ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Securities registered pursuant to section 12(g) of the Act: None |
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
DOCUMENTS INCORPORATED BY REFERENCE | ||||||||
Page | ||||||||
PART I | ||||||||
Item 1. | Business | |||||||
Item 1A. | Risk Factors | |||||||
Item 1B. | Unresolved Staff Comments | |||||||
Item 2. | Properties | |||||||
Item 3. | Legal Proceedings | |||||||
Item 4. | Mine Safety Disclosures | |||||||
PART II | ||||||||
Item 5. | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |||||||
Item 6. | [Reserved] | |||||||
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 | |||||||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |||||||
Item 9A. | Controls and Procedures | |||||||
Item 9B. | Other Information | |||||||
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | |||||||
PART III | ||||||||
Item 10. | Directors, Executive Officers and Corporate Governance | |||||||
Item 11. | Executive Compensation | |||||||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |||||||
Item 13. | Certain Relationships and Related Transactions and Director Independence | |||||||
Item 14. | Principal Accountant Fees and Services | |||||||
PART IV | ||||||||
Item 15. | Exhibits and Financial Statement Schedule | |||||||
Item 16. | Form 10-K Summary |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Corporate Finance & Restructuring | 36 | % | 34 | % | |||||||
Forensic and Litigation Consulting | 21 | % | 21 | % | |||||||
Economic Consulting | 23 | % | 25 | % | |||||||
Technology | 11 | % | 10 | % | |||||||
Strategic Communications | 9 | % | 10 | % | |||||||
Total | 100 | % | 100 | % |
December 31, | December 31, | ||||||||||||||||||||||
2022 | 2022 | 2021 | |||||||||||||||||||||
Offices | Countries | Billable Headcount | Billable Headcount | ||||||||||||||||||||
Corporate Finance & Restructuring | 67 | 22 | 1,946 | 1,702 | |||||||||||||||||||
Forensic and Litigation Consulting | 71 | 21 | 1,584 | 1,496 | |||||||||||||||||||
Economic Consulting | 47 | 18 | 1,007 | 921 | |||||||||||||||||||
Technology | 42 | 17 | 556 | 468 | |||||||||||||||||||
Strategic Communications | 40 | 19 | 970 | 814 | |||||||||||||||||||
Total | 6,063 | 5,401 |
(a) | (b) | (c) | ||||||||||||||||||
Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights | 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)) | ||||||||||||||||||
Plan Category | (in thousands, except per share data) | |||||||||||||||||||
Equity compensation plans approved by our security holders | 339 | (1) | $ | 36.91 | 1,027 | (3) | ||||||||||||||
Equity compensation plans not approved by our security holders | 53 | (2) | $ | 36.75 | — | |||||||||||||||
Total | 392 | $ | 36.89 | 1,027 |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (1) | Approximate Dollar Value That May Yet Be Purchased Under the Program | ||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||
October 1 through October 31, 2022 | 197 | (2) | $ | 149.75 | 197 | (5) | $ | 114,050 | |||||||||||||||
November 1 through November 30, 2022 | 84 | (3) | $ | 156.05 | 84 | (6) | $ | 100,987 | |||||||||||||||
December 1 through December 31, 2022 | 147 | (4) | $ | 156.08 | 144 | (7) | $ | 478,452 | |||||||||||||||
Total | 428 | 425 |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | % Increase (Decrease) | |||||||||||||||
(dollar amounts in thousands, except per share amounts) | |||||||||||||||||
Revenues | $ | 3,028,908 | $ | 2,776,222 | 9.1 | % | |||||||||||
Special charges (1) | $ | 8,340 | $ | — | 100.0 | % | |||||||||||
Net income | $ | 235,514 | $ | 234,966 | 0.2 | % | |||||||||||
Adjusted EBITDA | $ | 357,558 | $ | 354,010 | 1.0 | % | |||||||||||
Earnings per common share — diluted | $ | 6.58 | $ | 6.65 | -1.1 | % | |||||||||||
Adjusted earnings per common share — diluted | $ | 6.77 | $ | 6.76 | 0.1 | % | |||||||||||
Net cash provided by operating activities | $ | 188,794 | $ | 355,483 | -46.9 | % | |||||||||||
Total number of employees | 7,635 | 6,780 | 12.6 | % |
Year Ended December 31, 2022 | |||||
(in thousands) | |||||
Corporate Finance | $ | 2,444 | |||
FLC | 4,614 | ||||
Economic Consulting | 31 | ||||
Technology | 106 | ||||
Strategic Communications | 369 | ||||
Segment special charge | 7,564 | ||||
Unallocated Corporate | 776 | ||||
Total special charges | $ | 8,340 |
Billable Headcount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate Finance (1) | FLC | Economic Consulting | Technology | Strategic Communications | Total | Non-Billable Headcount | Total Headcount | |||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | 1,702 | 1,496 | 921 | 468 | 814 | 5,401 | 1,379 | 6,780 | ||||||||||||||||||||||||||||||||||||||||||
Additions, net | 244 | 88 | 86 | 88 | 156 | 662 | 193 | 855 | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | 1,946 | 1,584 | 1,007 | 556 | 970 | 6,063 | 1,572 | 7,635 | ||||||||||||||||||||||||||||||||||||||||||
Percentage change in headcount from December 31, 2021 | 14.3% | 5.9% | 9.3% | 18.8% | 19.2% | 12.3% | 14.0% | 12.6% | ||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(in thousands, except per share data) | |||||||||||
Revenues | |||||||||||
Corporate Finance | $ | 1,088,573 | $ | 938,969 | |||||||
FLC | 638,478 | 584,835 | |||||||||
Economic Consulting | 695,208 | 697,405 | |||||||||
Technology | 319,983 | 287,366 | |||||||||
Strategic Communications | 286,666 | 267,647 | |||||||||
Total revenues | $ | 3,028,908 | $ | 2,776,222 | |||||||
Segment operating income | |||||||||||
Corporate Finance | $ | 195,295 | $ | 145,765 | |||||||
FLC | 54,822 | 66,643 | |||||||||
Economic Consulting | 98,178 | 111,462 | |||||||||
Technology | 33,431 | 42,927 | |||||||||
Strategic Communications | 46,982 | 49,708 | |||||||||
Total segment operating income | 428,708 | 416,505 | |||||||||
Unallocated corporate expenses | (124,830) | (104,457) | |||||||||
Operating income | 303,878 | 312,048 | |||||||||
Other income (expense) | |||||||||||
Interest income and other | 3,918 | 6,193 | |||||||||
Interest expense | (10,047) | (20,294) | |||||||||
(6,129) | (14,101) | ||||||||||
Income before income tax provision | 297,749 | 297,947 | |||||||||
Income tax provision | 62,235 | 62,981 | |||||||||
Net income | $ | 235,514 | $ | 234,966 | |||||||
Earnings per common share — basic | $ | 6.99 | $ | 7.02 | |||||||
Earnings per common share — diluted | $ | 6.58 | $ | 6.65 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(in thousands) | |||||||||||
Net income | $ | 235,514 | $ | 234,966 | |||||||
Add back: | |||||||||||
Income tax provision | 62,235 | 62,981 | |||||||||
Interest income and other | (3,918) | (6,193) | |||||||||
Interest expense | 10,047 | 20,294 | |||||||||
Depreciation and amortization | 35,697 | 34,269 | |||||||||
Amortization of intangible assets | 9,643 | 10,823 | |||||||||
Special charges | 8,340 | — | |||||||||
Remeasurement of acquisition-related contingent consideration | — | (3,130) | |||||||||
Adjusted EBITDA | $ | 357,558 | $ | 354,010 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(in thousands, except per share data) | |||||||||||
Net income | $ | 235,514 | $ | 234,966 | |||||||
Add back: | |||||||||||
Remeasurement of acquisition-related contingent consideration | — | (3,130) | |||||||||
Special charges | 8,340 | — | |||||||||
Tax impact of special charges | (1,584) | — | |||||||||
Non-cash interest expense on convertible notes | — | 9,586 | |||||||||
Tax impact of non-cash interest expense on convertible notes | — | (2,492) | |||||||||
Adjusted Net Income | $ | 242,270 | $ | 238,930 | |||||||
Earnings per common share — diluted | $ | 6.58 | $ | 6.65 | |||||||
Add back: | |||||||||||
Remeasurement of acquisition-related contingent consideration | — | (0.09) | |||||||||
Special charges | 0.23 | — | |||||||||
Tax impact of special charges | (0.04) | — | |||||||||
Non-cash interest expense on convertible notes | — | 0.27 | |||||||||
Tax impact of non-cash interest expense on convertible notes | — | (0.07) | |||||||||
Adjusted earnings per common share — diluted | $ | 6.77 | $ | 6.76 | |||||||
Weighted average number of common shares outstanding — diluted | 35,783 | 35,337 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(in thousands) | |||||||||||
Net cash provided by operating activities | $ | 188,794 | $ | 355,483 | |||||||
Purchases of property and equipment | (53,098) | (68,569) | |||||||||
Free Cash Flow | $ | 135,696 | $ | 286,914 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(in thousands) | |||||||||||
Net income | $ | 235,514 | $ | 234,966 | |||||||
Add back: | |||||||||||
Income tax provision | 62,235 | 62,981 | |||||||||
Interest income and other | (3,918) | (6,193) | |||||||||
Interest expense | 10,047 | 20,294 | |||||||||
Unallocated corporate expenses | 124,830 | 104,457 | |||||||||
Total segment operating income | 428,708 | 416,505 | |||||||||
Add back: | |||||||||||
Segment depreciation expense | 32,876 | 31,072 | |||||||||
Amortization of intangible assets | 9,642 | 10,818 | |||||||||
Segment special charges | 7,564 | — | |||||||||
Remeasurement of acquisition-related contingent consideration | — | (3,130) | |||||||||
Total Adjusted Segment EBITDA | $ | 478,790 | $ | 455,265 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Number of revenue-generating professionals (at period end): | |||||||||||
Corporate Finance | 1,946 | 1,702 | |||||||||
FLC | 1,584 | 1,496 | |||||||||
Economic Consulting | 1,007 | 921 | |||||||||
Technology (1) | 556 | 468 | |||||||||
Strategic Communications | 970 | 814 | |||||||||
Total revenue-generating professionals | 6,063 | 5,401 | |||||||||
Utilization rates of billable professionals: (2) | |||||||||||
Corporate Finance | 61 | % | 59 | % | |||||||
FLC | 54 | % | 56 | % | |||||||
Economic Consulting | 68 | % | 72 | % | |||||||
Average billable rate per hour: (3) | |||||||||||
Corporate Finance | $ | 460 | $ | 452 | |||||||
FLC | $ | 361 | $ | 350 | |||||||
Economic Consulting | $ | 508 | $ | 509 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands, except rate per hour) | |||||||||||
Revenues | $ | 1,088,573 | $ | 938,969 | |||||||
Percentage change in revenues from prior year | 15.9 | % | |||||||||
Operating expenses | |||||||||||
Direct cost of revenues | 719,167 | 652,444 | |||||||||
Selling, general and administrative expenses | 163,691 | 133,275 | |||||||||
Special charges | 2,444 | — | |||||||||
Amortization of intangible assets | 7,976 | 7,485 | |||||||||
893,278 | 793,204 | ||||||||||
Segment operating income | 195,295 | 145,765 | |||||||||
Percentage change in segment operating income from prior year | 34.0 | % | |||||||||
Add back: | |||||||||||
Depreciation and amortization of intangible assets | 14,698 | 12,847 | |||||||||
Special charges | 2,444 | — | |||||||||
Fair value remeasurement of contingent consideration | — | (3,130) | |||||||||
Adjusted Segment EBITDA | $ | 212,437 | $ | 155,482 | |||||||
Gross profit (1) | $ | 369,406 | $ | 286,525 | |||||||
Percentage change in gross profit from prior year | 28.9 | % | |||||||||
Gross profit margin (2) | 33.9 | % | 30.5 | % | |||||||
Adjusted Segment EBITDA as a percentage of revenues | 19.5 | % | 16.6 | % | |||||||
Number of revenue-generating professionals (at period end) | 1,946 | 1,702 | |||||||||
Percentage change in number of revenue-generating professionals from prior year | 14.3 | % | |||||||||
Utilization rate of billable professionals | 61 | % | 59 | % | |||||||
Average billable rate per hour | $ | 460 | $ | 452 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands, except rate per hour) | |||||||||||
Revenues | $ | 638,478 | $ | 584,835 | |||||||
Percentage change in revenues from prior year | 9.2 | % | |||||||||
Operating expenses | |||||||||||
Direct cost of revenues | 451,269 | 412,575 | |||||||||
Selling, general and administrative expenses | 126,796 | 104,723 | |||||||||
Special charges | 4,614 | — | |||||||||
Amortization of intangible assets | 977 | 894 | |||||||||
583,656 | 518,192 | ||||||||||
Segment operating income | 54,822 | 66,643 | |||||||||
Percentage change in segment operating income from prior year | -17.7 | % | |||||||||
Add back: | |||||||||||
Depreciation and amortization of intangible assets | 6,509 | 5,902 | |||||||||
Special charges | 4,614 | — | |||||||||
Adjusted Segment EBITDA | $ | 65,945 | $ | 72,545 | |||||||
Gross profit (1) | $ | 187,209 | $ | 172,260 | |||||||
Percentage change in gross profit from prior year | 8.7 | % | |||||||||
Gross profit margin (2) | 29.3 | % | 29.5 | % | |||||||
Adjusted Segment EBITDA as a percentage of revenues | 10.3 | % | 12.4 | % | |||||||
Number of revenue-generating professionals (at period end) | 1,584 | 1,496 | |||||||||
Percentage change in number of revenue-generating professionals from prior year | 5.9 | % | |||||||||
Utilization rate of billable professionals | 54 | % | 56 | % | |||||||
Average billable rate per hour | $ | 361 | $ | 350 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands, except rate per hour) | |||||||||||
Revenues | $ | 695,208 | $ | 697,405 | |||||||
Percentage change in revenues from prior year | -0.3 | % | |||||||||
Operating expenses | |||||||||||
Direct cost of revenues | 510,987 | 508,575 | |||||||||
Selling, general and administrative expenses | 86,012 | 77,368 | |||||||||
Special charges | 31 | — | |||||||||
597,030 | 585,943 | ||||||||||
Segment operating income | 98,178 | 111,462 | |||||||||
Percentage change in segment operating income from prior year | -11.9 | % | |||||||||
Add back: | |||||||||||
Depreciation and amortization | 4,881 | 5,724 | |||||||||
Special charges | 31 | — | |||||||||
Adjusted Segment EBITDA | $ | 103,090 | $ | 117,186 | |||||||
Gross profit (1) | $ | 184,221 | $ | 188,830 | |||||||
Percentage change in gross profit from prior year | -2.4 | % | |||||||||
Gross profit margin (2) | 26.5 | % | 27.1 | % | |||||||
Adjusted Segment EBITDA as a percentage of revenues | 14.8 | % | 16.8 | % | |||||||
Number of revenue-generating professionals (at period end) | 1,007 | 921 | |||||||||
Percentage change in number of revenue-generating professionals from prior year | 9.3 | % | |||||||||
Utilization rate of billable professionals | 68 | % | 72 | % | |||||||
Average billable rate per hour | $ | 508 | $ | 509 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Revenues | $ | 319,983 | $ | 287,366 | |||||||
Percentage change in revenues from prior year | 11.4 | % | |||||||||
Operating expenses | |||||||||||
Direct cost of revenues | 206,611 | 176,527 | |||||||||
Selling, general and administrative expenses | 79,835 | 67,912 | |||||||||
Special charges | 106 | — | |||||||||
286,552 | 244,439 | ||||||||||
Segment operating income | 33,431 | 42,927 | |||||||||
Percentage change in segment operating income from prior year | -22.1 | % | |||||||||
Add back: | |||||||||||
Depreciation and amortization | 13,161 | 12,812 | |||||||||
Special charges | 106 | — | |||||||||
Adjusted Segment EBITDA | $ | 46,698 | $ | 55,739 | |||||||
Gross profit (1) | $ | 113,372 | $ | 110,839 | |||||||
Percentage change in gross profit from prior year | 2.3 | % | |||||||||
Gross profit margin (2) | 35.4 | % | 38.6 | % | |||||||
Adjusted Segment EBITDA as a percentage of revenues | 14.6 | % | 19.4 | % | |||||||
Number of revenue-generating professionals (at period end) (3) | 556 | 468 | |||||||||
Percentage change in number of revenue-generating professionals from prior year | 18.8 | % |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Revenues | $ | 286,666 | $ | 267,647 | |||||||
Percentage change in revenues from prior year | 7.1 | % | |||||||||
Operating expenses | |||||||||||
Direct cost of revenues | 177,910 | 165,386 | |||||||||
Selling, general and administrative expenses | 60,716 | 50,114 | |||||||||
Special charges | 369 | — | |||||||||
Amortization of intangible assets | 689 | 2,439 | |||||||||
239,684 | 217,939 | ||||||||||
Segment operating income | 46,982 | 49,708 | |||||||||
Percentage change in segment operating income from prior year | -5.5 | % | |||||||||
Add back: | |||||||||||
Depreciation and amortization of intangible assets | 3,269 | 4,605 | |||||||||
Special charges | 369 | — | |||||||||
Adjusted Segment EBITDA | $ | 50,620 | $ | 54,313 | |||||||
Gross profit (1) | $ | 108,756 | $ | 102,261 | |||||||
Percentage change in gross profit from prior year | 6.4 | % | |||||||||
Gross profit margin (2) | 37.9 | % | 38.2 | % | |||||||
Adjusted Segment EBITDA as a percentage of revenues | 17.7 | % | 20.3 | % | |||||||
Number of revenue-generating professionals (at period end) | 970 | 814 | |||||||||
Percentage change in number of revenue-generating professionals from prior year | 19.2 | % |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash Flows | (dollars in thousands) | ||||||||||
Net cash provided by operating activities | $ | 188,794 | $ | 355,483 | |||||||
Net cash used in investing activities | $ | (60,061) | $ | (79,093) | |||||||
Net cash used in financing activities | $ | (106,012) | $ | (61,674) | |||||||
Effect of exchange rate changes on cash and cash equivalents | $ | (25,518) | $ | (15,184) | |||||||
DSO (1) | 97 | 94 |
December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
2023 | 2024 to 2027 | Thereafter | Total | Fair Value | Total | Fair Value | |||||||||||||||||||||||||||||||||||
Long-Term Debt | (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
Fixed rate | $ | 316,219 | $ | — | $ | — | $ | 316,219 | $ | 509,682 | $ | 316,245 | $ | 466,619 | |||||||||||||||||||||||||||
Average interest rate | 2.0 | % | — | % | — | % | 2.0 | % | — | % | 5.4 | % | — | % | |||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Changes in Net Investment of Foreign Subsidiaries | (in thousands) | ||||||||||||||||
Euro | $ | (9,187) | $ | (12,381) | $ | 12,543 | |||||||||||
Australian dollar | (4,930) | (4,002) | 6,619 | ||||||||||||||
British pound | (29,738) | (3,132) | 13,599 | ||||||||||||||
Canadian dollar | (747) | (247) | 1,209 | ||||||||||||||
All other | (3,280) | (2,643) | 442 | ||||||||||||||
Total | $ | (47,882) | $ | (22,405) | $ | 34,412 |
Page | |||||
Management’s Report on Internal Control over Financial Reporting | |||||
Report of Independent Registered Public Accounting Firm — Internal Control over Financial Reporting | |||||
Report of Independent Registered Public Accounting Firm — Consolidated Financial Statements | |||||
Consolidated Balance Sheets — December 31, 2022 and 2021 | |||||
Consolidated Statements of Comprehensive Income — Years Ended December 31, 2022, 2021 and 2020 | |||||
Consolidated Statements of Stockholders’ Equity — Years Ended December 31, 2022, 2021 and 2020 | |||||
Consolidated Statements of Cash Flows — Years Ended December 31, 2022, 2021 and 2020 | |||||
Notes to Consolidated Financial Statements |
/s/ STEVEN H. GUNBY | ||
Steven H. Gunby President and Chief Executive Officer (Principal Executive Officer) | ||
/s/ AJAY SABHERWAL | ||
Ajay Sabherwal Chief Financial Officer (Principal Financial Officer) |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Current portion of notes receivable | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Notes receivable, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable, accrued expenses and other | $ | $ | |||||||||
Accrued compensation | |||||||||||
Billings in excess of services provided | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net | |||||||||||
Noncurrent operating lease liabilities | |||||||||||
Deferred income taxes | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 16) | |||||||||||
Stockholders’ equity | |||||||||||
Preferred stock, $ outstanding | |||||||||||
Common stock, $ issued and outstanding — | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Revenues | $ | $ | $ | ||||||||||||||
Operating expenses | |||||||||||||||||
Direct cost of revenues | |||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||
Special charges | |||||||||||||||||
Amortization of intangible assets | |||||||||||||||||
Operating income | |||||||||||||||||
Other income (expense) | |||||||||||||||||
Interest income and other | ( | ||||||||||||||||
Interest expense | ( | ( | ( | ||||||||||||||
( | ( | ( | |||||||||||||||
Income before income tax provision | |||||||||||||||||
Income tax provision | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Earnings per common share — basic | $ | $ | $ | ||||||||||||||
Earnings per common share — diluted | $ | $ | $ | ||||||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||||
Foreign currency translation adjustments, net of tax expense of $ | $ | ( | $ | ( | $ | ||||||||||||
Total other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||
Comprehensive income | $ | $ | $ |
Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Shares | Amount | Total | |||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net income | — | $ | — | $ | — | $ | $ | — | $ | ||||||||||||||||||||||||||
Other comprehensive income: | |||||||||||||||||||||||||||||||||||
Cumulative translation adjustment | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock in connection with: | |||||||||||||||||||||||||||||||||||
Exercise of options | — | — | |||||||||||||||||||||||||||||||||
Restricted share grants, less net settled shares of | ( | — | — | ( | |||||||||||||||||||||||||||||||
Stock units issued under incentive compensation plan | — | — | — | — | |||||||||||||||||||||||||||||||
Purchase and retirement of common stock | ( | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net income | — | $ | — | $ | — | $ | $ | — | $ | ||||||||||||||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||||||||||||||
Cumulative translation adjustment | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Issuance of common stock in connection with: | |||||||||||||||||||||||||||||||||||
Exercise of options | — | — | |||||||||||||||||||||||||||||||||
Restricted share grants, less net settled shares of | ( | — | — | ( | |||||||||||||||||||||||||||||||
Stock units issued under incentive compensation plan | — | — | — | — | |||||||||||||||||||||||||||||||
Purchase and retirement of common stock | ( | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||
Conversion feature of convertible senior notes due 2023 | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net income | — | $ | — | $ | — | $ | $ | — | $ | ||||||||||||||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||||||||||||||
Cumulative translation adjustment | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Issuance of common stock in connection with: | |||||||||||||||||||||||||||||||||||
Exercise of options | — | — | — | ||||||||||||||||||||||||||||||||
Restricted share grants, less net settled shares of | ( | — | — | ( | |||||||||||||||||||||||||||||||
Stock units issued under incentive compensation plan | — | — | — | — | |||||||||||||||||||||||||||||||
Purchase and retirement of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Cumulative effect due to adoption of new accounting standard | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
Conversion feature of convertible senior notes due 2023 | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Reclassification of negative additional paid-in capital | — | — | ( | — | |||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Operating activities | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Amortization and impairment of intangible assets | |||||||||||||||||
Acquisition-related contingent consideration | ( | ||||||||||||||||
Provision for expected credit losses | |||||||||||||||||
Share-based compensation | |||||||||||||||||
Amortization of debt discount and issuance costs and other | |||||||||||||||||
Deferred income taxes | ( | ( | |||||||||||||||
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 | |||||||||||||||||
Net cash provided by operating activities | |||||||||||||||||
Investing activities | |||||||||||||||||
Payments for acquisition of businesses, net of cash received | ( | ( | ( | ||||||||||||||
Purchases of property and equipment and other | ( | ( | ( | ||||||||||||||
Net cash used in investing activities | ( | ( | ( | ||||||||||||||
Financing activities | |||||||||||||||||
Borrowings under revolving line of credit | |||||||||||||||||
Repayments under revolving line of credit | ( | ( | ( | ||||||||||||||
Payments of debt issuance costs | ( | ||||||||||||||||
Purchase and retirement of common stock | ( | ( | ( | ||||||||||||||
Share-based compensation tax withholdings and other | ( | ( | ( | ||||||||||||||
Payments for business acquisition liabilities | ( | ( | ( | ||||||||||||||
Deposits and other | |||||||||||||||||
Net cash used in financing activities | ( | ( | ( | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ( | |||||||||||||||
Cash and cash equivalents, beginning of period | |||||||||||||||||
Cash and cash equivalents, end of period | $ | $ | $ | ||||||||||||||
Supplemental cash flow disclosures | |||||||||||||||||
Cash paid for interest | $ | $ | $ | ||||||||||||||
Cash paid for income taxes, net of refunds | $ | $ | $ | ||||||||||||||
Non-cash investing and financing activities: | |||||||||||||||||
Issuance of stock units under incentive compensation plans | $ | $ | $ | ||||||||||||||
Business acquisition liabilities not yet paid | $ | $ | $ | ||||||||||||||
Non-cash additions to property and equipment | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Numerator — basic and diluted | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Denominator | |||||||||||||||||
Weighted average number of common shares outstanding — basic | |||||||||||||||||
Effect of dilutive share-based awards | |||||||||||||||||
Effect of dilutive stock options | |||||||||||||||||
Effect of dilutive convertible notes | |||||||||||||||||
Weighted average number of common shares outstanding — diluted | |||||||||||||||||
Earnings per common share — basic | $ | $ | $ | ||||||||||||||
Earnings per common share — diluted | $ | $ | $ | ||||||||||||||
Antidilutive stock options and share-based awards |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Accounts receivable: | |||||||||||
Billed receivables | $ | $ | |||||||||
Unbilled receivables | |||||||||||
Allowance for expected credit losses | ( | ( | |||||||||
Accounts receivable, net | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Provision for expected credit losses | $ | $ | $ | ||||||||||||||
Write-offs | $ | $ | $ |
Year Ended December 31, 2022 | |||||
Corporate Finance | $ | ||||
FLC | |||||
Economic Consulting | |||||
Technology | |||||
Strategic Communications | |||||
Segment special charge | |||||
Unallocated Corporate | |||||
Total special charges | $ |
Year Ended December 31, 2020 | |||||
Corporate Finance | $ | ||||
FLC | |||||
Economic Consulting | |||||
Technology | |||||
Strategic Communications | |||||
Segment special charge | |||||
Unallocated Corporate | |||||
Total special charges | $ |
Year Ended December 31, | ||||||||||||||||||||
Income Statement Classification | 2022 | 2021 | 2020 | |||||||||||||||||
Direct cost of revenues | $ | $ | $ | |||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||
Total | $ | $ | $ |
Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Stock options outstanding at December 31, 2021 | $ | ||||||||||||||||||||||
Stock options exercised | ( | $ | |||||||||||||||||||||
Stock options outstanding and exercisable at December 31, 2022 | $ | $ |
Shares | Weighted Average Grant Date Fair Value | ||||||||||
Restricted share awards outstanding at December 31, 2021 | $ | ||||||||||
Restricted share awards granted | $ | ||||||||||
Restricted share awards vested | ( | $ | |||||||||
Restricted share awards forfeited | ( | $ | |||||||||
Restricted share awards outstanding at December 31, 2022 | $ |
Shares | Weighted Average Grant Date Fair Value | ||||||||||
Restricted stock units outstanding at December 31, 2021 | $ | ||||||||||
Restricted stock units granted | $ | ||||||||||
Restricted stock units released | ( | $ | |||||||||
Restricted stock units outstanding at December 31, 2022 | $ |
Shares | Weighted Average Grant Date Fair Value | ||||||||||
Performance stock units outstanding at December 31, 2021 | $ | ||||||||||
Performance stock units granted (1) | $ | ||||||||||
Performance stock units released | ( | $ | |||||||||
Performance stock units forfeited (2) | ( | $ | |||||||||
Performance stock units outstanding at December 31, 2022 | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Interest income and other | |||||||||||||||||
Interest income | $ | $ | $ | ||||||||||||||
Foreign exchange transaction gains (losses), net | ( | ||||||||||||||||
Other | ( | ( | |||||||||||||||
Total | $ | $ | $ | ( |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Prepaid expenses and other current assets | |||||||||||
Prepaid expenses | $ | $ | |||||||||
Income tax receivable | |||||||||||
Other current assets | |||||||||||
Total | $ | $ | |||||||||
Accounts payable, accrued expenses and other | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Accrued interest payable | |||||||||||
Accrued taxes payable | |||||||||||
Current operating lease liabilities | |||||||||||
Other current liabilities | |||||||||||
Total | $ | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Leasehold improvements | $ | $ | |||||||||
Construction in progress | |||||||||||
Furniture and equipment | |||||||||||
Computer equipment and software | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Corporate Finance (1) | FLC (1) | Economic Consulting (1) | Technology (1) | Strategic Communications (2) | Total | ||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Acquisitions (3) | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment and other | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Acquisitions (3) | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment and other | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
Weighted Average Useful Life in Years | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||||
Amortizing intangible assets | |||||||||||||||||||||||||||||||||||||||||
Customer relationships (1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Trademarks (1) | |||||||||||||||||||||||||||||||||||||||||
Acquired software and other (1) | |||||||||||||||||||||||||||||||||||||||||
Non-amortizing intangible assets | |||||||||||||||||||||||||||||||||||||||||
Trademarks | Indefinite | — | — | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
As of December 31, 2022 (1) | ||||||||
Year | ||||||||
2023 | $ | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
Thereafter | ||||||||
$ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Notes receivable from employees — beginning | $ | $ | |||||||||
Notes granted | |||||||||||
Repayments | ( | ( | |||||||||
Amortization | ( | ( | |||||||||
Cumulative translation adjustment and other | ( | ( | |||||||||
Notes receivable from employees — ending | |||||||||||
Less: current portion | ( | ( | |||||||||
Notes receivable from employees, net of current portion | $ | $ |
December 31, 2022 | |||||||||||||||||||||||
Hierarchy Level (Fair Value) | |||||||||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Acquisition-related contingent consideration (1) | $ | $ | $ | $ | |||||||||||||||||||
2023 Convertible Notes (2) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2021 | |||||||||||||||||||||||
Hierarchy Level (Fair Value) | |||||||||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Acquisition-related contingent consideration (1) | $ | $ | $ | $ | |||||||||||||||||||
2023 Convertible Notes (2) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Contingent Consideration | |||||
Balance at December 31, 2019 | $ | ||||
Additions | $ | ||||
Payments | ( | ||||
Balance at December 31, 2020 | $ | ||||
Additions | $ | ||||
Accretion expense (1) | |||||
Remeasurement gain (3) | ( | ||||
Payments | ( | ||||
Foreign currency translation adjustment (2) | ( | ||||
Balance at December 31, 2021 | $ | ||||
Additions (4) | $ | ||||
Accretion expense (1) | |||||
Payments | ( | ||||
Foreign currency translation adjustment and other (2) | ( | ||||
Balance at December 31, 2022 | $ | ||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
2023 Convertible Notes | $ | $ | |||||||||
Total debt | |||||||||||
Less: deferred debt discount (1) | ( | ||||||||||
Less: deferred debt issuance costs | ( | ( | |||||||||
Long-term debt, net (1) (2) | $ | $ | |||||||||
Additional paid-in capital | $ | $ | |||||||||
Discount attribution to equity | ( | ||||||||||
Equity component, net (1) | $ | — | $ |
December 31, | ||||||||||||||||||||
Leases | Classification | 2022 | 2021 | |||||||||||||||||
Assets | ||||||||||||||||||||
Operating lease assets | Operating lease assets | $ | $ | |||||||||||||||||
Total lease assets | $ | $ | ||||||||||||||||||
Liabilities | ||||||||||||||||||||
Current | ||||||||||||||||||||
Operating lease liabilities | $ | $ | ||||||||||||||||||
Noncurrent | ||||||||||||||||||||
Operating lease liabilities | Noncurrent operating lease liabilities | |||||||||||||||||||
Total lease liabilities | $ | $ |
Year Ended December 31, | ||||||||||||||
Lease Cost | 2022 | 2021 | ||||||||||||
Operating lease costs | $ | $ | ||||||||||||
Short-term lease costs | ||||||||||||||
Variable lease costs | ||||||||||||||
Sublease income | ( | ( | ||||||||||||
Total lease cost, net | $ | $ |
As of December 31, 2022 | |||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total future lease payments | |||||
Less: imputed interest | ( | ||||
Total | $ |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | |||||||||
Operating lease assets obtained in exchange for lease liabilities | $ | $ | |||||||||
Weighted average remaining lease term (years) | |||||||||||
Operating leases | |||||||||||
Weighted average discount rate | |||||||||||
Operating leases | % | % |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Deferred tax assets | |||||||||||
Allowance for expected credit losses | $ | $ | |||||||||
Accrued vacation and bonus | |||||||||||
Share-based compensation | |||||||||||
Notes receivable from employees | |||||||||||
State net operating loss carryforward | |||||||||||
Foreign net operating and capital loss carryforward | |||||||||||
Foreign tax credit carryforward | |||||||||||
Deferred compensation | |||||||||||
Operating lease assets | |||||||||||
Employee benefits obligations | |||||||||||
Other, net | |||||||||||
Total deferred tax assets | |||||||||||
Deferred tax liabilities | |||||||||||
Revenue recognition | ( | ( | |||||||||
Operating lease liabilities | ( | ( | |||||||||
Property and equipment, net | ( | ( | |||||||||
Equity debt discount | ( | ||||||||||
Goodwill and intangible assets | ( | ( | |||||||||
Total deferred tax liabilities | ( | ( | |||||||||
Foreign withholding tax | ( | ( | |||||||||
Valuation allowance | ( | ( | |||||||||
Net deferred tax liabilities | $ | ( | $ | ( |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Domestic | $ | $ | $ | ||||||||||||||
Foreign | |||||||||||||||||
Total | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Current | |||||||||||||||||
Federal | $ | $ | $ | ||||||||||||||
State | |||||||||||||||||
Foreign | |||||||||||||||||
Deferred | |||||||||||||||||
Federal | ( | ||||||||||||||||
State | ( | ||||||||||||||||
Foreign | ( | ( | ( | ||||||||||||||
( | ( | ||||||||||||||||
Income tax provision | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Income tax expense at federal statutory rate | $ | $ | $ | ||||||||||||||
State income taxes, net of federal benefit | |||||||||||||||||
Detriment from foreign tax rates | |||||||||||||||||
Other expenses not deductible for tax purposes | |||||||||||||||||
Adjustment to reserve for uncertain tax positions | ( | ( | |||||||||||||||
Share-based compensation | ( | ( | ( | ||||||||||||||
Release of valuation allowance on foreign tax credits | ( | ( | |||||||||||||||
Income tax benefit related to the License Agreement, net | ( | ( | |||||||||||||||
Release of valuation allowance on Australian deferred tax asset | ( | ||||||||||||||||
U.S. foreign tax credits | ( | ( | |||||||||||||||
Valuation allowance on U.S. foreign tax credit carryforwards | |||||||||||||||||
Deferred tax benefit of United Kingdom tax rate change | ( | ||||||||||||||||
Other adjustments, net | ( | ( | |||||||||||||||
Income tax provision | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Shares of common stock repurchased and retired | |||||||||||||||||
Average price paid per share | $ | $ | $ | ||||||||||||||
Total cost | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Revenues | |||||||||||||||||
Corporate Finance | $ | $ | $ | ||||||||||||||
FLC | |||||||||||||||||
Economic Consulting | |||||||||||||||||
Technology | |||||||||||||||||
Strategic Communications | |||||||||||||||||
Total revenues | $ | $ | $ | ||||||||||||||
Adjusted Segment EBITDA | |||||||||||||||||
Corporate Finance | $ | $ | $ | ||||||||||||||
FLC | |||||||||||||||||
Economic Consulting | |||||||||||||||||
Technology | |||||||||||||||||
Strategic Communications | |||||||||||||||||
Total Adjusted Segment EBITDA | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Add back: | |||||||||||||||||
Income tax provision | |||||||||||||||||
Interest income and other | ( | ( | |||||||||||||||
Interest expense | |||||||||||||||||
Unallocated corporate expenses | |||||||||||||||||
Segment depreciation expense | |||||||||||||||||
Amortization of intangible assets | |||||||||||||||||
Segment special charges | |||||||||||||||||
Remeasurement of acquisition-related contingent consideration | ( | ||||||||||||||||
Total Adjusted Segment EBITDA | $ | $ | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Corporate Finance | $ | $ | |||||||||
FLC | |||||||||||
Economic Consulting | |||||||||||
Technology | |||||||||||
Strategic Communications | |||||||||||
Total segment assets | |||||||||||
Unallocated corporate assets | |||||||||||
Total assets | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
U.S. | $ | $ | $ | ||||||||||||||
U.K. | |||||||||||||||||
All other foreign countries (1) | |||||||||||||||||
Total revenues | $ | $ | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
U.S. | $ | $ | |||||||||
U.K. | |||||||||||
All other foreign countries (1) | |||||||||||
Total long-lived assets | $ | $ |
(a) | (1) | The following financial statements are included in this Annual Report: | ||||||
Management’s Report on Internal Control over Financial Reporting | ||||||||
Report of Independent Registered Public Accounting Firm — Internal Control over Financial Reporting | ||||||||
Report of Independent Registered Public Accounting Firm — Consolidated Financial Statements | ||||||||
Consolidated Balance Sheets — December 31, 2022 and 2021 | ||||||||
Consolidated Statements of Comprehensive Income — Years Ended December 31, 2022, 2021 and 2020 | ||||||||
Consolidated Statements of Stockholders’ Equity — Years Ended December 31, 2022, 2021 and 2020 | ||||||||
Consolidated Statements of Cash Flows — Years Ended December 31, 2022, 2021 and 2020 | ||||||||
Notes to Consolidated Financial Statements | ||||||||
(2) | All schedules are omitted as the information is not required or is otherwise provided. | |||||||
(3) | Exhibit Index |
Exhibit Number | Description of Exhibits | |||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
4.1 | Indenture, dated as of August 20, 2018, between FTI Consulting, Inc. and U.S. Bank National Association, as Trustee. (Filed with the Securities and Exchange Commission on August 20, 2018 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated August 20, 2018 and incorporated herein by reference.) | |||||||
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99.6 | ||||||||
99.7 | Charter of the Nominating, Corporate Governance and Social Responsibility Committee of the Board of Directors, as last Amended and Restated Effective as of March 23, 2021. (Filed with the Securities and Exchange Commission on April 19, 2021 as an appendix to FTI Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A and incorporated herein by reference.) | |||||||
99.8 | ||||||||
101 | The following financial information from the Annual Report on Form 10-K of FTI Consulting, Inc. for the year ended December 31, 2022, included herewith, and formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Comprehensive Income; (iii) Consolidated Statements of Stockholders’ Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to the Consolidated Financial Statements, tagged as blocks of text. | |||||||
104 | The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2022, formatted in Inline XBRL (included as Exhibit 101). |
FTI CONSULTING, INC. | |||||
By: | /s/ STEVEN H. GUNBY | ||||
Name: | Steven H. Gunby | ||||
Title: | President and Chief Executive Officer |
SIGNATURE | CAPACITY IN WHICH SIGNED | DATE | ||||||||||||
/s/ STEVEN H. GUNBY | President, Chief Executive Officer and Director (Principal Executive Officer) | February 23, 2023 | ||||||||||||
Steven H. Gunby | ||||||||||||||
/s/ AJAY SABHERWAL | Chief Financial Officer (Principal Financial Officer) | February 23, 2023 | ||||||||||||
Ajay Sabherwal | ||||||||||||||
/s/ BRENDAN KEATING | Chief Accounting Officer and Controller (Principal Accounting Officer) | February 23, 2023 | ||||||||||||
Brendan Keating | ||||||||||||||
/s/ GERARD E. HOLTHAUS | Director and Chairman of the Board | February 23, 2023 | ||||||||||||
Gerard E. Holthaus | ||||||||||||||
/s/ BRENDA J. BACON | Director | February 23, 2023 | ||||||||||||
Brenda J. Bacon | ||||||||||||||
/s/ MARK S. BARTLETT | Director | February 23, 2023 | ||||||||||||
Mark S. Bartlett | ||||||||||||||
/s/ CLAUDIO COSTAMAGNA | Director | February 23, 2023 | ||||||||||||
Claudio Costamagna | ||||||||||||||
/s/ VERNON ELLIS | Director | February 23, 2023 | ||||||||||||
Vernon Ellis | ||||||||||||||
/s/ NICHOLAS C. FANANDAKIS | Director | February 23, 2023 | ||||||||||||
Nicholas C. Fanandakis | ||||||||||||||
/s/ STEPHEN C. ROBINSON | Director | February 23, 2023 | ||||||||||||
Stephen C. Robinson | ||||||||||||||
/s/ LAUREEN E. SEEGER | Director | February 23, 2023 | ||||||||||||
Laureen E. Seeger | ||||||||||||||
Legal Name | Jurisdiction | |||||||
Andersch digital GmbH | Germany | |||||||
Andersch Management GmbH | Germany | |||||||
Bold Capital Holding B.V. | Netherlands | |||||||
Bold Capital Management B.V. | Netherlands | |||||||
Bold Investment Management B.V. | Netherlands | |||||||
Bold Support Optimisation B.V. | Netherlands | |||||||
Compass Lexecon (Belgium) SRL [fka Compass Lexecon (Belgium) SPRL] | Belgium | |||||||
Compass Lexecon Economic Consulting (Beijing) Co., Ltd. | China | |||||||
Compass Lexecon LLC [fka Lexecon, LLC] [fka LI Acquisition Company, LLC] | Maryland | |||||||
Compass Lexecon Spain, S.L. | Spain | |||||||
Compass Lexecon SRL [fka FTI Consulting S.A.] | Argentina | |||||||
Cumulus Fund | Cayman Islands | |||||||
Cumulus Lower Volatility Fund | Cayman Islands | |||||||
Cumulus Master Fun | Cayman Islands | |||||||
FD MWA Holdings Inc. | Delaware | |||||||
Ferrier Hodgson Management Services Inc. | Philippines | |||||||
FH Asset Management Corp. | Philippines | |||||||
FH Corporate Services Inc. | Philippines | |||||||
FTI Capital Advisors - Canada ULC [fka FTI Consulting (Canada) Capital Advisors ULC] | Canada | |||||||
FTI Capital Advisors (Australia) Pty Ltd | Australia, New South Wales | |||||||
FTI Capital Advisors (DIFC) Limited | UAE | |||||||
FTI Capital Advisors (Hong Kong) Limited [fka FTI Consulting Capital Advisors (Hong Kong) Limited] [fka FTI Consulting (Hong Kong) Services Four Limited] [fka Sun Easy Investment Limited] | Hong Kong | |||||||
FTI Capital Advisors, LLC [fka FTI Merger & Acquisition Advisors, LLC] | Maryland | |||||||
FTI Capital Management (Cayman) Limited | Cayman Islands | |||||||
FTI Capital Management LLC | Maryland | |||||||
FTI Consulting - FD Australia Holdings Pty Ltd [fka FD Australia Holdings Pty Ltd] | Australia, Victoria | |||||||
FTI Consulting – Qatar LLC [fka Dispute Resolution Consulting LLC] | Qatar | |||||||
FTI Consulting (Asia) Ltd [fka International Risk Limited] | Hong Kong | |||||||
FTI Consulting (Australia) Pty Ltd | Australia |
FTI Consulting (Beijing) Co., Limited [fka - FD (Beijing) Consulting Co., Ltd.] | Beijing, China | |||||||
FTI Consulting (BVI) Limited [fka FTI Forensic Accounting Limited] [fka Forensic Accounting Limited] | British Virgin Islands | |||||||
FTI Consulting (Cayman) Ltd | Cayman Islands | |||||||
FTI Consulting (China) Ltd. Fka Thompson Market Services (Shanghai) Co. Ltd | China | |||||||
FTI Consulting (CM) Limited [fka K Capital Source Limited] | Ireland | |||||||
FTI Consulting (Government Affairs) LLC | New York | |||||||
FTI Consulting (Hong Kong) Limited | Hong Kong | |||||||
FTI Consulting (Hong Kong) Services One Limited [fka Chater Secretaries Limited] | Hong Kong | |||||||
FTI Consulting (Hong Kong) Services Two Limited [fka Lansdowne Nominees Limited] | Hong Kong | |||||||
FTI Consulting (Ireland) Limited [fka Financial Dynamics Ireland Ltd.] | Ireland | |||||||
FTI Consulting (Perth) Pty Ltd [fka FD PTY LIMITED] [fka FD Third Person Perth Pty Limited] [fka Kudos Consultants Pty Limited] | Australia | |||||||
FTI Consulting (SC) Inc. [fka FD U.S. Communications, Inc.] | New York | |||||||
FTI Consulting (Singapore) PTE. LTD. [fka FS Asia Advisory Pte. LTD.] | Singapore | |||||||
FTI Consulting (Strategic Communications) S.A.S. [fka Financial Dynamics S.A.S.] | France | |||||||
FTI Consulting (Sydney) Pty Ltd [fka FD (Sydney) PTY LTD] [fka FD Third Person Pty Limited] [fka Third Person Communications Pty Limited] [fka Kelly Gold Partners Pty Ltd] [fka Thornton Kelly Gold Communications Pty Ltd] | Australia, New South Wales | |||||||
FTI Consulting Acuity LLC | Maryland | |||||||
FTI Consulting Australia Nominees Pty Ltd | Australia | |||||||
FTI Consulting B.V. [fka Irharo B.V.] | Netherlands | |||||||
FTI Consulting Belgium SRL [fka FTI Consulting Belgium SA] [fka Blueprint Partners SA] | Belgium | |||||||
FTI Consulting Canada Inc. [fka Watson, Edgar, Bishop, Meakin & Aquirre Inc.] | British Columbia, Canada | |||||||
FTI Consulting Canada ULC | British Columbia, Canada | |||||||
FTI Consulting Capital Advisors (Singapore) Pte Ltd. | Singapore | |||||||
FTI Consulting Corporate Services (Cayman) Limited [fka FTI Consulting Directors (Cayman) Limited] | Cayman Islands | |||||||
FTI Consulting Denmark ApS | Denmark | |||||||
FTI Consulting Deutschland GmbH | Germany |
FTI Consulting Deutschland Group Holdings GmbH [fka Blitz F19-527 GmbH] | Germany | |||||||
FTI Consulting Deutschland Holding GmbH [fka Maia Neunundzwanzigste Vermögensverwaltungs-GmbH] | Germany | |||||||
FTI Consulting Finland Limited | England and Wales | |||||||
FTI Consulting for Business Services [fka Delta Partners LLC] | ||||||||
FTI Consulting Global Holdings Limited | England and Wales | |||||||
FTI Consulting Group Holdings, Inc. | District of Columbia | |||||||
FTI Consulting Group Limited [fka Financial Dynamics Ltd.] | England and Wales | |||||||
FTI Consulting Gulf Limited [FD Gulf Limited] [fka FD Dubai Limited] | England and Wales | |||||||
FTI Consulting Holdings, Inc. | Delaware | |||||||
FTI Consulting India Private Limited [fka FD Communications India Private Limited] | India | |||||||
FTI Consulting International Limited | British Virgin Islands | |||||||
FTI Consulting Italy S.R. L. | Italy | |||||||
FTI Consulting LLC | Maryland | |||||||
FTI Consulting LLP [fka FTI Consulting Management LLP] | England and Wales | |||||||
FTI Consulting Malaysia SDN. BHD. | Malaysia | |||||||
FTI Consulting Management Limited [fka FTI Consulting Limited] [fka Carmill Limited] | England and Wales | |||||||
FTI Consulting Management Ltd [fka FTI Consulting (Asia) Limited] [fka Baker Tilly Hong Kong Business Recovery Ltd] [fka Baker Tilly Purserblade Asia Limited] [fka Purserblade Asia Limited] | Hong Kong | |||||||
FTI Consulting Management Services Limited | British Virgin Islands | |||||||
FTI Consulting Management Solutions Limited [fka Distinct Intelligence Limited] | Ireland | |||||||
FTI Consulting Media Center FZ-LLC | UAE | |||||||
FTI Consulting Mexico, S.C. [fka FTI Consulting Mexico S DE RL DE CV] [fka FDFTI Mexico S DE RL DE CV] | Mexico | |||||||
FTI Consulting Pte Ltd. [fka International Risk (Singapore) Pte Ltd.] | Singapore | |||||||
FTI Consulting Realty LLC | New York | |||||||
FTI Consulting Realty, Inc. | California | |||||||
FTI Consulting S.A.S. [fka FTI Consulting (SC) Ltda.] [fka FD Gravitas Ltda.] [fka Gravitas Comunicaciones Estrategicos Limitada] | Colombia | |||||||
FTI Consulting SC GmbH [fka Financial Dynamics GmbH] [fka A & B Financial Dynamics gmbh] | Germany |
FTI Consulting Services (Israel) Ltd | Israel | |||||||
FTI Consulting Solutions Limited [fka Brewer Consulting Limited] | England And Wales | |||||||
FTI Consulting South Africa (Pty) Ltd [fka FD Media and Investor Relations Pty Ltd] [fka Beachhead Media and Investor Relations (Proprietary) Limited] | S. Africa | |||||||
FTI Consulting Spain, S.R.L. | Spain | |||||||
FTI Consulting Switzerland GmbH | Switzerland | |||||||
FTI Consulting Technology (Sydney) Pty Ltd [fka FTI Ringtail (AUST) PTY LTD] [fka FTI Australia Pty Ltd.] | Australia | |||||||
FTI Consulting Technology LLC [fka FTI Technology LLC ] [fka FTI Repository Services, LLC ] | Maryland | |||||||
FTI Consulting Technology Software Corp [fka Attenex Corporation] | Washington | |||||||
FTI Consulting Trade Advisory, LLC [fka FTI Consulting Platt Sparks LLC] | Texas | |||||||
FTI Consulting UK1 Holdings Limited | England and Wales | |||||||
FTI Consulting UK2 Holdings Limited | England and Wales | |||||||
FTI Consulting UK3 Holdings Limited | England and Wales | |||||||
FTI Consultoria Ltda. [fka FTI Holder Consultoria LTDA] [fka FTI Holder Consultoria S.A.]* [fka Arbok Holdings S.A.] | Brazil | |||||||
FTI Director Services Limited [fka FS Director Services Limited] | British Virgin Islands | |||||||
FTI Director Services Number 2 Limited [fka FS Director Services Number 2 Limited] | British Virgin Islands | |||||||
FTI Director Services Number 3 Limited [fka FS Director Services Number 3 Limited] | British Virgin Islands | |||||||
FTI Financial Services Limited [fka Hoodwell Limited] | UK | |||||||
FTI France SAS [fka FTI France SARL] | Paris, France | |||||||
FTI Hosting LLC | Maryland | |||||||
FTI International LLC [fka FTI FD LLC] | Maryland | |||||||
FTI Investigations, LLC | Maryland | |||||||
FTI UK Holdings Limited | England and Wales | |||||||
FTI, LLC | Maryland | |||||||
FTI-Andersch AG | Germany | |||||||
Greenleaf Power Management LLC | Maryland | |||||||
IRL (Holdings) Limited | British Virgin Islands | |||||||
OC 536 Offshore Fund, Ltd. | Cayman Islands | |||||||
Portal Arbitrage Opportunities Offshore Fund Ltd. | Cayman Islands | |||||||
PT. FTI Consulting Indonesia | Indonesia | |||||||
Sports Analytics LLC | Maryland |
The Lost City Estates S.A. | Panama | |||||||
Thompson Market Services Limited | Hong Kong | |||||||
Value Realisation GP LTD | Cayman Islands | |||||||
By: | /s/ STEVEN GUNBY | |||||||
Steven H. Gunby President and Chief Executive Officer (principal executive officer) |
By: | /s/ AJAY SABHERWAL | |||||||
Ajay Sabherwal Chief Financial Officer (principal financial officer) |
By: | /s/ STEVEN GUNBY | |||||||
Steven H. Gunby President and Chief Executive Officer (principal executive officer) |
By: | /s/ AJAY SABHERWAL | |||||||
Ajay Sabherwal Chief Financial Officer (principal financial officer) |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | McLean VA |
Auditor Firm ID | 185 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 34,026,000 | 34,333,000 |
Common stock, shares outstanding (in shares) | 34,026,000 | 34,333,000 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Statement [Abstract] | |||
Foreign currency translation adjustments, tax expense | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Stockholders' Equity (Parenthetical) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Statement of Stockholders' Equity [Abstract] | |||
Restricted share grants, net settled shares (in shares) | 116 | 94 | 93 |
Description of Business and Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business FTI Consulting, Inc., including its consolidated subsidiaries (collectively, the “Company,” “we,” “our” or “FTI Consulting”), is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. Individually, each of our segments and practices is staffed with experts recognized for the depth of their knowledge and a track record of making an impact. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle, from proactive risk management to rapid response to unexpected events and dynamic environments. We operate through five reportable segments: Corporate Finance & Restructuring (“Corporate Finance”), Forensic and Litigation Consulting (“FLC”), 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”). The consolidated financial statements include the accounts of FTI Consulting and all of our subsidiaries. All intercompany transactions and balances have been eliminated. Reclassifications of certain prior period amounts have been made to conform to the current period presentation. Foreign Currency Results of operations for our non-U.S. subsidiaries are translated from the designated functional currency to the reporting currency of the U.S. dollar (“USD”). 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 net translation adjustments are recorded as a component of stockholders’ equity in “Accumulated other comprehensive loss.” 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 the Consolidated Statements of Comprehensive 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 reported amounts 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. Our most significant estimates relate to revenues and the assessment of the recoverability of goodwill and intangible assets. Other estimates include, but are not limited to, the realization of deferred tax assets and the fair value of acquisition-related contingent consideration. Management bases its estimates on historical trends, projections, current experience and other assumptions that it believes are reasonable. Concentrations of Risk We do not have a single customer that represents 10% or more of our consolidated revenues. We derive the majority of our revenues from providing professional services to clients in the U.S. For the year ended December 31, 2022, we derived approximately 37% of our consolidated revenues from the work of professionals who are assigned to locations outside the U.S. 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. Revenue Recognition Revenues are recognized when we satisfy a performance obligation by transferring services promised in a contract to a customer and in an amount that reflects the consideration that we expect to receive in exchange for those services. Performance obligations in our contracts represent distinct or separate services that we provide to our customers. If, at the outset of an arrangement, we determine that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met. We generate the majority of our revenues by providing consulting services to our clients. Most of our consulting service contracts are based on one of the following types of contract arrangements: •Time and expense arrangements require the client to pay us based on the number of hours worked at contractually agreed-upon rates. We recognize revenues for these contract arrangements based on hours incurred and contracted rates utilizing a right-to-invoice practical expedient because we have a right to consideration for services completed to date. When a time and expense arrangement has a not-to-exceed or “cap” amount and we expect to perform work in excess of the cap, we recognize revenues up to the cap amount specified by the client. •Fixed-fee arrangements require the client to pay a fixed fee in exchange for a predetermined set of professional services. We recognize revenues earned to date by applying the proportional performance method. Generally, these arrangements have one performance obligation. •Performance-based or contingent arrangements represent forms of variable consideration. In these arrangements, our fees are based on the attainment of contractually defined objectives with our client, such as completing a business transaction or assisting the client in achieving a specific business objective. We recognize revenues earned to date in an amount that is probable not to reverse and by applying the proportional performance method when the criteria for over time revenue recognition are met. Certain fees in our time and materials arrangements may be subject to approval by a third-party, such as a bankruptcy court and other regulatory agency. In such cases, we record revenues based on the amount we estimate we will be entitled to in exchange for our services and only to the extent a significant reversal of revenue is not likely to occur when the uncertainty associated with the estimate is subsequently resolved. Potential fee reductions imposed by bankruptcy courts and other regulatory agencies or negotiated with specific clients are estimated on a specific identification basis. Our estimates may vary depending on the nature of the engagement, client economics, historical experience and other appropriate factors. When there are changes in our estimates of potential fee reductions, we record such changes to revenues with a corresponding offset to our billed and unbilled accounts receivable. In our Technology segment, certain clients are billed based on the amount of data storage used or the volume of information processed. Unit-based revenues are defined as revenues billed on a per item, per page or another unit-based method and include revenues from data processing and hosting. Unit-based revenues include revenues associated with the software products that are made available to customers via a web browser (“on-demand”). On-demand revenues are charged on a unit or monthly basis and include, but are not limited to, processing and review related functions. Reimbursable expenses, including those relating to travel, out-of-pocket expenses, outside consultants and other outside service 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. Timing of revenue recognition often differs from the timing of billing to our customers. Generally, we transfer goods or services to a customer before the customer pays consideration or payment is due. If we have an unconditional right to invoice and receive payment for goods or services already provided, we record billed and unbilled receivables on our Consolidated Balance Sheets. Our contract terms generally include a requirement of payment within 30 days when no contingencies exist. Payment terms and conditions vary depending on the jurisdiction, market and type of service, and whether regulatory or other third-party approvals are required. At times, we may execute contracts in a form provided by customers that might include different payment terms and contracts may be negotiated at the client’s request. Direct Cost of Revenues Direct cost of revenues consists primarily of billable employee compensation and related payroll benefits, the cost of contractors assigned to revenue-generating activities and direct expenses billable to clients. Direct cost of revenues also includes expense for cloud-based computing and depreciation expense on the software used to host and process client information. Direct cost of revenues does not include an allocation of corporate overhead and non-billable segment costs. Share-Based Compensation 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. The fair value of restricted share awards and restricted stock units is measured based on the closing price of the underlying stock on the date of grant. The fair value of performance stock units that contain market-based vesting conditions is measured using a Monte Carlo pricing model. The compensation cost of performance stock units with market-based vesting conditions is based on the grant date fair value and is not subsequently reversed if it is later determined that the market condition is unlikely to be met or is expected to be lower than originally anticipated. For performance stock units that contain performance-based vesting conditions, the compensation cost is adjusted each reporting period based on the probability of the awards vesting. For all of our share-based awards, we recognize forfeitures in compensation cost when they occur. Acquisition-Related Contingent Consideration The fair value of acquisition-related contingent consideration is estimated at the acquisition date utilizing either a Monte Carlo pricing model or the present value of our probability-weighted estimate of future cash flows. Subsequent to the acquisition date, on a quarterly basis, the contingent consideration liability is remeasured at current fair value with any changes recorded in earnings. Accretion expense is recorded to acquisition-related contingent consideration liabilities for changes in fair value due to the passage of time. Remeasurement gains or losses and accretion expense are included in “Selling, general and administrative” (“SG&A”) expenses on the Consolidated Statements of Comprehensive Income. 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 $19.4 million, $13.0 million and $15.2 million for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in SG&A expenses on the Consolidated Statements of Comprehensive Income. Income Taxes Our income tax provision consists principally of U.S. federal, state and international income taxes. We generate income in a significant number of states located throughout the U.S. and in 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. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including scheduled reversals of temporary differences, projected future taxable income, tax planning strategies and recent results of operations. Cash Equivalents Cash equivalents consist of money market funds, commercial paper and certificates of deposit with maturities of three months or less at the time of purchase. Allowance for Expected Credit Losses We estimate the current-period provision for expected credit losses on a specific identification basis. Our judgments regarding a specific client’s credit risk considers factors such as the counterparty’s creditworthiness, knowledge of the specific client’s circumstances and historical collection experience for similar clients. Other factors include, but are not limited to, current economic conditions and forward-looking estimates. Our actual experience may vary from our estimates. If the financial condition of our clients were to deteriorate, resulting in their inability or unwillingness to pay our fees, we may need to record additional provisions for expected credit losses in future periods. The risk of credit losses may be mitigated to the extent that we received a retainer from some of our clients prior to performing services. We maintain an allowance for expected credit losses, which represents the estimated aggregate amount of credit risk arising from the inability or unwillingness of specific clients to pay our fees or disputes that may affect our ability to fully collect our billed accounts receivable. We record our estimate of lifetime expected credit losses concurrently with the initial recognition of the underlying receivable. Accounts receivable, net of the allowance for expected credit losses, represents the amount we expect to collect. At each reporting date, we adjust the allowance for expected credit losses to reflect our current estimate. Adjustments to the allowance for expected credit losses are recorded to SG&A expenses on the Consolidated Statements of Comprehensive Income. Our billed accounts receivables are written off when the potential for recovery is considered remote. Property and Equipment We record property and equipment, including improvements that extend useful life, at cost, while maintenance and repairs are expensed as incurred. We calculate depreciation using the straight-line method based on an estimated useful life ranging from one year to eleven years for furniture, equipment and 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 computer equipment and software and is amortized over the estimated useful life of the software, which is generally three years. Purchased software licenses to be sold to customers are capitalized and amortized over the license term. Notes Receivable from Employees Notes receivable from employees principally include unsecured general recourse forgivable loans and retention payments, which are provided to attract and retain certain of our senior employees and other professionals. Generally, all of the principal amount and accrued interest of the forgivable loans we make to employees and other professionals will be forgiven according to the stated terms of the loan agreement, provided that the professional is providing services to the Company on the forgiveness date and upon other specified events, such as death or disability. Professionals who terminate their employment or services 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. If the termination was by the Company without “cause” or by the employee with “good reason,” or, subject to certain conditions, if the employee terminates his or her employment due to retirement or non-renewal of his or her employment agreement, the loan may be forgiven or continue to be forgivable, in whole or in part. We amortize forgivable loans ratably over the requisite service period, which ranges from a period of less than one year to 10 years. The amount of expense recognized at any date must at least equal the portion of the principal forgiven on the forgiveness date. Goodwill and Intangible Assets Goodwill represents the purchase price of acquired businesses in excess of the fair market value of net assets acquired at the date of acquisition. Intangible assets may include customer relationships, trademarks and acquired software. We test our goodwill and indefinite-lived intangible assets for impairment annually as of the first day of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. On a quarterly basis, we monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test. Important factors we consider 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 market decline related to negative industry or economic trends; and/or •our market capitalization relative to net carrying value. We assess our goodwill for impairment 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 the chief operating decision makers. Our annual goodwill impairment test may be conducted using a qualitative assessment or a quantitative assessment. Under GAAP, we have an option to bypass the qualitative assessment and perform a quantitative impairment test. We determine whether to perform a qualitative assessment first or to bypass the qualitative assessment and proceed with the quantitative goodwill impairment test for each of our reporting units based on the excess of fair value over carrying value from the most recent quantitative tests and other events or changes in circumstances that could impact the fair value of the reporting units. In the qualitative assessment, we consider various factors, events or circumstances, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant reporting unit specific events. If, based on the qualitative assessment, we determine that it is not “more likely than not” that the fair value of a reporting unit is less than its carrying value, we do not prepare a quantitative impairment test. If we determine otherwise, we will prepare a quantitative assessment for potential goodwill impairment. In the quantitative assessment, we compare the estimated fair value of the reporting unit with the carrying amount of that reporting unit. We estimate fair value using a combination of an income approach (based on discounted cash flows) and market approaches, using appropriate weighting factors. If the fair value exceeds the carrying amount, goodwill is not impaired. However, if the carrying value exceeds the fair value of the reporting unit, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Intangible assets with finite lives are amortized over their estimated useful life and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We amortize our acquired finite-lived intangible assets on a straight-line basis over periods ranging from to 15 years. Impairment of Long-Lived Assets We review long-lived assets such as property and equipment, operating lease assets and finite-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 with 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 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. Leases We determine if a contract is a leasing arrangement at inception. Operating lease assets represent our right to control the use of an identified asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized on the Consolidated Balance Sheets at the commencement date based on the present value of lease payments over the lease term. We use the incremental borrowing rate on the commencement date in determining the present value of our lease payments. We recognize operating lease expense for our operating leases on a straight-line basis over the lease term. We lease office space and equipment under non-cancelable operating leases, which may include renewal or termination options that are reasonably certain of exercise. Most leases include one or more options to renew, with renewal terms that can extend the lease term up to seven years. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are expensed on a straight-line basis. Lease and non-lease components are accounted for together as a single lease component for operating leases associated with our office space. 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 the Consolidated Balance Sheets. Convertible Notes The carrying amount of our 2.0% convertible senior notes due 2023 (“2023 Convertible Notes”) is recognized as a liability as of December 31, 2022 on the Consolidated Balance Sheets. We recorded debt issuance costs as an adjustment to the carrying amount of our 2023 Convertible Notes liability and amortize the costs using the effective interest rate method over the expected life of the instrument. Prior to January 1, 2022, we separately recorded the liability and equity components of our 2023 Convertible Notes. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2023 Convertible Notes. The equity component was not remeasured as long as it continued to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) was amortized to interest expense over the term of the 2023 Convertible Notes using the effective interest rate method. See Note 2, “New Accounting Standards” for additional information. Prior to January 1, 2022, upon conversion, the 2023 Convertible Notes could be settled, at our election, in cash, shares of our common stock or a combination of cash and shares of our common stock. Effective January 1, 2022, pursuant to the first supplemental indenture, dated as of January 1, 2022 (the “First Supplemental Indenture”), to the indenture, dated as of August 20, 2018, by and between the Company and U.S. Bank National Association, as trustee (as amended by the First Supplemental Indenture, the “Indenture”), governing the 2023 Convertible Notes, the Company surrendered its right to settle conversions of the 2023 Convertible Notes solely using our common stock and irrevocably elected to settle at least the $1,000 aggregate principal amount of each 2023 Convertible Note submitted for conversion on or after January 1, 2022 in cash in connection with a settlement for which we elect a cash and common stock combination settlement.
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New Accounting Standards |
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Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | New Accounting Standards Recently Adopted Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06 (“ ), Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain events. On January 1, 2022, we adopted ASU 2020-06 using the modified retrospective method and recorded a cumulative-effect adjustment of approximately $22.1 million to the beginning balance of retained earnings at the date of adoption and a $16.4 million net increase to “Long-term debt, net” on the Consolidated Balance Sheets. As permitted by the guidance, prior comparative periods were not adjusted under this method. Pursuant to ASU 2020-06, we are no longer permitted to separately account for the liability and equity components of convertible debt instruments. As such, the carrying amount of our 2023 Convertible Notes is recognized as a liability as of December 31, 2022 on the Consolidated Balance Sheets. The ASU 2020-06 adoption also resulted in the derecognition of the embedded conversion option, net of tax effects, of approximately $34.1 million, which is included in “Additional paid-in capital,” as well as the derecognition of the related deferred tax liabilities of approximately $4.3 million on the Consolidated Balance Sheets. The net effect of the adoption in the current and future periods as compared to prior periods is to reduce non-cash interest expense, or increase net income, as there is no longer a discount from the separation of the conversion feature within equity. The discount from recognition of debt issuance costs will be amortized over the effective life of the 2023 Convertible Notes using the effective interest method. ASU 2020-06 also no longer allows the use of the treasury stock method for convertible instruments for purposes of calculating diluted earnings per share and instead requires application of the if-converted method. Under that method, diluted earnings per share will generally be calculated assuming that all of the convertible debt instruments were converted solely into shares of common stock at the beginning of the reporting period unless the result would be anti-dilutive. Effective January 1, 2022, pursuant to the terms of the First Supplemental Indenture, the principal amount of the 2023 Convertible Notes being converted is required to be paid in cash and only the premium due upon conversion, if any, is permitted to be settled in shares, cash or a combination of shares and cash. Consequently, the if-converted method produces a similar result as the treasury stock method, which was used prior to the adoption of ASU 2020-06 for the 2023 Convertible Notes. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance, which requires entities to provide disclosures on significant government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. We adopted ASU 2021-10 on January 1, 2022, resulting in the reduction of direct cost of revenues expense on our Consolidated Statements of Comprehensive Income and an increase in other receivables, which are included in the “Prepaid expenses and other current assets” financial statement line item on the Consolidated Balance Sheets. The impact was not material on the Consolidated Balance Sheets as of December 31, 2022, or on the Consolidated Statements of Comprehensive Income, Consolidated Statements of Stockholders’ Equity or the Consolidated Statements of Cash Flows for the year ended December 31, 2022.
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Earnings per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Common Share | 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 common share for the effects of potentially dilutive common shares. Potentially dilutive common shares include the dilutive effects of shares issuable under our equity compensation plans, including stock options and share-based awards (restricted share awards, restricted stock units and performance stock units), each using the treasury stock method. For the year ended December 31, 2022, we used the if-converted method for calculating the potential dilutive effect of the conversion feature of the principal amount of the 2023 Convertible Notes on earnings per common share, as required by the adoption of ASU 2020-06. Prior to the adoption of ASU 2020-06, we used the treasury stock method for calculating the potential dilutive effect of the conversion feature of the principal amount of the 2023 Convertible Notes on earnings per common share because we had the ability and intent to settle the principal amount of the outstanding 2023 Convertible Notes in cash. The conversion feature had a dilutive impact on earnings per common share for the years ended December 31, 2022, 2021 and 2020, as the average market price per share of our common stock for the periods exceeded the conversion price of $101.38 per share. See Note 14, “Debt” for additional information about the 2023 Convertible Notes.
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Revenues |
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Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues We generate the majority of our revenues by providing consulting services to our clients. See Note 1, “Description of Business and Summary of Significant Accounting Policies” for additional information on the types of consulting contract arrangements we provide. Revenues are recognized when we satisfy a performance obligation by transferring services promised in a contract to a customer and in an amount that reflects the consideration that we expect to receive in exchange for those services. Performance obligations in our contracts represent distinct or separate services that we provide to our customers. We estimate that approximately 75% of our revenues recognized during the year ended December 31, 2022 were generated from time and expense contract arrangements. If, at the outset of an arrangement, we determine that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met. Revenues recognized during the current period may include revenues from performance obligations satisfied or partially satisfied in previous periods. This primarily occurs when the estimated transaction price has changed based on our current probability assessment over whether the agreed-upon outcome for our performance-based and contingent arrangements will be achieved. The aggregate amount of revenues recognized related to a change in the transaction price in the current period, which related to performance obligations satisfied or partially satisfied in a prior period, was $24.4 million, $26.3 million and $19.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. Unfulfilled performance obligations primarily consist of fees not yet recognized on certain fixed-fee arrangements and performance-based and contingent arrangements. As of December 31, 2022 and 2021, the aggregate amount of the remaining contract transaction price allocated to unfulfilled performance obligations was $3.6 million and $3.7 million, respectively. We expect to recognize the majority of the related revenues over the next 18 months. We elected to utilize the optional exemption to exclude from this disclosure fixed-fee and performance-based and contingent arrangements with an original expected duration of one year or less and to exclude our time and expense arrangements for which revenues are recognized using the right-to-invoice practical expedient. Contract assets are defined as assets for which we have recorded revenues but are not yet entitled to receive our fees because certain events, such as completion of the measurement period or client approval, must occur. The contract asset balance was immaterial and $3.8 million as of December 31, 2022 and 2021, respectively. Contract liabilities are defined as liabilities incurred when we have received consideration but have not yet performed the agreed-upon services. This may occur when clients pay fees before work begins. The contract liability balance was immaterial as of December 31, 2022 and 2021, respectively.
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Accounts Receivable and Allowance for Expected Credit Losses |
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Allowance For Doubtful Accounts And Unbilled Services [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Allowance for Expected Credit Losses | Accounts Receivable and Allowance for Expected Credit Losses The following table summarizes the components of “Accounts receivable, net” as presented on the Consolidated Balance Sheets:
The following table summarizes the total provision for expected credit losses and write-offs:
Our provision for expected credit losses includes recoveries, direct write-offs and charges to other accounts. Billed accounts receivables are written off when the potential for recovery is considered remote. See Note 1, “Description of Business and Summary of Significant Accounting Policies” for additional information on our accounting policies for the allowance for expected credit losses.
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Special Charges |
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Special Charges | Special Charges During the year ended December 31, 2022, we recorded a special charge of $8.3 million, which consisted of employee severance and other employee-related costs associated with programmatic headcount reductions primarily in our FLC and Corporate Finance segments to realign our workforce with current business demand. All of these amounts will be paid in cash in the next 12 months. The following table details the special charges by segment.
There were no special charges recorded during the year ended December 31, 2021. During the year ended December 31, 2020, we recorded a special charge of $7.1 million, which consists of the following components: •$4.7 million of lease abandonment and other relocation costs associated with the consolidation of office space in New York, New York; and •$2.4 million of employee severance and other employee-related costs in our FLC segment. The following table details the special charges by segment:
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Share-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation Share-Based Incentive Compensation Plans Under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan, effective as of June 7, 2017, and as amended as of June 3, 2020, there were 1,026,963 shares of common stock available for grant as of December 31, 2022. Share-Based Compensation Expense The table below reflects the total share-based compensation expense recognized in our Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020:
Stock Options We did not grant any stock options during the years ended December 31, 2022, 2021 and 2020. Historically, we used the Black-Scholes option-pricing model to determine the fair value of our stock option grants. A summary of our stock option activity during the year ended December 31, 2022 is presented below. The aggregate intrinsic value of stock options outstanding and exercisable, or fully vested, at December 31, 2022 in the table below represents the total pre-tax intrinsic value, which is calculated as the difference between the closing price of our common stock on the last trading day of 2022 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, 2022. The aggregate intrinsic value changes based on fluctuations in the fair market value per share of our common stock.
Cash received from option exercises for the years ended December 31, 2022, 2021 and 2020 was $2.3 million, $2.7 million and $4.9 million, respectively. The tax benefit realized from stock options exercised was immaterial for each of the years ended December 31, 2022, 2021 and 2020. The intrinsic value of stock 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 stock options exercised for the years ended December 31, 2022, 2021 and 2020 was $8.8 million, $8.3 million and $11.0 million, respectively. As of December 31, 2022, there was no unrecognized compensation cost related to stock options. Restricted Share Awards A summary of our restricted share awards activity during the year ended December 31, 2022 is presented below:
As of December 31, 2022, there was $45.9 million of unrecognized compensation cost related to unvested restricted share awards. That cost is expected to be recognized ratably over a weighted average period of 3.7 years. The total fair value of restricted share awards that vested during the years ended December 31, 2022, 2021 and 2020 was $42.1 million, $25.3 million and $27.9 million, respectively. Restricted Stock Units A summary of our restricted stock units activity during the year ended December 31, 2022 is presented below:
As of December 31, 2022, there was $8.9 million of unrecognized compensation cost related to unvested restricted stock units. That cost is expected to be recognized ratably over a weighted average period of 4.3 years. The total fair value of restricted stock units released for the years ended December 31, 2022, 2021 and 2020 was $7.2 million, $4.1 million and $6.1 million, respectively. Performance Stock Units Performance stock units represent common stock potentially issuable in the future, subject to achievement of either market or performance conditions. Our current outstanding performance stock units that are subject to market conditions vest based on the adjusted total shareholder return of the Company as compared with the adjusted total shareholder return of the Standard & Poor’s 500 Index over the applicable performance period. Our current outstanding performance stock units that are subject to performance conditions vest based on Adjusted EBITDA metrics over the applicable performance period. The vesting and payout range for all of our performance stock units is typically between 0% and up to 150% of the target number of shares granted at the end of a - or three-year performance period. A summary of our performance stock units activity during the year ended December 31, 2022 is presented below:
(1) Performance stock units granted are presented at the maximum potential payout percentage of 150% of target shares granted. (2) Performance stock units are forfeited when the market or performance conditions for maximum payout are not achieved, including performance stock units that do not achieve any payout, or the employee is terminated prior to vesting. As of December 31, 2022, there was $9.1 million of unrecognized compensation cost related to unvested performance stock units. That cost is expected to be recognized ratably over a weighted average period of 1.0 year. The total fair value of performance stock units released during the years ended December 31, 2022, 2021 and 2020 was $14.2 million, $17.2 million and $12.6 million, respectively. The weighted average grant date fair value per share of restricted share awards, restricted stock units and performance stock units awarded during the years ended December 31, 2022, 2021 and 2020 was $157.65, $132.40 and $120.99, respectively. The fair value of our restricted share awards, restricted stock units and performance stock units that are subject to performance conditions is determined based on the closing market price per share of our common stock on the grant date. The fair value of our performance stock units subject to market conditions is calculated using a Monte Carlo pricing model as of the grant date.
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Interest Income and Other |
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Interest Income and Other | Interest Income and Other The table below presents the components of “Interest income and other” as shown on the Consolidated Statements of Comprehensive Income:
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Balance Sheet Details |
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Balance Sheet Details | Balance Sheet Details The table below presents the components of “Prepaid expenses and other current assets” and “Accounts payable, accrued expenses and other” as shown on the Consolidated Balance Sheets:
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Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment consist of the following:
Depreciation expense for property and equipment totaled $35.9 million, $34.3 million and $32.6 million during the years ended December 31, 2022, 2021 and 2020, respectively.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The table below summarizes the changes in the carrying amount of goodwill by reportable segment:
(1)There were no accumulated impairment losses for the Corporate Finance, FLC, Economic Consulting or Technology segments as of December 31, 2022, 2021 and 2020. (2)Amounts for our Strategic Communications segment include gross carrying values of $305.6 million, $322.3 million and $323.7 million as of December 31, 2022, 2021, and 2020, respectively, and accumulated impairment losses of $194.1 million representing the aggregate impairment charges for the years ended December 31, 2022, 2021 and 2020. (3)During the years ended December 31, 2022 and 2021, we acquired certain assets of businesses that were assigned to the Corporate Finance and FLC segments, respectively. We recorded $11.3 million and $5.5 million in goodwill as a result of the acquisitions in 2022 and 2021, respectively. We have included the results of the acquired businesses' operations in the Corporate Finance and FLC segments since the acquisition dates. Intangible Assets Intangible assets were as follows:
(1)During the year ended December 31, 2022, we acquired a business, and its related intangible assets were assigned to the Corporate Finance segment. Intangible assets with finite lives are amortized over their estimated useful life. We recorded amortization expense of $9.6 million, $10.8 million and $10.4 million during the years ended December 31, 2022, 2021 and 2020, respectively. No impairment charges for intangible assets were recorded during the years ended December 31, 2022, 2021 and 2020. We estimate our future amortization expense for our intangible assets with finite lives to be as follows:
(1)Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, impairments, changes in useful lives, or other relevant factors or changes.
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Notes Receivable from Employees |
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Notes Receivable from Employees | Notes Receivable from Employees The table below summarizes the changes in the carrying amount of our notes receivable from employees:
As of December 31, 2022 and 2021, there were 365 and 321 notes outstanding, respectively. Total amortization expense for the years ended December 31, 2022, 2021 and 2020 was $30.8 million, $34.4 million and $29.4 million, respectively.
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Financial Instruments |
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Financial Instruments | Financial Instruments The following tables present the carrying amounts and estimated fair values of our financial instruments by hierarchy level as of December 31, 2022 and 2021:
(1)The short-term portion is included in “Accounts payable, accrued expenses and other,” and the long-term portion is included in “Other liabilities” on the Consolidated Balance Sheets. (2)The carrying value as of December 31, 2022 includes unamortized deferred debt issuance costs. The carrying value as of December 31, 2021 includes unamortized deferred debt issuance costs and debt discount. The fair values of financial instruments not included in the tables above are estimated to be equal to their carrying values as of December 31, 2022 and December 31, 2021. We estimate the fair value of our 2023 Convertible Notes based on their last actively traded prices. The fair value of our debt is classified within Level 2 of the fair value hierarchy because it is traded in less active markets. We estimate the fair value of acquisition-related contingent consideration using either a probability-weighted discounted cash flow model or a Monte Carlo pricing model. These fair value estimates represent Level 3 measurements as they are based on significant inputs not observed in the market and reflect our own assumptions. We have multiple valuation models that use different inputs and assumptions based on the timing of the acquisitions. As a result, the significant unobservable inputs used in these models vary. The acquisition-related contingent consideration liabilities subject to the Monte Carlo pricing model were valued using significant unobservable inputs, including volatility rates between 30.0% and 32.5% and discount rates between 14.0% and 16.5%, which reflect the weighted average of our cost of debt and adjusted cost of equity of the acquired companies, and future cash flows. The acquisition-related contingent consideration subject to the probability-weighted discounted cash flow model was valued using significant unobservable inputs, including a discount rate of 15.0% and future cash flows. Significant increases (or decreases) in these unobservable inputs in isolation would result in significantly lower (or higher) fair values. We reassess the fair value of our acquisition-related contingent consideration at each reporting period based on additional information as it becomes available. The change in our liability for acquisition-related contingent consideration for our Level 3 financial instruments is as follows:
(1)Accretion expense is included in “Selling, general and administrative expenses” on the Consolidated Statements of Comprehensive Income. (2)Foreign currency translation adjustments are included in “Other comprehensive income (loss), net of tax” on the Consolidated Statements of Comprehensive Income. (3)Remeasurement gain or loss resulting from a change in fair value of an acquisition's contingent consideration liability is recorded in SG&A expenses on the Consolidated Statements of Comprehensive Income. (4)During the year ended December 31, 2022, we acquired a business that was assigned to the Corporate Finance segment.
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Debt | Debt The table below summarizes the components of the Company’s debt:
(1)Pursuant to the adoption of ASU 2020-06, we derecognized the conversion option of $34.1 million, net of tax, previously attributable to the equity component of the 2023 Convertible Notes. Similarly, the related debt discount is no longer amortized into income as interest expense over the life of the instrument; therefore, we recorded a $16.4 million increase to “Long-term debt, net” on the Consolidated Balance Sheet as of December 31, 2022. (2)There were no current portions of long-term debt as of December 31, 2022 and 2021. The 2023 Convertible Notes due on August 15, 2023 are classified as long-term debt as of December 31, 2022 because we have the ability and intent to refinance them on a long-term basis under our Credit Facility, which matures on November 21, 2027. 2023 Convertible Notes On August 20, 2018, we issued the 2023 Convertible Notes in an aggregate principal amount of $316.3 million. The 2023 Convertible Notes bear interest at a fixed rate of 2.0% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2019. The 2023 Convertible Notes will mature on August 15, 2023, unless earlier converted or repurchased. As of December 31, 2021, upon conversion, the 2023 Convertible Notes could be settled, at our election, in cash, shares of our common stock or a combination of cash and shares of our common stock. Effective January 1, 2022, pursuant to the terms of the Indenture, upon conversion, the principal amount of the 2023 Convertible Notes being converted is required to be paid in cash and only the premium due upon conversion, if any, is permitted to be settled, at our election, in shares, cash or a combination of shares and cash. The 2023 Convertible Notes are senior unsecured obligations of the Company. The 2023 Convertible Notes are convertible at maturity at a conversion rate of 9.8643 shares of our common stock per $1,000 principal amount of the 2023 Convertible Notes (equivalent to a conversion price of approximately $101.38 per share of common stock). Holders may convert their 2023 Convertible Notes at any time prior to the close of business on the business day immediately preceding May 15, 2023 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of the 2023 Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate in effect on each such trading day; or (3) upon the occurrence of specified corporate events. On or after May 15, 2023, until the close of business on the business day immediately preceding the maturity date of August 15, 2023, holders may convert their 2023 Convertible Notes at any time, regardless of the foregoing circumstances. The 2023 Convertible Notes were convertible in each of the quarters ended September 30, 2021 through December 31, 2022. The number of shares issued upon conversion of the 2023 Convertible Notes in each period was immaterial. The circumstances required to allow the holders to convert their 2023 Convertible Notes prior to maturity were met as of December 31, 2022; therefore, holders may convert their notes at any time beginning on January 1, 2023 and ending on March 31, 2023. Based on the Company's stock price on December 31, 2022, the if-converted value of the 2023 Convertible Notes exceeded the principal amount by $179.1 million. We may not redeem the 2023 Convertible Notes prior to the maturity date. If we undergo a fundamental change (as defined in the Indenture), subject to certain conditions, holders may require us to repurchase for cash all or part of their 2023 Convertible Notes in principal amounts of $1,000 or a multiple thereof. The fundamental change repurchase price will be equal to 100% of the principal amount of the 2023 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. In addition, in certain circumstances, we may be required to increase the conversion rate for any 2023 Convertible Notes converted in connection with a make-whole fundamental change (as defined in the Indenture). Prior to the adoption of ASU 2020-06, the Company separated the 2023 Convertible Notes into liability and equity components. The debt discount and debt issuance costs attributable to the liability component were amortized to interest expense over the term of the 2023 Convertible Notes using the effective interest rate method. The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method, which resulted in accounting for the 2023 Convertible Notes as a single liability and the debt discount is no longer amortized into income as interest expense. See Note 2, “New Accounting Standards” for additional information about the adoption of ASU 2020-06. Contractual interest expense for the 2023 Convertible Notes was $6.3 million in each of 2022, 2021 and 2020. Amortization of the debt discount on the 2023 Convertible Notes prior to the adoption of ASU 2020-06 was $9.6 million and $9.1 million in 2021 and 2020, respectively. Credit Facility On June 26, 2015, we entered into a credit agreement, which provided for a $550.0 million senior secured bank revolving credit facility (“Original Credit Facility”) maturing on June 26, 2020. In November 2018, we amended and restated the credit agreement to the Original Credit Facility, to, among other things, extend the maturity to November 30, 2023 (“2018 Credit Facility”). On November 21, 2022, we amended and restated the credit agreement to the 2018 Credit Facility, to, among other things, (i) extend the maturity to November 21, 2027, (ii) increase the revolving line of credit limit from $550.0 million to $900.0 million, and (iii) increase the incremental facility from $150.0 million to a maximum of $300.0 million, subject to certain conditions (the Original Credit Facility as amended and restated by the 2018 Credit Facility and as further amended, the “Credit Facility”), and incurred an additional $4.0 million of debt issuance costs. The Credit Facility is guaranteed by substantially all of our wholly-owned domestic subsidiaries and is secured by a first priority security interest in substantially all of the assets of FTI Consulting and such domestic subsidiaries. Borrowings under the Credit Facility bear interest at a rate equal to, in the case of: (i) USD, at our option, Adjusted Term Secured Overnight Financing Rate (“SOFR”) or Adjusted Daily Simple SOFR, (ii) euro, Euro Interbank Offered Rate, (iii) British pound, Sterling Overnight Index Average Reference Rate, (iv) Australian dollars, Bank Bill Swap Reference Bid Rate, (v) Canadian dollars, Canadian Dollar Offered Rate, (vi) Swiss franc, Swiss Average Rate Overnight and (vii) Japanese yen, Tokyo Interbank Offered Rate, in each case, plus an applicable margin that will fluctuate between 1.25% per annum and 2.00% per annum based upon the Company’s Consolidated Total Net Leverage Ratio (as defined in the Credit Facility) at such time or, in the case of USD borrowings, an alternative base rate plus an applicable margin that will fluctuate between 0.25% per annum and 1.00% per annum based upon the Company’s Consolidated Total Net Leverage Ratio at such time. The alternative base rate means a fluctuating rate per annum equal to the highest of (1) the federal funds rate plus the sum of 50 basis points, (2) the rate of interest in effect for such day as the prime rate announced by Bank of America, and (3) the one-month Term SOFR plus 100 basis points. Under the Credit Facility, we are required to pay a commitment fee rate that fluctuates between 0.20% and 0.35% per annum and a letter of credit fee rate that fluctuates between 1.25% and 2.00% per annum, in each case, based upon the Company’s Consolidated Total Net Leverage Ratio. There were no borrowings outstanding under the Credit Facility as of December 31, 2022 and 2021. Additionally, $0.4 million of the borrowing limit was used for letters of credit (and, therefore, unavailable) as of December 31, 2022. There were $4.3 million and $0.9 million of unamortized debt issuance costs related to the Credit Facility as of December 31, 2022 and 2021, respectively. These amounts were included in “Other assets” on our Consolidated Balance Sheets. Long-Term Debt Maturities Our maturity analysis for our remaining future undiscounted cash flows for the principal portion of our long-term debt assumes that payments will be made based on the current payment schedule and excludes any additional revolving line of credit borrowings or repayments subsequent to December 31, 2022 and prior to the November 21, 2027 maturity date of our Credit Facility. We estimate future undiscounted cash flows for the principal portion of our long-term debt to be $316.2 million in 2023.
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Leases |
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Leases | LeasesWe lease office space and equipment under non-cancelable operating leases. We recognize operating lease expense on a straight-line basis over the lease term, which may include renewal or termination options that are reasonably certain of exercise. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets and are expensed on a straight-line basis. Most leases include one or more options to renew, with renewal terms that can extend the lease term up to seven years. The exercise of lease renewal options is at our sole discretion. Certain of our lease agreements include rental payments that are adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The table below summarizes the carrying amount of our operating lease assets and liabilities:
The table below summarizes total lease costs:
Our sublease arrangements do not contain renewal options or restrictive covenants. We estimate future sublease rental income to be $1.3 million in 2023, $1.2 million in 2024 and $0.3 million in 2025. There is no future sublease rental income estimated for the years beyond 2025. The maturity analysis below summarizes the remaining future undiscounted cash flows for our operating leases and includes a reconciliation to operating lease liabilities reported on the Consolidated Balance Sheets:
The table below includes cash paid for our operating lease liabilities, other non-cash information, our weighted average remaining lease term and weighted average discount rate:
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Commitments and Contingencies |
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Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesWe 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 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. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The table below summarizes significant components of deferred tax assets and liabilities:
As of December 31, 2022 and 2021, the Company recorded certain deferred tax assets related to foreign tax credits, foreign capital loss and foreign net operating loss carryforwards, which can be carried forward for periods ranging from 9 years to indefinite. Based on forward-looking financial information, the Company believes it is not more likely than not that the attributes will be utilized. Therefore, valuation allowances of $6.5 million and $10.3 million are recorded against the Company’s deferred tax assets as of December 31, 2022 and 2021, respectively. As of December 31, 2022, a U.S. subsidiary of the Company (the “Licensor”) entered into an intellectual property license agreement with certain foreign subsidiaries of the Company in consideration of royalty payments that have been partially prepaid (the “License Agreement”). The prepaid royalties remitted to the Licensor are taxable in the U.S. for the year ended December 31, 2022 and represent intangible assets in the foreign subsidiaries that are eliminated in consolidation. The impact on the U.S. current income tax provision was mainly offset by a deferred foreign income tax benefit related to the future tax deductions arising from amortization of intangible assets in the foreign subsidiaries. The License Agreement provides sufficient future taxable income in the U.S. to fully utilize the Company’s existing foreign tax credits in the U.S., which were previously subject to a valuation allowance. The impact on the tax rate for the year ended December 31, 2022 was a combined $9.6 million tax benefit. During the year ended December 31, 2021, the valuation allowance on the deferred tax assets in Australia was released because of sustained profitability. Additionally, a valuation allowance was recorded in the U.S. on foreign tax credit carryforwards as the Company does not have sufficient foreign source income in the U.S. to fully utilize the foreign tax credits. As of December 31, 2022, the Company has not recorded a $41.3 million deferred tax liability related to the basis difference in the investment in our foreign subsidiaries, as the investment is considered permanent in nature. The table below summarizes the components of income before income tax provision from continuing operations:
The table below summarizes the components of income tax provision from continuing operations:
Our income tax provision from continuing operations resulted in effective tax rates that varied from the federal statutory income tax rate as summarized below:
The income tax provision for the years ended December 31, 2022 and 2021 was $62.2 million and $63.0 million, respectively. The decrease in expense is primarily attributable to the $9.6 million income tax benefit related to the License Agreement, which was largely offset by the following 2021 favorable one-time tax adjustments: a $5.1 million benefit related to the release of the valuation allowance on our deferred tax assets in Australia because of sustained profitability and a $3.2 million benefit related to the remeasurement of our deferred tax asset related to an intellectual property license between our U.S. and United Kingdom (“U.K.”) subsidiaries due to a future change in the U.K. tax rate. 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 2017. We are also no longer subject to state and local or foreign tax examinations by tax authorities for years prior to 2014. Our liability for uncertain tax positions was $3.2 million and $6.4 million as of December 31, 2022 and 2021, respectively. As of December 31, 2022, our accrual for the payment of tax-related interest and penalties was not significant
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Stockholders' Equity |
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Stockholders' Equity | Stockholders’ Equity 2016 Stock Repurchase Program On June 2, 2016, our Board of Directors authorized a stock repurchase program of up to $100.0 million (the “Repurchase Program”). On each of May 18, 2017, December 1, 2017, February 21, 2019 and February 20, 2020, our Board of Directors authorized an additional $100.0 million. On each of July 28, 2020 and December 3, 2020, our Board of Directors authorized an additional $200.0 million. On December 1, 2022, our Board of Directors authorized an additional $400.0 million, increasing the Repurchase Program to an aggregate authorization of $1.3 billion. No time limit has been established for the completion of the Repurchase Program, and the Repurchase Program may be suspended, discontinued or replaced by the Board of Directors at any time without prior notice. As of December 31, 2022, we had $478.5 million available under the Repurchase Program to repurchase additional shares. The following table details our stock repurchases under the Repurchase Program:
As we repurchase our common shares, we reduce stated capital on our Consolidated Balance Sheets for the $0.01 of par value of the shares repurchased, with the excess purchase price over par value recorded as a reduction to additional paid-in capital. If additional paid-in capital is reduced to zero, we record the remainder of the excess purchase price over par value as a reduction of retained earnings. Common Stock Outstanding Common stock outstanding was 34.0 million shares and 34.3 million shares as of December 31, 2022 and 2021, respectively. Common stock outstanding includes unvested restricted stock awards, which are considered issued and outstanding under the terms of the restricted stock award agreements.
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Employee Benefit Plans |
12 Months Ended |
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Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 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 percentage of the participant’s eligible compensation. We made contributions related to the plan of $32.4 million, $29.1 million and $26.2 million during the years ended December 31, 2022, 2021 and 2020, respectively. We also maintain several defined contribution pension plans for our employees in the U.K. and other foreign countries. We contributed to these plans $12.6 million, $11.6 million and $9.2 million during the years ended December 31, 2022, 2021 and 2020, respectively.
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting We manage our business in five reportable segments: Corporate Finance, FLC, Economic Consulting, Technology and Strategic Communications. Our Corporate Finance segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, and other financing sources and creditor groups, as well as other parties-in-interest. We deliver a wide range of services centered around three core offerings: Business Transformation & Strategy, Transactions and Turnaround & Restructuring. Our FLC segment provides law firms, companies, boards of directors, government entities, private equity firms and other interested parties with a multidisciplinary and independent range of services in risk and investigations and disputes, including cybersecurity, and a focus on highly regulated industries such as our Construction & Environmental Solutions and Health Solutions Services. These services are supported by our data & analytics technology-enabled solutions, which help our clients analyze large, disparate sets of data related to their business operations and support our clients during regulatory inquiries and commercial disputes. We deliver a wide range of services centered around five core offerings: Construction & Environmental Solutions, Data & Analytics, Disputes, Health Solutions and Risk and Investigations. Our Economic Consulting segment, including subsidiary Compass Lexecon LLC, provides law firms, companies, government entities and other interested parties with analyses of complex economic issues for use in international arbitration, legal and regulatory proceedings, and strategic decision making and public policy debates around the world. We deliver a wide range of services centered around three core offerings: Antitrust & Competition Economics, Financial Economics and International Arbitration. Our Technology segment provides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of digital insights and risk management consulting services. Our professionals help organizations better address risk as the growing volume and variety of enterprise data intersects with legal, regulatory and compliance needs. We deliver a wide range of expert solutions driven by investigations, litigation, M&A, antitrust and competition, and compliance and risk through three core offerings: Corporate Legal Department Consulting, E-discovery Services and Expertise, and Information Governance, Privacy & Security Services. Our Strategic Communications segment develops and executes communications strategies to help management teams, boards of directors, law firms, governments and regulators manage change and mitigate risk surrounding transformational and disruptive events, including transactions, investigations, disputes, crises, regulation and legislation. We deliver a wide range of services centered around three core offerings: Corporate Reputation, Financial Communications and Public Affairs. We evaluate the performance of our operating segments based on Adjusted Segment EBITDA, a GAAP financial measure. We define Adjusted Segment EBITDA as a segment’s share of consolidated operating income before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment’s ability to generate cash. The table below presents revenues and Adjusted Segment EBITDA for our reportable segments:
The table below reconciles net income to Total Adjusted Segment EBITDA. Unallocated corporate expenses primarily include indirect costs related to centrally managed administrative functions that 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 and strategy functions.
The table below presents assets by reportable segment, reconciled to consolidated amounts. Segment assets primarily include accounts and notes receivable, fixed assets purchased specifically for the segment, goodwill and intangible assets.
The table below details total revenues by country. Revenues have been attributed to locations based on the location of the legal entity generating the revenues.
(1) There are no countries included in these amounts that individually represented more than 10 percent of total revenues for the years ended December 31, 2022, 2021 and 2020. We do not have a single customer that represents 10% or more of our consolidated revenues. The table below details information on our long-lived assets, which include property and equipment, net and non-current operating lease assets, by country. Long-lived assets have been attributed to locations based on the location of the legal entity holding the assets.
(1) There are no countries included in these amounts that individually represented more than 10 percent of long-lived assets as of December 31, 2022 and 2021.
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Description of Business and Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting Principles Our financial statements are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of FTI Consulting and all of our subsidiaries. All intercompany transactions and balances have been eliminated. Reclassifications of certain prior period amounts have been made to conform to the current period presentation.
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Foreign Currency | 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 (“USD”). 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 net translation adjustments are recorded as a component of stockholders’ equity in “Accumulated other comprehensive loss.” 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 the Consolidated Statements of Comprehensive 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.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts 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. Our most significant estimates relate to revenues and the assessment of the recoverability of goodwill and intangible assets. Other estimates include, but are not limited to, the realization of deferred tax assets and the fair value of acquisition-related contingent consideration. Management bases its estimates on historical trends, projections, current experience and other assumptions that it believes are reasonable.
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Concentrations of Risk | Concentrations of Risk We do not have a single customer that represents 10% or more of our consolidated revenues. We derive the majority of our revenues from providing professional services to clients in the U.S. For the year ended December 31, 2022, we derived approximately 37% of our consolidated revenues from the work of professionals who are assigned to locations outside the U.S. 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.
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Revenue Recognition | Revenue Recognition Revenues are recognized when we satisfy a performance obligation by transferring services promised in a contract to a customer and in an amount that reflects the consideration that we expect to receive in exchange for those services. Performance obligations in our contracts represent distinct or separate services that we provide to our customers. If, at the outset of an arrangement, we determine that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met. We generate the majority of our revenues by providing consulting services to our clients. Most of our consulting service contracts are based on one of the following types of contract arrangements: •Time and expense arrangements require the client to pay us based on the number of hours worked at contractually agreed-upon rates. We recognize revenues for these contract arrangements based on hours incurred and contracted rates utilizing a right-to-invoice practical expedient because we have a right to consideration for services completed to date. When a time and expense arrangement has a not-to-exceed or “cap” amount and we expect to perform work in excess of the cap, we recognize revenues up to the cap amount specified by the client. •Fixed-fee arrangements require the client to pay a fixed fee in exchange for a predetermined set of professional services. We recognize revenues earned to date by applying the proportional performance method. Generally, these arrangements have one performance obligation. •Performance-based or contingent arrangements represent forms of variable consideration. In these arrangements, our fees are based on the attainment of contractually defined objectives with our client, such as completing a business transaction or assisting the client in achieving a specific business objective. We recognize revenues earned to date in an amount that is probable not to reverse and by applying the proportional performance method when the criteria for over time revenue recognition are met. Certain fees in our time and materials arrangements may be subject to approval by a third-party, such as a bankruptcy court and other regulatory agency. In such cases, we record revenues based on the amount we estimate we will be entitled to in exchange for our services and only to the extent a significant reversal of revenue is not likely to occur when the uncertainty associated with the estimate is subsequently resolved. Potential fee reductions imposed by bankruptcy courts and other regulatory agencies or negotiated with specific clients are estimated on a specific identification basis. Our estimates may vary depending on the nature of the engagement, client economics, historical experience and other appropriate factors. When there are changes in our estimates of potential fee reductions, we record such changes to revenues with a corresponding offset to our billed and unbilled accounts receivable. In our Technology segment, certain clients are billed based on the amount of data storage used or the volume of information processed. Unit-based revenues are defined as revenues billed on a per item, per page or another unit-based method and include revenues from data processing and hosting. Unit-based revenues include revenues associated with the software products that are made available to customers via a web browser (“on-demand”). On-demand revenues are charged on a unit or monthly basis and include, but are not limited to, processing and review related functions. Reimbursable expenses, including those relating to travel, out-of-pocket expenses, outside consultants and other outside service 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. Timing of revenue recognition often differs from the timing of billing to our customers. Generally, we transfer goods or services to a customer before the customer pays consideration or payment is due. If we have an unconditional right to invoice and receive payment for goods or services already provided, we record billed and unbilled receivables on our Consolidated Balance Sheets. Our contract terms generally include a requirement of payment within 30 days when no contingencies exist. Payment terms and conditions vary depending on the jurisdiction, market and type of service, and whether regulatory or other third-party approvals are required. At times, we may execute contracts in a form provided by customers that might include different payment terms and contracts may be negotiated at the client’s request. Direct Cost of Revenues Direct cost of revenues consists primarily of billable employee compensation and related payroll benefits, the cost of contractors assigned to revenue-generating activities and direct expenses billable to clients. Direct cost of revenues also includes expense for cloud-based computing and depreciation expense on the software used to host and process client information. Direct cost of revenues does not include an allocation of corporate overhead and non-billable segment costs.
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Share-Based Compensation | Share-Based Compensation 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. The fair value of restricted share awards and restricted stock units is measured based on the closing price of the underlying stock on the date of grant. The fair value of performance stock units that contain market-based vesting conditions is measured using a Monte Carlo pricing model. The compensation cost of performance stock units with market-based vesting conditions is based on the grant date fair value and is not subsequently reversed if it is later determined that the market condition is unlikely to be met or is expected to be lower than originally anticipated. For performance stock units that contain performance-based vesting conditions, the compensation cost is adjusted each reporting period based on the probability of the awards vesting. For all of our share-based awards, we recognize forfeitures in compensation cost when they occur.
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Acquisition-Related Contingent Consideration | Acquisition-Related Contingent Consideration The fair value of acquisition-related contingent consideration is estimated at the acquisition date utilizing either a Monte Carlo pricing model or the present value of our probability-weighted estimate of future cash flows. Subsequent to the acquisition date, on a quarterly basis, the contingent consideration liability is remeasured at current fair value with any changes recorded in earnings. Accretion expense is recorded to acquisition-related contingent consideration liabilities for changes in fair value due to the passage of time. Remeasurement gains or losses and accretion expense are included in “Selling, general and administrative” (“SG&A”) expenses on the Consolidated Statements of Comprehensive Income.
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Advertising Costs | Advertising CostsAdvertising costs consist of marketing, advertising through print and other media, professional event sponsorship and public relations. These costs are expensed as incurred. |
Income Taxes | Income Taxes Our income tax provision consists principally of U.S. federal, state and international income taxes. We generate income in a significant number of states located throughout the U.S. and in 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. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including scheduled reversals of temporary differences, projected future taxable income, tax planning strategies and recent results of operations.
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Cash Equivalents | Cash EquivalentsCash equivalents consist of money market funds, commercial paper and certificates of deposit with maturities of three months or less at the time of purchase. |
Allowance for Expected Credit Losses | Allowance for Expected Credit Losses We estimate the current-period provision for expected credit losses on a specific identification basis. Our judgments regarding a specific client’s credit risk considers factors such as the counterparty’s creditworthiness, knowledge of the specific client’s circumstances and historical collection experience for similar clients. Other factors include, but are not limited to, current economic conditions and forward-looking estimates. Our actual experience may vary from our estimates. If the financial condition of our clients were to deteriorate, resulting in their inability or unwillingness to pay our fees, we may need to record additional provisions for expected credit losses in future periods. The risk of credit losses may be mitigated to the extent that we received a retainer from some of our clients prior to performing services. We maintain an allowance for expected credit losses, which represents the estimated aggregate amount of credit risk arising from the inability or unwillingness of specific clients to pay our fees or disputes that may affect our ability to fully collect our billed accounts receivable. We record our estimate of lifetime expected credit losses concurrently with the initial recognition of the underlying receivable. Accounts receivable, net of the allowance for expected credit losses, represents the amount we expect to collect. At each reporting date, we adjust the allowance for expected credit losses to reflect our current estimate. Adjustments to the allowance for expected credit losses are recorded to SG&A expenses on the Consolidated Statements of Comprehensive Income. Our billed accounts receivables are written off when the potential for recovery is considered remote.
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Property and Equipment | Property and Equipment We record property and equipment, including improvements that extend useful life, at cost, while maintenance and repairs are expensed as incurred. We calculate depreciation using the straight-line method based on an estimated useful life ranging from one year to eleven years for furniture, equipment and 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 computer equipment and software and is amortized over the estimated useful life of the software, which is generally three years. Purchased software licenses to be sold to customers are capitalized and amortized over the license term.
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Notes Receivable from Employees | Notes Receivable from Employees Notes receivable from employees principally include unsecured general recourse forgivable loans and retention payments, which are provided to attract and retain certain of our senior employees and other professionals. Generally, all of the principal amount and accrued interest of the forgivable loans we make to employees and other professionals will be forgiven according to the stated terms of the loan agreement, provided that the professional is providing services to the Company on the forgiveness date and upon other specified events, such as death or disability. Professionals who terminate their employment or services 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. If the termination was by the Company without “cause” or by the employee with “good reason,” or, subject to certain conditions, if the employee terminates his or her employment due to retirement or non-renewal of his or her employment agreement, the loan may be forgiven or continue to be forgivable, in whole or in part. We amortize forgivable loans ratably over the requisite service period, which ranges from a period of less than one year to 10 years. The amount of expense recognized at any date must at least equal the portion of the principal forgiven on the forgiveness date.
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the purchase price of acquired businesses in excess of the fair market value of net assets acquired at the date of acquisition. Intangible assets may include customer relationships, trademarks and acquired software. We test our goodwill and indefinite-lived intangible assets for impairment annually as of the first day of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. On a quarterly basis, we monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test. Important factors we consider 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 market decline related to negative industry or economic trends; and/or •our market capitalization relative to net carrying value. We assess our goodwill for impairment 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 the chief operating decision makers. Our annual goodwill impairment test may be conducted using a qualitative assessment or a quantitative assessment. Under GAAP, we have an option to bypass the qualitative assessment and perform a quantitative impairment test. We determine whether to perform a qualitative assessment first or to bypass the qualitative assessment and proceed with the quantitative goodwill impairment test for each of our reporting units based on the excess of fair value over carrying value from the most recent quantitative tests and other events or changes in circumstances that could impact the fair value of the reporting units. In the qualitative assessment, we consider various factors, events or circumstances, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant reporting unit specific events. If, based on the qualitative assessment, we determine that it is not “more likely than not” that the fair value of a reporting unit is less than its carrying value, we do not prepare a quantitative impairment test. If we determine otherwise, we will prepare a quantitative assessment for potential goodwill impairment. In the quantitative assessment, we compare the estimated fair value of the reporting unit with the carrying amount of that reporting unit. We estimate fair value using a combination of an income approach (based on discounted cash flows) and market approaches, using appropriate weighting factors. If the fair value exceeds the carrying amount, goodwill is not impaired. However, if the carrying value exceeds the fair value of the reporting unit, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Intangible assets with finite lives are amortized over their estimated useful life and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We amortize our acquired finite-lived intangible assets on a straight-line basis over periods ranging from to 15 years.
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review long-lived assets such as property and equipment, operating lease assets and finite-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 with 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 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.
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Leases | Leases We determine if a contract is a leasing arrangement at inception. Operating lease assets represent our right to control the use of an identified asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized on the Consolidated Balance Sheets at the commencement date based on the present value of lease payments over the lease term. We use the incremental borrowing rate on the commencement date in determining the present value of our lease payments. We recognize operating lease expense for our operating leases on a straight-line basis over the lease term. We lease office space and equipment under non-cancelable operating leases, which may include renewal or termination options that are reasonably certain of exercise. Most leases include one or more options to renew, with renewal terms that can extend the lease term up to seven years. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are expensed on a straight-line basis. Lease and non-lease components are accounted for together as a single lease component for operating leases associated with our office space.
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Billings in Excess of Services Provided | 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 the Consolidated Balance Sheets.
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Convertible Notes | Convertible Notes The carrying amount of our 2.0% convertible senior notes due 2023 (“2023 Convertible Notes”) is recognized as a liability as of December 31, 2022 on the Consolidated Balance Sheets. We recorded debt issuance costs as an adjustment to the carrying amount of our 2023 Convertible Notes liability and amortize the costs using the effective interest rate method over the expected life of the instrument. Prior to January 1, 2022, we separately recorded the liability and equity components of our 2023 Convertible Notes. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2023 Convertible Notes. The equity component was not remeasured as long as it continued to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) was amortized to interest expense over the term of the 2023 Convertible Notes using the effective interest rate method. See Note 2, “New Accounting Standards” for additional information.
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Recently Adopted Accounting Standards and Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06 (“ ), Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain events. On January 1, 2022, we adopted ASU 2020-06 using the modified retrospective method and recorded a cumulative-effect adjustment of approximately $22.1 million to the beginning balance of retained earnings at the date of adoption and a $16.4 million net increase to “Long-term debt, net” on the Consolidated Balance Sheets. As permitted by the guidance, prior comparative periods were not adjusted under this method. Pursuant to ASU 2020-06, we are no longer permitted to separately account for the liability and equity components of convertible debt instruments. As such, the carrying amount of our 2023 Convertible Notes is recognized as a liability as of December 31, 2022 on the Consolidated Balance Sheets. The ASU 2020-06 adoption also resulted in the derecognition of the embedded conversion option, net of tax effects, of approximately $34.1 million, which is included in “Additional paid-in capital,” as well as the derecognition of the related deferred tax liabilities of approximately $4.3 million on the Consolidated Balance Sheets. The net effect of the adoption in the current and future periods as compared to prior periods is to reduce non-cash interest expense, or increase net income, as there is no longer a discount from the separation of the conversion feature within equity. The discount from recognition of debt issuance costs will be amortized over the effective life of the 2023 Convertible Notes using the effective interest method. ASU 2020-06 also no longer allows the use of the treasury stock method for convertible instruments for purposes of calculating diluted earnings per share and instead requires application of the if-converted method. Under that method, diluted earnings per share will generally be calculated assuming that all of the convertible debt instruments were converted solely into shares of common stock at the beginning of the reporting period unless the result would be anti-dilutive. Effective January 1, 2022, pursuant to the terms of the First Supplemental Indenture, the principal amount of the 2023 Convertible Notes being converted is required to be paid in cash and only the premium due upon conversion, if any, is permitted to be settled in shares, cash or a combination of shares and cash. Consequently, the if-converted method produces a similar result as the treasury stock method, which was used prior to the adoption of ASU 2020-06 for the 2023 Convertible Notes. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance, which requires entities to provide disclosures on significant government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. We adopted ASU 2021-10 on January 1, 2022, resulting in the reduction of direct cost of revenues expense on our Consolidated Statements of Comprehensive Income and an increase in other receivables, which are included in the “Prepaid expenses and other current assets” financial statement line item on the Consolidated Balance Sheets. The impact was not material on the Consolidated Balance Sheets as of December 31, 2022, or on the Consolidated Statements of Comprehensive Income, Consolidated Statements of Stockholders’ Equity or the Consolidated Statements of Cash Flows for the year ended December 31, 2022.
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Earnings per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share Basic and Diluted |
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Accounts Receivable and Allowance for Expected Credit Losses (Tables) |
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Allowance For Doubtful Accounts And Unbilled Services [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable | The following table summarizes the components of “Accounts receivable, net” as presented on the Consolidated Balance Sheets:
The table below summarizes the changes in the carrying amount of our notes receivable from employees:
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Schedule of Accounts Receivable, Writeoff | The following table summarizes the total provision for expected credit losses and write-offs:
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Special Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Special Charges by Segment | The following table details the special charges by segment.
The following table details the special charges by segment:
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Share-Based Compensation (Tables) |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-Based Compensation Expense | The table below reflects the total share-based compensation expense recognized in our Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020:
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Schedule of Stock Option Activity | A summary of our stock option activity during the year ended December 31, 2022 is presented below. The aggregate intrinsic value of stock options outstanding and exercisable, or fully vested, at December 31, 2022 in the table below represents the total pre-tax intrinsic value, which is calculated as the difference between the closing price of our common stock on the last trading day of 2022 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, 2022. The aggregate intrinsic value changes based on fluctuations in the fair market value per share of our common stock.
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Schedule of Unvested Restricted Share Awards Activity | A summary of our restricted share awards activity during the year ended December 31, 2022 is presented below:
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Schedule of Restricted Stock Unit Activity | A summary of our restricted stock units activity during the year ended December 31, 2022 is presented below:
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Schedule of Performance Stock Units Activity | A summary of our performance stock units activity during the year ended December 31, 2022 is presented below:
(1) Performance stock units granted are presented at the maximum potential payout percentage of 150% of target shares granted. (2) Performance stock units are forfeited when the market or performance conditions for maximum payout are not achieved, including performance stock units that do not achieve any payout, or the employee is terminated prior to vesting.
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Interest Income and Other (Tables) |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Income and Other | The table below presents the components of “Interest income and other” as shown on the Consolidated Statements of Comprehensive Income:
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Balance Sheet Details (Tables) |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Balance Sheet Details | The table below presents the components of “Prepaid expenses and other current assets” and “Accounts payable, accrued expenses and other” as shown on the Consolidated Balance Sheets:
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment consist of the following:
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Carrying Amounts of Goodwill by Operating Segment | The table below summarizes the changes in the carrying amount of goodwill by reportable segment:
(1)There were no accumulated impairment losses for the Corporate Finance, FLC, Economic Consulting or Technology segments as of December 31, 2022, 2021 and 2020. (2)Amounts for our Strategic Communications segment include gross carrying values of $305.6 million, $322.3 million and $323.7 million as of December 31, 2022, 2021, and 2020, respectively, and accumulated impairment losses of $194.1 million representing the aggregate impairment charges for the years ended December 31, 2022, 2021 and 2020. (3)During the years ended December 31, 2022 and 2021, we acquired certain assets of businesses that were assigned to the Corporate Finance and FLC segments, respectively. We recorded $11.3 million and $5.5 million in goodwill as a result of the acquisitions in 2022 and 2021, respectively. We have included the results of the acquired businesses' operations in the Corporate Finance and FLC segments since the acquisition dates.
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Schedule of Other Intangible Assets Amortized Intangibles | Intangible assets were as follows:
(1)During the year ended December 31, 2022, we acquired a business, and its related intangible assets were assigned to the Corporate Finance segment.
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Schedule of Other Intangible Assets Unamortized Intangibles | Intangible assets were as follows:
(1)During the year ended December 31, 2022, we acquired a business, and its related intangible assets were assigned to the Corporate Finance segment.
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Schedule of Future Amortization Expense Intangible Assets | We estimate our future amortization expense for our intangible assets with finite lives to be as follows:
(1)Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, impairments, changes in useful lives, or other relevant factors or changes.
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Notes Receivable from Employees (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Carrying Amount of Notes Receivable From Employees | The following table summarizes the components of “Accounts receivable, net” as presented on the Consolidated Balance Sheets:
The table below summarizes the changes in the carrying amount of our notes receivable from employees:
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Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying and Estimated Fair Value of Other Financial Instruments | The following tables present the carrying amounts and estimated fair values of our financial instruments by hierarchy level as of December 31, 2022 and 2021:
(1)The short-term portion is included in “Accounts payable, accrued expenses and other,” and the long-term portion is included in “Other liabilities” on the Consolidated Balance Sheets. (2)The carrying value as of December 31, 2022 includes unamortized deferred debt issuance costs. The carrying value as of December 31, 2021 includes unamortized deferred debt issuance costs and debt discount.
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Schedule of Acquisition-Related Contingent Consideration | The change in our liability for acquisition-related contingent consideration for our Level 3 financial instruments is as follows:
(1)Accretion expense is included in “Selling, general and administrative expenses” on the Consolidated Statements of Comprehensive Income. (2)Foreign currency translation adjustments are included in “Other comprehensive income (loss), net of tax” on the Consolidated Statements of Comprehensive Income. (3)Remeasurement gain or loss resulting from a change in fair value of an acquisition's contingent consideration liability is recorded in SG&A expenses on the Consolidated Statements of Comprehensive Income. (4)During the year ended December 31, 2022, we acquired a business that was assigned to the Corporate Finance segment.
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Components of Debt Obligations | The table below summarizes the components of the Company’s debt:
(1)Pursuant to the adoption of ASU 2020-06, we derecognized the conversion option of $34.1 million, net of tax, previously attributable to the equity component of the 2023 Convertible Notes. Similarly, the related debt discount is no longer amortized into income as interest expense over the life of the instrument; therefore, we recorded a $16.4 million increase to “Long-term debt, net” on the Consolidated Balance Sheet as of December 31, 2022. (2)There were no current portions of long-term debt as of December 31, 2022 and 2021. The 2023 Convertible Notes due on August 15, 2023 are classified as long-term debt as of December 31, 2022 because we have the ability and intent to refinance them on a long-term basis under our Credit Facility, which matures on November 21, 2027.
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amount of Operating Lease Assets and Liabilities | The table below summarizes the carrying amount of our operating lease assets and liabilities:
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Schedule of Lease Cost | The table below summarizes total lease costs:
The table below includes cash paid for our operating lease liabilities, other non-cash information, our weighted average remaining lease term and weighted average discount rate:
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Schedule of Future Minimum Lease Payments | The maturity analysis below summarizes the remaining future undiscounted cash flows for our operating leases and includes a reconciliation to operating lease liabilities reported on the Consolidated Balance Sheets:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Components of Deferred Tax Assets and Liabilities | The table below summarizes significant components of deferred tax assets and liabilities:
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Summary of Components of Income Before Income Tax Provision from Continuing Operations | The table below summarizes the components of income before income tax provision from continuing operations:
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Summary of Components of Income Tax Provision from Continuing Operations | The table below summarizes the components of income tax provision from continuing operations:
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Summary of Income Tax Provision from Continuing Operations Resulted in Effective Tax Rates | Our income tax provision from continuing operations resulted in effective tax rates that varied from the federal statutory income tax rate as summarized below:
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Stockholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Repurchases | The following table details our stock repurchases under the Repurchase Program:
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Segment Reporting (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenues and Adjusted Segment Earnings before Interest, Taxes, Depreciation and Amortization for Reportable Segments | The table below presents revenues and Adjusted Segment EBITDA for our reportable segments:
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Schedule of Reconciliation of Net Income to Adjusted Segment Earnings before Interest, Taxes, Depreciation and Amortization | The table below reconciles net income to Total Adjusted Segment EBITDA. Unallocated corporate expenses primarily include indirect costs related to centrally managed administrative functions that 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 and strategy functions.
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Schedule of Assets by Segments | The table below presents assets by reportable segment, reconciled to consolidated amounts. Segment assets primarily include accounts and notes receivable, fixed assets purchased specifically for the segment, goodwill and intangible assets.
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Schedule of Revenues Based on Location of Legal Entity Generating the Revenues | The table below details total revenues by country. Revenues have been attributed to locations based on the location of the legal entity generating the revenues.
(1) There are no countries included in these amounts that individually represented more than 10 percent of total revenues for the years ended December 31, 2022, 2021 and 2020.
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Schedule of Long-Lived Assets Based on Location of Legal Entity Holding the Assets | The table below details information on our long-lived assets, which include property and equipment, net and non-current operating lease assets, by country. Long-lived assets have been attributed to locations based on the location of the legal entity holding the assets.
(1) There are no countries included in these amounts that individually represented more than 10 percent of long-lived assets as of December 31, 2022 and 2021.
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New Accounting Standards (Details) - USD ($) |
12 Months Ended | ||
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Dec. 31, 2022 |
Jan. 01, 2022 |
Dec. 31, 2021 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 | ||
Retained earnings | $ 1,858,103,000 | $ 1,698,156,000 | |
Long-term debt, current portion | 0 | 0 | |
Derecognition of additional paid in capital | 0 | 13,662,000 | |
Derecognition of deferred tax liabilities | $ (131,762,000) | $ (143,451,000) | |
Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 22,100,000 | ||
Long-term debt, current portion | 16,400,000 | ||
Derecognition of additional paid in capital | 34,100,000 | ||
Derecognition of deferred tax liabilities | $ 4,300,000 |
Revenues (Details) - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Disaggregation of Revenue [Line Items] | |||
Estimated revenues recognized | 75.00% | ||
Performance obligations satisfied or partially satisfied in previous periods | $ 24.4 | $ 26.3 | $ 19.0 |
Contract asset | 0.0 | 3.8 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |||
Disaggregation of Revenue [Line Items] | |||
Unfulfilled performance obligations | $ 3.7 | ||
Performance obligation expected duration | 18 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |||
Disaggregation of Revenue [Line Items] | |||
Unfulfilled performance obligations | $ 3.6 | ||
Performance obligation expected duration | 18 months |
Accounts Receivable and Allowance for Expected Credit Losses - Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accounts receivable: | ||
Billed receivables | $ 633,055 | $ 542,056 |
Unbilled receivables | 308,873 | 248,681 |
Allowance for expected credit losses | (45,775) | (36,617) |
Accounts receivable, net | $ 896,153 | $ 754,120 |
Accounts Receivable and Allowance for Expected Credit Losses - Writeoff (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Allowance For Doubtful Accounts And Unbilled Services [Abstract] | |||
Provision for expected credit losses | $ 19,684 | $ 16,151 | $ 19,692 |
Write-offs | $ 13,085 | $ 23,641 | $ 24,717 |
Special Charges - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ 8,340 | $ 0 | $ 7,103 |
Contract Termination | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 4,700 | ||
Employee Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ 2,400 |
Special Charges - Schedule of Special Charges By Segment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ 8,340 | $ 0 | $ 7,103 |
Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 7,564 | 6,730 | |
Unallocated Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 776 | 373 | |
Corporate Finance | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 2,444 | 861 | |
FLC | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 4,614 | 3,484 | |
Economic Consulting | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 31 | 35 | |
Technology | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 106 | 276 | |
Strategic Communications | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ 369 | $ 2,074 |
Share-Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total share-based compensation expense | $ 27,728 | $ 27,580 | $ 25,141 |
Direct cost of revenues | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total share-based compensation expense | 15,312 | 13,432 | 13,089 |
Selling, general and administrative expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total share-based compensation expense | $ 12,416 | $ 14,148 | $ 12,052 |
Share-Based Compensation - Schedule of Unvested Restricted Share Activity (Details) - Restricted Shares shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2022
$ / shares
shares
| |
Shares | |
Restricted stock units outstanding beginning of period (in shares) | shares | 782 |
Restricted share awards granted (in shares) | shares | 190 |
Restricted share awards vested (in shares) | shares | (269) |
Restricted share awards forfeited (in shares) | shares | (19) |
Restricted stock units outstanding ending of period (in shares) | shares | 684 |
Weighted Average Grant Date Fair Value | |
Restricted stock units outstanding beginning of period (in dollars per share) | $ / shares | $ 76.82 |
Restricted stock units granted (in dollars per share) | $ / shares | 159.43 |
Restricted share awards vested, (in dollars per share) | $ / shares | 60.43 |
Restricted share awards forfeited (in dollars per share) | $ / shares | 60.31 |
Restricted stock units outstanding ending of period (in dollars per share) | $ / shares | $ 106.63 |
Share-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2022
$ / shares
shares
| |
Shares | |
Restricted stock units outstanding beginning of period (in shares) | shares | 321 |
Restricted stock units granted (in shares) | shares | 51 |
Restricted stock units released (in shares) | shares | (44) |
Restricted stock units outstanding ending of period (in shares) | shares | 328 |
Weighted Average Grant Date Fair Value | |
Restricted stock units outstanding beginning of period (in dollars per share) | $ / shares | $ 62.60 |
Restricted stock units granted (in dollars per share) | $ / shares | 158.32 |
Restricted stock units released (in dollars per share) | $ / shares | 62.05 |
Restricted stock units outstanding ending of period (in dollars per share) | $ / shares | $ 77.66 |
Share-Based Compensation - Schedule of Performance Stock Units Activity (Details) - Performance Stock Units shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2022
$ / shares
shares
| |
Shares | |
Restricted stock units outstanding beginning of period (in shares) | shares | 269 |
Performance stock units granted (in shares) | shares | 103 |
Performance stock units released (in shares) | shares | (100) |
Performance stock units forfeited (in shares) | shares | (27) |
Restricted stock units outstanding ending of period (in shares) | shares | 245 |
Weighted Average Grant Date Fair Value | |
Restricted stock units outstanding beginning of period (in dollars per share) | $ / shares | $ 118.27 |
Performance stock units granted (in dollars per share) | $ / shares | 154.02 |
Performance stock units released (in dollars per share) | $ / shares | 92.43 |
Performance stock units forfeited (in dollars per share) | $ / shares | 131.58 |
Restricted stock units outstanding ending of period (in dollars per share) | $ / shares | $ 143.44 |
Interest Income and Other (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Interest income and other | |||
Interest income | $ 4,619 | $ 3,493 | $ 3,735 |
Foreign exchange transaction gains (losses), net | 57 | 2,426 | (4,099) |
Other | (758) | 274 | (48) |
Total | $ 3,918 | $ 6,193 | $ (412) |
Balance Sheet Details (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Prepaid expenses and other current assets | ||
Prepaid expenses | $ 46,895 | $ 52,751 |
Income tax receivable | 10,965 | 7,252 |
Other current assets | 37,609 | 31,163 |
Total | 95,469 | 91,166 |
Accounts payable, accrued expenses and other | ||
Accounts payable | 20,265 | 16,187 |
Accrued expenses | 65,231 | 61,618 |
Accrued interest payable | 2,096 | 2,153 |
Accrued taxes payable | 20,364 | 18,907 |
Current operating lease liabilities | 31,922 | 30,828 |
Other current liabilities | 34,075 | 35,332 |
Total | $ 173,953 | $ 165,025 |
Property and Equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 320,284 | $ 290,124 | |
Accumulated depreciation | (166,818) | (147,961) | |
Property and equipment, net | 153,466 | 142,163 | |
Depreciation expense for property and equipment | 35,900 | 34,300 | $ 32,600 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 129,036 | 128,954 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 43,931 | 21,053 | |
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 32,975 | 31,880 | |
Computer equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 114,342 | $ 108,237 |
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of other intangible assets | $ 9,643 | $ 10,823 | $ 10,387 |
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 5,964 | |
2024 | 3,647 | |
2025 | 2,940 | |
2026 | 1,788 | |
2027 | 1,718 | |
Thereafter | 4,357 | |
Net Carrying Amount | $ 20,414 | $ 26,890 |
Notes Receivable from Employees - Summary of Changes in Carrying Amount of Notes Receivable From Employees (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Notes receivable from employees — beginning | $ 83,795 | $ 96,374 |
Notes granted | 35,575 | 27,772 |
Repayments | (4,200) | (5,126) |
Amortization | (30,807) | (34,422) |
Cumulative translation adjustment and other | (1,093) | (803) |
Notes receivable from employees — ending | 83,270 | 83,795 |
Less: current portion | (27,292) | (30,256) |
Notes receivable from employees, net of current portion | $ 55,978 | $ 53,539 |
Notes Receivable from Employees - Additional information (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022
USD ($)
numberOfNote
|
Dec. 31, 2021
USD ($)
numberOfNote
|
Dec. 31, 2020
USD ($)
|
|
Receivables [Abstract] | |||
Notes outstanding (in notes) | numberOfNote | 365 | 321 | |
Amortization of forgivable loan expense | $ | $ 30.8 | $ 34.4 | $ 29.4 |
Debt - Summary of Components of Long-Term Debt Obligations (Details) - USD ($) |
Dec. 31, 2022 |
Jan. 01, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Total debt | $ 316,219,000 | $ 316,245,000 | |
Less: deferred debt discount | 0 | (16,724,000) | |
Less: deferred debt issuance costs | (1,047,000) | (2,363,000) | |
Long-term debt, net | 315,172,000 | 297,158,000 | |
Additional paid-in capital | 0 | 35,304,000 | |
Discount attribution to equity | 0 | (1,175,000) | |
Equity component, net | 34,129,000 | ||
Additional paid-in capital | 0 | 13,662,000 | |
Long-term debt, current portion | 0 | 0 | |
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | |||
Debt Instrument [Line Items] | |||
Additional paid-in capital | $ 34,100,000 | ||
Long-term debt, current portion | $ 16,400,000 | ||
2023 Convertible Notes | |||
Debt Instrument [Line Items] | |||
Total debt | 316,219,000 | 316,245,000 | |
Credit facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Less: deferred debt issuance costs | $ (4,300,000) | $ (900,000) |
Leases - Additional Information (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022
USD ($)
lease_option
| |
Lessor, Lease, Description [Line Items] | |
Number of renewal options | lease_option | 1 |
Estimate future sublease rental income 2023 | $ 1,300,000 |
Estimate future sublease rental income 2024 | 1,200,000 |
Estimate future sublease rental income 2025 | 300,000 |
Estimated future sublease rental income | $ 0 |
Maximum | |
Lessor, Lease, Description [Line Items] | |
Extended lease term | 7 years |
Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Assets | ||
Operating lease assets | $ 203,764 | $ 215,995 |
Current operating lease liabilities | 31,922 | 30,828 |
Noncurrent operating lease liabilities | 221,604 | 236,026 |
Total lease liabilities | $ 253,526 | $ 266,854 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable, accrued expenses and other | Accounts payable, accrued expenses and other |
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Lease Cost | ||
Operating lease costs | $ 48,550 | $ 54,541 |
Short-term lease costs | 2,180 | 1,752 |
Variable lease costs | 12,976 | 13,304 |
Sublease income | (851) | (3,800) |
Total lease cost, net | $ 62,855 | $ 65,797 |
Leases - Maturity Analysis (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
2023 | $ 50,280 | |
2024 | 47,608 | |
2025 | 39,257 | |
2026 | 34,537 | |
2027 | 34,260 | |
Thereafter | 117,722 | |
Total future lease payments | 323,664 | |
Less: imputed interest | (70,138) | |
Total lease liabilities | $ 253,526 | $ 266,854 |
Leases - Cash Paid For Operating Leases and Noncash Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 51,917 | $ 60,220 |
Operating lease assets obtained in exchange for lease liabilities | $ 27,876 | $ 99,084 |
Weighted average remaining lease term (years), Operating leases | 8 years 3 months 18 days | 8 years 8 months 12 days |
Weighted average discount rate, Operating leases | 5.60% | 5.40% |
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Contingency [Line Items] | |||
Valuation allowance | $ 6,459 | $ 10,315 | |
Impact of tax rate benefit | 4,049 | 4,859 | $ 0 |
Deferred tax liability not recognized related to tax basis difference in investment in foreign subsidiaries | 41,300 | ||
Income tax provision (benefit) | 62,235 | 62,981 | $ 51,764 |
Deferred tax assets, valuation allowance | 5,100 | ||
Liability for uncertain tax positions | 3,200 | $ 6,400 | |
License Agreement | |||
Income Tax Contingency [Line Items] | |||
Income tax provision (benefit) | (9,600) | ||
Intellectual Property | |||
Income Tax Contingency [Line Items] | |||
Impact of tax rate benefit | 9,600 | ||
Remeasurement of deferred tax assets | $ 3,200 |
Income Taxes - Summary of Components of Income Before Income Tax Provision from Continuing Operations (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ 165,553 | $ 136,008 | $ 122,800 |
Foreign | 132,196 | 161,939 | 139,646 |
Income before income tax provision | $ 297,749 | $ 297,947 | $ 262,446 |
Income Taxes - Summary of Components of Income Tax Provision from Continuing Operations (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Current | |||
Federal | $ 24,227 | $ 11,050 | $ 22,164 |
State | 12,935 | 8,328 | 10,257 |
Foreign | 34,917 | 37,656 | 29,390 |
Current, total | 72,079 | 57,034 | 61,811 |
Deferred | |||
Federal | (2,717) | 10,766 | 3,936 |
State | (1,173) | 3,458 | 362 |
Foreign | (5,954) | (8,277) | (14,345) |
Deferred, total | (9,844) | 5,947 | (10,047) |
Income tax provision | $ 62,235 | $ 62,981 | $ 51,764 |
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Thousands |
Dec. 31, 2022 |
Dec. 01, 2022 |
Dec. 31, 2021 |
Dec. 03, 2020 |
Jul. 28, 2020 |
Feb. 20, 2020 |
Feb. 21, 2019 |
Dec. 01, 2017 |
May 18, 2017 |
Jun. 02, 2016 |
---|---|---|---|---|---|---|---|---|---|---|
Stockholders Equity [Line Items] | ||||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||||
Common stock, shares outstanding (in shares) | 34,026 | 34,333 | ||||||||
2016 Stock Repurchase Program | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Share repurchase program authorized amount | $ 1,300,000,000 | $ 100,000,000 | ||||||||
Stock repurchase program additional amount authorized | $ 400,000,000 | $ 200,000,000 | $ 200,000,000 | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | |||
Available amount under repurchase program | $ 478,500,000 |
Stockholders' Equity - Schedule of Stock Repurchases (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Class of Stock [Line Items] | |||
Total cost | $ 88,606 | $ 46,132 | $ 353,451 |
2016 Stock Repurchase Program | |||
Class of Stock [Line Items] | |||
Shares of common stock repurchased and retired (in shares) | 574 | 422 | 3,269 |
Average price paid per share (in dollars per share) | $ 154.23 | $ 109.37 | $ 108.11 |
Total cost | $ 88,595 | $ 46,124 | $ 353,385 |
Employee Benefit Plans (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
U.S. | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contributions to plan | $ 32.4 | $ 29.1 | $ 26.2 |
Foreign Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contributions to plan | $ 12.6 | $ 11.6 | $ 9.2 |
Segment Reporting - Additional Information (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022
segment
| |
Segment Reporting [Abstract] | |
Number of reportable business segments | 5 |
Segment Reporting - Revenues and Adjusted Segment Earnings before Interest, Taxes, Depreciation and Amortization for Reportable Segments (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Segment Reporting Information [Line Items] | |||
Revenues | $ 3,028,908 | $ 2,776,222 | $ 2,461,275 |
Adjusted Segment EBITDA | 478,790 | 455,265 | 423,624 |
Corporate Finance | |||
Segment Reporting Information [Line Items] | |||
Revenues | 1,088,573 | 938,969 | 910,184 |
Adjusted Segment EBITDA | 212,437 | 155,482 | 216,830 |
FLC | |||
Segment Reporting Information [Line Items] | |||
Revenues | 638,478 | 584,835 | 500,275 |
Adjusted Segment EBITDA | 65,945 | 72,545 | 33,374 |
Economic Consulting | |||
Segment Reporting Information [Line Items] | |||
Revenues | 695,208 | 697,405 | 599,088 |
Adjusted Segment EBITDA | 103,090 | 117,186 | 91,432 |
Technology | |||
Segment Reporting Information [Line Items] | |||
Revenues | 319,983 | 287,366 | 223,016 |
Adjusted Segment EBITDA | 46,698 | 55,739 | 43,013 |
Strategic Communications | |||
Segment Reporting Information [Line Items] | |||
Revenues | 286,666 | 267,647 | 228,712 |
Adjusted Segment EBITDA | $ 50,620 | $ 54,313 | $ 38,975 |
Segment Reporting - Reconciliation of Net Income To Adjusted Segment Earnings before Interest, Taxes, Depreciation and Amortization (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Net income | $ 235,514 | $ 234,966 | $ 210,682 |
Income tax provision | 62,235 | 62,981 | 51,764 |
Interest income and other | (3,918) | (6,193) | 412 |
Interest expense | 10,047 | 20,294 | 19,805 |
Adjusted Segment EBITDA | 478,790 | 455,265 | 423,624 |
Segment Reconciling Items | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Net income | 235,514 | 234,966 | 210,682 |
Income tax provision | 62,235 | 62,981 | 51,764 |
Interest income and other | (3,918) | (6,193) | 412 |
Interest expense | 10,047 | 20,294 | 19,805 |
Unallocated corporate expenses | 124,830 | 104,457 | 94,463 |
Segment depreciation expense | 32,876 | 31,072 | 29,381 |
Amortization of intangible assets | 9,642 | 10,818 | 10,387 |
Segment special charges | 7,564 | 0 | 6,730 |
Remeasurement of acquisition-related contingent consideration | 0 | (3,130) | 0 |
Adjusted Segment EBITDA | $ 478,790 | $ 455,265 | $ 423,624 |
Segment Reporting - Schedule of Assets by Segments (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Total assets | $ 3,241,407 | $ 3,100,909 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,460,339 | 2,349,079 |
Operating Segments | Corporate Finance | ||
Segment Reporting Information [Line Items] | ||
Total assets | 1,028,251 | 927,543 |
Operating Segments | FLC | ||
Segment Reporting Information [Line Items] | ||
Total assets | 475,273 | 445,602 |
Operating Segments | Economic Consulting | ||
Segment Reporting Information [Line Items] | ||
Total assets | 540,133 | 554,978 |
Operating Segments | Technology | ||
Segment Reporting Information [Line Items] | ||
Total assets | 211,218 | 206,376 |
Operating Segments | Strategic Communications | ||
Segment Reporting Information [Line Items] | ||
Total assets | 205,464 | 214,580 |
Unallocated corporate assets | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 781,068 | $ 751,830 |
Segment Reporting - Revenues Based on Location of Legal Entity (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Segment Reporting Information [Line Items] | |||
Total revenues | $ 3,028,908 | $ 2,776,222 | $ 2,461,275 |
U.S. | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 1,922,337 | 1,708,673 | 1,544,777 |
U.K. | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 419,197 | 461,354 | 421,125 |
All other foreign countries | |||
Segment Reporting Information [Line Items] | |||
Total revenues | $ 687,374 | $ 606,195 | $ 495,373 |
Segment Reporting - Information on Long-Lived Assets and Net Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 357,230 | $ 358,158 |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 237,090 | 240,226 |
U.K. | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 41,343 | 52,208 |
All other foreign countries | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 78,797 | $ 65,724 |
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