Good day, everyone, and welcome to the FTI Consulting Fourth Quarter and Full Year 2014 Earnings Conference Call. As a reminder, today's call is being recorded. And now for opening remarks and introductions, I'd like to turn the call over to Mollie Hawkes, Director of Investor Relations at FTI Consulting. Please go ahead.

Good morning. Welcome to the FTI Consulting conference call to discuss the company's fourth quarter and full year 2014 results as reported this morning. Management will begin with formal remarks, after which, we'll take your questions. Before we begin, I would like to remind everyone that this conference call may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 of the Securities Exchange Act of 1934 that involve risks and uncertainties. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, future revenues, future results and performance expectations, plans or intentions relating to financial performance, acquisitions, business trends and other information or other matters that are not historical, including statements regarding estimates of our future financial results and other matters. For discussion of risks and other factors that may cause actual results or events to differ from those contemplated by forward-looking statements, investors should review the safe harbor statement in the earnings press release issued this morning, a copy of which is available on our website at www.fticonsulting.com as well as other disclosures under the heading of Risk Factors and Forward-Looking Information in our most recent Form 10-K and in our other filings filed with the SEC. Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this conference call and will not be updated. During the call, we will discuss certain non-GAAP financial measures, such as adjusted EBITDA, adjusted segment EBITDA, total adjusted segment EBITDA, adjusted earnings per share and adjusted net income. For a discussion of these and other non-GAAP financial measures as well as our reconciliation of non-GAAP financial measures to the most recently comparable GAAP measures, investors should review the press release and the accompanying financial tables that we issued this morning. Lastly, there are two items that have been posted to our Investor Relations website this morning for your reference this includes quarterly earnings call presentation that will refer to during this morning call and an Excel and PDF of our historical financial and operating data, which has been updated to include our fourth quarter and full year results. With these formalities out of the way, I am joined today by Steven Gunby, our President and Chief Executive Officer; and David Johnson our Chief Financial Officer. At this time, I will turn the call over to our President and Chief Executive Officer, Steven Gunby.

Thank you, Mollie. Let me join Mollie and welcome everyone to today's call. As many of you know on the call that I recently had my one year anniversary as CEO of FTI. But I like to start by just thanking many of you on this call for the input and thoughts you've given over the last year. It’s obvious that a great number of you have involved with this company for a long time, many of care deeply about this company and number of you have been good enough to share thoughts and observations with me. So thank you very much for that and for those you who I haven’t had the chance to meet this past year I very much look forward to changing that. We had a pre-announcement this quarter that pre-announcement of course did not give the full texture and the opportunity for Q&A that normally companies are earning releases. I suspect therefore that many of you are eager for me to get off this stage and here David give more details regarding the fourth quarter and the earnings outlook. So I will do that, I will be brief here and just a brief introduction. Which I really to make only one point and that is that I -- management team and I continue to have total commitment and conviction in the aspirational targets we have for 2016 and our guidance for 2015. Doesn’t mean we don’t have work to do of course in any professional services firm you have work to do. But the fourth quarter changes not in any way -- in any material way in my mind change the amount of work, the nature of the work, and the type of work. We're very much on track with the process that we outlined…

Thanks, Steve. Before I turn to the results I would like to also briefly talk about our decision to preannounce results. This wasn't an easy decision when the information came together in the last week of January our results were still preliminary and we were not completely done closing the books, we certainly weren't with the audit. Nonetheless we felt it was important to share what we knew quickly. There are two things we value really highly in our communications with our investors, communicating promptly and communicating in depth. In this case we're faced with a conflict between the two and we choose prompt. We understood and we regretted that being early left us unable to make phone calls, answer your questions, offer more details and explanation and I hope they won't be put in that situation again. Turning to the Slide 4 on the deck, I am going to speak in the reverse of our normal order. I talk about some of the mundane but in this case small details and then speak about our business results. So let me start by being clear as Steve said a portion of our mix was driven by the business we ha d some revenue softness later in the quarter. But the business shortfall would have led us to disappoint not preannounce. So let's first walk through some of the unexpected items. For your convenience I have laid those out on Slide 4 with reference to the middle of our previous guidance range $1.93 and compared that to our reported adjusted of EPS of a $1.64. There were a number of tax adjustments in the fourth quarter. The largest item by far was the Australian tax reserve which impacted EPS by $0.11. Over the last few years FTI has made a significant…

Thank you, David. Before we open for questions, I want to say a few more comments which have the risk of some redundancy given David’s through remarks, but I think there are some points that are worth underscoring. First of all obviously Dave and I both share disappointment in some of the adjustments we need to make in the fourth quarter, but just like David I just want to underscore the point it started with which is, that shortfall in no way shakes our confidence and where we can get this company over the medium-term and in fact has not shaken our confidence and where we think we can get in 2015. It was clear when we -- when I came here a year ago and as many of you said to me, when I first came into the role, the said of activities required to realize the full potential of this great company and other small list of activities and not a one-year activity. We haven’t thought of it that way. We’ve gotten enormous amount done in 2014, but that does not mean there is not a lot to do in 2015 and ’16 in each of our businesses and at the corporate level and not just to realize the targets we talked about at our Investor Day or today but it's more important to realize the fundamental underline potential of this company. To realize the aspirations of incredibly dedicated people who work here, what I feel good about is the fact that we are making progress and real progress. And David highlighted some of those examples and let me highlight a few more here, Investor Day last year, a number of you noted that one of the keys going forward was to have corporate finance and restructuring start…

[Operator Instructions] And we'll take our first question from Tobey Sommer, SunTrust.

I was wondering -- just a couple questions on the economic consulting segment. How do you feel like your market share is in the economic consulting area, how do you feeling like that’s trending?

I think our sense -- it can be very volatile quarter by quarter in the sense that you have a big thing that rolls often, somebody else has want a big thing. I think if you look over any extended period of time we have been gaining shares substantially in that business. Originally, primarily in the U.S but now both in the U.S. and in Europe, so I think that’s a long term trend that we have seen. I couldn’t tell you what happened in the fourth quarter.

What is the backlog kind of retainer look like related to Anitrust work because you did cite some large project that I guess have either slowed or ended in the fourth quarter? But given all the transactions out in the news, it would appear to me that you probably have some kind of backlog, could you comment on that?

Yes well given the sensitivity in some of that work we have to be fairly discrete about our backlog. But I think the folks are feeling pretty optimistic about some of the activities that you're seeing out there and our ability to play meaningful role. So again I would say that -- again we don’t necessarily have like committed set of hours that you're expecting through the balance of the year. But in terms of the number of matters that have emerged or are emerging and the role that we expect to have them I think we're optimistic about the backlog in Antitrust. We have actually wanted some very exciting things there, the question is not only the -- of course the point about total commitment of ours is a real one. But the other issues the timing in and the starts of those some of them have been laid up of into February-January so that none of those have really benefited Econ's early start to this year. But I think as per the talk still in that group, they're pretty bullish on what they're winning out there Tobey, that’s the core question.

Just one follow up and then I'll get back in the queue. When you're involved in a matter and you get kind of brought in because of your positioning in the economic consulting space, do you often also capture much second request work as a result of that -- in the technology segment? Thanks.

So both as a result of that and independently. We have a strong second request work in our technology booth independently because technology has done a lot of second request work and is seen as extremely capable and fast and moving on that but also sometimes joint with our economic consulting group.

And we will take our next question from Paul Ginocchio of Deutsche Bank.

Just beginning with economics, I know that this was previous to your tenure but obviously you signed a new deal and the margins were a little bit lower. How do you feel about that, I mean how do you feel about the sort of fairness of that deal now and where can economic margins go overtime based on those new contracts that were signed a year ago? Thanks.

Paul anytime I can find people of the caliber that we have here are willing to work for a dollar a year I am signing them up. So I haven't found that many folks like that but if you have folks to bring to my attention I am open to it. I think it was obviously an expensive deal the people are very talented in that space, I haven’t gone back and micro looked at that deal to say oh I would have changed this I would have changed that there is no use of that. Truth is we're excited about the people we have there and that deal will be economically very attractive for this company, so as long as we continue to grow that business in the way we have historically -- it looks a lot less attractive in a month were the revenue was down but that is not our long-term forecast for that business. So I think our commitment is to grow that business behind those contracts and return to what has been historically a substantial contributor shareholders value and return that business to that overtime. Does that help Paul?

It does. And I think you talked about high teens or David talked about high teens margins is that sort of the upper limit or it could?

I think I said getting back to the margins that it was in for the latter of last year and the latter part of this year, so I said that’s with mid-teens in the [indiscernible].

Just maybe let me speak one more on strategic, how are you trying to reposition that, what are areas are you investing in strategic communications?

So look, I think the strategy side of that we haven't been disclosed because it obviously has effects on hiring's and investments in certain areas. But so I have to be at high level on that, I mean we have obviously been a little more granular on some of the cost side. But I think Paul I guess it's just in line with what you might expect which is that if you disaggregate our business we have places around the world where we're seen and sub-segments of that business where are seen as the leading folks or have a real credible shot at being the leading folks. And the question we ask there is please can we grow that? For example energy, public affairs in the U.S and globally what can we do to grow that, so we ask those sorts of questions. And then we have some places where we're weaker than we would like, so we ask the questions, do we see a credible way to strength that position, where we do what do we need do. And so it's that systematic process of asking questions that lead to quite specific sets of plans that are by sub-segment by geography which we put in place and then monitor quarterly -- in fact I am having a -- after this call while David is talking to all of you, I am having four hour meeting with Stratcom to review some specific plans against that. So I think I have to leave it at that high level, but does that give you a feel?

It does, thank you.

And we will take our next question from Kevin McVeigh at Macquarie.

Hey, can you give us a sense of how big Australia is today and what the FLC business restructured business grew without the Australian headwinds?

I think David is looking up some answers. I would say my answer is Australia right now is less big than I had hoped it would be -- quite in time Kevin but I think David will give you more granularities on that.

I had one other one just in terms of the items that caught us by surprise in Q4, is there any way to just frame that we have gotten it all at this point, was it just a function of the year-end close kind of going through the first closure, just any confidence that there is no other items that may kind of come out if you would?

I am going to let David answer that, go into the details of that but he is looking it up.

We will have to get back to you on the exact number on Australia, what was the other question?

David, confidence that there aren't any other kind of unanticipated items if you would, was it a function of just the year-end close or that we have all the tax adjustments and so on so forth, it's in like there were a couple of items that maybe came in unexpected that we have captured them all and no other surprises after, if you would.

Yes, on Australia, I think it's likely we’re talking about 3% to 5% of the whole company including all segments, but we’ll get back to as more granular number. So every quarter we do feel confidently that all the items in the fourth quarter absolutely, some of those items were driven by unique events in the fourth quarter and could -- can and will there be unique events that give this continuous result in the future, yes. The question is can we do a better job of anticipating them and making sure that they are perfectly communicated. So for example, the largest one increase the evaluation allowance that, we were not -- we were expecting a profitable fourth quarter in Australia that would have dealt with that issue and not put us in this position where we needed evaluation allowance. So could we have a similar valuation allowance emerging some other taxable -- tax [penalty] or tax jurisdiction in the future, absolutely; are we worried about one as we sit here today, no; should we do a better job of forecasting and preparing for that in a sort of eventuality, yes and we’ll be working on that. The unexpected -- [equan] has its own story, so then expected equalization expense we cap that program to eliminate that problem going forward. Questions about severance, that was a decision made that was good for the business and if that -- I think one of the things that we are committed to is to make decisions like that that are good for the business and will put us in the correct position going forward and if that causes us to miss or be at variance by a few pennies we will take those decisions, obviously that was a small part of the $0.29, but that sort of volatility we will embrace if we have to keep positive our long-term future. So, I -- bottom-line is to the extent of volatility with us making decisions and not managing quarter-to-quarter or putting off important decisions in order to protect the quarter, we will have that volatility, but that can be managed and that will be small in scheme of thing, but we have things like tax event yes and I frankly expect more tax volatility, not valuation allowances, but changes in the effect of tax rate as we get more of our income and profitability overseas which is certainly has not been a problem for FTI i.e. growing profit, but we see that going forward. A long winded answer, but the answer is yes and no, I’ve certainly feel confident we captured everything we needed to. The volatility had number of stories, some we’ll do better with forecasting, some we will do better with managing with business, but some we will actually embrace it.

And then just real quick, in terms of absolute dollars did FX impact to ’15 guidance from a revenue perspective?

More than it has historically actually; again this is new for us. Our team is actually quite surprised, I think all things being equal the guidance could have been $0.5 to $0.10 higher if FX at all had been around back where it was six months ago.

We’ll take our next question from Robert Simmons with Janney.

Sitting in for Joe Foresi. How do you think that the shifts in oil prices is going to impact these readings?

Okay, the subject that we’re talking about substantially here. It has different effects on different businesses, but I would say in general our business is benefitted from substantial market volatility, we’ve substantial market volatility unfortunately it mean some companies who are in financial difficulty when then benefits our restructuring practices some of that sometimes will required need for prices communications or for advice on communication which benefits the communications business and we can also lead to mergers and acquisition sometimes which then effects some of our other businesses. So, we are obviously working on that pretty aggressively, I mean all of our groups have reached out to contacts in those industries and are talking and we’ve had some too -- the oil volatility and we expect more going forward.

Besides just volatility that was higher -- is the oil prices generally going to be good thing or is that just the volatility going in that matters?

Well, I am not sure, I haven’t really thought that through and I am not sure we have left, we’re don’t have [communications] that have sat down and look through the correct order effects of lower oil prices through higher consumers and whether that means in other segments fewer people go bankrupt and stuff like that. But I would say the volatility clearly creates changes in marketplace that drive demand for our services and I would say the drop to $50 in the near-term is a beneficial effect overall on our company.

Up next we got to Randle Reece, Avondale Partners.

First of all if you look at your segment breakdown the unallocated corporate this quarter was 23.7 million. And that was up from about 17 million in the previous quarter. What was the change their?

That was investments the biggest of which was our all SMD partners meeting which we held in November and that was expected.

Speaking of the partners meeting, does that have any effect it all in your operating results this quarter?

This is something you could torture the data either way. You can obviously make the arguments that people taking a week of people’s time out of the market which in some cases it was a week and something those to three days has an effect and you say, how can you not have an effect. So I think you could say that what I think the interesting this is this is not your question we got 268 responses from our survey after it one person out of 268 thought it wasn’t work his time to go to the all SMD meeting. I don’t know if you've been in professional services a long time Randy, they're very few times you can get a professional services organization to that degree of unanimity.

They’re really scared of you?

No, that was an anonymous reply to the survey they were allow saying whatever they wanted. But that still could be consistent with what we did here, which people found the connections across the organization very powerful. They thought it was both motivating but also very helpful for selling business going forward and finding linkage to the cost things. So could be still consistent with a view that it had some effectiveness this quarter and we'll have a beneficial effect down the road. But I don’t think either David or I want to say, if it wasn’t for the SMD meeting the fourth quarter would have come in where we originally forecasted. I don’t think we think it's the dominant cost does that helps Randy.

I understand that I know you anticipated the meeting beforehand. Finally, just looking across the business having been in for a year. I was wondering if you have formulated any kind of view about what the most important driving trends in your end markets are right now. The things that either presents your greatest growth opportunity or maybe increase risk.

Yes so we spend a lot time thinking about that, I mean Paul Linton is in the room with me. He is the head of Strategy and Transformation. He kind of like to talk about it -- we do talk about that every quarter with the businesses. Let me take you to the question slightly differently, I think -- the issue here is I don’t see some market forces out there that are going to cause any of our businesses to implode nor do I see the market forces that we can sort of sit back and just say, the tide will make us rise. But what I do feel like we have in the every business. In sub segments in every business and in parts in every geography not in every geography but in parts in every geography. We have powerful positions that are under exploited that if we just focus on them and deepen our client relationships or extend our brand to people who don’t know what we did for X, Y or Z case but should we find results. And that’s a large amount of what we're doing. I mean in Econ we are the leader in international arbitration. Somebody in London realize we had only talk to I think 23% of the leading international arbitration attorneys in London. Now we probably have talk more than any of our competitors but 23% leaves you a lot of room to grow. Now there is an opportunity that international arbitration as a market will grow which we believe it will but actually by far the biggest opportunity is not waiting around for the market to grow but us to make sure that our message about why our core client see that they get better results hiring us is out there to more people. And so that’s where we're driving it. My goal for this company is to not have to stand up year after year and sort of blame bad results often on market conditions or you know [crow] that market conditions are good our goal and it doesn’t mean we won't be effected quarter by quarter is to actually make a company that can grow successfully over any extended period of time independent of market conditions and I think the conditions are right for that does that touch on your question?

And we go next to Tim McHugh of William Blair & Company.

On economics I guess just a come back to that I guess, what gives you the confidence that the demand trends are going to rebound? I guess you talked about your monitoring the revenue trends from late Q4 and early Q1 but I think people have asked about the backlog but just given there is a not a ton of visibility I think you had talked about your guidance expecting them to get back to high single-digit growth by kind of after Q1. What gives you the confidence around that I guess?

I will give you two answers David can chime in if he has anything different. One of them is just the fundamental capability and we're clearly the leaders in that practice and around the world. Now that doesn't necessarily mean that if the markets go south in a hurry then you don't get affected but my experience of professional services is the leaders in businesses tend to gain share when markets go south. And so even if it did I would suspect we would do better than the market. The other issue is just actually the collection of anecdotes I have had, as I’ve talked with John and some of the folks like Donald and Michelle in the business we are winning some of the major jobs that are you reading around in the world on the Wall Street Journal and have been in the last two months. It's just some of them haven't started. So I think we have more than just a general view that supports the sense that business has kind of rebounded. It's taking a little longer than would you have liked this year. And again to not to make reference to history to support, but the Ecom gave us a little scare at the beginning of last year and also and came back quite nicely in the second and the third quarter, so that combined with what we're hearing about their backlog give us -- we are not panicked. This kind of December, January effect seems to have been and that thing is becoming a yearly pattern but we've seen weakness in the beginning before. Answering the question that we heard earlier I apologize for the delays we're segment oriented so we had to add up Australia in each of the different parts of the company and it's about 45 million in revenue last year.

Okay. And maybe as long as you mentioned how much of that is restructuring I think that’s the key kind of piece?

It's the Lion’s share of it.

And then on the corporate finance and restructuring, how do we think about maybe not even --.

It’s not like we don't defend our colleagues down there, we also have a growing and very nice -- small but growing and very nice Stratcom business down there.

On corporate finance and restructuring, what's the goal for the margin as you start to get a rebound there I guess I am sure that the big piece as we think about your business covering. It's a bit different mix than the past so if we're trying to understand what that can get back to?

Yes let me give you a little bit of a high level thing while David's looking up some numbers which is I do think that as we have gotten more into adjacent businesses which I think we've been slower than we could have been, but we're now moving forcefully into them like performance improvement. We will not have the peak margins that we did back when we were purely a restructuring house in the middle of a restructuring boom. I think those days are behind us but obviously we beat the margins in this business both by growing performance improvement to a more profitable business and by rebound and restructuring can go up and quite considerably from where they are. That's a conceptual answer, David I don't know if you want to give more specifics on that.

I think we were looking at that being around in the high teens this year consistent with and a little bit better than last year.

I guess and is the high teens where you would -- is that optimal for that business than given the mix or that is still --?

If went to a heavy overweight distressed obviously that could go higher. What's optimal is a really good question. I mean we sometimes debate about wouldn't it be wonderful if -- with all bankruptcy all the time and the margins look like they did four or five years ago or five or six years ago. But then you would be giving up the non-distressed franchises that we have worked so hard to build which are lower margin but nonetheless generate good profit and keep the segment engaged in good times as well as bad but of course that's reversed in that segment. So I am not that very well couldn't prove to be optimal if we really achieve everything we want in terms of growing the non-distress business and that becomes a permanent and large portion of that business, I don't think we planned it.

Let me maybe answer this in a different way. I don’t think we lack ambition for that business. If you remember at Investor Day if I get more questions on the aspirational targets for that business which if I recall correctly was a $100 million in EBITDA in 2016 and the reason was that lot of people were pointing to the fact that although we hadn't been north of that at one point in time we were down in the 60s in 2013 and predicting in 50s in 2014, which is where we came out. So we clearly are committed to turning that around. I just don’t like the focus on EBITDA dollars more than EBITDA percent because you get them by both growing top-line and bottom-line and because I do think we have to invest in adjacent spaces than we have to be willing to hit EBITDA dollars -- invest. And so if you had only been focused on EBITDA percent we never have made these bets that we’re making in Europe and I think these bets in Europe are key to the turnaround, we need to come up with other bets. So hence you hear the squeamishness without sort of committing to EBITDA percent target but there is not a lot of squeamishness about the aggressiveness that we have to having that business player 2014 at the bottom in terms of EBITDA dollars and going up substantially from there, does that help?

We turn next to Jerry Herman of Stifel.

I know it's getting late, just want to ask maybe one compound question if I can. David I am wondering if you could give a little bit or would be willing to give a little bit more color around the first quarter you referenced Steven and David that there is some weakness in January and then some of the businesses you cited in expectation that they would strengthening as the year progresses. But are you willing to maybe share some greater guidance on the first quarter? And then secondly I just want to be clear that your full year guidance and EPS does include the impact of that FX and I think you referenced that at whatever $0.05 to $0.10 per share?

Yes, sort of answered that backward, the guidance does include the effects of FX and we recalculated that as recently as the end of January. And though then the impact of that is kind of spread across there, but probably was couple of pennies for first quarter. The impact on the balance of the year, again which combination of revenues and profit, in which jurisdictions, in which currencies, but that would be depending on how you flex it while measuring it relative to -- I think our guidance would have been higher by $0.05 to $0.10 if we had particular configuration of revenues and currencies that was placed in mid fourth quarter. with regards to quarterly guidance, we’re not -- we’ve made decision we’re not doing quarterly guidance at this point, but I think it's fair to say that first quarter is always generally been our weakest quarter, seasonally that’s been our pattern and that’s what we’re expecting this year. We are definitely monitoring -- I think we’ve called out the segments that we’re monitoring that had a flow out of the box January economics and technology and -- so we were definitely focused on them, but they are working very hard and in economic especially very encouraging backlog developing. And we did give the specific guidance segment-by-segment which I am happy to go over with you again in terms of margin and contribution in each segment for first quarter, so happy to reiterate that for you.

And we’ll take our final question from Tobey Sommer of SunTrust.

Just one question, what are your plans to grow the billable consultant headcount in 2015?

Yes, there are substantial plans to continue to grow those. As I think I’ve mentioned earlier a key to organic growth is to actually best kind key positions and some of that is around -- a lot of that is around hiring into the right place. We did have some success on that in 2014 in a number of areas; I mean if we look at FLC particularly, even though we probably didn’t fully hit the targets that we had for FLC, I think the headcount year-on-year is probably up close to 10% or maybe over 10%. And we’re excited about that and that’s net obviously of people who you treat and some of the other segments had fair amount of success in the -- later in the year. We have ongoing plans, I mean that is just part of our business going forward and we -- what we have to do is the budget bringing in people ahead of demand, not just waiting and reacting to demand because what the scoop is in professional services, you react to the demand and then you're just pulling people off the street who you can get and you need to be proactive about that and that’s probably not a muscle that has had as much working here as it has been in other professional services firms of muscle or developing, but it's a muscle we’re committed to develop. So every year we are committed to budgeting in the budgets the additional span segment-by-segment and region-by-region to support the growth not only for that year because usually it's a cost of that year it's essential for the growth for the next year. So that’s the qualitative answer, do we have any specific numbers you want to share on that or not? We don’t share those numbers, but the key part of our budgeting process that will be a backhaul.

So, if you're not going to get specific numbers, would it be fair to say that the growth in billable headcount will likely at least slightly exceed growth in revenue?

Well, I would say over on an extended period of time we would expect revenue to grow faster than billable headcount because we will overtime improve price realization and so forth. Now in any short period of time as we’re doing catch-up headcount will grow faster than revenue in certain segments that will clearly be the case this year. I haven’t done the calculation to look at that overall.

Yes for improving leverage obviously with lower price people it should keep up --.

Some segments we're really focusing on increasing the leverage. So I would think on average this year the headcount probably goes up faster than revenue, but that’s a guess I suppose -- I'm not looking at a sheet of paper to give that answer. Does that give you a conceptual picture of what we're --?

Yes it does, thank you for your help.

Thanks to all of you guys for the support you've given over this past year and I really appreciate it. Anything else Mollie.

Thank you everyone for joining and we'll talk to you next quarter.