UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549
FORM 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20182021
OR
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to            
Commission file number 001-14875
FTI CONSULTING, INC.
(Exact Namename of Registrantregistrant as Specifiedspecified in Its Charter)
its charter)        
Maryland52-1261113
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
Maryland52-1261113
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
555 12th Street NW
Washington, D.C.
20004
Washington,
DC20004
(Address of Principal Executive Offices)principal executive offices)(ZIPZip Code)
(202) 312-9100
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Classeach classTrading SymbolName of Each Exchangeeach exchange on Which Registeredwhich registered
Common Stock, $0.01 par valueFCNNew York Stock Exchange
Securities Registered Pursuantregistered pursuant to Sectionsection 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Fileraccelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ☒
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant was $2.3$4.1 billion, based on the closing sales price of the registrant’s common stock on June 30, 2018.2021, the last business day of the registrant's most recently completed second fiscal quarter.
The number of shares of the registrant’s common stock outstanding onas of February 19, 201917, 2022 was 37,863,716.
34,347,156.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of our definitive Proxy Statement to be filed with the U.S. Securities and Exchange Commission within 120 days after the end of our 20182021 fiscal year are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein.



FTI CONSULTING, INC. AND SUBSIDIARIES
Annual Report on Form 10-K
Fiscal Year Ended December 31, 20182021




TABLE OF CONTENTS
Page
PART I
Item 1.Business
1
Item 1A.Risk Factors
1814
Item 1B.Unresolved Staff Comments
3129
Item 2.Properties
3129
Item 3.Legal Proceedings
3129
Item 4.Mine Safety Disclosures
3129
PART II
Item 5.Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
3230
Item 6.Selected Financial Data[Reserved]
3431
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations
3632
Item 7A.Quantitative and Qualitative Disclosures about Market Risk
5951
Item 8.Financial Statements and Supplementary Data
6153
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
9487
Item 9A.Controls and Procedures
9487
Item 9B.Other Information
9487
PART IIIItem 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
87
PART III
Item 10.Directors, Executive Officers and Corporate Governance
9588
Item 11.Executive Compensation
9588
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
9588
Item 13.Certain Relationships and Related Transactions and Director Independence
9588
Item 14.Principal Accountant Fees and Services
9588
PART IV
Item 15.Exhibits and Financial Statement Schedule
9689
Item 16.Form 10-K Summary
10699




FTI CONSULTING, INC.
PART I
Forward-Looking Information
This Annual Report on Form 10-K (the “Annual Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve uncertainties and risks. Forward-looking statements include statements concerning our plans, policies and practices, objectives, goals, strategies, future events, future revenues, future results and performance, future capital allocations and expenditures, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends, new, or changes to, laws and regulations, including the 2017 U.S. Tax Cuts and Jobs Act,foreign tax laws, environmental, social and governance ("ESG")-related issues, scientific or technological developments and other information that is not historical. Forward-looking statements often contain words such as “"estimates,” “expects,”" "expects," “anticipates,” “projects,” “plans,” “intends,” “believes,” “aspires,” “forecasts” and variations of such words or similar expressions. All forward-looking statements, including, without limitation, management’s financial guidance and examination of operating trends, are based upon our historical performance and our current plans, estimates, intentions and expectations at the time we make them, and various assumptions. There can be no assurance that management’s expectations, intentions, aspirations, beliefs, forecasts and projections will result or be achieved. Our actual financial results, performance or achievements could differ materially from those expressed in, or implied by, any forward-looking statements. The inclusion of any forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates, forecasts, intentions, aspirations, beliefs or expectations contemplated by us will be achieved. Given these risks, uncertainties and other factors, you should not place undue reliance on any forward-looking statements.
There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in, or implied by, statements in this Annual Report. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this Annual Report are set forth in this report, including under the heading “Summary Risk Factors” below and “Risk Factors” in Part I, Item 1A of this Annual Report. All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this Annual Report and are expressly qualified in their entirety by the cautionary statements included herein. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances and do not intend to do so.
ITEM 1.    BUSINESS
Unless otherwise indicated or required by the context, when we use the terms “Company,” “FTI Consulting,” “we,” “us” and “our,” we mean FTI Consulting, Inc., a Maryland corporation, and its consolidated subsidiaries.
Company Overview
General
FTI Consulting is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political and& regulatory, reputational and transactional. Individually, each of our segments and practices is staffed with experts recognized for the depth of their knowledge and a track record of making an impact. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle, from proactive risk management to rapid response to unexpected events and dynamic environments.
We report financial results for the following five reportable segments:
•Corporate Finance & Restructuring;
•Forensic and Litigation Consulting;
•Economic Consulting;
•Technology; and
•Strategic Communications.
We work closely with our clients to help them anticipate, illuminate and overcome complex business challenges and make the most of opportunities arising from factors such as the economy, financial and credit markets, governmental legislation and regulation, and litigation. We provide our clients with expert advice and solutions involving turnaround and restructuring (including bankruptcy), business transformations (including performance improvement), interim management, transactions (including mergers and acquisitions (“M&A”), forensic accounting and advisory services, global risk & investigationstransformation,

1





(“GRIP”),transactions, turnaround & restructuring, construction & environmental solutions, data & analytics, disputes, health solutions, risk and investigations, antitrust and& competition matters,economics, financial economics, international arbitrations, regulated industries, securities litigation and risk management,arbitration, corporate legal operations, electronic discovery management (or “e-discovery”), managed document review, collection services and computer forensics),expertise, information governance, privacy and& security M&A crisis and special situationservices, corporate reputation, financial communications and public affairs communications.affairs. Our experienced professionals are acknowledged leaders in their chosen field not only for their level of knowledge and understanding but for their ability to structure practical workable solutions to complex issues and real-world problems. Our clients include Fortune 500 corporations, FTSE 100 companies, global banks, major law firms, leading private equity firms, and local, state and national governments and agencies around the globe. In addition, major United States (“U.S.”) and international law firms refer us or engage us directly or on behalf of their clients. We believe clients retain us because of our recognized expertise and capabilities in highly specialized areas, as well as our reputation for successfully meeting our clients’ needs.
Our operations span the globe encompassing locations within: (i) the Americas, consisting of our 4750 U.S. offices located in 1923 states, threeand four offices located in Calgary, Toronto and Vancouver, Canada and ourCanada; (ii) Latin America, consisting of six offices serving Latin America located in Argentina, Brazil, Colombia, Mexico, the Cayman Islands and the Virgin Islands (British); (ii)(iii) Asia and the Pacific, consisting of 1519 offices located in Australia, China (including Hong Kong), India, Indonesia, Japan, Malaysia, Singapore and South Korea, MalaysiaKorea; and Singapore; and (iii)(iv) Europe, Middle East and Africa, (“EMEA”), consisting of 2434 offices located in Belgium, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Qatar, South Africa, Spain, United Arab Emirates and the United Kingdom (“UK”U.K.”). In certain jurisdictions, our segments and practices are operated through one or more direct or indirect subsidiaries.
We derive the majority of our revenues from providing professional services to clients in the U.S. For the year ended December 31, 2018,2021, we derived approximately 68%62% and 32%38% of our consolidated revenues from the work of professionals who are assigned to locations inside and outside the U.S., respectively.
Summary Financial and Other Information
The following table sets forth the percentage of consolidated revenues for the last threetwo years contributed by each of our five reportable segments.segments:
Year Ended December 31,
Year Ended December 31,20212020
Reportable Segment2018 2017 2016
Corporate Finance & Restructuring28% 27% 27%Corporate Finance & Restructuring34 %37 %
Forensic and Litigation Consulting26% 26% 25%Forensic and Litigation Consulting21 %20 %
Economic Consulting26% 27% 28%Economic Consulting25 %25 %
Technology9% 10% 10%Technology10 %9 %
Strategic Communications11% 10% 10%Strategic Communications10 %9 %
Total100% 100% 100%Total100 %100 %
The following table sets forth the number of offices and countries in which each segment operates, as well as the net number of revenue-generating professionals in each of our reportable segments.segments:
 December 31, December 31,
 202120212020
 OfficesCountriesBillable HeadcountBillable Headcount
Corporate Finance & Restructuring64 17 1,702 1,655 
Forensic and Litigation Consulting67 19 1,496 1,343 
Economic Consulting48 19 921 891 
Technology42 15 468 408 
Strategic Communications37 18 814 770 
Total5,401 5,067 
 Year Ended December 31, Year Ended December 31,
 2018 2018 2017 2016
 Offices Countries Billable Headcount Billable Headcount Billable Headcount
Corporate Finance & Restructuring43
 14
 948
 901
 895
Forensic and Litigation Consulting56
 19
 1,153
 1,067
 1,110
Economic Consulting41
 18
 708
 683
 656
Technology33
 9
 306
 292
 288
Strategic Communications38
 17
 641
 630
 647
Total    3,756
 3,573
 3,596


2





Our Reportable Segments
The Company is organized into five reportable segments, each of which seeks to be a global leader in its own right by serving as a trusted advisor when our clients are presented with challenging issues and the risks are high.
Corporate Finance & Restructuring
Our Corporate Finance & Restructuring (“Corporate Finance”)segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. We address the full spectrum of financial, operational and transactional risks and opportunities facing our clients. Our clients include companies, boards of directors, investors, private equity sponsors, banks, lenders, and other financing sources and creditor groups, as well as other parties-in-interest. We deliver a wide range of service offerings, including turnaround and corporate restructuring (and bankruptcy),services centered around three core offerings: business transformation, (including financial, operationaltransactions and performance improvement services), and interim management services. Additionally, our services include dispute advisory, M&A, valuation and financial advisory and tax services. Our clients demand our industry expertise, which includes emphasis in the automotive, energy, powerturnaround & products (“EPP”), healthcare, mining, real estate & infrastructure, retail & consumer products, and telecom, media & technology ("TMT") sectors.restructuring.
In 2018,2021, our Corporate Finance & Restructuring segment operated through business transformation, turnaround and restructuring, and other practices, which offeroffered the following services:
Business Transformation. We provide independent business transformation and strategy expertise to help drive change across the enterprise, enhance performance, build sustainable growth and value, and foster a culture of excellence, including the following offerings:
•Finance & Office of the CFO Solutions
•People & Transformation
•Revenue & Operations
•Strategy
•Technology Transformation
Transactions. We provide services that support clients to strategize, structure, conduct diligence, integrate, carve-out, value and communicate around business transactions, including the following offerings:
•Diligence
•Investment Banking & Transaction Opinions
•Merger Integration & Carve-out Advisory
•Transaction Strategy
•Valuation & Financial Advisory Services
Turnaround & Restructuring. Restructuring. We provide advisory services to help our clients stabilize finances and operations to reassure debtors, creditors and other stakeholders that proactive steps are being taken to preserve and enhance value. For clients confronting liquidity problems, excessive leverage, underperformance, overexpansion, or other business or financial issues, we develop liquidity forecasts, identify cash flow improvements, obtain financing, negotiate loan covenant waivers and guide complex debt restructuring.
Our turnaround management professionals provide their turnaround skills, restructuring expertise, and industry and functional experience to lead through crisis situations, such as financial and operational restructuring and insolvency and bankruptcy, by stabilizing financial position, optimizing financial resources, protecting enterprise value, resolving regulatory compliance issues, building morale and establishing credibility with stakeholders. Our professionals serve inincluding the following interim executiveofferings:
•Company Advisory
•Contentious Insolvency
•Creditor Advisory
•Dispute Advisory and management roles: chief executive officer, chief operating officer, chief financial officer, chief restructuring officer, controller and treasurer, and other senior positions that report to them.Litigation Support
Our company advisory group advises and assists clients by providing liquidity management, operational improvement, turnaround and restructuring, and capital solutions services to achieve successful turnarounds. Through our out-of-court services, we assist clients to right-size infrastructure, improve liquidity and solvency, improve cash flow and working capital management, sell noncore assets or business units and recapitalize. We perform due diligence reviews, financial statement, cash flow and EBITDA (earnings before interest expense, income taxes, depreciation and amortization) analyses, prepare liquidity forecasts and financial projections, recommend credit alternatives, assist in determining optimal capital structure, monitor portfolios of assets, assess collateral, provide crisis credit and securitized transaction assistance, negotiate loan covenant waivers and guide complex debt restructurings. We also lead and manage the financial aspects of in-court restructurings and bankruptcies by offering services that help our clients assess the impact of a bankruptcy filing on their financial condition and operations. We provide critical services specific to court-supervised insolvency and bankruptcy proceedings. We represent underperforming companies that are debtors-in-possession and lenders. With a focus on minimizing disruption and rebuilding the business after an exit from bankruptcy or insolvency, we help clients accelerate a return to business as usual.
Our creditor advisory group advises and assists secured and unsecured creditors in distressed situations to maximize recoveries and preserve the value of assets. Our services include assessing the short-term and long-term liquidity needs, evaluating operations and the reasonableness of business plans, determining enterprise value, negotiating executable restructuring programs, building a consensus within the creditor group, investigating intercompany transactions and potential fraudulent conveyances, bankruptcy preparation and reporting services, financial analysis in support of petitions and affiliated motions, strategies for monetizing a debtor’s assets, the discovery of unidentified assets and liabilities, and expert witness testimony.
Business Transformation. The services offered by our business transformation practice focus on improving the efficiency and effectiveness of clients’ operations by implementing systemic changes leading to sustainable results. Our expert-led teams focus on:
Revenues, by helping clients unlock profitability, combining consulting tools, analytics and operating experience to deploy strategies designed to deliver sustainable, accelerated revenue growth in an accelerated time frame;

3



Operations, such as sales, customers and sourcing and procurement, by analyzing data and other information that drives improvements, insights and change;
Transactions, such as M&A, by providing due diligence, pre- and post- advisory and merger integration services;
Finance, by collaborating with finance and accounting executives to address people, process and technology gaps by using data analytics and best practices to establish solutions that support finance responsibilities while balancing the company’s strategic goals, including through our interim management services that address gaps in executive expertise; and
People, by partnering with business leaders, management, communications and HR, to drive business results by fully addressing the people-side of change. We help organizations realize the benefits of a transformation more rapidly and deliver sustainable change that moves our clients’ businesses forward.
Office of the Chief Financial Officer (“CFO”) Solutions. Our Office of the CFO Solutions provides holistic, practical, value-enhancing solutions to address people, process and technology gaps. Our solutions are designed to preserve, create and sustain value and to help the CFO team achieve rapid success. We collaborate with CFOs and their finance and accounting organizations and use innovative engagement tools to provide transformation services, manage risk, deliver business intelligence capabilities, and prepare for and execute events, all while building confidence, clarity, controls and consistency.
•Interim Management.Through interim management services, our professionals fill the void when our clients need skilled, experienced leadership to pursue opportunities, contend with executive turnover and transition, or drive strategic transactions or change. The experienced and credentialed professionals in our transitional management practice assume executive officer level roles, providing the leadership, financial management, and operating and strategic decision-making abilities to lead transitions due to extraordinary events such as M&A, divestitures, changes in control and carve-outs of businesses from larger enterprises.
Transactions. We combine the disciplines of structured finance, investment banking, lender services, M&A, M&A integration, and U.S. Securities and Exchange Commission (“SEC”) and other regulatory experience to help our clients maximize value and minimize risk in M&A and other high stakes transactions. The many services that we provide relating to investment banking, lender services, M&A integration, and structured finance and transaction services include: performing due diligence reviews, evaluating key value drivers and risk factors, advising on the most advantageous tax and accounting structures, and assessing quality of earnings, quality of balance sheet and working capital requirements. We identify value enhancers and value issues. We provide comprehensive tax consulting intended to maximize a client’s return on investment. We help structure post-acquisition earn-outs and price adjustment mechanisms to allow a client to realize optimal value and perform services for clients involved in purchase price disputes such as assessing the consistent application of U.S. generally accepted accounting principles (“GAAP”), earn-out issues, working capital issues, settlement ranges and allocation of purchase price for tax purposes.
We provide investment banking services in the U.S. and other countries, including Canada and Puerto Rico, through financial industry regulated entities, focusing on identifying and executing value-added transactions for public and private middle market companies. We can also provide investment advisory services through our registered advisors.
Valuation & Financial Advisory Services. We provide an array of forecasting, valuation and transaction support services with respect to strategic transactions, including capital markets, M&A and distressed situations. We have the expertise to provide fairness, solvency, collateral valuation, intellectual asset valuation, and going concern valuation options.    
Dispute Advisory. We provide independent litigation consulting, including bankruptcy and avoidance litigation and industry-specific civil, commercial and regulatory dispute services. Our bankruptcy and avoidance litigation services include consulting, expert witness and trial services related to preferential payments, solvency and fraudulent conveyances, substantive consolidation, claims litigation, plan feasibility, valuation disputes and board fiduciary assessments.
Our commercial and regulatory dispute services involve industry-specific expertise relating to industry standards and customary practices, economic damages, fact finding, and forensic review and analysis, primarily related to the

4



automotive, hospitality, gaming and leisure, real estate and infrastructure, retail and consumer products, structured finance and TMT industries.
Tax Services. We provide advisory services relating to corporate, partnership, and real estate investment trust (“REIT”) and real estate tax compliance and reporting, international taxation, debt restructuring, foreign, state and local taxes, research and development, transfer pricing, tax valuation services and value-added taxation. We advise businesses on a variety of tax matters ranging from tax transaction support to best practice process implementation and structuring.
Executive Compensation & Corporate Governance. We provide objective advice on the design and implementation of comprehensive executive compensation programs to attract, retain, reward and motivate management and employees for the right kind of performance while closely aligning the interests of employees with those of the company’s shareholders and investors. Our corporate governance services include succession planning, stock ownership requirements, and shareholder engagement and outreach.
Forensic and Litigation Consulting
Our Forensic and Litigation Consulting (“FLC”) segment provides law firms, companies, government clientsentities, private equity firms and other interested parties with a multidisciplinary and independent dispute advisory,range of services in risk and investigations and disputes, including a focus on highly regulated industries, such as our construction & environmental solutions and health solutions services. These services are supported by our data & analytics forensic accounting, business intelligence and risk mitigation services. We advisesolutions, which help our clients in responseanalyze large, disparate sets of data related to allegations involving the propriety of accountingtheir business operations and financial reporting, fraud, regulatory scrutiny and anti-corruption. We assistsupport our clients in protecting enterprise value by (i) quantifying damagesduring regulatory inquiries and providing expert testimony incommercial disputes. We deliver a wide range of dispute situations: claimsservices centered around five core offerings: construction & environmental solutions, data & analytics, disputes, health solutions and liabilities, governmentrisk and regulatory inquiries, investigations and proceedings, litigation, intellectual property ("IP"), professional malpractice, lost profits, valuations, breach of contract, purchase price disagreements, business interruption, environmental claims, construction claims and fraud, (ii) employing forensic accounting and complex modeling to analyze financial transactions, and (iii) identifying, collecting, analyzing and preserving structured information within enterprise systems. We have the capacity to provide our full array of practice offerings across jurisdictional boundaries around the world.investigations.
3


In 2018,2021, our Forensic and Litigation ConsultingFLC segment operated through risk advisory, investigations and disputes practices, which offeroffered the following services:
Forensic AccountingConstruction & Advisory Services. We assist U.S. and multinational clients with responding to allegations involving the propriety of accounting, financial reporting, fraud, regulatory scrutiny and anti-corruption inquiries. We identify, collect, analyze and interpret financial and accounting data and information for fraud, accounting, complex financial reporting, audit and special committee investigations. We analyze issues, identify options and make recommendations to respond to financial misstatements, financial restatements and inadequate disclosure allegations, claims, threatened and pending litigation, regulatory inquiries and actions, and whistleblower allegations. We employ investigative skills, establish document and database controls, prepare analytical models, perform forensic accounting, present expert testimony and render opinions, and prepare written reports. We have particular expertise investigating compliance with the U.S. Foreign Corrupt Practices Act (the "FCPA") and other anti-corruption laws, including the UK Anti-Bribery Act (the "UKBA") and the Organisation for Economic Co-operation and Development (the “OECD”).Environmental Solutions. We provide consulting assistancecommercial management, risk-based advisory and expert witnessdispute resolution services to securities counselfor complex construction projects across multiple industries and their clients regarding inquiries and investigations initiated by the Divisions of Enforcement and Corporate Finance and Office of the Chief Accountant of the SEC. We assist clients in responding to inquiries from the Public Company Accounting Oversight Board.
GRIP. We utilize a multidisciplinary approach to conduct complex factual and regulatory investigations combining teams of former federal prosecutors and regulators, law enforcement and intelligence officials, forensic accountants, industry specialists and computer forensic specialists. We uncover actionable intelligence and perform value-added analysis to help our clients address and mitigate risks, protect assets, remediate compliance, make informed decisions and maximize opportunities.organizations manage environmental issues or programmatic challenges. Our capabilities andkey services include white collar defense intelligencethe following offerings:
•Asset Lifecycle Management
•Capital Program Risk Management
•Cost Analytics and investigations, complex commercial and financial investigations, business intelligence and investigative due diligence, political risk assessments, business risk assessments, fraud and forensic accounting investigations, computer forensics and electronics evidence, specialized fact finding, domestic and international arbitration proceedings, asset searching and analysis, IP and branding protection, anti-money laundering consulting, ethics and compliance program design, and transactional due diligence. We help our clients navigate anti-bribery and anti-corruption risk proactively (assessing and mitigating risk) and reactively (responding to allegations with multidisciplinary investigation, forensic accounting and information preservation experts). We help clients institute the necessary internal controls with which to comply, and we investigate suspected violations of the FCPA and other anti-corruption laws, including the UKBA and the OECD. We also develop remediation and
Auditing Services

5



monitoring plans, including the negotiation of settlement agreements. Through our services, we uncover actionable intelligence and perform value-added analysis to help our clients and other decision makers address and mitigate risk, protect assets, remediate compliance deficiencies, make informed decisions and maximize opportunities.
Cybersecurity.Our cybersecurity practice uses cutting-edge technologies and capabilities together with our comprehensive practice offerings to enable clients to address their most critical needs and integrate new solutions atop or alongside pre-existing policies and programs to address cyber threats. We help our clients understand their own environments, implement defensive strategies, identify threats, holistically respond to crises, and sustainably recover their operations and reputation after an incident.
Dispute Advisory Services. We provide early case assessment and pre-trial, in-trial and post-trial dispute advisory services in judicial and a broad range of alternative dispute resolution and regulatory forums, including international arbitration, to help clients assess potential, threatened and pending claims resulting from complex events, including securities, accounting and regulatory enforcement actions, valuation, solvency and acquisition disputes, intellectual property disputes and valuations, commercial disputes, including business insurance claims, financial and economic transactions, as well as accounting and professional malpractice allegations, and labor and employment disputes. We analyze records and information, including electronic information, to locate assets, trace flows of funds, identify illegal or fraudulent activity, reconstruct events from incomplete and/or corrupt data, uncover vital evidence, quantify damages and prepare for trial or settlement. In many of our engagements, we also act as an expert witness. We perform economic and commercial analyses necessary to support International Trade Commission Section 337 investigations used to prevent certain products subject to IP claims from entering the U.S.
•
Trial Services. We work as part of the team advising and supporting clients in large and highly complex civil trials. Through the use of our proprietary information technology, we turn facts and ideas into presentations and information that drive decisions. We help control litigation costs, expedite the in-trial process, prepare evidence, and help our clients to readily organize, access and present case-related data. Our proprietary TrialMax® software integrates documents, photographs, animations, deposition videos, audios and demonstrative graphics into a single trial preparation and presentation tool. Our graphics consulting services select the most appropriate presentation formats to maximize impact and memorability and then create persuasive graphic presentations that support, clarify and emphasize the key themes of a case. We provide illustrations and visual aids that help simplify complex technical subjects for jurors through opening and closing statement consulting, witness presentations, research presentations, exhibit plans and outlines, hardboards, scale models, storyboards, timelines, and technical and medical illustrations.
Data & Analytics.Analytics. We deliverprovide strategic business solutions forto clients requiring in-depth identification, analysis and preservation of large, disparate sets of financial, operational and transactional data.data where our professionals work hand in hand with industry, regulatory, legal and topical specialists. Our key services include the following offerings:
•Anti-corruption and Anti-money Laundering
•Dispute Resolutions
•Identifying Sanction Breaches and Fraud
•Investigations and Remediation
Disputes. We map relationships among various information systemsprovide courts and geographies, mine for specific transactionstribunals, parties to disputes, and uncover patterns that may signal fraudulent activity or transactional irregularities. We assist with recovering assetstheir legal counsel clear, reliable and designing and implementing safeguards to minimize the risk of recurrence. We produce detailed visualizations from complex data, making it easier to identify abnormalities and share information. We also have the expertise to perform system and information technology (“IT”) audits and due diligence.
Compliance, Monitoring & Receivership. Our expert industry professionals provide full-scale assessments and process improvement and support services for compliance programs, as well as act as independent monitors or in support of trustees, monitors, receivers and examiners. Inobjective advice on matters involving the appointment of monitors, receivers or examiners by courts or regulators, our experts possess the necessary independence and skills to test and monitor compliance with and the continuing effectiveness of the terms of settlements or reforms across many industries and professions.
Anti-Corruption Investigations & Compliance. We help clients mitigate corruption risks and investigate and prevent corruption issues arising from the FCPA, the UKBA, Brazil’s Clean Company Act and other similar global statutes.
Anti-Money Laundering. We help banks, broker-dealers, money transmitters, regulators, insurers, law firms, investors and corporations investigate and address anti-money laundering and anti-corruption regulations, compliance and sanctions with specialized consulting services, combiningwithin our expertise, from discovery and investigative experienceinvestigation to expert witness testimony and damage quantification in international arbitration and dispute resolution consulting. We support our global clients with our specialized technologydisputes of all kinds, including the following offerings:
•Claims in International Public Law
•Complex Commercial and data services.
Regulatory Disputes
•Financial Products and Broker-dealer Disputes
•Insurance-related Disputes
•Intellectual Property
•Labor and Employment
Health Solutions.Solutions. We work with a variety of healthcare and life sciences clients to discern innovative solutions that optimize performance in the short term and prepare for future strategic, operational, financial and legal challenges. We provide a one-companyOur diverse team of experts address challenges across the spectrum of healthcare disciplines. These
disciplines with specialized capabilities. Our key services include the following offerings:

•Investigations
•Life Sciences
•Performance Improvement
•Quality and Compliance
•Regulatory Risk
Risk and Investigations. We provide compliance, investigative, litigation consulting and remediation expertise on a wide range of investigations to boards of directors, executive management, in-house counsel and their outside legal advisors at law firms. Our experts conduct investigations over a wide scope of issues and allegations, including the following offerings:
•Anti-money Laundering
•Cybersecurity
6
4





•Embezzlement and Other Types of Corruption
professionals have specialized capabilities•Environmental, Social and a record of success across hospital operations and restructuring, healthcare economics, and stakeholder engagement and communication.Governance ("ESG") & Sustainability
•Export Controls, Sanctions & Trade
•Financial Reporting Fraud
•Foreign Corrupt Practices Act ("FCPA") Violations
•Ponzi Schemes
•Workplace Discrimination
Economic Consulting
Our Economic Consulting segment, including subsidiary Compass Lexecon LLC (“Compass Lexecon”), provides law firms, companies, government entities and other interested parties with analysisanalyses of complex economic issues for use in legal, regulatory and international arbitration, legal and regulatory proceedings, and 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 complex M&A transactions, antitrust litigation, commercial disputes, international arbitrations, regulatory proceedings, IP disputes and a wide range of services centered around three core offerings: antitrust & competition economics, financial litigation. We help clients analyze issues such as the economic impact of deregulation on a particular industryeconomics and the amount of damages suffered by a business as a result of a particular event. Our professionals regularly provide expert testimony on damages, rates and prices, valuations (including valuations of complex financial instruments), antitrust and competition regulation, business valuations, IP, transfer pricing and public policy.international arbitration.
In 2018,2021, our Economic Consulting segment offered the following services:
Antitrust & Competition Economics. Economics. We perform sophisticated economic analyses and provide financial,expert testimony on international and regulatory antitrust and competition proceedings and practices, including the following offerings:
•Damages Analysis
•Merger and Acquisition ("M&A")-Related Antitrust
•Non-M&A-Related Antitrust
Financial Economics. We perform sophisticated economic analysis and econometric consulting servicesmodeling of issues and provide expert testimony relating to assist clients in public policy debates,transactions, antitrust litigation, commercial disputes, international arbitration, regulatory proceedings and litigation. We apply our models to complex data in order to evaluate the likely effects of transactions on prices, costs and competition. Our professionals are experts at analyzing and explaining the antitrust and competition impact of diverse transactions and proceedings relating to M&A, price fixing, monopolization and abuse of a dominant position, exclusionary conduct, bundling and tying, and predatory pricing. Our services include financial and economic analyses of policy, regulatory and litigation matters. We provide expert testimony, testimony regarding class certifications and quantification of damages analyses for corporations, governments and public-sector entities in the U.S. and around the world.
Valuation. We help clients identify and understand the value of their businesses in both contentious and uncontentious situations. We provide business valuation, expert valuation and expert testimony services relating to traditional commercial disputes and other matters as diverse as transaction pricing and structuring, securities fraud, valuations for financial reporting, tax, regulatory and stakeholder investment compliance, solvency issues, fraudulent transfers, post-acquisition M&A disputes and transactions, and disputes between shareholders. We provide our clients with specialized valuation opinions and expert testimony involving international disputes before international courts of jurisdiction and arbitration tribunals. We assist our clients in making economic and investment decisions that significantly affect shareholder value, economic returns and capital allocation.
Intellectual Property. We help clients understand and maximize the value of their intangible business assets. We calculate losses from IP infringement, apply econometrics to develop pricing structures for IP valuations and licensing, manage the purchase or sale of IP assets, negotiate with tax authorities, and determine IP-related losses in legal disputes and arbitrations. We provide IP-related advice and expert opinions and testimony for commercial transactions, intergroup transfers, M&A and negotiations with taxing authorities to a wide range of industries.
securities litigation to regulated and unregulated industries and government regulators, including the following offerings:
•Rate Setting
•Securities Litigation & Risk Management
•Transfer Pricing
•Valuation
International Arbitration.Arbitration. We help clients navigate each phase of the dispute resolution process. Our international arbitration practice workswork with companies, governments and members of the international bar to provide independent advice and expert testimony relating to business valuations and economic damages in a wide variety of commercial and treaty disputes before international arbitration tribunals. Our services include evaluating claims, identifyingtribunals, including the following offerings:
•Business Valuations
•Commercial and quantifying economic damages, litigation support and identifying the best approaches to achieve positive outcomes.
Treaty Disputes
Labor & Employment. We prepare economic and statisticalanalyses for clients facing disputes relating to wage and hour issues, class action, class certification, lost earnings and discrimination. Our experienced labor and employment team provide statistical analyses of data and damage exposure, review and rebut expert reports, calculate the economic value of a claim, determine if the purported class in labor and employment litigation meets legal requirements for certification, and provide expert testimony. We provide clients with statistical and economic analysis of Fair Labor Standards Act wage and hour issues, state wage and hour issues, employment discrimination issues, Equal Employment Opportunity Commission investigations, Office of Federal Contract Compliance Program audits, reduction-in-force assessmentsand compensation studies.
•Economic Damages
Public Policy. We advise clients regarding the impact of legislation and political considerations on industries and commercial transactions. We perform financial and economic analyses of policy and regulatory matters and the effect of legislation, regulations and political considerations on a wide range of issues facing our clients around the world, such as the environment, taxation and regulations relating to global competitiveness. We provide comparative analyses of proposed policy alternatives, division of responsibilities of federal and local regulators,

7



the effects of regulations on risk sharing across constituencies and geographies, and unintended consequences. Our services include strategic and regulatory planning, program evaluation, regulatory and policy reform, tort liability, forecasting, public private partnerships and public finance.
Regulated Industries. We provide economic analysis, econometrics and network modeling to provide information to major network and regulated industry participants on the effects of regulations on global business strategies. We provide advice on pricing, valuation, risk management, and strategic and tactical challenges. We also advise clients on the transition of regulated industries to more competitive environments. Our services include economic analysis, econometrics and modeling, due diligence and expert testimony.
Securities •Litigation & Risk Management. Our professionals apply economic theory, econometrics and the modern theory of finance to assess, quantify and manage risks inherent in global financial markets. We advise clients and testify on a variety of issues, including securities fraud, insider trading, initial public offering (“IPO”) allocations, market efficiency, market manipulation and forms of securities litigation. We also evaluate financial products such as derivatives, securitized products, collateralized obligations, special purpose entities, and structured financial instruments and transactions.
Center for Healthcare Economics and Policy. We support and facilitate the work of local governments, insurers, providers, physicians, employers and community-based stakeholders by providing data-driven strategies and solutions based on empirical analyses and modeling to reduce the per capita cost of healthcare, improve the health of populations, and enhance patient experience and access to care.
Network Analysis. We provide our clients with hindsight, insight and foresight by using our technology and experience to visualize and evaluate relationships and flows among people, groups, markets, organizations, infrastructure, IT systems, biological systems and other interconnected entities in order to understand complex interconnected data. The information we generate can be used by our clients to evaluate and defend insurance claims, support litigation and regulatory proceedings, detect fraud, identify trends and problematic events, certify class litigation claims, and investigate social and terrorist networks.
Economic Impact Analysis. We apply both market and macroeconomic models across a range of industries to analyze how markets and the broader economy react to changes in public policy and investments. Our clients use our analyses to formulate their strategic plans to educate key stakeholders, policymakers, regulators, the media and the public on the benefits and costs of their plans when determining the best course of action.
Support
Technology
Our Technology segment offersprovides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of information governance, e-discovery management and data analytics software, services and consulting to corporations, law firms, courts and government agencies worldwide. Our consulting and services allow our clients to control the risk and expense of information duringaddress legal and regulatory events more confidently, as well as better understandrisk, including e-discovery, information governance, privacy and act on their data in the contextsecurity and corporate legal operations solutions. We deliver a full spectrum of complianceservices centered around three core offerings: corporate legal operations, e-discovery services and risk. Our professionals help clients locate, analyze, reviewexpertise, and produce electronically stored information ("ESI"), including email, computer files, audio, video, instant messaging, cloud data and social media. Our professionals have a proven track record of helping clients with complex issues, including internal investigations, regulatory and global investigations such as under the FCPA and UKBA, litigation and joint defense, discovery and preparation, and antitrust and competition investigations, including second requests under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
In 2018, our Technology segment operated through software and consulting and services practices, which offer the following services:
E-discovery Management.We plan, design and manage discovery workflows and engagements to maximize responsiveness, minimize costs and risks, and provide greater budget predictability. We offer several deployment options, from a do-it-yourself on-premises model to a full-service managed services option. We offer clients the option to establish master repositories so that data need only be collected and processed once. In the repository, the data can be accessed and used across multiple matters, enabling the reuse and retention of valuable attorney work product and other information.  
•
Managed Document Review. We offer Acuity®, a managed review offering that allows corporations and law firms to improve the cost-effectiveness of their e-discovery processes while more effectively identifying the most critical information and documents in large data sets. With Acuity®, we drive review efficiency by leveraging the power of analytics and artificial intelligence while ensuring rigorous project and budget oversight. Acuity® workflows enable collaboration among the corporation, law firm and our managed review teams.

8



Collections & Computer Forensics. We help organizations meet requirements for collecting, analyzing and producing large amounts of data from a variety of sources, including email, chat, voicemail, backup tapes, social media, the cloud, mobile devices, shared server files and databases, often on multiple continents. We provide both proactive and reactive support using expert services, methodologies and tools that help companies and their legal advisors understand technology-dependent issues. We also offer services to reconstruct data that has been deleted, misplaced or damaged.
Information Governance, Privacy & Security. We provide the people, process and technology to develop, implement and deliver information governance, privacy & security strategiesservices.
5


In 2021, our Technology segment offered the following services:
Corporate Legal Operations. We provide solutions to companies to streamline and optimize legal operations across their organization, in the context of adherence to compliance and minimization of risk, including the following offerings:
•Advisory on Governance, Policy, Standards and Execution
•Advisory on Operational Efficiencies
•Contract Intelligence
•Subscriptions and Managed Services
E-discovery Services and Expertise. We provide services to design, manage and host e-discovery workflows on multiple best-of-breed software platforms to maximize responsiveness and minimize costs, including the following offerings:
•Analytics Research
•Blockchain Advisory Services
•Consulting and Data Analytics
•Cross-Border Investigations and Digital Forensics
•Cryptocurrency Disputes and Investigations
•E-discovery and Data Compliance Management
•Managed Document Review
Information Governance, Privacy & Security Services. We develop and implement information governance solutions that reduce corporate risk, cutdecrease storage costs, secure data, improve the e-discovery process, and enable betterfaster and deeper insight into data. Services include: readiness assessment consultingdata and servicesexpert testimony defending methods and documentation, including the following offerings:
•Data Privacy Program Development and Implementation
•Data Remediation and Disposition for the Compliance and Risk Management
•General Data Protection Regulation Act, data privacy program development and managed services, scanningPrivacy
•Migration of Data to Cloud Applications
•Regulatory Readiness Advisory and quarantine of sensitive data, including personally identifiable information and trade secrets, cleanup of file share, litigation hold and preservation optimization, e-discovery readiness/meet-and-confer support, divestiture data segregation, decommission and disposition of business applications in a defensible manner, modernization of messaging policies, backup remediation, workstation and forensic image remediation, social media and messaging archive migration and remediation, migration to cloud applications, discovery of key data, enterprise content management and SharePoint migration and decommissioning, voice and audio readiness, and cybersecurity readiness assessment.
Contract Intelligence.Our Contract Intelligence service provides a cost-effective solution for a key component of contract life cycle management, offering organizations a centralized, organized method to review and analyze their global contract universe. Corporations and firms using our Contract Intelligence service can better find, understand and act upon contracts to meet regulatory requirements, reduce risk and recognize greater business value in business contexts such as pre-merger contract diligence, alignment of contract with new regulations and analyses of leasing agreements for compliance with new accounting standards.
•
Relativity®*. In 2017, we became an authorized provider of Relativity®, a third-party software product designed to help clients find relevant information quickly and accurately and manage the complexity and scope of investigations and litigation, and have successfully delivered Relativity® on multiple legal and regulatory engagements.
•
Ringtail®* E-discovery Software. In September 2018, we sold our Ringtail® software and related e-discovery and document review software platform to Nuix, an information software company, for approximately $55.0 million. At the time of sale, we entered into a three-year preferred partner licensing agreement with Nuix for the Nuix Ringtail Review platform. Ringtail helps companies find relevant information quickly and accurately and manage complex investigations and transactions.
Radiance Visual Analytics Software. Radiance is a highly scalable, visual analytics platform to search ESI from disparate sources in a single interface.











* Registered trademark of Relativity Technologies, Inc. Ringtail is a registered trademark of Nuix.

9



Implementation
Strategic Communications
Our Strategic Communications segment designsdevelops and executes communications strategies forto help management teams, and boards of directors, to help them seize opportunities,law firms, governments and regulators manage financial, regulatorychange and reputational challenges, navigate market disruptions, articulate their brand, stakemitigate risk surrounding transformational and disruptive events, including transactions, investigations, disputes, crises, regulation and legislation. We deliver a competitive position, and preserve and grow operations. We believe our integrated offerings, which include a broad scopewide range of services deep industry expertisecentered around three core offerings: corporate reputation, financial communications and global reach, are unique and distinguish us from other strategic communications consultancies.public affairs.
In 2018,2021, our Strategic Communications segment offered the following services:
M&A Crisis Communications & Special Situations. Corporate Reputation. We specialize in advising clients on theirdesign and provide communications to investorsprotect and other audiencesenhance business reputations, build an organization's public profile and support business outcomes, including the following offerings:
•Crisis & Issues Management
•Digital, Analytics & Insights
•ESG & Sustainability
•Litigation Communications
6


Financial Communications. We design and provide communications strategies to help them protect their business brand and market positions and achieve fair valuations in capital markets. We employ a disciplined discovery process to identify preparedness gaps, assess the situation, plan for various possibilities, prepare and disseminate communications, and manage legal and political consequences. We provide services relating to a wide range of M&A scenarios, including transformative and bolt-on acquisitions, friendly and hostile takeovers, and activism defense. We also advise clients in situations that present threats to their valuation and reputation with investors such as proxy contests, financial restatements, shareholder activism, unplanned management changes and other crises. Our integrated communications services are designed to address the concerns of all internal and external stakeholders.
Capital Markets Communications. We assist clients in developing and delivering aleaders deliver consistent and credible narrativenarratives to raise capital, engage with investors and navigate transitional business events, including the investment community. We help companies articulate and present their entry into the equity markets, from articulating the strategic rationale and investment story to preparing the registration statement with securities regulators to developing the road show for the IPO. We provide investor relations best practices programs and investor relations services and communications. We conduct perception audits and organize investor community events. We provide a wide range of research and analyses to our clients. We also help clients communicate leadership transitions and demonstrate new management credibility to investors.
following offerings:
•Corporate Reputation. We promote businesses and protect corporate reputations, creating solutions for our clients’ mission-critical communications needs. Our services include crisis and issues management, reputational risk advisory, stakeholder identification, mapping and engagement, messaging and organization positioning, thought leadership consultancy, corporate social responsibility, strategic media relations, employee communications, engagement and change communications, and media and presentation coaching, as well as qualitative and quantitative research.
Governance & Shareholder Activism
•M&A Communications
•Restructuring & Financial Issues
Public Affairs & Government Relations.We advise senior business leaders and leading organizations around the world on how to effectively engage with governments, politicians and policymakers and respond to regulatory changes. We advise governments on how to attract investors by improving their regulatory and legal frameworks. Our integrated global team is based in leading political centers, including Berlin, Brussels, London, Melbourne and Washington, D.C. Affairs. We combine public policy, economic consulting and capital markets and sector-specific expertise with strategic communications and business advisory skills. Weto offer unique insights for clients operating at the full range of engagement programs, ranging from crisis management of imminent legislation to longer-term shaping of the policy environment. We use a range of qualitative and quantitative tools to establish our clients’ case in connection with government investigations, political and legislative engagement, public policy debates and business strategies, whether in terms of message refinement, policy mapping, reputation benchmarking, opinion polling or speechwriting.
People & Change. We help clients plan, design and implement internal communications and programs to increase engagement and understanding among leadership teams, employees, vendors, partners and customers. We partner with our clients to understand their unique business environment and internal and external communications aspirations. Our services assist business leaders in communicating and navigating change and transformative events, including new strategy and vision introductions, leadership positioning, M&A, operating model changes, outsourcing or insourcing, workforce consolidations or reductions, and restructurings and reorganizations. Our services are designed to align stakeholder insights with organizational needs.
Digital & Creative Communications. We collaborate with clients to conceive and produce integrated design, content and digital strategies across all media and markets to advance business objectives with key stakeholders and the media. Our approach includes defining corporate and brand positioning, surveying the audience to gauge social sentiments and needs, demystifying complex business operations and situations, selecting a program that resonates with the marketplace, building the communications plan, launching the initiative for maximum visibility and evaluating the success of the program. We provide customized solutions to reach target audiences through digital channels. Our design and marketing teams specialize in corporate and brand identity development, website

10



development, advertising, interactive marketing campaigns, video and animation, brochures, fact sheets, testimonials and other marketing materials, and annual report development. Our social media experts work with clients to identify and engage stakeholders through the most appropriate and useful paid and non-paid social and digital media outlets.
Strategy Consulting & Research. We provide in-depth market and stakeholder analyses to help our clients solve complexcritical intersection between business and communications problems. Our research services include reputation benchmarking, peer analysis, benchmarking and financial market valuations, brand awareness studies and brand extension audits,government, including customer focus groups, shareholder analysis and investor targeting, consumer trend analysis, public opinion polling and policymaker perception audits.the following offerings:
•Government Investigations
•Government Relations
•Public Affairs Research & Opinion Polling
•Public Affairs Support of Business Strategies
•Public Policy Advocacy
Our Industry Specializations
We employ professionals across our segments and practices who are qualified to provide our core services plus a range of specialized consulting services and solutions that address the strategic, reputational, operational, financial, regulatory, legal and other needs of specific industries. The major industry groups that we service include:
•Aerospace & Defense. Our aerospace and defense professionals provide services addressing the core issues related to the strategic growth and tactical priorities of commercial aviation, airlines, defense contractors, aviation maintenance, repair and overhaul and service providers, and security-oriented businesses. We help our clients navigate issues such as organic and inorganic growth, affordability, profitability, digital strategies, complex disputes with governments and regulators, regulatory audits, strategic communications and improvements to business systems.
•Agriculture. Our agribusiness experts advise producers, accumulators and processers to address global concerns relating to the quality, quantity, biodiversity, commodity pricing and sustainable practices, and the effects of weather, climate change and animal rights activism on the food supply.
Automotive. Our automotive experts offer vehicle manufacturers, suppliers, retailers, vehicle financers and other automotive subsectors, as well as their creditors, lenders and other stakeholders, a comprehensive range of corporate finance and strategic communications services.  •Airlines & Aviation
Construction. Our construction services professionals provide commercial management, risk-based advice, dispute resolution services and strategic communications counsel on complex projects across all construction and engineering industries. Our professionals are industry leaders who understand technical, business, regulatory and legal matters and are seasoned in giving expert testimony to ensure that every aspect of their capital program or project is properly governed, well-executed, regulatory compliant and fully supported from beginning to end.•Automotive & Industrial
EPP. Our EPP professionals provide a wide array of advisory services that address the strategic, financial, restructuring, reputational, regulatory and legal needs of energy and utility clients involved in the production of crude oil, natural gas, refined products, chemicals, coal, electric power, emerging technologies, and renewable energy and clean energy technologies. Our professionals are involved in many of the largest financial and operational restructurings, regulatory and litigation matters involving energy and utility companies globally.•Construction
Environmental. Our environmental services professionals provide a comprehensive suite of services aimed at helping organizations manage and resolve specific environmental issues or programmatic challenges. Our services focus on the resolution of complex contamination, toxic tort, products liability, and insurance investigations and disputes before courts, regulators, mediators and alternative dispute tribunals.•Energy, Power & Products
•Environmental Solutions
•Financial Institutions. Our professionals assist banks and financial services clients of all sizes and types in navigating through a changing environment of financial services regulations and enforcement actions, litigation threats, and economic and competitive challenges. We work with clients to manage risk, ensure compliance, resolve regulatory inquiries as they arise, engage with relevant stakeholders, and leverage their assets to protect and enhance enterprise value.Services
•Healthcare & Life Sciences. Our professionals work with a wide variety of healthcare and life sciences clients to discern innovative solutions that optimize performance in the short term and prepare for future strategic, operational, financial, regulatory, legal and reputational challenges. We provide a one-company team of experts across the spectrum of healthcare disciplines. These professionals have specialized capabilities and a record of success across hospital operations and restructuring, healthcare economics, regulatory compliance, and stakeholder engagement and communications.
•Hospitality, Gaming & Leisure. Our professionals help hotels, resorts, casinos, timeshares and condo hotels with operational realignment, asset and interim management, strategic analysis and event readiness (e.g., IPO, receivership, bankruptcy) and stakeholder engagement to preserve, protect and enhance asset and enterprise value.

•Insurance
11•Mining


•Private Equity

Insurance. Our professionals combine their business and technical acumen to help insurers, reinsurers, captives, brokers, investors, regulators, corporations and their legal and business advisors address complex strategic and tactical issues. We apply methodologies, analytics and communications counsel to support the strategic requirements of our clients to protect assets, meet compliance requirements, achieve performance goals and engage with key stakeholders. Our professionals have a proven track record of effectively managing a broad range of large domestic and international engagements such as high-profile, discreet investigations and disputes, complex restructuring and enterprise-wide transformations, and the application of methodologies and analytics to innovate, improve performance, reduce risk and achieve compliance.
Mining. Our professionals assist mining businesses in understanding how to conduct business in emerging markets, M&A, capital markets financing, commodity pricing, valuations and quantification of damages in dispute situations.  
Public-Sector•Public Sector & Government Contracts. Our government contracts team assists businesses through all phases of public sector contracting, including complying with government regulations and managing government business, risk avoidance, dispute resolution and litigation support. Our public-sector solutions team delivers services, including financial and performance improvement, risk management and forensic consulting, economic and public policy consulting, technology and data analytics, and strategic communications.
•Real Estate & Infrastructure. Our professionals have the industry expertise and experience to help real estate owners, users, investors and lenders better navigate the real estate market’s complexities and manage its inherent risks. We provide such services through our real estate solutions practice within our Corporate Finance & Restructuring segment and our construction solutions practice within our Forensic and Litigation Consulting segment. We represent leading public and private real estate entities and stakeholders, including REITs, financial institutions, investment banks, opportunity funds, insurance companies, hedge funds, pension advisors, owners and developers, offering services that help align strategy with business goals.
•Retail & Consumer Products. Our professionals provide a full range of corporate finance, turnaround, restructuring and strategic communications expertise for retailers. We have experience in developing strategies for retail and consumer products companies to address internal and external challenges from inception through maturity. Our professionals have deep industry expertise in critical functional areas to help our clients drive performance, implement plans and engage with key stakeholders that will have sustained results. Our Fast Track™ approach utilizes highly developed frameworks and analytics to identify levers in the retail value equation that can be influenced quickly and serve to fund longer term strategic initiatives that drive shareholder value.
TMT. Our TMT team provides strategic, financial, operational and communications consulting with industry specialists in wireline and wireless telecom, print and digital media, broadcast TV and radio, entertainment and content production, and technology companies of all types, including software, hardware, Internet business models and cloud-based technology. We provide targeted performance improvement strategies and implementation, commercial diligence and transaction advisory, M&A integration, carve-outs and divestitures planning, valuation, interim management, restructuring and strategic communications. We deliver original insights that help clients better understand company performance, consumer behavior, digital substitution, emerging technologies, disruptive trends and stakeholder priorities in our industries.•Telecom, Media & Technology (TMT)
•Transportation. Our professionals provide corporate communications, financial communications, public affairs advice, strategy consulting and research to a broad range of organizations and companies involved in various forms of transportation, including rail, trucking and infrastructure. & Logistics
7


Our Business Drivers
Factors that drive demand for our business offerings include:
M&A Activity. M&A activity is an important driver for all of our segments. We offer services for all phases of the M&A process. Our services during the pre-transaction phase include government competition advice and pre-transaction analysis. Our services during the negotiation phase include due diligence, negotiation and other transaction advisory services, government competition and antitrust regulation services, expert advice, asset valuations and financial communications advice. We also offer post-M&A integration and transformation services.
Financial Markets. Financial market factors, including credit and financing availability, terms and conditions, the willingness of financial institutions to provide debt modifications or relief, corporate debt levels, default rates and capital markets transactions, are significant drivers of demand for our business offerings, particularly our Corporate Finance & Restructuring and Strategic Communications segments.
Regulatory Complexity, Public Scrutiny and Investigations. Increasingly complex global regulations and legislation, greater scrutiny of corporate governance, instances of corporate malfeasance, and more stringent and complex

12



reporting requirements drive demand for our business offerings. The need to understand and address the impact of regulation and legislation, as well as the increasing costs of doing business, have prompted companies to focus on better assessing and managing risks and opportunities. In addition, boards of directors, audit committees and independent board committees have been increasingly tasked with conducting internal investigations of financial wrongdoing, regulatory non-compliance and other issues. These factors and laws, such as the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, have contributed to the demand for independent consultants and experts to investigate and provide analyses and to support the work of outside legal counsel, accountants and other advisors. These types of investigations also increasingly demand the use of multiple disciplinary service offerings like ours, which combine skills and capabilities across practices with industry expertise. These factors drive demand for various practices and services of all our segments.
Litigation and Disputes. Litigation and business disputes, the complexity of the issues presented, and the amount of potential damages and penalties drive demand for the services offered by many of our segments, particularly our Forensic and Litigation Consulting, Economic Consulting and Technology segments. Law firms and their clients, as well as government regulators and other interested third parties, rely on independent outside resources to evaluate claims, facilitate discovery, assess damages, provide expert reports and testimony, manage the pre-trial and in-trial process, and effectively present evidence.
Operational Challenges and Opportunities. Businesses facing challenges require the evaluation and re-evaluation of strategy, risks and opportunities as a result of crisis-driven situations, competition, regulation, innovation and other events that arise in the course of business. These challenges include enterprise risk management, global expansion, competition from established companies, and emerging businesses and technologies doing business in emerging markets, and new and changing regulatory requirements and legislation. Management, companies and their boards need outside help to recognize, understand and evaluate such events and effect change, which drives demand for independent expertise that can combine general business acumen with the specialized technical expertise of our practice offerings and industry expertise. These factors drive demand for various practices and services of all our segments.
•Developing Markets.Markets. The growth of multinational firmscompanies and global consolidation can precipitate antitrust and competition scrutiny and the spread internationally of issues and practices that historically have been more common in the U.S., such as increased and complex litigation, corporate restructuring and bankruptcy activities, and antitrust and competition scrutiny. Companies in the developing world and multinational companies can benefit from our expert advice to access capital and business markets, comply with the regulatory and other requirements of multiple countries, structure M&A transactions and conduct due diligence, which drives demand for the services of all of our segments.
•Financial Markets. Financial market factors, including credit and financing availability, terms and conditions, the willingness of financial institutions to provide debt modifications or relief, corporate debt levels, default rates and capital markets transactions, are significant drivers of demand for our business offerings, particularly our Corporate Finance segment.
•Litigation and Disputes. Litigation and business disputes, the complexity of the issues presented, and the amount of potential damages and penalties drive demand for the services offered by many of our segments, particularly our FLC, Economic Consulting and Technology segments. Law firms and their clients, as well as government regulators and other interested third parties, rely on independent outside resources to evaluate claims, facilitate discovery, assess damages, provide expert reports and testimony, manage the pre-trial and in-trial process, and effectively present evidence.
•M&A Activity. M&A activity is an important driver for all of our segments. We offer services across all phases of the M&A life cycle. Our services during the pre-transaction phase include government competition advice and pre-transaction analysis. Our services during the negotiation phase include due diligence, negotiation and other transaction advisory services, government competition and antitrust regulation services, expert witness testimony, asset valuations and financial communications advice. Our services following the close of a transaction include post-M&A integration, transformation and disputes services.
•Operational Challenges and Opportunities. Operational challenges and opportunities drive demand for services across all of our segments. Businesses facing challenges require the evaluation and re-evaluation of strategy, risks and opportunities as a result of crisis-driven situations, competition, regulation, innovation and other events that arise in the course of business. These challenges include enterprise risk management, global expansion, competition from established companies, emerging businesses and technologies doing business in emerging markets, and new and changing regulatory requirements and legislation. Management, companies and their boards need outside help to recognize, understand and evaluate such events and effect change, which drives demand for independent expertise that can combine general business acumen with the specialized technical expertise of our service offerings and industry expertise.
•Regulatory Complexity, Public Scrutiny and Investigations. Regulatory complexity, public scrutiny and investigations drive demand for services across all of our segments. Increasingly complex global regulations and legislation, greater scrutiny of corporate governance, instances of corporate malfeasance, and more stringent and complex reporting requirements drive demand for our service offerings. The need to understand and address the impact of regulation and legislation, as well as the increasing costs of doing business, has prompted companies to focus on better assessment and management of risks and opportunities. In addition, boards of directors, audit committees and independent board committees have been increasingly tasked with conducting internal investigations of financial wrongdoing, regulatory non-compliance and other issues. These factors and laws, such as the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act in the U.S., have contributed to the demand for independent consultants and experts to investigate and provide analyses to support the work of outside legal counsel, accountants and other advisors. These types of investigations also increasingly demand the use of multiple disciplinary service offerings like ours, which combine skills and capabilities across segments and practices with industry expertise.
8


Our Competitive Strengths
We compete primarily on the basis of the breadth of our services, the quality of our work, the prominence of our professionals, our geographic reach, our reputation and performance record, our specificspecialized industry expertise and our strong client relationships. We believe our success is driven by a combination of long-standing competitive strengths, including:
•Pre-eminent BusinessesPositions and Professionals.Professionals. We believe that our segments include some of thewe have pre-eminent practicesmarket positions and professionals in our industry today.professionals. During 2018,2021, the awards and recognitions received by the Company include the following:
•FTI Consulting and Compass Lexecon led the Who’s Who Legal: Consulting Experts Guide for the sixth consecutive year with 152 experts recognized.
•FTI Consulting named to Forbes magazine's list of America’s Best Management Consulting Firms for the thirdsixth consecutive year, —recognized in 1811 sectors and functional areas
areas.
•FTI Consulting named to Consulting magazine’sa Best FirmsFirm to Work For list
by Consulting magazine for the sixth consecutive year.
•FTI Consulting named Who’s Who Legal’srecognized as Consulting Firm of the Year awardby Who’s Who Legal for the secondfourth consecutive year
year.
Corporate Finance & Restructuring ranked the #1 U.S. Restructuring Advisor by The Deal for 11 consecutive years
•FTI Consulting ranked #1 and Compass Lexecon had the most experts (144) recognized in the Who’s Who Legal Consulting Experts Guide for the third consecutive year
subsidiary Compass Lexecon ranked #1#2 on Global Arbitration Review’s GAR 100 Expert Witness Firms’ Power Index
Index.
Compass Lexecon named Who’s Who Legal’s Competition Economics Firm of the Year for the fourth consecutive year

13



•FTI Consulting named Who’s Who Legal’s ArbitrationGlobal Turnaround Consulting Firm of the Year for the third consecutive year
FTI Consulting named Who’s Who Legal’s Investigationsand Public Relations Firm of the Year
by Global M&A Network.
•FTI Technology named 2018 Technology Sector Consulting Firm ofrecognized as a leading firm by Chambers Litigation Support 2021 and the Year in Australia by Corporate Intl magazine
inaugural Chambers Crisis and Risk Management 2021 guide.
Strategic Communications•FTI Consulting ranked in the top five PR#1 U.S. Restructuring Advisor by deal count and volume in MergerMarket’s2018 PR Advisors League TablesinThe Deal for the Global, Europe and Asia-Pacific categories
14th consecutive year.
FTI Consulting named a Top 15 Strategy Consulting Firm in the Asia Pacific region by Consultancy Asia
•Diversified Service Offerings.Offerings. Our five reportable segments offer a diversified portfolio of practices providing services withinacross our four geographic regions. Our broad range of practices and services, the diversity of our revenue streams, our specialized industry expertise and our global locationsreach distinguish us from our competitors. This diversity helps to mitigate the impact of crises, events and changes in a particular practice, industry or country.
•Diversified Portfolio of Elite Clients.Clients. We provide services to a diverse group of clients, including global Fortune 500 companies, FTSE 100 companies, global financial institutions, banks, private equity funds and local, state and national governments and agencies in the U.S. and other countries. Additionally, 9698 of the top 100 law firms as ranked by American Lawyer Global 100: Most Revenue List refer or engage us directly or on behalf of multiplenumerous clients on multiple matters.
We are also an advisor to 59 of the Fortune 100 companies, nine of the world's top 10 bank holding companies and 7 of the top 10 private equity firms on the Private Equity International 300 list.
•Demand for Integrated Solutions and a Consultative Approach. Our breadth and depth of practice and service offerings and industry expertise across the globe drive demand by clients that seek our integrated services and consultative approach covering different aspects of event-driven occurrences, reputational issues and transactions across different jurisdictions.
•Strong Cash Flow.Flow. Our business model has several characteristics that produce consistent cash flows. Our strong cash flow supports business operations, capital expenditures, and research and development efforts in our Technology segment and our ability to service our indebtedness and pursue our growth and other strategies.
Demand for Integrated Solutions and a Consultative Approach. Our breadth and depth of practice and service offerings and industry expertise across the globe drive demand by businesses that seek our integrated services and consultative approach covering different aspects of event-driven occurrences, reputational issues and transactions across different jurisdictions.
Our Business Strategy
We build client relationships based on the quality of our services, our brand and the reputation of our professionals. We provide diverse complementary services to meet our clients’ needs around the world. We emphasize client service and satisfaction. We aim to build strong brand recognition. The following are key elements of our business strategy:
•Leverage Our Practitioners, Businesses, ExtensivePractitioners' and Businesses' Expertise, Geographic DiversificationReach, Diverse Service Offerings and Relationships. Client Relationships. We work hard to maintain and strengthen our core practices and competencies. We believe that our recognized expertise, geographic reach, diverse service offerings and client relationships, and the quality of our reputation, coupled with our successful track record sizeof serving as a trusted advisor for our clients when they are facing their greatest challenges and geographic diversity,
9


opportunities, are the most critical elements in a decision to retain us. Many of our professionals are recognized experts in their respective fields.
field.
•Grow Organically.Organically. Our strategy is to identify where we are best positioned to help our clients solve their most complex issues, invest behind those positions and leverage that success to grow organically by increasing headcount and market share to provide clients with an attractive and evolving suite of services across our segments, as well as the industries and geographic regions in which we operate.
organically.
Attract and Retain Highly Qualified Professionals. Our professionals are crucial to delivering our services to clients and generating new business. As of December 31, 2018, we employed 3,756 revenue-generating professionals, many of whom have an established and widely recognized name in their respective service and industry specialization. Through our substantial staff of highly qualified professionals, we can handle a large number of complex assignments simultaneously. To attract and retain highly qualified professionals, we offer significant compensation opportunities, including sign-on bonuses, forgivable loans, retention bonuses, cash incentive bonuses and equity compensation, along with a competitive benefits package and the chance to work on challenging global engagements with other highly skilled peers.
Enhance Profitability. We endeavor to manage costs, headcount, utilization, bill rates and pricing for both time and materials and alternative fee arrangements to operate profitably.
Acquisitions and Other Investments. Enhance value through capital allocation: The strength of our balance sheet gives us the flexibility to allocate capital and create shareholder value in numerous ways including investments in hiring new

14



employees, acquisitions and share repurchases. •Strategic Acquisitions. We consider strategic and opportunistic acquisition opportunities on a selective basis. We seek to integrate completed acquisitions and manage investments in a way that fosters organic growth, expands our geographic presence or complements our segments, practices, services and industry focuses.positions. We typically structure our acquisitions to retain the services of key individuals from the acquired companies.
•Enhance Profitability. We endeavor to leverage our investments to build positions that will support profitable growth on a sustained basis through a variety of economic conditions.
•Enhance Value through Capital Allocation. The strength of our balance sheet gives us the flexibility to allocate capital and create shareholder value in numerous ways, including investments in organic growth, share repurchases and acquisitions, among other capital allocation vehicles.
•Marketing. We rely primarily on our senior professionals to identify and pursue business opportunities. Referrals from clients, law firms and other intermediaries and our reputation from prior engagements are also key factors in securing new business. Our Employees
Our success depends onprofessionals often learn about new business opportunities from their frequent contact and close working relationships with clients. In marketing our services, we emphasize our experience, the quality of our services and our professionals’ particular areas of expertise, as well as our ability to quickly staff large engagements across multiple jurisdictions. While we aggressively seek new business opportunities, we maintain high professional standards and carefully evaluate potential new client relationships and engagements before accepting them.
•ESG & Sustainability. At FTI Consulting, we believe proactively identifying and addressing ESG-related risks and opportunities are integral to sustaining our growth trajectory and critical to maintaining our competitive position in today's dynamic market. As a professional services firm that is not a significant greenhouse gas emitter, FTI Consulting’s environmental impact is primarily driven by two factors: our business travel and leased office locations. Nonetheless, FTI Consulting has committed to reaching net-zero greenhouse gas GHG emissions by 2030. To remain transparent about our ESG practices, FTI Consulting has disclosed ESG metrics according to several reporting frameworks, including the Task Force on Climate-Related Financial Disclosures and the Sustainability Accounting Standards Board. Additionally, we are a participant of the United Nations (“UN”) Global Compact and support its Ten Principles on human rights, labor, environment and anti-corruption, as well as the UN Sustainable Development Goals. To learn more about our commitment to ESG and our sustainability journey, see our 2020 Corporate Sustainability Report, available on our website under about FTI–Diversity Inclusion & Belonging–Corporate Sustainability Report 2020.
Human Capital Resources
At FTI Consulting, we seek to provide the highest quality services to our clients. We do this by attracting and retaining experts in their field, empowering a diverse and inclusive global workforce, providing opportunities for advancement and personal growth, and supporting the communities in which we do business. As of December 31, 2021, we employed 6,780 employees, of which 5,401 were revenue-generating professionals. We also engage independent contractors, who exclusively provide services to FTI Consulting, to supplement our professionals on client engagements as needed.
We advance the best interests of all our stakeholders through:
•Attracting and Retaining Highly Qualified Professionals.Our professionals are crucial to delivering our services to clients and generating new business. Through our substantial staff of highly qualified professionals, we can handle a large number of complex global assignments simultaneously. To attract and retain our expert professional workforce. highly qualified professionals, we offer various compensation opportunities, including sign-on bonuses, forgivable loans, retention bonuses, cash incentive bonuses and equity compensation, along with a competitive benefits package and the opportunity to work on challenging global engagements with highly skilled peers.
•Experts-Driven Model. Our professionals include PhDs, MBAs, JDs, CPAs, CPA-ABVs (CPAs accredited in business valuations), CPA-CFFs (CPAs certified in financial forensics), CRAs (certified risk analysts), Certified Turnaround Professionals, Certified Insolvency and Reorganization Advisors, Certified Fraud Examiners, ASAs (accredited senior appraisers), construction engineers and former senior government officials.
10


•Inclusive and High-Performing Culture. We foster a culture where our professionals can grow their careers and achieve their full potential. We also engage independent contractorshire and strive to supplementretain professionals with the diverse set of qualities, background and expertise that our clients and teams need. We offer robust Diversity, Inclusion & Belonging programs and training opportunities to our employees across the globe at every level.
•Talent Development. We support the development of our professionals on client engagements as needed. Asat all levels of December 31, 2018,their careers. Our robust Talent Development program includes induction programs for new hires, milestone programs to prepare promotes for success in their new role and leadership readiness programs to help our people build the skills needed to advance to our most senior positions. These training programs are further supplemented by self-directed e-learning programs, among other segment-level talent development and training opportunities.
•Corporate Citizenship. We practice responsible corporate citizenship to drive positive change in the communities in which we employed 4,768do business. All full-time FTI Consulting employees ofare eligible to participate in our Corporate Citizenship program, which 3,756 were revenue-generating professionals.includes charitable gift matching, paid time off for volunteering and corporate-sponsored pro bono engagements.
Employment Agreements
As of December 31, 2018,2021, we had written employment arrangementsagreements with substantially all of our 486650 Senior Managing Directors and equivalent personnel (collectively, “SMD”). These arrangements generally provide for fixed salary and participation ineligibility for incentive payment programs (which, in some cases, may be based on financial measures such as Adjusted EBITDA, Adjusted EBITDA Margin, revenues or relative total shareholder return), salary continuation benefits, accrued bonuses and other benefits beyond the termination date if an SMD leaves our employment for specified reasons prior to the expiration date of the employment agreement. The length and amount of payments to be paid by us following the termination or resignation of an SMD maywill vary, depending on whether the personemployee resigned with or without “good reason” or was terminated by us with or without “cause,” retired or did not renew, died or became “disabled,” or was terminated as a result of a “change in control” (all such terms as defined in such SMD’s employment agreement). All of our written employment arrangementsagreements with SMDs require somespecify the required notice period to be given by us or the partySMD prior to termination of employment and include covenants providing for restrictions on the SMDsSMD competing against, and soliciting employees from, the Company for a specified period of time following the end of the SMDsSMD's employment.
Incentive, Retention and RetentionSign-on Payments
Our SMDs, consultants and other employees, consultants and professionals may receive incentive, retention or sign-on payments on a case-by-case basis, through unsecured general recourse forgivable loans, equity awards and/or other payments (collectively, “Retention Awards”). We believe that providing these multi-year Retention Awards greatly enhances our ability to attract and retain our key professionals.  
Some or all of the principal amount and accrued interest of the loans we make will be forgiven by us upon the passage of time, or their repayment will be funded by us through additional cash bonus compensation, provided that the recipient is an employee or consultant on the forgiveness date. In addition, upon certain termination events, accrued interest and the outstanding principal balance may be forgiven, including upon death, disability and, in some cases, retirement or termination by the Company without cause or the recipient with good reason, or thereason. The recipient may be required to repay the unpaid accrued interest and outstanding principal balance upon certain other termination events such as voluntary resignation, as provided in the applicable promissory note. The value of the forgivable loans we have made, in the aggregate, as well as on an individual basis, havehas been, and we anticipate will continue to be, significant. Our executive officers and outside directors are not eligible to receive loans, and no loans have been made to them.
Recipients of sign-on or other retention payments, other than loans, may be required to repay a portion or all of the original payment upon certain termination events. These awards are typically smaller amounts in nature than forgivable loans and have a shorter service requirement than forgivable loans.
Our executive officers, other members of senior management and outside directors, as well as employees and independent service providers, have received and will continue to receive equity awards, which may include stock optionoptions and share-based awards (including awards in the form of restricted stock, performance-based restricted stock units, deferred restricted stock units, and cash-settled stock appreciation rights and units), on a case-by-case basis, to the extent that shares are available under our stockholder-approved equity compensation plans. The value of such equity and cash-based awards, in the aggregate, as well as on an individual basis, has been and is expected to continue to be significant.
Recipients of sign-on or other retention payments, other than loans, may be required to repay a portion or all of the original payment upon a termination event. These awards are typically smaller amounts in nature than forgivable loans and have a shorter service requirement than forgivable loans.
Select SMDs may participate in certain incentive compensation programs, such as our Senior Managing Director Incentive Compensation Program in the U.S., UK and Canada (the “ICP”) or the Key Senior Managing Director Incentive Plan (the “KSIP”) or our Senior Managing Director Incentive Compensation Program (the “ICP”). The ICP was closed to new participants effective January 2015. Participants werein the KSIP are recommended by management and approved by
11


the Compensation Committee of the Board of Directors of the Company. The ICPKSIP and KSIPICP provide for a combination of forgivable loans, equity awards and retention bonuses that are paid over an averagea range of sixfour to 10 years depending

15



on the program and economic value of the award. These programs alsomay require participants to defer a portion of their bonus in the form of cash or restricted stock over a two-to-three-yeartwo- to three-year period.
Marketing
We rely primarily on our senior professionals to identify and pursue business opportunities. Referrals from clients, law firms and other intermediaries and our reputation from prior engagements are also key factors in securing new business. Our professionals often learn about new business opportunities from their frequent contacts and close working relationships with clients. In marketing our services, we emphasize our experience, the quality of our services and our professionals’ particular areas of expertise, as well as our ability to quickly staff new and large engagements. While we aggressively seek new business opportunities, we maintain high professional standards and carefully evaluate potential new client relationships and engagements before accepting them. We also employ or contract with sales professionals who are tasked primarily with marketing the services of our Corporate Finance & Restructuring, Forensic and Litigation Consulting, Technology and Strategic Communications segments.
Clients
During the year ended December 31, 2018,2021, no single client accounted for more than 10% of our consolidated revenues. Norevenues, and no reportable segment had a single client that accounted for more than 10% of its respective total revenues for the year ended December 31, 2018.segment revenues. In some cases, we may have engagements through law firms that represent a larger percentage of our consolidated revenues or the revenues of a segment; however, in these situations, each law firm engages us on behalf of multiple clients.
Competition
We compete with different companies or businesses of companies depending on the particular nature of a proposed engagement and the requested types of service(s) or the location of the client or delivery of the service(s) or product(s). Our businesses are highly competitive. Our competitors include large organizations, such as the global accounting firms and large management and financial consulting companies, that offer a broad range of consulting services; investment banking firms; ITinformation technology ("IT") consulting and software companies that offer niche services that are the same or similar to services or products offered by one or more of our segments;segments and small firms and independent contractors that provide one or more specialized services.
We compete primarily on the basis of the breadth of our services, the quality of our work, the prominence of our professionals, our geographic reach, our reputation and performance record, our specific industry expertise, our ability to staff multiple significant engagements across disciplines and industries in multiple locations, and our strong client relationships. Our Technology segment, particularly with respect to hosting and e-discovery services, and to a lesser extent our other segments, may also compete on price, although the critical nature of the services provided by our Corporate Finance, & Restructuring, Forensic and Litigation Consulting,FLC and Economic Consulting segments typically makes price a secondary consideration with respect to those segments.consideration. Since our businesses depend in large part on professional relationships, there are low barriers of entry for professionals, including our professionals, electing to work independently, start their own firms or change employers.
Our Corporate Finance & Restructuring segment primarily competes with specialty boutiques and publicly traded companies providing restructuring, bankruptcy orand M&A services and, to a lesser extent, large investment banks and global accounting firms.
Our Forensic and Litigation ConsultingFLC segment primarily competes with other large consulting companies and global accounting firms with service offerings similar to ours.
Our Economic Consulting segment primarily competes with individually recognized economists, specialty boutiques and large consulting companies with service offerings similar to ours.
Our Technology segment primarily competes with consulting and/or software providers specializing in e-discovery, ESIelectronically stored information and the management of electronic content. Competitors may offer products and/or services intended to address one piece or more of those areas. There continues to be significant consolidation of companies providing products and services similar to our Technology segment, through M&A and other transactions, which may provide competitors access to greater financial and other resources than those of FTI Consulting. This industry is subject to significant and rapid innovation. Larger competitors may be able to invest more in research and development or react more quickly to new regulatory or legal requirements and other changes and may be able to innovate more quickly and efficiently. In addition, companies compete aggressively against our Technology segment on the basis of price, particularly with respect to hosting and e-discovery services.
Our Strategic Communications segment competes with large public relations firms, as well as boutique M&A, crisis communications and public affairs firms.

16



Some service providers are larger than we are and, on certain engagements, may have an advantage over us with respect to one or more competitive factors. Specialty boutiques or smaller local or regional firms, while not offering the range of services we provide, may compete with us on the basis of geographic proximity, specialty services or pricing advantages.
Patents, Licenses and Trademarks
We hold no U.S. patents and have three U.S. patent applications pending. We have no U.S. provisional patent applications pending. We have no Canadian or other international patents, provisional patents or patents pending.
We consider the Acuity®, Radiance™ and our other technologies and software to be proprietary and confidential. We consider our TrialMax® comprehensive trial preparation software to be proprietary and confidential. The TrialMax® software and technology are not protected by patents. We rely upon international copyright laws, non-disclosure agreements and contractual agreements, internal controls, including confidentiality and invention disclosure agreements with our employees and independent contractors, and license agreements with third parties to protect our proprietary information, software and other works. Despite these safeguards, there is a risk that competitors may obtain and seek to use such intellectual property.
We have also developed marketing language such as “Critical Thinking at the Critical Time®” and “Experts with Impact™” and other trademarks, logos and designs. In some cases, but not all, the trademarks have been registered in the U.S. and/or foreign jurisdictions or, in some cases, applications have been filed and are pending. Certain FTI Consulting and Compass-formative marks’ use is pursuant to certain Co-Existence, Consent and/or Settlement agreements. We believe we take the appropriate steps to protect our trademarks and brands.
Corporate Information
We incorporated under the laws of the state of Maryland in 1982. We are a publicly traded company withOur common stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol FCN. Our executive offices are located at 555 12th Street NW, Suite 700, Washington, D.C.DC 20004. Our telephone number is 202-312-9100. Our website is http://www.fticonsulting.com.
Financial Information on Industry Segments and Geographic Areas
12
We manage and report operating results through five reportable segments. We also administratively manage our business regionally. See “Risk Factors — Risks Related to Our Operations” for a discussion of risks related to international operations. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 18, “Segment Reporting” in Part II, Item 8 of this Annual Report for a discussion of revenues, net income and total assets by business segment and revenues for the U.S., UK and all other foreign countries as a group.

Available Information
We make available, free of charge, on or through our website at http://www.fticonsulting.com, our annual, quarterly and current reports and any amendments to those reports, and our proxy statements, as well as our other filings with the SEC,Securities and Exchange Commission ("SEC"), as soon as reasonably practicable after electronically filing them with the SEC. Information posted on our website is not part of this Annual Report or any other report filed with the SEC in satisfaction of the requirements of the Exchange Act. Copies of this Annual Report, as well as other periodic reports filed with the SEC, may also be requested at no charge from our Corporate Secretary at FTI Consulting, Inc., 6300 Blair Hill Lane, Suite 303, Baltimore, MD 21209, telephone number 410-591-4867.

17
13





ITEM 1A.    RISK FACTORS
All of the following risks could materially and adversely affect our business, financial condition and results of operations. In addition to the risks discussed below and elsewhere in this Annual Report, other risks and uncertainties not currently known to us or that we currently consider immaterial could, in the future, materially and adversely affect our business, financial condition and financial results.
Risks Related to Coronavirus Disease 2019 ("COVID-19")
The COVID-19 pandemic has had, and could continue to have, a negative impact on our financial results and it could potentially have a material adverse impact on our business, financial condition and results of operations, the extent of which is not predictable.
The COVID-19 pandemic has created volatility, uncertainty and economic disruption for FTI Consulting, our clients and vendors, and the markets in which we do business. Government and client actions and related events around the world have impacted, and we expect will continue to impact, how we do business and the services that we provide, for a sustained period. The impact depends on many factors that continue to evolve and are out of our control. Those factors include, among other things (i) the duration of the COVID-19 pandemic and the types and magnitude of adverse impacts on regional economies, individually and the global economy as a whole; (ii) the health and welfare of our employees and contractors and those of our clients and vendors; (iii) evolving business and government actions in response to the pandemic, including government economic relief or incentives for businesses, moratoriums or postponements, and delays by governments and regulators on rulemaking and regulatory and legal proceedings, and stay-at-home, social distancing measures and travel bans; (iv) the varying impact that the pandemic may have on different industries; (v) the response of our clients or prospective clients to the pandemic, including delays, stoppages or termination of existing engagements or hiring decisions; (vi) the varying demand for the types of services we offer in the geographic regions in which we offer them; (vii) our ability to continue to effectively market our services; (viii) our ability to replace engagements as they end or are terminated, stopped or delayed; (ix) the ability of our professionals to effectively provide services, including as a result of travel restrictions, inability to meet clients in person, and the need to work remotely; (x) the type, size, profitability and geographic locations of our engagements; (xi) the ability of our clients to pay, to make timely payments or to pay in full; (xii) the mutation of the virus into different variants that may be more contagious or otherwise dangerous; (xiii) timing of finding effective treatments for COVID-19 variants; and (xiv) vaccine mandates by governmental authorities or clients, or vaccine hesitancy by our employees, client employees and others with whom we work. In some cases, such events have resulted in fewer or delayed engagements, less profitable engagements, reduction of existing or new work, a less profitable mix of work, or reduction in operations. Any of these events, and others we have not yet identified, have caused or contributed to, and could continue to cause or contribute to, the risks and uncertainties facing the Company and our clients and could materially adversely affect our business or portions thereof and our financial condition, results of operations and/or stock price.
The COVID-19 pandemic has impacted, and could continue to impact, our segments and practices, the types of services they provide, and the regions in which we operate, differently.
The COVID-19 pandemic has impacted, and we expect will continue to impact, the operations of our reportable segments and practices, the services they provide or the regions in which we operate, differently. Current disruptions to our business include governmental actions that delay certain other actions, such as moratoriums on bankruptcies by various jurisdictions, governmental relief and economic stimulus payments and fiscal and monetary policies, which have negatively impacted the restructuring practice of our Corporate Finance segment, and moratoriums or delays imposed by other governmental or regulatory authorities on legal proceedings, regulatory proceedings and rulemaking, which have negatively impacted the investigations and other practices of our FLC segment. The cancellation, stoppage, delay or decline in number and size of mergers and acquisitions ("M&A") transactions, litigation and governmental and regulatory proceedings, antitrust and competition matters, or other types of investigations and matters on which the Company advises, as well as disruptions in capital markets, has negatively impacted, and could continue to negatively impact, the financial results of one or more of each of our segments or regions, including our Economic Consulting and Strategic Communications segments. If the Company’s ability to market its services is impaired, in some cases the Company has been, and may continue to be, unable to replace engagements that are delayed, stopped or terminated or are otherwise completed with comparable, larger or more profitable engagements on a timely basis, or to maintain the utilization of its revenue generating professionals or to reassign professionals among segments and practices, in which case such events could adversely affect the financial condition, results of operations or prospects of a segment, practice or region or the Company as a whole.
The COVID-19 pandemic could heighten risks related to, or otherwise negatively impact the effectiveness of, cybersecurity, information technology, financial reporting and other corporate functions that the Company relies upon to operate.
14


The Company has encountered, and may continue to encounter, operational risks arising from changes in the way the Company conducts business during the COVID-19 pandemic. The majority of our employees and contractors, as well as our clients, are working remotely and rely heavily on technology to perform their jobs. Risks arising from our reliance on remote communications, virtual meetings and other forms of technology could include elevated cybersecurity risks and difficulty protecting company and client confidential communications. The Company may experience impairments or declines in the effectiveness, capabilities and capacity of certain technology we employ, including issues with virtual meetings or other remote communications systems. Certain employees or regions could experience difficulties accessing and maintaining Internet connections or issues with saving and retrieving information from cloud-based and other computing systems relied on by the Company. Furthermore, the Company’s increased reliance during the pandemic on technology for conducting certain corporate functions, such as financial reporting and internal controls and internal audit, may not be as effective as our historical practice of reliance on a combination of technology and in-person resources. The Company’s investment of time and resources to assure the functionality of the Company’s systems and mitigate technological risks may be more difficult to achieve or not wholly successful. If the Company experiences cybersecurity issues, is unable to protect confidential information, or is unable to adequately provide services or perform corporate functions, all or portions of the Company’s ability to conduct business and operate may be impaired. In such event, the Company’s financial condition and results of operations could be materially adversely affected.
The COVID-19 pandemic could adversely impact the health and welfare of our client-facing professionals, as well as our executive officers and other employees of our Company, which could have a material adverse effect on our ability to secure or perform client engagements and our results of operations.
Our client-facing professionals provide unique and highly specialized skills and knowledge to our clients. We rely heavily on our client-facing professionals, including the leaders of our segment and regional operations, to secure and perform client engagements. If the health and welfare of client-facing professionals or employees providing critical corporate functions, including our executive officers, deteriorates, the total number of employees so afflicted becomes significant, or an employee with skills and knowledge or material client relationships that cannot be replicated in our organization is impaired due to the COVID-19 pandemic, our ability to win business and provide services, as well as utilization, employee morale, client relationships, business prospects, and results of operations of one or more of our segments or practices, or the Company as a whole, could be materially adversely affected. Some employees have expressed vaccine hesitancy. In the U.S., we required employees to provide proof of full vaccination (or receive a valid exemption) or be subject to being placed on unpaid leave beginning January 4, 2022. Currently, an insignificant number of employees in the U.S. have opted not to be vaccinated. However, as vaccine needs evolve due to the proliferation of COVID-19 variants, that number could increase. Our responses to address vaccine hesitancy in jurisdictions outside of the U.S. are evolving in light ofthe scarcity of vaccines in some jurisdictions and the diversity of applicable government laws, rules and regulations. Consequences of vaccine hesitancy by employees or others with whom we work, which differ by jurisdiction, could include (i) our failure to comply with governmental and client vaccination mandates or other requirements, (ii) delays returning employees to in-person work environments, (iii) a reduction of the pool of qualified employment candidates or a negative impact on headcount growth, (iv) negative impacts on our ability to provide client services or win engagements and (v) more serious or widespread infections from COVID-19.
Risks Related to Our Reportable Segments
Changes in capital markets, M&A activity, legal or regulatory requirements, general economic conditions and monetary or geopolitical disruptions, as well as other factors beyond our control, could reduce demand for our practice offerings or services, in which case our revenues and profitability could decline.


Different factors outside of our control could affect demand for a segment’s practices and our services. These include:

(i) fluctuations in U.S. and/or global economies, including economic downturns or recessions and the strength and rate of any general economic recoveries;
(ii) the U.S. or global financial markets and the availability, costs, and terms of credit and credit modifications;
(iii) level of leverage incurred by countries or businesses;
(iv) M&A activity;
(v) frequency and complexity of significant commercial litigation;
(vi) overexpansion by businesses causing financial difficulties;
(vii) business and management crises, including the occurrence of alleged fraudulent or illegal activities and practices;
(viii) new and complex laws and regulations, repeals of existing laws and regulations or changes of enforcement of laws, rules and regulations, including antitrust/competition reviews of proposed M&A transactions;
(ix) other economic, geographic or political factors; and
(x) general business conditions.
We are not able to predict the positive or negative effects that future events or changes to the U.S. or global economies will have on our business or the business of any particular segment. Fluctuations, changes and disruptions in financial, credit, M&A and other markets, political instability and general business factors could impact various segments’ operations and could affect such operations differently. Changes to factors described above, as well as other events, including by way of example,
15


contractions of regional economies, or the economy of a particular country, trade restrictions, monetary systems, banking, real estate and retail or other industries; debt or credit difficulties or defaults by businesses or countries; new, repeals of or changes to laws and regulations, including changes to the bankruptcy and competition laws of the U.S. or other countries; tort reform; banking reform; a decline in the implementation or adoption of new laws or regulation, or in government enforcement, litigation or monetary damages or remedies that are sought; or political instability may have adverse effects on one or more of our segments or service, practice or industry offerings.

Our revenues, operating income and cash flows are likely to fluctuate.
We experience fluctuations in our revenues and cost structure and the resulting operating income and cash flows and expect that this will continue to occur in the future. We experience fluctuations in our annual and quarterly financial results, including revenues, operating income and earnings per share, for reasons that include: (i) the types and complexity, number, size, timing and duration of client engagements; (ii) the timing of revenue recognition under U.S. GAAP;revenues; (iii) the utilization of revenue-generating professionals, including the ability to adjust staffing levels up or down to accommodate the business and prospects of the applicable segment and practice; (iv) the time it takes before a new hire becomes profitable; (v) the geographic locations of our clients or the locations where services are rendered; (vi) billing rates and fee arrangements, including the opportunity and ability to successfully reach milestones, and complete engagements and collect success fees and other outcome-contingent or performance-based fees; (vii) the length of billing and collection cycles and changes in amounts that may become uncollectible; (viii) changes in the frequency and complexity of government regulatory and enforcement activities; (ix) business and asset acquisitions; (x) fluctuations in the exchange rates of various currencies against the U.S. dollar; and (xi) economic factors beyond our control.

18



The results of different segments and practices may be affected differently by the above factors. Certain of our practices, particularly our restructuring practice, tend to experience their highest demand during periods when market and/or industry conditions are less favorable for many businesses.  For example, in periods of limited credit availability, reduced M&A activity and/or declining business and/or consumer spending, while not always the case, there may be increased restructuring opportunities that will cause our restructuring practice to experience high demand. On the other hand, those same factors may cause a number of our other segments and practices, such as our antitrust and& competition practice in Economic Consulting, to experience reduced demand. The positive effects of certain events or factors on certain segments and practices may not be sufficient to overcome the negative effects of those same events or factors on other parts of our business. In addition, our mix of practice offerings adds complexity to the task of predicting revenues and results of operations and managing our staffing levels and expenditures across changing business cycles and economic environments.
Our results are subject to seasonal and similar factors, such as during the fourth quarter when our professionals and our clients typically take vacations. We may also experience fluctuations in our operating income and related cash flows because of increases in employee compensation, including changes to our incentive compensation structure and the timing of incentive payments, which we generally pay during the first quarter of each year, or hiring or retention payments, which are paid throughout the year. Also, the timing of investments or acquisitions and the cost of integrating them may cause fluctuations in our financial results, including operating income and cash flows. This volatility makes it difficult to forecast our future results with precision and to assess accurately whether increases or decreases in any one or more quarters are likely to cause annual results to exceed or fall short of previously issued guidance. While we assess our annual guidance at the end of each quarter and update such guidance when we think it is appropriate, unanticipated future volatility can cause actual results to vary significantly from our guidance, even where that guidance reflects a range of possible results and has been updated to take account of partial-year results.

If we do not effectively manage the utilization of our professionals or billable rates, our financial results could decline.
Our failure to manage the utilization of our professionals who bill on an hourly basis, or maintain or increase the hourly rates we charge our clients for our services, could result in adverse consequences, such as non- or lower-revenue-generating professionals, increased employee turnover, fixed compensation expenses in periods of declining revenues, the inability to appropriately staff engagements (including adding or reducing staff during periods of increased or decreased demand for our services), or special charges associated with reductions in staff or operations. Reductions in workforce or increases of billable rates will not necessarily lead to savings. In such events, our financial results may decline or be adversely impacted. A number of factors affect the utilization of our professionals. Some of these factors we cannot predict with certainty, including general economic and financial market conditions; the complexity, number, type, size and timing of client engagements; the level of demand for our services; appropriate professional staffing levels, in light of changing client demands and market conditions; utilization of professionals across segments and geographic regions; competition; and acquisitions. In addition, our global expansion into or within locations where we are not well-known or where demand for our services is not well-developed could also contribute to low or lower utilization rates in certain locations.
16


Segments may enter into engagements such as fixed feefixed-fee and time and materials with caps. Failure to effectively manage professional hours and other aspects of alternative fee engagements may result in the costs of providing such services exceeding the fees collected by the Company. Failure to successfully complete or reach milestones with respect to contingent fee or success fee assignments may also lead to lower revenues or the costs of providing services under those types of arrangements may exceed the fees collected by the Company.
Factors that could negatively affect utilization in our segments include:
Corporate Finance & Restructuring — The completion of bankruptcy proceedings; the timing of the completion of other engagements; fewer and smaller restructuring (including bankruptcy) cases; a recovering or strong economy; easy credit availability; low interest rates; and fewer, smaller and less complex M&A and restructuring activity; or less capital markets activity.
Forensic and Litigation Consulting FLC — The settlement of litigation; less frequent instances of significant mismanagement, fraud, wrongdoing or other business problems that could result in fewer or less complex business engagements; fewer and less complex legal disputes; fewer class action suits; the timing of the completion of engagements; less government regulation or fewer regulatory investigations; and the timing of government investigations and litigation.
Economic Consulting — Fewer, smaller and less complex M&A activity; less capital markets activity or fewer complex transactions; a reduced number of regulatory filings and less litigation, reduced or less aggressive antitrust and competition

19



regulation or enforcement; fewer government investigations and proceedings; and the timing of client utilization of our services.
Technology — The settlement of litigation; a decline in volume and complexity of litigation proceedings and governmental investigations; anda decline in volume and the timing of M&A activities and degree ofreduced or less aggressive enforcement of anti-trustantitrust and competition regulations.
Strategic Communications — Fewer event-driven crises affecting businesses; general economic decline that may reduce certain discretionary spending by clients; a decline in capital markets activity, including M&A; and fewer public securities offerings.

Our segments may face risks of fee non-payment, clients may seek to renegotiate existing fees and contract arrangements, and clients may not accept billable rate or price increases, which could result in loss of clients, fee write-offs, reduced revenues and less profitable business.
In some cases, our segments are engaged by certain clients who are experiencing or anticipate experiencing financial distress or are facing complex challenges, are engaged in litigation or regulatory or judicial proceedings, or are facing foreclosure of collateral or liquidation of assets. This may be true in light of general economic conditions; lingering effects of past economic slowdowns or recession; or business- or operations-specific reasons. Such clients may not have sufficient funds to continue operations or to pay for our services. We typically do not receive retainers before we begin performing services on a client’s behalf in connection with a significant number of engagements in our segments. In the cases where we have received retainers, we cannot assure the retainers will adequately cover our fees for the services we perform on behalf of these clients. With respect to bankruptcy cases, bankruptcy courts have the discretion to require us to return all, or a portion of, our fees.
We may receive requests to discount our fees or to negotiate lower rates for our services and to agree to contract terms relative to the scope of services and other terms that may limit the size of an engagement or our ability to pass throughpass-through costs. We consider these requests on a case-by-case basis. We routinely receive these types of requests and expect this to continue in the future. In addition, our clients and prospective clients may not accept rate increases that we put into effect or plan to implement in the future. Fee discounts, pressure not to increase or evenpressure to decrease our rates, and less advantageous contract terms could result in the loss of clients, lower revenues and operating income, higher costs and less profitable engagements. More discounts or write-offs than we expect in any period would have a negative impact on our results of operations. There is no assurance that significant client engagements will be renewed or replaced in a timely manner or at all, or that they will generate the same volume of work or revenues or be as profitable as past engagements.

Certain of our clients prefer fixed and other alternative fee arrangements that place revenue ceilings or other limitations on our fee structure or may shift more of our revenue-generating potential to back-end contingent and success fee arrangements. With respect to such alternative fee arrangements, we may discount our rates initially, which could mean that the cost of providing services exceeds the fees collected by the Company during all or a portion of the term of the engagement. In such cases, the Company’s failure to manage the engagement efficiently or collect the success or performance fees could expose the Company to a greater risk of loss on such engagement than other fee arrangements or may cause variations in the Company’s revenues and operating results due to the timing of achievement of the performance-based criteria, if achieved at all. A segment’s ability to service clients with these fee arrangements at a cost that does not directly correlate to time and materials
17


may negatively impact or result in a loss of the profitability of such engagements, adversely affecting the financial results of the segment.

Our Technology segment faces certain risks, including (i) industry consolidation and a highly competitive environment, (ii) client concentration, (iii) downward pricing pressure, (iii) data breach, (iv) technology changes and obsolescence, and (v) failure to protect IPintellectual property ("IP") used by the segment, which individually or together could cause the financial results and prospects of this segment and the Company to decline.
Our Technology segment is facingfaces significant competition from other consulting and/or software providers specializing in e-discovery ESI and the management of electronic content. There continues to be consolidation of companies providing products and services similar to those offered by our Technology segment, which may provide competitors access to greater financial and other resources than those of the Company. Larger competitors may be able to react more quickly to new regulatory or legal requirements and other changes or innovate more quickly and efficiently. Our Technology segment has been experiencing increasing competition from companies providing similar services at lower prices, particularly with respect to hosting and e-discovery services.
The success of our Technology segment and its ability to compete depends significantly on our ability to safeguard client data. There is no assurance that we will not incur losses related to cyber incidents or malicious data breach from external or internal sources in the future.
Our Technology segment also relies on the IP rights we license from third-parties. There is no assurance that (i) the software we license to provide our services will remain competitive or

20



technologically innovative, (ii) new, innovative or improved software or products will not be developed by others that will compete more effectively with the software or products we currently license or use to service our customers, or (iii) we can enter into licenses or other agreements on economically advantageous terms to license or enter into other agreements to use new or more innovative third-party software and products to provide our services. If our Technology segment is unable to license or otherwise use competitively innovative or technologically advanced software and products to provide our services, we could be unable to retain clients, grow our business and capitalize on market opportunities, which would adversely affect our operating margins and financial results.
Unauthorized use and misuse of our proprietary IP by employees or third parties could have a material adverse effect on our business, financial condition and results of operations. The available legal remedies for unauthorized use or misuse of our proprietary IP may not adequately compensate us for the damages caused by such unauthorized use.use or misuse and consequences arising from such actions.
Our segmentsWe face certain risks relating to cybersecurity, and the failure to protect the confidentiality of client information against misuse or disclosure.disclosure, and the use or misuse of social media.
Our reputation for maintaining the confidentiality of proprietary, confidential and trade secret information is critical to the success of our segments. In addition, our Technology segment is dependent on providing secure information storage of, and access to, host client information as a service. We routinely face cyber-based attacks and attempts by hackers and similar unauthorized users to gain access to or corrupt our information technology systems, which so far, to our knowledge, have been unsuccessful. Such attacks, if successful, could harm our overall professional reputation, disrupt our business operations, cause us to incur unanticipated losses or expenses, and result in unauthorized disclosures of confidential or proprietary information. We expect to continue to face such attempts.Although we seek to prevent, detect and investigate these network security incidents, and take steps to mitigate the likelihood of network security breaches, there can be no assurance that attacks by unauthorized users will not be attempted in the future or that our security measures will be effective. If we fail to effectively protect the confidentiality of our clients’ or our own IP and proprietary information from disclosure or misuse by our employees, contractors or third parties, the financial results of the affected segment or the Company would be adversely affected. There is no certainty that we can maintain the confidentiality or prevent the misuse of our or our clientclients' information.
The use or misuse of social media by employees or others could reflect negatively on us or our clients and could have a material adverse effect on our business, financial condition and results of operations. The available legal remedies for the use or misuse of social media may not adequately compensate us for the damages caused by such use or misuse and consequences arising from such actions.
We may not manage our growth effectively, and our profitability may suffer.
We experience fluctuations in growth of our different segments, practices orand services, including periods of rapid or declining growth. Periods of rapid expansion may strain our management team or human resources and information systems. To manage growth successfully, we may need to add qualified managers and employees and periodically update our operating, financial and other systems, as well as our internal procedures and controls. We also must effectively motivate, train and
18


manage a larger professional staff. If we fail to add or retain qualified managers, employees and contractors when needed, estimate costs or otherwise manage our growth effectively, our business, financial results and financial condition may suffer.
We cannot assure that we can successfully manage growth through acquisitions and the integration of the companies and assets we acquire or that they will result in the financial, operational and other benefits that we anticipate. Some acquisitions may not be immediately accretive to earnings, and some expansion may result in significant expenditures.
In periods of declining growth, underutilized employees and contractors may result in expenses and costs being a greater percentage of revenues. In such situations, we will have to weigh the benefits of decreasing our workforce or limiting our service offerings and saving costs against the detriment that the Company could experience from losing valued professionals and their industry expertise and clients.
Risks Related to Our Operations
Our international operations involve special risks.
Our international operations involve financial and business risks that differ from or areamong the jurisdictions in addition to those faced by our U.S.which we operate.
Our operations involve financial and business risks that differ among the jurisdictions in which we operate including:
(i) cultural and language differences;
limited (ii) various levels of FTI Consulting “brand” recognition;
(iii) different employment laws and rules, employment or service contracts, compensation methods, and social and cultural factors that could result in employee turnover, lower utilization rates, higher costs and cyclical fluctuations in utilization that could adversely affect financial and operating results;

21



(iv) foreign currency disruptions and currency fluctuations between the U.S. dollar and foreign currencies that could adversely affect financial and operating results;
different (v) differing legal and regulatory requirements and other barriers to conducting business;
greater (vi) difficulties in resolving the collection of receivables when legal proceedings are necessary;
greater (vii) difficulties in managing our non-U.S. operations, including client relationships, in certain locations;
(viii) disparate systems, policies, procedures and processes;
(ix) failure to comply with the FCPA and anti-bribery laws of other jurisdictions;
(x) higher operating costs;
(xi) longer sales and/or collections cycles;
(xii) potential restrictions or adverse tax consequences forresulting from the repatriation of foreign earnings, such as trapped foreign losses and importation or withholding taxes;
(xiii) different or less stable political and/or economic environments;
(xiv) potential increased regulatory and legal complexities surrounding the U.K.’s exit from the European Union, commonly referred to as Brexit; (xv) conflicts between and among the U.S. and countries in which we conduct business, including those arising from trade disputes or disruptions, the termination or suspension of treaties, or boycotts; and
(xvi) civil disturbances or other catastrophic events that reduce business activity.activity; (xvii) political interference with our ability to conduct business in the applicable jurisdiction; (xviii) impact of COVID-19, including varying governmental responses and requirements, client impacts and travel restrictions; (xix) failure to achieve or maintain a diverse workforce or otherwise meet evolving governmental or client-related standards and requirements pertaining to ESG-related issues; and (xx) physical risks associated with climate change, including rising temperatures, severe storms, energy disruptions and rising sea levels, among others.
If we are not able to quickly adapt to or effectively manage our operations in geographic markets outside the U.S., our business prospects and results of operations could be negatively impacted.
Failure to comply with governmental, regulatory and legal requirements or with our company-wide Code of Ethics and Business Conduct, Anti-Corruption Policy, Policy on Inside Information and Insider Trading, and other policies could lead to governmental or legal proceedings that could expose us to significant liabilities and damage our reputation.
We have a robust Code of Ethics and Business Conduct, Anti-Corruption Policy, Policy on Inside Information and Insider Trading, and other policies and procedures that are designed to educate and establish the standards of conduct that we expect from our executive officers, outside directors, employees, and independent consultants and contractors. These policies require strict compliance with U.S. and local laws and regulations applicable to our business operations, including those laws and regulations prohibiting improper payments to government officials. In addition, as a corporation whose securities are registered under the Securities Act and publicly traded on the NYSE, our executive officers, outside directors, employees and independent contractors are required to comply with the prohibitions against insider trading of our securities. In addition, we impose certain restrictions on the trading of securities of our clients. Nonetheless, we cannot assure our stakeholders that our policies, procedures and related training programs will ensure full compliance with all applicable legal requirements. Illegal or improper conduct by our executive officers, directors, employees, independent consultants or contractors, or others who are subject to our policies and procedures could damage our reputation in the U.S. and internationally, which could adversely affect our existing client relationships or adversely affect our ability to attract and retain new clients, or lead to litigation or governmental or regulatory proceedings in the U.S. or foreign jurisdictions, which could result in civil or criminal penalties, including substantial monetary awards, fines and penalties, as well as disgorgement of profits.

We are also exposed to new and changing regulations related to climate change, both in the U.S. and internationally. The fast pace of changes to regulation in this area can pose compliance challenges, and we may face risks similar to those described above.
22
19





We may be required to recognize goodwill impairment charges, which could materially affect our financial results.
We assess our goodwill trade names and otherrelated intangible assets as well as our other long-lived assets as and when required by GAAPGenerally Accepted Accounting Principles in the U.S. to determine whether they are impaired and, if they are, to record appropriate impairment charges. Factors we consider include significant underperformance relative to expected historical or projected future operating results and significant negative industry or economic trends. We have previously recorded impairment charges to the carrying value of goodwill of certain of our segments and it is possible that we may be required to record significant impairment charges in the future. Such charges have had and could have ana material adverse impact on our results of operations.
The compromise of confidential or proprietary information could damage our reputation, harm our businesses and adversely impact our financial results.
The Company’s own confidential and proprietary information and that of our clients could be compromised, whether intentionally or unintentionally, by our employees, consultants or vendors. Physical risks associated with climate change, including energy disruptions, may also impact the integrity of our information technology systems. A compromise of the security of our information technology systems leading to theft or misuse of our own or our clients’ proprietary or confidential information, or the public disclosure or use of such information by others, could result in losses, third-party claims against us and reputational harm, including the loss of clients. The theft or compromise of our or our clients’ information could negatively impact our reputation, financial results and prospects. In addition, if our reputation is damaged due to a data security breach, our ability to attract new engagements and clients may be impaired or we may be subjected to damages or penalties, which could negatively impact our businesses, financial results or financial condition.
Governmental focus on data privacy and security has increased, and could continue to increase, our costs of operations.
In reaction to publicized incidents in which electronically stored personal and other information has been lost, accessed or stolen, or transmitted by or to third parties without permission, U.S. and non-U.S. governmental authorities have proposed or adopted or are considering proposing or adopting data security and/or data privacy statutes or regulations, including the California Consumer Privacy Act and the General Data Protection Regulation of the European Union. Continued governmental focus and regulation of data security and privacy may lead to additional legislative and regulatory actions, which could increase the complexity of doing business in the U.S. or the applicable jurisdiction. The increased emphasis on information security and the requirements to comply with applicable U.S. and foreign data security and privacy laws and regulations has increased, and is expected to continue to increase, our related costs of doing business and could negatively impact our financial results.
Changes to corporate income tax rates, tax legislation, tax rules and regulations and tax treaties in the jurisdictions in which we conduct business may substantially negatively impact our effective tax rate and financial results of operations and increase our cash tax payment obligations.
Changes to corporate income tax laws and rules and regulations and tax treaties in jurisdictions where we pay taxes that increase rates, eliminate or reduce deductions or affect the utility or value of deferred tax assets or liabilities could negatively affect our reported financial results and increase our cash tax payment obligations. The U.S. Congress is currently considering broad tax legislation that includes higher corporate income tax rates on both domestic and foreign earnings, the application of global intangible low-taxed income on a country-by-country basis and limits on various deductions, including the deductibility of compensation paid to certain highly-compensated employees. Limits on the deductibility of employee compensation could have a significant impact on professional services firms such as FTI Consulting and other companies that require the services of in-demand professionals who are often highly compensated for their substantive expertise and their ability to attract business. The content and timing of tax legislation in the U.S., including whether any such legislation becomes law, remains uncertain. In addition, if any legislation is adopted, implementing regulations could significantly affect the impact of any tax legislation, both in terms of substance and timing.
We are exposed to certain physical and regulatory risks related to climate change, which could adversely affect our business, financial condition and results of operations.
Due to the global nature of our business, we are exposed to a variety of physical risks related to climate change, including rising temperatures, severe storms, energy disruptions and rising sea levels, among others.These risks could impact our ability to maintain business continuity, including by affecting our access to our leased office space in affected geographies and the integrity of our information technology systems.In addition, existing or future legislation and regulations applicable to our business and operations related to greenhouse gas emissions and climate change by federal, state, local and foreign legislatures and governmental agencies could cause us to incur additional compliance and operational costs or actions if we fail to comply.
20


Increasing scrutiny and changing expectations from governmental organizations, investors, clients and our colleagues with respect to our ESG-related practices and those of our clients may impose additional costs on us or expose us to new or additional risks.
There is increased focus, including from governmental organizations, investors, clients and employees on ESG issues such as environmental stewardship, climate change, diversity and inclusion, racial justice and workplace culture conduct.We have expended and may further expend resources to monitor, report and adopt policies and practices that we believe will improve alignment with our evolving ESG goals and plans, as well as third-party imposed ESG-related standards and expectations. If our ESG practices, including our goals for sustainability and diversity and inclusion, do not meet evolving rules and regulations or investor or other stakeholder expectations and standards (or if we are viewed in a negative light based on positions we do or do not take or work we do or do not perform for certain clients or industries), then our reputation, our ability to attract or retain leading experts, employees and other professionals, and our ability to attract new engagements and clients could be negatively impacted, as could our attractiveness as an investment, service provider, business partner or acquiror.Similarly, our failure or perceived failure to pursue or fulfill our current or future goals, targets and objectives or to satisfy various reporting standards within the timelines we announce, or at all, could also have similar negative impacts.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters, and unfavorable ratings of our Company may lead to negative investor sentiment, stock price fluctuations and the diversion of investment to other companies.
Our business depends on our ability to use and access information systems, and modernize or replace such systems from time to time, and failure to effectively maintain such systems or modernize or replace systems could materially adversely affect our business and operations and harm our reputation.
We depend on multiple information systems, including our enterprise resource planning ("ERP") system, for operating our business and internal controls. We utilize commercially available third-party technology solutions, which in many cases are customized to our business needs. Our information systems may be compromised by power outages, computer and telecommunications failures, computer viruses, security breaches, hackers, catastrophic events, human error and other events, many of which are beyond our control, and are subject to obsolescence and technological changes. We are currently replacing our ERP system to improve the efficiency and effectiveness of our financial and business transaction process, as well as the underlying systems environment. If our information systems, including our new ERP system, fail to work properly or otherwise become unavailable, we may incur substantial time, effort and costs to repair or replace such systems, or otherwise carry out our operations, including preparation of our financial statements and maintaining effectiveness of our internal controls, without the ability to use such systems. Failure of any such information system, including the ERP system, could result in delays, significant additional costs, incorrect information, including financial information, failure of internal controls and harm to our reputation or our clients, as well as expose us to regulatory actions and claims from clients or other persons, any of which could adversely affect our business and results of operations and our reputation.
Risks Related to Our People
Our failure to recruit and retain qualified professionals and manage headcount needs and utilization could negatively affect our financial results and our ability to staff client engagements, maintain relationships with clients and drive future growth.
We deliver sophisticated professional services to our clients. Our success is dependent, in large part, on our ability to keep our supply of skills and human resources in balance with client demand around the world. To attract and retain clients, we need to demonstrate professional acumen and build trust and strong relationships. Our professionals have highly specialized skills. They also develop strong bonds with the clients they serve. Our continued success depends upon our ability to attract and retain professionals who have expertise, a good reputation and client relationships critical to maintaining and developing our business. We face intense competition in recruiting and retaining highly qualified professionals to drive our organic growth and support expansion of our services and geographic footprint. We cannot assure that we will be able to attract or retain qualified professionals to maintain or expand our business. If we are unable to successfully integrate, motivate and retain qualified professionals, our ability to continue to secure work in may suffer. Moreover, competition has caused our costs of retaining and hiring qualified professionals to increase, a trend that could continue and could adversely affect our operating margins and financial results.

Despite fixed terms or renewal provisions, we could face retention issues during and at the end of the terms of those agreements and large compensation expenses to secure extensions. There is no assurance we will enter into new or extend existing employment agreements with our professionals. We monitor contract expirations carefully to commence dialogues with professionals regarding their employment in advance of the actual contract expiration dates. Our goal is to renew employment agreements when advisable and to stagger the expirations of the agreements if possible. Because of the concentration of
21


contract expirations in certain years, we may experience high turnover or other adverse consequences, such as higher costs, loss of clients and engagements or difficulty in staffing engagements, if we are unable to renegotiate employment arrangementsagreements or the costs of retaining qualified professionals become too high. The implementation of new compensation arrangements may result in the concentration of potential turnover in future years.
Headcount reductions to manage costs during periods of reduced demand for our services could have negative impacts on our business over the longer term.
Our people are our primary assets and account for the majority of our expenses. During periods of reduced demand for our services, or in response to unfavorable changes in market or industry conditions, we may seek to align our cost structure more closely with our revenues and increase our utilization rates by reducing headcount and eliminating or consolidating underused locations in affected businessreportable segments or practices. Following such actions, in response to subsequent increases in demand for our services, including as a result of favorable changes in market or industry conditions, we may need to hire, train and integrate additional qualified and skilled personnel and may be unable to do so to meet our needs or our clients’ demands on a timely basisbasis. If we are unable to manage staffing levels on a timely basis in light of changing opportunities or conditions, including as a result of the COVID-19 pandemic, our ability to accept or service business opportunities and client engagements, take advantage of positive market and industry developments, and realize future growth could be negatively affected, which could negatively impact our revenues and profitability. In addition, while increased utilization resulting from headcount reductions may enhance our profitability in the near term, it could negatively affect our business over the longer term by limiting the time our professionals have to seek out and cultivate new client relationships and win new projects.

We incur substantial costs to hire and retain our professionals, and we expect these costs to continue and to grow.
We may pay hiring or retention bonuses to secure the services of professionals. Those payments have taken the form of unsecured general recourse forgivable loans, stock options, restricted stock, cash-based stock appreciation rights and other equity- and cash-based awards, and cash payments to attract and retain our professional employees. We make forgivable loans to KSIP participants and may provide forgivable or other types of loans to new hires and professionals who join us in connection with acquisitions, as well as to select current employees and other professionals on a case-by-case basis. The

23



aggregate amount of loans to professionals is significant. We expect to continue issuing unsecured general recourse forgivable loans.
We also provide significant additional payments under the KSIP and annual recurring equity or cash awards under the ICP, the Executive Committee incentive compensation arrangements and other compensation programs, including awards in the form of restricted stock and other stock- or cash-based awards or, alternatively, cash if we do not have adequate equity securities available under stockholder-approved equity plans.
In addition, our Economic Consulting segment has contracts with select economists or professionals that provide for compensation equal to a percentage of such individual’s annual collected client fees plus a percentage of the annual fees generated by junior professionals working on engagements managed by such professionals, which results in compensation expenses for that segment being a higher percentage of segment revenues and Adjusted Segment EBITDA than the compensation paid by other segments. We expect that these arrangements will continue and that the Company may enter into similar arrangements with other economists and professionals hired by the Company.
We rely heavily on our executive officers and the heads of our operating segments and industry and regional leaders for the success of our business.business, the loss of whom may negatively impact our business and operations.
We rely heavily on our executive officers and the heads of our operating segments,segment, industry and regional locations and industriesleaders to manage our operations. Given the highly specialized nature of our services and the scale of our operations, our executive officers and the heads of our operating segments and industry and regional leaders must have a thorough understanding of our service offerings, as well as the skills and experience necessary to manage a large organization in diverse geographic locations. We are unable to predict with certainty the impact that leadership transitions and loss of certain employees in leadership roles may have on our business operations, prospects, financial results, client relationships, or employee retention or morale.
Professionals may leave our Company to form or join competitors, and we may not have, or may choose not to pursue, legal recourse against such professionals.
Our professionals typically have close relationships with the clients they serve, based on their expertise and bonds of personal trust and confidence. Therefore, the barriers to our professionals pursuing independent business opportunities or joining our competitors should be considered low. Although our clients generally contract for services with us as a company, and not with an individual professional, in the event that a professional leaves, such clients may decide that they prefer to continue working with a specific professional rather than with our Company. Substantially all of our written employment arrangementsagreements with our senior managing directorsSenior Managing Directors and equivalent employees include non-competition and non-solicitation covenants. These restrictions have generally been drafted to comply with state “reasonableness” standards. However, states generally interpret restrictions on competition narrowly and in favor of employees. Therefore, a state may hold certain
22


restrictions on competition to be unenforceable. In the case of employees outside the U.S., we draft non-competition provisions in an effort to comply with applicable foreign law. In the event an employee departs and acts in a way that we believe violates his or her non-competition or non-solicitation agreement, we will consider any legal remedies we may have against such person on a case-by-case basis. We may decide that preserving cooperation and a professional relationship with a former employee or client, or other concerns, outweighs the benefits of any possible legal recourse. We may also decide that the likelihood of success does not justify the costs of pursuing a legal remedy. Therefore, there may be times we may decide not to pursue legal action, even if it is available to us.
Our failure to achieve and maintain a diverse and inclusive workforce may impair our ability to attract and retain qualified employees, win and maintain clients or attract investment, which could have a material adverse effect on our business and financial results, as well as reputational harm.
We seek diverse talent internally and externally in an effort to achieve more diverse representation throughout our organization. We promote inclusion through hiring practices, education, training and development opportunities. We also drive accountability and equitable outcomes by reviewing and revising our practices and policies to reduce biased outcomes, and by measuring and assessing inclusive behaviors, practices and representation. Our evaluation of the success of our corporate leadership includes consideration of increases in workforce diversity, and the development and promotion of diverse employees. Key areas on which we are focused include (i) reinforcement of our diverse talent pipeline by, among other things, requiring diverse hiring candidate slates and promotion candidate groups, (ii) identifying and seeking to eliminate impediments to hiring and promotion of diverse candidates, and (iii) increasing representation of underrepresented groups based on gender and race/ethnicity. If we fail to promote diverse individuals to leadership positions, increase and maintain the representation of diverse groups in our workforce, provide opportunities for advancement and inclusion of diverse candidates, and remove barriers to hiring and retention of diverse individuals, we could lose, or face difficulties attracting and maintaining, employees, clients and investors in our business, and we could also face reputational harm.
Risks Related to Our Client Relationships
If we are unable to accept or continue client engagements due to real or perceived relationship issues, our revenues, growth, client engagements and prospects may be negatively affected.
Our inability to accept engagements from existing or prospective clients, represent multiple clients in connection with the same or competitive engagements, or any requirement that we resign from a client engagement may negatively impact our revenues, growth and financial results. While we follow internal practices to assess real and potential issues in the relationships between and among our clients, engagements, segments, practices and professionals, such concerns cannot always be avoided. For example, we generally will not represent parties adverse to each other in the same matter. Under U.S. federal bankruptcy rules, we generally may not represent both a debtor and its creditors in the same proceeding, and we are required to notify the U.S. Trustee of real or potential conflicts. Even if we begin a bankruptcy-related engagement, the U.S. Trustee could find that we no longer meet the disinterestedness standard because of real or potential changes in our status as a disinterested party and order us to resign, which could result in disgorgement of fees. Acquisitions may require us to resign from a client engagement because of relationship issues that are not currently identifiable. In addition, businesses that we acquire or employees who join us may not be free to accept engagements they could have accepted prior to our acquisition or hire because of relationship issues.

24



Claims involving our services or adverse publicity could harm our overall professional reputation and our ability to compete and attract business or hire or retain qualified professionals.
Our engagements involve matters that may result in a severe impact on a client’s business, cause the client a substantial monetary loss or prevent the client from pursuing business opportunities. Our ability to attract new clients and generate new and repeat engagements or hire professionals depends upon our ability to maintain a high degree of client satisfaction, as well as our reputation among industry professionals. As a result, any claims against us involving the quality of our services may be more damaging than similar claims against businesses in other industries.
From time to time, we may accept clients or perform engagements that may be viewed as controversial or that generate adverse publicity relating to our involvement or the services that we provide, including work we do for clients in high emissions industries. Such controversial engagements or negative reactions may adversely affect our reputation or the reputations of our employees and other professionals who provide services, or may otherwise harm our ability to attract or retain clients, employees and other professionals, all of which could have an adverse effect on our results of operations, business or prospects.
We may incur significant costs and may lose engagements as a result of claims by our clients regarding our services.
23


Many of our engagements involve complex analysis and the exercise of professional judgment, including litigation and governmental investigatory matters where we act as experts. Therefore, we are subject to the risk of professional and other liabilities. Although we believe we maintain an appropriate amount of insurance, it is limited. Damages and/or expenses resulting from any successful claim against us, for indemnity or otherwise, in excess of the amount of insurance coverage will be borne directly by us and could harm our profitability and financial resources. Any claim by a client or third party against us could expose us to reputational issues that adversely affect our ability to attract new or maintain existing engagements or clients or qualified professionals or other employees, consultants or contractors.
Our clients may terminate our engagements with little or no notice and without penalty, which may result in unexpected declines in our utilization and revenues.
Our engagements center on transactions, disputes, litigation and other event-driven occurrences that require independent analysis or expert services. Transactions may be postponed or canceled, litigation may be settled or dismissed, and disputes may be resolved, in each case with little or no prior notice to us. If we cannot manage our work in process, our professionals may be underutilized until we can reassign them or obtain new engagements, which can adversely affect financial results.
The engagement letters that we typically enter into with clients do not obligate them to continue to use our services. Typically, our engagement letters permit clients to terminate our services at any time without penalties.penalty. In addition, our business involves large client engagements that we staff with a substantial number of professionals. At any time, one or more client engagements may represent a significant portion of a segment’s revenues. If we are unable to replace clients or revenues as engagements end or if clients unexpectedly cancel engagements with us or curtail the scope of our engagements and we are unable to replace the revenues from those engagements, eliminate the costs associated with those engagements or find other engagements to utilize our professionals, the financial results of the Company could be adversely affected.
We may not have, or may choose not to pursue, legal remedies against clients that terminate their engagements.
The engagement letters that we typically have with clients do not obligate them to continue to use our services and permit them to terminate the engagement without penalty at any time. Even if the termination of an ongoing engagement by a client could constitute a breach of the client’s engagement agreement, we may decide that preserving the overall client relationship is more important than seeking damages for the breach and, for that or other reasons, decide not to pursue any legal remedies against a client, even though such remedies may be available to us. We make the determination whether to pursue any legal actions against a client on a case-by-case basis.
FailuresFailure of our internal information technology systems controls.controls may harm our overall professional reputation and disrupt our business operations.
Our reputation for providing secure information storage and maintaining the confidentiality of proprietary, confidential and trade secret information is critical to the success of our businesses, especially our Technology segment, which hosts client information as a service. We routinely face cyber-based attacks and attempts by hackers and similar unauthorized users to gain access to or corrupt our information technology systems, which so far, to our knowledge, have been unsuccessful. Such attacks could harm our overall professional reputation and disrupt our business operations, cause us to incur unanticipated losses or expenses, and result in unauthorized disclosures of confidential or proprietary information. We expect to continue to face such attempts. Although we seek to prevent, detect and investigate these network security incidents and have taken steps to mitigate the likelihood of network security breaches, there can be no assurance that attacks by unauthorized users will not be attempted in the future or that our security measures will be effective.
Compromise of confidential or proprietary information could damage our reputation, harm our businesses and adversely impact our financial results.
The Company’s own confidential and proprietary information and that of our clients could be compromised, whether intentionally or unintentionally, by our employees, consultants or vendors. A compromise of the security of our information technology systems leading to theft or misuse of our own or our clients’ proprietary or confidential information, or the public disclosure or use of such information by others, could result in losses, third-party claims against us and reputational harm,

25



including the loss of clients. The theft or compromise of our or our clients’ information could negatively impact our reputation, financial results and prospects. In addition, if our reputation is damaged due to a data security breach, our ability to attract new engagements and clients may be impaired or we may be subjected to damages or penalties, which could negatively impact our businesses, financial results or financial condition.
Governmental focus on data privacy and security could increase our costs of operations.
In reaction to publicized incidents in which electronically stored personal and other information has been lost, accessed or stolen, or transmitted by or to third parties without permission, U.S. and non-U.S. governmental authorities have proposed or adopted or are considering proposing or adopting data security and/or data privacy statutes or regulations. Continued governmental focus on data security and privacy may lead to additional legislative and regulatory action, which could increase the complexity of doing business in the U.S. or the applicable jurisdiction. The increased emphasis on information security and the requirements to comply with applicable U.S. and foreign data security and privacy laws and regulations may increase our costs of doing business and negatively impact our financial results.
Risks Related to Competition
If we fail to compete effectively, we may miss new business opportunities or lose existing clients, and our revenues and profitability may decline.
The market for some of our consulting services is highly competitive. We do not compete against the same companies across all of our segments, practices, services, industries or geographic regions. Instead, we compete with different companies or businesses of companies depending on the particular nature of a proposed engagement and the types of requested service(s) and the location of the client or delivery of the service(s). Our operations are highly competitive.
Our competitors include large organizations, such as the global accounting firms and the large management and financial consulting companies that offer a broad range of consulting services; investment banking firms; IT consulting and software companies, which offer niche services that are the same or similar to services or products offered by one or more of our segments; and small firms and independent contractors that focus on specialized services. Some of our competitors have
24


significantly more financial resources, a larger national or international presence, larger professional staffs and greater brand recognition than we do. Some have lower overhead and other costs and can compete through lower cost-service offerings.
Since our business depends in large part on professional relationships, our business has low barriers to entry for professionals electing to start their own firms or work independently. In addition, it is relatively easy for professionals to change employers.
If we cannot compete effectively or if the costs of competing, including the costs of hiring and retaining professionals, become too expensive, our revenue growth and financial results could be negatively affected and may differ materially from our expectations.
We may face competition from parties who sell us their businesses and from professionals who cease working for us.
In connection with our acquisitions, we generally obtain non-solicitation agreements from the professionals we hire, as well as non-competition agreements from senior managers and professionals. The agreements prohibit such individuals from competing with us during the term of their employment and for a fixed period afterwardsafterward and from seeking to solicit our employees or clients. In some cases, but not all, we may obtain non-competition or non-solicitation agreements from parties who sell us their businesses or assets. The duration of post-employment non-competition and non-solicitation agreements typically ranges from six to 12 months. Non-competition agreements with the sellers of businesses or assets that we acquire typically continue longer than 12 months. Certain activities may be carved out of, or otherwise may not be prohibited by, these arrangements. We cannot assure that one or more of the parties from whom we acquire a business or assets, or who do not join us or leave our employment, will not compete with us or solicit our employees or clients in the future. States and foreign jurisdictions may interpret restrictions on competition narrowly and in favor of employees or sellers. Therefore, certain restrictions on competition or solicitation may be unenforceable. In addition, we may not pursue legal remedies if we determine that preserving cooperation and a professional relationship with a former employee or his or her clients, or other concerns, outweighs the benefits of any possible legal recourse or the likelihood of success does not justify the costs of pursuing a legal remedy. Such persons, because they have worked for our Company or a business that we acquire, may be able to compete more effectively with us, or be more successful in soliciting our employees and clients, than unaffiliated third parties.

26



Risks Related to Acquisitions
We will consider future strategic or opportunistic acquisitions. In those cases, some or all of the following risks could be applicable.
We may have difficulty integrating acquisitions or convincing clients to allow assignment of their engagements to us, which can increase costs of, and reduce the benefits we receive from, acquisitions.
The process of managing and integrating acquisitions into our existing operations may result in unforeseen operating difficulties and may require significant financial, operational and managerial resources that would otherwise be available for the operation, development and organic expansion of our existing operations. To the extent that we misjudge our ability to properly manage and integrate acquisitions, we may have difficulty achieving our operating, strategic and financial objectives.
Acquisitions also may involve a number of special financial, business and operational risks, such as:
(i) difficulties in integrating diverse corporate cultures and management styles;
(ii) disparate policies and practices;
(iii) client relationship issues;
(iv) decreased utilization during the integration process;
(v) loss of key existing or acquired personnel;
(vi) increased costs to improve or coordinate managerial, operational, financial and administrative systems;
(vii) dilutive issuances of equity securities, including convertible debt securities, to finance acquisitions;
(viii) the assumption of legal liabilities;
(ix) future earn-out payments or other price adjustments;
(x) potential future write-offs relating to the impairment of goodwill or other acquired intangible assets or the revaluation of assets;
(xi) difficulty or inability to collect receivables; and
(xii) undisclosed liabilities.
In addition to the integration challenges mentioned above, our acquisitions of non-U.S. companies offer distinct integration challenges relating to foreign laws and governmental regulations, including tax and employee benefit laws, and other factors relating to operating in countries other than the U.S., which we have addressed above in the discussion regarding the difficulties we may face operating globally.
Asset transactions may require us to seek client consents to the assignment of their engagements to us or a subsidiary. All clients may not consent to assignments. In certain cases, such as government contracts and bankruptcy engagements, the consent of clients cannot be solicited until after the acquisition has closed. Further, such engagements may be subject to security clearance requirements or bidding provisions with which we might not be able to comply. There is no assurance that clients of the acquired entity or local, state, federal or foreign governments will agree to novate or assign their contracts to us.
The Company may also hire groups of selected professionals from another company. In such event, there may be restrictions on the ability of the professionals who join the Company to compete and work on client engagements. In addition, the Company may enter into arrangements with the former employers of those professionals regarding limitations on their work
25


until any time restrictions pass. In such circumstances, there is no assurance that the Company will enter into mutually agreeable arrangements with any former employer, and the utilization of such professionals may be limited, and our financial results could be negatively affected until their restrictions end. The Company could also face litigation risks from group hires.
We may be unable to take advantage of opportunistic acquisition situations, which may adversely affect our ability to expand or diversify our business.
At the time an acquisition opportunity presents itself, internal and external pressures (including, but not limited to, competition for such acquisition, the cost of such acquisition, borrowing capacity under our senior secured bank revolving

27



credit facility (as amended and restated on November 30, 2018, the “Credit Facility”) or the availability and cost of alternative financing) may cause us to be unable to pursue or complete an acquisition.
An acquisition may not be accretive in the near term or at all.
Competitive market conditions may require us to pay a price that represents a higher multiple of revenues or profits for an acquisition. As a result of these competitive dynamics, cost of the acquisition or other factors, certain acquisitions may not be accretive to our overall financial results at the time of the acquisition or at all.
We may have a different systemsystems of governance and management from a company we acquire or its parent, which could cause professionals who join us from an acquired company to leave us.
Our governance and management policies and practices will not mirror the policies and practices of an acquired company or its parent. In some cases, different management practices and policies may lead to workplace dissatisfaction on the part of professionals who join our Company. Some professionals may choose not to join our Company or leave after joining us. Existing professionals may leave us as well. The loss of key professionals may harm our business and financial results and cause us not to realize the anticipated benefits of the acquisition.
Due to fluctuations in our stock price, acquisition candidates may be reluctant to accept shares of our common stock as purchase price consideration, use of our shares as purchase price consideration may be dilutive or the owners of certain companies we seek to acquire may insist on stock price guarantees.
We may structure an acquisition to pay a portion of the purchase price in shares of our common stock. The number of shares issued as consideration is typically based on an average closing price per share of our common stock for a number of days prior to the closing of such acquisition. We believe that payment in the form of shares of common stock of FTI Consulting provides the acquired entity and its principals with a vested interest in the future success of the acquisition and the Company. Stock market volatility, generally, or FTI Consulting’s stock price volatility, specifically, may result in acquisition candidates being reluctant to accept our shares as consideration. In such cases, we may have to issue more shares if stock constitutes part of the consideration, offer stock price guarantees, pay the entire purchase price in cash or negotiate an alternative price structure. The result may be an increase in the cost of an acquisition.
Certain past acquisition-related agreements have contained stock price guarantees that resulted in cash payments in the future if the price per share of FTI Consulting common stock fell below a specified per share market value on the date restrictions lapse. There is no assurance that an acquisition candidate will not negotiate stock price guarantees with respect to a future acquisition, which may increase the cost of such acquisition.
Risks Related to Our Indebtedness
Our leverage could adversely affect our financial condition or operating flexibility if the Company fails to comply with operating covenants under applicable debt instruments.
Our senior secured bank revolving credit facility ("Credit Facility,Facility"), or our other indebtedness outstanding from time to time, contains or may contain operating covenants that may, subject to exceptions, limit our ability and the ability of our subsidiaries to, among other things:
(i) create, incur or assume certain liens;
(ii) make certain restricted payments, investments and loans;
(iii) create, incur or assume additional indebtedness or guarantees;
(iv) create restrictions on the payment of dividends or other distributions to us from our restricted subsidiaries;
(v) engage in M&A transactions, consolidations, sale-leasebacks, joint ventures, and asset and security sales and dispositions;
(vi) pay dividends or redeem or repurchase our capital stock;
(vii) alter the business that we and our subsidiaries conduct;
(viii) engage in certain transactions with affiliates;
(ix) modify the terms of certain indebtedness;
(x) prepay, redeem or purchase certain indebtedness; and

28



(xi) make material changes to accounting and reporting practices.
In addition, the Credit Facility includes a financial covenant that requires us not to exceed a maximum consolidated total net leverage ratio (the ratio of funded debt (less unrestricted cash up to $150.0 million) to Consolidated EBITDA, as defined in the Credit Facility).
Operating results below a certain level or other adverse factors, including a significant increase in interest rates, could result in us being unable to comply with certain covenants. If we violate any applicable covenants and are unable to obtain waivers, our agreements governing our indebtedness or other applicable agreement could be declared in default and could be accelerated, which could permit, in the case of secured debt, the lenders to foreclose on our assets securing the debt thereunder. If the indebtedness is accelerated, we may not be able to repay our debt or borrow sufficient funds to refinance it. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us. If our debt is in default for any reason, our cash flows, financial results or financial condition could be materially and adversely affected. In addition, complying with these covenants may cause us to take actions that are not favorable to holders of our indebtedness outstanding from time to timeindebtedness and may make it more difficult for us to successfully execute our business strategy and compete against companies that are not subject to such restrictions.
Despite our current level of indebtedness, we and our subsidiaries may still incur significant additional indebtedness, which could further exacerbate the risks associated with our substantial indebtedness.
Our current level of indebtedness could have important consequences on our future operations. We and our subsidiaries may be able toincur significant additional indebtedness.
We and our subsidiaries may incur substantial additional indebtedness, including additional secured indebtedness, in the future. The terms of the indenture, dated as of August 20, 2018, as amended by the first supplemental indenture, dated as of January 1, 2022 (the "First Supplemental Indenture"), between us and U.S. Bank National Association, as trustee (the(as so amended, the "Indenture"), governing the 2.0% Convertible Senior Notesconvertible senior notes due 2023 (the “2023"2023 Convertible Notes”Notes"), do not restrict us from incurring additional debt, securing existing or future debt, recapitalizing our debt or taking a number of other actions that are not limited by the terms of the Indenture. The terms of the agreements governing our Credit Facility and other indebtedness limit, but do not prohibit, us from incurring additional indebtedness.
Our ability to incur additional indebtedness may have the effect of reducing the funds available to pay amounts due with respect to our indebtedness. If we incur new indebtedness or other liabilities, the related risks that we and our subsidiaries may face could intensify.
We may not be able to generate sufficient cash to service our indebtedness, and we may be forced to take other actions to satisfy our payment obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments on or to refinance our indebtedness depends on our future performance, including the performance of our subsidiaries, which will be affected by financial, business and economic conditions,
26


competition and other factors. We will not be able to control many of these factors, such as the general economy, economic conditions in the industries in which we operate and competitive pressures. Our cash flowflows may not be sufficient to allow us to pay principal and interest on our indebtedness and to meet our other obligations. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures or to sell assets, seek additional capital, or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In addition, the terms of existing or future debt agreements, including our Credit Facility, may restrict us from pursuing any of these alternatives.
In the event that we need to refinance all or a portion of our outstanding indebtedness before maturity or as it matures, we may not be able to obtain terms as favorable as the terms of our existing indebtedness or refinance our existing indebtedness at all. If interest rates or other factors existing at the time of refinancing result in higher interest rates upon refinancing, we will incur higher interest expense. Furthermore, if any rating agency changes our credit rating or outlook, our debt and equity securities could be negatively affected, which could adversely affect our financial condition and financial results.
Our Credit Facility is guaranteed by substantially all of our domestic subsidiaries and will be required to be guaranteed by future domestic subsidiaries, including those that join us in connection with acquisitions.
Substantially all of our U.S. subsidiaries guarantee our obligations under our Credit Facility, and substantially all of their assets are pledged as collateral for the Credit Facility. Future U.S. subsidiaries will be required to provide similar guarantees under the Credit Facility. If we default on any guaranteed indebtedness, our U.S. subsidiaries could be required to make payments under their guarantees, and our senior secured creditors could foreclose on our U.S. subsidiaries’ assets to satisfy unpaid obligations, which would materially adversely affect our business and financial results.

29



We may not have the ability to raise the funds necessary to settle conversions of the 2023 Convertible Notes, or to repurchase the 2023 Convertible Notes upon a fundamental change or repay the 2023 Convertible Notes at the August 15, 2023 maturity date, and the agreements governing our other indebtedness contain, and our future debt agreements may contain, limitations on our ability to pay cash upon conversion or repurchase of the 2023 Convertible Notes.
HoldersThe maturity of our 2023 Convertible Notes is August 15, 2023. Prior to maturity, holders of the 2023 Convertible Notes will have the right to require us to repurchase their 2023 Convertible Notes upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2023 Convertible Notes to be repurchased, plus any accrued and unpaid interest. In addition, upon conversionpursuant to the First Supplemental Indenture, we irrevocably elected to (i) surrender our right to settle conversions of the 2023 Convertible Notes unless we elect to deliveron or after January 1, 2022 solely shares ofusing our common stock toand (ii) settle suchat least the $1,000 aggregate principal amount of each 2023 Convertible Note submitted for conversion (other than payingon or after January 1, 2022 in cash in lieuconnection with a settlement for which we elect a cash and common stock combination settlement. The practical effect of delivering any fractional share), we will be required to make cash payments in respectthese elections is that the $316,245,000 aggregate principal amount of the 2023 Convertible Notes being convertedoutstanding as of December 31, 2021 will be settled in accordance with the termscash and any premium due upon conversion may be settled (1) solely in cash, (2) solely in common stock or (3) in a combination of the Indenture governing the 2023 Convertible Notes.cash and common stock. However, we may not have enough available cash or be able to obtain financing at thematurity or such time we are required to make repurchasessettle conversions of the 2023 Convertible Notes.Notes or otherwise repurchase the 2023 Convertible Notes prior to maturity. Our Credit Facility prohibits us from making any cash payments on the maturity, conversion or repurchase of the 2023 Convertible Notes if a default or an event of default under that facility exists or would result from such conversion or repurchase, or if, after giving effect to such conversion or repurchase (and any additional indebtedness incurred in connection with such conversion or a repurchase), we would not be in pro forma compliance with certain financial teststhe leverage ratio and other applicable covenants under that the Credit Facility.
Any newfuture bank credit facility or other indebtedness that we may enter into may have similar restrictions. In addition,obtain could also contain debt limitations or covenants that could adversely affect our ability to repurchasemake cash payments on the 2023 Convertible Notes or to pay cash upon conversions of the 2023 Convertible Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our failure to repurchase the 2023 Convertible Notes at a time when the repurchase is required by the Indenture or to pay any cash payable on future conversions of the Notes as required by the Indenture would constitute a default under the Indenture. A default under the Indenture or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2023 Convertible Notes or make cash payments upon conversions thereof.Notes.
The conditional conversion feature of the 2023 Convertible Notes, if triggered, may adversely affect our financial condition and operating results.
In the event the conditional conversion feature of the 2023 Convertible Notes is triggered, holders of the 2023 Convertible Notes will be entitled to convert the 2023 Convertible Notes at their option at any time during specific periods listed in the Indenture governing the 2023 Convertible Notes. If one or more holders elect to convert their 2023 Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their 2023 Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2023 Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
The accounting method for convertible debt securities that may be settled in cash, such as the 2023 Convertible Notes, could have a material effect on our reported financial results.
Under Accounting Standards Codification 470-20, Debt with Conversion and Other Options (“ASC 470-20”), an entity must separately account for the liability and equity components of convertible debt instruments (such as the 2023 Convertible Notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC 470-20 on the accounting for the 2023 Convertible Notes is that the equity component is required to be included in the additional paid-in capital section of stockholders’ equity on our consolidated balance sheet, and the value of the equity component would be treated as original issue discount for purposes of accounting for the debt component of the 2023 Convertible Notes. As a result, we will be required to record a greater amount of non-cash interest expense in current periods presented as a result of the amortization of the discounted carrying value of the 2023 Convertible Notes to their face amount over the term of the 2023 Convertible Notes. We will report lower net income in our financial results because ASC 470-20 will require interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest, which could adversely affect our reported or future financial results, the trading price of our common stock and the trading price of the 2023 Convertible Notes.
In addition, under certain circumstances, convertible debt instruments (such as the 2023 Convertible Notes) that may be settled entirely or partly in cash are currently accounted for utilizing the treasury stock method, the effect of which is that the shares issuable upon conversion of the 2023 Convertible Notes are not included in the calculation of diluted earnings per share, except to the extent that the conversion value of the 2023 Convertible Notes exceeds their principal amount. Under the treasury

30



stock method, for diluted earnings per share purposes, the transaction is accounted for as if the number of shares of common stock that would be necessary to settle such excess, if we elected to settle such excess in shares, is issued. We cannot be sure that the accounting standards in the future will continue to permit the use of the treasury stock method. If we are unable to use the treasury stock method in accounting for the shares issuable upon conversion of the 2023 Convertible Notes, then our diluted earnings per share would be adversely affected.
Our variable rate indebtedness will subject us to interest rate risk, which could cause our annual debt service obligations to increase significantly.
27


Borrowings under our Credit Facility will be at variable rates of interest, which expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our cash flowflows could be adversely affected. An increase in debt service obligations under our variable rate indebtedness could affect our ability to make payments required under the terms of the agreements governing our indebtedness or our other indebtedness outstanding from time to time.
In July 2017, the Financial Conduct Authority ("FCA") of the United Kingdom, which regulates the London Interbank Offering Rate (“LIBOR”), announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. On December 4, 2020, however, the ICE Benchmark Administration Limited (“IBA”), which is the administrator that publishes LIBOR, published its consultation of the market on its intention to cease the publication of all settings of non-U.S. dollar ("USD") LIBOR and only the one-week and two-month USD LIBOR settings on December 31, 2021, with the publication of the remaining USD LIBOR settings being discontinued after June 30, 2023, subject to any rights of the FCA to compel the IBA to continue publication. On March 5, 2021, the IBA and the FCA made public statements regarding the permanent cessation and non-representativeness of LIBOR and publicly stated that the IBA will permanently cease publication of all settings of non-USD LIBOR and the one-week and two-month setting of USD LIBOR on December 31, 2021, with the publication of the remaining USD LIBOR setting ceasing on June 30, 2023. While the FCA, pursuant to its powers under Article 23D(2) of the Benchmark Regulations, is compelling the IBA to publish one-, three- and six-month British pound ("GBP") LIBOR on a synthetic basis until December 31, 2022, the FCA stated that such publication is under a "synthetic" methodology that is no longer representative. Our Credit Facility, which was undrawn at December 31, 2021 and is indexed to LIBOR for borrowings in USD, euro ("EUR") and GBP, provides for USD, EUR and GBP LIBOR, and multiple tenor options and GBP LIBOR or USD LIBOR may be used in the future. Although our Credit Facility provides for the ability to replace USD, EUR and GBP LIBOR with alternative reference rates agreed to by FTI Consulting and Bank of America, N.A., as administrative agent thereunder, subject to the negative consent of the Required Lenders (as defined therein), such alternative reference rates, the timing of selection thereof, any credit spread adjustment thereto and the consequences of the phase out of LIBOR cannot be entirely predicted at this time. An alternative reference rate could be higher or more volatile than LIBOR prior to its discontinuance, which could result in an increase in the cost of our indebtedness, impact our ability to refinance some or all of our existing indebtedness or otherwise have a material adverse impact on our business, financial condition and results of operations. Furthermore, there can be no assurance given as to whether all other USD LIBOR settings will actually be available until June 30, 2023 or whether USD LIBOR will be replaced by an alternative market benchmark in place of USD LIBOR prior to June 30, 2023.
28


ITEM 1B.    UNRESOLVED STAFF COMMENTS
None.
ITEM 2.    PROPERTIES
Our executive offices located in Washington, D.C., consist of 93,507100,511 square feet under a lease expiring April 2028. Our principal corporate facilitiesoffice located in Bowie, Maryland, consistconsists of 30,835 square feet under a lease expiring April 2028. We also lease offices to support our operations in 4536 other cities across the U.S., including New York, Chicago, Denver, Houston, Dallas, Los Angeles and San Francisco, and we lease office space to support our international locations in 2728 countries — the United Kingdom,U.K., Ireland, Finland, France, Germany, Spain, Belgium, Israel, Denmark, Israel,Italy, Australia, Malaysia, China (including Hong Kong), Japan, Singapore, the United Arab Emirates, South Korea, South Africa, Argentina, Brazil, Colombia, Mexico, Canada, Indonesia, India, Qatar, the Cayman Islands and the British Virgin Islands. We believe our existing leased facilities are adequate to meet our current requirements and that suitable space will be available as needed.
ITEM 3.    LEGAL PROCEEDINGS
From time to time in the ordinary course of business, we are subject to claims, asserted or unasserted, or named as a party to lawsuits or investigations. Litigation, in general, and IP and securities litigation, in particular, can be expensive and disruptive to normal business operations. Moreover, the results of legal proceedings cannot be predicted with any certainty, and in the case of more complex legal proceedings, such as IP and securities litigation, the results are difficult to predict at all. We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we establish reserves and/or disclose the relevant litigation claims or legal proceedings, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from those anticipated at the time. We currently are not aware of any asserted or unasserted legal proceedings or claims that we believe would have a material adverse effect on our financial condition or results of our operations.

ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.

29
31




PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Common Stock
Our common stock currently trades on the NYSENew York Stock Exchange (the “NYSE”) under the symbol FCN. As of January 31, 2019,2022, the number of holders of record of our common stock was 181.219.
Securities Authorized for Issuance under Equity Compensation Plans
The following table includes the number of shares of common stock of the Company authorized or to be issued upon exercise of outstanding options, warrants and rights awarded under our employee equity compensation plans as of December 31, 2018.2021:
 (a) (b) (c) 
Plan CategoryNumber of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) 
 (in thousands, except per share data) 
Equity compensation plans approved by our
security holders
881
(1) 
$36.48
 1,747
(3) 
Equity compensation plans not approved by our
security holders
54
(2) 
36.75
 —
 
Total935
 $36.50
 1,747
 
 (a) (b)(c) 
Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and RightsNumber of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) 
Plan Category(in thousands, except per share data) 
Equity compensation plans approved by our
security holders
407 (1)$36.41 1,209 (3)
Equity compensation plans not approved by our
security holders
53 (2)$36.75 —  
Total460  $36.45 1,209  
(1)
Includes up to (i) 11,826 shares of common stock issuable upon vesting and exercise of outstanding stock options granted under our 2004 Long-Term Incentive Plan (as Amended and Restated Effective as of May 14, 2008); (ii) 70,523 shares of common stock issuable upon vesting and exercise of outstanding stock options granted under our 2006 Global Long-Term Incentive Plan (as Amended and Restated Effective as of May 14, 2008); and (iii) 798,968 shares of common stock issuable upon vesting and exercise of outstanding stock options granted under our 2009 Omnibus Incentive Compensation Plan (as Amended and Restated Effective as of June 3, 2015).
(2)
Includes up to 53,552 shares of common stock issuable upon exercise of fully vested stock options granted as employment inducement on July 30, 2014 to an executive officer hire pursuant to Rule 303.08 of the NYSE.
(3)
Includes 1,746,500 shares of common stock available for issuance under our 2017 Omnibus Incentive Compensation Plan, all of which are available for stock-based awards.
Issuances(1)Includes up to (i) 16,666 shares of common stock issuable upon vesting and exercise of outstanding stock options granted under our 2006 Global Long-Term Incentive Plan (as Amended and Restated Effective as of May 14, 2008) and (ii) 390,260 shares of common stock issuable upon vesting and exercise of outstanding stock options granted under our 2009 Omnibus Incentive Compensation Plan (as Amended and Restated Effective as of June 3, 2015).
(2)Includes up to 53,552 shares of common stock issuable upon exercise of fully vested stock options granted as employment inducement on July 30, 2014 to an executive officer hire pursuant to Rule 303.08 of the NYSE.
(3)Includes 1,209,140 shares of common stock available for issuance under our 2017 Omnibus Incentive Compensation Plan, all of which are available for stock-based awards.
Sales of Unregistered Securities
Not Applicable.

None.
32
30





Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table provides information with respect to purchases we made of our common stock during the fourth quarter of 2018.2021:
 
Total
Number of
Shares
Purchased
 
Average
Price
Paid per
Share
 
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Program (1)
 
Approximate
Dollar Value
That May yet Be
Purchased
under the
Program
 (in thousands, except per share data)
October 1 through October 31, 2018—
 $—
 —
 $99,099
November 1 through November 30, 201893
(2) 
$67.35
 90
(4) 
$93,047
December 1 through December 31, 2018332
(3) 
$62.22
 329
(5) 
$72,582
Total425
   419
  
 Total
Number of
Shares
Purchased		 Average
Price
Paid per
Share
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Program (1)
 Approximate
Dollar Value
That May Yet Be
Purchased
Under the
Program
 (in thousands, except per share data)
October 1 through October 31, 20217 (2)$140.25 — 

$167,058 
November 1 through November 30, 2021— 

$— — $167,058 
December 1 through December 31, 20215 (3)$142.55 — $167,058 
Total12   —   
(1)
On June 2, 2016, our Board of Directors authorized a stock repurchase program of up to $100.0 million (the “Repurchase Program”). On each of May 18, 2017 and December 1, 2017, our Board of Directors authorized an additional $100.0 million, increasing the Repurchase Program to an aggregate authorization of $300.0 million. During the year ended December 31, 2018, we repurchased an aggregate of 755,803 shares of our outstanding common stock under the Repurchase Program at an average repurchase price of $53.88 per share for a total cost of approximately $40.7 million.
(2)
Includes 3,322 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.
(3)
Includes 3,216 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.
(4)
During the month ended November 30, 2018, we repurchased and retired 89,824 shares of common stock, at an average per share price of $67.35, for an aggregate cost of $6.0 million.
(5)
During the month ended December 31, 2018, we repurchased and retired 328,904 shares of common stock, at an average per share price of $62.20, for an aggregate cost of $20.5 million.

(1)On June 2, 2016, our Board of Directors authorized a stock repurchase program of up to $100.0 million (the “Repurchase Program”). On each of May 18, 2017, December 1, 2017, February 21, 2019 and February 20, 2020, our Board of Directors authorized an additional $100.0 million, respectively. On each of July 28, 2020 and December 3, 2020, our Board of Directors authorized an additional $200.0 million, respectively, increasing the Repurchase Program to an aggregate authorization of $900.0 million. No time limit has been established for the completion of the Repurchase Program, and the Repurchase Program may be suspended, discontinued or replaced by the Board of Directors at any time without prior notice. During the year ended December 31, 2021, we repurchased an aggregate of 421,725 shares of our outstanding common stock under the Repurchase Program at an average price of $109.37 per share for a total cost of approximately $46.1 million.
33(2)Includes 7,082 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.

(3)Includes 5,131 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.


ITEM 6.    SELECTED FINANCIAL DATA
We derived the selected financial data presented below for the periods or dates indicated from our consolidated financial statements. The data below should be read in conjunction with our consolidated financial statements, related notes and other financial information appearing in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 8 of this Annual Report.
A number of factors have caused our results of operations and financial position to vary significantly from one year to the next and can make it difficult to evaluate period-to-period comparisons because of a lack of comparability. The most significant of these factors include: acquisitions, goodwill impairment charges, special charges and stock repurchases.
Income Statement, Balance Sheet and Stockholders' Equity Data[RESERVED]
31

 Year Ended December 31,
 2018 2017 2016 2015 2014
 (in thousands, except per share data)
Income Statement Data         
Revenues$2,027,877
 $1,807,732
 $1,810,394
 $1,779,149
 $1,756,212
Operating Expenses   
  
  
  
Direct cost of revenues1,328,074
 1,215,560
 1,210,771
 1,171,444
 1,144,757
Selling, general and administrative expenses465,636
 432,013
 436,716
 431,468
 432,169
Special charges—
 40,885
 10,445
 —
 16,339
Amortization of other intangible assets8,162
 10,563
 10,306
 11,726
 15,521
 1,801,872
 1,699,021
 1,668,238
 1,614,638
 1,608,786
Operating income226,005
 108,711
 142,156
 164,511
 147,426
Interest income and other4,977
 3,752
 10,466
 3,232
 4,670
Interest expense(27,149) (25,358) (24,819) (42,768) (50,685)
Gain on sale of business13,031
 —
 —
 —
 —
Loss on early extinguishment of debt(9,072) —
 —
 (19,589) —
Income before income tax provision (benefit)207,792
 87,105
 127,803
 105,386
 101,411
Income tax provision (benefit)57,181
 (20,857) 42,283
 39,333
 42,604
Net income$150,611
 $107,962
 $85,520
 $66,053
 $58,807
Earnings per common share — basic$4.06
 $2.79
 $2.09
 $1.62
 $1.48
Earnings per common share — diluted$3.93
 $2.75
 $2.05
 $1.58
 $1.44
Weighted average number of common shares
   outstanding
 
  
  
  
  
Basic37,098
 38,697
 40,943
 40,846
 39,726
Diluted38,318
 39,192
 41,709
 41,729
 40,729
 December 31,
 2018 2017 2016 2015 2014
 (in thousands)
Balance Sheet Data         
Cash and cash equivalents$312,069
 $189,961
 $216,158
 $149,760
 $283,680
Working capital (1)
$482,783
 $383,851
 $404,716
 $394,548
 $489,749
Total assets$2,379,121
 $2,257,241
 $2,225,368
 $2,229,018
 $2,391,599
Long-term debt, net$265,571
 $396,284
 $365,528
 $494,772
 $699,404
Stockholders’ equity$1,348,825
 $1,191,971
 $1,207,358
 $1,147,603
 $1,102,746
(1)
Working capital is defined as current assets less current liabilities.

34




 Year Ended December 31,
 2018 2017 2016 2015 2014
 (in thousands)
Stockholders' Equity Data 
Shares of common stock repurchased and retired952
 4,674
 537
 765
 —
Total cost$55,722
 $168,001
 $21,479
 $26,516
 $—


35



ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion and analysis of our consolidated financial condition, results of operations, and liquidity and capital resources for each of the threetwo years in the period ended December 31, 20182021 and significant factors that could affect our prospective financial condition and results of operations. This discussion should be read in conjunction with our consolidated financial statements and notes included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report. For a similar discussion and analysis of our results for the year ended December 31, 2020 compared with our results for the year ended December 31, 2019, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report for the year ended December 31, 2020, filed with the United States ("U.S.") Securities and Exchange Commission (“SEC”) on Form 10-K (the “Annual Report”).February 25, 2021. Historical results and any discussion of prospective results may not indicate our future performance.
Business Overview
FTI Consulting is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political and& regulatory, reputational and transactional. Individually, each of our segments and practices is staffed with experts recognized for the depth of their knowledge and a track record of making an impact. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle, from proactive risk management to rapid response to unexpected events and dynamic environments.  
We report financial results for the following five reportable segments:
Our Corporate Finance & Restructuring (“Corporate Finance”)segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the worldworld. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, and deliversother financing sources and creditor groups, as well as other parties-in-interest. We deliver a wide range of service offerings related to restructuring,services centered around three core offerings: business transformation, transactions and transaction support. turnaround & restructuring.

Our restructuring practice includes corporate restructuring, including bankruptcy and interim management services. Our business transformation and transactions support practices include financings, mergers and acquisitions ("M&A"), M&A integration, valuations and tax advice, as well as financial, operational and performance improvement services.
Our Forensic and Litigation Consulting (“FLC”) segment provides law firms, companies, government clientsentities, private equity firms and other interested parties with a multidisciplinary and independent dispute advisory,range of services in risk and investigations and disputes, including a focus on highly regulated industries such as our construction & environmental solutions and health solutions services. These services are supported by our data & analytics forensic accounting,solutions, which help our clients analyze large, disparate sets of data related to their business intelligenceoperations and support our clients during regulatory inquiries and commercial disputes. We deliver a wide range of services centered around five core offerings: construction & environmental solutions, data & analytics, disputes, health solutions and risk mitigation services, as well as interim management and performance improvement services for our health solutions practice clients.investigations.
Our Economic Consulting segment, including subsidiary Compass Lexecon LLC, provides law firms, companies, government entities and other interested parties with analysisanalyses of complex economic issues for use in legal, regulatory and international arbitration, legal and regulatory proceedings, and strategic decision making and public policy debates in the United States ("U.S.") and around the world. We deliver a wide range of services centered around three core offerings: antitrust & competition economics, financial economics and international arbitration.
Our Technology segment offers a comprehensive portfolio of information governance and electronic discovery ("e-discovery") software, services and consulting support toprovides companies, law firms, courtsprivate equity firms and government agencies worldwide. entities with a comprehensive global portfolio of consulting and services to address legal and regulatory risk, including e-discovery, information governance, privacy and security and corporate legal operations solutions. We deliver a full spectrum of services centered around three core offerings: corporate legal operations, e-discovery services and expertise, and information governance, privacy & security services.
Our services allow our clients to control the risk and expense of e-discovery events more confidently, as well as manage their data in the context of compliance and risk.
Our Strategic Communications segment designsdevelops and executes communications strategies forto help management teams, and boards of directors, to help them seize opportunities,law firms, governments and regulators manage change and mitigate risk surrounding transformational and disruptive events, including transactions, investigations, disputes, crises, regulation and legislation. We deliver a wide range of services centered around three core offerings: corporate reputation, financial regulatorycommunications and reputational challenges, navigate market disruptions, articulate their brand, stake a competitive position, and preserve and grow their operations.public affairs.
We derive substantially all of our revenues from providing professional services to both U.S. and global clients. Most of our services are rendered under time-and-expensetime and expense contract arrangements, that obligatewhich require the client to pay us a fee forbased on the number of hours that we incurworked at contractually agreed-upon rates. Under this arrangement, we typically bill our clients for reimbursable expenses, which may include the cost of producing our work productincluding those relating to travel, out-of-pocket expenses, outside consultants and other direct expenses that we incur on behalf ofoutside service costs. Certain contracts are rendered under fixed-fee arrangements, which require the client such as travel costs. We also render servicesto pay a fixed fee in exchange for whicha predetermined set of professional services. Fixed-fee arrangements may require certain clients may be required to pay us a fixed fee or recurring retainer. TheseOur contract arrangements are generally cancelable at any time. Some of our engagementsmay also contain success fees or performance-based arrangements in which we earn a success fee when and if certain predefined outcomes occur.our fees are based on the attainment
32


of contractually defined objectives with our client. This type of success fee may supplement a time-and-expensetime and expense or fixed feefixed-fee arrangement. Success fee revenues may cause variations in our revenues and operating results due to the timing of when achieving the performance-based criteria.criteria becomes probable. Seasonal factors, such as the timing of our employees’ and clients’ vacations and holidays, may impact the timing of our revenues across our segments.
In our Technology segment, certain clients are billed based on the amount of data stored on our electronic systems,storage used or the volume of information processed or the number of users licensing our Ringtail® software prior to its sale in September 2018, and our other software products. We licensed, and in some cases continue to license, certain products directly to end users, as well as indirectly through our channel partner relationships.processed. Unit-based revenues are defined as revenues billed on a per item, per page or some other unit-based method and include revenues from data processing and hosting, software usage and software

36



licensing.hosting. Unit-based revenues include revenues associated with the software products that are made available to customers either via a web browser (“on-demand”) or installed at our customer or partner locations (“on-premise”). On-demand revenues are charged on a unit or monthly basis and include, but are not limited to, processing and review relatedreview-related functions. On-premise revenues are composed of upfront license fees, with recurring support and maintenance.
Our financial results are primarily driven by:
•the number, size and type of engagements we secure;
•the rate per hour or fixed charges we charge our clients for services;
•the utilization rates of the revenue-generating professionals we employ;
•the timing of revenue recognition related to revenues subject to certain performance-based contingencies;
•the number of revenue-generating professionals;
licensing of our software products and other technology services;
•the types of assignments we are working on at different times;
•the length of the billing and collection cycles; and
•the geographic locations of our clients or locations in which services are rendered.
We define acquisition growth as revenues of acquired companies in the first 12 months following the effective date of an acquisition. Our definition of organic growth is the change in revenues, excluding the impact of all such acquisitions.
When significant, we identify the estimated impact of foreign currency translation (“FX”) driven by our businesses with functional currencies other than the U.S. dollar (“USD”),. The estimated impact of FX on the period-to-period performance results. The estimated impact of FXresults is calculated as the difference between the prior period results, multiplied by the average foreign currencyFX exchange rates to USD in the current period and the prior period results, multiplied by the average foreign currencyFX exchange rates to USD in the prior period.
Non-GAAP Financial Measures
In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with generally accepted accounting principles in the United StatesU.S. ("GAAP"). Certain of these financial measures are considered “notnot in conformity with GAAP ("non-GAAP financial measures”) under the U.S. Securities and Exchange Commission (“SEC”)SEC rules. Specifically, we have referred to the following non-GAAP financial measures:
•Total Segment Operating Income
•Adjusted EBITDA
•Total Adjusted Segment EBITDA
•Adjusted EBITDA Margin
•Adjusted Net Income
•Adjusted Earnings per Diluted Share
•Free Cash Flow
We have included the definitions of Segment Operating Income (Loss) and Adjusted Segment EBITDA, which are GAAP financial measures, below in order to more fully define the components of certain non-GAAP financial measures in the accompanying analysis of financial information. As described in Note 18,20, “Segment Reporting” in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report, we evaluate the performance of our operating segments based on Adjusted Segment EBITDA, and Segment Operating Income (Loss) is a component of the definition of Adjusted Segment EBITDA.
33


We define Segment Operating Income (Loss), a GAAP financial measure, as a segment’s share of consolidated operating income. We define Total Segment Operating Income, which is a non-GAAP financial measure, as the total of Segment

37



Operating Income (Loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted Segment EBITDA a GAAP financial measure 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 as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment’s ability to generate cash. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of total revenues.
We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, gain or loss on sale of a business and losses on early extinguishment of debt. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. 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 non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies. We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.
We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income and earnings per diluted share ("EPS"), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes and the gain or loss on sale of a business and the impact of adopting the 2017 U.S. Tax Cuts and Jobs Act (the “2017 Tax Act”).business. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with an additional understanding of our business operating results, including underlying trends.
We define Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company’s ability to generate cash for ongoing business operations and other capital deployment.
Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Consolidated Statements of Comprehensive Income.Income and Consolidated Statements of Cash Flows. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included elsewhere in this report.

34


38




Full Year 20182021 Executive Highlights
Financial Highlights
 Year Ended December 31,
 20212020% Increase (Decrease)
 (dollar amounts in thousands, except per share amounts)
Revenues (1)
$2,776,222 $2,461,275 12.8 %
Special charges (2)
$— $7,103 -100.0 %
Net income$234,966 $210,682 11.5 %
Adjusted EBITDA$354,010 $332,271 6.5 %
Earnings per common share — diluted$6.65 $5.67 17.3 %
Adjusted earnings per common share — diluted$6.76 $5.99 12.9 %
Net cash provided by operating activities$355,483 $327,069 8.7 %
Total number of employees6,780 6,321 7.3 %
 Year Ended December 31,
 2018 2017 % Growth
 (dollar amounts in thousands, except per share amounts)
Revenues$2,027,877
 $1,807,732
 12.2 %
Special charges$—
 $40,885
 -100.0 %
Net income$150,611
 $107,962
 39.5 %
Adjusted EBITDA$265,703
 $192,038
 38.4 %
Earnings per common share — diluted$3.93
 $2.75
 42.9 %
Adjusted earnings per common share — diluted$4.00
 $2.32
 72.4 %
Net cash provided by operating activities$230,672
 $147,625
 56.3 %
Total number of employees as of December 314,768
 4,609
 3.4 %

(1)This includes acquisition-related revenues. We define acquisition growth as revenues of acquired companies in the first 12 months following the effective date of an acquisition. Our definition of organic growth is the change in revenues, excluding the impact of all such acquisitions.
(2)Excluded from non-GAAP financial measures.
Revenues

Revenues for the year ended December 31, 2021 increased $220.1$314.9 million, or 12.8%, as compared with the year ended December 31, 2020, which included a 2.0% estimated positive impact from FX. Acquisition-related revenues contributed $11.5 million, or 0.5% of the increase, compared with 2020. Excluding the estimated impact from FX and the acquisition-related revenues, revenues increased $253.6 million, or 12.2%10.3%, from 2017 to 2018. The increase in revenues was primarily due to higher globalincreased demand acrossfor all of our segments, particularly in our Corporate FinanceEconomic Consulting, FLC and FLC segments.Technology.
Special chargesCharges
There were no special charges in 2018.recorded during the year ended December 31, 2021. For the year ended December 31, 2017,2020, we recorded special charges of $40.9$7.1 million, related to certain targeted reductionswhich consisted of staff$4.7 million of lease abandonment and other relocation costs associated with the consolidation of office space in areasNew York, New York, and $2.4 million of each segment to realignemployee severance and other employee-related costs in our workforce with current business demand. In addition, cost-cutting actions were taken in certain corporate departments where we were able to streamline support activities and reduce our real estate costs.FLC segment.
Gain on sale of businessNet income
DuringNet income for the year ended December 31, 2018, we sold our Ringtail® e-discovery software and related business (collectively, "Ringtail"). The net proceeds from the sale were $50.3 million, which resulted in a pre-tax gain of $13.0 million.

Loss on early extinguishment of debt
In order to more effectively utilize the Company’s growing cash balances, maintain financial flexibility and reduce cash interest, we issued $316.3 million aggregate principal amount of 2.0% convertible senior notes due 2023 ("2023 Convertible Notes") and used a portion of the proceeds, along with cash on hand, to retire $300 million aggregate principal amount of 6.0% senior notes due 2022 (the “2022 Notes”) during 2018. We recognized a $9.1 million loss on early extinguishment of debt for 2018, consisting primarily of a redemption premium of $6.0 million and a $3.1 million non-cash write-off of unamortized deferred financing costs. The impact of early extinguishment of debt is excluded from the calculation of Adjusted EBITDA.
Net income
Net income2021 increased $42.6$24.3 million, or 39.5%11.5%, from 2017 to 2018. Thisas compared with the year ended December 31, 2020. The increase in net income was primarily due to higher operating profits across all business segmentsan increase in revenues, FX remeasurement gains and a $13.0 million gain related to the saleabsence of Ringtail,the above mentioned special charges, which werewas partially offset by a $9.1 million loss on early extinguishment of debt and $3.0 million of non-cash interest on convertible notes. Net income in 2017 included a $44.9 million net tax benefit to reflecthigher compensation expenses, which includes the impact of adopting the 2017 Tax Act, which was nearly offset by $40.9 milliona 6.6% increase in pre-tax special charges related tobillable headcount and real estate reductions.higher variable compensation, higher selling, general and administrative ("SG&A") expenses and a higher effective tax rate.
Adjusted EBITDA
Adjusted EBITDA for the year ended December 31, 2021 increased $73.7$21.7 million, or 38.4%6.5%, from 2017 to 2018.as compared with the year ended December 31, 2020. Adjusted EBITDA was 13.1%12.8% of revenues for the year ended December 31, 20182021 compared with 10.6%13.5% of revenues for the year ended December 31, 2017.2020. The increase in Adjusted EBITDA was primarily due to higheran increase in revenues, across all business segments, which werewas partially offset by an increase inhigher compensation primarily related to higher variable compensation and anexpenses, which includes the impact of a 6.6% increase in billable headcount and higher selling, general and administrative (“variable compensation, as well as higher SG&A”)&A expenses.

39



EPS and Adjusted EPS
EPS increased $1.18 to $3.93 in 2018 compared with $2.75 in 2017. 2018 EPS included a loss on early extinguishment of debt, which decreased EPS by $0.17 and non-cash interest on convertible notes, which decreased EPS by $0.06. These decreases were partially offset by a gain on the sale of Ringtail, which increased EPS by $0.16. EPS for the year ended December 31, 2017 included2021 increased $0.98 to $6.65 compared with $5.67 for the year ended December 31, 2020. The increase in EPS was primarily due to the higher net tax benefit recorded to reflect the impact of adopting the 2017 Tax Act, which increased EPS by $1.14,income described above and a special charge related to headcount and real estate reductions, which reduced EPS by $0.70.decline in diluted weighted average shares outstanding.
35


Adjusted EPS for the year ended December 31, 2021 increased $1.68$0.77 to $4.00 in 2018$6.76 compared with $2.32$5.99 for the year ended December 31, 2020. Adjusted EPS for the year ended December 31, 2021 excludes $9.6 million of non-cash interest expense related to the 2.0% convertible senior notes due 2023 (the "2023 Convertible Notes"), which increased Adjusted EPS by $0.20, which was partially offset by $3.1 million in 2017, largely duefair value remeasurement related to improved operating results.acquisition-related contingent consideration, which decreased Adjusted EPS by $0.09. Adjusted EPS for the year ended December 31, 2020 excluded the $7.1 million special charge and $9.1 million of non-cash interest expense related to the 2023 Convertible Notes, which increased Adjusted EPS by $0.14 and $0.18, respectively.
Liquidity and Capital Allocation
Cash balancesNet cash provided by operating activities for the year ended December 31, 2021 increased by $122.1$28.4 million or 64.3%, to $312.1$355.5 million compared with $327.1 million for the year endedDecember 31, 2018. Cash2020. The increase in net cash provided by operating activities increased $83.0 million to $230.7 million in 2018 as compared with $147.6 million in 2017. The increase was primarily due to higher cash collections resulting from higherincreased revenues combined with lower income tax payments largely due to the reversal of a significant deferred tax asset in the U.S. The increase was partially offset by higher compensation expense primarily related to headcount growth and an increase in cash paid for salaries and benefits and increased income tax payments.other operating expenses. Days sales outstanding (“DSO”) was 9394 days as of December 31, 2018 and 912021 compared with 95 days as of December 31, 2017.2020.
On June 2, 2016, our Board of Directors authorized a stock repurchase program of up to $100.0 million (the “Repurchase Program”). A portion of net cash provided by operating activities was used to repurchase and retire 0.8approximately 0.4 million shares of our common stock under our Repurchase Program for an average price per share of $53.88,$109.37, at a total cost of $40.7$46.1 million during the year ended December 31, 2018.2021. We had $72.6$167.1 million remaining under the Repurchase Program to repurchase additional shares as of December 31, 2018. Additionally, we used a portion of the proceeds from the issuance of the 2023 Convertible Notes to repurchase 0.2 million shares of our common stock at $76.51 per share for a total cost of $15.0 million. This was a separate repurchase transaction outside of the Repurchase Program.2021.
Free Cash Flow which is a non-GAAP financial measure,was an inflow of $286.9 million and $292.2 million for the years ended December 31, 20182021 and 2017 was $198.4 million and $115.6 million,2020, respectively. The increasedecrease was primarily due to an increase in net cash providedused for purchases of property and equipment.
Other Strategic Activities
During the year ended December 31, 2021, we acquired certain assets of The Rhodes Group, a leading construction consulting firm with offices in Pittsburgh, Pennsylvania and Houston, Texas.
Also during the year ended December 31, 2021, we entered into a definitive agreement to acquire BOLD, a leading restructuring, transactions, digital and transformation advisory firm in the Netherlands. The acquisition closed during the first quarter of 2022.
Coronavirus Disease 2019 ("COVID-19") Pandemic
The COVID-19 pandemic created global volatility, economic uncertainty and general market disruption, and it has impacted each of our segments, practices and regions differently. During the year ended December 31, 2021, the COVID-19 pandemic continued to impact our ability to deliver certain services due to, for example, travel restrictions, court closures, backlogs at courts and government moratoriums on restructuring, which is varied in each region. Although we have not been materially adversely impacted by operating activities,illness in our employee population, the COVID-19 pandemic itself and the potential evolution of more contagious or dangerous variants, coupled with vaccine hesitancy and the delay associated with developing vaccines targeted to new variants, could increase the risk that our employees may experience negative health outcomes, impair employee retention or headcount growth, and adversely affect our ability to service clients or win new engagements, which differs by segment, position and geography and is difficult to quantify. Governmental or client vaccine mandates could also impair our ability to perform services and attract and retain clients. In addition, vaccine hesitancy by some employees could delay or derail in-person back-to-work efforts, reduce the pool of qualified employment candidates that are available to staff engagements or to hire, negatively impact our ability to provide client services or win engagements, and result in more adverse health outcomes for our employee population. Evolving business practices, including those related to remote work, as described above.well as fiscal and monetary policies have mitigated the negative economic impact of the pandemic in certain key geographies, such as in North America. The COVID-19 pandemic and its impact on our business and the health and welfare of our employees continues to be difficult to predict, especially due to uncertainty arising from the potential continuing evolution of COVID-19 variants, the development and efficacy of vaccinations against variants and the roll-out of vaccination programs around the world, including vaccine mandates imposed by governments that could apply to us and our employees and requirements imposed by our clients relating to the vaccination status of our employees who serve such clients.
36


Headcount
Our total headcount increased 3.4%7.3% from 4,6096,321 as of December 31, 20172020 to 4,7686,780 as of December 31, 2018.2021. The following table includes the net billable headcount additions (reductions) for the year ended December 31, 2018.2021:
Billable HeadcountCorporate
Finance
FLC (1)
Economic ConsultingTechnologyStrategic
Communications		Total
December 31, 20201,6551,3438914087705,067
Additions, net47153306044334
December 31, 20211,7021,4969214688145,401
Percentage change in headcount from December 31, 20202.8 %11.4 %3.4 %14.7 %5.7 %6.6 %
Billable Headcount
Corporate
Finance
 FLC Economic Consulting Technology 
Strategic
Communications
 Total
December 31, 2017901
 1,067
 683
 292
 630
 3,573
Additions (reductions), net47
 86
 25
 14
 11
 183
December 31, 2018948
 1,153
 708
 306
 641
 3,756
Percentage change in headcount from
   December 31, 2017
5.2% 8.1% 3.7% 4.8% 1.7% 5.1%

(1)There were 38 revenue-generating professionals added during the year ended December 31, 2021 related to the acquisition of certain assets of a business within the FLC segment.
40



RESULTS OF OPERATIONS
Segment and Consolidated Operating Results:
 Year Ended December 31,
 20212020
 (in thousands, except per share data)
Revenues  
Corporate Finance$938,969 $910,184 
FLC584,835 500,275 
Economic Consulting697,405 599,088 
Technology287,366 223,016 
Strategic Communications267,647 228,712 
Total revenues$2,776,222 $2,461,275 
Segment operating income
Corporate Finance$145,765 $205,029 
FLC66,643 23,899 
Economic Consulting111,462 85,690 
Technology42,927 30,869 
Strategic Communications49,708 31,639 
Total segment operating income416,505 377,126 
Unallocated corporate expenses(104,457)(94,463)
Operating income312,048 282,663 
Other income (expense)
Interest income and other6,193 (412)
Interest expense(20,294)(19,805)
 (14,101)(20,217)
Income before income tax provision297,947 262,446 
Income tax provision62,981 51,764 
Net income$234,966 $210,682 
Earnings per common share — basic$7.02 $5.92 
Earnings per common share — diluted$6.65 $5.67 
37
 Year Ended December 31,
 2018 2017 2016
 (in thousands, except per share data)
Revenues     
Corporate Finance$564,479
 $482,041
 $483,269
FLC520,333
 462,324
 457,734
Economic Consulting533,979
 496,029
 500,487
Technology185,755
 174,850
 177,720
Strategic Communications223,331
 192,488
 191,184
Total revenues$2,027,877
 $1,807,732
 $1,810,394
Segment operating income (loss)     
Corporate Finance$115,124
 $70,234
 $91,481
FLC91,262
 54,520
 49,088
Economic Consulting64,052
 49,154
 68,842
Technology14,912
 4,795
 (2,183)
Strategic Communications37,250
 13,148
 23,110
Total segment operating income322,600
 191,851
 230,338
Unallocated corporate expenses(96,595) (83,140) (88,182)
Operating income226,005
 108,711
 142,156
Other income (expense)     
Interest income and other4,977
 3,752
 10,466
Interest expense(27,149) (25,358) (24,819)
Gain on sale of business13,031
 —
 —
Loss on early extinguishment of debt(9,072) —
 —
 (18,213) (21,606) (14,353)
Income before income tax provision (benefit)207,792
 87,105
 127,803
Income tax provision (benefit)57,181
 (20,857) 42,283
Net income$150,611
 $107,962
 $85,520
Earnings per common share — basic$4.06
 $2.79
 $2.09
Earnings per common share — diluted$3.93
 $2.75
 $2.05


41




Reconciliation of Net Income to Adjusted EBITDA:
 Year Ended December 31,
 2018 2017 2016
 (in thousands)
Net income$150,611
 $107,962
 $85,520
Add back:     
Income tax provision (benefit)57,181
 (20,857) 42,283
Interest income and other(4,977) (3,752) (10,466)
Interest expense27,149
 25,358
 24,819
Gain on sale of business(13,031) —
 —
Loss on early extinguishment of debt9,072
 —
 —
Depreciation and amortization31,536
 31,177
 38,700
Amortization of other intangible assets8,162
 10,563
 10,306
Special charges—
 40,885
 10,445
Remeasurement of acquisition-related contingent
   consideration
—
 702
 1,403
Adjusted EBITDA$265,703
 $192,038
 $203,010

42



 Year Ended December 31,
 20212020
 (in thousands)
Net income$234,966 $210,682 
Add back:
Income tax provision62,981 51,764 
Interest income and other(6,193)412 
Interest expense20,294 19,805 
Depreciation and amortization34,269 32,118 
Amortization of intangible assets10,823 10,387 
Special charges— 7,103 
Remeasurement of acquisition-related contingent consideration(3,130)— 
Adjusted EBITDA$354,010 $332,271 
Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS:
 Year Ended December 31,
 2018 2017 2016
 (in thousands, except per share data)
Net income$150,611
 $107,962
 $85,520
Add back:     
Special charges—
 40,885
 10,445
Tax impact of special charges—
 (13,570) (3,595)
Loss on early extinguishment of debt9,072
 —
 —
Tax impact of loss on early extinguishment of debt(2,359) —
 —
Remeasurement of acquisition-related contingent consideration—
 702
 1,403
Tax impact of remeasurement of acquisition-related contingent
   consideration
—
 (269) (546)
Non-cash interest expense on convertible notes3,019
 —
 —
Tax impact of non-cash interest expense on convertible
notes		(775) —
 —
Gain on sale of business(13,031) —
 —
Tax impact of gain on sale of business6,798
 —
 —
Impact of 2017 Tax Act—
 (44,870) —
Adjusted net income$153,335
 $90,840
 $93,227
Earnings per common share — diluted$3.93
 $2.75
 $2.05
Add back:     
Special charges—
 1.04
 0.25
Tax impact of special charges—
 (0.34) (0.08)
Loss on early extinguishment of debt0.23
 —
 —
Tax impact of loss on early extinguishment of debt(0.06) —
 —
Remeasurement of acquisition-related contingent consideration—
 0.02
 0.03
Tax impact of remeasurement of acquisition-related contingent
   consideration
—
 (0.01) (0.01)
Non-cash interest expense on convertible notes0.08
 —
 —
Tax impact of non-cash interest expense on convertible
notes		(0.02) —
 —
Gain on sale of business(0.34) —
 —
Tax impact of gain on sale of business0.18
 —
 —
Impact of 2017 Tax Act—
 (1.14) —
Adjusted earnings per common share — diluted$4.00
 $2.32
 $2.24
Weighted average number of common shares outstanding — diluted38,318
 39,192
 41,709
 Year Ended December 31,
 20212020
 (in thousands, except per share data)
Net income$234,966 $210,682 
Add back:
Remeasurement of acquisition-related contingent consideration(3,130)— 
Special charges— 7,103 
Tax impact of special charges— (1,847)
Non-cash interest expense on convertible notes9,586 9,083 
Tax impact of non-cash interest expense on convertible notes(2,492)(2,361)
Adjusted Net Income$238,930 $222,660 
Earnings per common share — diluted$6.65 $5.67 
Add back:
Remeasurement of acquisition-related contingent consideration(0.09)— 
Special charges— 0.19 
Tax impact of special charges— (0.05)
Non-cash interest expense on convertible notes0.27 0.24 
Tax impact of non-cash interest expense on convertible notes(0.07)(0.06)
Adjusted earnings per common share — diluted$6.76 $5.99 
Weighted average number of common shares outstanding — diluted35,337 37,149 
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow:
Year Ended December 31,
Year Ended December 31, 20212020
2018 2017 2016
(in thousands) (in thousands)
Net cash provided by operating activities$230,672
 $147,625
 $233,488
Net cash provided by operating activities$355,483 $327,069 
Purchases of property and equipment(32,270) (32,004) (28,935)Purchases of property and equipment(68,569)(34,866)
Free Cash Flow$198,402
 $115,621
 $204,553
Free Cash Flow$286,914 $292,203 
43
38





Year Ended December 31, 20182021 Compared with December 31, 20172020
Revenues and Operating Incomeoperating income
See “Segment Results” for an expanded discussion of Revenuesrevenues, gross profit and Adjusted Segment EBITDA.
Special Charges
There were no special charges during the year ended December 31, 2018. Special charges for the year ended December 31, 2017 were $40.9 million. See Note 5, "Special Charges" in Part II, Item 8 of this Annual Report for expanded disclosure.SG&A expenses.
Unallocated Corporate Expensescorporate expenses
Unallocated corporate expenses increased $13.5$10.0 million, or 16.2%10.6%, to $96.6$104.5 million in 20182021 from $83.1$94.5 million in 2017.2020. Excluding the impact of special charges of $3.7 million recorded in 2017,2020, unallocated corporate expenses increased by $17.1$10.4 million, in 2018, or 21.6%11.0%. The increase was primarily due to an increasehigher compensation due to headcount growth and higher infrastructure support costs to support growth in variable compensation expense, higher costs for corporate and regional business development initiatives and the senior managing director meeting held in December 2018.business.
Interest Incomeincome and Otherother
Interest income and other, which includes FX gains and losses, increased $1.2to a $6.2 million to $5.0 milliongain for the year ended December 31, 2018 from $3.82021, compared with a $0.4 million loss for the year ended December 31, 2017.2020. The increase was primarily due to a $1.5 million increase in interest income resulting from investments of excess cash and a $0.3$6.5 million increase in net unrealized FX gains, partially offset by a $0.6 million loss on sale of investment in 2018. gains.
FX gains and losses, both realized and unrealized, relate to the remeasurement or settlement of monetary assets and liabilities that are denominated in a currency other than an entity’s functional currency. These monetary assets and liabilities include cash, as well as third-party and intercompany receivables and payables.
Interest Expense
Interest expense increased $1.8 million, or 7.1%, to $27.1 million in 2018 from $25.4 million in 2017. The increase in interest expense reflects additional interest expense related to the 2023 Convertible Notes issuance that overlapped the period until the redemption of the 2022 Notes, partially offset by lower interest expense due to lower outstanding borrowings under our senior secured bank revolving credit facility.
Income Tax Provision (Benefit)
Our income tax provision was $57.2 million for 2018 as compared with an income tax benefit of $20.9 million for 2017. Excluding the discrete income tax benefit in 2017 from the adoption of the 2017 Tax Act, our effective tax rate was 27.5% for 2018 and 27.6% for 2017. The 2018 rate was favorably impacted by reductions in the U.S. income tax rate as a result of the 2017 Tax Act, which was partially offset by an unfavorable discrete tax adjustment relating to the sale of Ringtail®. The 2017 effective tax rate was favorably impacted by an unusually high mix of foreign earnings compared with low U.S. earnings due to 2017 special charges.
Year Ended December 31, 2017 Compared with December 31, 2016
Revenues and Operating Income
See “Segment Results” for an expanded discussion of Revenues and Adjusted Segment EBITDA.
Special Charges
Special charges for the year ended December 31, 2017 were $40.9 million. Special charges for the year ended December 31, 2016 were $10.4 million. See Note 5, "Special Charges" in Part II, Item 8 of this Annual Report for an expanded disclosure.     
Unallocated Corporate Expenses
Unallocated corporate expenses decreased $5.0 million, or 5.7%, to $83.1 million in 2017 from $88.2 million in 2016. Excluding the impact of special charges of $3.7 million recorded in 2017, unallocated corporate expenses decreased by $8.1 million in 2017, or 9.3%. The decrease was primarily due to lower infrastructure department spend and lower executive compensation expenses, which were partially offset by higher outside legal expenses.

44



Interest Income and Other
Interest income and other, which includes FX gains and losses, decreased $6.7 million to $3.8 million for the year ended December 31, 2017 from $10.5 million for the year ended December 31, 2016.  The decrease was primarily due to a net unrealized FX loss, which was $0.1 million for the year ended December 31, 2017 compared with a $4.9 million gain for the year ended December 31, 2016.  FX gains and losses, both realized and unrealized, relate to the remeasurement or settlement of monetary assets and liabilities that are denominated in a currency other than an entity’s functional currency.  These monetary assets and liabilities include cash, as well as third-party and intercompany receivables and payables.
Interest Expense
Interest expense increased $0.5 million, or 2.2%2.5%, to $25.4$20.3 million in 20172021 from $24.8$19.8 million in 2016 due to the impact of a 0.7% increase in average interest rates on our borrowings under our senior secured bank revolving credit facility in 2017, partially offset by lower average borrowings outstanding during 2017 as compared with 2016.2020.
Income Tax Provision (Benefit)tax provision
Our income tax benefit was $20.9provision increased $11.2 million, for 2017 asor 21.7%, to $63.0 million in 2021, compared with an income tax provision of $42.3$51.8 million for 2016.in 2020. Our 2017 income tax benefit included a discrete income tax benefit of $44.9 million related to the adoption of the 2017 Tax Act on December 22, 2017. Excluding the impact of the 2017 Tax Act, our effective tax rate was 27.6%21.1% for 20172021 as compared with an19.7% for 2020. The lower effective tax rate in 2020 was primarily due to intellectual property license agreements entered into between subsidiaries, resulting in a $11.2 million tax benefit. In addition, in 2021, a larger percentage of 33.1% for 2016. The 2017income was generated in higher tax jurisdictions than in 2020.
A portion of the increase in the 2021 effective tax rate excludingwas offset by the impact of adopting the 2017 Tax Act, declinedfollowing favorable tax adjustments: a $5.1 million benefit related to the mix of higher foreign and U.S. state earnings in lower taxed jurisdictions as compared with the prior year.
The $44.9 million discrete adjustment for 2017 related to the adoptionrelease of the 2017 Tax Act impact includes the following:
$65.1valuation allowance on our deferred tax assets in Australia because of sustained profitability and a $3.2 million income tax benefit related to the remeasurement of U.S.our deferred tax liabilities fromasset related to an intellectual property license between our U.S. and United Kingdom ("U.K.") subsidiaries due to a future change in the previous U.S. federalU.K. tax rate. In June 2021, the U.K. government approved a U.K. tax rate of 35%increase from 19.0% to the newly enacted rate of 21%; and25.0% effective in April 2023.
$18.7 million income tax expense related to a Transition Tax on a deemed repatriation of accumulated foreign earnings and profits as required under the new tax law.
SEGMENT RESULTS
Total Adjusted Segment EBITDA
We evaluate the performance of each of our operating segments based on Adjusted Segment EBITDA, which is a GAAP financial measure. The following table reconciles Net Incomenet income to Total Adjusted Segment EBITDA, a non-GAAP financial measure, for the years ended December 31, 2018, 20172021 and 2016.2020:
 Year Ended December 31,
 20212020
 (in thousands)
Net income$234,966 $210,682 
Add back:
Income tax provision62,981 51,764 
Interest income and other(6,193)412 
Interest expense20,294 19,805 
Unallocated corporate expenses104,457 94,463 
Total segment operating income416,505 377,126 
Add back:
Segment depreciation expense31,072 29,381 
Amortization of intangible assets10,818 10,387 
Segment special charges— 6,730 
Remeasurement of acquisition-related contingent consideration(3,130)— 
Total Adjusted Segment EBITDA$455,265 $423,624 
39
 Year Ended December 31,
 2018 2017 2016
 (in thousands)
Net income$150,611
 $107,962
 $85,520
Add back:     
Income tax provision (benefit)57,181
 (20,857) 42,283
Interest income and other(4,977) (3,752) (10,466)
Interest expense27,149
 25,358
 24,819
Gain on sale of business(13,031) —
 —
Loss on early extinguishment of debt9,072
 —
 —
Unallocated corporate expense96,595
 83,140
 88,182
Total segment operating income322,600
 191,851
 230,338
Add back:     
Segment depreciation expense27,979
 27,112
 34,064
Amortization of other intangible assets8,162
 10,563
 10,306
Segment special charges—
 37,207
 9,833
Remeasurement of acquisition-related
   contingent consideration
—
 702
 1,403
Total Adjusted Segment EBITDA$358,741
 $267,435
 $285,944


45




Other Segment Operating Data
 Year Ended December 31,
 2018 2017 2016
Number of revenue-generating professionals (at period end):     
Corporate Finance948
 901
 895
FLC1,153
 1,067
 1,110
Economic Consulting708
 683
 656
Technology (1)
306
 292
 288
Strategic Communications641
 630
 647
Total revenue-generating professionals3,756
 3,573
 3,596
Utilization rate of billable professionals (2):
     
Corporate Finance66% 61% 65%
FLC64% 61% 59%
Economic Consulting69% 67% 73%
Average billable rate per hour (3):
     
Corporate Finance$433
 $396
 $392
FLC$326
 $321
 $327
Economic Consulting$519
 $524
 $517
 Year Ended December 31,
 20212020
Number of revenue-generating professionals (at period end):  
Corporate Finance1,702 1,655 
FLC1,496 1,343 
Economic Consulting921 891 
Technology (1)
468 408 
Strategic Communications814 770 
Total revenue-generating professionals5,401 5,067 
Utilization rates of billable professionals: (2)
  
Corporate Finance59 %63 %
FLC56 %51 %
Economic Consulting72 %68 %
Average billable rate per hour: (3)
  
Corporate Finance$452 $468 
FLC$350 $335 
Economic Consulting$509 $494 
(1)
The number of revenue-generating professionals for the Technology segment excludes as-needed professionals, who we employ based on demand for the segment’s services. We employed an average of 253, 305 and 287 as-needed employees during the years ended December 31, 2018, 2017 and 2016, respectively.
(2)
We calculate the utilization rate for our billable professionals by dividing the number of hours that all of our billable professionals worked on client assignments during a period by the total available working hours for all of our billable professionals during the same period. Available hours are determined by the standard hours worked by each employee, adjusted for part-time hours, U.S. standard work weeks and local country holidays. Available working hours include vacation and professional training days but exclude holidays. Utilization rates are presented for our segments that primarily bill clients on an hourly basis. We have not presented utilization rates for our Technology and Strategic Communications segments as most of the revenues of these segments are not generated on an hourly basis.
(3)
For engagements where revenues are based on number of hours worked by our billable professionals, average billable rate per hour is calculated by dividing revenues (excluding revenues from success fees, pass-through revenues and outside consultants) for a period by the number of hours worked on client assignments during the same period. We have not presented average billable rates per hour for our Technology and Strategic Communications segments as most of the revenues of these segments are not based on billable hours.

(1)The number of revenue-generating professionals for the Technology segment excludes as-needed professionals, who we employ based on demand for the segment’s services. We employed an average of 518 and 331 as-needed employees during the years ended December 31, 2021 and 2020, respectively.
(2)We calculate the utilization rate for our billable professionals by dividing the number of hours that all of our billable professionals worked on client assignments during a period by the total available working hours for all of our billable professionals during the same period. Available hours are determined by the standard hours worked by each employee, adjusted for part-time hours, U.S. standard work weeks and local country holidays. Available working hours include vacation and professional training days, but exclude holidays. Utilization rates are presented for our segments that primarily bill clients on an hourly basis. We have not presented utilization rates for our Technology and Strategic Communications segments as most of the revenues of these segments are not generated on an hourly basis.
(3)For engagements where revenues are based on number of hours worked by our billable professionals, average billable rate per hour is calculated by dividing revenues (excluding revenues from success fees, pass-through revenues and outside consultants) for a period by the number of hours worked on client assignments during the same period. We have not presented average billable rates per hour for our Technology and Strategic Communications segments as most of the revenues of these segments are not based on billable hours.
46
40





CORPORATE FINANCE & RESTRUCTURING
 Year Ended December 31,
 2018 2017 2016
 (dollars in thousands, except rate per hour)
Revenues$564,479
 $482,041
 $483,269
Percentage change in revenues from prior year17.1% -0.3 %  
Operating expenses:     
Direct cost of revenues354,210
 318,606
 306,894
Selling, general and administrative expenses92,037
 83,747
 81,584
Special charges—
 5,440
 —
Amortization of other intangible assets3,108
 4,014
 3,310
 449,355
 411,807
 391,788
Segment operating income115,124
 70,234
 91,481
Percentage change in segment operating income from prior year63.9% -23.2 %  
Add back:     
Depreciation and amortization of intangible assets6,536
 7,189
 6,207
Special charges—
 5,440
 —
Adjusted Segment EBITDA$121,660
 $82,863
 $97,688
Gross profit (1)
$210,269
 $163,435
 $176,375
Percentage change in gross profit from prior year28.7% -7.3 %  
Gross profit margin (2)
37.3% 33.9 % 36.5%
Adjusted Segment EBITDA as a percent of revenues21.6% 17.2 % 20.2%
Number of revenue-generating professionals (at period end)948
 901
 895
Percentage change in number of revenue-generating professionals
   from prior year
5.2% 0.7 %  
Utilization rate of billable professionals66% 61 % 65%
Average billable rate per hour$433
 $396
 $392
 Year Ended December 31,
 20212020
 (dollars in thousands, except rate per hour)
Revenues$938,969 $910,184 
Percentage change in revenues from prior year3.2 %
Operating expenses
Direct cost of revenues652,444 578,875 
Selling, general and administrative expenses133,275 118,964 
Special charges— 861 
Amortization of intangible assets7,485 6,455 
 793,204 705,155 
Segment operating income145,765 205,029 
Percentage change in segment operating income from prior year-28.9 %
Add back:
   Depreciation and amortization of intangible assets12,847 10,940 
   Special charges— 861 
   Fair value remeasurement of contingent consideration(3,130)— 
Adjusted Segment EBITDA$155,482 $216,830 
Gross profit (1)
$286,525 $331,309 
Percentage change in gross profit from prior year-13.5 %
Gross profit margin (2)
30.5 %36.4 %
Adjusted Segment EBITDA as a percentage of revenues16.6 %23.8 %
Number of revenue-generating professionals (at period end)1,702 1,655 
Percentage change in number of revenue-generating professionals from prior year2.8 %
Utilization rate of billable professionals59 %63 %
Average billable rate per hour$452 $468 
(1)
(1)Revenues less direct cost of revenues.
(2)Gross profit as a percentage of revenues.
Revenues less direct cost of revenues.
(2)
Gross profit as a percent of revenues.
Year Ended December 31, 20182021 Compared with December 31, 20172020
Revenues increased $82.4$28.8 million, or 17.1%3.2%, from 20172020 to 2018.2021, which included a 2.0% estimated positive impact from FX. Acquisition-related revenues contributed $9.5$3.0 million, or 2.0%0.3%, of the increase, compared with 2017.2020. Excluding the acquisition,estimated impact from FX and acquisition-related revenues, revenues increased $73.0$7.8 million, or 15.1%. The revenue increase was largely driven by0.9%, primarily due to increased demand for our restructuring servicesand realized bill rates across transactions and business transformation and transactions services primarily in North America and Europe, the Middle East and Africa, (“EMEA”), along with higher realization due to mix of client engagements and staffing globally, which was partially offset by lower success fees.
 Gross profit increased $46.8 million, or 28.7%, from 2017 to 2018. Gross profit margin increased 3.4 percentage points from 2017 to 2018. This increase was primarily due to increased utilization because of higherdecreased demand in our global restructuring services and business transformation and transaction services along with higher realization, partially offset by lower success fees.
SG&A expenses increased $8.3 million, or 9.9%, from 2017 to 2018. SG&A expenses were 16.3% of revenues in 2018 compared with 17.4% in 2017. The increase in SG&A expenses was primarily due to higher bad debt, infrastructure support, recruiting and other general administrative expenses.
Year Ended December 31, 2017 Compared with December 31, 2016
Revenues decreased $1.2 million, or 0.3%, from 2016 to 2017. Acquisition-related revenues contributed $10.1 million, or 2.1%, compared with 2016. Excluding the acquisition, revenues decreased $11.3 million, or 2.3%. This decrease was primarily driven by lower demandrealized bill rates for restructuring practice offerings globally, which was partially offset by increased demand in the business transformation practice and higher success fees.services.

47



Gross profit decreased $12.9$44.8 million, or 7.3%13.5%, from 20162020 to 2017.2021. Gross profit margin decreased 2.65.9 percentage points from 20162020 to 2017. This decrease was due to lower utilization driven by an increase in billable headcount, which was partially offset by higher success fees.
SG&A expenses increased $2.2 million, or 2.7%, from 2016 to 2017, which included $1.2 million from a recent acquisition and the impact of higher bad debt expenses, partially offset by other general overhead expenses. Bad debt expenses in 2016 included collections of prior period write-offs. SG&A expenses were 17.4% of revenues in 2017 compared with 16.9% in 2016.
FORENSIC AND LITIGATION CONSULTING
 Year Ended December 31,
 2018 2017 2016
 (dollars in thousands, except rate per hour)
Revenues$520,333
 $462,324
 $457,734
Percentage change in revenues from prior year12.5% 1.0 %  
Operating expenses:     
Direct cost of revenues330,791
 305,822
 314,810
Selling, general and administrative expenses96,958
 88,056
 89,532
Special charges—
 12,334
 2,304
Amortization of other intangible assets1,322
 1,592
 2,000
 429,071
 407,804
 408,646
Segment operating income91,262
 54,520
 49,088
Percentage change in segment operating income from prior year67.4% 11.1 %  
Add back:     
Depreciation and amortization of intangible assets5,559
 5,851
 6,490
Special charges—
 12,334
 2,304
Adjusted Segment EBITDA$96,821
 $72,705
 $57,882
Gross profit (1)
$189,542
 $156,502
 $142,924
Percentage change in gross profit from prior year21.1% 9.5 %  
Gross profit margin (2)
36.4% 33.9 % 31.2%
Adjusted Segment EBITDA as a percent of revenues18.6% 15.7 % 12.6%
Number of revenue-generating professionals (at period end)1,153
 1,067
 1,110
Percentage change in number of revenue-generating professionals
   from prior year
8.1% -3.9 %  
Utilization rate of billable professionals64% 61 % 59%
Average billable rate per hour$326
 $321
 $327
(1)
Revenues less direct cost of revenues.
(2)
Gross profit as a percent of revenues.
Year Ended December 31, 2018 Compared with December 31, 2017
Revenues increased $58.0 million, or 12.5%, from 2017 to 2018. The increase was driven by higher demand for our construction solutions, investigations and disputes services, particularly across North America and EMEA.
Gross profit increased $33.0 million, or 21.1%, from 2017 to 2018. Gross profit margin increased 2.5 percentage points from 2017 to 2018. This increase in gross profit margin is related to higher utilization, primarily due to higher demand for our construction solutions and investigations services.
SG&A expenses increased $8.9 million, or 10.1%, from 2017 to 2018. SG&A expenses were 18.6% of revenues in 2018 compared with 19.0% in 2017. The increase in SG&A expenses was due to higher personnel, rent and occupancy, travel and other administrative costs.

48



Year Ended December 31, 2017 Compared with December 31, 2016
Revenues increased $4.6 million, or 1.0%, from 2016 to 2017. This increase was driven by increased volume in the global construction solutions practice and investigations practice in EMEA, which was partially offset by lower demand in the health solutions practice.
Gross profit increased $13.6 million, or 9.5%, from 2016 to 2017. Gross profit margin increased 2.7 percentage points from 2016 to 2017. This increase in gross profit margin is related to higher utilization, largely in the construction solutions, disputes and investigations practices, partially offset by lower success fees in our health solutions practice.
SG&A expenses decreased $1.5 million, or 1.6%, from 2016 to 2017. SG&A expenses were 19.0% of revenues in 2017 compared with 19.6% in 2016. The decrease in SG&A expenses was due to lower costs from headcount reductions, primarily in our health solutions practice, partially offset by higher bad debt expenses.
ECONOMIC CONSULTING
 Year Ended December 31,
 2018 2017 2016
 (dollars in thousands, except rate per hour)
Revenues$533,979
 $496,029
 $500,487
Percentage change in revenues from prior year7.7% -0.9 %  
Operating expenses:     
Direct cost of revenues396,001
 367,711
 363,616
Selling, general and administrative expenses73,630
 71,943
 67,383
Special charges—
 6,624
 —
Amortization of other intangible assets296
 597
 646
 469,927
 446,875
 431,645
Segment operating income64,052
 49,154
 68,842
Percentage change in segment operating income from prior year30.3% -28.6 %  
Add back:     
Depreciation and amortization of intangible assets5,903
 6,186
 5,260
Special charges—
 6,624
 —
Adjusted Segment EBITDA$69,955
 $61,964
 $74,102
Gross profit (1)
$137,978
 $128,318
 $136,871
Percentage change in gross profit from prior year7.5% -6.2 %  
Gross profit margin (2)
25.8% 25.9 % 27.3%
Adjusted Segment EBITDA as a percent of revenues13.1% 12.5 % 14.8%
Number of revenue-generating professionals (at period end)708
 683
 656
Percentage change in number of revenue-generating professionals
   from prior year
3.7% 4.1 %  
Utilization rate of billable professionals69% 67 % 73%
Average billable rate per hour$519
 $524
 $517
(1)
Revenues less direct cost of revenues.
(2)
Gross profit as a percent of revenues.
Year Ended December 31, 2018 Compared with December 31, 2017
Revenues increased $38.0 million, or 7.7%, from 2017 to 2018. The increase was primarily due to higher demand for antitrust services in EMEA and financial economic services in North America, which were partially offset by lower demand for antitrust services in North America and lower realization due to mix of client engagements in EMEA.
Gross profit increased $9.7 million, or 7.5%, from 2017 to 2018. Gross profit margin was consistent from 2017 to 2018. Higher margins from improved utilization were entirely offset by lower realization and higher variable compensation as a percentage of revenues.

49



SG&A expenses increased $1.7 million, or 2.3%, from 2017 to 2018. SG&A expenses were 13.8% of revenues in 2018 compared with 14.5% in 2017. The increase in SG&A expenses was primarily driven by higher rent and occupancy costs, which were partially offset by lower bad debt expense.
Year Ended December 31, 2017 Compared with December 31, 2016
Revenues decreased $4.5 million, or 0.9%, from 2016 to 2017. This decrease was primarily driven by lower demand for financial economics services in North America, which was partially offset by higher demand for antitrust services in EMEA and international arbitration services in North America.
Gross profit decreased $8.6 million, or 6.2%, from 2016 to 2017. Gross profit margin decreased 1.4 percentage points from 2016 to 2017. This decrease was primarily due to a decline in utilization, resulting from both lower demand and an increase in billable headcount.
SG&A expenses increased $4.6 million, or 6.8%, from 2016 to 2017. SG&A expenses were 14.5% of revenues in 2017 compared with 13.5% in 2016. The increase in SG&A expenses was driven primarily by higher bad debt, compensation, depreciation and infrastructure support costs, which were partially offset by lower legal fees.
TECHNOLOGY
 Year Ended December 31,
 2018 2017 2016
 (dollars in thousands)
Revenues$185,755
 $174,850
 $177,720
Percentage change in revenues from prior year6.2% -1.6 %  
Operating expenses:     
Direct cost of revenues111,129
 101,505
 107,591
Selling, general and administrative expenses59,644
 62,858
 64,135
Special charges—
 5,057
 7,529
Amortization of other intangible assets70
 635
 648
 170,843
 170,055
 179,903
Segment operating (loss) income14,912
 4,795
 -2,183
Percentage change in segment operating income from prior year211.0% -319.7 %  
Add back:     
Depreciation and amortization of intangible assets12,475
 12,319
 20,468
Special charges—
 5,057
 7,529
Adjusted Segment EBITDA$27,387
 $22,171
 $25,814
Gross profit (1)
$74,626
 $73,345
 $70,129
Percentage change in gross profit from prior year1.7% 4.6 %  
Gross profit margin (2)
40.2% 41.9 % 39.5%
Adjusted Segment EBITDA as a percent of revenues14.7% 12.7 % 14.5%
Number of revenue-generating professionals (at period end) (3)
306
 292
 288
Percentage change in number of revenue-generating
   professionals from prior year
4.8% 1.4 %  
(1)
Revenues less direct cost of revenues.
(2)
Gross profit as a percent of revenues.
(3)
Includes personnel involved in direct client assistance and revenue-generating consultants and excludes professionals employed on an as-needed basis.

50



Year Ended December 31, 2018 Compared with December 31, 2017
Revenues increased $10.9 million, or 6.2%, from 2017 to 2018. The increase in revenues was primarily due to an increase in both demand and pricing for consulting services, an increase in demand for hosting and higher realized pricing for M&A-related managed reviews. This increase was partially offset by lower pricing for hosting and $2.0 million in lower revenues from software licensing due to the Ringtail® divestiture. Higher consulting revenues were driven by increased demand for information governance, privacy and security services and global investigations.
Gross profit increased $1.3 million, or 1.7%, from 2017 to 2018. Gross profit margin decreased 1.7 percentage points to 40.2% from 2017 to 2018.2021. The decrease in gross profit margin was largely due to a 4 percentage point decline in utilization and lower mix of high-margin hosting and software licensing revenues.
SG&A expenses decreased $3.2 million, or 5.1%, from 2017 to 2018. SG&A expenses were 32.1% of revenues in 2018 compared with 35.9% in 2017. The decrease in SG&A expenses wasrealized bill rates, primarily due to lower research and development expenses due to the Ringtail® divestiture, partially offset by an increase in other general administrative expenses. Research and development expenses related to software development were $8.7 million in 2018, a decline of $6.2 million, compared with $14.9 million in 2017.
Year Ended December 31, 2017 Compared with December 31, 2016
Revenues decreased $2.9 million, or 1.6%, from 2016 to 2017. This decrease was primarily driven by lower pricing for hosting services as a result of a decline in legacy hosting matters at the end of their cycle, coupled with lower demand for managed review offerings, partially offset by higher demand for hosting services as a result of new engagements. Additionally, higher demand for consulting was driven by growth in new engagements, as well as growth in information governance engagements.
Gross profit increased $3.2 million, or 4.6%, from 2016 to 2017. Gross profit margin increased 2.4 percentage points to 41.9% from 2016 to 2017. This margin increase was due to higher pricing for consulting, higher demand for hosting and lower depreciation expense, which was partially offset by lower pricing for hosting services.
SG&A expenses decreased $1.3 million, or 2.0%, from 2016 to 2017. SG&A expenses were 35.9% of revenues in 2017 compared with 36.1% in 2016. This decrease was due to lower salary and benefits and lower research and development expenses, partially offset by higher sales commissions. Research and development expenses related to software development were $14.9 million in 2017, a decline of $2.6 million, compared with $17.5 million in 2016.

51



STRATEGIC COMMUNICATIONS
 Year Ended December 31,
 2018 2017 2016
 (dollars in thousands)
Revenues$223,331
 $192,488
 $191,184
Percentage change in revenues from prior year16.0% 0.7 %  
Operating expenses:     
Direct cost of revenues135,943
 121,916
 117,858
Selling, general and administrative expenses46,772
 45,947
 46,514
Special charges—
 7,752
 —
Amortization of other intangible assets3,366
 3,725
 3,702
 186,081
 179,340
 168,074
Segment operating income37,250
 13,148
 23,110
Percentage change in segment operating income from
   prior year
183.3% -43.1 %  
Add back:     
Depreciation and amortization of intangible assets5,668
 6,130
 5,945
Special charges—
 7,752
 —
Fair value remeasurement of contingent consideration—
 702
 1,403
Adjusted Segment EBITDA$42,918
 $27,732
 $30,458
Gross profit (1)
$87,388
 $70,572
 $73,326
Percentage change in gross profit from prior year23.8% -3.8 %  
Gross profit margin (2)
39.1% 36.7 % 38.4%
Adjusted Segment EBITDA as a percent of revenues19.2% 14.4 % 15.9%
Number of revenue-generating professionals (at period end)641
 630
 647
Percentage change in number of revenue-generating
   professionals from prior year
1.7% -2.6 %  
(1)
Revenues less direct cost of revenues.
(2)
Gross profit as a percent of revenues.
Year Ended December 31, 2018 Compared with December 31, 2017
Revenues increased $30.8 million, or 16.0%, from 2017 to 2018, which included a 1.6% estimated positive impact from FX. Excluding the estimated positive impact of FX, revenues increased $27.8 million or 14.4%. The increase was primarily due to higher project-based revenues in North America and higher retainer- and project-based revenues in EMEA. These increases were primarily driven by an increase in public affairs and financial communicationsrestructuring services, as well as an increase in pass-through revenues.
Gross profit increased $16.8 million, or 23.8%, from 2017 to 2018. Gross profit margin increased 2.4 percentage points from 2017 to 2018. The increase in gross profit margin was due to lower fixed compensation as a percentage of revenues, partially offset by higher variable compensation and a higher proportion of lower margin pass-through revenues.unfavorable business mix.
SG&A expenses increased $0.8$14.3 million, or 1.8%12.0%, from 20172020 to 2018.2021. SG&A expenses were 20.9%of 14.2% of revenues in 20182021 compared with 23.9%13.1% in 2017.2020. The increase in SG&A expenses was primarily due to higher infrastructure support costs, bad debtas well as rent and variableoccupancy and compensation partially offset by lower expenses, related to acquisition-related contingent consideration.
Year Ended December 31, 2017 Compared with December 31, 2016
Revenues increased $1.3 million, or 0.7%, from 2016 to 2017. This increase was due to higher retainer-based revenues across all regions, which was partially offset by lower project income in North America, primarily in the financial communications practice.

acquisition-related expenses.
52
41





FORENSIC AND LITIGATION CONSULTING
 Year Ended December 31,
 20212020
 (dollars in thousands, except rate per hour)
Revenues$584,835 $500,275 
Percentage change in revenues from prior year16.9 %
Operating expenses
Direct cost of revenues412,575 377,530 
Selling, general and administrative expenses104,723 94,562 
Special charges— 3,484 
Amortization of intangible assets894 800 
 518,192 476,376 
Segment operating income66,643 23,899 
Percentage change in segment operating income from prior year178.9 %
Add back:
   Depreciation and amortization of intangible assets5,902 5,991 
   Special charges— 3,484 
Adjusted Segment EBITDA$72,545 $33,374 
Gross profit (1)
$172,260 $122,745 
Percentage change in gross profit from prior year40.3 %
Gross profit margin (2)
29.5 %24.5 %
Adjusted Segment EBITDA as a percentage of revenues12.4 %6.7 %
Number of revenue-generating professionals (at period end)1,496 1,343 
Percentage change in number of revenue-generating professionals from prior year11.4 %
Utilization rate of billable professionals56 %51 %
Average billable rate per hour$350 $335 
(1)Revenues less direct cost of revenues.
(2)Gross profit as a percentage of revenues.
Year Ended December 31, 2021 Compared with December 31, 2020
Revenues increased $84.6 million, or 16.9%, from 2020 to 2021, which included a 1.5% estimated positive impact from FX. Acquisition-related revenues contributed $8.5 million, or 1.7% of the increase, compared with 2020. Excluding the estimated impact from FX and acquisition-related revenues, revenues increased $68.7 million, or 13.7%, primarily due to higher demand for our investigations, disputes and health solutions services.
Gross profit decreased $2.8increased $49.5 million, or 3.8%40.3%, from 20162020 to 2017.2021. Gross profit margin increased 5.0 percentage points from 2020 to 2021. The increase in gross profit margin was largely related to a 5 percentage point increase in utilization, primarily in our disputes, investigations and health solutions services, which was partially offset by higher variable compensation as a percentage of revenues.
SG&A expenses increased $10.2 million, or 10.7%, from 2020 to 2021. SG&A expenses of 17.9% of revenues in 2021 compared with 18.9% in 2020. The increase in SG&A expenses was primarily driven by higher infrastructure support and rent and occupancy costs, as well as an increase in variable compensation and other general and administrative expenses, which was partially offset by lower bad debt.
42


ECONOMIC CONSULTING
 Year Ended December 31,
 20212020
 (dollars in thousands, except rate per hour)
Revenues$697,405 $599,088 
Percentage change in revenues from prior year16.4 %
Operating expenses
Direct cost of revenues508,575 434,324 
Selling, general and administrative expenses77,368 78,714 
Special charges— 35 
Amortization of intangible assets— 325 
 585,943 513,398 
Segment operating income111,462 85,690 
Percentage change in segment operating income from prior year30.1 %
Add back:
   Depreciation and amortization of intangible assets5,724 5,707 
   Special charges— 35 
Adjusted Segment EBITDA$117,186 $91,432 
Gross profit (1)
$188,830 $164,764 
Percentage change in gross profit from prior year14.6 %
Gross profit margin (2)
27.1 %27.5 %
Adjusted Segment EBITDA as a percentage of revenues16.8 %15.3 %
Number of revenue-generating professionals (at period end)921 891 
Percentage change in number of revenue-generating professionals from prior year3.4 %
Utilization rate of billable professionals72 %68 %
Average billable rate per hour$509 $494 
(1)Revenues less direct cost of revenues.
(2)Gross profit as a percentage of revenues.
Year Ended December 31, 2021 Compared with December 31, 2020
Revenues increased $98.3 million, or 16.4%, from 2020 to 2021, which included a 2.1% estimated positive impact from FX. Excluding the estimated impact from FX, revenues increased $85.6 million, or 14.3%. The increase was primarily due to higher demand for our non-mergers and acquisitions ("M&A")-related antitrust services, along with higher demand and realized bill rates for financial economics and international arbitration services, which was partially offset by lower realized bill rates and demand for M&A-related antitrust services.
Gross profit increased $24.1 million, or 14.6%, from 2020 to 2021. Gross profit margin decreased 1.70.4 percentage points from 20162020 to 2017. This2021. The decrease in gross profit margin was primarily due to fewer large, high-margin engagementshigher variable compensation and contractor expenses, which was partially offset by a 4 percentage point improvement in North America, as well as higher compensation as a result of increased average billable headcount.utilization.
SG&A expenses decreased $0.6$1.3 million, or 1.2%1.7%, from 20162020 to 2017.2021. SG&A expenses were 23.9%of 11.1% of revenues in 20172021 compared with 24.3%13.1% in 2016.2020. The decrease in SG&A expenses was primarily due todriven by lower staff costs,bad debt, which was partially offset by the unfavorable impact from FX and higher travelinfrastructure support costs.
43


TECHNOLOGY
 Year Ended December 31,
 20212020
 (dollars in thousands)
Revenues$287,366 $223,016 
Percentage change in revenues from prior year28.9 %
Operating expenses
Direct cost of revenues176,527 134,568 
Selling, general and administrative expenses67,912 57,303 
Special charges— 276 
244,439 192,147 
Segment operating income42,927 30,869 
Percentage change in segment operating income from prior year39.1 %
Add back:
   Depreciation and amortization of intangible assets12,812 11,868 
   Special charges— 276 
Adjusted Segment EBITDA$55,739 $43,013 
Gross profit (1)
$110,839 $88,448 
Percentage change in gross profit from prior year25.3 %
Gross profit margin (2)
38.6 %39.7 %
Adjusted Segment EBITDA as a percentage of revenues19.4 %19.3 %
Number of revenue-generating professionals (at period end) (3)
468 408 
Percentage change in number of revenue-generating professionals from prior year14.7 %
(1)Revenues less direct cost of revenues.
(2)Gross profit as a percentage of revenues.
(3)Includes personnel involved in direct client assistance and entertainmentrevenue-generating consultants and excludes professionals employed on an as-needed basis.
Year Ended December 31, 2021 Compared with December 31, 2020
Revenues increased $64.4 million, or 28.9%, from 2020 to 2021, which included a 2.1% estimated positive impact from FX. Excluding the estimated impact from FX, revenues increased $59.8 million, or 26.8%. The increase was driven by increased demand across all practices associated with litigation, investigations and M&A-related “second request” services.
Gross profit increased $22.4 million, or 25.3%, from 2020 to 2021. Gross profit margin decreased 1.1 percentage points from 2020 to 2021. The decrease in gross profit margin was due to decreased utilization of our consulting services associated with high levels of hiring activity, partially offset by favorable mix and profitability of our managed review services.
SG&A expenses increased $10.6 million, or 18.5%, from 2020 to 2021. SG&A expenses of 23.6% of revenues in 2021 compared with 25.7% in 2020. The increase in SG&A expenses was primarily due to higher compensation, infrastructure support, rent and occupancy costs and other general and administrative expenses.
44


STRATEGIC COMMUNICATIONS
 Year Ended December 31,
 20212020
 (dollars in thousands)
Revenues$267,647 $228,712 
Percentage change in revenues from prior year17.0 %
Operating expenses
Direct cost of revenues165,386 147,414 
Selling, general and administrative expenses50,114 44,779 
Special charges— 2,074 
Amortization of intangible assets2,439 2,806 
 217,939 197,073 
Segment operating income49,708 31,639 
Percentage change in segment operating income from prior year57.1 %
Add back:
   Depreciation and amortization of intangible assets4,605 5,262 
   Special charges— 2,074 
Adjusted Segment EBITDA$54,313 $38,975 
Gross profit (1)
$102,261 $81,298 
Percentage change in gross profit from prior year25.8 %
Gross profit margin (2)
38.2 %35.5 %
Adjusted Segment EBITDA as a percentage of revenues20.3 %17.0 %
Number of revenue-generating professionals (at period end)814 770 
Percentage change in number of revenue-generating professionals from prior year5.7 %
(1)Revenues less direct cost of revenues.
(2)Gross profit as a percentage of revenues.
Year Ended December 31, 2021 Compared with December 31, 2020
Revenues increased $38.9 million, or 17.0%, from 2020 to 2021, which included a 3.2% estimated positive impact from FX. Excluding the estimated impact from FX, revenues increased $31.7 million or 13.9%. The increase was primarily due to growth in project- and retainer-based revenues, driven by higher demand for our corporate reputation and public affairs services.
Gross profit increased $21.0 million, or 25.8%, from 2020 to 2021. Gross profit margin increased 2.7 percentage points from 2020 to 2021. The increase in gross profit margin was driven by lower compensation as a percentage of revenues.
SG&A expenses increased $5.3 million, or 11.9%, from 2020 to 2021. SG&A expenses of 18.7% of revenues in 2021 compared with 19.6% in 2020. The increase in SG&A expenses was primarily driven by higher infrastructure support, outside services and other general and administrative expenses.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
For the years ended December 31, 2021, 2020 and Capital Resources
Cash Flows
 Year Ended December 31,
 2018 2017 2016
Cash Flows(dollars in thousands)
Net cash provided by operating activities$230,672
 $147,625
 $233,488
Net cash provided by (used in) investing activities$18,744
 $(40,638) $(30,132)
Net cash used in financing activities$(117,519) $(140,934) $(125,310)
DSO93
 91
 91
2019, our cash flows from operations exceeded our cash needs for capital expenditures and debt service requirements. We have generally financedfinance our day-to-day operations, capital expenditures, acquisitions and acquisitionsshare repurchases through cash flows from operations. During the first quarter of our fiscal year, our cash needs generally exceedWe believe that our cash flows from operations, duesupplemented by short-term borrowings under our senior secured bank revolving credit facility ("Credit Facility"), as necessary, will provide adequate cash to the payment of annual incentive compensation. Our operating cash flows generally exceedfund our long-term cash needs subsequent tofor at least the second quarter of each year.next 12 months.
Our operating assets and liabilities consist primarily of billed and unbilled accounts receivable, notes receivable from employees, accounts payable, accrued expenses and accrued compensation expenses. The timing of billings and collections of receivables, as well as compensation and vendor payments, affectaffects the changes in these balances.
45


Uncertainties and Trends Affecting Liquidity

Our conclusion that we will be able to fund our cash requirements for the next 12 months by using existing capital resources and cash generated from operations does not take into account exacerbation of, or additional or prolonged disruptions caused by, the COVID-19 pandemic that could result in a material adverse impact on our business, other events beyond our control, or the impact of any future acquisitions, unexpected significant changes in number of employees or other unanticipated uses of cash. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if events, including economic disruptions, arising from the COVID-19 pandemic worsen or other events beyond our control, or if other economic or business conditions change from those currently prevailing or from those now anticipated, or if unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or those of our clients, and the operating performance or financial results of our business. Any of these events or circumstances, including any new business opportunities, could involve significant additional funding needs in excess of the identified currently available sources and could require us to raise additional debt or equity funding to meet those needs. Our ability to raise additional capital, if necessary, is subject to a variety of factors that we cannot predict with certainty, including:
•our future profitability;
•the quality of our accounts receivable;
•our relative levels of debt and equity;
•the volatility and overall condition of the capital markets; and
•the market prices of our securities.
Any new debt funding, if available, may be on terms less favorable to us than our Credit Facility or the 2023 Convertible Notes. See information under the heading “Risk Factors” in Part I, Item 1A of this Annual Report.
Cash Flows
 Year Ended December 31,
20212020
Cash Flows(dollars in thousands)
Net cash provided by operating activities$355,483 $327,069 
Net cash used in investing activities$(79,093)$(60,120)
Net cash used in financing activities$(61,674)$(360,053)
DSO (1)
94 95 
(1)DSO is a performance measure used to assess how quickly revenues are collected by the Company. We calculate DSO at the end of each reporting period by dividing net accounts receivable reduced by billings in excess of services provided, by revenues for the quarter, adjusted for changes in foreign exchange rates. We multiply the result by the number of days in the quarter.
Free Cash Flow, a non-GAAP financial measure, for the three years ended December 31, 2018, 2017 and 2016 was $198.4 million, $115.6 million and $204.6 million, respectively.
Year Ended December 31, 20182021 Compared with Year Ended December 31, 20172020
Net cash provided by operating activities increased $83.0$28.4 million, or 56.3%8.7%, from 20172020 to 2018.2021. The increase in net cash provided by operating activities was primarily due to higher cash collections combined with lower income tax payments largely due to the reversal of a significant deferred tax asset in the U.S., which was partially offset by an increase in cash paid for salaries and benefitscompensation, primarily related to headcount growth and higher income tax payments.annual bonus payments, as well as other operating expenses. DSO was 9394 days as ofDecember 31, 20182021 and 9195 days as of December 31, 2017.2020.
Net cash provided byused in investing activities increased $59.4$19.0 million, or 146.1%31.6%, from 20172020 to 2018.2021. The Company received proceedsincrease in net cash used in investing activities was primarily due to an increase of $50.3$33.7 million from the salein capital expenditures, mainly related to leasehold improvement costs for our new office space in New York, New York, offset by a decrease of Ringtail®$14.8 million in 2018. Capital expenditures were $32.3 millionpayments for 2018 as compared with $32.0 million for 2017.acquisitions of businesses, net of cash received.
46


Net cash used in financing activities decreased $23.4$298.4 million, or 16.6%82.9%, from 20172020 to 2018. Cash used2021. The decrease in financing activities in 2018 included the $300 million redemption of the 2022 Notes, $100 million of net repayments under our senior secured bank revolving credit facility (as amended and restated on November 30, 2018, the “Credit Facility”), $16.1 million payments of debt issue costs, redemption premium and other redemption costs, and $55.7 million in common stock repurchases. These cash outflows were partially offset by $316.3 million in proceeds from the issuance of the 2023 Convertible Notes and $38.5 million from the issuance of common stock under our equity compensation plans. Net cash used in financing activities for the year ended December 31, 2017 includedwas primarily due to a decrease of $307.5 million in payments of $168.1 million for common stock repurchases and $5.2 million cash paid for acquisition-related contingent consideration, partially offset by $30.0 millionunder the Repurchase Program.
Principal Sources of net borrowings under our senior secured bank revolving credit facility.

53



Year Ended December 31, 2017 Compared with Year Ended December 31, 2016
Net cash provided by operating activities decreased $85.9 million, or 36.8%, from 2016 to 2017. The decrease was primarily due to higher compensation payments, including salaries, bonuses and severance, and lower cash collections. This was partially offset by lower income tax payments in the year ended December 31, 2017. DSO was 91 days as ofDecember 31, 2017 and 2016.
Net cash used in investing activities increased $10.5 million, or 34.9%, from 2016 to 2017. Payment for the acquisition of substantially all of the assets of a business completed in 2017 by our Corporate Finance segment was $8.9 million, net of cash received. Payment for the acquisition completed in 2016 by our Strategic Communications segment was $1.2 million, net of cash received. Capital expenditures were $32.0 million for 2017 as compared with $28.9 million for 2016.
Net cash used in financing activities increased $15.6 million, or 12.5%, from 2016 to 2017. Cash used in financing activities in 2017 included $168.1 million in common stock repurchases and $5.2 million cash paid for acquisition-related contingent consideration, partially offset by $30.0 million of net borrowings under our senior secured bank revolving credit facility and the receipt of $2.8 million of refundable deposits related to one of our foreign entities. Net financing activities for 2016 included repayments of $130.0 million of borrowings under our senior secured bank revolving credit facility and $21.5 million in common stock repurchases, partially offset by $21.7 million in cash received from the issuance of common stock under our equity compensation plan and the receipt of $4.0 million of refundable deposits related to one of our foreign entities.
Capital Resources
As of December 31, 2018,2021, our capital resources included $312.1$494.5 million of cash and cash equivalents and available borrowing capacity of $549.0$549.6 million under athe $550.0 million revolving line of credit under our Credit Facility. As of December 31, 2018,2021, we had no outstanding borrowings under our Credit Facility and $1.0$0.4 million of outstanding letters of credit, which reduced the availability of borrowings under the Credit Facility. We use letters of credit primarily in lieu of security deposits for our leased office facilities. The $550.0 million revolving line of credit under the Credit Facility includes a $75.0 million sublimit for borrowings in currencies other than USD, including the euro ("EUR"), British pound ("GBP"), Australian dollar and Canadian dollar.
The availability of borrowings, as well as issuances and extensions of letters of credit, under our Credit Facility is subject to specified conditions. We may choose to repay outstanding borrowings under the Credit Facility at any time before maturity without premium or penalty. Borrowings under the Credit Facility in USD, euroEUR and British poundGBP bear interest at an annual rate equal to the London Interbank Offered Rate ("LIBOR"), plus an applicable margin or, in the case of USD borrowings, an alternative base rate plus an applicable margin. The alternative base rate means a fluctuating rate per annum equalDue to the highestcessation by the ICE Benchmark Administration Limited of (1) the ratepublication on a representative basis of interest in effect for such dayEUR LIBOR and GBP LIBOR as the prime rate announced byof December 31, 2021, EUR LIBOR is no longer available under our Credit Agreement and one-, three- and six-month GBP LIBOR is available under a "synthetic" methodology until December 31, 2022. The Credit Agreement permits FTI Consulting and Bank of America, (2)N.A., as administrative agent thereunder, to agree to a new benchmark rate to replace EUR LIBOR and GBP LIBOR, subject to the federal funds rate plusnegative consent of the sumRequired Lenders (as defined therein). Prior to the incurrence of 50 basis points, and (3) the one-month LIBOR plus 100 basis points. Borrowingsany borrowings under the Credit Facility in Canadian dollars bear interest at an annualEUR or, after December 31, 2022, in GBP, we will need to agree to a replacement benchmark rate equal tofor each applicable currency in accordance with the Canadian Dealer Offered Rate plus an applicable margin. Borrowings underterms of the Credit Facility in Australian dollars bear interest at an annual rate equal to the Bank Bill Swap Reference Bid Rate plus an applicable margin.Agreement. The Credit Facility is guaranteed by substantially all of our domestic subsidiaries and is secured by a first priority security interest in substantially all of the assets of FTI Consulting and such domestic subsidiaries. Subject to certain conditions, at any time prior to maturity, we will be able to invite existing and new lenders to increase the size of the facility up to a maximum of $700.0 million.
OurThe amended and restated credit agreement entered into in November 2018, as further amended by the first amendment to the amended and restated credit agreement dated as of February 4, 2022 (the "Credit Agreement"), governing the Credit Facility and our other indebtedness outstanding from time to time contains or may contain covenants that, among other things, may limit our ability to: incur additional indebtedness; create liens; pay dividends on our capital stock, make distributions or repurchases of our capital stock or make specified other restricted payments; consolidate, merge or sell all or substantially all of our assets; guarantee obligations of other entities or our foreign subsidiaries; enter into hedging agreements; enter into transactions with affiliates or related persons; or engage in any business other than consulting-related businesses. In addition, the Credit FacilityAgreement includes a financial covenant that requires us not to exceed a maximum consolidated total net leverage ratio (the ratio of funded debt (less unrestricted cash up to $150.0 million) to Consolidated EBITDA, as defined in the Credit Facility)Agreement). As of December 31, 2018,2021, we were in compliance with the covenants contained in the Credit FacilityAgreement and the indenture, dated as of August 20, 2018, as amended by the first supplemental indenture, dated as of January 1, 2022, between us and U.S. Bank National Association, as trustee, (the "Indenture") governing the 2023 Convertible Notes.
Principal Uses of Capital Resources
Future Capital NeedsRequirements
We anticipate that our future capital needsrequirements will principally consist of funds required for:
•operating and general corporate expenses relating to the operation of our businesses;

54



•capital expenditures, primarily for information technology equipment, office furniture and leasehold improvements;
•debt service requirements, including interest payments on our long-term debt;
•compensation forto designated executive management and senior managing directors under our various long-term incentive compensation programs;
•discretionary funding of our stock repurchase program;the Repurchase Program;
•contingent obligations related to our acquisitions;
47


•potential acquisitions of businesses; and
•other known future contractual obligations.
We currently anticipateCapital Expenditures
During 2021, we spent $68.6 million in capital expenditures of $31 million to $38 million to support our organization, during 2019, including the leasehold improvement costs for the New York office space and direct support for specific client engagements. During 2022, we currently expect to make capital expenditures to support our organization in an aggregate amount between $44 million and $54 million. Our estimate takes into consideration the needs of our existing businesses but does not include the impact of any purchases that we may be required to make as a result of future acquisitions or specific client engagements that are not completed or not currently contemplated. Our capital expenditure requirements may change if our staffing levels or technology needs change significantly from what we currently anticipate, if we are required to purchase additional equipment specifically to support new client engagements or for their purposes or if we pursue and complete additional acquisitions.
2023 Convertible NotesShare Repurchase Program
Our 2023 Convertible NotesDuring the year ended December 31, 2021, we made $46.1 million in payments for common stock repurchases under the Repurchase Program. We had $167.1 million remaining under the Repurchase Program to repurchase additional shares as of December 31, 2021.
Payments for Acquisition of Businesses
During the year ended December 31, 2021, we acquired certain assets of businesses that were issued pursuantassigned to the Indenture. The 2023 Convertible Notes bear interest atCorporate Finance and FLC segments for an aggregate of $10.4 million. We also recorded a fixed rateliability of 2.0% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2019. The 2023 Convertible Notes will mature on August 15, 2023, unless earlier converted or repurchased. Upon conversion, the 2023 Convertible Notes may be settled, at our election in cash, shares of our common stock or a combination of cash and shares of our common stock.
Each $1,000 principal amount of the 2023 Convertible Notes will initially be convertible into 9.8643 shares of our common stock, which is equivalent to$1.1 million for an initial conversion price of approximately $101.38 per share of common stock, subject to adjustment upon the occurrence of specified events. Prior to the close of business on the business day immediately preceding May 15, 2023, the 2023 Convertible Notes may be converted only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of the 2023 Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate in effect on each such trading day; or (3) upon the occurrence of specified corporate events. On or after May 15, 2023, until the close of business on the business day immediately preceding the maturity date of August 15, 2023, holders may convert their 2023 Convertible Notes at any time, regardless of the foregoing circumstances.
We may not redeem the 2023 Convertible Notes prior to the maturity date.
If we undergo a fundamental change (as defined in the Indenture), subject to certain conditions, holders may require us to repurchase for cash all or part of their 2023 Convertible Notes in principal amounts of $1,000 or a multiple thereof. The fundamental change repurchase price will be equal to 100% of the principal amount of the 2023 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. In addition, in certain circumstances, we may be required to increase the conversion rate for any 2023 Convertible Notes converted in connection with a make-whole fundamental change (as defined in the Indenture). See Note 1, "Description of Business and Summary of Significant Accounting Policies" and Note 13, "Long-Term Debt" in Part II, Item 8 and "Risk Factors" in Part I, Item 1A of this Annual Report for a further discussion of the 2023 Convertible Notes.
Cash Flows
For the last several years, our cash flows from operations have exceeded our cash needs for capital expenditures and debt service requirements. We believe that our cash flows from operations, supplemented by short-term borrowings under our

55



Credit Facility, as necessary, will provide adequate cash to fund our long-term cash needs from normal operations for the next 12 months or longer.
Our conclusion that we will be able to fund our cash requirements by using existing capital resources and cash generated from operations does not take into account the impact of any future acquisitions, unexpected significant changes in number of employees or other unanticipated uses of cash. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if economic conditions change from those currently prevailing or from those now anticipated, or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business, including material negative changes in the operating performance or financial results of our business. Any of these events or circumstances, including any new business opportunities, could involve significant additional funding needs in excess of the identified currently available sources and could require us to raise additional debt or equity funding to meet those needs. Our ability to raise additional capital, if necessary, is subject to a variety of factors that we cannot predict with certainty, including:
our future profitability;
the quality of our accounts receivable;
our relative levels of debt and equity;
the volatility and overall condition of the capital markets; and
the market price of our securities.
Any new debt funding, if available, may be on terms less favorable to us than our Credit Facility or the Indenture that governs our 2023 Convertible Notes.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements other than operating leases, and we have not entered into any transactions involving unconsolidated subsidiaries or special purpose entities.acquisition-related contingent consideration.
Future Contractual Obligations
The following table sets forth our estimates as to the amounts and timing of contractual payments for our most significant contractualOur future obligations as of December 31, 2018. The2021 include both current and long-term obligations. We have a current obligation of $6.3 million and long-term obligations of $322.6 million related to our 2023 Convertible Notes, including current and long-term interest, and Credit Facility. For more information on our 2023 Convertible Notes and Credit Facility, refer to Note 14, "Debt" in the table reflects future unconditional payments and is based on the terms of the relevant agreements, appropriate classification of items under GAAP currently in effect and certain assumptions such as interest rates. Future events could cause actual payments to differ from these amounts.
Part II, Item 8. Future contractual obligations related to our long-term debt assume that payments will be made based on the current payment schedule and that interest payments will be at their stated rates and exclude any additional revolving line of credit borrowings or repayments subsequent to December 31, 20182021 and prior to the November 30, 2023 maturity date of our Credit Facility.
Under our operating leases as noted in Note 15, “Leases” in Part II, Item 8, we have a current obligation of $30.8 million and long-term obligations of $236.0 million.
   Payments Due by Period
Contractual ObligationsTotal Less than 1 Year 1-3 Years 3-5 Years More than 5 Years
 (in thousands)
Long-term debt (1)
$347,805
 $6,255
 $12,650
 $328,900
 $—
Operating leases261,291
 49,757
 91,564
 44,780
 75,190
Total obligations$609,096
 $56,012
 $104,214
 $373,680
 $75,190
(1)
Includes principal and interest payments. Projected interest payments may differ in the future based on the balance outstanding on our Credit Facility, as well as changes in market interest rates.
EffectThese amounts reflect future unconditional payments and are based on the terms of Inflation
Inflation is not generally a material factor affecting our business. General operating expensesthe relevant agreements, appropriate classification of items under GAAP currently in effect and certain assumptions such as salaries, employee benefits and lease costs are, however, subjectinterest rates. Future events could cause actual payments to normal inflationary pressures.differ from these amounts.

56



Critical Accounting PoliciesEstimates
General.General. Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which we have prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to allowance for doubtful accountsrevenues, goodwill and unbilled services, goodwill, share-based compensation,intangible assets, income taxes and contingencies, on an ongoing basis. We base ourOur estimates are based on current facts and circumstances, historical experience and various other assumptions that we believe are reasonable. These resultsreasonable, which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We believe that the following critical accounting policiesestimates reflect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
Revenue Recognition.Revenues are recognized when we satisfy a performance obligation by transferring goods or services promised in a contract to a customer and in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. Performance obligations in our contracts represent distinct or separate service streamsservices that we provide to our customers.
We evaluate our revenue contracts with customers based on the five-step model under Revenue from Contracts with Customers: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenues when (or as) each performance obligation is satisfied. If, at the outset of an arrangement, we determine that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met.
48


We generate the majority of our revenues by providing consulting services to our clients. Most of our consulting service contracts are based on one of the following types of contract arrangements:

•Time and expense arrangements require the client to pay us based on the number of hours worked at contractually agreed-upon rates. We recognize revenues for these contract arrangements based on hours incurred and contracted rates utilizing a right-to-invoice practical expedient because we have a right to consideration for services completed to date. When a time and expense arrangement has a not-to-exceed or "cap" amount and we expect to perform work in excess of the cap, we recognize revenuerevenues up to the cap amount specified by the client, based on the efforts or hours incurred as a percentage of total efforts or hours expected to be incurred (i.e., proportional"proportional performance method)method"). Certain time and materials
•Fixed-fee arrangements may be subject to third-party approval, e.g., a court or other regulatory institution, with interim billing and payments made and received based upon preliminarily agreed-upon rates. In such cases, we record revenues for the portion of our services based on our assessment of the expected probability of amounts ultimately to be agreed upon by the court or regulator. These assessments are made on a case-by-case basis depending on the nature of the engagement, client economics, historical experience and other appropriate factors.
Fixed fee arrangements require the client to pay a pre-establishedfixed fee in exchange for a predetermined set of professional services. We recognize revenues for these arrangements based onearned to date by applying the proportional performance related to individual performance obligations within each arrangement, however,method. Generally, these arrangements generally have one performance obligation.
•Performance-based or contingent arrangements represent forms of variable consideration. In these arrangements, our fees are based on the attainment of contractually defined objectives with our client, such as completing a business transaction or assisting the client in achieving a specific business objective. When our performance obligation(s) are satisfied over time, we determine the transaction price based on the expected probability of achieving the agreed-upon outcome andWe recognize revenues earned to date in an amount that is probable not to reverse and by applying the proportional performance method. These arrangements include conditional payments, commonly referred to as success fees, which were previously recognizedmethod when the cash was collected.criteria for over time revenue recognition are met.
Certain fees in our time and materials arrangements may be subject to approval by a third party, such as a bankruptcy court or other regulatory agency. In such cases, we record revenues based on the amount we estimate we will be entitled to in exchange for our services and only to the extent a significant reversal of revenues is not likely to occur when the uncertainty associated with the estimate is subsequently resolved. Potential fee reductions imposed by bankruptcy courts and other regulatory agencies or negotiated with specific clients are estimated on a specific identification basis. Our estimates may vary depending on the nature of the engagement, client economics, historical experience and other appropriate factors. When there are changes in our estimates of potential fee reductions, we record such changes to revenues with a corresponding offset to our billed and unbilled accounts receivable.
In addition, we generate certain revenues from our Technology segment, we generate unit-based revenues that are based on units of data stored or processed. Unit-based revenues are recognized as services are provided, based on eitherat agreed-upon per unit rates for the amount of data stored or processed, the number of concurrent users accessing the information, or the number of pages or images processed for a client, and agreed-upon per unit rates. We also generate revenues from our on-premise software licenses. Software license revenues are generally recognized at a point in time when the customer acceptance occurs, in accordance with the provision of the arrangements.
Certain of our time and expense and fixed fee billing arrangements may include client incentives in the form of volume-based discounts, where if certain fee levels are reached, the client can receive future services at a discounted hourly rate.

57



Contracts with customers that have a prospective discounted pricing option based on predetermined volume thresholds are evaluated to determine whether they include a material right, which is an option that provides a customer the right to acquire free or discounted goods or services in the future. If the option provides a material right to the customer, we allocate a portion of the transaction price to the material right and defer revenues during the pre-discount period, compared with our previous practice of recognizing the reduction in revenues when customers became eligible to receive the volume discount.client.
Reimbursable expenses, including those relating to travel, out-of-pocket expenses, outside consultants and other outside service costs, are generally included in revenues, and an equivalent amount of reimbursable expenses is included in costs of services in the period in which the expense is incurred.
Allowance for Doubtful Accounts and Unbilled Services.We maintain an allowance for doubtful accounts and unbilled services for estimated losses resulting from disputes that affect our ability to fully collectour billed accounts receivable, potential fee reductions negotiated by clients or imposed by bankruptcy courts and the inability of clients to pay our fees. Even if a bankruptcy court approves our services, the court has the discretion to require us to refund all or a portion of our fees due to the outcome of the case or a variety of other factors. We estimate the allowance for all receivable risks by reviewing the status of each matter and recording reserves based on our experience and knowledge of the particular client and historical collection patterns. However, our actual experience may vary from our estimates. If the financial condition of our clients were to deteriorate, resulting in their inability or unwillingness to pay our fees, or bankruptcy courts require us to refund certain fees, we may need to record additional allowances or write-offs in future periods. This risk related to a client’s inability to pay may be partially mitigated to the extent that we may receive retainers from some of our clients prior to performing services.
Timing of revenue recognition often differs from the timing of billing to our customers. Generally, we transfer goods or services to a customer before the customer pays consideration or payment is due. If we have an unconditional right to invoice and receive payment for goods or services already provided, we record billed and unbilled receivables on our Consolidated Balance Sheets. Our contract terms generally include a requirement of payment within 30 days when no contingencies exist. Payment terms and conditions vary depending on the jurisdiction, market and type of service, and whether regulatory or other third-party approvals are required. In addition, contracts may be negotiated per the client’s request, or atAt times, we are asked tomay execute contracts in a form provided by customers that might include different terms. Our standard contractpayment terms generally include a requirement of payment within 30 days where no contingencies exist.
We record adjustments to the allowance for doubtful accounts and unbilled services as a reduction in revenues when there are changes in estimates of fee reductions thatcontracts may be imposed by bankruptcy courts and other regulatory institutions, for both billed and unbilled receivables. The allowance for doubtful accounts and unbilled services is also adjusted afternegotiated at the related work has been billed to the client and we later discover that collectability is not reasonably assured. These adjustments are recorded to “Selling, general and administrative expenses” on the Consolidated Statements of Comprehensive Income and totaled $17.9 million, $15.4 million and $8.9 million for the years ended December 31, 2018, 2017 and 2016, respectively.client’s request.
Goodwill and Other Intangible Assets.Goodwill represents the purchase price of acquired businesses in excess of the fair market value of net assets acquired at the date of acquisition. Other intangibleIntangible assets may include trade names, customer relationships, non-competition agreementstrademarks and acquired software.
We test our goodwill and other indefinite-lived intangible assets for impairment annually as of the first day of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. On a quarterly basis, we monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test. Important factors we consider that could trigger an interim impairment review include, but are not limited to, the following:
•significant underperformance relative to expected historical or projected future operating results;
•a significant change in the manner of our use of the acquired asset or the strategy for our overall business;
•a significant market decline related to negative industry or economic trends; and/or
•our market capitalization relative to net carrying value.
49


We assess our goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or a business one level below that operating segment if discrete financial information is available and regularly reviewed by the chief operating decision makers. Entities
Our annual goodwill impairment test may be conducted using a qualitative assessment or a quantitative assessment. Under GAAP, we have an unconditional option under certain circumstances,to bypass the qualitative assessment and perform a quantitative impairment test. We determine whether to perform a qualitative assessment regardingfirst or to bypass the qualitative assessment and proceed with the quantitative goodwill impairment test for each of our reporting units based on the excess of fair value over carrying value from the most recent quantitative tests and other events or changes in circumstances that could impact the fair value of the reporting unit's fair value to determine whether it is necessary to perform the quantitative impairment test.units.
In the qualitative assessment, we consider various factors, events or circumstances, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant reporting unit specific events. If, based on the qualitative assessment, an entity determineswe determine that it is not “more likely than not” that the fair

58



value of a reporting unit is less than its carrying value, we do not prepare a quantitative impairment test. If we determine otherwise, we will prepare a quantitative assessment for potential goodwill impairment.
In the quantitative assessment, we compare the estimated fair value of the reporting unit with the carrying amount of that reporting unit. We estimate fair value using a combination of an income approach (based on discounted cash flows) and market approaches, using appropriate weighting factors. If the fair value exceeds the carrying amount, goodwill is not impaired. However, if the carrying value exceeds the fair value of the reporting unit, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
The cash flows employed in the income approach are based on our most recent forecasts, budgets forecasts and business plans, as well as various growth rate assumptions for years beyond the current business plan period, discounted using an estimated weighted average cost of capital (“WACC”) based on our, which reflects an assessment of the risk inherent in the future revenue streams and cash flows and our WACC.flows. The WACC consists of (1) a risk-free rate of return, (2) an equity risk premium that is based on the historical rate of return onfor equity securities of publicly traded companies, with business characteristics comparable with our reporting units, (3) the current after-tax market rate of return on debt of companies with business characteristics similar to our reporting units each weightedand (4) a company-specific risk premium. We weight the cost of equity and debt by the relative market value percentages of our equity and debt, and (4) an appropriate size premium.debt. In the market approach, we utilize market multiples derived from comparable guideline companies and comparable market transactions to the extent available. These valuations are based on estimates and assumptions, including projected future cash flows, and the determination of appropriate market comparablescomparable guideline companies and the determination of whether a premium or discount should be applied to such comparables.
We determine whether to perform qualitative assessment first or to bypass the qualitative assessment and proceed with the quantitative goodwill impairment test for each of our reporting units based on the headroom from the most recent quantitative tests and other events or changes in circumstances that could impact the fair value of the reporting units.comparable guideline companies.
The process of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment and estimates. There can be no assurance that the estimates and assumptions used in our goodwill impairment testing will prove to be accurate predictions of the future. If our assumptions regarding forecasted cash flows are not achieved or market conditions significantly deteriorate, we may be required to record goodwill impairment charges in future periods, whether in connection with our next annual impairment test or prior to that, if a triggering event occurs outside of the quarter during which the annual goodwill impairment test is performed. It is not possible at this time to determine if any future impairment charge would result or, if it does, whether such charge would be material.
Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset’s carrying valueasset may not be recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability of assets to be held and used by a comparison of the carrying value of the assets with future undiscounted net cash flows expected to be generated by the assets. We amortize our acquired finite-lived intangiblegroup assets on a straight-line basis over periods ranging from fiveat the lowest level for which there are identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset group, we estimate the fair value of the asset group to 15 years.determine whether an impairment loss should be recognized.
Significant New Accounting Pronouncements
See Note 2, “New Accounting Standards” in Part II, Item 8 of this Annual Report.
50


ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in interest rates, changes in the price of our common stock and changes in foreign exchange rates.
Interest Rate Risk and Market Risk
We are exposed to interest rate risk related to debt obligations outstanding. Interest rate changes expose our fixed rate long-term borrowings to changes in fair value and expose our variable rate borrowings to changes in our interest expense. As of December 31, 2021, there were no variable rate debt instruments outstanding as there were no outstanding borrowings under our Credit Facility. Future interest rate risk may be affected by revolving line of credit borrowings subsequent to December 31, 2021 and prior to the November 30, 2023 maturity date of our Credit Facility.
From time to time, we may use derivative instruments primarily consisting of interest rate swap agreements, to manage our interest rate exposure by achieving a desired proportion of fixed rate vs. variable rate borrowings.risk and market risk exposure. All of our derivative transactions are entered into for non-trading purposes.
The following table presents principal cash flows and related interest rates by year of maturity for our 2023 Convertible Notes and the fair value of the debt as of December 31, 2018. The2021 and 2020. Our stock price affects the fair value has beenof our 2023 Convertible Notes, which is determined based on the last actively traded prices in an over-the-counter market for our 2023 Convertible Notes. AsThe last actively traded prices for our 2023 Convertible Notes per $1,000 principal amount were $1,475.50 and $1,255.28 as of December 31, 2018, there were no variable rate debt instruments outstanding as there were no borrowings under our Credit Facility. Future interest rate risk may be affected by revolving line of credit borrowings subsequent to December 31, 20182021 and prior to the November 30, 2023 maturity date of our Credit Facility.2020, respectively.

59



     December 31, 2021December 31, 2020
2022202320242025ThereafterTotalFair
Value		TotalFair
Value
            December 31, 2018
Long-Term Debt2019 2020 2021 2022 2023 Thereafter Total 
Fair
Value
Long-Term Debt(dollars in thousands)
(dollars in thousands)
Fixed rate$—
 $—
 $—
 $—
 $316,250 $—
 $316,250 $291,837Fixed rate$— $316,245 $— $— $— $316,245$466,619 $316,250 $396,982 
Average interest rate—
 —
 —
 —
 5.4% —
 5.4% —
Average interest rate— 5.4 %— — — 5.4 %— 5.4 %— 
Foreign Currency Exchange Rate Risk
Exchange Rate Risk
Our foreign currencyFX exposure primarily relates to intercompany receivables and payables and third-party receivables and payables that are denominated in currencies other than the functional currency of our legal entities. Our largest foreign currencyFX exposure is unsettled intercompany payables and receivables, which are reviewed on a regular basis. In cases where settlement of intercompany balances is not practical, we may use cash to create offsetting currency positions to reduce exposure. Gains and losses from foreign currencyFX transactions are included in interest income and other on our Consolidated Statements of Comprehensive Income and to date have not had a material impact on our consolidated financial statements.Income. See Note 6,8, “Interest Income and Other” in Part II, Item 8 of this Annual Report for information.
51


Translation of Financial Results
Most of our foreign subsidiaries operate in a currency other than USD; therefore, increases or decreases in the value of USD against other major currencies will affect our operating results and the value of our balance sheet items denominated in foreign currencies. Our most significant exposures to translation risk currently relate to functional currency assets and liabilities that are denominated in the British pound, euro, Australian dollar, British pound and Canadian dollar. The following table details the unrealized changes in the net investments of foreign subsidiaries whose currencies are denominated in currencies other than USD for the years ended December 31, 2018, 20172021, 2020 and 2016.2019. These translation adjustments are reflected in “Other comprehensive income (loss)” on our Consolidated Statements of Comprehensive Income.
 Year Ended December 31,
202120202019
Changes in Net Investment of Foreign Subsidiaries(in thousands)
Euro$(12,381)$12,543 $(1,323)
Australian dollar(4,002)6,619 (208)
British pound(3,132)13,599 7,390 
Canadian dollar(247)1,209 1,020 
All other(2,643)442 91 
Total$(22,405)$34,412 $6,970 
52

 Year Ended December 31,
Changes in Net Investment of Foreign Subsidiaries2018 2017 2016
 (in thousands)
British pound$(15,590) $20,394
 $(34,329)
Euro(2,753) 6,595
 (1,274)
Australian dollar(6,077) 4,058
 922
Canadian dollar(1,639) 1,439
 328
All other(1,543) (1,822) (7,531)
Total$(27,602) $30,664
 $(41,884)

60




ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FTI Consulting, Inc. and Subsidiaries
Consolidated Financial Statements
INDEX
Page
Management’s Report on Internal Control over Financial Reporting
6254
Report of Independent Registered Public Accounting Firm — Internal Control over Financial Reporting
6355
Report of Independent Registered Public Accounting Firm — Consolidated Financial Statements
6456
Consolidated Balance Sheets — December 31, 20182021 and 20172020
6558
Consolidated Statements of Comprehensive Income — Years Ended December 31, 2018, 20172021, 2020 and 20162019
6659
Consolidated Statements of Stockholders’ Equity — Years Ended December 31, 2018, 20172021, 2020 and 20162019
6760
Consolidated Statements of Cash Flows — Years Ended December 31, 2018, 20172021, 2020 and 20162019
6861
Notes to Consolidated Financial Statements
6962

53
61




Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2018.2021. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our system of internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 20182021 based on the framework in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2018.2021.
KPMG LLP, the independent registered public accounting firm that audited our financial statements, has issued an audit report on their assessment of internal control over financial reporting, which is included elsewhere in this Annual Report.
Date: February 26, 2019
24, 2022
/s/ STEVEN H. GUNBY
Steven H. Gunby

President and Chief Executive Officer

(principal executive officer)
Principal Executive Officer)
/s/ AJAY SABHERWAL
Ajay Sabherwal

Chief Financial Officer and Interim Chief Accounting Officer

(principal financial officer)
Principal Financial Officer)

54
62




Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
FTI Consulting, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited FTI Consulting, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control —– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control — – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 20182021 and 2017,December 31, 2020, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2018,2021, and the related notes and financial statement Schedule II, Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February 27, 201924, 2022 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ KPMG LLP
McLean, Virginia
February 27, 2019

24, 2022
63
55





Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors
FTI Consulting, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of FTI Consulting, Inc. and subsidiaries (the Company) as of December 31, 20182021 and 2017,December 31, 2020, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2018,2021, and the related notes and financial statement Schedule II, Valuation and Qualifying Accounts (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,December 31, 2020, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2018,2021, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control —– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 201924, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 1 and 2 to the consolidated financial statements, effective January 1, 2018, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers. This change was adopted using the modified retrospective method.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Changes in estimates of potential fee reductions
As discussed in Note 1 to the consolidated financial statements, for certain arrangements, the Company records revenues based on the amount it estimates it will be entitled to in exchange for its services and only to the extent that a significant reversal of revenue is not likely to occur when the uncertainty associated with the estimate is subsequently resolved. The Company records changes to revenue when there are changes in estimates of potential fee reductions imposed by bankruptcy courts or other regulatory agencies or negotiated with specific clients. Revenues for the year ended December 31, 2021 were approximately $2.8 billion, which includes the previously mentioned changes.
We identified the evaluation of changes in estimates of potential fee reductions as a critical audit matter. There was a high degree of subjectivity and audit effort in evaluating the likely outcome of potential fee reductions imposed by bankruptcy courts or other regulatory agencies or negotiated by specific clients, which may vary depending on the nature of the engagement, client economics, historical experience and other appropriate factors.
56


The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s revenue process, including controls related to the monthly analysis of estimated potential fee reductions by arrangement, and review of the related changes to revenue. For a sample of changes in estimates of potential fee reductions, we inspected relevant evidence, including: (1) contractual documents, (2) regulatory correspondence if applicable, and (3) historical trends and analysis performed by the Company that supported the change, and also inquired of relevant Company personnel to assess the rationale for making the change. For a sample of arrangements, we assessed the existence and accuracy of the billed receivables by confirming amounts recorded directly with the Company’s clients. We compared actual collections and write-offs to previous billed and unbilled receivables to assess the Company’s ability to accurately record changes in estimates of potential fee reductions.
/s/ KPMG LLP
We have served as the Company's auditor since 2006.
McLean, Virginia
February 27, 2019

24, 2022
64
57




FTI Consulting, Inc. and Subsidiaries

Consolidated Balance Sheets
(in thousands, except per share data)
December 31, December 31,
2018 2017 20212020
Assets   Assets
Current assets   Current assets
Cash and cash equivalents$312,069
 $189,961
Cash and cash equivalents$494,485 $294,953 
Accounts receivable:   
Billed receivables437,797
 390,996
Unbilled receivables319,205
 312,569
Allowance for doubtful accounts and unbilled services(202,394) (180,687)
Accounts receivable, net554,608
 522,878
 Accounts receivable, net754,120 711,357 
Current portion of notes receivable29,228
 25,691
Current portion of notes receivable30,256 35,253 
Prepaid expenses and other current assets69,448
 55,649
Prepaid expenses and other current assets91,166 88,144 
Total current assets965,353
 794,179
Total current assets1,370,027 1,129,707 
Property and equipment, net84,577
 75,075
Property and equipment, net142,163 101,642 
Operating lease assetsOperating lease assets215,995 156,645 
Goodwill1,172,316
 1,204,803
Goodwill1,232,791 1,234,879 
Other intangible assets, net34,633
 44,150
Intangible assets, netIntangible assets, net31,990 41,550 
Notes receivable, net84,471
 98,105
Notes receivable, net53,539 61,121 
Other assets37,771
 40,929
Other assets54,404 51,819 
Total assets$2,379,121
 $2,257,241
Total assets$3,100,909 $2,777,363 
Liabilities and Stockholders' Equity   Liabilities and Stockholders' Equity
Current liabilities   Current liabilities
Accounts payable, accrued expenses and other$104,600
 $94,873
Accounts payable, accrued expenses and other$165,025 $170,066 
Accrued compensation333,536
 268,513
Accrued compensation507,556 455,933 
Billings in excess of services provided44,434
 46,942
Billings in excess of services provided45,535 44,172 
Total current liabilities482,570
 410,328
Total current liabilities718,116 670,171 
Long-term debt, net265,571
 396,284
Long-term debt, net297,158 286,131 
Noncurrent operating lease liabilitiesNoncurrent operating lease liabilities236,026 161,677 
Deferred income taxes155,088
 124,471
Deferred income taxes170,612 158,342 
Other liabilities127,067
 134,187
Other liabilities95,676 100,861 
Total liabilities1,030,296
 1,065,270
Total liabilities1,517,588 1,377,182 
Commitments and contingent liabilities (Note 14)
 
Commitments and contingencies (Note 16)Commitments and contingencies (Note 16)00
Stockholders' equity   Stockholders' equity
Preferred stock, $0.01 par value; shares authorized — 5,000; none
outstanding
—
 —
Preferred stock, $0.01 par value; shares authorized — 5,000; none
outstanding
— — 
Common stock, $0.01 par value; shares authorized — 75,000;
shares issued and outstanding — 38,147 (2018) and 37,729 (2017)
381
 377
Common stock, $0.01 par value; shares authorized — 75,000; shares
issued and outstanding — 34,333 (2021) and 34,481 (2020)
Common stock, $0.01 par value; shares authorized — 75,000; shares
issued and outstanding — 34,333 (2021) and 34,481 (2020)
343 345 
Additional paid-in capital299,534
 266,035
Additional paid-in capital13,662 — 
Retained earnings1,196,727
 1,045,774
Retained earnings1,698,156 1,506,271 
Accumulated other comprehensive loss(147,817) (120,215)Accumulated other comprehensive loss(128,840)(106,435)
Total stockholders' equity1,348,825
 1,191,971
Total stockholders' equity1,583,321 1,400,181 
Total liabilities and stockholders' equity$2,379,121
 $2,257,241
Total liabilities and stockholders' equity$3,100,909 $2,777,363 
See accompanying notes to consolidated financial statements.




6558



FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income
(in thousands, except per share data)
 Year Ended December 31,
 202120202019
Revenues$2,776,222 $2,461,275 $2,352,717 
Operating expenses
Direct cost of revenues1,915,507 1,672,711 1,534,896 
Selling, general and administrative expenses537,844 488,411 504,074 
Special charges— 7,103 — 
Amortization of intangible assets10,823 10,387 8,152 
 2,464,174 2,178,612 2,047,122 
Operating income312,048 282,663 305,595 
Other income (expense)
Interest income and other6,193 (412)2,061 
Interest expense(20,294)(19,805)(19,206)
 (14,101)(20,217)(17,145)
Income before income tax provision297,947 262,446 288,450 
Income tax provision62,981 51,764 71,724 
Net income$234,966 $210,682 $216,726 
Earnings per common share — basic$7.02 $5.92 $5.89 
Earnings per common share — diluted$6.65 $5.67 $5.69 
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments, net of tax
   expense of $—, $— and $—
$(22,405)$34,412 $6,970 
Total other comprehensive income (loss), net of tax(22,405)34,412 6,970 
Comprehensive income$212,561 $245,094 $223,696 
 Year Ended December 31,
 2018 2017 2016
Revenues$2,027,877
 $1,807,732
 $1,810,394
Operating expenses     
Direct cost of revenues1,328,074
 1,215,560
 1,210,771
Selling, general and administrative expenses465,636
 432,013
 436,716
Special charges—
 40,885
 10,445
Amortization of other intangible assets8,162
 10,563
 10,306
 1,801,872
 1,699,021
 1,668,238
Operating income226,005
 108,711
 142,156
Other income (expense)     
Interest income and other4,977
 3,752
 10,466
Interest expense(27,149) (25,358) (24,819)
Gain on sale of business13,031
 —
 —
Loss on early extinguishment of debt(9,072) —
 —
 (18,213) (21,606) (14,353)
Income before income tax provision (benefit)207,792
 87,105
 127,803
Income tax provision (benefit)57,181
 (20,857) 42,283
Net income$150,611
 $107,962
 $85,520
Earnings per common share — basic$4.06
 $2.79
 $2.09
Earnings per common share — diluted$3.93
 $2.75
 $2.05
Other comprehensive income (loss), net of tax     
Foreign currency translation adjustments, net of tax
expense of $373, $— and $—		$(27,602) $30,664
 $(41,884)
Other comprehensive income (loss), net of tax(27,602) 30,664
 (41,884)
Comprehensive income$123,009
 $138,626
 $43,636


See accompanying notes to consolidated financial statements.




6659



FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity
(in thousands)
Additional Paid-in CapitalRetained EarningsAccumulated
Other Comprehensive Loss
 Common Stock 
 SharesAmountTotal
Balance at December 31, 201838,147 $381 $299,534 $1,196,727 $(147,817)$1,348,825 
Net income— $— $— $216,726 $— $216,726 
Other comprehensive income:
Cumulative translation adjustment— — — — 6,970 6,970 
Issuance of common stock in connection with:
            Exercise of options256 3 9,685 — — 9,688 
            Restricted share grants, less net settled
               shares of 78
245 3 (6,520)— — (6,517)
 Stock units issued under incentive
compensation plan
— — 1,413 — — 1,413 
Purchase and retirement of common stock(1,258)(13)(105,928)— — (105,941)
Share-based compensation— — 17,978 — — 17,978 
Balance at December 31, 201937,390 $374 $216,162 $1,413,453 $(140,847)$1,489,142 
Net income— $— $— $210,682 $— $210,682 
Other comprehensive income:
Cumulative translation adjustment— — — — 34,412 34,412 
Issuance of common stock in connection with:
            Exercise of options140 1 4,933 — — 4,934 
            Restricted share grants, less net settled
               shares of 93
220 3 (10,759)— — (10,756)
 Stock units issued under incentive
compensation plan
— — 2,314 — — 2,314 
Purchase and retirement of common stock(3,269)(33)(235,554)(117,864)— (353,451)
Share-based compensation— — 22,904 — — 22,904 
Balance at December 31, 202034,481 $345 $— $1,506,271 $(106,435)$1,400,181 
Net income— $— $— $234,966 $— $234,966 
Other comprehensive loss:
Cumulative translation adjustment— — — — (22,405)(22,405)
Issuance of common stock in connection with:
            Exercise of options78 1 2,693 — — 2,694 
            Restricted share grants, less net settled
               shares of 94
196 1 (11,636)— — (11,635)
 Stock units issued under incentive
compensation plan
— — 2,603 — — 2,603 
Purchase and retirement of common stock(422)(4)(3,047)(43,081)— (46,132)
Conversion feature of convertible
   senior notes due 2023, net		— — (2)— — (2)
Share-based compensation— — 23,051 — — 23,051 
Balance at December 31, 202134,333 $343 $13,662 $1,698,156 $(128,840)$1,583,321 
     Additional Paid-in Capital Retained Earnings 
Accumulated
Other Comprehensive Loss
  
 Common Stock     
 Shares Amount    Total
Balance at December 31, 201541,234
 $412
 $400,705
 $855,481
 $(108,995) $1,147,603
Net income—
 $—
 $—
 $85,520
 $—
 $85,520
Other comprehensive income (loss):           
Cumulative translation adjustment—
 —
 —
 —
 (41,884) (41,884)
Issuance of common stock in connection with:           
Exercise of options, net of income tax benefit
   from share-based awards of $2,051
820
 8
 25,234
 —
 —
 25,242
Restricted share grants, less net settled shares
   of 137
520
 5
 (5,541) —
 —
 (5,536)
Stock units issued under incentive
   compensation plan
—
 —
 1,842
 —
 —
 1,842
Purchase and retirement of common stock(537) (5) (21,484) —
 —
 (21,489)
Share-based compensation—
 —
 16,060
 —
 —
 16,060
Balance at December 31, 201642,037
 $420
 $416,816
 $941,001
 $(150,879) $1,207,358
Net income—
 $—
 $—
 $107,962
 $—
 $107,962
Other comprehensive income (loss):           
Cumulative translation adjustment—
 —
 —
 —
 30,664
 30,664
Issuance of common stock in connection with:           
Exercise of options123
 1
 4,132
 —
 —
 4,133
Restricted share grants, less net settled shares
   of 92
243
 2
 (4,442) —
 —
 (4,440)
Stock units issued under incentive
   compensation plan
—
 —
 1,547
 —
 —
 1,547
Purchase and retirement of common stock(4,674) (46) (168,048) —
 —
 (168,094)
Cumulative effect due to adoption of new
accounting standard		—
 —
 —
 (3,189) —
 (3,189)
Share-based compensation—
 —
 16,030
 —
 —
 16,030
Balance at December 31, 201737,729
 $377
 $266,035
 $1,045,774
 $(120,215) $1,191,971
Net income—
 $—
 $—
 $150,611
 $—
 $150,611
Other comprehensive income (loss):           
Cumulative translation adjustment—
 —
 —
 —
 (27,602) (27,602)
Issuance of common stock in connection with:           
Exercise of options1,051
 11
 41,557
 —
 —
 41,568
Restricted share grants, less net settled shares
   of 58
319
 3
 (3,097) —
 —
 (3,094)
Stock units issued under incentive
   compensation plan
—
 —
 1,059
 —
 —
 1,059
Purchase and retirement of common stock(952) (10) (55,728) —
 —
 (55,738)
Cumulative effect due to adoption of
    new accounting standard
—
 —
 —
 342
 —
 342
Conversion feature of convertible
   senior notes due 2023, net
—
 —
 34,131
 —
 —
 34,131
Share-based compensation—
 —
 15,577
 —
 —
 15,577
Balance at December 31, 201838,147
 $381
 $299,534
 $1,196,727
 $(147,817) $1,348,825


See accompanying notes to consolidated financial statements.




6760



FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31, Year Ended December 31,
2018 2017 2016 202120202019
Operating activities     Operating activities   
Net income$150,611
 $107,962
 $85,520
Net income$234,966 $210,682 $216,726 
Adjustments to reconcile net income to net cash provided by operating activities:     Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization31,536
 31,177
 38,700
Depreciation and amortization34,269 32,661 30,153 
Amortization and impairment of other intangible assets8,162
 10,563
 10,306
Amortization and impairment of intangible assetsAmortization and impairment of intangible assets10,823 10,387 8,152 
Acquisition-related contingent consideration479
 2,291
 2,164
Acquisition-related contingent consideration(324)5,593 2,372 
Provision for doubtful accounts17,872
 15,386
 8,912
Non-cash share-based compensation15,577
 16,030
 16,920
Amortization of debt discount and issuance costs5,456
 1,984
 1,985
Loss on early extinguishment of debt9,072
 —
 —
Gain on sale of business(13,031) —
 —
Other769
 611
 (1,204)
Provision for expected credit lossesProvision for expected credit losses16,151 19,692 19,602 
Share-based compensationShare-based compensation23,051 22,904 17,978 
Amortization of debt discount and issuance costs and otherAmortization of debt discount and issuance costs and other11,701 11,259 11,917 
Deferred income taxesDeferred income taxes4,958 (9,132)(3,712)
Changes in operating assets and liabilities, net of effects from
acquisitions:
     Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, billed and unbilled(72,034) (50,831) 3,471
Accounts receivable, billed and unbilled(61,274)(26,800)(141,894)
Notes receivable8,987
 14,928
 3,145
Notes receivable12,645 8,029 10,445 
Prepaid expenses and other assets(2,258) 629
 (2,840)Prepaid expenses and other assets(1,165)4,640 (22,648)
Accounts payable, accrued expenses and other8,908
 4,421
 3,268
Accounts payable, accrued expenses and other(2,102)13,901 (8,907)
Income taxes11,941
 (25,768) 22,012
Income taxes10,523 (22,549)24,496 
Accrued compensation52,510
 1,795
 40,350
Accrued compensation59,566 38,627 61,339 
Billings in excess of services provided(3,885) 16,447
 779
Billings in excess of services provided1,695 7,175 (8,133)
Net cash provided by operating activities230,672
 147,625
 233,488
Net cash provided by operating activities355,483 327,069 217,886 
Investing activities     Investing activities
Proceeds from sale of business50,283
 —
 —
Payments for acquisition of businesses, net of cash received—
 (8,929) (1,251)Payments for acquisition of businesses, net of cash received(10,428)(25,271)(18,791)
Purchases of property and equipment(32,270) (32,004) (28,935)
Other731
 295
 54
Net cash provided by (used in) investing activities18,744
 (40,638) (30,132)
Purchases of property and equipment and otherPurchases of property and equipment and other(68,665)(34,849)(41,815)
Net cash used in investing activitiesNet cash used in investing activities(79,093)(60,120)(60,606)
Financing activities     Financing activities
Borrowings (repayments) under revolving line of credit, net(100,000) 30,000
 (130,000)
Proceeds from issuance of convertible notes316,250
 —
 —
Payments of long-term debt(300,000) —
 —
Payments of debt issue and debt prepayment costs(16,149) —
 —
Borrowings under revolving line of creditBorrowings under revolving line of credit402,500 289,500 45,000 
Repayments under revolving line of creditRepayments under revolving line of credit(402,500)(289,500)(45,000)
Purchase and retirement of common stock(55,738) (168,094) (21,489)Purchase and retirement of common stock(46,133)(353,593)(105,797)
Net issuance of common stock under equity compensation plans38,475
 (504) 21,708
Payments for acquisition-related contingent consideration(3,029) (5,161) (866)
Share-based compensation tax withholdings and otherShare-based compensation tax withholdings and other(9,246)(5,823)3,171 
Payments for business acquisition liabilitiesPayments for business acquisition liabilities(7,496)(3,948)(2,282)
Deposits and other2,672
 2,825
 5,337
Deposits and other1,201 3,311 1,597 
Net cash used in financing activities(117,519) (140,934) (125,310)Net cash used in financing activities(61,674)(360,053)(103,311)
Effect of exchange rate changes on cash and cash equivalents(9,789) 7,750
 (11,648)Effect of exchange rate changes on cash and cash equivalents(15,184)18,684 3,335 
Net increase (decrease) in cash and cash equivalents122,108
 (26,197) 66,398
Net increase (decrease) in cash and cash equivalents199,532 (74,420)57,304 
Cash and cash equivalents, beginning of period189,961
 216,158
 149,760
Cash and cash equivalents, beginning of period294,953 369,373 312,069 
Cash and cash equivalents, end of period$312,069
 $189,961
 $216,158
Cash and cash equivalents, end of period$494,485 $294,953 $369,373 
Supplemental cash flow disclosures     Supplemental cash flow disclosures
Cash paid for interest$21,687
 $23,285
 $23,154
Cash paid for interest$9,102 $7,752 $7,606 
Cash paid for income taxes, net of refunds$45,568
 $4,929
 $20,270
Cash paid for income taxes, net of refunds$47,500 $83,445 $50,941 
Non-cash investing and financing activities:     Non-cash investing and financing activities:
Issuance of stock units under incentive compensation plans$1,059
 $1,547
 $1,842
Issuance of stock units under incentive compensation plans$2,603 $2,314 $1,413 
Acquisition-related contingent liability$—
 $3,426
 $—
Business acquisition liabilities not yet paidBusiness acquisition liabilities not yet paid$1,093 $6,209 $9,746 
Non-cash additions to property and equipmentNon-cash additions to property and equipment$6,518 $4,966 $(2,742)

See accompanying notes to consolidated financial statements.

61
68



FTI Consulting, Inc. and Subsidiaries

Notes to Consolidated Financial Statements
(dollar and share amounts in tables expressed in thousands, except per share data)
1. Description of Business and Summary of Significant Accounting Policies
Description of Business
FTI Consulting, Inc., including its consolidated subsidiaries (collectively, the “Company,” “we,” “our” or “FTI Consulting”), is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political and& regulatory, reputational and transactional. Individually, each of our segments and practices is staffed with experts recognized for the depth of their knowledge and a track record of making an impact. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle, from proactive risk management to rapid response to unexpected events and dynamic environments. We operate through five5 reportable segments: Corporate Finance & Restructuring ("Corporate Finance"), Forensic and Litigation Consulting ("FLC"), Economic Consulting, Technology and Strategic Communications.
Accounting Principles
Our financial statements are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of FTI Consulting and all of our subsidiaries. All intercompany transactions and balances have been eliminated. Reclassifications of certain prior period amounts have been made to conform to the current period presentation.
Foreign Currency
Results of operations for our non-U.S. subsidiaries are translated from the designated functional currency to the reporting currency of the U.S. dollar ("USD"). Revenues and expenses are translated at average exchange rates for each month, while assets and liabilities are translated at balance sheet date exchange rates. Resulting net translation adjustments are recorded as a component of stockholders’ equity in “Accumulated other comprehensive income (loss).loss.”
Transaction gains and losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in “Interest income and other” on the Consolidated Statements of Comprehensive Income. Such transaction gains and losses may be realized or unrealized depending upon whether the transaction settled during the period or remains outstanding at the balance sheet date.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Due to the inherent uncertainty involved in making those assumptions, actual results could differ from those estimates. TheOur most significant estimates maderelate to revenues and assumptions used are the determination of the allowance for doubtful accounts and unbilled services, the assessment of the recoverability of goodwill otherand intangible assets andassets. Other estimates include, but are not limited to, the realization of deferred tax assets the valuation of share-based compensation and the fair value of acquisition-related contingent consideration. Management bases its estimates on historical trends, projections, current experience and other assumptions that it believes are reasonable.
Concentrations of Risk
We do not have a single customer that represents 10% or more of our consolidated revenues. We derive the majority of our revenues from providing professional services to clients in the U.S. For the year ended December 31, 2018,2021, we derived approximately 32%38% of our consolidated revenues from the work of professionals who are assigned to locations outside of the U.S. We believe that the geographic and industry diversity of our customer base throughout the U.S. and internationally minimizes the risk of incurring material losses due to concentrations of credit risk.
Revenue Recognition
Revenues are recognized when we satisfy a performance obligation by transferring goods or services promised in a contract to a customer and in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. Performance obligations in our contracts represent distinct or separate service streamsservices that we provide to our customers.
We evaluate our revenue contracts with customers based on the five-step model under Revenue from Contracts with Customers ("ASC 606"): (1) identify the contract with the customer; (2) identify the performance obligations in the contract;

69


(3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenues when (or as) each performance obligation is satisfied. If, at the outset of an arrangement, we determine that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met.
62

We generate the majority of our revenues by providing consulting services to our clients. Most of our consulting service contracts are based on one of the following types of contract arrangements:
•Time and expense arrangements require the client to pay us based on the number of hours worked at contractually agreed-upon rates. We recognize revenues for these contract arrangements based on hours incurred and contracted rates utilizing a right-to-invoice practical expedient because we have a right to consideration for services completed to date. When a time and expense arrangement has a not-to-exceed or "cap" amount and we expect to perform work in excess of the cap, we recognize revenues up to the cap amount specified by the client, based on the efforts or hours incurred as a percentage of total efforts or hours expected to be incurred (i.e., proportional performance method). Certain time and materials
•Fixed-fee arrangements may be subject to third-party approval, e.g., a court or other regulatory institution, with interim billing and payments made and received based upon preliminarily agreed-upon rates. In such cases, we record revenues for the portion of our services based on our assessment of the expected probability of amounts ultimately to be agreed upon by the court or regulator. These assessments are made on a case-by-case basis depending on the nature of the engagement, client economics, historical experience and other appropriate factors.
Fixed fee arrangements require the client to pay a pre-establishedfixed fee in exchange for a predetermined set of professional services. We recognize revenues for these arrangements based onearned to date by applying the proportional performance related to individual performance obligations within each arrangement; however,method. Generally, these arrangements generally have one performance obligation.
•Performance-based or contingent arrangements represent forms of variable consideration. In these arrangements, our fees are based on the attainment of contractually defined objectives with our client, such as completing a business transaction or assisting the client in achieving a specific business objective. When our performance obligation(s) are satisfied over time, we determine the transaction price based on the expected probability of achieving the agreed-upon outcome andWe recognize revenues earned to date in an amount that is probable not to reverse and by applying the proportional performance method. These arrangements include conditional payments, commonly referred to as success fees, which were previously recognizedmethod when the cash was collected.criteria for over time revenue recognition are met.
Certain fees in our time and materials arrangements may be subject to approval by a third party, such as a bankruptcy court and other regulatory agency. In such cases, we record revenues based on the amount we estimate we will be entitled to in exchange for our services and only to the extent a significant reversal of revenue is not likely to occur when the uncertainty associated with the estimate is subsequently resolved. Potential fee reductions imposed by bankruptcy courts and other regulatory agencies or negotiated with specific clients are estimated on a specific identification basis. Our estimates may vary depending on the nature of the engagement, client economics, historical experience and other appropriate factors. When there are changes in our estimates of potential fee reductions, we record such changes to revenues with a corresponding offset to our billed and unbilled accounts receivable.
In addition, we generate certain revenues from our Technology segment, we generate unit-based revenues that are based on units of data stored or processed. Unit-based revenues are recognized as services are provided, based on eitherat agreed-upon per unit rates for the amount of data stored or processed, the number of concurrent users accessing the information, or the number of pages or images processed for a client, and agreed-upon per unit rates. We also generate revenues from our on-premise software licenses. Software license revenues are generally recognized at a point in time when the customer acceptance occurs, in accordance with the provision of the arrangements.
Certain of our time and expense and fixed fee billing arrangements may include client incentives in the form of volume-based discounts, where if certain fee levels are reached, the client can receive future services at a discounted hourly rate. Contracts with customers that have a prospective discounted pricing option based on predetermined volume thresholds are evaluated to determine whether they include a material right, which is an option that provides a customer the right to acquire free or discounted goods or services in the future. If the option provides a material right to the customer, we allocate a portion of the transaction price to the material right and defer revenues during the pre-discount period, compared with our previous practice of recognizing the reduction in revenues when customers became eligible to receive the volume discount.client.
Reimbursable expenses, including those relating to travel, out-of-pocket expenses, outside consultants and other outside service costs, are generally included in revenues, and an equivalent amount of reimbursable expenses is included in costs of services in the period in which the expense is incurred.
Timing of revenue recognition often differs from the timing of billing to our customers. Generally, we transfer goods or services to a customer before the customer pays consideration or payment is due. If we have an unconditional right to invoice and receive payment for goods or services already provided, we record billed and unbilled receivables on our Consolidated Balance Sheets. Our contract terms generally include a requirement of payment within 30 days when no contingencies exist. Payment terms and conditions vary depending on the jurisdiction, market and type of service, and whether regulatory or other third-party approvals are required. At times, we may execute contracts in a form provided by customers that might include different payment terms and contracts may be negotiated at the client’s request.
Direct Cost of Revenues
Direct cost of revenues consists primarily of billable employee compensation and related payroll benefits, the cost of contractors assigned to revenue-generating activities and direct expenses billable to clients. Direct cost of revenues also includes expense for cloud-based computing and depreciation expense on the equipment of our Technology segment that issoftware used to host and process client information, as well as amortization of software.information. Direct cost of revenues does not include an allocation of corporate overhead and non-billable segment costs.

70


Share-Based Compensation
Share-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense over the requisite service period or performance period of the award. The amount of share-based compensation expense recognized at any date must at least equal the portion of grant date value of the award that is vested at that date.
63

The fair value of restricted share awards and restricted stock units is measured based on the closing price of the underlying stock on the date of grant. The fair value of performance share units that contain market-based vesting conditions is measured using a Monte Carlo pricing model. The compensation cost of performance stock units with market-based vesting conditions is based on the grant date fair value and is not subsequently reversed if it is later determined that the market condition is unlikely to be met or is expected to be lower than originally expected. For performance share units that contain performance-based vesting conditions, the compensation cost is adjusted each reporting period based on the probability of the awards vesting.
We use the Black-Scholes pricing model to determine the fair value of stock options on the date of grant. The Black-Scholes pricing model requires the development of assumptions, including volatility and expected term, which are based on our historical experience. The risk-free interest rate is based on the term of U.S. Treasury interest rates that is consistent with the expected term of the share-based award.
The fair value of restricted share awards and restricted stock units is measured based on the closing price of the underlying stock on the date of grant. The fair value of performance share units that contain market-based vesting conditions is measured using a Monte Carlo pricing model. The compensation cost of performance stock units is based on the grant date fair value and is not subsequently reversed if it is later determined that the market condition is unlikely to be met or is expected to be lower than originally expected.
For all our share-based awards, we recognize forfeiture expense as forfeitures in compensation cost when they occur.
Research and DevelopmentAcquisition-Related Contingent Consideration
Research and development costs related to software development are expensed as incurred. When we have determined that technological feasibility forThe fair value of acquisition-related contingent consideration is estimated at the acquisition date utilizing either a Monte Carlo pricing model or the present value of our software products is reached, development costs relatedprobability-weighted estimate of future cash flows. Subsequent to the project are capitalized until such products are availableacquisition date, on a quarterly basis, the contingent consideration liability is remeasured at current fair value with any changes recorded in earnings. Accretion expense is recorded to acquisition-related contingent consideration liabilities for general releasechanges in fair value due to customers as discussed in “Capitalized Software to Be Sold, Leasedthe passage of time. Remeasurement gains or Otherwise Marketed.” Researchlosses and development expenses related to software development totaled $8.7 million, $14.9 million and $17.5 million for the years ended December 31, 2018, 2017 and 2016, respectively, andaccretion expense are included in “Selling, general and administrative expenses”administrative” ("SG&A") expenses on the Consolidated Statements of Comprehensive Income.
Advertising Costs
Advertising costs consist of marketing, advertising through print and other media, professional event sponsorship and public relations. These costs are expensed as incurred. Advertising costs totaled $15.5$13.0 million, $14.8$15.2 million and $15.9$18.6 million for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively, and are included in “Selling, general and administrative expenses” on the Consolidated Statements of Comprehensive Income.
Acquisition-Related Contingent Consideration
The fair value of acquisition-related contingent consideration is estimated at the acquisition date utilizing a probability weighted estimate of future cash flow adjusted for the expected timing of each payment. Subsequent to the acquisition date, on a quarterly basis, the contingent consideration liability is remeasured at current fair value with any changes recorded in earnings. Accretion expense is recorded to adjust the discounted value of acquisition-related contingent consideration liabilities to their present value. Remeasurement gains or losses and accretion expense are included in “Selling, general and administrative expenses”SG&A expenses on the Consolidated Statements of Comprehensive Income.
Income Taxes
Our income tax provision (benefit) consists principally of U.S. federal, state and international income taxes. We generate income in a significant number of states located throughout the U.S., as well as and in foreign countries in which we conduct business. Our effective income tax rate may fluctuate due to a change in the mix of earnings between higher and lower state or country tax jurisdictions and the impact of non-deductible expenses. Additionally, we record deferred tax assets and liabilities using the asset and liability method of accounting, which requires us to measure these assets and liabilities using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including scheduled reversals of temporary differences, projected future taxable income, tax planning strategies and recent results of operations.
Cash Equivalents
Cash equivalents consist of money market funds, commercial paper and certificates of deposit with maturities of three months or less at the time of purchase.

71


Allowance for Doubtful Accounts and Unbilled ServicesExpected Credit Losses
We maintain an allowance for doubtful accounts and unbilled services for estimated losses resulting from potential fee reductions negotiated by clients or imposed by bankruptcy courts or other regulatory agencies and the inability of clients to pay our fees, as well as from disputes that affect our ability to fully collect our billed accounts receivable. Even if a bankruptcy court approves our services, the court has the discretion to require us to refund all or a portion of our fees due to the outcome of the case or a variety of other factors. We estimate the allowancecurrent-period provision for all receivable risks by reviewingexpected credit losses on a specific identification basis. Our judgments regarding a specific client’s credit risk considers factors such as the status of each matter and recording reserves based on our experience andcounterparty’s creditworthiness, knowledge of the particular clientspecific client’s circumstances and historical collection patterns. However, ourexperience for similar clients. Other factors include, but are not limited to, current economic conditions and forward-looking estimates. Our actual experience may vary significantly from our estimates. If the financial condition of our clients were to deteriorate, resulting in their inability or unwillingness to pay our fees, or bankruptcy courts require us to refund certain fees, we may need to record additional allowances or write-offsprovisions for expected credit losses in future periods. ThisThe risk related to a client’s non-paymentof credit losses may be mitigated to the extent that we receivereceived a retainer from some of our clients prior to performing services.
64

We maintain an allowance for expected credit losses, which represents the aggregate amount of credit risk arising from the inability of specific clients to pay our fees or disputes that may affect our ability to fully collect our billed accounts receivable. We record adjustmentsour estimate of lifetime expected credit losses concurrently with the initial recognition of the underlying receivable. Accounts receivable, net of the allowance for expected credit losses, represents the amount we expect to collect. At each reporting date, we adjust the allowance for expected credit losses to reflect our current estimate. Adjustments to the allowance for doubtful accounts and unbilled services as a reduction in revenues when there are changes in estimates of fee reductions that may be imposed by bankruptcy courts and other regulatory institutions for both billed and unbilled receivables. The allowance for doubtful accounts and unbilled services is also adjusted after the related work has been billed to the client and we discover that collectability is not reasonably assured. These adjustmentsexpected credit losses are recorded to “Selling, general and administrative expenses”SG&A expenses on the Consolidated Statements of Comprehensive Income and totaled $17.9 million, $15.4 million and $8.9 millionIncome. Our billed accounts receivables are written off when the potential for the years ended December 31, 2018, 2017 and 2016, respectively.recovery is considered remote.
Property and Equipment
We record property and equipment, including improvements that extend the useful lives,life of an asset, at cost, while maintenance and repairs are expensed as incurred. We calculate depreciation using the straight-line method based on the estimated useful liveslife ranging from threeone year to seven years for furniture, equipment and software. We amortize leasehold improvements over the shorter of the estimated useful life of the asset or the lease term. We capitalize costs incurred during the application development stage of computer software developed or obtained for internal use. Capitalized software developed for internal use is classified within furniture, equipment and software and is amortized over the estimated useful life of the software, which is generally three years. Purchased software licenses to be sold to customers are capitalized and amortized over the license term.
Notes Receivable from Employees
Notes receivable from employees principally include unsecured general recourse forgivable loans and retention payments, which are provided to attract and retain certain of our senior employees and other professionals. Generally, all of the principal amount and accrued interest of the forgivable loans we make to employees and other professionals will be forgiven according to the stated terms of the loan agreement, provided that the professional is providing services to the Company on the forgiveness date and upon other specified events, such as death or disability. Professionals who terminate their employment or services with us prior to the end of the forgiveness period are required to repay the outstanding, unforgiven loan balance and any accrued but unforgiven interest. If the termination was by the Company without cause or by the employee with good reason, or, subject to certain conditions, if the employee terminates his or her employment due to retirement or non-renewal of his or her employment agreement, the loan may be forgiven or continue to be forgivable, in whole or in part. We amortize forgivable loans ratably over the requisite service period, which ranges from a period of twoone year to 10 years. The amount of expense recognized at any date must be at least equal to the portion of the principal forgiven on the forgiveness date.
Goodwill and Other Intangible Assets
Goodwill represents the purchase price of acquired businesses in excess of the fair market value of net assets acquired at the date of acquisition. Other intangibleIntangible assets may include trade names, customer relationships, non-competition agreementstrademarks and acquired software.

72


We test our goodwill and other indefinite-lived intangible assets for impairment annually as of the first day of the fourth quarter orand whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. On a quarterly basis, we monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test. Important factors we consider that could trigger an interim impairment review include, but are not limited to, the following:
•significant underperformance relative to expected historical or projected future operating results;
•a significant change in the manner of our use of the acquired asset or the strategy for our overall business;
•a significant market decline related to negative industry or economic trends; and/or
•our market capitalization relative to net carrying value.
We assess our goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or a business one level below that operating segment if discrete financial information is available and regularly reviewed by the chief operating decision makers. Entities
Our annual goodwill impairment test may be conducted using a qualitative assessment or a quantitative assessment. Under GAAP, we have an unconditional option under certain circumstances,to bypass the qualitative assessment and perform a quantitative impairment test. We determine whether to perform a qualitative assessment regardingfirst or to bypass the qualitative assessment and proceed with the quantitative goodwill impairment test for each of our reporting units based on the excess of fair value over carrying value from the most recent quantitative tests and other events or changes in circumstances that could impact the fair value of the reporting unit’s fair value to determine whether it is necessary to perform the quantitative impairment test. units.
65

In the qualitative assessment, we consider various factors, events or circumstances, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant reporting unit specific events. If, based on the qualitative assessment, an entity determineswe determine that it is not “more likely than not” that the fair value of a reporting unit is less than its carrying value, we do not prepare a quantitative impairment test. If we determine otherwise, we will prepare a quantitative assessment for potential goodwill impairment.
In the quantitative assessment, we compare the estimated fair value of the reporting unit with the carrying amount of that reporting unit. We estimate fair value using a combination of an income approach (based on discounted cash flows) and market approaches using appropriate weighting factors. If the fair value exceeds the carrying amount, goodwill is not impaired. However, if the carrying value exceeds the fair value of the reporting unit, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
We determine whether to perform a qualitative assessment first or to bypass the qualitative assessment and proceed with the quantitative goodwill impairment test for each of our reporting units based on the excess of fair value over carrying value from the most recent quantitative tests and other events or changes in circumstances that could impact the fair value of the reporting units.
Intangible assets with finite lives are amortized over their estimated useful liveslife and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset’s carrying valueasset may not be recoverable. We amortize our acquired finite-lived intangible assets on a straight-line basis over periods ranging from fivetwo to 15 years.
Impairment of Long-Lived Assets
We review long-lived assets such as property and equipment, operating lease assets and finite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability of assets to be held and used by a comparison of the carrying value of the assets with future undiscounted net cash flows expected to be generated by the assets. We group assets at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset group, we estimate the fair value of the asset group to determine whether an impairment loss should be recognized.
Capitalized Software to Be Sold, Leased or Otherwise MarketedLeases
We expense costsdetermine if a contract is a leasing arrangement at inception. Operating lease assets represent our right to control the use of an identified asset for software products that will be sold, leased or otherwise marketed until technological feasibility has been established. Thereafter, eligible software development coststhe lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. Capitalized costs are amortized based on current and future revenues for each product with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product. We classify software products to be sold, leased or otherwise marketed as noncurrent “Other assets”recognized on the Consolidated Balance Sheets. Unamortized capitalized software costs were $0.2 million and $14.8 million asSheets at the commencement date based on the present value of December 31, 2018 and 2017, respectively. Amortizationlease payments over the lease term. We use the incremental borrowing rate on the commencement date in determining the present value of our lease payments. We recognize operating lease expense for capitalized software costs was $5.3 million, $6.7 million and $12.0 million forour operating leases on a straight-line basis over the years ended December 31, 2018, 2017 and 2016, respectively.

73


Leaseslease term.
We lease office space and equipment under non-cancelable operating leases. The leases, normally provide for the payment of minimum annual rentals andwhich may include scheduled rent increases. Somerenewal or termination options that are reasonably certain of exercise. Most leases include provisions for1 or more options to renew, with renewal options ofterms that can extend the lease term up to fiveseven years. SomeLeases with an initial term of our leases for office space contain provisions whereby12 months or less are not recorded on the future rental payments may be adjusted for increases in operating expenses above specified amounts.
We recognize rent expense under operating leasesbalance sheet and are expensed on a straight-line basis over the non-cancelablebasis. Lease and non-lease components are accounted for together as a single lease term. Forcomponent for operating leases associated with scheduled rent increases, this treatment results inour office space and our equipment leases. We apply a deferred rent liability, which is classified within “Other liabilities” on the Consolidated Balance Sheets. Lease inducements, such as tenant improvement allowances, cash inducements and rent abatements, are amortized on a straight-line basis over the life of the lease. Unamortized lease inducements are also included in deferred rent. Deferred rent totaled $45.1 million and $43.9 millionportfolio approach for certain equipment leases to effectively account for the years ended December 31, 2018operating lease assets and 2017, respectively.liabilities.
Billings in Excess of Services Provided
Billings in excess of services provided represent amounts billed to clients, such as retainers, in advance of work being performed. Clients may make advance payments, which are held on deposit until completion of work or are applied at predetermined amounts or times. Excess payments are either applied to final billings or refunded to clients upon completion of work. Payments in excess of related accounts receivable and unbilled receivables are recorded as billings in excess of services provided within the liabilities section of the Consolidated Balance Sheets.
Convertible Notes
On August 20, 2018, we issuedWe separately recorded the liability and equity components of our 2.0% convertible senior notes due 2023 ("2023 Convertible Notes") with an aggregate principal amount of $316.3 million, payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2019. The 2023 Convertible Notes will mature on August 15, 2023, unless earlier converted or repurchased. Upon conversion, the 2023 Convertible Notes may be settled, at our election in cash, shares of our common stock, or a combination of cash and shares of our common stock.
We separately recorded the liability and equity components of the 2023 Convertible Notes.. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2023 Convertible Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount ("debt discount") is amortized to interest expense over the term of the 2023 Convertible Notes using the effective interest rate method.
66

We record debt issuance costs as an adjustment to the carrying amount of the related liability and equity components of our 2023 Convertible Notes. We amortize the debt discount and debt issuance costs on the liability component using the effective interest rate method over the expected life of the debt instrument.
Prior to January 1, 2022, upon conversion, the 2023 Convertible Notes could be settled, at our election, in cash, shares of our common stock or a combination of cash and shares of our common stock. Effective January 1, 2022, pursuant to the first supplemental indenture, dated as of January 1, 2022 (the "First Supplemental Indenture"), to the indenture, dated as of August 20, 2018, by and between the Company and U.S. Bank National Association, as trustee (as amended by the First Supplemental Indenture, the "Indenture"), governing the 2023 Convertible Notes, the Company surrendered its right to settle conversions of the 2023 Convertible Notes solely using our common stock and irrevocably elected to settle at least the $1,000 aggregate principal amount of each 2023 Convertible Note submitted for conversion on or after January 1, 2022 in cash in connection with a settlement for which we elect a cash and common stock combination settlement.
2. New Accounting Standards
Recently Adopted Accounting Standards
In May 2014,November 2020, the U.S. Securities and Exchange Commission issued Release No. 33-10890, “Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information” to modernize, simplify and enhance certain financial disclosure requirements in Regulation S-K. Among other changes, the amendments enhance and clarify the disclosure requirements for liquidity and capital resources, eliminate the requirement to present five years of Selected Financial Data, replace the requirement to present two years of tabular selected quarterly financial data with a principles-based requirement to disclose when there are material retrospective changes and eliminate the tabular disclosure of contractual obligations. The company applied the amendments under the Release to this Annual Report on Form 10-K for the year ended December 31, 2021, as it is required for fiscal years ending on or after August 9, 2021.
Accounting Standards Not Yet Adopted
In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from 2020-06 ("ASU 2020-06"), Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts with Customers. On January 1, 2018, we adopted ASC 606 using the modified retrospective methodin Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and recordedContracts in an immaterial cumulative effect adjustmentEntity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity contracts to the beginning balance of retained earnings for revenue contracts that existed at the adoption date. Under the modified retrospective method, prior year information has not been adjusted and continues to be reported under the accounting standards in effect for periods prior to the adoption date. We have not retroactively restated the existing contracts for modifications that occurred before January 1, 2018.
See Note 1, "Description of Business and Summary of Significant Accounting Policies" for a description of the significant accounting policies and methods used in preparation of the Consolidated Financial Statements. See Note 4, “Revenues”qualify for the disclosures required under ASC 606.derivative scope exception and simplifies the diluted earnings per share calculation in certain events. The adoption of ASC 606 had an immaterial impact on our Consolidated Statements of Comprehensive Incomeamendments in this ASU are effective for annual and Consolidated Balance Sheets and had no impact on our Consolidated Statements of Cash Flows.
In March 2018, the FASB issued ASU 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update), Income Taxes (Topic 740). ASU 2018-05 provides guidance regarding the recording of tax impacts where uncertainty exists, in the period of adoption of the 2017 U.S. Tax Cuts and Jobs Act (the “2017 Tax Act”), which

74


allowed companies to reflect provisional amounts for those specific income tax effects of the 2017 Tax Act for which the accounting under ASC Topic 740 is incomplete but for which a reasonable estimate could be determined. The Company recognized the income tax effects of the adoption of the 2017 Tax Act in its financial statements in accordance with ASU 2018-05. The Company finalized its accounting for the income tax effects of the adoption of the 2017 Tax Act in the fourth quarter of 2018 with the filing of its tax returns. There were no material changes to the provisional amounts recorded in the 2017 financial statements in connection with the 2017 Tax Act.
Accounting Standards Not yet Adopted
In February 2016, the FASB issued ASU 2016-02, amended in some respects by subsequent ASUs (collectively “ASC 842”), which supersedes existing lease guidance. Under ASC 842, we will be required to record right-of-use assets and corresponding lease liabilities on the balance sheet, as well as to disclose key quantitative and qualitative information about leasing arrangements. This guidance is effective on a modified retrospective basis for reportinginterim periods beginning after December 15, 2018, with early adoption permitted.2021. We elected to adopt ASC 842will have adopted ASU 2020-06 effective January 1, 2022, using a modified transition approach, effective January 1, 2019.retrospective method. As permitted by the guidance, prior comparative periods will not be adjusted under this method. In addition,method, and a cumulative-effect adjustment of approximately $22.1 million will be recorded to the opening balance of retained earnings at the date of adoption.
Pursuant to ASU 2020-06, we electedare no longer permitted to separately account for the packageliability and equity components of practical expedients available underconvertible debt instruments (such as the guidance that allows us not to reassess whether a contract contains a lease, lease classification or initial direct costs.
In preparation2023 Convertible Notes). As such, for adoptionfuture periods, the entire carrying amount of the standard, the Company implemented internal controls and business process changes to enable the preparation of financial information in accordance with the standard. The standard2023 Convertible Notes will havebe recognized as a material impactliability on our Consolidated Balance Sheet. The most significant impact will be the recognition of right-of-use assets and lease liabilities for operating leases.consolidated balance sheet. The Company estimates that adoption of this standard will result in recognitiona net increase to “Long-term debt, net” of additional right-of-use assets in the range of $145.0 million and $155.0 million and additional lease liabilities in the range of $210.0 million and $220.0approximately $16.4 million on the adoption datedate. In addition, the adoption of the standard will result in the derecognition of the embedded conversion option, net of tax effects of approximately $34.1 million which is included in “Additional paid-in capital,” as well as the derecognition of the related deferred tax liabilities of approximately $4.3 million on the Consolidated Balance Sheet.
The net effect of the adoption of ASU 2020-06 for operating leases.future periods is a reduction of non-cash interest expense, or an increase to net income, as there is no longer a discount from the separation of the conversion feature within equity. The discount from recognition of issuance costs will be amortized over the effective life of the 2023 Convertible Notes using the effective interest method.
ASU 2020-06 also no longer allows the use of the treasury stock method for convertible instruments for purposes of calculating diluted earnings per share and instead requires application of the if-converted method. Under that method, diluted earnings per share will generally be calculated assuming that all of the convertible debt instruments were converted solely into shares of common stock at the beginning of the reporting period unless the result would be anti-dilutive. Effective January 1, 2022, pursuant to the First Supplemental Indenture, the principal amount of the 2023 Convertible Notes being converted is required to be paid in cash and only the premium due upon conversion, if any, is permitted to be settled in shares, cash or a combination of shares and cash. Consequently, the if-converted method will produce a similar result as the treasury stock method, which was used prior to the adoption of ASU 2020-06 for the 2023 Convertible Notes. We do not currently expect that the adoption of ASC 842ASU 2020-06 will have a material impact on our resultsthe Consolidated Statement of operations or cash flow presentation.Cash Flows.
67

In August 2018,November 2021, the FASB issued ASU 2018-13, Fair Value Measurement2021-10, Government Assistance (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement832), Disclosures by Business Entities about Government Assistance, which modifiesrequires entities to provide disclosures on significant government assistance transactions for annual reporting periods. The disclosures include information around the disclosure requirementsnature of the assistance, the related accounting policies used to account for fair value measurements.government assistance, the effect of government assistance on the entity’s financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. The guidance promotes a framework to help improve the effectiveness of disclosures in the notes andnew standard is effective for annual and interim periods beginning after December 15, 2019, although early adoption is permitted.2021 and impacts only annual financial statement footnote disclosures. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, Internal Use Software (Subtopic 350-40): Customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract, which requires the Company to capitalize implementation costs of a hosting arrangement that is a service contract and expense those costs over the term of the hosting arrangement. The guidance is effective for annual and interim periods beginning after December 15, 2019 although early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements.
3. Earnings per Common Share
Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share adjusts basic earnings per common share for the effects of potentially dilutive common shares. Potentially dilutive common shares include the dilutive effects of shares issuable under our equity compensation plans, including stock options and restricted shares (restricted share awards, restricted stock units and performance stock units), each using the treasury stock method.
BecauseFor the years ended December 31, 2021, 2020 and 2019, we expect to settle the principal amount of the outstanding 2023 Convertible Notes in cash, we useused the treasury stock method for calculating the potential dilutive effect of the conversion feature on earnings per common share if applicable.because we had the ability and intent to settle the principal amount of the outstanding 2023 Convertible Notes in cash. The conversion feature will havehad a dilutive impact on earnings per common share whenfor the years ended December 31, 2021, 2020 and 2019, as the average market price per share of our common stock for a given period exceedsthe periods exceeded the conversion price of $101.38 per share. As we did not meet this threshold during the year ended December 31, 2018, any shares of common stock potentially issuable upon conversion ofSee Note 14, "Debt" for additional information about the 2023 Convertible Notes are excluded from the calculation of diluted earnings per share.Notes.
 Year Ended December 31,
 202120202019
Numerator — basic and diluted
Net income$234,966 $210,682 $216,726 
Denominator
Weighted average number of common shares outstanding — basic33,489 35,602 36,774 
Effect of dilutive restricted shares701 763 820 
Effect of dilutive stock options368 419 455 
Effect of dilutive convertible notes779 365 62 
Weighted average number of common shares outstanding — diluted35,337 37,149 38,111 
Earnings per common share — basic$7.02 $5.92 $5.89 
Earnings per common share — diluted$6.65 $5.67 $5.69 
Antidilutive stock options and restricted shares4 66 19 

75


 Year Ended December 31,
 2018 2017 2016
Numerator — basic and diluted     
Net income$150,611
 $107,962
 $85,520
Denominator     
Weighted average number of common shares outstanding — basic37,098
 38,697
 40,943
Effect of dilutive stock options491
 117
 281
Effect of dilutive restricted shares729
 378
 485
Weighted average number of common shares outstanding — diluted38,318
 39,192
 41,709
Earnings per common share — basic$4.06
 $2.79
 $2.09
Earnings per common share — diluted$3.93
 $2.75
 $2.05
Antidilutive stock options and restricted shares175
 1,561
 1,404
4. Revenues
We generate the majority of our revenues by providing consulting services to our clients. See Note 1, "Description of Business and Summary of Significant Accounting Policies” for additional information on the types of consulting contract arrangements we provide.
Revenues are recognized when we satisfy a performance obligation by transferring services promised in a contract to a customer and in an amount that reflects the consideration that we expect to receive in exchange for those services. Performance obligations in our contracts represent distinct or separate services that we provide to our customers. If, at the outset of an arrangement, we determine that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met.
Revenues recognized during the current period may include revenues recognized from performance obligations satisfied or partially satisfied in previous periods. This primarily occurs when the estimated transaction price has changed based on a re-assessment of the expectedour current probability of achievingassessment over whether the agreed-upon outcome for our performance-based and contingent arrangements resulting in a catch-up adjustment for service provided in previous periods.will be achieved. The aggregate amount of revenues recognized related to the catch-up adjustment due to a change in the transaction price duringin the yearcurrent period, which related to performance obligations satisfied or partially satisfied in a prior period, was $26.3 million, $19.0 million and $28.9 million for the years ended December 31, 2018 was $16.1 million.2021, 2020 and 2019, respectively.
Unfulfilled performance obligations represent the remaining contract transaction prices allocated to the performance obligations that are unsatisfied, or partially unsatisfied, and therefore revenues have not yet been recorded.
68

Unfulfilled performance obligations primarily consist of the remaining fees not yet recognized under our proportional performance method for both our fixed feeon certain fixed-fee arrangements and the portion of performance-based and contingent arrangements that we have deemed probable.arrangements. As of December 31, 2018,2021 and 2020, the aggregate amount of the remaining contract transaction price allocated to unfulfilled performance obligations was $8.8$3.7 million and we$8.5 million, respectively. We expect to recognize the majority of the related revenues over the next 24 months. We elected to utilize the optional exemption to exclude from this disclosure fixed feefixed-fee and performance-based and contingent arrangements with an original expected duration of one year or less and to exclude our time and expense arrangements for which revenues are recognized using the right-to-invoice practical expedient.
Contract assets are defined as assets for which we have recorded revenue because we determined that it is probable that we will earn a performance-based or contingent fee,revenues but we are not yet entitled to receive our fees because certain events, such as completion of the measurement period or client approval, must occur. The contract asset balance was $2.4$3.8 million and $2.6 million as of December 31, 20182021 and immaterial as of December 31, 2017.2020, respectively.
Contract liabilities are defined as liabilities incurred when we have received consideration from a client but have not yet performed the agreed-upon services. This may occur when we receive advance billings before delivery and acceptance of software licenses in our Technology segment and when clients pay us upfront fees before we begin work for them.begins. The contract liability balance was immaterial as of December 31, 20182021 and December 31, 2017.2020.
5. Accounts Receivable and Allowance for Expected Credit Losses
The following table summarizes the components of “Accounts receivable, net” as presented on the Consolidated Balance Sheets:
December 31,
20212020
Accounts receivable:
Billed receivables$542,056 $513,459 
Unbilled receivables248,681 236,285 
Allowance for expected credit losses(36,617)(38,387)
Accounts receivable, net$754,120 $711,357 
The following table summarizes total provision for expected credit losses and write-offs:
Year Ended December 31,
202120202019
Provision for expected credit losses$16,151 $19,692 $19,602 
Write-offs$23,641 $24,717 $12,734 
Our provision for expected credit losses includes recoveries, direct write-offs and charges to other accounts. Billed accounts receivables are written off when the potential for recovery is considered remote. See Note 1, "Description of Business and Summary of Significant Accounting Policies” for additional information on our accounting policies for revenue recognition and allowance for expected credit losses.
69

6. Special Charges
There were no0 special charges recorded during the yearyears ended December 31, 2018.2021 and 2019.
During the year ended December 31, 2017,2020, we recorded special charges of $40.9 million. The charges related to certain targeted reductions in areas of each segment where we needed to realign our workforce with then-current business demand. In addition, cost-cutting actions were taken in certain corporate departments where we were able to streamline support activities and reduce our real estate costs. Thea special charge includedof $7.1 million, which consists of the following components:
•$23.54.7 million of lease abandonment and other relocation costs associated with the consolidation of office space in New York, New York; and
• $2.4 million of employee severance and other employee-related costs;

$14.4 million of exit costs associated with the curtailment of our lease on our executive office in Washington, D.C.; and

$3.0 million of other expenses, including costs related to disposing or closing several small international offices.


76


During the year ended December 31, 2016, we recorded special charges of $10.4 million. The charges related to employee terminations in our Technology segment, health solutions practice of our Forensic and Litigation Consulting segment, and corporate infrastructure group. The charges consisted of salary continuance and other contractual employee-related costs.FLC segment.
The following table details the special charges by segment and corporate.segment:
Year Ended
December 31, 2020
Corporate Finance$861 
FLC3,484 
Economic Consulting35 
Technology276 
Strategic Communications2,074 
Segment special charge6,730 
Unallocated Corporate373 
Total special charges$7,103 
 Year Ended December 31,
Special Charges by Segment2017 2016
Corporate Finance & Restructuring$5,440
 $—
Forensic and Litigation Consulting12,334
 2,304
Economic Consulting6,624
 —
Technology5,057
 7,529
Strategic Communications7,752
 —
 37,207
 9,833
Unallocated Corporate3,678
 612
Total$40,885
 $10,445
6. Interest Income and Other
The table below presents the components of “Interest income and other” as shown on the Consolidated Statements of Comprehensive Income.
 Year Ended December 31,
Interest Income and Other2018 2017 2016
Interest income$5,448
 $3,968
 $4,420
Foreign exchange transaction gains (losses), net261
 (77) 4,937
Other(732) (139) 1,109
Total$4,977
 $3,752
 $10,466
7. Share-Based Compensation
Share-Based Incentive Compensation Plans
Under the Company's 2017 Omnibus Incentive Compensation Plan, effective as of June 7, 2017, there were 1,746,5001,209,140 shares of common stock available for grant as of December 31, 2018.2021.
Share-Based Compensation Expense
The table below reflects the total share-based compensation expense recognized in our Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 20172021, 2020 and 2016.2019:
 2018 2017 2016
   Restricted   Restricted   Restricted
Income Statement Classification
Options (1)
 
Shares (2)
 
Options (1)
 
Shares (2)
 
Options (1)
 
Shares (2)
Direct cost of revenues$780
 $9,804
 $370
 $9,691
 $2,815
 $7,530
Selling, general and administrative expenses2,027
 8,191
 1,207
 4,870
 1,085
 8,998
Special charges—
 —
 —
 269
 56
 49
Total$2,807
 $17,995
 $1,577
 $14,830
 $3,956
 $16,577
 202120202019
Income Statement Classification
Options (1)
Restricted
Shares (2)
Options (1)
Restricted
Shares (2)
Options (1)
Restricted
Shares (2)
Direct cost of revenues$— $13,432 $9 $13,080 $497 $11,869 
Selling, general and administrative expenses2,018 12,130 126 11,926 2,628 9,005 
Total$2,018 $25,562 $135 $25,006 $3,125 $20,874 
(1)
Includes options and cash-settled stock appreciation rights.
(2)
Includes restricted share awards, restricted stock units, performance stock units and cash-settled restricted stock units.

(1)Includes options and cash-settled stock appreciation rights.

77



(2)Includes restricted share awards, restricted stock units, performance stock units and cash-settled restricted stock units.
Stock Options
We did not grant any stock options during the yearyears ended December 31, 2018. We2021, 2020 and 2019. Historically, we used the Black-Scholes option-pricing model to determine the fair value of our stock option grants during the years ended December 31, 2017 and 2016 using the assumptions in the following table.grants.
70
 Year Ended December 31,
Assumptions2017 2016
Risk-free interest rate1.60% 0.98%
Dividend yield—% —%
Expected term3 years 3 years
Stock price volatility31.94% 34.33%

A summary of our stock option activity during the year ended December 31, 20182021 is presented in the table below. The aggregate intrinsic value of stock options outstanding and exercisable, or fully vested, at December 31, 2018 in the table below2021 represents the total pre-tax intrinsic value, which is calculated as the difference between the closing price of our common stock on the last trading day of 20182021 and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their options on December 31, 2018.2021. The aggregate intrinsic value changes based on fluctuations in the fair market value per share of our common stock.
OptionsWeighted
Average
Exercise
Price		Weighted
Average
Remaining
Contractual
Term
(in Years)		Aggregate
Intrinsic
Value
Options 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
(in Years)
 
Aggregate
Intrinsic
Value
Stock options outstanding at December 31, 20172,258
 $40.63
    
Stock options outstanding at December 31, 2020Stock options outstanding at December 31, 2020538 $36.20 
Stock options granted—
 N/A
  Stock options granted— N/A
Stock options exercised(1,051) $39.55
  Stock options exercised(78)$34.73 
Stock options forfeited(272) $58.93
  Stock options forfeited— N/A
Stock options outstanding at December 31, 2018935
 $36.50
 5.0 $28,181
Stock options exercisable at December 31, 2018679
 $36.59
 4.5 $20,401
Stock options outstanding at December 31, 2021Stock options outstanding at December 31, 2021460 $36.45 3.5$53,863 
Stock options exercisable at December 31, 2021Stock options exercisable at December 31, 2021460 $36.45 3.5$53,863 
Cash received from option exercises for the years ended December 31, 2018, 20172021, 2020 and 20162019 was $41.6$2.7 million, $4.1$4.9 million and $27.3$9.7 million, respectively. The tax benefit realized from stock options exercised totaled $4.0$0.2 million, $1.1$0.4 million and $4.8$0.7 million for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively.
The intrinsic value of stock options exercised is the amount by which the market value of our common stock on the exercise date exceeds the exercise price. The total intrinsic value of stock options exercised for the years ended December 31, 2018, 20172021, 2020 and 20162019 was $26.4$8.3 million, $0.9$11.0 million and $6.9$13.2 million, respectively.

78



The following is a summary of stock options outstanding and exercisable as of December 31, 2018. 
 Options Outstanding Options Exercisable
   Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years)   Weighted Average Exercise Price
Exercise Price RangeOptions   Shares 
$26.68-$33.95200
 $31.39
 4.7 124
 $31.38
$34.33-$36.04193
 $34.74
 5.4 152
 $34.85
$36.43-$36.89222
 $36.79
 5.7 179
 $36.81
$37.09-$40.36245
 $39.27
 5.3 158
 $38.67
$41.69-$55.9975
 $44.62
 1.4 66
 $44.88
 935
     679
  
As of December 31, 2018,2021, there was $0.8 million ofno unrecognized compensation cost related to unvested stock options. That cost is expected to be recognized ratably over a weighted average period of 1.0 year.
Restricted Share Awards
A summary of our unvested restricted share awards activity during the year ended December 31, 20182021 is presented below.below:
SharesWeighted
Average Grant
Date Fair Value
Shares 
Weighted
Average Grant
Date Fair
Value
Unvested restricted share awards outstanding at December 31, 2017933
 $38.58
Unvested restricted share awards outstanding at December 31, 2020Unvested restricted share awards outstanding at December 31, 2020873 $66.00 
Restricted share awards granted263
 $56.97
Restricted share awards granted112 $131.59 
Restricted share awards vested(188) $37.11
Restricted share awards vested(192)$59.45 
Restricted share awards forfeited(16) $36.74
Restricted share awards forfeited(11)$79.91 
Unvested restricted share awards outstanding at December 31, 2018992
 $43.76
Unvested restricted share awards outstanding at December 31, 2021Unvested restricted share awards outstanding at December 31, 2021782 $76.82 
As of December 31, 2018,2021, there was $22.9$31.7 million of unrecognized compensation cost related to unvested restricted share awards. That cost is expected to be recognized ratably over a weighted average period of 4.13.4 years. The total fair value of restricted share awards that vested during the years ended December 31, 2018, 20172021, 2020 and 20162019 was $10.4$25.3 million, $9.9$27.9 million and $10.4$18.6 million, respectively.
Restricted Stock Units
A summary of our restricted stock units activity during the year ended December 31, 20182021 is presented below. The aggregate intrinsic value represents the total pre-tax intrinsic value based on the closing price of our common stock on the last trading day of 2018.below:
SharesWeighted
Average Grant
Date Fair Value
Restricted stock units outstanding at December 31, 2020315 $55.45 
Restricted stock units granted38 $129.75 
Restricted stock units released(32)$72.54 
Restricted stock units forfeited— N/A
Restricted stock units outstanding at December 31, 2021321 $62.60 
71
 Shares 
Weighted
Average Grant
Date Fair
Value
 
Intrinsic
Value
Restricted stock units outstanding at December 31, 2017402
 $37.49
  
Restricted stock units granted32
 $52.67
  
Restricted stock units released(99) $34.90
  
Restricted stock units forfeited—
 N/A
  
Restricted stock units outstanding at December 31, 2018335
 $39.72
 $22,329
The intrinsic value of restricted stock units released reflects the market value of our common stock on the date of release. The total intrinsic value of restricted stock units released for the years ended December 31, 2018, 2017 and 2016 was $5.4 million, $4.1 million and $9.3 million, respectively.

79




As of December 31, 2018,2021, there was $0.2$4.7 million of unrecognized compensation cost related to unvested restricted stock units. That cost is expected to be recognized ratably over a weighted average period of 0.64.2 years. The total fair value of restricted stock units that vested duringreleased for the years ended December 31, 2018, 20172021, 2020 and 20162019 was $1.7$4.1 million, $1.9$6.1 million and $2.4$4.5 million, respectively.
Performance Stock Units
Performance stock units represent common stock potentially issuable in the future, subject to achievement of either market or performance conditions. Our current outstanding performance stock units that are subject to market conditions vest based on the adjusted total shareholder return of the Company as compared with the adjusted total shareholder return of the Standard & Poor’s 500 Index over the applicable performance period. Our current outstanding performance stock units that are subject to performance conditions vest based on Adjusted EBITDA metrics over the applicable performance period. The vesting and payout range for all of our performance stock units is typically between 0% and up to 150% of the target number of shares granted at the end of a two- or three-year performance period.
A summary of our performance stock units activity during the year ended December 31, 20182021 is presented below. The performancebelow:
SharesWeighted
Average Grant
Date Fair Value
Performance stock units outstanding at December 31, 2020370 $87.50 
Performance stock units granted (1)
103 $134.27 
Performance stock units released(157)$63.72 
Performance stock units forfeited (1)
(47)$93.85 
Performance stock units outstanding at December 31, 2021269 $118.27 
(1)    Performance stock units granted and forfeited are subject to market conditions based onpresented at the total shareholder returnmaximum potential payout percentage of the Company as compared with the total shareholder return150% of the Standard & Poor’s 500. The aggregate intrinsic value represents the total pre-tax intrinsic value based on the closing price of our common stock on the last trading day of 2018.
 Shares 
Weighted
Average Grant
Date Fair
Value
 
Intrinsic
Value
Performance stock units outstanding at December 31, 2017252
 $25.71
  
Performance stock units granted91
 $36.34
  
Performance stock units released(29) $29.11
  
Performance stock units forfeited(39) $29.11
  
Performance stock units outstanding at December 31, 2018275
 $28.40
 $18,348
target shares granted.
As of December 31, 2018,2021, there was $2.1$7.7 million of unrecognized compensation cost related to unvested performance stock units. That cost is expected to be recognized ratably over a weighted average period of 0.8 years. The total fair value of performance stock units that vested during the year ended December 31, 2018 was $1.4 million. There were no performance stock units that vestedreleased during the years ended December 31, 20172021, 2020 and 2016.2019 was $17.2 million, $12.6 million and $5.8 million, respectively.
The table below reflects the weighted average grant date fair value per share of stock options, restricted share awards, restricted stock units and performance stock units awarded during the years ended December 31, 2018, 20172021, 2020 and 2016. The fair value of our stock options is calculated using the Black-Scholes option-pricing model.2019 was $132.40, $120.99 and $80.10, respectively. The fair value of our restricted stockshare awards, and restricted stock units and performance stock units that are subject to performance conditions is determined based on the closing market price per share of our common stock on the grant date. The fair value of theour performance stock units reflects thesubject to market conditions is calculated using a Monte Carlo pricing model as of the grant date using a Monte Carlo simulation.date.
8. Interest Income and Other
The table below presents the components of “Interest income and other” as shown on the Consolidated Statements of Comprehensive Income:
 Year Ended December 31,
202120202019
Interest income and other
Interest income$3,493 $3,735 $4,761 
Foreign exchange transaction gains (losses), net2,426 (4,099)(3,056)
Other274 (48)356 
Total$6,193 $(412)$2,061 
72
 Year Ended December 31,
 2018 2017 2016
Weighted average fair value of grants     
Stock options$—
 $9.56
 $8.41
Restricted share awards, restricted stock units and performance stock units$51.73
 $38.88
 $37.64

80




8.9. Balance Sheet Details
The table below presents the components of "Prepaid expenses and other current assets" and "Accounts payable, accrued expenses and other" as shown on the Consolidated Balance Sheets:
 December 31,
 20212020
Prepaid expenses and other current assets  
Prepaid expenses$52,751 $48,220 
Income tax receivable7,252 10,300 
Other current assets31,163 29,624 
Total$91,166 $88,144 
Accounts payable, accrued expenses and other
Accounts payable$16,187 $13,124 
Accrued expenses61,618 65,082 
Accrued interest payable2,153 2,902 
Accrued taxes payable18,907 14,719 
Current operating lease liabilities30,828 42,716 
Other current liabilities35,332 31,523 
Total$165,025 $170,066 
10. Property and Equipment
Property and equipment consist of the following:
 December 31,
 20212020
Leasehold improvements$128,954 $97,074 
Construction in progress21,053 15,291 
Furniture and equipment31,880 26,127 
Computer equipment and software108,237 107,901 
 290,124 246,393 
Accumulated depreciation(147,961)(144,751)
Property and equipment, net$142,163 $101,642 
Depreciation expense for property and equipment totaled $34.3 million, $32.6 million and $30.1 million during the years ended December 31, 2021, 2020 and 2019, respectively.
73
 December 31,
 2018 2017
Prepaid expenses and other current assets   
Prepaid expenses$35,762
 $35,667
Income tax receivable18,947
 7,194
Other current assets14,739
 12,788
Total$69,448
 $55,649
Accounts payable, accrued expenses and other   
Accounts payable$17,728
 $14,078
Accrued expenses52,461
 45,676
Accrued interest payable2,358
 2,354
Accrued taxes payable13,119
 12,075
Other current liabilities18,934
 20,690
Total$104,600
 $94,873

11. Goodwill and Intangible Assets
9.Goodwill
The table below summarizes the changes in the carrying amount of goodwill by reportable segment:
Corporate
Finance (1)
FLC (1)
Economic
Consulting (1)
Technology (1)
Strategic
Communications (2)
Total
Balance at December 31, 2019$478,842 $232,120 $268,677 $96,770 $126,358 $1,202,767 
Acquisitions (3)
20,632 — — — — 20,632 
Foreign currency translation adjustment and other6,598 1,254 410 51 3,167 11,480 
Balance at December 31, 2020$506,072 $233,374 $269,087 $96,821 $129,525 $1,234,879 
Acquisitions (3)
— 5,493 — — — 5,493 
Foreign currency translation adjustment and other(5,026)(938)(229)(10)(1,378)(7,581)
Balance at December 31, 2021$501,046 $237,929 $268,858 $96,811 $128,147 $1,232,791 
(1)There were no accumulated impairment losses for the Corporate Finance, FLC, Economic Consulting or Technology segments as of December 31, 2021, 2020 and 2019.
(2)Amounts for our Strategic Communications segment include gross carrying values of $322.3 million, $323.7 million and $320.5 million as of December 31, 2021, 2020 and 2019, respectively, and accumulated impairment losses of $194.1 million representing the aggregate impairment charges for the years ended December 31, 2021, 2020 and 2019.
(3)During the years ended December 31, 2021 and 2020, we acquired certain assets of businesses that were assigned to the FLC and Corporate Finance segments, respectively. We recorded $5.5 million and $20.6 million in goodwill as a result of the acquisitions in 2021 and 2020, respectively. We have included the results of the acquired businesses' operations in the FLC and Corporate Finance segments since the acquisition dates.
Intangible Assets
Intangible assets were as follows:
  December 31, 2021December 31, 2020
Weighted Average
Useful Life
in Years		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount
Amortizing intangible assets       
Customer relationships (1)
13.4$83,101 $63,124 $19,977 $111,556 $85,180 $26,376 
Trademarks (1)
5.610,965 4,732 6,233 11,809 2,768 9,041 
Acquired software and other9.63,114 2,434 680 3,618 2,585 1,033 
12.497,180 70,290 26,890 126,983 90,533 36,450 
Non-amortizing intangible assets
TrademarksIndefinite5,100 — 5,100 5,100 — 5,100 
Total$102,280 $70,290 $31,990 $132,083 $90,533 $41,550 
(1)During the year ended December 31, 2021, we acquired certain assets of a business, and its related intangible assets were assigned to the FLC segment.
74

Intangible assets with finite lives are amortized over their estimated useful life. We recorded amortization expense of $10.8 million, $10.4 million and $8.2 million during the years ended December 31, 2021, 2020 and 2019, respectively.
We estimate our future amortization expense for our intangible assets with finite lives to be as follows:
As of
December 31, 2021 (1)
Year
2022$8,805 
20235,077 
20243,639 
20252,979 
20261,758 
Thereafter4,632 
$26,890 
(1)Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, impairments, changes in useful lives, or other relevant factors or changes.
12. Notes Receivable from Employees
The table below summarizes the changes in the carrying amount of our notes receivable from employees:
 December 31,
 20212020
Notes receivable from employees — beginning$96,374 $104,139 
Notes granted27,772 34,383 
Repayments(5,126)(8,043)
Amortization(34,422)(29,444)
Cumulative translation adjustment and other(803)(4,661)
Notes receivable from employees — ending83,795 96,374 
Less: current portion(30,256)(35,253)
Notes receivable from employees, net of current portion$53,539 $61,121 
As of December 31, 2021 and 2020, there were 321 and 320 notes outstanding, respectively. Total amortization expense for the years ended December 31, 2021, 2020 and 2019 was $34.4 million, $29.4 million and $26.3 million, respectively.
75

13. Financial Instruments
The following table presentstables present the carrying amounts and estimated fair values of our other financial instruments by hierarchy level as of December 31, 20182021 and 2017.2020:
December 31, 2021
Hierarchy Level
(Fair Value)
Carrying
Amount		Level 1Level 2Level 3
Liabilities
Acquisition-related contingent consideration, including
current portion (1)(2)
$15,110 $— $— $15,110 
2023 Convertible Notes (3)
297,158 — 466,619 — 
Total$312,268 $— $466,619 $15,110 
 December 31, 2018
   Hierarchy Level
 
Carrying
Amount
 Level 1 Level 2 Level 3
Liabilities
 
 
 
Acquisition-related contingent consideration, including
current portion (1)
$2,960
 $—
 $—
 $2,960
Long-term debt316,250
 —
 291,837
 —
Total$319,210
 $—
 $291,837
 $2,960
 December 31, 2017
   Hierarchy Level
 
Carrying
Amount
 Level 1 Level 2 Level 3
Liabilities       
Acquisition-related contingent consideration, including
current portion (1)
$3,750
 $—
 $—
 $3,750
Long-term debt400,000
 —
 409,000
 —
Total$403,750
 $—
 $409,000
 $3,750
December 31, 2020
Hierarchy Level
(Fair Value)
Carrying
Amount		Level 1Level 2Level 3
Liabilities   
Acquisition-related contingent consideration, including
current portion (1)
$20,118 $— $— $20,118 
2023 Convertible Notes (3)
286,131 — 396,982 — 
Total$306,249 $— $396,982 $20,118 
(1)
(1)The short-term portion is included in “Accounts payable, accrued expenses and other,” and the long-term portion is included in “Other liabilities” on the Consolidated Balance Sheets.  
(2)During the year ended December 31, 2021, we acquired certain assets of a business that were assigned to the FLC segment and recorded an acquisition-related contingent consideration liability.
(3)The carrying values include unamortized deferred debt issue costs and debt discount.
The short-term portion is included in “Accounts payable, accrued expenses and other,” and the long-term portion is included in “Other liabilities” on the Consolidated Balance Sheets.  
The fair values of financial instruments not included in this table are estimated to be equal to their carrying values as of December 31, 20182021 and 2017.December 31, 2020.
We estimate the fair value of our 2023 Convertible Notes based on their last actively traded prices. The fair value of our debt is classified within Level 2 of the fair value hierarchy because it is traded in less active markets.
We estimate the fair value of acquisition-related contingent consideration using either a probability-weighted discounted cash flow model or a Monte Carlo pricing model. ThisThese fair value estimate represents aestimates represent Level 3 measurementmeasurements as it isthey are based on significant inputs not observed in the

81



market and reflect our own assumptions. TheWe have multiple valuation models that use different inputs and assumptions based on the timing of the acquisitions. As a result, the significant unobservable inputs used in these models vary. The acquisition-related contingent consideration liabilities subject to the Monte Carlo pricing model were valued using significant unobservable inputs, including volatility rates between 31.5% and 40.0% and discount rates between 13.1% and 13.5%, which reflect the weighted average of our cost of debt and adjusted cost of equity of the acquired companies, and future cash flows. The acquisition-related contingent consideration subject to the probability-weighted discounted cash flow model was valued using significant unobservable inputs, including discount rates of 13.5% and 15.0% and future cash flows. Significant increases (or decreases) in these unobservable inputs in isolation would result in significantly lower (or higher) fair values. We reassess the fair value measurements of our acquisition-related contingent consideration are our measures of the future profitability and related cash flows and discount rates. The fair value of the contingent consideration is reassessed at each reporting period by the Company based on additional information as it becomes available.
Any
76

The change in the fair value of an acquisition’sour liability for acquisition-related contingent consideration liability resultsfor our Level 3 financial instruments is as follows:
Contingent Consideration
Balance at December 31, 2018$3,698 
Additions9,746 
Accretion expense (1)
2,372 
Payments(1,000)
Foreign currency translation adjustment (2)
10 
Balance at December 31, 2019$14,826 
Additions3,460 
Accretion expense (1)
5,593 
Payments(4,692)
Foreign currency translation adjustment (2)
931 
Balance at December 31, 2020$20,118 
Additions (3)
1,093 
Accretion expense (1)
2,771 
Remeasurement gain (4)
(3,095)
Payments(5,122)
Foreign currency translation adjustment (2)
(655)
Balance at December 31, 2021$15,110 
(1)Accretion expense is included in a remeasurement gain or loss that is recorded in “Selling,"Selling, general and administrative expenses”expenses" on the Consolidated Statements of Comprehensive Income.
(2)Foreign currency translation adjustments are included in "Other comprehensive income (loss), net of tax" on the Consolidated Statements of Comprehensive Income.
(3)During the year ended December 31, 2018, there was no2021, we acquired certain assets of a business that were assigned to the FLC segment.
(4)Remeasurement gain or loss resulting from a change in the estimated fair value of future expectedan acquisition's contingent consideration payments. Duringliability is recorded in SG&A expenses on the years ended December 31, 2017 and 2016, we recorded $0.7 million and $1.4 million in expense related to increases in the fair valueConsolidated Statements of future expected contingent consideration payments, respectively.Comprehensive Income.
10. Property and Equipment
Property and equipment consist of the following.
 December 31,
 2018 2017
Leasehold improvements$88,623
 $77,921
Construction in progress2,754
 806
Furniture and equipment34,865
 33,827
Computer equipment and software106,318
 100,186
 232,560
 212,740
Accumulated depreciation(147,983) (137,665)
Property and equipment, net$84,577
 $75,075
Depreciation expense for property and equipment totaled $26.2 million, $24.4 million and $26.7 million during the years ended December 31, 2018, 2017 and 2016, respectively.
11. Goodwill and Other Intangible Assets
Goodwill
The table below summarizes the changes in the carrying amount of goodwill by reportable segment.
 
Corporate
Finance &
Restructuring
 
Forensic and
Litigation
Consulting
 
Economic
Consulting
 Technology 
Strategic
Communications
 Total
Balance at December 31, 2016           
Goodwill$440,666
 $230,544
 $268,209
 $117,607
 $317,114
 $1,374,140
Accumulated goodwill impairment—
 —
 —
 —
 (194,139) (194,139)
Goodwill, net at December 31, 2016440,666
 230,544
 268,209
 117,607
 122,975
 1,180,001
Acquisitions (1)
11,900
 —
 —
 —
 —
 11,900
Foreign currency translation adjustment and other2,250
 3,175
 786
 133
 6,558
 12,902
Balance at December 31, 2017           
Goodwill454,816
 233,719
 268,995
 117,740
 323,672
 1,398,942
Accumulated goodwill impairment—
 —
 —
 —
 (194,139) (194,139)
Goodwill, net at December 31, 2017454,816
 233,719
 268,995
 117,740
 129,533
 1,204,803
Sale of business (2)
—
 —
 —
 (20,928) —
 (20,928)
Foreign currency translation adjustment and other(3,819) (2,182) (448) (89) (5,021) (11,559)
Balance at December 31, 2018           
Goodwill450,997
 231,537
 268,547
 96,723
 318,651
 1,366,455
Accumulated goodwill impairment—
 —
 —
 —
 (194,139) (194,139)
Goodwill, net at December 31, 2018$450,997
 $231,537
 $268,547
 $96,723
 $124,512
 $1,172,316

82



(1)
During the year ended December 31, 2017, we made an initial payment of $8.9 million at closing to acquire a restructuring business within our Corporate Finance & Restructuring segment. We recorded $11.9 million in goodwill as a result of the acquisition. We have included the results of the acquired business' operations in the Corporate Finance & Restructuring segment since the acquisition date.
(2)
During the year ended December 31, 2018, we sold a business within our Technology segment for proceeds of $50.3 million. We wrote off $20.9 million in goodwill as a result of the sale.
Other Intangible Assets
Other intangible assets were as follows:
   December 31, 2018 December 31, 2017
 
Weighted Average
Useful Life
in Years
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Amortizing intangible assets             
Customer relationships (1)
14.3 $99,080
 $71,036
 $28,044
 $117,192
 $80,523
 $36,669
Acquired software9.8 3,107
 1,618
 1,489
 3,264
 1,383
 1,881
 14.2 102,187
 72,654
 29,533
 120,456
 81,906
 38,550
Non-amortizing intangible assets             
Trade names (1)
Indefinite 5,100
 —
 5,100
 5,600
 —
 5,600
Total  $107,287
 $72,654
 $34,633
 $126,056
 $81,906
 $44,150
(1)
During the year ended December 31, 2018, we sold a business and related intangible assets within our Technology segment.
Other intangible assets with finite lives are amortized over their estimated useful lives. We recorded amortization expense of $8.2 million, $10.6 million and $10.3 million during the years ended December 31, 2018, 2017 and 2016, respectively.
We estimate our future amortization expense for our intangible assets with a finite life to be as follows:
 
As of
December 31, 2018 (1)
Year
2019$7,291
20207,176
20216,657
20224,913
20231,693
Thereafter1,803
 $29,533
(1)
Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, changes in useful lives, or other relevant factors or changes.

83



12. Notes Receivable from Employees
The table below summarizes the changes in the carrying amount of our notes receivable from employees.
 December 31,
 2018 2017
Notes receivable from employees — beginning$123,796
 $136,388
Notes granted32,937
 18,247
Repayments(5,405) (7,394)
Amortization expense(36,418) (26,821)
Cumulative translation adjustment and other(1,211) 3,376
Notes receivable from employees — ending113,699
 123,796
Less: current portion(29,228) (25,691)
Notes receivable from employees, net of current portion$84,471
 $98,105
As of December 31, 2018 and 2017, there were 294 and 270 notes outstanding, respectively. Total amortization expense for the years ended December 31, 2018, 2017 and 2016 was $36.4 million, $26.8 million and $25.6 million, respectively.
13. Long-Term14. Debt
The table below summarizes the components of the Company’s long-term debt.debt:
 December 31,
 2018 2017
2023 Convertible Notes$316,250
 $—
2022 Notes—
 300,000
Credit Facility—
 100,000
Total debt316,250
 400,000
Less: deferred debt discount(43,998) —
Less: deferred debt issue costs(6,681) (3,716)
Long-term debt, net (1)
$265,571
 $396,284
Additional paid-in capital$35,306
 $—
Discount attribution to equity(1,175) —
Equity component, net$34,131
 $—
 December 31,
 20212020
2023 Convertible Notes$316,245 $316,250 
Total debt316,245 316,250 
Less: deferred debt discount(16,724)(26,310)
Less: deferred debt issue costs(2,363)(3,809)
Long-term debt, net (1)
$297,158 $286,131 
Additional paid-in capital$35,304 $35,306 
Discount attribution to equity(1,175)(1,175)
Equity component, net$34,129 $34,131 
(1)
(1)There were no current portions of long-term debt as of December 31, 2021 and 2020.
77

There were no current portions of long-term debt as of December 31, 2018 and 2017.
2023 Convertible Notes
On August 20, 2018, we issued $316.3 millionthe 2023 Convertible Notes in an aggregate principal amount of the 2023 Convertible Notes, which includes the notes issued pursuant to an option granted to the initial purchasers of the 2023 Convertible Notes to purchase additional notes.$316.3 million. The 2023 Convertible Notes bear interest at a fixed rate of 2.0% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2019. The 2023 Convertible Notes will mature on August 15, 2023 unless earlier converted or repurchased.
As of December 31, 2021, upon conversion, the 2023 Convertible Notes could be settled, at our election, in cash, shares of our common stock or a combination of cash and shares of our common stock. Effective January 1, 2022, the principal amount of the 2023 Convertible Notes being converted is required to be paid in cash and only the premium due upon conversion, if any, is permitted to be settled in shares, cash or a combination of shares and cash. The 2023 Convertible Notes are senior unsecured obligations of the Company and will rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 2023 Convertible Notes; equal in right of payment to any of our unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness (including all amounts outstanding, from time to time, under the Credit Facility) to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries.Company.
The 2023 Convertible Notes are convertible at an initialmaturity at a conversion rate of 9.8643 shares of our common stock per $1,000 principal amount of the 2023 Convertible Notes (equivalent to an initiala conversion price of approximately $101.38 per

84



share of common stock). Holders may convert their 2023 Convertible Notes at any time prior to the close of business on the business day immediately preceding May 15, 2023. The 2023 Convertible Notes may be converted only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five5 business day period after any five5 consecutive trading day period (the “Measurement Period”) in which the trading price (as defined in the indenture governing the 2023 Convertible Notes)Indenture) per $1,000 principal amount of the 2023 Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate in effect on each such trading day; or (3) upon the occurrence of specified corporate events. On or after May 15, 2023, until the close of business on the business day immediately preceding the maturity date of August 15, 2023, holders may convert their 2023 Convertible Notes at any time, regardless of the foregoing circumstances.
The 2023 Convertible Notes were convertible during the quarters ended September 30, 2021 and December 31, 2021, and the number of notes converted was immaterial. The circumstances required to allow the holders to convert their 2023 Convertible Notes prior to maturity were not met as of December 31, 2018.2021; therefore, holders may convert their notes at any time beginning on January 1, 2022 and ending on March 31, 2022. Based on the Company's stock price on December 31, 2021, the if-converted value of the 2023 Convertible Notes exceeded the principal amount by $162.4 million.
We may not redeem the 2023 Convertible Notes prior to the maturity date.
If we undergo a fundamental change (as defined in the indenture governing the 2023 Convertible Notes)Indenture), subject to certain conditions, holders may require us to repurchase for cash all or part of their 2023 Convertible Notes.
Debt issuance costsNotes in principal amounts of $8.4 million related$1,000 or a multiple thereof. The fundamental change repurchase price will be equal to 100% of the principal amount of the 2023 Convertible Notes were comprised primarilyto be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. In addition, in certain circumstances, we may be required to increase the conversion rate for any 2023 Convertible Notes converted in connection with a make-whole fundamental change (as defined in the Indenture). See Note 1, "Description of discountsBusiness and commissions payableSummary of Significant Accounting Policies."
The debt discount is amortized to interest expense over the initial purchasers.term of the 2023 Convertible Notes using the effective interest rate method. We incurred debt issue costs and allocated the total amount incurred to the liability and equity components of the 2023 Convertible Notes based on their relative values. IssuanceThe debt issue costs attributable to the liability component were $7.2 million and will beare amortized to interest expense over the term of the 2023 Convertible Notes using the effective interest rate method over the expected life of the 2023 Convertible Notes.method. Issuance costs attributable to the equity component were netted with the equity component in stockholders' equity.
ForThe table below summarizes the year ended December 31, 2018, weamount of interest cost recognized by us for both the contractual interest expense of $2.3 million and amortization of the debt discount and issuance costs of $3.0 million for the 2023 Convertible Notes.Notes:
Year Ended December 31,
202120202019
Contractual interest expense$6,325 $6,325 $6,325 
Amortization of debt discount (1)
9,586 9,083 8,606 
     Total$15,911 $15,408 $14,931 
(1)    The effective interest rate of the liability component wasis 5.45%.
2022 Notes
78
On November 15, 2018, we redeemed the $300.0 million outstanding principal amount of our 6.0% senior notes due 2022 ("2022 Notes"), pursuant to the terms of the indenture governing the 2022 Notes. We recognized a loss on early extinguishment of debt of $9.1 million, consisting primarily of a redemption premium of $6.0 million and a $3.1 million non-cash write-off of unamortized deferred financing costs. This loss has been recorded in “Loss on early extinguishment of debt” within the Consolidated Statements of Comprehensive Income.

Credit Facility
On June 26, 2015, we entered into a credit agreement, which provides for a $550.0 million senior secured bank revolving line of credit facility (“Original Credit Facility”) maturing on June 26, 2020. In November 2018, we amended and restated the credit agreement to the Original Credit Facility, to, among other things, extend the maturity to November 30, 2023 and incurred an additional $1.7 million of debt issuance costs, and on February 4, 2022, we entered into the first amendment to the amended and restated credit agreement (the “2018Original Credit Agreement”Facility as amended and restated and as further amended, the “Credit Facility”). At the Company’s option, borrowings under the 2018 Credit AgreementFacility in USD, euro ("EUR") and British pound ("GBP") will bear interest at either one-, two- or three-month London Interbank Offered Rate ("LIBOR") or an alternative base rate, in each case plus the applicable margin. Due to the cessation by the ICE Benchmark Administration Limited of the publication on a representative basis of EUR LIBOR and GBP LIBOR as of December 31, 2021, these interest rates are no longer available under our Credit Agreement. The Credit Agreement permits the Company and Bank of America, N.A., as administrative agent thereunder, to agree to a new benchmark rate to replace EUR LIBOR and GBP LIBOR, subject to the negative consent of the Required Lenders (as defined therein). Prior to the incurrence of any borrowings under the Credit Facility in EUR or, after December 31, 2022, GBP, we will need to agree to a replacement benchmark rate for each applicable currency in accordance with the terms of the Credit Agreement. The alternative base rate means a fluctuating rate per annum equal to the highest of (1) the rate of interest in effect for such day as the prime rate announced by Bank of America, (2) the federal funds rate plus the sum of 50 basis points, and (3) the one-month USD LIBOR plus 100 basis points. Borrowings under the Credit Facility in Canadian dollars bear interest at an annual rate equal to the Canadian Dealer Offered Rate plus an applicable margin. Borrowings under the Credit Facility in Australian dollars bear interest at an annual rate equal to the Bank Bill Swap Reference Bid Rate plus an applicable margin. The applicable margin will fluctuate between 1.25% per annum and 2.00% per annum, in the case of LIBOR borrowings, or between 0.25% per annum and 1.00% per annum, in the case of base rate borrowings, in each case, based upon the Company’s Consolidated Total Net Leverage Ratio (as defined in the 2018 Credit Agreement)Facility) at such time. The lenders have a security interest in substantially all of the assets of the Company and substantially all of its domestic subsidiaries.
Under the 2018 Credit Agreement,Facility, we are required to pay a commitment fee rate that fluctuates between 0.20% and 0.35% per annum and thea letter of credit fee rate that fluctuates between 1.25% and 2.00% per annum, in each case, based upon the Company’s Consolidated Total Net Leverage Ratio.
There were no borrowings outstanding under the 2018 Credit AgreementFacility as of December 31, 2018. The Company classified the borrowings outstanding as of December 31, 2017 as long-term debt in the accompanying Consolidated Balance Sheets as the amounts due were not contractually required or expected to be liquidated for more than one year from the applicable balance sheet date.2021 and 2020. Additionally, $1.0$0.4 million of the borrowing limit was used for letters of credit (and, therefore, unavailable) as of December 31, 2018 for letters of credit.  2021.
There were $3.6$0.9 million and $3.1$1.3 million of unamortized debt issue costs related to the Credit Facility as of December 31, 20182021 and 2017,2020, respectively. These amounts were included in “Other assets” on our Consolidated Balance Sheets.

Long-Term Debt Maturities
85



14. CommitmentsOur maturity analysis for our remaining future undiscounted cash flows for the principal portion of our long-term debt assumes that payments will be made based on the current payment schedule and Contingencies
Operating Lease Commitments
Rental expense, netexcludes any additional revolving line of rental income was $55.3 million, $56.0 million and $54.8 million during the years ended December 31, 2018, 2017 and 2016, respectively. For yearscredit borrowings or repayments subsequent to December 31, 2018,2021 and prior to the November 30, 2023 maturity date of our Credit Facility. We estimate future minimum paymentsundiscounted cash flows for allthe principal portion of our long-term debt to be $316.2 million in 2023.
79

15. Leases
We lease office space and equipment under non-cancelable operating leases. We recognize operating lease obligationsexpense on a straight-line basis over the lease term, which may include renewal or termination options that are reasonably certain of exercise. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets and are expensed on a straight-line basis. Most leases include 1 or more options to renew, with renewal terms that can extend the lease term up to seven years. The exercise of lease renewal options is at our sole discretion. Certain of our lease agreements include rental payments that are adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The table below summarizes the carrying amount of our operating lease assets and liabilities:
December 31,
LeasesClassification20212020
Assets
  Operating lease assetsOperating lease assets$215,995 $156,645 
Total lease assets$215,995 $156,645 
Liabilities
Current
  Operating lease liabilitiesAccounts payable, accrued expenses and other$30,828 $42,716 
Noncurrent
  Operating lease liabilitiesNoncurrent operating lease liabilities236,026 161,677 
Total lease liabilities$266,854 $204,393 
The table below summarizes total lease costs:
Year Ended December 31,
Lease Cost20212020
Operating lease costs$54,541 $51,764 
Short-term lease costs1,752 2,476 
Variable lease costs13,304 12,986 
Sublease income(3,800)(4,226)
Total lease cost, net$65,797 $63,000 
We sublease certain of our leased office spaces to third parties. Our sublease portfolio consists of leases of office space that we have initial non-cancelablevacated before the lease terms exceeding one year, net ofterm expiration. Operating lease expense on vacated office space is reduced by sublease rental income, from subleases are as follows.which is recorded to SG&A expenses on the Consolidated Statements of Comprehensive Income. Our sublease arrangements do not contain renewal options or restrictive covenants. We estimate future sublease rental income to be $0.8 million in 2022, $0.6 million in 2023, $0.6 million in 2024 and $0.3 million in 2025. There is no future sublease rental income estimated for the years beyond 2025.
The maturity analysis below summarizes the remaining future undiscounted cash flows for our operating leases and includes a reconciliation to operating lease liabilities reported on the Consolidated Balance Sheets:
 As of
December 31, 2021
2022$48,464 
202348,440 
202442,891 
202535,893 
202631,414 
Thereafter136,031 
   Total future lease payments343,133 
   Less: imputed interest(76,279)
Total$266,854 
80

 Operating Leases Sublease Rental Income
 
2019$49,757
 $4,760
202047,084
 3,944
202144,480
 3,864
202224,471
 707
202320,309
 614
Thereafter75,190
 939
Total$261,291
 $14,828
The table below includes cash paid for our operating lease liabilities, other non-cash information, our weighted average remaining lease term and weighted average discount rate:
Year Ended December 31,
 20212020
Cash paid for amounts included in the measurement of operating lease liabilities$60,220$56,075
Operating lease assets obtained in exchange for lease liabilities$99,084$32,759
Weighted average remaining lease term (years)
   Operating leases8.76.7
Weighted average discount rate
   Operating leases
5.4 %5.4 %
16. Commitments and Contingencies
We are subject to legal actions arising in the ordinary course of business. In management’s opinion, we believe we have adequate legal defenses and/or insurance coverage with respect to the eventuality of such actions. We do not believe any settlement or judgment relating to any pending legal action would materially affect our financial position or results of operations.
15.17. Income Taxes
On December 22, 2017, the 2017 Tax Act was signed into law. The 2017 Tax Act included a number of changes to the U.S. Internal Revenue Code, including a reduction of the U.S. corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017, and a one-time transition tax on certain unrepatriated foreign earnings (the “Transition Tax”). Prospective changes from the 2017 Tax Act that began in 2018 include imposed limitations on the deductibility of executive compensation and interest, a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries, and a new provision designed to tax global intangible low-taxed income ("GILTI"). The Company has made an accounting policy election to account for the tax effects of the GILTI provision as a period cost.
The Company recognized the income tax effects of the 2017 Tax Act in its financial statements for the year ended December 31, 2017, in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes. The Company finalized its accounting for the income tax effects of the 2017 Tax Act in the fourth quarter of 2018 and there was no material change.

86



The table below summarizes significant components of deferred tax assets and liabilities.liabilities:
 December 31,
 20212020
Deferred tax assets  
Allowance for expected credit losses$2,048 $14,676 
Accrued vacation and bonus40,608 30,694 
Share-based compensation14,374 13,522 
Notes receivable from employees12,911 13,333 
State net operating loss carryforward1,125 2,090 
Foreign net operating and capital loss carryforward8,357 9,437 
Foreign tax credit carryforward3,536 — 
Deferred compensation534 240 
Operating lease assets64,482 41,283 
Employee benefits obligations340 2,339 
Other, net4,037 3,701 
Total deferred tax assets152,352 131,315 
Deferred tax liabilities
Revenue recognition(6,779)(8,351)
Operating lease liabilities(52,087)(28,523)
Property and equipment, net(14,766)(7,663)
Equity debt discount(4,214)(6,623)
Goodwill and intangible assets(206,105)(202,842)
Total deferred tax liabilities(283,951)(254,002)
Foreign withholding tax(1,537)(1,980)
Valuation allowance(10,315)(13,300)
Net deferred tax liabilities$(143,451)$(137,967)
81
 Year Ended December 31,
 2018 2017
Deferred tax assets   
Allowance for doubtful accounts$11,792
 $11,279
Accrued vacation and bonus23,545
 23,896
Deferred rent9,016
 8,491
Share-based compensation11,837
 15,108
Notes receivable from employees12,993
 12,879
State net operating loss carryforward3,510
 3,586
Foreign net operating loss carryforward9,857
 12,075
Federal tax credit and capital loss carryforward9,470
 7,403
Deferred compensation1,801
 2,688
Other, net1,129
 7,159
Total deferred tax assets94,950
 104,564
Deferred tax liabilities   
Revenue recognition(5,087) (7,227)
Property, equipment and capitalized software(6,652) (2,308)
Equity debt discount(11,014) —
Goodwill and other intangible asset amortization(199,964) (190,638)
Total deferred tax liabilities(222,717) (200,173)
Foreign withholding tax(413) (1,035)
Valuation allowance(21,929) (21,621)
Net deferred tax liabilities$(150,109) $(118,265)

As of December 31, 20182021 and 2017,2020, the Company believesrecorded certain deferred tax assets principally associated withrelated to foreign tax credit,credits, capital loss and foreign net operating loss carryforwards, which can be carried forward for periods ranging from 510 years to indefinite, will expire basedindefinite. Based on updated forward-looking financial information.information, the Company believes it is not more likely than not that the attributes will be utilized. Therefore, valuation allowances of $21.9$10.3 million and $21.6$13.3 million are recorded against the Company’s net deferred tax assets as of December 31, 20182021 and 2017,2020, respectively.
PriorDuring the year ended December 31, 2021, the valuation allowance on the deferred tax assets in Australia was released because of sustained profitability. Additionally, a valuation allowance was recorded in the U.S. on foreign tax credit carryforwards as the Company does not have sufficient foreign source income in the U.S. to fully utilize the passageforeign tax credits.
During the year ended December 31, 2020, a U.S. subsidiary of the 2017 Tax Act,Company entered into an intellectual property license agreement with a United Kingdom ("U.K.") subsidiary of the Company assertedin consideration of royalty payments that substantially all of the undistributed earnings of our foreign subsidiaries were considered indefinitely reinvested and accordingly, no deferred taxes were recognized. Pursuant to the provisions of the U.S. Tax Act, these earnings were subjected to U.S. federal taxation as a result of the one-time Transition Tax; however, these earnings may still be subject to foreign withholding taxes upon distribution. We have re-evaluated our historical assertion as a result of the 2017 Tax Act and determined that we no longer consider a majority of the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested. As of December 31, 2018, the Company has recognized a deferred tax liability of $0.4 million for foreign withholding tax on undistributed earnings of our foreign subsidiaries that are not indefinitely reinvested.been partially prepaid.
As of December 31, 2018,2021, the Company has not recorded a $17.8$35.4 million deferred tax liability related to the basis difference in the investment in our foreign subsidiaries as the investment is considered permanent in nature.


87



The table below summarizes the components of income before income tax provision (benefit) from continuing operations.operations:
Year Ended December 31, Year Ended December 31,
2018 2017 2016 202120202019
Domestic$96,543
 $30,013
 $66,202
Domestic$136,008 $122,800 $150,860 
Foreign111,249
 57,092
 61,601
Foreign161,939 139,646 137,590 
Total$207,792
 $87,105
 $127,803
Total$297,947 $262,446 $288,450 
The table below summarizes the components of income tax provision (benefit) from continuing operations.operations:
 Year Ended December 31,
 202120202019
Current   
Federal$11,050 $22,164 $30,651 
State8,328 10,257 7,702 
Foreign37,656 29,390 37,083 
 57,034 61,811 75,436 
Deferred
Federal10,766 3,936 (1,767)
State3,458 362 785 
Foreign(8,277)(14,345)(2,730)
 5,947 (10,047)(3,712)
Income tax provision$62,981 $51,764 $71,724 
82
 Year Ended December 31,
 2018 2017 2016
Current     
Federal$10,847
 $15,164
 $(3,326)
State4,447
 742
 1,686
Foreign21,056
 14,816
 13,864
 36,350
 30,722
 12,224
Deferred     
Federal14,538
 (47,820) 23,182
State503
 (152) 8,284
Foreign5,790
 (3,607) (1,407)
 20,831
 (51,579) 30,059
Income tax provision (benefit)$57,181
 $(20,857) $42,283

Our income tax provision (benefit) from continuing operations resulted in effective tax rates that varied from the federal statutory federal income tax rate as summarized below.below:
Year Ended December 31, Year Ended December 31,
2018 2017 2016 202120202019
Income tax expense at federal statutory rate$43,636
 $30,487
 $44,731
Income tax expense at federal statutory rate$62,569 $55,114 $60,575 
State income taxes, net of federal benefit4,950
 781
 6,075
State income taxes, net of federal benefit8,643 10,567 8,430 
Detriment (benefit) from lower foreign tax rates3,655
 (8,500) (7,827)
Valuation allowance on foreign net operating loss carryforward(450) 253
 254
Detriment from foreign tax ratesDetriment from foreign tax rates4,375 1,175 3,425 
Other expenses not deductible for tax purposes3,543
 2,466
 3,082
Other expenses not deductible for tax purposes2,819 3,079 4,362 
Adjustment to reserve for uncertain tax positions(132) 456
 (3,547)Adjustment to reserve for uncertain tax positions2,665 (1,231)2,504 
Impact of 2017 U.S. tax reform — deferred tax
(706) (63,525) —
Impact of 2017 U.S. tax reform — Transition Tax
50
 18,655
 —
Impact of 2017 U.S. tax reformImpact of 2017 U.S. tax reform— — (1,088)
Sale of Ringtail business3,798
 —
 —
Sale of Ringtail business— — (2,097)
Share-based compensationShare-based compensation(6,167)(6,560)(4,447)
Release of valuation allowance on foreign tax creditsRelease of valuation allowance on foreign tax credits— (7,336)— 
Income tax benefit related to the License Agreement, netIncome tax benefit related to the License Agreement, net— (3,899)— 
Release of valuation allowance on Australian deferred tax assetRelease of valuation allowance on Australian deferred tax asset(5,063)— — 
U.S. foreign tax creditsU.S. foreign tax credits(4,859)— — 
Valuation allowance on U.S. foreign tax credit carryforwardsValuation allowance on U.S. foreign tax credit carryforwards3,536 — — 
Deferred tax benefit of U.K. tax rate changeDeferred tax benefit of U.K. tax rate change(3,167)— — 
Other adjustments, net(1,163) (1,930) (485)Other adjustments, net(2,370)855 60 
Income tax provision (benefit)$57,181
 $(20,857) $42,283
Income tax provisionIncome tax provision$62,981 $51,764 $71,724 
The income tax expenseprovision for 2018the years ended December 31, 2021 and 2020 was $57.2$63.0 million as compared with an income tax benefit of $20.9and $51.8 million, in 2017.respectively. The increase in expense is primarily attributable to higher pre-tax income in 20182021 as compared with 20172020 and the impact of the discrete income tax benefit of $44.9 million recorded in 2017 in connection with accounting for tax effects related to the 2017 Tax Act.intellectual property license agreement between subsidiaries in 2020.
We file numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and in many city, state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations for years prior to 2014.2017. We are also no longer subject to state and local or foreign tax examinations by tax authorities for years prior to 2012.

88



Our liability for uncertain tax positions was $3.7$6.4 million and $2.7$7.3 million as of December 31, 20182021 and 2017,2020, respectively. The Company does not expect anyexpects $2.1 million of the uncertain tax positions to settle within the next 12 months. As of December 31, 2018,2021, our accrual for the payment of tax-related interest and penalties was not significant.
16.18. Stockholders’ Equity
2016 Stock Repurchase Program
On June 2, 2016, our Board of Directors authorized a stock repurchase program of up to $100.0 million (the “Repurchase Program”). On each of May 18, 2017, and December 1, 2017, February 21, 2019 and February 20, 2020, our Board of Directors authorized an additional $100.0 million, respectively. On each of July 28, 2020 and December 3, 2020, our Board of Directors authorized an additional $200.0 million, respectively, increasing the Repurchase Program to an aggregate authorization of $300.0$900.0 million. No time limit has been established for the completion of the program,Repurchase Program, and the programRepurchase Program may be suspended, discontinued or replaced by the Board of Directors at any time without prior notice. As of December 31, 2018,2021, we have $72.6had $167.1 million available under this programthe Repurchase Program to repurchase additional shares.
The following table details our stock repurchases under the Repurchase Program:
 Year Ended December 31,
 202120202019
Shares of common stock repurchased and retired422 3,269 1,258 
Average price paid per share$109.37 $108.11 $84.16 
Total cost$46,124 $353,385 $105,915 
As we repurchase our common shares, we reduce stated capital on our Consolidated Balance Sheets for the $0.01 of par value of the shares repurchased, with the excess purchase price over par value recorded as a reduction of additional paid-in
83

 Year Ended December 31,
 2018 2017 2016
Shares of common stock repurchased and retired756
 4,674
 452
Average price per share$53.88
 $35.94
 $41.06
Total cost$40,722
 $168,001
 $18,577
2018 Repurchase Transaction
On August 13, 2018, our Boardcapital. If additional paid-in capital is reduced to zero, we record the remainder of Directors authorized the useexcess purchase price over par value as a reduction of retained earnings. During the years ended December 31, 2021 and 2020, due to the volume of repurchases, we recorded a reduction to stated capital for the par value of the shares repurchased, with a portion of the proceeds fromexcess purchase price over par value recorded as a reduction of additional paid-in capital of $3.0 million and $235.6 million, respectively, and the issuanceremainder of the 2023 Convertible Notes to repurchase up to $25.0excess purchase price over par value of $43.1 million and $117.9 million recorded as a reduction of common stock. On August 16, 2018, 196,050retained earnings, respectively.
Common Stock Outstanding
Common stock outstanding was 34.3 million shares and 34.5 million shares as of our commonDecember 31, 2021 and 2020, respectively. Common stock were repurchased at $76.51 per share for a total cost of $15.0 million. This is a separate repurchase transaction outsideoutstanding includes unvested restricted stock awards, which are considered issued and outstanding under the terms of the Repurchase Program.restricted stock award agreements.
2015 Stock Repurchase Program
On November 5, 2015, our Board of Directors authorized a six-month stock repurchase program of up to $50.0 million (the “2015 Repurchase Program”). During the year ended December 31, 2016, we repurchased and retired 85,100 shares of our common stock for an average per share price of $34.16, at a total cost of $2.9 million, which was paid in full in 2016. The 2015 Repurchase Program expired on May 5, 2016.
17.19. Employee Benefit Plans
We maintain a qualified defined contribution 401(k) plan, which covers substantially all of our U.S. employees. Under the plan, participants are entitled to make pre-tax and/or Roth post-tax contributions up to the annual maximums established by the Internal Revenue Service. We match a certain percentage of participant contributions pursuant to the terms of the plan, which contributions are limited to a percentage of the participant’s eligible compensation. Effective in 2018,2020, we increased our matching percentage. We made contributions related to the plan of $15.2$29.1 million, $11.6$26.2 million and $11.4$17.4 million during the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively.
We also maintain several defined contribution pension plans for our employees in the United KingdomU.K. and other foreign countries. We contributed to these plans $7.7$11.6 million, $6.4$9.2 million and $6.3$7.3 million during the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively.
18.20. Segment Reporting
We manage our business in five5 reportable segments: Corporate Finance, & Restructuring ("Corporate Finance"), Forensic and Litigation Consulting ("FLC"),FLC, Economic Consulting, Technology and Strategic Communications.
Our Corporate Finance segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the worldworld. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, and deliversother financing sources and creditor groups, as well as other parties-in-interest. We deliver a wide range of service offerings related to restructuring,services centered around three core offerings: business transformation, transactions and transaction support. Our restructuring practice includes corporate restructuring, including bankruptcy and interim management services. Our business transformation and transaction support practices include financings, mergers and acquisitions (“M&A”), M&A integration, valuations and tax advice, as well as financial, operational and performance improvement services.

89



turnaround & restructuring.
Our FLC segment provides law firms, companies, government clientsentities, private equity firms and other interested parties with a multidisciplinary and independent dispute advisory,range of services in risk and investigations and disputes, including a focus on highly regulated industries such as our construction & environmental solutions and health solutions services. These services are supported by our data & analytics forensic accounting,solutions, which help our clients analyze large, disparate sets of data related to their business intelligenceoperations and support our clients during regulatory inquiries and commercial disputes. We deliver a wide range of services centered around five core offerings: construction & environmental solutions, data & analytics, disputes, health solutions and risk mitigation services, as well as interim management and performance improvement services for our health solutions practice clients.investigations.
Our Economic Consulting segment, including subsidiary Compass Lexecon LLC, provides law firms, companies, government entities and other interested parties with analysisanalyses of complex economic issues for use in legal, regulatory and international arbitration, legal and regulatory proceedings, and strategic decision making and public policy debates in the U.S. and around the world. We deliver a wide range of services centered around three core offerings: antitrust & competition economics, financial economics and international arbitration.    
Our Technology segment provides corporations andcompanies, law firms, private equity firms and government entities with a comprehensive and global portfolio of consulting and services forto address legal and regulatory risk, including e-discovery, information governance, privacy and security electronic discovery and insight analytics. Our consultingcorporate legal operations solutions. We deliver a full spectrum of services centered around three core offerings: corporate legal operations, e-discovery services and expertise, enables clients to more confidently govern, secure, find, analyze and rapidly understand their data in the context of compliance and risk.information governance, privacy & security services.
Our Strategic Communications segment designsdevelops and executes communications strategies forto help management teams, and boards of directors, to help them seize opportunities,law firms, governments and regulators manage change and mitigate risk surrounding transformational and disruptive events, including transactions, investigations, disputes, crises, regulation and legislation. We deliver a wide range of services centered around three core offerings: corporate reputation, financial regulatorycommunications and reputational challenges, navigate market disruptions, articulate their brand, stake a competitive position, and preserve and grow their operations.public affairs.
84

We evaluate the performance of our operating segments based on Adjusted Segment EBITDA, a GAAP financial measure. We define Adjusted Segment EBITDA as a segment’s share of consolidated operating income before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment’s ability to generate cash.
The table below presents revenues and Adjusted Segment EBITDA for our reportable segments for the years ended December 31, 2018, 2017 and 2016.segments:
 Year Ended December 31,
 2018 2017 2016
Revenues     
Corporate Finance$564,479
 $482,041
 $483,269
FLC520,333
 462,324
 457,734
Economic Consulting533,979
 496,029
 500,487
Technology185,755
 174,850
 177,720
Strategic Communications223,331
 192,488
 191,184
Total revenues$2,027,877
 $1,807,732
 $1,810,394
Adjusted Segment EBITDA     
Corporate Finance$121,660
 $82,863
 $97,688
FLC96,821
 72,705
 57,882
Economic Consulting69,955
 61,964
 74,102
Technology27,387
 22,171
 25,814
Strategic Communications42,918
 27,732
 30,458
Total Adjusted Segment EBITDA$358,741
 $267,435
 $285,944

90



 Year Ended December 31,
 202120202019
Revenues   
Corporate Finance$938,969 $910,184 $723,721 
FLC584,835 500,275 577,780 
Economic Consulting697,405 599,088 592,542 
Technology287,366 223,016 215,584 
Strategic Communications267,647 228,712 243,090 
Total revenues$2,776,222 $2,461,275 $2,352,717 
Adjusted Segment EBITDA
Corporate Finance$155,482 $216,830 $160,735 
FLC72,545 33,374 104,435 
Economic Consulting117,186 91,432 84,112 
Technology55,739 43,013 45,688 
Strategic Communications54,313 38,975 44,544 
Total Adjusted Segment EBITDA$455,265 $423,624 $439,514 
The table below reconciles net income to Total Adjusted Segment EBITDA. Unallocated corporate expenses primarily include indirect costs related to centrally managed administrative functions that have not been allocated to the segments. These administrative costs include costs related to executive management, legal, corporate office support costs, information technology, accounting, marketing, human resources, and company-wide business development and strategy functions.
 Year Ended December 31,
 202120202019
Net income$234,966 $210,682 $216,726 
Add back:
Income tax provision62,981 51,764 71,724 
Interest income and other(6,193)412 (2,061)
Interest expense20,294 19,805 19,206 
Unallocated corporate expenses104,457 94,463 98,398 
Segment depreciation expense31,072 29,381 27,369 
Amortization of intangible assets10,818 10,387 8,152 
Segment special charges— 6,730 — 
Remeasurement of acquisition-related contingent consideration(3,130)— — 
Total Adjusted Segment EBITDA$455,265 $423,624 $439,514 
85
 Year Ended December 31,
 2018 2017 2016
Net income$150,611
 $107,962
 $85,520
Add back:     
Income tax provision (benefit)57,181
 (20,857) 42,283
Interest income and other(4,977) (3,752) (10,466)
Interest expense27,149
 25,358
 24,819
Gain on sale of business(13,031) —
 —
Loss on early extinguishment of debt9,072
 —
 —
Unallocated corporate expenses96,595
 83,140
 88,182
Segment depreciation expense27,979
 27,112
 34,064
Amortization of other intangible assets8,162
 10,563
 10,306
Segment special charges—
 37,207
 9,833
Remeasurement of acquisition-related contingent consideration—
 702
 1,403
Total Adjusted Segment EBITDA$358,741
 $267,435
 $285,944

The table below presents assets by segment.reportable segment, reconciled to consolidated amounts. Segment assets primarily include accounts and notes receivable, fixed assets purchased specifically for the segment, goodwill and other intangible assets.assets:
December 31, December 31,
2018 2017 20212020
Corporate Finance$707,924
 $726,176
Corporate Finance$927,543 $925,082 
FLC412,667
 401,905
FLC445,602 412,803 
Economic Consulting516,123
 501,471
Economic Consulting554,978 553,217 
Technology171,002
 195,399
Technology206,376 200,396 
Strategic Communications212,147
 215,083
Strategic Communications214,580 214,503 
Total segment assets2,019,863
 2,040,034
Total segment assets2,349,079 2,306,001 
Unallocated corporate assets359,258
 217,207
Unallocated corporate assets751,830 471,362 
Total assets$2,379,121
 $2,257,241
Total assets$3,100,909 $2,777,363 
The table below details information on ourtotal revenues for the years ended December 31, 2018, 2017 and 2016.by country. Revenues have been attributed to locations based on the location of the legal entity generating the revenues.
Year Ended December 31,
Year Ended December 31, 202120202019
2018 2017 2016
United States$1,372,116
 $1,262,682
 $1,298,492
United Kingdom302,576
 251,843
 246,236
U.S.U.S.$1,708,673 $1,544,777 $1,555,133 
U.K.U.K.461,354 421,125 389,338 
All other foreign countries353,185
 293,207
 265,666
All other foreign countries606,195 495,373 408,246 
Total revenues$2,027,877
 $1,807,732
 $1,810,394
Total revenues$2,776,222 $2,461,275 $2,352,717 
We do not have a single customer that represents 10% or more of our consolidated revenues.

91



The table below details information on our long-lived assets and net assets by geographic location, which is based on the location of the legal entity holding the assets. We define net assets as total assets less total liabilities.
 December 31, 2021December 31, 2020
 U.S.U.K.All Other
Foreign Countries		U.S.U.K.All Other
Foreign Countries
Property and equipment, net$107,216 $14,023 $20,924 $64,923 $19,150 $17,569 
Net assets$833,412 $294,809 $455,100 $763,159 $196,708 $440,314 
86
 December 31, 2018 December 31, 2017
 United States 
United
Kingdom
 
All Other
Foreign Countries
 United States 
United
Kingdom
 
All Other
Foreign Countries
Property and equipment, net$59,611
 $14,023
 $10,943
 $52,709
 $14,761
 $7,605
Net assets$867,321
 $160,894
 $320,610
 $654,010
 $207,885
 $330,076
19. Quarterly Financial Data (unaudited)
 Quarter Ended
 March 31 June 30 September 30 December 31
2018       
Revenues$497,774
 $512,098
 $513,012
 $504,993
Operating expenses       
Direct cost of revenues321,117
 330,318
 336,477
 340,162
Selling, general and administrative expenses112,128
 117,897
 117,448
 118,163
Amortization of other intangible assets2,270
 2,052
 1,975
 1,865
 435,515
 450,267
 455,900
 460,190
Operating income62,259
 61,831
 57,112
 44,803
Interest income and other(1,800) 2,474
 1,400
 2,903
Interest expense(6,244) (6,583) (7,246) (7,076)
Gain on sale of business—
 —
 13,031
 —
Loss on early extinguishment of debt—
 —
 —
 (9,072)
Income before income tax provision54,215
 57,722
 64,297
 31,558
Income tax provision15,270
 14,113
 19,964
 7,834
Net income$38,945
 $43,609
 $44,333
 $23,724
Earnings per common share — basic (1)
$1.06
 $1.18
 $1.19
 $0.63
Earnings per common share — diluted (1)
$1.04
 $1.14
 $1.14
 $0.61
Weighted average common shares outstanding       
Basic36,700
 37,001
 37,318
 37,368
Diluted37,612
 38,271
 38,756
 38,628

92




 Quarter Ended
 March 31 June 30 September 30 December 31
2017       
Revenues$446,344
 $444,715
 $448,962
 $467,711
Operating expenses       
Direct cost of revenues309,072
 304,071
 294,851
 307,566
Selling, general and administrative expenses107,690
 108,119
 104,161
 112,043
Special charges—
 30,074
 —
 10,811
Amortization of other intangible assets2,493
 2,422
 2,882
 2,766
 419,255
 444,686
 401,894
 433,186
Operating income27,089
 29
 47,068
 34,525
Interest income and other605
 1,592
 1,103
 452
Interest expense(5,801) (6,250) (6,760) (6,547)
Income before income tax provision (benefit)21,893
 (4,629) 41,411
 28,430
Income tax provision (benefit)7,877
 527
 9,197
 (38,458)
Net income$14,016
 $(5,156) $32,214
 $66,888
Earnings per common share — basic (1)
$0.35
 $(0.13) $0.86
 $1.81
Earnings per common share — diluted (1)
$0.34
 $(0.13) $0.85
 $1.78
Weighted average common shares outstanding       
Basic40,527
 39,555
 37,431
 36,906
Diluted41,245
 39,555
 37,746
 37,643
(1)
The sum of the quarterly earnings per share amounts may not equal the annual amounts due to changes in the weighted average number of common shares outstanding during each quarterly period.


93



ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A.    CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act), as of the end of the period covered by this Annual Report on Form 10-K was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (a) were effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is timely recorded, processed, summarized and reported, and (b) included, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Management’s report on internal control over financial reporting is included in Part II, Item 8, “Financial Statements and Supplementary Data.”
Changes in Internal Control over Financial Reporting
There have not been any changes in our internal control over financial reporting that occurred during the quarter ended December 31, 20182021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.    OTHER INFORMATION
None.

ITEM 9C.    DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
94
87




PART III

Certain information required in Part III is omitted from this report but is incorporated herein by reference from our definitive proxy statement for the 20192022 Annual Meeting of Stockholders to be filed within 120 days after the end of our fiscal year ended December 31, 2018,2021, pursuant to Regulation 14A with the U.S. Securities and Exchange Commission ("SEC").
ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information contained in our proxy statement under the captions “Information aboutAbout the Board of Directors and Committees,” “Corporate Governance,” “ExecutiveGovernance” and “Information About Our Executive Officers and Compensation” and “Section 16(a) Beneficial Ownership Reporting Compliance” is incorporated herein by reference.
We have adopted the FTI Consulting, Inc. Code of Ethics and Business Conduct (“Code of Ethics”), which applies to our Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Controller, and our other financial professionals, as well as all our other executive officers, including chief strategy and transformation officer, chief human resources officer, general counsel, and chief risk officer, and our other officers, directors, employees and independent contractors. The Code of Ethics is publicly available on our website at http:https://www.fticonsulting.com/~-/media/Files/files/us-files/our-firm/guidelines/fti-code-of-conduct.pdf.fti-code-of-conduct.pdf.If we make any substantive amendments to the Code of Ethics or grant any waiver, including any implicit waiver, from a provision of the Code of Ethics to our President, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Controller or persons performing similar functions, other executive officers or directors, we will disclose the nature of such amendment or waiver on our website within four business days following the date of the amendment or waiver, or in a Current Report on Form 8-K filed with the SEC. We will provide a copy of our Code of Ethics without charge upon request to our Corporate Secretary, FTI Consulting, Inc., 6300 Blair Hill Lane, Suite 303, Baltimore, MarylandMD 21209.
ITEM 11.    EXECUTIVE COMPENSATION
The information contained in our proxy statement under the caption “Executive“Information About Our Executive Officers and Compensation” is incorporated herein by reference.
ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information contained in our proxy statement under the captionscaption “Security Ownership of Certain Beneficial Owners and Management” and this Annual Report under the caption Part II, Item 5, “Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Securities Authorized for Issuance under Equity Compensation Plans” is incorporated herein by reference.
ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information contained in our proxy statement under the captions “Certain Relationships and Related Party Transactions,” “Information aboutAbout the Board of Directors and Committees,” and “Corporate Governance” and "Certain Relationships and Related Party Transactions" is incorporated herein by reference.
ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP, McLean VA, Auditor firm ID: 185.
The information contained in our proxy statement under the caption “Principal Accountant Fees and Services” is incorporated herein by reference.

88
95




PART IV
ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
(a)(1)The following financial statements are included in this Annual Report:
Management’s Report on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm — Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm — Consolidated Financial Statements
Consolidated Balance Sheets — December 31, 20182021 and 20172020
Consolidated Statements of Comprehensive Income — Years Ended December 31, 2018, 20172021, 2020 and 20162019
Consolidated Statements of Stockholders’ Equity — Years Ended December 31, 2018, 20172021, 2020 and 20162019
Consolidated Statements of Cash Flows — Years Ended December 31, 2018, 20172021, 2020 and 20162019
Notes to Consolidated Financial Statements
(2)The following financial statement schedule is included in this Annual Report:
Schedule II — Valuation and Qualifying Accounts
All schedules other than the schedule listed above, are omitted as the information is not required or is otherwise provided.
(3)Exhibit Index

9689



FTI Consulting, Inc. and Subsidiaries
Schedule II — Valuation and Qualifying Accounts
(in thousands)
  
Balance
at
Beginning
of Period
 Additions   
Balance
at End
of
Period
   
Charged
to
Expense
 
Charged
to Other
Accounts*
   
Description    Deductions** 
Year Ended December 31, 2018          
Reserves and allowances deducted from asset
   accounts:
          
Allowance for doubtful accounts and unbilled
   services
 $180,687
 $17,872
 $25,300
 $21,465
 $202,394
Valuation allowance for deferred tax asset $21,621
 $308
 $—
 $—
 $21,929
Year Ended December 31, 2017          
Reserves and allowances deducted from asset
   accounts:
          
Allowance for doubtful accounts and unbilled
   services
 $178,819
 $15,386
 $9,656
 $23,174
 $180,687
Valuation allowance for deferred tax asset $18,900
 $2,721
 $—
 $—
 $21,621
Year Ended December 31, 2016          
Reserves and allowances deducted from asset
   accounts:
          
Allowance for doubtful accounts and unbilled
   services
 $185,754
 $8,912
 $9,501
 $25,348
 $178,819
Valuation allowance for deferred tax asset $13,167
 $5,733
 $—
 $—
 $18,900

* Includes estimated provision for unbilled services recorded as a reduction to revenues (i.e., fee, rate and other adjustments).
** Includes estimated direct write-offs of uncollectible and unrealizable accounts receivable.


97



Exhibit

Number
Description of Exhibits
3.1
3.2
3.3
3.4
3.5
4.1
4.2
4.3
4.4
10.1 *
10.2 *
10.3 *
 
10.4 *
10.5 *
90

Exhibit
Number		Description of Exhibits
10.6 *

98



Exhibit
Number
Description of Exhibits
10.7 *
10.8 *
10.9 *
10.10 *
10.11 *
 
10.12 *
10.13 *
10.14 *
10.15 *
10.16 *
10.17 *
 
10.18 *
10.19 *
91

Exhibit
Number		Description of Exhibits
10.20 *

99



Exhibit
Number
Description of Exhibits
10.21 *
10.22 *
10.23 *
10.24 *
10.25 *
10.2710.26 *
10.2810.27 *
10.2910.28 *
10.3010.29 *
10.3110.30 *
10.3210.31 *
10.3310.32 *
 

10092




Exhibit
Number		Description of Exhibits
Exhibit
Number
10.33 *		Description of Exhibits
10.34 *
10.3610.34 *
10.3710.35 *
10.3810.36 *
10.3910.37 *
 
10.40
10.38 *
10.4110.39 *
10.4210.40 *
10.4310.41 *
10.4410.42 *
10.4510.43 *
10.4610.44 *
 
10.4710.45 *

101



Exhibit
Number
10.46 *		Description of Exhibits
10.48 *
 
93

10.49Exhibit
Number		Description of Exhibits
10.47 *
10.5010.48 *
10.5110.49 *
10.5210.50 *
10.5310.51 *
10.5410.52 *
10.5510.53 *
10.5610.54 *
 
10.57
10.55 *
 
10.5810.56 *
 
10.5910.57 *
 
10.60
10.58 **
 

102



Exhibit
Number
10.59 **		Description of Exhibits
10.61 **
 
94

10.62
Exhibit
Number		Description of Exhibits
10.60 *
 
10.63
10.61 *
 
10.64
10.62 *
 
10.65
10.63 *
 
10.66
10.64 *
10.6710.65 *
10.6810.66 *
10.6910.67 *
 
10.7010.68 *
10.7110.69 *
10.7210.70 *

103



Exhibit
Number
10.71 *		Description of Exhibits
10.73 *
95

10.74Exhibit
Number		Description of Exhibits
10.72 *
10.7510.73 *
10.7610.74 *
10.7710.75 *
10.7810.76 *
10.7910.77 *
10.8010.78 *
10.8110.79 *
10.8210.80 *
10.8310.81 *
10.82 *
10.84 *

104



Exhibit
Number
10.83 *		Description of Exhibits
10.85 *
10.8610.84 *
96

Exhibit
Number		Description of Exhibits
10.87
10.85 *
10.8810.86 *
10.8910.87 *
10.9010.88 *
10.9110.89 *
10.9210.90 **
11.1 †10.91 *
14.0 †10.92 *
10.93 *
10.94 *
10.95 *
10.96 *
97

Exhibit
Number		Description of Exhibits
10.97 *
10.98 *
10.99 ±
14.1
21.1 †
23.023.1 †
31.1 †
31.2 †

105



Exhibit
Number
Description of Exhibits
32.1 †
32.2 †
99.1
99.2
99.3
99.3 †99.4
99.4
Categorical Standards of Director Independence, as last Amended and Restated Effective as of February 25, 2009. (Filed with the Securities and Exchange Commission on February 28, 2013 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.)
99.5
99.6
98

99.7Exhibit
Number		Description of Exhibits
99.7
99.8
101
101The following financial information from the Annual Report on Form 10-K of FTI Consulting, Inc. for the year ended December 31, 2018, filed2021, included herewith, and formatted in Inline XBRL (Extensible(eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Comprehensive Income; (iii) Consolidated Statements of Stockholders’ Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to the Consolidated Financial Statements, tagged as blocks of text.
104The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL (included as Exhibit 101).
* Management contract or compensatory plan or arrangement.
† Filed or furnished herewith.
** With certain exceptions, annexes, exhibits and schedules (or similar attachments) to the Amendment and Restatement Agreement and exhibits and Schedules to the Amended and Restated Credit Agreement are not filed. FTI Consulting, Inc. will furnish supplementally a copy of any omitted annex, exhibit or schedule to the Securities and Exchange Commission upon request.
± Exhibits and Schedules (or similar attachments) to the Amended and Restated Lease are not filed. FTI Consulting, Inc. will furnish supplementally a copy of any omitted Exhibit or Schedule (or similar attachment) to the Securities and Exchange Commission upon request.
ITEM 16.    FORM 10-K SUMMARY
None.

10699






SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized this 26th24th day of February 2019.
2022.
FTI CONSULTING, INC.
By:/s/    STEVEN H. GUNBY
Name:Steven H. Gunby
Title:President and Chief Executive Officer
SIGNATURECAPACITY IN WHICH SIGNEDDATEFTI CONSULTING, INC.
By:/s/    STEVEN H. GUNBY
Name:Steven H. Gunby
Title:President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
SIGNATURECAPACITY IN WHICH SIGNEDDATE
/s/    STEVEN H. GUNBYPresident, Chief Executive Officer

and Director

(Principal Executive Officer)
February 26, 201924, 2022
Steven H. Gunby
/s/    AJAY SABHERWALChief Financial Officer
(Principal Financial Officer)		February 24, 2022
Ajay Sabherwal
/s/    AJAY SABHERWALBRENDAN KEATING
Chief FinancialAccounting Officer and Interim Chief Accounting OfficerController
(Principal Financial and Accounting Officer)
February 26, 201924, 2022
Ajay SabherwalBrendan Keating
/s/    GERARD E. HOLTHAUS
Director and Chairman of the BoardFebruary 26, 201924, 2022
Gerard E. Holthaus
/s/    BRENDA J. BACONDirectorFebruary 26, 201924, 2022
Brenda J. Bacon
/s/    MARK S. BARTLETTDirectorFebruary 26, 201924, 2022
Mark S. Bartlett
/s/    CLAUDIO COSTAMAGNADirectorFebruary 26, 201924, 2022
Claudio Costamagna
/s/    VERNON ELLISDirectorFebruary , 201924, 2022
Vernon Ellis
/s/    NICHOLAS C. FANANDAKISDirectorFebruary 26, 201924, 2022
Nicholas C. Fanandakis
/s/    LAUREEN E. SEEGERDirectorFebruary 26, 201924, 2022
Laureen E. Seeger

107

100