SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 27, 2012
FTI CONSULTING, INC.
(Exact Name of Registrant as Specified in Charter)
| Maryland | 001-14875 | 52-1261113 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
777 South Flagler Drive, Suite 1500, West Palm Beach, Florida 33401
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (561) 515-1900
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure.
FTI Consulting, Inc. (“FTI Consulting”) intends to use a presentation from time to time in its discussions with investors (the “Presentation”). The Presentation addresses FTI Consulting’s financial results for the year ended December 31, 2011, operating data and past, present and future business drivers. A copy of the Presentation is attached hereto as Exhibit 99.1 and has been posted to the FTI Consulting website at www.fticonsulting.com.
The Presentation includes information regarding adjusted EBITDA and adjusted earnings per diluted share. We define adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets and special charges (“Adjusted EBITDA”). We define adjusted earnings per diluted share as earnings per diluted share excluding the per share impact of special charges and debt extinguishment costs that were incurred in that period (“Adjusted EPS”). Although Adjusted EBITDA and Adjusted EPS 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 EPS are common alternative measures of operating performance which may be used by investors, financial analysts and rating agencies to value and compare the financial performance of companies in our industry. We use Adjusted EBITDA to evaluate and compare the operating performance of our segments. Adjusted EBITDA and Adjusted EPS 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 statements of income. Reconciliations of operating income to Adjusted EBITDA and earnings per diluted share to Adjusted EPS are included in the Appendix to the Presentation.
The Presentation contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are necessarily based on certain assumptions and are subject to significant risks and uncertainties. These forward-looking statements are based on management’s expectations as of February 24, 2012. The Registrant does not undertake any responsibility for the adequacy, accuracy or completeness or to update any of these statements in the future. Actual future performance and results could differ from that contained in or suggested by the forward-looking statements.
The information included herein, including Exhibit 99.1 furnished herewith, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing pursuant to the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing, except as expressly set forth by specific reference in such filing.
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ITEM 9.01. Financial Statements and Exhibits
(d) Exhibits.
99.1 Investor Presentation of FTI Consulting, Inc. dated February 2012
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, FTI has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| FTI CONSULTING, INC. | ||||||
| Dated: February 27, 2012 | By: | /S/ ERIC B. MILLER | ||||
| Eric B. Miller | ||||||
| Executive Vice President, General Counsel and Chief Risk Officer | ||||||
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EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Investor Presentation of FTI Consulting, Inc. dated February 2012. | |
4
Exhibit 99.1
Critical Thinking at the Critical Time™
FTI Consulting
(NYSE:FCN)
February 2012
Cautionary Note about Forward-Looking Statements
Certain statements in this Presentation are “forward-looking statements,” 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 Business 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.
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FTI Consulting Overview
Global business with pro-cyclical and counter-cyclical event-driven services and solutions
Strategy to enhance cross-discipline solutions, increase multi-practice nature of engagements and broaden geographic reach
Proven acquisition and integration track record
Portfolio investments, coupled with continued cash generation and operational discipline, demonstrated in financial results
Healthy balance sheet and consistent cash flow
Capital deployment focused on value-enhancing initiatives
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Global Business with Diverse Event-Driven Offering
FTI Consulting has pro-cyclical and counter-cyclical global businesses that offer event-driven services and solutions
Corporate Finance/Restructuring
Restructuring
M&A support
Transaction advisory services
Industry solutions
Interim management
Forensic and Litigation Consulting
Dispute advisory
Regulated industries
Investigations & forensic accounting
Global risk & investigations
Technology
Global e-discovery consulting
Structured data discovery
and services
Corporate litigation readiness
Ringtail® software
Economic Consulting
Antitrust engagements
Financial disputes
Economic testimony
Business economics
Regulatory & policy
Strategic Communications
Financial communications
Public affairs
Brand communications
Crisis & issues management
4Q11 Segment Revenues
Corporate Finance/Restructuring
12%
28%
Forensic and Litigation Consulting
23%
Technology
23%
Economic Consulting
14%
Strategic Communications
4Q11 Geographic Revenues
24%
25%
United States
75%76%
Rest of World
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|
Our Strategy for Sustainable Growth
FTI Consulting’s growth is being driven by the enhancement of the Company’s segments, geographic presence and industry offerings
Segment Geography Industry
Building out a diverse Applying a proven business Developing integrated
platform of industry leading model across an expanding industry-focused solutions to
services and solutions global platform through address increasingly
globally organic growth and strategic complex financial,
acquisitions operational, regulatory and
communications issues
??2011: Acquisition of LECG practices added ??2011: Acquisition of LECG practices added
offerings in European Competition , operations in Europe, Latin ??2011: Acquisition of LECG added
Financial Advisory, Tax Advisory and America and North America Airline and Aviation, Energy and
International Arbitration ?2010: Corporate Finance/Restructuring Electricity, Environmental and Insurance
?2011: Launch of Ringtail® 8 E-Discovery segment opens office in Madrid industry/sector practices
Software ?2010: Strategic Communications segment ?2010: Launch of Electricity Consulting Group
?2011: Launch of International Arbitration opens office in Brazil
Practice ?2010: Acquisition of FS Asia Advisory Limited ?2011: Launch of Insurance Actuarial Practice
?2010: Launch of FTI Consulting Harvester
Offering ?2010: Acquisition of Baker Tilly Hong Kong
Business Recovery Ltd.
?2010: Launch of Acuity ™ Integrated ?2010: Forensic and Litigation Consulting
Document Review Offering segment opens office in Colombia
?2010: Technology segment establishes a new
Acquisition data center in Australia
Launch of a new segment/industry
Geographic expansion
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Acquisitions: A Key Value Driver
FTI Consulting has acquired businesses to build a firm designed to address high-stakes issues that require specialized expertise and capabilities
?Diversification towards pro-cyclical businesses enhancing growth trajectory, with strategic acquisitions
Geographic expansion, broadening of capabilities and development of industry expertise
2011: Acquired certain
operations of LECG
Strategic Communications 2009: Continued to effectively expanding and
| $1.8 |
|
develop industry strengthening FTI’s |
Technology 2008: Invested in expertise with the international footprint and
| $1.6 |
|
Forensic & Litigation Consulting pro-cyclical acquisition of CXO building in key domain industries expertise |
businesses with 11
Economic Consulting 2006: Acquired bolt-on acquisitions
| $1.4 |
|
Corporate Finance/Restructuring Strategic |
ns) Communications
business to create
| $1.2 |
|
FTI Consulting’s 5th |
2005: Acquired business segment
(billio businesses to
| $1.0 |
|
further round out its |
2003: Acquired SEC services portfolio
| $0.8 |
|
investigation(Ringtail Solutions, |
specialists, Ten Eyck Cambio Health
venues Associates, the KPMG Solutions)
Re $0.6 DAS practice and
economic consulting
powerhouse Lexecon
$0.4
$0.2
$0.0
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11
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Delivering Portfolio Diversification
FTI Consulting is a strategically well-aligned and balanced company with the addition of multiple pro-cyclical businesses
??Enhancing FTI Consulting’s pro-cyclical business offering and expertise through a proven acquisition integration model
Broaden capabilities
Develop greater industry expertise
Enhance geographic scope
??25 acquisitions completed and fully integrated over the past five years ??Pro-cyclical segments benefiting from growth drivers in their respective businesses
Mergers & acquisitions Litigation and regulatory Globalization e-discovery
??Growth reflects the strength of FTI Consulting’s diversification strategy
Revenues (millions)
FY 02 Strategic Communications
Technology
FY 03 Economic Consulting
Forensic & Litigation Consulting
FY 04
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
FY 11
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The Globalization of FTI Consulting
Geographic expansion is key to FTI Consulting’s long-term growth – to drive unmatched breadth of services across a growing global footprint
?Revenue mix and strong organic growth underscore the long-term globalization strategy
4Q11 revenues outside the United States reached $99.2 million, or 25 percent of total revenues
?International opportunities are increasingly attractive and value enhancing:
Key geographic focus: Asia-Pacific, Europe, Middle East & Africa and Latin America
Key segment focus: Forensic and Litigation Consulting, Economic Consulting, Technology and Strategic Communications
4Q11 Revenues
25%
75%
United States
Rest of World
4Q11 Y/Y Revenue Growth
90% 84%
80%
72%
70%
60%
50%
40%
30% 26%
20%
10% 2%
0%
Asia EMEA Latin North
Pacific America America
4Q11 Revenue Growth
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Corporate Finance/Restructuring—A “New Normal”
Focused on capitalizing on opportunities and driving profitability
Aligning headcount and business to match demand by decreasing expenses, focusing on expanding organic margins and increasing contribution from international business
Starting to benefit from being a leaner, more streamlined organization
Focused on the profitability of the segment
Shift resources to support complementary pro-cyclical businesses that are experiencing increasing demand
Strengthen transaction support business in anticipation of a more vibrant financing market
Expect global economic volatility to continue in the near-term despite improved availability of credit in the U.S.
Experiencing continued softness in demand for restructuring and bankruptcy services
Opportunities remain strong in Asia, Europe and healthcare
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FTI Consulting’s Financial Position Is Strong
Portfolio investments, coupled with continued cash generation and operational discipline, demonstrated in financial results
?Track record of industry-leading growth in revenue and profitability
?Healthy balance of organic growth, acquisitions and practice development
?Investments have been the right strategic actions
Expanding global footprint and capabilities in key business, regulatory and financial centers around the world Building out full set of capabilities on a global basis Broadening portfolio of services to further serve clients with their critical issues Investing in brand and visibility to reinforce and enhance FTI Consulting’s leadership in the industry
?Strong balance sheet and cash flow
?Capital deployment for productive and value enhancing initiatives for shareholders
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FTI Consulting Summary
??Global business with pro-cyclical and counter-cyclical event-driven services and solutions
??Strategy to enhance cross-discipline solutions, increase multi-practice nature of engagements and broaden geographic reach
??Proven acquisition and integration track record
??Portfolio investments, coupled with continued cash generation and operational discipline, demonstrated in financial results
??Healthy balance sheet and consistent cash flow
??Capital deployment focused on value-enhancing initiatives
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Year Ended December 31, 2011 and 2010
($ in thousands, except per share data) Year Ended December 31,
2011 2010 (3)
Revenue $1,566,768 $1,401,461
Direct cost of revenues $956,908 $825,599
Selling, general and administrative expense $373,295 $341,239
Special charges $15,212 $51,131
Acquisition-related contingent consideration($6,465) $1,190
Amortization of other intangible assets $22,371 $23,910
Total Operating Expenses $1,361,321 $1,243,069
Operating income $205,447 $158,392
2011 2010 (3)
Interest income and other $6,304 $4,423
Interest expense($58,624)($50,263)
Loss on early extinguishment of debt -($5,161)
Income before income tax provision $153,127 $107,391
Income tax provision $49,224 $41,407
Net income $103,903 $65,984
Earnings per common share—diluted $2.39 $1.38
Weighted average common shares outstanding—diluted 43,473 47,664
Adjusted EBITDA (1) $271,612 $264,767 $317,255
% margin 17.3% 18.9%
Adjusted EPS (2) $2.60 $2.13
(1) We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets and special charges. Reconciliation to the GAAP measure is included in the Appendix of this presentation.
(2) We define Adjusted earnings per diluted share (Adjusted EPS) as earnings per diluted share excluding the per share impact of special charges and debt extinguishment costs that were incurred in that period. Reconciliation to the GAAP measure is included in the Appendix of this presentation.
(3) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K. The impact of the correction of these errors resulted in a decrease in net income of $5.9 million and a decrease in basic and fully-diluted earnings per share of $0.13 for the year ended December 31, 2010.
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Quarter Ended December 31, 2011 and 2010
($ in thousands, except per share data) Three Months Ended December 31,
2011 2010(2)
Unaudited
Revenues $390,713 $356,248
Direct cost of revenues $233,005 $207,959
Selling, general & administrative expense $92,932 $88,222
Special charges—$21,775
Acquisition-related contingent consideration($9,004) $1,011
Amortization of other intangible assets $5,576 $5,681
$322,509 $324,648
Operating income $68,204 $31,600
Other income (expense)
Interest income & other $895($317)
Interest expense($14,495)($15,663)
Income before income tax provision $54,604 $15,620
Income tax provision $14,723 $6,765
Net income $39,881 $8,855
Earnings per common share—diluted $0.93 $0.19
Weighted average common shares outstanding—diluted 42,857 46,972
Weighted average common shares outstandingAdjusted EPS- diluted(1)(2) $0.93 $0.52
(1) We define Adjusted earnings per diluted share (Adjusted EPS) as earnings per diluted share excluding the per share impact of special charges and debt extinguishment costs that were incurred in that period. Reconciliation to the GAAP measure is included in the Appendix of this presentation.
(2) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K. The impact of the correction of these errors resulted in a decrease in net income of $1.8 million and a decrease in basic and fully-diluted earnings per share of $0.04 for the three months ended December 31, 2010.
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2011 Results: Segment Performance
($ in thousands, except headcount data)
Revenue-
Generating
Year Ended December 31, 2011 Revenues Adjusted EBITDA(1) Margin Headcount
Corporate Finance/Restructuring $427,813 $97,638 22.8% 692
Forensic & Litigation Consulting $365,326 $69,180 18.9% 852
Economic Consulting $353,981 $67,028 18.9% 433
Technology (2) $218,738 $77,011 35.2% 290
Strategic Communications (2) $200,910 $26,801 13.3% 582
$1,566,768 $337,658 21.6% 2,849
Corporate($66,046)
Adjusted EBITDA (1) $271,612 17.3%
Revenue-
Generating
Year Ended December 31, 2010 Revenues Adjusted EBITDA(1) Margin Headcount
Corporate Finance/Restructuring $451,518 $108,634 24.1% 725
Forensic & Litigation Consulting $324,478 $75,920 23.4% 806
Economic Consulting $255,660 $49,481 1 19.4% 297
Technology (2) $176,607 $64,358 36.4% 257
Strategic Communications (2) $193,198 $28,971 15.0% 583
$1,401,461 $327,364 23.4% 2,668
Corporate($62,597)
Adjusted EBITDA(1)(3) $264,767 18.9%
(1) We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets and special charges. Reconciliation to the GAAP measure is included in the Appendix of this presentation.
(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) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K.
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Appendix
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data) (unaudited)
Three Months Ended Year Ended
December 31, December 31,
2011 2010 (2) 2011 2010 (2)
Net income $ 39,881 $ 8,855 $ 103,903 $ 65,984
Add backs:
Special charges, net of tax—15,553 9,285 32,733
Loss on early extinguishment of debt, net of tax—— 3,019
Adjusted net income (1) $ 39,881 $ 24,408 $ 113,188 $ 101,736
Earnings per common share—diluted $ 0.93 $ 0.19 $ 2.39 $ 1.38
Adjusted earnings per common share—diluted (1) $ 0.93 $ 0.52 $ 2.60 $ 2.13
Weighted average number of common shares outstanding—diluted 42,857 46,972 43,473 47,664
(1) 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 and loss on early extinguishment of debt that were incurred in that period, and their related income tax effects.
(2) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange
Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K.
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Reconciliation of Operating Income and Net Income to Adjusted EBITDA
(in thousands)
(unaudited)
Corporate
Forensic and
Strategic
Finance /
Litigation
Economic
Communi-
Three Months Ended December 31, 2011
Restructuring
Consulting
Consulting
Technology
cations
Corp HQ
Total
Net income
$
39,881
Interest income and other
(895)
Interest expense
14,495
Income tax provision
14,723
Operating income
$ 36,153
$ 14,723
$
15,326
$ 13,891
$ 5,615
$
(17,504)
$
68,204
Depreciation and amortization
863
844
669
2,761
754
1,184
7,075
Amortization of other intangible assets
1,450
567
399
1,997
1,163
-
5,576
Special charges
-
-
-
-
-
-
-
Adjusted EBITDA (1)
$ 38,466
$ 16,134
$
16,394
$ 18,649
$ 7,532
$
(16,320)
$
80,855
Year Ended December 31, 2011
Net income
$
103,903
Interest income and other
(6,304)
Interest expense
58,624
Income tax provision
49,224
Operating income
$ 78,923
$ 62,499
$
60,890
$ 57,917
$ 19,066
$
(73,848)
$
205,447
Depreciation and amortization
3,480
3,423
2,552
11,168
2,997
4,962
28,582
Amortization of other intangible assets
5,795
2,419
1,493
7,926
4,738
-
22,371
Special charges
9,440
839
2,093
-
-
2,840
15,212
Adjusted EBITDA (1)
$ 97,638
$ 69,180
$
67,028
$ 77,011
$ 26,801
$
(66,046)
$
271,612
Three Months Ended December 31, 2010 (2)
Net income
$
8,855
Interest income and other
317
Interest expense
15,663
Income tax provis ion
6,765
Operating income
$ 20,364
$ 17,192
$
12,101
$ 2,025
$ (2,387)
$
(17,695)
$
31,600
Depreciation and amortization
940
853
549
2,872
774
1,208
7,196
Amortization of other intangible assets
1,593
723
296
1,832
1,237
-
5,681
Special charges
3,877
(534)
(147)
10,986
7,784
(191)
21,775
| (1) |
|
17
Adjusted EBITDA
$ 26,774
$ 18,234
$
12,799
$ 17,715
$ 7,408
$
(16,678)
$
66,252
Reconciliation of Operating Income and Net Income to Adjusted EBITDA (cont.)
(in thousands) (unaudited)
Corporate Forensic and Strategic
Finance / Litigation Economic Communi-
Year Ended December 31, 2010 (2) Restructuring Consulting Consulting Technology cations Corp HQ Total
Net income $ 65,984
Interest income and other(4,423)
Interest expense 50,263
Loss on early extinguishment of debt 5,161
Income tax provision 41,407
Operating income $ 88,499 $ 64,121 $ 39,180 $ 27,569 $ 11,602 $ (72,579) $ 158,392
Depreciation and amortization 3,736 3,325 2,418 13,397 3,226 5,232 31,334
Amortization of other intangible assets 6,463 3,653 1,216 7,479 5,099—23,910
Special charges 9,936 4,821 6,667 15,913 9,044 4,750 51,131
Adjusted EBITDA (1) $ 108,634 $ 75,920 $ 49,481 $ 64,358 $ 28,971 $ (62,597) $ 264,767
(1) We define Adjusted EBITDA as consolidated operating income before depreciation, amortization of intangible assets, and special charges. 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, and special charges. 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. We use Adjusted EBITDA and Adjusted Segment EBITDA to evaluate and compare the operating performance of our segments.
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 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 Statements of Income. See also our reconciliation of non-GAAP financial measures.
(2) These amounts are revised based upon our completion of a re-examination of our historical practices regarding our accounting for compensation expense related to our Senior Managing Director Incentive Compensation Program and related agreements. In connection with this evaluation, we concluded that we had reported immaterial errors in prior period financial statements. Further information related to these immaterial errors can be found in the Current Report on Form 8-K as filed by the Company with the Securities and Exchange Commission on November 2, 2011. This press release should be read in conjunction with such previously filed Form 8-K.
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