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): June 16, 2014
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.) |
1101 K Street NW, Washington, D.C. 20005
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (202) 312-9100
(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 |
The brochure and investor presentation (the “Investor Presentation”) furnished as Exhibits 99.1 and 99.2, respectively, and incorporated herein by reference, are being used at the Investor Day of FTI Consulting, Inc. (“FTI Consulting”) on June 16, 2014 and may be used by FTI Consulting in various other presentations to investors from time to time. FTI Consulting will host its Investor Day at the New York Stock Exchange. The webcast of FTI Consulting’s Investor Day will be available through FTI Consulting’s website at www.fticonsulting.com/investor-day on June 16, 2014 and the webcast will remain available for replay for 30 days.
The Investor Presentation includes Non-GAAP financial information. FTI Consulting defines “Adjusted EBITDA” as consolidated net income (loss) 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. FTI Consulting defines “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. Although Adjusted EBITDA and Adjusted Segment EBITDA are not measures of financial condition or performance determined in accordance with U.S. generally accepted accounting principles (“GAAP”), FTI Consulting believes that they can be useful operating performance measures. FTI Consulting uses Adjusted Segment EBITDA to internally evaluate the financial performance of its segments because it believes it is a useful supplemental measure which reflects current core operating performance and provides an indicator of the segment’s ability to generate cash. FTI Consulting also believes that these non-GAAP measures, when considered together with its GAAP financial results, provide management and investors with a more complete understanding of its operating results, including underlying trends, by excluding the effects of special charges, remeasurement of acquisition-related contingent consideration and goodwill impairment charges. In addition, EBITDA is a common alternative measure of operating performance used by many of FTI Consulting’s competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in FTI Consulting’s industry. Therefore, FTI Consulting also believes that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of its operating results to the operating results of other companies.
FTI Consulting defines “Adjusted Net Income” and “Adjusted Earnings per Diluted Share,” or “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. FTI Consulting uses Adjusted Net Income for the purpose of calculating Adjusted Earnings per Diluted Share. Although Adjusted Earnings per Diluted Share is not a measure of financial condition or performance determined in accordance with GAAP, FTI Consulting uses Adjusted Earnings per Diluted Share to assess total FTI Consulting operating performance on a consistent basis. FTI Consulting believes that this measure, when considered together with its GAAP financial results, provides management and investors with a more complete understanding of its 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.
1
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 FTI Consulting’s Consolidated Statements of Comprehensive Income.
Adjusted Earnings per Diluted Share, or Adjusted EPS, Adjusted EBITDA, and Adjusted Segment EBITDA, for all periods presented have been calculated based on the updated definitions adopted for each of these non-GAAP measures beginning with the quarter ended March 31, 2014, which excludes the impact of remeasurement of acquisition-related contingent consideration. Accordingly, the amounts shown in the Investor Presentation may differ from the amounts presented in FTI Consulting’s historical SEC filings.
Reconciliations of Adjusted Earnings per Diluted Share, or Adjusted EPS, Adjusted EBITDA, and Adjusted Segment EBITDA, in each case to the most directly comparable GAAP financial measures, are included in the Investor Presentation furnished as Exhibit 99.2 to this Current Report on Form 8-K.
The information included herein, including Exhibits 99.1 and 99.2 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 they 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
| Exhibit No. |
Description | |
| 99.1 | Brochure delivered at FTI Consulting, Inc.’s Investor Day on June 16, 2014 | |
| 99.2 | Investor Presentation presented at FTI Consulting, Inc.‘s Investor Day on June 16, 2014 | |
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, FTI Consulting, Inc. has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| FTI CONSULTING, INC. | ||||||
| Dated: June 16, 2014 | 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 | Brochure delivered at FTI Consulting, Inc.’s Investor Day on June 16, 2014 | |
| 99.2 | Investor Presentation presented at FTI Consulting, Inc.‘s Investor Day on June 16, 2014 | |
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Exhibit 99.1
FTI CONSULTING
INVESTOR DAY
JUNE 16, 2014
NEW YORK STOCK EXCHANGE
CRITICAL THINKING AT THE CRITICAL TIME™
Welcome to
FTI CONSULTING’S
INVESTOR DAY
INVESTOR DAY FTI Consulting, Inc. 1
Our People
We have great people and great reach.
FTI Consulting’s integrated approach to protecting and enhancing enterprise value requires exceptional talent. We employ world-renowned industry experts in their respective fields, who serve as trusted advisors to our clients and mentors to our employees.
With more than 4,200 employees located on six continents, in 26 countries and in 97 offices, our collective expertise spans a wide range of geographies and businesses, which fuels our ability to develop multi-disciplinary solutions for client opportunities and challenges. Our people are experts in more than 80 different disciplines and specialize in 16 diverse industries.
Our goal is to attract, acquire and retain the most talented people.
Clients choose FTI Consulting because of the depth and expertise of our people. When stakes are high and someone needs totally committed teams with world-leading expertise, they turn to FTI Consulting.
Our diverse team of professionals includes forensic accountants; former chief executives and political leaders; Nobel Laureates; former FBI, FTC, FCC, DOJ and SEC professionals; cyber security experts; top-ranking economists; certified turnaround professionals; interim management professionals; corporate investigation specialists; banking and securities professionals; certified public accountants; chartered financial analysts; and corporate, financial and crisis communications specialists.
We hire the best talent and continue to invest in their ongoing development.
We are dedicated to investing in our people. FTI Consulting employees are supported throughout their career development, through educational and thought leadership initiatives including: New Hire Orientation, New Director School, FTI Consulting University, Managing Director Leadership Forum and Executive Leadership Forums.
This commitment to development and personal growth is the engine behind building a great professional services firm.
Joining “ FTI Consulting (from Distinct International) provided our clients and professionals with an established and broad global platform. We believe FTI Consulting is the ideal partner to expand our delivery of services, analytical tools and expertise internationally.”
— David Power, Senior Managing Director, Forensic & Litigation Consulting
“ When you hire the best and brightest it is easy to develop your people into future leaders. This is why I chose to spend the latter part of my career at FTI Consulting — people want to work with leading industry experts on the most critical and complex cases.”
— Freddie Reiss, Senior Managing Director, Corporate Finance/ Restructuring
Because “ I worked with a lot of consulting firms in my past roles, I saw things that did work and things that didn’t work. FTI Consulting just felt different, not only in the types of services that it offers, but also in how it provides these services to its clients. After meeting the people at FTI Consulting, I knew that FTI also attracted smart, dedicated professionals, and I wanted to be a part of that.”
— Ellen Smith, Senior Managing Director, Economic Consulting
The North Shore-LIJ Health System client team accepting their award for Operational Performance at the 2014 Association of Management Consulting Firms Spotlight Awards
2 FTI Consulting, Inc. INVESTOR DAY
FTI Consulting Facts
10/10 Advisor to the world’s top 10 bank holding companies 95/100 Advisor to 95 of the world’s top 100 law firms 55/100 Advisor to over half of the world’s 100 largest companies
6 Continents
26 Countries
97 Offices
4,200+ Employees
450+ Senior Managing Directors 500+ Managing Directors
16 Industries
INVESTOR DAY FTI Consulting, Inc. 3
Protecting and Enhancing Enterprise Value
The FTI Consulting service model provides a single source that addresses the interrelated issues that can affect enterprise value. Our goal is not just to address challenges but to anticipate them, surround them and deliver sustainable solutions that range from the immediate to the long-term.
GOVERNANCE
COMPLIANCE
LIABILITY
PERFORMANCE
ENTERPRISE VALUE
REPUTATION
FINANCE
INFORMATION
4 FTI Consulting, Inc. INVESTOR DAY
GOVERNANCE
Internal controls/Board advisory/Investigations/International due diligence/Corporate integrity
COMPLIANCE
Regulatory compliance/Antitrust disputes/Public policy/Bribery Act
LIABILITY
Litigation consulting/Dispute consulting/Enterprise risk management/Electronic evidence discovery/ Expert testimony
REPUTATION
Corporate, financial and crisis communications/Public affairs/Issues management/Corporate branding
INFORMATION
Global e-discovery services/Cost-effective document review and productions/Secure preservation and collection of sensitive data/Litigation readiness consulting/Ringtail® and Attenex® software
FINANCE
Capital solutions/Transaction advisory services/Creditor advisory services/Valuation consulting
PERFORMANCE
Business economics/Interim management/Operational improvement/Turnaround and restructuring/ Marketing consulting
INVESTOR DAY FTI consulting, Inc. 5
Our History
From our beginnings in a small warehouse, we have grown to one of the pre-eminent consulting firms in the world. FTI Consulting has been a trusted advisor during some of the most memorable events in recent history, including landmark celebrity legal cases, international crises and disputed presidential elections. Our founders were pioneers who created solutions at the intersection of law, communications and technology, and today our teams of world-leading experts in their fields provide critical thinking about wide-ranging and far-reaching business and economic issues.
1982
Forensic Technologies International is founded by Dan Luczak in a small warehouse in Annapolis, MD.
1988
The state of Illinois hires the firm to determine the cause of a central telephone office fire and make recommendations to prevent future disasters.
1989
Forensic Technologies International lands a product defect case in the construction industry that elevates the firm’s reputation as a provider of complex technical investigations and litigation services.
1995
The company provides courtroom graphics and jury consultation for the O.J. Simpson murder trial.
1996
Forensic Technologies International goes public in May of 1996. Trading under the ticker symbol FTIC, the firm raises $11.1 million on the NASDAQ, becoming one of the first public litigation-support services companies.
1997
Forensic Technologies International acquires LWG, which provides consulting services to property and casualty insurance claim adjusters and attorneys. The acquisition also expands the company’s presence into Canada.
1998
Forensic Technologies International changes its name to FTI Consulting, Inc.
The firm expands its investigation and research capabilities with the acquisition of S.E.A., Inc., and enters the financial disputes business with the acquisition of Click, Kent and Allen, Inc. The company also acquires Kahn Consulting, a turnaround, restructuring, bankruptcy and forensic accounting practice.
1999
FTI Consulting begins trading on the New York Stock Exchange under the ticker symbol FCN.
2000
The company enters the Technology business, specializing in e-discovery solutions.
1982 1989 1996 1998 2000
1988 1995 1997 1999 2002
6 FTI consulting, Inc. INVESTOR DAY
The firm provides trial graphics and courtroom presentation technology for the landmark Bush v. Gore case to resolve the disputed presidential election results.
2002
The company makes a major move into the corporate restructuring business with the acquisition of the business recovery services practice of PricewaterhouseCoopers.
The firm assists in the bankruptcy cases of Enron, WorldCom and Adelphia Communications.
2003
The company acquires the economic consulting firm Lexicon, the Dispute Advisory Services business from KPMG and Ten Eyck Associates, which specializes in Securities and Exchange Commission investigations and litigation.
The company has grown to 1,000 professionals located in 24 major U.S. cities and London.
2005
Acquisition of litigation technology software firm Ringtail Solutions Group (“Ringtail”) adds operations in Australia, the UK and the U.S.
The company develops its first five-year plan to double revenues from approximately $427 million to $1 billion in the next five years.
2006
The company acquires global strategic communications firm Financial Dynamics (“FD”), diversifying the company’s consulting capabilities and providing it with a significant presence outside the U.S.
The firm acquires International Risk, Ltd, forming the Global Risk and Investigations team in Asia.
The firm’s Technology segment plays a substantial role in the Major League Baseball steroids investigation and acquires G3 Consulting Ltd., expanding its UK technology client base.
2007
FTI Consulting enters the Latin American market with the acquisition of Holder International.
FTI Consulting achieves revenues of $1 billion — two years ahead of its five-year plan.
The company aids the investigation into the oil-for-food program bribery scandal tied to the Saddam Hussein regime.
2008
Lexecon and Competition Policy Associates (“COMPASS”), two of the premier economic consulting firms in the world, combine to form Compass Lexecon.
FTI Consulting acquires Attenex Corporation, a leading e-discovery software provider, and Strategic Discovery, Inc., a provider of litigation discovery and records management services.
2009
FTI Consulting helps track down the ill-gotten gains of Bernard L. Madoff , and serves on many of the largest, highest-profile corporate restructurings of the year, including Lehman Brothers, General Motors and CIT Group.
2010
The firm acquires FS Asia Advisory Limited, significantly expanding the company’s corporate finance, restructuring and turnaround capabilities in Asia.
2011
FTI Consulting acquires various operations of LECG, adding approximately 200 professionals in Europe, Latin America and the U.S.
The company employs more than 3,800 people, including economists and government, corporate and financial professionals from around the world. Thirty percent of the professionals reside outside the U.S.
2012
FTI Consulting has grown from 75 employees and $6 million in annual revenues in 1992 to a global enterprise with more than 3,800 employees in 24 countries and $1.58 billion in annual revenues.
2013
With more than 4,200 employees in 26 countries, 26 percent of revenues are generated outside of North America.
2014
On January 20th, Steven H. Gunby becomes FTI Consulting’s President and Chief Executive Officer, bringing more than 30 years of strategic, operational and performance improvement experience in global management consulting to FTI Consulting.
2003 2006 2008 2010 2012 2014
2005 2007 2009 2011 2013
74% 26% north America rest of world
INVESTOR DAY FTI consulting, Inc. 7
Corporate Finance/Restructuring
SEGMENT OVERVIEW
our Corporate Finance/Restructuring segment focuses on strategic, operational, financial and capital needs of businesses around the world. Our professionals address the full spectrum of financial, operational and transactional challenges facing our clients, which include companies, boards of directors, investors, lenders and creditors all seeking expertise in guiding companies through the value creation lifecycle. We advise and implement on a wide range of services, including restructuring, insolvency, litigation support, interim management, capital market advisory, post-acquisition integration, valuations, tax planning as well as financial management and performance improvement solutions. Among our core strengths is our deep industry expertise with dedicated teams specializing in the Healthcare, Real Estate, Energy, Retail and Consumer Products, and Telecom, Media and Technology sectors.
Our Corporate Finance/Restructuring services are offered through a global network of 47 offices in 14 countries.
CORPORATE FINANCE/ RESTRUCTURING SERVICES
Bankruptcy Support Services
Interim Management
Investment Banking
Litigation Support
Office of the CFO
Performance Improvement
Private Equity Advisory
Restructuring/Turnaround Services
Transaction Advisory Services
Valuation & Financial Advisory Services
AWARDS AND ACCOLADES
Ranked as #1 Crisis Management Firm by The Deal Pipeline consecutively for the last seven years
FTI Consulting honored with seven M&A Advisor Turnaround Awards in 2014, including engagements for American Suzuki Motors Corporation, Ahern Rentals, Arcapita Bank B.S.C.(c), Hostess Brands, Inc., Orchard Supply Hardware Stores, Residential Capital LLC and AES Eastern Energy, L.P.
FTI Consulting recognized with three M&A Advisor Awards in 2013 for Residential Capital LLC, Ahern Rentals and American Suzuki Motors Corporation
8 FTI Consulting, Inc. INVESTOR DAY
BRINGING BACK AMERICA’S SNACK.
Situation: Numerous challenges force the iconic Hostess Brands, maker of Twinkies and Wonder Bread, into bankruptcy
After emerging from bankruptcy in 2009, Hostess Brands continued to struggle with a wide range of challenges. Against the backdrop of industry overcapacity, adverse consumer trends in white bread and snack cakes, rising commodity prices, unsustainable debt loads and legacy labor and pension funding costs, Hostess burned through $250 million in cash in just three years. Eventually, the company re-entered bankruptcy in January 2012 and later sought federal bankruptcy court permission to cease operations in November 2012 after an extended nationwide strike.
FTI Consulting Role: Breathing new life into America’s most famous snack
FTI Consulting was engaged to provide interim management support and assist with the development and assessment of a turnaround plan to allow Hostess to overcome financial and operational challenges. The turnaround plan included cost-saving, revenue generation and restructuring measures to maximize profitability and resolve operational inefficiencies.
The FTI Consulting team worked closely with operations-level employees and Hostess’ management team to review the underlying operating and financial assumptions of the turnaround plan; discuss its associated execution risks and analyze its financial implications.
Union opposition to the turnaround plan and the ensuing employee strikes resulted in 36 production facilities being shuttered. Hostess could no longer fill customer orders or sell product at its retail stores; this cut off its access to the funding needed to operate the business. To capture the brand’s
significant value, Hostess, FTI Consulting and other advisors opted to auction the company in pieces.
OUT COME
GETTING SNACK CAKES TO SELL LIKE HOT CAKES AGAIN
FTI Consulting and Hostess’ other advisors focused their efforts on developing a sales process, which included auctioning separate collections of brands and assets. This created opportunities for many different buyers to enter the process.
The various auctions raised nearly $1 billion, a value that was more than twice the highest bid that Hostess had received before re-entering bankruptcy. Actual dollar recoveries to pre-bankruptcy lenders were in excess of two times original expectations. Certain plant locations re-opened within 30 days under new ownership, and the majority of the iconic cake and bread brands returned to the shelves within two months.
RECOGNITION
FTI Consulting was named the Distressed M&A Deal of the Year (Over$1 Billion) at the 8th Annual M&A Advisor Turnaround Awards in 2014
FTI Consulting’s work on Hostess was honored by the D CEO 2014 Mergers and Acquisition Awards for Large Deal of the Year
FTI Consulting was a finalist for the Association of Management Consulting Firms 2014 Spotlight Award for Operational Performance
The FTI Consulting team exhibited dedication, expertise and technical know-how throughout the restructuring process at Hostess Brands. Whether it was assuming and quickly adapting to interim management roles or rolling up their sleeves with the management team on the Turnaround Plan, FTI Consulting’s involvement with Hostess contributed to the efficient and timely wind-down and the successful asset sale process. Few project teams have the analytical depth, strategic insight and sound business judgment that the FTI Consulting team showcased on this engagement.
— Richard Seban
Former Chief Operating Officer, Hostess Brands, Inc.
Contacts
Robert J. Duffy
Global Segment Co-Leader
+1.617.897.1501 bob.duffy@fticonsulting.com
Kevin Lavin
Global Segment Co-Leader
+1.212.499.3660 kevin.lavin@fticonsulting.com
INVESTOR DAY FTI Consulting, Inc. 9
Forensic & Litigation Consulting
SEGMENT OVERVIEW
The Forensic & Litigation Consulting segment provides corporations, governments and law firms around the globe with the industry’s most complete range of multidisciplinary, independent dispute advisory, investigative, data acquisition/analysis and forensic accounting services. Our professionals combine end-to-end capabilities with unmatched qualifications when clients face high stakes litigation, arbitration and compliance investigations and regulatory scrutiny.
Our Forensic & Litigation Consulting services are offered through a global network of 50 offices in 18 countries.
FORENSIC & LITIGATION CONSULTING SERVICES
Business Insurance Claims
Compliance, Monitoring and Receivership
Construction & Environmental Solutions
Dispute Advisory Services
Financial & Data Enterprise Analytics
Financial Services
Forensic Accounting & Advisory Services
Global Risk & Investigations Practice
Government Contracts
Health Solutions
Insurance
Intellectual Property
Trial Services
AWARDS AND ACCOLADES
Most professionals by firm named in Global Arbitration Review’s list of “The International Who’s Who of Commercial Arbitration” for four consecutive years (2011-2014)
10 FTI Consulting, Inc. INVESTOR DAY
A WINNING
HAND.
Situation: What to do when Uncle Sam bets against your business
PokerStars was the largest online poker site in the world with more than 50 million registered users when the U.S. government came knocking on April 15, 2011, a day now known as Black Friday within the online poker community.
In one day, the federal government shut down three of the most popular online poker websites in the world: PokerStars, Full Tilt Poker and Absolute Poker/ UltimateBet. This action was launched after civil and criminal cases were filed against the companies and some of their directors, accusing them of violating federal bank fraud and money laundering statutes. As a result, these multibillion-dollar enterprises suddenly faced the very real prospect of having to fold.
FTI Consulting’s Role: Help persuade U.S. government to unfreeze and restore PokerStars’ operations and reputation
Faced with the worldwide closure of its business, PokerStars quickly reached a “domain name use agreement” with the U.S. government to allow the site to re-open worldwide. In return, the company agreed not to allow play from the U.S. for “real money.” In addition, it accepted the appointment of FTI Consulting as an independent monitor to ensure compliance. To support PokerStars, a team of multi-regional FTI Consulting professionals, with expertise across numerous business segments and practices within the firm, employed a four-pronged approach focused on technology, finance,
accounting and investigative research. This strategy ensured strict compliance with PokerStars’ obligations and ultimately led to PokerStars adopting and implementing recommendations beyond the obligations set forth by the federal government.
OUT COME
A WINNING HAND
Over the course of the 12-month monitorship, the steps and refinements recommended by FTI Consulting allowed PokerStars to demonstrate its comprehensive commitment to its compliance obligations, and helped pave the way for a settlement that included the dismissal of all civil charges in July 2012. Notably, of the three poker websites that were seized by the government on Black Friday, PokerStars is the only business still operating. This follows an agreement with the U.S. Department of Justice that allowed PokerStars to acquire Full Tilt Poker, a former competitor that faced an investigation over shortfalls in its player accounts.
RECOGNITION
Finalist for the 2013 Association of Management Consulting Spotlight Awards for Change Management
Finalist for the 2013 Association of Management Consulting Spotlight Awards for Finance and Risk Management
As chief outside counsel to PokerStars, I worked closely with FTI Consulting’s independent monitoring team, and participated in all discussions and meetings with the team over the course of the 12-month monitorship. FTI Consulting’s expertise, judgment, discretion and advice were integral to the enhancement of PokerStars’ compliance protocols. PokerStars respected and implemented many of FTI Consulting’s recommendations, which were reached through deliberative and substantive discussion and consultation with both counsel and the professionals at PokerStars. FTI Consulting worked hard to gain the trust of PokerStars, and their consultancy and integrity helped to pave the way for the resolution of the outstanding civil case in July 2012.
— Gil White
Outside Counsel to PokerStars
Contact
Neal A. Hochberg
Global Segment Leader
+1.212.499.3697 neal.hochberg@fticonsulting.com
INVESTOR DAY FTI Consulting, Inc. 11
Health Solutions
PRACTICE OVERVIEW
Our Health Solutions practice provides consulting and advisory services that help clients optimize their short-term and long-term performance, and prepare for and respond to strategic, operational and financial challenges in the healthcare and life sciences industries. Our Health Solutions professionals provide a broad range of services focusing on operational services, such as clinical and performance effectiveness and improvement; regulatory services, including the development, implementation and management of compliance programs and dispute resolution; advisory services, such as M&A; management services, such as turnaround services and the interim management of hospitals, health systems and other types of healthcare organizations; and process improvement services, such as strategy, planning, revenue growth and fee reimbursement advisory services.
HEALTH SOLUTIONS SERVICES
Clinical Operations
Financial Advisory Services
Managed Care/Government Health Insurance Programs
Performance Improvement
AWARDS AND ACCOLADES
Tenth Largest Hospital Management Consulting Practice in the U.S. by revenues as ranked by Modern Healthcare’s 8th Annual Management Consulting Firms Survey in September 2013
12 FTI Consulting, Inc. INVESTOR DAY
WHAT TO DO WHEN THE HOSPITAL HAS THE HEADACHE?
Situation: Surviving in an ever-changing industry
The healthcare industry in the U.S. is undergoing a game-changing transition as the combination of cost pressures and health-care reform drive significant challenges. The North Shore-LIJ Health System, an award-winning health organization comprised of 16 hospitals, grew rapidly through acquisition over the past several years. This rapid growth resulted in disparate practices, guidelines and reporting metrics across their Perioperative Services, which manage care for surgical patients before, during and after their procedures. Because Perioperative Services represent as much as 50 percent of the health system’s total annual revenues, identifying opportunities for improved efficiencies, outcomes, growth and strategic decision-making was critical for North Shore-LIJ.
Transforming North Shore-LIJ’s operations would require enterprise-wide integration, an aligned strategic vision and a shared operational platform. North Shore-LIJ needed a partner they could rely on to deliver industry-specific insight, expertise and processes.
FTI Consulting’s Role: Delivering transformational leadership
To begin this transformation, FTI Consulting performed a comprehensive evaluation, which included interviewing key stakeholders, observing processes and identifying both strategic and operational enablers and issues. Following this assessment, FTI Consulting defined a two-phased,
24-month plan to improve safety, quality, satisfaction, profitability and efficiencies significantly across the health system.
Phase one of this process focused on laying the foundation for a centralized, enterprise-wide Perioperative Services model.
It created an integrated body to provide consistent direction, support, business intelligence tools and communications across the company.
Phase two called for the deployment of FTI Consulting experts into North Shore-LIJ Health System’s facilities to identify hospital-specific challenges and opportunities; provide hands-on implementation support and guidance and educate Perioperative leadership and managers to ensure the successful adoption of best practices.
OUT COME
MEASUREABLE RESULTS, COST SAVINGS AND IMPROVED PATIENT CARE AND SAFETY
The customized model yielded measurable performance improvement, enhanced efficiencies, better communication and collaboration, enterprise-wide reporting, and enriched patient care for North Shore-LIJ Health System. It also generated measurable quantitative results including:
A 15 percent reduction in annual supply costs in physician high-preference categories of spinal and total joint replacement surgeries, achieved through pricing negotiations and vendor consolidation;
Site-level implementation efforts resulting in a 14 percent improvement in on-time starts across the health system’s 16 hospitals just six months following execution; and
The implementation of more than 30 foundational policies, guidelines, forms and tools that have been accepted by medical boards throughout the health system.
RECOGNITION
Winner of the 2014 Association of Management Consulting Firms Operational Performance Spotlight Award
The FTI Consulting team has been the best I have seen in my professional career. They create custom solutions, hold your hands to make improvements, and do not walk away after giving you advice and a manual.
— Chief of Bariatric Surgery at Lennox Hill Hospital
Contacts
Kenneth J. Barker
Global Practice Leader
+1.512.769.9969 ken.barker@fticonsulting.com
Michael Biggs
Senior Managing Director
+1.404.460.6200 michael.biggs@fticonsulting.com
INVESTOR DAY FTI Consulting, Inc. 13
Economic Consulting
SEGMENT OVERVIEW
our Economic Consulting segment provides law firms, companies, government entities and other interested parties with analysis of complex economic issues. We help these clients with legal, regulatory and international arbitration proceedings; strategic decision making; and public policy debates in the U.S. and around the world. We deliver sophisticated economic analysis and modeling of issues arising in M&A transactions, complex antitrust litigation, commercial disputes, international arbitration, regulatory proceedings and a wide range of securities litigation. Our statistical and economic experts help clients analyze complex economic issues, such as the economic impact of deregulation on a particular industry or the amount of damages suffered by a business as a result of particular events. Our professionals regularly provide expert testimony on damages, rates and prices, valuations (including valuations of complex derivatives), competitive effects and intellectual property disputes. They also provide analyses and advice relating to antitrust and competition cases, regulatory proceedings, business valuations and public policy.
Our Economic Consulting services are offered through a global network of 27 offices in 10 countries.
ECONOMIC CONSULTING SERVICES
Antitrust & Competition Economics
Business Valuation
Intellectual Property
International Arbitration
Labor & Employment
Public Policy
Regulated Industries
Securities Litigation & Risk Management
AWARDS AND ACCOLADES
Named one of the 20 Best Economics Firms in the World by
Global Competition Review for nine consecutive years (2006-2014)
Most professionals by firm named in
Global Arbitration Review’s list of “The International Who’s Who of Commercial Arbitration” for four consecutive years (2011-2014)
Named Global Competition Review’s
Economist of the Year in 2014, 2012
and 2011
Global Competition Review’s Matter of
the Year: US Airways/American Airlines
merger
Global Competition Review’s Behavioral
Matter of the Year – Americas: Defense
of Visa/MasterCard before Competition
Tribunal
14 FTI Consulting, Inc. INVESTOR DAY
ECONOMETRICS PROVE
THE PRICE IS RIGHT.
Situation: Securing antitrust clearance for a contested merger
OfficeMax and Office Depot announced a proposed merger in February 2013, attracting a great deal of public attention. Sixteen years earlier, when Staples and Office Depot attempted to merge, the transaction was challenged by the U.S. Federal Trade Commission (“FTC”), and blocked by the U.S. District Court in Washington, D.C. The potential combination of the second and third largest office supply superstore chains in the U.S. again raised the specter of antitrust-based rejection. Would history repeat itself?
FTI Consulting’s Role: Dispelling the concerns of the past through rigorous econometrics
Compass Lexecon, a subsidiary of FTI Consulting, was retained by OfficeMax to advise its board of directors on the transaction and provide in-depth economic analysis of the proposed merger.
The 1997 FTC v. Staples antitrust case helped to pioneer the application of large-scale, complicated econometrics in antitrust cases. In 2013, advanced econometrics were Officeagain in the spotlight. However, a great deal had changed in the market since then, with consumers increasingly purchasing office supplies
from big box stores and online retailers. Econometric modeling would need to account for these new realities. Compass Lexecon professionals, working closely with both OfficeMax’s and Office Depot’s counsel, performed sophisticated and detailed econometric analyses of the deal. They substantially expanded the econometric modeling used in the earlier attempted merger, taking into account competitive retail price effects of the transaction and the merging parties’ pricing.
OUT COME
TRAILBLAZERS IN AN INCREASINGLY COMPLEX ECONOMY
On November 1, 2013, the FTC provided regulatory clearance by deciding unanimously to close its seven-month investigation of the proposed merger between OfficeMax and OfficeDepot. The Compass Lexecon analysis, which found no systematic evidence that the merger would result in higher retail prices, was presented to the FTC and ultimately cited as one of the main reasons to allow the merger to close.
OfficeMax and OfficeDepot finalized their merger on November 5, 2013, creating a company serving consumers and businesses in 59 countries, employing approximately
66,000 associates and generating 2013 pro forma revenues of $17 billion.
RECOGNITION
Global Competition Review’s Merger Control Matter of the Year – Americas
The econometric analysis reflects the new competitive dynamics in the industry and shows that the proposed merger is unlikely to result in anticompetitive price effects. All of the econometrics, none of which assumed or depended on any particular definition of a relevant product or geographic market, indicate that the merger is unlikely to lead to anticompetitive price increases.
Federal Trade Commission
Contacts
John Klick
Global Segment Leader
+1.202.312.9145 john.klick@fticonsulting.com
Jonathan M. Orszag
Senior Managing Director
+1.561.515.1915 +1.202.253.9306 jorszag@compasslexecon.com
INVESTOR DAY FTI consulting, Inc. 15
Technology
SEGMENT OVERVIEW
Our Technology segment is a leading provider of software, services and consulting for e-discovery and information management. We assist corporations, law firms and government agencies worldwide with internal, regulatory and global investigations, early case assessment, litigation and joint defense, antitrust and competition investigations, including pre-merger notification “Second Request”, and the secure management, analysis and use of critical corporate information. We provide a comprehensive suite of software and services to help clients locate, review and produce electronically stored information (“ESI”) including e-mail, computer files, voice-mail, instant messaging and financial and transactional data. Ringtail® software and Acuity® managed review are used for e-discovery and document review in litigation and secure information management. Ringtail can be deployed either on-premises or as a service (SaaS) or on-demand as a hosted solution through us or our network of third-party service providers.
Technology software and services are offered globally through 23 offices in five countries.
TECHNOLOGY SOFTWARE
& SERVICES
E-discovery Software and Services
Computer Forensics and Investigations
Discovery Consulting
AWARDS AND ACCOLADES
Member of the “Leaders” Quadrant in Gartner’s “Magic Quadrant for E-discovery Software” Report
Ringtail® Software-as-a-Service e-discovery product named a Trend-Setting Product of 2013 by KMWorld magazine in September 2013
Recognized as an industry leader in legal software and service offerings in the
May 2014 National Law Journal reader rankings
Recognized by The National Law Journal
for “Best Predictive Coding Solution”
(2013)
Named to KMWorld magazine’s 100
Companies That Matter in Knowledge
Management list in March 2014
16 FTI Consulting, Inc. INVESTOR DAY
AWARD-WINNING E-DISCOVERY CLEARS MERGER FOR TAKEOFF.
Situation: Fulfill Department of Justice “Second Request” inquiry in a fast, defensible and cost efficient manner
The U.S. Department of Justice (“DOJ”) required Goodrich Corporation to collect and review millions of documents in a condensed timeframe as part of a “Second Request” related to its proposed multibillion-dollar acquisition by United Technologies Corporation. Under the Hart-Scott-Rodino Antitrust Improvements Act, the DOJ can impose these Second Requests if it suspects that a merger or acquisition may result in less competition. To comply, Goodrich had to collect and manage millions of documents from around the globe in a fast, defensible and cost-efficient manner. Global e-discovery capabilities were essential to meet the complex analytical, multi-lingual, regulatory and industry specific requirements of the request and complete the proposed multi-billion dollar transaction.
FTI Consulting’s Role: Boots on the ground, sophisticated workflow and industry-leading technology solutions
FTI Consulting’s ability to integrate a variety of services in a secure environment across borders and in remote locations was critical to successful collaboration with Goodrich and Jones Day. Our expert team was retained to ensure that global data privacy requirements were met and that data was collected in a defensible and reliable manner.
FTI Consulting deployed technology solutions that were vital to ensuring timely compliance with the Second Request. Using Ringtail® software with predictive coding and advanced analytics, and Acuity® managed review services for multi-lingual U.S. attorneys, the FTI Consulting team collected, processed and prioritized 5.4 million documents.
OUT COME
ON TIME, ON BUDGET AND
$1 MILLION IN SAVINGS
Of the 5.4 million documents collected,
700,000 documents were ultimately reviewed and 480,000 documents were produced for the DOJ on time. The 4.7 million documents eliminated by processing and predictive coding significantly reduced the cost of review compared to traditional linear review methodologies. Ultimately, the innovative Acuity® workflows saved Goodrich an estimated $1 million in e-discovery costs, by FTI Consulting’s calculations.
Today, Goodrich is a subsidiary of United Technologies Corporation, one of the world’s largest suppliers of technologically advanced aerospace and defense products servicing customers in the commercial aerospace, defense and building industries.
RECOGNITION
Jones Day’s Antitrust & Competition Law Practice received the top commendation of “Standout” for their work on Goodrich’s merger with United Technologies Corporation, which “created new standards in the use of computer-assisted review from the Financial Times in antitrust investigations”.
Contacts
Seth A. Rierson
Global Segment Leader
+1.312.630.3173 seth.rierson@fticonsulting.com
Patrick K. Strong
Senior Managing Director
+1.303.689.8844 patrick.strong@fticonsulting.com
Mike Kinnaman
Senior Managing Director
+1.206.373.6506 mike.kinnaman@fticonsulting.com
INVESTOR DAY FTI Consulting, Inc. 17
Strategic Communications
SEGMENT OVERVIEW
Our Strategic Communications segment provides advice and consulting services relating to financial and corporate communications and investor relations, reputation management and brand communications, public affairs, business consulting and digital design and marketing. We believe our integrated offering - which includes a broad scope of services, diverse sector coverage and global reach - is unique and distinguishes us from other strategic communications consultancies.
Our Strategic Communications services are offered through a global network of 35 offices in 16 countries.
STRATEGIC COMMUNICATIONS SERVICES
Corporate Communications
Creative Engagement and Digital Communications
Crisis Communications
Employee Engagement and Change Communications
Financial Communications
Litigation Communications
M&A Communications
Public Affairs
Restructuring and Financial Issues
Shareholder Activism and Proxy Advisory
Strategy Consulting and Research
AWARDS AND ACCOLADES
#1 Communications Advisor in Mergermarket League Tables of PR Advisors in Global M&A by deal volume in 2013
2013 M&A Advisor Award for Consumer Deal of the Year for the American Suzuki Motor Corporation
Named 2013 M&A PR Firm of the Year by the Americas M&A Atlas Awards
Named 2014 Strategic
Communications Firm of the Year in Belgium by Corporate INTL magazine
The Holmes Report 2013 Asia-Pacific SABRE Awards Winner in the “Industrial/Manufacturing” category for SapuraKencana Petroleum Berhad
18 FTI consulting, Inc. INVESTOR DAY
CRISIS COMMUNICATIONS IN THE
MOST TURBULENT OF WATERS.
Situation: A tragic explosion and oil spill create the ultimate crisis communications challenge
The Deepwater Horizon oil rig, located in the Gulf of Mexico, exploded on April 20, 2010. Tragically, 11 crewmen were killed. The rig eventually sank, unleashing not only the largest oil spill in history, but also — in an era of proliferating media channels — one of the most sustained global media events to date. The Deepwater Horizon rig was owned by Transocean and under contract to BP p.l.c. at the time.
In the days following the explosion, Transocean faced an unprecedented challenge. Coworkers and families were dealing with missing and fallen employees; countless lawsuits and government investigations were launched; the company faced a tsunami of outraged investors; and many began to question whether Transocean would survive.
FTI Consulting’s Role: Manage a crisis aggressively or it will manage you
Within 48 hours of the explosion, Transocean engaged FTI Consulting. Our crisis communications team — with deep energy sector, corporate and financial communications, and public and government affairs experience — worked closely with Transocean’s management team and its internal and external counsel. Together we developed and executed an aggressive, fact-based communications strategy designed to inform, effectively and accurately, the multiple stakeholders impacted by this catastrophe.
The strategy included direct, 24/7 media relations engagement; government relations; preparing testimony for Congressional Oversight and other hearings; internal communications to support morale and employee retention; investor relations to support critical shareholder engagement; and litigation communications to support and enhance Transocean’s position.
OUT COME
DIRECT, RAPID, ALL-ENCOMPASSING ENGAGEMENT RESULTS IN BALANCED, ACCURATE COVERAGE
The crisis communications strategies employed by FTI Consulting on behalf of Transocean were successful in helping to manage the fallout from the incident across all of the company’s stakeholders. For example, thousands of media inquiries were addressed and the communications strategy of direct engagement set the record straight with leading media outlets, including “60 Minutes”, “Anderson Cooper 360”, The
New York Times, The Wall Street Journal and Bloomberg BusinessWeek. The resulting media treatment of Transocean was more favorable and accurate than the coverage received by other parties involved, which were vilified in the press worldwide.
Epilogue: Activism nearly derails the recovery
Two weeks after Transocean settled with the Department of Justice in early 2013 on matters related to the Deepwater Horizon incident, Carl Icahn became Transocean’s largest shareholder, seeking a $4.00 per share dividend. FTI Consulting worked closely with Transocean to ensure Mr. Icahn’s short-term strategy would not negatively impact the company’s long-term asset strategy or derail its operational and financial progress. At its annual meeting of shareholders, Transocean successfully defeated Mr. Icahn’s proposals, receiving 75 percent shareholder support for its dividend policy.
FTI Consulting’s work was without parallel. Our victories were your victories… I am glad to have served with you.
— Mike Talbert
Former Chairman, Transocean
Contacts
Edward J. Reilly
Global Chief Executive Officer
+1.212.850.5645 edward.reilly@fticonsulting.com
Brian J. Kennedy
Global Energy & Natural Resources Sector Leader
+1.202.346.8826 brian.kennedy@fticonsulting.com
INVESTOR DAY FTI Consulting, Inc. 19
Global Locations
NORTH AMERICA
Executive Office
1101 K Street NW Suite B100 Washington, DC 20005
+1.202.312.9100
Corporate Office
909 Commerce Road Suite 1400 Annapolis, MD 21401
+1.800.334.5701
Canada
Calgary Toronto Vancouver
United States
Annapolis Atlanta Baltimore Boston Brentwood Charlotte Chicago Coral Gables Dallas
Denver Great Neck Houston Indianapolis Los Angeles McLean Miami Morristown New York Oakland Pasadena Philadelphia Phoenix Pittsburgh Portland
Princeton Red Bank Rockville Roseland Saddle Brook San Francisco Santa Barbara Seattle Tucson Walnut Creek Washington, DC Wayne West Palm Beach Winston-Salem
ASIA PACIFIC
Regional Headquarters
Level 22, The Center
99 Queen’s Road Central Hong Kong +852.3768.4500
Australia
Brisbane Gold Coast Melbourne Perth Sydney
Japan
Tokyo
Philippines
Manila
Singapore China
Beijing Guangzhou Hong Kong Shanghai
India
Mumbai New Delhi
Indonesia
Jakarta
EUROPE MIDDLE EAST AFRICA
Regional Headquarters
200 Aldersgate Aldersgate Street London EC1A 4HD +44.20.3727.1000
EUROPE
Belgium
Brussels
France
Paris
Germany
Berlin Frankfurt
Ireland
Dublin
Russia
Moscow
Spain
Madrid
United Kingdom
London Stirling
MIDDLE EAST
Qatar
Doha
United Arab Emirates
Abu Dhabi Dubai
AFRICA
South Africa
Cape Town Johannesburg
LATIN AMERICA
Regional Headquarters
804 Douglas Road 4th Floor Miami, FL 33134
+1.305.714.4600
Argentina
Buenos Aires
Brazil
Rio de Janeiro São Paulo
Colombia
Bogotá
Mexico
Mexico City
Panama
Panama City
CARIBBEAN
British Virgin Islands
Tortola
Cayman
George Town
Investor Relations Contact:
Mollie Hawkes
Director of Investor relations 200 state street, 9th Floor Boston, Ma 02109
+ 1.617.747.1791 mollie.hawkes@fticonsulting.com
1101 K Street NW Suite B100 Washington, DC 20005
+ 1.202.312.9100 NYSE: FCN
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. FTI Consulting professionals, who are located in all major business centers throughout the world, 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 and restructuring.
www.fticonsulting.com ©2014 FTI Consulting, Inc. All rights reserved.
CRITICAL THINKING
AT THE CRITICAL TIME™
Exhibit 99.2
F T I CONSULTING FTI Consulting Investor Day
New York Stock Exchange June 16, 2014
F T I
CONSULTING
Opening Remarks
Mollie Hawkes, Director of Investor Relations
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 2014 financial results, our medium-term growth targets or other future financial results. When used in this press release, words such as “anticipates,” “aspirational,” “estimates,” “expects,” “goals,” “intends,” “believes,” “forecasts,” “targets,” “objectives” 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 2014 financial results, our medium-term growth targets or other future financial results, are based upon our expectations at the time we make them and various assumptions. Our medium term growth targets do not represent forecasted future results or financial guidance; rather, they reflect our medium-term growth objectives, developed on the basis of a comprehensive review of our businesses and reflecting our plans for the future. Our expectations, beliefs, projections and growth targets 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, estimates or growth targets will be achieved, and the Company’s actual results may differ materially from our expectations, beliefs, estimates and growth targets. 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 bed 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.
F T I
CONSULTING
3
F T I
CONSULTING
Taking FTI Consulting to the Next Level
Steven H. Gunby, President and Chief Executive Officer
Key Message For Today
Strong confidence in our medium-term prospects
Strong businesses with strong people
Confronting the reality of the last few years
Making concrete changes that are grounded in those realities
Real people owning the changes with accountability
Delivering $2.50+ adjusted EPS by 2016
Major organic growth where we are strong
Aggressive action where we are challenged
Supported by disciplined cross-company capabilities
F T I
CONSULTING
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Agenda
Time
Presentation
Presenter
11:00 a.m. – 12:00 p.m. Registration and Lunch
12:00 – 12:05 p.m. Opening Remarks and Introductions Mollie Hawkes, Director of Investor Relations
12:05 – 12:45 p.m. Taking FTI Consulting to the Next Steven H. Gunby, President and Chief Executive Officer Level
12:45 – 1:00 p.m. Corporate Finance/Restructuring Robert J. Duffy and Kevin Lavin, Global Co-Leaders, Corporate
Finance/Restructuring
1:00 – 1:15 p.m. Economic Consulting John Klick, Global Leader, Economic Consulting
1:15 – 1:30 p.m. Forensic & Litigation Consulting Neal A. Hochberg, Global Leader, Forensic & Litigation Consulting
1:30 – 1:45 p.m. Strategic Communications Edward J. Reilly, Global Leader, Strategic Communications
1:45 – 2:00 p.m. Technology Seth A. Rierson, Global Leader, Technology
2:00 – 2:15 p.m. Break
Rod Sutton, Chairman of Asia Pacific Frank Holder, Chairman of Latin America
Kenneth J. Barker, Global Leader, Health Solutions Practice
2:15 – 2:55 p.m. Driving the Business Across/Beyond Carlyn Taylor, Telecom, Media & Technology Practice Leader and the Segments – Some Examples Global Industry Leader Jeffrey S. Amling, Head of Marketing and Business Development Adam S. Bendell, Senior Vice President – Strategic Development Roger D. Carlile, Executive Vice President and Chief Financial Officer
2:55 – 3:20 p.m. Financial Discussion Roger D. Carlile, Executive Vice President and Chief Financial Officer
3:20 – 3:55 p.m. Questions and Answers FTI Consulting Executive Team
3:55 – 4:00 p.m. Closing Remarks Steven H. Gunby, President and Chief Executive Officer
F T I
CONSULTING
6
Key Messages
Great company
Strong positions Great people
Recognize that the past few years have not lived up to…
Performance of the first 15 years Your expectations Our expectations
Making concrete changes…
Address weaknesses, but at least as important… …build on our strengths
…plans grounded in reality
Clear-sighted assessment of where we have the Right to Win Specific initiatives Clear accountabilities
Supported by a major upgrade in company-wide capabilities
Support from the center for rigor and discipline Specific initiatives
Transitioning to the next stage of FTI’s success
F T I
CONSULTING
7
We Are A Great Company With Proven Successes, Powerful Positions And Strong People
Advisor to the world’s top 10 banks and holding companies
Advisor to 95 of the world’s top 100 law firms
Advisor to over half of the world’s 100 largest companies
#1 crisis management firm in The Deal league tables for 7 consecutive years
Named leading Antitrust Economics Firm by Global Competition Review
Former Chairman of the FDIC
Former Chief Economist of the SEC
. . .
Two Nobel Laureates
Former SEC communications Director and DOJ Spokesperson
Former Federal Prosecutor for the Southern District of NY
Former Chairman of the SEC
Former Chief Economist at the FCC & FTC
For the biggest most complicated events in corporate life, organizations call on FTI
F T I
CONSULTING
8
Though We Outperformed For Many Years, Performance Recently Has Not Met Your (Or Our) Expectations
1 year
S&P 500
FCN
3 year
S&P 500
FCN
5 year
S&P 500
FCN
7 year
S&P 500
FCN
Not acceptable. We are going to change this.
F T I CONSULTING
9
We Are Making Concrete Changes In Every Segment…
Corporate Finance/Restructuring
Reinforce core positions, e.g. TMT, Retail, company-side, interim management Drive new businesses where we have the right to win, e.g., Office of the CFO, carve out Rationalize cost structure, e.g., compensation, Detroit, Philippines Driving overseas bets to fruition
Forensic & Litigation Consulting
Reinvestment behind core areas of strength, e.g., FAAS, FEDA…
Growing key regions where we have a right to win, e.g., Latin America Construction Investing behind people to expand key businesses, e.g., Insurance, Cyber Security…
Economic Consulting
Continue driving Compass Lexecon
Expansion of International Arbitration, Energy, Center for Healthcare Economics and Policy
Technology
Increased investment in sales and marketing
Ongoing investment to stay leading edge with respect to the most complicated, major corporate events
Strategic Communications
Reinforce Financial and Corporate Communications, continued expansion of Public Affairs Focus on EBIT improvement
F T I CONSULTING
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…But Also Major Changes Across Segments…
Industry strategies
Health Solutions
Substantial other cross-segment industry based alignments, e.g., Energy, Insurance with Distinct…
Regional strategies that reflect unique needs and positions, e.g.,
Asia: contentious insolvency; linkages with FLC and TECH through FCPA; uniquely placed to assist in cross-border transactions
Latin America: international arbitration, CF/R, Construction Solutions
Major bets in Europe to change our competitive position in CF/R
Leveraging intellectual capital created
Learnings from the mortgage backed securities modeling Patent valuation for transactions Systematic process for identifying IP we can leverage
Upgrading our key cross-segment processes
Client service processes, e.g., marketing of success stories, client coordinating partners Enhanced, disciplined approach to cost and effectiveness, e.g., real estate Quality, disciplined HR processes
Effective, disciplined new business/innovation processes, e.g., M&A
Other core processes
F T I CONSULTING
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More Broadly, A Number Of Key Themes
Disciplined assessment of where we have the Right to Win
Organic growth
Acquisitions, but only where they make sense and following a disciplined process
Willingness to invest EBITDA…
…but also relentless focus on where we have been spending in a way that doesn’t drive the business
Accountability
Discipline
Figuring out how to win and grow…even when markets are down
F T I CONSULTING
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We Are Also Making People Changes
We will be adding some key roles
Chief Human Resources Officer Analytical change talent at the center
….
We will also be rotating some roles/some changes in organizational structure
Will be looking at other opportunities, e.g., delayering…
More details to come
F T I CONSULTING
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How Are We Managing The Transformation Process?
Support the best parts of our businesses boldly; retool/fix other parts of our businesses
Build the core capabilities and disciplines to allow us to drive the businesses • also go beyond
What have we done ?
Aspirational 2016 EBITDA goals established for each segment Set of initiatives and investments needed to meet goals agreed to with each segment
Cross-company initiatives with explicit owners, deliverables and measurement process Investments and hiring to strengthen key functions
How are we tracking our progress?
Quarterly business strategy reviews to track progress and adapt plans
Executive Committee meetings every 6-8 weeks to review progress against initiatives
FTI CONSULTING
14
What Do We Expect This To Yield?
2014
Modest negative impact
2015
Modest positive impact
2016
Significant positive trajectory
FTI CONSULTING
15
One View Of The Next 3 Years – Targets/Financials
Adjusted EPS ($)
$3.00
$2.75
$2.50
$2.25
$2.00
$1.75
$1.50
$1.25
$1.00
$1.70
$1.55
$2.10
$1.75
?
$2.50
2014 2015 2016
FTI CONSULTING
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What Do We Think This Can Yield – More Holistically
Truly great companies need to (and do) retool along the way
FTI CONSULTING
17
Key Message For Today
Strong confidence in our medium-term prospects
Strong businesses with strong people
Confronting the reality of the last few years
Making concrete changes that are grounded in those realities
Real people owning the changes with accountability
Delivering $2.50+ adjusted EPS by 2016
Major organic growth where we are strong
Aggressive action where we are challenged
Supported by disciplined cross-company capabilities
FTI CONSULTING
18
FTI CONSULTING
Corporate Finance/Restructuring
Robert J. Duffy and Kevin Lavin, Global Co-Segment Leaders
Making A Difference For Our Clients
Boards of Directors
Equity Sponsors
Management
Secured Lenders
Bondholders
Unsecured Creditors
Restructuring
Company Advisory
Interim Management
Creditor & Lender Advisory
Capital Structure
Litigation Services
Business Transformation
Non-Transaction Related
Office of the CFO
Liquidity & Working Capital
Performance Improvement
Interim Management
Transaction-Related
Merger Integration & Carve-outs
Transaction Advisory Services
Valuation
Capital Markets Advisory
Company and Interim Management
Creditor and Lender Advisory
Business Transformation
$5B Global Plastics, Latex and Rubber Manufacturer
FTI CONSULTING
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Snapshot Of Our Business
Restructuring 65% of revenues
Business Transformation
35% of revenues
725+
Revenue Producing Professionals
14
Countries
47
Offices
Over 150+ interim/permanent operating positions filled by FTI professionals
100+ C-Suite roles
30+ Chairman/CEO positions
55+ CFO positions
#1 crisis management firm in The Deal league tables of crisis management firms for seven consecutive years (2007-2014)
TMA Turnaround and Transaction of the Year winner in October 2013
Honored by the Global M&A Network with 6 Turnaround Atlas Awards for excellence and outstanding achievements in the global restructuring, special situation M&A and turnaround markets in July 2013
FTI CONSULTING
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Financial Performance
Adjusted Segment EBITDA
Revenues
$450.00 $400.00 $350.00 $300.00 $250.00 $200.00 $150.00 $100.00 $50.00 $0.00
$449.7 $396.2 $364.4 $394.7 $382.5 $390.0
$159.9 $108.2 $75.9 $95.9 $67.2 $58.0
2009 2010 2011 2012 2013 2014 Guidance
Revenue Generating Headcount 636 620 587 697 737 726
Revenue CAGR of -4.0% between 2009 and 2013
- Recession impact on results from 2009 through 2012 when large projects like Lehman, GM and others ended
EBITDA CAGR of -19.5% between 2009 and 2013
- Margin impact from growth of business transformation products and practices outside of the U.S. Impact of investments in 2013 and 2014
The healthcare and life sciences practice of the Corporate Finance/Restructuring segment was reclassified in 2013 as the Heath Solutions practice within the Forensic and Litigation Consulting segment and the Company reported reclassified financial results for the years ended 2010 through 2012 in its Current Report on Form 8-K filed with the SEC on May 21, 2013. The 2009 Revenue and Adj. EBITDA presented in this Table for the Corporate Finance/Restructuring segment has been reclassified from $514.3M to $449.7M and $172.3M to $159.9M, respectively.
FTI CONSULTING
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Where We Are Going
Execute on Recent Investments
Strengthen the Core
Grow Organically
Profitability Enhancements
EMEA Transaction Advisory Services
EMEA Tax
Australia
Company Side & Interim Mgmt
Bondholder Restructurings
Fairness and Solvency Opinions
Industries
Office of the CFO
Carve-outs
Merger Integration
Performance Improvement
Industries
Geography Rationalization
Cost Control
Engagement Profitability Improvements
FTI CONSULTING
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Aspirational Targets
$120.0
$100.0
$80.0
$60.0
$40.0
$20.0
$0.0
Adjusted Segment EBITDA
$57.5
$100.0
2014 Guidance 2016 Aspirational Target
Medium-Term Growth Catalysts
Execute on Recent Investments
Strengthen the Core Practice
Grow Organically
Profitability Enhancements
FTI CONSULTING
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FTI CONSULTING
Economic Consulting
John Klick, Global Segment Leader
Indicative Success Stories
BNY MELLON
CME Group
NFA NATIONAL FUTURES ASSOCIATION
INSTITUTE FOR FINANCIAL MARKETS
A Nonprofit Foundation Founded in 1989
FTI CONSULTING
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Our Economists Are The Most Experienced In The Business
2 former Chief Economists from the SEC
6 former Deputy
Attorney Generals for Antitrust of the DOJ
120+ PhD Economists
Former Chief Economist from the FTC
2 former Chief Economists from the FCC
2 Nobel Prize Winners in Economics
Global Competition Review’s Economist of the Year in 2014, 2012 and 2011
Most professionals by firm named in Global Arbitration Review’s list of “The International Who’s Who of Commercial Arbitration” for four consecutive years (2011-2014)
FTI CONSULTING
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Financial Performance
$500.0 $450.0 $400.0 $350.0 $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 $0.0 $ Millions
Adjusted Segment EBITDA Revenues
$234.7 $255.7 $354.0 $391.6 $447.4 $467.0 $47.6 $49.5 $67.0 $77.5 $92.2 $67.5
2009 2010 2011 2012 2013 2014 Guidance
Revenue Generating Headcount 302 297 433 474 530 538
Revenue CAGR of 17.5% between 2009 and 2013
- Acquisition of certain practices of LECG effectively doubled our rate of revenue growth in 2011
- Benefitted from litigation arising out of the financial crisis, and a number of large M&A engagements in 2011 and 2013
EBITDA CAGR of 18.0% between 2009 and 2013
- Substantial focus throughout 2011-2013 and on integrating the LECG acquisition in EMEA and improving profitability in EMEA
For 2014, after a slow start to the year we expect mid-single digit revenue growth
2014 EBITDA step-down reflects, among other things, extended employment agreements through 2023 with senior client services professionals
FTI
CONSULTING
28
Medium–Term Growth Catalysts
International Arbitration
Increase market share
Better differentiate from low-price competitors Move closer to emerging markets
Regulatory Practices
Increase market share
Targeted group hires and acquisitions Continue to integrate engineering expertise
Healthcare Economics and Policy
Apply skills used in market-leading M&A practice to emerging business and regulatory challenges Potential clients (employers, state/regional governments and communities)
Continue to Expand
Cross-Segment
Collaboration
Energy, healthcare and restructuring
In summary, these initiatives involve selling what we already do to a higher percentage of potential buyers, leveraging what we already do into adjacent service offerings and geographical markets, and taking even more advantage of internal sales channels.
FTI
CONSULTING
29
Aspirational Targets
$100.0 $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 $ Millions
Adjusted Segment EBITDA
$67.5 M
$90M
2014 Guidance 2016 Aspirational Target
Medium-Term Growth Catalysts
High level of confidence we will execute effectively across the range of Economics Segment initiatives Assuming key markets remain stable, expecting adjusted segment EBITDA to grow at a compound annual growth rate in the low- to mid-teens over the 2014 to 2016 period
FTI
CONSULTING
30
FTI
CONSULTING
Forensic & Litigation Consulting
Neal A. Hochberg, Global Segment Leader
Engagement Highlights – Receiverships And Monitorships
Poker Stars.com MKG
PokerStars
Multi-disciplinary expertise:
Investigations, Data Analytics, Finance and Accounting Global, readily-deployable professionals Expertise in risk mitigation and regulatory compliance protocols Ability to instill confidence and trust to forge collaborative, productive relationships
Michael Kenwood Group
Multi-disciplinary expertise:
Investigations, Data Analytics, Finance and
Accounting
Technology, including software
Corporate Finance
Large numbers of readily-deployable professionals Deep expertise with complex financial investigations (e.g., Madoff, Stanford)
FTI
CONSULTING
32
Snapshot Of Our Business
Receiverships, Monitorships & Trusteeships
Global Investigations
Dispute Advisory Services
Regulatory Services
Insurance Practice Financial Services Practice Health Solutions
FTI CONSULTING
33
Financial Performance
$500.00 $450.00 $400.00 $350.00 $300.00 $250.00 $200.00 $150.00 $100.00 $50.00 $0.00
$ Millions Adjusted Segment EBITDA
Revenues
$365.3 $379.8 $428.7 $407.6 $433.6 $469.0 $88.8 $76.4 $80.9 $60.6 $74.5 $84.8
2009 2010 2011 2012 2013 2014 Guidance
Revenue Generating Headcount 876 911 957 952 1061 1076
Revenue CAGR of 4.4% between 2009 and 2013
- 2012 revenue decline reflects a number of actions that responded to market conditions
EBITDA CAGR of -4.3% between 2009 and 2013
- EBITDA declined as percentage of revenue due to market pressure on rates and the cost of investment in new geographies
2014 reflects heightened demand for all products and industries, although Health Solutions is impacted by flat growth and declining EBITDA
The healthcare and life sciences practice of the Corporate Finance/Restructuring segment was reclassified in 2013 as the Heath Solutions practice within the Forensic and Litigation Consulting segment and the Company reported reclassified financial results for the years ended 2010 through 2012 in its Current Report on Form 8-K filed with the SEC on May 21, 2013. The 2009 Revenue and Adj. EBITDA presented in this Table for the Forensic and Litigation Consulting segment has been reclassified from $300.7M to $365.3M and $76.4M to
$88.8M, respectively.
FTI CONSULTING 34
Medium Term Growth Opportunities
Build on Strong Foundation of Highly Skilled Professionals
Focus on organic growth within our global platform Aggressively pursue key hires and tuck-in acquisitions to strengthen our product and industry offerings
Target Profitable Industry Opportunities
Continue to develop and grow our global insurance consultancy Add key Construction Solutions resources to expand our focus in the heavy industrial sector Expand our global financial crimes capability
Continue to Enhance Regional Presence
Add FAAS, FEDA, GRIP and select industries’ resources in Asia, Europe, Middle East and Africa Enhance Insurance consultancy outside of North America and Europe
Utilize Technology as a Differentiator
Deploy Innovations in Data Visualization Continue to expand Financial & Enterprise Data Analytics global footprint
Respond to Changing Market Needs
Cyber Security Solutions Consumer Finance Protection
FTI CONSULTING 35
Aspirational Targets
$140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 $ Millions
Adjusted Segment EBITDA
$84.8
$119.0
2014 Guidance 2016 Aspirational Target
Medium-Term Growth Catalysts
Expand service offerings to serve market needs – e.g., cyber-security and consumer finance protection Pursue high margin industry focus opportunities – e.g., enhance global insurance consultancy and construction focus on heavy industrial sector Utilize technology as a market differentiator – e.g., innovations in data visualization, and Financial & Enterprise Data Analytics Expand presence in Europe, the Middle East and Africa, and in Latin America and Asia Continue to invest in organic growth and evaluate key hires and acquisitions that offer specific target growth opportunities Continue to develop new service lines to meet evolving health care system needs
FTI Consulting
36
FTI CONSULTING
Strategic Communications
Edward J. Reilly, Global Segment Leader
Evolution Of The Strategic Communications Segment
Transocean Perrigo noble energy
Crisis management that led to a multifaceted brief
US$8.6 billion acquisition of
Global public affairs and issues management
Complex
Issues
Cross-Border
Multi-Practice and
Multi-Segment
Specialized Expertise
Broad, Deep, Sustained Relationships
FTI CONSULTING 38
Financial Performance
$250 $200 $150 $100 $50 $0 $ Millions
Adjusted Segment EBITDA
Net Revenue
Pass-through
$27.7 $27.8 $26.4 $21.5 $20.5 $12.2 $152.4 $165.4 $174.6 $166.3 $165.8 $173.5
$24.9 $29.0 $26.8 $25.0 $18.7 $21.3
2009 2010 2011 2012 2013 2014 Guidance
Revenue Generating Headcount 573 583 582 593 590 584
Revenue CAGR of 0.8% between 2009 and 2013
- 2009-2012 characterized by low levels of M&A and capital activity
- 2010-2013 included significant investment in the portfolio of services
- 2014 gross revenue forecast to be marginally down on 2013
- Underlying net revenues forecast to be up 5% in 2014
- 40% decline in low-margin pass-through revenue in 2014 (largely from US digital communications clients)
EBITDA CAGR of -6.9% between 2009 and 2013
- EBITDA improvement of 14% in
2014, reflecting higher net revenues and improved underlying profitability
Asia Pacific is returning to profitability following a challenging 2012 - 2013 impacting overall segment performance
FTI CONSULTING 39
A Snapshot Of Our Business
3
core practice areas revenues
Public Affairs
Corporate Communications
Financial Communications
11% 36% 53% 22% 34% 44%
30% 35% 35%
2008 2013 2016
85%
revenues from client relationships 2 years
FY 2013
7 of top 20 clients in Q1’14 are new to that list of largest segment engagements
650+
professionals
FY 2013
35
offices
FY 2013
16
countries
FY 2013
8
specialty offerings
M&A Communications
Shareholder Activism and Proxy Advisory Crisis Communications Restructuring and Financial Issues Litigation Communications Employee Engagement and Change Communications Strategy Consulting and Research Creative Engagement and Digital Comms
#1
global M&A communications advisor by deal volume
FY 2013
15
areas of industry expertise
FTI CONSULTING 40
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Our Medium-Term Growth Plan Is Aligned With Market Trends
Integrate Financial Communications and Public Affairs offerings Grow “permission to operate” advisory Continue building-out high-value Financial Communications services (e.g., corporate governance counsel, proxy advisory and activism defense) Establish reputation management as an essential discipline around high-level, complex issues affecting multiple stakeholders Further strengthen cross-border M&A advisory capabilities
Intersection of Market Forces and Public Policy
More Activist Legislative and Regulatory Environment
More Empowered
Stakeholders
Comprehensive Communications Corporate Reputation
& Stakeholder Engagement & Compliance Strategy
71% 91%
of investors anticipate an increase of investors of investors say the in cross-border shareholder activism regulatory or political environment is important to their investment decision 41
FTI Consulting Global Investor Survey, February 2014
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Two-time Pulitzer Prize US Congressman, Member of House Global Head of Communications
Nominated Reporter Appropriations Committee and Marketing for Global Banking
Our Team Is Made-Up Of Industry-Leading Experts
Attorney General for
Western Australia
Two Business Editors
Press Secretary for
US Vice President Joseph Biden
Managing Director, National Security and Defense Head of Group Marketing and
Senior Pharma Analyst Presidential Advisor in Colombia Communications, Asia Pacific
International Communications Advisor and
Spokesperson to three Economy, Finance and Press Secretary for the US House
Industry Ministers of the French Government Executive Editor Minority Leader (now Speaker)
Vice President, Communications at Director of Communications at the US
Royal Dutch Shell Securities and Exchange Commission Head of London Office
42
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Revenue Mix1
9%
Regulatory Commercial
Leading Local Market Teams
Centers Hubs
Unparalleled Global Reach
Industry Sector and Specialist Skills
50%
37%
Capital Markets
EMEA North America Latin America Asia Pac
1 Q1 2014.
Our Global Network Is A Competitive Differentiator
43
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Aspirational Targets
$40.0
Adjusted Segment EBITDA
$35.0
$35.0
$30.0
$25.0
Millions $20.0 $21.3
$
$15.0
$10.0
$5.0
$0.0
2014 Guidance 2016 Aspirational Target
Medium-Term Growth Catalysts
Diversify and sharpen offering to lessen dependence on capital markets activity Pursue growth in areas of opportunity – e.g., high-value financial issues, public affairs, and reputation management challenges Improve our ability to be retained as an advisor on issues and ‘events’ Enhance human capital initiatives and performance management Leverage cross-segment opportunities Employ rigorous financial discipline and pursue operational efficiencies
44
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Technology
Seth A. Rierson, Global Segment Leader
|
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Product Innovator Industry Expert
Technology Overview: “Finding a Better Way”
Global Footprint Market Leader
46
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Financial Performance
$300.00
Adjusted Segment EBITDA Revenues
$250.00 $233.40
$218.74
$202.66
$200.00 $195.19
$170.17 $176.61
Millions $150.00
$100.00
$50.00
$77.01
$57.13 $64.36 $57.20 $60.65 $60.70
$0.00
2009 2010 2011 2012 2013 2014
Guidance
Revenue
Generating 251 257 290 277 306 321
Headcount
Revenue CAGR of 4.5% between 2009 and 2013
- 2011 revenue growth was driven by large, unique product liability and IP matters and cross-border FCPA projects
- Despite the continued wind down of large projects topline growth was driven by global investigations, second requests, and new corporate clients
EBITDA CAGR of 1.5% between 2009 and 2013
- 2012 EBITDA decline reflects the resolution of several large multi-year projects, price competition and investments in business development
2014 revenue growth is expected to be driven by increasing demand for global investigations and second requests
- 2014 projection for flat EBITDA reflects increased investment in business development and R&D
47
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Innovation For The Client
( + )
x + ( + )
Created new standards in the use of
= “ computer-assisted review of antitrust
investigations to allow Goodrich to
merge with United Technologies
Corporation. “
48
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Current Trends Play To FTI Technology Strengths
Data Volume and Variety Security and Privacy
Global Requirements Review is #1 Cost
49
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Investing To Win Tomorrow’s E-Discovery Market
Go-to-Market Geographic Expansion
New Products & Services Software Innovation
50
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Medium-Term Growth Catalysts
Data volume and variety Increased importance of security and data privacy Global e-discovery requirements Cost of review Expanded presence outside of North America Analytics and visualization to support corporate compliance and e-discovery requirements
Aspirational Targets
$80.0
Adjusted Segment EBITDA
$70.0 $75.0
$60.0
$60.7
$50.0
$ Millions
$40.0
$30.0
$20.0
$10.0
$0.0
2014 Guidance 2016 Aspirational Target
51
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Driving the Business Across/Beyond the Segments
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Asia Pacific
20 Offices 545 Employees
Key Business Hubs
Hong Kong – Singapore – Tokyo – Sydney
Macroeconomic Backdrop
Attractive positions in key Asian markets
Strong demand for forensic accounting and advisory services
Softness in the restructuring market
Growing mining and agribusiness industry
Key Initiatives
Primarily assisting western MNCs in emerging markets
Develop a global Contentious Insolvency practice
Organic growth in forensic accounting and advisory services
Develop a true operational turnaround service line
Industry initiatives: mining, agribusiness and construction
53
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Latin America
11 Offices 249 Employees
Key Business Hubs
São Paulo—Mexico City—Buenos Aires—Bogotá
Macroeconomic Backdrop
Dichotomy between Pacific Alliance and Atlantic countries
FDI flows should remain strong although commodities boom
slowing down in tandem with China growth prospects
Mining, energy (oil and gas), infrastructure and banking best
opportunities for growth
Key Initiatives
Expanding a thriving Construction Solutions practice
Increase headcount of Corporate Finance/Restructuring in
primary markets (Brazil, Mexico)
Continue growing core GRIP and FAAS practices
Investing resources in cross-segment initiatives
(international arbitration)
54
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OUR PEOPLE WHAT WE DO WHO WE SERVE
FORMER C-SUITE PERFORMANCE
EXECUTIVES IMPROVEMENT HOSPITALS & PHYSICIANS
BIG DATA EXPERTS PAYOR COMPLIANCE ACADEMIC MEDICAL
CENTERS & UNIVERSITIES
EPIC CERTIFIED SPECIALISTS CONVERGENCE & M&A PAYORS
FORENSIC ACCOUNTANTS INVESTIGATIONS PHARMACY, DEVICE &
BIOTECH MANUFACTURERS
BUSINESS ANALYTICS & WHOLESALE PHARMACY
STATISTICS EXPERTS SYSTEMS IMPROVEMENT DISTRIBUTORS
EXPERIENCED PHYSICIAN & SYSTEMS OPTIMIZATION PHARMACY CHAINS
NURSES
40% FORMER HOSPITAL CLINICAL RESEARCH & CLINICAL RESEARCH
STAFF COMPLIANCE ORGANIZATIONS
Health Solutions
260+ PROFESSIONALS WITH $114 MILLION IN REVENUES IN 2013
55
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15% 14% 30+ policies,
reduction in
improvement in guidelines, forms
annual supply costs on-time starts and tools adopted
MEASURABLE RESULTS, COST SAVINGS AND IMPROVED PATIENT CARE
Perioperative Services: North Shore-LIJ Health System
56
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PERFORMANCE
HEALTHCARE & LIFE ENERGY, POWER & INSURANCE
SCIENCES PRODUCTS FINANCE & TRANSACTIONS
LIABILITY
TELECOM, MEDIA & FINANCIAL
TECHNOLOGY REAL ESTATE INSTITUTIONS REPUTATION
COMMUNICATIONS
CONSTRUCTION & RETAIL & COMPLIANCE
MINING CONSUMER
ENVIRONMENTAL PRODUCTS
GOVERNANCE
FUNCTIONAL CAPABILITIES + GEOGRAPHIC REACH + INDUSTRY EXPERTISE =
HOLISTIC SOLUTIONS
Holistic Offering Delivers Unmatched Industry Solutions
57
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PERFORMANCE
HEALTHCARE & LIFE ENERGY, POWER & INSURANCE
SCIENCES PRODUCTS FINANCE & TRANSACTIONS
LIABILITY
TELECOM, MEDIA & FINANCIAL
TECHNOLOGY REAL ESTATE INSTITUTIONS REPUTATION
COMMUNICATIONS
CONSTRUCTION & RETAIL & COMPLIANCE
MINING CONSUMER
ENVIRONMENTAL PRODUCTS
GOVERNANCE
FUNCTIONAL CAPABILITIES + GEOGRAPHIC REACH + INDUSTRY EXPERTISE =
HOLISTIC SOLUTIONS
Holistic Offering Delivers Unmatched Industry Solutions
57
Marketing Our Successes
PAST FUTURE
GENERAL BRAND AWARENESS CLIENT SUCCESS STORIES
58
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Leveraging Our Intellectual Capital
59
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We are undertaking an analysis of our global infrastructure – taking a hard look numerous functions:
HUMAN RESOURCES INFORMATION TECHNOLOGY FINANCE & ACCOUNTING
REAL ESTATE MARKETING & BUSINESS
DEVELOPMENT
We are looking at each of these
functions through three lenses
Stopping activities Starting activities Performing
that are unnecessary that are necessary to necessary activities
or don’t enable our support our growth in the most efficient
growth goals goals manner can
We Are Taking A Hard Look At Our Global Infrastructure
60
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IT Transformation Project Goals And Objectives
IMPROVE QUALITY AND FLEXIBILITY WHILE REDUCING COST
HOW?
Re-think and re-design the Re-think and re-design the Ensure IT strategy, IT
fundamental way we deliver IT governance and services and IT costs are
every IT service to the investment decision transparent and aligned
business process with business-driven
requirements
61
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IT Transformation Project – Opportunities
Opportunities for
Cost Savings
Implement cloud-based e-mail archiving and storage Renegotiate data communications contracts Optimize internal helpdesk services Outsource disaster recovery to a fully managed service
Opportunities for Quality and Flexibility Improvements
Redesign the data center & service hosting model towards cloud and third-party managed services Redesign and transform each IT service and strategy to modern technologies to improve capability and flexibility
62
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Financial Presentation
Roger Carlile, EVP and Chief Financial Officer
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Objectives
Second Quarter 2014 Guidance Update Full-Year 2014 Guidance Introduction 2014 Mid-Term Growth Target
….And How Do We Get There
64
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Updated Second Quarter 2014 Guidance
Revenues: $445.0 million – $450.0 million Adjusted EPS: $0.49 – $0.55
65
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Introduction Of 2014 Annual Guidance
Revenues: $1.73 billion – $1.77 billion Adjusted EPS: $1.55 – $1.70
66
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Medium-Term Growth Targets
$ 3.00 Adjusted Earnings Per Share
$ 2.50
$2.50+
$ 2.00
$ 1.50
$1.55—
$1.70
$ 1.00
$ 0.50
$ 0.00
2014 2016
Medium-Term Earnings Catalysts
Growing organically in businesses in which we are already strong and have a right to win
Continuing growth of our recent investments in products such as TAS and Tax as well as key industry groups such as Health Solutions, Energy, Power & Products, Insurance, Construction and others
Improving the results of business which are challenged at the gross margin level
Addressing our infrastructure with a goal of improving quality and flexibility while reducing costs
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How Do We Get There?
Current 2014 forecast is ~$1.55—$1.70 per share
Segments have identified $125 -$145 million in 2016 Adjusted Segment EBITDA improvements …
… along with certain cross-segment and infrastructure initiatives not yet quantified…
… assuming realization rate of ~50% by 2016 …
Results in Adjusted EPS of no less than $2.50 per share by 2016
68
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Questions & Answers
FTI Consulting Executive Team
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Closing Thoughts
Steven H. Gunby, President and Chief Executive Officer
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Agenda
Time Presentation Presenter
11:00 a.m. – 12:00 p.m. Registration and Lunch
12:00 – 12:05 p.m. Opening Remarks and Introductions Mollie Hawkes, Director of Investor Relations
Taking FTI Consulting to the Next
12:05 – 12:45 p.m. Steven H. Gunby, President and Chief Executive Officer
Level
12:45 – 1:00 p.m. Corporate Finance/Restructuring Robert J. Duffy and Kevin Lavin, Global Co-Leaders, Corporate
Finance/Restructuring
1:00 – 1:15 p.m. Economic Consulting John Klick, Global Leader, Economic Consulting
1:15 – 1:30 p.m. Forensic & Litigation Consulting Neal A. Hochberg, Global Leader, Forensic & Litigation Consulting
1:30 – 1:45 p.m. Strategic Communications Edward J. Reilly, Global Leader, Strategic Communications
1:45 – 2:00 p.m. Technology Seth A. Rierson, Global Leader, Technology
2:00 – 2:15 p.m. Break
Rod Sutton, Chairman of Asia Pacific
Frank Holder, Chairman of Latin America
Kenneth J. Barker, Global Leader, Health Solutions Practice
2:15 – 2:55 p.m. Driving the Business Across/Beyond Carlyn Taylor, Telecom, Media & Technology Practice Leader and
the Segments – Some Examples Global Industry Leader
Jeffrey S. Amling, Head of Marketing and Business Development
Adam S. Bendell, Senior Vice President – Strategic Development
Roger D. Carlile, Executive Vice President and Chief Financial Officer
2:55 – 3:20 p.m. Financial Discussion Roger D. Carlile, Executive Vice President and Chief Financial Officer
3:20 – 3:55 p.m. Questions and Answers FTI Consulting Executive Team
3:55 – 4:00 p.m. Closing Remarks Steven H. Gunby, President and Chief Executive Officer
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Key Message For Today
Strong confidence in our medium-term prospects
Strong businesses with strong people
Confronting the reality of the last few years
Making concrete changes that are grounded in those realities
Real people owning the changes with accountability
Delivering $2.50+ adjusted EPS by 2016
Major organic growth where we are strong
Aggressive action where we are challenged
Supported by disciplined cross-company capabilities
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Appendix
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Adjusted Net Income And Adjusted EPS
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 the remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt.
74
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Adjusted EBITDA And Adjusted Segment EBITDA
We define Adjusted EBITDA as consolidated net income (loss) 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.
75
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FTI Consulting, Inc. And Subsidiaries Non-GAAP Financial Reconciliations
Years Ended December 31,
2013 2012 2011 2010 2009
Adjusted EPS:
Net income (loss) $(10,594) $(36,986) $103,903 $65,984 $139,843
Add back:
Special charges, net of tax 23,267 19,115 9,285 32,733 -
Goodwill impairment charge 83,752 110,387 —— -
Loss on early extinguishment of debt, net of tax — 2,910 — 3,019 -
Remeasurement of acquisition-related contingent (12,054) (5,228) (9,953) — -
consideration, net of taxes
Adjusted Net Income $84,371 $90,198 $103,235 $101,736 $139,843
Earnings (loss) per common share – diluted $(0.27) $(0.92) $2.39 $1.38 $2.63
Add back:
Special charges, net of tax 0.59 0.47 0.21 0.69 -
Goodwill impairment charge 2.14 2.74 —— -
Loss on early extinguishment of debt, net of tax — 0.07 — 0.06 -
Remeasurement of acquisition-related contingent (0.30) (0.13) (0.23) — -
consideration, net of taxes
Impact of denominator for diluted adjusted earnings (0.07) (0.06) —— -
per common share
Adjusted earnings per common share – diluted $2.09 $2.17 $2.37 $2.13 $2.63
Weighted average number of common 40,421 41,578 43,473 47,664 53,127
shares outstanding – diluted
Normalized Operating Cash Flow:
Net cash provided by operating activities $193,271 $120,188 $173,828 $195,054 $250,769
Shift in timing of annual bonus payments (25,200) 25,200 —— -
Normalized Free Cash Flow $168,071 $145,388 $173,828 $195,054 $250,769
(in thousands, except per share data) (unaudited)
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Reconciliation Of Net Loss And Operating Income (Loss) To Adjusted EBITDA
Corporate Forensic and Economic Strategic
Finance/ Litigation Technology Corporate Total
Restructuring Consulting Consulting Communications
Year Ended December 31,
2013
Net loss $(10,594)
Interest income and other (1,748)
Interest expense 51,376
Income tax provision 42,405
Operating income (loss) $58,594 $68,211 $86,714 $38,038 $(72,129) $(97,989) $81,439
Depreciation and amortization of 9,929 6,100 5,479 22,601 7,048 4,338 55,495
intangible assets
Special charges 10,274 2,111 11 16 66 25,936 38,414
Goodwill impairment charge ———— 83,752 — 83,752
Remeasurement of acquisition- (11,614) (1,941) ———— (13,555)
related contingent consideration
Adjusted EBITDA $67,183 $74,481 $92,204 $60,655 $18,737 $(67,715) $245,545
(in thousands, except per share data) (unaudited) 77
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Reconciliation Of Net Loss And Operating Income (Loss) To Adjusted EBITDA
Year Ended December 31, 2012 Net loss
Interest income and other Interest expense Income tax provision
Loss on early extinguishment of debt
Operating income (loss)
Depreciation and amortization of intangible assets
Special charges
Goodwill impairment charge
Remeasurement of acquisition-related contingent consideration
Adjusted EBITDA
Corporate Forensic and Economic Strategic
Finance/ Litigation Technology Corporate Total
Restructuring Consulting Consulting Communications
$(36,986)
(5,659)
56,731
40,100
4,850
$80,970 $45,809 $71,992 $33,642 $(97,298) $(76,079) $59,036
8,835 6,487 4,478 20,447 7,218 4,546 52,011
11,332 8,276 991 3,114 4,712 1,132 29,557
- — —— 110,387 — 110,387
(5,222) (6) ——— — (5,228)
$95,915 $60,566 $77,461 $57,203 $25,019 $(70,401) $245,763
(in thousands, except per share data) (unaudited)
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Reconciliation Of Net Loss And Operating Income (Loss) To Adjusted EBITDA
Corporate Forensic and Economic Strategic
Finance/ Litigation Technology Corporate Total
Restructuring Consulting Consulting Communications
Year Ended December 31,
2011
Net loss $103,903
Interest income and other (6,304)
Interest expense 58,624
Income tax provision 49,224
Operating income (loss) $66,591 $74,831 $60,890 $57,917 $19,066 $(73,848) $205,447
Depreciation and amortization of
intangible assets 8,902 6,215 4,045 19,094 7,735 4,962 50,953
Special charges 9,440 839 2,093 — — 2,840 15,212
Remeasurement of acquisition-
related contingent consideration (8,991) (962) —— — — (9,953)
Adjusted EBITDA $75,942 $80,923 $67,028 $77,011 $26,801 $(66,046) $261,659
(in thousands, except per share data) (unaudited)
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Reconciliation Of Net Loss And Operating Income (Loss) To Adjusted EBITDA
Corporate Forensic and Economic Strategic
Finance/ Litigation Technology Corporate Total
Restructuring Consulting Consulting Communications
Year Ended December 31,
2010
Net loss $65,984
Interest income and other (4,423)
Interest expense 50,263
Income tax provision 41,407
Loss on early extinguishment of debt 5,161
Operating income (loss) $89,861 $62,759 $39,180 $27,569 $11,602 $(72,579) $158,392
Depreciation and amortization of
intangible assets 9,730 7,447 3,634 20,876 8,325 5,232 55,244
Special charges 8,561 6,196 6,667 15,913 9,044 4,750 51,131
Adjusted EBITDA $108,152 $76,402 $49,481 $64,358 $28,971 $(62,597) $264,767
(in thousands, except per share data) (unaudited)
80
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Reconciliation Of Net Loss And Operating Income (Loss) To Adjusted EBITDA
Corporate Forensic and Economic Strategic
Finance/ Litigation Technology Corporate Total
Restructuring Consulting Consulting Communications
Year Ended December 31,
2009
Net loss $139,843
Interest income and other (8,408)
Interest expense 44,923
Income tax provision 81,825
Operating income (loss) $150,092 $83,290 $43,650 $37,410 $16,455 $(72,714) $258,183
Depreciation and amortization of
intangible assets 9,794 5,520 3,917 19,721 8,486 6,027 53,465
Litigation and settlements — — —— — 250 250
Adjusted EBITDA $159,886 $88,810 $47,567 $57,131 $24,941 $(66,437) $311,898
(in thousands, except per share data) (unaudited)
81
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