FTI Consulting Reports First Quarter 2014 Results

              FTI Consulting Reports First Quarter 2014 Results  - First Quarter Revenues of $425.6 Million  - First Quarter Adjusted EPS of $0.41; Fully Diluted EPS of $0.45  - Second Quarter 2014 Guidance for Revenues of $430 Million to $445 Million and Adjusted EPS of $0.32 to $0.42  PR Newswire  WASHINGTON, May 1, 2014  WASHINGTON, May 1, 2014 /PRNewswire/ --FTI Consulting, Inc. (NYSE: FCN) (the "Company"), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today released its financial results for the quarter ended March 31, 2014.  For the quarter, revenues increased 4.5 percent to $425.6 million compared to $407.2 million in the prior year quarter. Fully diluted earnings per share ("EPS") were $0.45 compared to $0.58 in the prior year quarter. EPS included a remeasurement gain related to the reduction in the fair value of estimated future contingent consideration payments for prior acquisitions, which increased first quarter EPS by $0.04. First quarter Adjusted EPS were $0.41 compared to $0.59 in the prior year quarter. First quarter Adjusted EBITDA was $51.2 million or 12.0 percent of revenues compared to $59.3 million or 14.6 percent of revenues in the prior year quarter.  Adjusted EPS, Adjusted EBITDA and Adjusted Segment EBITDA are non-GAAP measures defined elsewhere in this press release and are reconciled to GAAP measures in the financial tables that accompany this press release. Beginning with the quarter ended March 31, 2014, the definitions of each of these non-GAAP measures have been updated to exclude the impact of changes in the fair value of acquisition-related contingent consideration liabilities. All current and prior period information reflected herein has been reclassified to reflect this change.  Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting said, "The first quarter, in many ways, heralds a number of the themes that we will discuss at our June investor day. Our Adjusted EPS of $0.41 at one level shows the power of our company – the fact that, when the stakes are high and someone needs committed people with world-leading expertise, people turn to FTI. The major driver of quarterly results was Forensic and Litigation Consulting with a record quarter, fueled by a number of front-page newspaper assignments from across the globe relating to high-stakes client events ranging from FCPA investigations to mortgage-backed security litigations. Similarly, our Technology business continued to perform very well, driven by ongoing FCPA and financial services investigations as well as increased cross-border M&A related 'second request' activity."  Mr. Gunby added, "The first quarter also heralds the major set of work we have ahead. Notwithstanding the strong performance of Forensic and Litigation Consulting and Technology, our Adjusted EPS declined substantially year-over-year. Corporate Finance/Restructuring's profitability continued its downward trend, Strategic Communications had another down quarter and Economic Consulting had a disappointing start to the year, both in terms of revenue and profitability."  "Despite these challenges, I want be clear – since stepping into my role in late January I am more excited than ever to be here. The deeper I get into the business, the more impressed I am with the capabilities we have and with the talent, commitment and enthusiasm of our people. The quality of our client relationships is outstanding. And the potential is there. As we will discuss in June, I continue to think we will be able, in a relatively short period of time, to begin meeting the aspirations so many of us have for this company. At the same time I do want to underscore that 2014 will see no rapid turnaround in profitability. Though we see numerous opportunities to drive the performance of all of our segments and regions, most of these opportunities will benefit 2015 and 2016 much more than 2014. This year will be about laying that foundation and implementing actionable initiatives now that we believe will result in stronger market positions and enhanced stockholder returns in the future," Mr. Gunby concluded.  Cash and Capital Allocation  Net cash used by operating activities for the quarter was $110.8 million compared to $2.3 million in the prior year as we funded our annual bonus payments and retention payments to key client-service professionals. Short-term borrowings were $20.0 million at March 31, 2014, and cash and cash equivalents were $77.0 million. During the quarter, the Company used $15.6 million for acquisition related payments and expended $4.4 million to settle transactions to repurchase the Company's common stock that were made, but not settled in the fourth quarter of 2013. The Company did not repurchase any common stock during the first quarter of 2014.  First Quarter Segment Results  Corporate Finance/Restructuring Revenues in the Corporate Finance/Restructuring segment decreased 5.1 percent to $94.0 million in the quarter compared to $99.1 million in the prior year quarter. Revenues declined organically by 9.6 percent due to lower demand in our bankruptcy and restructuring practices in North America, lower average realized bill rates due to mix of services in our telecom, media and technology ("TMT") practice, and lower success fees in North America. Adjusted Segment EBITDA was $11.0 million or 11.7 percent of segment revenues compared to $19.1 million or 19.3 percent of segment revenues in the prior year quarter. Adjusted Segment EBITDA margin was reduced by lower utilization in our bankruptcy and restructuring practices in North America, increased acquired overhead expenses, lower average realized bill rates due to mix of services in our TMT practice and continued investment in our Europe, Middle East and Africa ("EMEA") based transaction advisory services practice.  Economic Consulting Revenues in the Economic Consulting segment decreased 7.2 percent to $106.9 million in the quarter compared to $115.2 million in the prior year quarter. Revenues declined organically by 8.8 percent due to lower demand for our financial economics practice in North America and lower demand and realization in our international arbitration, regulatory and valuation practices in EMEA, which was partially offset by higher demand for our antitrust litigation practice in EMEA. Adjusted Segment EBITDA was $13.0 million or 12.2 percent of segment revenues compared to $26.2 million or 22.7 percent of segment revenues in the prior year quarter. Adjusted Segment EBITDA margin was reduced by lower utilization in our financial economics practice in North America, the impact of employment contract extensions of key senior client-service professionals and lower utilization and realization in our international arbitration, regulatory and valuation practices in EMEA, which was partially offset by higher utilization in our antitrust litigation practice in EMEA.  Forensic and Litigation Consulting Revenues in the Forensic and Litigation Consulting segment increased 20.6 percent to $121.4 million in the quarter compared to $100.7 million in the prior year quarter. Revenues grew organically by 17.6 percent due to increased demand for the segment's global data analytics, disputes and insurance practices in North America, and the forensic accounting and global risk and investigations practices ("GRIP") in Asia Pacific. Adjusted Segment EBITDA was $26.5 million or 21.8 percent of segment revenues compared to $12.8 million or 12.7 percent of segment revenues in the prior year quarter. The increase in Adjusted Segment EBITDA margin was due to improved utilization and employee leverage in the aforementioned practices.  Technology Revenues in the Technology segment increased 28.6 percent to $60.1 million in the quarter compared to $46.7 million in the prior year quarter. The increase in revenues was due to Foreign Corrupt Practices Act ("FCPA") and financial services industry investigations, increased merger and acquisition related "second request" activity and higher volume for services, which was partially offset by lower pricing for services. Adjusted Segment EBITDA was $17.3 million or 28.9 percent of segment revenues compared to $13.7 million or 29.4 percent of segment revenues in the prior year quarter. The decrease in Adjusted Segment EBITDA margin was due to the mix of lower margin services and increased investment in business development support.  Strategic Communications Revenues in the Strategic Communications segment decreased 4.9 percent to $43.2 million in the quarter compared to $45.5 million in the prior year quarter. Revenues declined organically by 8.9 percent or $4.0 million due to reduced pass-through revenues. Adjusted Segment EBITDA was $2.7 million or 6.3 percent of segment revenues compared to $3.6 million or 7.8 percent of segment revenues in the prior year quarter. Adjusted Segment EBITDA margin was impacted by higher non-recurring facilities costs related to the transition to our new London office and increased acquired overhead costs, which were partially offset by reduced pass-through costs.  Second Quarter 2014 Guidance The Company estimates that revenues for the second quarter of 2014 will be between $430.0 million and $445.0 million and Adjusted EPS will be between $0.32 and $0.42. Expectations for second quarter 2014 Adjusted EPS consider projected shifts in business mix and increased costs as compared to the first quarter of 2014, notwithstanding the non-recurrence of certain costs incurred in the first quarter of 2014. As discussed previously, full year 2014 revenues and Adjusted EPS guidance will be provided during the Company's investor day on June 16, 2014.  First Quarter 2014 Conference Call FTI Consulting will host a conference call for analysts and investors to discuss first quarter 2014 financial results at 9:00 a.m. Eastern Time on May 1, 2014. The call can be accessed live and will be available for replay over the Internet for 90 days by logging onto the Company's website at www.fticonsulting.com.  About FTI Consulting FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 4,200 employees located in 26 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and restructuring. The company generated $1.65 billion in revenues during fiscal year 2013. More information can be found at www.fticonsulting.com.  Note: We define Segment Operating Income as a segment's share of consolidated operating income. We define Total Segment Operating Income as the total of Segment Operating Income for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted EBITDA as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. 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 as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We use Adjusted Segment EBITDA to internally evaluate the financial performance of our segments because we believe it is a useful supplemental measure which reflects current core operating performance and provides an indicator of the segment's ability to generate cash. We also believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges, and goodwill impairment charges. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results to the operating results of other companies.  We define Adjusted Net Income and Adjusted Earnings per Diluted Share ("Adjusted EPS") as net income and earnings per diluted share, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that this measure, when considered together with our GAAP financial results, provides management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-GAAP financial 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. Reconciliations of GAAP to non-GAAP financial measures are included elsewhere in this press release.  Safe Harbor Statement This press release 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 press release, 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 materially from our expectations, beliefs and estimates. Further, preliminary results are subject to normal year-end adjustments. 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 filed with the SEC and in the Company's other filings with the SEC, including the risks set forth under "Risks Related to Our Reportable  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.  Investor & Media Contact: Mollie Hawkes +1.617.747.1791 mollie.hawkes@fticonsulting.com    FINANCIAL TABLES FOLLOW    FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013 (in thousands, except per share data) (unaudited)                                       Three Months Ended                                       March 31,                                       2014                 2013 Revenues                              $             $                                             425,552              407,178 Operating expenses Direct cost of revenues               274,275              258,480 Selling, general and administrative   108,387              96,647 expense Special charges                       -                    427 Acquisition-related contingent        (1,843)              731 consideration Amortization of other intangible      4,616                5,564 assets                                       385,435              361,849 Operating income                      40,117               45,329 Other income (expense) Interest income and other             1,003                937 Interest expense                      (12,655)             (12,715)                                       (11,652)             (11,778) Income before income tax provision    28,465               33,551 Income tax provision                  10,348               9,871 Net income                            $            $                                              18,117               23,680 Earnings per common share - basic     $           $                                                 0.46               0.60 Earnings per common share - diluted   $           $                                                 0.45               0.58 Weighted average common shares        39,438               39,403 outstanding - basic Weighted average common shares        40,457               40,620 outstanding - diluted Other comprehensive income (loss), net of tax: Foreign currency translation          $           $       adjustments, net of tax of $0         4,728                (15,509) Total other comprehensive income      4,728                (15,509) (loss), net of tax Comprehensive income                  $            $                                               22,845               8,171      FTI CONSULTING, INC. OPERATING RESULTS BY BUSINESS SEGMENT                                                                 Average   Revenue-                                  Adjusted                       Billable  Generating                        Revenues  EBITDA    Margin  Utilization  Rate      Headcount                                  ^(1)              ^(3)         ^(3)                        (in thousands)                                     (at period                                                                           end) Three Months Ended March 31, 2014 Corporate              $ 93,982  $ 10,951  11.7%   70%          $ 362     726 Finance/Restructuring Forensic and           121,429   26,494    21.8%   75%          $ 317     1,076 Litigation Consulting Economic Consulting    106,851   13,030    12.2%   72%          $ 523     538 Technology ^(2)        60,063    17,348    28.9%   N/M          N/M     321 Strategic              43,227    2,729     6.3%    N/M          N/M     584 Communications ^ (2)                        $         70,552    16.6%                          3,245                        425,552 Corporate                        (19,356) Adjusted EBITDA^(1)              $ 51,196  12.0% Three Months Ended March 31, 2013 Corporate              $ 99,080  $ 19,085  19.3%   71%          $ 409     683 Finance/Restructuring Forensic and           100,724   12,811    12.7%   66%          $ 319     965 Litigation Consulting Economic Consulting    115,194   26,194    22.7%   89%          $ 493     476 Technology ^(2)        46,704    13,716    29.4%   N/M          N/M     275 Strategic              45,476    3,554     7.8%    N/M          N/M     619 Communications ^ (2)                        $         75,360    18.5%                          3,018                        407,178 Corporate                        (16,034) Adjusted EBITDA^(1)              $ 59,326  14.6% (1) We define Adjusted EBITDA as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. Amounts presented in the Adjusted EBITDA column for each segment reflect the segments' respective Adjusted Segment EBITDA. 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 use Adjusted Segment EBITDA to internally evaluate the financial performance of our segments because we believe it is a useful supplemental measure which reflects current core operating performance and provides an indicator of the segment's ability to generate cash. We also believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results to the operating results of other companies. 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 financial 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 GAAP to 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.    (3) 2013 utilization and average bill rate calculations for our Corporate Finance/Restructuring, Forensic and Litigation Consulting, and Economic Consulting segments were updated to reflect the realignment of certain practices as well as information related to non-U.S. operations that was not previously available      FTI CONSULTING, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013 (in thousands, except per share data)                                                   Three Months Ended March 31,                                                   2014           2013 Net income                                        $        $                                                         18,117        23,680 Add back: Special charges, net of tax effect ^(1)           -              253 Remeasurement of acquisition-related contingent   (1,350)        - consideration, net of tax effect ^(2) Adjusted Net Income ^(3)                          $        $                                                         16,767        23,933 Earnings per common share – diluted               $        $                                                           0.45        0.58 Add back: Special charges, net of tax effect ^(1)           -              0.01 Remeasurement of acquisition-related contingent   (0.04)         - consideration, net of tax effect ^(2) Adjusted earnings per common share – diluted      $        $       ^(3)                                                0.41        0.59 Weighted average number of common shares          40,457         40,620 outstanding – diluted  ^(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 rate for the adjustments related to special charges for the three months ended March 31, 2013 was 40.7%. The tax expense related to the adjustment for special charges for the three months ended March 31, 2013 was $0.2 million with no impact on diluted earnings per share. In the three months ended March 31, 2014, there were no special charges. ^ (2)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 related to the remeasurement of acquisition-related contingent consideration for the three months ended March 31, 2014 was 36.4%. The tax expense related to the remeasurement of acquisition-related contingent consideration for the three months ended March 31, 2014 was $0.8 million or a $0.02 impact on diluted earnings per share. In the three months ended March 31, 2013 there was no fair value remeasurement of contingent consideration.  ^(3)We define Adjusted Net Income and Adjusted Earnings per Diluted Share as net income and earnings per diluted share, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We use Adjusted Net Income for the purpose of calculating Adjusted Earnings per Diluted Share. Management uses Adjusted Earnings per Diluted Share to assess total company operating performance on a consistent basis. We believe that this measure, when considered together with our GAAP financial results, provides management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt.      RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA (in thousands)                      Corporate      Forensic                      Finance        and         Economic                  Strategic Three Months Ended                                          Technology^                  Corp HQ   Total March 31, 2014       /              Litigation  Consulting                Communications                      Restructuring                                     Consulting                                                                                                     $    Net income                                                                                                                                                                                                 18,117  Interest income                                                                                    (1,003)  and other  Interest expense                                                                                   12,655  Income tax                                                                                         10,348  provision                                     $       $       $                        $      $    Operating            $                                $                  income ^(1)              8,607  25,402      12,430      13,066            1,005            40,117                                                                                           (20,393)  Depreciation and    791            1,015       1,081       4,064         597             1,037     8,585  amortization  Amortization of  other intangible    2,215          750         306         218           1,127           -         4,616  assets  Remeasurement of  acquisition-related (662)          (673)       (787)       -             -               -         (2,122)  contingent  consideration                                     $       $       $                        $      $    Adjusted EBITDA      $                                $                  ^(2)                    10,951   26,494      13,030      17,348            2,729            51,196                                                                                           (19,356) Three Months Ended March 31, 2013                                                                                                     $    Net income                                                                                                                                                                                                 23,680  Interest income                                                                                    (937)  and other  Interest expense                                                                                   12,715  Income tax                                                                                         9,871  provision                                     $       $       $                        $      $    Operating            $                               $                  income ^(1)             16,699   11,102      24,995      8,082             1,727            45,329                                                                                           (17,276)  Depreciation and    767            1,024       805         3,635         645             1,130     8,006  amortization  Amortization  of other            1,551          512         398         1,985         1,118           -         5,564  intangible  assets  Special charges     68             173         (4)         14            64              112       427                                     $       $       $                        $      $    Adjusted EBITDA      $                                $                  ^(2)                    19,085   12,811      26,194      13,716            3,554            59,326                                                                                           (16,034) (1) We define Segment Operating Income as a segment's share of consolidated operating income. We define Total Segment Operating Income as the total of Segment Operating Income for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA.    (2) We define Adjusted EBITDA as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. Amounts presented in the Adjusted EBITDA row for each segment reflect the segments' respective Adjusted Segment EBITDA. 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 use Adjusted Segment EBITDA to internally evaluate the financial performance of our segments because we believe it is a useful supplemental measure which reflects current core operating performance and provides an indicator of the segment's ability to generate cash. We also believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results to the operating results of other companies. 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 financial 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 GAAP to non-GAAP financial measures.      FTI CONSULTING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013 (in thousands) (unaudited)                                                       Three Months Ended                                                       March 31,                                                       2014         2013 Operating activities Net income                                            $       $                                                            18,117       23,680 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization                         8,585        8,006 Amortization of other intangible assets               4,616        5,564 Acquisition-related contingent consideration          (1,843)      731 Provision for doubtful accounts                      4,442        4,094 Non-cash share-based compensation                    9,503        10,055 Non-cash interest expense                             675          670 Other                                                 (443)        (135) Changes in operating assets and liabilities, net of effects from acquisitions: Accounts receivable, billed and unbilled              (71,474)     (47,711) Notes receivable                                      (26,088)     (227) Prepaid expenses and other assets                     11,927       531 Accounts payable, accrued expenses and other          18,815       16,603 Income taxes                                         (684)        2,937 Accrued compensation                                  (93,573)     (28,862) Billings in excess of services provided               6,630        1,760  Net cash used in operating (110,795)    (2,304) activities Investing activities Payments for acquisition of businesses, net of cash   (15,611)     (14,676) received Purchases of property and equipment                   (15,179)     (7,323) Other                                                 (10)         12  Net cash used in investing  (30,800)     (21,987) activities Financing activities Borrowings under revolving line of credit, net        20,000       - Purchase and retirement of common stock               (4,367)      (28,758) Net issuance of common stock under equity             (2,490)      (1,335) compensation plans Other                                                 (101)        (100)  Net cash provided by (used  13,042       (30,193) in) financing activities Effect of exchange rate changes on cash and cash      (275)        (1,598) equivalents Net decrease in cash and cash equivalents             (128,828)    (56,082) Cash and cash equivalents, beginning of period        205,833      156,785 Cash and cash equivalents, end of period              $       $                                                           77,005       100,703      FTI CONSULTING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS AT MARCH 31, 2014 AND DECEMBER 31, 2013 (in thousands, except per share amounts)                                        March 31,            December 31,                                        2014                 2013 Assets                                 (unaudited) Current assets  Cash and cash equivalents           $      77,005  $     205,833  Accounts receivable:  Billed receivables              375,176              352,411  Unbilled receivables            296,838              233,307  Allowance for doubtful accounts (126,942)            (109,273) and unbilled services  Accounts receivable, net     545,072              476,445  Current portion of notes receivable 33,592               33,093  Prepaid expenses and other current  49,014               61,800 assets  Current portion of deferred tax     26,543               26,690 assets  Total current assets                 731,226              803,861 Property and equipment, net of         85,993               79,007 accumulated depreciation Goodwill                               1,221,318            1,218,733 Other intangible assets, net of        88,871               97,148 amortization Notes receivable, net of current       130,721              108,298 portion Other assets                           54,438               57,900 Total assets                           $    2,312,567    $    2,364,947 Liabilities and Stockholders' Equity Current liabilities  Accounts payable, accrued expenses $     112,808   $     126,886 and other  Accrued compensation                124,870              222,738  Current portion of long-term debt   26,000               6,014  Billings in excess of services     35,532               28,692 provided  Total current liabilities            299,210              384,330 Long-term debt, net of current portion 711,000              711,000 Deferred income taxes                  142,390              137,697 Other liabilities                      82,939               89,661 Total liabilities                      1,235,539            1,322,688 Stockholders' equity Preferred stock, $0.01 par value; shares authorized ―5,000; none         -                    - outstanding Common stock, $0.01 par value; shares authorized ―75,000; shares issued and  409                  405  outstanding ―40,854 (2014) and 40,526 (2013) Additional paid-in capital             374,242              362,322 Retained earnings                      748,738              730,621 Accumulated other comprehensive loss   (46,361)             (51,089) Total stockholders' equity             1,077,028            1,042,259 Total liabilities and stockholders'    $    2,312,567    $    2,364,947 equity        SOURCE FTI Consulting, Inc.  Website: http://www.fticonsulting.com  
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