FTI Consulting (FCN) 8-K FTI Consulting Reports Record Third Quarter 2022 Financial Results

Exhibit 99.1

FTI Consulting, Inc.

555 12th Street NW

Washington, DC 20004

+1.202.312.9100

Investor & Media Contact:

Mollie Hawkes

+1.617.747.1791

mollie.hawkes@fticonsulting.com

FTI Consulting Reports Record Third Quarter 2022 Financial Results

• Third Quarter 2022 Revenues of $775.9 Million, Up 10.5% Compared to $702.2 Million in Prior Year Quarter; Excluding Estimated Negative Impact of FX, Third Quarter 2022 Revenues Up 14.8% Compared to Prior Year Quarter

• Third Quarter 2022 EPS of $2.15, Up 9.7% Compared to $1.96 in Prior Year Quarter; Third Quarter 2022 Adjusted EPS of $2.15, Up 6.4% Compared to $2.02 in Prior Year Quarter

• Company Narrows 2022 Guidance Ranges for Revenues and EPS

Washington, D.C., October 27, 2022 — FTI Consulting, Inc. (NYSE: FCN) today released financial results for the quarter ended September 30, 2022.

Third quarter 2022 revenues of $775.9 million increased $73.6 million, or 10.5%, compared to revenues of $702.2 million in the prior year quarter. Excluding the estimated negative impact from foreign currency translation (“FX”), revenues increased $103.7 million, or 14.8%, compared to the prior year quarter. Acquisition-related revenues contributed $3.1 million during the quarter. The increase in revenues was due to higher realization, which includes the recognition of revenues previously deferred, and higher demand across all business segments. Net income of $77.3 million compared to $69.5 million in the prior year quarter. The increase in net income was primarily due to higher revenues, a lower effective tax rate, an increase in FX remeasurement gains and lower interest expense, which was partially offset by an increase in compensation, including the impact of a 12.4% increase in total headcount, and higher selling, general and administrative (“SG&A”) expenses compared to the prior year quarter. The lower effective tax rate was primarily related to a combined $8.3 million benefit from the use of foreign tax credits and a deferred tax benefit arising from an intracompany intellectual property license agreement. Adjusted EBITDA of $99.0 million, or 12.8% of revenues, compared to $100.3 million, or 14.3% of revenues, in the prior year quarter.

Third quarter 2022 earnings per diluted share (“EPS”) of $2.15 compared to $1.96 in the prior year quarter. Third quarter 2021 EPS included $2.4 million of non-cash interest expense related to the Company’s 2.0% convertible senior notes due 2023 (“2023 Convertible Notes”), which decreased EPS by $0.06. Third quarter 2022 Adjusted EPS of $2.15 compared to Adjusted EPS of $2.02 in the prior year quarter. Third quarter 2021 Adjusted EPS excluded the non-cash interest expense related to the 2023 Convertible Notes. The aforementioned $8.3 million tax benefit increased third quarter 2022 EPS and Adjusted EPS by $0.23.

Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “Our record results this quarter reflect the combination of solid underlying business performance in aggregate, together with some one-time benefits. As always, our focus remains on driving the powerful multi-year trajectory our firm has been on by continuing to invest behind our strong positions and the ambitions of our people.”

Cash Position and Capital Allocation

Net cash provided by operating activities of $128.3 million for the quarter ended September 30, 2022 compared to $196.9 million for the quarter ended September 30, 2021. The year-over-year decrease in net cash provided by operating activities was largely due to an increase in compensation, primarily related to headcount growth, as well as a decrease in cash collections compared to the same period in the prior year.

Cash and cash equivalents of $327.0 million at September 30, 2022 compared to $342.5 million at September 30, 2021 and $255.7 million at June 30, 2022. FX translation unfavorably impacted cash and cash equivalents at September 30, 2022 compared to September 30, 2021 and June 30, 2022. Total debt, net of cash, of ($10.8) million at September 30, 2022 compared to ($1.3) million at September 30, 2021 and $60.5 million at June 30, 2022. The sequential decrease in total debt, net of cash, was due to an increase in cash and cash equivalents.

During the quarter, the Company repurchased 127,791 shares of its common stock at an average price per share of $159.87 for a total cost of $20.4 million. As of September 30, 2022, approximately $143.5 million remained available for common stock repurchases under the Company’s stock repurchase authorization.

Third Quarter 2022 Segment Results

Corporate Finance & Restructuring

Revenues in the Corporate Finance & Restructuring segment increased $15.0 million, or 6.0%, to $265.4 million in the quarter compared to $250.3 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $24.1 million, or 9.6%, compared to the prior year quarter. Acquisition-related revenues contributed $3.1 million in the quarter. The increase in revenues was primarily due to higher demand for restructuring and business transformation services, which was partially offset by lower demand for transactions services and a decline in success fees compared to the prior year quarter. Adjusted Segment EBITDA of $51.5 million, or 19.4% of segment revenues, compared to $55.6 million, or 22.2% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was more than offset by higher compensation, which includes the impact of an 11.5% increase in billable headcount, and higher SG&A expenses.

Forensic and Litigation Consulting

Revenues in the Forensic and Litigation Consulting segment increased $14.7 million, or 10.1%, to $159.9 million in the quarter compared to $145.3 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $18.4 million, or 12.7%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for health solutions and investigations services and higher realization, which was partially offset by lower demand for disputes services compared to the prior year quarter. Adjusted Segment EBITDA of $18.2 million, or 11.4% of segment revenues, compared to $16.6 million, or 11.4% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation, which includes the impact of a 9.3% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

Economic Consulting

Revenues in the Economic Consulting segment increased $20.6 million, or 12.0%, to $193.2 million in the quarter compared to $172.5 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $30.1 million, or 17.4%, compared to the prior year quarter. The increase in revenues was due to higher realization, primarily from the recognition of revenues previously deferred and higher demand for non-merger and acquisition (“M&A”)-related antitrust services, which was partially offset by lower demand for M&A-related antitrust services compared to the prior year quarter. Adjusted Segment EBITDA of $32.9 million,

or 17.0% of segment revenues, compared to $29.9 million, or 17.3% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by higher compensation expenses, primarily related to an increase in variable compensation, and the impact of a 7.9% increase in billable headcount compared to the prior year quarter.

Technology

Revenues in the Technology segment increased $20.3 million, or 31.3%, to $84.9 million in the quarter compared to $64.7 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $22.6 million, or 34.9%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for M&A-related “second request” and investigations services compared to the prior year quarter. Adjusted Segment EBITDA of $13.2 million, or 15.6% of segment revenues, compared to $7.8 million, or 12.1% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation, which includes the impact of a 23.7% increase in billable headcount and an increase in contractors, as well as higher SG&A expenses compared to the prior year quarter.

Strategic Communications

Revenues in the Strategic Communications segment increased $3.0 million, or 4.3%, to $72.4 million in the quarter compared to $69.4 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $8.5 million, or 12.2%, compared to the prior year quarter. The increase in revenues was primarily due to increased demand for corporate reputation services compared to the prior year quarter. Adjusted Segment EBITDA of $12.9 million, or 17.9% of segment revenues, compared to $15.5 million, or 22.3% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was more than offset by higher compensation, which includes the impact of a 16.4% increase in billable headcount, and higher SG&A expenses.

2022 Guidance

The Company is narrowing its full year 2022 guidance ranges for revenues and EPS. The Company now expects revenues to range between $2.965 billion and $3.025 billion, which compares to the previous range of between $2.920 billion and $3.045 billion. The Company now expects EPS to range between $6.40 and $6.80, which compares to the previous range of between $6.40 and $7.20. The Company does not currently expect Adjusted EPS to differ from EPS.

Third Quarter 2022 Conference Call

FTI Consulting will host a conference call for analysts and investors to discuss third quarter 2022 financial results at 9:00 a.m. Eastern Time on Thursday, October 27, 2022. The call can be accessed live and will be available for replay over the internet for 90 days by logging onto the Company’s investor relations website here.

About FTI Consulting

FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 7,500 employees located in 31 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $2.78 billion in revenues during fiscal year 2021. More information can be found at www.fticonsulting.com.

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 (“GAAP”). Certain of these financial measures are considered not in conformity with GAAP (“non-GAAP financial measures”) under the United States Securities and Exchange Commission (“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 presented in this press release. 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 Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, gain or loss on sale of a business and losses on early extinguishment of debt. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies. We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income and 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. 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 (used in) 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 Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release.

Safe Harbor Statement

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve uncertainties and risks. Forward-looking statements include statements concerning our plans, initiatives, projections, prospects, policies and practices, objectives, goals, commitments, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends, new or changes to laws and regulations, including U.S. and foreign tax laws, environmental, social and governance (“ESG”)-related issues, climate change-related matters, scientific and technological developments, and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “commits,” “aspires,” “forecasts,” “future,” “goal,” “seeks” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s plans, expectations, intentions, aspirations, beliefs, goals, estimates, forecasts and projections will result or be achieved. Our actual financial results, performance or achievements and outcomes could differ materially from those expressed in, or implied by, any forward-looking statements. Further, unaudited quarterly results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flows in prior periods and expects that this will occur from time to time in the future. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer; the mix of the geographic locations where our clients are located or where services are performed; fluctuations in the price per share of our common stock; adverse financial, real estate or other market and general economic conditions; the impact of the COVID-19 pandemic and related events that are beyond our control, which could affect our segments, practices and the geographic regions in which we conduct business differently and adversely; and other future events, which could impact each of our segments, practices and the geographic regions in which we conduct business differently and could be outside of our control; the pace and timing of the consummation and integration of future acquisitions; the Company’s ability to realize cost savings and efficiencies; competitive and general economic conditions; retention of staff and clients; new laws and regulations or changes thereto; and other risks described under the heading “Item 1A, Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022 and in the Company’s other filings with the SEC. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

FINANCIAL TABLES FOLLOW

# # #

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	September 30,			December 31,
	2022			2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	327,047		$	494,485
Accounts receivable, net		947,993			754,120
Current portion of notes receivable		27,198			30,256
Prepaid expenses and other current assets		91,187			91,166
Total current assets		1,393,425			1,370,027
Property and equipment, net		144,713			142,163
Operating lease assets		195,339			215,995
Goodwill		1,212,541			1,232,791
Intangible assets, net		25,673			31,990
Notes receivable, net		54,144			53,539
Other assets		56,259			54,404
Total assets	$	3,082,094		$	3,100,909
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable, accrued expenses and other	$	175,491		$	165,025
Accrued compensation		422,985			507,556
Billings in excess of services provided		50,523			45,535
Total current liabilities		648,999			718,116
Long-term debt, net		314,756			297,158
Noncurrent operating lease liabilities		213,449			236,026
Deferred income taxes		161,486			170,612
Other liabilities		98,821			95,676
Total liabilities		1,437,511			1,517,588
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 34,422 (2022) and 34,333 (2021)		344			343
Additional paid-in capital		—			13,662
Retained earnings		1,868,424			1,698,156
Accumulated other comprehensive loss		(224,185	)		(128,840	)
Total stockholders’ equity		1,644,583			1,583,321
Total liabilities and stockholders’ equity	$	3,082,094		$	3,100,909

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share data)

	Three Months Ended September 30,
	2022			2021
	(Unaudited)
Revenues	$	775,865		$	702,228
Operating expenses
Direct cost of revenues		526,654			472,235
Selling, general and administrative expenses		159,186			138,600
Amortization of intangible assets		2,315			2,860
		688,155			613,695
Operating income		87,710			88,533
Other income (expense)
Interest income and other		7,771			5,175
Interest expense		(2,378	)		(5,073	)
		5,393			102
Income before income tax provision		93,103			88,635
Income tax provision		15,836			19,155
Net income	$	77,267		$	69,480
Earnings per common share — basic	$	2.29		$	2.07
Weighted average common shares outstanding — basic		33,812			33,495
Earnings per common share — diluted	$	2.15		$	1.96
Weighted average common shares outstanding — diluted		35,918			35,362
Other comprehensive loss, net of tax
Foreign currency translation adjustments, net of tax expense of $0	$	(48,475	)	$	(18,607	)
Total other comprehensive loss, net of tax		(48,475	)		(18,607	)
Comprehensive income	$	28,792		$	50,873

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share data)

	Nine Months Ended September 30,
	2022			2021
	(Unaudited)
Revenues	$	2,254,477		$	2,099,991
Operating expenses
Direct cost of revenues		1,539,838			1,431,381
Selling, general and administrative expenses		476,097			399,076
Amortization of intangible assets		7,320			8,515
		2,023,255			1,838,972
Operating income		231,222			261,019
Other income (expense)
Interest income and other		10,418			5,297
Interest expense		(7,468	)		(15,164	)
		2,950			(9,867	)
Income before income tax provision		234,172			251,152
Income tax provision		46,156			54,394
Net income	$	188,016		$	196,758
Earnings per common share — basic	$	5.57		$	5.88
Weighted average common shares outstanding — basic		33,741			33,478
Earnings per common share — diluted	$	5.25		$	5.58
Weighted average common shares outstanding — diluted		35,825			35,265
Other comprehensive loss, net of tax
Foreign currency translation adjustments, net of tax expense of $0	$	(95,345	)	$	(18,042	)
Total other comprehensive loss, net of tax		(95,345	)		(18,042	)
Comprehensive income	$	92,671		$	178,716

FTI CONSULTING, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022		2021			2022		2021
	(Unaudited)					(Unaudited)
Net income	$	77,267	$	69,480		$	188,016	$	196,758
Add back:
Remeasurement of acquisition-related contingent consideration		—		—			—		(3,130	)
Non-cash interest expense on convertible notes		—		2,412			—		7,141
Tax impact of non-cash interest expense on convertible notes		—		(627	)		—		(1,857	)
Adjusted Net Income	$	77,267	$	71,265		$	188,016	$	198,912
Earnings per common share — diluted	$	2.15	$	1.96		$	5.25	$	5.58
Add back:
Remeasurement of acquisition-related contingent consideration		—		—			—		(0.09	)
Non-cash interest expense on convertible notes		—		0.08			—		0.20
Tax impact of non-cash interest expense on convertible notes		—		(0.02	)		—		(0.05	)
Adjusted earnings per common share — diluted	$	2.15	$	2.02		$	5.25	$	5.64
Weighted average number of common shares outstanding — diluted		35,918		35,362			35,825		35,265

FTI CONSULTING, INC.

RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA

(in thousands)

Three Months Ended September 30, 2022 (Unaudited)	Corporate Finance & Restructuring		Forensic and Litigation Consulting		Economic Consulting		Technology		Strategic Communications		Unallocated Corporate			Total
Net income														$	77,267
Interest income and other															(7,771	)
Interest expense															2,378
Income tax provision															15,836
Operating income	$	47,948	$	16,570	$	31,674	$	9,833	$	12,155	$	(30,470	)	$	87,710
Depreciation and amortization		1,675		1,350		1,239		3,380		629		676			8,949
Amortization of intangible assets		1,909		242		—		—		163		1			2,315
Adjusted EBITDA	$	51,532	$	18,162	$	32,913	$	13,213	$	12,947	$	(29,793	)	$	98,974

Nine Months Ended September 30, 2022 (Unaudited)	Corporate Finance & Restructuring		Forensic and Litigation Consulting		Economic Consulting		Technology		Strategic Communications		Unallocated Corporate			Total
Net income														$	188,016
Interest income and other															(10,418	)
Interest expense															7,468
Income tax provision															46,156
Operating income	$	148,936	$	47,126	$	72,056	$	25,005	$	37,623	$	(99,524	)	$	231,222
Depreciation and amortization		5,049		4,265		3,698		9,935		1,962		2,136			27,045
Amortization of intangible assets		6,036		735		—		—		548		1			7,320
Adjusted EBITDA	$	160,021	$	52,126	$	75,754	$	34,940	$	40,133	$	(97,387	)	$	265,587

FTI CONSULTING, INC.

RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA

(in thousands)

Three Months Ended September 30, 2021 (Unaudited)	Corporate Finance & Restructuring			Forensic and Litigation Consulting			Economic Consulting		Technology		Strategic Communications		Unallocated Corporate			Total
Net income																$	69,480
Interest income and other																	(5,175	)
Interest expense																	5,073
Income tax provision																	19,155
Operating income	$	52,316		$	15,101		$	28,455	$	4,416	$	14,219	$	(25,974	)	$	88,533
Depreciation and amortization		1,446			1,270			1,462		3,419		533		737			8,867
Amortization of intangible assets		1,873			249			—		—		737		1			2,860
Adjusted EBITDA	$	55,635		$	16,620		$	29,917	$	7,835	$	15,489	$	(25,236	)	$	100,260
Nine Months Ended September 30, 2021 (Unaudited)	Corporate Finance & Restructuring			Forensic and Litigation Consulting			Economic Consulting		Technology		Strategic Communications		Unallocated Corporate			Total
Net income																$	196,758
Interest income and other																	(5,297	)
Interest expense																	15,164
Income tax provision																	54,394
Operating income	$	126,718		$	59,599		$	82,891	$	38,315	$	35,537	$	(82,041	)	$	261,019
Depreciation and amortization		4,016			3,808			4,304		9,636		1,630		2,237			25,631
Amortization of intangible assets		5,644			647			—		—		2,221		3			8,515
Remeasurement of acquisition-related contingent consideration		(3,130	)		—			—		—		—		—			(3,130	)
Adjusted EBITDA	$	133,248		$	64,054		$	87,195	$	47,951	$	39,388	$	(79,801	)	$	292,035
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FTI CONSULTING, INC.

OPERATING RESULTS BY BUSINESS SEGMENT

	Segment     Revenues		Adjusted     EBITDA			Adjusted EBITDA Margin			Utilization			Average Billable Rate		Revenue- Generating Headcount
	(in thousands)													(at period end)
Three Months Ended September 30, 2022 (Unaudited)
Corporate Finance & Restructuring	$	265,370	$	51,532			19.4	%		61	%	$	455		1,900
Forensic and Litigation Consulting		159,948		18,162			11.4	%		53	%	$	368		1,614
Economic Consulting		193,183		32,913			17.0	%		67	%	$	579		998
Technology (1)		84,915		13,213			15.6	%		N/M			N/M		548
Strategic Communications (1)		72,449		12,947			17.9	%		N/M			N/M		951
	$	775,865	$	128,767			16.6	%							6,011
Unallocated Corporate				(29,793	)
Adjusted EBITDA			$	98,974			12.8	%
Nine Months Ended September 30, 2022 (Unaudited)
Corporate Finance & Restructuring	$	795,766	$	160,021			20.1	%		62	%	$	455		1,900
Forensic and Litigation Consulting		478,092		52,126			10.9	%		55	%	$	360		1,614
Economic Consulting		523,201		75,754			14.5	%		70	%	$	506		998
Technology (1)		243,181		34,940			14.4	%		N/M			N/M		548
Strategic Communications (1)		214,237		40,133			18.7	%		N/M			N/M		951
	$	2,254,477	$	362,974			16.1	%							6,011
Unallocated Corporate				(97,387	)
Adjusted EBITDA			$	265,587			11.8	%
Three Months Ended September 30, 2021 (Unaudited)
Corporate Finance & Restructuring	$	250,321	$	55,635			22.2	%		62	%	$	465		1,704
Forensic and Litigation Consulting		145,264		16,620			11.4	%		54	%	$	355		1,476
Economic Consulting		172,543		29,917			17.3	%		68	%	$	539		925
Technology (1)		64,657		7,835			12.1	%		N/M			N/M		443
Strategic Communications (1)		69,443		15,489			22.3	%		N/M			N/M		817
	$	702,228	$	125,496			17.9	%							5,365
Unallocated Corporate				(25,236	)
Adjusted EBITDA			$	100,260			14.3	%
Nine Months Ended September 30, 2021 (Unaudited)
Corporate Finance & Restructuring	$	707,495	$	133,248			18.8	%		60	%	$	457		1,704
Forensic and Litigation Consulting		446,831		64,054			14.3	%		58	%	$	350		1,476
Economic Consulting		525,122		87,195			16.6	%		73	%	$	510		925
Technology (1)		222,762		47,951			21.5	%		N/M			N/M		443
Strategic Communications (1)		197,781		39,388			19.9	%		N/M			N/M		817
	$	2,099,991	$	371,836			17.7	%							5,365
Unallocated Corporate				(79,801	)
Adjusted EBITDA			$	292,035			13.9	%

N/M Not meaningful

⁽¹⁾ The majority of the Technology and Strategic Communications segments’ revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.

FTI CONSULTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended September 30,
	2022			2021
	(Unaudited)
Operating activities
Net income	$	188,016		$	196,758
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		27,045			25,631
Amortization and impairment of intangible assets		7,320			8,515
Acquisition-related contingent consideration		863			(1,014	)
Provision for expected credit losses		13,101			14,816
Share-based compensation		18,491			17,150
Amortization of debt discount and issuance costs and other		1,588			8,551
Deferred income taxes		(9,140	)		5,128
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, billed and unbilled		(251,280	)		(115,544	)
Notes receivable		838			4,392
Prepaid expenses and other assets		(3,066	)		1,145
Accounts payable, accrued expenses and other		21,936			(22,745	)
Income taxes		3,940			18,025
Accrued compensation		(67,763	)		2,803
Billings in excess of services provided		7,672			(7,691	)
Net cash provided by (used in) operating activities		(40,439	)		155,920
Investing activities
Payments for acquisition of businesses, net of cash received		(6,742	)		(9,833	)
Purchases of property and equipment and other		(38,935	)		(52,441	)
Net cash used in investing activities		(45,677	)		(62,274	)
Financing activities
Borrowings under revolving line of credit		165,000			377,500
Repayments under revolving line of credit		(165,000	)		(352,500	)
Purchase and retirement of common stock		(23,530	)		(46,133	)
Share-based compensation tax withholdings and other		(15,663	)		(8,277	)
Payments for business acquisition liabilities		(4,848	)		(7,496	)
Deposits and other		7,092			1,928
Net cash used in financing activities		(36,949	)		(34,978	)
Effect of exchange rate changes on cash and cash equivalents		(44,373	)		(11,094	)
Net increase (decrease) in cash and cash equivalents		(167,438	)		47,574
Cash and cash equivalents, beginning of period		494,485			294,953
Cash and cash equivalents, end of period	$	327,047		$	342,527

FTI CONSULTING, INC.

RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net cash provided by (used in) operating activities	$	128,292		$	196,946		$	(40,439	)	$	155,920
Purchases of property and equipment		(13,316	)		(24,745	)		(38,951	)		(52,470	)
Free Cash Flow	$	114,976		$	172,201		$	(79,390	)	$	103,450