2009 Annual Report (PDF) - FTI Consulting

the e-discovery market led us to create and launchAcuity, our new integrated e-discovery and documentreview offering, in February of 2010. Acuity addressesthe developing needs of our clients by providing themwith award-winning technology that offers a singlepoint of control over the e-discovery and documentreview process while seeking to drive significant costsavings for our clients in the review process, by farthe most expensive part of e-discovery and a part ofthe e-discovery continuum in which heretofore FTI didnot participate. In addition to Acuity, we introducedRingtail® QuickCull in late-2009, a revolutionary productthat streamlines and lowers the cost of e-discovery byfocusing legal teams only on what is important for casestrategy. The Technology segment continues to be thego-to solution when companies and organizations needto “be ready and be right.” We see that business poisedfor growth in the coming year and beyond.The Economic Consulting segment also had a recordrevenue year in 2009. Anticipating an increase in demandinternationally for antitrust advice, and for damagesanalysis and disputes resolution flowing out of the creditcrisis, we invested heavily in the future of the segment.We increased the number of professionals byapproximately 14%, including a number of worldclassexperts; expanded our presence in London, thebeachhead for our expansion into the European market;and established new offices in New York and Los Angeles.For the year, Economic Consulting’s revenues grew to$234.7 million, up 7% over the $219.9 million generatedby the segment in 2008 with record revenues in the thirdand fourth quarters. The segment produced EBITDA of$47.8 million, even after the significant investments madein professionals and the opening of new offices whichare in the process of growing into normalized levels ofutilization and profitability.The Strategic Communications segment is our mostglobal and most economically sensitive business.Revenues for the segment were $180.1 million in 2009,reflecting a decline in corporate discretionary spending,a significantly lower level of IPO and M&A activity andheadwinds from unfavorable foreign exchange rates dueto the stronger US dollar. EBITDA for the segment was$24.9 million. We responded to market conditions early inthe year by undertaking a number of initiatives to reducecosts in the segment and were rewarded with a steadyprogression of improved profitability throughout 2009.Despite the adverse operating environment during theyear, the Strategic Communications segment remainedone of the most active global M&A communicationsadvisors in the world, strong evidence that it continuesto be a global market leader across the economic cycle.From a strategic standpoint in 2009 we continuedto execute on our goal of investing in global expansion,domain expertise and an expanded range of specialistskills. Our acquisition activity was below the pace of2008, as we focused on the continued integration of the15 organizations that we acquired that year. We believethe benefits of this focus on efficiency will be evident foryears to come.Given the long-term structural transformationsoccurring in the telecom, media and cable sectors, at thevery end of 2008 we acquired CXO LLC, a premier interimand turnaround management services firm with particularfocus on these industries. We integrated CXO into ourCommunications, Media and Entertainment practice(CME) and this was an important factor in the excellentperformance of CME in 2009.We also saw continued growth in the number, sizeand complexity of international arbitration cases. Theamounts in dispute are often very large, the valuationand damages issues are complex and the cases must beresolved across multiple jurisdictions. FTI is ideally suitedto advise our clients on these matters, and we madeconsiderable progress in building out our InternationalArbitration practice during the year. From our originalbase in London, we have expanded on a global scalewith resources in Paris, Geneva, Hong Kong, New York,Washington and Toronto.We also further extended our depth in complexinvestigations to better serve clients in the new eraof greater regulatory ardor. We recruited a team of 20forensic and investigations professionals in our Bostonoffice which expands our expertise in this criticaldiscipline, and we launched a financial investigationsand litigation-focused practice in Paris to better servethe Continental European market.As we look into 2010 there are significant cross currentsthat cloud our crystal ball. On the positive side, the worldseems to have passed the danger point of a catastrophicfinancial or economic meltdown. Global capital marketsare again active, so high quality companies can onceagain access the markets to address their financingneeds. Managements have moved beyond their bunkermentalities and are looking to invest in their businessesand grow through acquisitions.On the other hand, unemployment remains high,the broader banking industry is still fragile, and thereare strains on state and municipal debt in the US andsovereign debt around the globe.Within this context, we look to have another recordyear in 2010. We have intellectual capital and financialstrength that are unmatched in our industry. We havebuilt the Company to perform well in a wide rangeof economic markets. Having grown throughout thedownside of the economic cycle, we now expect