of which approximately 47% 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 of 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 that 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 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
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

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footprint. 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.

As of December 31, 2009, we had written employment agreements with 189 of our 281 SMDs. These
employment agreements expire between 2010 and 2019, with 12 SMD agreements expiring in 2010, 53 SMD
agreements expiring in 2011 and 42 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 have been designated as
participants in our SMD IC Program. In an effort to reduce risk, we have included a renewal provision in most of
the employment agreements that provides that 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. There is no assurance we will enter into new long-term employment agreements
with other SMDs, although that is our intention. 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 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. The admission of additional SMDs into the SMD IC Program may result in the
concentration of expirations in future years.

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, disability, termination by us without cause or termination by the employee
with good reason, as may be applicable to such loan grant. 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.

In addition, our Economic Consulting segment has contracts with its economists that provide for
compensation equal to such professionals annual collected client fees plus a percentage of the annual fees
generated by junior professionals working on such management, which results in compensation expense for that
segment being a higher percentage of revenues and EBITDA than the compensation paid by other segments. We
expect that these arrangements will continue and that the Company will enter into similar arrangements with
other economists hired by the Company.

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

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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, 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 recourse. We may also decide that the likelihood 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 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 acquisition or hire because of relationship issues.

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.

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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. Although we
believe we maintain an appropriate amount of liability insurance it is limited. 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 and financial resources.

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.

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.
In addition, our business involves large client engagements that we staff with a substantial number of
professionals. At any time, one or more client engagements may represent a significant portion of a segment’s
revenues. For the year ended December 31, 2009, one client of our Technology segment accounted for
approximately 17% of that segment’s annual revenues and one client of our Forensic and Litigation Consulting
segment accounted for approximately 11% of that segment’s annual revenues. If we are unable to replace clients
or revenues as engagements end, clients unexpectedly cancel engagements with us or curtail the scope of our
engagements, and we are unable to replace the revenues from those engagements, eliminate the costs associated
with those engagements or find other engagements to utilize our professionals, the financial results and
profitability of a segment or the Company could be adversely affected.

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, 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.

Failure to protect our client confidential information could subject us to claims or impair our reputation and
ability to obtain new client engagements, and governmental focus on data security could increase our costs of
operations.

If we do not maintain the confidentiality of client information, we may be exposed to claims and potential

liability. Our reputation may be damaged by a compromise of data security, unauthorized disclosure of
confidential information or accidental loss or theft of client data in our possession. If our reputation is damaged
due to a data security breach, our ability to attract new engagements may be impaired, which could negatively
impact our businesses, financial condition or results of operations.

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In reaction to publicized incidents in which electronically stored information has been lost, illegally
accessed or stolen, many states have adopted breach of data security statutes and regulations. In addition, many
non-U.S. jurisdictions have data privacy laws applicable to personal information. Continued governmental focus
on data security may lead to additional legislative and regulatory action. The increased emphasis on information
security and the requirements to comply with applicable U.S. and foreign data privacy laws and regulations may
increase our costs of doing business and negatively impact our results of operations.

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. We do not compete against the same

companies across all of our segments or services. Instead we compete with different companies or businesses of
companies depending on the particular nature of a proposed engagement and the requested service(s). Our
businesses are highly competitive. Our competitors include large organizations, such as the global accounting
firms and the large management and financial consulting companies that offer a broad range of consulting
services, investment banking firms, consulting and software companies, which offer niche services that are the
same or similar to services or products offered by one or more of our segments, and 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 electing 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 typically 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

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(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.

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

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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
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.

Due to fluctuations in our stock price, acquisition candidates may be reluctant to accept shares of our
common stock as purchase price consideration , use of our shares as purchase price consideration may be
more dilutive, and the owners of certain companies we seek to acquire may insist on 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 price guarantees, particularly in light of our recent stock
price volatility, which may increase the cash paid for an acquisition.

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, 2009, the principal amount of our
outstanding borrowings totaled $566.1 million of which $564.9 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 $3.8 million of outstanding letters of credit under our senior secured bank revolving credit facility. We have
an additional $171.2 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;

limit our ability to borrow additional funds; or

limit our ability to make future acquisitions.

31

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. Our senior secured bank credit facility is scheduled to mature on September 30, 2011. We
cannot provide assurance that we will be able to obtain alternative or additional third party credit facilities or
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, in an amount sufficient to enable us to pay our indebtedness and
fund our other cash needs and business growth.

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,
and there is no assurance we will have sufficient cash on hand or be otherwise able to borrow funds to make such
payments when due.

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. However, 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 prohibited
from paying 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 may be unable to pay the cash portion of the conversion consideration, in
which case we could 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 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
pledge their assets 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 current senior secured bank credit facility and the indentures governing our notes do not prohibit the
incurrence of additional debt. As of December 31, 2009, we had $175.0 million of revolving availability under
our senior secured bank credit facility, subject to $3.8 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 increase.

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 56,714 square feet of office
space for our principal corporate facilities located in Annapolis, Maryland. We also lease offices to support our
operations in 33 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
21 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 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, 2009.

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.

2009

2008

High

Low

High

Low

Quarter Ended

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

$50.38
55.99
56.13
48.00

$36.54
46.99
42.61
40.81

$71.79
70.99
74.19
71.69

$52.20
55.47
64.86
41.16

Number of Stockholders of Record. As of January 30, 2010, the number of record holders of our common

stock was 273.

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. Moreover, our senior secured bank credit facility and the indentures governing our senior
notes restrict our ability to pay dividends. See Note 14 — “Long-Term Debt and Capital Lease Obligations” to
our consolidated financial statements for more information.

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, 2009. 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:

•

•

•

•

218,573 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);

654,923 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);

21,968 shares of common stock issued as unvested stock awards, restricted stock awards and restricted
stock unit awards under our 2009 Omnibus Incentive Compensation Plan (f/k/a the FTI Consulting,
Inc. Deferred Compensation Plan for Key Employees and Non-Employee Directors (as Amended and
Restated Effective as of May 14, 2008 (2009 Omnibus Plan)); 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, 2009

Plan Category

Equity compensation plans approved by our

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

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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)

4,762(1)

—

4,762

$31.96

—

$30.96

1,285(2)

—

1,285

(1)

(2)

Includes 860,855 shares of common stock issuable upon vesting and exercise of outstanding stock options
granted under our 1997 Stock Option Plan, 1,860,869 shares of common stock issuable upon vesting and
exercise of outstanding stock options granted under our 2004 Long-Term Incentive Plan, as amended,
2,004,253 shares of common stock issuable upon vesting and exercise of outstanding stock options granted
under our 2006 Global Long-Term Incentive Plan, as amended, and 36,376 shares of common stock issuable
upon vesting and exercise of outstanding stock options granted under our 2009 Omnibus Plan.

Includes 118,319 shares of common stock available for issuance under our 2006 Global Long-Term
Incentive Plan, as amended, including 34,243 shares of common stock available for stock awards and
1,167,161 shares of common stock available for issuance under our 2009 Omnibus Plan, including 877,045
shares of common stock available for stock awards (including deferred stock and restricted stock unit
awards).

Issuances of Unregistered Securities

None

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 2009 (in thousands except per share amounts).

Total Number
of Shares
Purchased (1)

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 (2)

October 1 through October 31, 2009 . . . . . . . . . . . .
November 1 through November 30, 2009 . . . . . . . .
December 1 through December 31, 2009 . . . . . . . . .

Total

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

9
3,504
1,407

4,920

$42.23
51.28
51.18

—
3,504
1,371

4,875

$ 50,000
250,000
250,000

(1)

The difference between the total number of shares purchased and the number of shares purchased as part of
a publicly announced program is 45,650 shares of common stock withheld to cover payroll tax withholdings
related to the lapse of restrictions on restricted stock.

(2) On November 4, 2009, our Board of Directors authorized a two-year stock repurchase program of up to

$500.0 million and terminated the $50.0 million stock repurchase program authorized in February 2009. On

35

November 9, 2009, we entered into an accelerated share buyback (“ASB”) agreement (“ASB Agreement”).
On the same day, we and an investment bank executed a supplemental confirmation to effect a $250.0
million ASB transaction under the ASB Agreement. On November 12, 2009, FTI paid $250.0 million to the
investment bank and repurchased 3,504,205 shares of our common stock. On December 7, 2009, we
repurchased 1,370,602 additional shares of our common stock bringing the total shares delivered to
4,874,807 shares in 2009. On January 27, 2010, we received an additional 580,784 shares of common stock,
bringing the total number of repurchased shares to 5,455,591 and the ASB transaction entered into on
November 9, 2009 was completed. All of the repurchased shares have been cancelled and retired.

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, 2009, 2008, 2007, and 2006 were audited by KPMG LLP, an independent registered public
accounting firm. Our consolidated financial statements as of and for the year ended December 31, 2005 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.”

Our previously reported financial results for the years ended December 31, 2008, 2007, and 2006 have been

revised to reflect the impact of the correction of an immaterial error related to the accounting for certain
contingent acquisition payments. The impact of the error was a decrease to net income and diluted earnings per
share of $2.1 million and $0.04 per share; $3.5 million and $0.08 per share; and $0.8 million and $0.02 per share
for the years ended December 31, 2008, 2007 and 2006, respectively. See Note 2 — “Revision of Previously
Reported Financial Information,” to our consolidated financial statements for more information.

On January 1, 2009, we retrospectively adopted the provisions of Accounting Standards Codification
(“ASC”) 470-20, Debt with Conversion and Other Options (formerly FSP APB 14-1) (“ASC 470-20”) for
convertible debt instruments that have cash settlement features. This new guidance applies to our 3 3⁄4% senior
subordinated convertible notes due 2012 (“Convertible Notes”) issued in August 2005. The impact of the
adoption of this change in accounting principle was a decrease to net income and diluted earnings per share of
$2.4 million and $0.05 per share, $2.3 million and $0.05 per share, $2.1 million and $0.05 per share, and $0.8
million and $0.02 per share for the years ended December 31, 2008, 2007, 2006 and 2005, respectively. See
Note 2 — “Revision of Previously Reported Financial Information,” to our consolidated financial statements for
more information.

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 on the 2008 and 2007 acquisitions.

Share-Based Payments

Effective January 1, 2006, we adopted new accounting principles for share based payments on a prospective

basis. Share based payments to employees and non-employee directors were recognized in our financial
statements based on their grant date fair values for the years ended December 31, 2009, 2008, 2007 and 2006.

36

Share based payments to employees and non-employee directors were recognized using the intrinsic value
method for the year ended December 31, 2005 which resulted in significantly lower share based compensation
expense in 2005.

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.

Stockholders’ Equity

In the fourth quarter of 2009 we repurchased 4.9 million shares of common stock for $250 million under an
accelerated stock buyback transaction using cash on hand. The repurchase of shares was accounted for as a share
retirement resulting in a reduction in stockholders’ equity of $250.0 million. See Note 17 — “Stockholders’
Equity” to our consolidated financial statements for more information.

37

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,

Year Ended December 31,

2009

2008

2007

2006

2005

(in thousands, except per share data)

$1,399,946

$1,293,145

$1,001,270

$ 707,933

$539,545

767,387

708,783

552,347

389,089

291,592

344,318
—
24,701

330,191
—
18,824

1,136,406

1,057,798

263,540
8,158
(44,923)

235,347
8,840
(45,105)

255,876
—
10,615

818,838

182,432
8,091
(47,639)

179,361
22,972
11,175

127,727
—
6,534

602,597

425,853

105,336
2,198
(32,441)

113,692
145
(16,375)

net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

250

(661)

(1,002)

(187)

(1,629)

Income from continuing operations, before

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

227,025
83,999

198,421
77,515

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

$ 143,026

$ 120,906

141,882
55,548

86,334

2.01
1.88

$

$
$

$

$
$

74,906
35,744

95,833
40,277

39,162

$ 55,556

0.99
0.97

$
$

1.36
1.33

2.86
2.70

$
$

2.46
2.26

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

$
$

shares outstanding

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

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

49,963

53,044

49,193

53,603

43,028

45,974

39,741

40,947

40,526

41,787

BALANCE SHEET DATA
Cash and cash equivalents . . . . . . . . . . . . . . . .
Working capital (1)
. . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt and capital lease obligations,
including current portion and fair value
hedge adjustments . . . . . . . . . . . . . . . . . . . .
Stockholders’ equity . . . . . . . . . . . . . . . . . . . . .

December 31,

2009

2008

2007

2006

2005

(in thousands)

$ 118,872
93,713
2,077,338

$ 191,842
147,774
2,083,577

$ 360,463
304,306
1,858,997

$

91,923
122,509
1,392,352

$153,383
193,208
958,358

555,498
1,104,214

551,507
1,127,557

551,172
978,274

544,154
577,100

318,566
471,526

(1) 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, 2009 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. 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 restructuring (including bankruptcy), financing and credit issues and indebtedness, interim business
management, forensic accounting and litigation services, mergers and acquisitions (M&A), antitrust and
competition matters, 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. 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.

We report financial results for the following five operating segments:

Our Corporate Finance/Restructuring segment focuses on strategic, operational, financial and capital
needs of businesses around the world and provides consulting and advisory services on a wide range of areas,
including restructuring (including bankruptcy), financings, claims management, mergers and acquisitions
(M&A), post-acquisition integration, valuations, tax issues and performance improvement.

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

other interested parties with dispute advisory, investigations, forensic accounting, business intelligence
assessments and risk mitigation services.

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

interested parties with 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.

Our Technology segment is a leading electronic discovery and information management software and
service provider. It provides products, services and consulting to companies, law firms, courts and government
agencies worldwide. Its comprehensive suite of software and services help clients locate, review and produce
electronically stored information (ESI), including e-mail, computer files, voicemail, instant messaging, and
financial and transactional data.

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

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 our ability to
attract new and recurring engagements and the acquisitions we have completed.

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. We also render services for which the client is required to
pay us a fixed 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, certain clients are also billed
based on the amount of data stored on our electronic systems, the volume of information processed and the
number of users licensing our Ringtail® and Attenex® software products for installation within their own
environments. We license these products directly to end users as well as indirectly through our channel partner
relationships. While our business has evolved over the last several years, seasonal factors, such as the timing of
our employees’ and clients’ vacations and holidays, continue to impact the timing of our revenues.

Our financial results are primarily driven by:

•

•

•

•

•

•

the number, size, and type of engagements we secure;

the rate per hour or fixed charges we charge our clients for services;

the utilization rates of the revenue-generating professionals we employ;

the number of revenue-generating professionals;

fees from clients on a retained basis or other; 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, 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 direct costs, such as
information technology services, accounting, marketing, human resources 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 segment employee cash incentive compensation. Unallocated

40

corporate expenses include primarily indirect costs related to centrally managed administrative functions which
have not been allocated to the segments. These administrative costs include costs related to executive
management, legal, corporate office support costs, information technology, accounting, marketing, human
resources, and company-wide business development functions.

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.

Executive Highlights

Year Ended December 31,

2009

2008

% Growth

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

(dollars in thousands, except per share amounts)
$1,293,145
$ 235,347
$ 279,547
$ 120,906
$
2.26
$ 197,480
3,382

$1,399,946
$ 263,540
$ 317,255
$ 143,026
$
2.70
$ 250,769
3,472

8.3%
12.0%
13.5%
18.3%
19.5%
27.0%
2.7%

Revenue for the year ended December 31, 2009 increased 8.3% to $1.4 billion, compared to $1.3 billion in

the prior year. Our revenue grew through a combination of organic growth of approximately 3% and
contributions from companies acquired of approximately 5%. Revenues from acquisitions contributed primarily
to the revenues of the Corporate Finance/Restructuring and Strategic Communications segments and, to a lesser
extent, the Technology and Forensic and Litigation Consulting segments. The estimated impact of the net
appreciation of the U.S. Dollar against other currencies had the effect of reducing revenue by approximately $25
million, or 1.9%, for the full year.

Late in the year we began to experience a transition in the drivers of our business from the credit crisis and

recession, which predominated the first three quarters, to the early stages of economic recovery. Our
countercyclical activities, such as bankruptcy and restructuring, grew at robust rates for the full year but slowed
significantly in the fourth quarter compared to the first three quarters. Our pro-cyclical activities, such as certain
strategic communications and economic consulting services as well as other services that are primarily driven by
discretionary corporate spending or capital markets and M&A activity began to show signs of stabilizing and, in
some cases, resumption of growth as the year concluded.

Operating income increased by $28.2 million, or 12.0%, to $263.5 million compared to $235.3 million in

the same period last year. EBITDA, as previously defined, increased by $37.8 million, or 13.5%, to $317.3
million compared to $279.5 million in the same period last year. EBITDA was 22.7% of revenue in 2009
compared to 21.6% of revenue in 2008. The higher operating income and EBITDA was driven by exceptional
growth in the Corporate Finance/Restructuring segment, a slight increase in the Forensic and Litigation
Consulting segment and strong management of corporate expenses. These served to offset lower operating
income and EBITDA in the Strategic Communications and Economic Consulting segments. The operating
income of the Technology segment decreased relative to the prior year but EBITDA improved, because year over
year growth in depreciation and amortization of intangible assets, which are excluded from the calculation of
EBITDA, were the drivers of the decline in operating income.

Net income increased $22.1 million, or 18.3%, to $143.0 million from $120.9 million. Diluted earnings per

common share were $2.70 per diluted share, or a 19.5% increase over the prior year of $2.26 per diluted share,
reflective of the Company’s higher operating earnings supplemented by a 1.0% decrease in average weighted

41

shares. Exercise of stock options, shares issued for acquisitions and increases in the dilution adjustments for the
company’s convertible notes and options were offset by shares of common stock that we repurchased pursuant to
an accelerated stock buyback transaction in the fourth quarter of 2009.

Cash provided by operating activities in 2009 was $250.8 million, an increase of $53.3 million over the
prior year, reflective of our higher earnings and improved cash collection efforts in 2009. Our fourth quarter
collections remained strong. The principal use of cash was to fund the accelerated stock buyback transaction and
acquisitions. Cash, cash equivalents and short-term investments at December 31, 2009 were $133.9 million.

Headcount increased by 90, or 2.7%, to 3,472 largely in the Corporate Finance/Restructuring, Economic and

Forensic and Litigation Consulting segments through a combination of hiring to support the growth of the
businesses and the addition of employees who joined the Company through acquired businesses. Headcount
declined in the Strategic Communications and Technology segments due to actions taken to bring resources into
line with the current demand for their services.

Operational Highlights

Organic revenue growth remained exceptionally strong throughout the first three quarters for our Corporate
Finance/Restructuring segment, which benefited directly from the worldwide economic and financial challenges.
The Corporate Finance/Restructuring segment was active in restructuring assignments in a broad range of
industries 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 our UK
restructuring practice, which has gained greater market acceptance, increased headcount and expanded its range
of offerings to meet demand for its services, and the initial contribution from the segment’s Canadian and Latin
American practices, which were launched in late-2008 and early-2009. Momentum in the segment slowed in the
fourth quarter due to the reduced volume of large bankruptcy filings and restructurings and improved credit
market conditions which have allowed companies to arrange for debt relief.

Revenues of the Forensic and Litigation Consulting segment, which relies on litigation and regulatory

investigations and proceedings, increased compared to last year despite a slow demand environment as
corporations continue to control expenses and defer litigation. Continued contributions from several large
financial fraud investigations and strong performances by our intellectual property, regulated industry and Latin
American investigations practices were partially offset by lower revenues in our Trial Services practice, which
was negatively impacted by the weak litigation activity. EBITDA margins were comparable to the prior year as
cost controls offset higher internal allocations of corporate costs incurred in direct support of segment operations.

The Economic Consulting segment generated higher revenues in 2009, with accelerating momentum
through the year due to increasing activity in strategic M&A transactions, rising activity levels in the financial
economics and network industries practices, increasing contributions from the segment’s new offices in New
York and Los Angeles, and acceleration in the level of engagement work in our recently-formed European
practice based in London. Margins in the segment declined in comparison to a strong performance in the prior
year due to the cost of expansion into new service offerings and geographic markets and the hiring of additional
professionals to meet anticipated higher demand, which began to occur in the latter part of the year.

Revenues in the Technology segment decreased year-over-year as contributions from large investigations,

bankruptcy cases and M&A second requests were offset by significant declines in revenues from product liability
cases and lower pricing compared to a year ago. Segment EBITDA margins improved compared to a year ago as
lower direct expenses from improved operating efficiencies and cost controls offset the decline in revenues.

The Strategic Communications segment was challenged by the dramatically slower volume of capital
markets activity and M&A transactions, and the continued impact of the global recession on discretionary
spending, which caused a decline in revenues related to M&A engagements and pressure on fees from retained

42

clients. Margins for the year declined compared to a year ago due to the lower revenues. In addition, the segment
was the most impacted by foreign exchange fluctuations, which reduced revenue by 6.0% and EBITDA by 7.7%
for the year.

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. Revenue is recognized when persuasive evidence of an arrangement exists, the
related services are provided, the price is fixed or determinable and collectability is reasonably assured. We
generate the majority of our revenues from providing professional services under four types of billing
arrangements: time-and-expense, fixed-fee, performance-based and unit-based.

Time-and-expense billing arrangements require the client to pay based on the number of hours worked by

our revenue-generating professionals at contractually agreed-upon rates. 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.

In fixed-fee billing arrangements, we agree to a pre-established fee in exchange for a pre-determined set of

professional services. Generally, the client agrees to pay a fixed fee every month over the specified contract term.
These contracts are for varying periods and generally permit the client to cancel the contract before the end of the
term. We recognize revenues for our professional services rendered under these fixed-fee billing arrangements
monthly over the specified contract term.

In performance-based or contingent billing arrangements, fees are tied to the attainment of contractually
defined objectives. Often this type of arrangement supplements a time-and-expense or fixed-fee engagement,
where payment of a performance-based fee is deferred until the conclusion of the matter or upon the achievement
of performance-based criteria. We do not recognize revenues under performance-based billing arrangements until
all related performance criteria are met and collection of the fee is reasonably assured.

In our Technology segment, unit-based revenues are based on either the amount of data stored or processed,

the number of concurrent users accessing the information, or the number of pages or images processed for a
client. We recognize revenues for our professional services rendered under unit-based engagements as the
services are provided based on agreed-upon rates. We also generate certain revenue from software licenses and
maintenance. We have vendor-specific objective evidence of fair value for support and maintenance separate
from software for the majority of our products. Accordingly, when licenses of certain offerings are included in an
arrangement with support and maintenance, we recognize the license revenue upon delivery of the license and
recognize the support and maintenance revenue over the term of the maintenance service period. Substantially all
of our software license agreements do not include any acceptance provisions. If an arrangement allows for

43

customer acceptance of the software, we defer revenue until the earlier of customer acceptance or when the
acceptance provisions lapse. Hosting revenues from hosting fees are recognized ratably over the term of the
hosting agreement. We have certain arrangements with clients in which we provide multiple elements of services
under one engagement contract. Revenues under these types of arrangements are accounted for in accordance
ASC 605-25, Multiple-Element Arrangements, and recognized pursuant to the criteria described above.

Some clients pay us retainers before we begin any work for them. We hold retainers on deposit until we
have completed the work. We generally 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
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 and final fee settlements have been negotiated. 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.

If at the outset of an arrangement we determine that the arrangement fee is not fixed or determinable,
revenue is deferred until all criteria for recognizing revenue are met. Reimbursable expenses, including those
relating to travel, out-of pocket expenses, outside consultants and other similar costs, are generally included in
revenues, and an equivalent amount of reimbursable expenses is included in costs of services in the period in
which the expense is incurred. Any taxes assessed on revenues relating to services provided to our clients are
recorded on a net basis. Revenues recognized, but not yet billed to clients, have been recorded as unbilled
receivables in the consolidated balance sheets.

Allowance for Doubtful Accounts and Unbilled Services. We maintain an allowance for doubtful accounts
for estimated losses resulting from the inability of 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 negotiated by clients or 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 all receivable risks by reviewing the status of each matter account and recording reserves based on
our experience and knowledge of the particular client and historical collection patterns. 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 bankruptcy courts 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 services.

The provision for doubtful accounts is recorded after the related work has been billed to the client and we
discover full collectability is not assured. It is classified in “Selling, general and administrative expense” on the
Consolidated Statements of Income and totaled $19.9 million, $22.5 million, and $11.8 million for the years
ended December 31, 2009, 2008 and 2007, respectively. The provision for unbilled services is normally recorded
prior to customer billing and is recorded as a reduction to revenues. This provision normally relates to fee
adjustments, estimates of fee reductions that may be imposed by bankruptcy courts and other discretionary
pricing adjustments.

Goodwill and Other Intangible Assets. 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 and other indefinite-lived intangible assets for impairment annually as of the first day
of the fourth quarter or whenever events or changes in circumstances indicate that the carrying value of an asset
may not be recoverable. Factors we consider important that could trigger an interim impairment review include,
but are not limited to, the following:

•

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

44

•

•

•

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.

We assess our goodwill for impairment using a fair value approach at the reporting unit level. The goodwill

impairment test is a two-step process. The first step (“Step 1”) involves determining whether the estimated fair
value of the reporting units exceeds the respective book values. If the fair value exceeds the book value, goodwill
of that reporting unit is not impaired. However, if the book value exceeds the fair value of the reporting unit,
goodwill may be impaired and additional analysis is required. The second step (“Step 2”) of the goodwill
impairment test compares the implied fair value of a reporting unit’s goodwill to its carrying value. The implied
fair value of goodwill is derived by performing a hypothetical purchase price allocation for the reporting unit as
of the measurement date, allocating the reporting unit’s estimated fair value to its assets and liabilities. The
residual amount from performing this allocation represents the implied fair value of goodwill. To the extent this
amount is below the carrying value of goodwill, an impairment charge is recorded.

In performing the Step 1 of the goodwill impairment test, we compared the carrying amount of our reporting

units to their estimated fair values. When available and as appropriate, we use market multiples derived from a
set of competitors with comparable market characteristics to establish fair values (a market approach) for a
particular reporting unit. If a set of comparables is not available, we estimate fair value using discounted cash
flows (an income approach).

The process of evaluating the potential impairment of goodwill is highly subjective and requires significant

judgment and estimates, as our businesses operate in a number of markets and geographical regions. The
assumptions utilized in the evaluation of the impairment of goodwill under the market approach include the
selection of comparable companies, which are subject to change based on the economic characteristics of our
reporting units. The assumptions utilized in the evaluation of the impairment of goodwill under the income
approach include revenue growth and EBITDA (earnings before interest expense, income taxes, depreciation and
amortization), tax rates, capital expenditures, weighted average cost of capital (“WACC”) and related discount
rates and expected long-term growth rates. The assumptions which have the most significant effect on our
valuations derived using a discounted cash flows methodology are: (1) the expected long-term growth rate of our
reporting units’ cash flows and (2) the discount rate.

The cash flows employed in the income approach are based on our most recent budgets, forecasts and

business plans as well as various growth rate assumptions for years beyond the current business plan period.
Long-term growth rates represent the expected long-term growth rate for the company, considering the industry
in which we operate and the global economy. Discount rate assumptions are based on an assessment of the risk
inherent in the future revenue streams and cash flows and our WACC. The risk adjusted discount rate used
represents the estimated WACC for our reporting units. The WACC is comprised of (1) a risk free rate of return,
(2) an equity risk premium that is based on the rate of return on equity of publicly traded companies with
business characteristics comparable to our reporting units, (3) the current after-tax market rate of return on debt
of companies with business characteristics similar to our reporting units, each weighted by the relative market
value percentages of our equity and debt, and (4) a size premium based on the equity capitalization of our
company.

We evaluate the reasonableness of the fair value calculations of our reporting units by reconciling the total
of the fair values of all of our reporting units to our total market capitalization, taking into account a reasonable
control premium.

The results of the Step 1 process indicated that the fair value of our reporting units exceeded their respective

book values. As a result, Step 2 of the goodwill impairment test did not need to be performed and therefore no

45

impairment charge was recorded for 2009. We believe that the procedures performed and the estimates and
assumptions used in the Step 1 analyses for each reporting unit are reasonable and in accordance with the
authoritative guidance. Based on our 2009 impairment assessment at October 1, 2009, we believe we have no
at-risk goodwill.

There can be no assurance however that the estimates and assumptions used in our goodwill impairment
testing will prove to be accurate predictions of the future. If our assumptions regarding forecasted cash flows are
not achieved, we may be required to record goodwill impairment charges in future periods, whether in
connection with our next annual impairment test or prior to that, if a triggering event occurs outside of the quarter
during which the annual goodwill impairment test is performed. It is not possible at this time to determine if any
future impairment charge would result or, if it does, whether such charge would be material.

Intangible assets with definite lives are 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. We amortize our acquired definite-lived intangible assets on a straight-line basis over periods
ranging primarily from 1 to 15 years.

Share-Based Compensation. We recognize share-based compensation using a fair value based recognition
method. Share-based compensation cost is estimated at the grant date based on the fair value of the award and is
recognized as expense over the requisite service period or performance period of the award. The amount of
share-based compensation expense recognized at any date must at least equal the portion of grant date value of
the award that is vested at that date.

We use the Black-Scholes pricing model to determine the fair value of stock options on the dates of grant.

The Black-Scholes pricing model requires various highly judgmental assumptions including volatility and
expected term, which are based on our historical experience. We 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 term 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.

Restricted stock is measured based on the fair market values of the underlying stock on the dates of grant.
Awards with performance-based vesting conditions require the achievement of specific financial targets at the
end of the specified performance period and the employee’s continued employment. We recognize the estimated
fair value of performance-based awards as share based compensation expense over the performance period. We
consider each performance period separately, based upon our determination of whether it is probable that the
performance target will be achieved. At each reporting period, we reassess the probability of achieving the
performance targets. If a performance target is not met, no compensation cost is ultimately recognized against
that target, and, to the extent previously recognized, compensation expense is reversed. For all our share-based
awards, we estimate the expected forfeiture rate and recognize expense only for those shares expected to vest.
We estimate the forfeiture rate based on historical experience. Groups of share-based award holders that have
similar historical behavior with regard to option exercise timing and forfeiture rates are considered separately for
valuation and attribution purposes.

Share-based awards granted to non-employees (primarily consultants) are measured at the estimated fair
value on the grant date of the award. The fair value of the awards is then remeasured at each reporting date until
the award vests. The stock-based compensation expense related to these grants will fluctuate as the estimated fair
value of the common stock fluctuates over the period from the grant date to the vesting date.

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 foreign
countries in which we conduct business. Our effective income tax rate may fluctuate due to changes in the mix of
earnings between higher and lower state or country tax jurisdictions and the impact of non-deductible expenses.

46

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.

Significant New Accounting Pronouncements

In December 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards

Update (“ASU”) No. 2009-17, Consolidations: Improvements to Financial Reporting by Enterprises Involved
with Variable Interest Entities (“ASU 2009-17”). This update amends guidance included in ASC Topic 810,
Consolidation as a result of Statement of Financial Accounting Standards (“SFAS”) No. 167, which was issued
by the FASB in June 2009. ASU 2009-17 amends previous guidance set forth by FASB Interpretation No. 46(R)
“Consolidation of Variable Interest Entities” to address the elimination of the concept of a qualifying special
purpose entity. It also replaces the quantitative-based risks and rewards calculation for determining which
enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying
which enterprise has the power to direct the activities of a variable interest entity and the obligation to absorb
losses or right to receive benefits from the entity. ASU 2009-17 requires additional disclosures aimed at
providing more timely and useful information about an enterprise’s involvement with a variable interest entity.
These new provisions will become effective as of January 1, 2010 for calendar year-end companies. We will
adopt the new provisions in January 2010, and do not anticipate any material impact on our Consolidated
Financial Statements.

In October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue Arrangements (“ASU
2009-13”), which affects ASC Topic 605, Revenue Recognition. ASU 2009-13 amends the criteria for separating
consideration in multiple-deliverable arrangements. It eliminates the requirement under previous guidance that
all undelivered elements have vendor-specific objective evidence (“VSOE”) or third-party evidence (“TPE”) of
fair value before recognizing a portion of revenue related to the delivered items, and establishes that revenue be
allocated to each element based on its relative selling price, as determined by VSOE, TPE, or the entity’s
estimated selling price if neither of the aforementioned is available. Additionally, ASU 2009-13 eliminates the
residual method of allocation and expands required disclosures about multiple-element revenue arrangements.
We are required to adopt the amendments in ASU 2009-13 prospectively for revenue arrangements entered into
or materially modified beginning January 1, 2011, with early adoption permitted. We are currently evaluating the
impact of adopting this ASU on our financial position, results of operations and cash flows.

47

RESULTS OF OPERATIONS

Segment and Consolidated Operating Results:

Year Ended December 31,

2009

2008

2007

(in thousands, except per share amounts)

Revenues

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

$ 514,260
259,204
234,723
211,680
180,079

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

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

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

$1,399,946

$1,293,145

$1,001,270

Operating income

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

$ 165,757
54,456
43,928
55,599
16,455

$ 108,013
52,118
55,123
58,090
43,976

$

70,412
53,135
42,861
55,053
38,315

Segment operating income . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated corporate expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .

336,195
(72,655)

317,320
(81,973)

259,776
(77,344)

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

263,540

235,347

182,432

Other income (expense)

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

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

8,158
(44,923)
250

(36,515)

227,025
83,999

8,840
(45,105)
(661)

(36,926)

198,421
77,515

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

$ 143,026

$ 120,906

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

$
$

2.86
2.70

$
$

2.46
2.26

8,091
(47,639)
(1,002)

(40,550)

141,882
55,548

86,334

2.01
1.88

$

$
$

Reconciliation of Operating Income to EBITDA:

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

$263,540
28,764
24,701
250

(in thousands)
$235,347
26,037
18,824
(661)

$182,432
19,351
10,615
(1,002)

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$317,255

$279,547

$211,396

Year Ended December 31,

2009

2008

2007

48

Year Ended December 31, 2009 compared to December 31, 2008

Revenues and Operating Income

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

Unallocated Corporate Expenses

Unallocated corporate expenses decreased $9.3 million, or 11.4%, to $72.7 million for 2009 from $82.0

million for 2008, primarily due to the following:

• Allocations to our operating segments increased $22.7 million, mainly for direct costs of information

technology and systems and segment marketing;

•

Salaries, bonuses, and benefits increased $6.0 million due to hiring of additional corporate employees
to support our growing organization;

• Marketing and business development expenses increased $9.8 million, primarily due to the launch of

our new corporate branding strategy; and

•

Professional services related to our proposed initial public offering (“IPO”) of stock of our Technology
segment that was contemplated in 2008, which were $2.6 million in 2008. No Technology segment IPO
offering related expenses were incurred in 2009.

Interest Income and Other

Interest income and other, which includes foreign currency transaction gains and losses, decreased by $0.6
million to $8.2 million for 2009 from $8.8 million for 2008. The decrease is primarily due to lower interest rates
earned on cash balances in 2009 relative to 2008 which resulted in a $1.8 million decrease in interest income. In
addition, there was a $0.3 million net negative impact relative to 2008 from foreign exchange transaction gains
and losses due to the remeasurement of receivables and payables required to be settled in a currency other than
an entity’s functional currency. Interest income and other also included a $2.3 million remeasurement gain in
2009 related to the acquisition of the remaining 50% equity interest in a German joint venture owned by our
Strategic Communications segment, partially offset by a decrease in investment income related to the same joint
venture which was accounted for as an equity investment prior to its consolidation in the third quarter of 2009.

Interest Expense

Interest expense decreased $0.2 million to $44.9 million for the year ended December 31, 2009 from $45.1
million for the year ended December 31, 2008. The decrease was primarily due to the favorable impact of lower
interest rates on interest rate swap contracts designated as fair value hedges on $60 million of 7 5⁄ 8% senior notes
due 2013. The counterparties to the interest rate swaps exercised their right to terminate the interest rate swaps as
of June 15, 2009 which resulted in a $2.3 million gain on termination. This gain has been recorded in “Long-term
debt and capital lease obligations” on the Consolidated Balance Sheets and will be amortized as a reduction to
interest expense over the remaining term of the 7 5⁄ 8% Notes, resulting in an effective interest rate of 6.5% per
annum on $60.0 million of the 7 5⁄ 8% senior notes due 2013.

Income Tax Provision

Our effective tax rate was 37.0% for the year ended December 31, 2009 as compared to 39.1% for the year

ended December 31, 2008. The decrease in the effective tax rate from the previous year is primarily due to a
decline in non deductible expenses and changes in estimate related to the prior year tax provisions. These
benefits were partially offset by higher state income taxes. The changes in estimate were primarily attributable to
the completion of tax projects with respect to our ability to qualify for technical income tax positions surrounding
certain tax credits and deductions.

49

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

Revenues and Operating Income

See “Segment Results” for an expanded discussion of segment operating revenues and 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, which includes foreign currency transaction gains and losses, increased $0.7
million, to $8.8 million in 2008 from $8.1 million in 2007. The increase is primarily due to a $1.7 million net
positive impact from foreign exchange transaction gains and losses relative to 2007, largely related to the
remeasurement of receivables and payables required to be settled in a currency other than an entity’s functional
currency.

Interest Expense

Interest expense decreased $2.5 million to $45.1 million for the year ended December 31, 2008 from $47.6
million for the year ended December 31, 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 decreased to 39.1% from 39.2% in 2007. The decrease in the rate is primarily

due to a decrease in non deductible expenses which were largely offset by a non-recurring benefit that was
recognized in 2007. The non-recurring benefit 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.

SEGMENT RESULTS

Segment EBITDA

We evaluate the performance of our operating segments based on segment EBITDA which is a non-GAAP

measure. The following table reconciles segment operating income to segment EBITDA for the years ended
December 31, 2009, 2008 and 2007.

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

$336,195
22,737
24,701
—

(in thousands)
$317,320
20,342
18,824
(436)

$259,776
14,582
10,615
(798)

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

$383,633

$356,050

$284,175

Year Ended December 31,

2009

2008

2007

50

Other Segment Operating Data

Year Ended December 31,

2009

2008

2007

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

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

758
667
302
338
573

669
639
264
357
592

406
430
236
344
538

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

2,638

2,521

1,954

Utilization rates of billable professionals: (1)

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

73%
73%
76%

75%
70%
83%

80%
75%
85%

Average billable rate per hour: (2)

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

$ 439
333
456

$ 438
330
446

$ 409
321
412

(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
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.

51

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 . . . . . .

Year Ended December 31,

2009

2008

2007

(dollars in thousands, except rate per hour)
$261,625
$374,504
$514,260

276,694
65,477
6,332

348,503

165,757
—
9,794

208,170
54,759
3,562

266,491

108,013
—
6,165

149,955
41,096
162

191,213

70,412
(526)
1,743

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

$175,551

$114,178

$ 71,629

Gross profit (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit margin (2)
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$237,566

$166,334

$111,670

46.2%
34.1%
758
73%
439

$

44.4%
30.5%
669
75%
438

$

42.7%
27.4%
406
80%
409

$

(1) Revenues less direct cost of revenues

(2) Gross profit as a percent of revenues

Year ended December 31, 2009 compared to December 31, 2008

Revenues increased $139.8 million, or 37.3%, to $514.3 million in 2009 from $374.5 million in 2008.
Revenue growth from acquisitions was approximately $40 million, or 10% due to acquisitions completed in
2008. Organic revenue growth was approximately $100 million, or 27%. Excluding the negative impact of
foreign currency translation, which was primarily due to the weakening of the British pound relative to the U.S.
dollar, organic revenue growth would have been approximately 28%. Organic revenue increased due to
significant business in the U.S. restructuring practice for both bankruptcy and non-bankruptcy cases, which offset
declines in capital markets and M&A related engagements. From an industry perspective, the demand for
restructuring services was broad based in 2009 with significant engagements in the financial services,
automotive, retail, real estate, communications and media and construction sectors. This is in contrast to the
demand for restructuring services in the prior year which was primarily concentrated in the mortgage, monoline
insurance, financial institution and housing related markets. The demand for restructuring services began to
decline in the fourth quarter of 2009 as the economy began to recover and is expected to continue to decline in
the coming year as the economy improves and the number of troubled companies and large bankruptcy filings are
anticipated to decline. We believe that any decreased demand for restructuring services will be partially offset by
a gradual increase in the demand for real estate and other transaction advisory services as the economy improves.

Gross profit increased $71.3 million to $237.6 million in 2009 from $166.3 million in 2008. Gross profit

margin increased to 46.2% for 2009 from 44.4% for 2008. Higher billing rates and a more profitable mix of
restructuring revenue offset the impact of the addition of our general advisory real estate subpractice and lower
utilization. Correspondingly, revenue generating headcount increased by 89 at December 31, 2009 relative to
December 31, 2008. However, headcount is down from peak levels earlier in 2009 in response to the decreased
demand for restructuring services in the fourth quarter of 2009.

Selling, general and administrative (“SG&A”) expense increased $10.7 million, or 19.6% to $65.5 million in

2009 from $54.8 million in 2008. As a percentage of revenues, SG&A expense was 12.7% for 2009, down from

52

14.6% in 2008. The increase in SG&A expense in 2009 was primarily due to higher internal allocations of
corporate costs incurred in direct support of segment operations, the addition of a full year of expenses relating to
our general advisory real estate sub-practice which was acquired in April 2008 and an increase in rent and
occupancy costs partially offset by lower bad debt expense. Bad debt expense was 0.5% of revenues for 2009
versus 1.8% for the 2008.

Amortization of other intangible assets increased by $2.7 million to $6.3 million in 2009 from $3.6 million

in 2008 due to the amortization of intangible assets acquired in business combinations completed in 2008.

Segment EBITDA increased $61.4 million, or 53.8%, to $175.6 million for 2009 from $114.2 million for

2008.

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 million, or 13%. Our 2008 acquisitions were primarily
focused on the addition of a general advisory real estate subpractice. Organic revenue growth was approximately
$80 million, or 30%. Excluding the negative impact of foreign currency translation 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%. 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 other than through acquisitions 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 increased $54.6 million, or 49.0% to $166.3 million for the year ended December 31, 2008
from $111.7 million for the year ended December 31, 2007. 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.

SG&A expense increased $13.7 million, or 33.2% 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 of other intangible assets increased by $3.4 million to $3.6 million in 2008 from $0.2 million

in 2007 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.

53

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,

2009

2008

2007

(dollars in thousands, except rate per hour)
$217,028
$253,918
$259,204

148,794
53,148
2,806

204,748

54,456
—
5,125

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

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

$ 59,581

$ 57,493

$ 57,292

Gross profit (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit margin (2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment EBITDA as a percent of revenues . . . . . . . . . . . . . . . . . . . . . . . .
Number of revenue generating professionals (at period end)
. . . . . . . . . .
Utilization rates of billable professionals (3) . . . . . . . . . . . . . . . . . . . . . . . .
Average billable rate per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$110,410

$105,608

$ 97,746

42.6%
23.0%
667
73%
333

$

41.6%
22.6%
639
70%
330

$

45.0%
26.4%
430
75%
321

$

(1) Revenues less direct cost of revenues

(2) Gross profit as a percent of revenues

(3)

The calculation for utilization and average billable rate per hour excludes the impact of revenue billed on a
basis other than time and materials and the impact of certain newly acquired businesses.

Year Ended December 31, 2009 compared to December 31, 2008

Revenues increased $5.3 million, or 2.1%, to $259.2 million for 2009 from $253.9 million for 2008, due to
revenue growth attributable to our acquisitions completed in 2008 of approximately $6 million, or 3%, primarily
driven by our UK forensic accounting and construction consulting practices. Organic revenues declined
approximately $1 million. Excluding the negative impact of foreign currency translation, which was primarily
due to the weakening of the British pound relative to the U.S. dollar, organic revenue increased approximately
1%. Our construction services business has continued to expand, and our Latin American investigations and
North American consulting practice revenue has also grown over the prior year. This revenue growth was
partially offset by a decline in revenue from trial services and our Asia Pacific international risk practice.
Revenue from our North American consulting practice benefited from revenue associated with two high profile
fraud cases which began in the first quarter of 2009 and replaced a significant amount of the revenues generated
in other investigation cases for the same period in the prior year. Revenue generating headcount increased
relative to 2008 due to strategic hires in the U.S. and the addition of staff in Europe, the Middle East, Africa and
Latin America, which were partially offset by staff reductions in our Asia Pacific international risk practice in
response to contracting markets in the region.

Gross profit increased $4.8 million, or 4.5% to $110.4 million for 2009 from $105.6 million for 2008. Gross
profit margin increased to 42.6% for 2009 from 41.6% for 2008. The primary drivers of the margin improvement
were higher utilization as the segment continued its focus on specialized practices and industry expertise
combined with cost containment efforts.

SG&A expense increased $2.5 million, or 5.0% to $53.1 million for 2009 from $50.6 million for 2008. As a

percentage of revenues, SG&A expense was 20.5% for 2009, up from 19.9% for 2008. The increase in SG&A

54

expense in 2009 was primarily due to higher internal allocations of corporate costs incurred in direct support of
segment operations and higher bad debt partially offset by lower personnel related costs. Bad debt expense
increased to 2.2% of revenues for 2009 versus 2.0% for 2008.

Amortization of other intangible assets decreased by $0.1 million to $2.8 million in 2009 from $2.9 million

in 2008.

Segment EBITDA increased $2.1 million, or 3.6%, to $59.6 million for 2009 from $57.5 million for 2008.

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 million, or 14%. 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 approximately $6 million, or 3%.
Organic revenue growth from our North American consulting practice was approximately $6 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 $5 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 $4 million due to additional headcount and higher utilization. Offsetting this revenue
growth was a decline in organic revenue from Trial Services of approximately $6 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 $3 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 increased $7.9 million, or 8.0% to $105.6 million for 2008 from $97.7 million for 2007. 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 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, or 19.0% 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.

55

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,

2009

2008

2007

(dollars in thousands, except rate per hour)
$174,447
$219,883
$234,723

152,932
35,744
2,119

190,795

43,928
3,917

136,322
26,157
2,281

164,760

55,123
3,897

106,174
21,960
3,452

131,586

42,861
5,224

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

$ 47,845

$ 59,020

$ 48,085

Gross profit (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit margin (2)
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 81,791

$ 83,561

$ 68,273

34.8%
20.4%
302
76%
456

$

38.0%
26.8%
264
83%
446

$

39.1%
27.6%
236
85%
412

$

(1) Revenues less direct cost of revenues

(2) Gross profit as a percent of revenues

Year ended December 31, 2009 compared to December 31, 2008

Revenues increased $14.8 million, or 6.7%, to $234.7 million for 2009 from $219.9 million for 2008.

Revenue growth was primarily organic arising from our two new offices in the U.S. and our recently formed
European practice based in London. This market expansion resulted in an increase in revenue generating
professionals and offset declines in strategic M&A and financial economic consulting engagements relative to
2008. Financial economic consulting includes consulting related to issues such as class action securities
litigation, material adverse change clauses, purchase price premiums, ERISA lawsuits, complex valuations of
assets including financial instruments and criminal cases related to financial dealings. Financial economic
consulting declined significantly in the first half of 2009, then began to rebound by the end of the year. There
was also a noticeable drop off in strategic M&A consulting in the beginning of 2009, followed by slow but
steady growth in the second half of 2009. Conversely, antitrust litigation consulting in 2009 continued at a higher
level than 2008.

Gross profit decreased $1.8 million, or 2.1% to $81.8 million for 2009 from $83.6 million for 2008. Gross

profit margin decreased to 34.8% for 2009 from 38.0% for 2008. Margin declines resulted from lower utilization
due to the slower than expected start-up of new engagements experienced in the first nine months of 2009; from
the opening of new offices in the U.S., UK, Canada and France, and from the effects of variable share-based
compensation expense. Entering new markets with a “build” strategy tends to result in margin compression until
operations grow to a scale at which revenues and staff leverage offset recruitment payments paid to the senior
hires generally made earliest in the process.

SG&A expense increased $9.5 million, or 36.7% to $35.7 million for 2009 from $26.2 million for 2008. As

a percentage of revenues, SG&A expense was 15.2% for 2009 versus 11.9% for 2008. The increase in SG&A
expense in 2009 was primarily due to higher internal allocations of corporate costs incurred in direct support of
segment operations, higher bad debt expense, and higher technology infrastructure costs. Bad debt expense was
2.6% of revenue for 2009 versus 1.7% for 2008.

56

Amortization of other intangible assets decreased by $0.2 million to $2.1 million in 2009 from $2.3 million

in 2008.

Segment EBITDA declined $11.2 million, or 18.9%, to $47.8 million for 2009 from $59.0 million for 2008.

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

Revenues increased $45.5 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 increased $15.3 million, or 22.4% to $83.6 million for 2008 from $68.3 million for 2007. 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, or 19.1% 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 22.7%, to $59.0 million in 2008 from $48.1 million in 2007.

TECHNOLOGY

Year Ended December 31,

2009

2008

2007

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

Operating expenses:

(dollars in thousands)
$220,359

$162,837

$211,680

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

77,337
70,501
8,243

87,659
69,586
5,024

75,619
30,920
1,245

156,081

162,269

107,784

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

55,599
—
20,116

58,090
(235)
15,651

55,053
—
7,868

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

$ 75,715

$ 73,506

$ 62,921

Gross profit (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit margin (2)
Segment EBITDA as a percent of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of revenue generating professionals (at period end) . . . . . . . . . . . . . .

$134,343

$132,700

$ 87,218

63.5%
35.8%
338

60.2%
33.4%
357

53.6%
38.6%
344

(1) Revenues less direct cost of revenues

(2) Gross profit as a percent of revenues

57

Year Ended December 31, 2009 compared to December 31, 2008

Revenues decreased $8.7 million, or 3.9% to $211.7 million for 2009 from $220.4 million for 2008.
Revenue growth from acquisitions completed in 2008 was approximately $8 million, or 4%. Organic revenue
declined approximately $17 million, or 8%. Approximately 1% of this decline was due to the negative impact of
foreign currency translation, which was primarily due to the weakening of the British pound relative to the U.S.
dollar. The decline in revenue relative to 2008 was primarily due to a decrease in revenues generated by several
large product liability cases, which was partially offset by revenues from several large financial fraud matters and
bankruptcy related consulting in 2009. While lower pricing has continued to impact our on-demand unit based
revenue compared to the prior year, this has been partially offset by higher volumes. The number of revenue
generating professionals has decreased to 338 at December 31, 2009 from 357 at December 31, 2008 due to
actions taken to bring resources into line with the current demand for our services.

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. Unit based
revenue includes revenue associated with our proprietary software that is made available to customers, either via
a web browser (“on-demand”) or installed at our customer or partner locations (“on-premise”). On-demand
revenue is charged on a unit or monthly basis and includes, but is not limited to, processing and review related
functions. On-premise revenue is comprised of up-front license fees, with recurring support and maintenance.

Gross profit increased $1.6 million, or 1.2% to $134.3 million for 2009 from $132.7 million for 2008. Gross

profit margin increased to 63.5% for 2009 from 60.2% for 2008. Gross profit margin for 2009 benefited from a
change in the classification of certain costs from direct cost of revenues to SG&A expense. If presented on a
comparable basis, the gross profit margin for 2008 would have been 63.3%. The 2009 gross profit margin
remained comparable to the 2008 gross profit margin because higher margin direct and channel revenues from
software products acquired in a merger completed in the third quarter of 2008 offset the negative impact of
pricing pressures on our on-demand services.

SG&A expense increased $0.9 million, or 1.3% to $70.5 million for 2009 from $69.6 million for 2008. As a

percentage of revenues, SG&A expense was 33.3% for 2009, versus 31.6% for 2008. The increase in SG&A
expense in 2009 is primarily due to the change in classification of certain costs from direct cost of revenues to
SG&A expense in 2009, an increase in research and development (R&D) activities and higher internal
allocations of corporate costs incurred in direct support of segment operations partially offset by lower bad debt
expense and discretionary expenses in 2009. Bad debt expense was 1.0% of revenues for 2009 versus 2.2% for
2008.

Amortization of other intangible assets increased by $3.2 million, or 64.1% to $8.2 million for 2009 from
$5.0 million for 2008. The increase in amortization expense was primarily due to the amortization of intangible
assets acquired in an acquisition completed in the third quarter of 2008.

Segment EBITDA increased $2.2 million, or 3.0%, to $75.7 million for 2009 from $73.5 million for 2008.

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

Revenues increased $57.6 million, or 35.3%, to $220.4 million in 2008 from $162.8 million in 2007.
Revenue growth from acquisitions was approximately $23 million, or 14%. Organic revenue growth was
approximately $35 million, or 21%. Organic revenue growth was driven by an increased volume of unit based
revenue and other sales primarily attributable to product liability engagements. 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.

58

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 unfavorably impacted by unit-based pricing declines.

SG&A expense increased $38.7 million to $69.6 million in 2008 from $30.9 million for 2007. As a
percentage of revenues, SG&A expense was 31.6% of revenue in 2008 versus 19.0% of revenue in 2007. R&D
spending in support of our Ringtail® and Attenex® products accounted for $15.7 million of the increase in SG&A
expense. 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.

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.

STRATEGIC COMMUNICATIONS

Year Ended December 31,

2009

2008

2007

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

Operating expenses:

(dollars in thousands)
$224,481

$185,333

$180,079

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

111,630
46,793
5,201

128,322
47,119
5,064

101,317
42,047
3,654

163,624

180,505

147,018

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

16,455
—
8,486

43,976
(201)
8,078

38,315
(97)
6,030

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

$ 24,941

$ 51,853

$ 44,248

Gross profit (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit margin (2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment EBITDA as a percent of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of revenue generating professionals (at period end) . . . . . . . . . . . . . .

$ 68,449

$ 96,159

$ 84,016

38.0%
13.9%
573

42.8%
23.1%
592

45.3%
23.9%
538

(1) Revenues less direct cost of revenues

(2) Gross profit as a percent of revenues

Year Ended December 31, 2009 compared to December 31, 2008

Revenues decreased $44.4 million, or 19.8%, to $180.1 million for 2009 from $224.5 million for 2008.
Revenue growth from acquisitions completed in 2008 and the acquisition of the remaining equity interest in our
German joint venture in June 2009 was approximately $13 million, or 6%. Organic revenues declined

59

approximately $57 million, or 26%. Excluding the negative impact of foreign currency translation, which was
primarily due to the weakening of the British pound relative to the U.S. dollar, organic revenue declined
approximately 20%. This decrease in organic revenue is due to the global slowdown in general M&A and capital
markets activity which has reduced project based revenues and success fees coupled with lower retained
revenues. The decline is also partially attributable to pricing pressures and a reduction in corporate
communications spending.

Gross profit decreased $27.8 million, or 28.9% to $68.4 million for 2009 from $96.2 million for 2008. Gross

profit margin decreased by 4.8 percentage points to 38.0% for 2009 from 42.8% for 2008. The gross profit
margin decline was due to a change in revenue mix in 2009 with a higher percentage of revenue from pass
through costs and lower revenue from M&A and Initial Public Offering (“IPO”) advisory engagements, partially
mitigated by lower direct costs as a result of cost reduction efforts, which resulted in a decrease in revenue
generating professionals relative to 2008.

SG&A expense decreased $0.3 million to $46.8 million for 2009 from $47.1 million for 2008. As a
percentage of revenues, SG&A expense was 26.0% for 2009, an increase from 21.0% for 2008. The decrease in
SG&A expense for 2009 was primarily due to the favorable impact of foreign currency translation of
approximately $2 million, the absence of the litigation provision recorded in 2008 of $1.7 million and lower
personnel costs, which were mostly offset by an increase in SG&A expenses from higher internal allocations of
corporate costs incurred in direct support of segment operations, an increase in bad debt expense and severance
expense. Bad debt expense was 1.7% of revenues for 2009 versus 0.9% for 2008.

Amortization of other intangible assets increased $0.1 million to $5.2 million for 2009 from $5.1 million for

2008.

Segment EBITDA decreased $27.0 million, or 51.9%, to $24.9 million for 2009 from $51.9 million for

2008.

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

Revenues increased $39.2 million, or 21.1%, to $224.5 million in 2008 from $185.3 million in 2007.
Revenue growth from acquisitions was approximately $31 million, or 17%. Organic revenue growth was
approximately $8 million, or 4%. Excluding the negative impact of foreign currency translation, which was
primarily due to the weakening of the British pound relative to the U.S. dollar, organic revenue growth would
have been approximately 9%. Organic revenue growth was driven by an increase in retained revenues of
approximately $3 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 million. Project based
revenue increased approximately $1 million from the prior year. The decline M&A transactions 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 increased $12.2 million, or 14.5% to $96.2 million for 2008 from $84.0 million for 2007. Gross

profit margin decreased 2.5 percentage points to 42.8% in 2008 from 45.3% in 2007. 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 $5.1 million to $47.1 million in 2008 from $42.0 million in 2007. As a percentage

of revenue, SG&A was 21.0% in 2008, down favorably from 22.7% in 2007. The increase in SG&A expense in
2008 was primarily due to approximately $5 million in SG&A expense from businesses acquired in 2008.
Excluding the impact of acquisitions, SG&A expense increased $0.1 million, including a positive impact from

60

foreign currency translation of approximately $2 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, higher facility costs and slightly higher bad debt expense, at 0.9% of revenue versus 0.6% in the prior
year.

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 $7.7 million, or 17.2%, to $51.9 million in 2008 from $44.2 million in 2007.

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

professionals added as a result of acquisitions.

Liquidity and Capital Resources

Cash Flows

Year Ended December 31,

2009

2008

2007

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . .

$ 250,769
(89,888)
(240,278)

(dollars in thousands)
$ 197,480
(374,140)
20,251

$ 68,350
(67,797)
269,653

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 related contingent
payment amounts. Our operating cash flows generally improve subsequent to the first quarter of each year.

Our operating assets and liabilities consist primarily of billed and unbilled accounts receivable, notes
receivable (largely employee forgivable loans), 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.

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

Cash provided by operating activities increased $53.3 million, to $250.8 million in 2009 from $197.5
million in 2008. This increase was attributable to higher net income and improved cash collections in 2009 as
compared to 2008 and lower U.S. income tax payments, partially offset by higher annual compensation and
employee forgivable loan payments as well as a lack of current year payroll tax withholding inflows related to
the Employee Stock Purchase Plan, which was terminated as of December 31, 2008.

Net cash used in investing activities for 2009 was $89.9 million as compared to $374.1 million for 2008.
This decrease was primarily due to fewer new acquisitions and lower contingent acquisition payments. Cash used
in investing activities for 2009 included contingent payments for prior years’ acquisitions of $42.5 million and
$4.2 million of payments to fund current year acquisitions and a $15.1 million outflow for the purchase of short-
term investments, net of sales. Cash used in investing activities for 2008 included $299.9 million paid to fund
acquisitions and $43.3 million of contingent acquisition payments.

Capital expenditures were $28.6 million for 2009 as compared to $35.7 million for 2008. Capital
expenditures in both 2009 and 2008 primarily related to leasehold improvements and the purchase of data
processing equipment.

61

Our financing activities for 2009 included the repurchase of $250.0 million in common stock, as discussed

below and, $15.7 million received from the issuance of common stock under equity compensation plans offset by
$13.8 million to repay notes payable, primarily to former shareholders of an acquired business. Our financing
activities for 2008 included $20.6 million received from the issuance of common stock under equity compensation
plans offset by $8.7 million to repay notes payable, primarily to former shareholders of an acquired business.

On November 4, 2009, our Board of Directors authorized a two-year stock repurchase program of up to
$500.0 million and terminated the $50.0 million stock repurchase program authorized in February 2009. On
November 9, 2009, we entered into an accelerated share buyback agreement (“ASB Agreement”) with an
investment bank. On the same day, we and the investment bank executed a supplemental confirmation to effect a
$250.0 million accelerated stock buyback transaction under the ASB Agreement.

On November 12, 2009, FTI paid $250.0 million to the investment bank and as of January 27, 2010 has
received all of the shares to be delivered in the accelerated buyback transaction. The stock repurchase was funded
using cash on hand.

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

Cash provided by operating activities increased by $129.1 million, to $197.5 million from $68.4 million in

2007. The increase was primarily due to an increase in net income (adjusted for noncash items) of approximately
$100.2 million and a decrease in our net investment in working capital of approximately $28.9 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 fundings 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.

Net cash used in investing activities for 2008 was $374.1 million as compared to cash used in investing

activities of $67.8 million for 2007. The increase in cash used in investing activities is primarily due to an
increase in cash used to fund acquisitions. For 2008, net cash used in investing activities included $299.9 million
paid to fund acquisitions and $43.3 million of acquisition contingent payments. For 2007, net cash used in
investing activities included $5.3 million used to acquire the remaining 3% of share capital of FD, $8.3 million of
acquisition contingent payments and $18.4 million related to other acquisition activities.

Capital expenditures were $35.7 million for 2008 as compared to $36.4 million for 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 2008, our financing activities consisted of $20.6
million of cash received from the issuance of common stock under equity compensation plans and an $8.7 million
repayment of notes payable, primarily to former shareholders of an acquired business. During 2007, our financing
activities consisted of the $231.4 million of 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.

Capital Resources

As of December 31, 2009, our capital resources included $118.9 million of cash and cash equivalents, $15.0

million of short-term investments and available borrowing capacity of $171.2 million under a $175 million
revolving line of credit under our senior secured bank credit facility (‘bank credit facility”).

62

The availability of borrowings under our bank credit facility is subject to specified borrowing conditions.

We may choose to repay outstanding borrowings under the bank credit facility at any time before maturity
without penalty. Debt under bank 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 bank credit facility,
the lenders have a security interest in substantially all of our assets.

Our amended and restated bank credit facility, as further amended, provides for a $175.0 million revolving
line of credit with a maturity date of September 30, 2011. Letters of credit reduce the availability under that line
of credit. We use letters of credit primarily as security deposits for our office facilities. As of December 31, 2009,
we had no outstanding indebtedness under our revolving line of credit, however, $3.8 million of outstanding
letters of credit reduced the availability of borrowings under that line of credit.

Our bank credit facility and the indentures governing our 7 5⁄ 8% due 2013, 3 3⁄4% senior subordinated
convertible notes due 2012 and 7 3⁄4% senior notes due 2016 (collectively, 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 our current and
other consulting related businesses. The bank credit facility requires compliance with financial ratios, including
total indebtedness to earnings before interest, taxes, depreciation and amortization; earnings before interest,
taxes, depreciation and amortization to specified charges; and the maintenance of a minimum net worth, each as
defined under the senior secured bank credit facility. At December 31, 2009, we were in compliance with all
covenants as stipulated in the senior secured bank credit facility and the indentures governing our senior notes.

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 businesses;

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 $38 million to $44 million to support our

organization during 2010, including direct support for specific client engagements. Our estimate takes into
consideration the needs of our existing businesses 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.

In certain business combinations consummated prior to January 1, 2009, a portion of our purchase price is in
the form of contingent consideration, often referred to as earn-outs. 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

63

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. Our obligations change from period to period primarily as a result of payments made during the
current period, changes in the acquired entities’ performance and changes in foreign currency exchange rates.
These differences could be significant.

In connection with our required adoption of the new accounting principles for business combinations,

contingent purchase price obligations included in business combinations consummated subsequent to
December 31, 2008 would be recorded as liabilities on our consolidated balance sheet and re-measured at fair
value at each subsequent reporting date with an offset to current period earnings. We have no such obligations
accounted for under the new accounting principles for business combinations at December 31, 2009.

Holders of our 3 3⁄4% senior subordinated convertible notes (“Convertible 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 Convertible Notes will be paid either in cash, shares of our common stock or a
combination of cash and shares of our common stock 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, multiplied
by the initial conversion rate of 31.998 shares of our common stock for each $1,000 principal amount of the
notes, subject to adjustment upon specified events.

The Convertible Notes are currently convertible at the option of the holders through April 15, 2010 as
provided in the indenture covering the notes. The notes are 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 in period ended
January 15, 2010.

Upon surrendering any Convertible 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 our
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 Convertible 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 $149.9 million principal amount of the Convertible 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 are registered securities. As of December 21, 2009, the last trade date before
December 31, 2009, the Convertible Notes had a market price of $1,595 per $1,000 principal amount of
Convertible Notes, compared to an estimated conversion value of approximately $1,509 per $1,000 principal
amount of Convertible Notes. Because the Convertible Notes have historically traded at market prices above the
estimated conversion values, we do not anticipate holders will elect to convert their Convertible Notes in the near
future unless the value ratio should change. 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.

64

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, 2009. The information in the table reflects future
unconditional payments and is based on the terms of the relevant agreements, appropriate classification of items
under GAAP 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, 2009 and prior to the September 30, 2011 maturity date.

The interest obligation on our long-term debt assumes that our senior 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.

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 2010 on the following table and
includes the $149.9 million principal amount of Convertible Notes and $1.1 million of notes payable to
shareholders of an acquired business.

Contractual Obligations

Total

2010

2011

2012

2013

2014

Thereafter

Long-term debt
. . . . . . . . . . . . .
Interest on long-term debt . . . . .
Capital lease obligations . . . . . .
Operating leases . . . . . . . . . . . .

$ 566,072
179,520
814
297,385

$151,072
37,549
524
38,625

$ — $ — $200,000
23,653
34,959
37,536
—
49
241
28,893
32,620
36,761

$ — $215,000
29,160
16,663
—
—
134,132
26,354

Total obligations . . . . . . . . . . . .

$1,043,791

$227,770

$74,538

$67,628

$252,546

$43,017

$378,292

(in thousands)

Future Outlook

We believe that our anticipated operating cash flows and our total liquidity, consisting of our cash on hand,
short-term investments and $171.2 million of availability under our revolving bank 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 $118.9 million of cash and cash equivalents and $15.0 million of short-term investments at
December 31, 2009;

funds required for debt service payments, including interest payments on our long-term debt;

funds required for capital expenditures during 2010 of about $38 million to $44 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 the 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 bank line of credit, as necessary, will provide adequate cash to fund
our long-term cash needs from normal operations.

65

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.
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 bank credit facility or the

indentures that govern our senior 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. Interest rate changes expose our

fixed rate long-term borrowings to changes in fair value and expose our variable rate borrowings to changes in
our interest expense. 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.

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, 2009 and 2008. Our Convertible
Notes which are callable by the holder have been shown as maturing in 2010. The fair values have been
determined based on quoted market prices for our senior notes.

Year of Maturity

December 31, 2009

December 31, 2008

2010

2011 2012

2013

2014 Thereafter

Total

(dollars in thousands)

Fair
Value

Total

Fair
Value

Long-term debt

Fixed rate . . . . . . . . . . . . $149,940 $— $— $200,000 $— $215,000 $564,940 $662,841 $564,951 $583,427
Average interest rate . . .

4% —% —%

8% —%

7%

8%

7%

66

Equity Price Sensitivity

We currently have outstanding $149.9 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 currently convertible 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 the maximum conversion rate of 41.5973 per $1,000 principal amount of
Convertible Notes. The Convertible Notes are currently convertible at the option of the holders through April 15,
2010 as provided in the indenture covering the notes.

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 2009 were $56.13 and $36.54.

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. The following table details by year the cash
outflows that would result from the price protection payments if, on the applicable determination dates, our
common stock price was at, 20% above or 20% below our common stock price on December 31, 2009 of $47.16
per share.

Cash outflow, assuming:
Closing share price of $47.16 at December 31, 2009 . . . . . . . . . . . .
20% decrease in share price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20% increase in share price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$315
573
57

$10,625
15,105
6,146

$475
740
209

$ 902
1,669
211

$12,317
18,087
6,623

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 that are denominated in currencies
other than the functional currency of our subsidiaries. Gains or losses from foreign currency transactions 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.
Changes in the exchange rate between the British pound and the U.S. dollar have the most significant impact on
the translation of our operating results. The net impact of a change in translation rates is recorded as a component
of stockholders equity in “Accumulated Other Comprehensive (Loss) Income.” For the year ended December 31,
2009, consolidated revenues decreased by 1.9%, operating income decreased by 1.8% and diluted earnings per
share decreased by 2.3% due to fluctuating foreign exchange rates.

67

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FTI Consulting, Inc. and Subsidiaries

Consolidated Financial Statements

INDEX

Page

Management’s Report on Internal Control over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Report of Independent Registered Public Accounting Firm — Internal Control over Financial Reporting . . . 70

Report of Independent Registered Public Accounting Firm — Consolidated Financial Statements . . . . . . . . . 71

Consolidated Balance Sheets — December 31, 2009 and 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Consolidated Statements of Income — Years Ended December 31, 2009, 2008 and 2007 . . . . . . . . . . . . . . . 73

Consolidated Statements of Stockholders’ Equity and Comprehensive Income — Years Ended

December 31, 2009, 2008 and 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Consolidated Statements of Cash Flows — Years Ended December 31, 2009, 2008 and 2007 . . . . . . . . . . . . 75

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

68

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, 2009. 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, 2009 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, 2009.

KPMG LLP, the independent registered public accounting firm that audited our financial statements, has

issued an audit report on their assessment of internal control over financial reporting, which is included
elsewhere in this Annual Report.

Date: February 26, 2010

/s/

JACK B. DUNN, IV
Jack B. Dunn, IV
President and Chief Executive Officer
(principal executive officer)

/s/

JORGE A. CELAYA
Jorge Celaya
Executive Vice President and Chief Financial Officer
(principal financial officer)

69

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, 2009, 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, 2009, 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, 2009 and 2008, 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, 2009, and our report dated February 26, 2010
expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Baltimore, Maryland
February 26, 2010

70

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, 2009 and 2008, 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, 2009. 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 audits 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, 2009 and 2008, and the results
of their operations and their cash flows for each of the years in the three-year period ended December 31, 2009,
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 2, the Company adopted the provisions of Accounting Standards Codification 470-20,

Debt with Conversion and Other Options (“ASC 470-20”) (formerly FSP APB 14-1) for convertible debt
instruments that have cash settlement features on January 1, 2009. The provisions of ASC 470-20 are
retrospective upon adoption, and prior period amounts have been adjusted to apply the new method of
accounting.

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, 2009, 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 February 26, 2010 expressed an
unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Baltimore, Maryland
February 26, 2010

71

FTI Consulting, Inc. and Subsidiaries

Consolidated Balance Sheets
(in thousands, except per share data)

December 31,

2009

2008

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

$ 118,872

$ 191,842

241,911
104,959
(59,328)

287,542
20,853
52,172
20,476

237,009
98,340
(45,309)

290,040
15,145
34,989
24,372

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

499,915
80,678
1,195,949
175,962
69,213
55,621

556,388
78,575
1,143,461
189,304
56,500
59,349

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,077,338

$2,083,577

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

$

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt and capital lease obligations, net of current portion . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81,193
152,807
138,101
34,101

406,202
417,397
95,704
53,821

973,124

$ 108,905
135,922
132,915
30,872

408,614
418,592
83,777
45,037

956,020

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 — 46,985 (2009) and 50,903 (2008) . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

470
535,754
615,529
(47,539)

509
733,520
472,503
(78,975)

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,104,214

1,127,557

Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . .

$2,077,338

$2,083,577

See accompanying notes to the consolidated financial statements

72

FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Income
(in thousands, except per share data)

Year Ended December 31,

2009

2008

2007

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

$1,399,946

$1,293,145

$1,001,270

Operating expenses

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

767,387
344,318
24,701

708,783
330,191
18,824

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

263,540

235,347

1,136,406

1,057,798

Other income (expense)

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

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

8,158
(44,923)
250

(36,515)

227,025
83,999

8,840
(45,105)
(661)

(36,926)

198,421
77,515

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

$ 143,026

$ 120,906

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

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

$

$

2.86

2.70

$

$

2.46

2.26

552,347
255,876
10,615

818,838

182,432

8,091
(47,639)
(1,002)

(40,550)

141,882
55,548

86,334

2.01

1.88

$

$

$

See accompanying notes to the consolidated financial statements

73

FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity and Comprehensive Income
(in thousands)

Common Stock

Shares Amount

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
(Loss) Income

Total

$419

$ 294,350 $268,937

$ 1,394

$ 565,100

Balance December 31, 2006, as previously reported . . . . . . . . . . . . 41,890
Adjustment to initially apply new accounting principle for convertible

debt instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

Adjustment for immaterial error correction . . . . . . . . . . . . . . . . . . . . .

(61)

Balance December 31, 2006, as adjusted . . . . . . . . . . . . . . . . . . . . . 41,829
Comprehensive income:

Cumulative translation adjustment, net of 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:

—

(1)

418

—
—
—

Exercise of options, including income tax benefit of $18,737 . . .
Employee stock purchase plan . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share grants, less net settled shares of 25 . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Public stock offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and retirement of common stock . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

4,830
237
(500)

1,785
424
292
21 —

19
4
3

48
2
(5)

—

18,069
(2,367)

(2,909)
(765)

—
(27)

15,160
(3,160)

310,052

265,263

1,367

577,100

—
—
—

—
—
86,334

7,537
(55)
—

55,824
9,949
(1,206)
467
231,360
7,740
(18,113)
21,266

—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—

7,537
(55)
86,334

93,816

55,843
9,953
(1,203)
467
231,408
7,742
(18,118)
21,266

Balance December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,918
Comprehensive income:

Cumulative translation adjustment, net of income taxes 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:

548
Exercise of options, including income tax benefit of $11,048 . . .
302
Employee stock purchase plan . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share grants, less net settled shares of 86 . . . . . . . . . . .
233
Stock units issued under incentive compensation plan . . . . . . . . . —
Business combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
902
Reacquisition of equity component of convertible debt . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

Balance December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,903
Comprehensive income:

Cumulative translation adjustment, net of income taxes of

$489

$ 617,339 $351,597

$ 8,849

$ 978,274

—
—
—

6
3
2

—
9

—

—
—
—
—
— 120,906

(87,879)
55
—

23,193
13,338
(4,933)
3,496
54,922
(47)
26,212

—
—
—
—
—

—

—
—
—
—
—

—

(87,879)
55
120,906

33,082

23,199
13,341
(4,931)
3,496
54,931
(47)
26,212

$509

$ 733,520 $472,503

$(78,975)

$1,127,557

$1,483 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

—
—

—
— 143,026

—

31,436
—

Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Issuance of common stock in connection with:

Exercise of options, including income tax benefit from share-

564
based awards of $5,307 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
138
Employee stock purchase plan . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share grants, less net settled shares of 71 . . . . . . . . . . .
216
Stock units issued under incentive compensation plan . . . . . . . . . —
Business combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reacquisiton of equity component of convertible debt . . . . . . . . . . . . . —
Purchase and retirement of common stock . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

(4,875)

—
39 —
—
(49)
—

6
1
3

19,136
5,236
(3,376)
5,308
1,344
(3)
(249,951)
24,540

—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—

31,436
143,026

174,462

19,142
5,237
(3,373)
5,308
1,344
(3)
(250,000)
24,540

Balance December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,985

$470

$ 535,754 $615,529

$(47,539)

$1,104,214

See accompanying notes to the consolidated financial statements

74

FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Cash Flow
(in thousands)

Year Ended December 31,

2009

2008

2007

Operating activities

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating activities:

$ 143,026

$ 120,906

$ 86,334

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Billings in excess of services provided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,765
24,702
19,866
25,631
(5,193)
7,214
(1,604)

(13,314)
(18,364)
1,334
(14,179)
29,877
20,090
2,918

26,037
18,824
22,474
26,381
(10,820)
7,124
3,407

(49,251)
(9,377)
(11,577)
(3,382)
12,990
32,836
10,908

19,351
10,615
11,777
22,703
(17,986)
6,921
228

(85,565)
(22,037)
(2,110)
8,814
(2,804)
31,895
214

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

250,769

197,480

68,350

Investing activities

Payments for acquisition of businesses, including contingent payments and acquisition costs, net of

cash received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property and equipment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(46,710)
(28,557)
(35,717)
20,576
520

(343,169)
(35,674)
—
—
4,703

(31,857)
(36,422)
—
—
482

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(89,888)

(374,140)

(67,797)

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 and capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash received for settlement of interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock, net of offering costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and retirement of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net issuance of common stock under equity compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit from share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
—
(13,761)
2,288
—

(250,000)
15,699
5,193
303

—
—
(2,275)
(8,744)
—
—
—
20,562
10,820
(112)

25,000
(25,000)
—
(7,945)
—
231,408
(18,118)
46,322
17,986
—

Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(240,278)

20,251

269,653

Effect of exchange rate changes and fair value adjustments on cash and cash equivalents . . . . . . . . . . . .

6,427

(12,212)

(1,666)

Net (decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(72,970)
191,842

(168,621)
360,463

268,540
91,923

Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 118,872

$ 191,842

$360,463

Supplemental cash flow disclosures

Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid for income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 38,741
54,122

$ 39,013
64,945

$ 40,200
58,352

Non-cash investing and financing activities:

Issuance of common stock to acquire businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of stock units under incentive compensation plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of notes payable as contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,166
5,308
12,266

54,931
3,496
506

7,742
1,057
8,096

See accompanying notes to the consolidated financial statements

75

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 business
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, Economic Consulting, Technology and Strategic
Communications.

Accounting Principles

Our financial statements are prepared in conformity with United States (“U.S.”) generally accepted

accounting principles (“GAAP”).

Subsequent Events

Subsequent events have been evaluated through the date the financial statements were issued.

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.

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 for
each month while assets and liabilities are translated at balance sheet date exchange rates. Resulting translation
adjustments are recorded as a component of stockholders’ equity in “Accumulated other comprehensive (loss)
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. Such transaction gains and losses may be realized or unrealized depending
upon whether the transaction settled during the period or remains outstanding at the balance sheet date.

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.

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

76

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

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 well as analyzing
historical bad debt 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

Revenue is recognized when persuasive evidence of an arrangement exists, the related services are provided,

the price is fixed or determinable and collectability is reasonably assured. We generate the majority of our
revenues from providing professional services under four types of billing arrangements: time-and-expense,
fixed-fee, performance-based and unit-based.

Time-and-expense billing arrangements require the client to pay based on the number of hours worked by

our revenue-generating professionals at contractually agreed-upon rates. 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.

In fixed-fee billing arrangements, we agree to a pre-established fee in exchange for a pre-determined set of

professional services. Generally, the client agrees to pay a fixed fee every month over the specified contract term.
These contracts are for varying periods and generally permit the client to cancel the contract before the end of the
term. We recognize revenues for our professional services rendered under these fixed-fee billing arrangements
monthly over the specified contract term.

In performance-based or contingent billing arrangements, fees are tied to the attainment of contractually
defined objectives. Often this type of arrangement supplements a time-and-expense or fixed-fee engagement,
where payment of a performance-based fee is deferred until the conclusion of the matter or upon the achievement
of performance-based criteria. We do not recognize revenues under performance-based billing arrangements until
all related performance criteria are met and collection of the fee is reasonably assured.

In our Technology segment, unit-based revenues are based on either the amount of data stored or processed,

the number of concurrent users accessing the information, or the number of pages or images processed for a
client. We recognize revenues for our professional services rendered under unit-based engagements as the
services are provided based on agreed-upon rates. We also generate certain revenue from software licenses and
maintenance. We have vendor-specific objective evidence of fair value for support and maintenance separate
from software for the majority of our products. Accordingly, when licenses of certain offerings are included in an
arrangement with support and maintenance, we recognize the license revenue upon delivery of the license and
recognize the support and maintenance revenue over the term of the maintenance service period. 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

77

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

acceptance provisions lapse. Hosting revenues from hosting fees are recognized ratably over the term of the
hosting agreement. We have certain arrangements with clients in which we provide multiple elements of services
under one engagement contract. Revenues under these types of arrangements are accounted for in accordance
ASC 605-25, Multiple-Element Arrangements, and recognized pursuant to the criteria described above.

Some clients pay us retainers before we begin any work for them. We hold retainers on deposit until we
have completed the work. We generally 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
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 and final fee settlements have been negotiated. 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.

If at the outset of an arrangement we determine that the arrangement fee is not fixed or determinable,
revenue is deferred until all criteria for recognizing revenue are met. Reimbursable expenses, including those
relating to travel, out-of pocket expenses, outside consultants and other similar costs, are generally included in
revenues, and an equivalent amount of reimbursable expenses is included in costs of services in the period in
which the expense is incurred. Any taxes assessed on revenues relating to services provided to our clients are
recorded on a net basis. Revenues recognized, but not yet billed to clients, have been recorded as unbilled
receivables in the consolidated balance sheets.

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
host and process client information. Direct cost of revenues does not include an allocation of overhead costs.

Share-Based Compensation

We recognize share-based compensation using a fair value based recognition method. Share-based

compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense
over the requisite service period or performance period of the award. The amount of share-based compensation
expense recognized at any date must at least equal the portion of grant date value of the award that is vested at
that date.

We use the Black-Scholes pricing model to determine the fair value of stock options on the dates of grant.

The Black-Scholes pricing model requires various highly judgmental assumptions including volatility and
expected term, which are based on our historical experience. We 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 term 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.

Restricted stock is measured based on the closing price of the underlying stock on the dates of grant.
Awards with performance-based vesting conditions require the achievement of specific financial targets at the
end of the specified performance period and the employee’s continued employment. We recognize the estimated
fair value of performance-based awards as share-based compensation expense over the performance period. We

78

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

consider each performance period separately, based upon our determination of whether it is probable that the
performance target will be achieved. At each reporting period, we reassess the probability of achieving the
performance targets. If a performance target is not met, no compensation cost is ultimately recognized against
that target, and, to the extent previously recognized, compensation expense is reversed. For all our share-based
awards, we estimate the expected forfeiture rate and recognize expense only for those shares expected to vest.
We estimate the forfeiture rate based on historical experience. Groups of share-based award holders that have
similar historical behavior with regard to option exercise timing and forfeiture rates are considered separately for
valuation and attribution purposes.

Share-based awards granted to non-employees (primarily consultants) are measured at the estimated fair
value on the grant date of the award. The fair value of the awards is then remeasured at each reporting date until
the award vests. The stock-based compensation expense related to these grants will fluctuate as the estimated fair
value of the common stock fluctuates over the period from the grant date to the vesting date.

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 until such products are available for general release to customers as discussed in “Capitalized
Software to be Sold, Leased or Otherwise Marketed” below.

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 $18.1 million,
$10.9 million, and $9.7 million during 2009, 2008 and 2007, 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 U.S. as well as foreign countries in which we
conduct business. 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.

Cash Equivalents and Short-Term Investments

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. In
addition, we also may invest in short-term investments with maturities greater than three months, consisting
primarily of certificates of deposit and treasury bills. Any short-term investments are classified as available-for-
sale and carried at fair value, based on quoted market prices or other readily available market information.

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)

Unrealized gains and losses, net of taxes, are included in “Accumulated other comprehensive (loss) income,”
which is reflected as a separate component of stockholders’ equity. Gains on the sale of commercial paper or
treasury bills 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. Short-term investments at December 31, 2009
consisted of $15.0 million of certificates of deposit carried at cost, which approximates fair value, and included
in “Prepaid expenses and other current assets” on the Consolidated Balance Sheet. There were no short-term
investments 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 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 negotiated by clients or 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 all receivable risks by reviewing the status
of each matter account and recording reserves based on our experience and knowledge of the particular client and
historical collection patterns. 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 bankruptcy courts 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 services.

The provision for doubtful accounts is recorded after the related work has been billed to the client and we

discover full collectability is not reasonably assured. It is classified in “Selling, general and administrative
expense” on the Consolidated Statements of Income and totaled $19.9 million, $22.5 million, and $11.8 million
for the years ended December 31, 2009, 2008 and 2007, respectively. The provision for unbilled services is
normally recorded prior to customer billing and is recorded as a reduction to revenues. This provision normally
relates to fee adjustments, estimates of fee reductions that may be imposed by bankruptcy courts and other
discretionary pricing adjustments.

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.

Notes Receivable from Employees

Notes receivable due from employees include unsecured general recourse forgivable loans to attract and
retain highly-skilled 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 through cliff vesting, provided that the professional

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)

is an employee on the forgiveness date, and upon other specified events, such as death or disability. 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, except, in most cases, if the
termination was by FTI without cause or by the employee with good reason. We amortize forgivable loans to
expense on a straight-line basis over their forgiveness periods of one to ten years. We record interest income on
the notes and compensation expense, as such interest is forgiven.

Goodwill and Other Intangible Assets

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 and other indefinite-lived intangible assets for impairment annually as of the first day
of the fourth quarter or whenever events or changes in circumstances indicate that the carrying value of an asset
may not be recoverable. Factors we consider important that could trigger an interim impairment review include,
but are not limited to, 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.

We assess our goodwill for impairment using a fair value approach at the reporting unit level. A reporting

unit is an operating segment or a business one level below that operating segment if discrete financial
information is available and regularly reviewed by segment management. When available and as appropriate, we
use market multiples derived from a set of comparables to establish fair values (a market approach). If a set of
comparables are not available, we estimate fair value using discounted cash flows (an income approach).

Intangible assets with definite lives are 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. We amortize our acquired definite-lived intangible assets on a straight-line basis over periods
ranging primarily from 5 to 15 years.

As of December 31, 2009, we concluded that our goodwill and other intangible assets were not impaired.

Impairment of Long-Lived Assets

We review long-lived assets such as property and equipment and definite-lived intangible assets whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be 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 of assets to be held and used by a comparison of the carrying value of the assets to future
undiscounted net cash flows expected to be generated by the assets. 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

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)

the total of the expected undiscounted future cash flows is less than the carrying amount of the asset group, we
estimate the fair value of the asset group to determine whether an impairment loss should be recognized. An
impairment loss will be recognized for the difference between the fair value and carrying value of the asset
group. If fair value is determined using discounted cash flows, 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 on a
straight-line basis. The amortization of debt financing costs is included in “Interest expense” in our Consolidated
Statements of Income. Unamortized debt financing costs are classified within “Other assets” on our Consolidated
Balance Sheets.

Capitalized Software to be Sold, Leased or Otherwise Marketed

We expense costs for software products that will be sold, leased or otherwise marketed until 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” on our Consolidated Balance Sheets. Unamortized capitalized software
costs were $5.6 million and $2.8 million at December 31, 2009 and 2008, respectively. Amortization of
capitalized software costs was $1.0 million, $0.5 million and $0.1 million for the years ended December 31,
2009, 2008 and 2007, respectively.

Leases

We lease office space and equipment under non-cancelable operating leases. We also lease certain

equipment under capital leases. The leases normally provide for the payment of minimum annual rentals and may
include scheduled rent increases. 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 recognize rent expense under operating leases on a straight-line basis over the non-cancelable lease
term. For leases with scheduled rent increases this treatment results in a deferred rent liability, which is classified
within “Other liabilities” on the Consolidated Balance Sheets. Lease inducements such as tenant improvement
allowances, cash inducements, and rent abatements are amortized on a straight-line basis over the life of the
lease. Unamortized lease inducements are also included in deferred rent. Deferred rent at December 31, 2009 and
2008 totaled $37.8 million and $32.6 million, respectively.

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. At December 31, 2009, we were not a party to any
derivative instruments.

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)

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 (loss) 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.

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
or are applied at predetermined amounts or times. Excess payments are either applied to final billings or refunded
to clients upon completion of work. Payments in excess of related accounts receivable and unbilled receivables
are recorded as billings in excess of services provided within the liabilities section of our Consolidated Balance
Sheets.

2. Revision to Previously Reported Financial Information

Correction of Immaterial Error

In the third quarter of 2009, we concluded an internal re-examination of our contingent acquisition

payments and related accounting treatment. As a result of this review, we discovered an immaterial error which
impacted previously reported results for 2008, 2007 and 2006 related to certain contingent acquisition payments
made in connection with the purchase of previously acquired businesses. The payments were made upon the
achievement of required performance conditions as specified in the related purchase agreements. These purchase
agreements allowed for a portion of the contingent payment to be paid to employee benefit trusts (“EBT”) or
designated employees who at the time were deemed to be shareholders of the acquired entity. After further
analysis, we concluded that neither the EBT nor the designated employees who received contingent payments
qualified as original selling shareholders of the acquired businesses. As such, distributions made from the EBT or
to these designated employees should have been recorded as compensation expense and not capitalized as part of

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)

the purchase price of the applicable acquisition. We revised our previously reported financial information in our
Form 10-Q filing for the quarterly period ended September 30, 2009 to reflect the impact of the correction of the
immaterial error.

We assessed the materiality of these errors in accordance with the Securities and Exchange Commission

(SEC) Staff Accounting Bulletin No. 108,”Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements,” and determined that the error was immaterial
to the previously reported amounts contained in our periodic filings. The impact of the correction of the
immaterial error was a decrease to net income and diluted earnings per share of $2.1 million and $0.04 per share,
$3.5 million and $0.08 per share; and $0.8 million and $0.02 per share for the years ended December 31, 2008,
2007 and 2006, respectively. The correction of the immaterial error resulted in a decrease in cash flows from
operations of $2.4 million and $0.4 million and a corresponding increase in cash flows from investing activities
for the years ended December 31, 2008 and 2007, respectively. In addition, we determined that one of the EBT’s
meets the criteria for consolidation and accordingly, the consolidation of the EBT is reflected in all periods
presented.

Change in Accounting Principle

On January 1, 2009, we adopted the provisions of Accounting Standards Codification (“ASC”) 470-20, Debt

with Conversion and Other Options (“ASC 470-20”) (formerly FSP APB 14-1) for convertible debt instruments
that have cash settlement features. ASC 470-20 requires issuers of convertible debt securities within its scope to
separate those securities into a debt component and an equity component, resulting in the debt component being
recorded at fair value without consideration given to the conversion feature. Issuance costs are also allocated
between the debt and equity components. We are required to record interest expense using our nonconvertible
debt borrowing rate. The provisions of ASC 470-20 are retrospective upon adoption, and prior period amounts
have been adjusted to apply the new method of accounting. This new guidance applies to our 3 3⁄4% senior
subordinated convertible notes due 2012 (“Convertible Notes”) issued in August 2005. The cumulative impact of
the accounting change on retained earnings for years prior to 2007 was $2.9 million. The impact of the adoption
of this accounting change was a decrease to net income and diluted earnings per share of $2.4 million and $0.05
per share; $2.3 million and $0.05 per share; $2.1 million and $0.05; and $0.8 million and $.02 per share for the
years ended December 31, 2008, 2007, 2006 and 2005, respectively.

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)

The combined effect of recording the correction of the immaterial error and adoption of ASC 470-20 in our

Consolidated Statement of Income is presented in the following table:

For the Year Ended

December 31,
2008

December 31,
2007

December 31,
2006

December 31,
2005

As
Reported

As
Revised

As
Reported

As
Revised

As
Reported

As
Revised

As
Reported

As
Revised

Direct cost of revenues . . . . . . . 705,611 708,783 548,407 552,347 389,032 389,089 291,592 291,592
Selling, general and

administrative expense . . . . . 330,052 330,191 255,238 255,876 178,572 179,361 127,727 127,727
Operating income . . . . . . . . . . 238,658 235,347 187,010 182,432 106,182 105,336 113,692 113,692
145
. . . . .
Interest income and other
Interest expense . . . . . . . . . . . . .
(41,051) (45,105) (43,857) (47,639) (28,949) (32,441) (15,021) (16,375)
Income before income tax

7,639

2,198

2,119

8,091

8,685

8,840

145

provision . . . . . . . . . . . . . . . . 205,631 198,421 149,790 141,882
55,548
86,334

77,515
Income tax provision . . . . . . . . .
Net income . . . . . . . . . . . . . . . . 125,435 120,906
Earnings per common share:
Basic . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . .

57,669
92,121

2.46
2.26

2.55
2.34

80,196

79,165
37,141
42,024

74,906
35,744
39,162

97,187
40,819
56,368

95,833
40,277
55,556

2.14
2.00

2.01
1.88

1.06
1.04

0.99
0.97

1.38
1.35

1.36
1.33

The combined effect of recording the correction of the immaterial error and adoption of ASC 470-20 on our

Consolidated Balance Sheet at December 31, 2008 is presented in the following table:

Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable, accrued expenses and other
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt and capital lease obligations . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes-noncurrent
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,
2008

As Reported

As Revised

$

31,055
552,454
1,151,388
59,948
2,088,169
109,036
133,103
150,898
423,909
76,804
964,342
509
717,158
486,493
(80,333)
1,123,827
2,088,169

$

34,989
556,388
1,143,461
59,349
2,083,577
108,905
135,922
132,915
408,614
83,777
956,020
509
733,520
472,503
(78,975)
1,127,557
2,083,577

The Notes to the Consolidated Financial Statements have also been updated to reflect the correction of the

immaterial errors and the retrospective adoption of the change in accounting principle.

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)

3. 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 issuances of 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 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
2009 and 2008 because the average price per share of our common stock for the years ended December 31, 2009
and 2008 was above the current conversion price of the notes.

Year Ended December 31,

2009

2008

2007

Numerator - basic and diluted

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

$143,026

$120,906

$86,334

Denominator

Weighted average number of common shares outstanding — basic . . . . . .
Effect of dilutive stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of dilutive convertible notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of dilutive restricted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted average number of common shares outstanding — diluted . . . .

49,963
1,167
1,613
301

53,044

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

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

$

$

2.86

2.70

$

$

Antidilutive stock options and restricted shares . . . . . . . . . . . . . . . . . . . . . . .

1,102

49,193
1,600
2,367
443

43,028
1,285
1,294
367

53,603

45,974

2.46

2.26

455

$

$

2.01

1.88

1,223

4. New Accounting Standards Not Yet Adopted

In December 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards

Update (“ASU”) No. 2009-17, Consolidations: Improvements to Financial Reporting by Enterprises Involved
with Variable Interest Entities (“ASU 2009-17”). This update amends guidance included in ASC 810,
Consolidation as a result of Statement of Financial Accounting Standards (“SFAS”) No. 167, which was issued
by the FASB in June 2009. ASU 2009-17 amends previous guidance set forth by FASB Interpretation No. 46(R)
“Consolidation of Variable Interest Entities” to address the elimination of the concept of a qualifying special
purpose entity. It also replaces the quantitative-based risks and rewards calculation for determining which
enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying
which enterprise has the power to direct the activities of a variable interest entity and the obligation to absorb
losses or right to receive benefits from the entity. ASU 2009-17 requires additional disclosures aimed at
providing more timely and useful information about an enterprise’s involvement with a variable interest entity.
These new provisions will become effective as of January 1, 2010 for calendar year-end companies. We will
adopt the new provisions in January 2010, and do not anticipate any material impact on our Consolidated
Financial Statements.

In October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue Arrangements (“ASU

2009-13”), which affects ASC 605, Revenue Recognition. ASU 2009-13 amends the criteria for separating
consideration in multiple-deliverable arrangements. It eliminates the requirement under previous guidance that

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)

all undelivered elements have vendor-specific objective evidence (“VSOE”) or third-party evidence (“TPE”) of
fair value before recognizing a portion of revenue related to the delivered items, and establishes that revenue be
allocated to each element based on its relative selling price, as determined by VSOE, TPE, or the entity’s
estimated selling price if neither of the aforementioned is available. Additionally, ASU 2009-13 eliminates the
residual method of allocation and expands required disclosures about multiple-element revenue arrangements.
We are required to adopt the amendments in ASU 2009-13 prospectively for revenue arrangements entered into
or materially modified beginning January 1, 2011, with early adoption permitted. We are currently evaluating the
impact of adopting this ASU on our financial position, results of operations and cash flows.

5. Interest Income and Other

The table below presents the components of “Interest income and other” as shown on the Consolidated

Statements of Income.

Year Ended December 31,

2009

2008

2007

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange transaction gains (losses), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remeasurement gain on acquisition of German joint venture . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$5,645
587
2,277
(351)

$7,454
899
—
487

$8,173
(839)
—
757

Interest income and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$8,158

$8,840

$8,091

See Note 8 to the Consolidated Financial Statements for information on the remeasurement gain.

6. Share-Based Compensation

Share-Based Incentive Compensation Plans

Our 2004 Long-Term Incentive Plan (“2004 Plan”) authorizes common stock for option rights, 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, subject to the discretion of the
administrator to make awards. 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 or other share-based awards. As of December 31, 2009, there are no shares of common stock
available for grant under our 2004 Long-Term Incentive Plan.

The FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan (“2006 Plan”) authorizes common stock
for 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,
subject to the discretion of the administrator to make awards. 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, 2009, 118,319
shares of common stock were available for grant under our 2006 Plan, of which 34,243 shares may be granted as
share-based awards.

The amendment and restatement of the FTI Consulting, Inc. Deferred Compensation Plan for Key

Employees and Non-Employee Directors, as previously amended (the “Deferred Compensation Plan”), (renamed
the FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan (“Omnibus Plan”)), was approved by the
stockholders of FTI on June 3, 2009.

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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 2009 Omnibus Plan authorizes common stock for 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, subject to the discretion of the administrator to make
awards, incentive compensation in the form of equity and equity-based awards. The Omnibus Plan also
authorizes common stock in connection with the issuance of deferred stock units or deferred restricted stock units
on account of certain eligible compensation electively deferred by our non-employee directors and certain key
employees (excluding executive officers of FTI). We are authorized to issue up to 1,500,000 shares of common
stock under the Omnibus Plan, of which an aggregate of 900,000 shares of common stock would be available for
restricted and unrestricted stock awards or other stock-based awards. As of December 31, 2009, 1,167,161 shares
of common stock were available for grant under our 2009 Omnibus Plan, of which 877,045 shares may be
granted as share-based awards.

Options have been granted to employees with exercise prices equal to or greater than 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 become fully vested 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 and award
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.
Shares of common stock under the Omnibus Plan will also be issued on account of deferred stock units and
deferred restricted stock units upon an event of separation service or an elected payment date pursuant to
Section 409A of the Internal Revenue Code of 1986, as amended, and the plan.

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 issuance 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 (“2007 ESPP”) 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 the 2007 ESPP, 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 and 304,277 shares of
common stock at $23.71 during the year ended December 31, 2007.The 2007 ESPP was terminated effective
January 1, 2009 pursuant to action taken by our Board of Directors on December 18, 2008.

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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 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 2007 ESPP. Employees purchased
120,439 shares of common stock under this plan at a weighted average price per share of $22.75 during the year
ending December 31, 2007. 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 employee stock purchase plan

grants using the assumptions in the following table.

Year Ended December 31,

2009

2008

2007

Assumptions
Risk-free interest rate–option plan grants . . . . . . . . . .
Risk-free interest rate–purchase plan grants . . . . . . . .
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term of option grants . . . . . . . . . . . . . . . . . .
Expected term of stock purchase plan grants . . . . . . .
Stock price volatility–option plan grants . . . . . . . . . .
Stock price volatility–purchase plan grants . . . . . . . .

.66% – 2.81%
N/A
0%
3 – 6 years
N/A

1.86% – 4.13% 3.38% – 4.89%
3.11% – 4.60% 4.94% – 5.02%
0%
3 – 10 years
0.5 year
38.43% – 44.75% 32.36% – 43.46% 32.2% – 48.70%
N/A 35.48% – 41.24% 29.9% – 34.50%

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, 2009, 2008 and 2007. Forfeitures are 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 different groups of equity
award holders that have similar historical forfeiture experience.

Income Statement Classification

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

2009

2008

2007

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

$ 6,759

$ 5,842

$ 8,577

$ 3,599

$ 6,699

$3,032

expense . . . . . . . . . . . . . . . . . . . .

5,072

7,958

7,702

6,503

9,659

4,370

Share-based compensation expense

before income taxes . . . . . . . . . . .
Income tax benefit . . . . . . . . . . . . . .

Share-based compensation, net of

11,831
4,821

13,800
5,006

16,279
4,737

10,102
3,483

16,358
4,448

7,402
2,866

income taxes . . . . . . . . . . . . . . . .

$ 7,010

$ 8,794

$11,542

$ 6,619

$11,910

$4,536

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 the fair value of
the awards is remeasured at each reporting date until the award vests.

Expenses included in the table above related to these non-employee options are $1.1 million, $(0.1) million
and $2.5 million for the years ended December 31, 2009, 2008 and 2007, respectively. As of December 31, 2009
and 2008, $4.1 million and $3.0 million, respectively, were included in “Other liabilities” on the Consolidated
Balance Sheet.

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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 July 2008, we issued 34,790 restricted shares with a price floor guarantee to employees. The incremental
value to the employee, as a result of the stock floor, is expensed and amortized over the vesting period using the
liability method of accounting. The incremental value is computed as the excess of the stock floor price over the
period end share price, multiplied by the number of shares vested as of the period end date. The expense related
to the liability component of these awards that is included in the table above for the years ended December 31,
2009 and 2008 is $0.1 million and $0.3 million, respectively.

As of December 31, 2009, there was $24.8 million of unrecognized compensation cost related to unvested
stock options. That cost is expected to be recognized ratably over a weighted-average period of 3.2 years as the
options vest.

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, 2009. 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 2009 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, 2009. This amount changes
based on changes in the fair market value per share of our common stock.

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

Shares

Options outstanding, January 1, 2009 . . . . . . . . . . . . . . . . . . . . . . . .

4,953

$30.19

Options granted during the period:

Exercise Price = fair market value . . . . . . . . . . . . . . . . . . . .

489

$47.49

Options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(564)
(101)

$24.54
$62.39

Options outstanding, December 31, 2009 . . . . . . . . . . . . . . . . . . . . .

4,777

$31.94

6.3 years

$81,944

Options exercisable, December 31, 2009 . . . . . . . . . . . . . . . . . . . . . .

2,740

$27.49

5.4 years

$56,907

Cash received from option exercises under all share-based payment arrangements for the years ended
December 31, 2009, 2008 and 2007 was $13.8 million, $12.2 million and $37.1 million, respectively. The actual
tax benefit realized from stock options exercised totaled $2.8 million, $7.7 million and $19.3 million,
respectively, for the years ended December 31, 2009, 2008 and 2007.

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:

•

•

•

$14.4 million during the year ended December 31, 2009;

$22.7 million during the year ended December 31, 2008; and

$51.7 million during the year ended December 31, 2007.

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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 per share of stock options granted, shares
purchased under our employee stock purchase plan and restricted shares and share units granted during the years
ended December 31, 2009, 2008 and 2007:

Year Ended December 31,

2009

2008

2007

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
$19.49
$ — $30.52
N/A $17.12
$67.37

$46.92

$15.65
$21.44
$ 7.71
$34.58

Following is a summary of the status of stock options outstanding and exercisable at December 31, 2009:

Exercise Price Range

$3.23 - $24.28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$25.25 - $26.66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$26.73 - $27.89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$27.90 - $41.03 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$41.15 - $71.16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Options Outstanding

Options Exercisable

Weighted-
Average
Exercise
Price

$19.96
$26.25
$27.72
$31.27
$57.54

Weighted-
Average
Remaining
Contractual
Term

3.8 years
6.4 years
6.4 years
6.5 years
8.6 years

Weighted-
Average
Exercise
Price

$19.94
$26.32
$27.61
$31.19
$60.21

Shares

1,008
782
397
332
221

2,740

Shares

1,020
971
955
956
875

4,777

A summary of our unvested restricted share award activity during the year ended December 31, 2009 is
presented below. The fair value of unvested restricted share-based awards is determined based on the closing
market price per share of our common stock on the grant date. Pre-vesting forfeitures were estimated to be
between 0% and 1.2% based on historical experience.

Unvested restricted shares outstanding, January 1, 2009 . . . . . . . . . . . . . . . . . . . . . . .
Restricted share awards granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share awards vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share awards forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shares

964
322
(318)
(70)

Unvested restricted shares outstanding, December 31, 2009 . . . . . . . . . . . . . . . . . . . . .

898

Weighted-
Average Grant-
Date Fair
Value

$41.48
$46.69
$36.25
$64.48

$43.40

Restricted share units under the deferred compensation provisions of the 2009 Omnibus Plan may be

granted to non-employee directors who elect to defer their annual equity payment with a value of $250,000,
payable on the date of our annual stockholders meeting each year and to certain key employees. Each restricted
share unit is equivalent to one share of common stock of FTI. The restricted share units for non-employee
directors are issued on account of the director’s annual equity payment and vest on the first anniversary of the

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FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

grant date, provided that the non-employee director is serving in that capacity on the applicable vesting date.
Stock units scheduled to vest in a year in which the director is not nominated for election or a director is not
elected by shareholders will vest and not be forfeited. Upon a separation of service event or an elected payment
date pursuant to Section 409A of the Internal Revenue Code, such director will receive one share of common
stock for each stock unit credited to his or her account on the books of FTI. The restricted share units are then
distributed to the director following his or her last date of service. The restricted share units for key employees
are immediately vested upon issuance and are settled in common stock with the participants at either their date of
separation of service or the individual’s elected payment date pursuant to section 409A of the Internal Revenue
Code.

A summary of our restricted share unit activity during the year ended December 31, 2009 is presented
below. The fair value of restricted share-based units is determined based on the closing market price per share of
our common stock on the grant date.

Restricted share units outstanding, January 1, 2009 . . . . . . . . . . . . . . . . . . .
Restricted share units granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share units released . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restricted share units outstanding, December 31, 2009 . . . . . . . . . . . . . . . .

Weighted-
Average Grant-
Date Fair
Value

Intrinsic
Value

$40.44
47.57
26.89

$45.36

$12,703

Shares

196
116
(43)

269

The intrinsic value of restricted share units released reflects the market value of our common stock on the

date of release. The total intrinsic value of restricted share units released was $2.2 million for the year ended
December 31, 2009 and was not material for the years ended December 31, 2008 and 2007.

As of December 31, 2009, there was $29.3 million of unrecognized compensation cost related to unvested
restricted awards and share units. That cost is expected to be recognized ratably over a weighted-average period
of 3.0 years as the awards and units vest. The total fair value of restricted share awards and share units that
vested during the years ended December 31, 2009, 2008 and 2007 was $12.5 million, $7.6 million and $3.4
million, respectively.

7. Research and Development Costs

Research and development costs related to software development charged to expense totaled $21.1 million,

$18.0 million and $7.6 million for the years ended December 31, 2009, 2008 and 2007, 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, 2007, $5.3 million of research and development costs
were classified as direct cost of revenues, and $2.3 million of research and development costs were classified as
selling, general and administrative expense.

8. Acquisitions

Certain acquisition related restricted stock agreements entered into prior to January 1, 2009 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 applicable stock restrictions lapse (the “determination date”). For those acquisitions, the

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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 settlement of any contingency related to common stock price will be recorded as a reduction to additional
paid-in capital. During 2009, we paid $0.1 million in cash in relation to the price protection provision on certain
shares of common stock that became unrestricted, which was recorded as a reduction to additional paid-in
capital. As of December 31, 2009, 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 remaining common stock price guarantee provisions
have stock floor prices that range from $22.33 to $69.62 per share and have determination dates that range from
2010 to 2013.

In certain business combinations consummated prior to January 1, 2009, 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 within a specified time period. Contingent consideration related to
acquisitions consummated prior to January 1, 2009 is recorded as additional purchase price with the adjustment
recorded as an increase to goodwill if the contingency is satisfied. Additional consideration related to businesses
acquired prior to January 1, 2009 that was recorded as an adjustment to goodwill was $32.3 million, $49.4
million, and $41.0 million for the years ended December 31, 2009, 2008 and 2007, respectively.

For acquisitions consummated prior to January 1, 2009, the fair value of shares of our common stock issued

in connection with a business combination was based on an average stock price formula, such as a five-day
average of the closing price of our common stock for a period of days prior to or after the date of consummation
of the acquisition.

On January 1, 2009, we were required to adopt new accounting principles for business combinations. These

principles are required to be applied prospectively to business combinations consummated subsequent to
December 31, 2008. These new principles change how an acquirer recognizes and measures the identifiable
assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired in a
business combination. Key changes include:

•

•

•

•

•

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

the recognition of the estimated fair value of certain contingent consideration at the acquisition date
rather than when the consideration was issued or became issuable;

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

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

changes in the accounting for business combinations achieved in stages. When control of a business is
achieved in stages, acquisition method accounting is applied on the date that control is obtained. In
addition, the acquirer remeasures its previously acquired non-controlling equity investment in the
acquiree at fair value as of the acquisition date, and recognizes any gain or loss on that remeasurement
in current period earnings.

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FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

2009 Acquisition

In 2009, we acquired the remaining 50% equity interest in a German joint venture owned by the Strategic
Communications segment resulting in a controlling interest and consolidation of this entity. We completed the
valuation of the previously acquired non-controlling equity investment and recorded a $2.3 million gain on
remeasuring our existing investment in the joint venture to fair value. The $2.3 million gain is included in
“Interest income and other” on the Consolidated Statement of Income for the year ended December 31, 2009.

2008 and 2007 Acquisitions

During 2008, we completed 16 business combinations for a total acquisition cost of $373.1 million,
consisting of cash, transaction costs, liabilities assumed of $319.1 million and 870,725 restricted shares of our
common stock valued at $54.0 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 one to five years. Any contingent
consideration payable in the future will be applied to goodwill. Based on the 2009 and 2008 financial results, we
have paid or accrued additional contingent consideration of $8.5 million, which has been included in the
preceding disclosed acquisition costs.

During 2007, we completed seven business combinations for a total acquisition cost of $54.8 million,

consisting of cash and transaction costs of $48.8 million and 169,999 restricted shares of our common stock
valued at $6.0 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 years. Any contingent consideration
payable in the future will be applied to goodwill. Based on 2009, 2008 and 2007 financial results, we have paid
or accrued additional contingent consideration of $27.3 million, which has been included in the preceding
disclosed acquisition costs.

9. Concentrations of Risk

We derive the majority of our revenues from providing professional services to our clients in the U.S., with
approximately 82% of our revenue being generated from U.S. legal entities. We believe that the geographic and
industry diversity of our customer base throughout the U.S. and internationally minimizes the risk of incurring
material losses due to concentrations of credit risk. The table below details information on our net assets at
December 31, 2009 and 2008. Net assets have been attributed to geographic location based on the location of the
legal entity holding the assets.

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All foreign countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 831,326
272,888

$ 924,722
202,835

Total net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,104,214

$1,127,557

December 31,

2009

2008

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. One of these client matters has resulted in a $19.0 million
unsecured trade receivable that has been classified as non-current within “Other assets” on our Consolidated
Balance Sheets at December 31, 2009 and 2008, respectively.

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)

10. Balance Sheet Details

December 31,

2009

2008

Prepaid expenses and other current assets

Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$22,431
15,000
14,741

$ 22,046
—
12,943

$52,172

$ 34,989

Notes receivable

Notes receivable from employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note receivable from purchasers of former subsidiary . . . . . . . . . . . . . . . .

$20,394
459

$ 14,645
500

$20,853

$ 15,145

Notes receivable, net of current portion

Notes receivable from employees, net of current portion . . . . . . . . . . . . . .
Notes receivable from purchasers of former subsidiary and other . . . . . . .

$69,213
—

$ 56,000
500

Accounts payable, accrued expenses and other

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$69,213

$ 56,500

$ 8,486
22,264
23,376
27,067

$ 13,241
26,391
48,936
20,337

$81,193

$108,905

11. Financial Instruments

Derivative Financial Instruments

We enter into derivative contracts to manage our exposure to interest rate changes by achieving a desired

proportion of fixed rate versus variable rate debt. In June 2009, the counterparties to our two interest rate swaps,
with an aggregate $60.0 million notional amount, exercised their right to terminate these agreements. Prior to
their termination, these interest rate swaps effectively converted $60.0 million of our 7 5⁄ 8% Senior Notes due
2013 (“7 5⁄ 8% Notes”) from a fixed rate to a variable rate instrument. (See Note 14 to the Consolidated Financial
Statements for information on the swap termination). These interest rate swaps, previously designated as fair
value hedges of fixed rate debt, qualified for hedge accounting using the short-cut method under ASC 815-20-25,
Derivatives and Hedging (formerly SFAS No. 133), which assumes no hedge ineffectiveness. As a result,
changes in the fair value of the interest rate swaps and changes in the fair value of the hedged debt were assumed
to be equal and offsetting. At December 31, 2008, a $2.9 million fair value adjustment related to the interest rate
swap is recorded in “Other assets” on the Consolidated Balance Sheet with an offsetting $2.9 million fair value
adjustment to “Long-term debt and capital lease obligations.”

Fair Value of Financial Instruments

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

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)

respective assets and liabilities at December 31, 2009, based on the short-term nature of the assets and liabilities.
We determined the fair value of our long-term debt based on quoted market prices for our 7 5⁄ 8% Notes, 7 3⁄4%
Senior Notes due 2016 (“7 3⁄4% Notes”) and Convertible Notes.

There were no financial instruments carried at fair value at December 31, 2009. At December 31, 2008,
interest rate swaps with an aggregate $60.0 million notional amount were carried at fair value based on estimates
to settle the agreements as of the balance sheet date, which would be considered fair value determined using
significant other observable inputs. The fair value adjustment related to the interest rate swap is recorded in
“Other assets” on the Consolidated Balance Sheet.

The following table presents financial assets and liabilities measured at fair value as of December 31, 2008:

As of December 31, 2008

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Interest rate swaps (recorded in “Other assets”)

. . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hedge adjustment on long-term debt (recorded in “Long-term
debt and capital lease obligations”) . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$—

$—

$—

$—

$2,884

$2,884

$2,884

$2,884

$—

$—

$—

$—

Total

$2,884

$2,884

$2,884

$2,884

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.

December 31,

2009

2008

Carrying
Amount

Estimated
Fair Value

Carrying
Amount

Estimated
Fair Value

Long-term debt, including current portion (a)
. . . . . . . . . . . . . . . . .
Interest rate swap assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$572,703
—

$663,973
—

$549,900
2,884

$583,475
2,884

(a) Carrying amount includes the equity component of Convertible Notes recorded in “Additional paid-in

capital” of $18.0 million.

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)

12. Property and Equipment

Property and equipment consist of the following:

December 31,

2009

2008

Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer equipment and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 43,974
8,442
27,887
81,544

$ 37,524
4,335
24,091
70,753

Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . .

161,847
(81,169)

136,703
(58,128)

Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 80,678

$ 78,575

Depreciation expense was $27.8 million in 2009, $25.5 million in 2008 and $19.3 million in 2007.

13. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by reportable segment are as follows:

Balance December 31, 2007 . . . . . . .
Goodwill acquired during the

year . . . . . . . . . . . . . . . . . . . . .
. . . .

Contingent consideration (a)
Adjustments to allocation of

Corporate
Finance/
Restructuring

Forensic and
Litigation
Consulting

Economic
Consulting Technology

Strategic
Communications

Total

$298,571

$149,308 $181,669 $ 37,590

$267,746

$ 934,884

92,019
—

50,679
1,083

1,206
8,169

81,563
—

3,569
37,494

229,036
46,746

purchase price . . . . . . . . . . . . .

—

(612)

Foreign currency translation
adjustment and other

. . . . . . .

Balance December 31, 2008 . . . . . . .
Goodwill acquired during the

year . . . . . . . . . . . . . . . . . . . . .
Contingent consideration . . . . . .
Adjustments to allocation of

(656)

(11,329)

—

—

—

(4,198)

(4,810)

(612)

(49,798)

(62,395)

389,934

189,129

191,044

118,541

254,813

1,143,461

—
—

—
1,366

—
5,655

—
—

3,008
25,285

3,008
32,306

purchase price . . . . . . . . . . . . .

(3,119)

—

—

(934)

935

(3,118)

Foreign currency translation
adjustment and other

. . . . . . .

461

3,734

32

404

15,661

20,292

Balance December 31, 2009 . . . . . . .

$387,276

$194,229 $196,731 $118,011

$299,702

$1,195,949

(a) 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 $24.7 million in 2009, $18.8 million in 2008 and $10.6 million in 2007. Based solely on

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)

the amortizable intangible assets recorded as of December 31, 2009, we estimate amortization expense to be
$23.4 million in 2010, $21.3 million in 2011, $20.8 million in 2012, $17.8 million in 2013, $10.2 million in 2014
and $56.8 million in years after 2014. 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 or changes.

December 31, 2009

December 31, 2008

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

1 to 15
1 to 10
5 to 6
1 to 5
1

$144,048
18,268
37,700
9,591
317

$33,016
8,788
13,335
4,184
317

$133,113
17,194
37,700
9,555
273

$19,897
5,735
6,401
2,153
23

Unamortized intangible assets

Tradenames . . . . . . . . . . . . . . . . . . . . . . . . . .

Indefinite

25,678

—

25,678

—

209,924

59,640

197,835

34,209

$235,602

$59,640

$223,513

$34,209

For acquisitions completed during 2009 and 2008, the aggregate amount of purchase price assigned to

intangible assets other than goodwill consisted of the following:

December 31, 2009

December 31, 2008

Weigted-
Average
Amortization
Period in
Years

Amortized intangible assets

Contract backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-competition agreements . . . . . . . . . . . . . . . . . . . . . .
Tradenames . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

6
6
1

Weigted-
Average
Amortization
Period in
Years

1
14
5
5
6

Fair Value

$ —
5,313
540
140
—

5,993

Fair Value

$

275
78,336
5,427
8,512
33,300

125,850

Unamortized intangible assets

Tradenames . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Indefinite

—

Indefinite

11,200

$5,993

$137,050

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)

14. Long-Term Debt and Capital Lease Obligations

7 5⁄ 8% senior notes due 2013 (a) (b)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 3⁄4% senior notes due 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 3⁄4% convertible senior subordinated notes due 2012 (c) . . . . . . . . . . . . . . . . .
Notes payable to former shareholders of acquired business . . . . . . . . . . . . . . .

Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Long-term debt, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . .

Total capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital lease obligations, net of current portion . . . . . . . . . . . . . . . . .

December 31,

2009

2008

$202,012
215,000
136,540
1,132

554,684
137,672

417,012

814
429

385

$202,884
215,000
131,968
47

549,899
132,015

417,884

1,608
900

708

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

portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$417,397

$418,592

(a)

(b)

Includes unamortized proceeds from interest rate swap terminations of $2.0 million at December 31, 2009
on our $200 million face value 7 5⁄ 8% senior notes.

Includes a fair value hedge adjustment of $2.9 million at December 31, 2008 on our $200 million face value
7 5⁄ 8% senior notes.

(c)

Includes discount of $13.4 million at December 31, 2009 and $18.0 million at December 31, 2008.

7 5⁄ 8% senior notes due 2013. These notes are registered with the SEC. Cash interest is payable semi-
annually beginning December 15, 2005 at a rate of 7.625% per year. We may redeem all or part of these notes at
the redemption prices (expressed as percentages of the principal amount) set forth below plus accrued and unpaid
interest on the notes redeemed to the applicable redemption date, if redeemed during the twelve month period
beginning on June 15, of the years indicated below, subject to the rights of holders of notes on the relevant record
date to receive interest on the relevant interest payment date.

Year

2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Percentage

103.813%
101.906%
100.000%

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%.

In August 2005, we entered into two interest rate swap contracts with an aggregate notional amount of $60.0

million to receive interest at 7 5⁄8% and pay a variable rate of interest based upon LIBOR. We designated these
swaps as fair value hedges of the changes in fair value of $60.0 million of our 7 5⁄8% Notes. Under the terms of

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)

the interest rate swap agreements, we received interest on the $60.0 million notional amount at a fixed rate of
7.625% and paid 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 matched those of the hedged senior notes. In accordance with ASC 815-20-25, Derivatives
and Hedging (formerly SFAS No. 133), the swaps were accounted for as effective hedges. Accordingly, the
changes in the fair values of both the swaps and the debt were recorded as equal and offsetting gains and losses in
interest expense. No hedge ineffectiveness was 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 year ended December 31, 2007, the impact of effectively
converting the interest rate increased interest expense by $0.5 million. The counterparties to the swaps exercised
their right to terminate the swaps as of June 15, 2009 which resulted in a $2.3 million gain on termination. This
gain has been recorded in “Long-term debt and capital lease obligations” on the Consolidated Balance Sheets and
will be amortized as a reduction to interest expense over the remaining term of the 7 5⁄8% Notes, resulting in an
effective interest rate of 6.5% per annum on $60.0 million of 7 5⁄8% Notes.

7 3⁄4% senior notes due 2016. These notes are registered with SEC. 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. 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. These notes are registered with the SEC. 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, 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 $149.9 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.

The Convertible Notes are currently convertible at the option of the holders through April 15, 2010 as
provided in the indenture covering the notes. The notes are 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 in period ended
January 15, 2010.

100

FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements, Continued
(dollar and share amounts in tables expressed in thousands, except per share data)

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. Based
on our closing stock price at December 31, 2009, the aggregate Convertible Notes conversion value exceeds their
aggregate principal amount by $76.3 million.

As of January 1, 2009, we adopted the provisions of ASC 470-20, Debt with Conversion and Other Options
(“ASC 470-20”) (formerly FSP APB 14-1) with retrospective application to prior periods. ASC 470-20 addresses
the accounting and disclosure requirements for convertible debt that may be settled in cash upon conversion. It
requires an issuer to separately account for the liability and equity components of convertible debt in a manner
that reflects the issuer’s nonconvertible borrowing rate, resulting in higher interest expense over the life of the
instrument due to the amortization of the discount. Our Convertible Notes are subject to ASC 470-20. We applied
this guidance retrospectively to all periods presented.

The following table summarizes the liability and equity components of our Convertible Notes:

December 31,
2009

December 31,
2008

Liability component:

Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unamortized discount
Balance of 3 3⁄4% convertible notes due 2012 . . . . . . . . . . . . . .
Equity component (recorded in additional paid-in capital) . . . . . . . . . . . .

$149,940
(13,400)

$149,951
(17,983)

136,540

18,019

131,968

18,022

The discount on the liability component will be amortized over the remaining term of the Convertible Notes
through July 15, 2012 using the effective interest method. The effective interest rate on the Convertible Notes is
7 5⁄ 8%. The components of interest cost on the Convertible Notes for the years ended December 31, 2009 and
2008 were as follows:

Year Ended December 31,

2009

2008

Contractual interest
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of debt discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of deferred note issue costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5,624
4,582
641

$ 5,625
4,264
641

Total interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$10,847

$10,530

Secured bank credit facility. Our amended and restated senior secured bank credit facility, as further amended

(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 bank credit facility at
any time before maturity without penalty. Debt under the bank 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 bank credit facility, the lenders have a security interest in substantially all of our assets.

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)

Our 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 and engage in any business other than consulting related businesses.
The bank 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 bank credit facility. At December 31, 2009, we were in
compliance with all covenants as stipulated in the bank credit facility and the indentures governing our senior
notes. No borrowings were outstanding under the bank credit facility at December 31, 2009 or December 31,
2008. However, $3.8 million and $9.2 million of the borrowing limit was used (and, therefore, unavailable) as of
December 31, 2009 and 2008, respectively, for letters of credit.

Notes payable to shareholders of acquired business. In connection with the acquisition of FD International
(Holdings) Limited in October 2006 (“FD”), we issued notes to former holders of FD capital shares who elected
to receive notes in lieu of cash for acquisition and earn-out consideration. These notes are unsecured and bear
interest based on the London Interbank Offered Rate, or LIBOR, that compounds quarterly. These notes are
redeemable at any time prior to their maturity and accordingly they have been classified as a current obligation.
The outstanding balance of these notes was $1.1 million at December 31, 2009 and was minimal at December 31,
2008.

Guarantees. Currently, we do not have any debt guarantees related to entities outside of the consolidated

group. As of December 31, 2009, substantially all of our domestic subsidiaries are guarantors of borrowings
under our bank credit facility, our senior notes and our convertible notes in the amount of $565 million.

Future Maturities of Long-Term Debt

For years subsequent to December 31, 2009, scheduled annual maturities of long-term debt outstanding as

of December 31, 2009 are as follows. Long-term debt that is callable by the holder has been classified as
maturing in 2010 on the following table and includes the $149.9 million principal amount of Convertible Notes
and $1.1 million of notes payable to shareholders of an acquired business.

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter

Long-term
Debt (a)

$151,072
—
—
200,000
—
215,000

566,072

Less imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

Capital
Lease
Obligations

$566
253
50
—
—
—

869

55

Total

$151,638
253
50
200,000
—
215,000

566,941

55

(a)

Principal balance does not include unamortized proceeds from interest rate swap termination or the discount
or conversion premium on Convertible Notes.

$566,072

$814

$566,886

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)

15. Commitments and Contingencies

Operating Lease Commitments

Rental expense, net of rental income was $49.5 million during 2009, $44.8 million during 2008 and $35.8
million during 2007. For years subsequent to December 31, 2009, future minimum payments for all operating
lease obligations that have initial non-cancelable lease terms exceeding one year, net of rental income from
subleases of $1.4 million in 2010, $0.5 million in 2011, and $0.1 million in 2012 are as follows:

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating
Leases

$ 38,625
36,761
32,620
28,893
26,354
134,132
$297,385

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, 2009

December 31, 2008

Asset

Liability

Asset

Liability

Current deferred tax assets (liabilities)

Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . .
Accrued vacation and bonus . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current deferred tax assets (liabilities) . . . . . . . . . . . . . . . .
Long-term deferred assets (liabilities)

Property, equipment and capitalized software . . . . . . . . . . . . .
Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes receivable from employees . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill and other intangible asset amortization . . . . . . . . . .
Convertible debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . .
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total long-term deferred tax assets (liabilities) . . . . . . . . . . . . . .

$ 8,684
9,586
2,412
—
20,682

—
14,386
12,733
14,205
1,838
—

—
—
683
$43,845

$

$

— $ 8,574
12,260
—
2,980
—
558
(206)
24,372
(206)

—
—
—
—
—

2,097
11,537
9,510
9,998
4,388
—

(1,152)
—
—
—
—
(965)
(131,022)
(5,209)
(1,201)
—

—
—
684
$(139,549) $38,214

—
—
—
—
—
(1,260)
(113,758)
(6,973)
—
—

$(121,991)

$ (59,405)

Total deferred tax assets (liabilities) . . . . . . . . . . . . . . . . . . . . . . .

$ (75,228)

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)

As of December 31, 2009, we have not recorded a $14.3 million deferred tax liability related to the tax basis

difference in the investment in our foreign subsidiaries as the investment is considered permanent in duration.

We also have $1.8 million of foreign tax credit carryforwards that begin to expire in 2019. Based upon

current levels of foreign source income and foreign income taxes, we expect to use the $1.8 million of credits
prior to their expiration.

We have not established a valuation allowance for any of our deferred tax assets as we expect that future
taxable income as well as the reversal of temporary differences will enable us to fully utilize our deferred tax
assets.

The components of “Income before income tax provision” from continuing operations are as follows:

Year Ended December 31,

2009

2008

2007

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$194,155
32,870

$143,505
54,916

$107,016
34,866

$227,025

$198,421

$141,882

The components of the income tax provision from continuing operations are as follows:

Year Ended December 31,

2009

2008

2007

Current

Federal
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$42,911
14,379
9,743

$58,075
13,313
11,838

$39,328
10,275
11,715

67,033

83,226

61,318

Deferred

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$15,865
2,353
(1,252)

$ (5,968) $ (4,639)
(1,131)
—

257
—

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

$83,999

$77,515

$55,548

16,966

(5,711)

(5,770)

Our income tax provision from continuing operations resulted in effective tax rates that varied from the

statutory federal income tax rate as follows:

Federal income tax provision at statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net of federal benefit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill amortization on foreign acquisitions deductible for U.S. tax

Year Ended December 31,

2009

2008

2007

35.0%
4.8

35.0%
4.3

35.0%
4.2

purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses not deductible for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2.2)
0.8
(1.4)

(2.4)
2.2
—

(3.2)
2.9
0.3

37.0%

39.1%

39.2%

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)

At December 31, 2009, we had a net income tax payable of $6.3 million as compared to a net income tax

receivable of $4.9 million at December 31, 2008.

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 2006 and are no longer subject to state and local or foreign tax examinations by tax authorities for years
prior to 2004. 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 2009, 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, 2009, our accrual for the payment of tax-related interest and penalties was not material. 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. Our liability for uncertain tax
positions was $0.4 million and $0.1 million at December 31, 2009 and 2008, respectively.

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 our 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 discounts 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.

Common Stock Repurchase Program

On November 4, 2009, our Board of Directors authorized a two-year stock repurchase program of up to
$500.0 million and terminated the $50.0 million stock repurchase program authorized in February 2009. On
November 9, 2009, we entered into an accelerated share buyback agreement (“ASB Agreement”) with an
investment bank. On the same day, FTI and the investment bank executed a supplemental confirmation to effect a
$250.0 million accelerated stock buyback transaction under the ASB Agreement.

On November 12, 2009, FTI paid $250.0 million to the investment bank and received a substantial majority

of the shares to be delivered by the investment bank in the accelerated buyback transaction. On December 10,
2009, FTI received additional shares bringing the total shares delivered in 2009 to 4,874,807 shares of FTI
common stock. This transaction was accounted for as two separate transactions, a share repurchase and a forward
contract indexed to our own stock.

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)

The repurchase of shares was accounted for as a share retirement resulting in a reduction of common stock

issued and outstanding of 4,874,807 shares and a corresponding reduction in common stock and additional
paid-in capital of $250.0 million. Final settlement of the repurchase transaction was scheduled for no later than
July 9, 2010 and could occur earlier at the option of the investment bank or later under certain circumstances. On
January 22, 2010, FTI received notice that the investment bank exercised its rights to terminate the accelerated
buyback transaction. As a result, FTI received an additional 580,784 shares of common stock in January 2010,
bringing the total shares repurchased pursuant to the accelerated buyback transaction to 5,455,591 shares at a
purchase price of $45.82 per share. No cash was required to complete the final delivery of shares. The additional
shares received were accounted for as a share retirement in the first quarter of 2010.

For the year ended December 31, 2009, the forward contract was anti-dilutive as the forward contract
represented a contingent number of shares that would be delivered to FTI by the investment bank. As the shares
were anti-dilutive, their impact was not considered in the computation of earnings per share for the year ended
December 31, 2009 in accordance with the guidance of ASC 260, Earnings Per Share. The shares were removed
from the count used for the calculation of earnings per share after delivery to FTI.

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 and/or Roth post-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 contributions are limited to a percent of the participant’s
eligible compensation. FTI matches each participant’s eligible 401(k) plan contributions up to the annual limit
specified by the Internal Revenue Service. We made contributions related to the plan of $7.8 million during
2009, $7.1 million during 2008 and $5.6 million during 2007.

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 FTI in independently
administered funds. We contributed $4.9 million to these plans during 2009, $4.7 million during 2008, and $4.4
million during 2007.

19. Segment Reporting

We manage our business in five reportable operating segments: Corporate Finance/Restructuring, Forensic

and Litigation Consulting, Economic Consulting, Technology and Strategic Communications.

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

of businesses around the world and provides consulting and advisory services on a wide range of areas, including
restructuring (including bankruptcy), financings, claims management, mergers and acquisitions, post-acquisition
integration, valuations, tax issues and performance improvement.

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

other interested parties with dispute advisory, investigations, forensic accounting, business intelligence
assessments and risk mitigation services.

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

parties with 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.

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)

Our Technology segment is a leading electronic discovery and information management software and
service provider. It provides products, services and consulting to companies, law firms, courts and government
agencies worldwide. Its comprehensive suite of software and services help clients locate, review and produce
electronically stored information, including e-mail, computer files, voicemail, instant messaging, and financial
and transactional data.

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

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

amortization of other intangible assets, 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 direct costs, such as
information technology services, accounting, marketing, human resources 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 segment employee cash incentive compensation.

The table below presents revenues and segment EBITDA for our reportable segments for the three years

ended December 31, 2009:

Year Ended December 31,

2009

2008

2007

Revenues

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

$ 514,260
259,204
234,723
211,680
180,079

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

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

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

$1,399,946

$1,293,145

$1,001,270

Segment EBITDA

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

$ 175,551
59,581
47,845
75,715
24,941

$ 114,178
57,493
59,020
73,506
51,853

$

71,629
57,292
48,085
62,921
44,248

Total segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 383,633

$ 356,050

$ 284,175

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 table below reconciles segment EBITDA to income before income tax provision. Unallocated corporate

expenses include primarily indirect costs related to centrally managed administrative functions which have not
been allocated to the segments. These administrative costs include costs related to executive management, legal,
corporate office support costs, information technology, accounting, marketing, human resources, and company-
wide business development functions.

Year Ended December 31,

2009

2008

2007

Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated corporate expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate litigation settlement gains (losses)

$383,633
(22,737)
(24,701)
(72,655)
8,158
(44,923)
250

$356,050
(20,342)
(18,824)
(81,973)
8,840
(45,105)
(225)

$284,175
(14,582)
(10,615)
(77,344)
8,091
(47,639)
(204)

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

$227,025

$198,421

$141,882

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Economic Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Strategic Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated corporate assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,

2009

2008

$ 547,091
320,720
356,432
238,136
436,571

1,898,950
178,388

$ 556,638
297,785
322,047
266,405
397,482

1,840,357
243,220

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,077,338

$2,083,577

The table below details information on our revenues for the three years ended December 31, 2009. 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 legal entity generating the revenue.

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All foreign countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,154,112
245,834

$1,056,616
236,529

$ 838,941
162,329

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

$1,399,946

$1,293,145

$1,001,270

Year Ended December 31,

2009

2008

2007

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)

The table below details information on our long-lived assets at December 31, 2009 and 2008. Long-lived

assets have been attributed to geographic location based on the location of the legal entity holding the assets.

December 31, 2009

December 31, 2008

United
States

All foreign
countries

United
States

All foreign
countries

Property and equipment, net

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

$69,028

$11,650

$69,547

$9,028

20. Supplemental Condensed Consolidating Guarantor and Non-Guarantor Financial Information

Substantially all of our U.S. 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.

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)

Condensed Consolidating Balance Sheet Information as of December 31, 2009

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

$

60,720
102,768
58,969
69,871

292,328
46,298
426,314
8,465
1,382,550
60,396

$

665
143,146
335,933
17,972

497,716
22,728
530,809
118,756
882,833
161,813

$

57,487
41,628
120,210
8,007

227,332
11,652
238,826
48,741
778,478
14,104

$

— $ 118,872
287,542
—
—
93,501

(515,112)
(2,349)

(517,461)

—
—
—

(3,043,861)
(111,479)

499,915
80,678
1,195,949
175,962
—
124,834

Total assets . . . . . . . . . . . . .

$2,216,351

$2,214,655

$1,319,133

$(3,672,801) $2,077,338

Liabilities

Intercompany payables . . . . . . . . .
Other current liabilities . . . . . . . . .

$ 319,905
265,053

$

Total current liabilities . . . .
Long-term debt, net
. . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . .

584,958
417,012
110,167

99,833
92,350

192,183
385
37,671

$

95,374
51,148

146,522
—
113,166

$ (515,112) $

(2,349)

(517,461)

—

(111,479)

—
406,202

406,202
417,397
149,525

Total liabilities . . . . . . . . . . .
Stockholders’ equity . . . . . . . . . . . . . .

1,112,137
1,104,214

230,239
1,984,416

259,688
1,059,445

(628,940)
(3,043,861)

973,124
1,104,214

Total liabilities and

stockholders’ equity . . . .

$2,216,351

$2,214,655

$1,319,133

$(3,672,801) $2,077,338

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)

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
51,748

345,762
45,089
416,302
4,284
1,194,329
62,188

$

11,663
164,198
173,048
22,512

371,421
24,457
534,100
138,976
820,163
146,431

$

48,767
37,983
91,030
8,111

185,891
9,029
193,059
46,044
742,167
8,538

$

— $ 191,842
290,040
—
—
74,506

(338,821)
(7,865)

(346,686)

—
—
—

(2,756,659)
(101,308)

556,388
78,575
1,143,461
189,304
—
115,849

Total assets . . . . . . . . . . . . .

$2,067,954

$2,035,548

$1,184,728

$(3,204,653) $2,083,577

Liabilities

Intercompany payables . . . . . . . . .
Other current liabilities . . . . . . . . .

$ 178,994
251,939

$

Total current liabilities . . . .
Long-term debt, net
. . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . .

430,933
417,883
91,581

83,024
111,581

194,605
709
35,557

Total liabilities . . . . . . . . . . .
Stockholders’ equity . . . . . . . . . . . . . .

940,397
1,127,557

230,871
1,804,677

$

76,803
52,959

129,762
—
102,984

232,746
951,982

$ (338,821) $

(7,865)

(346,686)

—

(101,308)

—
408,614

408,614
418,592
128,814

(447,994)
(2,756,659)

956,020
1,127,557

Total liabilities and

stockholders’ equity . . . .

$2,067,954

$2,035,548

$1,184,728

$(3,204,653) $2,083,577

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)

Condensed Consolidated Income Statement for the Year Ended December 31, 2009

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

$592,986

$1,179,633

$255,582

$(628,255) $1,399,946

320,521

907,558

159,764

(620,456)

767,387

159,449

139,265

53,403

(7,799)

344,318

assets . . . . . . . . . . . . . . . . . . . . . .

1,604

17,865

5,232

—

24,701

481,574

1,064,688

218,399

(628,255)

1,136,406

Operating income . . . . . . . . . . . . . . . . .
Other income (expense) . . . . . . . . . . . .

111,412
(40,294)

Income before income tax

provision . . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . .
Equity in net earnings of

71,118
28,595

114,945
12,656

127,601
51,305

37,183
(8,877)

28,306
4,099

—
—

—
—

263,540
(36,515)

227,025
83,999

subsidiaries . . . . . . . . . . . . . . . . . . . .

100,503

19,946

8,816

(129,265)

—

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

$143,026

$

96,242

$ 33,023

$(129,265) $ 143,026

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

872,746

136,127

(576,381)

708,783

165,370

122,021

50,339

(7,539)

330,191

assets . . . . . . . . . . . . . . . . . . . . . .

1,125

12,438

5,261

—

18,824

442,786

1,007,205

191,727

(583,920)

1,057,798

Operating income . . . . . . . . . . . . . . . . .
Other income (expense) . . . . . . . . . . . .

51,133
(40,675)

Income before income tax

provision . . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . .
Equity in net earnings of

10,458
4,663

136,315
6,724

143,039
62,010

47,899
(2,975)

44,924
10,842

—
—

—
—

235,347
(36,926)

198,421
77,515

subsidiaries . . . . . . . . . . . . . . . . . . . .

115,111

34,370

10,428

(159,909)

—

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

$120,906

$ 115,399

$ 44,510

$(159,909) $ 120,906

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)

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

571,375

87,342

(411,044)

552,347

expense . . . . . . . . . . . . . . . . . . . . . .

179,633

35,381

43,167

(2,305)

255,876

Amortization of other intangible

assets . . . . . . . . . . . . . . . . . . . . . . .

2,006

5,028

3,581

—

10,615

486,313

611,784

134,090

(413,349)

818,838

Operating income . . . . . . . . . . . . . . . . . . .
Other income (expense) . . . . . . . . . . . . . .

Income before income tax provision . . .
Income tax provision . . . . . . . . . . . . . . . .
Equity in net earnings of subsidiaries . .

58,047
(42,495)

15,552
6,297
77,079

89,637
2,544

92,181
37,640
25,299

34,748
(599)

34,149
11,611
2,755

—
—

—
—

(105,133)

182,432
(40,550)

141,882
55,548
—

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

$ 86,334

$ 79,840

$ 25,293

$(105,133) $

86,334

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 Statement of Cash Flows for the Year Ended December 31, 2009

FTI
Consulting, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Consolidated

Operating activities

Net cash provided by operating activities . . . . . . . . . . .

$ 55,941

$ 176,239

$18,589

$ 250,769

Investing activities

Payments for acquisition of businesses, net of cash

received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(44,880)

952

(2,782)

(46,710)

Purchases of short-term investments, net of

sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property and equipment and other . . . . . .

(15,141)
(8,284)

—
(13,637)

Net cash used in investing activities . . . . . . . . . . .

(68,305)

(12,685)

—
(6,116)

(8,898)

(15,141)
(28,037)

(89,888)

Financing activities

Payments of long-term debt and capital lease

obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash received for settlement of interest rate swaps . . .
Purchase and retirement of common stock . . . . . . . . . .
Issuance of common stock and other
. . . . . . . . . . . . . .
Excess tax benefits from share based equity . . . . . . . . .
Intercompany transfers . . . . . . . . . . . . . . . . . . . . . . . . .

(12,967)
2,288
(250,000)
16,002
5,193
181,156

(794)
—
—
—
—

(173,758)

Net cash used in financing activities . . . . . . . . . . .

(58,328)

(174,552)

Effects of exchange rate changes and fair value adjustments
on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . .

—

—

Net (decrease) increase in cash and cash equivalents . . .
Cash and cash equivalents, beginning of year . . . . . . . . .

(70,692)
131,412

(10,998)
11,663

—
—
—
—
—
(7,398)

(7,398)

6,427

8,720
48,767

(13,761)
2,288
(250,000)
16,002
5,193
—

(240,278)

6,427

(72,970)
191,842

Cash and cash equivalents, end of year . . . . . . . . . . . . . .

$ 60,720

$

665

$57,487

$ 118,872

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 Statement of Cash Flow Information for the Year Ended December 31, 2008

Operating activities

Net cash provided by operating activities . . . . . . .

$ 72,352

$ 70,977

$ 54,151

$ 197,480

FTI
Consulting, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Consolidated

Investing activities

Payments for acquisition of businesses, net of

cash received . . . . . . . . . . . . . . . . . . . . . . . . . . .

(333,830)

(2,700)

(6,639)

(343,169)

Purchases of property and equipment and

other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(15,464)

(9,068)

(6,439)

(30,971)

Net cash used in investing activities . . . . . . .

(349,294)

(11,768)

(13,078)

(374,140)

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

—
(8,261)
20,450
10,820
56,785

(2,275)
(483)
—
—
(46,061)

—
—
—
—
(10,724)

(2,275)
(8,744)
20,450
10,820
—

activities . . . . . . . . . . . . . . . . . . . . . . . . . . .

79,794

(48,819)

(10,724)

20,251

Effects of exchange rate changes and fair value

adjustments on cash and cash equivalents . . . . . . . . .

55

—

(12,267)

(12,212)

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

(168,621)
360,463

Cash and cash equivalents, end of year . . . . . . . . . . .

$ 131,412

$ 11,663

$ 48,767

$ 191,842

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 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

$ 9,283

$ 68,350

Investing activities

Payments for acquisition of businesses, net of cash

received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . .

Purchases of property and equipment and other

(1,402)
(27,890)

(8,466)
(2,897)

(21,989)
(5,153)

Net cash used in investing activities . . . . . . . . . .

(29,292)

(11,363)

(27,142)

Financing activities

Capital contributions . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and retirement of common stock . . . . . . . . .
Intercompany transfers . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(313,649)
(18,118)
318,292
231,408
56,363

260,821

—

(297,353)

—
—

52,828
—
(20,939)
—
—

(31,857)
(35,940)

(67,797)

—
(18,118)
—
231,408
56,363

Net cash provided by (used in) financing

activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

274,296

(36,532)

31,889

269,653

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

(1,666)

268,540
91,923

Cash and cash equivalents, end of year . . . . . . . . . . . . . . $ 328,505 $

1,273

$ 30,685

$360,463

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)

21. Quarterly Financial Data (unaudited)

Quarter Ended

March 31

June 30

September 30 December 31

2009

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

$347,846

$360,525

$348,637

342,938

Operating expenses

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

192,412
88,753
6,050

194,181
88,842
6,149

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

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

287,215

289,172

60,631
2,053
(11,013)
250

51,921
20,249

71,353
702
(11,030)
—

61,025
23,800

193,204
84,976
6,171

284,351

64,286
3,330
(11,434)
—

56,182
18,626

187,590
81,747
6,331

275,668

67,270
2,073
(11,446)
—

57,897
21,324

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

$ 31,672

$ 37,225

$ 37,556

$ 36,573

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

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

$

$

0.63

0.60

$

$

0.74

0.69

$

$

0.74

0.70

$

$

0.75

0.71

Weighted average common shares outstanding

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

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

50,171

52,979

50,384

53,835

50,696

53,896

48,612

51,433

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

173,404
72,697
2,898

188,990
77,779
4,457

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

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

248,999

271,226

58,103
3,545
(11,599)
(1)

50,048
19,852

66,444
2,049
(11,307)
(435)

56,751
22,543

175,309
91,513
5,664

272,486

53,011
1,942
(10,942)
(275)

43,736
17,383

171,080
88,202
5,805

265,087

57,789
1,304
(11,257)
50

47,886
17,737

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

$ 30,196

$ 34,208

$ 26,353

$ 30,149

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

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

$

$

0.62

0.57

$

$

0.70

0.64

$

$

0.53

0.48

$

$

0.61

0.56

Weighted average common shares outstanding

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

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

48,325

52,717

49,155

53,700

49,541

54,460

49,738

53,411

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.

117

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, 2009 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

118

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 2010 Annual Meeting of Stockholders to be filed within 120 days
after the end of our fiscal year ended December 31, 2009, 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 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. 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 a copy of our Code of Ethics without charge upon request to our
Corporate Secretary, FTI Consulting, Inc., 500 East Pratt Street, Suite 1400, Baltimore, Maryland 21202.

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.

119

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, 2009 and 2008

Consolidated Statements of Income — Years Ended December 31, 2009, 2008 and 2007

Consolidated Statements of Stockholders’ Equity and Comprehensive Income — Years Ended
December 31, 2009, 2008 and 2007

Consolidated Statements of Cash Flows — Years Ended December 31, 2009, 2008 and 2007

Notes to Consolidated Financial 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.

120

FTI Consulting, Inc. and Subsidiaries

Schedule II — Valuation and Qualifying Accounts
(in thousands)

Balance
at
Beginning
of Period

Additions

Charged
to
Expense

Charged
to Other
Accounts *

Balance
at End
of
Period

Deductions **

Description

Year Ended December 31, 2009

Reserves and allowances deducted from asset

accounts:

Allowance for doubtful accounts and

unbilled services . . . . . . . . . . . . . . . . . . . .

$45,309

$19,866

$11,513

$17,360

$59,328

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

*

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.

121

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.)

122

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 Columbia
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.)

123

Exhibit
Number

3.2

3.3

3.4

4.1

4.2

4.3

4.4

4.5

4.6

4.7

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.)

Amendment No. 7 to By-Laws of FTI Consulting, Inc. dated as of February 25, 2009. (Filed with the
Securities and Exchange Commission on March 3, 2009 as an exhibit to FTI Consulting, Inc.’s
Current Report on Form 8-K dated February 25, 2009 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.)

124

Exhibit
Number

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

Description of Exhibits
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., a District of
Columbia 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 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.)

125

Exhibit
Number

4.16

4.17

4.18

4.19

4.20

4.21

4.22

Description of Exhibits
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
Columbia 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.)

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
Columbia 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 Columbia 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.)

126

Exhibit
Number

4.23

4.24

4.25

4.26

4.27

4.28

Description of Exhibits
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.)
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.)

127

Exhibit
Number

4.29

4.30

4.31

4.32

4.33

10.1*

10.2*

10.3*

Description of Exhibits
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.)
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.)
Ninth Supplemental Indenture relating to 7 5⁄ 8% Senior Notes due 2013, dated as of May 15, 2009,
among FTI CXO Acquisition LLC, a Maryland limited liability company, and FTI Consulting
Canada LLC, a Maryland 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 August 10, 2009 as an
exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009
and incorporated herein by reference.)
Ninth Supplemental Indenture relating to 3 3⁄4% Convertible Senior Subordinated Notes due July 15,
2012, dated as of May 15, 2009, among FTI CXO Acquisition LLC, a Maryland limited liability
company, and FTI Consulting Canada LLC, a Maryland 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
August 10, 2009 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2009 and incorporated herein by reference.)
Fifth Supplemental Indenture relating to 7 3⁄4% Senior Notes due 2016, dated as of May 12, 2009,
among FTI CXO Acquisition LLC, a Maryland limited liability company, and FTI Consulting
Canada LLC, a Maryland 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 August 10, 2009 as an
exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009
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.)

128

Exhibit
Number

10.4*

10.5*

10.6*

10.7**

10.8**

10.9**

10.10

10.11

10.12

10.13

Description of Exhibits

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.)

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.)

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.)

129

Exhibit
Number

10.14*

10.15*

10.16*

10.17*

10.18*

10.19*

10.20*

10.21*

10.22*

10.23*

10.24*

Description of Exhibits

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.)

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.)

130

Exhibit
Number

10.25*

10.26*

10.27*

10.28*

10.29*

10.30*

10.31*

10.32*

10.33*

10.34*

10.35*

10.36*

Description of Exhibits

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.)

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.)

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.)

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.)

131

Exhibit
Number

10.37*

10.38*

10.39**

10.40*

10.41*

10.42*

10.43*

10.44*

10.45*

10.46*

10.47*

Description of Exhibits

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.)

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.)

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.)

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.)

132

Exhibit
Number

10.48*

10.49*

10.50*

10.51*

10.52*

10.53**

10.54**

10.55**

10.56

10.57**

Description of Exhibits

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.)

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.)

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.)

Amended and Restated Pledge Agreement dated as of September 29, 2006, by and among the
parties 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.)

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.)

133

Exhibit
Number

10.58*

10.59*

10.60*

10.61*

10.62*

10.63*

10.64*

10.65

10.66*

10.67*

10.68*

Description of Exhibits

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.)

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.)

134

Exhibit
Number

10.69*

10.70*

10.71*

10.72*

10.73*

10.74*

10.75*

10.76*

10.77*

10.78*

Description of Exhibits

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 and
incorporated herein by reference.)

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.)

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.)

135

Exhibit
Number

10.79*

10.80*

10.81**

10.82**

10.83*

10.84*

10.85** *

10.86*

10.87*

10.88*

Description of Exhibits

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.)

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.)

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.)

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.)

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. (Filed with the Securities and Exchange
Commission on March 2, 2009 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form
10-K for the year ended December 31, 2008 and incorporated herein by reference.)

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. (Filed with
the Securities and Exchange Commission on March 2, 2009 as an exhibit to FTI Consulting, Inc.’s
Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by
reference.)

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. (Filed with the
Securities and Exchange Commission on March 2, 2009 as an exhibit to FTI Consulting, Inc.’s
Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by
reference.)

136

Exhibit
Number

10.89** *

10.90*

10.91*

10.92*

10.93*

10.94*

10.95*

10.96*

10.97*

10.98*

10.99*

Description of Exhibits

Employment Agreement by and among, FD U.S. Communications, Inc., FTI Consulting, Inc. and
Declan Kelly. (Filed with the Securities and Exchange Commission on March 2, 2009 as an
exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31,
2008 and incorporated herein by reference.)

Amendment as of August 1, 2008 to the Employment Agreement by and among, FD U.S.
Communications, Inc., FTI Consulting, Inc. and Declan Kelly. (Filed with the Securities and
Exchange Commission on March 2, 2009 as an exhibit to FTI Consulting, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2008 and incorporated herein by reference.)

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. (Filed with the Securities and
Exchange Commission on March 2, 2009 as an exhibit to FTI Consulting, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2008 and incorporated herein by reference.)

Amendment made and entered into as of December 31, 2008 to Offer Letter dated June 14, 2007
to and accepted by Jorge A. Celaya. (Filed with the Securities and Exchange Commission on
March 2, 2009 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year
ended December 31, 2008 and incorporated herein by reference.)

Employment Letter dated as of December 31, 2008 to and accepted by Roger Carlile. (Filed with
the Securities and Exchange Commission on March 2, 2009 as an exhibit to FTI Consulting, Inc.’s
Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by
reference.)

Offer Letter dated April 26, 2006 to and accepted by Eric B. Miller. (Filed with the Securities and
Exchange Commission on March 2, 2009 as an exhibit to FTI Consulting, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2008 and incorporated herein by reference.)

Amendment made and entered into as of December 31, 2008 to Offer Letter dated April 26, 2006
to and accepted by Eric B. Miller. (Filed with the Securities and Exchange Commission on
March 2, 2009 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year
ended December 31, 2008 and incorporated herein by reference.)

Amendment No. 1dated March 31, 2009 to the 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 5, 2009 as an exhibit to FTI Consulting, Inc.’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 and incorporated herein by
reference.)

Amendment No. 3 to Employment Agreement made and entered into as of January 2, 2009 by and
between FTI Consulting, Inc. and Dennis J. Shaughnessy. Schedules to Amendment No. 3 to the
Employment Agreement are not filed. FTI Consulting Inc. will furnish supplementally a copy of
any omitted schedule to the SEC upon request. (Filed with the Securities and Exchange
Commission on May 5, 2009 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2009 and incorporated herein by reference.)

FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan (Filed with the Securities and
Exchange Commission on April 23, 2009 as an exhibit to FTI Consulting, Inc.’s Proxy Statement
and incorporated herein by reference.)

Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Incentive Stock Option
Agreement. (Filed with the Securities and Exchange Commission on June 3, 2009 as an exhibit to
FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009 and incorporated herein by
reference).

137

Exhibit
Number

10.100*

10.101*

10.102*

10.103*

10.104*

Description of Exhibits

Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Restricted Stock
Agreement. (Filed with the Securities and Exchange Commission on June 3, 2009 as an exhibit to
FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009 and incorporated herein by
reference).

Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Restricted Stock Unit
Agreement for Non-Employee Directors. (Filed with the Securities and Exchange Commission on
June 3, 2009 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009
and incorporated herein by reference).

Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Stock Unit Agreement
for Non-Employee Directors. (Filed with the Securities and Exchange Commission on June 3, 2009
as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009 and
incorporated herein by reference).

Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Restricted Stock
Agreement for Non-Employee Directors. (Filed with the Securities and Exchange Commission on
June 3, 2009 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009
and incorporated herein by reference).

Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Nonstatutory Stock
Option Agreement. (Filed with the Securities and Exchange Commission on June 3, 2009 as an
exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009 and incorporated
herein by reference).

10.105*‡

Separation Agreement dated as of July 27, 2009, by and among FD U.S. Communications, Inc., FTI
Consulting, Inc. and Declan Kelly (Filed with the Securities and Exchange Commission on
November 6, 2009 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2009 and incorporated herein by reference).

10.106‡** Master Confirmation Accelerated Share Buyback Agreement dated November 9, 2009. (Filed with
the Securities and Exchange Commission on November 13, 2009 as an exhibit to FTI Consulting,
Inc.’s Current Report on Form 8-K dated November 9, 2009 and incorporated herein by reference).

10.107‡** Supplemental Confirmation dated November 9, 2009. (Filed with the Securities and Exchange

Commission on November 13, 2009 as an exhibit to FTI Consulting, Inc.’s Current Report on Form
8-K dated November 9, 2009 and incorporated herein by reference).

11.1†

14.0

21.1†

23.0†

31.1†

31.2†

32.1†

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).

138

Exhibit
Number

32.2†

99.1

99.2

99.3

99.4†

99.5

99.6†

99.7†

99.8†

99.9

Description of Exhibits

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. (Filed with
the Securities and Exchange Commission on March 2, 2009 as an exhibit to FTI Consulting, Inc.’s
Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by
reference.)

Policy Statement on Inside Information and Insider Trading, as last amended and restated effective as
of May 14, 2008. (Filed with the Securities and Exchange Commission on March 2, 2009 as an
exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008
and incorporated herein by reference.)

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 December 16, 2009.

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 16, 2009.

Charter of the Compensation Committee, as last amended and restated effective as of December 16,
2009.

Charter of the Nominating and Corporate Governance Committee, as last amended and restated
effective as of December 16, 2009.

Anti-Corruption Policy effective as of August 1, 2007. (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.)

* 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.

‡

Certain portion of this Exhibit have been omitted and filed separately with the Securities and Exchange
Commission pursuant to our request for confidential treatment under Rule 24b-2 of the Securities Act of
1933, as amended, which was granted by the Securities and Exchange Commission on January 11, 2010.

139

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 26th day of February 2010.

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

February 26, 2010

Dennis J. Shaughnessy

/S/

JACK B. DUNN, IV
Jack B. Dunn, IV

/S/

JORGE A. CELAYA
Jorge A. Celaya

Chief Executive Officer and
President and Director
(Principal Executive Officer)

Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)

February 26, 2010

February 26, 2010

/S/ CATHERINE M. FREEMAN

Catherine M. Freeman

Senior Vice President, Controller
and Chief Accounting Officer
(Principal Accounting Officer)

February 26, 2010

/S/ BRENDA J. BACON

Brenda J. Bacon

/S/ MARK H. BEREY

Mark H. Berey

Director

Director

February 26, 2010

February 26, 2010

/S/ DENIS J. CALLAGHAN

Director

February 26, 2010

Denis J. Callaghan

/S/

JAMES W. CROWNOVER
James W. Crownover

Director

February 26, 2010

/S/ GERARD E. HOLTHAUS

Director

February 26, 2010

Gerard E. Holthaus

/S/ MATTHEW F. MCHUGH

Director

February 26, 2010

Matthew F. McHugh

/S/ GEORGE P. STAMAS

Director

February 26, 2010

George P. Stamas

140

Exhibit 21.1

Schedule of Subsidiaries of FTI Consulting, Inc.

Name

Jurisdiction of Incorporation

85Four Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . England and Wales

Financial Dynamics GmbH (fka A & B Financial

Dynamics gmbh) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Germany

Attenex Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . Washington

FD Media and Investor Relations Pty Ltd. (fka
Beachhead Media and Investor Relations
(Proprietary) Limited) . . . . . . . . . . . . . . . . . . . . . . . .

S. Africa

Blueprint Partners SA . . . . . . . . . . . . . . . . . . . . . . . . . . Belgium

Brewer Consulting Limited . . . . . . . . . . . . . . . . . . . . . . England And Wales

Compass Lexecon LLC (fka Lexecon, LLC) (fka LI

Acquisition Company, LLC) . . . . . . . . . . . . . . . . . . . Maryland

Competition Policy Associates, Inc.

. . . . . . . . . . . . . . . District of Columbia

FCN Holdings CV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Netherlands

FD (Beijing) Consulting Co., Ltd. . . . . . . . . . . . . . . . . . Beijing

FD Australia Holdings Pty Ltd . . . . . . . . . . . . . . . . . . . Victoria, Australia

FD Gulf Limited (fka FD Dubai Limited) . . . . . . . . . . England and Wales

FD India Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . England and Wales

FD International Ltd.

. . . . . . . . . . . . . . . . . . . . . . . . . . England and Wales

FD MWA Holdings Inc. . . . . . . . . . . . . . . . . . . . . . . . . . Delaware

FD Russia Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . England and Wales

FD Singapore PTE Ltd. . . . . . . . . . . . . . . . . . . . . . . . . .

Singapore

FD Third Person Pty Limited (fkaThird 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 Inc. (fka Watson, Edgar,

Bishop, Meakin & Aquirre Inc.) . . . . . . . . . . . . . . . . British Columbia

FTI Consulting Canada LLC . . . . . . . . . . . . . . . . . . . . Maryland

FTI Consulting Canada ULC . . . . . . . . . . . . . . . . . . . . British Columbia

FTI Consulting Colombia S.A.S.

. . . . . . . . . . . . . . . . . Colombia

FTI Consulting Deutschland GmbH . . . . . . . . . . . . . . Germany

FTI Consulting Deutschland Holding GmbH.

. . . . . . Germany

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 Economic Consulting ULC . . . . . . . . . . . . . . . . . . British Columbia

FTI Financial Services Limited (fka Hoodwell

Limited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . England and Wales

FTI Forensic Accounting Limited (fka Forensic

Accounting Partners Limited)

. . . . . . . . . . . . . . . . . England and Wales

FTI France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

France

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 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

FD Gravitas Ltda. (fka 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 Limited (fka LLM

Communications Limited) . . . . . . . . . . . . . . . . . . . . . England and Wales

Orion Technology Comercio e Servicos LTDA . . . . . . Brazil

FD Sante Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . England and Wales

Tecnologia Servicos e Comércio 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

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Exhibit 23.0

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, 333-134793 and 333-
134790 on Forms S-8 and registration statement No. 333-129715 on Form S-3 of FTI Consulting, Inc. of our
reports dated February 26, 2010, with respect to the consolidated balance sheets of FTI Consulting, Inc. as of
December 31, 2009 and 2008, 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, 2009
and related financial statement schedule, and the effectiveness of internal control over financial reporting as of
December 31, 2009, which reports appear in the December 31, 2009 Annual Report on Form 10-K of FTI
Consulting, Inc.

As discussed in Note 2, the Company adopted the provisions of Accounting Standards Codification 470-20,

Debt with Conversion and Other Options (“ASC 470-20”) (formerly FSP APB 14-1) for convertible debt
instruments that have cash settlement features on January 1, 2009. The provisions of ASC 470-20 are
retrospective upon adoption, and prior period amounts have been adjusted to apply the new method of
accounting.

/s/ KPMG LLP

Baltimore, Maryland
February 26, 2010

Certification of Principal Executive Officer

Pursuant to Rule 13a-14(a)

(Section 302 of the Sarbanes-Oxley Act of 2002)

Exhibit 31.1

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: February 26, 2010

By:

/s/ JACK B. DUNN, IV
Jack B. Dunn, IV
President and Chief Executive Officer
(principal executive officer)

Certification of Principal Financial Officer

Pursuant to Rule 13a-14(a)

(Section 302 of the Sarbanes-Oxley Act of 2002)

Exhibit 31.2

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: February 26, 2010

By:

/s/ JORGE A. CELAYA

Jorge A. Celaya
Executive Vice President and
Chief Financial Officer
(principal financial officer)

Certification of Principal Executive Officer

Pursuant to 18 USC. Section 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

Exhibit 32.1

In connection with the Annual Report of FTI Consulting, Inc. (the “Company”) on Form 10-K for the year

ended December 31, 2009, 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: February 26, 2010

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.

Certification of Principal Financial Officer

Pursuant to 18 USC. Section 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

Exhibit 32.2

In connection with the Annual Report of FTI Consulting, Inc. (the “Company”) on Form 10-K for the year

ended December 31, 2009, 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: February 26, 2010

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
The graph below compares the cumulative total stockholder return on our common stock from December 31, 2004 
through December 31, 2009 with the cumulative total return of the S&P 500 Index and two customized peer groups. The 
new peer group of nine companies includes Evercore Partners Inc., Greenhill & Company Inc., Hewitt Associates Inc., Hu-
ron Consulting Group Inc., Lazard Limited, Navigant Consulting, Inc., Resources Connection, Inc., Robert Half Interna-
tional, Inc. and Towers Watson & Company. The old peer group of six companies includes CRA International Inc., Huron 
Consulting Group Inc., LECG Corporation, Navigant Consulting, Inc., Resources Connection, Inc. and Robert Half Inter-
national, Inc. We believe that certain companies in the old peer group are no longer comparable to FTI in size and scope 
of operations or client focus. We have expanded the new peer group to include nine companies in order to achieve a 
more broadly based benchmark and have selected the companies included in the new peer group based on their compa-
rability to FTI in terms of size, the type of strategic services they provide to boards of directors and senior management 
on events surrounding capital structure, capital formation, mergers, acquisitions or other services similar to those that 
we offer our clients, as well as professional employee demographics, organizational structure and  
global focus.  

The information below assumes an investment of $100 in the Company’s common stock and in each of the comparison 

groups beginning December 31, 2004. The comparison assumes that all dividends, if any, are reinvested into additional 
shares of common stock during the holding period.  

FTI Consulting, Inc. 
S&P 500 
Old Peer Group 
New Peer Group 

12/08	

12/05	

12/07	

12/06	

12/04	
12/09
100.00  130.23  132.37  292.55  212.06  223.83
102.11
100.00  104.91  121.48  128.16  80.74 
100.00  114.25  120.25  96.75 
80.18
75.79 
100.00   116.90  134.00  126.94  106.51  127.91

Copyright© 2010 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.

	
CORPORATE TEAM

BOARD OF DIRECTORS

CORPORATE INFORMATION

Jack	B.	Dunn,	IV
President and Chief Executive Officer 

Dennis	J.	Shaughnessy
Chairman of the Board 

Dennis	J.	Shaughnessy
Chairman of the Board

Jack	B.	Dunn,	IV
President and Chief Executive Officer 

Executive	Office
777 South Flagler Drive,
Phillips Point, Suite 1500 West Tower,
West Palm Beach, FL 33401
+1 561-515-1900

Dominic	DiNapoli
Executive Vice President and  
Chief Operating Officer

David	G.	Bannister
Executive Vice President and 
Chief Financial Officer 

Roger	D.	Carlile
Executive Vice President and  
Chief Administrative Officer 

John	A.	MacColl
Executive Vice President and  
Chief Risk Officer 

Eric	B.	Miller
Executive Vice President, 
General Counsel and Chief Ethics Officer

Catherine	M.	Freeman
Senior Vice President, Controller and 
Chief Accounting Officer 

Liz	Nickles
Senior Vice President and  
Chief Marketing Officer

Joanne	F.	Catanese
Associate General Counsel and Secretary

Brenda	J.	Bacon
President and Chief Executive Officer of 
Brandywine Senior Living

Principal	Place	of	Business
909 Commerce Road
Annapolis, Maryland 21401

Mark	H.	Berey
President of MHB Ventures LLC

Denis	J.	Callaghan
Retired Former Director of  
North American Equity Research for 
Deutsche Bank Alex. Brown 

James	W.	Crownover
Retired Former Head of McKinsey &  
Company’s Southwest Practice and  
co-headed McKinsey’s worldwide  
energy practice

Gerard	E.	Holthaus
Chairman of the Board 
Algeco Scotsman 

Matthew	F.	McHugh
Retired Former Nine Term  
United States Congressman

George	P.	Stamas
Partner at Kirkland & Ellis 

Annual	Stockholders’	Meeting
The 2010 annual meeting of  
stockholders will be held on  
June 2, 2010, at 9:30 a.m. at  
our executive offices at  
777 South Flagler Drive,
Phillips Point, Suite 1500 West Tower,
West Palm Beach, FL 33401

Independent	Registered
Public Accounting Firm
KPMG LLP
Baltimore, Maryland

Transfer	Agent
American Stock Transfer &  
Trust Company
New York, New York

Stock
FTI’s stock trades on the  
New York Stock Exchange (NYSE)  
under the symbol FCN.

Investor	Relations	Firm
FD
Wall Street Plaza
88 Pine Street, 32nd Floor
New York, New York 10005 
+1 212-850-5600

Stockholder	Information
Our internet website is www.fticonsulting.com. We make available, free of charge on our website, our annual reports on Form 
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports and proxy statements as 
soon as reasonably practicable after we electronically file with or furnish such materials to the Securities and Exchange Com-
mission. We also make available on our website our Corporate Governance Guidelines; Categorical Standards of Director Inde-
pendence; Policy on Ethics and Business Conduct; Policy on Conflicts of Interest; Anti-Corruption Policy; Charters for the Audit, 
Compensation, and Nominating and Corporate Governance Committees of our Board of Directors; other corporate governance 
documents; and any amendments to those documents. 

 
™

777 South Flagler Drive,
Phillips Point, Suite 1500 West Tower,
West Palm Beach, FL 33401
+1 561-515-1900

fticonsulting.com

NYSE: FCN