16. 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 and 2020 Senior Notes and 2022 Senior Notes (collectively, the “Senior Notes”). The guarantees are full and unconditional and joint and several. All of the guarantors are 100%-owned, direct or indirect, subsidiaries. The following financial information presents condensed consolidating balance sheets, statements of comprehensive income (loss) 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 June 30, 2013


	FTI Consulting, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	19,671	$	308	$	72,575	$	—		$	92,554
Accounts receivable, net		149,013		186,230		144,789		—		$	480,032
Intercompany receivables		—		729,235		—		(729,235	)	$	—
Other current assets		52,287		19,289		20,615		—		$	92,191

Total current assets		220,971		935,062		237,979		(729,235	)		664,777
Property and equipment, net		33,641		18,683		13,283		—		$	65,607
Goodwill		559,519		425,864		277,783		—		$	1,263,166
Other intangible assets, net		35,754		23,797		72,129		(30,005	)	$	101,675
Investments in subsidiaries		1,768,811		511,827		—		(2,280,638	)	$	—
Other assets		96,327		62,491		27,766		(10,928	)	$	175,656

Total assets	$	2,715,023	$	1,977,724	$	628,940	$	(3,050,806	)	$	2,270,881

Liabilities
Intercompany payables	$	648,931	$	67,108	$	13,196	$	(729,235	)	$	—
Other current liabilities		90,049		85,967		85,762		—		$	261,778

Total current liabilities		738,980		153,075		98,958		(729,235	)		261,778
Long-term debt, net		700,000		17,000		—		—		$	717,000
Other liabilities		196,476		20,690		6,298		(10,928	)	$	212,536

Total liabilities		1,635,456		190,765		105,256		(740,163	)		1,191,314
Stockholders’ equity		1,079,567		1,786,959		523,684		(2,310,643	)	$	1,079,567

Total liabilities and stockholders’ equity	$	2,715,023	$	1,977,724	$	628,940	$	(3,050,806	)	$	2,270,881

Condensed Consolidating Balance Sheet Information as of December 31, 2012


	FTI Consulting, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	66,663	$	610	$	89,512	$	—		$	156,785
Restricted cash		—		—		1,190		—			1,190
Accounts receivable, net		140,254		149,253		139,733		—			429,240
Intercompany receivables		7,053		674,136		23,185		(704,374	)		—
Other current assets		46,978		20,469		19,713		—			87,160

Total current assets		260,948		844,468		273,333		(704,374	)		674,375
Property and equipment, net		37,411		16,477		14,304		—			68,192
Goodwill		558,473		418,789		282,773		—			1,260,035
Other intangible assets, net		36,826		23,975		74,967		(31,587	)		104,181
Investments in subsidiaries		1,631,243		502,954		—		(2,134,197	)		—
Other assets		85,109		66,170		28,318		(10,928	)		168,669

Total assets	$	2,610,010	$	1,872,833	$	673,695	$	(2,881,086	)	$	2,275,452

Liabilities
Intercompany payables	$	549,339	$	112,137	$	42,898	$	(704,374	)	$	—
Other current liabilities		118,865		79,533		105,799		—			304,197

Total current liabilities		668,204		191,670		148,697		(704,374	)		304,197
Long-term debt, net		700,024		17,000		—		—			717,024
Other liabilities		173,550		10,479		12,898		(10,928	)		185,999

Total liabilities		1,541,778		219,149		161,595		(715,302	)		1,207,220
Stockholders’ equity		1,068,232		1,653,684		512,100		(2,165,784	)		1,068,232

Total liabilities and stockholders’ equity	$	2,610,010	$	1,872,833	$	673,695	$	(2,881,086	)	$	2,275,452

Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended June 30, 2013


	FTI Consulting, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	144,390		$	254,394	$	113,565		$	(97,736	)	$	414,613
Operating expenses
Direct cost of revenues		92,781			192,526		70,725			(96,504	)		259,528
Selling, general and administrative expense		38,575			28,614		30,367			(1,231	)		96,325
Acquisition-related contingent consideration		92			195		(7,739	)		—			(7,452	)
Amortization of other intangible assets		1,095			2,501		3,146			(789	)		5,953

Operating income		11,847			30,558		17,066			788			60,259
Other (expense) income		(16,773	)		202		3,113			—			(13,458	)

Income (loss) before income tax provision		(4,926	)		30,760		20,179			788			46,801
Income tax (benefit) provision		(4,290	)		24,090		3,515			—			23,315
Equity in net earnings of subsidiaries		24,122			15,679		—			(39,801	)		—

Net income		23,486			22,349		16,664			(39,013	)		23,486

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax $0		—			—		(11,714	)		—			(11,714	)

Other comprehensive income (loss), net of tax		—			—		(11,714	)		—			(11,714	)

Comprehensive income	$	23,486		$	22,349	$	4,950		$	(39,013	)	$	11,772

Condensed Consolidating Statement of Comprehensive Income (Loss) for the Three Months Ended June 30, 2012


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	151,442		$	241,033		$	101,451		$	(97,683	)	$	396,243
Operating expenses
Direct cost of revenues		96,450			180,788			66,080			(95,098	)		248,220
Selling, general and administrative expense		39,041			28,507			27,497			(2,585	)		92,460
Special Charges		16,731			4,287			5,764						26,782
Acquisition-related contingent consideration		—			—			(3,541	)		—			(3,541	)
Amortization of other intangible assets		1,297			2,473			2,541			(821	)		5,490

Operating income		(2,077	)		24,978			3,110			821			26,832
Other (expense) income		(17,469	)		(195	)		2,106			—			(15,558	)

Income (loss) before income tax provision		(19,546	)		24,783			5,216			821			11,274
Income tax (benefit) provision		(9,666	)		12,910			283			—			3,527
Equity in net earnings of subsidiaries		17,627			5,741			—			(23,368	)		—

Net income		7,747			17,614			4,933			(22,547	)		7,747

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax $0		—			—			(10,960	)		—			(10,960	)

Other comprehensive income (loss), net of tax		—			—			(10,960	)		—			(10,960	)

Comprehensive income (loss)	$	7,747		$	17,614		$	(6,027	)	$	(22,547	)	$	(3,213	)

Condensed Consolidating Statement of Comprehensive Income for the Six Months Ended June 30, 2013


	FTI Consulting, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	295,350		$	501,055	$	221,561		$	(196,175	)	$	821,791
Operating expenses
Direct cost of revenues		193,618			379,873		138,698			(194,181	)		518,008
Selling, general and administrative expense		81,471			56,590		56,905			(1,994	)		192,972
Special charges		323			104		—			—			427
Acquisition-related contingent consideration		179			195		(7,095	)		—			(6,721	)
Amortization of other intangible assets		2,322			4,948		5,829			(1,582	)		11,517

Operating income		17,437			59,345		27,224			1,582			105,588
Other (expense) income		(31,713	)		531		5,946			—			(25,236	)

Income (loss) before income tax provision		(14,276	)		59,876		33,170			1,582			80,352
Income tax (benefit) provision		(7,221	)		34,062		6,345			—			33,186
Equity in net earnings of subsidiaries		54,221			24,114		—			(78,335	)		—

Net income		47,166			49,928		26,825			(76,753	)		47,166

Other comprehensive income, net of tax:
Foreign currency translation adjustments, net of tax $0		—			—		(27,223	)		—			(27,223	)

Other comprehensive income, net of tax		—			—		(27,223	)		—			(27,223	)

Comprehensive income	$	47,166		$	49,928	$	(398	)	$	(76,753	)	$	19,943

Condensed Consolidating Statement of Comprehensive Income for the Six Months Ended June 30, 2012


	FTI Consulting, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	305,023		$	482,749	$	203,509		$	(199,810	)	$	791,471
Operating expenses
Direct cost of revenues		197,625			362,737		128,999			(195,523	)		493,838
Selling, general and administrative expense		86,435			57,559		55,342			(4,287	)		195,049
Special charges		16,731			4,287		5,764			—			26,782
Acquisition-related contingent consideration		—			—		(2,984	)		—			(2,984	)
Amortization of other intangible assets		2,600			4,950		5,097			(1,640	)		11,007

Operating income		1,632			53,216		11,291			1,640			67,779
Other (expense) income		(30,456	)		35,987		1,874			(34,885	)		(27,480	)

Income (loss) before income tax provision		(28,824	)		89,203		13,165			(33,245	)		40,299
Income tax (benefit) provision		(28,380	)		40,724		1,777			—			14,121
Equity in net earnings of subsidiaries		26,622			13,383		—			(40,005	)		—

Net income		26,178			61,862		11,388			(73,250	)		26,178

Other comprehensive income, net of tax:
Foreign currency translation adjustments, net of tax $0		—			—		1,889			—			1,889

Other comprehensive income, net of tax		—			—		1,889			—			1,889

Comprehensive income	$	26,178		$	61,862	$	13,277		$	(73,250	)	$	28,067

Condensed Consolidating Statement of Cash Flow for the Six Months Ended June 30, 2013


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	(59,591	)	$	50,836		$	28,124		$	19,369
Investing activities
Payments for acquisition of businesses, net of cash received		(11,601	)		(7,157	)		(21,754	)		(40,512	)
Purchases of property and equipment		(1,505	)		(10,386	)		(2,239	)		(14,130	)
Other		21			—			—			21

Net cash used in investing activities		(13,085	)		(17,543	)		(23,993	)		(54,621	)

Financing activities
Issuance of common stock and other		1,083			—			(645	)		438
Purchase and retirement of common stock		(28,758	)		—			—			(28,758	)
Excess tax benefits from share-based compensation		191			—			—			191
Intercompany transfers		53,168			(33,595	)		(19,573	)		—

Net cash provided by (used in) financing activities		25,684			(33,595	)		(20,218	)		(28,129	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(850	)		(850	)

Net decrease in cash and cash equivalents		(46,992	)		(302	)		(16,937	)		(64,231	)
Cash and cash equivalents, beginning of period		66,663			610			89,512			156,785

Cash and cash equivalents, end of period	$	19,671		$	308		$	72,575		$	92,554

Condensed Consolidating Statement of Cash Flow for the Six Months Ended June 30, 2012


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	(70,726	)	$	336		$	13,102		$	(57,288	)
Investing activities
Payments for acquisition of businesses, net of cash received		(21,186	)		—			(364	)		(21,550	)
Purchases of property and equipment		(3,384	)		(8,350	)		(1,994	)		(13,728	)
Other		93			—			—			93

Net cash used in investing activities		(24,477	)		(8,350	)		(2,358	)		(35,185	)

Financing activities
Payments of long-term debt and capital lease obligations		(1,929	)		(45	)		—			(1,974	)
Net issuance of common stock and other		(948	)		—			(1,287	)		(2,235	)
Excess tax benefits from share-based compensation		71			—			—			71
Intercompany transfers		8,906			7,955			(16,861	)		—

Net cash provided by (used in) financing activities		6,100			7,910			(18,148	)		(4,138	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(1,831	)		(1,831	)

Net decrease in cash and cash equivalents		(89,103	)		(104	)		(9,235	)		(98,442	)
Cash and cash equivalents, beginning of period		161,180			197			103,046			264,423

Cash and cash equivalents, end of period	$	72,077		$	93		$	93,811		$	165,981