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. 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.

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. 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.

Failures 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, 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 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 afterwards 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.

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 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 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

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 system 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 ~~Credit Facility,~~senior secured bank revolving credit facility (the "Credit 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

(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 outstanding indebtedness 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 to~~incur 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, between us and U.S. Bank National Association, as trustee (the "Indenture") governing the 2.0% Convertible Senior Notes due 2023 (the “2023 Convertible 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, 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 flow 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.

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, and the agreements governing our other indebtedness contain, and our future debt may contain, limitations on our ability to pay cash upon conversion or repurchase of the 2023 Convertible Notes.

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 conversion of the 2023 Convertible Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2023 Convertible Notes being converted in accordance with the terms of the Indenture governing the 2023 Convertible Notes. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2023 Convertible Notes. Our Credit Facility prohibits us from making any cash payments on the 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 tests under ~~that~~ the Credit Facility.

Any new credit facility that we may enter into may have similar restrictions. In addition, our ability to repurchase 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.

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

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.

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 flow 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 LIBOR and only the one-week and two-month U.S. dollar LIBOR settings on December 31, 2021, with the publication of the remaining U.S. dollar LIBOR settings being discontinued after June 30, 2023, subject to any rights of the FCA to compel the IBA to continue publication (the “IBA Consultation”). The IBA Consultation closed on January 25, 2021 and the IBA intends to share the results with the FCA and publish shortly thereafter a statement summarizing responses from the IBA Consultation. In connection with the IBA Consultation, the FCA issued a statement supporting IBA’s stated intention to extend the expected cessation date for the dominant tenors of U.S. dollar to June 30, 2023. Our Credit Facility, which was undrawn at December 31, ~~2019,~~2020 and is indexed to LIBOR, provides for multiple LIBOR currency and tenor options and may be used in the future. Although our ~~borrowing arrangement~~Credit Facility provides for alternative ~~base~~reference rates, such alternative ~~base~~reference rates and the consequences of the phase out of LIBOR cannot be entirely predicted at this time. An alternative ~~base~~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 tenor settings of LIBOR will actually cease to be available after 2021, whether certain U.S. dollar LIBOR settings will actually be available until June 30, 2023 or whether U.S. dollar LIBOR or such other LIBOR currency will be replaced by an alternative ~~rate will become the~~ market benchmark in ~~its place.~~place of U.S. dollar LIBOR or such other LIBOR currency, as the case may be.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our executive offices located in Washington, D.C., consist of 100,511 square feet under a lease expiring April 2028. Our principal corporate office located in Bowie, Maryland, consists of 30,835 square feet under a lease expiring April 2028. In October 2020, we entered into a material lease agreement, amending and restating the lease agreement entered into during August 2020, for our new principal office space in New York, New York for an initial fixed term of 15 years, subject to two renewal options of five years each. We also lease offices to support our operations in 4636 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 2627 countries — the ~~United Kingdom,~~U.K., Ireland, Finland, France, Germany, Spain, Belgium, Israel, Denmark, 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.

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 ~~NYSE~~New York Stock Exchange (the “NYSE”) under the symbol FCN. As of January ~~31, 2020,~~29, 2021, the number of holders of record of our common stock was ~~196.~~216.

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, ~~2019.~~2020:

(a) (b) (c)
Plan Category Number 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
624
⁽¹⁾
$ 35.91
1,396
⁽³⁾
Equity compensation plans not approved by our
security holders
54
⁽²⁾
36.75
—

Total 678
$ 35.98
1,396


	(a)		(b)		(c)
Plan Category	Number 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	484	(1)	$	36.14	1,311	(3)
Equity compensation plans not approved by our security holders	54	(2)	36.75		—
Total	538		$	36.20	1,311

⁽¹⁾

(1)Includes up to (i) 19,748 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) 464,764 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 1,310,586 shares of common stock available for issuance under our 2017 Omnibus Incentive Compensation Plan, all of which are available for stock-based awards.

Includes up to (i) 35,708 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) 589,223 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 1,396,183 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

None.

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 ~~2019.~~2020:

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, 2019 44
⁽²⁾
$ 108.26
40
⁽⁵⁾
$ 90,312
November 1 through November 30, 2019 203
⁽³⁾
$ 107.54
198
⁽⁶⁾
$ 69,022
December 1 through December 31, 2019 23
⁽⁴⁾
$ 108.52
22
⁽⁷⁾
$ 66,641
Total 270
260


	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, 2020	599	(2)	$	109.09	599	(5)	$	117,084
November 1 through November 30, 2020	773	(3)	$	103.06	769	(6)	$	37,839
December 1 through December 31, 2020	241	(4)	$	106.94	231	(7)	$	213,191
Total	1,613				1,599

⁽¹⁾

(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, 2020, we repurchased an aggregate of 3,268,906 shares of our outstanding common stock under the Repurchase Program at an average price of $108.11 per share for a total cost of approximately $353.4 million.

(2)Includes 367 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.

(3)Includes 3,677 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.

(4)Includes 10,758 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.

(5)During the month ended October 31, 2020, we repurchased and retired 598,730 shares of common stock, at an average price per share of $109.09, for an aggregate cost of $65.3 million.

(6)During the month ended November 30, 2020, we repurchased and retired 768,889 shares of common stock, at an average price per share of $103.04, for an aggregate cost of $79.2 million.

(7)During the month ended December 31, 2020, we repurchased and retired 230,921 shares of common stock, at an average price per share of $106.72, for an aggregate cost of $24.6 million.

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 and February 21, 2019, our Board of Directors authorized an additional $100.0 million, respectively, increasing the Repurchase Program to an aggregate authorization of $400.0 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, 2019, we repurchased an aggregate of 1,258,420 shares of our outstanding common stock under the Repurchase Program at an average repurchase price of $84.16 per share for a total cost of approximately $105.9 million.


⁽²⁾	~~Includes 4,328 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.~~


⁽³⁾	~~Includes 4,518 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.~~


⁽⁴⁾	~~Includes 1,311 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.~~


⁽⁵⁾	~~During the month ended October 31, 2019, we repurchased and retired 40,000 shares of common stock, at an average per share price of $107.99, for an aggregate cost of $4.3 million.~~


⁽⁶⁾	~~During the month ended November 30, 2019, we repurchased and retired 197,868 shares of common stock, at an average per share price of $107.58, for an aggregate cost of $21.3 million.~~


⁽⁷⁾	~~During the month ended December 31, 2019, we repurchased and retired 21,955 shares of common stock, at an average per share price of $108.40, for an aggregate cost of $2.4 million.~~

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.~~Report on Form 10-K (the "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.~~comparisons. The most significant of these factors include: acquisitions, ~~goodwill impairment charges,~~ special charges and stock repurchases.

Income Statement, Balance Sheet and Stockholders' Equity Data


	Year Ended December 31,
	2020		2019		2018		2017		2016

	(in thousands, except per share data)
Income Statement Data
Revenues	$	2,461,275	$	2,352,717	$	2,027,877	$	1,807,732	$	1,810,394
Operating expenses
Direct cost of revenues	1,672,711		1,534,896		1,328,074		1,215,560		1,210,771
Selling, general and administrative expenses	488,411		504,074		465,636		432,013		436,716
Special charges	7,103		—		—		40,885		10,445

Amortization of intangible assets	10,387		8,152		8,162		10,563		10,306

	2,178,612		2,047,122		1,801,872		1,699,021		1,668,238
Operating income	282,663		305,595		226,005		108,711		142,156
Other income (expense)
Interest income and other	(412)		2,061		4,977		3,752		10,466
Interest expense	(19,805)		(19,206)		(27,149)		(25,358)		(24,819)
Gain on sale of business	—		—		13,031		—		—
Loss on early extinguishment of debt	—		—		(9,072)		—		—
Income before income tax provision (benefit)	262,446		288,450		207,792		87,105		127,803
Income tax provision (benefit)	51,764		71,724		57,181		(20,857)		42,283
Net income	$	210,682	$	216,726	$	150,611	$	107,962	$	85,520
Earnings per common share — basic	$	5.92	$	5.89	$	4.06	$	2.79	$	2.09
Earnings per common share — diluted	$	5.67	$	5.69	$	3.93	$	2.75	$	2.05
Weighted average number of common shares outstanding
Basic	35,602		36,774		37,098		38,697		40,943
Diluted	37,149		38,111		38,318		39,192		41,709

Year Ended December 31,
2019 2018 2017 2016 2015
(in thousands, except per share data)
Income Statement Data
Revenues $ 2,352,717
$ 2,027,877
$ 1,807,732
$ 1,810,394
$ 1,779,149
Operating expenses

Direct cost of revenues 1,534,896
1,328,074
1,215,560
1,210,771
1,171,444
Selling, general and administrative expenses 504,074
465,636
432,013
436,716
431,468
Special charges —
—
40,885
10,445
—
Amortization of other intangible assets 8,152
8,162
10,563
10,306
11,726
2,047,122
1,801,872
1,699,021
1,668,238
1,614,638
Operating income 305,595
226,005
108,711
142,156
164,511
Other income (expense)
Interest income and other 2,061
4,977
3,752
10,466
3,232
Interest expense (19,206 ) (27,149 ) (25,358 ) (24,819 ) (42,768 )
Gain on sale of business —
13,031
—
—
—
Loss on early extinguishment of debt —
(9,072 ) —
—
(19,589 )
Income before income tax provision (benefit) 288,450
207,792
87,105
127,803
105,386
Income tax provision (benefit) 71,724
57,181
(20,857 ) 42,283
39,333
Net income $ 216,726
$ 150,611
$ 107,962
$ 85,520
$ 66,053
Earnings per common share — basic $ 5.89
$ 4.06
$ 2.79
$ 2.09
$ 1.62
Earnings per common share — diluted $ 5.69
$ 3.93
$ 2.75
$ 2.05
$ 1.58
Weighted average number of common shares
outstanding

Basic 36,774
37,098
38,697
40,943
40,846
Diluted 38,111
38,318
39,192
41,709
41,729

December 31,
2019 2018 2017 2016 2015
(in thousands)
Balance Sheet Data
Cash and cash equivalents $ 369,373
$ 312,069
$ 189,961
$ 216,158
$ 149,760
Working capital ⁽¹⁾
$ 566,124
$ 482,783
$ 383,851
$ 404,716
$ 394,548
Total assets $ 2,783,142
$ 2,379,121
$ 2,257,241
$ 2,225,368
$ 2,229,018
Long-term debt, net $ 275,609
$ 265,571
$ 396,284
$ 365,528
$ 494,772
Stockholders’ equity $ 1,489,142
$ 1,348,825
$ 1,191,971
$ 1,207,358
$ 1,147,603


	December 31,
	2020		2019		2018		2017		2016

	(in thousands)
Balance Sheet Data
Cash and cash equivalents	$	294,953	$	369,373	$	312,069	$	189,961	$	216,158
Working capital (1)	$	459,536	$	566,124	$	482,783	$	383,851	$	404,716
Total assets	$	2,777,363	$	2,783,142	$	2,379,121	$	2,257,241	$	2,225,368
Long-term debt, net	$	286,131	$	275,609	$	265,571	$	396,284	$	365,528
Stockholders’ equity	$	1,400,181	$	1,489,142	$	1,348,825	$	1,191,971	$	1,207,358


⁽¹⁾ (1)Working capital is defined as current assets less current liabilities.	~~Working capital is defined as current assets less current liabilities.~~


	Year Ended December 31,
	2020		2019		2018		2017		2016


	(in thousands)
Stockholders' Equity Data
Shares of common stock repurchased and retired	3,269		1,258		952		4,674		537
Total cost	$	353,385	$	105,915	$	55,722	$	168,001	$	21,479

Year Ended December 31,
2019 2018 2017 2016 2015
(in thousands)
Stockholders' Equity Data
Shares of common stock repurchased and retired 1,258
952
4,674
537
765
Total cost $ 105,915
$ 55,722
$ 168,001
$ 21,479
$ 26,516

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 two years in the period ended December 31, ~~2019~~2020 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 on Form 10-K (the “Annual Report”).~~Report. For a similar discussion and analysis of our results for the year ended December 31, ~~2018~~2019 compared towith our results for the year ended December 31, ~~2017,~~2018, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report ~~on Form 10-K~~ for the year ended December 31, ~~2018,~~2019, filed with the ~~SEC~~United States ("U.S.") Securities and Exchange Commission (“SEC”) on February ~~27, 2019.~~25, 2020. 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 ~~world~~world. Our clients include companies, boards of directors, investors, private equity sponsors, banks, lenders, and ~~delivers~~other 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 ~~transactions. Our~~turnaround, restructuring ~~practice includes corporate restructuring, including bankruptcy~~ and interim management services. Our business transformation and transactions practices include financial, operational and performance improvement services, as well as due diligence, financing advisory, mergers and acquisitions ("M&A") advisory, M&A integration, carveout support and valuations.bankruptcy.

Our Forensic and Litigation Consulting (“FLC”) segment provides law firms, companies, government ~~clients~~entities and other interested parties with a multidisciplinary and independent 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 services which help our clients analyze large, disparate sets of data related to ~~risk advisory, investigations~~their business operations and support our clients during regulatory inquiries and commercial disputes. We ~~have expertise in anti-corruption/anti-money laundering investigations~~deliver a wide range of services centered around five core offerings: construction & environmental solutions, data & analytics, disputes, health solutions and ~~compliance, cybersecurity, data analytics, export controls~~risk and ~~sanctions, and monitorship. We offer specialized industry expertise in the areas of insurance, construction, healthcare, environmental and trial services.~~investigations.

Our Economic Consulting segment, including subsidiary Compass Lexecon LLC, provides law firms, companies, government entities and other interested parties with ~~analysis~~analyses 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 provides companies, ~~and~~ law firms and government entities with a comprehensive ~~and~~ global portfolio of ~~consulting and services for~~e-discovery, information governance, privacy and security ~~electronic discovery ("e-discovery")~~ and ~~insight analytics. Our consulting expertise enables clients to more confidently govern, secure, find, analyze~~corporate legal operations solutions. We deliver a full spectrum of services including data collection, data processing, document review, hosting, advanced analytics and ~~rapidly understand their data in the context of compliance and risk.~~consulting.

Our Strategic Communications segment ~~designs~~develops and executes communications strategies ~~for CEOs,~~to help management teams, ~~and~~ boards of directors, ~~that 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 ~~regulatory~~communications and ~~reputational challenges, navigate market disruptions, articulate their corporate brand, stake a competitive position and preserve their freedom to operate.~~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 expense arrangements that obligate the client to pay us a fee for the hours that we incur at agreed-upon rates. Under this arrangement, we typically bill our clients for reimbursable expenses, which may include the cost of producing our work product and other direct expenses that we incur on behalf of the client, such as travel costs. We also render services for which certain clients may be required to pay us a fixed-fee or recurring retainer. These arrangements are generally cancelable at any time. Some of our engagements contain performance-based arrangements in which we earn a contingent or success fee when and if certain predefined outcomes occur. This type of success fee may supplement a time and expense or fixed-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 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 storage used or the volume of information 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. Unit-based revenues include revenues associated with the software products that are made available to customers via a web browser (“on-demand”). On-demand revenues are charged on a unit or monthly basis and include, but are not limited to, processing and review related functions.

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 (“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 is calculated as the difference between the prior period results multiplied by the average FX exchange rates to USD in the current period and the prior period results, multiplied by the average FX 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 States~~U.S. ("GAAP"). Certain of these financial measures are considered not 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 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 ~~19,~~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 is a component of the definition of Adjusted Segment EBITDA.

We define Segment Operating Income 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 Operating Income for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted 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 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, which is a non-GAAP financial measure, 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 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.~~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.

Full Year ~~2019~~2020 Executive Highlights

Financial Highlights


	Year Ended December 31,
	2020		2019		% Increase (Decrease)

	(dollar amounts in thousands, except per share amounts)
Revenues	$	2,461,275	$	2,352,717	4.6	%
Special charges (1)	$	7,103	$	—	100.0	%
Net income	$	210,682	$	216,726	-2.8	%
Adjusted EBITDA	$	332,271	$	343,900	-3.4	%
Earnings per common share — diluted	$	5.67	$	5.69	-0.4	%
Adjusted earnings per common share — diluted	$	5.99	$	5.80	3.3	%
Net cash provided by operating activities	$	327,069	$	217,886	50.1	%
Total number of employees	6,321		5,567		13.5	%

Year Ended December 31,
2019 2018 % Growth
(dollar amounts in thousands, except per share amounts)
Revenues $ 2,352,717
$ 2,027,877
16.0 %
Net income $ 216,726
$ 150,611
43.9 %
Adjusted EBITDA $ 343,900
$ 265,703
29.4 %
Earnings per common share — diluted $ 5.69
$ 3.93
44.8 %
Adjusted earnings per common share — diluted $ 5.80
$ 4.00
45.0 %
Net cash provided by operating activities $ 217,886
$ 230,672
-5.5 %
Total number of employees as of December 31 5,567
4,768
16.8 %

(1)Excluded from non-GAAP financial measures.

Revenues

Revenues for the year ended December 31, 2020 increased ~~$324.8~~ $108.6 million, or ~~16.0%~~4.6%, ~~from 2018 to 2019, which included a 1.3% estimated negative impact from FX.~~as compared with the year ended December 31, 2019. Acquisition-related revenues contributed ~~$19.6~~$40.7 million, or ~~1.0%~~1.7%, compared with ~~2018.~~2019. Excluding ~~the estimated impact from FX and~~ the acquisition-related revenues, ~~the increase was~~revenues increased $67.8 million, or 2.9%, primarily due to ~~higher global~~increased demand ~~across all segments, particularly in~~for our Corporate Finance ~~Economic Consulting~~segment, which was partially offset by lower demand for our FLC segment, as well as a $38.5 million decrease in pass-through revenues, primarily resulting from a Coronavirus Disease 2019 ("COVID-19") pandemic related decline in billable travel and entertainment expenses, compared with 2019.

Special Charges

During the year ended December 31, 2020, we recorded a special charge of $7.1 million, which consists of the following components:

•$4.7 million of lease abandonment and other relocation costs associated with the consolidation of office space in New York, New York. The lease abandonment costs include non-cash charges of $4.4 million related to accelerated amortization on operating lease assets and accelerated depreciation on lease-related property and equipment; and

•$2.4 million of employee severance and other employee-related costs associated with performance-related actions in our FLC ~~segments.~~segment that impacted 16 employees. All of these amounts will be paid in cash within the next 12 months.

~~Net Income~~There were no special charges recorded during the year ended December 31, 2019.

The following table details the special charges by segment:


	Year Ended December 31, 2020
	(in thousands)
Corporate Finance	$	861
FLC	3,484
Economic Consulting	35
Technology	276
Strategic Communications	2,074
Segment special charge	6,730
Unallocated Corporate	373
Total	$	7,103

Net income ~~increased $66.1~~

Net income for the year ended December 31, 2020 decreased $6.0 million, or ~~43.9%~~2.8%, ~~from 2018 to~~as compared with the year ended December 31, 2019. ~~This increase~~ The decrease in net income was ~~primarily~~ due to higher ~~operating profits across all business segments, lower interest expense~~compensation expenses, primarily related to a 14.5% increase in billable headcount and higher variable compensation, as well as a special charge of $7.1 million, which were partially offset by an increase in revenues, a decline in selling, general and administrative ("SG&A") expenses and a lower effective tax ~~rate. 2018 net income included~~rate, primarily due to a ~~$13.0~~combined $11.2 million ~~gain related to~~tax benefit from the ~~sale~~use of foreign tax credits and the ~~Ringtail e-discovery software and related business (collectively, "Ringtail"), which was partially offset by a $9.1 million loss on early extinguishment~~deferred tax benefit of ~~debt related to the redemption of the 6.0% senior notes due 2022 ("2022 Notes").~~an intellectual property license agreement between subsidiaries.

Adjusted EBITDA

Adjusted EBITDA ~~increased $78.2~~for the year ended December 31, 2020 decreased $11.6 million, or ~~29.4%~~3.4%, ~~from 2018 to~~as compared with the year ended December 31, 2019. Adjusted EBITDA was 13.5% of revenues for the year ended December 31, 2020 compared with 14.6% of revenues for the year ended December 31, ~~2019 compared with 13.1% of~~2019. The decrease in Adjusted EBITDA, which excludes the special charge, was due to higher compensation expenses, primarily related to a 14.5% increase in billable headcount and higher variable compensation, which were partially offset by an increase in revenues and a decline in SG&A expenses.

EPS and Adjusted EPS

EPS for the year ended December 31, ~~2018. The increase in Adjusted EBITDA was primarily due~~2020 decreased $0.02 to higher revenues across all business segments, which was partially offset by higher compensation, primarily related to an increase in variable compensation and a 17.8% increase in billable headcount, as well as an increase in selling, general and administrative ("SG&A") expenses compared to the prior year.

~~EPS and Adjusted EPS~~

~~EPS increased $1.76 to $5.69 in 2019~~$5.67 compared with ~~$3.93 in 2018.~~$5.69 for the year ended December 31, 2019. 2020 EPS included a $7.1 million special charge, which reduced EPS by $0.14. The ~~increase~~decrease in EPS was primarily due to the lower operating results described above, which were partially offset by a lower effective tax rate and a decline in diluted weighted average shares outstanding.

Adjusted EPS for the year ended December 31, 2020 increased $0.19 to $5.99 compared with $5.80 for the year ended December 31, 2019. Adjusted EPS for the year ended December 31, 2020 excludes the $7.1 million special charge and $9.1 million of non-cash interest expense related to the 2.0% convertible senior notes due 2023 ~~(“2023~~(the "2023 Convertible ~~Notes”~~Notes") ~~outstanding in 2019 as compared to the 2022 Notes outstanding in 2018,~~, which increased Adjusted EPS by $0.14 and ~~a lower effective tax rate, which were partially offset by a net FX loss. During~~$0.18, respectively. Adjusted EPS for the year ended December 31, ~~2018, we had a loss on early extinguishment~~2019 excluded $8.6 million of debt related to the redemption of the 2022 Notes for that same period, which decreased EPS by $0.17, which was partially offset by the Ringtail divestiture, which resulted in a $6.2 million after-tax gain and increased EPS by $0.16 for that period.

~~Adjusted EPS increased $1.80 to $5.80 in 2019 compared with $4.00 in 2018, primarily due to improved operating results, lower~~non-cash interest expense related to the 2023 Convertible Notes, which increased Adjusted EPS by $0.17 and a ~~lower effective~~discrete tax ~~rate.~~adjustment resulting from a change in estimate related to the accounting for the Ringtail e-discovery software and related business divestiture (collectively, "Ringtail Divestiture"), which decreased Adjusted EPS by $0.06.

Liquidity and Capital Allocation

~~Cash balances~~Net cash provided by operating activities for the year ended December 31, 2020 increased ~~by $57.3~~$109.2 million ~~or 18.4%,~~ to ~~$369.4~~$327.1 million compared with $217.9 million for the year endedDecember 31, ~~2019. Cash provided by operating activities decreased $12.8 million to $217.9 million in 2019 as compared with $230.7 million in 2018.~~2019. The ~~decrease~~increase in net cash provided by operating activities was primarily due to ~~an increase in compensation-related costs and~~higher cash collections, combined with lower non-compensation-related operating costs, ~~as a result of the growth in the business,~~which were partially offset by higher ~~cash collections resulting from higher revenues as compared~~compensation, primarily related to ~~the prior year period.~~headcount growth, and an increase in income tax payments. Days sales outstanding (“DSO”) was 95 days as of December 31, 2020 compared with 97 days as of December 31, ~~2019 and 93 days as of December 31, 2018. The increase in DSO is primarily due to an increase in revenues, which outpaced cash collections.~~

2019.

A portion of net cash provided by operating activities was used to repurchase and retire ~~1.3~~approximately 3.3 million shares of our common stock under our Repurchase Program for an average price per share of ~~$84.16,~~$108.11, at a total cost of ~~$105.9~~$353.4 million during the year ended December 31, ~~2019.~~2020. We had ~~$66.6~~$213.2 million remaining under the Repurchase Program to repurchase additional shares as of December 31, ~~2019.~~2020.

Free Cash Flow ~~which is a non-GAAP financial measure,~~was an inflow of $292.2 million and $175.8 million for the years ended December 31, ~~2019~~2020 and ~~2018 was $175.8 million and $198.4 million,~~2019, respectively. The ~~decrease~~increase was primarily due to ~~a decline in~~higher net cash provided by operating activities, as described ~~above, combined with increased capital expenditures for the year ended December 31, 2019 as compared with December 31, 2018.~~above.

Other Strategic Activities

During the year ended December 31, ~~2019,~~2020, we acquired ~~Andersch AG ("Andersch"),~~certain assets of Delta Partners Group Limited, a leading ~~German restructuring advisory~~telecom, media and technology focused strategy consulting and investment banking firm with offices in ~~Frankfurt, Hamburg~~Dubai, New York, Singapore, Barcelona, Johannesburg, San Francisco and ~~Düsseldorf.~~Sydney.

Also, during the year ended December 31, 2020, we entered into a material lease agreement for our new principal office space in New York, New York to consolidate existing office space into fewer locations and in anticipation of future office space needs in view of our current leases, which are scheduled to expire in November 2021.

COVID-19 Pandemic

The COVID-19 pandemic has created global volatility, economic uncertainty and general market disruption. During the year ended December 31, 2020, the COVID-19 pandemic impacted each of our segments, practices and regions differently. In general, limitations in our ability to service our clients due to social distancing, travel restrictions and remote work negatively impacted our financial results, though we benefited from a decline in travel and entertainment expenses. In addition, we experienced a reduction in demand, and in some cases delays, in our ability to provide certain services due to regulatory moratoriums and postponements of legal proceedings and investigations. These events arising from the COVID-19 pandemic negatively impacted our segment results to a varied extent during the year ended December 31, 2020, but they particularly negatively impacted our FLC segment. While restructuring and bankruptcy services provided by our Corporate Finance segment experienced increased demand as compared with the year ended December 31, 2019 as a result of the adverse economic impact of the COVID-19 pandemic, during the second half of 2020 we experienced a decline in activity as compared with the first half of 2020 primarily resulting from government-backed stimulus packages and the availability of other financing sources. The extent to which the COVID-19 pandemic will continue to impact our business is difficult to predict.

Headcount

Our total headcount increased ~~16.8%~~13.5% from ~~4,768 as of December 31, 2018 to~~ 5,567 as of December 31, ~~2019.~~2019 to 6,321 as of December 31, 2020. The following table includes the net billable headcount additions (reductions) for the year ended December 31, ~~2019.~~2020:


Billable Headcount	Corporate Finance (1) (2)		FLC (1)		Economic Consulting		Technology		Strategic Communications		Total
December 31, 2019	1,194		1,351		790		361		728		4,424
Additions (reductions), net	461		(8)		101		47		42		643
December 31, 2020	1,655		1,343		891		408		770		5,067
Percentage change in headcount from December 31, 2019	38.6	%	-0.6	%	12.8	%	13.0	%	5.8	%	14.5	%

(1)There were 66 revenue-generating professionals in Europe, Middle East and Africa (“EMEA”) who moved from FLC to Corporate Finance during the year ended December 31, 2020.

(2)There were 151 revenue-generating professionals added during the year ended December 31, 2020 related to the acquisition of a strategy consulting and investment banking business within the Corporate Finance segment.

Billable Headcount
Corporate
Finance
FLC Economic Consulting Technology
Strategic
Communications
Total
December 31, 2018 948
1,153
708
306
641
3,756
Additions, net 246
198
82
55
87
668
December 31, 2019 1,194
1,351
790
361
728
4,424
Percentage change in headcount from
December 31, 2018
25.9 % 17.2 % 11.6 % 18.0 % 13.6 % 17.8 %

RESULTS OF OPERATIONS

Segment and Consolidated Operating Results:


								Year Ended December 31,
	Year Ended December 31,							2020		2019
	2019			2018
	(in thousands, except per share data)							(in thousands, except per share data)
Revenues							Revenues
Corporate Finance	$	723,721		$	564,479		Corporate Finance	$	910,184	$	723,721
FLC	577,780			520,333			FLC	500,275		577,780
Economic Consulting	592,542			533,979			Economic Consulting	599,088		592,542
Technology	215,584			185,755			Technology	223,016		215,584
Strategic Communications	243,090			223,331			Strategic Communications	228,712		243,090
Total revenues	$	2,352,717		$	2,027,877		Total revenues	$	2,461,275	$	2,352,717
Segment operating income							Segment operating income
Corporate Finance	$	152,948		$	115,124		Corporate Finance	$	205,029	$	152,948
FLC	98,648			91,262			FLC	23,899		98,648
Economic Consulting	78,201			64,052			Economic Consulting	85,690		78,201
Technology	35,022			14,912			Technology	30,869		35,022
Strategic Communications	39,174			37,250			Strategic Communications	31,639		39,174
Total segment operating income	403,993			322,600			Total segment operating income	377,126		403,993
Unallocated corporate expenses	(98,398		)	(96,595		)	Unallocated corporate expenses	(94,463)		(98,398)
Operating income	305,595			226,005			Operating income	282,663		305,595
Other income (expense)							Other income (expense)
Interest income and other	2,061			4,977			Interest income and other	(412)		2,061
Interest expense	(19,206		)	(27,149		)	Interest expense	(19,805)		(19,206)
Gain on sale of business	—			13,031
Loss on early extinguishment of debt	—			(9,072		)

	(17,145		)	(18,213		)		(20,217)		(17,145)
Income before income tax provision	288,450			207,792			Income before income tax provision	262,446		288,450
Income tax provision	71,724			57,181			Income tax provision	51,764		71,724
Net income	$	216,726		$	150,611		Net income	$	210,682	$	216,726
Earnings per common share — basic	$	5.89		$	4.06		Earnings per common share — basic	$	5.92	$	5.89
Earnings per common share — diluted	$	5.69		$	3.93		Earnings per common share — diluted	$	5.67	$	5.69

Reconciliation of Net Income to Adjusted EBITDA:

Year Ended December 31,
2019 2018
(in thousands)
Net income $ 216,726
$ 150,611
Add back:
Income tax provision 71,724
57,181
Interest income and other (2,061 ) (4,977 )
Interest expense 19,206
27,149
Gain on sale of business —
(13,031 )
Loss on early extinguishment of debt —
9,072
Depreciation and amortization 30,153
31,536
Amortization of other intangible assets 8,152
8,162
Adjusted EBITDA $ 343,900
$ 265,703


	Year Ended December 31,
	2020		2019

	(in thousands)
Net income	$	210,682	$	216,726
Add back:
Income tax provision	51,764		71,724
Interest income and other	412		(2,061)
Interest expense	19,805		19,206


Depreciation and amortization	32,118		30,153
Amortization of intangible assets	10,387		8,152
Special charges	7,103		—

Adjusted EBITDA	$	332,271	$	343,900

Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS:

Year Ended December 31,
2019 2018
(in thousands, except per share data)
Net income $ 216,726
$ 150,611
Add back:
Loss on early extinguishment of debt —
9,072
Tax impact of loss on early extinguishment of debt —
(2,359 )
Non-cash interest expense on convertible notes 8,606
3,019
Tax impact of non-cash interest expense on convertible
notes (2,237 ) (775 )
Gain on sale of business —
(13,031 )
Tax impact of gain on sale of business ⁽¹⁾
(2,097 ) 6,798
Adjusted net income $ 220,998
$ 153,335
Earnings per common share — diluted $ 5.69
$ 3.93
Add back:
Loss on early extinguishment of debt —
0.23
Tax impact of loss on early extinguishment of debt —
(0.06 )
Non-cash interest expense on convertible notes 0.23
0.08
Tax impact of non-cash interest expense on convertible
notes (0.06 ) (0.02 )
Gain on sale of business —
(0.34 )
Tax impact of gain on sale of business ⁽¹⁾
(0.06 ) 0.18
Adjusted earnings per common share — diluted $ 5.80
$ 4.00
Weighted average number of common shares outstanding — diluted 38,111
38,318


	Year Ended December 31,
	2020		2019

	(in thousands, except per share data)
Net income	$	210,682	$	216,726
Add back:
Special charges	7,103		—
Tax impact of special charges	(1,847)		—




Non-cash interest expense on convertible notes	9,083		8,606
Tax impact of non-cash interest expense on convertible notes	(2,361)		(2,237)

Tax impact of gain on sale of business (1)	—		(2,097)

Adjusted Net Income	$	222,660	$	220,998
Earnings per common share — diluted	$	5.67	$	5.69
Add back:
Special charges	0.19		—
Tax impact of special charges	(0.05)		—




Non-cash interest expense on convertible notes	0.24		0.23
Tax impact of non-cash interest expense on convertible notes	(0.06)		(0.06)

Tax impact of gain on sale of business (1)	—		(0.06)

Adjusted earnings per common share — diluted	$	5.99	$	5.80
Weighted average number of common shares outstanding — diluted	37,149		38,111


⁽¹⁾ (1)In 2019, represents a discrete tax adjustment resulting from a change in estimate related to the accounting for the Ringtail Divestiture in 2018.	~~In 2019, represents a discrete tax adjustment resulting from a change in estimate related to the accounting for the Ringtail divestiture.~~

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow:


								Year Ended December 31,
	Year Ended December 31,							2020		2019
	2019			2018
	(in thousands)							(in thousands)
Net cash provided by operating activities	$	217,886		$	230,672		Net cash provided by operating activities	$	327,069	$	217,886
Purchases of property and equipment	(42,072		)	(32,270		)	Purchases of property and equipment	(34,866)		(42,072)
Free Cash Flow	$	175,814		$	198,402		Free Cash Flow	$	292,203	$	175,814

Year Ended December 31, ~~2019~~2020 Compared with December 31, ~~2018~~2019

Revenues and ~~Operating Income~~operating income

See “Segment Results” for an expanded discussion of ~~Revenues~~revenues, gross profit and ~~Adjusted Segment EBITDA.~~SG&A expenses.

Unallocated ~~Corporate Expenses~~corporate expenses

Unallocated corporate expenses ~~increased $1.8~~decreased $3.9 million, or ~~1.9%~~4.0%, to $94.5 million in 2020 from $98.4 million in ~~2019 from $96.6 million in 2018.~~2019. The ~~increase~~decrease was primarily due to ~~higher~~lower travel and entertainment expenses due to restrictions imposed by governments to reduce the spread of COVID-19, and lower variable compensation for our executive and ~~employee-related costs and higher legal expenses.~~regional leadership.

Interest ~~Income~~income and ~~Other~~other

Interest income and other, which includes FX gains and losses, decreased ~~$2.9~~$2.5 million to ~~$2.1~~a $0.4 million loss for the year ended December 31, ~~2019 from $5.0~~2020, compared with $2.1 million of income for the year ended December 31, ~~2018.~~2019. The decrease was primarily due to $1.0 million in lower interest income and a $1.0 million increase in net FX ~~loss,~~

losses.

~~which was $3.1 million for the year ended December 31, 2019 compared with a $0.3 million net FX gain for the year ended December 31, 2018.~~ 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~~expense

Interest expense ~~decreased $7.9~~increased $0.6 million, or ~~29.3%~~3.1%, to $19.8 million in 2020 from $19.2 million in 2019 from $27.1 million in 2018. The decrease in interest expense reflects additional interest expense in 2018 related to the 2023 Convertible Notes issuance that overlapped the period until the redemption of the 2022 Notes in November 2018, as well as lower average outstanding borrowings under our Credit Facility in 2019 as compared to 2018. In addition, the decrease in interest expense reflects lower average interest rates on the 2023 Convertible Notes outstanding in 2019 as compared to the 2022 Notes outstanding in 2018.2019.

Income ~~Tax Provision~~tax provision

Our income tax provision ~~increased $14.5~~decreased $20.0 million, or ~~25.4%~~27.8%, to$51.8 million in 2020 from $71.7 million in ~~2019 from $57.2 million in 2018 primarily due to higher pre-tax income.~~2019. Our effective tax rate was 19.7% for 2020 as compared with 24.9% ~~in 2019 compared to 27.5% in 2018.~~for 2019. The ~~2019~~lower effective tax rate in 2020 was ~~favorably impacted by~~primarily due to a combined $11.2 million tax benefit from the use of foreign tax credits and the deferred tax benefit of an intellectual property license agreement between subsidiaries, as well as a favorable discrete tax ~~adjustments including a change in estimate~~adjustment related to ~~the accounting for the Ringtail divestiture and~~ share-based compensation. ~~The 2018 tax rate was unfavorably impacted by the Ringtail divestiture.~~

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 Income~~net income to Total Adjusted Segment EBITDA, a non-GAAP financial measure, for the years ended December 31, ~~2019~~2020 and ~~2018.~~2019:


	Year Ended December 31,
	2020		2019

	(in thousands)
Net income	$	210,682	$	216,726
Add back:
Income tax provision	51,764		71,724
Interest income and other	412		(2,061)
Interest expense	19,805		19,206


Unallocated corporate expenses (1)	94,463		98,398
Total segment operating income	377,126		403,993
Add back:
Segment depreciation expense	29,381		27,369
Amortization of intangible assets	10,387		8,152
Segment special charges	6,730		—

Total Adjusted Segment EBITDA	$	423,624	$	439,514

(1)Includes a $0.4 million special charge.

Year Ended December 31,
2019 2018
(in thousands)
Net income $ 216,726
$ 150,611
Add back:
Income tax provision 71,724
57,181
Interest income and other (2,061 ) (4,977 )
Interest expense 19,206
27,149
Gain on sale of business —
(13,031 )
Loss on early extinguishment of debt —
9,072
Unallocated corporate expense 98,398
96,595
Total segment operating income 403,993
322,600
Add back:
Segment depreciation expense 27,369
27,979
Amortization of other intangible assets 8,152
8,162
Total Adjusted Segment EBITDA $ 439,514
$ 358,741

Other Segment Operating Data

Year Ended December 31,
2019 2018
Number of revenue-generating professionals (at period end):
Corporate Finance 1,194
948
FLC 1,351
1,153
Economic Consulting 790
708
Technology ⁽¹⁾
361
306
Strategic Communications 728
641
Total revenue-generating professionals 4,424
3,756
Utilization rate of billable professionals ⁽²⁾:

Corporate Finance 67 % 66 %
FLC 63 % 64 %
Economic Consulting 75 % 69 %
Average billable rate per hour ⁽³⁾:

Corporate Finance $ 452
$ 433
FLC $ 337
$ 331
Economic Consulting $ 500
$ 519


	Year Ended December 31,
	2020			2019
Number of revenue-generating professionals (at period end):
Corporate Finance	1,655			1,194
FLC	1,343			1,351
Economic Consulting	891			790
Technology (1)	408			361
Strategic Communications	770			728
Total revenue-generating professionals	5,067			4,424
Utilization rates of billable professionals: (2)
Corporate Finance	63		%	67		%
FLC	51		%	63		%
Economic Consulting	68		%	75		%
Average billable rate per hour: (3)
Corporate Finance	$	468		$	452
FLC	$	335		$	337
Economic Consulting	$	494		$	500

⁽¹⁾

(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 331 and 285 as-needed employees during the years ended December 31, 2020 and 2019, 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.

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 285 and 253 as-needed employees during the years ended December 31, 2019 and 2018 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.

CORPORATE FINANCE & RESTRUCTURING

Year Ended December 31,
2019 2018
(dollars in thousands, except rate per hour)
Revenues $ 723,721
$ 564,479
Percentage change in revenues from prior year 28.2 %
Operating expenses
Direct cost of revenues 454,214
354,210
Selling, general and administrative expenses 112,630
92,037
Amortization of other intangible assets 3,929
3,108
570,773
449,355
Segment operating income 152,948
115,124
Percentage change in segment operating income from prior year 32.9 %
Add back:
Depreciation and amortization of intangible assets 7,787
6,536
Adjusted Segment EBITDA $ 160,735
$ 121,660
Gross profit ⁽¹⁾
$ 269,507
$ 210,269
Percentage change in gross profit from prior year 28.2 %
Gross profit margin ⁽²⁾
37.2 % 37.3 %
Adjusted Segment EBITDA as a percent of revenues 22.2 % 21.6 %
Number of revenue-generating professionals (at period end) 1,194
948
Percentage change in number of revenue-generating professionals
from prior year
25.9 %
Utilization rate of billable professionals 67 % 66 %
Average billable rate per hour $ 452
$ 433


	Year Ended December 31,
	2020			2019

	(dollars in thousands, except rate per hour)
Revenues	$	910,184		$	723,721
Percentage change in revenues from prior year	25.8		%
Operating expenses
Direct cost of revenues	578,875			454,214
Selling, general and administrative expenses	118,964			112,630
Special charges	861			—

Amortization of intangible assets	6,455			3,929
	705,155			570,773
Segment operating income	205,029			152,948
Percentage change in segment operating income from prior year	34.1		%
Add back:
Depreciation and amortization of intangible assets	10,940			7,787
Special charges	861			—

Adjusted Segment EBITDA	$	216,830		$	160,735
Gross profit (1)	$	331,309		$	269,507
Percentage change in gross profit from prior year	22.9		%
Gross profit margin (2)	36.4		%	37.2		%
Adjusted Segment EBITDA as a percent of revenues	23.8		%	22.2		%
Number of revenue-generating professionals (at period end)	1,655			1,194
Percentage change in number of revenue-generating professionals from prior year	38.6		%
Utilization rate of billable professionals	63		%	67		%
Average billable rate per hour	$	468		$	452


⁽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, ~~2019~~2020 Compared with December 31, ~~2018~~2019

Revenues increased ~~$159.2~~$186.5 million, or ~~28.2%~~25.8%, from ~~2018~~2019 to ~~2019, which included a 1.2% estimated negative impact from FX.~~2020. Acquisition-related revenues contributed ~~$19.6~~$40.7 million, or ~~3.5%~~5.6%, compared with ~~2018.~~2019. Excluding ~~the estimated impact from FX and~~ the acquisition-related revenues, revenues increased ~~$146.5~~$145.7 million, or ~~26.0%.~~20.1%, primarily due to higher demand for our restructuring services, largely in North America and EMEA.

Gross profit increased $61.8 million, or 22.9%, from 2019 to 2020. Gross profit margin decreased 0.8 percentage points from 2019 to 2020. The decrease in gross profit margin was primarily due to increased compensation related to higher headcount and an increase in variable compensation as a percentage of revenues, combined with a 4 percentage point decline in utilization.

SG&A expenses increased $6.3 million, or 5.6%, from 2019 to 2020. SG&A expenses of 13.1% of revenues in 2020 compared with 15.6% in 2019. The increase in SG&A expenses was primarily due to acquisition-related expenses and higher infrastructure support costs, largely related to an increase in headcount, which was partially offset by a decrease in travel and entertainment and bad debt expenses.

FORENSIC AND LITIGATION CONSULTING


	Year Ended December 31,
	2020			2019

	(dollars in thousands, except rate per hour)
Revenues	$	500,275		$	577,780
Percentage change in revenues from prior year	-13.4		%
Operating expenses
Direct cost of revenues	377,530			367,988
Selling, general and administrative expenses	94,562			109,992
Special charges	3,484			—

Amortization of intangible assets	800			1,152
	476,376			479,132
Segment operating income	23,899			98,648
Percentage change in segment operating income from prior year	-75.8		%
Add back:
Depreciation and amortization of intangible assets	5,991			5,787
Special charges	3,484			—

Adjusted Segment EBITDA	$	33,374		$	104,435
Gross profit (1)	$	122,745		$	209,792
Percentage change in gross profit from prior year	-41.5		%
Gross profit margin (2)	24.5		%	36.3		%
Adjusted Segment EBITDA as a percent of revenues	6.7		%	18.1		%
Number of revenue-generating professionals (at period end)	1,343			1,351
Percentage change in number of revenue-generating professionals from prior year	-0.6		%
Utilization rate of billable professionals	51		%	63		%
Average billable rate per hour	$	335		$	337

(1)Revenues less direct cost of revenues

(2)Gross profit as a percentage of revenues

Year Ended December 31, 2020 Compared with December 31, 2019

Revenues decreased $77.5 million, or 13.4%, from 2019 to 2020. The decrease was primarily due to lower demand for all of our services, particularly for our disputes, investigations and health solutions services.

Gross profit decreased $87.0 million, or 41.5%, from 2019 to 2020. Gross profit margin decreased 11.8 percentage points from 2019 to 2020. The decrease in gross profit margin was largely related to a 12 percentage point decline in utilization.

SG&A expenses decreased $15.4 million, or 14.0%, from 2019 to 2020. SG&A expenses of 18.9% of revenues in 2020 compared with 19.0% in 2019. The decrease in SG&A expenses was primarily driven by lower travel and entertainment, bad debt, hiring and other general and administrative expenses.

ECONOMIC CONSULTING


	Year Ended December 31,
	2020			2019

	(dollars in thousands, except rate per hour)
Revenues	$	599,088		$	592,542
Percentage change in revenues from prior year	1.1		%
Operating expenses
Direct cost of revenues	434,324			437,862
Selling, general and administrative expenses	78,714			76,302
Special charges	35			—

Amortization of intangible assets	325			177
	513,398			514,341
Segment operating income	85,690			78,201
Percentage change in segment operating income from prior year	9.6		%
Add back:
Depreciation and amortization of intangible assets	5,707			5,911
Special charges	35			—

Adjusted Segment EBITDA	$	91,432		$	84,112
Gross profit (1)	$	164,764		$	154,680
Percentage change in gross profit from prior year	6.5		%
Gross profit margin (2)	27.5		%	26.1		%
Adjusted Segment EBITDA as a percent of revenues	15.3		%	14.2		%
Number of revenue-generating professionals (at period end)	891			790
Percentage change in number of revenue-generating professionals from prior year	12.8		%
Utilization rate of billable professionals	68		%	75		%
Average billable rate per hour	$	494		$	500

(1)Revenues less direct cost of revenues

(2)Gross profit as a percentage of revenues

Year Ended December 31, 2020 Compared with December 31, 2019

Revenues increased $6.5 million, or 1.1%, from 2019 to 2020. The increase was primarily due to higher demand for our mergers and ~~higher~~acquisitions ("M&A") related antitrust services, which was partially offset by lower demand for our financial economics services, along with lower realized bill rates due to the mix of client engagements and staffing for our ~~restructuring and business transformation and transactions services, as well as a $21.1 million increase in success fees compared to 2018.~~

~~Gross profit increased $59.2 million, or 28.2%, from 2018 to 2019. Gross profit margin decreased 0.1 percentage points from 2018 to 2019.~~

SG&A expenses increased $20.6 million, or 22.4%, from 2018 to 2019. SG&A expenses were 15.6% of revenues in 2019 compared with 16.3% in 2018. The increase in SG&A expenses included acquisition-related costs, along with an increase in infrastructure support costs, travel and entertainment expenses and other general and administrative costs.

~~FORENSIC AND LITIGATION CONSULTING~~

Year Ended December 31,
2019 2018
(dollars in thousands, except rate per hour)
Revenues $ 577,780
$ 520,333
Percentage change in revenues from prior year 11.0 %
Operating expenses
Direct cost of revenues 367,988
330,791
Selling, general and administrative expenses 109,992
96,958
Amortization of other intangible assets 1,152
1,322
479,132
429,071
Segment operating income 98,648
91,262
Percentage change in segment operating income from prior year 8.1 %
Add back:
Depreciation and amortization of intangible assets 5,787
5,559
Adjusted Segment EBITDA $ 104,435
$ 96,821
Gross profit ⁽¹⁾
$ 209,792
$ 189,542
Percentage change in gross profit from prior year 10.7 %
Gross profit margin ⁽²⁾
36.3 % 36.4 %
Adjusted Segment EBITDA as a percent of revenues 18.1 % 18.6 %
Number of revenue-generating professionals (at period end) 1,351
1,153
Percentage change in number of revenue-generating professionals
from prior year
17.2 %
Utilization rate of billable professionals 63 % 64 %
Average billable rate per hour $ 337
$ 331


⁽¹⁾	~~Revenues less direct cost of revenues.~~


⁽²⁾	~~Gross profit as a percent of revenues.~~

~~Year Ended December 31, 2019 Compared with December 31, 2018~~

Revenues increased $57.4 million, or 11.0%, from 2018 to 2019. The increase in revenues was primarily due to increased demand for our investigations, disputes and construction solutions services, combined with higher realized rates due to mix of client engagements and staffing globally for our investigationsnon-M&A-related antitrust services.

Gross profit increased ~~$20.3~~$10.1 million, or ~~10.7%~~6.5%, from ~~2018~~2019 to ~~2019. Gross profit margin decreased 0.1 percentage points from 2018 to 2019.~~

SG&A expenses increased $13.0 million, or 13.4%, from 2018 to 2019. SG&A expenses were 19.0% of revenues in 2019 compared with 18.6% in 2018. The increase in SG&A expenses was driven by higher infrastructure support, travel and entertainment, hiring and bad debt expenses.

~~ECONOMIC CONSULTING~~

Year Ended December 31,
2019 2018
(dollars in thousands, except rate per hour)
Revenues $ 592,542
$ 533,979
Percentage change in revenues from prior year 11.0 %
Operating expenses
Direct cost of revenues 437,862
396,001
Selling, general and administrative expenses 76,302
73,630
Amortization of other intangible assets 177
296
514,341
469,927
Segment operating income 78,201
64,052
Percentage change in segment operating income from prior year 22.1 %
Add back:
Depreciation and amortization of intangible assets 5,911
5,903
Adjusted Segment EBITDA $ 84,112
$ 69,955
Gross profit ⁽¹⁾
$ 154,680
$ 137,978
Percentage change in gross profit from prior year 12.1 %
Gross profit margin ⁽²⁾
26.1 % 25.8 %
Adjusted Segment EBITDA as a percent of revenues 14.2 % 13.1 %
Number of revenue-generating professionals (at period end) 790
708
Percentage change in number of revenue-generating professionals
from prior year
11.6 %
Utilization rate of billable professionals 75 % 69 %
Average billable rate per hour $ 500
$ 519


⁽¹⁾	~~Revenues less direct cost of revenues.~~


⁽²⁾	~~Gross profit as a percent of revenues.~~

~~Year Ended December 31, 2019 Compared with December 31, 2018~~

Revenues increased $58.6 million, or 11.0%, from 2018 to 2019, which included a 1.3% estimated negative impact from FX. Excluding the estimated negative impact of FX, revenues increased $65.4 million, or 12.3%, due to higher demand for our non-M&A-related antitrust services in North America and Europe, Middle East and Africa (“EMEA”).

~~Gross profit increased $16.7 million, or 12.1%, from 2018 to 2019.~~2020. Gross profit margin increased ~~0.3~~1.4 percentage points from ~~2018~~2019 to ~~2019.~~2020. The increase in gross profit margin was primarily due to a higher ~~utilization in North America~~proportion of junior professional staff, lower variable compensation as a percentage of revenues and ~~EMEA,~~a favorable mix of lower margin contractor revenues, which was partially offset by a 7 percentage point decline in utilization.

SG&A expenses increased $2.4 million, or 3.2%, from 2019 to 2020. SG&A expenses of 13.1% of revenues in 2020 compared with 12.9% in 2019. The increase in SG&A expenses was primarily driven by higher bad debt, which was partially offset by lower travel and entertainment expenses.

TECHNOLOGY


	Year Ended December 31,
	2020			2019

	(dollars in thousands)
Revenues	$	223,016		$	215,584
Percentage change in revenues from prior year	3.4		%
Operating expenses
Direct cost of revenues	134,568			123,504
Selling, general and administrative expenses	57,303			57,058
Special charges	276			—

	192,147			180,562
Segment operating income	30,869			35,022
Percentage change in segment operating income from prior year	-11.9		%
Add back:
Depreciation and amortization of intangible assets	11,868			10,666
Special charges	276			—
Adjusted Segment EBITDA	$	43,013		$	45,688
Gross profit (1)	$	88,448		$	92,080
Percentage change in gross profit from prior year	-3.9		%
Gross profit margin (2)	39.7		%	42.7		%
Adjusted Segment EBITDA as a percent of revenues	19.3		%	21.2		%
Number of revenue-generating professionals (at period end) (3)	408			361
Percentage change in number of revenue-generating professionals from prior year	13.0		%

(1)Revenues less direct cost of revenues

(2)Gross profit as a percentage of revenues

(3)Includes personnel involved in direct client assistance and revenue-generating consultants and excludes professionals employed on an as-needed basis

Year Ended December 31, 2020 Compared with December 31, 2019

Revenues increased $7.4 million, or 3.4%, from 2019 to 2020. The increase was primarily driven by higher demand and realized bill rates for our consulting services, largely due to M&A-related "second request" and litigation activities, which was partially offset by lower revenues related to the completion of a transitional services agreement, as well as lower realized rates for our managed review services.

Gross profit decreased $3.6 million, or 3.9%, from 2019 to 2020. Gross profit margin decreased 3.0 percentage points from 2019 to 2020. The decrease in gross profit margin was largely due to the completion of a transitional services agreement combined with lower profitability for our managed review and processing services, which was partially offset by higher profitability for our consulting services.

SG&A expenses increased $0.2 million, or 0.4%, from 2019 to 2020. SG&A expenses of 25.7% of revenues in 2020 compared with 26.5% in 2019.

STRATEGIC COMMUNICATIONS


	Year Ended December 31,
	2020			2019

	(dollars in thousands)
Revenues	$	228,712		$	243,090
Percentage change in revenues from prior year	-5.9		%
Operating expenses
Direct cost of revenues	147,414			151,319
Selling, general and administrative expenses	44,779			49,703
Special charges	2,074			—

Amortization of intangible assets	2,806			2,894
	197,073			203,916
Segment operating income	31,639			39,174
Percentage change in segment operating income from prior year	-19.2		%
Add back:
Depreciation and amortization of intangible assets	5,262			5,370
Special charges	2,074			—

Adjusted Segment EBITDA	$	38,975		$	44,544
Gross profit (1)	$	81,298		$	91,771
Percentage change in gross profit from prior year	-11.4		%
Gross profit margin (2)	35.5		%	37.8		%
Adjusted Segment EBITDA as a percent of revenues	17.0		%	18.3		%
Number of revenue-generating professionals (at period end)	770			728
Percentage change in number of revenue-generating professionals from prior year	5.8		%

(1)Revenues less direct cost of revenues

(2)Gross profit as a percentage of revenues

Year Ended December 31, 2020 Compared with December 31, 2019

Revenues decreased $14.4 million, or 5.9%, from 2019 to 2020. The decrease in revenues was due to an $8.6 million decline in pass-through revenues, and a reduction in retainer- and project-based revenues, primarily driven by lower demand for our corporate reputation services.

Gross profit decreased $10.5 million, or 11.4%, from 2019 to 2020. Gross profit margin decreased 2.3 percentage points from 2019 to 2020. The decrease in gross profit margin was primarily driven by higher costs due to increased headcount, which was partially offset by an increase in lower margin pass-through revenues and a decrease in variable compensation as a percentage of revenues.

SG&A expenses ~~increased $2.7~~decreased $4.9 million, or ~~3.6%~~9.9%, from ~~2018~~2019 to ~~2019.~~2020. SG&A expenses ~~were 12.9%~~of 19.6% of revenues in ~~2019~~2020 compared with ~~13.8%~~20.4% in ~~2018. The increase in SG&A expenses was primarily driven by higher infrastructure support and other general and administrative costs.~~

~~TECHNOLOGY~~

Year Ended December 31,
2019 2018
(dollars in thousands)
Revenues $ 215,584
$ 185,755
Percentage change in revenues from prior year 16.1 %
Operating expenses
Direct cost of revenues 123,504
111,129
Selling, general and administrative expenses 57,058
59,644
Amortization of other intangible assets —
70
180,562
170,843
Segment operating income 35,022
14,912
Percentage change in segment operating income from prior year 134.9 %
Add back:
Depreciation and amortization of intangible assets 10,666
12,475
Adjusted Segment EBITDA $ 45,688
$ 27,387
Gross profit ⁽¹⁾
$ 92,080
$ 74,626
Percentage change in gross profit from prior year 23.4 %
Gross profit margin ⁽²⁾
42.7 % 40.2 %
Adjusted Segment EBITDA as a percent of revenues 21.2 % 14.7 %
Number of revenue-generating professionals (at period end) ⁽³⁾
361
306
Percentage change in number of revenue-generating
professionals from prior year
18.0 %


⁽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.~~

~~Year Ended December 31, 2019 Compared with December 31, 2018~~

Revenues increased $29.8 million, or 16.1%, from 2018 to 2019, which included a 1.0% estimated negative impact from FX. Excluding the estimated negative impact of FX, revenues increased $31.7 million, or 17.1%. The increase in revenues was primarily due to higher demand for consulting, hosting and managed review services, primarily driven by higher demand for large, cross-border investigation and litigation engagements.

~~Gross profit increased $17.5 million, or 23.4%, from 2018 to~~ 2019. Gross profit margin increased 2.5 percentage points from 2018 to 2019. The increase in gross profit margin was primarily due to higher utilization and realized rates for our consulting services, as well as a favorable regional and service mix, with a higher share of expert-driven work which resulted in higher realized hourly pricing, within our processing business.

~~SG&A expenses decreased $2.6 million, or 4.3%, from 2018 to 2019. SG&A expenses were 26.5% of revenues in 2019 compared with 32.1% in 2018.~~ The decrease in SG&A expenses was primarily due to ~~$8.3 million of~~ lower ~~research~~travel and ~~development expenses primarily associated with the September 2018 Ringtail divestiture, which was partially offset by an increase in personnel costs and other general administrative~~entertainment expenses.

~~STRATEGIC COMMUNICATIONS~~

Year Ended December 31,
2019 2018
(dollars in thousands)
Revenues $ 243,090
$ 223,331
Percentage change in revenues from prior year 8.8 %
Operating expenses
Direct cost of revenues 151,319
135,943
Selling, general and administrative expenses 49,703
46,772
Amortization of other intangible assets 2,894
3,366
203,916
186,081
Segment operating income 39,174
37,250
Percentage change in segment operating income from
prior year
5.2 %
Add back:
Depreciation and amortization of intangible assets 5,370
5,668
Adjusted Segment EBITDA $ 44,544
$ 42,918
Gross profit ⁽¹⁾
$ 91,771
$ 87,388
Percentage change in gross profit from prior year 5.0 %
Gross profit margin ⁽²⁾
37.8 % 39.1 %
Adjusted Segment EBITDA as a percent of revenues 18.3 % 19.2 %
Number of revenue-generating professionals (at period end) 728
641
Percentage change in number of revenue-generating
professionals from prior year
13.6 %


⁽¹⁾	~~Revenues less direct cost of revenues.~~


⁽²⁾	~~Gross profit as a percent of revenues.~~

~~Year Ended December 31, 2019 Compared with December 31, 2018~~

Revenues increased $19.8 million, or 8.8%, from 2018 to 2019, which included a 2.7% estimated negative impact from FX. Excluding the estimated negative impact of FX, revenues increased $25.7 million, or 11.5%. The increase was primarily due to higher demand for project-based crisis communications and corporate reputation services in North America and EMEA and a $6.7 million increase in pass through revenues compared to 2018.

Gross profit increased $4.4 million, or 5.0%, from 2018 to 2019. Gross profit margin decreased 1.3 percentage points from 2018 to 2019. The decrease was primarily due to a higher proportion of lower margin pass through revenues, combined with higher compensation as a percentage of revenues.

SG&A expenses increased $2.9 million, or 6.3%, from 2018 to 2019. SG&A expenses were 20.4% of revenues in 2019 compared with 20.9% in 2018. The increase in SG&A expenses was primarily due to an increase in infrastructure support costs and other general and administrative expenses.

~~Liquidity and Capital Resources~~LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Year Ended December 31,
2019 2018
Cash Flows (dollars in thousands)
Net cash provided by operating activities $ 217,886
$ 230,672
Net cash provided by (used in) investing activities $ (60,606 ) $ 18,744
Net cash used in financing activities $ (103,311 ) $ (117,519 )
DSO 97
93


	Year Ended December 31,
	2020		2019

Cash Flows	(dollars in thousands)
Net cash provided by operating activities	$	327,069	$	217,886
Net cash used in investing activities	$	(60,120)	$	(60,606)
Net cash used in financing activities	$	(360,053)	$	(103,311)
DSO	95		97

We generally finance our day-to-day operations, capital expenditures, acquisitions and ~~acquisitions~~share repurchases through cash flows from operations. During the first quarter of our fiscal year, our cash needs generally exceed our cash flows from operations due to the payment of annual incentive compensation. Our operating cash flows generally exceed our cash needs subsequent to the second quarter of each year.

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, affect the changes in these balances.

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.

Year Ended December 31, ~~2019~~2020 Compared with December 31, ~~2018~~2019

Net cash provided by operating activities ~~decreased $12.8~~increased $109.2 million, or ~~5.5%~~50.1%, from ~~2018~~2019 to ~~2019.~~2020. The ~~decrease~~increase in net cash provided by operating activities was primarily due to ~~an increase in compensation-related costs and~~higher cash collections, combined with lower non-compensation-related operating costs, ~~as a result of the growth in the business. These cash outflows~~which were partially offset by higher ~~cash collections resulting from higher revenues as compared~~compensation, primarily related to ~~the prior year period.~~headcount growth, and an increase in income tax payments. DSO was 9795 days as of December 31, ~~2019~~2020 and 9397 days as of December 31, ~~2018. The increase in DSO is primarily due to an increase in revenues, which outpaced cash collections.~~2019.

Net cash used in investing activities ~~increased $79.4~~decreased $0.5 million, or 0.8%, from ~~2018~~2019 to ~~2019.~~2020. The ~~Company~~decrease in net cash used ~~$42.1~~in investing activities was primarily due to a decrease of $7.0 million ~~for~~in capital expenditures, ~~and $18.8~~partially offset by an increase of $6.5 million ~~to purchase Andersch and its related trademark,~~in payments for the acquisition of businesses, net of cash ~~acquired, in 2019. Net cash provided by investing activities in 2018 included $50.3 million from the 2018 Ringtail divestiture, partially offset by capital expenditures of $32.3 million.~~received.

Net cash used in financing activities ~~decreased $14.2~~increased $256.7 million, or ~~12.1%~~248.5%, from ~~2018~~2019 to ~~2019. Net~~2020. The increase in net cash used in financing activities ~~in 2019 consisted mainly~~was primarily due to an increase of ~~$105.8~~$247.8 million in payments for common stock repurchases under the Repurchase Program. Cash used in financing activities in 2018 included the $300.0 million redemption of the 2022 Notes, $100.0 million of net repayments under our 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.

Capital Resources

As of December 31, ~~2019,~~2020, our capital resources included ~~$369.4~~$295.0 million of cash and cash equivalents and available borrowing capacity of ~~$549.0~~$548.9 million under athe $550.0 million revolving line of credit under our ~~Credit Facility.~~senior secured bank revolving credit facility (the "Credit Facility"). As of December 31, ~~2019,~~2020, we had no outstanding borrowings under our Credit Facility and ~~$1.0~~$1.1 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, British pound, 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, euro and British pound bear interest at an annual rate equal to the London Interbank Offered Rate ("LIBOR"), plus an applicable margin or an alternative base rate plus an applicable margin. 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 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

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.

Our Credit ~~Facility~~Agreement and 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 ~~Facility~~Agreement 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, ~~2019,~~2020, we were in compliance with the covenants contained in the Credit ~~Facility~~Agreement and the indenture, dated as of August 20, 2018, between us and U.S. Bank National Association, as trustee (the "Indenture"), governing the 2023 Convertible Notes.

Future Capital Needs

We anticipate that our future capital needs will principally consist of funds required for:

•operating and general corporate expenses relating to the operation of our businesses;

•capital expenditures, primarily for information technology equipment, office furniture and leasehold improvements;

•debt service requirements, including interest payments on our long-term debt;

•compensation ~~for~~to designated executive management and senior managing directors under our various long-term incentive compensation programs;

•discretionary funding of ~~our~~the Repurchase Program;

•contingent obligations related to our acquisitions;

•potential acquisitions of businesses; and

•other known future contractual obligations.

~~We currently anticipate~~During 2020, we spent $34.9 million in capital expenditures ~~of $40 million to $49 million~~ to support our organization, ~~during 2020,~~ including direct support for specific client engagements. During 2021, we currently expect to make capital expenditures to support our organization in an aggregate amount between $70 million and $80 million, which includes costs related to leasehold improvements for our new principal office space in New York, New York. 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 if we pursue and complete additional acquisitions.

2023 Convertible Notes

Our 2023 Convertible Notes were issued pursuant to the Indenture. 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. 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 ~~an initial~~a conversion price of approximately $101.38 per share of common stock, at maturity, 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,~~14, "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 ended December 31, 2020, 2019 and 2018 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 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 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, which are 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 if other 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 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 ~~price~~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 “Forward-Looking Statements” under the heading “Risk Factors” in Part I, Item 1A, of this Annual ~~Report on Form 10-K.~~ Report.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements and we have not entered into any transactions involving unconsolidated subsidiaries or special purpose entities that would be expected to have a material impact on our financial condition or results of operations.

Future Contractual Obligations

The following table sets forth our estimates as to the amounts and timing of ~~contractual payments for~~ our ~~most significant~~future contractual obligations as of December 31, ~~2019.~~2020. The information 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.

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, ~~2019~~2020 and prior to the November 30, 2023 maturity date of our Credit Facility.

Payments Due by Period
Contractual Obligations Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years
(in thousands)
Long-term debt ⁽¹⁾
$ 341,550
$ 6,325
$ 12,650
$ 322,575
$ —
Operating leases 257,086
45,849
83,525
50,550
77,162
Total obligations $ 598,636
$ 52,174
$ 96,175
$ 373,125
$ 77,162


			Payments Due by Period
Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years

	(in thousands)
Long-term debt (1)	$	335,225	$	6,325	$	328,900	$	—	$	—
Operating leases	243,486		49,666		75,489		54,388		63,943
Total obligations	$	578,711	$	55,991	$	404,389	$	54,388	$	63,943

⁽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.

On October 26, 2020, the Company entered into a material lease agreement, amending and restating the lease agreement entered into as of August 19, 2020 (the "Lease") for its new principal office space in New York, New York to consolidate existing office space into fewer locations and in anticipation of future office space needs in view of its current leases, which are scheduled to expire in November 2021. The Company expects to accept possession of the premises on or about April 1, 2021, subject to the satisfaction of certain conditions. The Lease shall continue for an initial fixed term of 15 years, subject to two renewal options of five years each. Fixed rental payments under the Lease are scheduled to commence in April 2022, payable in monthly installments, and will aggregate approximately $145 million, excluding lease-related incentives over the term of the Lease. During the lease term, the Company will be responsible for its percentage share of the leased square footage of the premises of increases in taxes over a base tax year of July 1, 2021-June 30, 2022 and operating expenses over a base operating year of calendar year 2021.

~~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.~~

Effect of Inflation

Inflation is not generally a material factor affecting our business. General operating expenses such as salaries, employee benefits and lease costs are, however, subject to normal inflationary pressures.

Critical Accounting Policies

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 accounts~~revenues, goodwill and ~~unbilled services, goodwill,~~intangible assets, income taxes and contingencies, on an ongoing basis. ~~We base our~~Our estimates are based on current facts and circumstances, historical experience and various other assumptions that we believe are ~~reasonable. These results~~reasonable, which form the basis for making judgments about the ~~carrying value~~values 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 policies 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 streams~~services 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.

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, or based on the efforts or hours incurred as a percentage of total efforts or hours expected to be incurred (i.e., "proportional performance method").

•

~~Fixed-fee arrangements~~ ~~require the client to pay a pre-established~~

•Fixed-fee arrangements require the client to pay a fixed fee in exchange ~~for a predetermined set of professional services. We recognize revenues~~ for a predetermined set of professional services. We recognize revenues earned to date by applying the proportional performance method. Generally, these arrangements ~~based on the proportional performance related to individual performance obligations within each arrangement, however, 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. We recognize revenues earned to date in an amount that is probable not to reverse and by applying the proportional performance method when the 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 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.

•

~~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. We recognize revenues earned to date by applying the proportional performance method.

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 either~~at 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.~~

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.

~~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 collect~~our billed accounts receivable, potential fee reductions negotiated with specific clients or imposed by bankruptcy courts and the inability of specific 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 specific client collections and the Company's historical collection patterns for similar client collections. 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 ~~Condensed~~ 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 at~~At times, we ~~are asked to~~may execute contracts in a form provided by customers that might include different ~~terms.~~

~~We record adjustments to~~payment terms and contracts may be negotiated at the allowance for doubtful accounts and unbilled services as a reduction in revenues when there are changes in estimates of fee reductions, such as those fee reductions 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 adjustments are recorded to SG&A expenses on the Consolidated Statements of Comprehensive Income. Our bad debt expense totaled $19.6 million, $17.9 million and $15.4 million for the years ended December 31, 2019, 2018 and 2017, 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 intangible~~Intangible assets may include ~~trademarks,~~ customer relationships, trademarks 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.

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 ~~regarding~~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 ~~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 determines~~we 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.

The cash flows employed in the income approach are based on our most recent forecasts, budgets 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 ”)~~WACC”), which reflects an assessment of the risk inherent in the future revenue streams and cash 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 for equity securities of publicly traded companies, (3) ~~an appropriate size premium, (4)~~ the current after-tax market rate of return on debt of companies with business characteristics similar to our reporting units and ~~(5)~~(4) a company-specific risk premium. We ~~weighted~~weight the cost of equity and debt by the relative market value percentages of our equity and 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, determination of appropriate comparable guideline companies and the determination of whether a premium or discount should be applied to such comparable guideline companies.

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.

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 value~~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 ~~amortize our acquired finite-lived intangible~~group assets ~~on a straight-line basis over periods ranging from three~~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 ~~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.

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, ~~2019,~~2020, 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, ~~2019~~2020 and prior to the November 30, 2023 maturity date of our Credit Facility.

From time to time, we may use derivative instruments to manage our interest rate 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, ~~2019~~2020 and ~~2018.~~2019. Our stock price affects the fair value of 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. The last actively traded prices for our 2023 Convertible Notes per $1,000 principal amount were ~~$1,258.55~~$1,255.28 and ~~$935.50~~$1,258.55 as of December 31, ~~2019~~2020 and ~~2018,~~2019, respectively.


																													December 31, 2020					December 31, 2019
																		2021		2022		2023			2024		Thereafter		Total			Fair Value		Total			Fair Value
											December 31, 2019			December 31, 2018
Long-Term Debt	2020		2021		2022		2023		Thereafter		Total		Fair Value	Total		Fair Value	Long-Term Debt	(dollars in thousands)
	(dollars in thousands)
Fixed rate	$	—	$	—	$	—	$316,250		$	—	$316,250		$398,016	$316,250		$291,837	Fixed rate	$	—	$	—	$	316,250		$	—	$	—	$	316,250		$	396,982	$	316,250		$	398,016
Average interest rate	—		—		—		5.4	%	—		5.4	%	—	5.4	%	—	Average interest rate	—		—		5.4		%	—		—		5.4		%	—		5.4		%	—

Foreign Currency Exchange Rate Risk

Exchange Rate Risk

Our FX 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 FX 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 FX 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 7,8, “Interest Income and Other” in Part II, Item 8 of this Annual Report for information.

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 relate to functional currency assets and liabilities that are denominated in the British pound, euro, ~~Canadian~~Australian dollar and ~~Australian~~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, 2020, 2019 ~~2018~~ and ~~2017.~~2018. These translation adjustments are reflected in “Other comprehensive income (loss)” on our Consolidated Statements of Comprehensive Income.


	Year Ended December 31,
Changes in Net Investment of Foreign Subsidiaries	2020		2019		2018

	(in thousands)
British pound	$	13,599	$	7,390	$	(15,590)
Euro	12,543		(1,323)		(2,753)
Australian dollar	6,619		(208)		(6,077)
Canadian dollar	1,209		1,020		(1,639)
All other	442		91		(1,543)
Total	$	34,412	$	6,970	$	(27,602)

Year Ended December 31,
Changes in Net Investment of Foreign Subsidiaries 2019 2018 2017
(in thousands)
British pound $ 7,390
$ (15,590 ) $ 20,394
Euro (1,323 ) (2,753 ) 6,595
Canadian dollar 1,020
(1,639 ) 1,439
Australian dollar (208 ) (6,077 ) 4,058
All other 91
(1,543 ) (1,822 )
Total $ 6,970
$ (27,602 ) $ 30,664

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			5855
Report of Independent Registered Public Accounting Firm — Internal Control over Financial Reporting			5956
Report of Independent Registered Public Accounting Firm — Consolidated Financial Statements			6057
Consolidated Balance Sheets — December 31, ~~2019~~2020 and ~~2018~~2019			6259
Consolidated Statements of Comprehensive Income — Years Ended December 31, 2020, 2019 ~~2018~~ and ~~2017~~2018			6360
Consolidated Statements of Stockholders’ Equity — Years Ended December 31, 2020, 2019 ~~2018~~ and ~~2017~~2018			6461
Consolidated Statements of Cash Flows — Years Ended December 31, 2020, 2019 ~~2018~~ and ~~2017~~2018			6562
Notes to Consolidated Financial Statements			6663

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, ~~2019.~~2020. 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, ~~2019~~2020 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, ~~2019.~~2020.

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 25, ~~2020~~

2021



/s/ STEVEN H. GUNBY
Steven H. Gunby President and Chief Executive Officer (Principal Executive Officer)

/s/ AJAY SABHERWAL
Ajay Sabherwal Chief Financial Officer (Principal Financial Officer)

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’~~subsidiaries' (the Company) internal control over financial reporting as of December 31, ~~2019,~~2020, based on criteria established inInternal 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, ~~2019,~~2020, 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, ~~2019~~2020 and ~~2018,~~2019, 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, ~~2019,~~2020, and the related notes ~~and financial statementSchedule II, Valuation and Qualifying Accounts(collectively,~~(collectively, the consolidated financial statements), and our report dated February 25, ~~2020~~2021 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 25, ~~2020~~

2021

Report of Independent Registered Public Accounting Firm

To the Stockholders and 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, ~~2019~~2020 and ~~2018,~~2019, 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, ~~2019,~~2020, and the related ~~notes and financial statementSchedule II, Valuation and Qualifying Accounts~~notes. (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, ~~2019~~2020 and ~~2018,~~2019, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, ~~2019,~~2020, 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, ~~2019,~~2020, 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 25, ~~2020~~2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

~~Changes~~Change in Accounting Principle

~~As discussed in Note 2 to the consolidated financial statements, the~~The Company ~~has changed its method of accounting for revenue as of January 1, 2018 due to the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606,~~ ~~Revenue from Contracts with Customers~~.

~~As discussed in Note 1 and 2 to the consolidated financial statements, the Company has~~ changed its method of accounting for leases as of January 1, 2019 due to the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 842, Leases.

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 separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

~~Assessment~~Changes in estimates of ~~the estimation of losses related to billed and unbilled receivables~~potential fee reductions

As discussed in Note 1 to the consolidated financial statements, for certain arrangements, the Company ~~maintains an allowance~~records revenues based on the amount it estimates it will be entitled to in exchange for ~~doubtful accounts~~its services and ~~unbilled services for estimated losses (the allowance).~~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 ~~allowance results from~~Company records changes to revenue when there are changes in estimates of potential fee reductions ~~negotiated with specific clients or~~ imposed by bankruptcy courts or other regulatory ~~agencies;~~agencies or negotiated with specific ~~clients’ inability to pay; and/or disputes impacting~~clients. Revenues for the ~~Company’s ability to fully collect billed and unbilled amounts. As of~~year ended December 31, ~~2019,~~

2020 were approximately $2.5 billion, which includes the previously mentioned changes.

the allowance was $265.5 million. The allowance is recorded based on the Company’s understanding of specific client collections and the Company's historical collection patterns for similar client collections.

We identified the ~~assessment~~evaluation of ~~the estimation~~changes in estimates of ~~losses related to billed and unbilled receivables~~potential fee reductions as a critical audit matter. There was a high degree of subjectivity and audit effort in evaluating the ~~following assumptions: (1)~~ likely outcome of potential fee reductions imposed by bankruptcy ~~court~~courts or other regulatory ~~agencies’ imposed fee reductions, (2) probability of~~agencies or negotiated by specific clients, ~~successfully negotiating fee reductions, (3)~~which may vary depending on the ~~ability of clients to pay assessed fees, and (4) the probability~~nature of the ~~Company successfully negotiating remaining unbilled fees owed.~~engagement, client economics, historical experience and other appropriate factors.

The following are the primary procedures we performed to address this critical audit ~~matter included~~matter. We evaluated the ~~following. We~~design and tested the operating effectiveness of certain internal controls ~~over~~related to the Company’s ~~estimation of the allowance~~revenue process, including controls related to the monthly analysis of ~~reserves~~estimated potential fee reductions by ~~matter,~~arrangement, and review of ~~manual adjustments~~the related changes to ~~unbilled receivables~~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 ~~revenue. We~~(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 ~~establishing an allowance, or lack thereof, for specific clients. We inspected relevant evidence, including: (1) documents received~~making the change. For a sample of arrangements, we assessed the existence and accuracy of the billed receivables by confirming amounts recorded directly ~~by us from~~with the Company’s ~~client, (2) documents received by the Company from their client, (3) contractual documents, (4) regulatory correspondence, and (5) historical trends and analysis performed by the Company.~~clients. We compared actual collections and write-offs to ~~amounts previously reserved. We compared the Company’s receivable turnover ratio as of December 31, 2019, which represents revenues divided by the average amount of~~previous billed and unbilled receivables to assess the Company’s ~~historical receivables turnover ratio. We compared the days outstanding for the current billed and unbilled receivables as~~ability to accurately record changes in estimates of ~~December 31, 2019, to the days outstanding for the Company’s historical billed and unbilled receivables.~~potential fee reductions.

/s/ KPMG LLP

We have served as the Company's auditor since 2006.

McLean, Virginia

February 25, ~~2020~~

2021

FTI Consulting, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except per share data)


	December 31,
	2020		2019
Assets
Current assets
Cash and cash equivalents	$	294,953	$	369,373




Accounts receivable, net	711,357		693,372
Current portion of notes receivable	35,253		35,106
Prepaid expenses and other current assets	88,144		80,810
Total current assets	1,129,707		1,178,661
Property and equipment, net	101,642		93,672
Operating lease assets	156,645		159,777
Goodwill	1,234,879		1,202,767
Intangible assets, net	41,550		38,432
Notes receivable, net	61,121		69,033
Other assets	51,819		40,800
Total assets	$	2,777,363	$	2,783,142
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable, accrued expenses and other	$	170,066	$	158,936
Accrued compensation	455,933		416,903
Billings in excess of services provided	44,172		36,698
Total current liabilities	670,171		612,537
Long-term debt, net	286,131		275,609
Noncurrent operating lease liabilities	161,677		176,378
Deferred income taxes	158,342		151,352
Other liabilities	100,861		78,124
Total liabilities	1,377,182		1,294,000
Commitments and contingencies (Note 16)	0		0
Stockholders' equity
Preferred stock, $0.01 par value; shares authorized — 5,000; 0ne outstanding	0		0
Common stock, $0.01 par value; shares authorized — 75,000; shares issued and outstanding — 34,481 (2020) and 37,390 (2019)	345		374
Additional paid-in capital	0		216,162
Retained earnings	1,506,271		1,413,453
Accumulated other comprehensive loss	(106,435)		(140,847)
Total stockholders' equity	1,400,181		1,489,142
Total liabilities and stockholders' equity	$	2,777,363	$	2,783,142

December 31,
2019 2018
Assets
Current assets
Cash and cash equivalents $ 369,373
$ 312,069
Accounts receivable:
Billed receivables 540,584
437,797
Unbilled receivables 418,288
319,205
Allowance for doubtful accounts and unbilled services (265,500 ) (202,394 )
Accounts receivable, net 693,372
554,608
Current portion of notes receivable 35,106
29,228
Prepaid expenses and other current assets 80,810
69,448
Total current assets 1,178,661
965,353
Property and equipment, net 93,672
84,577
Operating lease assets 159,777
—
Goodwill 1,202,767
1,172,316
Other intangible assets, net 38,432
34,633
Notes receivable, net 69,033
84,471
Other assets 40,800
37,771
Total assets $ 2,783,142
$ 2,379,121
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable, accrued expenses and other $ 158,936
$ 104,600
Accrued compensation 416,903
333,536
Billings in excess of services provided 36,698
44,434
Total current liabilities 612,537
482,570
Long-term debt, net 275,609
265,571
Noncurrent operating lease liabilities 176,378
—
Deferred income taxes 151,352
155,088
Other liabilities 78,124
127,067
Total liabilities 1,294,000
1,030,296
Commitments and contingent liabilities (Note 15)

Stockholders' equity
Preferred stock, $0.01 par value; shares authorized — 5,000; none
outstanding
—
—
Common stock, $0.01 par value; shares authorized — 75,000;
shares issued and outstanding — 37,390 (2019) and 38,147 (2018)
374
381
Additional paid-in capital 216,162
299,534
Retained earnings 1,413,453
1,196,727
Accumulated other comprehensive loss (140,847 ) (147,817 )
Total stockholders' equity 1,489,142
1,348,825
Total liabilities and stockholders' equity $ 2,783,142
$ 2,379,121

See accompanying notes to consolidated financial statements.

FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(in thousands, except per share data)


	Year Ended December 31,
	2020		2019		2018
Revenues	$	2,461,275	$	2,352,717	$	2,027,877
Operating expenses
Direct cost of revenues	1,672,711		1,534,896		1,328,074
Selling, general and administrative expenses	488,411		504,074		465,636
Special charges	7,103		0		0

Amortization of intangible assets	10,387		8,152		8,162
	2,178,612		2,047,122		1,801,872
Operating income	282,663		305,595		226,005
Other income (expense)
Interest income and other	(412)		2,061		4,977
Interest expense	(19,805)		(19,206)		(27,149)
Gain on sale of business	0		0		13,031
Loss on early extinguishment of debt	0		0		(9,072)
	(20,217)		(17,145)		(18,213)
Income before income tax provision	262,446		288,450		207,792
Income tax provision	51,764		71,724		57,181
Net income	$	210,682	$	216,726	$	150,611
Earnings per common share — basic	$	5.92	$	5.89	$	4.06
Earnings per common share — diluted	$	5.67	$	5.69	$	3.93
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments, net of tax expense of $0, $0 and $373	$	34,412	$	6,970	$	(27,602)
Total other comprehensive income (loss), net of tax	34,412		6,970		(27,602)
Comprehensive income	$	245,094	$	223,696	$	123,009

Year Ended December 31,
2019 2018 2017
Revenues $ 2,352,717
$ 2,027,877
$ 1,807,732
Operating expenses
Direct cost of revenues 1,534,896
1,328,074
1,215,560
Selling, general and administrative expenses 504,074
465,636
432,013
Special charges —
—
40,885
Amortization of other intangible assets 8,152
8,162
10,563
2,047,122
1,801,872
1,699,021
Operating income 305,595
226,005
108,711
Other income (expense)
Interest income and other 2,061
4,977
3,752
Interest expense (19,206 ) (27,149 ) (25,358 )
Gain on sale of business —
13,031
—
Loss on early extinguishment of debt —
(9,072 ) —
(17,145 ) (18,213 ) (21,606 )
Income before income tax provision (benefit) 288,450
207,792
87,105
Income tax provision (benefit) 71,724
57,181
(20,857 )
Net income $ 216,726
$ 150,611
$ 107,962
Earnings per common share — basic $ 5.89
$ 4.06
$ 2.79
Earnings per common share — diluted $ 5.69
$ 3.93
$ 2.75
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments, net of tax
expense of $—, $373 and $— $ 6,970
$ (27,602 ) $ 30,664
Other comprehensive income (loss), net of tax 6,970
(27,602 ) 30,664
Comprehensive income $ 223,696
$ 123,009
$ 138,626

See accompanying notes to consolidated financial statements.

FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(in thousands)


				Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss
	Common Stock
	Shares	Amount								Total
Balance at December 31, 2017	37,729	$	377	$	266,035	$	1,045,774	$	(120,215)	$	1,191,971
Net income	—	$	—	$	—	$	150,611	$	—	$	150,611
Other comprehensive loss:
Cumulative translation adjustment	—	—		—		—		(27,602)		(27,602)
Issuance of common stock in connection with:
Exercise of options	1,051	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, 2018	38,147	$	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 options	256	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, 2019	37,390	$	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 options	140	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, 2020	34,481	$	345	$	0	$	1,506,271	$	(106,435)	$	1,400,181

Additional Paid-in Capital Retained Earnings
Accumulated
Other Comprehensive Loss

Common Stock
Shares Amount Total
Balance at December 31, 2016 42,037
$ 420
$ 416,816
$ 941,001
$ (150,879 ) $ 1,207,358
Net income —
$ —
$ —
$ 107,962
$ —
$ 107,962
Other comprehensive income:
Cumulative translation adjustment —
—
—
—
30,664
30,664
Issuance of common stock in connection with:
Exercise of options 123
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, 2017 37,729
$ 377
$ 266,035
$ 1,045,774
$ (120,215 ) $ 1,191,971
Net income —
$ —
$ —
$ 150,611
$ —
$ 150,611
Other comprehensive loss:
Cumulative translation adjustment —
—
—
—
(27,602 ) (27,602 )
Issuance of common stock in connection with:
Exercise of options 1,051
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, 2018 38,147
$ 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 options 256
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, 2019 37,390
$ 374
$ 216,162
$ 1,413,453
$ (140,847 ) $ 1,489,142

See accompanying notes to consolidated financial statements.

FTI Consulting, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)


	Year Ended December 31,										Year Ended December 31,
	2019			2018			2017				2020		2019		2018
Operating activities										Operating activities
Net income	$	216,726		$	150,611		$	107,962		Net income	$	210,682	$	216,726	$	150,611
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 amortization	30,153			31,536			31,177			Depreciation and amortization	32,661		30,153		31,536
Amortization and impairment of other intangible assets	8,152			8,162			10,563
Amortization and impairment of intangible assets										Amortization and impairment of intangible assets	10,387		8,152		8,162
Acquisition-related contingent consideration	2,372			479			2,291			Acquisition-related contingent consideration	5,593		2,372		479
Provision for doubtful accounts	19,602			17,872			15,386
Provision for expected credit losses										Provision for expected credit losses	19,692		19,602		17,872
Share-based compensation	17,978			15,577			16,030			Share-based compensation	22,904		17,978		15,577
Amortization of debt discount and issuance costs	11,615			5,456			1,984			Amortization of debt discount and issuance costs	11,214		11,615		5,456
Loss on early extinguishment of debt	—			9,072			—			Loss on early extinguishment of debt	0		0		9,072
Gain on sale of business	—			(13,031		)	—			Gain on sale of business	0		0		(13,031)
Deferred income taxes	(3,712		)	20,831			(51,579		)	Deferred income taxes	(9,132)		(3,712)		20,831
Other	302			769			611			Other	45		302		769
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	(141,894		)	(72,034		)	(50,831		)	Accounts receivable, billed and unbilled	(26,800)		(141,894)		(72,034)
Notes receivable	10,445			8,987			14,928			Notes receivable	8,029		10,445		8,987
Prepaid expenses and other assets	(22,648		)	(2,258		)	629			Prepaid expenses and other assets	4,640		(22,648)		(2,258)
Accounts payable, accrued expenses and other	(8,907		)	8,908			4,421			Accounts payable, accrued expenses and other	13,901		(8,907)		8,908
Income taxes	24,496			(8,890		)	25,811			Income taxes	(22,549)		24,496		(8,890)
Accrued compensation	61,339			52,510			1,795			Accrued compensation	38,627		61,339		52,510
Billings in excess of services provided	(8,133		)	(3,885		)	16,447			Billings in excess of services provided	7,175		(8,133)		(3,885)
Net cash provided by operating activities	217,886			230,672			147,625			Net cash provided by operating activities	327,069		217,886		230,672
Investing activities										Investing activities
Proceeds from sale of business	—			50,283			—

Payments for acquisition of businesses, net of cash received	(18,791		)	—			(8,929		)	Payments for acquisition of businesses, net of cash received	(25,271)		(18,791)		0
Purchases of property and equipment	(42,072		)	(32,270		)	(32,004		)	Purchases of property and equipment	(34,866)		(42,072)		(32,270)
Proceeds from sale of business										Proceeds from sale of business	0		0		50,283
Other	257			731			295			Other	17		257		731
Net cash provided by (used in) investing activities	(60,606		)	18,744			(40,638		)	Net cash provided by (used in) investing activities	(60,120)		(60,606)		18,744
Financing activities										Financing activities
Borrowings under revolving line of credit	45,000			233,500			422,000			Borrowings under revolving line of credit	289,500		45,000		233,500
Repayments under revolving line of credit	(45,000		)	(333,500		)	(392,000		)	Repayments under revolving line of credit	(289,500)		(45,000)		(333,500)
Proceeds from issuance of convertible notes	—			316,250			—			Proceeds from issuance of convertible notes	0		0		316,250
Payments of long-term debt	—			(300,000		)	—			Payments of long-term debt	0		0		(300,000)
Payments of debt issue and debt prepayment costs	—			(16,149		)	—			Payments of debt issue and debt prepayment costs	0		0		(16,149)

Purchase and retirement of common stock	(105,797		)	(55,738		)	(168,094		)	Purchase and retirement of common stock	(353,593)		(105,797)		(55,738)
Net issuance of common stock under equity compensation plans	3,171			38,475			(504		)	Net issuance of common stock under equity compensation plans	(5,823)		3,171		38,475
Payments for business acquisition liabilities	(2,282		)	(3,029		)	(5,161		)	Payments for business acquisition liabilities	(3,948)		(2,282)		(3,029)
Deposits and other	1,597			2,672			2,825			Deposits and other	3,311		1,597		2,672
Net cash used in financing activities	(103,311		)	(117,519		)	(140,934		)	Net cash used in financing activities	(360,053)		(103,311)		(117,519)
Effect of exchange rate changes on cash and cash equivalents	3,335			(9,789		)	7,750			Effect of exchange rate changes on cash and cash equivalents	18,684		3,335		(9,789)
Net increase (decrease) in cash and cash equivalents	57,304			122,108			(26,197		)	Net increase (decrease) in cash and cash equivalents	(74,420)		57,304		122,108
Cash and cash equivalents, beginning of period	312,069			189,961			216,158			Cash and cash equivalents, beginning of period	369,373		312,069		189,961
Cash and cash equivalents, end of period	$	369,373		$	312,069		$	189,961		Cash and cash equivalents, end of period	$	294,953	$	369,373	$	312,069
Supplemental cash flow disclosures										Supplemental cash flow disclosures
Cash paid for interest	$	7,606		$	21,687		$	23,285		Cash paid for interest	$	7,752	$	7,606	$	21,687
Cash paid for income taxes, net of refunds	$	50,941		$	45,568		$	4,929		Cash paid for income taxes, net of refunds	$	83,445	$	50,941	$	45,568
Non-cash investing and financing activities:										Non-cash investing and financing activities:
Issuance of stock units under incentive compensation plans	$	1,413		$	1,059		$	1,547		Issuance of stock units under incentive compensation plans	$	2,314	$	1,413	$	1,059
Business acquisition liabilities not yet paid	$	9,746		$	—		$	3,426		Business acquisition liabilities not yet paid	$	6,209	$	9,746	$	0

See accompanying notes to consolidated financial ~~statements.~~statements

6562

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 5 reportable segments: Corporate Finance & Restructuring (“("Corporate ~~Finance”~~Finance"), Forensic and Litigation Consulting ~~(“FLC”~~("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. Our most significant estimates relate to ~~the determination of the allowance for doubtful accounts~~revenues and ~~unbilled services,~~ the assessment of the recoverability of goodwill and intangible assets. Other estimates include, but are not limited to, the realization of deferred tax assets 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, ~~2019,~~2020, we derived approximately ~~34%~~37% of our consolidated revenues from the work of professionals who are assigned to locations outside 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

~~(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.

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 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 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.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).

•Fixed-fee arrangements require the client to pay a fixed fee in exchange for a predetermined set of professional services. We recognize revenues earned to date by applying the proportional performance method. Generally, these arrangements have one performance obligation.

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.


•	~~Fixed-fee arrangements~~ require the client to pay a pre-established fee in exchange for a predetermined set of professional services. We recognize revenues for these arrangements based on the proportional performance related to individual performance obligations within each arrangement; however, these arrangements generally have one performance obligation.

•

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 ~~as well as~~and depreciation expense on the software used to host and process client information. Direct cost of revenues does not include an allocation of corporate overhead and non-billable segment costs.

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.

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.

For all our share-based awards, we recognize forfeitures in compensation cost when they occur.

~~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 $18.6 million, $15.5 million and $14.8 million for the years ended December 31, 2019, 2018 and 2017, 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 either ~~a probability weighted~~the present value of our probability-weighted estimate of future cash ~~flow adjusted for the expected timing of each payment~~flows or a Monte Carlo simulation. 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 acquisition-related contingent consideration liabilities for changes in fair value due to the passage of time. Remeasurement gains or losses and accretion 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 $15.2 million, $18.6 million and $15.5 million for the years ended December 31, 2020, 2019 and 2018, respectively, and are included in 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.

Allowance for ~~Doubtful Accounts and Unbilled Services~~Expected Credit Losses

We maintain an allowance for doubtful accounts and unbilled services for estimated losses resulting from potential fee reductions negotiated with specific clients or imposed by bankruptcy courts or other regulatory agencies and the inability of specific 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 ~~allowance~~current-period provision for ~~all receivable risks by reviewing~~expected 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 and~~counterparty’s creditworthiness, knowledge of the specific ~~client collections~~client’s circumstances and ~~the Company's~~ historical collection ~~patterns~~experience for similar ~~client collections. However, our~~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-offs~~provisions for expected credit losses in future periods. ~~This~~The risk ~~related to a client’s non-payment~~of credit losses may be mitigated to the extent that we ~~receive~~received a retainer from some of our clients prior to performing services.

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 ~~adjustments~~our 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. Our ~~bad debt expense totaled $19.6 million, $17.9~~billed accounts receivables are written off when the potential for recovery is considered remote.

The Company voluntarily revised the presentation of billed and unbilled accounts receivables in the Consolidated Balance Sheets. Previously, changes in estimates of our potential fee reductions, such as those imposed by bankruptcy courts and other regulatory agencies, were presented within allowance for expected credit losses in the Consolidated Balance Sheets. Our presentation was revised in the current year to report adjustments to estimates of our potential fee reductions within billed and unbilled receivables. As a result of the change, billed and unbilled receivables were reduced by approximately $58.3 million and ~~$15.4~~$172.1 million, respectively, and the allowance for expected credit losses was reduced by approximately $230.3 million as compared with the amounts previously presented on the Consolidated Balance Sheets in our Annual Report on Form 10-K for the ~~years~~year ended December 31, ~~2019, 2018 and 2017, respectively.~~2019. The presentation did not impact the Consolidated Statements of Comprehensive Income, Consolidated Statements of Stockholder’s Equity or Consolidated Statements of Cash Flows.

Property and Equipment

We record property and equipment, including improvements that extend useful lives, at cost, while maintenance and repairs are expensed as incurred. We calculate depreciation using the straight-line method based on estimated useful lives ranging from ~~three years~~one 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 one ~~year~~ to 10 ~~years~~.years. The amount of expense recognized at any date must 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 intangible~~Intangible assets may include customer relationships, trademarks 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 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.

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 ~~regarding~~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 ~~unit’s fair value to determine whether it is necessary to perform the quantitative impairment test.~~ units.

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 ~~lives~~life and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an ~~asset’s carrying value~~asset may not be recoverable. We amortize our acquired finite-lived intangible assets on a straight-line basis over periods ranging from ~~three~~two 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.

Leases

~~As of January 1, 2019, the Company adopted Accounting Standards Update ("ASU") 2016-02,~~ ~~Leases~~, which was amended in some respects by subsequent ASUs (collectively Accounting Standards Codification (“ASC") 842 ("ASC 842")) and supersedes existing lease guidance. The standard requires us to record operating lease assets and corresponding lease liabilities on the balance sheet and disclose key quantitative and qualitative information about our lease contracts.

~~Under ASC 842, we~~We determine if a contract is a leasing arrangement at inception. Operating lease assets represent our right to control the use of an identified asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized on the Consolidated Balance Sheets at the commencement date based on the present value of lease 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 our operating leases on a straight-line basis over the lease term.

We lease office space and equipment under non-cancelable operating leases, which may include renewal or termination options that are reasonably certain of exercise. Most leases include ~~one~~1 or more options to renew, with renewal terms that can extend the lease term up to seven years. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are expensed on a straight-line basis. Lease and non-lease components are accounted for together as a single lease component for operating leases associated with our office space and our equipment leases. We apply a portfolio approach for certain equipment leases to effectively account for the operating lease assets and 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 issued~~We 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.

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.

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.

2. New Accounting Standards

Recently Adopted Accounting Standards

In ~~May 2014,~~August 2018, the Financial Accounting Standards Board ("FASB") issued ~~ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~. On January 1, 2018, we adopted ASC 606 using the modified retrospective method and recorded an immaterial cumulative effect adjustment 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” for the disclosures required under ASC 606. The adoption of ASC 606 had an immaterial impact on our Consolidated Statements of Comprehensive Income and Consolidated Balance Sheets and had no impact on our Consolidated Statements of Cash Flows.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases~~, which was amended in some respects by subsequent ASUs. We adopted ASC 842 using the modified retrospective basis for reporting. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward the historical lease classification for existing leases on the adoption date, and allowed us not to reassess whether an existing contract contains a lease or initial direct costs. As permitted by the guidance, prior comparative periods will not be adjusted under this method.

See Note 1, "Description of Business and Summary of Significant Accounting Policies" for a description of the significant accounting policies for our operating leases. See Note 14, "Leases" for the disclosures required under ASC 842. The adoption of this standard resulted in recognition of operating lease assets in the amount of $148.5 million and lease liabilities in the amount of $206.7 million for operating leases on our Consolidated Balance Sheets as of January 1, 2019. Our existing deferred rent and cease-use liabilities were $62.3 million as of December 31, 2018 and were included as a reduction to the initial measurement of our operating lease assets. Our existing prepaid rent balance was $4.1 million as of December 31, 2018 and was included as a reduction to the initial measurement of our operating lease liabilities. There was no material impact on the Consolidated Statements of Comprehensive Income, Consolidated Statements of Stockholders’ Equity or Consolidated Statements of Cash Flows.

~~In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement~~, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The guidance promotes a framework to help improve the effectiveness of disclosures in the notes to the financial statements and is effective for annual and interim periods beginning after December 15, 2019. We elected, as permitted by the standard, to early adopt ASU 2018-13 as of December 31, 2019 and have prospectively applied the modifications which are limited to presentation and disclosure changes that did not have a material impact on the consolidated financial statements.

Accounting Standards ~~Not Yet Adopted~~

~~In August 2018, the FASB issued~~ Update ("ASU") 2018-15 ("ASU ~~2018-15,~~2018-15"), Internal Use Software ~~(Subtopic~~(Subtopic 350-40): Customer's Accounting forImplementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires ~~the Company~~companies to capitalize implementation costs of a hosting arrangement that is a service contract and expense those costs over the term of the hosting arrangement. On January 1, 2020, we prospectively adopted ASU 2018-15 for eligible costs incurred on or after the adoption date. The ~~guidance is~~adoption of this standard resulted in the recognition of additional internal use software costs, which are included in the “Property and equipment, net” financial statement line item on the Consolidated Balance Sheets. The impact was not material on the Consolidated Balance Sheets as of December 31, 2020 or on the Consolidated Statements of Comprehensive Income, Consolidated Statements of Stockholders’ Equity or Consolidated Statements of Cash Flows for the year ended December 31, 2020.

Accounting Standards Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’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 qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. The amendments in this ASU are effective for annual and interim periods beginning after December 15, ~~2019~~2021, 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 ~~options,~~units), each using the treasury stock method.

Because we expect to settle the principal amount of the outstanding 2023 Convertible Notes in cash, we use the treasury stock method for calculating the potential dilutive effect of the conversion feature on earnings per common share, if applicable. The conversion feature had a dilutive impact on earnings per common share for the ~~year~~years ended December 31, 2020 and 2019, as the average market price per share of our common stock for the ~~period~~periods exceeded the conversion price of $101.38 per share. See Note ~~13,~~14, "Debt" for additional information about the 2023 Convertible Notes.

Year Ended December 31,
2019 2018 2017
Numerator — basic and diluted
Net income $ 216,726
$ 150,611
$ 107,962
Denominator
Weighted average number of common shares outstanding — basic 36,774
37,098
38,697
Effect of dilutive convertible notes 62
—
—
Effect of dilutive stock options 455
491
117
Effect of dilutive restricted shares 820
729
378
Weighted average number of common shares outstanding — diluted 38,111
38,318
39,192
Earnings per common share — basic $ 5.89
$ 4.06
$ 2.79
Earnings per common share — diluted $ 5.69
$ 3.93
$ 2.75
Antidilutive stock options and restricted shares 19
175
1,561


	Year Ended December 31,
	2020		2019		2018
Numerator — basic and diluted
Net income	$	210,682	$	216,726	$	150,611
Denominator
Weighted average number of common shares outstanding — basic	35,602		36,774		37,098
Effect of dilutive restricted shares	763		820		729
Effect of dilutive stock options	419		455		491
Effect of dilutive convertible notes	365		62		0
Weighted average number of common shares outstanding — diluted	37,149		38,111		38,318
Earnings per common share — basic	$	5.92	$	5.89	$	4.06
Earnings per common share — diluted	$	5.67	$	5.69	$	3.93
Antidilutive stock options and restricted shares	66		19		175

4. Revenues

We generate the majority of our revenues by providing consulting services to our clients. ~~Most~~See Note 1, "Description of ~~our consulting service contracts are based~~Business and Summary of Significant Accounting Policies” for additional information on ~~one of~~ the ~~following~~ types of ~~arrangements:~~consulting contract arrangements we provide.


•	~~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 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.


•	~~Fixed-fee arrangements~~ require the client to pay a pre-established fee in exchange for a predetermined set of professional services. We recognize revenues for these arrangements based on the proportional performance related to individual performance obligations within each arrangement; however, these arrangements generally have one performance obligation.

•

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 from performance obligations satisfied or partially satisfied in previous periods. This primarily occurs when the estimated transaction price has changed based on our current probability assessment over whether the agreed-upon outcome for our performance-based and contingent arrangements will be achieved. The aggregate amount of revenues recognized related to a change in the transaction price in the current period, which related to performance obligations satisfied or partially satisfied in a prior period, was $19.0 million, $28.9 million and $16.1 million for the years ended December 31, 2020, 2019 and 2018, respectively.

~~Unfulfilled performance obligations represent the remaining contract transaction prices allocated to the performance obligations that are unsatisfied.~~ Unfulfilled performance obligations primarily consist of fees not yet recognized on ~~a proportional performance basis for~~certain fixed-fee arrangements and performance-based and contingent arrangements. As of December 31, ~~2019~~2020 and ~~December 31, 2018,~~2019, the aggregate amount of the remaining contract transaction price allocated to unfulfilled performance obligations was $8.5 million and $2.3 million, ~~and $8.8 million, respectively, and we~~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-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~~revenues but 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 ~~$1.3~~$2.6 million and ~~$2.4~~$1.3 million as of December 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

Contract liabilities are defined as liabilities incurred when we have received consideration but have not yet performed the agreed-upon services. This may occur when clients pay ~~us upfront~~ fees before ~~we begin~~ work ~~for them.~~begins. The contract liability balance was immaterial as of December 31, 2020 and 2019, ~~and 2018.~~respectively.

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,
	2020		2019
Accounts receivable:
Billed receivables	$	513,459	$	482,333
Unbilled receivables	236,285		246,205
Allowance for expected credit losses	(38,387)		(35,166)
Accounts receivable, net	$	711,357	$	693,372

The following table summarizes total provision for expected credit losses and write-offs:


	Year Ended December 31,
	2020		2019		2018
Provision for expected credit losses	$	19,692	$	19,602	$	17,872
Write-offs	$	24,717	$	12,734	$	21,465

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.

6. Special Charges

During the year ended December 31, 2020, we recorded a special charge of $7.1 million, which consists of the following components:

•$2.4 million of employee severance and other employee-related costs associated with performance-related actions in our FLC segment that impacted 16 employees. All of these amounts will be paid in cash within the next 12 months.

There were 0 special charges recorded during the years ended December 31, 2019 and ~~December 31,~~ 2018.

~~During~~The following table details the ~~year ended December 31, 2017, 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. The special charge included the following components:by segment:

~~$23.5 million of employee severance and other employee-related costs;~~


	Year Ended December 31, 2020
Corporate Finance	$	861
FLC	3,484
Economic Consulting	35
Technology	276
Strategic Communications	2,074
Segment special charge	6,730
Unallocated Corporate	373
Total	$	7,103

~~$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.~~

6.7. 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 ~~1,396,183~~1,310,586 shares of common stock available for grant as of December 31, ~~2019.~~2020.

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, 2020, 2019 ~~2018~~ and ~~2017.~~2018:

2019 2018 2017
Restricted Restricted Restricted
Income Statement Classification
Options ⁽¹⁾

Shares ⁽²⁾

Options ⁽¹⁾

Shares ⁽²⁾

Options ⁽¹⁾

Shares ⁽²⁾
Direct cost of revenues $ 497
$ 11,869
$ 780
$ 9,804
$ 370
$ 9,691
Selling, general and administrative expenses 2,628
9,005
2,027
8,191
1,207
4,870
Special charges —
—
—
—
—
269
Total $ 3,125
$ 20,874
$ 2,807
$ 17,995
$ 1,577
$ 14,830


	2020				2019				2018
			Restricted				Restricted				Restricted
Income Statement Classification	Options (1)		Shares (2)		Options (1)		Shares (2)		Options (1)		Shares (2)
Direct cost of revenues	$	9	$	13,080	$	497	$	11,869	$	780	$	9,804
Selling, general and administrative expenses	126		11,926		2,628		9,005		2,027		8,191

Total	$	135	$	25,006	$	3,125	$	20,874	$	2,807	$	17,995


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

(2)Includes restricted share awards, restricted stock units, performance stock units and cash-settled restricted stock units.

Stock Options

We did 0t grant any stock options during the years ended December 31, 2020, 2019 and 2018. WeHistorically, we used the Black-Scholes option-pricing model to determine the fair value of our stock option ~~grants during the year ended December 31, 2017 using the assumptions in the table below.~~



		~~Year Ended December 31,~~
~~Assumptions~~		~~2017~~
~~Risk-free interest rate~~		~~1.60%~~
~~Dividend yield~~		—%
~~Expected term~~		~~3 years~~
~~Stock price volatility~~		~~31.94%~~

grants.

A summary of our stock option activity during the year ended December 31, ~~2019~~2020 is presented below. The aggregate intrinsic value of stock options outstanding and exercisable, or fully vested, at December 31, ~~2019~~2020 in the table below 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 ~~2019~~2020 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, ~~2019.~~2020. The aggregate intrinsic value changes based on fluctuations in the fair market value per share of our common stock.

Options
Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Term
(in Years)

Aggregate
Intrinsic
Value
Stock options outstanding at December 31, 2018 935
$ 36.50

Stock options granted —
N/A

Stock options exercised (256 ) $ 37.88

Stock options forfeited (1 ) $ 30.28

Stock options outstanding at December 31, 2019 678
$ 35.98
4.7 $ 50,669
Stock options exercisable at December 31, 2019 605
$ 35.75
4.6 $ 45,343


	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Stock options outstanding at December 31, 2019	678	$	35.98
Stock options granted	0	N/A
Stock options exercised	(140)	$	35.14
Stock options forfeited	0	N/A
Stock options outstanding at December 31, 2020	538	$	36.20	4.3	$	40,065
Stock options exercisable at December 31, 2020	538	$	36.20	4.3	$	40,065

Cash received from option exercises for the years ended December 31, 2020, 2019 and 2018 ~~and 2017~~ was $4.9 million, $9.7 million ~~$41.6 million~~ and ~~$4.1~~$41.6 million, respectively. The tax benefit realized from stock options exercised totaled $0.4 million, $0.7 million ~~$4.0 million~~ and ~~$1.1~~$4.0 million for the years ended December 31, 2020, 2019 ~~2018~~ and ~~2017,~~2018, 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, 2020, 2019 and 2018 ~~and 2017~~ was $11.0 million, $13.2 million and $26.4 million, ~~and $0.9 million,~~ respectively.

~~The following is a summary of stock options outstanding and exercisable as of December 31, 2019.~~

Options Outstanding Options Exercisable
Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Weighted Average Exercise Price
Exercise Price Range Options Shares
$26.68-$33.95 137
$ 31.46
3.7 124
$ 31.53
$34.33-$34.62 138
$ 34.40
5.4 138
$ 34.40
$35.73-$36.87 195
$ 36.67
4.4 188
$ 36.68
$36.89-$40.36 202
$ 39.28
5.4 149
$ 39.12
$41.69-$41.69 6
$ 41.69
0.3 6
$ 41.69
678
605

As of December 31, ~~2019,~~2020, there was ~~$0.1 million of~~0 unrecognized compensation cost related to ~~unvested~~ stock options. ~~That cost is expected to be recognized ratably over a weighted average period of 0.2 years.~~

Restricted Share Awards

A summary of our restricted share awards activity during the year ended December 31, ~~2019~~2020 is presented ~~below.~~below:

Shares
Weighted
Average Grant
Date Fair
Value
Unvested restricted share awards outstanding at December 31, 2018 992
$ 43.76
Restricted share awards granted 222
$ 81.64
Restricted share awards vested (229 ) $ 43.04
Restricted share awards forfeited (28 ) $ 38.87
Unvested restricted share awards outstanding at December 31, 2019 957
$ 52.86


	Shares	Weighted Average Grant Date Fair Value
Unvested restricted share awards outstanding at December 31, 2019	957	$	52.86
Restricted share awards granted	165	$	116.75
Restricted share awards vested	(242)	$	48.95
Restricted share awards forfeited	(7)	$	56.08
Unvested restricted share awards outstanding at December 31, 2020	873	$	66.00

As of December 31, ~~2019,~~2020, there was ~~$27.5~~$32.0 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 ~~4.0~~3.8 years. The total fair value of restricted share awards that vested during the years ended December 31, 2020, 2019 and 2018 ~~and 2017~~ was $27.9 million, $18.6 million ~~$10.4 million~~ and ~~$9.9~~$10.4 million, respectively.

Restricted Stock Units

A summary of our restricted stock units activity during the year ended December 31, ~~2019~~2020 is presented ~~below.~~below:

Shares
Weighted
Average Grant
Date Fair
Value
Restricted stock units outstanding at December 31, 2018 335
$ 39.72
Restricted stock units granted 30
$ 82.39
Restricted stock units released (52 ) $ 42.15
Restricted stock units forfeited —
N/A
Restricted stock units outstanding at December 31, 2019 313
$ 43.45


	Shares	Weighted Average Grant Date Fair Value
Restricted stock units outstanding at December 31, 2019	313	$	43.45
Restricted stock units granted	57	$	114.95
Restricted stock units released	(55)	$	48.08
Restricted stock units forfeited	0	N/A
Restricted stock units outstanding at December 31, 2020	315	$	55.45

As of December 31, ~~2019,~~2020, there was ~~$0.8~~$3.9 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 ~~2.8~~4.7 years. The total fair value of restricted stock units released for the years ended December 31, 2020, 2019 and 2018 ~~and 2017~~ was $6.1 million, $4.5 million and $5.4 million, ~~and $4.1 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 ~~range~~ between 0% and up to 150% of the target number of shares granted at the end of a ~~two-~~two- or three-year performance period.

A summary of our performance stock units activity during the year ended December 31, ~~2019~~2020 is presented ~~below.~~below:

Shares
Weighted
Average Grant
Date Fair
Value
Performance stock units outstanding at December 31, 2018 275
$ 42.60
Performance stock units granted ⁽¹⁾
170
$ 77.67
Performance stock units released (84 ) $ 35.75
Performance stock units forfeited —
N/A
Performance stock units outstanding at December 31, 2019 361
$ 60.67


	Shares	Weighted Average Grant Date Fair Value
Performance stock units outstanding at December 31, 2019	361	$	60.67
Performance stock units granted (1)	109	$	130.58
Performance stock units released	(100)	$	37.48
Performance stock units forfeited	0	N/A
Performance stock units outstanding at December 31, 2020	370	$	87.50


⁽¹⁾ Performance stock units granted are presented at the maximum potential payout percentage of 150% of target shares granted. 72	~~Performance stock units granted are presented at the maximum potential payout percentage of 150% of target shares granted.~~

As of December 31, ~~2019,~~2020, there was ~~$6.3~~$8.0 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 ~~1.1~~0.8 years. The total fair value of performance stock units that released during the years ended December 31, 2020, 2019 and 2018 was $12.6 million, $5.8 million and $1.4 million, respectively. ~~There were 0 performance stock units that released during the year ended December 31, 2017.~~

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, 2020, 2019 and 2018 was $120.99, $80.10 and ~~2017. The fair value of our stock options is calculated using the Black-Scholes option-pricing model.~~$51.73, respectively. The fair value of our restricted ~~stock~~share awards, restricted stock units and ~~our~~ 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 our performance stock units ~~that are~~ subject to market conditions ~~reflects the market conditions~~is calculated using a Monte Carlo simulation as of the grant ~~date using a Monte Carlo simulation.~~date.

Year Ended December 31,
2019 2018 2017
Weighted average fair value of grants
Stock options $ —
$ —
$ 9.56
Restricted share awards, restricted stock units and performance stock
units
$ 80.10
$ 51.73
$ 38.88

7.8. Interest Income and Other

The table below presents the components of “Interest income and other” as shown on the Consolidated Statements of Comprehensive ~~Income.~~Income:

Year Ended December 31,
Interest Income and Other 2019 2018 2017
Interest income $ 4,761
$ 5,448
$ 3,968
Foreign exchange transaction gains (losses), net (3,056 ) 261
(77 )
Other 356
(732 ) (139 )
Total $ 2,061
$ 4,977
$ 3,752


	Year Ended December 31,
Interest Income and Other	2020		2019		2018
Interest income	$	3,735	$	4,761	$	5,448
Foreign exchange transaction gains (losses), net	(4,099)		(3,056)		261
Other	(48)		356		(732)
Total	$	(412)	$	2,061	$	4,977

8.9. Balance Sheet Details


	December 31,
	2020		2019
Prepaid expenses and other current assets
Prepaid expenses	$	48,220	$	39,740
Income tax receivable	10,300		8,161
Other current assets	29,624		32,909
Total	$	88,144	$	80,810
Accounts payable, accrued expenses and other
Accounts payable	$	13,124	$	18,346
Accrued expenses	65,082		46,511
Accrued interest payable	2,902		2,243
Accrued taxes payable	14,719		35,895
Current operating lease liabilities	42,716		35,727
Other current liabilities	31,523		20,214
Total	$	170,066	$	158,936

December 31,
2019 2018
Prepaid expenses and other current assets
Prepaid expenses $ 39,740
$ 35,762
Income tax receivable 8,161
18,947
Other current assets 32,909
14,739
Total $ 80,810
$ 69,448
Accounts payable, accrued expenses and other
Accounts payable $ 18,346
$ 17,728
Accrued expenses 46,511
52,461
Accrued interest payable 2,243
2,358
Accrued taxes payable 35,895
13,119
Current operating lease liabilities 35,727
—
Other current liabilities 20,214
18,934
Total $ 158,936
$ 104,600

10. Property and Equipment

Property and equipment consist of the ~~following.~~following:

December 31,
2019 2018
Leasehold improvements $ 99,837
$ 88,623
Construction in progress 4,359
2,754
Furniture and equipment 36,698
34,865
Computer equipment and software 119,904
106,318
260,798
232,560
Accumulated depreciation (167,126 ) (147,983 )
Property and equipment, net $ 93,672
$ 84,577


	December 31,
	2020		2019
Leasehold improvements	$	97,074	$	99,837
Construction in progress	15,291		4,359
Furniture and equipment	26,127		36,698
Computer equipment and software	107,901		119,904
	246,393		260,798
Accumulated depreciation	(144,751)		(167,126)
Property and equipment, net	$	101,642	$	93,672

Depreciation expense for property and equipment totaled $32.6 million, $30.1 million ~~$26.2 million~~ and ~~$24.4~~$26.2 million during the years ended December 31, 2020, 2019 ~~2018~~ and ~~2017,~~2018, respectively.

~~10.~~11. Goodwill and ~~Other~~ Intangible Assets

Goodwill

The table below summarizes the changes in the carrying amount of goodwill by reportable ~~segment.~~segment:

Corporate
Finance
FLC
Economic
Consulting
Technology
Strategic
Communications
Total
Balance at December 31, 2017
Goodwill $ 454,816
$ 233,719
$ 268,995
$ 117,740
$ 323,672
$ 1,398,942
Accumulated goodwill impairment —
—
—
—
(194,139 ) (194,139 )
Goodwill, net at December 31, 2017 454,816
233,719
268,995
117,740
129,533
1,204,803
Sale of business ⁽¹⁾
—
—
—
(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
Goodwill 450,997
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
Acquisitions ⁽²⁾
27,389
—
—
—
—
27,389
Foreign currency translation adjustment and other 456
583
130
47
1,846
3,062
Balance at December 31, 2019
Goodwill 478,842
232,120
268,677
96,770
320,497
1,396,906
Accumulated goodwill impairment —
—
—
—
(194,139 ) (194,139 )
Goodwill, net at December 31, 2019 $ 478,842
$ 232,120
$ 268,677
$ 96,770
$ 126,358
$ 1,202,767


	Corporate Finance (1)		FLC (1)		Economic Consulting (1)		Technology (1)		Strategic Communications (2)		Total



Balance as of December 31, 2018	$	450,997	$	231,537	$	268,547	$	96,723	$	124,512	$	1,172,316
Acquisitions (3)	27,389		—		—		—		—		27,389
Foreign currency translation adjustment and other	456		583		130		47		1,846		3,062



Balance as of 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 other	6,598		1,254		410		51		3,167		11,480



Balance as of December 31, 2020	$	506,072	$	233,374	$	269,087	$	96,821	$	129,525	$	1,234,879

(1)There were 0 accumulated impairment losses for the Corporate Finance, FLC, Economic Consulting or Technology segments as of December 31, 2020, 2019 and 2018.

(2)Amounts for our Strategic Communications segment include gross carrying values of $323.7 million, $320.5 million and $318.7 million as of December 31, 2020, 2019 and 2018, respectively, and accumulated impairment losses of $194.1 million as of December 31, 2020, 2019 and 2018.

(3)During the years ended December 31, 2020 and 2019, we acquired businesses that were assigned to the Corporate Finance segment. We recorded $20.6 million and $27.4 million in goodwill as a result of the acquisitions in 2020 and 2019, respectively. The purchase price allocation for the 2020 acquisition is preliminary. We have included the results of the acquired businesses' operations in the Corporate Finance segment since the acquisition dates.


⁽¹⁾	~~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.~~


⁽²⁾	During the year ended December 31, 2019, we acquired a restructuring business that was assigned to the Corporate Finance segment. We recorded $27.4 million in goodwill based on a preliminary purchase price allocation as a result of the acquisition. We have included the results of the acquired business’s operations in the Corporate Finance segment since its acquisition date.

~~Other~~ Intangible Assets

~~Other intangible~~Intangible assets were as follows:

December 31, 2019 December 31, 2018

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⁾
14.2 $ 99,613
$ 76,808
$ 22,805
$ 99,080
$ 71,036
$ 28,044
Trademarks ⁽¹⁾
6.0 9,855
653
9,202
—
—
—
Acquired software and other ⁽¹⁾
9.1 3,386
2,061
1,325
3,107
1,618
1,489
13.4 112,854
79,522
33,332
102,187
72,654
29,533
Non-amortizing intangible assets
Trademarks Indefinite 5,100
—
5,100
5,100
—
5,100
Total $ 117,954
$ 79,522
$ 38,432
$ 107,287
$ 72,654
$ 34,633


		December 31, 2020						December 31, 2019
	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)	13.9	$	111,556	$	85,180	$	26,376	$	99,613	$	76,808	$	22,805
Trademarks (1)	5.7	11,809		2,768		9,041		9,855		653		9,202
Acquired software and other	9.2	3,618		2,585		1,033		3,386		2,061		1,325
	13.0	126,983		90,533		36,450		112,854		79,522		33,332
Non-amortizing intangible assets
Trademarks	Indefinite	5,100		—		5,100		5,100		—		5,100
Total		$	132,083	$	90,533	$	41,550	$	117,954	$	79,522	$	38,432


⁽¹⁾	~~During the year ended December 31, 2019, we acquired a restructuring business and its related intangible assets that were assigned to the Corporate Finance segment.~~

~~Other~~(1)During the year ended December 31, 2020, we acquired a strategy consulting and investment banking business, and its related intangible assets were assigned to the Corporate Finance segment.

Intangible assets with finite lives are amortized over their estimated useful ~~lives.~~life. We recorded amortization expense of $10.4 million, $8.2 million ~~$8.2~~and $8.2 million ~~and~~ ~~$10.6 million~~ during the years ended December 31, 2020, 2019 and 2018, ~~and 2017,~~ respectively.

We estimate our future amortization expense for our intangible assets with a finite ~~life~~lives to be as follows:

As of
December 31, 2019 ⁽¹⁾
Year
2020 $ 9,393
2021 8,861
2022 7,028
2023 3,604
2024 2,207
Thereafter 2,239
$ 33,332


	As of December 31, 2020 (1)
Year
2021	$	10,710
2022	8,683
2023	4,972
2024	3,504
2025	2,787
Thereafter	5,794
	$	36,450


⁽¹⁾ (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.	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.

~~11.~~12. Notes Receivable from Employees

The table below summarizes the changes in the carrying amount of our notes receivable from ~~employees.~~employees:

December 31,
2019 2018
Notes receivable from employees — beginning $ 113,699
$ 123,796
Notes granted 28,879
32,937
Repayments (13,179 ) (5,405 )
Amortization (26,294 ) (36,418 )
Cumulative translation adjustment and other 1,034
(1,211 )
Notes receivable from employees — ending 104,139
113,699
Less: current portion (35,106 ) (29,228 )
Notes receivable from employees, net of current portion $ 69,033
$ 84,471


	December 31,
	2020		2019
Notes receivable from employees — beginning	$	104,139	$	113,699
Notes granted	34,383		28,879
Repayments	(8,043)		(13,179)
Amortization	(29,444)		(26,294)
Cumulative translation adjustment and other	(4,661)		1,034
Notes receivable from employees — ending	96,374		104,139
Less: current portion	(35,253)		(35,106)
Notes receivable from employees, net of current portion	$	61,121	$	69,033

As of December 31, ~~2019~~2020 and ~~2018,~~2019, there were ~~303~~320 and ~~294~~303 notes outstanding, respectively. Total amortization expense for the years ended December 31, 2020, 2019 and 2018 ~~and 2017~~ was $29.4 million, $26.3 million ~~$36.4 million~~ and ~~$26.8~~$36.4 million, respectively.

~~12.~~

13. Financial Instruments

The following table presents the carrying amounts and estimated fair values of our ~~other~~ financial instruments by hierarchy level as of December 31, ~~2019~~2020 and ~~2018.~~2019:


	December 31, 2020
			Hierarchy Level (Fair Value)
	Carrying Amount		Level 1		Level 2		Level 3
Liabilities
Acquisition-related contingent consideration, including current portion (1)(2)	$	20,118	$	0	$	0	$	20,118
2023 Convertible Notes (3)	286,131		0		396,982		0
Total	$	306,249	$	0	$	396,982	$	20,118

December 31, 2019

Hierarchy Level
(Fair Value)

Carrying
Amount
Level 1 Level 2 Level 3
Liabilities

Acquisition-related contingent consideration, including
current portion ^{(1) (2)}
$ 14,826
$ —
$ —
$ 14,826
Long-term debt ⁽³⁾
275,609
—
398,016
—
Total $ 290,435
$ —
$ 398,016
$ 14,826

December 31, 2018

Hierarchy Level
(Fair Value)

Carrying
Amount
Level 1 Level 2 Level 3
Liabilities
Acquisition-related contingent consideration, including
current portion ⁽¹⁾
$ 3,698
$ —
$ —
$ 3,698
Long-term debt ⁽³⁾
265,571
—
291,837
—
Total $ 269,269
$ —
$ 291,837
$ 3,698


	December 31, 2019
			Hierarchy Level (Fair Value)
	Carrying Amount		Level 1		Level 2		Level 3
Liabilities
Acquisition-related contingent consideration, including current portion (1)	$	14,826	$	0	$	0	$	14,826
2023 Convertible Notes (3)	275,609		0		398,016		0
Total	$	290,435	$	0	$	398,016	$	14,826

⁽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, 2020, we acquired a strategy consulting and investment banking business that was assigned to the Corporate Finance 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.~~


⁽²⁾	~~During the year ended December 31, 2019, we acquired a restructuring business that was assigned to the Corporate Finance segment.~~


⁽³⁾	~~The carrying values include unamortized deferred debt issue costs and debt discount.~~

The fair ~~value~~values of financial instruments not included in this table are estimated to be equal to their carrying ~~value~~values as of December 31, ~~2019~~2020 and ~~2018.~~

December 31, 2019.

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 simulation. These fair value estimates represent Level 3 measurements as they are based on significant inputs not observed in the market and reflect our own assumptions. We 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 subject to the probability-weighted discounted cash flow model was valued using significant unobservable inputs, including a discount rate of 13.5% and future cash flows. The acquisition-related contingent consideration liabilities subject to the Monte Carlo simulation ~~was~~were valued using significant unobservable inputs, including a volatility ~~rate of 30.0%~~rates between 31.5% and a40.0% and discount ~~rate of~~rates between 14.0% and 13.6%, which ~~reflects~~reflect the weighted average of our cost of debt and adjusted cost of equity of the acquired ~~company.~~companies, and future cash flows. Significant increases ~~(decreases)~~(or decreases) in these unobservable inputs in isolation would result in a significantly lower ~~(higher)~~(or higher) fair ~~value.~~values. We reassess the fair value of our acquisition-related contingent consideration at each reporting period based on additional information as it becomes available.

The change in our liability for acquisition-related contingent consideration for our Level 3 financial instruments is as follows:

Liability for Acquisition-Related Contingent Consideration
Balance at December 31, 2016 $ 5,692
Additions ⁽¹⁾
3,426
Accretion for time value of money ⁽²⁾
1,589
Remeasurement gain ⁽³⁾
702
Payments (5,161 )
Transfer out (2,498 )
Balance at December 31, 2017 $ 3,750
Accretion for time value of money ⁽²⁾
479
Payments (531 )
Balance at December 31, 2018 $ 3,698
Additions ⁽¹⁾
9,746
Accretion for time value of money ⁽²⁾
2,372
Payments (1,000 )
Foreign currency translation adjustment ⁽⁴⁾
10
Balance at December 31, 2019 $ 14,826



			Contingent Consideration

Balance at December 31, 2017	$	3,750

^{Accretion expense}(1)	~~We acquired restructuring businesses that were assigned to the Corporate Finance segment during the years ended December 31, 2017 and 2019.~~479

Payments	(531)

Balance at December 31, 2018	$	3,698
^Additions(2)	9,746
Accretion ~~for the time value of money is included in "Selling, general and administrative expenses" on the Consolidated Statements of Comprehensive Income.~~expense (1)	2,372

Payments	(1,000)
Foreign currency translation adjustment (3)	10
Balance at December 31, 2019	$	14,826
Additions (2)	3,460
Accretion expense (1)	5,593

⁽³⁾Payments	Remeasurement gain or loss resulting from a change in the fair value of an acquisition's contingent consideration liability is recorded in “Selling, general and administrative expenses” on the Consolidated Statements of Comprehensive Income.

(4,692)
⁽⁴⁾	Foreign currency translation ~~adjustments are included in "Other comprehensive income (loss), net of tax" on the Consolidated Statements of Comprehensive Income.~~adjustment (3)	931
Balance at December 31, 2020	$	20,118

(1)Accretion expense is included in "Selling, general and administrative expenses" on the Consolidated Statements of Comprehensive Income.

(2)During the years ended December 31, 2020 and 2019, we acquired businesses that were assigned to the Corporate Finance segment.

(3)Foreign currency translation adjustments are included in "Other comprehensive income (loss), net of tax" on the Consolidated Statements of Comprehensive Income.

~~13.~~

14. Debt

The table below summarizes the components of the Company’s debt:

December 31,
2019 2018
2023 Convertible Notes $ 316,250
$ 316,250
Total debt 316,250
316,250
Less: deferred debt discount (35,393 ) (43,998 )
Less: deferred debt issue costs (5,248 ) (6,681 )
Long-term debt, net ⁽¹⁾
$ 275,609
$ 265,571
Additional paid-in capital $ 35,306
$ 35,306
Discount attribution to equity (1,175 ) (1,175 )
Equity component, net $ 34,131
$ 34,131


	December 31,
	2020		2019
2023 Convertible Notes	$	316,250	$	316,250


Total debt	316,250		316,250
Less: deferred debt discount	(26,310)		(35,393)
Less: deferred debt issue costs	(3,809)		(5,248)
Long-term debt, net (1)	$	286,131	$	275,609
Additional paid-in capital	$	35,306	$	35,306
Discount attribution to equity	(1,175)		(1,175)
Equity component, net	$	34,131	$	34,131


⁽¹⁾ (1)There were 0 current portions of long-term debt as of December 31, 2020 and 2019.	~~There were 0 current portions of long-term debt as of December 31, 2019 and 2018.~~

2023 Convertible Notes

On August 20, 2018, we issued the 2023 Convertible Notes in an aggregate principal amount of $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, and will mature on August 15, 2023, unless earlier converted or repurchased. The 2023 Convertible Notes are senior unsecured obligations of the Company.

The 2023 Convertible Notes are convertible at ~~an initial~~maturity 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 initial~~a conversion price of approximately $101.38 per 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 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~~5 business day period after any ~~five~~5 consecutive trading day period (the “Measurement Period”) in which the trading price (as defined in the indenture governing the 2023 Convertible Notes) 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 circumstances required to allow the holders to convert their 2023 Convertible Notes were not met as of December 31, ~~2019.~~2020.

If we undergo a fundamental change (as defined in the indenture governing the 2023 Convertible Notes), subject to certain conditions, holders may require us to repurchase for cash all or part of their 2023 Convertible Notes.

The debt discount is amortized to interest expense over the term of the 2023 Convertible Notes using the effective interest rate method.

We incurred debt issue costs and allocated the total amount to the liability and equity components of the 2023 Convertible Notes based on their relative values. The debt issue costs attributable to the liability component are amortized to interest expense over the term of the 2023 Convertible Notes using the effective interest rate method. Issuance costs attributable to the equity component were netted with the equity component in stockholders' equity.

The table below summarizes the amount of interest cost recognized by us for both the contractual interest expense and amortization of the debt discount for the 2023 Convertible Notes:

December 31,
2019 2018
Contractual interest expense $ 6,325
$ 2,302
Amortization of debt discount ⁽¹⁾
8,606
3,018
Total $ 14,931
$ 5,320


	Year Ended December 31,
	2020		2019		2018
Contractual interest expense	$	6,325	$	6,325	$	2,302
Amortization of debt discount (1)	9,083		8,606		3,018
Total	$	15,408	$	14,931	$	5,320

⁽¹⁾The effective interest rate of the liability component ~~was~~is 5.45%.

2022 Notes

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 credit facility ("(“Original Credit ~~Facility"~~Facility”) maturing on June 26, ~~2020~~.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 (the Original Credit Facility as amended and restated, the “Credit Facility”). At the Company’s option, borrowings under the Credit Facility in USD, euro and British pound 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. 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 Credit 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 Credit Facility, we are required to pay a commitment fee rate that fluctuates between 0.20% and 0.35% per annum and a 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 0 borrowings outstanding under the Credit Facility as of December 31, ~~2019~~2020 and ~~2018.~~2019. Additionally, ~~$1.0~~$1.1 million of the borrowing limit was used for letters of credit (and, therefore, unavailable) as of December 31, ~~2019 for letters of credit.~~ 2020.

There were ~~$2.0~~$1.3 million and ~~$3.6~~$2.0 million of unamortized debt issue costs related to the Credit Facility as of December 31, ~~2019~~2020 and ~~2018,~~2019, respectively. These amounts were included in “Other assets” on our Consolidated Balance Sheets.

~~14.~~15. Leases

We lease office space and equipment under non-cancelable operating leases. We recognize operating lease expense on a straight-line basis over the lease ~~term.~~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 ~~balance sheet~~Consolidated Balance Sheets and are expensed on a straight-line basis. Most leases include ~~one~~1 or more options to renew, with renewal terms that can extend the lease term from six months 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:

As of
Leases Classification December 31, 2019
Assets
  Operating lease assets Operating lease assets $ 159,777
Total lease assets $ 159,777
Liabilities
Current
  Operating lease liabilities Accounts payable, accrued expenses and other $ 35,727
Noncurrent
  Operating lease liabilities Noncurrent operating lease liabilities 176,378
Total lease liabilities $ 212,105


		December 31,
Leases	Classification	2020		2019
Assets
Operating lease assets	Operating lease assets	$	156,645	$	159,777
Total lease assets		$	156,645	$	159,777
Liabilities
Current
Operating lease liabilities	Accounts payable, accrued expenses and other	$	42,716	$	35,727
Noncurrent
Operating lease liabilities	Noncurrent operating lease liabilities	161,677		176,378
Total lease liabilities		$	204,393	$	212,105

The table below summarizes total lease ~~costs for the year ended December 31, 2019:~~costs:

Year Ended December 31,
Lease Cost 2019
Operating lease costs $ 45,144
Short-term lease costs 3,173
Variable lease costs 11,962
Sublease income (5,015 )
Total lease cost $ 55,264


	Year Ended December 31,
Lease Cost	2020		2019
Operating lease costs	$	51,764	$	45,144
Short-term lease costs	2,476		3,173
Variable lease costs	12,986		11,962
Sublease income	(4,226)		(5,015)
Total lease cost, net	$	63,000	$	55,264

We sublease certain of our leased office spaces to third parties. Our sublease portfolio consists of leases of office space that we have vacated before the lease term expiration. Operating lease expense on vacated office space is reduced by sublease rental income, which is recorded to ~~selling, general and administrative (“~~SG~~&A”)~~&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 ~~$4.9 million in 2020, $4.5~~$4.6 million in 2021, ~~$0.7~~$0.8 million in 2022, $0.6 million in 2023, $0.6 million in 2024 and $0.3 million in 2025. There is 0 future sublease rental income estimated for the years beyond ~~2024.~~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,~~Sheets:


	As of December 31, 2020
2021	$	49,666
2022	41,055
2023	34,434
2024	29,688
2025	24,700
Thereafter	63,943
Total future lease payments	243,486
Less: imputed interest	(39,093)
Total	$	204,393

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,
	2020			2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	56,075		$	46,079

Operating lease assets obtained in exchange for lease liabilities	$	32,759		$	37,774

Weighted average remaining lease term (years)
Operating leases	6.7			6.5

Weighted average discount rate
Operating leases	5.4		%	5.6		%

As of
December 31, 2019
2020 $ 45,849
2021 51,331
2022 32,194
2023 26,896
2024 23,654
Thereafter 77,162
   Total future lease payments 257,086
   Less: imputed interest (44,981 )
Total $ 212,105

Weighted average remaining lease term (years)
   Operating leases 6.5

Weighted average discount rate
   Operating leases
5.6 %

On October 26, 2020, the Company entered into a material lease agreement, amending and restating the lease agreement entered into as of August 19, 2020 (the "Lease") for its new principal office space in New York, New York. The ~~table below summarizes cash paid~~Company expects to accept possession of the premises on or about April 1, 2021, subject to the satisfaction of certain conditions. The Lease shall continue for ~~our~~an initial fixed term of 15 years, subject to 2 renewal options of five years each. Fixed rental payments under the Lease are scheduled to commence in April 2022, payable in monthly installments, and will aggregate approximately $145 million, excluding lease-related incentives over the term of the Lease. The Lease is not included in operating lease assets and operating lease liabilities ~~and other non-cash information:~~

Year Ended December 31,
2019
Cash paid for amounts included in the measurement of operating lease liabilities $ 46,079

Operating lease assets obtained in exchange for lease liabilities $ 37,774

~~Operating Lease Commitments~~

~~Under ASC 840,~~ ~~Leases, our future minimum payments for all operating lease obligations that have initial non-cancelable lease terms exceeding one year, net of rental income from subleases~~on the Consolidated Balance Sheets as of December 31, ~~2018, were~~2020 as ~~follows:~~the Company does not yet have the right to use the premises.

Operating Leases Sublease Rental Income

2019 $ 49,757
$ 4,760
2020 47,084
3,944
2021 44,480
3,864
2022 24,471
707
2023 20,309
614
Thereafter 75,190
939
Total $ 261,291
$ 14,828

~~15.~~16. Commitments and Contingencies

The Company entered into a material lease agreement for its new principal office space in New York, New York during the year ended December 31, 2020. See Note 15, "Leases" for additional information about the terms of the Lease.

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.

~~16.~~

17. Income Taxes

On December 22, 2017, the 2017 U.S. Tax Cuts and Jobs Act (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 table below summarizes significant components of deferred tax assets and ~~liabilities.~~liabilities:

Year Ended December 31,
2019 2018
Deferred tax assets
Allowance for doubtful accounts $ 13,041
$ 11,792
Accrued vacation and bonus 27,438
23,545
Deferred rent —
9,016
Share-based compensation 12,647
11,837
Notes receivable from employees 12,187
12,993
State net operating loss carryforward 2,066
3,510
Foreign net operating loss carryforward 9,388
9,857
Federal tax credit and capital loss carryforward 7,336
9,470
Deferred compensation 2,117
1,801
Operating lease assets 43,397
—
Employee benefits obligations 1,191
943
Other, net 1,898
186
Total deferred tax assets 132,706
94,950
Deferred tax liabilities
Revenue recognition (6,732 ) (5,087 )
Operating lease liabilities (29,671 ) —
Property and equipment, net (3,797 ) (6,652 )
Equity debt discount (8,890 ) (11,014 )
Goodwill and other intangible assets (209,250 ) (199,964 )
Total deferred tax liabilities (258,340 ) (222,717 )
Foreign withholding tax (1,195 ) (413 )
Valuation allowance (19,865 ) (21,929 )
Net deferred tax liabilities $ (146,694 ) $ (150,109 )


	December 31,
	2020		2019
Deferred tax assets
Allowance for expected credit losses	$	14,676	$	13,041
Accrued vacation and bonus	30,694		27,438

Share-based compensation	13,522		12,647
Notes receivable from employees	13,333		12,187
State net operating loss carryforward	2,090		2,066
Foreign net operating loss carryforward	9,437		9,388
Federal tax credit and capital loss carryforward	0		7,336

Deferred compensation	240		2,117
Operating lease assets	41,283		43,397
Employee benefits obligations	2,339		1,191
Other, net	3,701		1,898
Total deferred tax assets	131,315		132,706
Deferred tax liabilities
Revenue recognition	(8,351)		(6,732)
Operating lease liabilities	(28,523)		(29,671)
Property and equipment, net	(7,663)		(3,797)
Equity debt discount	(6,623)		(8,890)
Goodwill and intangible assets	(202,842)		(209,250)
Total deferred tax liabilities	(254,002)		(258,340)
Foreign withholding tax	(1,980)		(1,195)
Valuation allowance	(13,300)		(19,865)
Net deferred tax liabilities	$	(137,967)	$	(146,694)

As of December 31, ~~2019~~2020 and ~~2018,~~2019, the Company recorded certain deferred tax assets related to foreign tax credits, capital ~~losses~~loss and foreign net operating loss carryforwards, which can be carried forward for periods ranging from 10 years to indefinite. Based on forward-looking financial information, the Company believes it is not more likely than not that the attributes will be utilized. Therefore, valuation allowances of ~~$19.9~~$13.3 million and ~~$21.9~~$19.9 million are recorded against the Company’s deferred tax assets as of December 31, 2020 and 2019, ~~and 2018,~~ respectively.

During the year ended December 31, 2020, a U.S. subsidiary of the Company (the “Licensor”) entered into an intellectual property license agreement with a United Kingdom ("U.K.") subsidiary of the Company (the “Licensee”) in consideration of royalty payments that have been partially prepaid (the "License Agreement"). The prepaid royalties remitted to the Licensor were taxable in the U.S. for the year ended December 31, 2020. The impact on the U.S. current income tax provision was mainly offset by a deferred foreign income tax benefit related to the future tax deductions arising from amortization of intangible assets in the U.K. The License Agreement provided sufficient taxable income in the U.S. to fully utilize the Company’s existing foreign tax credits, which were previously subject to a valuation allowance.

As of December 31, ~~2019,~~2020, the Company has not recorded a ~~$22.9~~$27.9 million deferred tax liability related to the basis difference in the investment in our foreign subsidiaries, as the investment is considered permanent in nature.

The table below summarizes the components of income before income tax provision ~~(benefit)~~ from continuing ~~operations.~~operations:


	Year Ended December 31,
	2020		2019		2018
Domestic	$	122,800	$	150,860	$	96,543
Foreign	139,646		137,590		111,249
Total	$	262,446	$	288,450	$	207,792

Year Ended December 31,
2019 2018 2017
Domestic $ 150,860
$ 96,543
$ 30,013
Foreign 137,590
111,249
57,092
Total $ 288,450
$ 207,792
$ 87,105

The table below summarizes the components of income tax provision ~~(benefit)~~ from continuing ~~operations.~~operations:

Year Ended December 31,
2019 2018 2017
Current
Federal $ 30,651
$ 10,847
$ 15,164
State 7,702
4,447
742
Foreign 37,083
21,056
14,816
75,436
36,350
30,722
Deferred
Federal (1,767 ) 14,538
(47,820 )
State 785
503
(152 )
Foreign (2,730 ) 5,790
(3,607 )
(3,712 ) 20,831
(51,579 )
Income tax provision (benefit) $ 71,724
$ 57,181
$ (20,857 )


	Year Ended December 31,
	2020		2019		2018
Current
Federal	$	22,164	$	30,651	$	10,847
State	10,257		7,702		4,447
Foreign	29,390		37,083		21,056
	61,811		75,436		36,350
Deferred
Federal	3,936		(1,767)		14,538
State	362		785		503
Foreign	(14,345)		(2,730)		5,790
	(10,047)		(3,712)		20,831
Income tax provision	$	51,764	$	71,724	$	57,181

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,
2019 2018 2017
Income tax expense at federal statutory rate $ 60,575
$ 43,636
$ 30,487
State income taxes, net of federal benefit 8,430
4,950
781
Detriment (benefit) from foreign tax rates 3,425
3,655
(8,500 )
Valuation allowance on foreign net operating loss carryforward 260
(450 ) 253
Other expenses not deductible for tax purposes 4,362
3,543
2,466
Adjustment to reserve for uncertain tax positions 2,504
(132 ) 456
Impact of 2017 U.S. tax reform — deferred tax
—
(706 ) (63,525 )
Impact of 2017 U.S. tax reform — Transition Tax
(1,088 ) 50
18,655
Sale of Ringtail business (2,097 ) 3,798
—
Equity-based compensation (4,447 ) (1,371 ) 809
Other adjustments, net (200 ) 208
(2,739 )
Income tax provision (benefit) $ 71,724
$ 57,181
$ (20,857 )


	Year Ended December 31,
	2020		2019		2018
Income tax expense at federal statutory rate	$	55,114	$	60,575	$	43,636
State income taxes, net of federal benefit	10,567		8,430		4,950
Detriment from foreign tax rates	1,175		3,425		3,655

Other expenses not deductible for tax purposes	3,079		4,362		3,543
Adjustment to reserve for uncertain tax positions	(1,231)		2,504		(132)

Impact of 2017 U.S. tax reform	0		(1,088)		(656)
Sale of Ringtail business	0		(2,097)		3,798
Share-based compensation	(6,560)		(4,447)		(1,371)
Release of valuation allowance on foreign tax credits	(7,336)		0		0
Income tax benefit related to the License Agreement, net	(3,899)		0		0
Other adjustments, net	855		60		(242)
Income tax provision	$	51,764	$	71,724	$	57,181

The income tax ~~expense~~provision for the years ended December 31, 2020 and 2019 ~~and 2018~~ was ~~$71.7~~$51.8 million and ~~$57.2~~$71.7 million, respectively. The ~~increase~~decrease in expense is primarily attributable to ~~higher~~lower pre-tax income in ~~2019~~2020 as compared with ~~2018.~~2019, the release of the valuation allowance on foreign tax credits and the income tax benefit related to the License Agreement.

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 ~~2015.~~2016. We are also no longer subject to state and local or foreign tax examinations by tax authorities for years prior to ~~2013.~~

2014.

Our liability for uncertain tax positions was ~~$11.1~~$7.3 million and ~~$3.7~~$11.1 million as of December 31, ~~2019~~2020 and ~~2018,~~2019, respectively. The Company does not expect any of the uncertain tax positions to settle within the next 12 months. As of December 31, ~~2019,~~2020, our accrual for the payment of tax-related interest and penalties was not significant.

~~17.~~

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, December 1, 2017, ~~and~~ 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 ~~$400.0~~$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. As of December 31, ~~2019,~~2020, we have ~~$66.6~~$213.2 million available under ~~this program~~the Repurchase Program to repurchase additional shares.

The following table details our stock repurchases under the Repurchase Program:


	Year Ended December 31,
	2020		2019		2018
Shares of common stock repurchased and retired	3,269		1,258		756
Average price paid per share	$	108.11	$	84.16	$	53.88
Total cost	$	353,385	$	105,915	$	40,722

Year Ended December 31,
2019 2018 2017
Shares of common stock repurchased and retired 1,258
756
4,674
Average price per share $ 84.16
$ 53.88
$ 35.94
Total cost $ 105,915
$ 40,722
$ 168,001

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 capital. If additional paid-in capital is reduced to zero, we record the remainder of the excess purchase price over par value as a reduction of retained earnings. During the year ended December 31, 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 excess purchase price over par value recorded as a reduction of additional paid-in capital of $235.6 million, which reduced additional paid-in capital to 0, and the remainder of the excess purchase price over par value of $117.9 million recorded as a reduction of retained earnings.

2018 Repurchase Transaction

On August 13, 2018, our Board of Directors authorized the use of a portion of the proceeds from the issuance of the 2023 Convertible Notes to repurchase up to $25.0 million of common stock. On August 16, 2018, 196,050 shares of our common stock were repurchased at $76.51 per share for a total cost of $15.0 million. This is a separate repurchase transaction outside of the Repurchase Program.

Common Stock Outstanding

~~18.~~Common stock outstanding was 34.5 million shares and 37.4 million shares as of December 31, 2020 and 2019, respectively. Common stock outstanding includes unvested restricted stock awards, which are considered issued and outstanding under the terms of the restricted stock award agreements.

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 $26.2 million, $17.4 million ~~$15.2 million~~ and ~~$11.6~~$15.2 million during the years ended December 31, 2020, 2019 ~~2018~~ and ~~2017,~~2018, respectively.

We also maintain several defined contribution pension plans for our employees in the ~~United Kingdom~~U.K. and other foreign countries. We contributed to these plans $9.2 million, $7.3 million ~~$7.7 million~~ and ~~$6.4~~$7.7 million during the years ended December 31, 2020, 2019 ~~2018~~ and ~~2017,~~2018, respectively.

~~19.~~20. Segment Reporting

We manage our business in 5 reportable segments: Corporate Finance, 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 ~~world~~ world. Our clients include companies, boards of directors, investors, private equity sponsors, banks, lenders,

and ~~delivers~~other 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 ~~transactions. Our~~turnaround, restructuring ~~practice includes corporate restructuring, including bankruptcy~~ and interim management services. Our business transformation and transactions practices include financial, operational and performance improvement services, as well as due diligence, financing advisory, mergers and acquisitions ("M&A") advisory, M&A integration, carveout support and valuations.bankruptcy.

Our FLC segment provides law firms, companies, government clients and other interested parties with multidisciplinary and independent services related to risk advisory, investigations and disputes. We have expertise in anti-corruption/anti-money laundering investigations and compliance, cybersecurity, data analytics, export controls and sanctions, and monitorship. We offer specialized industry expertise in the areas of insurance, construction, healthcare, environmental and trial services.

~~Our Economic Consulting~~ segment provides law firms, companies, government entities and other interested parties with ~~analysis~~a multidisciplinary and independent 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 services which help our clients analyze large, disparate sets of data related to their business operations 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 and investigations.

Our Economic Consulting segment, including subsidiary Compass Lexecon LLC, provides law firms, companies, government entities and other interested parties with analyses 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 companies, ~~and~~ law firms and government entities with a comprehensive ~~and~~ global portfolio of ~~consulting and services for~~e-discovery, information governance, privacy and security ~~electronic discovery~~ and ~~insight analytics. Our consulting expertise enables clients to more confidently govern, secure, find, analyze~~corporate legal operations solutions. We deliver a full spectrum of services including data collection, data processing, document review, hosting, advanced analytics and ~~rapidly understand their data in the context of compliance and risk.~~consulting.

Our Strategic Communications segment ~~designs~~develops and executes communications strategies ~~for CEOs,~~to help management teams, ~~and~~ boards of directors, ~~that 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 ~~regulatory~~communications and ~~reputational challenges, navigate market disruptions, articulate their corporate brand, stake a competitive position, and preserve their freedom to operate.~~public affairs.

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’~~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, 2019, 2018 and 2017.~~segments:


	Year Ended December 31,
	2020		2019		2018
Revenues
Corporate Finance	$	910,184	$	723,721	$	564,479
FLC	500,275		577,780		520,333
Economic Consulting	599,088		592,542		533,979
Technology	223,016		215,584		185,755
Strategic Communications	228,712		243,090		223,331
Total revenues	$	2,461,275	$	2,352,717	$	2,027,877
Adjusted Segment EBITDA
Corporate Finance	$	216,830	$	160,735	$	121,660
FLC	33,374		104,435		96,821
Economic Consulting	91,432		84,112		69,955
Technology	43,013		45,688		27,387
Strategic Communications	38,975		44,544		42,918
Total Adjusted Segment EBITDA	$	423,624	$	439,514	$	358,741

Year Ended December 31,
2019 2018 2017
Revenues
Corporate Finance $ 723,721
$ 564,479
$ 482,041
FLC 577,780
520,333
462,324
Economic Consulting 592,542
533,979
496,029
Technology 215,584
185,755
174,850
Strategic Communications 243,090
223,331
192,488
Total revenues $ 2,352,717
$ 2,027,877
$ 1,807,732
Adjusted Segment EBITDA
Corporate Finance $ 160,735
$ 121,660
$ 82,863
FLC 104,435
96,821
72,705
Economic Consulting 84,112
69,955
61,964
Technology 45,688
27,387
22,171
Strategic Communications 44,544
42,918
27,732
Total Adjusted Segment EBITDA $ 439,514
$ 358,741
$ 267,435

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,
	2020		2019		2018
Net income	$	210,682	$	216,726	$	150,611
Add back:
Income tax provision	51,764		71,724		57,181
Interest income and other	412		(2,061)		(4,977)
Interest expense	19,805		19,206		27,149
Gain on sale of business	0		0		(13,031)
Loss on early extinguishment of debt	0		0		9,072
Unallocated corporate expenses (1)	94,463		98,398		96,595
Segment depreciation expense	29,381		27,369		27,979
Amortization of intangible assets	10,387		8,152		8,162
Segment special charges	6,730		0		0

Total Adjusted Segment EBITDA	$	423,624	$	439,514	$	358,741

Year Ended December 31,
2019 2018 2017
Net income $ 216,726
$ 150,611
$ 107,962
Add back:
Income tax provision (benefit) 71,724
57,181
(20,857 )
Interest income and other (2,061 ) (4,977 ) (3,752 )
Interest expense 19,206
27,149
25,358
Gain on sale of business —
(13,031 ) —
Loss on early extinguishment of debt —
9,072
—
Unallocated corporate expenses 98,398
96,595
83,140
Segment depreciation expense 27,369
27,979
27,112
Amortization of intangible assets 8,152
8,162
10,563
Segment special charges —
—
37,207
Remeasurement of acquisition-related contingent consideration —
—
702
Total Adjusted Segment EBITDA $ 439,514
$ 358,741
$ 267,435

(1)Includes a $0.4 million special charge.

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.

December 31,
2019 2018
Corporate Finance $ 814,820
$ 707,924
FLC 462,155
412,667
Economic Consulting 543,475
516,123
Technology 200,430
171,002
Strategic Communications 217,129
212,147
Total segment assets 2,238,009
2,019,863
Unallocated corporate assets 545,133
359,258
Total assets $ 2,783,142
$ 2,379,121


	December 31,
	2020		2019
Corporate Finance	$	925,082	$	814,820
FLC	412,803		462,155
Economic Consulting	553,217		543,475
Technology	200,396		200,430
Strategic Communications	214,503		217,129
Total segment assets	2,306,001		2,238,009
Unallocated corporate assets	471,362		545,133
Total assets	$	2,777,363	$	2,783,142

The table below details ~~information on our~~total revenues ~~for the years ended December 31, 2019, 2018 and 2017.~~by country. Revenues have been attributed to locations based on the location of the legal entity generating the revenues.

Year Ended December 31,
2019 2018 2017
U.S. $ 1,555,133
$ 1,372,116
$ 1,262,682
United Kingdom 389,338
302,576
251,843
All other foreign countries 408,246
353,185
293,207
Total revenues $ 2,352,717
$ 2,027,877
$ 1,807,732


	Year Ended December 31,
	2020		2019		2018
U.S.	$	1,544,777	$	1,555,133	$	1,372,116
U.K.	421,125		389,338		302,576
All other foreign countries	495,373		408,246		353,185
Total revenues	$	2,461,275	$	2,352,717	$	2,027,877

We do not have a single customer that represents 10% or more of our consolidated revenues.

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, 2019 December 31, 2018
U.S.
United
Kingdom

All Other
Foreign Countries
U.S.
United
Kingdom

All Other
Foreign Countries
Property and equipment, net $ 63,563
$ 16,423
$ 13,686
$ 59,611
$ 14,023
$ 10,943
Net assets $ 925,288
$ 196,087
$ 367,767
$ 867,321
$ 160,894
$ 320,610


	December 31, 2020						December 31, 2019
	U.S.		U.K.		All Other Foreign Countries		U.S.		U.K.		All Other Foreign Countries
Property and equipment, net	$	64,923	$	19,150	$	17,569	$	63,563	$	16,423	$	13,686
Net assets	$	763,159	$	196,708	$	440,314	$	925,288	$	196,087	$	367,767

~~20.~~21. Quarterly Financial Data (unaudited)


	Quarter Ended
	March 31		June 30		September 30		December 31
2020
Revenues	$	604,593	$	607,852	$	622,249	$	626,581







Operating income	$	73,056	$	65,599	$	73,070	$	70,938






Net income	$	56,747	$	48,174	$	50,172	$	55,589
Earnings per common share — basic (1)	$	1.56	$	1.33	$	1.41	$	1.63
Earnings per common share — diluted (1)	$	1.49	$	1.27	$	1.35	$	1.57
Weighted average common shares outstanding
Basic	36,415		36,169		35,639		34,198
Diluted	38,190		37,852		37,086		35,484

Quarter Ended
March 31 June 30 September 30 December 31
2019
Revenues $ 551,274
$ 606,119
$ 593,106
$ 602,218
Operating expenses
Direct cost of revenues 349,066
386,266
380,892
418,672
Selling, general and administrative expenses 113,185
129,906
127,951
133,032
Amortization of other intangible assets 1,861
1,852
2,125
2,314
464,112
518,024
510,968
554,018
Operating income 87,162
88,095
82,138
48,200
Interest income and other 159
2,609
2,973
(3,680 )
Interest expense (4,746 ) (4,793 ) (4,832 ) (4,835 )
Income before income tax provision 82,575
85,911
80,279
39,685
Income tax provision 19,930
21,313
19,857
10,624
Net income $ 62,645
$ 64,598
$ 60,422
$ 29,061
Earnings per common share — basic ⁽¹⁾
$ 1.69
$ 1.75
$ 1.65
$ 0.80
Earnings per common share — diluted ⁽¹⁾
$ 1.64
$ 1.69
$ 1.59
$ 0.76
Weighted average common shares outstanding
Basic 36,981
36,960
36,617
36,545
Diluted 38,219
38,168
37,938
38,126

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 revenues 321,117
330,318
336,477
340,162
Selling, general and administrative expenses 112,128
117,897
117,448
118,163
Amortization of other intangible assets 2,270
2,052
1,975
1,865
435,515
450,267
455,900
460,190
Operating income 62,259
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 provision 54,215
57,722
64,297
31,558
Income tax provision 15,270
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
Basic 36,700
37,001
37,318
37,368
Diluted 37,612
38,271
38,756
38,628


	Quarter Ended
	March 31		June 30		September 30		December 31
2019
Revenues	$	551,274	$	606,119	$	593,106	$	602,218







Operating income	$	87,162	$	88,095	$	82,138	$	48,200




Net income	$	62,645	$	64,598	$	60,422	$	29,061
Earnings per common share — basic (1)	$	1.69	$	1.75	$	1.65	$	0.80
Earnings per common share — diluted (1)	$	1.64	$	1.69	$	1.59	$	0.76
Weighted average common shares outstanding
Basic	36,981		36,960		36,617		36,545
Diluted	38,219		38,168		37,938		38,126


⁽¹⁾ (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.	~~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.~~

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, ~~2019~~2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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 ~~2020~~2021 Annual Meeting of Stockholders to be filed within 120 days after the end of our fiscal year ended December 31, ~~2019,~~2020, 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 About the Board of Directors and Committees,” “Corporate Governance” and “Information About Our Executive Officers and Compensation” 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/us-files/our-firm/guidelines/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, Maryland 21209.

ITEM 11. EXECUTIVE COMPENSATION

The information contained in our proxy statement under the caption “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 captions “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 About the Board of Directors and Committees,” and “Corporate Governance” is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information contained in our proxy statement under the caption “Principal Accountant Fees and Services” is incorporated herein by reference.

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, ~~2019~~2020 and ~~2018~~2019
			Consolidated Statements of Comprehensive Income — Years Ended December 31, 2020, 2019 ~~2018~~ and ~~2017~~2018
			Consolidated Statements of Stockholders’ Equity — Years Ended December 31, 2020, 2019 ~~2018~~ and ~~2017~~2018
			Consolidated Statements of Cash Flows — Years Ended December 31, 2020, 2019 ~~2018~~ and ~~2017~~2018
			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

~~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, 2019
Reserves and allowances deducted from asset
   accounts:

Allowance for doubtful accounts and unbilled
   services
$ 202,394
$ 19,602
$ 56,238
$ 12,734
$ 265,500
Valuation allowance for deferred tax asset $ 21,929
$ —
$ —
$ 2,064
$ 19,865
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

* 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.



Exhibit Number						Description of Exhibits

3.1						Articles of Incorporation of FTI Consulting, Inc., as Amended and Restated. (Filed with the Securities and Exchange Commission on May 23, 2003 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated May 21, 2003 and incorporated herein by reference.)

3.2						Articles of Amendment dated June 1, 2011 to Charter of FTI Consulting, Inc. (Filed with the Securities and Exchange Commission on June 2, 2011 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 1, 2011 and incorporated herein by reference.)

3.3						Bylaws of FTI Consulting, Inc., as Amended and Restated on June 1, 2011. (Filed with the Securities and Exchange Commission on June 2, 2011 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 1, 2011 and incorporated herein by reference.)

3.4						Amendment No. 1 to Bylaws of FTI Consulting, Inc. (Filed with the Securities and Exchange Commission on December 16, 2013 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated December 13, 2013 and incorporated herein by reference.)

3.5						Amendment No. 2 to Amended and Restated Bylaws of FTI Consulting, Inc. (Filed with the SEC on September 22, 2014 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated September 17, 2014 and incorporated herein by reference.)

4.1						Indenture, dated as of August 20, 2018, between FTI Consulting, Inc. and U.S. Bank National Association, as Trustee. (Filed with the Securities and Exchange Commission on August 20, 2018 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated August 20, 2018 and incorporated herein by reference.)

4.2						Form of 2.0% Convertible Senior Notes due 2023 (included in Exhibit 4.1). (Filed with the Securities and Exchange Commission on August 20, 2018 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated August 14, 2018 and incorporated herein by reference.)

4.3 †						Description of ~~Securities.~~Securities (Filed with the Securities and Exchange Commission on February 25, 2020 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the Year Ended December 31, 2019 and incorporated herein by reference.)

~~10.1~~ 10.1��*						FTI Consulting, Inc. 2004 Long-Term Incentive Plan, as Amended and Restated as of April 27, 2005. (Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated May 18, 2005 and incorporated herein by reference.)

10.2 *						Form of Incentive Stock Option Agreement used with 2004 Long-Term Incentive Plan. (Filed with the Securities and Exchange Commission on November 9, 2004 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 and incorporated herein by reference.)

10.3 *						Form of Restricted Stock Agreement used with 2004 Long-Term Incentive Plan, as amended. (Filed with the Securities and Exchange Commission on November 9, 2004 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 and incorporated herein by reference.)

10.4 *						FTI Consulting, Inc. Non-Employee Director Compensation Plan established effective April 27, 2005. (Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated May 18, 2005 and incorporated herein by reference.)

10.5 *						Form of FTI Consulting, Inc. Non-Employee Director Compensation Plan Stock Option Agreement. (Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated May 18, 2005 and incorporated herein by reference.)

10.6 *						Form of FTI Consulting, Inc. Non-Employee Director Compensation Plan Restricted Stock Agreement. (Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated May 18, 2005 and incorporated herein by reference.)



~~Exhibit~~ ~~Number~~				~~Description of Exhibits~~

10.7 *				Form of FTI Consulting, Inc. Non-Employee Director Compensation Plan Stock Unit Agreement. (Filed with the Securities and Exchange Commission on May 24, 2005 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated May 18, 2005 and incorporated herein by reference.)


Exhibit Number						Description of Exhibits
10.8 *						Form of Nonqualified Stock Option Agreement used with 2004 Long-Term Incentive Plan. (Filed with the Securities and Exchange Commission on January 13, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-4/A and incorporated herein by reference.)

10.9 *						Amendment to FTI Consulting, Inc. 2004 Long-Term Incentive Plan, as Amended and Restated Effective April 27, 2005. (Filed with the Securities and Exchange Commission on March 31, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 29, 2006 and incorporated herein by reference.)

10.10 *						Amendment dated as of June 6, 2006 to the FTI Consulting, Inc. Non-Employee Director Compensation Plan. (Filed with the Securities and Exchange Commission on June 7, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 6, 2006 and incorporated herein by reference.)



10.11 *						Amendment dated as of June 6, 2006 to the FTI Consulting, Inc. 2004 Long-Term Incentive Plan, as Amended and Restated Effective as of April 27, 2005, as further amended. (Filed with the Securities and Exchange Commission on June 7, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 6, 2006 and incorporated herein by reference.)

10.12 *						FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan. (Filed with the Securities and Exchange Commission on June 6, 2006 as exhibit 4.3 to FTI Consulting, Inc.’s Registration Statement on Form S-8 (333-134789) and incorporated herein by reference.)

10.13 *						Form of FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan Incentive Stock Option Agreement. (Filed with the Securities and Exchange Commission on June 6, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-8 (333-134789) and incorporated herein by reference.)

10.14 *						Form of FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan Restricted Stock Agreement. (Filed with the Securities and Exchange Commission on June 6, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-8 (333-134789) and incorporated herein by reference.)

10.15 *						FTI Consulting, Inc. Deferred Compensation Plan for Key Employees and Non-Employee Directors. (Filed with the Securities and Exchange Commission on April 28, 2006 as an exhibit to FTI Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A and incorporated herein by reference.)

10.16 *						Form of FTI Consulting, Inc. Deferred Compensation Plan For Key Employees and Non-Employee Directors Restricted Stock Unit Agreement for Non-Employee Directors. (Filed with the Securities and Exchange Commission on June 6, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-8 (333-134790) and incorporated herein by reference.)

10.17 *						Form of FTI Consulting, Inc. Deferred Compensation Plan For Key Employees and Non-Employee Directors Stock Unit Agreement for Non-Employee Directors. (Filed with the Securities and Exchange Commission on June 6, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-8 (333-134790) and incorporated herein by reference.)

10.18 *						FTI Consulting, Inc. 2007 Employee Stock Purchase Plan. (Filed with the Securities and Exchange Commission on April 28, 2006 as an exhibit to FTI Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A and incorporated herein by reference.)

10.19 *						FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan, Amended and Restated Effective October 25, 2006. (Filed with the Securities and Exchange Commission on October 26, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated October 25, 2006 and incorporated herein by reference.)

10.20 *						FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan/Appendix II: Australian Sub-Plan. (Filed with the Securities and Exchange Commission on December 15, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-4 (File No. 333-139407) and incorporated herein by reference.)


10.21 *
~~Exhibit~~ ~~Number~~		~~Description of Exhibits~~

10.21 *		FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan/Appendix III: Ireland Sub-Plan. (Filed with the Securities and Exchange Commission on December 15, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-4 (File No. 333-139407) and incorporated herein by reference.)


Exhibit Number						Description of Exhibits
10.22 *						FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan/Appendix IV: United Kingdom Sub-Plan. (Filed with the Securities and Exchange Commission on December 15, 2006 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-4 (File No. 333-139407) and incorporated herein by reference.)

10.23 *						FTI Consulting, Inc. Non-Employee Director Compensation Plan Stock Option Agreement under FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan. (Filed with the Securities and Exchange Commission on December 13, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated December 11, 2006 and incorporated herein by reference.)

10.24 *						FTI Consulting, Inc. Non-Employee Director Compensation Plan Restricted Stock Agreement under FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan. (Filed with the Securities and Exchange Commission on December 13, 2006 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated December 11, 2006 and incorporated herein by reference.)

10.25 *						FTI Consulting, Inc. Non-Qualified Stock Option Agreement under FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan. (Filed with the Securities and Exchange Commission on May 9, 2007 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 and incorporated herein by reference.)



~~10.27~~10.26 *						FTI Consulting, Inc. Non-Employee Director Compensation Plan Amended and Restated Effective as of February 20, 2008. (Filed with the Securities and Exchange Commission on May 7, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and incorporated herein by reference.)

~~10.28~~10.27 *						FTI Consulting, Inc. Deferred Compensation Plan For Key Employees and Non-Employee Directors Restricted Stock Unit Agreement for Non-Employee Directors Under the Non-Employee Director Compensation Plan, as Amended and Restated Effective as of February 20, 2008. (Filed with the Securities and Exchange Commission on May 7, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and incorporated herein by reference.)

~~10.29~~10.28 *						FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan Restricted Stock Agreement Under the Non-Employee Director Compensation Plan, as Amended and Restated Effective as of February 20, 2008. (Filed with the Securities and Exchange Commission on May 7, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and incorporated herein by reference.)

~~10.30~~10.29 *						Form of Restricted Stock Unit Agreement for Non-Employee Directors under the Non-Employee Director Compensation Plan, as Amended and Restated Effective as of February 20, 2008. (Filed with the Securities and Exchange Commission on August 7, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference.)

~~10.31~~10.30 *						Form of Stock Unit Agreement for Non-Employee Directors under the Non-Employee Director Compensation Plan, as Amended and Restated Effective as of February 20, 2008. (Filed with the Securities and Exchange Commission on August 7, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference.)

~~10.32~~10.31 *						Form of FTI Consulting, Inc. 2004 Long-Term Incentive Plan Incentive Stock Option Agreement. (Filed with the Securities and Exchange Commission on August 7, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference.)

~~10.33~~10.32 *						FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan (Amended and Restated Effective as of May 14, 2008). (Filed with the Securities and Exchange Commission on August 7, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference.)



~~Exhibit~~ ~~Number~~ 10.33 *		~~Description of Exhibits~~

10.34 *	Form of FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan Restricted Stock Agreement under the Non-Employee Director Compensation Plan, as Amended and Restated Effective as of February 20, 2008. (Filed with the Securities and Exchange Commission on August 7, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference.)


~~10.36~~Exhibit Number						Description of Exhibits
10.34 *						Form of Incentive Stock Option Agreement under the FTI Consulting, Inc. 2006 Global Long-Term Incentive Plan, as Amended and Restated. (Filed with the Securities and Exchange Commission on November 6, 2008 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and incorporated herein by reference.)

~~10.37~~10.35 *						FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission on April 23, 2009 as an exhibit to FTI Consulting, Inc.’s Definitive Proxy Statement and incorporated herein by reference.)

~~10.38~~10.36 *						Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Incentive Stock Option Agreement. (Filed with the Securities and Exchange Commission on June 3, 2009 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009 and incorporated herein by reference.)

~~10.39~~10.37 *						Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Restricted Stock Agreement. (Filed with the Securities and Exchange Commission on June 3, 2009 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009 and incorporated herein by reference.)
~~10.40~~
10.38 *						Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Restricted Stock Unit Agreement for Non-Employee Directors. (Filed with the Securities and Exchange Commission on June 3, 2009 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009 and incorporated herein by ~~reference)~~reference .)

~~10.41~~10.39 *						Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Stock Unit Agreement for Non-Employee Directors. (Filed with the Securities and Exchange Commission on June 3, 2009 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009 and incorporated herein by reference.)



~~10.42~~10.40 *						Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Restricted Stock Agreement for Non-Employee Directors. (Filed with the Securities and Exchange Commission on June 3, 2009 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009 and incorporated herein by reference.)

~~10.43~~10.41 *						Form of FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Nonstatutory Stock Option Agreement. (Filed with the Securities and Exchange Commission on June 3, 2009 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 3, 2009 and incorporated herein by reference.)

~~10.44~~10.42 *						FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan Cash-Based Performance Award Agreement. (Filed with the Securities and Exchange Commission on March 29, 2010 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 25, 2010 and incorporated herein by reference.)

~~10.45~~10.43 *						FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan as Amended and Restated Effective as of June 2, 2010. (Filed with the Securities and Exchange Commission on April 23, 2010 as Appendix A to FTI Consulting, Inc.’s Definitive Proxy Statement dated April 23, 2010 and incorporated herein by reference.)

~~10.46~~10.44 *						FTI Consulting, Inc. Incentive Compensation Plan. (Filed with the Securities and Exchange Commission on April 18, 2011 as an exhibit to FTI Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A and incorporated herein by reference.)

~~10.47~~10.45 *						Employment Agreement dated as of December 13, 2013, by and between FTI Consulting, Inc. and Steven Gunby. (Filed with the Securities and Exchange Commission on December 16, 2013 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated December 13, 2013 and incorporated herein by reference.)

~~100~~



~~Exhibit~~ ~~Number~~ 10.46 *		~~Description of Exhibits~~

10.48 *	Form of Cash-Based Stock Appreciation Right Award Agreement. (Filed with the Securities and Exchange Commission on March 27, 2014 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 26, 2014 and incorporated herein by reference.)

~~10.49~~10.47 *		Form of Cash Unit Award Agreement. (Filed with the Securities and Exchange Commission on March 27, 2014 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 26, 2014 and incorporated herein by reference.)


~~10.50~~Exhibit Number						Description of Exhibits
10.48 *						Form of Cash-Based Performance Award Agreement. (Filed with the Securities and Exchange Commission on March 27, 2014 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 26, 2014 and incorporated herein by reference.)

~~10.51~~10.49 *						Form of FTI Consulting, Inc. Restricted Stock Agreement for Employment Inducement Awards to Chief Financial Officer and Chief Strategy and Transformation Officer. (Filed with the Securities and Exchange Commission on August 22, 2014 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-8 (File No.: 333-198311) and incorporated herein by reference.)

~~10.52~~10.50 *						Form of FTI Consulting, Inc. Non-Statutory Stock Option Agreement for Employment Inducement Award to Chief Financial Officer and Chief Strategy and Transformation Officer. (Filed with the Securities and Exchange Commission on August 22, 2014 as an exhibit to FTI Consulting, Inc.’s Registration Statement on Form S-8 (File No.: 333-198311) and incorporated herein by reference.)

~~10.53~~10.51 *						Offer of Employment Letter dated July 15, 2014, by and between FTI Consulting, Inc. and Paul Linton. (Filed with the Securities and Exchange Commission on October 30, 2014 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference.)

~~10.54~~10.52 *						Offer of Employment Letter dated July 2, 2014, by and between FTI Consulting, Inc. and Holly Paul. (Filed with the Securities and Exchange Commission on October 30, 2014 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference.)

~~10.55~~10.53 *						Amendment No. 1 to Offer of Employment Letter dated July 27, 2014, by and between FTI Consulting, Inc. and Holly Paul. (Filed with the Securities and Exchange Commission on October 30, 2014 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference.)

~~10.56~~10.54 *						The FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan (Amended and Restated Effective as of June 3, 2015). (Filed as Appendix A to FTI Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 21, ~~2015.~~2015 and incorporated herein by reference.)
~~10.57~~
10.55 *						Form of Non-Statutory Stock Option Award Agreement under FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan (Amended and Restated Effective as of June 3, 2015). (Filed with the Securities and Exchange Commission on February 25, 2016 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.)



~~10.58~~10.56 *						Form of Incentive Stock Option Award Agreement under FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan (Amended and Restated Effective as of June 3, 2015). (Filed with the Securities and Exchange Commission on February 25, 2016 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.)

~~10.59~~10.57 *						Form of Restricted Stock Award [or Restricted Stock Unit] Agreement under FTI Consulting, Inc. 2009 Omnibus Incentive Compensation Plan (Amended and Restated Effective as of June 3, 2015). (Filed with the Securities and Exchange Commission on February 25, 2016 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.)
~~10.60~~
10.58 **						Security Agreement dated as of June 26, 2015, by and among FTI Consulting, Inc., the other grantors party thereto and Bank of America, N.A., as administrative agent. (Filed as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 26, 2015 filed with the SEC on June 30, 2015 and incorporated herein by reference.)

~~101~~



~~Exhibit~~ ~~Number~~ 10.59 **		~~Description of Exhibits~~

10.61 **	Pledge Agreement, dated as of June 26, 2015, by and among FTI Consulting, Inc., the other pledgors party thereto and Bank of America, N.A., as administrative agent. (Filed as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated June 26, 2015 filed with the SEC on June 30, 2015 and incorporated herein by reference.)
~~10.62~~
10.60 *		Employment Letter dated May 14, 2015 between FTI Consulting, Inc. and Curtis Lu. (Filed as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 filed with the Securities and Exchange Commission on July 30, 2015 and incorporated by reference herein.)

~~10.63~~
Exhibit Number						Description of Exhibits
10.61 *						FTI Consulting, Inc. Non-Employee Director Compensation Plan Amended and Restated as of January 1, 2016. (Filed with the Securities and Exchange Commission on February 25, 2016 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.)
~~10.64~~
10.62 *						Form of Deferred Restricted Stock Unit Award Agreement for Non-Employee Directors Pursuant to the FTI Consulting, Inc. Non-Employee Director Compensation Plan Amended and Restated as of January 1, 2016. (Filed with the Securities and Exchange Commission on February 25, 2016 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.)
~~10.65~~
10.63 *						Form of Restricted Stock Unit Award Agreement for Non-Employee Directors Pursuant to the FTI Consulting, Inc. Non-Employee Director Compensation Plan Amended and Restated as of January 1, 2016. (Filed with the Securities and Exchange Commission on February 25, 2016 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.)
~~10.66~~
10.64 *						Form of Restricted Stock [or Restricted Stock Unit] Award Agreement for Non-Employee Directors Pursuant to the FTI Consulting, Inc. Non-Employee Director Compensation Plan Amended and Restated as of January 1, 2016. (Filed with the Securities and Exchange Commission on February 25, 2016 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.)

~~10.67~~10.65 *						FTI Consulting, Inc. Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as Appendix A to FTI Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A dated April 20, 2016 filed with the SEC on April 20, 2016 and incorporated herein by reference.)

~~10.68~~10.66 *						Offer of Employment Letter dated as of July 5, 2016, by and between FTI Consulting, Inc. and Ajay Sabherwal. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated July 14, 2016 filed with the SEC on July 18, 2016 and incorporated herein by reference.)

~~10.69~~10.67 *						Amendment No. 1 dated as of December 5, 2016 to Employment Agreement made and entered into as of December 13, 2013, by and between FTI Consulting, Inc. and Steven Gunby. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated December 5, 2016 filed with the SEC on December 5, 2016 and incorporated herein by reference.)

~~10.70~~10.68 *						Amendment No. 2 effective as of March 21, 2017 to Employment Agreement dated as of December 13, 2013, as amended, by and between FTI Consulting, Inc. and Steven Gunby. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 21, 2017, filed with the SEC on March 23, 2017 and incorporated herein by reference.)

~~10.71~~10.69 *						Amendment No. 1 effective as of March 21, 2017 to Offer of Employment Letter dated as of July 5, 2016, by and between FTI Consulting, Inc. and Ajay Sabherwal. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 21, 2017, filed with the SEC on March 23, 2017 and incorporated herein by reference.)

~~10.72~~10.70 *						Amendment No. 1 effective as of March 21, 2017 to Offer of Employment Letter dated July 15, 2014, by and between FTI Consulting, Inc. and Paul Linton. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 21, 2017, filed with the SEC on March 23, 2017 and incorporated herein by reference.)

~~102~~



~~Exhibit~~ ~~Number~~ 10.71 *		~~Description of Exhibits~~

10.73 *	Amendment No. 1 effective as of March 21, 2017 to Employment Letter dated May 14, 2015, by and between FTI Consulting, Inc. and Curtis Lu. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 21, 2017, filed with the SEC on March 23, 2017 and incorporated herein by reference.)

~~10.74~~10.72 *		Amendment No. 2 effective as of March 21, 2017 to Offer of Employment Letter dated July 15, 2014, by and between FTI Consulting, Inc. and Holly Paul. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 21, 2017, filed with the SEC on March 23, 2017 and incorporated herein by reference.)


~~10.75~~Exhibit Number						Description of Exhibits
10.73 *						FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan (Effective as of June 7, 2017). (Included as Appendix A to FTI Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A filed on April 25, 2017 and incorporated herein by reference.)

~~10.76~~10.74 *						Form of Executive Long-Term Incentive Pay Restricted Stock Award Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.77~~10.75 *						Form of Executive Long-Term Incentive Pay Incentive Stock Option Award Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.78~~10.76 *						Form of Executive Long-Term Incentive Pay Performance-Based Restricted Stock Unit Award Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.79~~10.77 *						Form of General Restricted Stock Award Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.80~~10.78 *						Form of General Restricted Stock Unit Award Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.81~~10.79 *						Form of General Incentive Stock Option Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.82~~10.80 *						Form of General Nonstatutory Stock Option Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.83~~10.81 *						Form of General Performance-Based Restricted Stock Unit Award Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.84~~10.82 *						Form of General Cash Unit Award Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~103~~



~~Exhibit~~ ~~Number~~ 10.83 *		~~Description of Exhibits~~

10.85 *	Form of General Cash-Based Stock Appreciation Right Award Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.86~~10.84 *		Form of General Cash-Based Performance Unit Award Agreement under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.87~~10.85 *		Form of Restricted Stock Award Agreement for Non-Employee Directors under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)


~~10.88~~Exhibit Number						Description of Exhibits
10.86 *						Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.89~~10.87 *						Form of Deferred Stock Unit Award Agreement for Non-Employee Directors under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.90~~10.88 *						Form of Deferred Restricted Stock Unit Award Agreement for Non-Employee Directors under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on July 27, 2017 and incorporated herein by reference.)

~~10.91~~10.89 *						Amendment No. 3 dated March 16, 2018 to that Employment Agreement dated as of December 13, 2013, by and between FTI Consulting, Inc. and Steven H. Gunby. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on April 26, 2018 and incorporated herein by reference.)

~~10.92~~10.90 **						Amendment and Restatement Agreement, dated as of November 30, 2018, among FTI Consulting, Inc., a Maryland corporation, the Subsidiaries of the Company party thereto, as Guarantors, the Lenders and L/C Issuers party thereto and Bank of America, N.A., as administrative agent (including Annex C-Amended and Restated Credit Agreement dated as of November 30, 2018), by and among FTI Consulting, Inc., the designated borrowers party thereto, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative agent. (Filed with the Securities and Exchange Commission on December 3, 2018 as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated November 30, 2018 and incorporated herein by reference.)

~~10.93~~10.91 *						Amendment No. 4 dated as of February 28, 2019 to Employment Agreement dated as of December 13, 2013, by and between FTI Consulting, Inc. and Steven H. Gunby. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated February 28, 2020, filed with the SEC on March 4, 2019 and incorporated herein by reference.)

~~10.94~~10.92 *						Amendment No. 2 effective as of February 28, 2019 to Offer of Employment Letter dated as of July 5, 2016, by and between FTI Consulting, Inc. and Ajay Sabherwal. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated February 28, 2020, filed with the SEC on March 4, 2019 and incorporated herein by reference.)

~~10.95~~10.93 *						Amendment No. 2 effective as of February 28, 2019 to Offer of Employment Letter dated as of July 15, 2014, by and between FTI Consulting, Inc. and Paul Linton. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated February 28, 2020, filed with the SEC on March 4, 2019 and incorporated herein by reference.)

~~10.96~~10.94 *						Amendment No. 2 effective as of February 28, 2019 to Offer of Employment Letter dated as of May 14, 2015, by and between FTI Consulting, Inc. and Curtis Lu. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated February 28, 2020, filed with the SEC on March 4, 2019 and incorporated herein by reference.)

~~104~~



~~Exhibit~~ ~~Number~~ 10.95 *		~~Description of Exhibits~~

10.97 *	Amendment No. 3 effective as of February 28, 2019 to Offer of Employment Letter dated as of July 15, 2014, by and between FTI Consulting, Inc. and Holly Paul. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated February 28, 2020, filed with the SEC on March 4, 2019 and incorporated herein by reference.)

~~10.98~~10.96 *		Offer Letter dated as of March 1, 2019, by and between FTI Consulting, Inc. and Brendan Keating. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated March 6, 2020, filed with the SEC on March 7, 2019 and incorporated herein by reference.))

~~10.99~~10.97 *		Amendment No. 5 made and entered into as of January 8, 2020 to Employment Agreement dated December 13, 2013, by and between FTI Consulting, Inc. and Steven H. Gunby. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Current Report on Form 8-K dated January 9, 2020, filed with the SEC on January 13, 2020 and incorporated herein by reference.)


~~11.1 †~~Exhibit Number						Description of Exhibits
10.98 *						~~Computation of Earnings per Share (included in Note 3~~Amendment No. 1 to the ~~Consolidated Financial Statements included in Part II, Item 8 herein).~~FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan, Effective as of June 3, 2020 (Filed as Appendix B to FTI Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 16, 2020 and incorporated herein by reference.)

~~14.0~~10.99 ±						Amended and Restated Lease dated as of October 26, 2020 by and between 1166 LLC and FTI Consulting, Inc. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the q uarter e nded September 30, 2020, filed with the SEC on October 29, 2020 and incorporated herein by reference.)

14.0 †						FTI Consulting, Inc. Code of Ethics and Business Conduct, as Amended and Restated effective February 21, 2018. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the Year Ended December 31, 2018, filed with the SEC on February 27, 2019 and incorporated herein by reference.)18, 2020.

21.1 †						Subsidiaries of FTI Consulting, Inc.

23.0 †						Consent of KPMG LLP.

31.1 †						Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended (Section 302 of the Sarbanes-Oxley Act of 2002).

31.2 †						Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended (Section 302 of the Sarbanes-Oxley Act of 2002).

32.1 †						Certification of Principal Executive Officer Pursuant to 18 USC. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

32.2 †						Certification of Principal Financial Officer Pursuant to 18 USC. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

99.1						Policy on Disclosure Controls, as Amended and Restated Effective as of January 1, 2016. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 28, 2017 and incorporated herein by reference.)

99.2 †						Policy on Inside Information and Insider Trading, as Amended and Restated Effective ~~January~~April 1, 2016. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 28, 2017 and incorporated herein by reference.)2019.

99.3						Corporate Governance Guidelines, as last Amended and Restated Effective as of September 20, 2018. (Filed with the Securities and Exchange Commission as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the Year Ended December 31, 2018, filed with the SEC on February 27, 2019 and incorporated herein by reference.)

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.)

~~105~~


99.5
~~Exhibit~~ ~~Number~~	~~Description of Exhibits~~

~~99.5~~	Charter of Audit Committee of the Board of Directors, as last Amended and Restated Effective as of February 23, 2011. (Filed with the Securities and Exchange Commission on April 18, 2011 as an exhibit to FTI Consulting, Inc.’s Definitive Proxy Statement on Schedule 14A and incorporated herein by reference.)

99.6		Charter of the Compensation Committee of the Board of Directors, as last Amended and Restated Effective as of February 27, 2013. (Filed with the Securities and Exchange Commission on May 9, 2013 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 and incorporated herein by reference.)

99.7		Charter of the Nominating and Corporate Governance Committee, as last Amended and Restated Effective as of December 16, 2009. (Filed with the Securities and Exchange Commission on February 26, 2010 as an exhibit to FTI Consulting, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.)

99.8 †		Anti-Corruption Policy, as Amended and Restated Effective February 19, 2014. (Filed with the Securities and Exchange Commission on May 2, 2014 as an exhibit to FTI Consulting, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 and incorporated herein by reference.)18, 2020.


Exhibit Number						Description of Exhibits
101						The following financial information from the Annual Report on Form 10-K of FTI Consulting, Inc. for the year ended December 31, ~~2019,~~2020, included herewith, and formatted in Inline XBRL (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.

104						The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, 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.

~~106~~

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized this 25th day of February ~~2020.~~

2021.



FTI 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.

SIGNATURE

CAPACITY IN WHICH SIGNED

DATE

/s/ STEVEN H. GUNBY

President, Chief Executive Officer

and Director

(Principal Executive Officer)

February 25, ~~2020~~2021

Steven H. Gunby

/s/ AJAY SABHERWAL

Chief Financial Officer

(Principal Financial Officer)

February 25, ~~2020~~2021

Ajay Sabherwal

/s/ BRENDAN KEATING

Chief Accounting Officer and Controller

(Principal Accounting Officer)

February 25, ~~2020~~2021

Brendan Keating

/s/ GERARD E. HOLTHAUS

Director and Chairman of the Board

February 25, ~~2020~~2021

Gerard E. Holthaus

/s/ BRENDA J. BACON

Director

February 25, ~~2020~~2021

Brenda J. Bacon

/s/ MARK S. BARTLETT

Director

February 25, ~~2020~~2021

Mark S. Bartlett

/s/ CLAUDIO COSTAMAGNA

Director

February 25, ~~2020~~2021

Claudio Costamagna

/s/ VERNON ELLIS

Director

February 25, ~~2020~~2021

Vernon Ellis

/s/ NICHOLAS C. FANANDAKIS

Director

February 25, ~~2020~~2021

Nicholas C. Fanandakis

/s/ LAUREEN E. SEEGER

Director

February 25, ~~2020~~2021

Laureen E. Seeger

100

~~107~~


Maryland		52-1261113
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~Maryland~~		~~52-1261113~~
~~(State or Other Jurisdiction of~~ ~~Incorporation or Organization)~~	~~(I.R.S. Employer~~ ~~Identification No.)~~

555 12th Street NW
Washington,
DC		20004
(Address of ~~Principal Executive Offices)~~principal executive offices)		(~~ZIP~~Zip Code)



		Page
PART I

Item 1.	Business	1

Item 1A.	Risk Factors	1813

Item 1B.	Unresolved Staff Comments	3125

Item 2.	Properties	3126

Item 3.	Legal Proceedings	3126

Item 4.	Mine Safety Disclosures	3126

PART II

Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3227

Item 6.	Selected Financial Data	3429

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3631

Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	5552

Item 8.	Financial Statements and Supplementary Data	5754

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	9387

Item 9A.	Controls and Procedures	9387

Item 9B.	Other Information	9387

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	9488

Item 11.	Executive Compensation	9488

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	9488

Item 13.	Certain Relationships and Related Transactions and Director Independence	9488

Item 14.	Principal Accountant Fees and Services	9488

PART IV

Item 15.	Exhibits and Financial Statement Schedule	9589

Item 16.	Form 10-K Summary	~~106~~99



☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



			Securities ~~Registered Pursuant~~registered pursuant to ~~Section~~section 12(g) of the Act: None



			DOCUMENTS INCORPORATED BY REFERENCE
Portions of our definitive Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after the end of our ~~2019~~2020 fiscal year are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein.


	Year Ended December 31,					Year Ended December 31,
Reportable Segment	2019		2018		Reportable Segment	2020		2019
Corporate Finance & Restructuring	31	%	28	%	Corporate Finance & Restructuring	37	%	31	%
Forensic and Litigation Consulting	25	%	26	%	Forensic and Litigation Consulting	20	%	25	%
Economic Consulting	25	%	26	%	Economic Consulting	25	%	25	%
Technology	9	%	9	%	Technology	9	%	9	%
Strategic Communications	10	%	11	%	Strategic Communications	9	%	10	%
Total	100	%	100	%	Total	100	%	100	%


•	~~Business Transformation~~•Company Advisory. The services offered by our business transformation practice focus on supporting clients through transformational change, disruption and M&A to drive sustainable growth and value. Dedicated to working alongside our clients at every stage of the business lifecycle, our experts focus on:


•	~~Revenue Growth,including sales effectiveness, market, product and customer strategy, pricing, and profitability.~~


•	~~Operations,~~•Dispute Advisory/Litigation Supportincluding strategic sourcing and procurement, optimizing the supply chain and operating network, increasing the efficiency of manufacturing and implementing lean best practices to enhance profitability and organizational effectiveness.


•	~~Finance,~~addressing people, process and technology gaps by utilizing data analytics and best practices to establish solutions that support finance responsibilities while balancing the company’s strategic goals.


•	~~People,~~partnering with business leaders, management and human resources professionals, to help organizations fully realize transformational change by addressing human capital needs, including organizational design and workforce optimization, culture and change management, employee engagement, executive compensation, and people analytics.


•	~~Investment Banking Services.~~ 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.


•	~~Trial Services~~. We help organize information into a cohesive and persuasive story and provide the tools and expertise to present that story in briefs and expert reports, in the courtroom or in presentations to regulators. Our


•	~~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 anti-corruption laws.~~


•	~~FTI Consulting named to~~ ~~Forbes~~ ~~magazine's list of America’s Best Management Consulting Firms for the fourth consecutive year, recognized in 16 sectors and functional areas.~~


•	~~FTI Consulting named to~~ ~~Consulting~~ ~~magazine’s Best Firms to Work For list for the second consecutive year.~~


•	~~FTI Consulting recognized as Consulting Firm of the Year by~~ ~~Who’s Who Legal~~ ~~for the third consecutive year.~~


•	~~Compass Lexecon ranked #1 on~~ ~~Global Arbitration Review’s GAR 100 Expert Witness Firms’ Power Index for the second consecutive year.~~


•	~~FTI Consulting recognized as Arbitration Expert Firm of the Year by~~ ~~Who’s Who Legal~~ ~~for the fifth consecutive year.~~


•	~~Compass Lexecon recognized as Competition Economics Firm of the Year by~~ ~~Who’s Who Legal~~ ~~for the fifth consecutive year.~~


•	~~FTI Consulting and Compass Lexecon led the~~ ~~Who’s Who Legal~~ ~~Consulting Experts Guide for the fourth consecutive year with 149 experts recognized.~~


•	~~FTI Consulting ranked #1 U.S. Restructuring Advisor by~~ ~~The Deal~~ ~~for the 12th consecutive year.~~


•	Strong Cash Flow. Our business model has several characteristics that produce consistent cash flows. Our strong cash flow supports business operations, capital expenditures 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.


•	~~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.~~



Billable Headcount	Corporate Finance		FLC		Economic Consulting		Technology		Strategic Communications		Total
December 31, 2018	948		1,153		708		306		641		3,756
Additions, net	246		198		82		55		87		668
December 31, 2019	1,194		1,351		790		361		728		4,424
Percentage change in headcount from December 31, 2018	25.9	%	17.2	%	11.6	%	18.0	%	13.6	%	17.8	%



	Options Outstanding				Options Exercisable
		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)		Weighted Average Exercise Price
Exercise Price Range	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Shares	Weighted Average Exercise Price
$26.68-$33.95	137	$	31.46	3.7	124	$	31.53
$34.33-$34.62	138	$	34.40	5.4	138	$	34.40
$35.73-$36.87	195	$	36.67	4.4	188	$	36.68
$36.89-$40.36	202	$	39.28	5.4	149	$	39.12
$41.69-$41.69	6	$	41.69	0.3	6	$	41.69
	678				605



	Shares		Weighted Average Grant Date Fair Value
Unvested restricted share awards outstanding at December 31, 2018	992		$	43.76
Restricted share awards granted	222		$	81.64
Restricted share awards vested	(229	)	$	43.04
Restricted share awards forfeited	(28	)	$	38.87
Unvested restricted share awards outstanding at December 31, 2019	957		$	52.86



	Corporate Finance			FLC			Economic Consulting			Technology			Strategic Communications			Total
Balance at December 31, 2017
Goodwill	$	454,816		$	233,719		$	268,995		$	117,740		$	323,672		$	1,398,942
Accumulated goodwill impairment	—			—			—			—			(194,139		)	(194,139		)
Goodwill, net at December 31, 2017	454,816			233,719			268,995			117,740			129,533			1,204,803
Sale of business ⁽¹⁾	—			—			—			(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
Goodwill	450,997			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
Acquisitions ⁽²⁾	27,389			—			—			—			—			27,389
Foreign currency translation adjustment and other	456			583			130			47			1,846			3,062
Balance at December 31, 2019
Goodwill	478,842			232,120			268,677			96,770			320,497			1,396,906
Accumulated goodwill impairment	—			—			—			—			(194,139		)	(194,139		)
Goodwill, net at December 31, 2019	$	478,842		$	232,120		$	268,677		$	96,770		$	126,358		$	1,202,767



	As of December 31, 2019 ⁽¹⁾
Year	As of December 31, 2019 ⁽¹⁾
2020	$	9,393
2021	8,861
2022	7,028
2023	3,604
2024	2,207
Thereafter	2,239
	$	33,332