ITEM 7.01. Regulation FD Disclosure
FTI Consulting has included the definitions of Segment Operating Income (Loss) and Adjusted Segment EBITDA, which are
financial measures presented in accordance with U.S. generally accepted accounting principles (GAAP), in order to more fully define the components of certain financial measures not presented in accordance with GAAP
(Non-GAAP). FTI Consulting evaluates the performance of its operating segments based on Adjusted Segment EBITDA, and Segment Operating Income (Loss) is a component of the definition of Adjusted Segment EBITDA.
FTI Consulting defines Segment Operating Income (Loss) as a segments share of consolidated operating income (loss). FTI
Consulting defines Total Segment Operating Income (Loss), which is a Non-GAAP financial measure, as the total of Segment Operating Income (Loss) for all segments, which excludes unallocated corporate expenses. FTI Consulting uses Segment
Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA. FTI Consulting defines Adjusted Segment EBITDA as a segments share of consolidated operating income (loss) before depreciation, amortization of
intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. FTI Consulting uses Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of its
segments because FTI Consulting believes it reflects current core operating performance and provides an indicator of the segments ability to generate cash. FTI Consulting defines Adjusted Segment EBITDA Margin as Adjusted Segment
EBITDA as a percentage of a segments revenues.
FTI Consulting defines 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. FTI Consulting defines 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 and losses on
early extinguishment of debt. FTI Consulting believes that the Non-GAAP financial measures, which exclude the effects of remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges, when considered
together with its GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of FTI Consultings operating results, including underlying trends. In addition, EBITDA is a common
alternative measure of operating performance used by many of FTI Consultings competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in FTI
Consultings
1
industry. Therefore, FTI Consulting also believes that these measures, considered along with corresponding GAAP measures, provide management and investors with additional information for
comparison of its operating results with the operating results of other companies.
FTI Consulting defines 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, respectively, excluding the impact of remeasurement of acquisition-related
contingent consideration, special charges, goodwill impairment charges and losses on early extinguishment of debt. FTI Consulting uses Adjusted Net Income for the purpose of calculating Adjusted EPS. Management of FTI Consulting uses Adjusted EPS to
assess total company operating performance on a consistent basis. FTI Consulting believes that this Non-GAAP financial measure, which excludes the effects of the remeasurement of acquisition-related contingent consideration, special charges,
goodwill impairment charges and losses on early extinguishment of debt, when considered together with its GAAP financial results, provides management and investors with an additional understanding of its business operating results, including
underlying trends.
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 FTI Consultings Condensed Consolidated Statements of
Comprehensive Income. Reconciliations of GAAP to Non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables that accompanied the Press Release.
The information included herein, including Exhibit 99.1 furnished herewith, shall not be deemed to be filed for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing pursuant to the Securities Act of
1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing, except as expressly set forth by specific reference in such filing.
2