16. Supplemental Condensed Consolidating Guarantor and Non-Guarantor Financial Information

Substantially all of our domestic subsidiaries are guarantors of borrowings under our senior bank credit facility and 2020 Notes and 2022 Notes (collectively, the “Senior Notes”). The guarantees are full and unconditional and joint and several. All of the guarantors are 100%-owned, direct or indirect, subsidiaries. The following financial information presents condensed consolidating balance sheets, statements of comprehensive income (loss) and statements of cash flows for FTI Consulting, all the guarantor subsidiaries, all the non-guarantor subsidiaries and the eliminations necessary to arrive at the consolidated information for FTI Consulting and its subsidiaries. For purposes of this presentation, we have accounted for our investments in our subsidiaries using the equity method of accounting. The principal eliminating entries eliminate investment in subsidiary and intercompany balances and transactions.

Condensed Consolidating Balance Sheet Information as of September 30, 2013


	FTI Consulting, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	64,452	$	359	$	83,115	$	—		$	147,926
Accounts receivable, net		164,158		175,254		155,498		—		$	494,910
Intercompany receivables		—		789,858		19,307		(809,165	)	$	—
Other current assets		62,097		18,151		23,826		—		$	104,074

Total current assets		290,707		983,622		281,746		(809,165	)		746,910
Property and equipment, net		31,627		20,221		14,452		—		$	66,300
Goodwill		559,519		394,304		240,591		—		$	1,194,414
Other intangible assets, net		34,665		22,108		65,161		(29,196	)	$	92,738
Investments in subsidiaries		1,736,165		496,840		—		(2,233,005	)	$	—
Other assets		83,343		62,128		31,709		—		$	177,180

Total assets	$	2,736,026	$	1,979,223	$	633,659	$	(3,071,366	)	$	2,277,542

Liabilities
Intercompany payables	$	687,749	$	94,330	$	27,086	$	(809,165	)	$	—
Other current liabilities		110,038		93,931		100,165		—		$	304,134

Total current liabilities		797,787		188,261		127,251		(809,165	)		304,134
Long-term debt, net		700,000		11,000		—		—		$	711,000
Other liabilities		202,138		23,126		1,043		—		$	226,307

Total liabilities		1,699,925		222,387		128,294		(809,165	)		1,241,441
Stockholders’ equity		1,036,101		1,756,836		505,365		(2,262,201	)	$	1,036,101

Total liabilities and stockholders’ equity	$	2,736,026	$	1,979,223	$	633,659	$	(3,071,366	)	$	2,277,542

Condensed Consolidating Balance Sheet Information as of December 31, 2012


	FTI Consulting, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	66,663	$	610	$	89,512	$	—		$	156,785
Restricted cash		—		—		1,190		—			1,190
Accounts receivable, net		140,254		149,253		139,733		—			429,240
Intercompany receivables		7,053		674,136		23,185		(704,374	)		—
Other current assets		46,978		20,469		19,713		—			87,160

Total current assets		260,948		844,468		273,333		(704,374	)		674,375
Property and equipment, net		37,411		16,477		14,304		—			68,192
Goodwill		558,473		418,789		282,773		—			1,260,035
Other intangible assets, net		36,826		23,975		74,967		(31,587	)		104,181
Investments in subsidiaries		1,631,243		502,954		—		(2,134,197	)		—
Other assets		85,109		66,170		28,318		(10,928	)		168,669

Total assets	$	2,610,010	$	1,872,833	$	673,695	$	(2,881,086	)	$	2,275,452

Liabilities
Intercompany payables	$	549,339	$	112,137	$	42,898	$	(704,374	)	$	—
Other current liabilities		118,865		79,533		105,799		—			304,197

Total current liabilities		668,204		191,670		148,697		(704,374	)		304,197
Long-term debt, net		700,024		17,000		—		—			717,024
Other liabilities		173,550		10,479		12,898		(10,928	)		185,999

Total liabilities		1,541,778		219,149		161,595		(715,302	)		1,207,220
Stockholders’ equity		1,068,232		1,653,684		512,100		(2,165,784	)		1,068,232

Total liabilities and stockholders’ equity	$	2,610,010	$	1,872,833	$	673,695	$	(2,881,086	)	$	2,275,452

Condensed Consolidating Statement of Comprehensive Income (Loss) for the Three Months Ended September 30, 2013


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	149,176		$	243,186		$	111,867		$	(89,586	)	$	414,643
Operating expenses
Direct cost of revenues		89,410			181,561			73,678			(89,497	)		255,152
Selling, general and administrative expense		37,470			28,279			28,853			(89	)		94,513
Special charges		6,447			8			3,964			—			10,419
Acquisition-related contingent consideration		152			229			249			—			630
Amortization of other intangible assets		1,089			2,689			2,807			(809	)		5,776
Goodwill impairment charge		—			30,321			53,431			—			83,752

Operating income (loss)		14,608			99			(51,115	)		809			(35,599	)
Other (expense) income		(13,468	)		(1,165	)		2,971			—			(11,662	)

Income (loss) before income tax provision		1,140			(1,066	)		(48,144	)		809			(47,261	)
Income tax (benefit) provision		(3,530	)		14,070			(7,180	)		—			3,360
Equity in net earnings of subsidiaries		(55,291	)		(42,632	)		—			97,923			—

Net income (loss)		(50,621	)		(57,768	)		(40,964	)		98,732			(50,621	)

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax $0		(61	)		—			17,176			—			17,115

Other comprehensive income (loss), net of tax		(61	)		—			17,176			—			17,115

Comprehensive income (loss)	$	(50,682	)	$	(57,768	)	$	(23,788	)	$	98,732		$	(33,506	)

Condensed Consolidating Statement of Comprehensive Income for the Three Months Ended September 30, 2012


	FTI Consulting, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	145,198		$	233,300	$	99,963		$	(92,406	)	$	386,055
Operating expenses
Direct cost of revenues		93,428			175,160		65,052			(92,026	)		241,614
Selling, general and administrative expense		36,915			28,226		24,148			(380	)		88,909
Special Charges		2,295			451		29			—			2,775
Acquisition-related contingent consideration		63			—		340			—			403
Amortization of other intangible assets		1,590			2,488		2,512			(824	)		5,766

Operating income		10,907			26,975		7,882			824			46,588
Other (expense) income		(15,921	)		5,514		(1,217	)		—			(11,624	)

Income (loss) before income tax provision		(5,014	)		32,489		6,665			824			34,964
Income tax (benefit) provision		(675	)		10,598		2,328			—			12,251
Equity in net earnings of subsidiaries		27,052			4,710		—			(31,762	)		—

Net income		22,713			26,601		4,337			(30,938	)		22,713

Other comprehensive income, net of tax:
Foreign currency translation adjustments, net of tax $0		—			—		12,731			—			12,731

Other comprehensive income, net of tax		—			—		12,731			—			12,731

Comprehensive income	$	22,713		$	26,601	$	17,068		$	(30,938	)	$	35,444

Condensed Consolidating Statement of Comprehensive Income (Loss) for the Nine Months Ended September 30, 2013


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	444,526		$	744,241		$	333,428		$	(285,761	)	$	1,236,434
Operating expenses
Direct cost of revenues		283,028			561,434			212,376			(283,678	)		773,160
Selling, general and administrative expense		118,941			84,869			85,758			(2,083	)		287,485
Special charges		6,770			112			3,964			—			10,846
Acquisition-related contingent consideration		331			424			(6,846	)		—			(6,091	)
Amortization of other intangible assets		3,411			7,637			8,636			(2,391	)		17,293
Goodwill impairment charge		—			30,321			53,431			—			83,752

Operating income (loss)		32,045			59,444			(23,891	)		2,391			69,989
Other (expense) income		(45,181	)		(634	)		8,917			—			(36,898	)

Income (loss) before income tax provision		(13,136	)		58,810			(14,974	)		2,391			33,091
Income tax (benefit) provision		(10,751	)		48,132			(835	)		—			36,546
Equity in net earnings of subsidiaries		(1,070	)		(18,518	)		—			19,588			—

Net income (loss)		(3,455	)		(7,840	)		(14,139	)		21,979			(3,455	)

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax $0		(61	)		—			(10,047	)		—			(10,108	)

Other comprehensive income (loss), net of tax		(61	)		—			(10,047	)		—			(10,108	)

Comprehensive income (loss)	$	(3,516	)	$	(7,840	)	$	(24,186	)	$	21,979		$	(13,563	)

Condensed Consolidating Statement of Comprehensive Income for the Nine Months Ended September 30, 2012


	FTI Consulting, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	450,221		$	716,049	$	303,472		$	(292,216	)	$	1,177,526
Operating expenses
Direct cost of revenues		291,053			537,897		194,051			(287,549	)		735,452
Selling, general and administrative expense		123,350			85,785		79,490			(4,667	)		283,958
Special charges		19,026			4,738		5,793			—			29,557
Acquisition-related contingent consideration		63			—		(2,644	)		—			(2,581	)
Amortization of other intangible assets		4,190			7,438		7,609			(2,464	)		16,773

Operating income		12,539			80,191		19,173			2,464			114,367
Other (expense) income		(46,377	)		41,501		657			(34,885	)		(39,104	)

Income (loss) before income tax provision		(33,838	)		121,692		19,830			(32,421	)		75,263
Income tax (benefit) provision		(29,055	)		51,322		4,105			—			26,372
Equity in net earnings of subsidiaries		53,674			18,093		—			(71,767	)		—

Net income		48,891			88,463		15,725			(104,188	)		48,891

Other comprehensive income, net of tax:
Foreign currency translation adjustments, net of tax $0		—			—		14,620			—			14,620

Other comprehensive income, net of tax		—			—		14,620			—			14,620

Comprehensive income	$	48,891		$	88,463	$	30,345		$	(104,188	)	$	63,511

Condensed Consolidating Statement of Cash Flow for the Nine Months Ended September 30, 2013


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	(37,182	)	$	111,908		$	29,080		$	103,806
Investing activities
Payments for acquisition of businesses, net of cash received		(11,855	)		(7,157	)		(21,754	)	$	(40,766	)
Purchases of property and equipment		(2,092	)		(16,064	)		(4,838	)	$	(22,994	)
Other		24			—			—		$	24

Net cash used in investing activities		(13,923	)		(23,221	)		(26,592	)		(63,736	)

Financing activities
Payments of long-term debt		—			(6,000	)		—			(6,000	)
Net issuance of common stock and other		6,437			—			(1,029	)		5,408
Purchase and retirement of common stock		(48,769	)		—			—			(48,769	)
Intercompany transfers		91,226			(82,938	)		(8,288	)		—

Net cash provided by (used in) financing activities		48,894			(88,938	)		(9,317	)		(49,361	)

Effect of exchange rate changes on cash and cash equivalents		—			—			432			432

Net decrease in cash and cash equivalents		(2,211	)		(251	)		(6,397	)		(8,859	)
Cash and cash equivalents, beginning of period		66,663			610			89,512			156,785

Cash and cash equivalents, end of period	$	64,452		$	359		$	83,115		$	147,926

Condensed Consolidating Statement of Cash Flow for the Nine Months Ended September 30, 2012


	FTI Consulting, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	(47,163	)	$	36,366		$	24,421		$	13,624
Investing activities
Payments for acquisition of businesses, net of cash received		(26,089	)		—			(364	)		(26,453	)
Purchases of property and equipment		(6,016	)		(11,689	)		(2,829	)		(20,534	)
Other		(1,105	)		—			—			(1,105	)

Net cash used in investing activities		(33,210	)		(11,689	)		(3,193	)		(48,092	)

Financing activities
Borrowings under revolving line of credit		75,000			—			—			75,000
Payments of long-term debt and capital lease obligations		(156,438	)		(49	)		—			(156,487	)
Purchase and retirement of common stock		(20,013	)		—			—			(20,013	)
Net issuance of common stock and other		513			—			(1,972	)		(1,459	)
Intercompany transfers		51,398			(24,278	)		(27,120	)		—

Net cash used in financing activities		(49,540	)		(24,327	)		(29,092	)		(102,959	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(68	)		(68	)

Net decrease in cash and cash equivalents		(129,913	)		350			(7,932	)		(137,495	)
Cash and cash equivalents, beginning of period		161,180			197			103,046			264,423

Cash and cash equivalents, end of period	$	31,267		$	547		$	95,114		$	126,928