Tobey Sommer - SunTrust Robinson Humphrey Arnie Ursaner- CJS Securities Brandt Sakakeeny - Deutsche Bank Andrew Fones - UBS Chris Agnew - Goldman Sachs David Gold - Sidoti Alan Kurtz - Lord Abbett Jim Janesky - Stifel Nicolaus Scott Schneeberger - Oppenheimer Timothy Mchugh - William Blair & Company Dan Suzuki - Merrill Lynch

Good day. And welcome to the FTI Consulting fourth quarter 2007 earnings call. As a reminder, today's call is being recorded. For opening remarks and introductions, I would like to turn the call over to Eric Boyriven of FD. Please go ahead, sir.

Good afternoon. By now you should have received a copy of the company's fourth quarter 2007 press release. If not copies of the press release can be found on the FTI website at www.fticonsulting.com. This conference call is being simultaneously webcast on the company's website and a replay will be available on the site for 90 days. Your hosts for today's call are Jack Dunn, President and Chief Executive Officer; Dennis Shaughnessy, Chairman; Dom DiNapoli, Executive Vice President and Chief Operating Officer; Jorge Celaya, Executive Vice President and Chief Financial Officer; and Dave Bannister, Executive Vice President and Chief Development Officer. Management will begin with formal remarks, after which they'll take your questions. Before we begin, I would like to remind everyone that this conference call may include 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 revenue, operating income and cash flow in prior periods and expects that 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 subjected 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. I would now like to turn the call over to Jack Dunn, President and CEO of FTI. Jack.

Thank you, Eric. And good afternoon and thanks to all of you for joining us on our 2007 fourth quarter and year end conference call. The fourth quarter was just an outstanding finish to an extremely good and important 2007 for FTI. For the full year, we saw the tangible results of the investments we have made in our people, our brand and our infrastructure in prior periods. For the quarter, we maintained the extremely strong momentum that we have built over the course of the year enabling us to produce not only a record year for our company, but an important milestone for FTI. And by that I mean, the virtual completion of our 2009 five year plan, two years early. As you remember the essentials of that plan were to double our revenue to $1billion have 15% of those revenues originate from outside the US, maintain our industry leading profitability and maintain our leverage at below three times EBITDA. I'm pleased to report that for 2007, our revenue topped a billion dollars, 16% of those revenues originated from outside the US. We maintained our industry leading profit margins and our net leverage was below one times EBITDA at year end. Achieving these goals fully two years ahead of plan is attributed to our people, to our strategy, to the platform we have built and to our focus on execution. Our products are proving to be the right ones and our plan for geographical expansion is enjoying not only a strong demand for our services from the local market, but also demand from the multinational organizations coming to us, as one of the select few providers of both the critical mass and the ability to perform in multiple venues, as they increasingly globalize their operations. We think that achieving…

(Operator Instructions) And we'll take our first question from Tobey Sommer of SunTrust Robinson Humphrey.

Tobey Sommer, regarding acquisition in 2008, can you give us what's your additional debt assumption is maybe and then free cash flow and CapEx?

Yeah, our assumption is that we'll be using the cash on our balance sheet and not all of it for the ones that we've outlined in the guidance, which should leave us with sufficient cash balances over the year. So, we would not look for any more debt.

Okay. And also, do you expect strategic foreign buyers to keep the economic consulting busy all year?

They are actually not so much strategic foreign buyers as they are strategic buyers within the US acquiring other companies or certainly as a component of that business. I think, about 16% or 17% of it of course from offshore last year. But we're seeing it broad based among -- it's more driven by sectors that are seeing a financial need to do acquisitions and to [merge] for out of distress and other issues.

Okay, thank you very much.

Thank you, Tobey.

And we'll take our next question from Arnie Ursaner from CJS Securities.

Jack, can you hear me?

Hi Arnie, yes.

It's rarely heard an executive so excited about a very challenging economic world, but it really is playing to your strength. Little quick question I ask you, I think, I may have misheard something you've said in your prepared remarks about the '08 guidance. I think, I heard you say that the acquisitions, you believe would add $0.12 to $0.16, but then I thought after that, you mentioned the $0.40 number?

Yeah, $0.40 would be the -- after we get, typically in an acquisition, you've some accelerated amortization and depreciation for things under the accounting rules where for example you've to attribute a part of the purchase price to backlog and then you've to burn that off as the contracts burn off. So, what we're talking about on a normalized basis, we'd think going forward after about 15 months that these acquisitions could provide us on an annualized basis about $0.40.

Okay.

And Arnie, it's Dennis. We only model these acquisitions for the last three quarter. So, we wouldn't have the benefit of the four years ownership anyway.

But what I thought intriguing is again it's pretty matured to think about '09 but you kind of already laying out of $0.25, $0.30 cushion as you think about '09 you're almost to $3 without any growth, which is a pretty interesting way to think about your business. I hope I'm not thinking about it the wrong way.

No.

The other question I had about your guidance is the 17.5% to 19% organic growth again that's obviously quite a strong absolute number. But trying to understand that relative to the growth you had in '07 the accelerated growth you had in the back half of year and most importantly the comment you made about each of your segment looking into '08 what is causing you to believe your revenue growth will slow from what you're seeing right now?

Arnie, it's Dennis again. Look I think, we're not going to do this model and you sit back and you try to project not only where the demand is taking you but your ability to match the capacity, the service demand with the demand I think that 19% is replicable of what we did last year across the entire year. And I'd say for most companies probably going into recession, if they did 19% top line growth that would be harping the champagne bottles. I think the 17% is a more conservative number and it clearly I agree. It looks conservative compared to the 25%. But I think honestly if we want to model 25% you would probably laugh at us and to realistically sustain 25% over a long period of time, you do get in to capacity issues and we felt it was more appropriate to model something closer to the annual result rather than the last six months.

In the same sprit two more questions if I can. In economic consulting the thing that really quashed your margin was the tremendous excess demand you had, you had to use outside consultants, and yet in the body of your reports, you highlighted since December, is that incredible number of new engagements. Why would you be taking on that many new engagements if you already capacity constrained and if you are taking the model, why aren't you pricing it to either maintain or even expand your margin?

But we are using outside contractors, we are in a business where you don't turn down business, we are also , more importantly in a business where we have a tremendous amount of momentum and a tremendous amount of credibility in economic consulting. We have as we joked before we have three of the top two competition policy (inaudible) in the world they all want to work with us. We had meetings yesterday and the day before strategizing with them how to get more people to do that work. Our goal is to make our great experts available. Its work you can't turn down, because everybody wants us there literally aren't other people to do some of that work. So, we will find a way to do it through outside contractors when we have to, but we are aggressively hiring and looking to acquire as fast as we can.

And I think Arnie the impact of margin was obvious, on the other hand its still a very impressive margin with extremely good top line growth. So, I think you want to keep doing it, we want to recruit people so that we can be less dependent on the outside or co-op the outside consultants to come join us fulltime. But I think it's a high class problem when you have this kind of demand and we are working aggressively to try to build the classic.

If I can have one final question if I may, I know you've at least considered the possibility of (inaudible) spin off for your Tech. Group and it's just booming. What's the update or the status of that please?

I think I'll go back and repeat what we've said and answer that question pretty consistently. Our job as the management of this company is to maximize value for the shareholders. It is quite obvious that the Technology Group is enjoying a tremendous amount of growth not only in the US, but very gratifying to us in Europe and in Asia and now beginning in Latin America. I think Arnie we would continue to look at the relative evaluations of companies that are primarily software or service companies. The revenues in this upcoming year will be about 65% classic technology, licensing fees and hosting fees versus consulting so each year that number approaches more and more of a pure technology offering and I think we just have to very keenly aware of our job to maximize value and we keep trying to get the story out that this is a unique part of the company and a very valuable part of the company. So, I think we'll be watching to see if we receive value from the investment community for this division's performance or else.

A great execution, terrific job, thank you very much.

Thank you Arnie

Thank you

And we will take our next question from Brandt Sakakeeny from Deutsche Bank.

That's Brandt. So just a couple questions again on the technology segment, that did reaccelerate, looks like sequentially 3Q to 4Q, did you get any additional projects there, was there anything that really drove that business in the fourth quarter.

They received some very large projects offshore Brandt, predominantly for out of the Magic Circle law firms in UK for a lot of European clients and received several large assignments in the pharma area on a global basis which have really kicked in the fourth quarter and are continuing to kick in the first quarter.

Okay, great. And just a question on the restructuring business. I mean that traditionally has been a great margin business. As you start to see it cycle up again and some initial engagements, what is your sense for what the margin's could be this cycle, probably not as high as they were in previous cycle but are you seeing anything that would make you think that you couldn't get some margin expansions out of the [Corp Fin] and the restructuring business as that segment ramps up?

Well, this is Dom DiNapoli. With higher utilization margins can ramp up a bit, we have put in place as Jack mentioned incentive plans and retention plans just to secure our top people, that's cost us a little bit, but as we can keep our people busier as the assignments get larger, we can leverage that better and with higher leverage we will generate higher margins, because it's the younger professionals where we make the higher margins. So, a more robust restructuring market should definitely lead to slightly higher margins than we have experienced in the recent past. Additionally, we are moving from more of the [tax] business which is the transaction advisory [due diligence] business which is the transaction advisory, the diligent business which historically has been slightly lower margin that the restructuring business so, just that the movement from that practice into the core restructuring should help these margins a bit also.

Yeah, Brain I think the record margins that we showed in the last restructuring cycle sort of in the low 40s, I think none of us here, feel that we will replicate those margins, structurally, the business is different as Dom said, we have changed the way we compensate with people differently. On the other hand, I think we have also said that this is the one area where we do believe if the utilization and as Dom said the jobs come in, you will continue to see margin expansion, but not at the record levels that you my have seen if you looked at us in the last big recycling cycle.

Great thanks that's helpful. And I guess just for Jorge couple quick mining questions Jorge the tax rate for '08 what should we assume?

Yeah approximately 40%.

Okay. And stock comp expense in the quarter?

For the fourth quarter?

Yeah.

I'll get back to you on this Brandt.

Okay. Perfect thanks.

And we'll take our next question from Andrew Fones of UBS

Hi, can you hear me.

Yes.

Okay. I had a question on the acquisitions; first I think you mentioned that as of today you've added about 246 in billable headcounts since the end of the year, can you tell us, does that include TSC and what proportion of that headcount is [IS] related acquisitions? Thanks.

It's about 50-50. The 50 would be just new hire, net new hire's and 50% would be from the first four acquisitions.

Okay

That's approximate.

Okay so it does include the TSC.

It would include TSC yeah.

Okay. And then I think on the balance sheet you had $360 million in the cash at the end of the year. You're saying that you'll have spent 170 on acquisitions during the first quarter.

Yeah.

Can you tell me what the bonus payout we should expect and so I guess what I'm trying to understand is how much cash you'll have left to peruse acquisitions beyond the first quarter? Thanks.

It could be probably approximately $90 million.

Okay. So you'll have about $100 million or so plus any cash from ops.

Right, right, cash from ops in the first quarter would add to that

Okay. And then you gave some interesting statistics on bankruptcies cases that you are currently active on at the end of the year by different verticals. Can you perhaps compare that to what you had seen a year ago? And beyond the obvious increases in sub-prime and real estate, have you seen increases in some of those other areas, is there are any evidence that the bankruptcies are spreading into two of other verticals? Thanks.

Well, in 2007 early on, we saw that in the automotive sector. And we had some of the largest cases that we have ever had, including Delphi with tremendous bankruptcy and restructuring case. So, as consumer confidence started to wane away, we spread into the other areas, as Jack mentioned. So, just recently that we were really seeing to pick up in retail bankruptcies, as Jack mentioned, we've been fortunate to get in our 15 to 16, probably since September, October, several with regards (inaudible) weeks. So, there is a lot of pick-up there is. The consumer is feeling the pinch of the higher energy cost and the housing prices plummeting. We are going to see a lot more on the; certainly on the real estate side, the automotive side is going to continue and the retail is, particularly the specialty retailers are really starting to feel the pain. On the sub-prime and the financial institution type [warrant] debts. I mean that's really starting to pick up. We have been involved with some of the builders in the part of the last six months, but that looks like that maybe accelerating also. So, generally the restructuring market is looking pretty strong going forward. We haven't seen the mega cases that we have seen in the prior years yet and that really drives profitability to higher utilization. But we assume that the market continues to deteriorate we'd be seeing a lot more of the larger cases over the next six to nine months.

Andrew, we're saying it creep into hospitality as well. We recently received some engagements in the hospitality industry, restaurant chain things like that. But again right to what Dom said I think it's linked to the consumer disposable income and the way he chooses to allocate it.

Okay that's really helpful. And then just a final one on hiring if you could perhaps help us understand what your plans might be, which division should be hiring most aggressively. And then pass spectra earlier question on Economic Consulting, what your thoughts are there and perhaps of that 50% that came from organic hiring in the first quarter how that breaks approximately?

We'd look over the course of the year to increase our headcount by about 25%., but for an average that will creep in over the year. In fact we've always say it will be about 10% to 12% and that's how we get part of our estimates for our growth because we do need in many of our businesses that type of headcount growth to produce the billable hours. As you can imagine two areas that standout are Technology, where we've very aggressive hiring plans and then Restructuring and FLC right now we will try and tamper that with what we see that's the growth in that marketplace that's a little bit behind the others in terms of responding to the credit crisis belt. And in terms of Economic Consulting, we'll take as many people, we can but as you consider that business because it tends to be very much in terms of very credential business it's not as easy to find the number of bodies, when you're looking for the PhDs and economists out of the great university. So, that will be a little slower. But it will as fast as we can at this point as we talk earlier we really do need the people there.

Okay, thanks. And just to be clear that guidance -- does that -- does the headcount guidance, does that include the acquisition?

We'd look to probably add -- that would include the acquisitions we've so for. But not any additional ones we'd do towards the second half of the year.

Okay, thank you.

And we'll take our next question from Chris Agnew of Goldman Sachs.

Thank you good afternoon. Couple of questions on Technology and I guess as you said the mix shift moving more towards pure technology is benefiting margins. Where can you see margins going to for the Technology business?

Well it is no hybrid offering and we actually think this is the strength of the offering and it is the fact that it's a mixture of technology offered services and domain expertise. Clearly the repetitive nature of the business and that we're now hosing a little bit more than a billion electronic pages in our network operating center in the US and in the UK. I mean it's strictly we don't have to replace it the fee licenses does keep recurring the client server installed base licenses are recurring. So, by definition it just keeps building and you should have some margin expansion. But the consulting will always be meaningful here. So, you'll never morph into a classic gross profit margin for the technology business where your main cost are media and then your other cost are marketing, packaging and R&D. So, I think you're right. I think we'd expect -- you can see this division continue to show some margin improvement. But it wouldn't be by leaps and bounds to get you up into the gross profit margin basis of a pure technology play.

Okay. And then the new sales channels for the Ringtail technology did they have a meaningful impact in Q4. Is that something that's going to accelerate the shift to software licensing and who were the value added resellers. And would they include some of your maybe competitors that just don't have the scale for technology business.

The answer to the question would be yes to all of the above. And would be some of our competitors have already branded it, that's a unique channel. There are other value added retailers in certain parts of the world, where we don't have a direct channel distribution that we are utilizing that clearly facilitate our ability to access certain users and if we began to feel an impact of it in the fourth quarter primarily and the effort was really started this summer. So, we would hope that impact would continue as we go forward.

It's not a question of the scale of the value added retailer some of them are very, very large organizations rather it's the proprietary intellectual capital that we had and they're need for that proprietary capital, right?

Okay. That makes sense. And then I think given the sense you are having I think I heard on another conference call some one talked about E-Discovery market being flooded by new entrants. And what are you seeing there and does that impact in anyway maybe your pricing power.

Obviously, it didn't in the fourth quarter. I think what we have heard for numerous years more and more company saying that they are manning up, they are coming in, it's a major growth opportunity for with a major initiative. And I have no clue of what their growth looks like. We can only monitor our own and we've done very well over the last three or four years. Without a doubt when you have a dynamic market like this, Gartner and Forrester and Yankee all projected its growing, marketwise worldwide 30 to 40% growth rate top line, you're going to have new entrants coming in and you are going to have new competition and I think that you have to be prepared to be flexible and to be aggressive in the way, you are investing in your product and scale. I can assure you that we are investing aggressively in this division given the margins that we have to keep our leadership position. We are adding new feature sets to our proprietary technology. We are partnering with other companies to link their technology into our feature sets and we will be looking at these companies and other companies as a potential acquisition target to fall their technology under our tent and offer a broader continue on to the client to keep our lead. And again all of this rest upon the fact that we have five or six years of reputation of delivering. Tremendous results now across the world for wide variety of either key intermediaries, the large court of law firms in the world are Fortune 100 type of clients, who were hosting all these pages for. And again I have to emphasize that the hosting part of this business, when you are holding a billion pages of sensitive documents in Europe, Asia and the US for very, very large clients. It is a very sticky relationship and is not a relationship that they are inclined to move very quickly. So, I'm sure we'll see new competition coming in. We are hopeful that the investments that we are making, the developments that our own people are making internally, potential acquisition so we could possibly add here to bolster it and again our reputation and client relationships here will hold us in good stead against the competition.

Yeah. I think you've to think of it in terms of the market it serves as well. When you think about the legal market there are literally thousands of law firms, but there are 200 that really control the commerce of the major -- literally the major companies and enterprises of the world. There will be E-Discovery companies out there that will serve the smaller firms that will be boutique and that individual practitioners will like. But when you're talking about the type of international matters that we use where you literally have to have an international capability that really narrows the playing field, as Dennis said, I think they are more likely to be acquisition targets than they are to be a threat to us going forward.

Okay, thank you. And may be just one last question, now you've achieved your long-term goals; is it time where you think about setting some new targets?

Yeah. I think clearly we told people that we've aspirations to be a $2 billion revenue business by 2012. We think we can accomplish that and maintain the same margins that we've and also maintain the integrity of our balance sheet. We'd expect that you would see a business plan, which we're finishing up as we speak and we'll actually announce into the market place probably sometime at the end of the second quarter. That will show that at that new five year milestone you'd see probably instead of the 16% to 19% offshore business that we did last year that number will most likely increased into the 30s. So, that will be one of the major differences. But I would say $2 billion at 2012 that's accomplished really through 11.5% compound organic growth rate and the acquisition of about $250 million in revenues in the first two years of the plan. As I said, we've already acquired about $220 million at the end of this quarter. So, we're well on our way to that.

Great, thanks very much.

And we'll take our next question from David Gold of Sidoti.

Hey, good afternoon. Couple of questions, one, can you just go -- let me check the acquisition, how much revenue is already in-house?

From these acquisitions?

Right then at the first quarter and I know you said I think a $120 million was the goal, but just how much of that we've done?

Yeah, David -- Dave is going to dwell into that David.

Perfect, thanks.

We were expected at -- we had about $27 million -- $27 million and $28 million expecting in-house.

$27 million is --

Is done, it's been announced.

It's announced, okay and that's including today?

Right, correct.

Got you, so, there is….

Competition to this year.

Sorry?

Competition to this year.

Right. And presumably and the $120 number that you gave us for this year as well. So, there is something --

David the $120 is an annualized number, the $90 million to $100 million is for this year.

Okay, got you. But I guess, the point there is, there is still something -- there is still something decent size to be done over the span of the next month.

Correct.

Okay. And then can you talk a little bit about the plan with say the rest of the cash, when [touched] on. I guess, at the time, that you did the offering might got the assumption maybe incorrectly that you're targeting maybe some bigger acquisitions rather than those tuck and incisive just curious if that still would be the thinking or if you are more inclined to say a decent, nicely accretive tuck-ins and then say a little bit slowly as we're doing?

Well number one; if we add a $130 million of revenues, $120 million of revenues on an annualized basis in the first quarter that's 12% of our revenue base during the year. So, that obviously makes an impact, I think, as Jack said, when you normalize the amortization of the intangibles that as you know, you've to eat normally in the first of sort of first four to first six quarters of your ownership and we've been looking at those to contribute $0.40 a share. So, that's pretty accretive. I think that we would continue doing those deals because if we can buy companies that tuck-in very nicely to us and pay 6.2 to 7 times doing EBITDA, that's a very accretive arbitrage for the shareholders as well as building out our platform internationally and brining into new domain expertise domestically. We are always looking David, as you know I've talked about at larger deals we've talked to people about larger deals. We are not afraid to do a larger deal. I think that it's just a [deice], where the ones that in the last four months are coming to provision and it's coincidental on all [honesties] they happened to be closing sort of right on top, which have been in the first quarter, but it does make an easier of course to model them and give you some guidance, but we are looking at other large deals and we are not be afraid to do one.

Okay. And I think one other actually couple I just I know you didn't break out by division, but curious if you can give us sense for how you are thinking about growth in the restructuring busyness for this year?

We didn't give segment guidance for specifically for reason -- especially because of the credit crisis is really a perfect example. It's affecting all of our divisions, we have people, who are crossing over and doing work and just makes a very hard to do that. So, we think it's much better to look at our company on a overall growth rate. So, if we start just on your corporate finance and just on your technology and I guess will kind of undue, what I think about, but I think that, I mean if you look at the fourth quarter that was, that give a pretty healthy indication of where the momentum is in our different business.

David, I mean the nice thing about the group of our practices, its creates very good interdisciplinary teams and the confusing part of giving segment guidance would be how we allocate the time, when you have these joint efforts I mean we have some instances where we started out in restructuring, the restructuring lead to having to bring in, forensic investigation, the forensic investigation going to lead to potential defense activity and same time the client has hired our communication armed help to manage communication. We're somewhat Salmon is sitting here and saying okay you can get credit for this much, you can get credit that much, it mean something internally. That really can distort the numbers, when people trying to analyze the segments, when we thought given where we saw the business going certainly in a foreseeable future that would be we better off, not to do that.

Got it, fair. One more if I may, any success fees sizable one of that we should know about in the fourth quarter?

We did have success fees in the fourth quarter, they would not be material enough I want to comment on.

Okay, that's helpful thank you all.

Okay.

And we will take our next question from Alan Kurtz with Lord Abbett.

Hi guys. Another great quarter, thanks again. Most of my question answered at this point, but the one I didn't seen your prepared remarks, pre DSO at the end of the year.

78

78

78, right, every year. And the other thing I know in strategic communications for example a lot of the work is a tenant based but given this level of demand within that area and a couple of the others. What kind of pricing are you able to take on a year-over-year basis?

Very typically on our fixed price and they are able to raise like the rest of our companies their prices again that 7% to 10% that we look at each year. They are consistent with the rest of our practices.

Okay. And (inaudible) said to hit on this earlier actually. You had a big spike in the headcount in a couple of different areas end of the year. You said you see a lot of the headcount in the year coming on through restructuring. How do you see a plan out through the year like on a quarterly basis?

We have hiring targets and we also obviously have to meet our demand so you would see that the hiring budgets are for a fairly even growth through the year, but remembering that's all the kids that we get all the people out of college would come in the September time frame. So that's where you would see a little bit of a spike.

That's predominantly the corporate finance and the SLC practice that they'll hide (inaudible) start probably September.

Okay got it. Thanks a lot.

Thank you.

And we'll take our next question from Jim Janesky of Stifel Nicolaus.

Jack when you were commenting on the seasonality of the first quarter, did you say that we could expect that revenues could be down sequentially or just EBITDA. I didn't catch that part.

It's not unusual to have just a tiny bit smaller revenues in the first quarter than in the fourth quarter. It's a seasonal pattern we have seen year-after-year. The business kind of plateaus and you do a lot of ramping up in the fourth quarter to look at your year and that's what happens you start of coming back from holidays and then it begins to build and then in your second quarter you really start knocking the cover of the ball.

Now, last year that didn't happen except for in FD, we are already into February here. Is that something that you could expect for this quarter based upon the demand, the strong demand that you are seeing across the board?

Yeah, we are just trying to give people a heads-up on their models for what we have seen for the past couple of years. Again we are talking about amounts that are almost too close to call. So I would say that be aware of that for your model, but that it wouldn't be anything to worry about.

Okay, now looking at the organic growth rate for 2008, obviously on a billion dollars, lot of companies would love to have organic growth rates at the amounts that you are projecting. How much of that, really has to, is really on the comp versus, I know you don't really have backlog per se, but when you are looking at that, you think that the momentum of the business is pretty, you are confident that it can sustain that level of organic growth or is there still an amount of selling that's involved, their marketing in order to hit those targets as we move throughout the year?

Jim it is Dennis. Number one, I think you have to look at fourth quarter over third quarter, there is good sequentially growth, fourth quarter to third quarter as well as obviously tremendous year-over-year growth fourth quarter to fourth quarter. I think to go back to your earlier question. Jack so we are trying to enlighten you to the seasonal patterns, we are not trying to predict that we would necessarily be down. Obviously we are aware of the momentum that's there we are just trying to be honest and what the history has looked like. I think on the organic growth, we're very busy. We've a lot of engagements, the engagements are picking up not declining as Dom talked about on the restructuring side and we talked about how sticky technology is per se. So that business doesn't tend or reverse itself easily it's more sort of incremental. FD is another good example, where first quarter again tends to be a more stable quarter for them because its more of the work product type of quarter rather than new company business, but they again are tenure based business, so most of their work is, they have good visibility on. So, I'd say we've pretty good visibility going forward. We're still on a [vent] driven consultancy. So, we live and die with new engagements as they come forward, but given the technology portion of the tech business the retainer portion of the FD business and then of course simply the momentum that we're seeing in some of our other businesses, we feel pretty good about the trajectory.

And typically in the past the restructuring cases and bankruptcy are longer-term engagements.

Sure.

New builder we had 90 at the end of the third quarter, we now have a 108 those don't go away in three months like some of the litigation cases do.

And if you look at -- [corrupt for] practices you would like I think elephant hunter. So, the larger cases that often last longer south. I think litigation certainly can settle at any time, but our experience is that these litigation cases and ECON cases and the restructuring cases isn't lasting anywhere from 3 months to 24 months plus. So, they given a momentum that we've got in the cases that we got in household over the last quarter. We're relatively comfortable that 2008 will be a pretty good year and the cases aren't going to be settle overnight and given that the cases that have come in have been corrupt practices, the risk of tremendous drop off all last although anything can happen.

Okay, Sure. Question for Jorge, when since you folks have modeled in the incremental acquisitions about another $60 million to $70 million for the balance of 2008, we obviously want to take into account that up-front amortization. Can you give us an idea of what the incremental amortization versus -- will be you reported about $2.8 million in the December quarter. Is that going to be a $1 million as a quarter in incremental, amortization are more?

I think without the acquisition, the amortization will be pretty similar to what it was last year and with the acquisition you could see it's a little more than doubling.

More than doubling? Okay. So, and that is acquisitions in hand and that you have modeled, right?

About a $1 million a month for acquisition that we'd expect to be announced in the first quarter of incremental life of -- incremental amortization, but that based on $90 million to $100 million of revenue. I'm not sure that number 60 you taken incorrect.

I think you were taken the number that we have said were those original four that we have announced at the end.

Yes, right. Yeah that's right. You said that was about $30 million, $35 million. So, you are obviously very confident that you will be announcing between another $60 million to $70 million and then that will affect calendar 2008 that's what I -- that was the number I was talking about?

Got it, okay. Thank you.

And will take our next question from Scott Schneeberger of Oppenheimer.

Thanks. Good afternoon and congratulations.

Hi, Scott.

Hi, Scott.

First question in the Economic Consulting group, the outsource consultants who are these folks are you getting them from competitive firms, are you getting independent, are these people that you might be hiring on. Since obviously the demand is robust and in-house you currently don't have enough. When do you think that will balance off?

They are high level testifying experts. They would be more normally fairly well known academics, who are actively teaching. They would be working with our researchers, staffers, model builders, who are doing the analysis building the models, building the case and they would be ones they will be assisting sort of some of the rock stars in their testimony work or they're actually doing the testimony themselves. Predominantly right now the demand for these individuals has been in our West Coast operations, so they have actually been somewhat West Coast centric. And yes, we're talking to them constantly about recruiting them coming and things like that.

It's not unusual that's the way we get our people. They want to associate with people like Bobby Willig, then Janusz Ordover, and Dan Fischel and Denis Callaghan and Meg Guerin-Calvert and Jon Orszag and when they come in they find, they like it here and it becomes a very easy model for them to hookup with.

I think it was confluence of demand that surprised us and that we were literally being named on all the sides a very conceivable permutation and in order to create teams that could be Chinese Waldorf, we're having to bring another people in and the margin that you get on the people that you bring is clearly not as great as those who work for you. But I think we're actively trying to recruit some of them and some of their colleagues to join us.

Sure. And it sounds like a high class problem. But do you think we'll be seeing this in forward quarters or we get closer to having a remedy?

I think, you could see it continue in the first quarter although without a doubt we're working hard to take steps to increase the capacity I think you'll see debate going forward because who have been successful over our efforts in the next quarter -- in the next two quarters to bring in more capacity.

Okay, thanks. Moving over to the Technology Consulting space anyhow it's fairly fragmented we talked earlier about a lot of new entrance there. Could you give us an idea of -- I think, Jack you referred doing the top 200 law firms, how many of competitors are serving them is that very fragmented or it's just a few? And then just kind of high level thoughts on where you see this industry two to three years from now would there be a lot of consolidations and if the few large players are still widely scattered? Thanks.

My view is that they are probably 10 people that we watch in the different categories. We very closely watch the top ten list to come out of the surveys that are done continually to suitable litigators like who are they using, who is the installed base in the law firms and I think absolutely you'll see consolidation, you'll see the big enterprise software players want to acquire these firms because they want to get back to the source. But I getting the attorneys and the legal departments they get the entire company for their software suites and that's, what they are after at the end of the day, I believe.

So, it's a gap and which is a -- an industry analyst that track these things and sort of runs the list does have some pretty good research if you want to access to that, if you want to cross offline we can do that and clearly they were the firm that picked us as the top one in all capabilities last year. So, I don't mind giving in our research.

Okay, thanks. I appreciate that. One final one if I can, obviously it was in the third quarter and I imagine you do it again, but and I think I read that infrastructure and branding spending something that you've been pushing on obviously a great global operation you've. How aggressive it going to be in '08. Can you talk about what percentage of?

It's Dennis again. I think that we will continue to do that and I think that what you'll see is that the overall percentage of SG&A as a percentage of revenues will decline slightly. The actual spend on marketing brand building as a percentage of revenues will be pretty constant. So, we will increase in absolute dollar stay about constant level for this year. We just think it's very important especially building this platform overseas that we continue to drive home the capabilities of the brand, the depth of the brand, and the reach of the brand. And so we can't back offer, although we know we've got to keep the expense basically within the same proportions that have we experienced last year.

Great, thanks very much.

Thank you.

And we'll take our next question from Timothy Mchugh of William Blair and Company. Timothy Mchugh - William Blair & Company: Yes, Dunn, just want to ask about the unannounced, uncompleted acquisition at this point. Can you give us an idea what segments you'd hope to complete those and as we complete our models as well as annual EPS accretion you mentioned from acquisitions. How much of that would be from stuff not completed.

Well, I think what we -- we really can't disclose those for obvious reasons and we only really have about four weeks left in the quarter. So, we expect to get these things done in a pretty timely manner. I think the numbers (inaudible) and talk about right now is the per share numbers that we disclose that would be what this year after the amortization would contribute and that's in that $0.14 type of range we talked about. After that amortization burns off, then we will be looking for more of $0.40 annualized, I think, I'm not trying to be sort of cute, but I think really we'll put out a lot more information on them in the next four weeks, as you see us making these announcements and I think we just be unfair to the company to be maybe shed some light one them, when the deals aren't 100% finished yet. Timothy Mchugh - William Blair & Company: Okay. And then looking at the margin expansion embedded in your guidance you mentioned SG&A likely so that implies some nice improvement in the gross margins next year. What's driving that, it's a utilization improvement, a revenue mix shift, any comments there will be helpful?

Could you repeat the question?

Give a break enough a little bit, I'm sorry. Timothy Mchugh - William Blair & Company: Oh I'm sorry. EBITDA margin expansion that is embedded in your guidance is pretty nice, you mentioned SG&A would be done slightly, which implies pretty solid gross margin expansion, I was just wondering if you could comment on what you feel the drivers of that?

There is couple of drivers. I think as Dom said, clearly as we anticipate utilization going up in some of the areas, that drives better margin, more profitability. I think the acquisitions that we are acquiring number one in their own right have a higher EBITDA margin right now than we do. And then number two, they are in areas that do not require significant incremental expense to support them. So, on an operating leverage basis we again, once we get through sort of this artificial write-off of the intangibles we see significant leverage. So, we really come from a combination of controlling the cost on an absolute basis, so that the percentage goes down as the revenues go up and that's a just general SG&A. Number two would be higher utilization in some areas its simply give us higher margins. And then number three of the $128 odd million of revenue that we're acquiring on an annualized basis, the margins are one higher than ours in the aggregate. And number two the support that we give them given the type of acquisitions they are and how they'll fit into the organization is not significantly incremental.

And it's also we're always looking at ways to reduce cost in the duplications that we've got within the practices, between the practices and corporate etcetera. We got a project going on now that. We hope to eliminate some of the redundancies that there might be in some of the support areas. Timothy Mchugh - William Blair & and Company: Okay, thank you.

And we'll take our final question from Dan Suzuki of Merrill Lynch.

Yes. Good afternoon. Just a couple of questions here. I want to better understand the Forensic and Litigation, the slowdown you saw on revenue growth there. I understand in the press release in the prepared remarks you talked about the large amount of options backdated, which you did last year is that -- is there anything else or there any particular segments that you're seeing slowness in?

Well, number one the $50, we did about $52 million I think in the fourth quarter of 2006 and that was the record quarter in this company for Forensic and Lit that we had ever had. So, we were lapping the highest quarter we ever had. So, just on a pure comparative basis down it was just a tough quarter to lap. And that was -- it's largely driven by artificial demand from our clients to get the stock option backdating over so they could quantify the hit if any put it in their P&Ls and get their audited reports done. I think without a doubt, as we've been saying all along, we did not see any huge assignments coming in the first half of the year. We thought it was somewhat of a sluggish year. We're doing all right, low double digit growth. And I think that continued into the third quarter. I think, but for the fourth quarter tough comp it would have been again low double digit growth. And I think that we're now beginning to see the larger assignments come in although they did have a significant impact on the fourth quarter. These will be foreign corrupt practice cases of which we've gotten quite a few. A lot of those are teamed between the Technology group and the Forensic group. Technology goes first and brings in an awful lot of the information host it, harvesters it, [silos] it, organizes it and then the investigators from FLC get involved and do a lot of the forensic type of investigation. So, we're seeing a lot of foreign corrupt practices activity and we're beginning to see the beginnings of credit crisis oriented type of work either high stake securities potential litigation, obviously we talked about hedge fund investigations and I think we're starting to feel the pick-up but it wasn't there enough -- the momentum from this it's just beginning and it didn't mature enough in the fourth quarter to overcome a very difficult comp.

Okay, that's very helpful. And then on the Economic Consulting side, just trying to reconcile the lack of capacity you had to fulfill the strong demand you had there with the utilization rate flat year-over-year and down sequentially by 6 percentage points just trying to reconcile?

It's a function where our utilization is. So, if you can think of a theoretical case where you bringing an expert, we've our own experts, where we've a whole team of people doing a lot of the work if it's going to mature, so you've to start doing a lot of testifying work, the actual team, so your younger people may have been finishing their work and your utilization might slack off enough. Your experts might have utilization up around 100%, 110%, 120% because that's the time where they really have to get involved in sort of the personnel activity or the interaction between the regulators, the commission over in Brussels, DoJ here or in cases of litigation it could be a corporate. So, a lot of this is simply how the work flows in the mix, so if we would segment that and break it down you might see some quarters where the experts would have utilization that might be down in the 70%, 60% range and your staff would have utilization up in a 100 and then it could slip the next quarter depending on the maturity of the actual case to where the experts are up in the 100's and the staff back off and I think it was just more of the quarter anomaly where we just literally had to have a lot of people who were 'experts status' where most of the modeling research work had already been done and just I can tell you already it's equilibrated.

We also brought in about 10 additional hires in the quarter anytime, it takes a while to...

In the research side yes.

Right and that turns right around in the third quarter.

Yeah.

Okay. That makes a lot of sense and then on the communication side of the business, the bonus plans and pardon me if I missed this is that a one time catch up?

No it's an annual plan, so the margins that you saw on the fourth quarter were pretty much led on the same margin song third, second and first and that's what we would expect going forward. There was no bonus plan in the stub period that we owned the company in 2006. We put it in for the first full year in 2007 and that plan will stay in as it is, so you would expect to see margins next year the same that you say in the trailing four quarters.

Okay. And then so it's going to be a fourth quarter event if I'm understand …?

No.

No, no. Dan that was reflected this year for the full year.

Okay.

Each quarter.

Right that makes a lot of sense. And then one quick question for you guys. The growth rate do you have any idea how FX impacted the growth rate?

Very small, it's going to be very significant.

Okay alright thanks guys.

And that does conclude the Q&A session. I'd like to turn the call back to over to management for additional or closing remarks.

Thank you. Again I'd like to thank everyone for being with us. We want to use this time period to be able to give you some time to adjust for what was fairly full and frank disclosure. All the things we've going on were very optimistic for 2008 and we look forward to speaking with you after our first quarter results if not the fourth. So with that thank you very much we look forward to talking with you.

And that does conclude today's conference. We do appreciate your participation you may disconnect at this time.