 FTI Consulting
March 2013
Exhibit 99.1 |
 1
Cautionary Note About
Forward-Looking Statements
This presentation includes "forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which involve
uncertainties and risks. Forward-looking statements include
statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance,
expectations, plans or intentions relating to acquisitions and other matters,
business trends and other information that is not historical, including
statements regarding estimates of our future financial results. When used in this presentation, words such as “estimates,”
“expects,” “anticipates,” “projects,”
“plans,” “intends,” “believes,” “forecasts” and variations of such words or similar expressions are
intended to identify forward-looking statements. All forward-looking
statements, including, without limitation, estimates of our future
financial results, are based upon our expectations at the time we make them and
various assumptions. Our expectations, beliefs and projections are
expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that
management’s expectations, beliefs and estimates will be achieved, and the
Company’s actual results may differ from our expectations, beliefs
and estimates. The Company has experienced fluctuating revenues, operating income and cash flow in prior periods and expects
that this will occur from time to time in the future. Other factors that could
cause such differences include declines in demand for, or changes in,
the mix of services and products that we offer, the mix of the geographic locations where our clients are located or where
services are performed, adverse financial, real estate or other market and
general economic conditions, which could impact each of our segments
differently, the pace and timing of the consummation and integration of past and future acquisitions, the Company's ability to
realize cost savings and efficiencies, competitive and general economic
conditions, retention of staff and clients and other risks described
under the heading “Item 1A. Risk Factors” in the Company’s most
recent Form 10-K and in the Company's other filings with the Securities
and Exchange Commission, including the risks set forth under “Risks
Related to Our Operating Segments” and “Risks Related to Our
Operations”. We are under no duty to update any of the forward-looking
statements to conform such statements to actual results or events and do
not intend to do so. |
 2
Investment Thesis
Scalable business model
Flexible and attractive business model with the opportunity to leverage
cross-practice engagements Well positioned to benefit from key
activities Global regulatory activism, overhaul of financial and credit
regulatory markets and the overall complexity of doing business
globally
Strong competitive position to capture market share in global
investigations LIBOR probe, FCPA investigations, whistleblower
investigations and trading probes Executable growth strategy
Adding scale to established global infrastructure should yield higher
incremental margins Balanced approach to enhanced stockholder
value Capital deployment focused on value-enhancing initiatives
$250
million
stock
buyback
program
approved
in
June
2012
-
repurchased
approximately
$50
million
of
stock
in
2012
Healthy balance sheet, strong cash flows and access to capital
FTI Consulting is a
global
business
advisory firm
dedicated to
helping
organizations
protect and
enhance their
enterprise value in
an increasingly
complex legal,
regulatory and
economic
environment |
 Global Business with Diverse
Event-Driven Offering
FTI Consulting has
built a balanced
portfolio of global
businesses that
offer event-driven
services and
solutions
Technology
Strategic Communications
Forensic and Litigation Consulting
Economic Consulting
Corporate Finance/Restructuring
United States
Rest of World
FY12 Segment Revenues
FY12 Geographic Revenues
Corporate Finance/Restructuring
Forensic and Litigation Consulting
Economic Consulting
Technology
Strategic Communications
3
29%
22%
25%
12%
12%
26%
74%
Restructuring/turnaround services
Transaction advisory services
Interim management
Investment banking
Bankruptcy support services
Private equity
Performance improvement
Antitrust & competition economics
Securities litigation & risk management
Intellectual property
International arbitration
Labor & employment
Public policy
Regulated industries
Business valuation
Forensic accounting & advisory services
Global risk & investigations segment
Compliance, monitoring & receivership
Intellectual property
Dispute advisory services
Trial services
Financial & enterprise data analytics
Computer forensics & investigations
Discovery consulting
E-discovery software & services
Financial communications
Corporate communications
Strategy consulting & research
Crisis communications
Public affairs
Creative engagement |
 4
The Globalization of FTI Consulting
North America
Strong demand for Healthcare, Energy, Telecommunications,
Media and Technology, Financial Services and Insurance industry
solutions
Opportunity to enhance client relationships through cross-
segment engagements
Europe, Middle East and Africa (EMEA)
Depressed valuations present M&A opportunities
Continue
to
invest
based
on
pockets
of
demand
–
Global
Risk
and Investigations Practice (GRIP), Restructuring, Anticorruption,
Compliance, Valuation and Remediation
Asia Pacific & Latin America
Continue to build out geographic presence and capabilities
Restructuring and Global Risk and Investigations Practice (GRIP)
driven by rapid influx of capital
FTI Consulting will
continue to add
scale and expertise
to the Company’s
global
infrastructure
The
increasingly
aggressive
regulatory and
enforcement
environment
should bode very
well for large
consulting firms
with global reach
and reputations
like FTI Consulting
4 |
 5
The FTI Consulting Matrix
FTI Consulting’s
matrix
organizational
structure
appropriately
emphasizes the
segment,
geographic and
industry drivers of
our businesses,
allowing for
improved
understanding and
response to our
client’s needs and
increased leverage
of resources,
knowledge and
solutions in our
rapidly growing
markets
Grow & Develop
Industry
Segment
Geography
Industry: Develop integrated industry
focused solutions
Geography: Replicate segment and
practice offering across existing
global platform
Segment: Continue to build out
diverse platform of practices and
solutions
Three strategies that drive our business: |
 6
Our People
FTI Consulting’s most valuable asset is our people
Over 3,900 employees in 95 offices and 24 countries
379 Senior Managing Directors, 469 Managing Directors and
access to three Nobel Laureates
FTI Consulting is a global company with global leaders and
advisors
The FTI Consulting matrix establishes global leadership
Board of Directors offering global insights, extensive experience
and tenured leadership
Our collective expertise spans a wide range of practices,
business and industries and fuels our ability to address even
the most complex challenges
We hire the best and continue to invest in their on-going
development
FTI Consulting employees are supported throughout their career
development through our educational and thought leadership
initiatives: New Hire Orientation, New Managing Director School,
FTI Consulting University and Executive Leadership Forums
FTI Consulting’s
unique integrated
approach to
protect and
enhance enterprise
value requires
exceptional talent
Employees
Source &
Acquire
Attract &
Retain
Service &
Support
Grow & Develop
Measure &
Assess
Reward &
Engage |
 7
2013 Growth Catalysts
Improved post election regulatory environment
Uptick in the pace of M&A activity
Currently
have
strong
levels
of
M&A
“first
look”
retentions
M&A touches every business segment with the potential to materially
increase revenues Restructuring and investigations opportunities in
Europe, Asia Pacific and Latin America Investments made to enhance our
Global Risk and Investigations Practice (GRIP), Restructuring, and Anticorruption,
Compliance, Valuation and Remediation Practice
Rapid influx of capital investment in Asia Pacific and Latin America
Attractive macro-drivers in Asia Pacific and Latin America
China's new leadership plans to boost spending to support economic
recovery Opportunities for our Construction solutions offering in Brazil
ahead of the 2014 World Cup and 2016 Olympic Games Industry solutions
opportunities in Healthcare, Energy and Insurance Need for business
advisory in the ever-changing Healthcare industry Demand globally
for Energy services irrespective of macroeconomic backdrop
Insurance
expected
to
be
driven
by
increased
disputes
related
to
insurance
payments
and
adjudications
Demand for FTI
Consulting’s
services and
expertise is
expected to be
driven by multiple
catalysts in 2013 |
 8
Case Study: M&A Lifecycle and
FTI Consulting’s Integrated Service Offering
Testing, Design & Implementation of Internal Controls
Employee Outreach & Engagement
M&A Digital/Social Media Strategies
Media Relations
Investor Relations
Valuation Services
Buyer Services
Seller Services
Lender Services
M&A Fraud Services
Intellectual Property Valuation & Protection
Transactional Due Diligence
System Audits/IT Due Diligence
Compliance & Accounting Internal Controls
Reviews
Foreign Bribery & Corruption Risk Assessments
Subsidiary, Joint Venture & Controlled Entity
Investigations
E-discovery
Tax Services
Second Requests
M&A Communications
Proxy Communications
Corporate Finance/Restructuring
Economic Consulting
Technology
Strategic Communications
Forensic Litigation and Consulting
Post-Close
Execution
Post-Close
Planning
Pre-Close
Planning
Due
Diligence
M&A
Lifecycle
Pre-Deal
Preparation
and
Evaluation
Merger Integration Services
Post-Acquisition Disputes
Purchase Price Dispute Services
Global Risk & Investigation Services
Compliance Monitoring & Remediation Services
Post-Merger Communication Implementation
Change Management Communications
First Look Services
Antitrust & Competition Economics
Investigative Due Diligence & Integrity Investigations
Emerging Market Entry Analysis, Political & Corruption Index Assessments |
 9
Case Study: Cross–Segment Engagements
FTI Consulting has established a global platform with deep expertise and broad
capabilities FTI Consulting leverages this platform by presenting our
full set of services to current and potential clients as “one
firm” A powerful tool and we believe a competitive advantage when
marketing FTI Consulting services Cross-segment engagements promote
a more client-centric, solutions-based go-to-market strategy
Our clients’
problems, more often than not, need to benefit from services provided by more
than one of our business practices
Clients that face the most complex and critical situations want an integrated
FTI Consulting team, a team that has the right combination of skills to
solve multiple problems FTI Consulting’s biggest and most
profitable projects are cross-segment engagements In 2012, all of
FTI Consulting’s top ten engagements were cross-segment engagements, with many of them including
three or more business segments
Our top ten clients represent multiple industries and include Fortune 500
companies, the world’s most prestigious law firms, and the
world’s top bank holding companies Expect cross-
segment
engagements to
bolster FTI
Consulting’s
organic growth,
brand visibility and
reputation |
 10
FTI Consulting’s Financial Position Is Strong
Significant cash flow generation
$156.8
million
in
cash
and
cash
equivalents
on
the
balance
sheet
as
of
December
31,
2012
Leverage
as
of
December
31,
2012
–
less
than
3:1
Balanced capital deployment aimed at productive and value enhancing
initiatives for stockholders Maintain
market
leadership
positions,
impressive
credentials
and
established
reputation
by
investing
in
talent
Investments in R&D and innovation should drive organic growth
Acquisition strategy focused on building attractive,
sustainable businesses $250
million
stock
buyback
program
authorized
in
June
2012
–
repurchased
approximately
$50
million
of
stock
in
2012
In 2012, completed debt refinancing transactions resulting in decreased
interest rate, longer maturity profile and increased access to
capital Portfolio
investments,
coupled with
continued cash
generation and
operational
discipline,
demonstrated in
financial results |
 11
FTI Consulting Summary
Scalable business model
Flexible and attractive business model with the opportunity to leverage
cross-practice engagements Well positioned to benefit from key
trends Global regulatory activism, overhaul of financial and credit
regulatory markets and the overall complexity of doing business
globally Strong competitive position to capture market share in global
investigations LIBOR probe, FCPA investigations, whistleblower
investigations and trading probes Executable growth strategy
Adding scale to established global infrastructure should yield higher
incremental margins Balanced approach to enhanced stockholder
value Capital deployment focused on value-enhancing initiatives
Healthy balance sheet, strong cash flows and access to capital
FTI Consulting is a
global business
advisory firm
dedicated to
helping
organizations
protect and
enhance their
enterprise value in
an increasingly
complex legal,
regulatory and
economic
environment
$250 million stock
buyback
program
approved
in
June
2012
-
repurchased
approximately $50 million of stock in 2012 |
 12
Fiscal 2012 Results
Year Ended December 31,
2012
2011
$1,576,871
$1,566,768
$980,532
$956,908
$378,016
$373,295
$29,557
$15,212
($3,064)
($6,465)
$22,407
$22,371
$110,387
–
$1,517,835
$1,361,321
$59,036
$205,447
$5,659
$6,304
($56,731)
($58,624)
($4,850)
–
($55,922)
($52,320)
$3,114
$153,127
$40,100
$49,224
($36,986)
$103,903
($0.92)
$2.53
40,316
41,131
($0.92)
$2.39
40,316
43,473
$15,023
($2,902)
$15,023
($2,902)
($21,963)
$101,001
($ in thousands, except per share data)
Revenues
Direct cost of revenues
Selling, general & administrative expense
Special charges
Acquisition-related contingent consideration
Amortization of other intangible assets
Goodwill impairment charge
Operating income
Other income (expense)
Interest income & other
Interest expense
Loss on early extinguishment of debt
Income
tax
provision
Net income (loss)
Earnings (loss) per common share –
basic
Weighted average common shares outstanding –
basic
Earnings (loss) per common share –
diluted
Weighted average common shares outstanding –
diluted
Other Comprehensive income (loss), net of tax:
of $654 and ($1,568) in 2012 and 2011, respectively
Other comprehensive income (loss), net of tax
Comprehensive income (loss)
Foreign currency translation adjustments, including tax expense (benefit) Income
before income tax provision |
 13
Fiscal 2012 Results: Segment Performance
($ in thousands, except headcount data)
Year Ended December 31, 2012
Revenues
Adjusted
EBITDA
(1)
Adjusted
EBITDA
(1)
as a % of
Revenue
Utilization
Average
Billable Rate
Revenue-
Generating
Headcount
Corporate Finance/Restructuring
$459,231
$108,966
23.7%
71%
$416
836
Forensic & Litigation Consulting
$343,074
$52,743
15.4%
68%
$370
813
Economic Consulting
$391,622
$77,461
19.8%
81%
$493
474
Technology
(2)
$195,194
$57,203
29.3%
N/M
N/M
277
Strategic Communications
(2)
$187,750
$25,019
13.3%
N/M
N/M
593
Total Adjusted Segment EBITDA
$1,576,871
$321,392
20.4%
2,993
Corporate/Regions
($70,401)
Adjusted EBITDA
(1)
$250,991
15.9%
Year Ended December 31, 2011
Revenues
Adjusted
EBITDA
(1)
Adjusted
EBITDA
(1)
as a % of
Revenue
Utilization
Average
Billable Rate
Revenue-
Generating
Headcount
Corporate Finance/Restructuring
$427,813
$97,638
22.8%
70%
$427
692
Forensic & Litigation Consulting
$365,326
$69,180
18.9%
69%
$330
852
Economic Consulting
$353,981
$67,028
18.9%
85%
$482
433
Technology
(2)
$218,738
$77,011
35.2%
N/M
N/M
290
Strategic Communications
(2)
$200,910
$26,801
13.3%
N/M
N/M
582
Total Adjusted Segment EBITDA
$1,566,768
$337,658
21.6%
2,849
Corporate/Regions
($66,046)
Adjusted EBITDA
(1)
$271,612
17.3%
(1) We define Adjusted EBITDA as net income before income tax provision, other
income (expense), depreciation, amortization of intangible assets, special charges and goodwill impairment charge.
Amounts presented in the Adjusted EBITDA column for each segment reflect the
segments' respective Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as the segments' share of
consolidated operating income before depreciation, amortization of
intangible assets, special charges and goodwill impairment charge. Although Adjusted EBITDA and Adjusted Segment EBITDA are
not measures of financial condition or performance determined in accordance
with generally accepted accounting principles ("GAAP"), we believe that these measures can be a useful operating
performance measure for evaluating our results of operations as compared from
period to period and as compared to our competitors. Adjusted EBITDA and Adjusted Segment EBITDA are not
defined in the same manner by all companies and may not be comparable to other
similarly titled measures of other companies. These non-GAAP measures should be considered in addition to,
but not as a substitute for or superior to, the information contained in our
Condensed Consolidated Statements of Comprehensive Income. See also our reconciliation of non-GAAP financial measures.
(2) The majority of the Technology and Strategic Communications segments'
revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented
as they are not meaningful as a segment-wide metric.
|
 Appendix |
 15
Reconciliation of non-GAAP Financial Measures
($ in thousands, except per share data)
Year Ended December 31,
2012
2011
Net Income (loss)
($36,986)
Add back:
Special
charges,
net
of
tax
effect
(1)
$19,115
Goodwill
impairment
charge
(2)
$110,387
Loss
on
early
extinguishment
of
debt,
net
of
tax
(3)
$2,910
Adjusted Net Income
$95,426
Earnings
(loss)
per
common
share
–
diluted
($0.92)
Add back:
Special
charges,
net
of
tax
effect
(1)
$0.47
Goodwill
impairment
charge
(2)
$2.74
Loss
on
early
extinguishment
of
debt,
net
of
tax
(3)
$0.07
Impact
of
denominator
for
diluted
adjusted
earnings
per
common
share
(4)
($0.06)
Adjusted
earnings
per
common
share
–
diluted
$2.30
Weighted
average
number
of
common
shares
outstanding
–
diluted
41,578
–
–
–
–
–
–
–
(1) The tax effect takes into account the tax treatment and related tax rate(s)
that apply to each adjustment in the applicable tax jurisdiction(s). As a result, the effective tax rates for the adjustments
for the years ended December 31, 2012 and 2011 were 35.3% and 39.0%,
respectively. The tax expense related to the adjustments for the years ended December 31, 2012 and 2011 were $10.4
million or $0.26 impact on adjusted earnings per diluted share and $5.9 million
or $0.14 impact on diluted earnings per share, respectively. (2) The goodwill impairment charge related to our Strategic
Communications segment and is non-deductible for income tax purposes and resulted in no tax benefit for the year ended December 31, 2012.
(3) The tax effect takes into account the tax treatment and related tax rate(s)
that apply to each adjustment in the applicable tax jurisdiction(s). As a result, the effective tax rate for the adjustments for year
ended December 31, 2012 were 40.0%. The tax expense related to the adjustments
for the year ended December 31, 2012 was $1.9 million or $0.05 impact on adjusted earnings per diluted share.
(4) For year ended December 31, 2012, the Company reported a net loss. For the
period, the basic weighted average common shares outstanding equals the diluted weighted average common shares
outstanding for purposes of calculating U.S. GAAP earnings per share because
potentially dilutive securities would be antidilutive. For non-GAAP purposes, the per share and share amounts presented
herein reflect the impact of the inclusion of share-based awards and
convertible notes that are considered dilutive based on the impact of the add backs included in Adjusted Net Income above.
$103,903
$9,285
$113,188
$2.39
$0.21
$2.60
43,473 |
 16
Reconciliation of Net Income and Operating Income to
Adjusted EBITDA
($ in thousands)
Year Ended December 31, 2012
Forensic
and
Litigation
Consulting
Economic
Consulting
Technology
Strategic
Communications
Corporate/
Regions
Total
Net Income (loss)
($36,986)
Interest Income and other
Interest expense
Income tax provision
Loss on early extinguishment of debt
(5,659)
56,731
40,100
4,850
Operating Income (loss)
$87,367
$39,412
$71,992
$33,642
($97,298)
($76,079)
$59,036
Depreciation and amortization
Amortization of other intangible assets
Special charges
Goodwill impairment charge
3,424
6,239
11,936
–
3,715
1,944
7,672
–
2,863
1,615
991
–
12,501
7,946
3,114
–
2,555
4,663
4,712
110,387
4,546
–
1,132
–
29,604
22,407
29,557
110,387
Adjusted EBITDA
(1)
$108,966
$52,743
$77,461
$57,203
$25,019
($70,401)
$250,991
Year Ended December 31, 2011
Forensic
and
Litigation
Consulting
Economic
Consulting
Technology
Strategic
Communications
Corporate/
Regions
Total
Net Income
$103,903
Interest Income and other
Interest expense
Income tax provision
Loss on early extinguishment of debt
(6,304)
58,624
49,224
–
Operating Income (loss)
$78,923
$62,499
$60,890
$57,917
$19,066
($73,848)
$205,447
Depreciation and amortization
Amortization of other intangible assets
Special charges
Goodwill impairment charge
3,480
5,795
9,440
–
3,423
2,419
839
–
2,552
1,493
2,093
–
11,168
7,926
–
–
2,997
4,738
–
–
4,962
–
2,840
–
28,582
22,371
15,212
–
Adjusted EBITDA
(1)
$97,638
$69,180
$67,028
$77,011
$26,801
($66,046)
$271,612
(1) We define Adjusted EBITDA as net income before income tax provision, other
income (expense), depreciation, amortization of intangible assets, special charges
and goodwill impairment charges. We define Adjusted Segment EBITDA as a
segment’s share of consolidated operating income before depreciation, amortization of
intangible assets, special charges and goodwill impairment charges. We define
Total Adjusted Segment EBITDA as the total of Adjusted Segment EBITDA for all segments.
We define Adjusted Net Income and Adjusted Earnings Per Diluted Share as net
income and earnings per diluted share, respectively, excluding the impact of the special
charges, goodwill impairment and loss on early extinguishment of debt that were
incurred in that period. Adjusted EBITDA, Adjusted Segment EBITDA, Total Adjusted
Segment EBITDA, Adjusted Earnings Per Share and Adjusted Net Income are not
defined in the same manner by all companies and may not be comparable to other
similarly titled measures of other companies unless the definition is the same.
These non-GAAP measures should be considered in addition to, but not as a substitute
for or superior to, the information contained in our Consolidated Statements of
Comprehensive Income (Loss). Corporate
Finance
/
Restructuring
Corporate
Finance
/
Restructuring |
 17
Critical thinking at the critical time™ |