15. Supplemental Condensed Consolidating Guarantor and Non-Guarantor Financial Information

Substantially all of our domestic subsidiaries are guarantors of borrowings under our senior bank credit facility, senior notes and our Convertible Notes. The Convertible Notes matured on July 15, 2012. The guarantees are full and unconditional and joint and several. All of our guarantors are wholly-owned, direct or indirect, subsidiaries. The following financial information presents condensed consolidating balance sheets, statements of comprehensive income and statements of cash flows for FTI Consulting, all the guarantor subsidiaries, all the non-guarantor subsidiaries and the eliminations necessary to arrive at the consolidated information for FTI Consulting and its subsidiaries. For purposes of this presentation, we have accounted for our investments in our subsidiaries using the equity method of accounting. The principal eliminating entries eliminate investment in subsidiary and intercompany balances and transactions.

Condensed Consolidating Balance Sheet Information as of September 30, 2012


	FTI Consulting, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	31,267	$	547	$	95,114	$	—		$	126,928
Restricted cash		—		—		1,192		—			1,192
Accounts receivable, net		175,934		183,820		125,303		—			485,057
Intercompany receivables		—		596,880		57,826		(654,706	)		—
Other current assets		25,744		23,383		30,497		—			79,624

Total current assets		232,945		804,630		309,932		(654,706	)		692,801
Property and equipment, net		37,247		15,463		14,223		—			66,933
Goodwill		549,567		443,920		333,554		—			1,327,041
Other intangible assets, net		35,648		26,464		74,377		(32,421	)		104,068
Investments in subsidiaries		1,668,949		551,607		—		(2,220,556	)		—
Other assets		77,984		103,196		24,477		(46,552	)		159,105

Total assets	$	2,602,340	$	1,945,280	$	756,563	$	(2,954,235	)	$	2,349,948

Liabilities
Intercompany payables	$	482,622	$	105,751	$	66,333	$	(654,706	)	$	—
Other current liabilities		204,466		91,399		71,199		—			367,064

Total current liabilities		687,088		197,150		137,532		(654,706	)		367,064
Long-term debt, net		619,821		17,000		—		—			636,821
Other liabilities		121,711		36,970		60,214		(46,552	)		172,343

Total liabilities		1,428,620		251,120		197,746		(701,258	)		1,176,228
Stockholders’ equity		1,173,720		1,694,160		558,817		(2,252,977	)		1,173,720

Total liabilities and stockholders’ equity	$	2,602,340	$	1,945,280	$	756,563	$	(2,954,235	)	$	2,349,948

Condensed Consolidating Balance Sheet Information as of December 31, 2011


	FTI Consulting, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	161,180	$	197	$	103,046	$	—		$	264,423
Restricted cash		8,632		—		1,581		—			10,213
Accounts receivable, net		148,698		165,871		114,533		—			429,102
Intercompany receivables		—		557,846		59,857		(617,703	)		—
Other current assets		22,599		15,694		28,923		—			67,216

Total current assets		341,109		739,608		307,940		(617,703	)		770,954
Property and equipment, net		44,233		14,240		15,975		—			74,448
Goodwill		547,667		439,068		322,623		—			1,309,358
Other intangible assets, net		38,913		34,692		45,284		—			118,889
Investments in subsidiaries		1,538,883		532,091		—		(2,070,974	)		—
Other assets		70,551		48,529		18,355		—			137,435

Total assets	$	2,581,356	$	1,808,228	$	710,177	$	(2,688,677	)	$	2,411,084

Liabilities
Intercompany payables	$	433,284	$	93,947	$	90,472	$	(617,703	)	$	—
Other current liabilities		316,559		109,651		71,627		—			497,837

Total current liabilities		749,843		203,598		162,099		(617,703	)		497,837
Long-term debt, net		620,579		23,000		—		—			643,579
Other liabilities		104,732		43,297		15,437		—			163,466

Total liabilities		1,475,154		269,895		177,536		(617,703	)		1,304,882
Stockholders’ equity		1,106,202		1,538,333		532,641		(2,070,974	)		1,106,202

Total liabilities and stockholders’ equity	$	2,581,356	$	1,808,228	$	710,177	$	(2,688,677	)	$	2,411,084

Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended September 30, 2012


	FTI Consulting, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	145,198		$	233,300	$	99,963		$	(92,406	)	$	386,055
Operating expenses
Direct cost of revenues		93,428			175,160		65,052			(92,026	)		241,614
Selling, general and administrative expense		36,915			28,226		24,148			(380	)		88,909
Special Charges		2,295			451		29			—			2,775
Acquisition-related contingent consideration		63			—		340			—			403
Amortization of other intangible assets		1,590			2,488		2,512			(824	)		5,766

Operating income		10,907			26,975		7,882			824			46,588
Other (expense) income		(15,921	)		5,514		(1,217	)		—			(11,624	)

Income (loss) before income tax provision		(5,014	)		32,489		6,665			824			34,964
Income tax (benefit) provision		(675	)		10,598		2,328			—			12,251
Equity in net earnings of subsidiaries		27,052			4,710		—			(31,762	)		—

Net income		22,713			26,601		4,337			(30,938	)		22,713

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments including tax benefit of $0		—			—		12,731			—			12,731

Other comprehensive income (loss), net of tax		—			—		12,731			—			12,731

Comprehensive income	$	22,713		$	26,601	$	17,068		$	(30,938	)	$	35,444

Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended September 30, 2011


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	157,053		$	253,165		$	103,795		$	(100,211	)	$	413,802
Operating expenses
Direct cost of revenues		99,635			181,359			66,111			(97,130	)		249,975
Selling, general and administrative expense		43,053			31,347			26,299			(3,081	)		97,618
Acquisition-related contingent consideration		—			—			944			—			944
Amortization of other intangible assets		1,467			2,667			1,709			—			5,843

Operating income		12,898			37,792			8,732			—			59,422
Other (expense) income		(14,067	)		(1,890	)		2,124			—			(13,833	)

Income (loss) before income tax provision		(1,169	)		35,902			10,856			—			45,589
Income tax provision		209			15,082			859			—			16,150
Equity in net earnings of subsidiaries		30,817			(8,498	)		—			(22,319	)		—

Net income	$	29,439		$	12,322		$	9,997		$	(22,319	)	$	29,439

Other comprehensive loss, net of tax:
Foreign currency translation adjustments including tax expense of $500		(503	)		—			(15,370	)		—			(15,873	)

Other comprehensive loss, net of tax		(503	)		—			(15,370	)		—			(15,873	)

Comprehensive income (loss)	$	28,936		$	12,322		$	(5,373	)	$	(22,319	)	$	13,566

Condensed Consolidating Statement of Comprehensive Income for the Nine months ended September 30, 2012


	FTI Consulting, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	450,221		$	716,049	$	303,472		$	(292,216	)	$	1,177,526
Operating expenses
Direct cost of revenues		291,053			537,897		194,051			(287,549	)		735,452
Selling, general and administrative expense		123,350			85,785		79,490			(4,667	)		283,958
Special charges		19,026			4,738		5,793			—			29,557
Acquisition-related contingent consideration		63			—		(2,644	)		—			(2,581	)
Amortization of other intangible assets		4,190			7,438		7,609			(2,464	)		16,773

Operating income		12,539			80,191		19,173			2,464			114,367
Other (expense) income		(46,377	)		41,501		657			(34,885	)		(39,104	)

Income before income tax provision		(33,838	)		121,692		19,830			(32,421	)		75,263
Income tax (benefit) provision		(29,055	)		51,322		4,105			—			26,372
Equity in net earnings of subsidiaries		53,674			18,093		—			(71,767	)		—

Net income		48,891			88,463		15,725			(104,188	)		48,891

Other comprehensive income, net of tax:
Foreign currency translation adjustments net of tax benefit of $0		—			—		14,620			—			14,620

Other comprehensive income, net of tax		—			—		14,620			—			14,620

Comprehensive income	$	48,891		$	88,463	$	30,345		$	(104,188	)	$	63,511

Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended September 30, 2011


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	427,804		$	760,553		$	284,186		$	(296,488	)	$	1,176,055
Operating expenses
Direct cost of revenues		281,576			545,080			185,699			(288,452	)		723,903
Selling, general and administrative expense		119,639			96,038			72,723			(8,036	)		280,364
Special charges		8,561			228			6,423			—			15,212
Acquisition-related contingent consideration		—			—			2,538			—			2,538
Amortization of other intangible assets		2,346			9,526			4,923			—			16,795

Operating income		15,682			109,681			11,880			—			137,243
Other (expense) income		(39,747	)		(1,333	)		2,360			—			(38,720	)

Income before income tax provision		(24,065	)		108,348			14,240			—			98,523
Income tax (benefit) provision		(9,998	)		45,216			(717	)		—			34,501
Equity in net earnings of subsidiaries		78,089			(4,121	)		—			(73,968	)		—

Net income	$	64,022		$	59,011		$	14,957		$	(73,968	)	$	64,022

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments net of tax benefit of $1,568		1,565			—			(783	)		—			782

Other comprehensive income (loss), net of tax		1,565			—			(783	)		—			782

Comprehensive income	$	65,587		$	59,011		$	14,174		$	(73,968	)	$	64,804

Condensed Consolidating Statement of Cash Flow for the Nine months ended September 30, 2012


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	(47,163	)	$	36,366		$	24,421		$	13,624
Investing activities
Payments for acquisition of businesses, net of cash received		(26,089	)		—			(364	)		(26,453	)
Purchases of property and equipment		(6,016	)		(11,689	)		(2,829	)		(20,534	)
Other		(1,105	)		—			—			(1,105	)

Net cash used in investing activities		(33,210	)		(11,689	)		(3,193	)		(48,092	)

Financing activities
Borrowings under revolving line of credit		75,000			—			—			75,000
Payments of long-term debt and capital lease obligations		(156,438	)		(49	)		—			(156,487	)
Purchase and retirement of common stock		(20,013	)		—						(20,013	)
Net issuance of common stock and other		415			—			(1,972	)		(1,557	)
Excess tax benefits from share-based compensation		98			—			—			98
Intercompany transfers		51,398			(24,278	)		(27,120	)		—

Net cash used in financing activities		(49,540	)		(24,327	)		(29,092	)		(102,959	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(68	)		(68	)

Net increase (decrease) in cash and cash equivalents		(129,913	)		350			(7,932	)		(137,495	)
Cash and cash equivalents, beginning of period		161,180			197			103,046			264,423

Cash and cash equivalents, end of period	$	31,267		$	547		$	95,114		$	126,928

Condensed Consolidating Statement of Cash Flow for the Nine months ended September 30, 2011


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	(18,645	)	$	77,208		$	(11,715	)	$	46,848
Investing activities
Payments for acquisition of businesses, including contingent payments, net of cash received		(33,735	)		—			(28,611	)		(62,346	)
Purchases of property and equipment		(7,644	)		(10,210	)		(6,741	)		(24,595	)
Other		(127	)		—			—			(127	)

Net cash used in investing activities		(41,506	)		(10,210	)		(35,352	)		(87,068	)

Financing activities
Borrowings under revolving line of credit		25,000			—			—			25,000
Payments of revolving line of credit		(25,000	)		—			—			(25,000	)
Payments of long-term debt and capital lease obligations		(6,806	)		(161	)		—			(6,967	)
Net issuance of common stock and other		796			—			—			796
Purchase and retirement of common stock		(209,400	)		—			—			(209,400	)
Excess tax benefits from share-based compensation		198			—			—			198
Intercompany transfers		40,555			(67,857	)		27,302			—

Net cash (used in) provided by financing activities		(174,657	)		(68,018	)		27,302			(215,373	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(747	)		(747	)

Net decrease in cash and cash equivalents		(234,808	)		(1,020	)		(20,512	)		(256,340	)
Cash and cash equivalents, beginning of period		292,738			1,430			90,402			384,570

Cash and cash equivalents, end of period	$	57,930		$	410		$	69,890		$	128,230