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Fourth-Quarter Results
For the quarter, revenues were $104.9 million, an increase of 9.0 percent compared with $96.2 million for the fourth quarter of 2003. Income from operations before one-time charges declined 22.4 percent to $20.1 million from $25.9 million before one-time charges in the comparable quarter last year. Income from operations for the fourth quarter of 2004 was reduced by one-time charges totaling $6.2 million described below, while income from operations for the 2003 period was reduced by one-time charges of $3.1 million.

Earnings per share before one-time charges in the fourth quarter of 2004 declined 22.9 percent to $0.27 on a diluted basis compared with $0.34 last year before one-time charges. Earnings per share for the fourth quarter of 2004 were reduced by approximately $0.01 for a change in the company’s income tax rate for calendar 2004 to 42.1 percent from the 41.6 percent estimated rate used for the first nine months of the year, and were also reduced by one-time charges totaling approximately $0.09 per share as follows: (a) a $0.06 per share charge for moving the company’s New York office and closing one of its Saddle Brook, N.J., offices; (b) a $0.02 per share non-cash charge for amortization expense on intangibles related to the fourth-quarter 2003 acquisitions of DAS and Lexecon based on the independent purchase price allocations and assigned useful lives that differed from the preliminary estimates; and (c) a $0.01 per share charge for a discount of $475,000 related to the prepayment of a $6.0 million note receivable, due in 2010, from the purchasers of the company’s former SEA subsidiary. Earnings per share for the fourth quarter of 2003 were reduced by approximately $0.04 per diluted share for “special termination expenses” in FTI’s corporate finance/restructuring practice. Earnings per diluted share on a Generally Accepted Accounting Principles (GAAP) basis after the one-time charges were $0.18 for the fourth quarter of 2004 and $0.30 for the fourth quarter of 2003. In addition, earnings for the fourth quarter of 2004 benefited by approximately $0.02 per share related to the settlement of various lawsuits, net of legal costs.

Earnings from operations before interest, taxes, depreciation and amortization (EBITDA) before one-time charges (Adjusted EBITDA) were $25.3 million compared with $25.9 million in the prior year, a decrease of 2.3 percent. Although Adjusted EBITDA and EBITDA are not measures of financial condition or performance determined in accordance with GAAP, FTI believes that they are useful operating performance measures for evaluating its results of operations from period to period and as compared to its competitors. EBITDA is a common alternative measure of operating performance used by investors, financial analysts and rating agencies to value and compare the financial performance of companies in its industry. FTI uses EBITDA to evaluate and compare the operating performance of its segments and it is one of the primary measures used to determine employee bonuses. FTI also uses EBITDA to value businesses it acquires or anticipates acquiring. A reconciliation of Adjusted EBITDA before one-time charges to net earnings and EBITDA is included in the accompanying tables to this press release. Adjusted EBITDA and EBITDA are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same. In addition, because the calculation of EBITDA in the maintenance covenants contained in FTI’s credit facilities is based on accounting policies in use, consistently applied from the time the indebtedness was incurred, Adjusted EBITDA and EBITDA as supplemental financial measures are also indicative of the company’s capacity to service debt and thereby provide additional useful information to investors regarding the company’s financial condition and results of operations. Adjusted EBITDA and EBITDA for purposes of those covenants are not calculated in the same manner as they are calculated in the accompanying table.

Cash flow provided by operations was $28.2 million compared with $14.7 million in the fourth quarter of 2003. At December 31, 2004, FTI had cash and cash equivalents of approximately $25.7 million. Total long-term debt at December 31, 2004 was $105.0 million. During the fourth quarter, the company repurchased 78,400 shares of common stock at an average price of $18.89 per share, for an aggregate of approximately $1.5 million. At December 31, 2004, the remaining amount authorized under the company’s current share repurchase program was approximately $35.2 million.

Total headcount at December 31, 2004 was 1,035, and billable headcount was 745. Utilization of billable personnel was approximately 74 percent for the fourth quarter, and average rate per hour for the quarter was approximately $359.

Fourth-Quarter Business Segment Results
FTI’s three major business practices—corporate finance/restructuring, forensic and litigation consulting, and economic consulting—began reporting as segments beginning with the first quarter of 2004 in accordance with GAAP under Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information. In 2003, FTI’s business practices were not operated as segments, and accordingly the company did not report results of operations by segment. The accompanying table reports revenues and Adjusted EBITDA before one-time charges by segment for the fourth quarter and full year 2004, as well as associated segment business metrics, and for the fourth quarter and full year 2003 reports only revenues and associated business metrics by major practice area, which are estimates derived from classifying client engagements by the principal nature of the service.

Corporate finance/restructuring revenues were $39.2 million for the fourth quarter. Although 33.1 percent less than the $58.6 million recorded in the 2003 fourth quarter, revenues were essentially flat when allowance is made for the revenues lost after a group of professionals in the company’s restructuring practice departed in the first quarter of 2004. Its Adjusted EBITDA margin before one-time charges was 30.3 percent for the fourth quarter of 2004, and decreased sequentially from 33.6 percent in the prior quarter, primarily as a result of the continued significant investments in its transaction advisory, interim management, and merger and acquisition practices.

Forensic and litigation consulting revenues increased 53.4 percent to $44.8 million in the fourth quarter from $29.2 million last year as a result of organic growth and the acquisitions of the former dispute advisory business of KPMG (DAS) and Ten Eyck Associates in the fourth quarter of 2003, but reflected a smaller than expected increase from its third-quarter 2004 revenues of $44.0 million, primarily due to a greater than anticipated seasonal slowdown in the fourth quarter. This segment’s fourth-quarter Adjusted EBITDA margin before one-time charges of approximately 26.4 percent reflected a small sequential quarterly decrease from 26.6 percent for the same reason.

Economic consulting revenues were $20.9 million in the fourth quarter of 2004, increasing 148.8 percent from $8.4 million in the fourth quarter of 2003 as a result of the acquisition of Lexecon late in the fourth quarter of 2003 and the organic growth of FTI’s legacy network industries practice, but reflected a smaller than expected increase from its third-quarter revenues of $20.0 million primarily due to a greater than anticipated seasonal slowdown in portions of the business in the fourth quarter. This segment’s Adjusted EBITDA margin before one-time charges of 25.0 percent in the fourth quarter reflected a significant sequential quarterly increase from 16.8 percent, due primarily to a recovery from its temporary slowdown in the third quarter of its legacy telecommunications and other regulatory consulting practices that have higher margins than the portions of the business affected by the fourth quarter seasonal slowdown.

Year 2004 Results
For the year ended December 31, 2004, revenues were $427.0 million, an increase of 13.7 percent compared with $375.7 million from continuing operations for 2003. Income from operations before one-time charges declined 25.6 percent to $84.7 million from $113.8 million from continuing operations in the prior year, and earnings per diluted share before one-time charges declined 30.8 percent to $1.10 on a diluted basis compared with $1.59 last year from continuing operations. Earnings per share were reduced by the previously mentioned one-time charges totaling approximately $0.09 per share for 2004 and $0.04 per share for 2003. Earnings per share on a GAAP basis were $1.01 for 2004 and $1.54 from continuing operations for 2003. In addition, earnings for 2004 benefited by approximately $0.02 per share related to the settlement of various lawsuits, net of legal costs.

Discontinued operations in 2003 include the results of the company’s former SEA practice group, which was sold on August 31, 2003. Income from operations of discontinued operations was $1.6 million, or $0.04 per share, for the year ended December 31, 2003. Net loss from sale of discontinued operations for the year ended December 31, 2003 was $7.0 million, or $0.17 per share. Including the discontinued SEA practice group, earnings per diluted share for 2003 on a GAAP basis were $1.41.

Cash flow provided by operations for the year ended December 31, 2004, was $58.4 million compared with $95.6 million in the prior year. As previously reported, cash flow from operations was reduced by several one-time events in the 2004 first quarter, including approximately $7.0 million to provide working capital for one of the company’s late-2003 acquisitions, and approximately $10.0 million of retainers returned to clients in connection with the first-quarter personnel departures. Adjusted EBITDA from operations before one-time charges was $100.8 million compared with $123.5 million in the prior year, a decrease of 18.4 percent.

Utilization of billable personnel was approximately 77 percent for the full year 2004. Average rate per hour for the year was $354.

For the year, corporate finance/restructuring revenues were $162.5 million, 36.3 percent less than the $255.3 million recorded in 2003, as a result of the reduced volume of new business in the restructuring market, as well as the departure of a number of professionals in the company’s restructuring practice in the first quarter of 2004. Its Adjusted EBITDA margin before one-time charges was 31.2 percent and reflected significant investments in its transaction advisory, interim management and merger and acquisition practices.

Forensic and litigation consulting revenues increased 73.3 percent to $178.7 million from $103.1 million last year as a result of organic growth and the acquisitions of the former dispute advisory business of KPMG (DAS) and Ten Eyck Associates in the fourth quarter of 2003. Its Adjusted EBITDA margin before one-time charges was 28.3 percent and reflected continued investments in key new personnel and the development of new and/or expanded offerings in homeland security, electronic evidence, and data repository consulting.

Economic consulting revenues were $85.9 million in 2004, increasing 396.5 percent from $17.3 million in 2003 as a result of the acquisition of Lexecon late in the fourth quarter of 2003 in addition to organic growth. This segment’s Adjusted EBITDA margin of 22.5 percent before one-time charges was approximately as anticipated.

Outlook for 2005
Revenues are anticipated to range from $460.0 million to $480.0 million, EBITDA to range from $106.0 million to $113.0 million, and earnings per diluted share to range from $1.20 to $1.30. The company expects cash flow from operations to range between $75.0 million and $85.0 million. Average bill rates and utilization are anticipated to be approximately $359 and 75 percent (on a 2,032 hours base), respectively. Average billing rates in 2005 are expected to remain similar to 2004 as rate increases will be offset by changes in staff mix. Utilization in 2005 is predicted to be somewhat lower than 2004, reflecting the company’s continued investment in people and practices. EBITDA margins are expected to improve from 2004 in each of the company’s business segments, and decrease slightly overall, reflecting greater corporate activity including a focus on marketing activities.

Commenting on the 2005 outlook, Jack Dunn, FTI’s president and chief executive officer, said, “As discussed in our prior press release, we expect the market drivers for FTI’s services in 2005 to include increasing default levels in the latter part of 2005 that will strengthen the market for our corporate finance/restructuring business toward the end of the year; the continued effects of Sarbanes-Oxley and federal, state and local emphasis on corporate governance that will combine to increase demand for our forensic and litigation consulting practice; and increased economic activity, generally, and merger and acquisition activity, specifically, that will benefit our economic consulting business. Given these dynamics, the investments we’ve made to build this platform and our market position, we expect to continue to add senior-level personnel and associated staff in 2005 and to aggressively increase our branding and marketing activities to capitalize on this position.”

The accompanying table also indicates business metrics by segment for 2005.

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Fourth-Quarter and Year-End Conference Call
FTI will hold a conference call to discuss fourth-quarter and year-end results and management’s outlook for 2005 at 11:00 a.m. Eastern time on Thursday, February 17, 2005. The call can be accessed live and will be available for replay over the Internet by logging onto www.vcall.com as well as on the company’s website, www.fticonsulting.com, for 90 days.

About FTI Consulting
FTI is the premier provider of corporate finance/restructuring, forensic and litigation consulting, and economic consulting. Strategically located in 24 of the major US cities and London, FTI's total workforce of approximately 1,000 employees includes numerous PhDs, MBA's, CPAs, CIRAs and CFEs, who are committed to delivering the highest level of service to clients. These clients include the world's largest corporations, financial institutions and law firms in matters involving financial and operational improvement and major litigation.

This press release includes "forward-looking" statements that involve uncertainties and risks. There can be no assurance that actual results will not differ from the company's expectations. The company has experienced fluctuating revenues, operating income and cash flow in some prior periods and expects this may occur from time to time in the future. As a result of these possible fluctuations, the company’s actual results may differ from our projections. Further, preliminary results are subject to normal year-end adjustments. Other factors that could cause such differences include pace and timing of additional acquisitions, the company's ability to realize cost savings and efficiencies, competitive and general economic conditions, retention of staff and clients and other risks described in the company's filings with the Securities and Exchange Commission. 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.