Exhibit 99.2
F T I CONSULTING FTI Consulting Investor Day
New York Stock Exchange June 16, 2014
F T I
CONSULTING
Opening Remarks
Mollie Hawkes, Director of Investor Relations
Cautionary Note About Forward-Looking Statements
This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve uncertainties and risks. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions and other matters, business trends and other information that is not historical, including statements regarding estimates of our 2014 financial results, our medium-term growth targets or other future financial results. When used in this press release, words such as “anticipates,” “aspirational,” “estimates,” “expects,” “goals,” “intends,” “believes,” “forecasts,” “targets,” “objectives” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our 2014 financial results, our medium-term growth targets or other future financial results, are based upon our expectations at the time we make them and various assumptions. Our medium term growth targets do not represent forecasted future results or financial guidance; rather, they reflect our medium-term growth objectives, developed on the basis of a comprehensive review of our businesses and reflecting our plans for the future. Our expectations, beliefs, projections and growth targets are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates or growth targets will be achieved, and the Company’s actual results may differ materially from our expectations, beliefs, estimates and growth targets. The Company has experienced fluctuating revenues, operating income and cash flow in prior periods and expects that this will occur from time to time in the future. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer, the mix of the geographic locations where our clients are located or where services are performed, adverse financial, real estate or other market and general economic conditions, which could impact each of our segments differently, the pace and timing of the consummation and integration of past and future acquisitions, the Company’s ability to realize cost savings and efficiencies, competitive and general economic conditions, retention of staff and clients and other risks described bed under the heading “Item 1A Risk Factors” in the Company’s most recent Form 10-K filed with the SEC and in the Company’s other filings with the SEC, including the risks set forth under “Risks Related to Our Reportable Segments” and “Risks Related to Our Operations”. We are under no duty to update any of the forward looking statements to conform such statements to actual results or events and do not intend to do so.
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CONSULTING
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F T I
CONSULTING
Taking FTI Consulting to the Next Level
Steven H. Gunby, President and Chief Executive Officer
Key Message For Today
Strong confidence in our medium-term prospects
Strong businesses with strong people
Confronting the reality of the last few years
Making concrete changes that are grounded in those realities
Real people owning the changes with accountability
Delivering $2.50+ adjusted EPS by 2016
Major organic growth where we are strong
Aggressive action where we are challenged
Supported by disciplined cross-company capabilities
F T I
CONSULTING
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Agenda
Time
Presentation
Presenter
11:00 a.m. – 12:00 p.m. Registration and Lunch
12:00 – 12:05 p.m. Opening Remarks and Introductions Mollie Hawkes, Director of Investor Relations
12:05 – 12:45 p.m. Taking FTI Consulting to the Next Steven H. Gunby, President and Chief Executive Officer Level
12:45 – 1:00 p.m. Corporate Finance/Restructuring Robert J. Duffy and Kevin Lavin, Global Co-Leaders, Corporate
Finance/Restructuring
1:00 – 1:15 p.m. Economic Consulting John Klick, Global Leader, Economic Consulting
1:15 – 1:30 p.m. Forensic & Litigation Consulting Neal A. Hochberg, Global Leader, Forensic & Litigation Consulting
1:30 – 1:45 p.m. Strategic Communications Edward J. Reilly, Global Leader, Strategic Communications
1:45 – 2:00 p.m. Technology Seth A. Rierson, Global Leader, Technology
2:00 – 2:15 p.m. Break
Rod Sutton, Chairman of Asia Pacific Frank Holder, Chairman of Latin America
Kenneth J. Barker, Global Leader, Health Solutions Practice
2:15 – 2:55 p.m. Driving the Business Across/Beyond Carlyn Taylor, Telecom, Media & Technology Practice Leader and the Segments – Some Examples Global Industry Leader Jeffrey S. Amling, Head of Marketing and Business Development Adam S. Bendell, Senior Vice President – Strategic Development Roger D. Carlile, Executive Vice President and Chief Financial Officer
2:55 – 3:20 p.m. Financial Discussion Roger D. Carlile, Executive Vice President and Chief Financial Officer
3:20 – 3:55 p.m. Questions and Answers FTI Consulting Executive Team
3:55 – 4:00 p.m. Closing Remarks Steven H. Gunby, President and Chief Executive Officer
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CONSULTING
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Key Messages
Great company
Strong positions Great people
Recognize that the past few years have not lived up to…
Performance of the first 15 years Your expectations Our expectations
Making concrete changes…
Address weaknesses, but at least as important… …build on our strengths
…plans grounded in reality
Clear-sighted assessment of where we have the Right to Win Specific initiatives Clear accountabilities
Supported by a major upgrade in company-wide capabilities
Support from the center for rigor and discipline Specific initiatives
Transitioning to the next stage of FTI’s success
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CONSULTING
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We Are A Great Company With Proven Successes, Powerful Positions And Strong People
Advisor to the world’s top 10 banks and holding companies
Advisor to 95 of the world’s top 100 law firms
Advisor to over half of the world’s 100 largest companies
#1 crisis management firm in The Deal league tables for 7 consecutive years
Named leading Antitrust Economics Firm by Global Competition Review
Former Chairman of the FDIC
Former Chief Economist of the SEC
. . .
Two Nobel Laureates
Former SEC communications Director and DOJ Spokesperson
Former Federal Prosecutor for the Southern District of NY
Former Chairman of the SEC
Former Chief Economist at the FCC & FTC
For the biggest most complicated events in corporate life, organizations call on FTI
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CONSULTING
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Though We Outperformed For Many Years, Performance Recently Has Not Met Your (Or Our) Expectations
1 year
S&P 500
FCN
3 year
S&P 500
FCN
5 year
S&P 500
FCN
7 year
S&P 500
FCN
Not acceptable. We are going to change this.
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We Are Making Concrete Changes In Every Segment…
Corporate Finance/Restructuring
Reinforce core positions, e.g. TMT, Retail, company-side, interim management Drive new businesses where we have the right to win, e.g., Office of the CFO, carve out Rationalize cost structure, e.g., compensation, Detroit, Philippines Driving overseas bets to fruition
Forensic & Litigation Consulting
Reinvestment behind core areas of strength, e.g., FAAS, FEDA…
Growing key regions where we have a right to win, e.g., Latin America Construction Investing behind people to expand key businesses, e.g., Insurance, Cyber Security…
Economic Consulting
Continue driving Compass Lexecon
Expansion of International Arbitration, Energy, Center for Healthcare Economics and Policy
Technology
Increased investment in sales and marketing
Ongoing investment to stay leading edge with respect to the most complicated, major corporate events
Strategic Communications
Reinforce Financial and Corporate Communications, continued expansion of Public Affairs Focus on EBIT improvement
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…But Also Major Changes Across Segments…
Industry strategies
Health Solutions
Substantial other cross-segment industry based alignments, e.g., Energy, Insurance with Distinct…
Regional strategies that reflect unique needs and positions, e.g.,
Asia: contentious insolvency; linkages with FLC and TECH through FCPA; uniquely placed to assist in cross-border transactions
Latin America: international arbitration, CF/R, Construction Solutions
Major bets in Europe to change our competitive position in CF/R
Leveraging intellectual capital created
Learnings from the mortgage backed securities modeling Patent valuation for transactions Systematic process for identifying IP we can leverage
Upgrading our key cross-segment processes
Client service processes, e.g., marketing of success stories, client coordinating partners Enhanced, disciplined approach to cost and effectiveness, e.g., real estate Quality, disciplined HR processes
Effective, disciplined new business/innovation processes, e.g., M&A
Other core processes
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More Broadly, A Number Of Key Themes
Disciplined assessment of where we have the Right to Win
Organic growth
Acquisitions, but only where they make sense and following a disciplined process
Willingness to invest EBITDA…
…but also relentless focus on where we have been spending in a way that doesn’t drive the business
Accountability
Discipline
Figuring out how to win and grow…even when markets are down
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We Are Also Making People Changes
We will be adding some key roles
Chief Human Resources Officer Analytical change talent at the center
….
We will also be rotating some roles/some changes in organizational structure
Will be looking at other opportunities, e.g., delayering…
More details to come
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How Are We Managing The Transformation Process?
Support the best parts of our businesses boldly; retool/fix other parts of our businesses
Build the core capabilities and disciplines to allow us to drive the businesses • also go beyond
What have we done ?
Aspirational 2016 EBITDA goals established for each segment Set of initiatives and investments needed to meet goals agreed to with each segment
Cross-company initiatives with explicit owners, deliverables and measurement process Investments and hiring to strengthen key functions
How are we tracking our progress?
Quarterly business strategy reviews to track progress and adapt plans
Executive Committee meetings every 6-8 weeks to review progress against initiatives
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What Do We Expect This To Yield?
2014
Modest negative impact
2015
Modest positive impact
2016
Significant positive trajectory
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One View Of The Next 3 Years – Targets/Financials
Adjusted EPS ($)
$3.00
$2.75
$2.50
$2.25
$2.00
$1.75
$1.50
$1.25
$1.00
$1.70
$1.55
$2.10
$1.75
?
$2.50
2014 2015 2016
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What Do We Think This Can Yield – More Holistically
Truly great companies need to (and do) retool along the way
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Key Message For Today
Strong confidence in our medium-term prospects
Strong businesses with strong people
Confronting the reality of the last few years
Making concrete changes that are grounded in those realities
Real people owning the changes with accountability
Delivering $2.50+ adjusted EPS by 2016
Major organic growth where we are strong
Aggressive action where we are challenged
Supported by disciplined cross-company capabilities
FTI CONSULTING
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FTI CONSULTING
Corporate Finance/Restructuring
Robert J. Duffy and Kevin Lavin, Global Co-Segment Leaders
Making A Difference For Our Clients
Boards of Directors
Equity Sponsors
Management
Secured Lenders
Bondholders
Unsecured Creditors
Restructuring
Company Advisory
Interim Management
Creditor & Lender Advisory
Capital Structure
Litigation Services
Business Transformation
Non-Transaction Related
Office of the CFO
Liquidity & Working Capital
Performance Improvement
Interim Management
Transaction-Related
Merger Integration & Carve-outs
Transaction Advisory Services
Valuation
Capital Markets Advisory
Company and Interim Management
Creditor and Lender Advisory
Business Transformation
$5B Global Plastics, Latex and Rubber Manufacturer
FTI CONSULTING
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Snapshot Of Our Business
Restructuring 65% of revenues
Business Transformation
35% of revenues
725+
Revenue Producing Professionals
14
Countries
47
Offices
Over 150+ interim/permanent operating positions filled by FTI professionals
100+ C-Suite roles
30+ Chairman/CEO positions
55+ CFO positions
#1 crisis management firm in The Deal league tables of crisis management firms for seven consecutive years (2007-2014)
TMA Turnaround and Transaction of the Year winner in October 2013
Honored by the Global M&A Network with 6 Turnaround Atlas Awards for excellence and outstanding achievements in the global restructuring, special situation M&A and turnaround markets in July 2013
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Financial Performance
Adjusted Segment EBITDA
Revenues
$450.00 $400.00 $350.00 $300.00 $250.00 $200.00 $150.00 $100.00 $50.00 $0.00
$449.7 $396.2 $364.4 $394.7 $382.5 $390.0
$159.9 $108.2 $75.9 $95.9 $67.2 $58.0
2009 2010 2011 2012 2013 2014 Guidance
Revenue Generating Headcount 636 620 587 697 737 726
Revenue CAGR of -4.0% between 2009 and 2013
- Recession impact on results from 2009 through 2012 when large projects like Lehman, GM and others ended
EBITDA CAGR of -19.5% between 2009 and 2013
- Margin impact from growth of business transformation products and practices outside of the U.S. Impact of investments in 2013 and 2014
The healthcare and life sciences practice of the Corporate Finance/Restructuring segment was reclassified in 2013 as the Heath Solutions practice within the Forensic and Litigation Consulting segment and the Company reported reclassified financial results for the years ended 2010 through 2012 in its Current Report on Form 8-K filed with the SEC on May 21, 2013. The 2009 Revenue and Adj. EBITDA presented in this Table for the Corporate Finance/Restructuring segment has been reclassified from $514.3M to $449.7M and $172.3M to $159.9M, respectively.
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Where We Are Going
Execute on Recent Investments
Strengthen the Core
Grow Organically
Profitability Enhancements
EMEA Transaction Advisory Services
EMEA Tax
Australia
Company Side & Interim Mgmt
Bondholder Restructurings
Fairness and Solvency Opinions
Industries
Office of the CFO
Carve-outs
Merger Integration
Performance Improvement
Industries
Geography Rationalization
Cost Control
Engagement Profitability Improvements
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Aspirational Targets
$120.0
$100.0
$80.0
$60.0
$40.0
$20.0
$0.0
Adjusted Segment EBITDA
$57.5
$100.0
2014 Guidance 2016 Aspirational Target
Medium-Term Growth Catalysts
Execute on Recent Investments
Strengthen the Core Practice
Grow Organically
Profitability Enhancements
FTI CONSULTING
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FTI CONSULTING
Economic Consulting
John Klick, Global Segment Leader
Indicative Success Stories
BNY MELLON
CME Group
NFA NATIONAL FUTURES ASSOCIATION
INSTITUTE FOR FINANCIAL MARKETS
A Nonprofit Foundation Founded in 1989
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Our Economists Are The Most Experienced In The Business
2 former Chief Economists from the SEC
6 former Deputy
Attorney Generals for Antitrust of the DOJ
120+ PhD Economists
Former Chief Economist from the FTC
2 former Chief Economists from the FCC
2 Nobel Prize Winners in Economics
Global Competition Review’s Economist of the Year in 2014, 2012 and 2011
Most professionals by firm named in Global Arbitration Review’s list of “The International Who’s Who of Commercial Arbitration” for four consecutive years (2011-2014)
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Financial Performance
$500.0 $450.0 $400.0 $350.0 $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 $0.0 $ Millions
Adjusted Segment EBITDA Revenues
$234.7 $255.7 $354.0 $391.6 $447.4 $467.0 $47.6 $49.5 $67.0 $77.5 $92.2 $67.5
2009 2010 2011 2012 2013 2014 Guidance
Revenue Generating Headcount 302 297 433 474 530 538
Revenue CAGR of 17.5% between 2009 and 2013
- Acquisition of certain practices of LECG effectively doubled our rate of revenue growth in 2011
- Benefitted from litigation arising out of the financial crisis, and a number of large M&A engagements in 2011 and 2013
EBITDA CAGR of 18.0% between 2009 and 2013
- Substantial focus throughout 2011-2013 and on integrating the LECG acquisition in EMEA and improving profitability in EMEA
For 2014, after a slow start to the year we expect mid-single digit revenue growth
2014 EBITDA step-down reflects, among other things, extended employment agreements through 2023 with senior client services professionals
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CONSULTING
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Medium–Term Growth Catalysts
International Arbitration
Increase market share
Better differentiate from low-price competitors Move closer to emerging markets
Regulatory Practices
Increase market share
Targeted group hires and acquisitions Continue to integrate engineering expertise
Healthcare Economics and Policy
Apply skills used in market-leading M&A practice to emerging business and regulatory challenges Potential clients (employers, state/regional governments and communities)
Continue to Expand
Cross-Segment
Collaboration
Energy, healthcare and restructuring
In summary, these initiatives involve selling what we already do to a higher percentage of potential buyers, leveraging what we already do into adjacent service offerings and geographical markets, and taking even more advantage of internal sales channels.
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Aspirational Targets
$100.0 $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 $ Millions
Adjusted Segment EBITDA
$67.5 M
$90M
2014 Guidance 2016 Aspirational Target
Medium-Term Growth Catalysts
High level of confidence we will execute effectively across the range of Economics Segment initiatives Assuming key markets remain stable, expecting adjusted segment EBITDA to grow at a compound annual growth rate in the low- to mid-teens over the 2014 to 2016 period
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FTI
CONSULTING
Forensic & Litigation Consulting
Neal A. Hochberg, Global Segment Leader
Engagement Highlights – Receiverships And Monitorships
Poker Stars.com MKG
PokerStars
Multi-disciplinary expertise:
Investigations, Data Analytics, Finance and Accounting Global, readily-deployable professionals Expertise in risk mitigation and regulatory compliance protocols Ability to instill confidence and trust to forge collaborative, productive relationships
Michael Kenwood Group
Multi-disciplinary expertise:
Investigations, Data Analytics, Finance and
Accounting
Technology, including software
Corporate Finance
Large numbers of readily-deployable professionals Deep expertise with complex financial investigations (e.g., Madoff, Stanford)
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Snapshot Of Our Business
Receiverships, Monitorships & Trusteeships
Global Investigations
Dispute Advisory Services
Regulatory Services
Insurance Practice Financial Services Practice Health Solutions
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Financial Performance
$500.00 $450.00 $400.00 $350.00 $300.00 $250.00 $200.00 $150.00 $100.00 $50.00 $0.00
$ Millions Adjusted Segment EBITDA
Revenues
$365.3 $379.8 $428.7 $407.6 $433.6 $469.0 $88.8 $76.4 $80.9 $60.6 $74.5 $84.8
2009 2010 2011 2012 2013 2014 Guidance
Revenue Generating Headcount 876 911 957 952 1061 1076
Revenue CAGR of 4.4% between 2009 and 2013
- 2012 revenue decline reflects a number of actions that responded to market conditions
EBITDA CAGR of -4.3% between 2009 and 2013
- EBITDA declined as percentage of revenue due to market pressure on rates and the cost of investment in new geographies
2014 reflects heightened demand for all products and industries, although Health Solutions is impacted by flat growth and declining EBITDA
The healthcare and life sciences practice of the Corporate Finance/Restructuring segment was reclassified in 2013 as the Heath Solutions practice within the Forensic and Litigation Consulting segment and the Company reported reclassified financial results for the years ended 2010 through 2012 in its Current Report on Form 8-K filed with the SEC on May 21, 2013. The 2009 Revenue and Adj. EBITDA presented in this Table for the Forensic and Litigation Consulting segment has been reclassified from $300.7M to $365.3M and $76.4M to
$88.8M, respectively.
FTI CONSULTING 34
Medium Term Growth Opportunities
Build on Strong Foundation of Highly Skilled Professionals
Focus on organic growth within our global platform Aggressively pursue key hires and tuck-in acquisitions to strengthen our product and industry offerings
Target Profitable Industry Opportunities
Continue to develop and grow our global insurance consultancy Add key Construction Solutions resources to expand our focus in the heavy industrial sector Expand our global financial crimes capability
Continue to Enhance Regional Presence
Add FAAS, FEDA, GRIP and select industries’ resources in Asia, Europe, Middle East and Africa Enhance Insurance consultancy outside of North America and Europe
Utilize Technology as a Differentiator
Deploy Innovations in Data Visualization Continue to expand Financial & Enterprise Data Analytics global footprint
Respond to Changing Market Needs
Cyber Security Solutions Consumer Finance Protection
FTI CONSULTING 35
Aspirational Targets
$140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 $ Millions
Adjusted Segment EBITDA
$84.8
$119.0
2014 Guidance 2016 Aspirational Target
Medium-Term Growth Catalysts
Expand service offerings to serve market needs – e.g., cyber-security and consumer finance protection Pursue high margin industry focus opportunities – e.g., enhance global insurance consultancy and construction focus on heavy industrial sector Utilize technology as a market differentiator – e.g., innovations in data visualization, and Financial & Enterprise Data Analytics Expand presence in Europe, the Middle East and Africa, and in Latin America and Asia Continue to invest in organic growth and evaluate key hires and acquisitions that offer specific target growth opportunities Continue to develop new service lines to meet evolving health care system needs
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FTI CONSULTING
Strategic Communications
Edward J. Reilly, Global Segment Leader
Evolution Of The Strategic Communications Segment
Transocean Perrigo noble energy
Crisis management that led to a multifaceted brief
US$8.6 billion acquisition of
Global public affairs and issues management
Complex
Issues
Cross-Border
Multi-Practice and
Multi-Segment
Specialized Expertise
Broad, Deep, Sustained Relationships
FTI CONSULTING 38
Financial Performance
$250 $200 $150 $100 $50 $0 $ Millions
Adjusted Segment EBITDA
Net Revenue
Pass-through
$27.7 $27.8 $26.4 $21.5 $20.5 $12.2 $152.4 $165.4 $174.6 $166.3 $165.8 $173.5
$24.9 $29.0 $26.8 $25.0 $18.7 $21.3
2009 2010 2011 2012 2013 2014 Guidance
Revenue Generating Headcount 573 583 582 593 590 584
Revenue CAGR of 0.8% between 2009 and 2013
- 2009-2012 characterized by low levels of M&A and capital activity
- 2010-2013 included significant investment in the portfolio of services
- 2014 gross revenue forecast to be marginally down on 2013
- Underlying net revenues forecast to be up 5% in 2014
- 40% decline in low-margin pass-through revenue in 2014 (largely from US digital communications clients)
EBITDA CAGR of -6.9% between 2009 and 2013
- EBITDA improvement of 14% in
2014, reflecting higher net revenues and improved underlying profitability
Asia Pacific is returning to profitability following a challenging 2012 - 2013 impacting overall segment performance
FTI CONSULTING 39
A Snapshot Of Our Business
3
core practice areas revenues
Public Affairs
Corporate Communications
Financial Communications
11% 36% 53% 22% 34% 44%
30% 35% 35%
2008 2013 2016
85%
revenues from client relationships 2 years
FY 2013
7 of top 20 clients in Q1’14 are new to that list of largest segment engagements
650+
professionals
FY 2013
35
offices
FY 2013
16
countries
FY 2013
8
specialty offerings
M&A Communications
Shareholder Activism and Proxy Advisory Crisis Communications Restructuring and Financial Issues Litigation Communications Employee Engagement and Change Communications Strategy Consulting and Research Creative Engagement and Digital Comms
#1
global M&A communications advisor by deal volume
FY 2013
15
areas of industry expertise
FTI CONSULTING 40
Our Medium-Term Growth Plan Is Aligned With Market Trends
Integrate Financial Communications and Public Affairs offerings Grow “permission to operate” advisory Continue building-out high-value Financial Communications services (e.g., corporate governance counsel, proxy advisory and activism defense) Establish reputation management as an essential discipline around high-level, complex issues affecting multiple stakeholders Further strengthen cross-border M&A advisory capabilities
Intersection of Market Forces and Public Policy
More Activist Legislative and Regulatory Environment
More Empowered
Stakeholders
Comprehensive Communications Corporate Reputation
& Stakeholder Engagement & Compliance Strategy
71% 91%
of investors anticipate an increase of investors of investors say the in cross-border shareholder activism regulatory or political environment is important to their investment decision 41
FTI Consulting Global Investor Survey, February 2014
Two-time Pulitzer Prize US Congressman, Member of House Global Head of Communications
Nominated Reporter Appropriations Committee and Marketing for Global Banking
Our Team Is Made-Up Of Industry-Leading Experts
Attorney General for
Western Australia
Two Business Editors
Press Secretary for
US Vice President Joseph Biden
Managing Director, National Security and Defense Head of Group Marketing and
Senior Pharma Analyst Presidential Advisor in Colombia Communications, Asia Pacific
International Communications Advisor and
Spokesperson to three Economy, Finance and Press Secretary for the US House
Industry Ministers of the French Government Executive Editor Minority Leader (now Speaker)
Vice President, Communications at Director of Communications at the US
Royal Dutch Shell Securities and Exchange Commission Head of London Office
42
Revenue Mix1
9%
Regulatory Commercial
Leading Local Market Teams
Centers Hubs
Unparalleled Global Reach
Industry Sector and Specialist Skills
50%
37%
Capital Markets
EMEA North America Latin America Asia Pac
1 Q1 2014.
Our Global Network Is A Competitive Differentiator
43
Aspirational Targets
$40.0
Adjusted Segment EBITDA
$35.0
$35.0
$30.0
$25.0
Millions $20.0 $21.3
$
$15.0
$10.0
$5.0
$0.0
2014 Guidance 2016 Aspirational Target
Medium-Term Growth Catalysts
Diversify and sharpen offering to lessen dependence on capital markets activity Pursue growth in areas of opportunity – e.g., high-value financial issues, public affairs, and reputation management challenges Improve our ability to be retained as an advisor on issues and ‘events’ Enhance human capital initiatives and performance management Leverage cross-segment opportunities Employ rigorous financial discipline and pursue operational efficiencies
44
Technology
Seth A. Rierson, Global Segment Leader
Product Innovator Industry Expert
Technology Overview: “Finding a Better Way”
Global Footprint Market Leader
46
Financial Performance
$300.00
Adjusted Segment EBITDA Revenues
$250.00 $233.40
$218.74
$202.66
$200.00 $195.19
$170.17 $176.61
Millions $150.00
$100.00
$50.00
$77.01
$57.13 $64.36 $57.20 $60.65 $60.70
$0.00
2009 2010 2011 2012 2013 2014
Guidance
Revenue
Generating 251 257 290 277 306 321
Headcount
Revenue CAGR of 4.5% between 2009 and 2013
- 2011 revenue growth was driven by large, unique product liability and IP matters and cross-border FCPA projects
- Despite the continued wind down of large projects topline growth was driven by global investigations, second requests, and new corporate clients
EBITDA CAGR of 1.5% between 2009 and 2013
- 2012 EBITDA decline reflects the resolution of several large multi-year projects, price competition and investments in business development
2014 revenue growth is expected to be driven by increasing demand for global investigations and second requests
- 2014 projection for flat EBITDA reflects increased investment in business development and R&D
47
Innovation For The Client
( + )
x + ( + )
Created new standards in the use of
= “ computer-assisted review of antitrust
investigations to allow Goodrich to
merge with United Technologies
Corporation. “
48
Current Trends Play To FTI Technology Strengths
Data Volume and Variety Security and Privacy
Global Requirements Review is #1 Cost
49
Investing To Win Tomorrow’s E-Discovery Market
Go-to-Market Geographic Expansion
New Products & Services Software Innovation
50
Medium-Term Growth Catalysts
Data volume and variety Increased importance of security and data privacy Global e-discovery requirements Cost of review Expanded presence outside of North America Analytics and visualization to support corporate compliance and e-discovery requirements
Aspirational Targets
$80.0
Adjusted Segment EBITDA
$70.0 $75.0
$60.0
$60.7
$50.0
$ Millions
$40.0
$30.0
$20.0
$10.0
$0.0
2014 Guidance 2016 Aspirational Target
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Driving the Business Across/Beyond the Segments
Asia Pacific
20 Offices 545 Employees
Key Business Hubs
Hong Kong – Singapore – Tokyo – Sydney
Macroeconomic Backdrop
Attractive positions in key Asian markets
Strong demand for forensic accounting and advisory services
Softness in the restructuring market
Growing mining and agribusiness industry
Key Initiatives
Primarily assisting western MNCs in emerging markets
Develop a global Contentious Insolvency practice
Organic growth in forensic accounting and advisory services
Develop a true operational turnaround service line
Industry initiatives: mining, agribusiness and construction
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Latin America
11 Offices 249 Employees
Key Business Hubs
São Paulo—Mexico City—Buenos Aires—Bogotá
Macroeconomic Backdrop
Dichotomy between Pacific Alliance and Atlantic countries
FDI flows should remain strong although commodities boom
slowing down in tandem with China growth prospects
Mining, energy (oil and gas), infrastructure and banking best
opportunities for growth
Key Initiatives
Expanding a thriving Construction Solutions practice
Increase headcount of Corporate Finance/Restructuring in
primary markets (Brazil, Mexico)
Continue growing core GRIP and FAAS practices
Investing resources in cross-segment initiatives
(international arbitration)
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OUR PEOPLE WHAT WE DO WHO WE SERVE
FORMER C-SUITE PERFORMANCE
EXECUTIVES IMPROVEMENT HOSPITALS & PHYSICIANS
BIG DATA EXPERTS PAYOR COMPLIANCE ACADEMIC MEDICAL
CENTERS & UNIVERSITIES
EPIC CERTIFIED SPECIALISTS CONVERGENCE & M&A PAYORS
FORENSIC ACCOUNTANTS INVESTIGATIONS PHARMACY, DEVICE &
BIOTECH MANUFACTURERS
BUSINESS ANALYTICS & WHOLESALE PHARMACY
STATISTICS EXPERTS SYSTEMS IMPROVEMENT DISTRIBUTORS
EXPERIENCED PHYSICIAN & SYSTEMS OPTIMIZATION PHARMACY CHAINS
NURSES
40% FORMER HOSPITAL CLINICAL RESEARCH & CLINICAL RESEARCH
STAFF COMPLIANCE ORGANIZATIONS
Health Solutions
260+ PROFESSIONALS WITH $114 MILLION IN REVENUES IN 2013
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15% 14% 30+ policies,
reduction in
improvement in guidelines, forms
annual supply costs on-time starts and tools adopted
MEASURABLE RESULTS, COST SAVINGS AND IMPROVED PATIENT CARE
Perioperative Services: North Shore-LIJ Health System
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PERFORMANCE
HEALTHCARE & LIFE ENERGY, POWER & INSURANCE
SCIENCES PRODUCTS FINANCE & TRANSACTIONS
LIABILITY
TELECOM, MEDIA & FINANCIAL
TECHNOLOGY REAL ESTATE INSTITUTIONS REPUTATION
COMMUNICATIONS
CONSTRUCTION & RETAIL & COMPLIANCE
MINING CONSUMER
ENVIRONMENTAL PRODUCTS
GOVERNANCE
FUNCTIONAL CAPABILITIES + GEOGRAPHIC REACH + INDUSTRY EXPERTISE =
HOLISTIC SOLUTIONS
Holistic Offering Delivers Unmatched Industry Solutions
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PERFORMANCE
HEALTHCARE & LIFE ENERGY, POWER & INSURANCE
SCIENCES PRODUCTS FINANCE & TRANSACTIONS
LIABILITY
TELECOM, MEDIA & FINANCIAL
TECHNOLOGY REAL ESTATE INSTITUTIONS REPUTATION
COMMUNICATIONS
CONSTRUCTION & RETAIL & COMPLIANCE
MINING CONSUMER
ENVIRONMENTAL PRODUCTS
GOVERNANCE
FUNCTIONAL CAPABILITIES + GEOGRAPHIC REACH + INDUSTRY EXPERTISE =
HOLISTIC SOLUTIONS
Holistic Offering Delivers Unmatched Industry Solutions
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Marketing Our Successes
PAST FUTURE
GENERAL BRAND AWARENESS CLIENT SUCCESS STORIES
58
Leveraging Our Intellectual Capital
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We are undertaking an analysis of our global infrastructure – taking a hard look numerous functions:
HUMAN RESOURCES INFORMATION TECHNOLOGY FINANCE & ACCOUNTING
REAL ESTATE MARKETING & BUSINESS
DEVELOPMENT
We are looking at each of these
functions through three lenses
Stopping activities Starting activities Performing
that are unnecessary that are necessary to necessary activities
or don’t enable our support our growth in the most efficient
growth goals goals manner can
We Are Taking A Hard Look At Our Global Infrastructure
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IT Transformation Project Goals And Objectives
IMPROVE QUALITY AND FLEXIBILITY WHILE REDUCING COST
HOW?
Re-think and re-design the Re-think and re-design the Ensure IT strategy, IT
fundamental way we deliver IT governance and services and IT costs are
every IT service to the investment decision transparent and aligned
business process with business-driven
requirements
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IT Transformation Project – Opportunities
Opportunities for
Cost Savings
Implement cloud-based e-mail archiving and storage Renegotiate data communications contracts Optimize internal helpdesk services Outsource disaster recovery to a fully managed service
Opportunities for Quality and Flexibility Improvements
Redesign the data center & service hosting model towards cloud and third-party managed services Redesign and transform each IT service and strategy to modern technologies to improve capability and flexibility
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Financial Presentation
Roger Carlile, EVP and Chief Financial Officer
Objectives
Second Quarter 2014 Guidance Update Full-Year 2014 Guidance Introduction 2014 Mid-Term Growth Target
….And How Do We Get There
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Updated Second Quarter 2014 Guidance
Revenues: $445.0 million – $450.0 million Adjusted EPS: $0.49 – $0.55
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Introduction Of 2014 Annual Guidance
Revenues: $1.73 billion – $1.77 billion Adjusted EPS: $1.55 – $1.70
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Medium-Term Growth Targets
$ 3.00 Adjusted Earnings Per Share
$ 2.50
$2.50+
$ 2.00
$ 1.50
$1.55—
$1.70
$ 1.00
$ 0.50
$ 0.00
2014 2016
Medium-Term Earnings Catalysts
Growing organically in businesses in which we are already strong and have a right to win
Continuing growth of our recent investments in products such as TAS and Tax as well as key industry groups such as Health Solutions, Energy, Power & Products, Insurance, Construction and others
Improving the results of business which are challenged at the gross margin level
Addressing our infrastructure with a goal of improving quality and flexibility while reducing costs
How Do We Get There?
Current 2014 forecast is ~$1.55—$1.70 per share
Segments have identified $125 -$145 million in 2016 Adjusted Segment EBITDA improvements …
… along with certain cross-segment and infrastructure initiatives not yet quantified…
… assuming realization rate of ~50% by 2016 …
Results in Adjusted EPS of no less than $2.50 per share by 2016
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Questions & Answers
FTI Consulting Executive Team
Closing Thoughts
Steven H. Gunby, President and Chief Executive Officer
Agenda
Time Presentation Presenter
11:00 a.m. – 12:00 p.m. Registration and Lunch
12:00 – 12:05 p.m. Opening Remarks and Introductions Mollie Hawkes, Director of Investor Relations
Taking FTI Consulting to the Next
12:05 – 12:45 p.m. Steven H. Gunby, President and Chief Executive Officer
Level
12:45 – 1:00 p.m. Corporate Finance/Restructuring Robert J. Duffy and Kevin Lavin, Global Co-Leaders, Corporate
Finance/Restructuring
1:00 – 1:15 p.m. Economic Consulting John Klick, Global Leader, Economic Consulting
1:15 – 1:30 p.m. Forensic & Litigation Consulting Neal A. Hochberg, Global Leader, Forensic & Litigation Consulting
1:30 – 1:45 p.m. Strategic Communications Edward J. Reilly, Global Leader, Strategic Communications
1:45 – 2:00 p.m. Technology Seth A. Rierson, Global Leader, Technology
2:00 – 2:15 p.m. Break
Rod Sutton, Chairman of Asia Pacific
Frank Holder, Chairman of Latin America
Kenneth J. Barker, Global Leader, Health Solutions Practice
2:15 – 2:55 p.m. Driving the Business Across/Beyond Carlyn Taylor, Telecom, Media & Technology Practice Leader and
the Segments – Some Examples Global Industry Leader
Jeffrey S. Amling, Head of Marketing and Business Development
Adam S. Bendell, Senior Vice President – Strategic Development
Roger D. Carlile, Executive Vice President and Chief Financial Officer
2:55 – 3:20 p.m. Financial Discussion Roger D. Carlile, Executive Vice President and Chief Financial Officer
3:20 – 3:55 p.m. Questions and Answers FTI Consulting Executive Team
3:55 – 4:00 p.m. Closing Remarks Steven H. Gunby, President and Chief Executive Officer
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Key Message For Today
Strong confidence in our medium-term prospects
Strong businesses with strong people
Confronting the reality of the last few years
Making concrete changes that are grounded in those realities
Real people owning the changes with accountability
Delivering $2.50+ adjusted EPS by 2016
Major organic growth where we are strong
Aggressive action where we are challenged
Supported by disciplined cross-company capabilities
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Appendix
Adjusted Net Income And Adjusted EPS
We define Adjusted Net Income and Adjusted Earnings per Diluted Share as net income and earnings per diluted share, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. We use Adjusted Net Income for the purpose of calculating Adjusted Earnings per Diluted Share. Management uses Adjusted Earnings per Diluted Share to assess total company operating performance on a consistent basis. We believe that this measure, when considered together with our GAAP financial results, provides management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of the remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt.
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Adjusted EBITDA And Adjusted Segment EBITDA
We define Adjusted EBITDA as consolidated net income (loss) before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. Amounts presented in the Adjusted EBITDA row for each segment reflect the segments’ respective Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment’s share of consolidated operating income before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA to internally evaluate the financial performance of our segments because we believe it is a useful supplemental measure which reflects current core operating performance and provides an indicator of the segment’s ability to generate cash. We also believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our operating results, including underlying trends, by excluding the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for comparison of our operating results to the operating results of other companies. Adjusted EBITDA and Adjusted Segment EBITDA are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. These non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Condensed Consolidated Statements of Comprehensive Income.
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FTI Consulting, Inc. And Subsidiaries Non-GAAP Financial Reconciliations
Years Ended December 31,
2013 2012 2011 2010 2009
Adjusted EPS:
Net income (loss) $(10,594) $(36,986) $103,903 $65,984 $139,843
Add back:
Special charges, net of tax 23,267 19,115 9,285 32,733 -
Goodwill impairment charge 83,752 110,387 —— -
Loss on early extinguishment of debt, net of tax — 2,910 — 3,019 -
Remeasurement of acquisition-related contingent (12,054) (5,228) (9,953) — -
consideration, net of taxes
Adjusted Net Income $84,371 $90,198 $103,235 $101,736 $139,843
Earnings (loss) per common share – diluted $(0.27) $(0.92) $2.39 $1.38 $2.63
Add back:
Special charges, net of tax 0.59 0.47 0.21 0.69 -
Goodwill impairment charge 2.14 2.74 —— -
Loss on early extinguishment of debt, net of tax — 0.07 — 0.06 -
Remeasurement of acquisition-related contingent (0.30) (0.13) (0.23) — -
consideration, net of taxes
Impact of denominator for diluted adjusted earnings (0.07) (0.06) —— -
per common share
Adjusted earnings per common share – diluted $2.09 $2.17 $2.37 $2.13 $2.63
Weighted average number of common 40,421 41,578 43,473 47,664 53,127
shares outstanding – diluted
Normalized Operating Cash Flow:
Net cash provided by operating activities $193,271 $120,188 $173,828 $195,054 $250,769
Shift in timing of annual bonus payments (25,200) 25,200 —— -
Normalized Free Cash Flow $168,071 $145,388 $173,828 $195,054 $250,769
(in thousands, except per share data) (unaudited)
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Reconciliation Of Net Loss And Operating Income (Loss) To Adjusted EBITDA
Corporate Forensic and Economic Strategic
Finance/ Litigation Technology Corporate Total
Restructuring Consulting Consulting Communications
Year Ended December 31,
2013
Net loss $(10,594)
Interest income and other (1,748)
Interest expense 51,376
Income tax provision 42,405
Operating income (loss) $58,594 $68,211 $86,714 $38,038 $(72,129) $(97,989) $81,439
Depreciation and amortization of 9,929 6,100 5,479 22,601 7,048 4,338 55,495
intangible assets
Special charges 10,274 2,111 11 16 66 25,936 38,414
Goodwill impairment charge ———— 83,752 — 83,752
Remeasurement of acquisition- (11,614) (1,941) ———— (13,555)
related contingent consideration
Adjusted EBITDA $67,183 $74,481 $92,204 $60,655 $18,737 $(67,715) $245,545
(in thousands, except per share data) (unaudited) 77
Reconciliation Of Net Loss And Operating Income (Loss) To Adjusted EBITDA
Year Ended December 31, 2012 Net loss
Interest income and other Interest expense Income tax provision
Loss on early extinguishment of debt
Operating income (loss)
Depreciation and amortization of intangible assets
Special charges
Goodwill impairment charge
Remeasurement of acquisition-related contingent consideration
Adjusted EBITDA
Corporate Forensic and Economic Strategic
Finance/ Litigation Technology Corporate Total
Restructuring Consulting Consulting Communications
$(36,986)
(5,659)
56,731
40,100
4,850
$80,970 $45,809 $71,992 $33,642 $(97,298) $(76,079) $59,036
8,835 6,487 4,478 20,447 7,218 4,546 52,011
11,332 8,276 991 3,114 4,712 1,132 29,557
- — —— 110,387 — 110,387
(5,222) (6) ——— — (5,228)
$95,915 $60,566 $77,461 $57,203 $25,019 $(70,401) $245,763
(in thousands, except per share data) (unaudited)
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Reconciliation Of Net Loss And Operating Income (Loss) To Adjusted EBITDA
Corporate Forensic and Economic Strategic
Finance/ Litigation Technology Corporate Total
Restructuring Consulting Consulting Communications
Year Ended December 31,
2011
Net loss $103,903
Interest income and other (6,304)
Interest expense 58,624
Income tax provision 49,224
Operating income (loss) $66,591 $74,831 $60,890 $57,917 $19,066 $(73,848) $205,447
Depreciation and amortization of
intangible assets 8,902 6,215 4,045 19,094 7,735 4,962 50,953
Special charges 9,440 839 2,093 — — 2,840 15,212
Remeasurement of acquisition-
related contingent consideration (8,991) (962) —— — — (9,953)
Adjusted EBITDA $75,942 $80,923 $67,028 $77,011 $26,801 $(66,046) $261,659
(in thousands, except per share data) (unaudited)
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Reconciliation Of Net Loss And Operating Income (Loss) To Adjusted EBITDA
Corporate Forensic and Economic Strategic
Finance/ Litigation Technology Corporate Total
Restructuring Consulting Consulting Communications
Year Ended December 31,
2010
Net loss $65,984
Interest income and other (4,423)
Interest expense 50,263
Income tax provision 41,407
Loss on early extinguishment of debt 5,161
Operating income (loss) $89,861 $62,759 $39,180 $27,569 $11,602 $(72,579) $158,392
Depreciation and amortization of
intangible assets 9,730 7,447 3,634 20,876 8,325 5,232 55,244
Special charges 8,561 6,196 6,667 15,913 9,044 4,750 51,131
Adjusted EBITDA $108,152 $76,402 $49,481 $64,358 $28,971 $(62,597) $264,767
(in thousands, except per share data) (unaudited)
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Reconciliation Of Net Loss And Operating Income (Loss) To Adjusted EBITDA
Corporate Forensic and Economic Strategic
Finance/ Litigation Technology Corporate Total
Restructuring Consulting Consulting Communications
Year Ended December 31,
2009
Net loss $139,843
Interest income and other (8,408)
Interest expense 44,923
Income tax provision 81,825
Operating income (loss) $150,092 $83,290 $43,650 $37,410 $16,455 $(72,714) $258,183
Depreciation and amortization of
intangible assets 9,794 5,520 3,917 19,721 8,486 6,027 53,465
Litigation and settlements — — —— — 250 250
Adjusted EBITDA $159,886 $88,810 $47,567 $57,131 $24,941 $(66,437) $311,898
(in thousands, except per share data) (unaudited)
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Critical Thinking at the Critical Time ™