FTI Consulting, Inc.

Good morning, everyone, and welcome to the FTI Consulting Fourth Quarter and Full Year 2023 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypads. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Molly Hawks, Head of Investor Relations. Ma'am, please go ahead.

Good morning. Welcome to the FTI Consulting Conference call to discuss the company's fourth quarter and full year 2023 earnings results, as reported this morning. Management will begin with formal remarks after which they will 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, 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, initiatives, projects, prospects, policies, processes and practices, objectives, goals, commitments, strategies, future events, future revenues, future results and performance, future capital allocations and expenditures, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends, ESG-related matters, new or changes to laws and regulations, scientific or technological developments. 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 headings of risk factors and forward-looking information in our quarterly report on our annual report on Form 10-K for the year ended December 31st, 2023, and in our other filings 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 earnings call and will not be updated. During the call, we will discuss certain non-GAAP financial measures, such as total segment operating incomes adjusted EBITDA, total adjusted segment EBITDA, adjusted earnings per diluted share, adjusted net income, adjusted EBITDA margin, and free cash flow. For a discussion of these and other non-GAAP financial measures, as well as our reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures, investors should review the press release and the accompanying financial tables that we issued this morning, which include the reconciliations. Lastly, there are two items that have been posted to the investor relations section of our website for your reference. These include a quarterly earnings presentation and an Excel and PDF of our historical financial and operating data, which have been updated to include our fourth quarter and full year 2023 results. Of note, during today's prepared remarks, management will not speak directly to the quarterly earnings presentation posted to the investor relations section of our website. To ensure our disclosures are consistent, these slides provide the similar details as they have historically, and as I have said, are available on the investor relations section of our website. With these formalities out of the way, I'm joined today by Stephen Gumby, our President and Chief Executive Officer, and Ajay Savarwal, our Chief Financial Officer. At this time, I will turn the call over for our President and Chief Executive Officer, Steve Gumby.

Thank you, Molly. Welcome, everyone, and thank you all for joining us this morning. I'm sure many of you saw in this morning's press release, we delivered fabulous results in the fourth quarter and fabulous results more generally in the second half of the year. Those results in turn turned the year, the whole year, into one that was terrific overall. The results at the end of this year exceeded our expectations and I suspect many of yours as well. So what I'd like to do, before turning this over to Ajay, who will go through the quarter in more detail, is take a moment to reflect on the entire year. In particular, to reflect on the variation we saw in some of the performance metrics across the quarters and talk about how we thought about what actions we should take and what actions we shouldn't take as the year went on. I'm hoping those reflections support the more general conversations that we've had from time to time about how do we think about the twin objectives of being responsible stewards of this company, for you as shareholders, being seen as responsible stewards. Also, not losing sight of the core ultimate objective, which of course is not quarterly earnings, which can be very transient, but rather is building something more powerful, an ever more capable organization, a more welcoming organization, one that can make ever more difference for our clients, one that's ever more able to attract customers, great people and support them so they can develop themselves and the people around them. And through that, create something real, something durable for our clients and for our people and for you, our shareholders. Looking back, I'm sure as many of you will recall, our first quarter's earnings were well below our internal expectations, below Streets' expectations. and down versus the prior year. Even halfway through the year, earnings were only flat versus the first half of the year. To the responsibility point, when you have periods of time where earnings are down or flat, you have to, as a responsible management team, look at the underlying causes and challenge oneself. If the results are down because you're losing traction with clients or professionals are departing in droves or you're not attracting more great professionals, Those are serious indicators, indicators you may have fundamental problems and you may need to react in fundamental ways. We look at the company's performance actually on an ongoing basis, after every quarter, in every good quarter, and ask those questions. But of course, we particularly ask them when quarters are down. And if you remember, during the first half of the year, that was the time when a number of competitors were talking about difficult market conditions and when some of them were taking major actions. And that sort of commentary and set of actions also has to cause one to reflect.